The Searching Eye says:

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The Searching Eye functions like a player card.

Forced : After you draw this card, either exhaust each hero you control, or reveal an encounter card.

The FAQ at 1.44 says (although The Searching Eye doesn't use the word "must"):

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If a card instead uses the structure “... must either X or Y...” then the player may choose which task to perform, although one of them must be performed in full, if able.

If I draw The Searching Eye when at least one (but not all) of my heroes is exhausted, may I choose the first option, or must I reveal an encounter card? I think the question boils down to whether exhausting some of my heroes counts as performing "exhaust each hero you control" in full.

"Exhaust" can't happen to an already-exhausted character, so I would think that "exhaust each hero" can only be performed in full if all your heroes are ready.

9 hours ago, NathanH said:

"Exhaust" can't happen to an already-exhausted character, so I would think that "exhaust each hero" can only be performed in full if all your heroes are ready.

Yeah, that's how I read it too. This is a rough card!