SECURED TERM NOTE
                                -----------------

          FOR  VALUE  RECEIVED,  GARWOOD  PETROSEARCH, INC., a Texas corporation
("GARWOOD")  promises  to  pay  to  LAURUS  MASTER FUND, LTD., c/o M&C Corporate
Services  Limited,  P.O.  Box  309 GT, Ugland House, South Church Street, George
Town,  Grand  Cayman,  Cayman  Islands,  Fax: 345-949-8080 (the "HOLDER") or its
registered  assigns  or  successors  in interest, the sum of Eight Million Three
Hundred  Thousand  Dollars  ($8,300,000),  together  with any accrued and unpaid
interest  hereon,  on November 1, 2009 (the "MATURITY DATE") if not sooner paid.

          Capitalized  terms  used  herein  without  definition  shall  have the
meanings  ascribed  to  such terms in that certain Securities Purchase Agreement
dated  as  of the date hereof by and between Garwood and the Holder (as amended,
modified  and/or  supplemented  from  time  to  time, the "PURCHASE AGREEMENT").

          The  following  terms  shall  apply  to  this  Secured Term Note (this
"NOTE"):

                                   ARTICLE 1
                         CONTRACT RATE AND AMORTIZATION

          1.1     Contract  Rate.  Subject  to  Sections  2.2  and 3.9, interest
                  --------------
payable  on  the  outstanding  principal  amount  of  this  Note (the "PRINCIPAL
AMOUNT") shall accrue at a rate per annum equal to the "PRIME RATE" published in
The  Wall  Street Journal from time to time (the "PRIME RATE"), plus two percent
-------------------------
(2%)  (the  "CONTRACT RATE").  The Contract Rate shall be increased or decreased
as  the case may be for each increase or decrease in the Prime Rate in an amount
equal  to  such  increase  or  decrease  in  the  Prime  Rate; each change to be
effective as of the day of the change in the Prime Rate; provided, however, that
the  Contract Rate shall not at any time be less than eight percent (8%) or more
than  fifteen percent (15%).  Interest shall be (i) calculated on the basis of a
360  day  year,  and  (ii)  payable monthly, in arrears, commencing on the First
Payment  Date  (as  hereinafter  defined),  on  the  first  business day of each
consecutive  calendar  month thereafter through and including the Maturity Date,
and on the Maturity Date, whether by acceleration or otherwise.  For purposes of
this  Section  1.1 and Section 1.2, the term "FIRST PAYMENT DATE" shall mean the
earlier  of  (i) the first business day of the month following Garwood's receipt
of  proceeds  from first production from the Kallina 46 #1 Well in the Southwest
Garwood  field  in  Colorado County, Texas or (ii) one-hundred twenty (120) days
from  the  date  hereof.

          1.2     Payments.  Amortizing  payments  of  the  aggregate  principal
                  --------
amount outstanding under this Note shall be made by Garwood on the First Payment
Date  and  on the first business day of each succeeding month thereafter through
and  including  the  Maturity  Date  (each, an "AMORTIZATION DATE").  Subject to
Article III below, commencing on the first Amortization Date, Garwood shall make
monthly  payments  of  principal and interest to the Holder on each Amortization
Date equal to the Amortization Amount (as hereafter defined).  All such payments
shall  be  applied  by the Holder first to accrued and unpaid interest, fees and
expenses  owing  by  Garwood to the Holder and then to the outstanding principal
balance  owing hereunder.  In the event the Amortization Amount during any month
is  less  than  $100,000  then


                                        1
<PAGE>
Garwood  shall  nevertheless  make  a  monthly payment to the Holder during such
month  in  an  amount  equal  to  the  difference  between $100,000 and the then
applicable  Amortization  Amount,  which  such  payment  shall be applied by the
Holder to accrued and unpaid interest, fees and expenses owing by Garwood to the
Holder.  Any  outstanding  Principal Amount together with any accrued and unpaid
interest and any and all other unpaid amounts which are then owing by Garwood to
the  Holder  under  this  Note,  the Purchase Agreement and/or any other Related
Agreement  shall  be due and payable on the Maturity Date.  For purposes of this
Section, (a) the term "AMORTIZATION AMOUNT" shall mean an amount equal to ninety
percent  (90%)  of  the  Net  Revenue  relating to all oil and gas properties of
Garwood  (the  "OIL  AND  GAS  PROPERTIES")  for  the calendar month immediately
preceding  the  Amortization  Date;  provided,  however,  such  percentage shall
                                     --------   -------
increase  to  one  hundred  percent  (100%)  upon  the occurrence and during the
continuance of an Event of Default and (b) the term "NET REVENUE" shall mean the
gross  proceeds  paid to Garwood in respect of oil, gas and/or other hydrocarbon
production in which it has an interest whether or not such proceeds are remitted
to  the  lockbox account and/or any other blocked account established by Garwood
in  connection  with  the transactions contemplated hereby net of, in each case,
with  respect  to  the period for which such Net Revenue relates, the reasonable
ordinary  day to day expenses associated with Garwood's operation of the leases,
wells  and  equipment, including fuel, materials, labor, maintenance to maintain
production  from  an  existing  completed  well,  royalty,  severance tax and ad
valorem tax, in each case using accounting practices and procedures ordinary and
customary  in  the  oil  and  gas industry, all of which shall be subject to the
Holder's  approval,  which  shall  be  provided  in the exercise of the Holder's
reasonable discretion based on such supporting documentation from Garwood as the
Holder  shall  request.

                                   ARTICLE 2
                               EVENTS OF DEFAULT

          2.1     Events  of  Default.  The  occurrence  of any of the following
                  -------------------
events  set  forth  in  this  Section  2.1  shall constitute an event of default
("EVENT  OF  DEFAULT")  hereunder:

               (a)     Failure  to  Pay.  Garwood  fails  to  pay  when  due any
                       ----------------
installment  of principal, interest or other fees hereon in accordance herewith,
or  Garwood  fails  to pay any of the other Obligations (under and as defined in
the  Master  Security  Agreement)  when due, and, in any such case, such failure
shall  continue  for a period of three (3) business days following the date upon
which  any  such  payment  was  due.

               (b)     Breach of Covenant.  Garwood breaches any covenant or any
                       ------------------
other  term  or  condition  of  this  Note  and such breach, if subject to cure,
continues  for  a  period  of  fifteen  (15)  days after the occurrence thereof.

               (c)     Breach  of  Representations  and  Warranties.  Any
                       --------------------------------------------
representation, warranty or statement made or furnished by Garwood in connection
with the transaction contemplated hereby, by the Purchase Agreement or any other
Related  Agreement  shall  at  any time be false or misleading on the date as of
which  made  or  deemed  made.

               (d)     Default  Under  Other  Agreements.  The occurrence of any
                       ---------------------------------
default  (or  similar  term)  in  the  observance  or  performance  of any other
agreement  or  condition  relating


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<PAGE>
to  any  indebtedness  or  contingent  obligation,  in each case in an aggregate
amount  of  not  less  than  $25,000,  of  Garwood;

               (e)     Material Adverse Effect.  Any change or the occurrence of
                       -----------------------
any  event which could reasonably be expected to have a Material Adverse Effect;

               (f)     Bankruptcy.  Garwood  or  any Subsidiary of Garwood shall
                       ----------
(i)  apply  for, consent to or suffer to exist the appointment of, or the taking
of  possession  by, a receiver, custodian, trustee or liquidator of itself or of
all  or  a  substantial part of its property, (ii) make a general assignment for
the  benefit  of  creditors,  (iii)  commence a voluntary case under the federal
bankruptcy  laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt
or  insolvent,  (v)  file  a petition seeking to take advantage of any other law
providing for the relief of debtors, (vi) acquiesce to, without challenge within
ten (10) days of the filing thereof, or failure to have dismissed, within thirty
(30)  days,  any  petition  filed  against it in any involuntary case under such
bankruptcy  laws,  or  (vii) take any action for the purpose of effecting any of
the  foregoing;

               (g)     Judgments.  Attachments or levies in excess of $25,000 in
                       ---------
the  aggregate  are made upon Garwood's assets or a judgment is rendered against
Garwood's  property  involving  a liability of more than $25,000 which shall not
have  been  vacated,  discharged, stayed or bonded within ten (10) days from the
entry  thereof;

               (h)     Insolvency.  Garwood  shall  admit  in  writing  its
                       ----------
inability,  or be generally unable, to pay its debts as they become due or cease
operations  of  its  present  business;

               (i)     Change  of  Control.  A  Change  of  Control  (as defined
                       -------------------
below)  shall  occur with respect to Garwood, unless Holder shall have expressly
consented  to  such  Change  of Control in writing.  A "CHANGE OF CONTROL" shall
mean  any event or circumstance as a result of which (i) any "PERSON" or "GROUP"
(as  such  terms are defined in Sections 13(d) and 14(d) of the Exchange Act, as
in  effect  on  the  date  hereof),  other  than  the  Holder, is or becomes the
"BENEFICIAL  OWNER"  (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act),  directly  or  indirectly,  of 35% or more on a fully diluted basis of the
then  outstanding  voting  equity  interest of Garwood (other than a "PERSON" or
"GROUP"  that  beneficially  owns  35% or more of such outstanding voting equity
interests of Garwood on the date hereof), (ii) the Board of Directors of Garwood
shall cease to consist of a majority of Garwood's board of directors on the date
hereof (or directors appointed by a majority of the board of directors in effect
immediately  prior  to such appointment) or (iii) Garwood merges or consolidates
with,  or  sells  all or substantially all of its assets to, any other person or
entity;

               (j)     Indictment;  Proceedings.  The  indictment  or threatened
                       ------------------------
indictment  of  Garwood  or  any executive officer of Garwood under any criminal
statute,  or  commencement  or  threatened  commencement  of  criminal  or civil
proceeding against Garwood or any executive officer of Garwood pursuant to which
statute  or  proceeding  penalties  or  remedies  sought  or  available  include
forfeiture  of  any  of  the  property  of  Garwood;  or

               (k)     The  Purchase  Agreement  and Related Agreements.  (i) An
                       ------------------------------------------------
Event  of  Default shall occur under and as defined in the Purchase Agreement or
any  other  Related


                                        3
<PAGE>
Agreement,  (ii)  Garwood  shall  breach  any  term or provision of the Purchase
Agreement  or  any  other Related Agreement and such breach, if capable of cure,
continues unremedied for a period of ten (10) days after the occurrence thereof,
(iii)  Garwood  attempts  to  terminate,  challenges  the  validity  of,  or its
liability  under,  the  Purchase  Agreement  or  any Related Agreement, (iv) any
proceeding  shall  be  brought  to challenge the validity, binding effect of the
Purchase  Agreement  or any Related Agreement, (v) the Purchase Agreement or any
Related  Agreement  ceases  to be a valid, binding and enforceable obligation of
Garwood.

          2.2     Default  Interest.  Following  the  occurrence  and during the
                  -----------------
continuance  of  an  Event  of Default, Garwood shall pay additional interest on
this  Note in an amount equal to two percent (2%) per month, and all outstanding
obligations  under  this  Note,  the  Purchase  Agreement and each other Related
Agreement,  including unpaid interest, shall continue to accrue interest at such
additional  interest  rate from the date of such Event of Default until the date
such  Event  of  Default  is  cured  or  waived.

          2.3     Default  Payment.  Following  the  occurrence  and  during the
                  ----------------
continuance  of  an  Event  of  Default,  the  Holder, at its option, may demand
repayment  in  full  of  all obligations and liabilities owing by Garwood to the
Holder  under  this  Note,  the  Purchase  Agreement  and/or  any  other Related
Agreement and/or may elect, in addition to all rights and remedies of the Holder
under  the  Purchase  Agreement  and  the  other  Related  Agreements  and  all
obligations  and  liabilities  of  Garwood  under the Purchase Agreement and the
other Related Agreements, to require Garwood to make a Default Payment ("DEFAULT
PAYMENT").  The  Default  Payment  shall  be  130%  of the outstanding principal
amount  of  the  Note,  plus  accrued  but  unpaid interest, all other fees then
remaining  unpaid, and all other amounts payable hereunder.  The Default Payment
shall  be  applied  first  to any fees due and payable to the Holder pursuant to
this  Note, the Purchase Agreement, and/or the other Related Agreements, then to
accrued  and  unpaid  interest  due  on  this  Note  and then to the outstanding
principal  balance  of  this Note.  The Default Payment shall be due and payable
immediately  on  the  date  that the Holder has exercised its rights pursuant to
this  Section  2.3.

                                    ARTICLE 3
                                  MISCELLANEOUS

          3.1     Cumulative  Remedies.  The  remedies  under this Note shall be
                  --------------------
cumulative.

          3.2     Failure  or Indulgence Not Waiver.  No failure or delay on the
                  ---------------------------------
part  of  the  Holder  hereof  in  the exercise of any power, right or privilege
hereunder  shall  operate  as  a waiver thereof, nor shall any single or partial
exercise  of  any  such  power,  right  or  privilege  preclude other or further
exercise  thereof  or  of  any  other right, power or privilege.  All rights and
remedies  existing hereunder are cumulative to, and not exclusive of, any rights
or  remedies  otherwise  available.

          3.3     Notices.  Any  notice herein required or permitted to be given
                  -------
shall  be  in  writing  and shall be deemed effectively given: (a) upon personal
delivery to the party notified, (b) when sent by confirmed telex or facsimile if
sent  during  normal  business  hours of the recipient, if not, then on the next
business day, (c) five (5) business days after having been sent by registered or
certified  mail,  return receipt requested, postage prepaid, or (d) two (2) days
after


                                        4
<PAGE>
deposit  with  a  nationally  recognized  overnight courier, specifying next day
delivery,  with  written  verification  of receipt.  All communications shall be
sent  to Garwood at the addresses provided in the Purchase Agreement executed in
connection  herewith,  and to the Holder at the address provided in the Purchase
Agreement  for  such  Holder,  with  a  copy to [John E. Tucker, Esq., 825 Third
Avenue,  14th Floor, New York, New York 10022, facsimile number (212) 541-4434],
or  at  such  other  address  as Garwood or the Holder may designate by ten days
advance  written  notice  to  the  other  parties  hereto.

          3.4     Amendment  Provision.  The  term  "NOTE"  and  all  references
                  --------------------
thereto,  as  used  throughout  this  instrument,  shall mean this instrument as
originally  executed, or if later amended or supplemented, then as so amended or
supplemented,  and  any successor instrument as such successor instrument may be
amended  or  supplemented.

          3.5     Assignability.  This  Note  shall  be binding upon Garwood and
                  -------------
its  respective  successors  and  assigns, and shall inure to the benefit of the
Holder  and  its  successors  and  assigns, and may be assigned by the Holder in
accordance  with  the  requirements  of the Purchase Agreement.  Garwood may not
assign  any of its obligations under this Note without the prior written consent
of the Holder, any such purported assignment without such consent being null and
void.

          3.6     Cost  of  Collection.  In  case  of any Event of Default under
                  --------------------
this  Note,  Garwood  shall  pay  the  Holder  costs  of  collection,  including
attorneys'  fees.

          3.7     Governing  Law,  Jurisdiction  and  Waiver  of  Jury  Trial.
                  -----------------------------------------------------------

               (a)     THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN  ACCORDANCE  WITH  THE  LAWS  OF  THE  STATE  OF  NEW YORK, WITHOUT REGARD TO
PRINCIPLES  OF  CONFLICTS  OF  LAW.

               (b)     GARWOOD  HEREBY  CONSENTS  AND  AGREES  THAT THE STATE OR
FEDERAL  COURTS  LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE
EXCLUSIVE  JURISDICTION  TO  HEAR  AND  DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
GARWOOD,  ON THE ONE HAND, AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS
NOTE  OR  ANY OF THE OTHER RELATED AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATED  TO  THIS  NOTE OR ANY OF THE RELATED AGREEMENTS; PROVIDED, THAT GARWOOD
                                                          --------
ACKNOWLEDGES  THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED  OUTSIDE  OF  THE  COUNTY  OF  NEW  YORK, STATE OF NEW YORK; AND FURTHER
                                                                         -------
PROVIDED,  THAT  NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO PRECLUDE THE
--------
HOLDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION
TO  COLLECT  THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY
FOR  THE  OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
THE  HOLDER.  GARWOOD  EXPRESSLY  SUBMITS  AND  CONSENTS  IN  ADVANCE  TO  SUCH
JURISDICTION  IN  ANY  ACTION  OR  SUIT COMMENCED IN ANY SUCH COURT, AND GARWOOD
HEREBY  WAIVES  ANY  OBJECTION  WHICH  IT  MAY  HAVE BASED UPON LACK OF PERSONAL


                                        5
<PAGE>
JURISDICTION,  IMPROPER  VENUE  OR  FORUM NON CONVENIENS.  GARWOOD HEREBY WAIVES
                                    --------------------
PERSONAL  SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH
ACTION  OR  SUIT  AND  AGREES  THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER
PROCESS  MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO GARWOOD AT THE
ADDRESS  SET  FORTH  IN THE PURCHASE AGREEMENT AND THAT SERVICE SO MADE SHALL BE
DEEMED  COMPLETED  UPON THE EARLIER OF GARWOOD'S ACTUAL RECEIPT THEREOF OR THREE
(3)  DAYS  AFTER  DEPOSIT  IN  THE  U.S.  MAILS,  PROPER  POSTAGE  PREPAID.

               (c)     GARWOOD  DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE
APPLYING  SUCH  APPLICABLE  LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OF
THE  BENEFITS  OF  THE JUDICIAL SYSTEM AND OF ARBITRATION, GARWOOD HERETO WAIVES
ALL  RIGHTS  TO  TRIAL  BY  JURY  IN  ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE
HOLDER  AND GARWOOD ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE
RELATIONSHIP  ESTABLISHED  BETWEEN  THEM IN CONNECTION WITH THIS NOTE, ANY OTHER
RELATED  AGREEMENT  OR  THE  TRANSACTIONS  RELATED  HERETO  OR  THERETO.

          3.8     Severability.  In the event that any provision of this Note is
                  ------------
invalid  or unenforceable under any applicable statute or rule of law, then such
provision  shall  be  deemed  inoperative  to  the  extent  that it may conflict
therewith  and  shall be deemed modified to conform with such statute or rule of
law.  Any  such provision which may prove invalid or unenforceable under any law
shall  not  affect the validity or enforceability of any other provision of this
Note.

          3.9     Maximum Payments.  Nothing contained herein shall be deemed to
                  ----------------
establish  or  require  the  payment  of  a rate of interest or other charges in
excess  of  the maximum permitted by applicable law.  In the event that the rate
of  interest  required  to be paid or other charges hereunder exceed the maximum
rate permitted by such law, any payments in excess of such maximum rate shall be
credited  against  amounts  owed  by  Garwood  to  the  Holder.

          3.10     Security  Interest and Mortgage.  The Holder has been granted
                   -------------------------------
a  security interest (i) in certain assets of Garwood as more fully described in
the  Master Security Agreement dated as of the date hereof (as amended, restated
or  otherwise  modified  from  time  to  time),  (ii) in the equity interests of
Petrosearch  Energy  Corp.,  a  Nevada  corporation  "Petrosearch")  in  Garwood
pursuant  to  the  Stock  Pledge  Agreement  dated as of the date hereof between
Petrosearch and the Holder (as amended, restated or otherwise modified from time
to  time), and (iii) in the oil and gas properties of Garwood pursuant to one or
more  deeds  of  trust  dated  as  of  the  date  hereof.

          3.11     Construction.  Each party acknowledges that its legal counsel
                   ------------
participated in the preparation of this Note and, therefore, stipulates that the
rule  of  construction  that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against  the  other.


                                        6
<PAGE>
          3.12     Registered  Obligation.  This  Note  is  intended  to  be  a
                   ----------------------
registered  obligation  within  the  meaning  of  Treasury  Regulation  Section
1.871-14(c)(1)(i)  and  Garwood  (or  their agent) shall register this Note (and
thereafter shall maintain such registration) as to both principal and any stated
interest.  Notwithstanding  any  document,  instrument  or agreement relating to
this  Note  to the contrary, transfer of this Note (or the right to any payments
of  principal  or  stated  interest  thereunder)  may  only  be  effected by (i)
surrender  of this Note and either the reissuance by Garwood of this Note to the
new  holder or the issuance by Garwood of a new instrument to the new holder, or
(ii)  transfer through a book entry system maintained by Garwood (or its agent),
within  the  meaning  of  Treasury  Regulation  Section  1.871-14(c)(1)(i)(B).


       [Balance of page intentionally left blank; signature page follows]


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<PAGE>
          IN  WITNESS  WHEREOF,  Garwood has caused this Secured Term Note to be
signed  in  its  name  effective  as  of  this  1st  day  of  November  2006.


                                        GARWOOD PETROSEARCH, INC.


                                        By: /s/ Richard D. Dole
                                           -------------------------------------
                                             Name:  Richard D. Dole
                                             Title: Manager

WITNESS:


-------------------------------------