EXHIBIT 10.1
 
AGREEMENT (this “Agreement”) is entered as of January 21, 2010, among United
Energy Corp., a Nevada corporation (the “Company”), Ronald Wilen (“Wilen”), and
Hilltop Holding Company, L.P., a Delaware limited partnership (“Hilltop”).
 
WHREAS, the Company previously issued to Wilen (a) its 12% Promissory Note,
dated as of March 13, 2009, in the original stated principal amount of
$50,000.00 (as amended, the “Wilen March Note”), (b) pursuant to the Agreement,
dated as of May 13, 2009 (the “May Agreement”), among the Company, Wilen, Martin
Rappaport (“Rappaport”), Jack Silver (“Silver”) and Sherleigh Associates Inc.
Profit Sharing Plan, its Secured Convertible Promissory Note, dated as of May
13, 2009, in the stated principal amount of $50,000 (as amended, the “Wilen May
Note”), and (c) pursuant to the Agreement, dated as of October 13, 2009 (the
“October Agreement”), among the Company, Wilen, Rappaport and Silver, its
Secured Convertible Promissory Note, dated as of July 29, 2009, in the stated
principal amount of $50,000 (the “Wilen July Note”, and collectively, the “Wilen
Notes”);
 
WHEREAS, the Company previously issued to Rappaport (a) its 12% Promissory Note,
dated as of March 23, 2009, in the original stated principal amount of
$50,000.00 (as amended, the “Rappaport March Note”), (b) pursuant to the May
Agreement, its Secured Convertible Promissory Note, dated as of May 13, 2009, in
the stated principal amount of $50,000 (the “Rappaport May Note”), and (c)
pursuant to the October Agreement, its Secured Convertible Promissory Note,
dated as of August 13, 2009, in the stated principal amount of $50,000 (the
“Rappaport August Note”, and collectively, the “Rappaport Notes”);
 
WHEREAS, the Company previously issued to Hilltop (a) pursuant to the May
Agreement, its Secured Convertible Promissory Note, dated as of May 13, 2009, in
the stated principal amount of $101,016.67 (as amended, the “Hilltop May Note”),
which note was originally issued erroneously to Silver, and (b) pursuant to the
October Agreement, its Secured Convertible Promissory Note, dated as of August
27, 2009, in the stated principal amount of $50,000 (the “Hilltop August Note”,
and collectively the “Hilltop Notes”) (the Wilen Notes, the Rappaport Notes and
the Hilltop Notes are collectively referred to herein as the “Existing Notes”);
 
WHEREAS, pursuant to the May Agreement, (a) the Wilen March Note was amended and
restated as the Amended and Restated 12% Secured Convertible Promissory Note,
dated as of May 13, 2009, in the stated principal amount of $51,016.67, and (b)
the Rappaport March Note was amended and restated as the Amended and Restated
12% Secured Convertible Promissory Note, dated as of May 13, 2009, in the stated
principal amount of $50,850.00;
 
WHEREAS, pursuant to the Agreement to Amend Promissory Note, dated as of July
13, 2009 (the “July Agreement”), among the Company, Wilen, Rappaport and Silver,
the Wilen March Note, the Wilen May Note, the Rappaport March Note, the
Rappaport May Note and the Hilltop May Note were amended to extend the maturity
date thereof;
 
WHEREAS, pursuant to the October Agreement, the Wilen March Note, the Wilen May
Note, the Rappaport March Note, the Rappaport May Note and the Hilltop May Note
were further amended to, inter alia, extend the maturity date thereof to January
29, 2010;
 
 
 
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WHEREAS, pursuant to the Agreement, dated as of January 29, 2010 (the “January
Agreement”), among the Company, Wilen, Hilltop and Rappaport, each of the
Existing Notes were further amended to, inter alia, extend the maturity date
thereof to January 31, 2011;
 
WHEREAS, pursuant to a Securities Purchase Agreement, dated as of January 10,
2011, between Hilltop and Sondra Rappaport as Executrix of the Estate of Martin
Rappaport, Hilltop has acquired all of the Rappaport Notes and all of
Rappaport’s rights under the Security Agreement, the Patent Security Agreement
and the Intercreditor Agreement (as such terms are defined below);
 
WHEREAS, the Company, Wilen, Hilltop and Rappaport desire to further extend the
maturity date of the Existing Notes, upon the terms and conditions stated in
this Agreement;
 
WHEREAS, Hilltop desires to purchase, upon the terms and conditions stated in
this Agreement, (a) the Company’s Secured Convertible Promissory Note (the “New
Note”), substantially in the form attached hereto as Exhibit A, in the principal
amount of $100,000.00, and (b) warrants (the “New Warrants”), substantially in
the form attached hereto as Exhibit B, to acquire 1,111,111 shares of the
Company’s Common Stock;
 
WHEREAS, subject to the terms and conditions stated in this Agreement, Hilltop
may at its option purchase and the Company will be require to sell (a)
additional New Notes in the principal amount of up to $100,000.00, and (b)
additional New Warrants  to acquire up to 1,111,111 shares of the Company’s
Common Stock; and
 
WHEREAS, the parties hereto desire to amend (a) the Security Agreement, dated as
of May 13, 2009, among Wilen, Hilltop and Rappaport (as amended by the October
Agreement, the “Security Agreement”), (b) the Amended and Restated Patent
Security Agreement, dated as of October 31, 2009, among Wilen, Hilltop and
Rappaport (the “Patent Security Agreement”), and (c) the Intercreditor
Agreement, dated as of May 13, 2009, among Wilen, Hilltop and Rappaport (as
amended by the October Agreement, the “Intercreditor Agreement”), to include the
obligations under the New Note and to reflect Hilltop’s acquisition of the
Rappaport Notes.
 
NOW, THEREFORE, the Company, Wilen and Hilltop hereby agree as follows:
 
1. Purchase of New Note and New Warrants.
 
a. Initial Closing.  The Company shall issue and sell to Hilltop, and Hilltop
agrees to purchase from the Company (a) the New Notes in the original principal
amount of $100,000.00 (the “Initial New Notes”), and (b) the New Warrants to
purchase 1,111,111 shares of the Company’s Common Stock at an initial exercise
price of $0.11 per share (the “Initial Warrants”), for an aggregate purchase
price of $100,000.00, which amount has been paid by Hilltop to the Company on
January 3, 2011 (the “Initial Closing”).
 
b. Additional Closings.  Subject to the satisfaction (or waiver) of the
conditions set forth in Section 8.b, at the option of Hilltop, the Company shall
issue and sell to Hilltop at multiple closings, if applicable, and Hilltop may
purchase from the Company (a) additional New Notes in the principal amount of up
to $100,000.00 (the “Additional New Notes”), and (b) for each $10,000.00 of
Additional New Notes purchased, additional New Warrants to purchase 111,111
shares of the Company’s Common Stock at an initial exercise price of $0.11 per
share (the “Additional Warrants”), for an aggregate purchase price equal to the
principal amount of the Additional New Notes purchased (each an “Additional
Closing”).
 
 
 
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2. Amendment to Existing Notes.  Each of the Existing Notes is hereby amended,
as follows:
 
a. Extension of Maturity Date.  To extend the maturity date thereof from January
31, 2011 to December 20, 2011; and
 
b. Amendment to Prepayment Provisions.  By deleting the last sentence of the
first paragraph thereof, and insert in lieu thereof the following:
 
The Debtor shall have the right to prepay all or any portion of this Note
without the consent of the Holder; provided, (a) such prepayment is approved by
the majority of the members of the Debtor’s board of directors who are not
beneficial owners of any portion the Existing Notes or the New Note (as such
terms are defined in that certain agreement, dated as of January 21, 2011, among
the Debtor and certain of the holders of the Debtor’s promissory notes due
December 20, 2011); (b) any such prepayment is made on a pro rata basis on the
aggregate outstanding principal amount of all Existing Notes and of the New
Note; (c) the Debtor provides at least ten (10) business days prior written
notice of such prepayment, specifying the amount of such prepayment and the date
fixed for such prepayment; and (d) upon receipt of such prepayment notice, the
Holder may convert, in lieu of such prepayment, at any time prior to the date
fixed for such prepayment, all or any part of the principal amount and accrued
and unpaid interest designated by the Company for prepayment.
 
3. Amendments to Security Agreement.  The first “Whereas” clause of the Security
Agreement is hereby amended and restated in its entirety to state, as follows:
 
WHEREAS, the Secured Parties are the holders of (a) the Debtor’s Amended and
Restated 12% Secured Convertible Promissory Notes, dated as of May 13, 2009, in
the aggregate principal amount of $101,866.67 (the “Original Notes”), (b) the
Debtor’s Secured Convertible Promissory Notes, dated as of May 13, 2009, in the
aggregate principal amount of $201,016.67 (the “May Notes”), (c) the Debtor’s
Secured Convertible Promissory Notes, dated as of July 29, 2009 through August
27, 2009, in the aggregate principal amount of $150,000.00 (the “August Notes”),
and (d) the Debtor’s Secured Convertible Promissory Note, dated as of January 3,
2011, in the original principal amount of $100,000.00 (the “January Note”);
 
WHEREAS, pursuant to that certain Agreement, dated as of January 21, 2011, by
and among the Company and the Secured Parties, the Debtor may issue and Hilltop
Holding Company, L.P. may purchase in the future additional Secured Convertible
Promissory Notes in the principal amount of up to $100,000.00 (the “Future
Notes”, and together with the Original Notes, the May Notes the August Notes and
the January Note, the “Notes”);
 
4. Amendments to Patent Security Agreement.  The first and second “Whereas”
clauses of the Patent Security Agreement is hereby amended and restated in its
entirety to state, as follows:
 
WHEREAS, the Secured Parties are the holders of (a) the Grantor’s Amended and
Restated 12% Secured Convertible Promissory Notes, dated as of May 13, 2009, in
the aggregate principal amount of $101,866.67 (the “Original Notes”), (b) the
Grantor’s Secured Convertible Promissory Notes, dated as of May 13, 2009, in the
aggregate principal amount of $201,016.67 (the “May Notes”), (c) the Grantor’s
Secured Convertible Promissory Notes, dated as of July 29, 2009 through August
27, 2009, in the aggregate principal amount of $150,000.00 (the “August Notes”),
and (d) the Grantor’s Secured Convertible Promissory Note, dated as of January
3, 2011, in the original principal amount of $100,000.00 (the “January Note”)
 
WHEREAS, pursuant to that certain Agreement, dated as of January 21, 2011, by
and among the Grantor and the Secured Parties, the Debtor may issue and Hilltop
Holding Company, L.P. may purchase in the future additional Secured Convertible
Promissory Notes in the principal amount of up to $100,000.00 (the “Future
Notes”, and together with the Original Notes, the May Notes the August Notes and
the January Note, the “Notes”);
 
 
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WHEREAS, the Grantor has executed and delivered a Security Agreement, dated as
of May 13, 2009, as amended by the Agreement, dated as of October 13, 2009, and
by the Agreement, dated as of January 21, 2011 (together with all amendments and
other modifications, if any, from time to time thereafter made thereto, the
“Security Agreement”), among the Grantor and the Secured Parties;
 
5. Amendments to Intercreditor Agreement.
 
a. The first “Whereas” clause of the Intercreditor Agreement is hereby amended
and restated in its entirety to state, as follows:
 
WHEREAS, the Creditors are the holders of (a) the Debtor’s Amended and Restated
12% Secured Convertible Promissory Notes, dated as of May 13, 2009, in the
aggregate principal amount of $101,866.67 (the “Original Notes”), (b) the
Debtor’s Secured Convertible Promissory Notes, dated as of May 13, 2009, in the
aggregate principal amount of $201,016.67 (the “May Notes”), (c) the Debtor’s
Secured Convertible Promissory Notes, dated as of July 29, 2009 through August
27, 2009, in the aggregate principal amount of $150,000.00 (the “August Notes”),
and (d) the Debtor’s Secured Convertible Promissory Note, dated as of January 3,
2011, in the original principal amount of $100,000.00 (the “January Note”), in
the respective principal amounts set forth on Schedule A annexed hereto, which
Notes have been issued by United Energy Corp. a Nevada corporation (the
“Debtor”);
 
WHEREAS, pursuant to that certain Agreement, dated as of January 21, 2011, by
and among the Company and the Creditors, the Debtor may issue and Hilltop
Holding Company, L.P. may purchase in the future additional Secured Convertible
Promissory Notes in the principal amount of up to $100,000.00 (the “Future
Notes”, and together with the Original Notes, the May Notes the August Notes and
the January Note, the “Notes”);
 
 
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b. Schedule A to Intercreditor Agreement is hereby amended and restated in its
entirety in the form attached hereto as Exhibit C.
 
6. Assignment and Assumption of Note Documents by Hilltop.  The Company, Wilen
and Hilltop hereby acknowledge and agree that Hilltop has been assigned all of
Rappaport’s rights, and has assumed all of Rappaport’s obligations, under the
Security Agreement, the Patent Security Agreement and the Intercreditor
Agreement, and as a result thereof, Rappaport is no longer a party to the
Security Agreement, the Patent Security Agreement and the Intercreditor
Agreement.
 
7. Warrants.  In consideration for the extension of the maturity date of each of
the Existing Notes, the Company shall issue to each of Wilen and Hilltop,
Warrants (the “Warrants”) to purchase the number of shares of Common of the
Company set forth below next to each such holder’s name.  Such Warrants shall be
exercisable for a period of five (5) years, at an initial exercise price of
$0.11 per share, and shall be substantially in the form of the New Warrants.
 
 
Holder’s Name
Number of
Warrant Shares
Ronald Wilen
1,984,939
Hilltop Holding Company, L.P.
 
3,959,894

8. Closing.
 
a. Initial Closing. The Initial Closing shall be on such date and time (the
“Initial Closing Date”) as is mutually agreed to by the Company and
Hilltop.  The Closing shall be conditioned upon receipt by the company of
Anti-Dilution Waivers from the holders of Series A Convertible Preferred Stock
upon terms acceptable to the Company in its sole discretion.
 
b. Additional Closing.  Each Additional Closing shall be on the date and time
specified in the Additional Closing Notice (as defined below) (an “Additional
Closing Date”) (or such later date as is mutually agreed to by the Company and
Hilltop). At any time prior to June 30, 2011, Hilltop may purchase, at Hilltop’s
option, Additional New Notes and related Additional Warrants by delivering a
written notice to the Company (the “Additional Closing Notice”) at least three
business days prior to the Additional Closing Date set forth in the Additional
Closing Notice.  The Additional Closing Notice shall set forth (i) the principal
amount of Additional New Notes (which amount shall be in increments of
$10,000.00) and the number of related Additional Warrants Hilltop will purchase
and (ii) the Additional Closing Date.
 
9. Miscellaneous.
 
 
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a. Notation on Existing Notes.  Immediately following the Initial Closing, each
of Wilen and Hilltop shall deliver to the Company the original Existing Notes
beneficially owned by such party so that the Company may place a legend on the
face thereof to indicate that each such Existing Note has been amended by this
Agreement, as well as the July Agreement, the October Agreement and the January
Agreement.
 
b. Amendments and Waivers.  Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the parties hereto.
 
c. Severability.  If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from this
Agreement and the balance of this Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
 
d. Entire Agreement.  This Agreement, including the exhibits and schedules
hereto, constitutes the entire agreement among the parties hereof with respect
to the subject matter hereof and thereof and supersede all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter hereof and thereof.
 
e. Further Assurances.  The parties shall execute and deliver all such further
instruments and documents and take all such other actions as may reasonably be
required to carry out the transactions contemplated hereby and to evidence the
fulfillment of the agreements herein contained.
 
f. Applicable Law and Jurisdiction.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.
 
g. Counterparts.                                This Agreement may be executed
by fax transmission and in several counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
instrument.
 
h. Notice.   For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the Schedule of Purchasers, provided that all
notices to the Company shall be directed to the President and to the Chairman of
the Company at 600 Meadowlands Parkway, Secaucus, NJ 07094, or to such other
address as a party may have furnished to the others in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
 
[signature page follows]
 
 
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IN WITNESS WHEREOF, the Company, Wilen and Hilltop have caused this Agreement to
be duly executed as of the date first written above.
 

 
UNITED ENERGY CORP.
             
By:
/s/ Ronald Wilen                                 
 
Name:
Ronald Wilen
 
Title:
President
                   
/s/ Ronald Wilen                                                      
 
Ronald Wilen
       
HILLTOP HOLDING COMPANY, L.P.
             
By:
/s/ Jack Silver                                        
 
Name:
Jack Silver
 
Title:
Managing Partner