ESCROW
      AGREEMENT

     

    This
      Escrow Agreement (the “Agreement”) is made and entered into on July 3, 2008, by
      and among Knight Energy Corp., a Maryland corporation (the “Company”),and HD
      Special-Situations, LP (the “Lender”), and David S. Hamilton, a duly licensed
      attorney who practices law in the State of California, as escrow agent (the
      “Escrow Agent”). 

     

    A.
      Capitalized terms used and not otherwise defined herein have the meanings set
      forth in the Note Purchase Agreement entered into between the Company and the
      Lender dated concurrently herewith (the “Note Purchase Agreement”).


     

    B
      Pursuant to the Note Purchase Agreement, at the Closing, the Company has agreed
      to sell, and the Lender has agreed to purchase, the Note. 

     

    C.
      The
      Lender and the Company have agreed to effectuate the Closing utilizing an escrow
      arrangement as described in this Agreement. 

     

    D.
      It is
      a condition of the Company’s obligation to sell, and the Lender’s obligation to
      purchase, the Note, that this Agreement be executed and delivered. 

     

    E.
      The
      Escrow Agent is willing to act hereunder on the terms and conditions set forth
      herein. 

     

    NOW,
      THEREFORE, in consideration of their respective promises contained herein and
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the parties hereby agree as follows: 

     

    1.
      Escrow
      Account.
      On or
      before the Closing Date, by wire transfer of immediately available funds in
      United States Dollars, the Lender shall deposit the Purchase Price with the
      Escrow Agent, to be held by the Escrow Agent in a separate non-interest bearing
      account (the “Escrow Account”), established at Bank of America (the “Bank”),
      subject to the provisions of this Agreement. At the request of the Company
      or
      the Lender, the Escrow Agent shall provide the requesting party with copies
      of
      all Bank statements, notices and other writings that he receives from the Bank
      in connection with the Escrow Account. 

     

    2.
      Disbursement
      of Funds and Documents.
      

     

    2.1
      Closing
      Procedures.
      The
      Closing shall take place in the following manner: 

     

    (a)
      The
      Company and the Lender shall each deliver to the Escrow Agent via facsimile
      or
      other electronic transmission (to be promptly followed by delivery of original
      documents via courier service or Federal Express) complete originals of all
      documents as provided in Sections 2.2
      and
      2.3 below, as applicable (the “Escrowed Documents”). Pending such delivery, each
      party hereby agrees that a facsimile or other electronic transmission of a
      document permitted to be delivered
      hereunder, once delivered to the Escrow Agent, shall be binding upon such party
      in the same
      manner as would an original to the full extent permitted by applicable
      law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (ii)
      Upon
      receipt of the requisite documents via facsimile or otherwise from a party,
      the
      Escrow Agent shall, in turn, send via facsimile (to be promptly followed by
      delivery of original documents via courier service or Federal Express) such
      documents to the other parties. In addition, upon receipt by the Escrow Agent
      of
      the Purchase Price and the original Note, the Escrow Agent shall (i) disburse
      the Purchase Price as provided in the Disbursement Instructions and (ii) deliver
      the original Note to the Lender via courier service. Anything herein to the
      contrary notwithstanding, the Escrow Agent shall not disburse the Purchase
      Price
      prior to taking physical possession of the original Note; likewise, the Escrow
      Agent shall not release the original Note prior to receipt in the Escrow Account
      of the Purchase Price. 

     

    2.2
      Items
      to be Delivered by the Company to the Escrow Agent.
      On or
      before the Closing Date, the Company shall deliver to the Escrow Agent on behalf
      of the Lender each of the following documents: (i) three (3) fully executed
      originals of the Note Purchase Agreement, (ii) one (1)
      original fully executed Note, (iii) three (3) fully executed originals of this
      Agreement, (iv) three (3)
      fully
      executed originals of the Amendment, (v) one (1) fully-executed original of
      the
      Amendment to Deed of Trust, (vi) three (3) fully executed originals of the
      Subsidiary Amendment, (vii) three (3) fully executed originals of the
      Disbursement Instructions and (viii) three (3) fully executed originals of
      such
      other items as may be specified in the Note Purchase Agreement to be delivered
      by the Company. 

    


    2.3
      Items
      to be Delivered by the Lender to the Escrow Agent.
      In
      addition to the Purchase Price, on or before the Closing Date, the Lender shall
      deliver to the Escrow Agent on behalf of the Company each of the following
      documents: (i) three (3) fully executed originals of the Note Purchase
      Agreement, (ii) three (3) fully executed originals of this Agreement, (iii)
      three (3) fully executed originals of the Amendment, (iv) three (3) fully
      executed originals of the Subsidiary Amendment, (v) three (3) fully executed
      originals of the Disbursement Instructions and (vi) three (3)
      fully
      executed copies of such other items as may be specified in the Note Purchase
      Agreement to be delivered by the Lender. 

     

    2.4
      Controversies.
      If any
      controversy arises between any of the parties hereto, or between any of the
      parties hereto and any person not a party hereto, as to whether or not or to
      whom the EscrowAgent shall deliver the PurchasePrice, the Escrowed Documents,
      or
      any portion thereof, or as to any other matter arising out of or relating to
      this Escrow Agreement, the Escrow Agent shall not be required to determine
      the
      same and need not make any delivery of the Purchase Price, the Escrowed
      Documents, or any portion thereof, but may retain the same until the rights
      of
      the parties to the dispute have been finally determined by written agreement
      or
      by final judgment of a court of competent jurisdiction after all appeals have
      been finally determined (or the time for further appeals has expired without
      an
      appeal having been made). The Escrow Agent shall deliver that portion of the
      Purchase Priceand/orEscrowed Documentscovered bysuch agreement or final judgment
      within five (5) days after the Escrow Agent receives a copy thereof. The Escrow
      Agent shall assume that no
      such
      controversy has arisen unless and until he receives written notice from the
      Lender or the Company
      which refers specifically to this Agreement and identifies the controversy
      and
      the adverse claimants.

     

    
      
        
        

      

      
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    2.5
No
      Other Disbursements.
      No
      portion of the Purchase Price and/or the Escrowed Documents shall be disbursed
      or otherwise transferred except in accordance with this Section 2, Section
      4 or
      Section 5.1(b). 

     

    3.
      Escrow Agent.
      The
      acceptance by the Escrow Agent of his duties hereunder is subject tothefollowing
      terms and conditions, which the parties to this Agreement hereby agree shall
      govern and control with respect to the rights, duties,liabilities andindemnities
      of theEscrow Agent: 

    


    (a)
      The
      Escrow Agent shall not be responsible or liable in any manner whatsoever for
      (i)
      the sufficiency, correctness, genuineness or validity of any cash, investments
      or other amounts deposited with or held by the Escrow Agent, (ii) acting upon
      any written notice, certificate, instruction, request or other document believed
      by the Escrow Agent to be genuine and to have been signed or presented by the
      proper party or parties or (iii) any act done hereunder, except in the case
      of
      the Escrow Agent’s willful misconduct or bad faith. 

     

    (b)
      The
      Escrow Agent shall not be obligated or permitted to investigate the correctness
      or accuracy of any document or to determine whether or not the signatures
      contained in any document are genuine or to require documentation or evidence
      substantiating any such document or signature. 

     

    (c)
      The
      Escrow Agent shall have no duties as Escrow Agent except those that are
      expressly set forth herein, and in any permitted amendment hereof; provided,
      however, that no such amendment shall affect the Escrow Agent’s duties unless
      the EscrowAgent shall have given written consent thereto. 

     

    (d)
      The
      Company and the Lender specifically acknowledge that (i) the Escrow Agent is
      a
      practicing attorney in California and (ii) the Escrow Agent has drafted the
      documents for this transaction only on behalf of HD Special-Situations, LP
      and
      has acted as counsel in this transaction only for HD Special-Situations, LP.
      The
      Company represents that it has retained legal counsel of its choosing with
      respect to the transactions contemplated herein and in the Note Purchase
      Agreement, and is satisfied in its sole discretion with the form and content
      of
      the documentation drafted by the Escrow Agent. The Company hereby waives any
      objection to the Escrow Agent acting as described herein based upon conflict
      of
      interest or lack of impartiality. The Escrow Agent agrees to act impartially
      and
      in accordance with the terms of this Agreement and the parties’ respective
      instructions, so long as they are not in conflict with the terms of this
      Agreement. 

    


    4.
      Termination.
      This
      Agreement shall terminate on the earlier of (i) the date on which the Purchase
      Price, the Escrowed Documents and other items described herein shall have been
      fully disbursed
      in accordance with the terms and conditions of this Agreement or (ii) any other
      date agreed to
      by the
      Lender and the Company.

     

    
      
        
        

      

      
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    5.
      Miscellaneous.
      

     

    5.1
      Indemnification
      of the Escrow Agent.
      

     

    (a)
      The
      Company and the Lender each agree, jointly and severally, to indemnify the
      Escrow Agent for, and to defend and hold the Escrow Agent harmless against,
      any
      loss, damage, claim, liability, cost or expense (including, but not limited
      to,
      reasonable attorney’s fees and costs of investigation) arising out of or in
      connection with the performance of this Agreement, including the costs and
      expenses of defending against any claim or liability in connection with the
      exercise or performance of any of the Escrow Agent’s powers or duties hereunder.
      The foregoing notwithstanding, this indemnification shall not apply to a party
      with respect to a direct claim against the Escrow Agent by such party alleging
      in good faith either gross negligence, willful misconduct or bad faith on the
      Escrow Agent's part or a breach of this Agreement by the Escrow Agent, which
      claim results in a final non-appealable judgment against the Escrow Agent with
      respect to such claim. 

     

    (b)
      In
      the event of any dispute as to the nature of the rights or obligations of the
      Lender, the Company and/or the Escrow Agent hereunder, the Escrow Agent may
      at
      any time or from time to time interplead and/or deliver all of the Purchase
      Price and/or the Escrowed Documents with or to a court of competent jurisdiction
      sitting in Los Angeles, California, or in any appropriate federal court, in
      accordance with the procedural rules thereof. The Escrow Agent shall give notice
      of such action to the Company and the Lender. Upon such interpleader or
      delivery, the Escrow Agent shall immediately and automatically be relieved
      and
      discharged from all further obligations and responsibilities hereunder.


    


    5.2
      Entire
      Agreement; Amendments.
      This
      Agreement contains the entire understanding of the parties with respect to
      the
      matters covered herein and supercedes all prior agreements, negotiations and
      understandings, written or oral, with respect to such matters. Except as
      specifically set forth herein, neither the Company, the Lender nor the Escrow
      Agent makes any representation, warranty, covenant or undertaking with respect
      to such matters. No provision of this Agreement may be waived or amended other
      than by an instrument in writing signed by the party to be charged with
      enforcement. 

     

    5.3
      Notices.
      Any
      notices required or permitted to be given under the terms of this Agreement
      shall be in writing and sent by U. S. Mail or delivered personally or by a
      courier service or via facsimile (if via facsimile, to be followed within one
      (1) business day by an original of the notice document via overnight delivery
      service) and shall be effective (i) five (5) days after being placed in the
      mail, if mailed, certified or registered, return receipt requested, (ii) upon
      receipt, if delivered personally or (iii) one (1) day after facsimile
      transmission or delivery to a courier service for overnight delivery, in each
      case properly addressed to the party to receive the same. The addresses
      for such notices shall be as set forth in the Note Purchase Agreement or, in
      the
      case of the Escrow
      Agent, as set forth under the Escrow Agent’s signature on this
      Agreement.

     

    
      
        
        

      

      
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    5.4
      Successors
      and Assigns.
      This
      Agreement shall bind and inure to the benefit of the parties hereto and their
      respective permitted successors and assigns; provided, however, that the Escrow
      Agent shall not assign his duties under this Agreement. 

     

    5.5
      Governing
      Law.
      This
      Agreement shall be governed by and construed and interpreted in accordance
      with
      the laws of the State of California as applied to contracts made and to be
      fully
      performed in such state, without regard to the conflicts of laws provisions
      thereof. 

     

    5.6
      Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be an
      original, and all of which together shall constitute one and the same agreement.
      

     

    5.7
      No
      Third Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns, and is not for the benefit of, nor may any
      provision hereof be enforced by, any other person. 

     

    5.8
      Remedies.
      No
      provision of this Agreement providing for any specific remedy to a party shall
      be construed to limit such party to the specific remedy described, and any
      other
      remedy that would otherwise be available to such party at law or in equity
      shall
      be so available. No delay or omission of either party hereto in exercising
      any
      right or remedy hereunder shall constitute a waiver of such right or remedy,
      and
      no waiver as to any obligation shall operate as a continuing waiver or as a
      waiver of any subsequent breach. 

     

    5.9
      Survival.
      The
      provisions of Section 5.1 above shall survive the Closing of the Note Purchase
      Agreement. 

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed by their respective authorized persons on the date first written above.
      

     

    
      	
              KNIGHT
                ENERGY CORP.

            
	 	 
	
              By:

            	 	 
	
              Title:

            	 	 
	 	 	 
	
              By:

            	 	 
	
              Title:  

            	 	 


    

     

    
      
        
        

      

      
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              HDSPECIAL-SITUATIONS,
                LP

            
	 
	
              By:

            	 	 
	
              Title: 

            	 	 
	 	 	 
	 	 
	
              David
                S. Hamilton

            	 
	 	 
	
              Address:   
                5699 Kanan Road, #251

              Agoura
                Hills, California 91301

              Telephone:
                (818) 735-0050

              Telecopier:
                (818) 879-5449

            


    

     

    
      
        
        

      

      
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