SC 13D/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No. 2)

United Energy Corp.

(Name of Issuer)

Common Stock, par value $0.01 per share

(Title of Class of Securities)

910900208

(CUSIP Number)

John Shin, Esq.

Silverman Sclar Shin & Byrne PLLC

381 Park Avenue South

New York, NY 10016

(212) 779-8600

(Name, Address and Telephone Number of Person Authorized

 to Receive Notices and Communications)

October 31, 2009

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box o.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 910900208

SCHEDULE 13D

1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON JACK SILVER
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) ¨ (b) ý
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)				o
6	CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 4,995,350 (1)
		8	SHARED VOTING POWER
		9	SOLE DISPOSITIVE POWER 4,995,350 (1)
		10	SHARED DISPOSITIVE POWER
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 4,995,350 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.7%
14	TYPE OF REPORTING PERSON IN

CUSIP No. 91090020

1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON SHERLEIGH ASSOCIATES INC. PROFIT SHARING PLAN
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) ¨ (b) ý
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)				o
6	CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 2,313,333 (1)
		8	SHARED VOTING POWER
		9	SOLE DISPOSITIVE POWER 2,313,333 (1)
		10	SHARED DISPOSITIVE POWER
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,313,333 (1)
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.4%
14	TYPE OF REPORTING PERSON OO

CUSIP No. 91090020

1	NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON HILLTOP HOLDING COMPANY, L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP			(a) ¨ (b) ý
3	SEC USE ONLY
4	SOURCE OF FUNDS WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)				o
6	CITIZENSHIP OR PLACE OF ORGANIZATION UNITED STATES
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH		7	SOLE VOTING POWER 2,682,017
		8	SHARED VOTING POWER
		9	SOLE DISPOSITIVE POWER 2,682,017
		10	SHARED DISPOSITIVE POWER
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,682,017
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES				□
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.9%
14	TYPE OF REPORTING PERSON OO

CUSIP No. 91090020

_______________________

(1)           Excludes shares of Convertible Preferred Stock convertible into Common Stock and shares of Common Stock issuable upon exercise of Warrants, to the extent following such exercise or conversion the holder or its affiliates would beneficially own more than 9.9% of the total number of issued and outstanding Common Stock of the Issuer.

CUSIP No. 91090020

Item 1. Security and Issuer.

The title of the class of equity securities to which this statement relates is Common Stock, par value $0.01each (“Common Stock”) of United Energy Corp., a Nevada corporation (the “Issuer”).  The principal executive office of the Issuer is located at 600 Meadowlands Parkway #20, Secaucus, New Jersey 07094.

Item 2. Identity and Background.

(a) This Statement is being filed by Jack Silver, Sherleigh Associates Inc. Profit Sharing Plan (“Sherleigh”), and Hilltop Holding Company, L.P. (“Hilltop”), and together with Mr. Silver and Sherleigh, the “Reporting Persons”).   Sherleigh is a trust of which Mr. Silver is the trustee and Hilltop is a limited partnership of which Mr. Silver is a general partner.

(b) The address of the Reporting Persons is 80 Columbus Circle, PH76A, New York, New York 10023.

(c) Mr. Silver is the principal investor and manager of SIAR Capital, LLC, an independent investment fund whose address is 80 Columbus Circle, PH76A, New York, New York 10023.

(d) and (e) The Reporting Persons have not, during the last five years, been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors), or (b) parties to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which he or it is or was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.

Pursuant to a Securities Purchase Agreement, dated as of March 18, 2005 (the “Purchase Agreement”), among the Issuer, Sherleigh and Joseph J. Grano, Jr., in March 2005, Sherleigh purchased from the Issuer 533,333 shares of Common Stock and Series A Warrants to acquire 266,667 shares of Common Stock for a purchase price of $426,664.  Thereafter, during the period of August 2005 through January 2006, Sherleigh acquired, pursuant to the Purchase Agreement, 800,000 additional shares of Common Stock and additional Series A Warrants to acquire 400,000 shares of Common Stock for an aggregate purchase price of $639,667.  Then in March 2006, pursuant to the Purchase Agreement, as amended, Sherleigh acquired 3 shares of the Issuer’s Series A Convertible Preferred Stock (the “Preferred Stock”), Series B Warrants to acquire 12,000 shares of Common Stock and Series C Warrants to acquire 5,004,000 shares of Common Stock for a purchase price of $24,000.  The source of funds used for each of the above described purchases by Sherleigh was the working capital of Sherleigh.  None of the funds used in connection with such purchases were borrowed by Sherleigh.

CUSIP No. 91090020

In March 2009, Sherleigh provided the Issuer with a short term loan in the amount of $50,000 and received warrants to purchase up to 200,000 shares of Common Stock at an exercise price of $0.125 per share which warrants are exercisable for a period of five (5) years. Subsequently, in May 2009, the loan by Sherleigh was repaid and Hilltop loaned the Issuer $101,017.  Thereafter, in June 2009, the Issuer issued to Hilltop Secured Convertible Promissory Note (the “June Note”) for his May 2009 loans to the Issuer.  The June Note bears interest at 12% per annum, was due August 13, 2009 and is secured by substantially all the assets of the Issuer.  In consideration for agreeing to make the May 2009 loan, Hilltop received warrants to purchase up to 400,000 shares of Common Stock at an exercise price of $0.12 per share, which warrants are exercisable for a period of five (5) years.  In July 2009, Hilltop agreed to extend the maturity date of the June Note to August 13, 2009 and in consideration for such extension received warrants to purchase up to 204,054 shares of Common Stock at an exercise price of $0.12 per share, which warrants are exercisable for a period of five (5) years.

Pursuant to an agreement, dated as of October 31, 2009 (the “Agreement”), among the Issuer, Ronald Wilen, Martin Rappaport and Hilltop, the Company issued to Hilltop Secured Convertible Promissory Note (the “October Note”) in the principal amount of $50,000 and Warrants to purchase in the aggregate of 1,200,000 shares of the Company’s Common Stock in consideration for a loan made by Hilltop in the amount of $50,000 and for Hilltop agreeing to extend the maturity date of the June Note to January 29, 2010.  The June Note was also amended to reduce the conversion price from $0.12 per share to $0.09 per share.  The October Note earns interest at 12% per annum and has a maturity date of January 29, 2010.  The October Note is convertible into shares of Common Stock of the Issuer at the conversion price of $0.09 per share.  The October Note is secured by a security interest in substantially all the assets of the Company, including its patents.  The Warrants that were issued in October 2009 are exercisable at $0.09 per share and may be exercised at any time prior to October 31, 2014.

Item 4. Purpose of Transaction.

There is no change to the information set forth in Item 4 of the Original Schedule 13D.

Item 5. Interest in Securities of the Issuer.

(a)  Mr. Silver beneficially own 4,995,350  shares of Common Stock, representing 14.7% of the outstanding shares of Common Stock (based upon 31,328,587 shares of Common Stock outstanding as of August 14, 2009, as reported in the Issuer’s quarterly report on Form 10-Q for the quarter ended June 30, 2009).  Such shares of Common Stock beneficially owned by the Mr. Silver include: (i) 2,313,333 shares of Common Stock held by Sherleigh; (ii) 1,004,054 shares of Common Stock issuable upon exercise of warrants held by Hilltop; (iii) 1,677,963 shares of Common Stock issuable upon conversion of Convertible Notes held by Hilltop, but excludes shares of Common Stock underlying warrants to purchase 6,032,667 shares of Common Stock and Preferred Stock convertible into 200,000 shares of Common Stock to the extent following the exercise or conversion thereof, Mr. Silver would be deemed to beneficially own more than 9.9% of the total number of issued and outstanding Common Stock of the Issuer.  Pursuant to the terms of such warrants and the Preferred Stock, such warrants and the Preferred Stock cannot be exercised or converted to the extent following such exercise or conversion the holder or its affiliates would beneficially own more than 9.9% of the total number of issued and outstanding Common Stock of the Issuer.

(b)  The Reporting Persons have the sole power to vote or to direct the vote and to dispose or direct the disposition of all of the securities reported herein.

CUSIP No. 91090020

(c)  With the exception of the issuance of warrants to acquire 204,054 shares to Hilltop on July 13, 2009, the issuance of warrants to acquire 400,000 shares to Hilltop on October 31, 2009, and the issuance of the October Note convertible into 555,556 shares to Hilltop on October 31, 2009, no transactions in the Common Stock were effected by the Reporting Persons in the last 60 days.

(d) and (e) Not applicable.

Item 6.                   Contracts, Arrangements, Understandings or Relationships With Respect to Securities of Issuer.

On October 31, 2009, the Reporting Persons entered into an Agreement (the “October Agreement”) with the Issuer and other directors whereby the Issuer agreed to issue and sell to Hilltop warrants to acquire 400,000 shares of Common Stock of the Issuer and the October Note convertible into 555,556 shares of Common Stock of the Issuer in consideration for a loan made by Hilltop in the amount of $50,000 and for Hilltop agreeing to extend the maturity date of the June Note.

Security Agreement

The Security Agreement, as amended on October 31, 2009, was entered into on May 13, 2009, by and among Ronald Wilen, Hilltop and Martin Rappaport (the “Creditors”) and the Issuer.  Pursuant to the Security Agreement, the Issuer granted the Creditors a security interest in substantially all of its assets in order to secure payment and performance of all of the obligations under the Convertible Notes issued to the Creditors.

Anti-Dilution Waiver Agreement

The issuance of the October Note and the Warrants in October 2009 and the reduction of the conversion price of the Convertible Notes that were issued in June 2009 (including the June Note) triggered the anti-dilution provisions of the Issuer’s outstanding Series A Warrants, Series B Warrants, Series C Warrants and Series A Convertible Preferred Stock.  As a result, on October 31, 2009, the Issuer, Sherleigh, Joseph Grano and Connie Kristen entered into an Anti-Dilution Waiver Agreement whereby the exercise price of the Series A Warrants, the Series B Warrants and the Series C Warrants were reduced from $0.12 to $0.09 per share; however, Sherleigh, Mr. Grano and Ms. Kristen agreed to waive any increase in the number of shares underlying the Series A Warrants, Series B Warrants and Series C Warrants as a result of such reduction in the exercise price.  In addition, Sherleigh agreed to waive the anti-dilution provisions of the Series A Convertible Preferred Stock.

The foregoing summaries of the October Agreement, Security Agreement, the Preferred Stock, the Convertible Notes and the various warrants and Anti-Dilution Waiver Agreement are qualified in their entirety by reference to the copies of such agreements which are incorporated by this reference.

CUSIP No. 91090020

Item 7. Materials to be Filed as Exhibits.

Exhibit No.	Description
1.	Securities Purchase Agreement, dated March 18, 2005, among the Issuer, Sherleigh and Mr. Grano (incorporated by reference to Exhibit 10.1 of the Issuer’s Current Report on Form 8-K filed March 23, 2005)
2.	First Amendment to Security Purchase Agreement, dated January 26, 2006, among the Issuer, Sherleigh and Mr. Grano (incorporated by reference to Exhibit 10.1 of the Issuer’s Current Report on Form 8-K filed January 27, 2006)
3.	Second Amendment to Security Purchase Agreement, dated March 9, 2006, among the Issuer, Sherleigh and Mr. Grano (incorporated by reference to Exhibit 10.1 of the Issuer’s Current Report on Form 8 filed March 9, 2006)
4.	Form of the Series A Warrant (incorporated by reference to Exhibit 10.2 of the Issuer’s Current Report on Form 8-K filed March 23, 2005)
5.	Form of the Series B Warrant (incorporated by reference to Exhibit 10.3 of the Issuer’s Current Report on Form 8-K filed March 23, 2005)
6.	Form of the Series C Warrant (incorporated by reference to Exhibit 10.4 of the Issuer’s Current Report on Form 8-K filed March 9, 2006)
7.	Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 of the Issuer’s Current Report on Form 8-K filed March 9, 2006)
8.	Registration Rights Agreement, dated March 18, 2005, among the Issuer, Sherleigh and Mr. Grano (incorporated by reference to Exhibit 10.4 of the Issuer’s Current Report on Form 8-K filed March 23, 2005)
9.	Registration Rights Agreement, dated March 9, 2006, between the Issuer and Sherleigh (incorporated by reference to Exhibit 10.2 of the Issuer’s Current Report on Form 8-K filed March 9, 2006)
10.	Consulting Agreement, by and between the Issuer and SIAR (incorporated by reference to Exhibit 10.1 of the Issuer’s Current Report on Form 8-K filed September 26, 2008)
11.	Form of Director Warrants (incorporated by reference to Exhibit 4.1 of the Issuer’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2008 and filed on February 17, 2009)
12.	Anti-Dilution Waiver Agreement, dated February 13, 2009, by and between the Issuer and Sherleigh (incorporated by reference to Exhibit 10.2 of the Issuer’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2008 and filed on February 17, 2009)
13.	October Agreement, dated October 31, 2009, among the Issuer, Ronald Wilen, Hilltop and Martin Rappaport (incorporated by reference to Exhibit 10.1 of the Issuer’s Current Report on Form 8-K filed November 2, 2009)
14.	Security Agreement, dated May 13, 2009, among the Issuer, Ronald Wilen, Hilltop and Martin Rappaport (filed herewith)

CUSIP No. 91090020

17.	Anti-Dilution Waiver Agreement, dated October 31, 2009, among the Issuer, Sherleigh, Jack Silver, Joseph Grano and Connie Kristen (incorporated by reference to Exhibit 10.2 of the Issuer’s Current Report on Form 8-K filed November 2, 2009)
18.	Form of the Secured Convertible Promissory Note (incorporated by reference to Exhibit 4.1 of the Issuer’s Current Report on Form 8-K filed November 2, 2009)
19.	Form of the Purchase Warrant (incorporated by reference to Exhibit 4.2 of the Issuer’s Current Report on Form 8-K filed November 2, 2009)

SIGNATURE

After reasonable inquiry and to the best of its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: October 31, 2009
/s/ Jack Silver
Jack Silver
	SHERLEIGH ASSOCIATES INC.
	PROFIT SHARING PLAN
By:	/s/ Jack Silver
Name:	Jack Silver
Title:	Trustee
HILLTOP HOLDING COMPANY, L.P.
By:	/s/ Jack Silver
Name:	Jack Silver
Title:	General Partner

EX-14

EXHIBIT 14

SECURITY AGREEMENT

THIS SECURITY AGREEMENT dated as of May 13, 2009 (this “Agreement”), is by and among United Energy Corp.., a Nevada corporation with its chief executive office and principal place of business located at 600 Meadowlands Parkway, No. 20, Secaucus, NJ 07094 (the “Debtor”), and Ronald Wilen with an address at 287 Columbia Terrace, Paramus, NJ 07652, Jack Silver with an address at 80 Columbus Circle PH76A, New York, NY  10023, and Martin Rappaport, with an address at 174 Delawanna Avenue, Clifton, NJ 07014 (collectively, the “Secured Parties”).

WHEREAS, the Secured Parties are the holders of the Debtor’s Amended and Restated 12% Secured Convertible Promissory Notes, dated May 13, 2009 in the aggregate principal amount of $101,866.67 (the “Original Notes”), and the 12% Convertible Promissory Notes, dated May 13, 2009 in the aggregate principal amount of $201,016.67 (the “New Notes”, and together with the Original Notes, the “Notes”);

WHEREAS, in order to secure the Debtor’s obligations under the Notes, the Debtor have agreed to execute and deliver this Agreement; and

WHERAS, this Agreement is subject to the terms and conditions of that certain Intercreditor Agreement of even date herewith by and among the Secured Parties.

NOW, THEREFORE, in consideration of the above premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Debtor, the Debtor hereby agree with the Secured Parties as follows:

Section 1.Definitions.

(a)For the purposes of this Agreement:

“Applicable Law” means all applicable provisions of constitutions, statutes, laws, rules, regulations and orders of all governmental bodies and all orders, rulings and decrees of all courts and arbitrators.

“Business Day” means any day other than a Saturday, Sunday or other day on which banks in New York, New York are authorized or required by law to close.

“Collateral” means the following properties, assets and rights of the Debtor, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof:  all personal and fixture property of every kind and nature, including, without limitation, all goods (including inventory, equipment and any accessions thereto), instruments (including promissory notes), documents, accounts, chattel paper (whether tangible or electronic), deposit accounts, letter-of-credit rights (whether or not the letter of credit is evidenced by a writing), commercial tort claims, intellectual property (including, without limitation, patents), securities of United States Persons and all other investment property, supporting obligations, any other contract rights or rights to the payment of money, insurance claims and proceeds, tort claims, and all general intangibles, and all products and proceeds of the foregoing, in any form, including insurance proceeds and all claims against third parties for loss or damage to or destruction of or other involuntary conversion of any kind or nature of any or all of the other Collateral.

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“Event of Default” means the occurrence or existence of any Event of Default under the Notes.

“Lien”, as applied to the property of any Person, means any security interest, lien, encumbrance, mortgage, deed to secure debt, deed of trust, pledge, charge, conditional sale or other title retention agreement, or other encumbrance of any kind covering any property of such Person, or upon the income or profits therefrom or any agreement to convey any of the foregoing or any other agreement or interest covering the property of a Person which is intended to provide collateral security for the obligation of such Person.

“Obligations” means any and all obligations, liabilities and indebtedness of every kind, nature and description owing by the Debtor or any other obligor to the Secured Parties under this Agreement or the Notes, including, principal, interest, charges, fees, premiums, indemnities and expenses, however evidenced, whether as principal, surety, endorser, a debtor or otherwise, whether arising under this Agreement or otherwise, whether now existing or hereafter arising or after the commencement of any case with respect to the Debtor or any other obligor under the U.S. Bankruptcy Code or any similar statute (including the payment of interest which would accrue and become due but for the commencement of such case, whether or not a claim for such amounts is allowed or allowable in whole or in part in such case), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, and whether arising directly or howsoever acquired by the Secured Parties.

“Permitted Liens” means:

(i)Liens securing taxes, assessments and other governmental charges or levies not yet due and payable or the claims of, or obligations owing to, materialmen, mechanics, carriers, warehousemen or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business but not yet due and payable;

(ii)Liens consisting of deposits or pledges made, in the ordinary course of business, in connection with, or to secure payment of, obligations under workmen’s compensation, unemployment insurance or similar legislation;

(iii)Liens which in the sole judgment of the Secured Parties do not materially detract from the value of the Collateral;

(iv)Liens in favor of the Secured Parties;

(v)Purchase money security interests and Liens to secure the Debtor’s performance of equipment leases arising in the ordinary course of business; provided, that such Liens do not extend to any property or assets which is not acquired property (in the case of purchase money security interest) or is not leased property (in the case of equipment lease) subject to such purchase or lease.

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“Person” means an individual, corporation, partnership, limited liability company, association, trust or unincorporated organization, or a government or any agency or political subdivision thereof.

“UCC” means the Uniform Commercial Code of the State of New York, as in effect from time to time.

(b)Unless otherwise set forth herein to the contrary, all terms not otherwise defined herein and which are defined in the UCC are used herein with the meanings ascribed to them in the UCC.  However, if a term is defined in Article 9 of the UCC differently than in another Article of the UCC, the term has the meaning specified in Article 9 of the UCC.

Section 2.Grant of Security.  To secure the prompt and complete payment, observance and performance when due (whether at stated maturity, by acceleration or otherwise) of all of the Obligations, the Debtor hereby collaterally assigns and pledges to the Secured Parties, and grants to the Secured Parties a security interest and Lien in and to, the Collateral.  The Secured Parties acknowledges that the attachment of their security interest in any commercial tort claim as original collateral is subject to the Debtor’s compliance with Section 4(a).

Section 3.Authorization to File Financing Statements.  The Debtor hereby irrevocably authorizes the Secured Parties at any time and from time to time to file in any Uniform Commercial Code jurisdiction any initial financing statements and amendments thereto that (a) indicate the Collateral (i) as all assets of the Debtor or words of similar effect, regardless of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of the UCC or Article 9 of the Uniform Commercial Code of such other jurisdiction, or (ii) as being of an equal or lesser scope or with greater detail, and (b) contain any other information required by part 5 of Article 9 of the UCC or the analogous part of Article 9 of the Uniform Commercial Code of such other jurisdiction for the sufficiency or filing office acceptance of any financing statement or amendment.  The Debtor agrees to furnish any such information to the Secured Parties promptly upon request.

Section 4.Other Actions.  Further to ensure the attachment, perfection and priority of, and the ability of the Secured Parties to enforce, the Secured Parties’ security interest in the Collateral, the Debtor agrees, in each case at the Debtor’s own expense, to take the following actions with respect to the following Collateral:

(a)Commercial Tort Claims.  If the Debtor shall at any time hold or acquire a commercial tort claim, the Debtor shall immediately notify the Secured Parties in a writing signed by the Debtor of the brief details thereof and grant to the Secured Parties in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to the Secured Parties.

(b)Actions as to any and all Collateral.  The Debtor agrees to take any other action reasonably requested by the Secured Parties to ensure the attachment, perfection and, priority of, and the ability of the Secured Parties to enforce, the Secured Parties’ security interest in any and all of the Collateral, including, without limitation, the execution and delivery of patent security agreements (substantially in the form attached hereto as Exhibit A) for filing with the Unites States Patent and Trademark Office and fully executed deposit control agreements in form reasonable acceptable to the Secured Parties with respect to any deposit accounts.

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Section 5.Representations and Warranties Regarding Legal  Status.

(a)The Debtor represents and warrants to the Secured Parties as follows: (a) the correct legal name of the Debtor is set forth in the introductory paragraph of this Agreement, and the Debtor does not conduct and, during the five-year period immediately preceding the date of this Agreement, has not conducted, business under any trade name other than as set forth in the introductory paragraph of this Agreement, (b) the Internal Revenue Service taxpayer identification number of the Debtor is [**], (c) the Debtor is a corporation, duly incorporated, validly existing and in good standing under the laws of the State of Nevada, and (d) the Debtor’s place of business is accurately set forth in the introductory paragraph hereof.

(b)The Debtor represents and warrants to the Secured Parties (i) it is a corporation duly organized and in good standing under the laws of its state of incorporation, and is duly qualified as a foreign corporation and in good standing in all states or other jurisdictions where the nature and extent of the business transacted by it or the ownership of assets makes such qualification necessary, except for those jurisdictions in which the failure to so qualify would not have a material adverse effect on its financial condition, results of operation or business or the rights of Secured Parties in or to any of the Collateral; (ii) the execution, delivery and performance of this Agreement and the transactions contemplated hereunder (A) are all within its corporate or other powers, (B) have been duly authorized, (C) are not in contravention of law or the terms of its certificate of incorporation, by-laws, or other organizational documentation, or any indenture, agreement or undertaking to which it is a party or by which it or its property are bound and (D) will not result in the creation or imposition of, or require or give rise to any obligation to grant, any lien, security interest, charge or other encumbrance upon any its property; (iii) this Agreement constitute legal, valid and binding obligations of the Debtor enforceable in accordance with its terms.

Section 6.Covenants Regarding Legal Status.  The Debtor covenants with the Secured Parties as follows:  (a) without providing at least 15 Business Days prior written notice to the Secured Parties, the Debtor will not change its name, its place of business or, if more than one, chief executive office, or its mailing address or organizational identification number if it has one, and (b) without providing at least 15 Business Days prior written notice to the Secured Parties, the Debtor will not change its type of organization, jurisdiction of organization or other legal structure.

Section 7.Representations and Warranties Regarding Collateral, Etc.  The Debtor further represents and warrants to the Secured Parties as follows:  (a) the Debtor is the owner of the Collateral pledged by it, free from any Lien, except for Permitted Liens, (b) none of the Collateral pledged by it constitutes or is the proceeds of “farm products” as defined in § 9-102(a)(34) of the UCC, (c) none of the account debtors or other persons obligated on any of the Collateral pledged by it is a governmental authority covered by the Federal Assignment of Claims Act or like federal, state or local statute or rule in respect of such Collateral, (d) the Debtor does not hold any commercial tort claim, and (e) to the best of the Debtor’s knowledge, the Debtor has at all times operated its business in compliance in all material respects with all Applicable Laws.

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Section 8.Covenants Regarding Collateral Generally.  The Debtor further covenants with the Secured Parties as follows: (a) other than Permitted Liens, the Debtor shall not pledge, mortgage or create, or suffer to exist any Lien in the Collateral in favor of any Person, (b) the Debtor shall keep the Collateral in good order and repair and will not use the same in violation of any Applicable Law or any policy of insurance thereon, (c) the Debtor shall permit the Secured Parties, or their designees, to inspect the Collateral at any reasonable time upon reasonable prior notice, wherever located, (d) the Debtor shall not sell, transfer or otherwise dispose, or offer to sell, transfer or otherwise dispose, of the Collateral or any interest therein except for (i) sales and leases of inventoryin the ordinary course of businessand (ii) so long as no Event of Default has occurred and is continuing, sales or other dispositions of obsolescent items of equipment in the ordinary course of business consistent with past practices, and (e) the equipment constituting Collateral shall remain personal property and the Debtor shall not permit any such equipment to be or become a part of or affixed to real property except to the extent that upon such event the Secured Parties has a perfected security interest in such fixture.

Section 9.Rights and Remedies.  Upon the occurrence and during the continuance of an Event of Default, the Secured Parties, without any other notice to or demand upon the Debtor, shall have in any jurisdiction in which enforcement hereof is sought, in addition to the rights and remedies of a Secured Parties under the UCC and any additional rights and remedies as may be provided to a Secured Parties in any jurisdiction in which Collateral is located or enforcement is sought, including, without limitation, the right to take possession of the Collateral, and for that purpose the Secured Parties may, so far as the Debtor can give authority therefor, enter upon any premises on which the Collateral may be situated and remove the same therefrom.  The Secured Parties may in their discretion require the Debtor to assemble all or any part of the Collateral at such location or locations within the jurisdiction(s) of the Debtor’s principal office(s) or at such other locations as the Secured Parties may reasonably designate.  Unless the Collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Secured Parties shall give to the Debtor at least five (5) Business Days prior written notice of the time and place of any public sale of Collateral or of the time after which any private sale or any other intended disposition is to be made.  The Debtor hereby acknowledges that five (5) Business Days prior written notice of such sale or sales shall be reasonable notice.  In addition, the Debtor waives any and all rights that it may have to a judicial hearing in advance of the enforcement of any of the Secured Parties’ rights and remedies hereunder, including, without limitation, its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights and remedies with respect thereto.

Section 10.No Waiver by Secured Parties, Etc.  The Secured Parties shall not be deemed to have waived any of their rights and remedies in respect of the Obligations or the Collateral unless such waiver shall be in writing and signed by the Secured Parties.  No delay or omission on the part of the Secured Parties in exercising any right or remedy shall operate as a waiver of such right or remedy or any other right or remedy.  A waiver on any one occasion shall not be construed as a bar to or waiver of any right or remedy on any future occasion.  All rights and remedies of the Secured Parties with respect to the Obligations or the Collateral, whether evidenced hereby or by any other instrument or papers, shall be cumulative and may be exercised singularly, alternatively, successively or concurrently at such time or at such times as the Secured Parties deem expedient.

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Section 11.Suretyship Waivers by the Debtor.  The Debtor waives demand, notice, protest, notice of acceptance of this Agreement, notice of loans made, credit extended, Collateral received or delivered or other action taken in reliance hereon and all other demands and notices of each description.  With respect to both the Obligations and the Collateral, the Debtor assents to any extension or postponement of the time of payment or any other indulgence, to any substitution, exchange or release of or failure to perfect any security interest in any Collateral, to the addition or release of any party or person primarily or secondarily liable, to the acceptance of partial payment thereon and the settlement, compromising or adjusting of any thereof, all in such manner and at such time or times as the Secured Parties may deem advisable.  The Secured Parties shall not have any duty as to the collection or protection of the Collateral or any income therefrom, the preservation of rights against prior parties, or the preservation of any rights pertaining thereto beyond any duties imposed by Applicable Law.  The Debtor further waives any and all other suretyship defenses.

Section 12.Marshalling.  The Secured Parties shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of the rights and remedies of the Secured Parties hereunder and of the Secured Parties in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising.  To the extent that it lawfully may, the Debtor hereby agrees that it will not invoke any Applicable Law relating to the marshalling of collateral which might cause delay in or impede the enforcement of the Secured Parties’ rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, the Debtor hereby irrevocably waives the benefits of all such laws.

Section 13.Proceeds of Dispositions; Expenses.  The Debtor agrees to pay to the Secured Parties on demand any and all expenses, including attorneys’ fees and disbursements, incurred or paid by the Secured Parties in protecting, preserving or enforcing the Secured Parties’ rights and remedies under or in respect of any of the Obligations or any of the Collateral.  After deducting all of said expenses, the residue of any proceeds of collection or sale or other disposition of Collateral shall, to the extent actually received in cash, be applied to the payment of the Obligations in such order or preference as the Secured Parties may determine, proper allowance and provision being made for any Obligations not then due.  Upon the final payment and satisfaction in full of all of the Obligations and after making any payments required by Sections 9-608(a)(1)(C) or 9-615(a)(3) of the UCC, any excess shall be returned to the Debtor.  In the absence of final payment and satisfaction in full of all of the Obligations, the Debtor shall remain liable for any deficiency.

Section 14.The Debtor Remains Liable.  Anything herein to the contrary notwithstanding (a) the Debtor will remain liable under the contracts and agreements included in the Collateral to the extent set forth therein, to the same extent as if this Agreement had not been executed; (b) the exercise by the Secured Parties of any of their rights hereunder will not release the Debtor from any of its duties or obligations under any such contracts or agreements included in the Collateral; and (c) no Secured Party will have any obligation or liability under any contracts or agreements included in the Collateral by reason of this Agreement, nor will any Secured Party be obligated to perform any of the obligations or duties of the Debtor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

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Section 15.[intentionally deleted]

Section 16.Power of Attorney.  The Debtor hereby irrevocably designates and appoints each of the Secured Parties as the Debtor’s true and lawful attorney-in-fact, and authorizes the Secured Parties, in the Debtor’s or each Secured Party’s name, to:  (a) at any time an Event of Default exists or has occurred and is continuing (i) demand payment on receivables or other Collateral, (ii) enforce payment of receivables by legal proceedings or otherwise, (iii) exercise all of the Debtor’s rights and remedies to collect any receivable or other Collateral, (iv) sell or assign any receivable upon such terms, for such amount and at such time or times as the Secured Parties deems advisable, (v) settle, adjust, compromise, extend or renew an account, (vi) discharge and release any receivable, (vii) prepare, file and sign the Debtor’s name on any proof of claim in bankruptcy or other similar document against an account debtor or other obligor in respect of any receivables or other Collateral, (viii) notify the post office authorities to change the address for delivery of remittances from account debtors or other obligors in respect of receivables or other proceeds of Collateral to an address designated by Secured Parties, and open and dispose of all mail addressed to the Debtor and handle and store all mail relating to the Collateral; (ix) at any time to take control in any manner of any item of payment in respect of receivables or constituting Collateral or otherwise received in or for deposit in any deposit accounts maintained by the Debtor or otherwise received by the Secured Parties, (x) have access to any lockbox or postal box into which remittances from account debtors or other obligors in respect of receivables or other proceeds of Collateral are sent or received, (xi) endorse the Debtor’s name upon any items of payment in respect of receivables or constituting Collateral or otherwise received by the Secured Parties and deposit the same in Secured Parties’ account for application to the Obligations, (xii) endorse the Debtor’s name upon any chattel paper, document, instrument, invoice, or similar document or agreement relating to any receivable or any goods pertaining thereto or any other Collateral, including any warehouse or other receipts, or bills of lading and other negotiable or non-negotiable documents, and (xiii) sign the Debtor’s name on any verification of receivables and notices thereof to account debtors or any secondary obligors or other obligors in respect thereof and (b) do all acts and things which are necessary, in the Secured Parties’ determination, to fulfill the Debtor’s obligations under this Agreement and the Notes.  The Debtor hereby releases each Secured Party and its officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of such Secured Party’s own gross negligence or wilful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

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Section 17.Right to Cure.  The Secured Parties may, but is not required to, at any time an Event of Default exists or has occurred and is continuing (a) upon notice to the Debtor, cure any material default by the Debtor under any material agreement with a third party that materially affects the Collateral, its value or the ability of the Secured Parties to collect, sell or otherwise dispose of the Collateral or the rights and remedies of the Secured Parties therein or the ability of the Debtor to perform its obligations hereunder or under the Notes, (b) pay or bond on appeal any judgment entered against the Debtor, (c) discharge taxes, liens, security interests or other encumbrances at any time levied on or existing with respect to the Collateral and (d) pay any amount, incur any expense or perform any act which, in the Secured Parties’ judgment, is necessary or appropriate to preserve, protect, insure or maintain the Collateral and the rights of the Secured Parties with respect thereto.  The Secured Parties may add any amounts so expended to the Obligations and charge the Debtor therefor, such amounts to be repayable by the Debtor on demand.  The Secured Parties shall be under no obligation to effect such cure, payment or bonding and shall not, by doing so, be deemed to have assumed any obligation or liability of the Debtor.  Any payment made or other action taken by the Secured Parties under this Section shall be without prejudice to any right to assert an Event of Default hereunder and to proceed accordingly.

Section 18.Governing Law; Consent to Jurisdiction; Jury Trial Waiver.  THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.  EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.  Each of the parties hereto hereby irrevocably consents to the non-exclusive jurisdiction of the Supreme Court of New York, New York County and the United States District Court of New York, New York County and waives trial by jury in any action or proceeding with respect to this Agreement.  THE DEBTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE DEBTOR AND SECURED PARTIES IN RESPECT OF THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.

Section 19.Amendments, Etc.  No amendment or waiver of any provision of this Agreement or consent to any departure by the Debtor herefrom shall in any event be effective unless the same shall be in writing and signed by the parties hereto, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

Section 20.Notices.  Unless otherwise provided herein, communications provided for hereunder shall be in writing and shall be mailed, couriered, telecopied or delivered, to any party at its address for notices set forth above, or, as to each party, at such other address as shall be designated by such party in a written notice to the other parties.  All such notices and other communications to the Debtor or the Secured Parties shall be deemed given when delivered personally, mailed by certified mail (postage pre-paid and return receipt requested), sent by overnight courier service or faxed (transmission confirmed), or otherwise actually received.

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Section 21.Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under Applicable Law, but if any provision of this Agreement shall be prohibited by or invalid under Applicable Law, such provisions shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement.

Section 22.RELATIONSHIP WITH INTERCREDITOR AGREEMENT.  NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE ENFORCEMENT OF THE LIEN AND SECURITY INTEREST GRANTED TO THE SECURED PARTIES PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT OR REMEDY BY THE SECURED PARTIES HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT, DATED THE DATE HEREOF (THE “INTERCREDITOR AGREEMENT”) AMONG THE SECURED PARTIES.  IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THIS SECURITY AGREEMENT, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN; PROVIDED THAT NOTHING IN THE INTERCREDITOR AGREEMENT SHALL AFFECT THE ATTACHMENT OF OR, SUBJECT TO THE PRIORITIES ESTABLISHED IN THE INTERCREDITOR AGREEMENT, PERFECTION OF THE LIEN AND SECURITY INTEREST GRANTED TO THE SECURED PARTIES PURSUANT TO THIS AGREEMENT.

Section 23.Counterparts.  This Agreement may be executed in several counterparts, each of which shall be an original and all of which, taken together, shall constitute but one and the same instrument.

Section 24.Miscellaneous.  The headings of each section of this Agreement are for convenience only and shall not define or limit the provisions thereof.  This Agreement and all rights and obligations hereunder shall be binding upon the Debtor and its successors and assigns (including, without limitation, trustees and liquidators), and shall inure to the benefit of the Secured Parties and their successors and assigns (including, without limitation, trustees and liquidators).

[signature page follows]

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IN WITNESS WHEREOF, each of the Secured Parties and the Debtor has caused this Agreement to be duly executed and delivered under seal by its duly authorized officer as of the day first above written.

UNITED ENERGY CORP.

By:/s/ Ronald Wilen

Name:    Ronald Wilen

Title:       President

/s/ Ronald Wilen

Ronald Wilen

/s/ Jack Silver

Jack Silver

/s/ Martin Rappaport

Martin Rappaport