EXHIBIT 10.2

                           PLEDGE AND ESCROW AGREEMENT

THIS PLEDGE AND ESCROW  AGREEMENT (the  "Agreement") is made and entered into as
of July 15, 2005 (the "Effective  Date") by and among CORNELL CAPITAL  PARTNERS,
LP, a Delaware  limited  partnership and HIGHGATE HOUSE FUNDS,  LTD., a Delaware
limited  partnership  (the  "Pledgees"),   FALCON  NATURAL  GAS  CORPORATION,  a
corporation  organized  and existing  under the laws of the State of Nevada (the
"Pledgor"),  and  KIRKPATRICK & LOCKHART  NICHOLSON  GRAHAM LLP, as escrow agent
("Escrow Agent").

                                    RECITALS:

WHEREAS, in order to secure the Company's obligations under the Promissory Note,
and this  Agreement all of even date herewith  (collectively  referred to as the
"Transaction  Documents"),  the  Pledgor  has  agreed to pledge to the  Pledgees
twenty-four million  (24,000,000) shares (the "Pledged Shares") of the Pledgor's
common stock.

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.    Pledge and Transfer of Pledged Shares.

      The Pledgor  hereby grants to Pledgees a security  interest in all Pledged
Shares  as  security  for  Pledgor's  obligations  under  the  Promissory  Note.
Simultaneously  with the  execution of the  Transaction  Documents,  the Pledgor
shall deliver to the Escrow Agent stock  certificates  representing  the Pledged
Shares,  together with duly executed stock powers or other appropriate  transfer
documents executed in blank by the Pledgor (the "Transfer Documents"),  and such
stock  certificates  and  Transfer  Documents  shall be held by the Escrow Agent
until the full payment of all amounts due to the Pledgees  under the  Promissory
Note and through  repayment in accordance with the terms of the Promissory Note,
or the termination or expiration of this Agreement.

2.    Rights  Relating to Pledged  Shares.  Upon the  occurrence  of an Event of
Default (as defined herein),  the Pledgees shall be entitled to vote the Pledged
Shares, to receive dividends and other distributions  thereon,  and to enjoy all
other rights and privileges incident to the ownership of the Pledged Shares.

3.    Release of Pledged Shares from Pledge. Upon the payment of all amounts due
to the Pledgees  under the Promissory  Note by repayment in accordance  with the
terms of the Note,  the parties  hereto  shall  notify the Escrow  Agent to such
effect in  writing.  Upon  receipt of such  written  notice  for  payment of the
amounts due to the Pledgees  under the  Promissory  Note, the Escrow Agent shall
return to the Pledgor the Transfer  Documents and the certificates  representing
the Pledged Shares,  (collectively the "Pledged  Materials"),  whereupon any and
all  rights  of  Pledgees  in  the  Pledged   Materials   shall  be  terminated.
Notwithstanding  anything to the contrary contained herein, upon full payment of
all amounts due to the  Pledgees  under the  Promissory  Note,  by  repayment in
accordance  with the terms of the Note,  this Agreement and Pledgees's  security
interest and rights in and to the Pledged Shares shall terminate.

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4.    Event of Default.  An "Event of Default"  shall be deemed to have occurred
under this Agreement upon an Event of Default under the Transaction Documents.

5.    Remedies.  Upon the  occurrence  of an Event of  Default,  Pledgees  shall
provide  written  notice of such  Default (the  "Default  Notice") to the Escrow
Agent,  with a copy to the Pledgor.  As soon as practicable after receipt of the
Default Notice, the Escrow Agent shall deliver to Pledgees the Pledged Materials
held by the Escrow Agent hereunder,  whereupon  Pledgees may exercise all rights
and  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.

6.    Concerning the Escrow Agent.

      6.1   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.

      6.2   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.

      6.3   Pledgees and the Pledgor  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
Pledgor.

      6.4   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  Pledgor,  the Company and  Pledgees 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.


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      6.5   The Escrow Agent may consult with counsel of its own choice (and the
costs of such counsel  shall be paid by the Pledgor and Pledgees) 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.

      6.6   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.

      6.7   Conflict  Waiver.  The Pledgor hereby  acknowledges  that the Escrow
Agent is general  counsel to the Pledgees,  a partner in the general  partner of
the Pledgees,  and counsel to the Pledgees in connection  with the  transactions
contemplated  and referred  herein.  The Pledgor 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 Pledgees and the Pledgor
will not seek to disqualify such counsel and waives any objection  Pledgor might
have with respect to the Escrow  Agent  acting as the Escrow  Agent  pursuant to
this Agreement.

      6.8   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 Pledgor, to:        Falcon Natural Gas Corporation
                              Westchase Center
                              2500 Citywest Boulevard, Suite 300
                              Houston, TX  77019
                              Attention:  Massimiliano Pozzoni
                                          Vice President
                              Telephone:  (832) 476-8699
                              Facsimile:  (713) 456-2581

With a copy to:               Kirkpatrick & Lockhart Nicholson Graham LLP
                              201 South Biscayne Boulevard - Suite 2000
                              Miami, FL  33131-2399
                              Attention:  Clayton E. Parker, Esq.
                              Telephone:  (305) 539-3300
                              Facsimile:  (305) 358-7095

If to the Pledgees:           Cornell Capital Partners, L.P.
                              101 Hudson Street, Suite 3700
                              Jersey City, NJ 07302
                              Attention:  Mark A. Angelo
                              Telephone:  (201) 985-8300
                              Facsimile:  (201) 985-8744

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                              Highgate House Funds, Ltd.
                              488 Madison Avenue, 12th Floor
                              New York, NY  10022
                              Attention:  Adam Gottbetter
                              Telephone:  (212) 400-6900
                              Facsimile:  (212) 400-6901

With copy to:                 David Gonzalez, Esq.
                              101 Hudson Street, Suite 3700
                              Jersey City, NJ 07302
                              Telephone:  (201) 985-8300
                              Facsimile:  (201) 985-8744

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.

      7.    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.

      8.    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.

      9.    Enforcement  Costs.  If any  legal  action  or other  proceeding  is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach,  default or  misrepresentation 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 limitation, 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.

      10.   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  hereafter  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.

      11.   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.

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

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      13.   JURY TRIAL.  EACH OF THE PLEDGEES 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  PLEDGEES 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.


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IN WITNESS WHEREOF, the parties hereto have duly executed this Pledge and Escrow
Agreement as of the date first above written. CORNELL CAPITAL PARTNERS, LP


                                     By:  /s/ Mark Angelo
                                          --------------------------------------
                                     Name:    Mark Angelo
                                     Title:   Portfolio Manager



                                     HIGHGATE HOUSE FUNDS, LTD.


                                     By:  /s/ Adam Gottbetter
                                          --------------------------------------
                                     Name:    Adam Gottbetter
                                     Title:   Portfolio Manager



                                     FALCON NATURAL GAS CORPORATION


                                     By:  /s/ Massimiliano Pozzoni
                                          --------------------------------------
                                     Name:    Massimiliano Pozzoni
                                     Title:   Vice President


                                     ESCROW AGENT
                                     KIRKPATRICK & LOCKHART NICHOLSON GRAHAM LLP


                                     By:  /s/ Clayton E. Parker
                                          --------------------------------------
                                     Name:    Clayton E. Parker
                                     Title:   Partner


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