Document:

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                            LINE OF CREDIT AGREEMENT

UNITED ENERGY CORPORATION of, 600 Meadowlands Parkway #20, Secaucus, NJ 07094
(jointly and severally if more than one, the "Borrower") and FLEET BANK, N.A., a
national banking association created and existing under the laws of the United
States of America with a principal office located at 30 Montgomery Street,
Jersey City, New Jersey 07303 (the "Bank"), for valuable consideration, the
receipt of which is hereby acknowledged, agree as follows:

1.   DEFINITIONS.

  1. Each reference herein to:

    a. "ACCOUNTS", "CHATTEL PAPER", "CONSUMER GOODS", "DOCUMENTS", "EQUIPMENT",
       "FARM PRODUCTS", "FIXTURES", "GENERAL INTANGIBLES", "GOODS",
       "INSTRUMENTS", "INVENTORY", "MONEY", AND "SECURITIES" shall have the
       meaning assigned to each in the Uniform Commercial Code from time to time
       in effect in the State (the "UCC");

    b. "AFFILIATES OF BORROWER" means any person or entity that, directly or
       indirectly, controls, is controlled by or is under common control with
       the Borrower or is an inside director or officer of the Borrower. For
       purposes of this definition, the term "control" (including the terms
       "controlling", "controlled by" and "under common control with") means the
       possession, direct or indirect, of the power to vote five percent (5%)
       or more of (i) the voting stock of a corporation, (ii) the partnership
       interests of a partnership, or (iii) the membership interests of a
       limited liability company, or to direct or cause the direction of the
       management and policies of any such entity, whether through the ownership
       of voting stock, partnership interests, membership interests, by contract
       or otherwise;

    c. "BOOKS AND RECORDS" shall mean all books, correspondence, credit files,
       records and other documents relating directly or indirectly to the
       Obligations and the Collateral, including, without limitation, all tapes,
       cards, runs, data bases, software programs, diskettes, and other papers
       and documents in the possession or control of the Borrower, any computer
       service bureau, or other agent or independent contractor;

    d. "LOAN DOCUMENTS" shall mean this Agreement, the Note, any Bank issued
       Commitment Letter and any amendments thereto, and any and all mortgages,
       pledge agreements, security agreements, financing statements, guaranties
       and other documents related to this Agreement and/or the Loan;

    e. "MATERIAL ADVERSE CHANGE" shall mean with respect to the Borrower and any
       guarantors and any of their respective properties or revenues, an event,
       action or condition that would or is reasonably likely to (i) adversely
       affect the validity or enforceability of, or the authority of the
       Borrower and/or any guarantor to perform their respective obligations
       under, the Loan Documents, or (ii) materially adversely affect the
       business, operations, assets or condition (financial or otherwise) of
       the Borrower and/or any guarantor or the ability of the Borrower and/or
       any guarantor to perform their respective obligations under any of the
       Loan Documents, or (iii) materially adversely affect the value of any
       Collateral;

    f. "PRIME RATE" shall mean the rate of interest designated by the Bank from
       time to time as being its prime rate of interest, which rate of interest
       may not necessarily be the lowest rate of interest charged by the Bank to
       anyone of its customers or any particular class of customers.

    g. "STATE" shall mean the State of New Jersey.

II.  LOAN.

  1. CREDIT LIMIT. This Agreement evidences a line of credit for the Borrower's
     short-term borrowing needs (the "Loan") with a credit limit (the "Credit
     Limit") of the maximum principal sum of One Million and No/100 Dollars
     ($1,000,000.00). Such Credit Limit is further modified by the provisions of
     Paragraph 10 of this Part II. Within such Credit Limit, until demand by the
     Bank and/or termination of the Bank's commitment upon the occurrence of an
     Event of Default, the Borrower may borrow, repay, and re-borrow hereunder.

  2. ADVANCES. The Bank agrees to make advances to the Borrower until demand by
     the Bank and/or termination of the Bank's commitment upon the occurrence of
     an Event of Default, provided that the aggregate principal amount of the
     Loan does not exceed the Credit Limit. The outstanding principal balance of
     all advances shall bear interest at the sum of the Prime Rate plus ZERO
     percent (0.00%) per annum.

  3. EXCESS ADVANCES. If for any reason the aggregate outstanding principal
     balance of the Loan should at any time exceed the Credit Limit, the
     Borrower shall, without demand, immediately pay to the Bank a sum
     sufficient to reduce the outstanding principal balance of the Loan to the
     Credit Limit.

  4. MINIMUM AMOUNT OF ADVANCE. Each advance under this Agreement shall be in
     the minimum amount of One Thousand Dollars ($1,000.00) or the unadvanced
     balance of the Credit Limit, whichever is less.

  5. TELEPHONE ACCESS. The Borrower shall access the Loan by a telephonic
     request. The Borrower accepts all risks inherent in such request. The
     Borrower absolves the Bank from all damages, loss and liabilities of
     whatsoever nature which may result from an unauthorized telephone request,
     a defective transmission, or a telephonic request which is misunderstood by
     the Bank

UNITED ENERGY CORPORATION

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       employee. Neither the Bank nor any of its directors, officers or
       employees shall be under any duty to pass upon the validity, accuracy,
       authorization, effectiveness, or genuineness of any telephonic request,
       and the Bank and its directors, officers and employees shall be entitled
       to assume that any such telephonic instructions are valid, effective,
       accurate, genuine and authorized. The Borrower consents to the Bank's
       taping and recording of all telephonic conversations relating to this
       Agreement and the Loan. All advances shall be disbursed by the Bank by
       deposit of the Loan proceeds to the Borrower's deposit account with the
       Bank.

 6.    DEMAND LOAN. On demand by the Bank, the entire outstanding principal
       balance of the Loan and all accrued interest shall immediately become due
       and payable.

 7.    NOTE; INTEREST CALCULATION. The Loan shall be evidenced by the Borrower's
       note of even date with this Agreement (which note and all amendments
       thereto and any additional or supplementary notes executed pursuant to
       this Agreement are herein referred to collectively as the "Note"). After
       demand, all principal and other amounts outstanding and payable under the
       Note shall bear interest at the rate of twenty percent (20%) per annum
       until paid in full. Interest shall be calculated on the basis of a
       360-day year using the actual number of days elapsed.

 8.    LATE FEE. If the entire amount of any principal and/or interest is not
       paid in full within (10) days after the same is due, the Borrower shall
       pay the Bank a later fee equal to five percent (5%) of the required
       payment.

 9.    PREPAYMENT. The Borrower shall have the right at any time and from time
       to time to prepay the Loan in whole or in part, without premium, penalty,
       or other charge (except as set forth in the next sentence), but with
       accrued interest to the day of such prepayment on the amount prepaid. To
       the extent that any full prepayment during the first twelve (12) months
       from the date of this Agreement results, directly or indirectly, from the
       application of funds borrowed by the Borrower from any lending or
       financial services institution other than the Bank, the Borrower shall
       pay to the Bank at the time of such prepayment a non-refundable early
       termination fee of $35 (if unsecured) or $75 (if secured). This provision
       shall not constitute a waiver of Part V, 9 of this Agreement.

10.    ANNUAL CLEAN UP. As long as this Agreement remains in effect, the
       Borrower shall at least once each twelve (12) month period pay such
       amount of outstanding advances and accrued interest thereon as may be
       necessary to maintain for a period of at least thirty (30) consecutive
       days thereafter a Loan balance less than or equal to zero percent (0%)
       of the Credit Limit. The Borrower's compliance with this provision shall
       not cause a termination of any security agreements, mortgages or other
       agreements which may secure the Loan.

III.   REPRESENTATIONS AND WARRANTIES.
      The Borrower represents and warrants that:

 1.    ORGANIZATION AND POWERS. (a) If a corporate, partnership, limited
       liability company or trust Borrower, it is duly organized, validly
       existing and in good standing, (b) it has the power and authority to own
       its properties and to carry on its business as now being conducted and,
       if a corporate, partnership, limited liability company or trust
       Borrower, is qualified to do business in every jurisdiction where such
       qualification is necessary, (c) it has the power to execute, deliver and
       perform the Loan Documents, (d) the execution, delivery and performance
       of the Loan Documents have been duly authorized by all requisite action;
       (e) the execution, delivery and performance of the Loan Documents will
       not violate any provision of law, any order of any court or other agency
       of government, the Articles of Incorporation or By-laws of a corporate
       Borrower, the partnership agreement of a partnership Borrower, the
       Articles of Incorporation or Operating Agreement of a limited liability
       company Borrower, or the trust agreement of a trust Borrower, or any
       indenture, agreement or other instrument to which it is a party, or by
       which it is bound, or be in conflict with, result in a breach of or
       constitute (with due notice or lapse of time or both) a default under
       any such indenture, agreement or other instrument, or result in the
       creation or imposition of any lien, charge or encumbrance of any nature
       whatsoever upon any of the property or assets of the Borrower (other
       than in favor of the Bank) or the acceleration of any of its outstanding
       indebtedness.

 2.    FINANCIAL STATEMENTS. The Borrower has heretofore furnished to the Bank
       accurate and complete financial data and other information based on its
       operations in previous years, and said financial data fairly presents
       the financial position and the results of operations for the periods
       indicated therein. There has been no Material Adverse Change since the
       date of the most recent financial statement.

 3.    LITIGATION. There is no action, suit or proceeding at law or in equity
       or by or before any governmental instrumentality or other agency now
       pending or threatened against or affecting the Borrower.

 4.    NO CONFLICT. The Borrower is not a party to any agreement or instrument
       or subject to any restriction materially or adversely affecting its
       business, properties or assets, operations or condition, financial or
       otherwise. The Borrower has no knowledge that it is in default in the
       performance, observance or fulfillment of any of the obligations,
       covenants or conditions contained in any agreement or instrument to
       which it is a party.

 5.    USE OF PROCEEDS. No part of the proceeds of the Loan will be used for
       consumer purposes or will be used to purchase or carry, directly or
       indirectly, any margin stock or margin security (within the meaning of
       Regulation U of the Board of Governors of the Federal Reserve System) or
       to extend credit to others for the purpose of purchasing or carrying any
       such margin stock or margin security. If requested by the Bank, the
       Borrower will furnish in connection with this Agreement a statement in
       conformity with the requirements of Federal Reserve Form U-I referred to
       in said Regulation U.

IV.    CONDITIONS OF LENDING.

       The Bank shall be obligated to make advances under this Agreement only
       if on the date such advance is requested:

UNITED ENERGY CORPORATION

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           a. The representations and warranties in Part III hereof are true and
              correct;

           b. No Event of Default exists; and

           c. The Bank shall have received: (a) certificate of authority, (b)
              the original Loan Documents, and (c) such additional supporting
              documents as the Bank may reasonably request.

V.         COVENANTS.

       The Borrower covenants and agrees that it will:

     1.    LEGAL EXISTENCE; INSURANCE; ETC. Keep in full force and effect its
           legal existence (if a corporation, partnership, limited liability
           company or trust), rights, licenses, permits and franchises and
           operate its business as conducted prior to the date hereof; maintain
           all property used in the conduct of its business and keep the same in
           good repair, working order and condition; and maintain adequate
           insurance on its properties against fire, theft, and extended
           coverage risks and against public liability and property damage and
           products liability and such other risks as may be required by law or
           as may be reasonably required by the Bank, in such form, for such
           periods, and written by such companies as may be satisfactory to the
           Bank, such insurance in the case of a secured loan to name the Bank
           as additional insured and/or mortgagee/loss payee. All policies of
           insurance shall provide for at least twenty (20) days' written notice
           to the Bank prior to cancellation or change in the coverage, scope
           or amount of any such policies or policies. Borrower shall furnish
           the Bank with certificates of compliance with the foregoing insurance
           provision.

     2.    COMPLIANCE WITH LAWS. Comply with all present and future applicable
           laws, ordinances, rules, regulations, directives and other
           requirements of all governmental instrumentalities, including without
           limitation those relating to Hazardous Substances, within such time
           periods as required thereby, with time being of the essence.

     3.    OPERATION OF BUSINESS. Maintain and operate its business in a proper
           and efficient manner.

     4.    PAYMENT OF TAXES. Pay and discharge all taxes, assessments, and
           governmental charges imposed upon Borrower, its income or its
           property before the same shall be in default, as well as all lawful
           claims for labor, materials and supplies or otherwise which, if
           unpaid, might become a lien upon any such properties.

     5.    FINANCIAL STATEMENTS. Furnish to the Bank

           a. promptly, from time to time as requested by the Bank, and in all
              events within one hundred twenty (120) days after the close of
              each applicable party's tax year, (i) with respect to the Borrower
              and all corporate, partnership or trust guarantors, financial
              statements (audited if requested), balance sheets, profit and loss
              statements, together with supporting schedules, signed and in such
              form as may be acceptable to the Bank; (ii) with respect to all
              individual guarantors, signed personal financial statements; and
              (iii) with respect to all entities and individuals referred to in
              (i) and (ii), current Federal income tax returns (with all
              schedules and exhibits), or in the case of a partnership, Form
              1065 (with all schedules and exhibits). In any event, all the
              documents referred to in this subparagraph (a), regardless of when
              last submitted, must be submitted to the Bank, as often as the
              Bank shall deem necessary, if there occurs a Material Adverse
              Change.

           b. promptly, from time to time, such other information regarding the
              operations, assets, business, affairs and financial condition of
              the Borrower and all guarantors, as the Bank may reasonably
              request; and

           c. with respect to all personal financial statements submitted by
              individual guarantors, such statements shall be on forms
              prescribed by the Bank.

     6.    INSPECTION. Permit agents or representatives of the Bank, at
           reasonable hours and upon reasonable notice, to inspect the Books and
           Records of the Borrower and to make abstracts or reproductions
           thereof, all at the Borrower's expense.

     7.    ADVERSE CHANGES. Promptly advise the Bank of any Material Adverse
           Change.

     8.    ACCOUNTING SYSTEM. Maintain a standard system of accounting in
           accordance with generally accepted accounting principles.

     9.    DEPOSITORY. Maintain the Bank as the Borrower's principal depository.

     10.   INDEBTEDNESS. Not incur or permit to exist any indebtedness or
           liability except indebtedness to the Bank or any Bank affiliate,
           indebtedness with respect to warranty, trade obligations and other
           liabilities incurred in the ordinary course of business, and any
           indebtedness or liability permitted in writing by the Bank.

     11.   LIENS. Not create, assume or suffer to exist any mortgage, security
           interest, or lien on any of its assets, now or hereafter owned, other
           than liens securing indebtedness to the Bank or any Bank affiliate,
           liens securing the payment of taxes not yet due, liens imposed by law
           (other than for borrowed money), liens incurred by the Borrower in
           good faith in the ordinary course of business, and other liens
           permitted in writing by the Bank.

     12.   GUARANTIES; ETC. Not guarantee, endorse or otherwise become or be
           responsible for obligations of any other person or entity, whether by
           agreement to purchase the indebtedness of any other person or entity
           or agreement for the furnishing of funds to any other person or
           entity through purchase of Goods, supplies or services, or by way of
           stock purchase, capital contribution, advance or loan, for the
           purpose of paying or discharging any indebtedness or obligation of
           such other person or entity, or otherwise, except endorsements of
           negotiable instruments for collection in the ordinary course of
           business.

     13.   INVESTMENTS. Not purchase, invest in or otherwise acquire or hold
           Securities including, without limitation, capital stock (including
           closely held stock) and evidences of indebtedness of, or make loans
           or advances to, or enter into any arrangement for the purpose of
           providing funds or credit to, any other person or entity (including,
           without limitation, all Affiliates of the Borrower), except
           investments in short-term obligations of the United States and
           certificates of deposit issued by the Bank or any Bank Affiliate.

     14.   SALES OF ACCOUNTS AND INSTRUMENTS. Not sell, assign, discount or
           dispose of any Accounts or Instruments held by the Borrower, with or
           without recourse, except for collection (including endorsements) in
           the ordinary course of business.

UNITED ENERGY CORPORATION                                                    40
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 15.  SALES AND TRANSFERS. Not sell, assign, lease, transfer, sell and
      leaseback, or otherwise dispose of all or any material amount of its
      assets not in the ordinary course of business to any person or entity or
      turn over the management of, or enter into a management contract with
      respect to, such assets.

 16.  VALUATION. Not write up (by creating an appraisal surplus or otherwise)
      the value of any capital assets above their cost less the depreciation
      regularly allowable thereon.

 17.  FUNDAMENTAL CHANGES. Not dissolve, liquidate, consolidate with or merge
      with any corporation, limited liability company or other entity or agree
      to do any of the foregoing.

 18.  DISTRIBUTIONS. If a corporate Borrower, not declare or pay any dividends,
      or make any distribution to holders of shares of its capital stock (and on
      account of such capital stock) of cash, capital stock or other property,
      or directly or indirectly, redeem, purchase or otherwise acquire any
      shares of its capital stock of any class; and if a partnership or limited
      liability company Borrower, not permit the return or withdrawal of any
      capital contributions; provided, however, that if the Borrower is an "S"
      Corporation under the Internal Revenue Code, the Borrower may make
      annually such cash distributions to its shareholders as shall equal the
      sum of federal income taxes which are allocable to such shareholders'
      income received or deemed to have been received on account of such
      shareholders' capital stock in the Borrower.

 19.  Additional Covenants. Comply with the additional covenants, if any, set
      forth on affixed Exhibit A-1.

VI.  SECURITY AGREEMENT AND OTHER SECURITY DOCUMENTS.

  In addition to any Collateral which may be provided for in Part VI of this
  Agreement, the Loan is secured by one or more of the following additional
  documents: Pledge Agreement(s),

1.    SECURITY INTEREST; COLLATERAL; OBLIGATIONS. The Borrower hereby
      grants to the Bank, as security for any and all obligations whatsoever of
      the Borrower to the Bank, whether direct, indirect, absolute or
      contingent, due or to become due, and whether now existing or hereafter
      arising and howsoever evidenced or acquired, including without limitation
      all indebtedness and liabilities evidenced by the Loan, this Agreement,
      the other Loan Documents, checking account overdrafts, and letter of
      credit reimbursement agreements, excluding, however, indebtedness incurred
      primarily for personal, family or household purposes (collectively, the
      "Obligations"), a security interest in and agrees and acknowledges that
      the Bank has and will continue to have a security interest in all of the
      Collateral described below, both presently owned and after acquired,
      together with all proceeds and products thereof, additions and accessions
      thereto, and all replacements and substitutions therefor (collectively,
      the "Collateral"), excluding, however, all such Collateral which
      constitutes Consumer Goods in the hands of the Borrower: Accounts,
      Books/Records, Chattel, Documents, Equipment, Fixtures, Instruments,
      Intangibles, Inventory, Securities, Machinery, Furniture, Contract Rights.

 2.   Borrower hereby warrants, covenants and agrees that:

   a.  TITLE; ADVERSE LIENS. Except for prior security interests disclosed on
       Exhibits A-2 (if any) and except for the security interest granted
       hereby, the Borrower is the owner of presently owned Collateral and will
       be the owner of Collateral hereafter acquired free from any adverse lien,
       and Borrower will defend the Collateral against the claims and demands of
       all persons at any time claiming the same or any interest therein.

   b.  FINANCING STATEMENTS. Except for financing statements evidencing the
       security interests which may be listed on Exhibit A-2 (if any), no
       financing statements covering any Collateral are on file in any public
       office. At the request of the Bank, the Borrower will execute one or more
       (i) financing statements pursuant to the UCC; (ii) title certificate lien
       application forms; and (iii) other documents necessary or advisable to
       perfect the security interests evidenced hereby, all in form satisfactory
       to the Bank. Where allowed by law, the Borrower hereby irrevocably
       authorizes the Bank to file financing statements and amendments without
       the signature of the Borrower. The Borrower will pay the cost of filing
       the aforesaid documents or filing or recording this Agreement in all
       public offices wherever filing or recording is deemed by the Bank to be
       necessary or desirable.

   c.  ADVERSE LIENS. The Borrower will keep the Collateral free from any future
       adverse liens.

   d.  EQUIPMENT. If the Borrower has granted a security interest in Equipment:
      i.  The Equipment is used primarily for business purposes.

      ii. The Equipment will be kept at the location listed on affixed Exhibit
          A-3. Borrower will promptly notify Bank of any change in the location
          of the Equipment, and Borrower will not remove the Equipment from such
          location without the prior written consent of the Bank.

   e.  INVENTORY. If the Borrower has granted a security interest in Inventory:

      i.  The Inventory is acquired for business purposes. In the absence of an
          Event of Default hereunder, the Borrower may sell the Inventory in the
          ordinary course of its business upon terms not exceeding thirty (30)
          days, or upon such further terms as the Bank may from time to time
          approve. The Borrower shall not without the consent of the Bank sell
          the Inventory to any supplier or employee of the Borrower or to any
          person to whom the Borrower is indebted or under circumstances which
          would otherwise create an adverse lien, including a right of set-off,
          against the Account resulting from such sale.

      ii. Inventory will be kept at the location listed on affixed Exhibit A-3.
          The Borrower will promptly notify the Bank of any change in the
          location of the Inventory, and the Borrower will not remove the
          Inventory from such location without the prior written consent of the
          Bank.

   f.  ACCOUNTS. If the Borrower has granted a security interest in Accounts:

      i.  The Borrower will upon demand render to the Bank a statement
          indicating the total dollar value of the Accounts.

UNITED ENERGY CORPORATION

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               ii.  The only offices where the Borrower keeps Books and Records
                    concerning any Accounts is at the location listed on affixed
                    Exhibit A-3. The Borrower will not remove any of such Books
                    and Records from said offices without the prior written
                    consent of the Bank.

               iii. During the five years immediately preceding the grant of the
                    security interest hereby to the Secured Party, Borrower has
                    maintained its chief executive office at the address(es),
                    and during the time periods, set forth on Exhibit A-3.
                    Without the prior written consent of the Secured Party,
                    Borrower will not change its chief executive office.

               iv.  The Borrower will at all times keep accurate and complete
                    Books and Records of its Accounts, and the Bank or any of
                    its agents shall have the right to inspect the Borrower's
                    Books and Records relating to said Accounts or to any other
                    transactions to which the Borrower is a party and from which
                    an Account might arise and to make extracts from said Books
                    and Records, all at the Borrower's expense. The Bank may in
                    its own name or in the names of others, communicate with
                    account debtors in order to verify with them, to the Bank's
                    satisfaction, the existence, amount and terms of any
                    Accounts. The Borrower shall immediately notify the Bank of
                    any event causing loss or depreciation in value of any of
                    its Accounts and the amount of such loss or depreciation.

               v.   If any of the Borrower's Accounts arise out of contracts
                    with the United States or any department, agency or
                    instrumentality thereof, the Borrower will immediately
                    notify the Bank thereof in writing and execute any
                    instruments and take any steps required by the Bank in order
                    that all monies due and to become due under such contracts
                    shall be assigned to the Bank and notice thereof given to
                    the government under the Federal Assignment of Claims Act.

               vi.  If any of the Borrower's Accounts should be evidenced by
                    Instruments, the Borrower will immediately deliver such
                    Instruments to the Bank, appropriately endorsed to the
                    Bank's order and, regardless of the form of such
                    endorsement, the Borrower hereby waives presentment, demand
                    or notice of any kind with respect thereto.

               vii. This Agreement may, but need not be supplemented by separate
                    assignments of Accounts to the Bank, and if such assignments
                    are given, the rights given thereby shall be in addition to
                    and not in limitation of the rights and security interests
                    given by this Agreement.

          g.   FIXTURES; FARM PRODUCTS. If the Borrower has granted a security
               interest in Fixtures and/or Farm Products, there is affixed
               hereto as Exhibit A-4 a description of the applicable real estate
               and the name(s) of the record owner.

          h.   INVESTMENT SECURITIES. If the Borrower has granted a security
               interest in Investment Securities the Bank may transfer
               Collateral into its name or that of its nominee and may receive
               the income and any distributions thereon and hold the same as
               Collateral for the Obligations, or apply the same to any
               Obligation, whether or not an Event of Default has occurred.

VII. EVENTS OF DEFAULT.

     THE ITEMIZATION OF THE FOLLOWING EVENTS OF DEFAULT DOES NOT CHANGE THE
     DEMAND NATURE OF THE OBLIGATIONS EVIDENCED BY THIS AGREEMENT AND THE NOTE.

     1.   LISTING OF EVENTS OF DEFAULT. The occurrence of any of the following
          events or conditions with respect to the Borrower shall, individually
          and collectively, be an "Event of Default" hereunder:

          a.   any representation or warranty made herein or in any report,
               certificate, financial statement or other instrument furnished in
               connection with this Agreement or the Loan shall prove to be
               false or misleading in any material respect;

          b.   failure to pay the principal of, or interest on, the Note or any
               other indebtedness of the Borrower to the Bank, within ten (10)
               days from the date the same or any installment thereof shall
               become due and payable, whether at the due date thereof or at a
               date fixed for prepayment or by acceleration or otherwise;

          c.   default in the due observance or performance of any other
               covenant, condition or agreement contained in this Agreement, any
               of the other Loan Documents, or in any other agreement or
               document evidencing or pertaining to Obligations, and such other
               default shall remain unremedied for ten (10) days;

          d.   the acceleration of the maturity of any of the Borrower's
               indebtedness other than to the Bank;

          e.   involvement in financial difficulties as evidenced by:

          f.   an attachment made on the Borrower's property or assets which
               remains unreleased for a period in excess of forty-five (45)
               days; or

               i.   the inability to pay its debts (including without limitation
                    taxes) generally as they become due; or

               ii.  the appointment or authorization of a custodian as defined
                    in the Bankruptcy Code; provided, however, that in the case
                    of the appointment of a receiver in an involuntary
                    proceeding such appointment continues in effect and
                    undischarged for a period of thirty (30) days; or

               iii. the entry of an order for relief in a voluntary case under
                    any chapter of the Bankruptcy Code; or

               iv.  the filing of an involuntary petition under any chapter of
                    the Bankruptcy Code, which petition remains undismissed for
                    a period of thirty (30) days; or

               v.   any other judicial modification or adjustment of the rights
                    of Borrower's creditors;

          g.   final judgment for the payment in excess of an aggregate of Ten
               Thousand Dollars ($10,000.00) shall be rendered against the
               Borrower and the same shall remain undischarged for a period of
               thirty (30) consecutive days during which execution shall not be
               effectively stayed;

          h.   any transfer (which shall include, without limitation, by sale,
               exchange, gift, pledge, hypothecation, or by other means except
               transfers by operation of law) to any person who is not presently
               a shareholder of a corporate Borrower or the spouse or child of a
               shareholder of a corporate Borrower of any voting capital stock
               of the Borrower, except any transfers of such shares upon the
               death of a shareholder either by will or by intestacy;

UNITED ENERGY CORPORATION                                                     42
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          i. any transfer (as defined in (g)) to any person who is not presently
             a partner of a partnership Borrower or the spouse or child of a
             partner of a partnership Borrower of any partnership interest in
             the Borrower, except any transfer of such interest upon the death
             of a partner either by will or intestacy;

          j. any transfer (as defined in (g)) to any person who is not presently
             a member of a limited liability company Borrower or the spouse or
             child of a member of a limited liability company Borrower of any
             membership interest in the Borrower, except any transfer of such
             interest upon the death of a member either by will or intestacy;

          k. in the case of a trust Borrower, (i) any change in the
             beneficiaries of the trust; (ii) any dilution of the beneficial
             interest of one or more of the beneficiaries; or (iii) any change
             in the trustee or trustees;

          l. the suspension of business for cause, other than strike, casualty
             or other cause beyond the Borrower's control and in the event of
             such suspension for cause beyond the Borrower's control, failure to
             resume operations as soon as possible;

          m. dissolution or termination of the legal existence of the Borrower;

          n. participation in any illegal activity or in any activity, whether
             or not related to the business of the Borrower, that may subject
             the assets of the Borrower to (i) a restraining order or any form
             of injunction issued by any federal or state court, or (ii)
             seizure, forfeiture or confiscation by any federal or state
             governmental instrumentality;

          o. if the Bank believes in good faith, at any time, that either (a)
             the prospect of the Borrower's (i) repayment of the Loan or payment
             of any of its other obligations under the Loan Documents or (ii)
             performance of its duties thereunder is impaired or (b) there is
             any Material Adverse Change; or

          p. with respect to any guaranty and/or subordination agreement
             included in the Loan Documents, the failure of the same to remain
             in full force and effect until the Loan is paid in full and this
             Agreement is terminated.

     2.   CERTAIN CROSS-DEFAULTS. The happening of any event or condition set
          forth in subsection 1(e), (f), (l), or (m) above, with respect to a
          general partner of a partnership Borrower or any guarantor of the Loan
          shall likewise constitute an Event of Default.

     3.   TERMINATION OF COMMITMENT. If an Event of Default occurs, the Bank, at
          its option, may (i) make demand for payment of the entire outstanding
          principal balance and all accrued interest on account of the advances
          (the Bank having the right at all times, whether or not an Event of
          Default has occurred, to make such demand); and (ii) terminate the
          commitment to make advances under this Agreement (provided, however,
          that if the Bank shall exercise its discretionary right to make
          demand, such demand shall also terminate the Bank's commitment to make
          advances, whether or not an Event of Default has occurred).

VIII. MISCELLANEOUS.

     1.   WAIVER OF EVENT OF DEFAULT. No delay in terminating the Bank's
          commitment under this Agreement and/or in making demand shall affect
          the rights of the Bank later to take such action with respect thereto,
          and no waiver as to one Event of Default shall affect rights as to any
          other default.

     2.   NOTICES. Except as otherwise specifically provided for herein, any
          notice, demand or communication hereunder shall be given in writing
          (including facsimile transmission or telex) and mailed or delivered to
          each party at its address set forth below, or, as to each party, at
          such other address as shall be designated by such party by a prior
          notice to the other party in accordance with the terms of this
          provision. Any notice to the Borrower shall be sent as follows: UNITED
          ENERGY CORPORATION, 600 Meadowlands Parkway #20, Secaucus, NJ 07094.
          All notices hereunder shall be effective upon the earliest to occur of
          (i) five (5) business days after such notice is mailed, by registered
          or certified mail, postage prepaid (return receipt requested), (ii)
          upon delivery by hand (iii) upon delivery if delivered by overnight
          courier (such delivery to be evidenced by the courier's records), and
          (iv) in the case of any notice or communication by telex or telecopy,
          on the date when sent.

     3.   SURVIVAL. This Agreement and all covenants, agreements,
          representations and warranties made herein and in the certificates
          delivered pursuant hereto shall survive any making by the Bank of the
          Loan and the execution and delivery of any Loan Documents and shall
          continue in full force and effect until this Agreement is terminated
          and all the Obligations are paid in full.

     4.   LEGAL FEES AND EXPENSES; ADDITIONAL FEES AND CHARGES. The Borrower
          will pay all expenses incurred by the Bank in connection with the
          preparation of the Loan Documents, the making of the Loan, and the
          enforcement of the rights of the Bank in connection with this
          Agreement, any of the other Loan Documents and the Loan, including,
          but not limited to, the reasonable fees of its counsel (which may
          include costs allocated by the Bank's internal legal department), plus
          the disbursements of said counsel. Borrower further agrees to pay to
          the Bank on demand all reasonable fees, costs and expenses incurred by
          the Bank in connection with the administration of the Loan, including,
          without limitation, overnight courier fees, lien search fees, and
          filing and recording fees. The Borrower agrees to pay on demand the
          Bank's service fees and charges for administrative costs as in effect
          from time to time (including, without limitation, such fees and
          charges as may be expressly provided for in this Agreement). Any such
          fee or charge may be implemented by the Bank from time to time or, in
          the case of any such existing fee or charge, the amount thereof may be
          increased by the Bank from time to time, in each instance, in or to
          such amount as the Bank in its sole discretion deems reasonable.

     5.   CHOICE OF LAW. This Agreement and all the other Loan Documents shall
          be construed in accordance with and governed by the local laws
          (excluding the conflict of laws rules, so-called) of the State.

     6.   WRITTEN MODIFICATION AND WAIVER. No modification or waiver of any
          provision of this Agreement or of any of the other Loan Documents nor
          consent to any departure by the Borrower therefrom shall in any event
          be effective unless the same shall be in writing, and then such waiver
          or consent shall be effective only in the specific instance and for
          the purpose for which

UNITED ENERGY CORPORATION                                                    43
<PAGE>   7
     given. No notice to or demand on the Borrower in any case shall entitle the
     Borrower to any other or further notice or demand in the same, similar or
     other circumstances.
 7.  ACCOUNTING PRACTICE. All matters involving accounting practice are to be
     determined both as to classification of items and amounts in accordance
     with generally accepted principles of accounting practice consistently
     applied by the Borrower's accountants in the preparation of its previous
     annual financial statements.
 8.  DOCUMENTATION. All documents required hereunder shall be in form and
     substance satisfactory to the Bank.
 9.  JOINT AND SEVERAL OBLIGATIONS. If this Agreement is signed by more than one
     Borrower, all obligations of the Borrowers are their joint and several
     obligations, and all references to the Borrower herein shall be deemed to
     refer to each of them, either of them, and all of them.
10.  UNENFORCEABILITY. In the event any term or provision of this Agreement or
     the application thereof to any person or circumstance shall, to any extent,
     be held invalid or unenforceable, the remainder of this Agreement or the
     application of such term or provision to persons or circumstances other
     than those to which it is held invalid or unenforceable, shall be valid
     and enforceable to the fullest extent permitted by law.
11.  CUMULATIVE REMEDIES; SETOFF. The rights and remedies provided the Bank in
     this Agreement and in the other Loan Documents shall be cumulative and
     shall be in addition to and not in derogation of any rights or remedies
     provided the Bank in any other document, instrument or agreement or under
     applicable law or otherwise, and may be exercised concurrently or
     successively. Borrower and any Guarantor hereby grant to Bank, a lien,
     security interest and right of setoff as security for all liabilities and
     obligations to Bank, whether now existing or hereafter arising, upon and
     against all deposits, credits, collateral and property, now or hereafter
     in the possession, custody, safekeeping or control of Bank or any entity
     under the control of FleetBoston Financial Corporation, or in transit to
     any of them. At any time, without demand or notice, Bank may set off the
     same or any part thereof and apply the same to any liability or obligation
     of Borrower and any Guarantor even though unmatured and regardless of the
     adequacy of any collateral securing the Loan. ANY AND ALL RIGHTS TO
     REQUIRE  BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER
     COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING ITS RIGHT OF SETOFF
     WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF THE BORROWER OR
     ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.
12.  ASSIGNMENTS AND PARTICIPATIONS. The Borrower agrees that the Bank shall
     have the right at all times to sell all or any portion of the Loan and all
     Loan Documents, and to grant one or more participations in the Loan and in
     all Loan Documents. In connection therewith, the Borrower hereby
     irrevocably authorizes the Bank to deliver to each such purchaser,
     participant and prospective purchaser and prospective participant originals
     and copies of all Loan Documents and all financial statements and other
     credit and factual data from time to time in the Bank's possession which
     relate to the Borrower and/or all guarantors, if any, of the Loan. The
     Borrower further agrees that the Bank shall have the right at all times to
     disclose and report to credit reporting agencies such information
     pertaining to the Borrower and/or all guarantors, if any, as is consistent
     with the Bank's policies and practices from time to time in effect.
13.  MAXIMUM RATE OF INTEREST. All provisions of this Agreement are expressly
     subject to the condition that in no event shall the amount paid or agreed
     to be paid to the Bank hereunder and deemed interest under applicable law
     exceed the maximum rate of interest on the unpaid principal balance of the
     Loan allowed by applicable law (the "Maximum Allowable Rate"), which shall
     mean the law in effect on the date of this Agreement, except that if there
     is a change in such law which results in a higher Maximum Allowable Rate
     being applicable to this Agreement, then this Agreement shall be governed
     by such amended law from and after its effective date. In the event that
     fulfillment of any provision of this Agreement results in the interest rate
     hereunder being in excess of the Maximum Allowable Rate, the obligation to
     be fulfilled shall automatically be reduced to eliminate such excess. If,
     notwithstanding the foregoing, the Bank receives an amount which under
     applicable law would cause the interest rate set forth in this Agreement to
     exceed the Maximum Allowable Rate, the portion thereof which would be
     excessive shall automatically be applied to and deemed a prepayment of the
     unpaid principal balance of the Loan and not a payment of interest.
14.  WAIVER OF JURY TRIAL. THE BORROWER WAIVES ANY RIGHTS IT MAY HAVE TO A
     TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT
     AND ANY OF THE OTHER LOAN DOCUMENTS, AND AGREES THAT ANY SUCH DISPUTE SHALL
     BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
15.  JURISDICTION AND VENUE. The Borrower irrevocably consents that any legal
     action or proceeding against it or any of its property with respect to any
     matter arising under or relating to this Agreement and the other Loan
     Documents may be brought in any court of the State, or any Federal Court of
     the United States of America located in the State, as the Bank may elect,
     and by execution and delivery of this Agreement the Borrower hereby
     submits to and accepts with regard to any such action or proceeding, for
     itself and in respect of its property, generally and unconditionally, the
     jurisdiction of the aforesaid courts. The Borrower further irrevocably
     consents to the service of process in any such action or proceeding by the
     mailing of copies thereof by registered or certified mail, postage prepaid,
     to the Borrower at its address set forth herein. The foregoing, however,
     shall not limit the Bank's rights to serve process in any other manner
     permitted by law or to bring any legal action or proceeding or to obtain
     execution of judgment in any other jurisdiction. The Borrower irrevocably
     waives any objection which it may now or hereafter have to the laying of
     the venue of any suit, action or proceeding arising out of or relating to
     this Agreement and the other Loan Documents, and further irrevocably waives
     any claim that the State is not a convenient forum for any such suit,
     action or proceeding.

UNITED ENERGY CORPORATION                                                     44
<PAGE>   8
16.  PRESENTMENT; ETC. The Borrower expressly waives presentment, notice of
     dishonor, protest and notice of non-payment.
17.  DEBIT. The Borrower hereby irrevocably authorizes the Bank and any
     subsequent holder of the Note, both before and after demand, to debit any
     of the Borrower's business accounts maintained with the Bank (or
     subsequent holder for all sums (including without limitation principal,
     interest, late fees, and other fees) payable from time to time under this
     Agreement and the other Loan Documents. In addition, if the Borrower has
     signed a separate authorization, the Bank is authorized to initiate ACH
     debit transfers for the Loan payments and on the business account(s)
     specified in the authorization. These provisions shall not obligate the
     Bank to create or allow any overdraft, and such authority shall not relieve
     the Borrower of the obligation to assure that payments are made when due.
18.  INTEGRATION. The Loan Documents supersede all prior agreements between the
     parties with respect to the Loan, whether oral or written, including,
     without limitation, all correspondence between counsel for the respective
     parties. The Loan Documents constitute the entire agreements between the
     parties with respect to the Loan, and the rights, duties, and obligations
     of the parties with respect thereto.
19.  LENDER LIABILITY. The Bank shall not be liable for any loss sustained by
     any party resulting from any action, omission, or failure to act by the
     Bank, whether with respect to the exercise or enforcement of the Bank's
     rights or remedies under the Loan Documents, the Loan, or otherwise, unless
     such loss is caused by the actual willful misconduct of the Bank conducted
     in bad faith. IN NO EVENT SHALL THE BANK EVER BE LIABLE FOR CONSEQUENTIAL
     OR PUNITIVE DAMAGES, ANY RIGHT OR CLAIM THERETO BEING EXPRESSLY AND
     UNCONDITIONALLY WAIVED.
20.  BANK'S DECISIONAL STANDARDS. To the extent that applicable laws require
     the Bank's actions or decisions under the Loan Documents to be conducted in
     good faith, the term "good faith" shall be defined (using a subjective
     standard) as honesty in fact with regard to the conduct or transaction
     concerned based upon the facts and circumstances actually known to the
     individual(s) acting for the Bank, and such requirement may be satisfied by
     reliance upon the advice of attorneys, accountants, appraisers, architects,
     engineers, or other qualified professionals. 21.  DESCRIPTIVE HEADINGS;
     CONTEXT. The captions in this Agreement are for convenience of reference
     only and shall not define or limit any provision. Whenever the context
     requires, reference in this Agreement to the neuter gender shall include
     the masculine and/or feminine gender, and the singular number shall include
     the plural, and, in each case, vice versa. 22.  ACKNOWLEDGMENT OF COPY. The
     Borrower acknowledges that it has received a fully executed copy of this
     Agreement.

  IN WITNESS WHEREOF, the Borrower and the Bank, by persons duly authorized,
  have executed this Agreement as of May 31, 2000.

WITNESS:

                                                    UNITED ENERGY CORPORATION
/s/ James L. Biringer, VP
--------------------------                          By:   /s/ Ronald Wilen
                                                          ----------------------
                                                    Name:  Ronald Wilen
                                                    Title: President

                                                    By:
                                                          ----------------------
                                                    Name:
                                                    Title:

                                                    Fleet Bank, N.A.

[signature illegible]                               By:    /s/ James L. Biringer
                                                           ---------------------
                                                    Name:  James L. Biringer
                                                    Title: Vice President

UNITED ENERGY CORPORATION                                                    45

<PAGE>   9
                                  EXHIBIT A-1

<TABLE>
<CAPTION>
           COVENANT                         LIMITS          TESTING FREQUENCY
<S>                                        <C>                 <C>
NI+Dep+Int Exp-Unfunded CAPEX-Dividends    1.20 to 1           Annual
---------------------------------------
             CMLTD+Int
         Minimum TNW (GAAP)                600,000             Quarterly
</TABLE>

UNITED ENERGY CORPORATION                                                    46

<PAGE>   10
                                  EXHIBIT A-2

                     PRIOR SECURITY INTERESTS IN COLLATERAL

                                  EXHIBIT A-3

                             LOCATION OF EQUIPMENT
                 600 Meadowlands Parkway #20 Secaucus, NJ 07094

                             LOCATION OF INVENTORY
                 600 Meadowlands Parkway #20 Secaucus, NJ 07094

                     OFFICES CONTAINING RECORDS OF ACCOUNTS
                 600 Meadowlands Parkway #20 Secaucus, NJ 07094

                                  EXHIBIT A-4

                           DESCRIPTION OF REAL ESTATE

                            NAME(S) OF RECORD OWNER

UNITED ENERGY CORPORATION                                                    47

<PAGE>   11
                         LINE OF CREDIT PROMISSORY NOTE

$1,000,000.00 PRINCIPAL AMOUNT

                                                              Date: May 31, 2000

BORROWER: UNITED ENERGY CORPORATION

BANK: Fleet Bank, N.A.

BANK'S ADDRESS: 30 Montgomery Street, Jersey City, New Jersey 07303

INTEREST RATE: The interest rate per annum equal to ZERO (0.00%) percentage
     points above the Prime Rate (as defined in Section 2).

PAYMENT SCHEDULE: Monthly payments of interest only in arrears shall be due and
     payable commencing on JULY 1, 2000, and continuing on the same day of each
     successive month, and upon payment in full of this Note. Principal shall be
     due and payable on demand.

LOAN AGREEMENT: That certain Line of Credit Loan Agreement of even date between
     the Bank and the Borrower relating to the indebtedness evidenced hereby,
     the terms and provisions of which are incorporated herein by reference.

     All capitalized words or phrases which are not otherwise specifically
     defined hereinabove or elsewhere in this Note shall have the meaning
     assigned in the Loan Agreement.

1.   PROMISE TO PAY. FOR VALUE RECEIVED, the Borrower (jointly and severally if
     more than one) promises to pay to the order of the Bank, ON DEMAND, the
     Maximum Principal Amount or if less, the aggregate unpaid principal amount
     of advances made by the Bank to the Borrower pursuant to the Loan
     Agreement; together with interest in accordance with the Payment Schedule
     and at the Interest Rate on the unpaid principal balance hereof from time
     to time outstanding. Notwithstanding the foregoing, from and after demand,
     all principal and other amounts outstanding and payable under this Note
     shall bear interest at the rate of sixteen percent (16%) per annum until
     paid in full. All interest payable hereunder shall be computed on the basis
     of the actual number of days elapsed using a three hundred sixty (360) day
     year.

2.   PRIME RATE. Each reference in this Note to "Prime Rate" shall mean the
     prime rate designated from time to time by the Bank as being its "prime
     rate" of interest, such interest rate to change on the effective date of
     each change in the Prime Rate, which rate of interest may not necessarily
     be the lowest rate of interest charged by the Bank to anyone of its
     customers or any particular class of customers.

3.   PAYMENT PROVISIONS. All sums payable hereunder are payable in lawful money
     of the United States of America and in immediately available funds at the
     Bank's Address or at such place or places as the Bank, its successors or
     assigns (collectively, the "Holder"), may designate in writing. If this
     Note or any payment hereunder becomes due on a Saturday, Sunday or other
     holiday on which the Bank is authorized to close, the due date of this Note
     or payment shall be extended to the next succeeding business day, but any
     interest or fees shall be calculated based on the actual time of payment.
     Each Note payment (other than final payment in full of the Note) made by
     check drawn on a bank other than the Bank shall be credited to the Note on
     the business day that funds are deemed to be available under applicable
     federal law.

4.   PREPAYMENT. This Note may be prepaid at any time, in whole or in part,
     without premium, penalty or other charge (except as set forth in the next
     sentence), but with accrued interest to the day of such prepayment on the
     amount prepaid. To the extent that any full prepayment during the first
     twelve (12) months from the date of this Note results, directly or
     indirectly, from the application of funds borrowed by the Borrower from any
     lending or financial services institution other than the Bank, the Borrower
     shall pay to the Bank at the time of such prepayment a non-refundable early
     termination fee of $35 (if unsecured) $75 (if secured).

5.   LATE FEE. If the entire amount of any principal and/or interest is not paid
     in full within (10) days after the same is due, the Borrower shall pay the
     Bank a later fee equal to five percent (5%) of the required payment.

6.   FEES AND EXPENSES. The Borrower will pay all expenses incurred by the
     Holder in connection with the preparation of the Loan Documents, the making
     of the loan evidenced by this Note, and the enforcement of the rights of
     the Holder in connection with this Note and the Loan Documents, including,
     but not limited to, the reasonable fees of its counsel (which may include
     costs allocated by the Holder's internal legal department), plus the
     disbursements of said counsel. The Borrower further agrees to pay to the
     Holder on demand all reasonable fees, costs and expenses incurred by the
     Holder in connection with the administration of this Loan, including,
     without limitation, overnight courier fees, lien search fees, filing and
     recording fees, and other fees and charges as provided in the Loan
     Agreement.

UNITED ENERGY CORPORATION                                                    48

<PAGE>   12
7.   PLEDGE TO FEDERAL RESERVE. Bank may at any time pledge all or any portion
     of its rights under the loan documents including any portion of the
     promissory note to any of the twelve (12) Federal Reserve Banks organized
     under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such
     pledge or enforcement thereof shall release Bank from its obligations under
     any of the loan documents.

8.   WAIVER. The Borrower expressly waives presentment, notice of dishonor,
     protest and notice of non-payment.

9.   JOINT AND SEVERAL OBLIGATIONS. If this Note is signed by more than one
     Borrower, all obligations of the Borrower are their joint and several
     obligations.

10.  CHOICE OF LAW. This Note shall be construed in accordance with and governed
     by the local laws (excluding the conflict of laws rules, so-called) of the
     State of New Jersey.

WITNESS:                                UNITED ENERGY CORPORATION
/s/ James L. Biringer
--------------------                    BY: /s/ Ronald Wilen
Vice President                          --------------------------
                                        NAME: Ronald Wilen
                                        TITLE: President

                                        BY:
-------------------                        --------------------------
                                        NAME:
                                        TITLE:

UNITED ENERGY CORPORATION                                                    49

<PAGE>   13
                                PLEDGE AGREEMENT

United Energy Corporation (jointly and severally if more than one, the
"Pledgor") and FLEET BANK, N.A., a national banking association created and
existing under the laws of the United States of America with a principal office
located at 30 Montgomery Street, Jersey City, New Jersey 07303 (the "Bank"),
agree as follows:

1.  DEFINITIONS.  THE FOLLOWING ADDITIONAL DEFINITIONS APPLY:

    A.  BORROWER: UNITED ENERGY CORPORATION.

    B.  LIABILITIES:  All obligations, indebtedness and liability of any type of
        the Borrower and the Pledgor to the Bank, whether now existing or
        hereafter incurred, whether direct, indirect, absolute or contingent,
        whether otherwise guaranteed or secured, and howsoever evidenced or
        acquired, excluding, however, indebtedness incurred primarily for
        personal, family or household purposes; the obligations of the Borrower
        and the Pledgor under any agreement evidencing any of the foregoing; and
        expenses or costs incurred by the Bank in the enforcement of any of its
        rights with respect thereto.

    C.  PLEDGED COLLATERAL:  (i) The property delivered or otherwise transferred
        by the Pledgor to the Bank and consisting, as of the date of this
        Agreement, of the property described on affixed Exhibit A; (ii) any and
        all securities (both certificated and uncertificated), closely held
        capital stock, notes, mortgages, instruments, documents, letters of
        credit, certificates of deposit, deposit accounts, bank accounts,
        balances in any account of the Pledgor with the Bank, and all other
        property interests which may subsequently be delivered or transferred by
        the Pledgor to the Bank; (iii) any of the foregoing when put in transit
        to the Bank; (iv) in the case of securities and closely held capital
        stock, Pledged Collateral shall include, without limitation, all shares
        of any class of the capital stock of the issuer which shall be issued or
        distributed (by way of stock dividends or otherwise) or sold by the
        issuer to the Pledgor at any time or times after the date of this
        Agreement or which shall be purchased or otherwise acquired by or on
        behalf of the Pledgor from the issuer or from any other person or
        persons at any time or times after the date of this Agreement; all
        dividends of every kind which shall become and be due and payable or
        distributable on or in respect of all or any of the securities and
        closely held capital stock; all payments of every kind whatever which
        shall become and be due and payable or distributable on account of the
        purchase, redemption, repurchase or other retirement of all or any of
        the securities and closely held capital stock; all other distributions
        of every kind (including, without limitation, all capital distributions)
        which shall become and be due and payable or distributable on or in
        respect of the securities and closely held capital stock; and (v) all
        proceeds of the foregoing, including, without limitation, the roll-over
        or reinvested proceeds of the foregoing. Any delivery or transfer of any
        of the Pledged Collateral to an agent or custodian designated by the
        Bank shall be deemed a delivery or transfer to the Bank.

2.  SECURITY INTEREST.  The Pledgor hereby pledges and impresses the Pledged
    Collateral with a lien, and grants to the Bank a security interest in the
    Pledged Collateral, to secure the punctual payment and performance of all
    the Liabilities.

3.  PLEDGOR'S ADDITIONAL OBLIGATIONS.  The Pledgor agrees that: (1) any
    distribution in kind received by the Pledgor from any party for or on
    account of the Pledged Collateral, including distributions of stock as a
    dividend or split of any of the Pledged Collateral, shall be immediately
    delivered to the Bank in the form received with any required endorsement;
    (2) additional collateral in form and kind satisfactory to the Bank will be
    deposited by the Pledgor with the Bank if the Bank at any time deems the
    Pledged Collateral insufficient or unsatisfactory; (3) any note or other
    instrument executed and delivered to the Pledgor by any party to evidence
    any obligation of such party with respect to the Pledged Collateral shall be
    immediately delivered with any required endorsement to the Bank. All such
    items shall be held by the Bank in accordance with the terms of this Pledge
    Agreement.

      The Pledgor agrees to pay the Bank on demand all reasonable fees, costs
    and expenses incurred by the Bank in connection with the administration of
    this Pledge Agreement, including, without limitation, overnight courier
    fees, lien search fees, and filing and recording fees.

      The Pledgor agrees to execute and deliver to the Bank and/or third parties
    designated by the Bank such additional documents, notices, requests and
    other instruments as the Bank deems necessary or advisable to protect the
    Bank's rights under this Pledge Agreement.

4.  CERTAIN RIGHTS AND DUTIES OF BANK.  The Pledgor acknowledges that: the Bank
    has no duty of any type with respect to the Pledged Collateral except for
    the use of due care in safekeeping any of the Pledged Collateral actually in
    the physical custody of the Bank; prior to the occurrence of any event of
    default described in the succeeding paragraph the Bank's rights with respect
    to the Pledged Collateral shall be limited to the Bank's rights as a secured
    party and pledgee and the right to perfect its security interest, preserve,
    enforce and protect the lien granted hereunder and its interest in the
    Pledged Collateral; and the Bank may sell, assign or grant participations in
    any of the Liabilities and any of the Pledged Collateral and that the Bank's
    purchaser, assignee or participant shall have the same rights and privileges
    with respect to such Liabilities and Pledged Collateral as the Pledgor
    grants to the Bank under this Pledge Agreement. With respect to any Pledged
    Collateral with a stated maturity date (including, without limitation,
    certificates of deposit and other term accounts), the Bank is authorized and
    directed, upon maturity, to roll-over and reinvest such Pledged Collateral
    in a similar investment, with such tenor and interest rate or yield as the
    Bank, in its discretion, deems to be reflective of prevailing market
    conditions. Bank may transfer Collateral into its name or that of its
    nominee and may receive the income and any distributions thereon and hold
    the same as Collateral for the Obligations, or apply the same to any
    Obligation, whether or not a default or an Event of Default has occurred.
    Prior to the occurrence of any event of default described in the succeeding
    paragraph, the Bank agrees that it will not vote any Pledged Collateral
    constituting securities or closely held capital stock.

5.  EVENTS OF DEFAULT; REMEDIES.  Upon occurrence of any event of default under
    any instrument evidencing any of the Liabilities or of any of the following
    events: (1) default in the payment or performance of any other of the
    obligations or liabilities of the Pledgor under any agreement between the
    Bank and Pledgor; (2) the Pledgor, if a business entity, discontinues
    business operations at any of the Pledgor's locations; (3) the Pledgor is
    generally unable to pay debts as they become due or the Bank deems itself
    insecure; (4) the Pledgor makes a general assignment for the benefit of
    creditors; (5) the entry of a decree, order or order for relief by a court
    having jurisdiction of a case initiated by or against the Pledgor under the
    federal bankruptcy code or any other federal or state laws pursuant to which
    a receiver, liquidator, assignee, custodian, trustee, sequestrator, debtor
    in possession, examiner or other similar official, is appointed for the
    Pledgor or any of the Pledgor's property, with or without consent, for any
    purpose whatsoever; (6) a substantial part of the property of the Pledgor is
    taken by attachment, execution or any other form of legal process; (7) the
    assertion of any levy, seizure or attachment on the Pledged Collateral; or
    (8) death of an individual Pledgor or dissolution or termination of legal
    existence of a corporate, limited liability company, partnership or trust
    Pledgor; then the Bank, with or without notice to the Pledgor and without
    demand for additional collateral, may (a) transfer the Pledged Collateral
    into the name of the Bank or its nominee and vote any Pledged Collateral
    constituting securities or closely held capital stock; (b) sell at public or
    private sale any or all of the Pledged Collateral, which the Bank may
    purchase free from any right of redemption; or (c) at its discretion in its
    own name or in the name of the Pledgor take any action for the collection of
    the Pledged Collateral, including the filing of a proof of claim in
    insolvency proceedings, and may receive the

                                                                              50

<PAGE>   14
     proceeds thereof and execute releases therefor. After deducting its
     expenses, including reasonable attorney's fees, incurred in the sale or
     collection of the Pledged Collateral, the Bank shall apply the proceeds to
     the Liabilities and shall account to the Pledgor for any surplus. The
     Pledgor agrees that the Bank has no obligation to sell or otherwise
     liquidate the Pledged Collateral in any particular order or to apply the
     proceeds thereof to any particular portion of the Liabilities. The Pledgor
     further agrees that after the occurrence of an event of default, the Bank
     shall have no obligation to vote any Pledged Collateral constituting
     securities or closely held capital stock.

6.   POWER OF ATTORNEY, ETC. The Pledgor hereby irrevocably constitutes and
     appoints the Bank the true and lawful attorney-in-fact for and on behalf of
     the Pledgor with full power of substitution and revocation in its own name
     or in the name of the Pledgor to make, execute, deliver and record any and
     all financing statements, continuation statements, assignments, proofs of
     claim, powers of attorney, leases, discharges or other instruments or
     agreements which the Bank in its sole discretion may deem necessary or
     advisable to perfect, preserve, enforce or protect the lien granted
     hereunder and its interest in the Pledged Collateral and to carry out the
     purposes of this Pledge Agreement, including but without limiting the
     generality of the foregoing, any and all proofs of claim in bankruptcy or
     other insolvency proceedings of the Borrower, with the right to collect and
     apply to the Liabilities all distributions and dividends made on account of
     the Pledged Collateral. The rights and powers conferred on the Bank by the
     Pledgor are expressly declared to be coupled with an interest and shall be
     irrevocable until all the Liabilities are paid and performed in full. A
     carbon, photographic, or other reproduction of a security agreement
     (including this Pledge Agreement) or a financing statement is sufficient as
     a financing statement.

7.   MISCELLANEOUS. This Pledge Agreement and the Pledged Collateral shall not
     be in any way affected by the extension of time or renewal of any of the
     Liabilities, the modification in any manner of the taking or release in
     whole or in part of any security therefor or the obligations of any
     endorsers, sureties, guarantors or other parties or the granting of any
     other indulgences to the Borrower or to the Pledgor. No termination of this
     Pledge Agreement shall be effective in any event until the Bank in its
     discretion determines that the Liabilities of the Borrower covered by this
     Pledge Agreement have been satisfied in full.

8.   NOTICES. Except as otherwise specifically provided for herein, any notice,
     demand or communication hereunder shall be given in writing (including
     facsimile transmission or telex) and mailed or delivered to each party at
     its address set forth below, or, as to each party, at such other address as
     shall be designated by such party by a prior notice to the other party in
     accordance with the terms of this provision. Any notice to the Bank shall
     be sent as follows: Fleet Bank, N.A., 2970 Transit Road NY/BU/2083, West
     Seneca, NY 14224, Attention Central Documentation. Any notice to the
     Pledgor shall be sent to the address(es) as referenced below. All notices
     hereunder shall be effective upon the earliest to occur of (i) five (5)
     business days after such notice is mailed, by registered or certified mail,
     postage prepaid (return receipt requested), (ii) upon delivery by hand
     (iii) upon delivery if delivered by overnight courier (such delivery to be
     evidenced by the courier's records), and (iv) in the case of any notice or
     communication by telex or telecopy, on the date when sent.

9.   JOINT AND SEVERAL OBLIGATIONS; CONSTRUCTION. If more than one Pledgor has
     signed this Pledge Agreement, the obligations of the Pledgor are joint and
     several. The term "Pledgor" and all pronouns referring thereto as used
     herein shall be construed in the masculine, feminine, neuter or singular
     or plural as the context may require.

10.  CHOICE OF LAW. This Pledge Agreement is executed under and shall be
     construed in accordance with the local laws (excluding the conflict of
     laws rules, so-called) of the state in which the Bank has its principal
     office (as indicated on page 1 hereof).

11.  SUCCESSORS AND ASSIGNS. This Pledge Agreement shall inure to the benefit
     of the Bank and its successors and assigns and shall bind the Pledgor and
     the successors, representatives and heirs of the Pledgor.

     This Pledge Agreement has been executed by the Pledgor and the Bank in
     duplicate original as of the ____ day of ____________, ____.

     WITNESS:

     /s/ James L. Biringer, Vice President      /s/ Ronald Wilen, President
     -------------------------------------      ---------------------------
                                                Name: United Energy Corporation

                                                600 Meadowlands Parkway #20
                                                ----------------------------
                                                Address: Secaucus, NJ 07094
                                                         Ronald Wilen, President

                                                Fleet Bank, N.A.

                                            BY: /s/ James L. Biringer
                                                -----------------------------
                                                Name:  James L. Biringer
                                                Title: Vice President

                                                                              51

<PAGE>   15

                                   EXHIBIT A
                      (Description of Pledged Collateral)

             SECURITIES AND CLOSELY HELD CAPITAL STOCK (CORPORATE)
<TABLE>
<CAPTION>
ISSUER                        NO. OF SHARES            CERTIFICATE NO.     CUSIP NO.
------                        -------------            ---------------     -----------
<S>                           <C>                      <C>                 <C>
United Energy Corporation        750,000                    4215           910900 20 8
</TABLE>

                                                                              52
<PAGE>   16

                                    GUARANTY

This Guaranty is executed and delivered as of May 31, 2000, by the undersigned,
JOSEPH J. GRANO, (jointly and severally if more than one, the "Guarantor") to
FLEET BANK, N.A., a national banking association created and existing under the
laws of the United States of America with a principal office located at 30
Montgomery Street, Jersey City, New Jersey 07303 (the "Bank").

                                  WITNESSETH:

WHEREAS, the Bank and UNITED ENERGY CORPORATION (the "Borrower") intend to enter
into a loan transaction of even date herewith; and

WHEREAS, the Bank has advised the Guarantor that it will not enter into the
aforesaid loan transaction with the Borrower unless, among other matters, the
Guarantor guarantees the punctual payment and performance of all obligations of
the Borrower to the Bank as hereinafter provided, including without limitation
the punctual payment of all principal, interest and fees; and

WHEREAS, the Guarantor is willing and has agreed to guarantee the payment and
performance of the aforesaid obligations, as hereinafter provided.

NOW, THEREFORE, in consideration of any and all loans, advances, discounts and
extensions of credit made and to be made by the Bank to, for the account of, or
on behalf of the Borrower, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Guarantor agrees as follows:

     1. DEFINITION OF LIABILITIES. "Liabilities of the Borrower" shall mean all
        obligations, indebtedness and liability of any type of the Borrower to
        the Bank, whether now existing or hereafter incurred, whether direct,
        indirect, absolute or contingent, whether otherwise guaranteed or
        secured, and howsoever evidenced or acquired (excluding, however,
        indebtedness incurred primarily for personal, family or household
        purposes); the obligations of the Borrower under any agreement
        evidencing any of the foregoing; expenses and costs incurred by the Bank
        in the enforcement of any of its rights with respect thereto, including
        without limitation reasonable attorneys' fees; and any and all costs and
        expenses incurred by the Bank for appraisals, environmental site
        assessments, and examinations and inspections of both books and records
        and property including, without limitation, the fees and expenses of all
        engineers, appraisers and other professionals.

     2. GUARANTY OF LIABILITIES. The Guarantor hereby guarantees to the Bank the
        full and prompt payment and performances of all Liabilities of the
        Borrower. The obligations of Guarantor hereunder are primary and not
        contingent. Notwithstanding the name of this document, reference to the
        term Guarantor, or any other provision herein to the contrary, Guarantor
        acknowledges and agrees that this Guaranty is intended to be a contract
        of suretyship and that the Guarantor has agreed to act as a surety to
        the Bank.

     3. GUARANTY ABSOLUTE AND UNCONDITIONAL. This is a continuing, absolute and
        unconditional Guaranty which is subject to no limitations except those
        expressly agreed to by the Guarantor and the Bank in writing. This
        Guaranty is not conditioned or contingent upon the genuineness,
        validity, or enforceability of the loan documents or other instruments
        relating to the creation or performance of the Liabilities of the
        Borrower or the pursuit by the Bank of any remedies which the Bank has
        now or may hereafter have with respect thereto under the loan documents
        at law, in equity, or otherwise. Furthermore, the Guarantor shall
        forthwith pay all sums due to the Bank hereunder without regard to any
        counterclaim, setoff, deduction, or defense of any kind which any party
        obligated under the loan documents may have or assert, and without
        abatement, suspension, deferment, or reduction on account of any
        occurrence whatsoever.

     4. EVENTS OF DEFAULT. Upon the occurrence of any event of default under any
        instrument evidencing any of the Liabilities of the Borrower or any of
        the following events: (a) default in the payment or performance of any
        other obligations or liabilities of the Guarantor under any other
        agreement between the Bank and the Guarantor; (b) the Guarantor, if a
        business entity, discontinues business operations at any of the
        Guarantor's locations; (c) the Guarantor is generally unable to pay
        debts as they become due or the Bank deems itself insecure; (d) the
        Guarantor makes a general assignment for the benefit of creditors; (e)
        the entry of a decree, order or order for relief by a court having
        jurisdiction of a case initiated by or against the Guarantor under the
        federal bankruptcy code or any other federal or state laws pursuant to
        which a receiver, liquidator, assignee, custodian, trustee,
        sequestrator, debtor in possession, examiner or other similar official,
        is appointed for the Guarantor or any of the Guarantor's property, with
        or without consent, for any purpose whatsoever; (f) a substantial part
        of the property of the Guarantor is taken by attachment, execution or
        any other form of legal process; or (g) death of an individual Guarantor
        or dissolution of a Guarantor that is a business entity; then the
        liabilities and obligations of the Guarantor hereunder shall immediately
        become due and payable at the election of the Bank without notice or
        demand. The Bank shall have no obligation to exercise any right or
        remedy or to seek any recovery from any party obligated under the loan
        documents or to realize upon any collateral prior to proceeding
        hereunder against the Guarantor, and likewise the enforcement of the
        Bank's rights against the Borrower, any other party to the loan
        documents, or any collateral, shall not impair the right of the Bank to
        enforce this Guaranty against the Guarantor. The Guarantor expressly
        agrees that any such action by the Bank shall never operate as a release
        or other diminution of the liability of the Guarantor under this
        Guaranty.

     5. RESTRICTIONS ON ASSET TRANSFERS. The Guarantor hereby covenants that
        during such time as this Guaranty is in effect, the Guarantor will not
        make or permit any substantial diminution in the Guarantor's net worth
        and will not sell, mortgage or pledge any material portion of the
        Guarantor's real or personal property (except mortgages, security
        agreements and pledges to the Bank as security for this Guaranty and
        guarantees and other transactions in the ordinary course of the
        Guarantor's business and of a type

UNITED ENERGY CORPORATION                                                    53

<PAGE>   17
       and magnitude similar to those of past transactions in the ordinary
       course of business) without having first obtained the Bank's written
       consent therefor.

 6.    GUARANTOR'S REPRESENTATIONS AND WARRANTIES. The Guarantor hereby
       represents and warrants that: (a) neither the execution nor performance
       of this Guaranty will violate any indenture, agreement or other
       instrument to which the Guarantor is a party, or by which the Guarantor
       is bound, or be in conflict with, result in a breach of or constitute
       with due notice or lapse of time or both a default under, or except as
       may be provided by this Guaranty, result in the creation or imposition
       of any lien, charge or encumbrance of any nature whatsoever upon any of
       the property or assets of the Guarantor pursuant to any such indenture,
       agreement or instrument; (b) there is no action suit or proceeding at
       law or in equity or by or before any governmental instrumentality or
       other agency now pending or, to the knowledge of the Guarantor,
       threatened or affecting the Guarantor which, if adversely determined,
       would have a material adverse effect on the business, operations,
       properties, assets or condition, financial or otherwise, of the
       Guarantor; (c) the Guarantor is not party to any agreement or instrument
       or subject to any restriction adversely affecting the guarantor's
       business, properties or assets, operations or conditions, financial or
       otherwise; (d) the Guarantor is not in material default in the
       performance, observance or fulfillment of any of the obligations,
       covenants or conditions contained in any agreement or instrument to
       which the Guarantor is a party; and (e) if a corporate, partnership,
       limited liability company or trust Guarantor, it is duly organized,
       validly existing and in good standing under the laws of the state of its
       formation and in every other jurisdiction, except where the failure to
       so qualify would not have a material adverse effect on the Guarantor,
       its property, its financial condition or otherwise.

 7.    GUARANTOR'S WAIVERS; WAIVER OF SUBROGATION. The Guarantor waives notice
       of the incurring of Liabilities of the Borrower, the acceptance of this
       Guaranty by the Bank; presentment and demand for payment, protest,
       notice of protest, notice of dishonor or non-payment of any instrument
       evidencing any Liabilities of the Borrower, acceleration, and intent to
       accelerate; any right to require suit against the Borrower or any other
       party before enforcing this Guaranty; any right to have security applied
       before enforcing this Guaranty in any manner; any right to marshaling of
       assets; the defense of impairment of collateral; and all other
       suretyship defenses. The Guarantor consents and agrees that renewals and
       extensions of time of payment, surrender, release, exchange,
       substitution, dealing with or taking of additional collateral security,
       taking or release of any guaranties, abstaining from taking advantage of
       or realizing upon any collateral security or other guaranties and any
       and all other forbearances or indulgences granted by the Bank to the
       Borrower or any other party may be made, granted and effected by the
       Bank without notice to the Guarantor and without in any manner affecting
       the Guarantor's liability hereunder. Any notice to the Guarantor by the
       Bank at any time shall not imply that such notice or any further or
       similar notice was or is required. The Guarantor also hereby waives any
       claim, right or remedy which the Guarantor may now have or hereafter
       acquire against the Borrower that arises hereunder and/or from the
       performance by the Guarantor hereunder including, without limitation,
       any claim, remedy or right of subrogation, reimbursement, exoneration,
       contribution, indemnification, or participation in any claim, right or
       remedy of the Bank against the Borrower or any security which the Bank
       now has or hereafter acquires, whether or not such claim, right or
       remedy arises in equity, under contract, by statute, under common law or
       otherwise.

 8.    SETOFF RIGHTS. Borrower and any Guarantor hereby grant to Bank, a lien,
       security interest and right of setoff as security for all liabilities
       and obligations to Bank, whether now existing or hereafter arising, upon
       and against all deposits, credits, collateral and property, now or
       hereafter in the possession, custody, safekeeping or control of Bank or
       any entity under the control of FleetBoston Financial Corporation, or in
       transit to any of them. At any time, without demand or notice, Bank may
       set off the same or any part thereof and apply the same to any liability
       or obligation of Borrower and any Guarantor even though unmatured and
       regardless of the adequacy of any collateral securing the Loan. ANY AND
       ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH
       RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO
       EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR
       OTHER PROPERTY SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
       PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE HEREBY KNOWINGLY,
       VOLUNTARILY AND IRREVOCABLY WAIVED.

 9.    FEES AND EXPENSES. The Guarantor agrees to pay the Bank any and all
       costs, expenses and reasonable attorneys' fees (which may include costs
       allocated by the Bank's internal legal department), paid or incurred by
       the Bank in administering, enforcing or endeavoring to enforce this
       Guaranty, including, without limitation, overnight courier fees, lien
       search fees, and filing and recording fees. The Guarantor hereby grants
       to the Bank a continuing security interest in all accounts, deposits, and
       property of the Guarantor, and all proceeds thereof, from time to time
       with or in the hands of the Bank to secure the liabilities of the
       Guarantor, and the Bank shall have the same right to setoff with respect
       to deposits and other credits of the Guarantor as it has with respect to
       deposits and other credits of the Borrower under any agreements
       evidencing any of the Liabilities of the Borrower or under any applicable
       law.

10.    PREFERENCE, ETC. The Guarantor agrees that this Guaranty shall continue
       to be effective or be reinstated, as the case may be, if at any time
       payment, or any part thereof, of the principal of, interest on, or fees
       with respect to any of the Liabilities of the Borrower is rescinded or
       must otherwise be restored or returned by the Bank upon insolvency,
       bankruptcy or reorganization of the Borrower or the Guarantor, or
       otherwise, all as though such payment had not been made.

11.    CHOICE OF LAW; MODIFICATION; SUCCESSORS AND ASSIGNS. (hereinafter the
       "State"). It may not be amended, modified or waived except by a written
       instrument describing such amendment, modification or waiver executed by
       the Guarantor and the Bank. It may not be assigned by the Guarantor. It
       shall inure to the benefit of the Bank and its successors and assigns and
       shall bind the Guarantor and the successors, representatives and heirs of
       the Guarantor.

12.    WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY WAIVES ANY RIGHTS IT MAY HAVE
       TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS
       GUARANTY, AND AGREES THAT ANY

UNITED ENERGY CORPORATION                                                   54

<PAGE>   18
    SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.

13. JURISDICTION AND VENUE. The Guarantor hereby irrevocably consents that any
    legal action or proceeding against the Guarantor or any of the Guarantor's
    property with respect to any matter arising under or relating to this
    Guaranty may be brought in any court of the State, or any Federal Court of
    the United States of America located in the State, as the Bank may elect,
    and by execution and delivery of this Guaranty the Guarantor hereby submits
    to and accepts with regard to any such action or proceeding, for itself and
    in respect of its property, generally and unconditionally, the jurisdiction
    of the aforesaid courts. The Guarantor further irrevocably consents to the
    service of process in any such action or proceeding by the mailing of copies
    thereof by registered or certified mail, postage prepaid, to the Guarantor
    at its address set forth herein. The foregoing, however, shall not limit the
    Bank's rights to serve process in any other manner permitted by law or to
    bring any legal action or proceeding or to obtain execution of judgment in
    any other jurisdiction. The Guarantor hereby irrevocably waives any
    objection which it may now or hereafter have to the laying of the venue of
    any suit, action or proceeding arising out of or relating to this Guaranty,
    and hereby further irrevocably waives any claim that the State is not a
    convenient forum for any such suit, action or proceeding.

14. BORROWER'S DISCHARGE. If for any reason any of the Liabilities of the
    Borrower have been discharged or have become irrecoverable from the Borrower
    by operation of law or for any other reason, the liabilities of the
    Guarantor under this Guaranty shall nevertheless remain in full force and
    effect notwithstanding such discharge or irrecoverability.

15. PROSPECTIVE TERMINATION ONLY. This Guaranty shall not be terminated until
    the Bank in its discretion determines that the Liabilities of the Borrower
    covered by this Guaranty have been satisfied in full.

16. FINANCIAL STATEMENTS; TAX RETURNS. During each calendar year that this
    Guaranty is in effect, the Guarantor agrees to furnish to the Bank on or
    before one hundred and twenty (120) days after the Guarantor's fiscal year
    end, the following: in the case of a corporate, limited liability company,
    partnership or trust Guarantor, financial statements (audited if requested),
    balance sheets, profit and loss statements, together with supporting
    schedules, signed and in such form as may be acceptable to the Bank; in the
    case of an individual Guarantor, signed personal financial statements on a
    form prescribed by the Bank; in the case of corporate, trust, and individual
    Guarantors, current Federal income tax returns (with all schedules and
    exhibits); in the case of a partnership Guarantor, Form 1065 (with all
    schedules and exhibits); and in the case of a limited liability company
    Guarantor, the appropriate current Federal income tax return (with all
    schedules and exhibits). In any event, all the documents referred to in the
    foregoing sentence must be submitted to the Bank if there occurs a material
    adverse change in the financial or business condition of the Borrower or the
    Guarantor or an event of default under this Guaranty.

17. NOTICES. Except as otherwise specifically provided for herein, any notice,
    demand or communication hereunder shall be given in writing (including
    facsimile transmission or telex) and mailed or delivered to each party at
    its address or telecopier number set forth below, or, as to each party, at
    such other address or telecopier number as shall be designated by such party
    by a prior notice to the other party in accordance with the terms of this
    provision. Any notice to the Guarantor shall be sent to the address(es) as
    referenced below. All notices hereunder shall be effective upon the earliest
    to occur of (i) five (5) business days after such notice is mailed, by
    registered or certified mail, postage prepaid (return receipt requested),
    (ii) upon delivery by hand (iii) upon delivery if delivered by overnight
    courier (such delivery to be evidenced by the courier's records), and (iv)
    in the case of any notice or communication by telex or telecopy, on the date
    when sent.

18. ASSIGNMENTS AND PARTICIPATIONS. The Guarantor agrees that the Bank shall
    have the right at all times to sell all or any portion of the Liabilities of
    the Borrower and all documents and instruments evidencing or pertaining to
    the Liabilities of the Borrower including this Guaranty, and to grant one or
    more participations in the Liabilities of the Borrower and in all documents
    and instruments evidencing or pertaining to the Liabilities of the Borrower
    including this Guaranty. In connection therewith, the Guarantor hereby
    irrevocably authorizes the Bank to deliver to each such purchaser,
    participant and prospective purchaser or participant originals and copies of
    all loan documents and instruments and this Guaranty and all financial
    statements and other credit and factual data from time to time in the Bank's
    possession which relate to the Borrower and/or all guarantors, including the
    Guarantor. This Guaranty is expressly declared to be transferrable and
    assignable.

19. JOINT AND SEVERAL OBLIGATIONS; GENDER. If more than one Guarantor has signed
    this Guaranty, the obligations of the Guarantor are joint and several. The
    term "Guarantor" and all pronouns referring thereto as used herein shall be
    construed in the masculine, feminine, neuter or singular or plural as the
    context may require.

20. DOLLAR LIMITATION. This guarantee is limited to: $1,000,000.00.

This Guaranty has been executed by the Guarantor, through its duly authorized
representative where required, as of the date above written.

WITNESS:                     Sworn to me this
                             8th day of June, 2000
                             /s/ Judith A. Mee

/s/ Concetta B. Kristan      JUDITH A. MEE         /s/ Joseph J. Grano
-----------------------    Notary Public, State   --------------------
                            of New York           Name: Joseph J. Grano
                           No. 43-4800341         Address: Sheepfield Drive,
                           Qualified in Richmond           PO Box 583
                            County                         New Vernon, NJ 07976
                           Commission Expires
                            August 31, 2000

UNITED ENERGY CORPORATION                                                    55<PAGE>   1
                                                                 EXHIBIT (10)(e)

                        EXCLUSIVE DISTRIBUTION AGREEMENT

         AGREEMENT made this 22nd day of September, 2000, by and between UNITED
ENERGY CORPORATION ("UNRG"), a Nevada corporation, with a principal place of
business located at 600 Meadowlands Parkway, #20, Secaucus, New Jersey 07094,
and LUNSFORD, LTD., doing business as ALAMEDA COMPANY ("ALAMEDA"), a California
corporation, having a principal place of business at 1260 N. Lakeview Avenue,
Anaheim, CA 92807.

                                 R E C I T A L S

         WHEREAS, UNRG is in the business of manufacturing and distributing
various products ("products") as more fully set forth on Exhibit "A" (in
particular UNIPROOF(R) Blue Line proofing paper); and

         WHEREAS, UNRG seeks to establish distribution of the products in the
United States, Canada, Puerto Rico, Mexico, Central America, South America and
the Caribbean; and

         WHEREAS, ALAMEDA has agreed to distribute the products for UNRG and
UNRG agrees subject to the terms of this Agreement to appoint ALAMEDA as its
exclusive distributor for the regions set out above, subject to the conditions
set forth herein;

         NOW, THEREFORE, upon the mutual covenants contained herein, it is
agreed as follows:

                                                                              56

<PAGE>   2
                                    ARTICLE I

                     UNRG'S REPRESENTATIONS AND OBLIGATIONS

         1.1 UNRG will manufacture the products described on Exhibit "A".

         1.2 UNRG will keep in full force and effect its existing licenses,
patents, trademarks, service marks, etc., that each product currently enjoys and
will obtain such intellectual property rights on any new products UNRG
manufactures and/or distributes, in UNRG's sole discretion.

         1.3 UNRG will hold ALAMEDA harmless and indemnify ALAMEDA (including
reasonable legal fees) from any third party claim relating to:

                  (i) intellectual property right infringements which shall
include reimbursement for any Products purchased by ALAMEDA from UNRG which
ALAMEDA is prevented from selling by reason of such claimed infringement;

                  (ii) product liability or negligence claims concerning the
manufacture of the Products;

                  (iii) breach of any term of this Agreement by UNRG;

         1.4 UNRG will produce Product consistent with present performance and
reliability.

                                   ARTICLE II

                                 DISTRIBUTORSHIP

         2.1 UNRG appoints ALAMEDA as its exclusive distributor for the Products
described on Exhibit "A" for the United States, Canada, Puerto Rico, Mexico,
South America, Central America and the Caribbean, for the term of this Agreement
subject to the conditions set

                                                                              57

<PAGE>   3
forth herein. The territory so described and as may be subsequently enlarged,
reduced or otherwise changed with the mutual consent of the parties is
hereinafter referred to as the "Territory".

         2.2 UNRG grants ALAMEDA the right to purchase the Products described in
Exhibit "A" at prices mutually agreed to between the parties from time to time.
Notwithstanding the foregoing, ALAMEDA shall have the right to purchase the
Products described in Exhibit "A" at the prices set out in Exhibit "A". Prices
are guaranteed through December 31, 2002.

         2.3 All of such prices may be adjusted by UNRG to reflect documented
raw material or manufacturing price increases or decreases on a dollar-
for-dollar basis. Such adjustments shall become effective only upon the
expiration of thirty (30) days after written notice of the adjustment shall have
been given by UNRG to ALAMEDA, accompanied by a copy of a vendor invoice or
other document reflecting the particular increase in cost of materials or
manufacturing incurred by UNRG.

         2.4 All prices are F.O.B. UNRG's manufacturing facilities. Risk of loss
shall pass at the time of shipment from such facility. 2.5 UNRG will supply
ALAMEDA such quantities of Products necessary for ALAMEDA to satisfy purchase
orders obtained by ALAMEDA.

         2.6 UNRG will permit ALAMEDA to advertise, sell and distribute the
Products under the ALAMEDA label or such other label selected by ALAMEDA
(including UNRG's labels and trademarks), with the approval of UNRG, which
approval shall not be unreasonably withheld.

         2.7 UNRG will invoice ALAMEDA for Products shipped (cost of shipping
         and freight to be paid by ALAMEDA) on the day of shipping of the
         product to ALAMEDA's specified United States location.

         2.8 Payment terms are as set forth on Exhibit "A".

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<PAGE>   4
         2.9 For purposes of this Agreement, Products are defined as those
described in Exhibit "A", which may include from time to time any additional
products derived from the UNIPROOF(R) technology.

         2.10 UNRG represents that to the best of its knowledge, the Products do
not infringe upon any patents and/or any other intellectual property right to
which any other party in the United States or abroad has patent rights.

         2.11 UNRG will not cause, sell, distribute or give away any samples of
the Products within the Territory.

         2.12 During the term of this Agreement, UNRG shall turn over all past,
future and existing accounts for the Products within the Territory (including
private label) to ALAMEDA and shall not appoint any other or different person,
firm, or corporation to sell the Products in the Territory. UNRG will not sell
to any account outside the Territory where it can be shown that said account
shipped the Products back into the Territory.

         2.13 During the term of this Agreement, UNRG shall not produce any of
the Products or any product similar to the Products under a private label or any
other name for any person, company or entity within the Territory. UNRG shall
not produce any of the Products similar to the Products for sale on the Internet
or any website within the Territory.

                                                                              59

<PAGE>   5
                                   ARTICLE III

                                   TERMINATION

         3.1 In the event of a breach of this Agreement by a party, as a
condition to the exercise of any remedy on account thereof by the non-breaching
party, the non-breaching party shall give written notice to the breaching party
of the event or occurrence constituting breach hereunder and stating what
conduct is needed to cure the same. The party receiving such a notice shall
have, in all cases, thirty (30) days from the date such notice is given in which
to cure the same. If no cure is effected within such time frame, then the
non-breaching party may exercise any or all remedies available to it at law or
in equity on account thereof, and in addition to and cumulative of all such
remedies, the non-breaching party shall have the right to terminate this
Agreement by delivering notice of termination to the breaching party. No
termination of this Agreement shall relieve a party of obligations incurred
prior to the date of such termination.

         3.2 In the event of termination, this Agreement shall remain applicable
to any orders for Products which ALAMEDA has previously placed and to any other
orders which may be placed within sixty (60) days subsequent to the effective
date of termination.

         3.3 In the event of termination of this Agreement for failure of
ALAMEDA to maintain minimum purchase requirements, UNRG will permit ALAMEDA to
become a non-exclusive distributor.

                                   ARTICLE IV

                    ALAMEDA'S REPRESENTATIONS AND OBLIGATIONS

         4.1      ALAMEDA will purchase, sell and distribute the Products

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<PAGE>   6
in the Territory using its best efforts to achieve maximum sales of the
Products. In order to maintain exclusivity in the Territory, ALAMEDA must
purchase from UNRG the following product minimums:

In calendar year 2001, ALAMEDA must purchase a minimum of 13,394,641 sq. ft. of
UNIPROOF(R) Blue Line proofing paper in mill rolls only and in calendar year
2002 must purchase a minimum of 16,073,569 sq.ft. of such product.

         4.2 ALAMEDA will pay UNRG the amount invoiced for the Products in
accordance with the pricing and payment terms set forth above and on Exhibit
"A".

         4.3 ALAMEDA shall pay all advertising and promotional costs it incurs
and all such costs UNRG incurs at ALAMEDA's request.

         4.4 During the term of this Agreement, ALAMEDA agrees not to sell or
distribute any product used for the same purpose as the Products that is exposed
through a light source for proofing purposes.

                                   ARTICLE V

                        LIMITED WARRANTY OF THE PRODUCTS

         5.1 UNRG expressly warrants, for a period of ninety (90) days from the
date of shipment to ALAMEDA, or to a place designated by ALAMEDA, that products
sold hereunder shall be free from defects in workmanship or materials that
render the product(s) unusable for its ordinary purpose, and during that period
agrees to, without cost to ALAMEDA, repair or replace products that prove to be
defective in workmanship or materials, provided written notice of the defect is
given to UNRG within ninety (90) days of delivery to ALAMEDA and the defective
products are returned to the UNRG. This

                                                                              61

<PAGE>   7
warranty shall not cover damage to the products occurring during or after
shipment. Except for the foregoing express warranty, UNRG MAKES NO OTHER
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, CONCERNING THE PRODUCTS AND
HEREBY DISCLAIMS ANY AND ALL OTHER EXPRESS OR IMPLIED WARRANTIES, INCLUDING
WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.

                                   ARTICLE VI

                                      TERM

         6.1 The term of this Agreement shall be effective from the date
executed by both parties through December 31, 2002, provided ALAMEDA meets the
minimum purchase requirements herein. Thereafter, the Agreement will
automatically renew for successive one-year terms provided ALAMEDA has purchased
the minimum amounts of products per year agreed to herein and to be agreed upon
for each year following 2002.

                                   ARTICLE VII

                         PURCHASE OF EXISTING INVENTORY

         7.1 ALAMEDA will purchase all of UNRG's existing inventory of finished
goods of UNIPROOF(R) Blue Line proofing paper at 37% off low net price plus
2%-net 10 days ("Existing Inventory"). Low net prices are as follows:

         Low net on two-sided sheets            $0.49 per square foot

         Low net on one-sided sheets            $0.35 per square foot

         Low net on two-sided rolls             $0.43 per square foot

         Low net on one-sided rolls             $0.30 per square foot

                                                                              62

<PAGE>   8
         7.2 ALAMEDA will also purchase all mill rolls (unconverted goods) at
$0.25 per square foot for two-sided rolls and at $0.175 per square foot for
one-sided rolls.

         7.3 All shipments will be F.O.B. UNRG manufacturing facilities.

         7.4 UNRG's finished inventory will be held at UNRG facilities per
request of ALAMEDA and shipped at ALAMEDA's direction.

         7.5 Payment for Existing Inventory to UNRG by ALAMEDA will be in five
(5) equal payments with the first payment to UNRG due upon the first receipt of
any Existing Inventory from UNRG ("First Payment"). The next four (4) equal
payments will commence sixty (60) days from the date the first payment is due in
thirty (30) day intervals.

                                  ARTICLE VIII

                                  MISCELLANEOUS

         8.1 Notices. All notices permitted or required under this Agreement
shall be in writing and shall be either (a) delivered by personal service, (b)
delivered by courier service, or (c) sent by certified or registered mail,
postage prepaid, return receipt requested, to the parties hereto at their
addresses set forth below or at such other addresses which may be designated in
writing by the parties:

                  If to UNRG:        600 Meadowlands Parkway #20
                                             Secaucus, New Jersey 07094
                                             Attn: Ronald Wilen, President

                  If to ALAMEDA:     1260 N. Lakeview Avenue
                                             Anaheim, CA 92807
                                             Attn: Robin Lunsford, President

                                                                              63

<PAGE>   9
         8.2 Entire Agreement. This Agreement (including Exhibits hereto)
supersedes all prior agreements and understandings, oral and written, among the
parties with respect to the subject matter hereof, and this Agreement
constitutes the entire agreement of the parties.

         8.3 No Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to confer any rights or obligations on any person other
than the parties of their respective heirs, successors and assigns.

         8.4 Assignment. No party shall assign its rights or obligations under
this Agreement without the prior written consent of the other party.

         8.5 Successors and Assigns. The covenants, agreements and conditions
contained or granted shall be binding upon and shall inure to the benefit of the
parties and their respective heirs, successors and permitted assigns.

         8.6 No Joint Venture. The parties, by entering into this Agreement and
consummating the transaction contemplated in this Agreement, shall not be, and
shall not be considered, a partner or joint venturer of one another.

         8.7 Headings. The article, section and other headings contained in this
Agreement are for reference purposes only and shall not be deemed to be part of
this Agreement or to affect the meaning or interpretation of this Agreement.

         8.8 Counterparts. This Agreement may be executed in any number of
counterparts, including facsimile counterparts, each of which, when executed,
shall be deemed to be an original, and all

                                                                              64

<PAGE>   10
of which together shall be deemed to be one and the same instrument.

         8.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without giving effect to
any choice of law principles.

         8.10 Severability. If any term, covenant, condition, or provision of
this Agreement of the application thereof to any circumstances shall be invalid
or unenforceable to any extent, the remaining terms, covenants, conditions and
provisions of this Agreement shall not be affected and each remaining term,
covenant, condition, and provision of this Agreement shall be valid and shall be
enforceable to the fullest extent permitted by law. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only as broad as it is enforceable.

         8.11 Amendments. This Agreement may not be modified or changed except
by a written instrument signed by both parties.

         8.12 Construction of Agreement. This Agreement was negotiated at arm's
length by the parties and their respective counsel. The rule that an agreement
is to be construed against the party drafting the agreement is hereby waived,
and shall have no applicability in construing this Agreement or any provision
thereof.

         8.13 Independent Counsel. The parties hereby acknowledge that each of
them has received the advice of independent counsel in connection with the
transactions contemplated herein.

                                                                              65

<PAGE>   11
         8.14 Arbitration. Any controversy or claim arising out of or related to
this Agreement shall be commenced, prosecuted and resolved in the State of New
Jersey by arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon any award rendered by the arbitration(s) may be
entered in any court having jurisdiction thereof. Cost of arbitration hearing
shall be the responsibility of the losing party.

         8.15 Force Majeure. Neither party to this Agreement will be held liable
for a delay or failure in performance due to the occurrence of a contingency,
the non-occurrence of which was a basic assumption of this Agreement, including,
but not limited to UNRG's failure to deliver because of resource or raw
materials shortages, strikes, or other matters beyond its control.

         8.16 ALAMEDA Not Agent or Legal Representative. This Agreement does not
constitute ALAMEDA, as the agent or legal representative of UNRG for any purpose
whatsoever. ALAMEDA is not granted any right or authority to assume or to accrue
any obligation or responsibility, express or implied, in behalf of or in the
name of UNRG or to bind UNRG in any manner.

         8.17 Completeness of Instrument. This instrument, including Exhibit
"A", contains all of the agreements, understandings, representations,
conditions, warranties, and covenants made between the parties hereto. Unless
set forth herein, neither party shall be liable for any representation made, and
all modifications and amendments hereto must be in writing.

                                                                              66

<PAGE>   12
         8.18 No Implied Waivers. The failure of either party at any time to
require performance by the other party of any provision hereof shall not affect
in any way the full right to require such performance at any time hereafter. Nor
shall the waiver by either party of a breach of any provision hereof be taken or
held to be a waiver of the provision itself.

         8.18 Attorney Fees. If an action is brought to enforce any of the terms
or provisions of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees.

         IN WITNESS WHEREOF, the undersigned have executed this Distribution
Agreement as of the date first above written.

                                        "UNRG"

                                        UNITED ENERGY CORPORATION

Dated:  September 25, 2000              By:        \s\  Ronald Wilen
                                                   RON WILEN, President

                                                   "ALAMEDA"

                                                   LUNSFORD, LTD.

Dated: September 22, 2000               By:         \s\  Robin Lunsford
                                                    ROBIN LUNSFORD,
                                                    President/CEO

                                                                              67

<PAGE>   13
                                   EXHIBIT "A"

         ALAMEDA will purchase all new finished master rolls of UNIPROOF(R) Blue
Line proofing paper at $0.25 per square foot for 2-sided master rolls and at
$0.175 per square foot for all 1-sided master rolls, based on linear feet
shipped.

         Prices are guaranteed to December 31, 2002, with an understanding and
agreement to pass along increases and decreases in manufacturing and materials
cost, which must be documented. Should competing or existing products decrease
in price, UNRG will attempt to decrease prices to ALAMEDA by the same
percentage.

         Terms of payment will be net 20 days from date of invoice. Invoices
will be faxed to ALAMEDA immediately upon shipment of Product(s). All shipments
will be F.O.B. UNRG manufacturing facilities. Purchase order requirements are
as follows for new materials:

         (a) Minimum order must be for 26 master rolls (at least 20,000 linear
feet per roll) per quarter, placed ninety (90) days prior to delivery.

         (b) After December 31, 2000, if ALAMEDA fails to meet minimum quarterly
purchase orders of at least 26 master rolls for two (2) consecutive quarters,
then ALAMEDA will lose exclusivity but will remain a dealer. Further, all UNRG
customers will revert back to UNRG and the termination provisions of this
Agreement will apply.

LUNSFORD, LTD.                               UNITED ENERGY CORPORATION

By:      \s\  Robin Lunsford                 By:    \s\  Ronald Wilen
         ROBIN LUNSFORD,                            RONALD WILEN, President
         President/CEO\

                                                                              68

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