exv10w3







Exhibit 10.3









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



 









 





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