EXTENSION AGREEMENT
THIS EXTENSION
AGREEMENT (this "Agreement"), dated as of March
30,
2006, is entered into by and between Exxon Mobil Corporation, a
New Jersey
corporation
("ExxonMobil"),
Harding Company, a
Texas corporation ("Harding"),
PetroSearch Energy
Corporation, a Nevada corporation ("PetroSearch"), Eagle Oil
& Gas Co., a Texas corporation ("Eagle"), and PS Gas
Partners, LLC, a Texas
limited liability
company, in its individual capacity and as general partner on
behalf of Gas
Partners, L.P., a Texas limited partnership (collectively
"PSG").
RECITALS
--------
WHEREAS, ExxonMobil
and Harding entered into a Lease Acquisition and
Exploration Agreement
dated June 29, 2005 (the "Exploration Agreement"),
pursuant to
which ExxonMobil and Harding have agreed to participate in
the
acquisition, and
possible joint exploration and development, of oil and
gas
leases (the "Leases")
in portions of Dallas, Denton, Ellis, Johnson and Tarrant
Counties, Texas,
subject to the terms and conditions set forth in the
Exploration
Agreement;
WHEREAS, all
Leases acquired by Harding pursuant to the Exploration
Agreement are subject to the form Operating Agreement attached as
Exhibit "C" to
the Exploration
Agreement, which includes a preferential right to purchase (the
"Preferential Purchase
Right") in Article
VIII.F of said Operating Agreement;
WHEREAS, Harding has
agreed to sell an undivided interest in the Leases to
PetroSearch pursuant
to that certain First Amended and Restated Program
Agreement dated
February 6, 2006, between PetroSearch and Harding (the
"PetroSearch
Agreement");
WHEREAS, Harding has
agreed to sell an undivided interest in the Leases to
Eagle pursuant to that certain Lease Acquisition and Exploration
Agreement dated
effective February 17, 2006, between Eagle and Harding (the "Eagle
Agreement");
WHEREAS, Harding
has entered into an agreement with PSG dated dated
as
December 15,
2005 (the "PSG Agreement");
WHEREAS, the
deadline ("PetroSearch
Deadline") for ExxonMobil to exercise
the Preferential
Purchase Right with respect to Harding's
proposed sale of an
interest in the Leases pursuant to the PetroSearch Agreement is
March 31, 2006;
WHEREAS, ExxonMobil,
Harding and PetroSearch desire to extend the
PetroSearch Deadline
with respect to
ExxonMobil's exercise of the Preferential
Purchase Right with
respect to the PetroSearch Agreement from March 31, 2006 to
May 2, 2006, in order to give the parties to this
Agreement adequate time to
explore possible
alternatives
to the current structure of ExxonMobil's
arrangement with
Harding under the Exploration Agreement;
WHEREAS, the
deadline ("Eagle Deadline") for ExxonMobil to
exercise the
Preferential Purchase
Right with respect to Harding's proposed sale of an
interest in
the Leases pursuant the Eagle Agreement is April 21, 2006;
<PAGE>
WHEREAS, ExxonMobil,
Harding and Eagle desire to extend the Eagle Deadline
with respect
to ExxonMobil's exercise of the
Preferential Purchase Right with
respect to
the Eagle Agreement
from April 21, 2006 to May 2, 2006, in order to
give the parties to this Agreement adequate time to explore possible
alternatives to
the current structure
of ExxonMobil's arrangement with Harding
under the Exploration Agreement;
WHEREAS, the
deadline ("PSG Deadline") for ExxonMobil to exercise the
Preferential Purchase
Right, if such right exists, with respect to the
PSG
Agreement has
not yet been determined;
WHEREAS, ExxonMobil, Harding and PSG desire to extend the PSG
Deadline with
respect to ExxonMobil's exercise of the Preferential Purchase Right
with respect
to the PSG Agreement, if such right exists, to a date (the "Extended PSG
Deadline") which
is the later of (i)
May 2, 2006 or (ii) the deadline provided
in Article
VIII.F of said
Operating Agreement, in order to give the parties to
this Agreement
adequate time to explore possible alternatives
to the current
structure of
ExxonMobil's
arrangement
with Harding under the Exploration
Agreement;
WHEREAS, the parties
wish to explore possible alternative structures under
which an integrated venture could be formed which
would include both upstream
and pipeline
assets and activities, which would better align each party's
interest, and
which would enhance the ability of the venture to
assure that
adequate pipeline
capacity would be available to move natural gas
to market,
however, the parties are not in any manner whatsoever bound by or
limited to the
foregoing possible
structures
or goals and any party may propose
expanding,
modifying or
abandoning all or any
part of such possible structures or goals;
NOW,
THEREFORE,
for and in consideration of the premises and
to induce
ExxonMobil to
delay its decision regarding the exercise of the
Preferential
Purchase Right,
the parties hereby covenant and agree as follows:
AGREEMENT
---------
1.
Extension of
Deadlines
------------------------
1.1
The
PetroSearch Deadline
with respect to ExxonMobil's exercise of
the Preferential
Purchase Right with respect to the PetroSearch
Agreement is
hereby extended from March 31, 2006 to May 2, 2006. ExxonMobil may exercise the
Preferential Purchase
Right with respect to the PetroSearch
Agreement at any
time after
April 10, 2006, and on or before May 2, 2006.
1.2
The
Eagle Deadline with respect to ExxonMobil's
exercise of the
Preferential Purchase
Right with respect to the Eagle Agreement is hereby
extended from
April 21, 2006 to May 2, 2006. ExxonMobil may exercise the
Preferential Purchase
Right with respect to the Eagle Agreement at any
time
after April
10, 2006, and on or before May 2, 2006.
1.3
The
PSG Deadline with respect to ExxonMobil's exercise of
any
Preferential Purchase Right which may exist with respect to the PSG
Agreement is
hereby extended
to the Extended PSG Deadline.
<PAGE>
2.
Warranty
and Representation
-----------------------------
2.1
PetroSearch hereby
represents
and warrants to ExxonMobil and
Harding that
(i) it has the
absolute and unrestricted right, power, authority,
and capacity
to execute and deliver this Agreement and to perform its
obligations under
this Agreement, (ii)
its execution, delivery and performance
of this Agreement will not contravene,
conflict with, or result in a violation
of (A) any provision of its
organizational documents or any resolutions of its
board of directors or
shareholders, (B) any contract, agreement, loan document,
note, security or
instrument to which it or any of its affiliates is a party or
by which it or any of its affiliates is bound, or (C)
any legal requirement
binding on
it or its affiliates, (iii) this
Agreement constitutes the legal,
valid, and
binding obligation of
it, enforceable against it in accordance with
its terms,
and (iv) it owns all rights granted or inuring
to the benefit of
PetroSearch under
the PetroSearch Agreement.
2.2
Harding hereby represents and warrants to ExxonMobil,
PetroSearch,
Eagle and PSG that (i) it has the absolute and unrestricted
right, power,
authority, and capacity to execute and deliver this Agreement and
to perform its
obligations under
this Agreement, (ii)
its execution, delivery and performance
of this Agreement will not contravene,
conflict with, or result in a violation
of (A) any provision of its
organizational documents or any resolutions of its
board of directors or
sharehold
