Exhibit 10.1

SECOND AMENDMENT TO SECURITIES PURCHASE AGREEMENT

          This Second Amendment (the “Amendment”) is made as of the 9th day of
March, 2006, to amend that certain Securities Purchase Agreement dated as March
18, 2005 (as amended by an Amendment and Waiver Agreement dated August 25, 2005,
and a First Amendment Agreement dated as of January 26, 2006, collectively, the
“Purchase Agreement”), by and among United Energy Corp., a Nevada corporation
(the “Company”) with Sherleigh Associates Inc. Profit Sharing Plan
(“Sherleigh”), and Joseph J. Grano (“Grano” and collectively with Sherleigh, the
“Purchasers”).

RECITALS

          A. Capitalized terms herein shall have the same meaning as defined in
the Purchase Agreement.

          B. Pursuant to the Purchase Agreement, the Purchasers agreed to
purchase and the Company agreed to sell and issue to the Purchasers upon the
terms and subject to the conditions stated in the Purchase Agreement:

          (a) Up to twenty (20) Series A units of the Company's securities (each
a “Series A Unit” and collectively the “Series A Units”) at a purchase price of
$80,000 per unit. Each Series A Unit consists of (i) 100,000 shares of the
Company's Common Stock, $.01 par value (“Unit Shares”) and (ii) warrants (each a
“Series A Warrant” and collectively the “Series A Warrants”) to purchase 50,000
shares of Common Stock at an exercise price of $1.00 per share; and

          (b) up to forty-two (42) Series B units of the Company’s securities
(each a “Series B Unit” and, collectively, the “Series B Units”) at a purchase
price of $80,000 per Unit. Each Series B Unit consists of (i) ten shares of
Preferred Stock (convertible at the initial conversion price into an aggregate
of 80,000 shares of Common Stock); and (ii) a warrant (each a “Series B Warrant”
and, collectively, the “Series B Warrants”) to purchase an aggregate of 40,000
shares of Common Stock at an exercise price of $1.00 per share.

          C. As of the date hereof, the Purchasers have purchased and the
Company has sold and issued to the Purchasers an aggregate of twenty Series A
Units and no Series B Units;

          D. Pursuant to the Purchase Agreement, the Purchasers’ obligation to
purchase the Series B Units is subject to and conditioned upon the receipt by
the Company of Purchase Orders (at the rate of $100,000 per Unit) for the
purchase and sale of each remaining Series B Unit during the Unit Purchase
Period (the “Purchase Order Condition”);

          E. The Company has agreed to sell and Sherleigh has agreed to purchase
30% of one Series B Unit for an aggregate purchase price of $24,000 and waive
the Purchase Order Condition for the purchase and sale of such one quarter Unit;

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          F. The Company has requested and the Purchasers have agreed to waive
all existing events of default under the Purchase Agreement including the
Company’s failure to timely file a Certificate of Designations and failure to
timely issue common stock certificates and warrant certificates to the
Purchasers (the “Waiver”).

          G. The Company and the Purchasers have agreed that upon execution of
this Amendment, that with the exception of the sale of three-tenth of a Series B
Unit to Sherleigh, the obligation of the Company to sell and the obligation of
the Purchasers to purchase any of the remaining Series B Units shall terminate.

          H. In consideration of the Waiver, and inconsideration of the
termination of the Company’s obligation to issue and sell the remaining Series B
Units to the Purchasers, the Company has agreed to issue to Sherleigh, warrants
(the “Series C Warrants”) to purchase an aggregate of 5,004,000 shares of Common
Stock at an exercise price of $1.00 per share, in the form annexed hereto as
Exhibit A.

          I. Contemporaneous with the execution and delivery of this Amendment,
the parties hereto are executing and delivering a Registration Rights Agreement,
in the form annexed hereto as Exhibit B (the “Registration Rights Agreement”),
pursuant to which the Company has agreed to provide certain registration rights
under the 1933 Act and the rules and regulations promulgated thereunder, and
applicable state securities laws.

          NOW, THEREFORE, in consideration of the mutual promises made herein
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:

               1. Purchase and Sale of Series B Unit. Sherleigh agrees to
purchase and the Company agrees to sell to Sherleigh three-tenth (3/10) of a
Series B Unit for an aggregate purchase price of $24,000.00. The closing (the
“Closing”) of the purchase and sale of such three-tenth of a Unit shall occur on
the date the Company all the conditions set forth in Section 7 have been
satisfied or waived. The Purchasers shall have no further obligation to purchase
and the Company shall have no further obligation to sell any additional Series B
Units pursuant to the Purchase Agreement.

               2. Definitions. (a) The definition of Unit Purchase Period in
Section 1.16 of the Purchase Agreement is hereby amended in its entirety to read
as follows:

 

 

 

 

“Unit Purchase Period” means the period commencing on the Initial Closing Date
and ending on such date the Purchasers have acquired at least three-tenth (3/10)
of a Series B Unit.

 

          (b) The definition of Triggering Event in Section 1.30 of the Purchase
Agreement is amended in its entirety to read as follows:

 

 

 

 

1.30 “Triggering Event” means (i) the failure of the Company to have gross
revenues of a least $5,000,000 for the six month

 

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period ending September 30, 2006;or (ii) the material breach by the Company of
any of its representations, warranties, agreements, covenants, terms or
obligations under any of the Agreements.

 

               3. Certificate of Designations. The Company shall, within ten
(10) days from the date of this Amendment, file with the Secretary of State of
the State of Nevada the Certificate of Designations in the form annexed hereto
as Exhibit C.

               4. Amendment to By-Laws. The Company shall immediately amend its
by-laws to provide that Section 78.378 to 78.3793 of the Nevada Revised Statutes
(and any successor statute) do not apply to the Company, which amended provision
shall be in the form annexed hereto as Exhibit D, and shall cause to continue to
include such provision in its by-laws or certificate of incorporation so long as
any of the Purchasers hold any Unit Shares, Preferred Stock, Underlying Shares,
Warrants (including the Series C Warrant) or the Warrant Shares (including
shares of Common Stock issuable upon exercise of the Series C Warrant).

               5. Series C Warrants. Upon execution of this Amendment, the
Company shall issue to Sherleigh, Series C Warrants in the form annexed hereto
as Exhibit A to purchase an aggregate of 5,004,000 shares of Common Stock at an
exercise price of $1.00 per share.

               6. Counsel Fees. The Company shall pay Purchaser’s reasonable
counsel fees in connection with this Amendment, not to exceed $5,000.

               7. Condition to Closing. The obligation of Sherleigh to
consummate the Closing is subject to the satisfaction of all of the following
conditions, unless waived by Sherleigh by prior written notice thereof:

               (a) The Certificate of Designation in the form annexed hereto as
Exhibit C shall have been filed with the Secretary of State of Nevada, and a
copy thereof certified by such Secretary of State shall have been delivered to
Sherleigh;

               (b) The By-laws of the Company shall have been amended in
accordance with Section 4 above; and

               (c) Each of the conditions to closing set forth in Section 4.2 of
the Purchase Agreement shall have been satisfied.

               8. Miscellaneous.

               (a) Ratification. Except as expressly amended, modified or
affected by this Amendment, all of the terms, provisions and conditions of the
Purchase Agreement shall continue in full force and effect and are hereby
ratified and affirmed in its entirety.

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               (b) Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to conflicts of laws principles thereof.

               (c) No Waiver. The waivers set forth herein shall be limited as
provided for herein to the provisions expressly waived and solely for the
purposes expressly waived herein and shall not be deemed to be waivers to,
consents to or modification of any other term or provision of the Agreements or
of any transactions contemplated by the Agreements or any other failure to
comply with the terms and provisions of the Agreements which may be continuing
on the date hereof or which may occur after the date hereof, and the Purchasers
have not agreed to forbear with respect to any of their rights or remedies
concerning any failure to comply with the terms and provisions of the Agreements
(other than to the extent expressly set forth herein), which may have occurred
or which may occur after the date hereof.

               (d) Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original, and all of which together
shall constitute one and the same instrument.

[signature page follows]

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          IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.

 

 

 

 

 

The Company:

 

 

 

UNITED ENERGY CORPORATION

 

 

 

By: /s/ Brian King

 

 

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Name: Brian King

 

 

 

Title: Chief Executive Officer

 

 

 

 

 

 

Purchasers:

 

 

 

 

 

SHERLEIGH ASSOCIATES INC. PROFIT SHARING PLAN

 

 

 

 

 

 

By: /s/ Jack Silver

 

 

 

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Name: Jack Silver

 

 

 

Title: Trustee

 

 

 

 

/s/ Joseph J. Grano, Jr.

 

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Joseph J. Grano, Jr.

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