Exhibit 10.09


    
      

      

    

     

    Exhibit
      10.9

     

     

    PLEDGE
      AND ESCROW AGREEMENT

     

    PLEDGE
      AND ESCROW AGREEMENT
      (the
“Agreement”)
      dated
      December 20, 2006, made by each of the undersigned (each a “Pledgor”,
      and
      collectively, the “Pledgors”),
      in
      favor of CORNELL
      CAPITAL PARTNERS, LP,
      in its
      capacity as collateral agent (in such capacity, the “Collateral
      Agent”)
      for
      the “Buyers” (as defined below) party to the Securities Purchase Agreement, of
      even date herewith (the "Securities
      Purchase Agreement").

     

    RECITALS:

     

    WHEREAS, Cobalis
      Corporation, a Nevada corporation (the “Company”),
      and
      each party listed as a "Buyer" on the Schedule of Buyers attached thereto (each
      a "Buyer",
      and
      collectively, the "Buyers")
      are
      parties to the Securities Purchase Agreement, pursuant to which the Company
      shall issue and sell to the Buyers, as provided in the Securities Purchase
      Agreement and the Buyers shall purchase secured convertible debentures (the
“Convertible
      Debentures”),
      which
      shall be convertible into shares of the Company’s common stock, par value $0.001
      per share (the “Common
      Stock”)
      (as
      converted, the “Conversion
      Shares”);

     

    WHEREAS,
      it is a
      condition precedent to the Buyers purchasing the Convertible Debentures that
      the
      Pledgors execute and deliver to the Collateral Agent a pledge agreement securing
      all of the obligations of the Company under the Securities Purchase Agreement,
      the Convertible Debentures and the Transaction Documents (as defined in the
      Securities Purchase Agreement, the “Transaction
      Documents”);

     

    WHEREAS,
      each
      Pledgor has determined that the execution, delivery and performance of this
      Agreement directly benefits, and is in the best interest of, such Pledgor;
      and


     

    WHEREAS, the
      parties to this Agreement desire to appoint DAVID
      GONZALEZ,
      ESQ.,
      as escrow agent (“Escrow
      Agent”)
      to
      hold in escrow the Pledged Shares (as defined below) pursuant to the terms
      and
      conditions of this Agreement. 

     

    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants, agreements, warranties, and
      representations herein contained, and for other good and valuable consideration,
      the receipt and sufficiency of which is hereby acknowledged, the parties hereto
      agree as follows:

     

    TERMS
      AND CONDITIONS

     

    1.  Obligations
      Secured. The
      security interest created hereby in the Pledged Shares constitutes continuing
      collateral security for all obligations of the Company now existing or
      hereinafter incurred to the Buyers, whether oral or written and whether arising
      before, on or after the date hereof including, without limitation of the
      following obligations (collectively, the “Obligations”):

     

    (a)  for
      so long as the
      Convertible Debentures are outstanding, the payment by the Company, as and
      when
      due and payable (by scheduled maturity, acceleration, demand or otherwise),
      of
      all amounts from time to time owing by it in respect of the Securities Purchase
      Agreement, the Convertible Debentures and the other Transaction Documents;
      and

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    


    (b)  for
      so long as the
      Convertible Debentures are outstanding, the due performance and observance
      by
      the Company of all of its other obligations from time to time existing in
      respect of any of the Transaction Documents, including without limitation,
      the
      Company’s obligations with respect to any conversion or redemption rights of the
      Buyer under the Convertible Debentures.

     

    2.  Pledge
      and Transfer of Pledged Shares.
      Each
      Pledgor hereby grants to the Collateral Agent an irrevocable, first priority
      security interest in all the securities set forth next to such Pledgor’s name on
      Schedule I attached hereto (the “Pledged
      Shares”)
      as
      security for the Obligations. Simultaneously with the execution of this
      Agreement, each Pledgor shall deliver to the Escrow Agent, and the Escrow Agent
      shall hold in escrow pursuant to the terms of this Agreement, stock certificates
      made out in favor of the Pledgor representing the Pledged Shares, together
      with
      duly executed stock powers or other appropriate transfer documents with
      medallion bank guarantees and executed in blank by each Pledgor (the
“Transfer
      Documents”),
      and
      such stock certificates and Transfer Documents shall be held by the Escrow
      Agent
      until the satisfaction in full of all the Obligations.

     

    3.  Rights
      Relating to Pledged Shares.
      Upon
      the occurrence of an Event of Default (as defined herein), the Collateral Agent
      shall be entitled to vote the Pledged Shares, receive dividends and other
      distributions thereon, and enjoy all other rights and privileges incident to
      the
      ownership of the number of Pledged Shares actually released from escrow in
      accordance with Section 6.1 hereof on behalf of the Buyers. 

     

    4.  Release
      of Pledged Shares from Pledge.
      

     

    a.  Upon
      the
      satisfaction in full of all the Obligations the parties hereto shall notify
      the
      Escrow Agent to such effect in writing. Promptly upon receipt of such written
      notice, the Escrow Agent shall return to each Pledgor the Transfer Documents
      and
      the certificates representing the Pledged Shares (collectively the “Pledged
      Materials”),
      whereupon any and all rights of the Collateral Agent in the Pledged Materials
      shall be terminated.

     

    b.  Upon
      the
      satisfaction of all the following conditions (i) the registration statement
      with
      respect to the resale of the Common Stock underlying the Convertible Debentures
      shall have been declared effective by the Securities and Exchange Commission,
      (ii) the Common Stock shall be traded on a Principal Market (as defined in
      the
      Convertible Debentures), (iii) no Event of Default shall have occurred, and
      (iv)
      the closing price of the Common Stock on the Principal Market has been greater
      than $2.00 for prior three trading days, the security interest created
      hereunder
      solely
      with respect to fifty percent (50%)
      of the
      Pledged Shares pledged hereunder by each Pledgor shall terminate. Promptly
      upon
      the satisfaction of such conditions, the parties hereto shall notify the Escrow
      Agent to such effect in writing. Promptly upon receipt of such written notice,
      the Escrow Agent shall return to each Pledgor the Pledged Materials with respect
      to one half of each Pledgors’ Pledged Shares, and all rights of Collateral Agent
      in such Pledged Shares returned shall be terminated.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    5.  Event
      of Default.
      An
“Event
      of Default”
shall
      be deemed to have occurred under this Agreement upon an Event of Default under
      the Convertible Debentures.

     

    6.  Remedies.
      

     

    a.  Upon
      and
      anytime after the occurrence of an Event of Default, the Collateral Agent shall
      have the right acquire the Pledged Shares in accordance with the following
      procedure: (a) the Collateral Agent shall provide written notice of such Event
      of Default (the “Default
      Notice”)
      to the
      Escrow Agent, with a copy to the Pledgors; (b) in a Default Notice the
      Collateral Agent shall specify the number of Pledged Shares to be issued to
      the
      Collateral Agent, provided
      however,
      that
      neither the Collateral Agent, nor any Buyer shall not have the right to acquire
      such number of Pledged Shares which would cause the Collateral Agent or such
      Buyer, together with its affiliates, to beneficially own in excess of 4.99%
      of
      the outstanding capital of the Company (unless the Collateral Agent or such
      Buyer waives such limitation by providing 65 days’ advance written notice); and
      (c) as soon as practicable after receipt of a Default Notice, the Escrow Agent
      shall deliver the specified number of Pledged Shares along with the applicable
      Transfer Documents to the Company’s Transfer Agent with instructions to issue
      such Pledged Shares to the Collateral Agent in accordance with the Irrevocable
      Transfer Agent Instructions of even date herewith. 

     

    b.  Upon
      receipt of the Pledged Shares issued to a the Collateral Agent, the Collateral
      Agent shall have the right to (i) sell the Pledged Shares and to apply the
      proceeds of such sales, net of any selling commissions, to the Obligations
      owed
      to the Buyers by the Company under the Transaction Documents, including, without
      limitation, outstanding principal, interest, legal fees, and any other amounts
      owed to the Buyers, and exercise all other rights and (ii) any and all remedies
      of a secured party with respect to such property as may be available under
      the
      Uniform Commercial Code as in effect in the State of New Jersey. The Collateral
      Agent shall have the absolute right to sell or dispose of the Pledged Shares
      in
      any manner it sees fit and shall have no liability to any Pledgor or any other
      party for selling or disposing of such Pledged Shares even if other methods
      of
      sales or dispositions would or allegedly would result in greater proceeds than
      the method actually used. Each Pledgor shall remain liable for shortfalls,
      if
      any, that may exist after the Collateral Agent has exhausted all remedies
      hereunder. The Collateral Agent shall return any Pledged Shares issued to it
      and
      instruct the Escrow Agent to return any Pledged Shares it is holding in escrow
      after the full satisfaction of the Obligations. 

     

    c.  Each
      right, power and remedy of the Collateral Agent provided for in this Agreement
      or any other Transaction Document shall be cumulative and concurrent and shall
      be in addition to every other such right, power or remedy. The
      exercise or beginning of the exercise by the
      Collateral Agent
      of any
      one or more of the rights, powers or remedies provided for in this Agreement
      or
any
      other
      Transaction Document or
      now or
      hereafter existing at law or in equity or by statute or otherwise shall not
      preclude the simultaneous or later exercise by the
      Collateral Agent
      or any
      Buyer of all such other rights, powers or remedies, and no failure or delay
      on
      the part of the
      Collateral Agent
      or any
      Buyer to exercise any such right, power or remedy shall operate as a waiver
      thereof. No notice to or demand on any Pledgor in any case shall entitle any
      Pledgor to any other or further notice or demand in similar or other
      circumstances or constitute a waiver of any of the rights of the
      Collateral Agent
      to any
      other further action in any circumstances without demand or notice. The
      Collateral Agent
      shall
      have the full power to enforce or to assign or contract is rights under this
      Agreement to a third party. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    7.  Representations,
      Warranties and Covenants.
      

     

    a.  Each
      Pledgor represents, warrants and covenants that:

     

    (i)  Pledgor
      is, and at the time when pledged hereunder will be, the legal, beneficial and
      record owner of, and has (and will have)
      good and
      valid title to, all Pledged Shares pledged by it hereunder, subject to no
      pledge, lien, mortgage, hypothecation, security interest, charge, option or
      other encumbrance whatsoever;

     

    (ii)  Pledgor
      has full power, authority and legal right to pledge all the Pledged Shares
      pledged pursuant to this Agreement; and

     

    (iii)  all
      the
      Pledged Shares have been duly and validly issued, are fully paid and
      non-assessable and are subject to no options to purchase or similar
      rights.

     

    b.  Each
      Pledgor covenants and agrees to take all reasonable steps to defend the
      Collateral Agent’s right, title and security interest in and to the Pledged
      Shares and the proceeds thereof against the claims and demands of all persons
      whomsoever (other than the Collateral Agent and the Escrow Agent); and each
      Pledgor covenants and agrees that it will have like title to
      and
      right to pledge any other property at any time hereafter pledged to the
      Collateral Agent
      as
      collateral hereunder and will likewise take all reasonable steps to defend
      the
      right thereto and security interest therein of the
      Collateral Agent.

     

    c.  Each
      Pledgor covenants and agrees to take no action which would violate or be
      inconsistent with any of the terms of any Transaction Document, or which would
      have the effect of impairing the position or interests of the Collateral Agent
      under any Transaction Document.

     

    d.  Each
      Pledgor represents, warrants and covenants that unless otherwise indicated
      on
      Schedule II attached hereto, Pledgor has been the beneficial owner of the
      Pledged Shares for a period of not less than two (2) years as computed in
      accordance with Rule 144(d) promulgated under the Securities Act of 1933, as
      amended. Upon an Event of Default, the Collateral Agent shall be deemed to
      have
      acquired the Pledged Shares on the date they were acquired by the Pledgor.
      Unless otherwise indicated on the Schedule II attached hereto, each Pledgor
      is
      an “affiliate” of the Company, as such term is defined in Rule 144(a)
      promulgated under the Securities Act of 1933, as amended.

     

    8.  Concerning
      the Escrow Agent.

     

    a.  The
      Escrow Agent undertakes to perform only such duties as are expressly set forth
      herein and no implied duties or obligations shall be read into this Agreement
      against the Escrow Agent.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    b.  The
      Escrow Agent may act in reliance upon any writing or instrument or signature
      which it, in good faith, believes to be genuine, may assume the validity and
      accuracy of any statement or assertion contained in such a writing or
      instrument, and may assume that any person purporting to give any writing,
      notice, advice or instructions in connection with the provisions hereof has
      been
      duly authorized to do so. The Escrow Agent shall not be liable in any manner
      for
      the sufficiency or correctness as to form, manner, and execution, or validity
      of
      any instrument deposited in this escrow, nor as to the identity, authority,
      or
      right of any person executing the same; and its duties hereunder shall be
      limited to the safekeeping of such certificates, monies, instruments, or other
      document received by it as such escrow holder, and for the disposition of the
      same in accordance with the written instruments accepted by it in the
      escrow.

     

    c.  The
      Collateral Agent and the Pledgors hereby agree, to defend and indemnify the
      Escrow Agent and hold it harmless from any and all claims, liabilities, losses,
      actions, suits, or proceedings at law or in equity, or any other expenses,
      fees,
      or charges of any character or nature which it may incur or with which it may
      be
      threatened by reason of its acting as Escrow Agent under this Agreement; and
      in
      connection therewith, to indemnify the Escrow Agent against any and all
      expenses, including attorneys’ fees and costs of defending any action, suit, or
      proceeding or resisting any claim (and any costs incurred by the Escrow Agent
      pursuant to Sections 6.4 or 6.5 hereof). The Escrow Agent shall be vested with
      a
      lien on all property deposited hereunder, for indemnification of attorneys’ fees
      and court costs regarding any suit, proceeding or otherwise, or any other
      expenses, fees, or charges of any character or nature, which may be incurred
      by
      the Escrow Agent by reason of disputes arising between the makers of this escrow
      as to the correct interpretation of this Agreement and instructions given to
      the
      Escrow Agent hereunder, or otherwise, with the right of the Escrow Agent,
      regardless of the instructions aforesaid, to hold said property until and unless
      said additional expenses, fees, and charges shall be fully paid. Any fees and
      costs charged by the Escrow Agent for serving hereunder shall be paid by the
      Pledgors.

     

    d.  If
      any of
      the parties shall be in disagreement about the interpretation of this Agreement,
      or about the rights and obligations, or the propriety of any action contemplated
      by the Escrow Agent hereunder, the Escrow Agent may, at its sole discretion
      deposit the Pledged Materials with the Clerk of the United States District
      Court
      of New Jersey, sitting in Newark, New Jersey, and, upon notifying all parties
      concerned of such action, all liability on the part of the Escrow Agent shall
      fully cease and terminate. The Escrow Agent shall be indemnified by the
      Pledgors, the Company and the Collateral Agent for all costs, including
      reasonable attorneys’ fees in connection with the aforesaid proceeding, and
      shall be fully protected in suspending all or a part of its activities under
      this Agreement until a final decision or other settlement in the proceeding
      is
      received.

     

    e.  The
      Escrow Agent may consult with counsel of its own choice (and the costs of such
      counsel shall be paid by the Company and Collateral Agent) and shall have full
      and complete authorization and protection for any action taken or suffered
      by it
      hereunder in good faith and in accordance with the opinion of such counsel.
      The
      Escrow Agent shall not be liable for any mistakes of fact or error of judgment,
      or for any actions or omissions of any kind, unless caused by its willful
      misconduct or gross negligence.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    f.  The
      Escrow Agent may resign upon ten (10) days’ written notice to the parties in
      this Agreement. If a successor Escrow Agent is not appointed within this ten
      (10) day period, the Escrow Agent may petition a court of competent jurisdiction
      to name a successor.

     

    9.  Conflict
      Waiver.
      The
      Pledgors hereby acknowledges that the Escrow Agent is general counsel to the
      Collateral Agent, a partner in the general partner of the Collateral Agent,
      and
      counsel to the Collateral Agent in connection with the transactions contemplated
      and referred herein. The Pledgors agrees that in the event of any dispute
      arising in connection with this Agreement or otherwise in connection with any
      transaction or agreement contemplated and referred herein, the Escrow Agent
      shall be permitted to continue to represent the Collateral Agent and the
      Pledgors will not seek to disqualify such counsel and waives any objection
      Pledgors might have with respect to the Escrow Agent acting as the Escrow Agent
      pursuant to this Agreement. 

     

    10.  Notices.
      Unless
      otherwise provided herein, all demands, notices, consents, service of process,
      requests and other communications hereunder shall be in writing and shall be
      delivered in person or by overnight courier service, or mailed by certified
      mail, return receipt requested, addressed:

     

    
      	
              If
                to the Company, to:

            	
              Cobalis
                Corporation

            
	
               

            	
              2445
                McCabe Way, Suite 150

            
	
               

            	
              Irvine,
                CA 92614

            
	
               

            	
              Attention:
                Dr. Gerald J. Yaktan

            
	
               

            	
              Telephone: 

            
	
               

            	
              Facsimile: 

            
	
               

            	
               

            
	
              With
                a copy to:

            	
              Wilson
                Sonsini Goodrich & Rosati

            
	
               

            	
              12235
                El Camino Real, Suite 200

            
	
               

            	
              San
                Diego, CA 92130

            
	
               

            	
              Martin
                J. Waters, Esq.

            
	
               

            	
              Telephone:
                 858-350-2300

            
	
               

            	
              Facsimile:    
                858-350-2399

            
	
               

            	
               

            
	
              If
                to the
                Collateral Agent:

            	
              Cornell
                Capital Partners LP

            
	
               

            	
              101
                Hudson Street, Suite 3700

            
	
               

            	
              Jersey
                City, NJ 07302

            
	
               

            	
              Attention:
                 Mark
                A. Angelo

            
	
               

            	
              Telephone: (201)
                985-8300

            
	
               

            	
              Facsimile:   
                (201)
                985-8744

            
	
               

            	
               

            
	
              With
                copy to:

            	
              Cornell
                Capital Partners, LP

            
	
               

            	
              101
                Hudson Street, Suite 3700

            
	
               

            	
              Jersey
                City, NJ 07302

            
	
               

            	
              Attention:
                 David
                Gonzalez, Esq.

            
	
               

            	
              Telephone: (201)
                985-8300

            
	
               

            	
              Facsimile:   
                (201)
                985-1964

            
	
               

            	
               

            
	
              If
                to the Pledgors, to:

            	
              To
                the addresses provided on the signature pages attached
                hereto

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Any
      such
      notice shall be effective (a) when delivered, if delivered by hand delivery
      or overnight courier service, or (b) five (5) days after deposit in the
      United States mail, as applicable.

     

    11.  Binding
      Effect.
      All of
      the covenants and obligations contained herein shall be binding upon and shall
      inure to the benefit of the respective parties, their successors and
      assigns.

     

    12.  Governing
      Law; Venue; Service of Process.
      The
      validity, interpretation and performance of this Agreement shall be determined
      in accordance with the laws of the State of New Jersey applicable to contracts
      made and to be performed wholly within that state except to the extent that
      Federal law applies. The parties hereto agree that any disputes, claims,
      disagreements, lawsuits, actions or controversies of any type or nature
      whatsoever that, directly or indirectly, arise from or relate to this Agreement,
      including, without limitation, claims relating to the inducement, construction,
      performance or termination of this Agreement, shall be brought in the state
      superior courts located in Hudson County, New Jersey or Federal district courts
      located in Newark, New Jersey, and the parties hereto agree not to challenge
      the
      selection of that venue in any such proceeding for any reason, including,
      without limitation, on the grounds that such venue is an inconvenient forum.
      The
      parties hereto specifically agree that service of process may be made, and
      such
      service of process shall be effective if made, pursuant to Section 8
      hereto.

     

    13.  Enforcement
      Costs.
      If any
      legal action or other pro-ceeding is brought for the enforcement of this
      Agreement, or because of an alleged dispute, breach, default or
      misrepresenta-tion in connection with any provisions of this Agreement, the
      successful or prevailing party or parties shall be entitled to recover
      reasonable attorneys’ fees, court costs and all expenses even if not taxable as
      court costs (including, without limita-tion, all such fees, costs and expenses
      incident to appeals), incurred in that action or proceeding, in addition to
      any
      other relief to which such party or parties may be entitled.

     

    14.  Remedies
      Cumulative.
      No
      remedy herein conferred upon any party is intended to be exclusive of any other
      remedy, and each and every such remedy shall be cumulative and shall be in
      addition to every other remedy given hereunder or now or here-after existing
      at
      law, in equity, by statute, or otherwise. No single or partial exercise by
      any
      party of any right, power or remedy hereunder shall preclude any other or
      further exercise thereof. 

     

    15.  Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed an original, but all of which together shall constitute the same
      instrument.

     

    16.  No
      Penalties.
      No
      provision of this Agreement is to be interpreted as a penalty upon any party
      to
      this Agreement.

     

    17.  JURY
      TRIAL.
      EACH OF
      THE COLLATERAL AGENT AND THE PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND
      INTENTIONALLY WAIVES THE RIGHT WHICH IT MAY HAVE TO A TRIAL BY JURY OF ANY
      CLAIM, DEMAND, ACTION OR CAUSE OF ACTION BASED HEREON, OR ARISING OUT OF, UNDER
      OR IN ANY WAY CONNECTED WITH THE DEALINGS BETWEEN THE COLLATERAL AGENT AND
      PLEDGOR, THIS PLEDGE AND ESCROW AGREEMENT OR ANY DOCUMENT EXECUTED IN CONNECTION
      HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
      ORAL
      OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR THERETO IN EACH CASE WHETHER
      NOW
      EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR
      OTHERWISE. 

     

    
      [REMAINDER
        OF PAGE INTENTIONALLY LEFT BLANK]

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    


    


    IN
      WITNESS WHEREOF,
      each
      Pledgor has caused this Pledge and Escrow Agreement to be executed by its
      respective duly authorized officer, as of the date first above
      written.

     

    
      	 	 	 	 
	 	 	 	Pledgor
              #1
	 	 	 	 
	 	 	 	 
	 	 	
               
                

            	By:
              /s/ Radul
              Radovich
	
            	 	 	
              
Name:
              Radul Radovich
	 	 	 	Title:
	 	 	 	 
	 	 	 	
              Address: 46 Calle Fresno

            
	 	 	 	
                               
                San Clemente, CA 92672

            




    


    FOR
      VALUE RECEIVED,
      the
      Pledgor hereby unconditionally and absolutely guarantees the Company’s
      Obligations (as defined above). This Agreement is made with
      recourse.

    


    


    By:
      _______________________________

    Name:
      

    


     


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF,
      each
      Pledgor has caused this Pledge and Escrow Agreement to be executed by its
      respective duly authorized officer, as of the date first above
      written.

     

    
      
        	 	 	 	 
	 	 	 	Pledgor
                #2
	 	 	 	 
	 	 	 	 
	 	 	
                 
                  

              	By:
                /s/ Radul
                Radovich
	
              	 	 	
                
Name:
                Silver Mountain Promotions, Inc.
	 	 	 	Title:
                President
	 	 	 	 
	 	 	 	
                Address: 46 Calle Fresno

              
	 	 	 	
                                 
                  San Clemente, CA 92672

              


      

    

     

     

    FOR
      VALUE RECEIVED,
      the
      Pledgor hereby unconditionally and absolutely guarantees the Company’s
      Obligations (as defined above). This Agreement is made with
      recourse.

    


    


    By:
      _______________________________

    Name:
      

     


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    IN
      WITNESS WHEREOF,
      each
      Pledgor has caused this Pledge and Escrow Agreement to be executed by its
      respective duly authorized officer, as of the date first above
      written.

     

    
       

      
        
          	 	 	 	 
	 	 	 	Pledgor
                  #3
	 	 	 	 
	 	 	 	 
	 	 	
                   
                    

                	By:
                  /s/ Radul
                  Radovich
	
                	 	 	
                  
Name:
                  St. Petka Trust
	 	 	 	Title:
                  Trustee
	 	 	 	 
	 	 	 	
                  Address: 46 Calle Fresno

                
	 	 	 	
                                   
                    San Clemente, CA 92672

                


        

      

      
 

    

    FOR
      VALUE RECEIVED,
      the
      Pledgor hereby unconditionally and absolutely guarantees the Company’s
      Obligations (as defined above). This Agreement is made with
      recourse.

    


    


    By:
      _______________________________

    Name:
      

     

    

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      



    IN
      WITNESS WHEREOF,
      each
      Pledgor has caused this Pledge and Escrow Agreement to be executed by its
      respective duly authorized officer, as of the date first above
      written.

     

    
       

      
        
          	 	 	 	 
	 	 	 	Pledgor
                  #4
	 	 	 	 
	 	 	 	 
	 	 	
                   
                    

                	By:
                  /s/ Radul
                  Radovich
	
                	 	 	
                  
Name:
                  R and R Holdings
	 	 	 	Title:
                  President
	 	 	 	 
	 	 	 	
                  Address: 46 Calle Fresno

                
	 	 	 	
                                   
                    San Clemente, CA 92672

                


        

      

      
 

    

    FOR
      VALUE RECEIVED,
      the
      Pledgor hereby unconditionally and absolutely guarantees the Company’s
      Obligations (as defined above). This Agreement is made with
      recourse.

    


    


    By:
      _______________________________

    Name:
      

     


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    


    IN
      WITNESS WHEREOF,
      the
      undersigned acknowledge and agree to the terms and conditions of this Pledge
      and
      Escrow Agreement as of the date first above written. 

     

    
      
        
          	 	 	 
	 	
                  CORNELL
                    CAPITAL PARTNERS, LP

                
	 	 
	 	By:
                  Yorkville Advisors, LLC
	 	Its:
                  General Partner
	 
 	 
 	 
 
	 	By:  	/s/ Mark
                  Angelo
	 	
                  
Name:
                  Mark Angelo
	 	Title:
                  Portfolio Manager


        

         

        
          
            
              
                	 	 	 
	 	
                        COBALIS
                          CORPORATION

                      
	 	 
	 
 	 
 	 
 
	 	By:  	/s/ Gerald
                        Yakatan
	 	
                        
Name:
                        Gerald
                        Yakatan
	 	Title:
                        Chief
                        Executive Office


              

              
                 

                
                  
                    
                      
                        	 	 	 
	 	
                                ESCROW
                                  AGENT

                              
	 	 
	 
 	 
 	 
 
	 	By:  	/s/ David
                                Gonzalez
	 	
                                
Name:
                                David Gonzalez, Esq.


                      

                      


                        
                          
                            
                            

                          

                          
                            12

                            
                              

                            

                          

                          
                            
                            

                          

                        



                    

                  

                

              

            

          

        

      

    

    SCHEDULE
      I

    


    PLEDGED
      SHARES

    


    


    
      	
              PLEDGOR

            	
              Number
                of Shares

            	
              Certificate
                No.

            
	
              Radul
                Radovich

            	
              833,938

            	
              9363

            
	
              Radul
                Radovich

            	
              394,147

            	
              9368

            
	
              Silver
                Mountain Promotions, Inc.

            	
              803,855

            	
              9366

            
	
              St.
                Petka Trust

            	
              1,382,180

            	
              9364

            
	
              St.
                Petka Trust

            	
              4,510,838

            	
              9216

            
	
              R
                and R Holdings

            	
              411,042

            	
              9365

            
	
              TOTAL

            	
              8,400,000

            	
               

            


    

     


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    SCHEDULE
      II

    


    DISCLOSURE
      SCHEDULE

    


    Of
      the
      8,400,000 Pledged Shares, the following Pledged Shares have been held by the
      Pledgor for less
      than
      two (2) years as computed in accordance with Rule 144(d) promulgated under
      the
      Securities Act of 1933, as amended.
      

    


    
      	
              PLEDGOR

            	
              Number
                of Shares

            	
              Certificate
                No.

            
	
              Radul
                Radovich

            	
              1,228,085

            	
              9363,
                9368

            
	
              Silver
                Mountain Promotions, Inc.

            	
              803,855

            	
              9366

            
	
              St.
                Petka Trust

            	
              1,382,180

            	
              9364

            
	
              R
                and R Holdings

            	
              411,042

            	
              9365

            
	
              TOTAL

            	
              3,825,162

            	
               

            


    

    


    


    14