GUARANTY

dated as of April 10, 2008

of

the Guarantors listed on the signature pages hereof

and that otherwise may become a party hereto

in favor of

CITIBANK, N.A.

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

TABLE OF CONTENTS

 

           Page

ARTICLE I Definitions and References

   1

    Section 1.1.

   Definitions in Credit Agreement    1

    Section 1.2.

   Definitions in this Guaranty    1

    Section 1.3.

   Rules of Construction; References and Titles    2

ARTICLE II Guaranty

   2

    Section 2.1.

   Guaranty    2

    Section 2.2.

   Obligation as a Guarantor    2

    Section 2.3.

   Fees and Expenses    2

    Section 2.4.

   Limitation of Liability of Certain Guarantors    2

ARTICLE III Guaranty Absolute

   3

    Section 3.1.

   Unconditional Guaranty    3

    Section 3.2.

   No Release Based on Actions of the Lender    3

    Section 3.3.

   Waivers    3

    Section 3.4.

   Continuing Guaranty; Reinstatement    5

ARTICLE IV Representations and Warranties

   6

    Section 4.1.

   Representations and Warranties    6

ARTICLE V Covenants

   7

    Section 5.1.

   Covenants    7

ARTICLE VI Remedies of the Lender

   7

    Section 6.1.

   Exercise of Remedies    7

    Section 6.2.

   Liability for Deficiencies    8

    Section 6.3.

   Delay not a Waiver; Remedies Cumulative    8

    Section 6.4.

   Right of Set-Off    8

ARTICLE VII Subordination; Subrogation; Contribution

   8

    Section 7.1.

   Subordination    8

    Section 7.2.

   Limited Right of Subrogation    9

    Section 7.3.

   Right of Contribution    9

ARTICLE VIII Indemnification

   10

    Section 8.1.

   General Indemnification    10

    Section 8.2.

   Tax Indemnification    10

    Section 8.3.

   Waiver of Consequential Damages, Etc.    11

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

ARTICLE IX Miscellaneous

   11

    Section 9.1.

   Notices    11

    Section 9.2.

   Amendments and Waivers    11

    Section 9.3.

   Additional Guarantors    11

    Section 9.4.

   Severability    11

    Section 9.5.

   Survival of Agreements    11

    Section 9.6.

   Binding Effect and Assignment    11

    Section 9.7.

   Governing Law    12

    Section 9.8.

   Final Agreement    12

    Section 9.9.

   Counterparts; Facsimile    12

    Section 9.10.

   Acceptance by Lender    12

    Section 9.11.

   Limitation on Interest    12

    Section 9.12.

   Jurisdiction, Etc.    12

    Section 9.13.

   Waiver of Jury Trial    13

        Schedule I

       Guarantor Information   

        Exhibit A

       Form of Guaranty Supplement   

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

GUARANTY

THIS GUARANTY is made as of April 10, 2008, by the Persons listed on the
signature pages hereof and that may become parties hereto pursuant to
Section 9.3, in favor of CITIBANK, N.A. (the “Lender”).

RECITALS

A. TX Energy Services, LLC, a Delaware limited liability company (“TX Energy”),
C.C. Forbes, LLC, a Delaware limited liability company (“C.C. Forbes”), Superior
Tubing Testers, LLC, a Delaware limited liability company (“Superior” and
together with TX Energy and C.C. Forbes, collectively, the “Borrower”), Forbes
Energy Services LLC, a Delaware limited liability company (“Parent”), and Lender
are parties to the Credit Agreement dated as of April 10, 2008 (as amended from
time to time, the “Credit Agreement”).

B. Pursuant to the Credit Agreement, Lender agreed to extend credit to Borrower.

C. In order to induce Lender to extend such credit and to issue letters of
credit, Guarantor has agreed to execute and deliver this Guaranty.

D. It is in the best interest of Guarantor to execute this Guaranty inasmuch as
each Guarantor will derive substantial direct and indirect benefits from the
extensions of credit made from time to time to or for the account of Borrower.

NOW, THEREFORE, in consideration of the premises and for other valuable
consideration, the receipt and sufficiency of that the parties acknowledge,
Guarantor agrees as follows:

ARTICLE I

Definitions and References

Section 1.1. Definitions in Credit Agreement. Capitalized terms used herein and
not otherwise defined have the respective meanings specified in the Credit
Agreement.

Section 1.2. Definitions in this Guaranty. The following terms have the
following meanings:

“Borrower” has the meaning specified in Recital A.

“Credit Agreement” has the meaning specified in Recital A.

“Guaranteed Obligations” means all Obligations of Borrower under the Loan
Documents, including all amounts that constitute part of the Guaranteed
Obligations and would be owed by Borrower to the Lender but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving Borrower.

“Guarantor” means each Person guarantying the Guaranteed Obligations pursuant to
this Guaranty. References to “Guarantor” in this Guaranty are intended to refer
to each such Person as if such Person were the only guarantor pursuant to this
Agreement, except:

(a) that references to “any Guarantor” are meant to refer to each Person that is
a Guarantor,

 

GUARANTY – Page 1

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

(b) that references to “the Guarantors” are meant to refer to collectively all
Persons that are Guarantors, and

(c) as otherwise may be specifically set forth herein.

“Indemnified Party” has the meaning specified in Section 8.1(a).

“Net Worth” has the meaning specified in Section 7.3.

“Post-Petition Interest” has the meaning specified in Section 7.1(b).

“Subordinated Debt” has the meaning specified in Section 7.1.

Section 1.3. Rules of Construction; References and Titles. Section 1.3 of the
Credit Agreement is incorporated herein by reference herein as if fully set
forth.

ARTICLE II

Guaranty

Section 2.1. Guaranty. The Guarantors, jointly and severally, irrevocably,
absolutely and unconditionally guarantee to Lender the prompt and complete
payment and performance when due, no matter how the same shall become due, of
all Guaranteed Obligations.

Section 2.2. Obligation as a Guarantor. If Borrower shall for any reason fail to
pay any Guaranteed Obligation, as and when such Guaranteed Obligation shall
become due and payable, whether at its stated maturity, as a result of the
exercise of any power to accelerate, or otherwise, Guarantor will, upon five
(5) days written notice by Lender, pay such Guaranteed Obligation in full to
Lender. If Borrower shall for any reason fail to perform promptly any Guaranteed
Obligation that is not for the payment of money, Guarantor will, upon demand by
Lender, cause such Guaranteed Obligation to be performed or, if specified by
Lender, provide sufficient funds, in such amount and manner as Lender shall in
good faith determine, for the prompt, full and faithful performance of such
Guaranteed Obligation by Lender or such other Person as Lender shall designate.
Without limiting the generality of the foregoing, Guarantor will pay all amounts
that constitute part of the Guaranteed Obligations and would be owing but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding.

Section 2.3. Fees and Expenses. The Guarantors, jointly and severally, forthwith
upon demand by Lender, will pay all reasonable expenses (including all
reasonable fees and expenses of counsel) incurred by Lender in enforcing against
any Guarantor any right under this Guaranty.

Section 2.4. Limitation of Liability of Certain Guarantors. Notwithstanding any
other provision of this Guaranty, with respect to any Guaranteed Obligations
guaranteed hereby and the liability of such Guarantor under this Guaranty and
any other Loan Document to which it is a party shall be limited to the maximum
liability that can be incurred by such Guarantor without rendering this Guaranty
subject to avoidance under Section 548 of the United States Bankruptcy Code or
any comparable provisions of any applicable state or federal law.

 

GUARANTY – Page 2

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

ARTICLE III

Guaranty Absolute

Section 3.1. Unconditional Guaranty. (a) Guarantor will pay the Guaranteed
Obligations strictly in accordance with the terms of the Loan Documents,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any such term or any right of any Lender with respect
thereto.

(b) This is a guaranty of payment and not of collection. The obligations of
Guarantor under or in respect of this Guaranty and each other Loan Document to
which Guarantor is a party are independent of the Guaranteed Obligations or any
other obligation of any other Restricted Person under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against Guarantor to enforce this Guaranty, irrespective of whether any action
is brought against Borrower or any other Restricted Person or whether Borrower
or any other Restricted Person is joined in any such action or actions.

(c) The obligations of Guarantor under this Guaranty and each other Loan
Document to which Guarantor is a party shall not be affected by:

(i) any voluntary or involuntary liquidation, dissolution, sale of all or
substantially all assets, marshalling of assets or liabilities, receivership,
conservatorship, assignment for the benefit of creditors, insolvency,
bankruptcy, reorganization, arrangement, or composition of any Restricted
Person,

(ii) any other proceeding involving any Restricted Person or any asset of any
Restricted Person under any law for the protection of debtors, or

(iii) any discharge, impairment, modification, release, or limitation of the
liability of, or stay of actions or lien enforcement proceeding against, any
Restricted Person, any property of any Restricted Person, or the estate in
bankruptcy of any Restricted Person in the course of or resulting from any such
proceeding.

Section 3.2. No Release Based on Actions of the Lender. Except for Lender’s
gross negligence or willful misconduct, no action that Lender may take or omit
to take in connection with any Loan Document, any Guaranteed Obligation (or any
other indebtedness owing by Borrower to Lender), or any collateral security, and
no course of dealing between Lender and Borrower, any Guarantor or any other
Person, shall release or diminish Guarantor’s Guaranteed Obligations,
liabilities, agreements or duties hereunder, affect this Guaranty or any other
Loan Document to which Guarantor is a party, or afford Guarantor any recourse
against Lender, regardless of whether any such action or inaction may increase
any risk to or liability of Borrower or any Guarantor or increase any risk to or
diminish any safeguard of any collateral security.

Section 3.3. Waivers. The liability of Guarantor under this Guaranty and each
other Loan Document to which Guarantor is a party shall be irrevocable, absolute
and unconditional irrespective of, and Guarantor irrevocably waives, for
purposes of this Guaranty and each other Loan Document to which Guarantor is a
party, any defense that it may now have or hereafter acquire relating to, any or
all of the following, (and Guarantor acknowledges that it will receive
substantial direct and indirect benefits from the financing arrangements
contemplated by the Loan Documents and that the waivers set forth below and
otherwise in this Guaranty are knowingly made in contemplation of such
benefits):

 

GUARANTY – Page 3

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

(a) Any lack of validity or enforceability of any Loan Document, any agreement
or instrument relating thereto, any defense arising by reason of any disability
or other defense of any other Person or the cessation from any cause whatsoever
of the liability of any other Person.

(b) Any change in the time, manner or place of payment of, or in any other term
of, any Guaranteed Obligation or any other Obligation of any other Restricted
Person in respect of the Loan Documents, or any other amendment or waiver of or
any consent to departure from any Loan Document, including any increase in the
Guaranteed Obligations resulting from the extension of additional credit to
Borrower or any Restricted Person or any of its Subsidiaries or otherwise.

(c) Any taking, exchange, release or non-perfection of any collateral security,
or any taking, release or amendment or waiver of, or consent to departure from
any other guaranty of any Guaranteed Obligation.

(d) Any manner of application of collateral security, or proceeds thereof, to
any Guaranteed Obligation, or any manner of sale or other disposition of any
collateral security securing any Guaranteed Obligation or any other obligation
of any Restricted Person under the Loan Documents or any other asset of Borrower
or any Restricted Person or any of its Subsidiaries, and any other obligation to
marshall assets.

(e) Any right to require Lender to proceed against any other Person, to exhaust
any collateral security for the Guaranteed Obligations, to have any other Person
joined with Guarantor in any suit arising out of the Guaranteed Obligations or
this Guaranty or to pursue any other remedy in Lender’s power.

(f) Any change or restructuring of the corporate structure or termination of the
existence of Borrower or any Restricted Person or any of its Subsidiaries.

(g) Any failure of Lender to disclose to any Restricted Person any information
relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of any other Restricted Person now or
hereafter known to Lender (each Guarantor waiving any duty on the part of Lender
to disclose such information).

(h) Any failure of any other Person to execute or deliver this Guaranty, any
supplement hereto or any other guaranty or agreement.

(i) Any release or reduction of the liability of any Guarantor or other
guarantor or surety with respect to the Guaranteed Obligations or any other
compromise or settlement of the Guaranteed Obligations.

(j) Promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of non-performance, notice of default, notice of intent to
accelerate, notice of acceleration, protest or dishonor and, to the extent
permitted by Law, any other notice with respect to any Guaranteed Obligation and
this Guaranty.

(k) Any requirement that Lender create or perfect any Lien or protect or insure
any property subject thereto.

(l) Any right to revoke this Guaranty.

 

GUARANTY – Page 4

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

(m) Any election of remedies by Lender that in any manner impairs, reduces,
releases or otherwise adversely affects any collateral security or any
subrogation, reimbursement, exoneration, contribution or indemnification right
of Guarantor or other right of Guarantor to proceed against any other Restricted
Person, any other guarantor, any other Person or any collateral security.

(n) Any right of set-off or counterclaim against or in respect of the
Obligations of Guarantor hereunder.

(o) Any neglect, failure or refusal to take any action:

(i) for the collection or enforcement of any Guaranteed Obligation,

(ii) to realize on any collateral security,

(iii) to enforce any Loan Document,

(iv) to file or enforce a claim in any proceeding described in Section 3.1(c),

(v) in connection with the administration of any Loan Document, or

(vi) otherwise concerning the Guaranteed Obligations or the Loan Documents,

or any delay in taking any such action.

(p) The fact that any Guarantor may have incurred directly any Guaranteed
Obligation or is otherwise primarily liable therefor.

(q) Intentionally Deleted.

(r) Any defense to the recovery by Lender against Guarantor of any deficiency
after a non-judicial sale and any defense or benefit that may be afforded by
applicable Law (and in that connection Guarantor acknowledges that Lender may,
without notice to or demand upon Guarantor and without affecting the liability
of such Guarantor under this Guaranty, foreclose under any mortgage by
non-judicial sale).

(s) Any statute of limitations applicable to the Guaranteed Obligations to the
extent such statute of limitations can be waived by Guarantor.

(t) To the extent permitted by Law, any other circumstance or any existence of
or reliance on any representation by Lender, except for indefeasible payment in
full in cash and performance in full of each Guaranteed Obligation, that might
otherwise constitute a defense available to, or a discharge of, Guarantor, any
Restricted Person or any other guarantor or surety.

Section 3.4. Continuing Guaranty; Reinstatement. (a) This Guaranty is a
continuing guaranty and shall remain in full force and effect until the latest
of:

(i) the indefeasible payment in full in cash of the Guaranteed Obligations and
all other amounts payable under this Guaranty,

 

GUARANTY – Page 5

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

(ii) the date on which all commitments of Lender under the Credit Agreement
shall terminate, and

(iii) the latest date of expiration or termination of all Commitments and
letters of credit issued under the Credit Agreement.

(b) This Guaranty and each other Loan Document to which Guarantor is a party
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any Guaranteed Obligation is rescinded or must otherwise be
returned by Lender as a result of the insolvency, bankruptcy or reorganization
of any Restricted Person or otherwise, all as though such payment had not been
made, and the Guarantor jointly and severally will pay such amount to Lender on
demand. Any transfer by subrogation that is made as contemplated in Section 7.2
prior to any such payment shall (regardless of the terms of such transfer) be
automatically voided upon the making of any such payment or payments, and all
rights so transferred shall thereupon automatically revert to and be vested in
Lender.

ARTICLE IV

Representations and Warranties

Section 4.1. Representations and Warranties. Guarantor represents and warrants
to the Lender as follows:

(a) Each representation and warranty made with respect to it in any other Loan
Document is correct in all material respects.

(b) Guarantor is an entity of the type specified opposite its name on Schedule 1
(or Schedule 1 to any guaranty supplement delivered by it pursuant to
Section 9.3) opposite its name and is organized under the laws of the
jurisdiction specified in such Schedule opposite its name.

(c) None of the execution, delivery or performance by Guarantor of this Guaranty
and each other Loan Document to which Guarantor is a party:

(i) conflicts with:

(A) any domestic or foreign law, statute, rule or regulation,

(B) any organizational document of Guarantor, or

(C) any agreement, judgment, license, order or permit applicable to or binding
upon Guarantor, or

(ii) results in or requires the creation of any Lien, charge or encumbrance upon
any asset of Guarantor.

(d) No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or other regulatory body or third party is
required for the due execution, delivery and performance by Guarantor of this
Guaranty or any other Loan Document to which Guarantor is a party, except to the
extent the same has been obtained, effected or given.

(e) Each of this Guaranty and each other Loan Document to which Guarantor is a
party is the legal, valid and binding obligation of Guarantor, enforceable
against Guarantor in accordance with its

 

GUARANTY – Page 6

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

terms, except as limited by bankruptcy, insolvency, moratorium, fraudulent
transfer, fraudulent conveyance or similar laws of general application relating
to the enforcement of creditors’ rights.

(f) There is no condition precedent to the effectiveness of this Guaranty or any
other Loan Document to which Guarantor is a party that has not been satisfied or
waived.

(g) Guarantor has, independently and without reliance upon Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Guaranty and each other Loan Document
to which it is a party, and Guarantor has established adequate means of
obtaining from each other Restricted Person on a continuing basis information
pertaining to, and is now and on a continuing basis will be completely familiar
with, the business, condition (financial or otherwise), operations, performance,
properties and prospects of each other Restricted Person.

(h) The direct or indirect value of the consideration received and to be
received by Guarantor in connection herewith and the incurrence of liability by
Guarantor in return for such consideration may reasonably be expected to benefit
Guarantor, directly or indirectly. Guarantor is not “insolvent” on the date
hereof (that is, the sum of Guarantor’s absolute and contingent liabilities,
including its liabilities hereunder and under each other Loan Document to which
Guarantor is a party, does not exceed the fair market value of Guarantor’s
assets). Guarantor’s capital is adequate for the businesses in which Guarantor
is engaged and intends to be engaged. Guarantor has not incurred (whether hereby
or otherwise), nor does Guarantor intend to incur or believe that it will incur,
debts which will be beyond its ability to pay as such debts mature.

ARTICLE V

Covenants

Section 5.1. Covenants. Guarantor will, so long as any Guaranteed Obligation
shall remain unpaid, any letter of credit shall be outstanding, or Lender shall
have any commitment, perform and observe, and cause each of its Subsidiaries to
perform and observe, all of the terms, covenants and agreements in the Loan
Documents on its or their part to be performed or observed or that Parent or
Borrower has agreed to cause Guarantor or such Subsidiaries to perform or
observe.

ARTICLE VI

Remedies of the Lender

Section 6.1. Exercise of Remedies. Lender may enforce, from time to time, in any
order and at Lender’s sole discretion, any right, power or remedy that Lender
may have under the Loan Documents or otherwise, including judicial foreclosure,
the exercise of a right of power of sale, the taking of a deed or assignment in
lieu of foreclosure, the appointment of a receiver to collect rents, issues and
profits, the exercise of remedies against personal property, or the enforcement
of any assignment of leases, rentals, or other property or right, whether real
or personal, tangible or intangible.

Section 6.2. Liability for Deficiencies. Guarantor shall be liable to Lender for
any deficiency resulting from the exercise by Lender of any right or remedy,
even though any right that Guarantor may have against Borrower or others may be
eliminated or diminished by the exercise of any such right or remedy.

 

GUARANTY – Page 7

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

Section 6.3. Delay not a Waiver; Remedies Cumulative. No failure on the part of
Lender to exercise, and no delay in exercising, any right under this Guaranty or
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The rights and remedies of Lender
provided in this Guaranty and the Loan Documents are cumulative and are in
addition to, and not exclusive of, any other right or remedy provided by law or
otherwise.

Section 6.4. Right of Set-Off. Guarantor grants to Lender and its Affiliates a
right of set-off on any and all money, securities and other property (and the
proceeds therefrom) of Guarantor now or hereafter held or received by or in
transit to Lender from or for the account of Guarantor, whether for safekeeping,
custody, pledge, transmission, collection or otherwise, and also upon any and
all deposits (general or special), credits and claims of Guarantor at any time
existing against Lender. Upon the occurrence and during the continuance of any
Default or Event of Default, Lender and its Affiliates are authorized at any
time and from time to time, without notice to Guarantor, to set-off, appropriate
and apply any such items against the Guaranteed Obligations and Guarantor’s
obligations and liabilities hereunder irrespective of whether or not Lender
shall have made any demand under this Guaranty and although such Guaranteed
Obligations and liabilities may be contingent or unmatured. Lender will notify
Guarantor after any such set-off and application made by it; provided that the
failure to give such notice shall not affect the validity of such set-off and
application.

ARTICLE VII

Subordination; Subrogation; Contribution

Section 7.1. Subordination. Guarantor subordinates all debts, liabilities and
other Obligations owed to Guarantor by each other Restricted Person (the
“Subordinated Obligations”) to the Guaranteed Obligations as follows:

(a) Except during the continuance of a Default (including the commencement and
continuation of any proceeding under any bankruptcy law relating to any other
Restricted Person), Guarantor may receive regularly scheduled payments or
prepayments in whole or in part from any other Restricted Person on account of
the Subordinated Obligations or otherwise. After the occurrence and during the
continuance of any Default (including the commencement and continuation of any
proceeding under any bankruptcy law relating to any other Restricted Person),
unless Lender otherwise agrees, Guarantor shall not demand, accept or take any
action to collect any payment on account of any Subordinated Obligation.

(b) In any proceeding under any bankruptcy law relating to any other Restricted
Person, Lender shall be entitled to receive payment in full in cash of all
Guaranteed Obligations (including all interest and expenses accruing after the
commencement of a proceeding under any Bankruptcy Law, whether or not
constituting an allowed claim in such proceeding (“Post-Petition Interest”))
before Guarantor receives payment of any Subordinated Obligation.

(c) After the occurrence and during the continuance of any Default (including
the commencement and continuation of any proceeding under any bankruptcy law
relating to any other Restricted Person), Guarantor shall, if Lender so
requests, collect, enforce and receive payments on account of the Subordinated
Obligations as trustee for Lender and deliver such payments to Lender on account
of the Guaranteed Obligations (including all Post-Petition Interest), together
with any necessary endorsements or other instruments of transfer, but without
reducing or affecting in any manner the liability of Guarantor under the other
provisions of this Guaranty.

 

GUARANTY – Page 8

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

Section 7.2. Limited Right of Subrogation. (a) Until all Guaranteed Obligations
have been indefeasibly paid in full in cash and otherwise performed in full, and
all obligations under each other Loan Document to which Guarantor is a party
have been paid and performed in full, Guarantor shall have no right of
subrogation, reimbursement, indemnity, exoneration, contribution or any other
claim against any Restricted Person or any Security in connection with this
Guaranty. Until such time, Guarantor waives any right to enforce any remedy that
Guarantor may have against Borrower and any right to participate in any
collateral security.

(b) If any amount shall be paid to Guarantor on account of any subrogation or
other similar right, any such other similar remedy with respect to the
Guaranteed Obligations, or any collateral security therefor at any time when all
of the Guaranteed Obligations and all other expenses guaranteed pursuant hereto
shall not have been paid in full, such amount shall be held in trust for the
benefit of Lender, shall be segregated from the other funds of Guarantor and
shall forthwith be paid over to Lender to be held by Lender for the benefit of
the Lender as collateral security for, or then or at any time thereafter applied
in whole or in part by Lender against, any Guaranteed Obligation, whether
matured or unmatured, in such order as Lender shall elect.

(c) If Guarantor shall have paid off any Guaranteed Obligation and if all of the
Guaranteed Obligations shall have been indefeasibly paid in full in cash, Lender
will, at expense and reasonable request, execute and deliver to Guarantor
(without recourse, representation or warranty) appropriate documents necessary
to evidence the transfer, without representation or warranty, by subrogation to
Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by Guarantor; provided that:

(i) such transfer shall be subject to Section 3.4(b), and

(ii) without the consent of Lender (which Lender may withhold in its discretion)
Guarantor shall not have the right to be subrogated to any claim or right
against any Restricted Person that has become owned by Lender, whose ownership
has otherwise changed in the course of enforcement of the Loan Documents, or
that Lender otherwise has released or wishes to release from its Guaranteed
Obligations.

Section 7.3. Right of Contribution. After all Guaranteed Obligations have been
indefeasibly paid in full in cash and otherwise performed in full, and all
obligations under each other Loan Document to which Guarantor is a party have
been paid and performed in full, all Guarantors that have made payments in
respect of the Guaranteed Obligations shall be entitled to contribution from all
other Guarantors, to the end that all such payments upon the Guaranteed
Obligations shall be shared among all such Guarantors in proportion to their
respective Net Worths; provided that the contribution obligations of each such
Guarantor shall be limited to the maximum amount that it can pay at such time
without rendering its contribution obligations voidable under applicable law
relating to fraudulent conveyances or fraudulent transfers. “Net Worth” means,
at any time and for any Guarantor:

(a) the fair value of such Guarantor’s assets (other than such right of
contribution), minus

(b) the fair value of such Guarantor’s liabilities (other than its liabilities
under its guaranty of the Guaranteed Obligations).

 

GUARANTY – Page 9

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

ARTICLE VIII

Indemnification

Section 8.1. General Indemnification. Without limiting any other obligation of
any Guarantor or remedy of Lender under this Guaranty, Guarantor shall, to the
fullest extent permitted by law, indemnify, defend and save and hold harmless
Lender and each of its Affiliates, officers, directors, employees, and advisors
(each, an “Indemnified Party”) from and against, and shall pay on demand, any
and all claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party in connection with or as a
result of any failure of any Guaranteed Obligation to be the legal, valid and
binding obligation of any Restricted Person, enforceable against such Restricted
Person in accordance with its terms.

Section 8.2. Tax Indemnification. (a) Any and all payments made by Guarantor
under or in respect of this Guaranty or any other Loan Document shall be made,
in accordance with Section 3.1 of the Credit Agreement, free and clear of and
without deduction for any present or future Taxes. If Guarantor shall be
required by law to deduct any Taxes from or in respect of any sum payable under
or in respect of this Guaranty or any other Loan Document to Lender:

(i) the sum payable by Guarantor shall be increased as may be necessary so that
after such Guarantor has made all required deductions (including deductions
applicable to additional sums payable under this Section), Lender receives an
amount equal to the sum it would have received had no such deductions been made,

(ii) Guarantor shall make all such deductions, and

(iii) Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.

(b) In addition, Guarantor will pay any present or future Other Taxes that arise
from any payment made by or on behalf of such Guarantor under or in respect of
this Guaranty or any other Loan Document or from the execution, delivery or
registration of, performance under, or otherwise with respect to, this Guaranty
and the other Loan Documents.

(c) Guarantor will indemnify Lender for and hold it harmless against the full
amount of Taxes and Other Taxes, and for the full amount of taxes of any kind
imposed by any jurisdiction on amounts payable under this Section, imposed on or
paid by Lender and any liability (including penalties, additions to tax,
interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date on which Lender makes
written demand therefor.

(d) Within 30 days after the date of any payment of Taxes by or on behalf of any
Guarantor, Guarantor shall furnish to Lender the original or a certified copy of
a receipt evidencing such payment. In the case of any payment hereunder by or on
behalf of Guarantor through an account or branch outside the United States or by
or on behalf of Guarantor by a payor that is not a United States person, if
Guarantor determines that no Taxes are payable in respect thereof, Guarantor
shall furnish, or shall cause such payor to furnish, to Lender, at such address,
an opinion of counsel acceptable to Lender stating that such payment is exempt
from Taxes. For purposes of subsections (d) and (e) of this Section, the terms
“United States” and “United States person” shall have the meanings specified in
Section 7701 of the Internal Revenue Code.

 

GUARANTY – Page 10

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

Section 8.3. Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable law, no party hereto shall assert, and hereby waives,
any claim against the other party, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof.

ARTICLE IX

Miscellaneous

Section 9.1. Notices. Any notice or communication required or permitted
hereunder shall be given in writing, sent in the manner provided in the Credit
Agreement, if to Lender or to a Guarantor that is a party to the Credit
Agreement, to the address set forth in the Credit Agreement and, for any other
Guarantor to the address specified opposite its name on Schedule 1, or to such
other address or to the attention of such other individual as hereafter shall be
designated in writing by the applicable party sent in accordance herewith. Any
such notice or communication shall be deemed to have been given as provided in
the Credit Agreement for notices given thereunder.

Section 9.2. Amendments and Waivers. No amendment of this Guaranty shall be
effective unless it is in writing and signed by Guarantor and Lender, and no
waiver of this Guaranty or consent to any departure by Guarantor herefrom shall
be effective unless it is in writing and signed by Lender, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for that given and to the extent specified in such writing. In addition,
all such amendments and waivers shall be effective only if given with the
necessary approvals required in the Credit Agreement. No such amendment shall
bind any Guarantor not a party thereto, but no such amendment with respect to
any Guarantor shall require the consent of any other Guarantor.

Section 9.3. Additional Guarantors. Upon the execution and delivery, or
authentication, by any Person of a Guaranty supplement in substantially the form
of Exhibit A, such Person shall become a Guarantor hereunder, and each reference
in this Guaranty and the other Loan Documents to “Guarantor” shall also mean and
be a reference to such Person.

Section 9.4. Severability. Any provision of this Guaranty that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or invalidity without invalidating the
remaining portions hereof or thereof or affecting the validity or enforceability
of such provision in any other jurisdiction.

Section 9.5. Survival of Agreements. All representations, warranties, covenants
and agreements of Guarantor herein shall survive the execution and delivery of
this Guaranty, the execution and delivery of any other Loan Document and the
creation of the Guaranteed Obligations.

Section 9.6. Binding Effect and Assignment. This Guaranty shall:

(a) be binding on Guarantor and its successors and permitted assigns, and

(b) inure, together with all rights and remedies of Lender hereunder, to the
benefit of Lender its respective successors, transferees and assigns.

Without limiting the generality of the foregoing, Lender may (except as
otherwise provided in any Loan Document) pledge, assign or otherwise transfer
any right under any Loan Document to any other Person,

 

GUARANTY – Page 11

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

and such other Person shall thereupon become vested with all of the benefits in
respect thereof granted herein or otherwise. No right or duty of Guarantor
hereunder may be assigned or otherwise transferred without the prior written
consent of Lender, except in connection with a merger or other consolidation of
two or more of the entities comprising the Guarantors and/or the Borrower to the
extent permitted under the Credit Agreement.

Section 9.7. Governing Law. This Guaranty shall be governed by and construed in
accordance with the laws of the State of New York.

Section 9.8. Final Agreement. This Guaranty and the other Loan Documents
represent the final agreement of the Guarantors and Lender and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties hereto. There are no unwritten oral agreements between
the Guarantors and Lender.

Section 9.9. Counterparts; Facsimile. This Guaranty may be separately executed
in any number of counterparts, all of that when so executed shall be deemed to
constitute one and the same Agreement. This Guaranty may be validly delivered by
facsimile or other electronic transmission of an executed counterpart of the
signature page hereof.

Section 9.10. Acceptance by Lender. By its acceptance of the benefits hereof,
Lender shall be deemed to have agreed to be bound hereby and to perform any
obligation on its part set forth herein.

Section 9.11. Limitation on Interest. Section 10.8 of the Credit Agreement,
which limits the interest for which Guarantor is obligated, is incorporated
herein by reference.

Section 9.12. Jurisdiction, Etc. Guarantor:

(a) irrevocably and unconditionally submits, for itself and its property, to the
non-exclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in Houston, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Guaranty, or for recognition or enforcement of any judgment;

(b) irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court;

(c) agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law;

(d) irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement in any New York State or federal court; and

(e) irrevocably waives, to the fullest extent permitted by law, the defense of
an inconvenient forum to the maintenance of such action or proceeding in any
such court.

Nothing in this Guaranty shall affect any right that any party may otherwise
have to bring any action or proceeding relating to this Guaranty in the courts
of any jurisdiction.

Section 9.13. Waiver of Jury Trial. Guarantor irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to this Guaranty or the
actions of Lender in the negotiation, administration, performance or enforcement
thereof.

 

GUARANTY – Page 12

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

IN WITNESS WHEREOF, Guarantor has executed and delivered this Guaranty as of the
date first written above.

 

FORBES ENERGY SERVICES, LLC By:   /s/ John E. Crisp   Name:   John E. Crisp  
Title:  

President and

Chief Executive Officer

 

FORBES ENERGY CAPITAL INC. By:   /s/ John E. Crisp   Name:   John E. Crisp  
Title:  

President and

Chief Executive Officer

 

GUARANTY – Page 13

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

SCHEDULE 1

to

GUARANTY

 

Name of Guarantor

  

Type of
Organization

   Jurisdiction of
Organization    Address for Notices

FORBES ENERGY SERVICES LLC

   limited liability company    Delaware    3000 South Business Hwy 281

Alice, TX 78332

FORBES ENERGY CAPITAL INC.

   corporation    Delaware    3000 South Business Hwy 281

Alice, TX 78332

 

GUARANTY – SCHEDULE 1 – Page 1

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

EXHIBIT A

to

GUARANTY

GUARANTY SUPPLEMENT

FORBES ENERGY SERVICES LTD.

Effective May 29, 2008

Citibank, N.A.

2000 W. Sam Houston Pkwy South, Suite 600

Houston, Texas 77042

Attn: Arthur Pryde

Ladies and Gentlemen:

The undersigned refers to:

(i) the Credit Agreement dated as of April 10, 2008 (the “Credit Agreement”)
among TX Energy Services, LLC, a Delaware limited liability company, C.C.
Forbes, LLC, a Delaware limited liability company, Superior Tubing Testers, LLC,
a Delaware limited liability company and Forbes Energy Services LLC, a Delaware
limited liability company, and

(ii) the Guaranty dated as of April 10, 2008 (the “Guaranty”) made by the
Guarantors from time to time party thereto in your favor for the benefit of
Lender.

Terms defined in the Credit Agreement or the Guaranty and not otherwise defined
herein are used herein as defined in the Credit Agreement or the Guaranty.

SECTION 1. Guaranty. The undersigned, jointly and severally with the other
Guarantors, irrevocably, absolutely, and unconditionally guarantees to Lender
the prompt and complete payment and performance when due, and no matter how the
same shall become due, of all Guaranteed Obligations and otherwise agrees to be
bound in all respects by the Guaranty as if an original Guarantor party thereto,
subject to any limitation set forth therein. As of the date first-above written,
that each reference in the Guaranty to a “Guarantor” shall also mean and be a
reference to the undersigned.

SECTION 2. Information Relating to the Undersigned. The undersigned is an entity
of the type specified on Schedule 1 and is organized under the laws of the
jurisdiction specified on Schedule 1 and its address for notices is specified on
Schedule 1.

SECTION 3. Representations and Warranties. The undersigned as of the date hereof
makes each representation and warranty set forth in Section 4.1 of the Guaranty.

SECTION 4. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the jurisdiction whose laws the Guaranty provides
will govern it.

[Remainder of page left blank intentionally]

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

IN WITNESS WHEREOF, the parties hereto have caused this Guaranty Supplement to
be duly executed, all as of the date first above written.

 

Very truly yours,

 

FORBES ENERGY SERVICES LTD.

By:   /s/ L. Melvin Cooper   Name:   L. Melvin Cooper   Title:   Senior Vice
President and Chief Financial Officer

 

ACCEPTED AND AGREED AS OF THE

DATE FIRST-ABOVE STATED.

 

CITIBANK, N.A. By:   /s/ Arthur Pryde   Name:   Arthur Pryde   Title:   Vice
President

 

Signature Page to Guaranty Supplement – Forbes Energy Services Ltd.

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

SCHEDULE 1

to

GUARANTY SUPPLEMENT

 

Name of Guarantor

 

Type of
Organization

 

Jurisdiction of
Organization

 

Address for Notices

FORBES ENERGY SERVICES LTD.

  An Exempted Company   Bermuda  

3000 South Business

Hwy 281

Alice, TX 78332