Exhibit 10.3
(FORESTAR LOGO) [d84423d8442300.gif]
Christopher L. Nines
Chief Financial Officer & Treasurer
Direct: 512-433-5210
ChrisNines@Forestargroup.com
September 30, 2011
KeyBank National Association, as Administrative Agent
1200 Abernathy Road, N.E. — Suite 1550
Atlanta, Georgia 30328
Attn: Nate Weyer
Re: Exercise of Extension Option
Ladies and Gentlemen:
     Reference is made to that certain Amended and Restated Revolving and Term
Credit Agreement, dated as of August 6, 2010, as amended by that certain First
Amendment to Amended and Restated Revolving and Term Credit Agreement dated as
of May 6, 2011, and that certain Second Amendment to Amended and Restated
Revolving and Term Credit Agreement dated as of September 30, 2011 (as it has
been or may be further amended, restated or otherwise modified from time to
time, the “Credit Agreement”), among Forestar (USA) Real Estate Group Inc.
(“Borrower”), certain guarantors party thereto, certain lenders party thereto
and KeyBank National Association, as Agent (“Agent”). Capitalized terms used in
this Certificate have the meanings set forth in the Credit Agreement unless
specifically defined herein.
     Pursuant to Section 3.1(b) of the Credit Agreement, Borrower hereby
notifies Agent, that, effective as of September 30, 2011 (the “Extension
Effective Date”), Borrower hereby elects to extend the Revolving Credit Maturity
Date to August 6, 2014 (the “Extension”), and further certifies that:
     1. No Default or Event of Default exists on the date hereof.
     2. Each of the representations and warranties made by Borrower or the other
Loan Parties in the Credit Agreement or the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with the Credit
Agreement is true in all material respects as of the date they were made and as
of the date hereof (except to the extent of changes resulting from transactions
permitted by the Loan Documents, it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
     3. Borrower understands that as conditions to the effectiveness of the
Extension, (i) the Loan Parties must execute and deliver such amendments or
modifications to the Security Deeds as Agent may require in order to evidence
such extension and to maintain the effectiveness and priority of the

 

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KeyBank National Association
September 30, 2011
Page 2
Security Deeds, together with payment of all mortgage, recording, intangible,
documentary stamp or other similar taxes and charges which Agent determines to
be payable as a result of such extension and the recording of such amendments or
modifications, and affidavits or other information which Agent determines to be
necessary in connection therewith, and (ii) Borrower shall have paid to Agent on
the Extension Effective Date, for the account of the Revolving Lenders in
accordance with their respective percentage of the aggregate Revolving
Commitments of all Revolving Lenders, an extension fee equal to fifty one
hundredths of one percent (0.50%) of the aggregate Revolving Commitments of the
Revolving Lenders as of the Extension Effective Date.
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KeyBank National Association
September 30, 2011
Page 3
     IN WITNESS WHEREOF, this notification letter is executed this 30th day of
September, 2011.

            Forestar (USA) Real Estate Group Inc.
      By:   /s/ Christopher L. Nines         Name:   Christopher L. Nines       
Title:   Chief Financial Officer