Document:

exv10w1

Exhibit 10.1

Execution
Version 

AMENDED AND RESTATED REVOLVING AND TERM CREDIT AGREEMENT

DATED AS OF AUGUST 6, 2010

AMONG

FORESTAR (USA) REAL ESTATE GROUP INC.,

as Borrower,

FORESTAR GROUP INC.

AND

THE WHOLLY OWNED SUBSIDIARIES

OF BORROWER SIGNATORY HERETO,

as Guarantors,

AND

KEYBANK NATIONAL ASSOCIATION,

as a Lender, Swing Line Lender and Agent

AND

THE OTHER LENDERS WHICH MAY BECOME

PARTIES TO THIS AGREEMENT

AND

KEYBANC CAPITAL MARKETS

as Sole Arranger and Sole Book Runner

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	§1. DEFINITIONS AND RULES OF INTERPRETATION
	 	 	2	 
	 
	 	 	 	 
	§1.1 Definitions
	 	 	2	 
	§1.2 Rules of Interpretation
	 	 	28	 
	 
	 	 	 	 
	§2. LOANS AND LETTERS OF CREDIT
	 	 	29	 
	 
	 	 	 	 
	§2.1 Commitment to Lend
	 	 	29	 
	§2.2 Notes
	 	 	32	 
	§2.3 Interest on Loans
	 	 	33	 
	§2.4 Unused Facility Fee
	 	 	33	 
	§2.5 Reduction and Termination of Revolving Commitment
	 	 	33	 
	§2.6 Requests for Loans
	 	 	34	 
	§2.7 Funds for Loans
	 	 	34	 
	§2.8 Use of Proceeds
	 	 	35	 
	§2.9 Increase in Commitments
	 	 	35	 
	§2.10 Letters of Credit
	 	 	37	 
	 
	 	 	 	 
	§3. REPAYMENT AND PREPAYMENT OF THE LOANS
	 	 	40	 
	 
	 	 	 	 
	§3.1 Stated Maturity; Extension Option
	 	 	40	 
	§3.2 Mandatory Prepayments
	 	 	41	 
	§3.3 Optional Prepayments
	 	 	41	 
	§3.4 Partial Prepayments
	 	 	42	 
	§3.5 Effect of Prepayments
	 	 	42	 
	 
	 	 	 	 
	§4. CERTAIN GENERAL PROVISIONS
	 	 	42	 
	 
	 	 	 	 
	§4.1 Conversion Options; Number of LIBOR Contracts
	 	 	42	 
	§4.2 Certain Fees
	 	 	43	 
	§4.3 Letter of Credit Fees
	 	 	43	 
	§4.4 Funds for Payments
	 	 	44	 
	§4.5 Computations
	 	 	45	 
	§4.6 Inability to Determine LIBOR Rate
	 	 	45	 
	§4.7 Illegality
	 	 	45	 
	§4.8 Additional Interest
	 	 	46	 
	§4.9
Additional Costs, Etc.
	 	 	46	 
	§4.10 Capital Adequacy
	 	 	47	 
	§4.11 Indemnity by Borrower
	 	 	48	 
	§4.12 Interest on Overdue Amounts; Late Charge
	 	 	48	 
	§4.13 Certificate
	 	 	48	 
	§4.14 Limitation on Interest
	 	 	49	 
	 
	 	 	 	 
	§5. COLLATERAL SECURITY; RELEASES
	 	 	49	 
	 
	 	 	 	 
	§5.1 Collateral
	 	 	49	 
	§5.2 Appraisals; Evaluations; Adjusted Value
	 	 	50	 
	§5.3 Release of Mortgaged Property
	 	 	51	 
	§5.4 Additional Mineral Rights Leases
	 	 	52	 
	§5.5 Addition of Negative Pledge Properties to the Borrowing Base Assets
	 	 	53	 

 

 

	 	 	 	 	 
	 	 	Page
	§5.6 Operating Account
	 	 	54	 
	§5.7 Advance Account
	 	 	54	 
	§5.8 Alabama Mortgage Tax
	 	 	54	 
	 
	 	 	 	 
	§6. REPRESENTATIONS AND WARRANTIES
	 	 	55	 
	 
	 	 	 	 
	§6.1 Corporate Authority, Etc.
	 	 	55	 
	§6.2 Approvals
	 	 	56	 
	§6.3 Title to Properties; Leases
	 	 	56	 
	§6.4 Financial Statements
	 	 	57	 
	§6.5 No Material Changes
	 	 	57	 
	§6.6 Franchises, Patents, Copyrights, Etc.
	 	 	57	 
	§6.7 Litigation
	 	 	57	 
	§6.8 No Materially Adverse Contracts, Etc.
	 	 	58	 
	§6.9 Compliance with Organizational Documents, Other Instruments, Laws, Etc.
	 	 	58	 
	§6.10 Tax Status
	 	 	58	 
	§6.11 No Event of Default
	 	 	58	 
	§6.12 Investment Company Act
	 	 	58	 
	§6.13 Reserved
	 	 	59	 
	§6.14 Setoff, Etc.
	 	 	59	 
	§6.15 Certain Transactions
	 	 	59	 
	§6.16 Employee Benefit Plans
	 	 	59	 
	§6.17 Regulations T, U and X
	 	 	59	 
	§6.18 Environmental Compliance
	 	 	60	 
	§6.19 Loan Documents
	 	 	61	 
	§6.20 Mortgaged Properties and Negative Pledge Properties
	 	 	62	 
	§6.21 Reserved
	 	 	63	 
	§6.22 Brokers
	 	 	63	 
	§6.23 Ownership
	 	 	63	 
	§6.24 OFAC
	 	 	64	 
	§6.25 No Fraudulent Intent
	 	 	64	 
	§6.26 Transaction in Best Interests of Loan Parties; Consideration
	 	 	64	 
	§6.27 Solvency
	 	 	64	 
	§6.28 No Bankruptcy Filing
	 	 	65	 
	§6.29 Other Debt
	 	 	65	 
	 
	 	 	 	 
	§7. AFFIRMATIVE COVENANTS OF LOAN PARTIES
	 	 	65	 
	 
	 	 	 	 
	§7.1 Punctual Payment
	 	 	65	 
	§7.2 Maintenance of Office
	 	 	65	 
	§7.3 Records and Accounts
	 	 	66	 
	§7.4 Financial Statements, Certificates and Information
	 	 	66	 
	§7.5 Notices
	 	 	68	 
	§7.6 Existence; Maintenance of Properties
	 	 	69	 
	§7.7 Insurance
	 	 	69	 
	§7.8 Taxes
	 	 	71	 
	§7.9 Inspection of Mortgaged Properties, Negative Pledge Properties and Books
	 	 	71	 

ii

 

	 	 	 	 	 

	§7.10 Compliance with Laws, Contracts, Licenses, and Permits
	 	 	71	 
	§7.11 Sweep of Certain Funds in Operating Accounts of Loan Parties and Subsidiaries
	 	 	72	 
	§7.12 Further Assurances
	 	 	72	 
	§7.13 Project Approvals
	 	 	72	 
	§7.14 Timber Affirmative Covenants
	 	 	72	 
	§7.15 Plan Assets
	 	 	73	 
	§7.16 [RESERVED]
	 	 	73	 
	§7.17 Business Operations
	 	 	73	 
	§7.18 Registered Servicemark
	 	 	74	 
	§7.19 Mineral Activities
	 	 	74	 
	§7.20 More Restrictive Agreements
	 	 	75	 
	§7.21 Additional Subsidiaries; Additional Guarantors
	 	 	75	 
	§7.22 Future Advances Tax Payment
	 	 	76	 
	 
	 	 	 	 
	§8. CERTAIN NEGATIVE COVENANTS OF LOAN PARTIES
	 	 	76	 
	 
	 	 	 	 
	§8.1 Restrictions on Indebtedness
	 	 	76	 
	§8.2
Restrictions on Liens, Etc.
	 	 	78	 
	§8.3 Restrictions on Investments
	 	 	80	 
	§8.4 Merger, Consolidation
	 	 	82	 
	§8.5 Sale and Leaseback
	 	 	83	 
	§8.6 Compliance with Environmental Laws
	 	 	83	 
	§8.7 Distributions
	 	 	84	 
	§8.8 Asset Sales
	 	 	85	 
	§8.9 [RESERVED]
	 	 	86	 
	§8.10 Restriction on Prepayment of Indebtedness
	 	 	87	 
	§8.11 [RESERVED]
	 	 	87	 
	§8.12
Negative Pledges, Restrictive Agreements, etc.
	 	 	87	 
	§8.13 Organizational Documents
	 	 	88	 
	§8.14 Affiliate Transactions
	 	 	88	 
	§8.15
Management Fees, Expenses, etc.
	 	 	88	 
	§8.16 Deposit Account Control Agreements
	 	 	89	 
	§8.17 [RESERVED]
	 	 	89	 
	§8.18 Modification of Certain Agreements
	 	 	89	 
	 
	 	 	 	 
	§9. FINANCIAL COVENANTS OF BORROWER
	 	 	89	 
	 
	 	 	 	 
	§9.1 Corporate Financial Covenants of Loan Parties
	 	 	89	 
	§9.2 Borrowing Base Covenants
	 	 	91	 
	§9.3 Value to Commitment
	 	 	91	 
	 
	 	 	 	 
	§10. CLOSING CONDITIONS
	 	 	91	 
	 
	 	 	 	 
	§10.1 Loan Documents
	 	 	91	 
	§10.2 Certified Copies of Organizational Documents
	 	 	91	 
	§10.3 Resolutions
	 	 	92	 
	§10.4 Incumbency Certificate; Authorized Signers
	 	 	92	 
	§10.5 Opinion of Counsel
	 	 	92	 
	§10.6 Payment of Fees
	 	 	92	 

iii

 

	 	 	 	 	 

	§10.7 Insurance
	 	 	92	 
	§10.8 Performance; No Default
	 	 	92	 
	§10.9 Representations and Warranties
	 	 	93	 
	§10.10 Proceedings and Documents
	 	 	93	 
	§10.11 Mortgaged Property Documents
	 	 	93	 
	§10.12 Surveys and Title Policies
	 	 	93	 
	§10.13 Compliance Certificate
	 	 	93	 
	§10.14  [RESERVED]
	 	 	93	 
	§10.15 Other Documents
	 	 	94	 
	§10.16 No Condemnation/Taking
	 	 	94	 
	§10.17 [RESERVED]
	 	 	94	 
	§10.18 No Litigation
	 	 	94	 
	§10.19 Other
	 	 	94	 
	 
	 	 	 	 
	§11. CONDITIONS TO ALL BORROWINGS AND LETTERS OF CREDIT
	 	 	94	 
	 
	 	 	 	 
	§11.1 Representations True; No Default
	 	 	94	 
	§11.2 No Legal Impediment
	 	 	95	 
	§11.3 Borrowing Documents
	 	 	95	 
	 
	 	 	 	 
	 §12. EVENTS OF DEFAULT; ACCELERATION; ETC.
	 	 	95	 
	 
	 	 	 	 
	§12.1 Events of Default and Acceleration
	 	 	95	 
	§12.2 Limitation of Cure Periods
	 	 	98	 
	§12.3 Termination of Commitments
	 	 	98	 
	§12.4 Remedies
	 	 	98	 
	§12.5 Distribution of Collateral Proceeds
	 	 	99	 
	 
	 	 	 	 
	§13. SETOFF
	 	 	100	 
	 
	 	 	 	 
	§14. THE AGENT
	 	 	100	 
	 
	 	 	 	 
	§14.1 Authorization
	 	 	100	 
	§14.2 Employees and Agents
	 	 	101	 
	§14.3 No Liability
	 	 	101	 
	§14.4 No Representations
	 	 	101	 
	§14.5 Payments
	 	 	102	 
	§14.6 Holders of Notes
	 	 	103	 
	§14.7 Indemnity
	 	 	104	 
	§14.8 Agent as Lender
	 	 	104	 
	§14.9 Resignation
	 	 	104	 
	§14.10 Duties in the Case of Enforcement
	 	 	105	 
	§14.11 Request for Agent Action
	 	 	105	 
	§14.12 Removal of Agent
	 	 	106	 
	§14.13 Bankruptcy
	 	 	106	 
	 
	 	 	 	 
	§15. EXPENSES
	 	 	106	 
	 
	 	 	 	 
	§16. INDEMNIFICATION
	 	 	107	 
	 
	 	 	 	 
	§17. SURVIVAL
OF COVENANTS, ETC.
	 	 	108	 

iv

 

	 	 	 	 	 

	§18. ASSIGNMENT AND PARTICIPATION
	 	 	108	 
	 
	 	 	 	 
	§18.1 Conditions to Assignment by Lenders
	 	 	108	 
	§18.2 Register
	 	 	110	 
	§18.3 New Notes
	 	 	110	 
	§18.4 Participations
	 	 	111	 
	§18.5 Pledge by Lender
	 	 	111	 
	§18.6 No Assignment by Borrower
	 	 	111	 
	§18.7 Cooperation; Disclosure
	 	 	112	 
	§18.8 Mandatory Assignment
	 	 	112	 
	§18.9 Co-Agents
	 	 	113	 
	§18.10 Treatment of Certain Information; Confidentiality
	 	 	113	 
	§18.11 Withholding Tax
	 	 	114	 
	 
	 	 	 	 
	§19. NOTICES
	 	 	115	 
	 
	 	 	 	 
	§20. RELATIONSHIP
	 	 	117	 
	 
	 	 	 	 
	§21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE
	 	 	117	 
	 
	 	 	 	 
	§22. HEADINGS
	 	 	118	 
	 
	 	 	 	 
	
§23. COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION
	 	 	118	 
	 
	 	 	 	 
	
§24. ENTIRE AGREEMENT, ETC.
	 	 	119	 
	 
	 	 	 	 
	§25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS
	 	 	119	 
	 
	 	 	 	 
	
§26. DEALINGS WITH THE BORROWER
	 	 	119	 
	 
	 	 	 	 
	
§27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
	 	 	120	 
	 
	 	 	 	 
	
§28. SEVERABILITY
	 	 	122	 
	 
	 	 	 	 
	 §29. NO UNWRITTEN AGREEMENTS
	 	 	122	 
	 
	 	 	 	 
	 §30. ACKNOWLEDGMENT OF INDEMNITY OBLIGATIONS
	 	 	122	 
	 
	 	 	 	 
	
§31. REPLACEMENT OF NOTES
	 	 	122	 
	 
	 	 	 	 
	§32. TIME IS OF THE ESSENCE
	 	 	123	 
	 
	 	 	 	 
	§33. RIGHTS OF THIRD PARTIES
	 	 	123	 
	 
	 	 	 	 
	§34. GUARANTY
	 	 	123	 
	 
	 	 	 	 
	§34.1 The Guaranty
	 	 	123	 
	§34.2 Obligations Unconditional
	 	 	124	 
	§34.3 Reinstatement
	 	 	125	 
	§34.4 Certain Waivers
	 	 	125	 
	§34.5 Remedies
	 	 	126	 

v

 

	 	 	 	 	 

	§34.6 Rights of Contribution
	 	 	126	 
	§34.7 Guaranty of Payment; Continuing Guaranty
	 	 	126	 
	§34.8 Special Provisions Applicable to Guarantors
	 	 	126	 
	 
	 	 	 	 
	§35. EFFECTIVENESS OF AMENDMENT AND RESTATEMENT; NO NOVATION
	 	 	127	 

EXHIBITS AND SCHEDULES

	 	 	 

	Exhibit A-1

	 	Form of Revolving Loan Note
	Exhibit A-2

	 	Form of Term Loan Note
	Exhibit A-3

	 	Form of Swing Line Note
	Exhibit B

	 	Form of Compliance Certificate
	Exhibit C

	 	Form of Assignment and Assumption Agreement
	Exhibit D-1

	 	Form of Request for Loan
	Exhibit D-2

	 	Form of Request for Swing Line Loan
	Exhibit E

	 	Form of Borrowing Base Certificate
	Exhibit F

	 	Patriot Act and OFAC Transferee and Assignee Identifying Information Form
	Exhibit G

	 	Form of Letter of Credit Request
	Exhibit H

	 	Form of Joinder Agreement (Guarantor)
	Exhibit I

	 	Form of Officer’s Certificate
	Schedule 1.1

	 	Lenders and Commitments
	Schedule 2

	 	Mortgaged Property Documents
	Schedule 3

	 	Mortgaged Properties
	Schedule 4

	 	[ Reserved]
	Schedule 5

	 	Timberland
	Schedule 6

	 	High Value Timberland
	Schedule 7

	 	Raw Entitled Land
	Schedule 8

	 	Entitled Land Under Development
	Schedule 9

	 	Non-Appraised Entitled Land
	Schedule 10

	 	[ Reserved]
	Schedule 11

	 	Excluded Subsidiaries as of Closing Date
	Schedule 5.8

	 	Alabama Mortgage Modifications
	Schedule 6.7

	 	Litigation
	Schedule 6.10

	 	Open Audit Periods
	Schedule 6.15

	 	Transactions with Affiliates
	Schedule 6.20(f)

	 	Unresolved Real Estate Claims or Disputes
	Schedule 6.20(g)

	 	Material Real Estate Agreements
	Schedule 8.2

	 	Permitted Liens
	Schedule 8.3

	 	Investments

vi

 

AMENDED AND RESTATED

REVOLVING AND TERM CREDIT AGREEMENT

     THIS AMENDED AND RESTATED REVOLVING AND TERM CREDIT AGREEMENT (this “Agreement”) is
made the                      day of August, 2010, by and among FORESTAR (USA) REAL ESTATE GROUP INC., a Delaware
corporation, as borrower (“Borrower”), having its principal place of business at 6300 Bee
Cave Road, Building Two, Suite 500, Austin, Texas 78746, FORESTAR GROUP INC., a Delaware
corporation (“Forestar Group”), and the wholly owned, direct and indirect Subsidiaries of
Borrower now or hereafter signatory hereto, as guarantors (collectively with Forestar Group,
“Guarantors”), KEYBANK NATIONAL ASSOCIATION, a national banking association
(“KeyBank”), as Swing Line Lender, and with the other lending institutions that are or may
become parties hereto pursuant to §18 as lenders (“Lenders”), KEYBANK NATIONAL ASSOCIATION,
as administrative agent (“Agent”) for itself and the other Lenders, and KEYBANC CAPITAL
MARKETS, as sole arranger and sole bookrunner.

RECITALS 

     WHEREAS, Borrower, Guarantors, Agent and certain of the Lenders previously entered into a
Revolving and Term Credit Agreement dated as of December 14, 2007, as amended by that certain First
Amendment to Revolving and Term Credit Agreement and Other Loan Documents dated as of March 12,
2008, and that certain Second Amendment to Revolving and Term Credit Agreement dated as of July 16,
2009 (collectively, the “Original Credit Agreement”) pursuant to which the Lenders party
thereto extended certain financial accommodations to Borrower;

     WHEREAS, Borrower has requested that Lenders continue to make available to it a revolving
credit facility and a term loan facility;

     WHEREAS, the Revolving Lenders (as hereinafter defined) are willing to make such revolving
credit facility available to Borrower, which will include a Swing Line Commitment (as hereinafter
defined) and a letter of credit sub-facility, and the Term Lenders (as hereinafter defined) are
willing to make such term loan facility available to Borrower, all upon the terms and conditions
contained herein;

     WHEREAS, in order to make such Loans, Borrower, Agent and Lenders have agreed to amend and
restate the Original Credit Agreement in its entirety as set forth herein;

     NOW, THEREFORE, in consideration of the recitals herein and the mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows:

 

 

§1. DEFINITIONS AND RULES OF INTERPRETATION

          §1.1 Definitions

     The following terms shall have the meanings set forth in this §1 or elsewhere in the
provisions of this Agreement referred to below:

     Acquisition Expenditures. The amount of any hard and soft costs incurred by any Loan
Party, any of their respective Subsidiaries and any of the Joint Ventures in connection with the
acquisition of unimproved Real Estate, including the purchase price thereof, and reasonable and
customary, out-of-pocket transactional costs and expenses paid by any Loan Party in connection with
such acquisition, for which such Loan Party shall provide or cause to be provided to Agent, upon
Agent’s request from time to time, invoices, settlement statements and other supporting
documentation in respect thereof (and which, with respect to any Real Estate included in the
Borrowing Base Assets, have otherwise been properly accounted for by such Loan Party in the
Borrowing Base Certificates submitted to Agent), but excluding therefrom general administrative and
overhead costs and Development Expenditures.

     Adjusted Asset Value. For the Loan Parties, as of any date of determination, the sum
of the following, without duplication: (a) the aggregate amount of unrestricted cash and cash
equivalents; (b) the Timberland Value; (c) the High Value Timberland Amount; (d) the Raw Entitled
Land Value; (e) the Entitled Land Under Development Value; (f) the Non-Appraised Entitled Land
Value; (g) the Mineral Business Enterprise Value; (h) all other Real Estate owned by the Loan
Parties, valued at book value without regard to any Indebtedness; and (i) all assets held by Joint
Ventures, valued at book value without regard to any Indebtedness at the Joint Venture level,
provided however, that only the Loan Parties’ respective pro rata share of such Joint Venture
assets shall be taken into account for purposes of this definition. Notwithstanding anything to
the contrary contained in this definition, in the event Borrower requests that Agent order and
review an Appraisal of any assets described in clauses (h) or (i) of this definition, then such
assets shall be valued at the lower of book value or appraised value as set forth in such
Appraisal.

     Advance Account. The account established with Agent pursuant to §5.7.

     Affected Lender. See §18.8.

     Affiliates. As applied to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person. For purposes of this
definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled
by” and “under common control with”), as applied to any Person, means (a) the possession, directly
or indirectly, of the power to vote fifty percent (50%) or more of the stock, shares, voting trust
certificates, beneficial interests, partnership interests, member interests or other interests
having voting power for the election of directors of such Person or otherwise to direct or cause
the direction of the management and policies of that Person, whether through the ownership of
voting securities or by contract or otherwise, or (b) the ownership of (i) a general partnership
interest, (ii) a managing member’s interest in a limited liability company or (iii) a limited
partnership interest or preferred stock (or other ownership interest) representing fifty percent
(50%) or more

2

 

of the outstanding limited or general partnership interests, preferred stock or other ownership
interests of such Person.

     Agent. KeyBank, acting as Administrative Agent for itself and the other Lenders, its
successors and assigns.

     Agent’s Office. Agent’s office located at 127 Public Square, Cleveland, Ohio 44114,
or at such other location as Agent may designate from time to time by notice to Borrower and the
other Lenders.

     Agent’s Special Counsel. Bryan Cave LLP or such other counsel as may be selected by
Agent.

     Agreement. This Amended and Restated Revolving and Term Credit Agreement, including
the Schedules and Exhibits hereto.

     Agreement Regarding Fees. The Agreement Regarding Fees dated as of August ___, 2010,
among Agent, Arranger and Borrower regarding certain fees payable by Borrower in connection with
this Agreement.

     Applicable Approval Percentage. For purposes of the definitions of Required Lenders
and Requisite Class Lenders, the Applicable Approval Percentage shall be either (i) sixty-six and
two-thirds percent (66-2/3%) in connection with any amendment, consent or waiver relating to the
provisions of §5, §8, §9 or §12 (including applicable definitions), and (ii) in all other cases,
fifty percent (50%).

     Appraisal. An appraisal of the value of Real Estate determined on a fair market value
basis, performed by an independent MAI appraiser selected by Agent who is not an employee of
Borrower, Agent or a Lender, the form and substance of each such appraisal and the identity of the
appraiser to be in accordance with regulatory laws and policies (both regulatory and internal)
applicable to Lenders and otherwise acceptable to Agent.

     Arranger. KeyBanc Capital Markets.

     Assignment and Assumption Agreement. See §18.1.

     Assignment of Leases and Rents. The Amended and Restated Assignment of Leases and
Rents, dated as of even date herewith, from Borrower in favor of Agent, as the same may be amended,
restated, supplemented, consolidated or otherwise modified from time to time, pursuant to which
there shall be assigned to Agent for the benefit of Lenders a security interest in the interest of
Borrower as lessor with respect to all Leases (including Timber leases) of all or any part of the
Real Estate owned by Borrower, such assignment to be in form and substance satisfactory to Agent.

     Assignment of Mineral Rights Leases. Collectively, the Amended and Restated
Assignment of Leases and Rents, dated as of even date herewith, from Forestar Minerals LLC, and the
Assignment of Leases and Rents, dated as of even date herewith, from Forestar Oil & Gas LLC, in
favor of Agent, and any other assignment of Mineral Rights Leases hereafter entered into

3

 

from time to time by any other Loan Party as security for the Obligations, as any and all of
the same may be amended, restated, supplemented, consolidated or otherwise modified from time to
time, pursuant to which there shall be assigned to Agent for the benefit of Lenders a security
interest in the interest of Forestar Minerals LLC, Forestar Oil & Gas LLC or such other Loan Party,
as applicable, with respect to all Mineral Rights Leases, each such assignment to be in form and
substance satisfactory to Agent.

     Assignment of Rights to Joint Venture Distributions. The Amended and Restated
Assignment and Security Agreement regarding Joint Venture Distributions dated as of the Closing
Date, executed by and among the Loan Parties that from time to time own Equity Interests in any
Joint Venture, in favor of Agent for the benefit of Agent and Lenders.

     Available Liquidity. As of any date of determination, an amount equal to the sum of
(a) the amount available for drawing under the Revolving Commitment (subject to pro forma
compliance with all covenants, including, without limitation, §9.2(b)) plus (b)
unrestricted cash plus (c) Cash Equivalents which are not pledged or encumbered and the use
of which is not restricted by the terms of any agreement.

     Balance Sheet Date. December 31, 2009.

     Base Rate. The term Base Rate shall mean, for any day, a fluctuating interest rate
per annum as shall be in effect from time to time which rate per annum shall at all times be equal
to the greatest of: (i) the rate of interest established by KeyBank from time to time as its
“prime rate” whether or not publicly announced, which interest rate may or may not be the lowest
rate charged by it for commercial loans or other extensions of credit, plus the Base Rate Spread;
(ii) the Federal Funds Effective Rate in effect from time to time, determined one Business Day in
arrears, subject to the Interest Rate Floor, plus 1/2 of one percent (0.5%) per annum, plus the Base
Rate Spread; or (iii) the then-applicable LIBOR Rate for a one (1) month Interest Period, subject
to the Interest Rate Floor, plus one percent (1.0%) per annum, plus the LIBOR Rate Spread.

     Base Rate Loans. Those Loans bearing interest by reference to the Base Rate.

     Base Rate Spread. The per annum rate of two and one-half percent (2.5%).

     Bond Indebtedness. Indebtedness in the form of unsecured bonds or notes issued by
Forestar Group and sold either in an underwriting or in a private placement transaction, including
Convertible Bond Indebtedness.

     Bonus Payment. The initial payment received upon execution and delivery of a new
Mineral Rights Lease.

     Borrower. As defined in the preamble hereto.

     Borrower’s Knowledge or Knowledge. The actual knowledge of the chief executive
officer, Principal Financial Officer, chief financial officer (if different from the Principal
Financial Officer), general counsel or vice-president-land management of Borrower, after having
conducted a reasonable investigation and inquiry thereof; provided, however, the foregoing shall
not be deemed to require Borrower to obtain any written environmental site assessment reports.

4

 

     Borrowing Base. As of any date of determination, the sum of the following percentages
of the Borrowing Base Assets:

          (a) thirty-five percent (35%) of Timberland Value; plus

          (b) twenty-five percent (25%) of High Value Timberland Amount;
plus

          (c) forty percent (40%) of Raw Entitled Land Value; plus

          (d) forty-five percent (45%) of Entitled Land Under Development
Value; plus

          (e) sixty percent (60%) of Mineral Business Enterprise Value;

provided, however, that the Borrowing Base shall be reduced by the amounts, if any,
by which (i) the portion of the Borrowing Base accounted for by clause (b) of this definition would
exceed fifteen percent (15%) of the Borrowing Base, and (ii) the portion of the Borrowing Base
accounted for by clause (c) of this definition would exceed twenty-five percent (25%) of the
Borrowing Base; and provided further, however, that the Borrowing Base shall be reduced by
any reserve existing under §9.1(a)(iii).

     Borrowing Base Assets. Collectively, the Timberland, the High Value Timberland, the
Raw Entitled Land, the Entitled Land Under Development and the Mineral Business, subject to §9.2.
With respect to Borrowing Base Assets other than the Mineral Business, parcels of Real Estate may
from time to time move from one classification of Borrowing Base Asset to another upon designation
by Borrower on the Borrowing Base Certificate most recently delivered to Agent, but can never be in
more than one classification at any point in time.

     Borrowing Base Certificate. See §7.4(e).

     Bulk Sales. See §2.9.

     Business Day. Any day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close under the Laws of, or are in fact closed in, the state of New York,
the state of Texas, the state where Agent’s Office is located and, if such day relates to any
Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and
between banks in the London interbank Eurodollar market.

     Call Option Overlay. The Convertible Bond Hedge Transactions, the Warrant
Transactions and the Capped Call Transactions.

     Capitalized Lease. A lease under which a Person is the lessee or obligor, the
discounted future rental payment obligations under which are required to be capitalized on the
balance sheet of the lessee or obligor in accordance with GAAP.

     Capped Call Transactions. One or more call options referencing Forestar Group’s
common stock purchased by Forestar Group in connection with the issuance of Convertible Bond
Indebtedness with a strike or exercise price (howsoever defined) initially equal to the conversion
or exchange price (howsoever defined) of the related Convertible Bond Indebtedness (subject to
rounding) and limiting the amount deliverable to Forestar Group upon exercise thereof based on a
cap or upper strike price (howsoever defined).

5

 

     Cash Equivalents. Investments of the type described in §8.3(a) through (f).

     CERCLA. See §6.18.

     Change of Control. A Change of Control shall exist upon the occurrence of any of the
following:

          (a) a transaction in which any “person” or “group” (within the meaning of Section 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or
indirectly, of a sufficient number of shares of all classes of stock then outstanding of Forestar
Group ordinarily entitled to vote in the election of directors, empowering such “person” or “group”
to elect a majority of the Board of Directors of Forestar Group, who did not have such power before
such transaction;

          (b) Borrower ceases for any reason to be a wholly owned, direct Subsidiary of Forestar Group;
or

          (c) A “Change of Control” occurs under the terms of any Permitted Bond Indebtedness except
where any such “Change of Control” would not, in and of itself, directly result in a default or
event of default under such Permitted Bond Indebtedness.

     Class. With respect to Lenders, the Revolver Lenders and Term Lenders, and with
respect to Loans, Revolving Loans and Term Loans.

     Closing Date. The first date on which all of the conditions set forth in §10 and §11
have been satisfied or waived in writing by Agent.

     Code. The Internal Revenue Code of 1986, as amended.

     Collateral. All of the property, rights and interests of Borrower and Guarantors
which are or are intended to be subject to the security interests, security title, liens and
mortgages created by the Security Documents, including, without limitation, the Mortgaged Property.

     Collateral Assignment of Timber Purchase Agreement. The Amended and Restated
Collateral Assignment executed by the Borrower in respect of the Timber Purchase Agreement, which
Collateral Assignment shall be in form and substance satisfactory to Agent.

     Commitment. With respect to each Lender, the amount set forth on Schedule 1.1
hereto as the amount of such Lender’s Commitment to make or maintain Loans to Borrower, or purchase
participations in Swing Line Loans in accordance with §2.1, or purchase participations in Letters
of Credit issued by Agent for the account of Borrower in accordance with §2.10, in each case as the
same may be changed from time to time in accordance with the terms of this Agreement, including,
without limitation, §2.9.

     Commitment Percentage. With respect to each Lender, the percentage set forth on
Schedule 1.1 hereto as such Lender’s percentage of the aggregate Commitments of all of
Lenders.

6

 

     Commodity Hedge Agreement. Any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more commodities, or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these transaction (but not
including any Hedge Agreement, the Convertible Bond Hedge Transactions, the Warrant Transactions
and the Capped Call Transactions), in each case entered into to hedge or mitigate risks to which
the Borrower reasonably believes it has actual exposure. For avoidance of doubt, obligations and
liabilities under Commodity Hedge Agreements shall not be part of the Obligations.

     Compliance Certificate. See §7.4(c).

     Consolidated or combined. With reference to any term defined herein, that term as
applied to the accounts of a Person and its Subsidiaries, determined on a consolidated or combined
basis in accordance with GAAP.

     Consolidated Tangible Net Worth. The amount by which Consolidated Total Assets
exceeds Consolidated Total Liabilities less, to the extent included in Consolidated Total Assets,
the sum of:

          (a) the total book value of all assets of a Person and its Subsidiaries properly classified as
intangible assets under GAAP, including such items as good will, the purchase price of acquired
assets in excess of the fair market value thereof, trademarks, trade names, service marks, brand
names, copyrights, patents and licenses, and rights with respect to the foregoing; plus

          (b) all amounts representing any write-up in the book value of any assets of a Person and its
Subsidiaries resulting from a revaluation thereof subsequent to the Balance Sheet Date; plus

          (c) all amounts representing minority interests which are applicable to third parties.

     Consolidated Total Assets. All assets of a Person and its Subsidiaries determined on a
consolidated basis in accordance with GAAP.

     Consolidated Total Liabilities. All liabilities of a Person and its Subsidiaries and
their allocable share of liabilities of their respective Subsidiaries determined on a consolidated
basis in accordance with GAAP, and all Indebtedness of such Person and its Subsidiaries, whether or
not so classified.

     Conversion Request. A notice given by Borrower to Agent of its election to convert or
continue a Loan in accordance with §4.1.

     Convertible Bond Hedge Transactions. One or more call options referencing Forestar
Group’s common stock purchased by Forestar Group in connection with the issuance of Convertible
Bond Indebtedness with a strike or exercise price (howsoever defined) initially equal

7

 

to the conversion or exchange price (howsoever defined) of the related Convertible Bond
Indebtedness (subject to rounding).

     Convertible Bond Indebtedness. Permitted Bond Indebtedness having a feature which
entitles the holder thereof to convert all or a portion of such Indebtedness into or by reference
to Equity Interests in Forestar Group.

     Default. See §12.1.

     Default Rate. See §4.12.

     Defaulting Lender. Any Lender that has (a)(i) been adjudicated as or determined by
any Governmental Authority having regulatory authority over such Lender or its assets to be
insolvent or has a parent company that has been adjudicated as or determined by any Governmental
Authority having regulatory authority over such Lender or its assets to be insolvent or (ii) become
the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee
or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent
to, approval of or acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or
indicating its consent to, approval of or acquiescence in any such proceeding or appointment, (b)
given notice to Agent or Borrower that it will not make, or that it has disaffirmed or repudiated
any obligation to make, any Loan hereunder (unless such notice is given by or on behalf of all
Lenders), or (c) become and remains a Delinquent Lender under §14.5(c).

     Delay Rental Payment. The payment received by any Loan Party from time to time in the
event the tenant or lessee under any Mineral Rights Lease does not commence drilling within the
applicable timeframe established under such Mineral Rights Lease.

     Deposit Account Bank. Each bank or other financial institution at which any Loan
Party maintains a deposit account, that has entered into a Deposit Account Control Agreement.

     Deposit Account Control Agreement. Each deposit account control agreement, in form
and substance satisfactory to Agent, from time to time executed by a Deposit Account Bank in favor
of Agent for the benefit of Agent and Lenders, each applicable Loan Party and Agent.

     Development. A residential community, commercial development, mixed use residential
and commercial community or industrial development or any other project or development developed by
Borrower or by any Loan Party or Joint Venture.

     Development Expenditures. The amount of any hard and soft costs incurred by any Loan
Party or any of the Joint Ventures in connection with the development of the Developments
attributable to zoning, permitting, design, site improvement, amenities, and construction of
infrastructure in connection with the Developments for which such Loan Party shall provide or cause
to be provided to Agent, upon Agent’s request from time to time, invoices, work orders and other
supporting documentation with respect thereto, and which, with respect to any Development on Real
Estate included in the Borrowing Base Assets, have otherwise been properly accounted for by such
Loan Party in the Borrowing Base Certificates submitted to Agent, including

8

 

infrastructure costs, but excluding therefrom general administrative and overhead costs, and
Acquisition Expenditures.

     Direct Competitor. Any Person principally and directly engaged in the business of
real estate entitlement and development or the development or leasing of mineral or wood fiber
resources in the United States of America.

     Distribution. With respect to any Person, the declaration or payment of any cash,
cash flow, dividend or distribution (whether in the form of cash or property) on or in respect of
any shares of any class of capital stock, partnership interest, membership interest or other
beneficial interest of such Person; the purchase, redemption, exchange or other retirement for
value of any shares of any class of capital stock, partnership interest, membership interest or
other beneficial interest of such Person, directly or indirectly through a Subsidiary of such
Person or otherwise; the return of capital (whether in the form of cash or property) by a Person to
its shareholders, partners, members or other beneficial owners as such; or any other distribution
on or in respect of any shares of any class of capital stock, partnership interest, membership
interest or other beneficial interest of such Person.

     Distribution and Separation Agreement. The Separation and Distribution Agreement
dated as of the Spin-off Effective Date, by and among Temple-Inland, Forestar Group and Guaranty
Financial Group Inc., executed and delivered in connection with the Spin-off Transaction.

     Dollars or $. Dollars in lawful currency of the United States of America.

     Domestic Lending Office. Initially, the office of each Lender designated as such in
Schedule 1.1 hereto; thereafter, such other office of such Lender, if any, located within
the United States that will be making or maintaining Base Rate Loans.

     Drawdown Date. The date on which any Loan ( other than a Swing Line Loan) is made or
is to be made, and the date on which any Loan is converted to a Loan of the other Type.

     EBITDA. With respect to any Person for any fiscal period, the sum of (a) Net Income
of such Person, plus (b) to the extent the following have been deducted in the calculation
of Net Income for such period, (i) interest expense, (ii) federal, state and local income taxes
paid or accrued, (iii) depletion, depreciation and amortization expense and (iv) all non-recurring
non-cash expenses or charges (excluding any such non-cash item to the extent that it represents an
accrual or reserve for potential cash items in any future period or amortization of a prepaid cash
item that was paid in a prior period), minus (c) all non-recurring non-cash items
increasing Net Income of such Person for such period (excluding any such non-cash item to the
extent it represents the reversal of an accrual or reserve for potential cash item in any prior
period), all determined without duplication and in accordance with GAAP. EBITDA for any fiscal
period shall be adjusted to give effect, on a pro forma basis and consistent with GAAP, to any
acquisition made during such period as if such acquisition was made at the beginning of such
period.

     Eligible Assignee: (a) Any Lender or any Affiliate of a Lender; (b) any commercial
bank, savings bank, savings and loan association, investment or mutual fund, or similar financial
institution which (i) has total assets of $5,000,000,000 or more, (ii) is “well capitalized” within

9

 

the meaning of such term under the regulations promulgated under the auspices of the Federal
Deposit Insurance Corporation Improvement Act of 1991, as amended, (iii) in the sole judgment of
Agent, is engaged in the business of lending money and extending credit, and buying loans or
participations in loans under credit facilities substantially similar to those extended under this
Agreement, and (iv) in the sole judgment of Agent, is operationally and procedurally able to meet
the obligations of a Lender hereunder; (c) any insurance company in the business of writing
insurance which (i) has total assets of $5,000,000,000 or more (ii) is “best capitalized” within
the meaning of such term under the applicable regulations of the National Association of Insurance
Commissioners, and (iii) meets the requirements set forth in subclauses (iii) and (iv) of clause
(b) above; and (d) any other financial institution having total assets of $5,000,000,000
(including a mutual fund or other fund under management of any investment manager having under its
management total assets of $5,000,000,000 or more, and any of its Related Funds) which meets the
requirement set forth in subclauses (iii) and (iv) of clause (b) above; provided that each Eligible
Assignee must (A) be organized under the Laws of the United States of America, any state thereof or
the District of Columbia, or, if a commercial bank, be organized under the Laws of the United
States of America, any State thereof or the District of Columbia, the Cayman Islands or any country
which is a member of the Organization for Economic Cooperation and Development, or a political
subdivision of such a country, (B) act under the Loan Documents through a branch, agency or funding
office located in the United States of America, (C) be exempt from withholding of tax on payments
hereunder and deliver the documents related thereto pursuant to the Internal Revenue Code as in
effect from time to time, and (D) not be Borrower, a Guarantor or an Affiliate of Borrower or any
Guarantor or a Direct Competitor of the Loan Parties.

     Employee Benefit Plan. Any employee benefit plan within the meaning of §3(3) of ERISA
maintained or contributed to by Borrower or any ERISA Affiliate, other than a Multiemployer Plan.

     Entitled Land Under Development. Real Estate owned in fee simple absolute by any Loan
Party and described in Schedule 8 as of June 30, 2010, together with all other Real Estate
acquired thereafter in fee simple absolute or formerly classified as another type of Borrowing Base
Asset or was Negative Pledge Property that has been designated for inclusion in the Borrowing Base
in accordance with §5.5, in each case for which all material required zoning, utilities and
development permits and approvals have been obtained and for which such Loan Party has commenced
construction for a Development (all as certified in the Borrowing Base Certificate most recently
delivered by Borrower).

     Entitled Land Under Development Value. As of any date of determination, the aggregate
value of all Entitled Land Under Development valued on the basis of an “as is”, MAI Appraisal
covering at least seventy-five percent (75%) of the remaining Lot portfolio and at least
seventy-five percent (75%) of the remaining commercial acreage (both as selected by Agent), with
all other Entitled Land Under Development to be valued and included in the Borrowing Base at its
book value. The initial Entitled Land Under Development Value shall be determined based upon an
“as is”, MAI Appraisal ordered by and approved by Agent prior to the Closing Date. All Development
Expenditures incurred by the Loan Parties with respect to the development of the Entitled Land
Under Development subsequent to the most recent Appraisal shall be added to the Entitled Land Under
Development Value, and such amount shall also be reduced by the value of

10

 

any parcels or Lots sold since the prior Appraisal date, in each case without duplicating any
post-closing adjustments resulting from any updated Appraisals. Entitled Land Under Development
Value shall also be increased or decreased, as the case may be, as and to the extent provided in
the definition of Non-Appraised Entitled Land Value, without duplication.

     Environmental Engineer. Any firm of independent professional engineers or other
scientists generally recognized as expert in the detection, analysis and remediation of Hazardous
Substances and related environmental matters and reasonably acceptable to Agent.

     Environmental Laws. See §6.18(a).

     Environmental Reports. See §6.18

     EPA. See §6.18(b).

     Equity Interests. With respect to any Person, all shares of capital stock,
partnership interests, membership interests in a limited liability company or other ownership in
participation or equivalent interests (however designated, whether voting or non-voting) of such
Person’s equity capital (including any warrants, options or conversion or other purchase rights
with respect to the foregoing) whether now outstanding or issued after the Closing Date.

     Equity Offering. The issuance and sale by Forestar Group subsequent to the date of
this Agreement of any equity securities of Forestar Group to investors (other than the Warrant
Transactions and Convertible Bond Indebtedness).

     Equity Plan. The Forestar Real Estate Group Inc. 2007 Stock Incentive Plan dated
November 28, 2007, and any other similar plan for granting of equity interests to employees,
directors and eligible consultants or contractors as adopted from time to time by the Forestar
Group Board of Directors.

     ERISA. The Employee Retirement Income Security Act of 1974, as amended and in effect
from time to time and any rules and regulations promulgated pursuant thereto.

     ERISA Affiliate. Any Person which is treated as a single employer with Borrower under
§414 (b) or (c) of the Code.

     ERISA Reportable Event. A reportable event with respect to a Guaranteed Pension Plan
within the meaning of §4043 (c) of ERISA and the regulations promulgated thereunder as to which the
requirement of notice has not been waived.

     Event of Default. See §12.1.

     Excluded Subsidiary. The Subsidiaries listed on Schedule 11, together with
any and all direct or indirect, wholly owned Subsidiaries created or acquired by any Loan Party
subsequent to the Closing Date, which additional Subsidiary (i) has assets with a book value less
than two and one-half percent (2.5%) of the consolidated book value of Borrower and its
Subsidiaries, determined as of the last day of each fiscal quarter of Borrower, or (ii) which is an
SPE Subsidiary; provided, however, that the Excluded Subsidiaries other than SPE
Subsidiaries shall

11

 

not, collectively, have assets whose book value exceeds five percent (5%) of the consolidated
book value of Borrower and its Subsidiaries.

     Excluded Taxes. See §4.4(b).

     Extended Letter of Credit. See §2.10(l).

     Extension Effective Date. See §3.1(b).

     Extension Period. See §3.1(b).

     Facility Fee. See §2.4.

     FATCA. Sections 1471 through 1474 of the Code and any regulations (whether final,
temporary or proposed) that are issued thereunder or official government interpretations thereof.

     Federal Funds Effective Rate. For any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of the quotations for
such day on such transactions received by Agent from three (3) Federal funds brokers of recognized
standing selected by Agent. Any change in the Federal Funds Effective Rate shall become effective
as of the opening of business on the day on which such change in the Federal Funds Effective Rate
becomes effective, without notice or demand of any kind.

     Forestar Form 10. The Registration Statement on Form 10, filed by Forestar Group on
August 10, 2007, as amended on September 26, 2007, October 24, 2007, November 13, 2007, November
29, 2007 and December 10, 2007 (File Number 001-33662), with the SEC, as in effect on the Closing
Date.

     Forestar Group. Forestar Group Inc., a Delaware corporation and formerly known as
Forestar Real Estate Group Inc.

     Funded Debt. With respect to any Person, all outstanding Indebtedness of such Person,
other than (i) Indebtedness described in clause (f) of the definition of Indebtedness herein, and
(ii) Indebtedness in respect of Trade Letters of Credit.

     GAAP. Generally accepted accounting principles in the United States, applied on a
basis consistent with the principles used in preparing Forestar Group’s audited consolidated
financial statements as of the Balance Sheet Date and for the fiscal year then ended, as such
principles may be revised as a result of changes in such accounting principles implemented by
Forestar Group and its consolidated Subsidiaries subsequent to such date. If at any time any
change in GAAP would affect the computation of any financial ratio or requirement set forth herein
and Borrower or the Required Lenders shall so request, Agent, Lenders, and Loan Parties shall
negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Required Lenders); provided
that, until so

12

 

amended, such ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein.

     Governmental Authority. Any international, foreign, federal, state, county or
municipal government, or political subdivision thereof; any governmental, quasi-governmental or
regulatory agency, authority, board, bureau, commission, department, instrumentality or public
body; or any court or administrative tribunal.

     Guaranteed Obligations. See §34.1.

     Guaranteed Pension Plan. Any employee pension benefit plan within the meaning of
§3(2) of ERISA maintained or contributed to by Borrower or any ERISA Affiliate the benefits of
which are guaranteed on termination in full or in part by the PBGC pursuant to Title IV of ERISA,
other than a Multiemployer Plan.

     Guarantors. Forestar Group, the wholly owned, direct and indirect Subsidiaries of
Borrower signatory to this Agreement as guarantors, and all other wholly owned, direct and indirect
Subsidiaries of Borrower hereafter created or acquired (whether by acquisition of Equity Interests,
merger or otherwise) by Borrower or Forestar Group (other than Excluded Subsidiaries) that execute
and deliver a joinder to the Guaranty Agreement pursuant to §7.21.

     Guaranty Agreement. The agreements of Guarantors set forth in §34 of this Agreement
and any guaranties of the Obligations (or portions thereof) executed by a Guarantor in favor of
Agent, for the benefit of Lenders, after the date hereof, all such guaranties to be in form and
substance reasonably satisfactory to Agent as of the date such guaranties are delivered, and as the
same may be modified or amended hereafter.

     Hazardous Substances. See §6.18(b).

     Hedge Agreement. Any interest rate cap, collar, floor, forward rate or swap agreement
or similar protective agreement regarding the hedging of interest rate risk exposure now or
hereafter entered into between Borrower and any Lender with respect to the Loans.

     High Value Timberland. The Real Estate owned in fee simple absolute by a Loan Party
and described on Schedule 6 hereof as of June 30, 2010, together with any other Real Estate
hereafter acquired in fee simple absolute by any Loan Party or formerly classified as another type
of Borrowing Base Asset or was Negative Pledge Property that has been designated for inclusion in
the Borrowing Base in accordance with §5.5, in each case on which, or on a portion of which, Timber
is located and for which the applicable Loan Party shall have commenced the entitlement process by
submitting, or beginning to prepare, one or more applications for the zoning, utilities, access and
subdivision approvals, licenses and permits required in order to commence construction and
installation of the infrastructure improvements for a Development, but for which all necessary
approvals, licenses and permits have not yet been received (all as certified in the Borrowing Base
Certificate most recently delivered by Borrower).

     High Value Timberland Amount. As of any determination date, the value of the High
Value Timberland as determined by the most recent evaluations performed by an MAI appraiser
covering at least seventy-five percent (75%) of the total acreage of the High Value Timberland

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(as selected by Agent), with the remainder of the High Value Timberland valued at the average
per acre price determined in the evaluations performed by an MAI appraiser.

     Increasing Lender. See §2.9.

     Incurred Interest. For Forestar Group and its Subsidiaries on a Consolidated basis,
for any fiscal period, the aggregate amount of all interest paid, accrued or capitalized during
such period, excluding loan fees.

     Indebtedness. With respect to any Person means: (a) all indebtedness for money
borrowed and any obligations evidenced by bonds, debentures, notes or similar debt instruments; (b)
all liabilities secured by any mortgage, deed of trust, deed to secure debt, pledge, security
interest, lien, charge or other encumbrance existing on property owned or acquired subject thereto,
whether or not the liability secured thereby shall have been assumed; (c) all guarantees,
endorsements and other contingent obligations whether direct or indirect in respect of indebtedness
of others, including any obligation to supply funds to or in any manner to invest directly or
indirectly in a Person, to purchase indebtedness, or to assure the owner of indebtedness against
loss through an agreement to purchase goods, supplies or services for the purpose of enabling the
debtor to make payment of the indebtedness held by such owner, through indemnity or otherwise, and
the obligation to reimburse the issuer in respect of any letter of credit; (d) any obligation as a
lessee or obligor under a Capitalized Lease; (e) all reimbursement obligations with respect to
letters of credit or similar instruments issued by a Person; and (f) all indebtedness, obligations
or other liabilities under or with respect to (i) interest rate swap, collar, cap or similar
agreements providing interest rate protection, including, without limitation, any Hedge Agreement,
(ii) any Commodity Hedge Agreement, and (iii) foreign currency exchange agreements. For avoidance
of doubt, Forestar Group’s obligations under the Warrant Transactions shall not constitute
Indebtedness.

     Indemnified Taxes. Taxes other than Excluded Taxes.

     Indemnity Agreement. The Amended and Restated Indemnity Agreement Regarding Hazardous
Materials, made by Forestar Group and Borrower in favor of Agent and Lenders, dated as of even date
herewith, pursuant to which such Loan Parties agree to indemnify Agent and Lenders with respect to
Hazardous Substances and Environmental Laws, such Indemnity Agreement to be in form and substance
satisfactory to Agent, as the same may be amended, restated, consolidated, supplemented or
otherwise modified from time to time.

     Interest Coverage Ratio. For any Test Period, the ratio of (i) EBITDA of Forestar
Group and its Subsidiaries for such period, calculated on a Consolidated basis in accordance with
GAAP, plus (to the extent deducted in the calculation of Net Income) all non-cash compensation
expenses to officers, directors and employees of such Persons, to (ii) Incurred Interest for such
period.

     Interest Payment Date. With respect to each Loan, the first day of each calendar
month during the term of such Loan.

     Interest Period. With respect to each LIBOR Rate Loan, (a) initially, the period
commencing on the Drawdown Date of such Loan and ending one (1), two (2), three (3) or six

14

 

(6), or, if available to all Lenders, nine (9) or twelve (12) months thereafter and (b)
thereafter, each period commencing on the day following the last day of the immediately preceding
Interest Period applicable to such LIBOR Rate Loan and ending on the last day of one of the periods
set forth above, as selected by Borrower in a Loan Request or Conversion Request; provided
that all of the foregoing provisions relating to Interest Periods are subject to the following:

          (i) the first day of each Interest Period must be a Business Day.

          (ii) if any Interest Period with respect to a LIBOR Rate Loan would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to the next succeeding Business
Day, unless such Business Day falls in the next calendar month, in which case the Interest Period
shall end on the next preceding Business Day;

          (iii) if Borrower shall fail to give notice as provided in §4.1, Borrower shall be deemed to
have requested a conversion of the affected LIBOR Rate Loan to a Base Rate Loan on the last day of
the then current Interest Period with respect thereto; and

          (iv) no Interest Period relating to any LIBOR Rate Loan shall extend beyond the Maturity Date.

     Interest Rate Floor. A per annum rate equal to two percent (2%).

     Investments. With respect to any Person, all shares of capital stock, partnership
interests, limited liability company interests or other ownership interests, evidences of
Indebtedness and other securities issued by any other Person, all loans, advances, or extensions of
credit to, or contributions to the capital of, any other Person, all purchases of the securities or
business or integral part of the business of any other Person and commitments to make such
purchases and all interests in real property; provided, however, that the term
“Investment” shall not include (i) equipment, inventory and other tangible personal
property acquired in the ordinary course of business, or (ii) current trade and customer accounts
receivable for services rendered in the ordinary course of business and payable in accordance with
customary trade terms. In determining the aggregate amount of Investments outstanding at any
particular time: (a) the amount of any investment represented as a guaranty shall be taken at not
less than the principal amount of the obligations guaranteed and still outstanding; (b) there shall
be included as an Investment all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (c) there shall be deducted in respect of each
such Investment any amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (d) there shall not be
deducted or increased in respect of any Investment any amounts received as earnings on such
Investment, whether as dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there shall not be deducted
from, or added to, the aggregate amount of Investments any decrease or increase, respectively, in
the value thereof.

     Joinder Agreement (Guarantor). An agreement in the form attached hereto and made a
part hereof as Exhibit H, whereby a Person shall become an additional joint and several
Guarantor pursuant to §7.21.

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     Joint Venture. Any Person (including non-wholly owned Subsidiaries) in which any of
the Loan Parties is directly the owner of any Equity Interest, provided that such Equity Interest
(taken together with all Equity Interests, if any, owned by any other Loan Parties in such Person)
constitute less than all of the issued and outstanding Equity Interests of such Person.

     KeyBank. KeyBank National Association, a national banking association.

     Leases. Leases, licenses and agreements whether written or oral, relating to the use
or occupancy of any Mortgaged Property, Negative Pledge Property or other Real Estate, including,
without limitation, hunting leases, Timber leases and Mineral Rights Leases.

     Lenders. KeyBank and the other lending institutions which may become parties to this
Agreement, pursuant to § 18 hereof, as is defined in the first paragraph of this Agreement, to
include Revolving Lenders, Term Lenders and as the context requires, Swing Line Lender.

     Letter of Credit. An irrevocable standby letter of credit issued by Agent (in its
capacity as letter of credit issuer) pursuant to §2.10 for the account of any Loan Party in respect
of obligations of any Loan Party incurred pursuant to contracts made or performances undertaken or
to be undertaken in the ordinary course of its such Loan Party’s business which is payable upon
presentation of a sight draft and other documents described in the Letter of Credit, if any, as
originally issued pursuant to this Agreement or as amended, modified, extended, renewed or
supplemented.

     Letter of Credit Fees. The fees due in connection with the Outstanding Letters of
Credit pursuant to §4.3.

     Letter of Credit Request. A written request from Borrower to Agent in the form of
Exhibit G attached hereto, requesting the issuance of a Letter of Credit pursuant to
§2.10(b).

     LIBOR Lending Office. Initially, the office of each Lender designated as such in
Schedule 1.1 hereto; thereafter, such other office of such Lender, if any, that shall be
making or maintaining LIBOR Rate Loans.

     LIBOR Rate. As applicable to any LIBOR Rate Loan, the rate per annum as determined on
the basis of the offered rates for deposits in Dollars, for a period of time comparable to the
Interest Period for such LIBOR Rate Loan which appears on the Reuters Screen LIBOR01 Page as of
11:00 a.m. London time on the day that is two (2) LIBOR Business Days preceding the first day of
the Interest Period for such LIBOR Rate Loan; provided, however, if the rate
described above does not appear on such service on any applicable interest determination date, the
LIBOR Rate shall be the rate (rounded upward, if necessary, to the nearest one hundred-thousandth
of a percentage point), determined on the basis of the offered rates for deposits in Dollars for a
period of time comparable to the Interest Period for such LIBOR Rate Loan which are offered by four
(4) major banks in the London interbank market at approximately 11:00 a.m. London time, on the day
that is two (2) LIBOR Business Days preceding the first day of the Interest Period for the LIBOR
Rate Loan as selected by Agent. The principal London office of each of the four (4) major London
banks will be requested to provide a quotation of its Dollar deposit offered rate. If at least two
such quotations are provided, the rate for that date will be the arithmetic mean of the quotations.
If fewer than two quotations are provided as requested, the rate for that date will be

16

 

determined on the basis of the rates quoted for loans in Dollars to leading European banks for
a period of time comparable to the Interest Period for such LIBOR Rate Loan offered by major banks
in New York City at approximately 11:00 a.m. (eastern time), on the day that is two (2) LIBOR
Business Days preceding the first day of the Interest Period for the LIBOR Rate Loan. In the event
that Agent is unable to obtain any such quotation as provided above, it will be deemed that the
LIBOR Rate for a LIBOR Rate Loan cannot be determined. In such event, the Loan shall bear interest
at the Base Rate. In the event that the Board of Governors of the Federal Reserve System shall
impose a Reserve Percentage with respect to LIBOR deposits of Agent, then for any period during
which such Reserve Percentage shall apply, the LIBOR Rate shall be equal to the amount determined
above divided by an amount equal to one (1) minus the Reserve Percentage.

     LIBOR Rate Loans. Those Loans bearing interest calculated by reference to the LIBOR
Rate.

     LIBOR Rate Spread. The per annum rate of four and one-half percent (4.5%).

     Liens. See §8.2.

     Loan or Loans. Collectively, the aggregate Revolving Loans, Term Loans and Swing Line
Loans to be made by Lenders hereunder, as applicable, which Revolving Loans, Term Loans and Swing
Line Loans may be, at the request of the applicable Lender, evidenced by the Revolving Loan Notes,
the Term Loan Notes and the Swing Line Note, as the case may be. Amounts drawn under a Letter of
Credit shall be converted into Revolving Loans as provided in §2.10.

     Loan Documents. Collectively, this Agreement, the Notes, the Security Documents, the
Hedge Agreements, and all other documents, instruments or agreements now or hereafter assumed,
executed or delivered by or on behalf of any Loan Party in favor of the Agent or the Lenders in
connection with the Loans, as the same may be amended, modified, renewed, extended, consolidated,
supplemented or restated from time to time.

     Loan Parties. Collectively, Borrower and the Guarantors, any of which may be
sometimes referred to individually as a Loan Party.

     Loan Request. See §2.6.

     Lot or Lots. An individual residential lot located or to be located on Entitled Land
Under Development or Non-Appraised Entitled Land and designated on the final subdivision plat, map
or filing (or in the case of Entitled Land Under Development or Non-Appraised Entitled Land, an
individual lot designated on an approved tentative tract map, preliminary plat map, preliminary
subdivision plat or similar plat or map) and including any related community or commercial lot(s)
relating to the amenities for that Development.

     Material Adverse Effect. A materially adverse effect on (a) the business, assets,
liabilities, condition (financial or otherwise), or results of operations of the Loan Parties taken
as a whole, (b) the ability of any Loan Party to perform its obligations under the Loan Documents,
(c) the validity or enforceability of any of the Loan Documents, or (d) the rights, benefits or
interests of Lenders and Agent in and to this Agreement, any other Loan Document or the Collateral.

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     Maturity Date. The Revolving Credit Maturity Date or the Term Loan Maturity Date,
whichever is applicable.

     Mineral Activity. The exploration, extraction, mining, processing, production,
storage, transportation or handling of any coal, oil, gas, related liquid hydrocarbons or any other
mineral or related marketable substance.

     Mineral Business. The business of Borrower or any of the other Loan Parties in
respect of Mineral Activity or otherwise consisting of realizing lease and royalty payments from
oil and gas mineral interests.

     Mineral Business Enterprise Value. As of any date of determination, an amount equal
to the product of (a) annualized EBITDA of the Loan Parties from the Mineral Business for the most
recently completed four (4) fiscal quarters, multiplied by (b) four (4).

     Mineral Rights Lease. Any Lease, joint operating agreement, operating agreement,
joint venture agreement, oil and gas partnership agreement, division order or other agreement
pursuant to which any Loan Party grants one or more third-parties the right to conduct Mineral
Activity on Real Estate owned or leased by such Loan Party or in which such Loan Party has rights
interests, obligations or privileges.

     Moody’s. Moody’s Investors Service, Inc.

     Mortgaged Property or Mortgaged Properties. Individually and collectively,
the property described on Schedule 3 attached hereto, each by this reference incorporated
herein, which has been conveyed as security for the Obligations pursuant to the Security Deeds, and
any other property which is added as a Mortgaged Property pursuant to §5.1 or §5.3 hereof.

     Mortgaged Property Documents. See Schedule 2 attached hereto by reference
made a part hereof.

     Multiemployer Plan. Any multiemployer plan within the meaning of §3(37) of ERISA to
which Borrower or any ERISA Affiliate is making, or is required to make, contributions.

     Multifamily Property. Real Estate containing a residential structure with five or
more dwelling units in the same structure.

     Negative Pledge Property or Negative Pledge Properties. Individually and
collectively, any and all Real Estate owned in fee simple absolute (but not including mineral
interests only) by any of the Loan Parties other than (i) the Mortgaged Properties and (ii) Real
Estate which is subject to a Permitted Lien securing Indebtedness (other than the Obligations)
permitted by §8.1.

     Net Income. With respect to Forestar Group and its Subsidiaries for any Test Period,
the net income (or deficit) of such Persons, after deduction of all expenses, taxes and other
property charges, determined in accordance with GAAP, except that contributions or other transfers
of Real Estate to one or more Joint Ventures shall be considered a “sale” with 100% of any
resulting “gain on sale” included in Net Income for the fiscal quarter in which such contributions
or transfers occurs notwithstanding any requirement for any computation to be made in accordance

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with GAAP so long as the structure of such Joint Venture has been approved by Agent, such
approval not to be unreasonably withheld, conditioned or delayed.

     Net Sale Proceeds. With respect to the sale of any Lots or all or any portion of any
Mortgaged Property, the gross sales price payable by the purchaser thereof (net of any rebates or
discounts) less all reasonable and customary costs of sale that are charged to sellers of property
and standard for such market in a given jurisdiction, including without limitation, title insurance
charges, escrow fees, seller’s legal fees, prorated real estate taxes, transfer taxes and real
estate brokers’ commissions.

     Non-Appraised Entitled Land. The Real Estate described on Schedule 9 hereof
as of June 30, 2010 and Real Estate acquired thereafter from time to time, in each case consisting
of Real Estate owned in fee simple absolute by any Loan Party or a Joint Venture for which all
material required zoning, utilities and development permits and approvals have been obtained in
connection with a proposed Development, but for which an Appraisal has not been obtained by such
Loan Party and provided to Agent. Once an Appraisal meeting the applicable requirements of this
Agreement shall have been obtained and provided to Agent, such Real Estate (if owned by a Loan
Party) shall thereafter cease to be Non-Appraised Entitled Land and shall instead be treated under
this Agreement and the other Loan Documents as Raw Entitled Land or Entitled Land Under
Development, as the case may be.

     Non-Appraised Entitled Land Value. As of any date of determination, the aggregate
value of all Non-Appraised Entitled Land valued at current book value. Non-Appraised Entitled Land
Value shall not be included in the Borrowing Base except as follows: with respect to any
Non-Appraised Entitled Land acquired and owned by a Loan Party after the Closing Date and for which
the Appraisal required to convert such Non-Appraised Entitled Land into Raw Entitled Land or
Entitled Land Under Development (as the case may be) shall have not been obtained, the book value
of such Non-Appraised Entitled Land shall temporarily be included in the Borrowing Base as part of
Raw Entitled Land Value or Entitled Land Under Development Value (depending upon whether such
Non-Appraised Entitled Land would qualify as Raw Entitled Land or Entitled Land Under Development
if the requisite Appraisal had been obtained) through and including the sixtieth (60th)
day after the acquisition of such Non-Appraised Entitled Land by the applicable Loan Party. If the
Appraisal described in the definition of Raw Entitled Land or Entitled Land Under Development (as
applicable) is not delivered to Agent within such sixty (60)-day timeframe, such Non-Appraised
Entitled Land Value shall immediately and automatically be removed from the Borrowing Base. Upon
delivery of such Appraisal to Agent, whether before or after such sixty (60)-day period expires,
such Non-Appraised Entitled Land shall thereafter cease to be Non-Appraised Entitled Land and shall
instead be treated under this Agreement and the other Loan Documents as Raw Entitled Land or
Entitled Land Under Development, as the case may be

     Non-Consenting Lender. See §18.8.

     Non-Recourse Assets. Real Estate (other than Mortgaged Property), all rights related
thereto (including contract rights), the improvements and Leases thereon and the rents and profits
thereof and all proceeds of any of the foregoing which are of the type customarily transferred or
in respect of which security interests or mortgages are customarily granted in connection with the

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non-recourse financing of Real Estate and which, to the extent permitted under this Agreement,
are sold, transferred or otherwise conveyed by the Borrower or a Subsidiary to an SPE Subsidiary or
directly to the provider(s) of such financing (or an agent on its or their behalf) in connection
with the incurrence of Non-Recourse Indebtedness permitted under §8.1.

     Non-Recourse Indebtedness. Indebtedness of a Person which is secured by one or more
parcels of Real Estate (other than Mortgaged Property) and related Non-Recourse Assets and is not a
general obligation of any Loan Party or any of their respective wholly owned Subsidiaries other
than the applicable SPE Subsidiary (except for Permitted Recourse Undertakings), the holder of such
Indebtedness having recourse solely to the Non-Recourse Assets securing such Indebtedness or other
assets of Persons that are not Loan Parties or wholly owned Subsidiaries of any Loan Party other
than the applicable SPE Subsidiary (except in connection with Permitted Recourse Undertakings).

     Notes. See §2.2.

     Notice. See §19.

     Obligations. All indebtedness, obligations and liabilities of Borrower and Guarantors
to any of Lenders and Agent, individually or collectively, under this Agreement or any of the other
Loan Documents or in respect of any of the Loans or the Notes, or other instruments at any time
evidencing any of the foregoing, whether existing on the date of this Agreement or arising or
incurred hereafter, direct or indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law
or otherwise (including, without limitation, advances made by Agent to protect or preserve the
Collateral or the security interests therein), and including interest and fees that accrue after
the commencement by or against any Loan Party of any proceeding under the United States Bankruptcy
Code or other similar federal or State law, naming such Person as the debtor in such proceeding,
regardless of whether or not such interest and fees are allowed claims in such proceeding. To the
extent this definition of “Obligations” is referenced in any Security Document, the definition
shall also include any Indebtedness, obligations and liabilities of Borrower under any and all
Hedge Agreements.

     OFAC Review Process. That certain review process established by Agent to determine if
any potential transferee of any interests or any assignee of any portion of the Loans or any of
their members, officers or partners are a party with whom Agent and any Lender are restricted from
doing business under (i) the regulations of OFAC, including those Persons named on OFAC’s Specially
Designated and Blocked Persons list, or (ii) any other statute, executive order or other
governmental action or list (including the September 24, 2001 Executive Order Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism.

     Operating Accounts. See §5.6.

     Organizational Document. With respect to any Person other than a natural person, its
articles or certificate of incorporation, formation or organization, partnership agreement,
operating agreement, by-laws and all shareholder agreements, voting trusts and similar arrangements
applicable to any of its authorized Equity Interests.

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     Outstanding. With respect to the Loans, the aggregate unpaid principal thereof as of
any date of determination. With respect to issued Letters of Credit, the aggregate undrawn amounts
under issued Letters of Credit as of any date of determination.

     Patriot Act Customer Identification Process. That certain customer identification and
review process established by Agent pursuant to the requirements of 31 U.S.C. §5318(1) and 31
C.F.R. §103.121 to verify the identity of all permitted transferees of interests in Borrower and
any assignees of a portion of the Loan hereunder.

     PBGC. The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any
successor entity or entities having similar responsibilities.

     Permitted Bond Indebtedness. The Indebtedness permitted by §8.1(xvi).

     Permitted Existing Indebtedness. Indebtedness of the Loan Parties and their
Subsidiaries, or any of them, which is outstanding on the Closing Date and identified on the
written disclosure provided to, and approved by, Agent pursuant to §6.29.

     Permitted Liens. Liens, security interests and other encumbrances permitted by §8.2.

     Permitted Recourse Undertakings. Representations, warranties, covenants,
environmental indemnities, and “bad acts” or similarly limited guarantees entered into by Borrower
or any Subsidiary of Borrower in connection with Non-Recourse Indebtedness which are customary for
non-recourse real estate financings.

     Permitted Refinancing Indebtedness. Any Indebtedness of the Loan Parties issued in
exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease
or refund, Permitted Existing Indebtedness, Indebtedness otherwise permitted by this Agreement or
other Permitted Refinancing Indebtedness of such Person, provided, that:

          (a) the principal amount of such Indebtedness (not including accrued or capitalized interest
and premiums, fees and expenses) does not exceed the then outstanding principal amount of the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded;

          (b) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is
Permitted Existing Indebtedness which is Non-Recourse Indebtedness, the Permitted Refinancing
Indebtedness with respect thereto must also be Non-Recourse Indebtedness; and

          (c) no Default or Event of Default has occurred and is continuing or would result from the
issuance or origination of such Indebtedness.

     Person. Any individual, corporation, partnership, limited liability company, trust,
unincorporated association, business, or other legal entity, and any government or any governmental
agency or political subdivision thereof.

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     Plan Asset Regulations. The regulations promulgated under ERISA at 29 CFR 2510.3-101,
as amended and in effect from time to time.

     Plan Assets. Assets of any Employee Benefit Plan subject to Part 4, Subtitle A, Title
I of ERISA.

     Pledge and Security Agreement. The Amended and Restated Pledge and Security Agreement
dated as of the Closing Date executed by the Loan Parties for the purpose of pledging and granting
a first priority security interest in and to all Equity Interests now or hereafter owned by them in
any other Loan Party and (if and to the extent no consent is required at all or the necessary
consents have been obtained) in any of their respective Joint Ventures.

     Pledged Deposit Account. The main operating account pledged by Borrower to Agent for
the benefit of Lenders as Collateral for the Obligations.

     Prepayment Fee. With respect to each repayment or prepayment, in whole or in part, of
any of the outstanding principal balance of the Term Loans, an amount equal to the principal amount
so prepaid, multiplied by (a) three percent (3%) for any repayment or prepayment of Term Loans made
prior to the six (6) month anniversary of the Closing Date, (b) two percent (2%) for each repayment
or prepayment of the Term Loans made on or after the six (6) month anniversary of the Closing Date
and prior to the one (1) year anniversary of the Closing Date, or (c) one percent (1%) for each
repayment or prepayment of the Term Loans made on or after the one (1) year anniversary of the
Closing Date and prior to the eighteen (18) month anniversary of the Closing Date;
provided, however, that no prepayment fee shall be payable with respect to the
first $25,000,000 of Term Loan principal repaid or prepaid. No Prepayment Fee will apply to any
repayment or prepayment of the Term Loans, or any portion thereof, made on or after the eighteen
(18) month anniversary of the Closing Date.

     Principal Financial Officer. The primary officer or the authorized agent of Borrower
or Forestar Group, as the case may be, responsible for the preparation and certification of
financial statements.

     Prior Letter of Credit. Any letter of credit issued prior to the Closing Date under
the Original Credit Agreement for the account of any of the Loan Parties and which will remain
outstanding after the Closing Date.

     Project Approvals. See §6.20(a).

     Raw Entitled Land. The Real Estate described on Schedule 7 hereof as of June
30, 2010 together with any other Real Estate acquired thereafter or formerly classified as another
type of Borrowing Base Asset or was Negative Pledge Property that has been designated for inclusion
in the Borrowing Base in accordance with §5.5, in each case consisting of Real Estate owned in fee
simple by a Loan Party (i) that is suitable for Development and (ii) for which all major
discretionary land-use approvals have been obtained (all as certified in the Borrowing Base
Certificate most recently delivered by Borrower).

     Raw Entitled Land Value. As of any date of determination, the aggregate value of all
Raw Entitled Land valued on the basis of an “as is”, MAI Appraisal covering at least seventy-five

22

 

percent (75%) of the remaining Lot portfolio and at least seventy-five percent (75%) of the
remaining commercial acreage (both as selected by Agent), with all other Raw Entitled Land to be
valued at book value. The initial Raw Entitled Land Value shall be determined based upon an “as
is”, MAI Appraisal ordered by and approved by Agent prior to Closing. All costs incurred by
Borrower and the applicable Guarantors with respect to the development of the Raw Entitled Land
subsequent to the Appraisal shall be added to the Raw Entitled Land Value Amount, and such amount
shall also be reduced by the value of any parcels or lots sold since the prior Appraisal date, in
each case without duplicating any post-closing adjustments resulting from any updated Appraisals.
Raw Entitled Land Value shall also be increased or decreased, as the case may be, as and to the
extent provided in the definition of Non-Appraised Entitled Land Value, without duplication.

     RCRA. See §6.18(a).

     Real Estate. All real property at any time owned or leased (as lessee or sublessee)
by any Loan Party or their respective Subsidiaries or Joint Ventures including, without limitation,
the Mortgaged Properties and the Negative Pledge Properties.

     Record. The grid attached to any Note, or the continuation of such grid, or any other
similar record, including computer records, maintained by Agent with respect to any Loan referred
to in such Note.

     Reference Bank. KeyBank.

     Register. See §18.2.

     Reimbursement Agreement. The applications made and agreements entered into between
Agent and (i) Borrower and (ii) any other Loan Party relating to a Letter of Credit on the form
then in use by Agent as its standard form agreement with respect to similar letters of credit.

     Related Fund. With respect to any fund that invests in loans, any other fund that
invests in loans that is managed by the same investment advisor as such Lender or by an Affiliate
of such Lender or such investment advisor.

     Related Parties. With respect to any Person, such Person’s Affiliates and the
partners, directors, officers, employees, agents and advisors of such Person and of such Person’s
Affiliates.

     Release. See §6.18(c) (iii).

     Renewal Date. See §3.1(b).

     Request for Swing Line Loan. See §2.6(b).

     Required Lenders. As of any date, the Lender or Lenders (not including any Defaulting
Lender which shall not be entitled to vote) whose aggregate Commitment Percentage equals or exceeds
the Applicable Approval Percentage. For purposes of this definition, a Revolving Lender (other
than Swing Line Lender) shall be deemed to hold a Swing Line Loan or participate in a

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Letter of Credit to the extent such Lender has acquired a participation therein under the
terms of this Agreement and has not failed to perform its obligations in respect of such
participation.

     Requirements. Any applicable federal or state law or governmental regulation, or any
local ordinance, order or regulation, including but not limited to laws, regulations, or ordinances
relating to zoning, building use and occupancy, subdivision control, fire protection, health,
sanitation, safety, handicapped access, historic preservation and protection, tidelands, wetlands,
flood control and Environmental Laws, including without limitation, the Americans With Disabilities
Act or any state laws regarding disability requirements, or any lease, agreement, covenant or
instrument to which any Mortgaged Property or Negative Pledge Property, or any Loan Party as the
owner of such Real Estate, may be subject.

     Requisite Class Lenders. At any time of determination, (i) for the Revolving Lenders,
Revolving Lenders (not including any Defaulting Lender which shall not be entitled to vote) holding
at least the Applicable Approval Percentage of the aggregate Revolving Loans (or if there are no
Revolving Loans Outstanding, of the Revolving Commitment, disregarding the Outstanding Loans or
Commitment of any Defaulting Lender, as applicable) and (ii) for the Term Lenders, Term Lenders
holding at least the Applicable Approval Percentage of the aggregate Outstanding principal amount
of the Term Loans (disregarding the Outstanding Term Loans of any Defaulting Lender). For purposes
of this definition, a Revolving Lender (other than Swing Line Lender) shall be deemed to hold a
Swing Line Loan or participate in a Letter of Credit to the extent such Lender has acquired a
participation therein under the terms of this Agreement and has not failed to perform its
obligations in respect of such participation.

     Reserve Percentage. As of any date, the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves) which is imposed on member banks
of the Federal Reserve System against “Euro-currency Liabilities” as defined in Regulation D. The
LIBOR Rate for each outstanding LIBOR Rate Loan shall be adjusted automatically as of the effective
date of any change in the Reserve Percentage.

     Revenues/Capital Expenditures Ratio. For any Test Period, the ratio of Total Revenues
for such period to Total Capital Expenditures for such period.

     Revolving Commitment. With respect to each Revolving Lender, the amount set forth on
Schedule 1.1 hereto as the amount of such Lender’s commitment to make or maintain Revolving
Loans to Borrower, to purchase participations in Swing Line Loans made by Swing Line Lender
pursuant to §2.1(c), or to purchase participations in Letters of Credit issued by Agent for the
account of any Loan Party in accordance with §2.10, as the same may be changed from time to time in
accordance with the terms of this Agreement, including without limitation, §2.9.

     Revolving Commitment Percentage. With respect to each Revolving Lender, the
percentage set forth on Schedule 1.1 hereto as such Revolving Lender’s percentage of the
aggregate Revolving Commitments of all Revolving Lenders.

     Revolving Credit Exposure. For any Revolving Lender as of any date of determination,
such Lender’s Revolving Commitment Percentage of the sum of (i) all Revolving Loans then
Outstanding, (ii) all Outstanding Letters of Credit, and (iii) any Swing Line Loans then
Outstanding.

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     Revolving Credit Maturity Date. August ___, 2013, or if the Revolving Credit Maturity
Date is extended pursuant to §3.1(b), August ___, 2014, or such earlier date on which the Revolving
Loans shall become due and payable pursuant to the terms hereof.

     Revolving Lenders. The Lenders having Revolving Commitments, together with their
permitted successors and assigns.

     Revolving Loan. Collectively, the amounts advanced from time to time by Revolving
Lenders to Borrower under the Revolving Commitments for Revolving Loans, not to exceed $175,000,000
at any time Outstanding; subject, however, to increase in accordance with §2.9.

     Revolving Loan Notes. See §2.2.

     Rights Agreement. The Rights Agreement dated as of December 11, 2007 between Forestar
Group and ComputerShare Trust Company, N.A., as Rights Agent thereunder, providing for the issuance
to Forestar Group’s stockholders, under the circumstances described therein, of certain rights to
acquire shares of Series A junior participating preferred stock of Forestar Group, on the terms and
conditions set forth in such agreement.

     S&P. Standard & Poor’s Ratings Service, a division of The McGraw-Hill Companies.

     SARA. See §6.18(a).

     SEC. United States Securities and Exchange Commission.

     Security Deeds. Collectively, the deed of trust, mortgage and/or deed to secure debt
from or assumed by any Loan Party, whether now existing or hereinafter entered into, in favor of
Agent for the benefit of Lenders (or to trustees named therein acting on behalf of Agent for the
benefit of Lenders), as modified, amended or restated from time to time, pursuant to which such
Loan Party shall have conveyed or granted a mortgage lien upon or conveyed security title to each
Mortgaged Property as security for the Obligations, each such deed of trust, mortgage and deed to
secure debt to be in form and substance satisfactory to Agent.

     Security Documents. Collectively, the Security Deeds, the Assignment of Leases and
Rents, the Assignment of Mineral Rights Leases, the Collateral Assignment of Timber Purchase
Agreement, the Assignment of Rights to Joint Venture Distributions, the Indemnity Agreement,
Deposit Account Control Agreements and any further collateral assignments now or hereafter
delivered by a Loan Party to Agent for the benefit of Lenders, including, without limitation, UCC-1
financing statements filed or recorded in connection therewith, as each may be further amended,
modified, renewed, consolidated, supplemented or extended, from time to time.

     SPE Subsidiary. A bankruptcy remote or other special purpose entity which is a
Subsidiary and which is formed for the purpose of, and engages in no material business other than,
issuing or incurring Non-Recourse Indebtedness and, in connection therewith, owning Non-Recourse
Assets and pledging or transferring interests therein.

     Spin-off Effective Date. The date on which the Spin-off Transaction was completed
which was December 28, 2007.

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     Spin-off Tax Sharing Agreement. The Tax Sharing Agreement, to be dated as of the
Spin-off Effective Date, between Temple-Inland and Forestar Group.

     Spin-off Transaction. The transfer of certain assets and liabilities of Temple-Inland
and certain of its Affiliates to the Loan Parties as contemplated by Temple-Inland’s distribution
of all of its shares of Forestar Group to Temple-Inland’s stockholders as contemplated by the
Distribution and Separation Agreement and as described in the Forestar Form 10, the making of the
initial Loans hereunder, repayment of intercompany indebtedness and the related transactions
contemplated by the parties thereto in connection with each thereof.

     Standby Letters of Credit. All Letters of Credit issued by the Agent for the account
of any Loan Party pursuant to the terms set forth in this Agreement other than Trade Letters of
Credit.

     State. A state of the United States of America, or the District of Columbia.

     Subsequent Lender. See §2.9

     Subsidiary. Any corporation, association, partnership, limited liability company,
trust or other business or legal entity of which the designated parent shall at any time own,
directly or indirectly through a Person or Persons, a greater than fifty percent (50%) ownership
interest.

     Substitute Collateral. See §5.3(d)(ii).

     Survey. With respect to each Mortgaged Property and each Negative Pledge Property, an
instrument survey of such Mortgaged Property or such Negative Pledge Property from time to time
obtained by or otherwise in the possession of Borrower or any Guarantor, whether a “boundary-only”
or “as-built” survey.

     Swing Line Commitment. Swing Line Lender’s obligation to make Swing Line Loans
pursuant to §2.1(c) in an amount up to, but not exceeding, $25,000,000, at any time Outstanding.

     Swing Line Lender. KeyBank, together with its respective successors and assigns.

     Swing Line Loan. A loan made by Swing Line Lender to Borrower pursuant to §2.1(c).

     Swing Line Note. The promissory note of Borrower payable to the order of Swing Line
Lender in a face principal amount equal to the amount of the Swing Line Commitment as originally in
effect and otherwise duly completed, substantially in the form of Exhibit “A-3”.

     Taxes. See §4.4(b).

     TEMCO Investment. See §8.3(u).

     Temple-Inland. Temple-Inland Inc., a Delaware corporation.

     Temple Inland Agreements shall mean the Distribution and Separation Agreement, the
Timber Purchase Agreement and the Spin-off Tax Sharing Agreement.

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     Term Commitment. With respect to each Term Lender, the amount set forth on
Schedule 1.1 hereto as the amount of such Lender’s commitment to make or maintain Term
Loans to Borrower on the Closing Date, as the same may be changed from time to time in accordance
with the terms of this Agreement, including, without limitation, §2.9.

     Term Commitment Percentage. With respect to each Term Lender, the percentage set
forth on Schedule 1.1 hereto as such Term Lender’s percentage of the Outstanding Term
Loans.

     Term Lenders. Each Lender having a Term Commitment or making a Term Loan to Borrower
pursuant to this Agreement, together with their successors and permitted assigns.

     Term Loan. Collectively, the Loans made or continued to Borrower under §2.1(b) on the
Closing Date under the Term Commitments, not to exceed $125,000,000 in the aggregate; subject,
however, to increase in accordance with §2.9.

     Term Loan Maturity Date. August ___, 2015, or such earlier date on which the Term Loan
shall become due and payable pursuant to the terms hereof.

     Term Loan Notes. See §2.2.

     Test Period. See §9.1(a).

     Timber. Any trees of any age, species, or condition, whether standing, lying, growing
or to be grown, alive or dead and now or hereafter at any time located on the Timberland.

     Timber Purchase Agreement. That certain Timber Purchase Agreement, dated December 1,
2007, between TIN Inc. and Borrower, as amended, extended, renewed, restated or otherwise modified
from time to time in accordance with §7.14(e).

     Timberland. The Real Estate owned in fee simple absolute by any Loan Party and
described on Schedule 5 hereof, together with any other Real Estate (other than High Value
Timberland, Raw Entitled Land or Entitled Land Under Development) hereafter acquired in fee simple
absolute by any Loan Party on which, or on a portion of which, Timber is located.

     Timberland Value. Except for High Value Timberland, an amount equal to the per acre
amount for Timberland determined in the most recent valuation update pursuant to §5.2(b).

     Title Policy. With respect to each parcel of Mortgaged Property, any policy or
owner’s title insurance issued to Borrower or the applicable Guarantor, from time to time obtained
by or otherwise in the possession of Borrower or any Guarantor.

     Total Capital Expenditures. For the relevant period, the aggregate amount of all
Development Expenditures and Acquisition Expenditures incurred by Borrower (for Borrower and its
consolidated Joint Ventures) and its Subsidiaries, plus (without duplication) such parties’ pro
rata share of all such expenditures incurred by unconsolidated Joint Ventures.

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     Total Funded Debt. As of any date of determination, an amount equal to one hundred
percent (100%) of all Funded Debt of any Loan Party, plus any Loan Party’s pro rata share
of the Funded Debt of their respective Joint Ventures.

     Total Leverage Ratio. As of any date of determination, the ratio of Total Funded Debt
to Adjusted Asset Value, expressed as a percentage.

     Total Revenues. For the relevant period, the aggregate amount of all gross revenues
derived from the operations of Forestar Group and its Subsidiaries, plus their pro rata share of
operating revenues from unconsolidated Joint Ventures; provided that any “gain on sale” resulting
from the contributions or other transfers of Real Estate to one or more Joint Ventures shall be
considered revenues derived from the operations of Forestar Group and its Subsidiaries for the
fiscal quarter in which such contributions or transfers occur so long as the structure of such
Joint Venture has been approved by Agent, such approval not to be unreasonably withheld,
conditioned or delayed.

     Trade Letters of Credit. All trade or documentary Letters of Credit issued by Agent
for the account of any Loan Party pursuant to the terms set forth in this Agreement, in connection
with the purchase by any Loan Party of goods or services in the ordinary course of business.

     Type. As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.

     Voting Interests. Stock, partnership, membership or similar ownership interests of
any class or classes (however designated), the holders of which are at the time entitled, as such
holders, (a) to vote for the election of a majority of the directors (or persons performing similar
functions) of the corporation, association, partnership, limited liability company, trust or other
business entity involved, or (b) to control, manage, or conduct the business of the corporation,
partnership, limited liability company, association, trust or other business entity involved.

     Warrant Transactions. One or more call options referencing Forestar Group’s common
stock written by Forestar Group substantially contemporaneously with the purchase by Forestar Group
of Convertible Bond Hedge Transactions and having an initial strike or exercise price (howsoever
defined) greater than the strike or exercise price (howsoever defined) of such Convertible Bond
Hedge Transactions.

          §1.2 Rules of Interpretation.

               (a) A reference to any document or agreement shall include such document or agreement as
amended, modified or supplemented from time to time in accordance with its terms and the terms of
this Agreement.

               (b) The singular includes the plural and the plural includes the singular.

               (c) A reference to any law includes any amendment or modification to such law.

               (d) A reference to any Person includes its permitted successors and permitted assigns.

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               (e) Accounting terms not otherwise defined herein have the meanings assigned to them by GAAP
applied on a consistent basis by the accounting entity to which they refer.

               (f) The words “include”, “includes” and “including” are not limiting.

               (g) The words “approval” and “approved” as the context so determines, means an approval in
writing given to the party seeking approval after full and fair disclosure to the party giving
approval of all material facts necessary in order to determine whether approval should be granted.

               (h) All terms not specifically defined herein or by GAAP, which terms are defined in the
Uniform Commercial Code as in effect in the State of New York, have the meanings assigned to them
therein.

               (i) Reference to a particular “§”, refers to that section of this Agreement unless otherwise
indicated.

               (j) The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this
Agreement as a whole and not to any particular section or subdivision of this Agreement.

               (k) All references in this Agreement to “Cleveland time” shall refer to prevailing time in
Cleveland, Ohio.

§2. LOANS AND LETTERS OF CREDIT

          §2.1 Commitment to Lend.

               (a) Revolving Loans. Subject to the terms and conditions set forth in this Agreement,
each of the Revolving Lenders severally agrees to lend to Borrower, and Borrower may borrow (and
repay and reborrow) from time to time between the Closing Date and the Revolving Credit Maturity
Date upon notice by Borrower to Agent given in accordance with §2.6, such sums as are requested by
Borrower for the purposes set forth in §2.8 up to a maximum aggregate principal amount outstanding
(after giving effect to all amounts requested) at any one time equal to the lesser of (a)
such Lender’s Revolving Commitment, and (b) such Lender’s Revolving Commitment Percentage of (i)
the Borrowing Base less (ii) the sum of (x) the aggregate principal amount of Term Loans
Outstanding or being funded on such date of determination plus (y) unless Borrower shall have
elected to make all of the Borrowing Base Assets (other than the Mineral Business) Mortgaged
Properties pursuant to §9.2(b), the aggregate outstanding principal amount of Permitted Bond
Indebtedness at such time; provided, that, in all events no Default or Event of Default
shall have occurred and be continuing, or shall result therefrom; and provided,
further, that the Outstanding principal amount of the Revolving Loans and Swing Line Loans
(after giving effect to all amounts requested), plus the Outstanding Letters of Credit, shall not
at any time exceed the aggregate Revolving Commitments of all Revolving Lenders or cause a
violation of the covenant set forth in §9.2(b). The Revolving Loans shall be made pro rata in
accordance with each Revolving Lender’s Revolving Commitment Percentage. Each request for a
Revolving Loan hereunder shall constitute a representation and warranty by Borrower that all of the
conditions set forth in §10 and §11, as applicable, have been satisfied on

29

 

the date of such request. No Revolving Lender shall have any obligation to make Revolving
Loans to Borrower in an aggregate principal amount outstanding which, together with such Lender’s
participation interest in Swing Line Loans and Outstanding Letters of Credit, exceeds such Lender’s
Revolving Commitment.

               (b) Term Loans. Subject to the terms and conditions set forth in this Agreement, each
of the Term Lenders severally agrees to lend to Borrower, and Borrower will borrow on the Closing
Date, an amount equal to such Lender’s Term Commitment; provided, that, in all events no
Default or Event of Default shall have occurred and be continuing; and provided,
further, that the outstanding principal amount of the Term Loans (after giving effect to
all amounts requested), shall not at any time exceed the aggregate Term Commitments of all Term
Lenders or cause a violation of the covenant set forth in §9.2(b). The Term Loans shall be made
pro rata in accordance with each Term Lender’s Term Commitment Percentage. Borrower’s request for
the Term Loans hereunder shall constitute a representation and warranty by Borrower that all of the
conditions set forth in §10 and §11, as applicable, have been satisfied on the date of such
request. No Term Lender shall have any obligation to make Term Loans to Borrower in a principal
amount of more than the principal face amount of such Lender’s Term Commitment. Notwithstanding
the foregoing, Borrower acknowledges that the making of the Term Loans on the Closing Date will not
involve the advance of any funds to Borrower but only the continuation of the outstanding “Term
Loans” under the Original Credit Agreement, but each Term Loan will be in accordance with the
respective Term Commitments of the Term Lenders.

               (c) Swing Line Loans. (i) Subject to the terms and conditions hereof, from time to
time from the Closing Date to but excluding the fifth (5th) day prior to the Revolving
Credit Maturity Date, Swing Line Lender agrees to make Swing Line Loans to Borrower in an aggregate
principal amount at any one time Outstanding up to, but not exceeding Swing Line Commitment;
provided, that in all events no Default or Event of Default shall have occurred and be
continuing; and provided, further, that the sum of (A) the Outstanding principal
amount of the Revolving Loans and the Swing Line Loans (after giving effect to the Swing Line Loan
being requested), plus (B) the Outstanding Letters of Credit shall not exceed the aggregate
Revolving Commitments of the Revolving Lenders or cause a violation of the covenant set forth in
§9.2(b). If at any time the aggregate principal amount of the Swing Line Loans Outstanding at such
time exceeds the Swing Line Commitment in effect at such time, Borrower shall promptly pay Agent
for the account of Swing Line Lender the amount of such excess. Subject to the terms and
conditions of this Agreement, Borrower may borrow, repay and reborrow Swing Line Loans hereunder.

                    (ii) Swing Line Loans shall bear interest at a per annum rate equal to the rate of interest
borne by Base Rate Loans. Interest payable on Swing Line Loans is solely for the account of Swing
Line Lender, subject to the participation rights of each Revolving Lender that has fully funded its
participation interest in such Swing Line Loans pursuant to §2.1(c)(v). All accrued and unpaid
interest on Swing Line Loans shall be payable by Borrower on the dates and in the manner provided
in §3 with respect to interest on Base Rate Loans (except as Swing Line Lender and Borrower may
otherwise agree in writing in connection with any particular Swing Line Loan).

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                    (iii) Each Swing Line Loan shall be in the minimum amount of $1,000,000 and integral multiples
of $100,000 or such other minimum amounts agreed to by Swing Line Lender and Borrower from time to
time. Any voluntary prepayment of a Swing Line Loan must be in integral multiples of $100,000 or
the aggregate principal amount of all outstanding Swing Line Loans (or such other minimum amounts
upon which Swing Line Lender and Borrower may agree in writing) and in connection with any such
prepayment, Borrower must give Swing Line Lender prior written notice thereof no later than 10:00
a.m. (Cleveland time) on the date of such prepayment.

                    (iv) Borrower agrees to repay each Swing Line Loan within five (5) days after the date such
Swing Line Loan was made; provided, that the proceeds of a Swing Line Loan may not be used to repay
a Swing Line Loan. Notwithstanding the foregoing, Borrower shall repay the entire outstanding
principal amount of, and all accrued but unpaid interest on, the Swing Line Loans on the Revolving
Credit Maturity Date (or such earlier date as Swing Line Lender and Borrower may agree in writing).
In lieu of demanding repayment of any outstanding Swing Line Loan from Borrower, Swing Line Lender
may, on behalf of Borrower (which hereby irrevocably directs Swing Line Lender to act on its behalf
for such purpose), request a borrowing of Base Rate Loans from the Revolving Lenders in an amount
equal to the principal balance of such Swing Line Loan, provided that the proposed advance of a
Base Rate Loan meets all other requirements for such Advance in this Loan Agreement. The amount
limitations of §2.6(a) shall not apply to any borrowing of Base Rate Loans made pursuant to this
subsection. Swing Line Lender shall give notice to Agent of any such borrowing of Base Rate Loans
not later than 12:00 noon (Cleveland time) on the proposed date of such borrowing and Agent shall
give prompt notice of such borrowing to the Revolving Lenders. No later than 2:00 p.m. (Cleveland
time) on such date, each Revolving Lender will make available to Agent at the Agent’s Head Office
for the account of Swing Line Lender, in immediately available funds, the proceeds of the Base Rate
Loan to be made by such Revolving Lender and, to the extent of such Base Rate Loan, such Revolving
Lender’s participation in the Swing Line Loan so repaid shall be deemed to be funded by such Base
Rate Loan. Agent shall pay the proceeds of such Base Rate Loans to Swing Line Lender, which shall
apply such proceeds to repay such Swing Line Loan.

                    (v) At the time each Swing Line Loan is made, each Revolving Lender shall automatically (and
without any further notice or action) be deemed to have purchased from Swing Line Lender, without
recourse or warranty, an undivided interest and participation to the extent of such Lender’s
Revolving Commitment Percentage in such Swing Line Loan. If the Revolving Lenders are prohibited
from making Revolving Loans required to be made under this subsection for any reason, including
without limitation, the occurrence of any Default or Event of Default described in §12.1.(h) or
§12.1.(i), upon notice from Agent or Swing Line Lender, each Revolving Lender severally agrees to
pay to Agent for the account of Swing Line Lender in respect of such participation the amount of
such Lender’s Revolving Commitment Percentage of each outstanding Swing Line Loan. If such amount
is not in fact made available to Agent by any Revolving Lender, Swing Line Lender shall be entitled
to recover such amount on demand from such Revolving Lender, together with accrued interest thereon
for each day from the date of demand thereof, at the Federal Funds Effective Rate. If such
Revolving Lender does not pay such amount forthwith upon demand therefor by Agent or Swing Line
Lender, and until such time as such Revolving Lender makes the required payment, Swing Line Lender
shall be deemed to continue to have outstanding Swing Line Loans in the amount of such unpaid
participation

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obligation for all purposes of the Loan Documents (other than those provisions requiring the
other Revolving Lenders to purchase a participation therein). Further, such Revolving Lender shall
be deemed to have assigned any and all payments made of principal and interest on its Revolving
Loans, and any other amounts due such Revolving Lender hereunder, to Swing Line Lender to fund
Swing Line Loans in the amount of the participation in Swing Line Loans that such Revolving Lender
failed to purchase pursuant to this Section until such amount has been purchased (as a result of
such assignment or otherwise).

                    (vi) A Revolving Lender’s obligation to make payments in respect of a participation in a Swing
Line Loan shall be absolute and unconditional and shall not be affected by any circumstance
whatsoever, including without limitation, (i) any claim of setoff, counterclaim, recoupment,
defense or other right which such Revolving Lender or any other Person may have or claim against
Agent, Swing Line Lender or any other Person whatsoever, (ii) the occurrence or continuation of a
Default or Event of Default (including without limitation, any of the Defaults or Events of Default
described in §12.1.(h) or §12.1.(i)) or the termination of any Lender’s Revolving Commitment, (iii)
the existence (or alleged existence) of an event or condition which has had or could have a
Material Adverse Effect, (iv) any breach of any Loan Document by Agent, any Lender or any Loan
Party or (v) any other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.

          §2.2 Notes.

     If requested by a Lender, the Revolving Loans of such Lender shall be evidenced by separate
revolving promissory notes of Borrower in favor of the Revolving Lenders in substantially the form
of Exhibit A-1 (“Revolving Loan Notes”), the Term Loans of such Lender shall be
evidenced by separate term promissory notes of Borrower in favor of the Term Lenders in
substantially the form of Exhibit A-2 hereto (“Term Loan Notes”), and the Swing
Line Loans of such Lender shall be evidenced by the Swing Line Note in substantially the form of
Exhibit A-3 hereto (“Swing Line Note”), each initially dated as of even date with
this Agreement and completed with appropriate insertions (collectively, the Revolving Loan Notes,
the Term Loan Notes, the Swing Line Note, any substitute or replacement notes therefor and any new
Revolving Loan Notes or Term Loan Notes issued in connection with the increase of the Revolving
Commitment or the Term Commitment, or both, pursuant to §2.9 of this Agreement, the
“Notes”). A Revolving Loan Note shall be payable to each Revolving Lender in the principal
face amount equal to such Lender’s Revolving Commitment, or, if less, the outstanding amount of all
Revolving Loans made by such Lender, plus interest accrued thereon, as set forth below. A Term
Loan Note shall be payable to each Lender in the principal face amount equal to such Lender’s Term
Commitment, or, if less, the outstanding amount of all Term Loans made by such Lender, plus
interest accrued thereon, as set forth below. The Swing Line Note shall be payable to the Swing
Line Lender in the principal face amount equal to the Swing Line Commitment, or, if less, the
Outstanding amount of all Swing Line Loans made by Swing Line Lender, plus interest accrued
thereon, as set forth in §2.1(c)(ii). Each such Note shall be issued by Borrower to the applicable
Lender and shall be duly executed and delivered by an authorized officer of Borrower. Borrower
irrevocably authorizes Agent to make or cause to be made, at or about the time of the Drawdown Date
of any Loan or the time of receipt of any payment of principal thereof, an appropriate notation on
Agent’s Record reflecting the making of such Loan or the receipt of such payment. The Outstanding
amount of the Loans set forth on Agent’s Record shall

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be prima facie evidence of the principal amount thereof owing and unpaid to each Lender, but
the failure to record, or any error in so recording, any such amount on Agent’s Record shall not
limit or otherwise affect the obligations of Borrower, hereunder or under any Note to make payments
of principal of or interest on any Note when due.

          §2.3 Interest on Loans.

               (a) Each LIBOR Rate Loan shall bear interest for the period commencing with the Drawdown Date
thereof and ending on the last day of the Interest Period with respect thereto or the date on which
such LIBOR Rate Loan is converted to a Base Rate Loan at a rate per annum equal to the sum of (A)
the LIBOR Rate, subject to the Interest Rate Floor, plus (B) the LIBOR Rate Spread; and

               (b) Each Base Rate Loan shall bear interest for the period commencing with the Drawdown Date
thereof and ending on the date on which such Base Rate Loan is repaid or converted to a LIBOR Rate
Loan at a rate per annum equal to the Base Rate.

               (c) Borrower promises to pay interest on the Loans in arrears on each Interest Payment Date
with respect thereto.

               (d) Base Rate Loans and LIBOR Rate Loans may be converted to Loans of the other Type as
provided in §4.1.

          §2.4 Unused Facility Fee.

     Borrower agrees to pay to Agent for the account of the Revolving Lenders in accordance with
their respective Revolving Commitment Percentages an unused facility fee (the “Facility
Fee”) calculated at the rate of forty-five one-hundredths of one percent (0.45%) per annum on
the average daily amount by which the aggregate Revolving Commitments from time to time exceed the
sum of the Outstanding Revolving Loans, the Outstanding Swing Line Loans and the Outstanding
Letters of Credit during each fiscal quarter or portion thereof commencing on the Effective Date
and ending on the Revolving Credit Maturity Date. The Facility Fee shall be payable quarterly in
arrears on the first day of each fiscal quarter of Borrower for the immediately preceding fiscal
quarter, with a final payment due and payable on the Revolving Credit Maturity Date. Any payment
due under this Section shall be prorated for any partial fiscal quarter. The Facility Fee shall be
fully earned when due and non-refundable when paid.

          §2.5 Reduction and Termination of Revolving Commitment.

     Borrower shall have the right at any time and from time to time upon five (5) Business Days’
prior written notice to Agent to reduce by $1,000,000 or an integral multiple of $1,000,000 in
excess thereof (provided that in no event shall the Revolving Commitments be reduced in such manner
to an amount less than $75,000,000 unless all Obligations are being repaid or prepaid and this
Agreement is terminated) or to terminate entirely the unborrowed portion of the Revolving
Commitments, whereupon the Revolving Commitments of Revolving Lenders shall be reduced pro rata in
accordance with their respective Revolving Commitment Percentages of the amount specified in such
notice or, as the case may be, terminated, any such termination or reduction to be without penalty
except as otherwise set forth in §4.8; provided, however, that no such

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termination or reduction shall be permitted if, after giving effect thereto, the sum of
Outstanding Revolving Loans, Outstanding Swing Line Loans and Outstanding Letters of Credit would
exceed the Revolving Commitments of all Revolving Lenders as so terminated or reduced. Promptly
after receiving any notice from Borrower delivered pursuant to this §2.5, Agent will notify Lenders
of the substance thereof. Upon the effective date of any such reduction or termination, Borrower
shall pay to Agent for the respective accounts of Lenders the full amount of any facility fee under
§2.4 then accrued on the amount of the reduction. No reduction or termination of the Commitment
may be reinstated.

          §2.6 Requests for Loans.

               (a) Borrower shall give to Agent written notice in the form of Exhibit D-1 hereto (or
telephonic notice confirmed in writing in the form of Exhibit D-1 hereto) of each Loan
(other than a Swing Line Loan) requested hereunder (a “Loan Request”) by 12:00 noon
(Cleveland time) on the Business Day prior to the proposed Drawdown Date with respect to Base Rate
Loans and three (3) Business Days prior to the proposed Drawdown Date with respect to LIBOR Rate
Loans. Each such notice shall specify with respect to the requested Loan the proposed principal
amount of such Loan, the Type of Loan, the initial Interest Period (if applicable) for such Loan
and the Drawdown Date. Each such notice shall also contain a statement that the conditions to
borrowing set forth in §11 hereof have been satisfied. Promptly upon receipt of any such notice,
Agent shall notify each of Lenders thereof. Each such Loan Request shall be irrevocable and
binding on Borrower and shall obligate Borrower to accept the Loan requested from Lenders on the
proposed Drawdown Date. Subject to §2.1(c)(iv), each Loan Request shall be (a) for a Base Rate
Loan in a minimum aggregate amount of $1,000,000 or an integral multiple of $100,000 in excess
thereof; or (b) for a LIBOR Rate Loan in a minimum aggregate amount of $2,000,000 or an integral
multiple of $100,000 in excess thereof; provided, however, that there shall be no
more than eight (8) LIBOR Rate Loans outstanding at any one time.

               (b) Borrower shall give to Agent and Swing Line Lender written notice in the form of
Exhibit D-2 hereto (or telephonic notice confirmed in writing in the form of Exhibit
D-2 hereto) of each Swing Line Loan requested hereunder (a “Request for Swing Line
Loan”) by 1:00 p.m. (Cleveland time) on the Business Day of the proposed borrowing of a Swing
Line Loan. On the date of the requested Swing Line Loan and subject to satisfaction of the
applicable conditions set forth in §11 for all borrowings, Swing Line Lender will make the proceeds
of such Swing Line Loan available to Borrower in Dollars, in immediately available funds, at the
account specified by Borrower in its Request for Swing Line Loan not later than 3:00 p.m.
(Cleveland time) on such date. Each such Request for Swing Line Loan shall also contain a
statement that the conditions to borrowing set forth in §11 hereof have been satisfied.

	 

	          §2.7 Funds for Loans.

               (a) Not later than 2:00 p.m. (Cleveland time) on the proposed Drawdown Date of any Loans other
than Swing Line Loans, each of Lenders will make available to Agent, at Agent’s Office, in
immediately available funds, the amount of such Lender’s Commitment Percentage of the amount of the
requested Loans which may be disbursed pursuant to §2.1. Upon receipt from each Lender of such
amount, and upon receipt of the documents required by §10 (in

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the case of Loans to be made on the Closing Date only) and §11 and the satisfaction of the
other conditions set forth therein, to the extent applicable, Agent will make available to Borrower
the aggregate amount of such Loans made available to Agent by the Lenders by crediting such amount
to the account of Borrower maintained at Agent’s Head Office. The failure or refusal of any Lender
to make available to Agent at the aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the requested Loans shall not relieve any other Lender from its several
obligation hereunder to make available to Agent the amount of such other Lender’s Commitment
Percentage of any requested Loans, including any additional Loans that may be requested subject to
the terms and conditions hereof to provide funds to replace those not advanced by the Lender so
failing or refusing. In the event of any such failure or refusal, the Lenders not so failing or
refusing shall be entitled to a priority secured position as against the Lender or Lenders so
failing or refusing to make available to Borrower the amount of its or their Commitment Percentage
for such Loans as provided in §12.4.

               (b) Unless Agent shall have been notified by any Lender prior to the applicable Drawdown Date
that such Lender will not make available to Agent such Lender’s Commitment Percentage of a proposed
Loan, Agent may in its discretion assume that such Lender has made such Loan available to Agent in
accordance with the provisions of this Agreement and Agent may, if it chooses, in reliance upon
such assumption make such Loan available to Borrower, and such Lender shall be liable to Agent for
the amount of such advance. If such Lender does not pay such corresponding amount upon Agent’s
demand therefor, Agent will promptly notify Borrower, and Borrower shall promptly pay such
corresponding amount to Agent. Agent shall also be entitled to recover from the Lender or
Borrower, as the case may be, interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by Agent to Borrower to the date such
corresponding amount is recovered by Agent at a per annum rate equal to (i) from Borrower at the
applicable rate for such Loan or (ii) from a Lender at the Federal Funds Effective Rate.

          §2.8 Use of Proceeds.

     Borrower will use the proceeds of the Loans solely (i) to pay closing costs and expenses in
connection with this Agreement and the other Loan Documents; (ii) to refinance existing
Indebtedness under the Original Credit Agreement; (iii) to fund Borrower’s working capital and
general corporate needs which include, without limitation, the construction and sale of Lots, the
acquisition and development of real estate and the making of other Investments and the making of
Distributions, in each case as permitted by this Agreement; and (iv) for such other purposes as may
be approved in writing from time to time by the Required Lenders.

          §2.9 Increase in Commitments.

     At any time prior to January 31, 2013, Agent may, at the request of Borrower, increase, from
time to time, but not more than four (4) times in the aggregate, the total Revolving Commitments or
the total Term Commitments, or both, by (i) admitting additional Lenders hereunder (each a
“Subsequent Lender”), and/or (ii) increasing the Revolving Commitment of any Revolving
Lender and/or the Term Commitment of any Term Lender, as the case may be (each an “Increasing
Lender”), subject to the following conditions:

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               (a) each Subsequent Lender shall meet the conditions for assignee under §18.1;

               (b) if requested by the applicable Lender, Borrower executes new Revolving Loan Notes or Term
Loan Notes, or both, as applicable, payable to the order of each Subsequent Lender, or a new or
replacement Revolving Loan Note or Term Loan Note (or both, as applicable) payable to the order of
each Increasing Lender;

               (c) each Subsequent Lender executes and delivers to Agent a signature page to this Agreement
evidencing its agreement to be bound as a Lender hereunder and each Increasing Lender executes and
delivers to Agent an acknowledgement of its increased Revolving Commitment and/or Term Commitment;

               (d) Borrower and Agent shall have executed modifications of the Security Documents and other
Loan Documents to reflect the increase in the Revolving Commitments or the Term Commitments (or
both, as applicable) and Borrower shall have paid to Agent any and all documentary stamp tax,
non-recurring intangible tax or other taxes imposed in connection with the recording of such
modifications of the Security Documents or increase in (i) the Revolving Loan amount or Revolving
Commitment (whichever is the basis for computing such tax), or (ii) the Term Loan amount or Term
Commitment (whichever is the basis for computing such tax), or (iii) both (i) and (ii), if
applicable;

               (e) the allocation of the increased Commitments by Borrower as between the Revolving
Commitments and the Term Commitments shall be subject to Agent’s consent (not to be unreasonably
withheld or delayed);

               (f) after giving effect to the admission of any Subsequent Lender or the increase in the
Revolving Commitment or the Term Commitment (or both, as the case may be) of any Increasing Lender,
the sum of all Revolving Commitments and all Term Commitments and (without duplication) Outstanding
Term Loans does not exceed $450,000,000;

               (g) each increase in the Revolving Commitments or the Term Commitments (as applicable) shall
be in the amount of at least $10,000,000, or a greater integral multiple of $5,000,000;

               (h) no increase in the Revolving Commitments or the Term Commitments (or both, as applicable)
of any existing Lender shall be effective without the written consent of such Lender;

               (i) all of the representations and warranties of Borrower in the Loan Documents shall be true
and correct in all material respects as of the effective date of the increase in the total
Commitment (or if such representations and warranties by their terms relate solely to an earlier
date, then as of such earlier date);

               (j) no Default or Event of Default exists or would result therefrom;

               (k) no Lender, including, but not limited to KeyBank, shall be an Increasing Lender without
the written consent of such Lender; and

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               (l) Borrower shall have executed such other modifications and documents and made such other
deliveries as Agent may reasonably require to evidence and effectuate such new or increased
Commitments and shall pay or reimburse Agent and Agent’s Special Counsel for all reasonable fees
(including any fees specified in the Agreement Regarding Fees), expenses and costs in connection
with the foregoing and Borrower shall also pay such Loan fees and placement fees, if any, as may be
agreed for such increase in the Revolving Commitments or the Term Commitments (or both, as
applicable).

After adding the Revolving Commitment or the Term Commitment (or both, as applicable) of any
Increasing Lender or Subsequent Lender, Agent shall promptly provide each Lender and Borrower with
a new Schedule 1.1 to this Agreement (and each Lender acknowledges that its Commitment
Percentage under Schedule 1.1 and allocated portion of the Outstanding Revolving Loans,
Swing Line Loans and Letters of Credit on the one hand, or the Outstanding Term Loans on the other
(or both, as applicable), will change in accordance with its pro rata share of the increased
Revolving Commitments or Term Commitments (or both, as applicable). Unless and until the total
Revolving Commitments and/or Term Commitments have been increased in accordance with this §2.9,
Borrower shall not be permitted any disbursement beyond the amount of the Commitments in effect
immediately prior to such proposed increase.

          §2.10 Letters of Credit.

               (a) Issuance of Letters of Credit. Subject to the terms and conditions set forth in
this Agreement, at any time and from time to time from the Closing Date through the day that is
thirty (30) days prior to the Revolving Credit Maturity Date, Agent shall issue such Letters of
Credit as Borrower may request upon the delivery of a Letter of Credit Request to Agent,
provided that (i) no Default or Event of Default shall have occurred and be continuing,
(ii) upon issuance of such Letter of Credit, the Outstanding Letters of Credit shall not exceed
$100,000,000, (iii) upon the issuance of such Letter of Credit, the amount of all Outstanding
Letters of Credit, Swing Line Loans and Revolving Loans shall not exceed the aggregate Revolving
Commitments of all Revolving Lenders, (iv) the conditions set forth in §10 and §11, as applicable,
shall have been satisfied, (v) upon the issuance of such Letter of Credit, the amount of all
Outstanding Letters of Credit and Outstanding Loans shall not result in a violation of the covenant
set forth in §9.2(b), (vi) in no event shall any amount drawn under a Letter of Credit be available
for reinstatement or a subsequent drawing under such Letter of Credit, and (vii) the term of any
Letter of Credit shall not exceed the Revolving Credit Maturity Date. The foregoing requirements
shall not limit the ability of Borrower to obtain Letters of Credit in face amounts that are not
rounded to the nearest $1,000 or other amount. Each Letter of Credit shall be issued pursuant to a
Reimbursement Agreement; provided that to the extent any of the terms of the Reimbursement
Agreement are contrary to the terms of this Agreement, the terms of this Agreement shall control.
Each Revolving Lender acknowledges and agrees that, if and to the extent Agent agrees to reimburse
or otherwise indemnify the issuer of any Prior Letter of Credit for draws thereunder or other
obligations of a Loan Party arising in connection therewith, such Revolving Lender shall be deemed
to have purchased a participation in such reimbursement or indemnification obligation of Agent in
an amount equal to its Revolving Commitment Percentage of the amount of each such Prior Letter of
Credit (if any). The Outstanding amount under any Letter of Credit shall reduce on a dollar for
dollar basis the amount available to be drawn under the Revolving Commitments as a Revolving Loan.

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               (b) Letter of Credit Requests. Each Letter of Credit Request shall be submitted by
Borrower to Agent at least five (5) Business Days prior to the date upon which the requested Letter
of Credit is to be issued. Each Letter of Credit Request shall be executed by an authorized
officer of Borrower. Agent shall be entitled to conclusively rely on such Person’s authority to
request a Letter of Credit on behalf of Borrower. Agent shall have no duty to verify the
authenticity of any signature appearing on a Letter of Credit Request. Each such Letter of Credit
Request shall contain (i) a statement as to whether such Letter of Credit is a Standby Letter of
Credit or a Trade Letter of Credit, and (ii) a certification that the conditions to the issuance of
such Letter of Credit set forth in §11 hereof have been satisfied. Borrower shall further deliver
to Agent such additional applications and documents as Agent reasonably may require, in conformity
with the then standard practices of its letter of credit department, in connection with the
issuance of such Letter of Credit. Following the receipt of a Letter of Credit Request, Agent
shall promptly notify each of the Revolving Lenders of the Letter of Credit Request. Borrower
assumes all risks with respect to the use of the Letters of Credit, under §2.10(i).

               (c) Agent Approval. Subject to the conditions set forth in this Agreement, Agent if
it reasonably approves of the Letter of Credit Request, shall issue the Letter of Credit on or
before five (5) Business Days following receipt of the documents required in §2.10(b), or at such
later date as Borrower may direct in writing. Each Letter of Credit shall be in form and substance
satisfactory to Agent in its sole discretion.

               (d) Lender Participation. Upon the issuance of a Letter of Credit, each Revolving
Lender shall be deemed to have purchased a participation therein from Agent in an amount equal to
its Revolving Commitment Percentage of the amount of such Letter of Credit.

               (e) Amounts Drawn Considered Loans. If and to the extent that any amounts are drawn
upon any Letter of Credit, the amounts so drawn shall, unless reimbursed by Borrower on the date
such draw is honored by Agent, from the date of payment thereof by Agent, be considered Revolving
Loans for all purposes hereunder, bearing interest as provided in §2.3. All such Revolving Loans
shall initially be Base Rate Loans. Revolving Lenders shall be required to make such Revolving
Loans regardless of whether all of the conditions to disbursement set forth in §11 have been
satisfied.

               (f) Bankruptcy. If after the issuance of a Letter of Credit by Agent, but prior to
the funding of any portion thereof by Agent or a Lender, one of the events described in §12.1(g),
(h) or (i) shall have occurred, each Lender will immediately transfer to Agent in immediately
available funds an amount equal to such Lender’s Revolving Commitment Percentage of the Outstanding
Letters of Credit, such amount to be held by Agent as security for the payment of the Letters of
Credit.

               (g) Repayment to Lenders. Whenever at any time after Agent has received from any
Revolving Lender such Revolving Lender’s payment of funds under a Letter of Credit and thereafter
Agent receives any payment on account thereof, then Agent will distribute to such Revolving Lender
its participating interest in such amount (appropriately adjusted in the case of interest payments
to reflect the period of time during which such Revolving Lender’s participating interest was
outstanding and funded); provided, however, that in the event that such

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payment received by Agent is required to be returned, such Revolving Lender will return to
Agent any portion thereof previously distributed by Agent to it.

               (h) Funds for Draws. Upon the receipt by Agent of any draw or other presentation for
payment of a Letter of Credit and the payment of any amount under a Letter of Credit, Agent shall,
without notice to or the consent of Borrower, direct Revolving Lenders to fund to Agent in
accordance with §2.7 on or before 2:00 p.m. (Cleveland time) on the next Business Day their
respective Revolving Commitment Percentages of the amount so paid by Agent. The proceeds of such
funding shall be paid to Agent to reimburse Agent for the payment made by it under the Letter of
Credit. The provisions of §2.7 shall apply to any Revolving Lender or Lenders failing or refusing
to fund its Revolving Commitment Percentage of any such draw.

               (i) Risks. The Obligations of the Loan Parties to Agent and Revolving Lenders under
this Agreement in connection with the issuance of a Letter of Credit shall be absolute,
unconditional and irrevocable, and shall be paid and performed strictly in accordance with the
terms of this Agreement, notwithstanding any of the following circumstances: (i) any improper use
which may be made of any Letter of Credit or any improper acts or omissions of any beneficiary or
transferee of any Letter of Credit in connection therewith; (ii) the existence of any claim,
set-off, defense or any right which any Loan Party may have at any time against any beneficiary or
any transferee of any Letter of Credit (or persons or entities for whom any such beneficiary or any
such transferee may be acting) or Revolving Lenders (other than the defense of payment to Revolving
Lenders in accordance with the terms of this Agreement) or any other person, whether in connection
with any Letter of Credit, this Agreement, any other Loan Document, or any unrelated transaction;
(iii) any statement or any other documents presented to Agent under any Letter of Credit proving to
be insufficient, forged, fraudulent or invalid in any respect or any statement therein being untrue
or inaccurate in any respect whatsoever; (iv) any breach of any agreement between any Loan Party
and any beneficiary or transferee of any Letter of Credit; (v) any irregularity in the transaction
with respect to which any Letter of Credit is issued, including any fraud by the beneficiary or any
transferee of such Letter of Credit; and (vi) payment by Agent under any Letter of Credit against
presentation of a sight draft or a certificate which does not comply with the terms of such Letter
of Credit in any non-material respect; provided, that Borrower shall not be precluded from
asserting any claim for damages suffered by any Loan Party to the extent caused by the bad faith,
willful misconduct or gross negligence of Agent in determining whether a request presented under
any Letter of Credit issued by it complied on its face with the terms of such Letter of Credit.

               (j) Non-Renewal; Cash Collateral. Agent may, at its option, during the existence of a
Default or Event of Default, elect not to renew any Letter of Credit by giving written notice of
non-renewal to Borrower at least thirty (30) days prior to the expiration date of such Letter of
Credit. Agent may, in its discretion at any time and from time to time while there exists any
Event of Default, make a Revolving Loan in an amount equal to all or any portion of the Outstanding
Letters of Credit hereunder (including fee amounts due), and hold the proceeds thereof in an
interest bearing account as collateral security for such Obligations (and such account shall be
subject to Agent’s right to setoff against such amounts under §13 hereof), provided that
Agent shall promptly notify Borrower of such action and the application of the proceeds thereof and
further provided that all interest earned on proceeds so held shall be applied as
and when

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available to reduce any Obligations outstanding hereunder or, if there are no Obligations
outstanding, such interest shall be paid over to Borrower.

               (k) Subsequent Issuance. The issuance of any supplement, modification, amendment,
renewal or extension to or of any Letter of Credit shall be treated in all respects the same as the
issuance of a new Letter of Credit.

               (l) Extended Letters of Credit; Cash Collateral. Notwithstanding the contrary
provisions of §2.10(a), Letters of Credit may be issued with expiry dates later than the scheduled
Revolving Credit Maturity Date upon the terms and conditions set forth in this §2.10(l) (any such
Letter of Credit, an “Extended Letter of Credit”). No Extended Letter of Credit shall have
an expiry date later than one (1) year after the scheduled Revolving Credit Maturity Date. From
the date that is five (5) days prior to the scheduled Revolving Credit Maturity Date and at all
times thereafter when any Extended Letters of Credit are Outstanding, Borrower shall maintain cash
collateral in a special purpose interest bearing collateral account in the name of Borrower, but
subject to the sole dominion and control of Agent, in an amount not less than one hundred five
percent (105%) of the aggregate Extended Letters of Credit then Outstanding.

§3. REPAYMENT AND PREPAYMENT OF THE LOANS

          §3.1 Stated Maturity; Extension Option.

               (a) Maturity Date. Borrower promises to pay on the applicable Maturity Date, and
there shall become absolutely due and payable on such Maturity Date, the entire Outstanding
principal amount of all Loans subject to such Maturity Date outstanding on such date, together with
any and all accrued and unpaid interest thereon.

               (b) Extension Option. At any time after the first anniversary of the Closing Date,
the Borrower shall have the option to extend the Revolving Credit Maturity Date for a one (1) year
period (the “Extension Period”) by giving Agent written Notice of such election to extend
not more than 45 days prior to the proposed date that such extension is to become effective (the
“Extension Effective Date”), which date of effectiveness shall be not later than the
original Revolving Credit Maturity Date, provided that (i) no Default or Event of Default exists
either on the date such notice is given or on the Extension Effective Date, (ii) each of the
representations and warranties made by Borrower or the other Loan Parties in this Agreement or the
other Loan Documents or in any document or instrument delivered pursuant to or in connection with
this Agreement shall be true in all material respects as of the date they were made, as of the date
notice of extension is given and as of the Extension Effective Date (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), (iii) the
Loan Parties 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 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 (iv)

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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. Pursuant to §9.1(c), the maximum Total Leverage Ratio shall be reduced to thirty
percent (30%) as of the last day of any fiscal quarter of Borrower during the Extension Period.

          §3.2 Mandatory Prepayments.

               (a) Loans Exceed Commitments, Borrowing Base or Commitment to Value Ratio. If at any
time (i) the sum of the aggregate Outstanding principal amount of the Revolving Loans (including
Swing Line Loans) plus the amount of Outstanding Letters of Credit exceeds the aggregate Revolving
Commitments, (ii) the aggregate Outstanding principal amount of the Term Loans exceeds the
aggregate Term Commitments required under §3.2(a) or §3.2(b), (iii) the aggregate Outstanding
principal balance of the Loans (including Swing Line Loans), plus the amount of Outstanding Letters
of Credit, plus, unless Borrower shall have elected to make all of the Borrowing Base Assets (other
than the Mineral Business) Mortgaged Properties pursuant to §9.2(b), the aggregate outstanding
principal amount of Permitted Bond Indebtedness, exceeds the Borrowing Base, or (iv) the sum of the
Outstanding principal balance of the Loans (including Swing Line Loans) plus the Outstanding
Letters of Credit exceeds the aggregate Commitments permitted in order to comply with the covenant
set forth in §9.3, then Borrower shall pay within five (5) days of written demand from Agent the
amount of such excess to Agent for the respective accounts of Lenders, as applicable, for
application for the Revolving Loans or Term Loans, as applicable, as provided in §3.4, together
with any additional amounts payable pursuant to §4.8; provided however that until such time as
Borrower has paid such amount to Agent for the respective accounts of the appropriate Lenders
pursuant to the preceding clause, Revolving Lenders shall have no obligation to make additional
funds available to Borrower pursuant to this Agreement. For the avoidance of doubt, the Term
Commitment shall be a reference to the Outstanding principal amount of the Term Loans
notwithstanding that no Term Lender has any remaining commitment to make Term Loans.

               (b) Prepayment from Permitted Bond Indebtedness. The Term Loans shall be subject to
mandatory prepayment within ten (10) days after Borrower’s receipt of the net cash proceeds from
the issuance of Permitted Bond Indebtedness as provided in §8.1(xvi)(c).

               (c) Prepayment Fee relating to Term Loan. Contemporaneously with each prepayment
required under §3.2(a) or §3.2(b), in whole or in part, and from whatever source, of the
Outstanding principal of the Term Loans prior to the date which is eighteen (18) months after the
Closing Date, Borrower shall pay the applicable Prepayment Fee to Agent for the account of Term
Lenders.

          §3.3 Optional Prepayments.

     Borrower shall have the right, at its election, to prepay the outstanding amount of the Loans,
as a whole or in part, at any time without penalty or premium, provided that if any full or partial
prepayment of the outstanding amount of any LIBOR Rate Loans is made on a date that is not the last
day of the Interest Period relating thereto, such payment shall be accompanied by the

41

 

amount payable pursuant to §4.8. Borrower shall give Agent, no later than 10:00 a.m.,
Cleveland time, at least three (3) Business Days prior written notice of any prepayment pursuant to
this §3.3, in each case specifying the proposed date of payment of Loans, the principal amount of
the Term Loans to be prepaid (if any), the principal amount of the Revolving Loans to be prepaid
(if any), and the date on which such prepayment is to be made. Notice of prepayment, once given,
shall be irrevocable, and such amount shall become due and payable on the specified prepayment
date. Contemporaneously with each optional prepayment, in whole or in part, of the Outstanding
principal of the Term Loans prior to the date which is eighteen (18) months after the Closing Date,
Borrower shall pay the applicable Prepayment Fee to Agent for the account of Term Lenders.

          §3.4 Partial Prepayments.

     Each partial prepayment of the Loans under §3.3 shall be in the minimum amount of $1,000,000
or an integral multiple of $100,000 in excess thereof (unless the applicable Loan is being prepaid
in full or unless the Loan is being prepaid in part pursuant to §5.3), and each partial prepayment
of the Loans under §3.2 and §3.3 shall be accompanied by the payment of accrued interest on the
principal prepaid to the date of payment and, after payment of such interest, shall be applied, in
the absence of instruction by Borrower, first to the principal of Revolving Loans or Term Loans (as
applicable) that are Base Rate Loans, and then to the Revolving Loans or Term Loans (as applicable)
that are LIBOR Rate Loans; provided, however, that no such partial prepayment shall
reduce the aggregate principal amount of the Loans to an amount that is less than $10,000,000.

          §3.5 Effect of Prepayments.

     Amounts of the Revolving Loans and Swing Line Loans prepaid prior to the Revolving Credit
Maturity Date may be reborrowed as and to the extent provided in §2. Except as otherwise expressly
provided herein, all payments shall be applied, (a) first to any fees or other charges then due and
payable hereunder or under the other Loan Documents (other than amounts payable under any Hedge
Agreements), (b) next to any Default Rate interest accrued and outstanding, (c) next to any
interest accrued and outstanding on Swing Line Loans, (d) next to any interest accrued and
outstanding on Base Rate Loans, (e) next to any interest accrued, outstanding, and payable on any
LIBOR Rate Loans, (f) next to any Outstanding principal on any Swing Line Loans, (g) next to any
Outstanding principal on any Revolving Loans that are Base Rate Loans, (h) next to any Outstanding
principal on any Revolving Loans that are LIBOR Rate Loans, (i) next to any Outstanding principal
on any Term Loans that are Base Rate Loans, and (j) next to any Outstanding principal on any Term
Loans that are LIBOR Rate Loans. Amounts applied pursuant to clauses (d) and (e) of this Section
shall be applied ratably and without preference or priority as between Revolving Loans and Term
Loans.

§4. CERTAIN GENERAL PROVISIONS

          §4.1 Conversion Options; Number of LIBOR Contracts.

               (a) Borrower may elect from time to time to convert any of the outstanding Loans to a Loan of
another Type and such Loan shall thereafter bear interest as a Base Rate Loan or a LIBOR Rate Loan,
as applicable; provided that (i) with respect to any such conversion of a

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LIBOR Rate Loan to a Base Rate Loan, Borrower shall give Agent at least three (3) Business
Days’ prior written notice of such election, and such conversion shall only be made on the last day
of the Interest Period with respect to such LIBOR Rate Loan; (ii) with respect to any such
conversion of a Base Rate Loan to a LIBOR Rate Loan, Borrower shall give Agent at least three (3)
LIBOR Business Days’ prior written notice of such election and the Interest Period requested for
such Loan; the principal amount of the Loan so converted shall be in a minimum aggregate amount of
$2,000,000 or an integral multiple of $100,000 in excess thereof; and (iii) no Loan may be
converted into a LIBOR Rate Loan when any Event of Default has occurred and is continuing. All or
any part of the outstanding Loans of any Type may be converted as provided herein, provided
that no partial conversion shall result in a Base Rate Loan in an aggregate principal amount of
less than $1,000,000 or a LIBOR Rate Loan in an aggregate principal amount of less than $2,000,000
and that the aggregate principal amount of each Loan shall be an integral multiple of $100,000. On
the date on which such conversion is being made, each Lender shall take, to the extent it deems it
necessary to do so, such action as is necessary to transfer its Commitment Percentage of such Loans
to its Domestic Lending Office or its LIBOR Lending Office, as the case may be. Each Conversion
Request relating to the conversion of a Base Rate Loan to a LIBOR Rate Loan shall be irrevocable by
Borrower.

               (b) Any Loan may be continued as such Type upon the expiration of an Interest Period with
respect thereto by compliance by Borrower with the terms of §4.1; provided that no LIBOR
Rate Loan may be continued as such when any Event of Default has occurred and is continuing, but
shall be automatically converted to a Base Rate Loan on the last day of the Interest Period
relating thereto ending during the continuance of any Default or Event of Default.

               (c) In the event that Borrower does not notify Agent of its election hereunder with respect to
any Loan, such Loan shall be automatically converted to a Base Rate Loan at the end of the
applicable Interest Period.

               (d) There shall be no more than eight (8) LIBOR Rate Loans outstanding at any one time.

          §4.2 Certain Fees.

     Borrower agrees to pay to KeyBank certain fees for services rendered or to be rendered in
connection with the Loans as provided in the Agreement Regarding Fees. All such fees shall be
fully earned when due and non-refundable when paid.

          §4.3 Letter of Credit Fees.

     Borrower shall pay to Agent Agent’s customary issuance fee, not to exceed $400.00 per Letter
of Credit, and a Letter of Credit Fee with respect to each Letter of Credit issued under this
Agreement. The Letter of Credit Fee with respect to all Letters of Credit shall be equal to four
percent (4.0%) per annum on the average of the amount of the Letters of Credit Outstanding for any
given month. All Letter of Credit Fees shall be paid monthly in arrears on the first day of each
calendar month. Upon receipt of the Letter of Credit Fee, Agent shall deduct and retain one-eighth
of one percent (0.125%) per annum of the Outstanding Letters of Credit as a fee due to Agent and
shall remit to each Revolving Lender a portion of the remaining Letter of Credit Fee

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equal to each such Revolving Lender’s Commitment Percentage of the remaining Letter of Credit
Fee.

          §4.4 Funds for Payments.

               (a) All payments of principal, interest, facility fees, Letter of Credit Fees, Agent’s fees,
closing fees and any other amounts due hereunder or under any of the other Loan Documents shall be
made to Agent, for the respective accounts of Lenders and Agent, as the case may be, at Agent’s
Office, no later than 1:00 p.m. (Cleveland time) on the day when due, in each case in lawful money
of the United States in immediately available funds.

               (b) Unless otherwise required by law, any and all payments by Borrower to or for the account
of any Lender hereunder or under any other Loan Document shall be made without setoff or
counterclaim and free and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges and withholdings (collectively, “Taxes”) and
all liabilities with respect thereto, excluding: (i) Taxes imposed on or measured by the net
income (including branch profits or similar Taxes) of, and gross receipts, franchise or similar
taxes imposed on, any Lender or Agent by the jurisdiction (or subdivision thereof) under the laws
of which such Lender or Agent is organized or in which its principal executive office is located or
in which its applicable lending office is located or in which it is otherwise doing business, (ii)
in the case of each Lender or Agent, any United States withholding tax imposed on such payments,
but other than in the case of an assignee pursuant to the election by the Borrower under §4.9, only
to the extent that such Lender or Agent is subject to United States withholding tax at the time
such Lender or Agent first becomes a party to this Agreement or changes its applicable lending
office, (iii) any backup withholding tax imposed by the United States of America (or any state or
locality thereof) on a Lender or Agent, (iv) any Taxes imposed as the result of the failure of a
recipient of such payment to comply with §4.4(c) or §18.11, and (v) any Taxes imposed by FATCA (all
such excluded Taxes being hereinafter referred to as “Excluded Taxes”). If the Borrower
shall be required by law to deduct any Indemnified Taxes from or in respect of any sum payable
hereunder or under any other Loan Document to any Lender or Agent, (A) the sum payable shall be
increased as necessary so that after making all such required deductions (including deductions
applicable to additional sums payable under this §4.4(b)) such Lender receives an amount equal to
the sum it would have received had no such deductions for Indemnified Taxes been required, (B)
Borrower shall make such deductions, (C) Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable law and (D) Borrower
shall furnish to Agent, for delivery to such Lender, the original or a certified copy of a receipt
evidencing payment thereof.

               (c) Each Lender organized under the laws of a jurisdiction outside the United States, if
requested in writing by Borrower (but only so long as such Lender remains lawfully able to do so),
shall provide Borrower with such duly executed form(s) or statement(s) which may, from time to
time, be prescribed by law and, which, pursuant to applicable provisions of (i) an income tax
treaty between the United States and the country of residence of such Lender, (ii) the Code, or
(iii) any applicable rules or regulations in effect under (i) or (ii) above, indicates the
withholding status of such Lender; provided that nothing herein (including without limitation the
failure or inability to provide such form or statement) shall relieve Borrower of its obligations
under §4.4(b). In the event that Borrower shall have delivered the certificates or vouchers

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described above for any payments made by Borrower and such Lender receives a refund of any
taxes paid by Borrower pursuant to §4.4(b), such Lender will pay to Borrower the amount of such
refund promptly upon receipt thereof; provided that if at any time thereafter such Lender
is required to return such refund, Borrower shall promptly repay to such Lender the amount of such
refund.

               (d) Each Lender that is organized under the laws of a jurisdiction other than the United
States shall comply with any certification, documentation, information or other reporting necessary
to establish an exemption from withholding under FATCA and shall provide any other documentation
reasonably requested by Borrower or Agent sufficient for Agent and Borrower to comply with their
obligations under FATCA and to determine that such Lender has complied with such applicable
reporting requirements.

               (e) Each Lender and Agent that is a United States person (within the meaning of Section
7701(a)(30) of the Code) shall, upon the request of Borrower, provide a duly executed IRS Form W-9
to Borrower certifying that such Lender is exempt from backup withholding.

          §4.5 Computations.

     All computations of interest on the Loans and of other fees to the extent applicable shall be
based on a 360-day year (or, in the case of interest on Base Rate Loans, a 365/366-day year) and
paid for the actual number of days elapsed. Except as otherwise provided in the definition of the
term “Interest Period” with respect to LIBOR Rate Loans, whenever a payment hereunder or under any
of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such
payment shall be extended to the next succeeding Business Day, and interest shall accrue during
such extension. The outstanding amount of the Loans as reflected on the records of Agent from time
to time shall be considered prima facie evidence of such amount.

          §4.6 Inability to Determine LIBOR Rate.

     In the event that at any time Agent shall determine in the exercise of its good faith business
judgment that adequate and reasonable methods do not exist for ascertaining the LIBOR Rate, Agent
shall forthwith give notice of such determination (which shall be conclusive and binding on
Borrower and Lenders) to Borrower and Lenders. In such event (a) any Loan Request with respect to
LIBOR Rate Loans shall be automatically withdrawn and shall be deemed a request for Base Rate Loans
and (b) each LIBOR Rate Loan will automatically become a Base Rate Loan at the end of the current
Interest Period, and the obligations of Lenders to make LIBOR Rate Loans shall be suspended until
Agent determines that the circumstances giving rise to such suspension no longer exist, whereupon
Agent shall so notify Borrower and Lenders.

          §4.7 Illegality.

     Notwithstanding any other provisions herein, if any present or future law, regulation, treaty
or directive or the interpretation or application thereof shall make it unlawful, or any central
bank or other Governmental Authority having jurisdiction over a Lender or its LIBOR Lending Office
shall assert that it is unlawful, for any Lender to make or maintain LIBOR Rate Loans, such Lender
shall forthwith give notice of such circumstances to Agent and Borrower and thereupon (a) the
commitment of Lenders to make LIBOR Rate Loans or convert Loans of

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another type to LIBOR Rate Loans shall forthwith be suspended and (b) the LIBOR Rate Loans
then outstanding shall be converted automatically to Base Rate Loans.

          §4.8 Additional Interest.

     If any LIBOR Rate Loan or any portion thereof is repaid or is converted to a Base Rate Loan
for any reason on a date which is prior to the last day of the Interest Period applicable to such
LIBOR Rate Loan, or if repayment of the Loans has been accelerated as provided in §12.1, Borrower
will pay to Agent upon demand for the account of Lenders in accordance with their respective
Commitment Percentages, in addition to any amounts of interest otherwise payable hereunder, any
amounts required to compensate Lenders for any losses, costs or expenses (but not loss of profit)
which may reasonably be incurred as a result of such payment or conversion, including, without
limitation, an amount equal to daily interest for the unexpired portion of such Interest Period on
the LIBOR Rate Loan or portion thereof so repaid or converted at a per annum rate equal to the
excess, if any, of (a) the interest rate calculated on the basis of the LIBOR Rate applicable to
such LIBOR Rate Loan (excluding any spread over such LIBOR Rate) minus (b) the yield
obtainable by Agent upon the purchase of debt securities customarily issued by the Treasury of the
United States of America which have a maturity date most closely approximating the last day of such
Interest Period (it being understood that the purchase of such securities shall not be required in
order for such amounts to be payable and that a Lender shall not be obligated or required to have
actually obtained funds at the LIBOR Rate or to have actually reinvested such amount as described
above).

          §4.9 Additional Costs, Etc.

     Subject to §4.4, if any present or future applicable law, or any amendment or modification of
present applicable law, which expression, as used herein, includes statutes, rules and regulations
thereunder and legally binding interpretations thereof by any competent court or by any
governmental or other regulatory body or official with appropriate jurisdiction charged with the
administration or the interpretation thereof and requests, directives, instructions and notices at
any time or from time to time hereafter made upon or otherwise issued to any Lender or Agent by any
central bank or other fiscal, monetary or other authority (whether or not having the force of law),
shall:

               (a) subject any Lender or Agent to any tax, levy, impost, duty, charge, fee, deduction or
withholding of any nature with respect to this Agreement, the other Loan Documents, such Lender’s
Commitment, a Letter of Credit or the Loans (other than Excluded Taxes), or

               (b) materially change the basis of taxation (except for changes in taxes on income or profits)
of payments to any Lender of the principal of or the interest on any Loans or any other amounts
payable to any Lender under this Agreement or the other Loan Documents, or

               (c) impose or increase or render applicable any special deposit, reserve, assessment,
liquidity, capital adequacy or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or Loans or Letters of Credit by, or
commitments of an office of any Lender, or

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               (d) impose on any Lender or Agent any other conditions or requirements with respect to this
Agreement, the other Loan Documents, the Loans, such Lender’s Commitment, a Letter of Credit or any
class of loans or commitments of which any of the Loans or Letters of Credit or such Lender’s
Commitment forms a part, and the result of any of the foregoing is

                    (i) to increase the cost to any Lender of making, funding, issuing, renewing, extending or
maintaining any of the Loans or Letters of Credit or such Lender’s Commitment, or

                    (ii) to reduce the amount of principal, interest or other amount payable to such Lender or
Agent hereunder on account of such Lender’s Commitment or any of the Loans or Letters of Credit, or

                    (iii) to require such Lender or Agent to make any payment or to forego any interest or other
sum payable hereunder, the amount of which payment or foregone interest or other sum is calculated
by reference to the gross amount of any sum receivable or deemed received by such Lender or Agent
from Borrower hereunder;

then, and in each such case, Borrower will, within fifteen (15) days of demand made by such Lender
or (as the case may be) Agent at any time and from time to time and as often as the occasion
therefor may arise, pay to such Lender or Agent such additional amounts as such Lender or Agent
shall determine in good faith to be sufficient to compensate such Lender or Agent for such
additional cost, reduction, payment or foregone interest or other sum. Each Lender and Agent in
determining such amounts may use any reasonable averaging and attribution methods, generally
applied by such Lender or Agent. Notwithstanding the foregoing, Borrower shall have the right, in
lieu of making the payment referred to in this §4.9, to prepay the Loans of the applicable Lender
within fifteen (15) days of such demand and avoid the payment of the amounts otherwise due under
this §4.9 or to cause the applicable Lender to assign its Loans and Commitments in accordance with
§18.8, provided, however, that Borrower shall be required to pay together with such prepayment of
the Loan all other costs, damages and expenses otherwise due under this Agreement as a result of
such prepayment.

          §4.10 Capital Adequacy.

     If after the date hereof any Lender determines that (a) the adoption of or change in any law,
rule, regulation, guideline, directive or request (whether or not having the force of law)
regarding capital requirements for banks or bank holding companies or any change in the
interpretation or application thereof by any Governmental Authority, central bank or comparable
agency charged with the administration thereof, or (b) compliance by such Lender or its parent bank
holding company with any guideline, request or directive of any such entity regarding capital
adequacy or any amendment or change in interpretation of any existing guideline, request or
directive (whether or not having the force of law), has the effect of reducing the return on such
Lender’s or such holding company’s capital as a consequence of such Lender’s commitment to make
Loans hereunder to a level below that which such Lender or holding company could have achieved but
for such adoption, change or compliance (taking into consideration such Lender’s or such holding
company’s then existing policies with respect to capital adequacy and assuming the full utilization
of such entity’s capital) by any amount deemed by such Lender to be material, then such Lender may
notify Borrower thereof. Borrower agrees to pay to such Lender the amount of

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such reduction in the return on capital as and when such reduction is determined, upon
presentation by such Lender of a statement of the amount setting for the Lender’s calculation
thereof. In determining such amount, such Lender may use any reasonable averaging and attribution
methods. Notwithstanding the foregoing, Borrower shall have the right, in lieu of making the
payment referred to in this §4.10, to prepay the Loans of the applicable Lender within fifteen (15)
days of such demand and avoid the payment of the amounts otherwise due under this §4.10 or to cause
the applicable Lender to assign its Loans and Commitments in accordance with §18.8, provided,
however, that Borrower shall be required to pay together with such prepayment of the Loan all other
fees, costs, damages and expenses otherwise due under this Agreement as a result of such
prepayment.

          §4.11 Indemnity by Borrower.

     Borrower agrees to indemnify each Lender and to hold each Lender harmless from and against any
loss, cost or expense that such Lender may sustain or incur as a consequence of (a) default by
Borrower in payment of the principal amount of or any interest on any LIBOR Rate Loans as and when
due and payable, including any such loss or expense arising from interest or fees payable by such
Lender to lenders of funds obtained by it in order to maintain its LIBOR Rate Loans, or (b) default
by Borrower in making a borrowing or conversion after Borrower has given (or is deemed to have
given) a Conversion Request, or (c) default by Borrower in making the payments or performing their
obligations under §§4.8, 4.9, 4.10 or 4.12.

          §4.12 Interest on Overdue Amounts; Late Charge.

     Following the occurrence and during the continuance of any Event of Default, and regardless of
whether or not Lenders shall have accelerated the maturity of the Loans, at the election of the
Required Lenders, all Loans shall bear interest payable on demand at a rate per annum equal to two
percent (2%) above the rate that would otherwise be applicable at such time (the “Default
Rate”), until such amount shall be paid in full (after as well as before judgment), or if such
rate shall exceed the maximum rate permitted by law, then at the maximum rate permitted by law. In
addition, Borrower shall pay Agent, for the account of the applicable Lenders, a late charge equal
to five percent (5%) of any amount of interest and/or principal payable on the Loans or any other
amounts payable hereunder or under the Loan Documents, which is not paid within ten (10) days of
the date when due. Such late charge is and shall be deemed to be a charge to compensate Agent and
Lenders for administrative services and costs incurred in connection with the related delinquent
payment and shall under no circumstances constitute or be deemed to be a charge for the use of
money.

          §4.13 Certificate.

     A certificate setting forth any amounts payable pursuant to §4.8, §4.9, §4.10, §4.11 or §4.12
and a reasonably detailed explanation and calculation of such amounts which are due, submitted by
any Lender or Agent to Borrower, shall be conclusive in the absence of manifest error.

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          §4.14 Limitation on Interest.

     Notwithstanding anything in this Agreement to the contrary, all agreements between Borrower
and Lenders and Agent, whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason of acceleration of the maturity of any
of the Obligations or otherwise, shall the interest contracted for, charged or received by Lenders
exceed the maximum amount permissible under applicable law. If, from any circumstance whatsoever,
interest would otherwise be payable to Lenders in excess of the maximum lawful amount, the interest
payable to Lenders shall be reduced to the maximum amount permitted under applicable law; and if
from any circumstance Lenders shall ever receive anything of value deemed interest by applicable
law in excess of the maximum lawful amount, an amount equal to any excessive interest shall be
applied to the reduction of the principal balance of the Obligations and to the payment of interest
or, if such excessive interest exceeds the unpaid balance of principal of the Obligations, such
excess shall be refunded to Borrower. All interest paid or agreed to be paid to Lenders shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the
full period until payment in full of the principal of the Obligations (including the period of any
renewal or extension thereof) so that the interest thereon for such full period shall not exceed
the maximum amount permitted by applicable law. This section shall control all agreements between
Borrower and Lenders and Agent.

§5. COLLATERAL SECURITY; RELEASES

          §5.1 Collateral.

     The Obligations shall be secured by (i) a perfected first priority lien or security title and
security interest to be held by Agent for the benefit of Lenders in the Mortgaged Properties and
certain personal property of Loan Parties related to the Mortgaged Properties, pursuant to the
terms of the Security Deeds, (ii) a perfected first priority security interest to be held by Agent
for the benefit of Lenders in the Leases pursuant to the Security Deeds and the Assignment of
Leases and Rents, in the Mineral Rights Leases pursuant to the Assignment of Mineral Rights Leases,
and in the Timber Purchase Agreement pursuant to the Collateral Assignment of Timber Purchase
Agreement, (iii) a perfected first priority security interest to be held by Agent for the benefit
of Lenders in the Pledged Deposit Account and all monies, instruments and investments from time to
time held therein, (iv) a perfected first priority pledge of and security interest in all issued
and outstanding Equity Interests held by any Loan Party in another Loan Party or in any Joint
Venture pursuant to the Pledge and Security Agreement, provided that in the event a pledge of or
security interest in such Equity Interests in any Joint Venture pursuant to the Pledge and Security
Agreement is not permitted under the Organizational Documents of the applicable Joint Venture or
pursuant to any other agreement, then such security interest shall be limited to an assignment of
such Loan Party’s rights to any distributions made or to be made by such Joint Venture in favor of
Agent for the benefit of Lenders pursuant to the Assignment of Rights to Joint Venture
Distributions, such Equity Interests or rights shall not be included as Collateral, and (v) such
additional collateral, if any, as the Loan Parties may agree to grant and Agent for the benefit of
Lenders from time to time may accept as security for the Obligations. The Loan Parties agree that
all existing and thereafter acquired Timberland and High Value Timberland shall be included in the
Mortgaged Properties except for Real Estate distributed as part of the TEMCO Investment

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and as otherwise agreed by Agent. All Borrowing Base Assets other than the Mineral Business
shall be included in the Mortgaged Properties if Borrower elects to secure all such Borrowing Base
Assets pursuant to §9.2(b).

          §5.2 Appraisals; Evaluations; Adjusted Value.

               (a) Agent on behalf of Lenders shall require evaluations of the High Value Timberland
performed by MAI appraisers, selected and engaged by Agent, which will be ordered by Agent and
reviewed and approved by Agent from time to time, each of said evaluations to cover a minimum of
seventy-five percent (75%), by acreage, of the High Value Timberland (as selected by Agent) in
order to determine the current High Value Timberland Amount. Such evaluations shall set forth the
specific Appraised Value of the High Value Timberland. On an annual basis, Borrower shall cause
the value of such properties to be re-evaluated. Borrower agrees to pay to Agent on demand all
reasonable out-of-pocket costs of all such evaluations and re-evaluations. Notwithstanding
anything to the contrary contained in this paragraph, however, so long as no Event of Default shall
have occurred and be continuing and regulatory requirements of any Lender generally applicable to
real estate loans of the category made under this Agreement as reasonably interpreted by such
Lender shall not require such evaluations more frequently than annually, Borrower shall not be
required to pay for such evaluations more often than once in any period of twelve (12) consecutive
months.

               (b) Agent on behalf of Lenders shall require annual updates of the evaluation with respect to
the Timberland performed by any third-party consultant selected and engaged by Agent, which will be
ordered by Agent and reviewed and approved by Agent from time to time in order to determine the
current Timberland Value, and Borrower shall pay to Agent on demand all reasonable out-of-pocket
costs of all such evaluation updates; provided, however, that so long as no Event
of Default shall have occurred and be continuing and regulatory requirements of any Lender
generally applicable to real estate loans of the category made under this Agreement as reasonably
interpreted by such Lender shall not require such evaluation updates more frequently than annually,
Borrower shall not be required to pay for such evaluation updates more often than once in any
period of twelve (12) consecutive months.

               (c) Agent on behalf of Lenders shall require “as is” Appraisals of the Raw Entitled Land and
Entitled Land Under Development, in each case performed by MAI appraisers selected and engaged by
Agent, which Appraisals will be ordered by Agent and reviewed and approved by Agent from time to
time, and will cover a minimum of seventy-five percent (75%) of the remaining Lot portfolio and
seventy-five percent (75%) of the remaining commercial acreage (both as selected by Agent) in order
to determine the current Raw Entitled Land Value and the Entitled Land Under Development Value, as
the case may be. On an annual basis, such properties shall be reappraised. Borrower agrees to pay
to Agent on demand all reasonable out-of-pocket costs of all such Appraisals and reappraisals.
Notwithstanding anything to the contrary contained in this paragraph, however, so long as no Event
of Default shall have occurred and be continuing and regulatory requirements of any Lender
generally applicable to real estate loans of the category made under this Agreement as reasonably
interpreted by such Lender shall not require such Appraisals or reappraisals more frequently than
annually, Borrower shall not be required to pay for such Appraisals or reappraisals more often than
once in any period of twelve (12) consecutive months.

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               (d) In the event that Agent shall advise Borrower in writing, on the basis of any Appraisal
(or update of an existing Appraisal or evaluation), that the Borrowing Base is insufficient to
comply with the requirements of §9.2(b), then until the Borrowing Base is increased or the
Outstanding principal amount of the Loans is reduced such that the Borrowing Base is in compliance
with §9.2(b), Revolving Lenders and Swing Line Lender shall not be required to make advances under
§2.1, Agent shall not be required to issue any Letter of Credit under §2.10, and Borrower shall
make the mandatory prepayment (if any) required under the provisions of §3.2(a).

               (e) Borrower acknowledges that Agent may, upon five (5) Business Days prior notice to
Borrower, make changes or adjustments to the value set forth in any Appraisal as may be required by
Agent in the exercise of its good faith business judgment and after consultation with Borrower, and
that Agent is not bound by the value set forth in any Appraisal performed pursuant to this
Agreement and does not make any representations or warranties with respect to any such Appraisal.
Borrower further agrees that Lenders and Agent shall have no liability as a result of or in
connection with any such Appraisal for statements contained in such Appraisal, including without
limitation, the accuracy and completeness of information, estimates, conclusions and opinions
contained in such Appraisal, or variance of such Appraisal from the fair value of such property
that is the subject of such Appraisal given by the local tax assessor’s office, or Borrower’s idea
of the value of such property.

          §5.3 Release of Mortgaged Property.

     Provided no Default or Event of Default shall have occurred hereunder and be continuing (or
would exist immediately after giving effect to the transactions contemplated by this §5.3), Agent
shall release a Mortgaged Property or any portion thereof, from the lien or security title of the
Security Documents encumbering the same upon the request of Borrower subject to and upon the
following terms and conditions:

               (a) Borrower shall deliver to Agent a written notice of its desire to obtain such release no
later than five (5) Business Days prior to the date on which such release is to be effected (or
such lesser amount of time as agreed to by Agent), and, if the Mortgaged Property to be released in
connection with any sale or related series of sales contains more than 5,000 acres in the
aggregate, such notice shall be accompanied by a pro forma Compliance Certificate showing that no
Default or Event of Default exists either immediately prior, or after giving effect, to such
release and that immediately after giving effect to such release, Loan Parties remain in compliance
with the financial covenant in §9.3;

               (b) if the Mortgaged Property to be released in connection with any sale or related series of
sales contains more than 10,000 acres in the aggregate or is valued in excess of $30,000,000 in the
aggregate (based on the higher of book value or the gross sale price for such transaction or
related series of transactions), Borrower shall submit to Agent with such request a Compliance
Certificate prepared using the financial statements of Borrower most recently provided or required
to be provided to Agent under §6.4 or §7.4, adjusted in the best good faith estimate of Borrower to
give effect to the proposed release, and demonstrating that no Default or Event of Default with
respect to the covenants referred to therein shall exist after giving effect to such release;

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               (c) all release documents to be executed by Agent shall be in form and substance reasonably
satisfactory to Agent;

               (d) such release shall be in conjunction with (i) a bona fide, arm’s-length sale or like-kind
exchange of the property to be released to an unaffiliated third-party, or the transfer of such
property to a Joint Venture as a capital contribution or sale, in either case for reasonably
equivalent value or consideration, otherwise permitted under the terms of this Agreement, (ii) a
donation, grant, dedication or other transfer of property (including, without limitation,
donations, grants or other transfers of Mortgaged Property for use as schools, parks, utilities,
rights-of-way or other public or quasi-public purposes) for a value or consideration (whether cash
or non-cash, or any combination thereof) determined in good faith by Borrower to be reasonable and
appropriate taking into account the actual or expected benefits to be received, directly or
indirectly, by a Loan Party in respect of such donation, grant, dedication or other transfer, which
determination shall be set forth in an officer’s certificate of Borrower in substantially the form
of Exhibit I delivered to the Agent prior to or contemporaneously with the release, or
(iii) (A) arrangements entered into with governmental or quasi-governmental authorities relating to
the preservation of wetlands, streams, endangered species, carbon or similar items in exchange for
offsetting credits or other benefits or (B) the creation of quasi-governmental water, utility or
similar districts providing for the reimbursement of certain development costs. In the case of (x)
any donation, grant, dedication or other transfer of property pursuant to clause (ii) above in
excess of 500 acres, or (y) any release pursuant to clause (iii) above in excess of 3,000 acres,
such donations, grants, dedications, transfers or releases shall be approved by the Agent, such
approval not to be unreasonably withheld, conditioned or delayed;

               (e) if the Mortgaged Property to be released in connection with any sale or related series of
sales contains more than 10,000 acres in the aggregate or is valued in excess of $30,000,000 in the
aggregate (based on the higher of book value or the gross sale price for such transaction or
related series of transactions), Borrower shall submit to Agent a Borrowing Base Certificate,
giving pro forma effect to the proposed transaction, demonstrating that immediately after giving
effect to the proposed sale and release, Borrower will remain in compliance with the Borrowing Base
requirements under this Agreement; and

               (f) if only a portion of any Mortgaged Property is to be released, and the portion of the
Mortgaged Property to be released in connection with any sale or related series of sales contains
more than 10,000 acres in the aggregate or is valued in excess of $30,000,000 in the aggregate
(based on the higher of book value or the gross sale price for such transaction or related series
of transactions), Borrower shall have provided Agent with evidence satisfactory to Agent (in its
sole discretion) that the remaining portion of such Mortgaged Property will comply with all
material Requirements, and have all necessary access, utility easements and other easements,
rights-of-way or similar rights so that the applicable Loan Party’s ability to use the remaining
portion of the Mortgaged Property for its intended purpose will not be materially diminished or
impaired.

          §5.4 Additional Mineral Rights Leases.

     Within forty-five (45) days after the end of each fiscal quarter of Forestar Group, Borrower
will deliver to Agent a supplement to the list delivered to Agent pursuant to

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Section 6.20(h), setting forth the list of all new Mineral Rights Leases constituting Leases or joint
operating agreements in effect as of the end of that quarter and any such type of Mineral Rights
Leases no longer in effect as of the end of that quarter, whereupon such list shall automatically
be deemed to have been modified accordingly, without the necessity of any approval of Lenders or
Agent. Without limiting the generality of §7.12, Borrower and the other applicable Loan Parties
agree to execute and deliver any and all additional documents, instruments or agreements as Agent
may reasonably request from time to time in order to further evidence or perfect Agent’s security
interest in the Loan Parties’ right, title and interest in, to and under the additional Mineral
Rights Leases.

          §5.5 Addition of Negative Pledge Properties to the Borrowing Base Assets.

     After the Closing Date, so long as no Default or Event of Default shall have occurred and be
continuing and so long as Borrower has not elected to include all Borrowing Base Assets (other than
the Mineral Business) as Mortgaged Properties pursuant to §9.2(b), subject to the satisfaction by
Borrower of the conditions set forth in this §5.5, Borrower shall have the right to request that a
Negative Pledge Property be added to the Borrowing Base Assets. Real Estate constituting Negative
Pledge Property not initially included as a Borrowing Base Asset shall be added to the Borrowing
Base Assets if, as and when the following conditions precedent shall have been satisfied:

               (a) such Real Estate satisfies all of the following conditions, unless otherwise waived in
writing by the Required Lenders:

                    (i) such Real Estate is owned in fee simple absolute by Borrower or a Guarantor, subject only
to Permitted Liens;

                    (ii) such Real Estate is not mortgaged to secure any Indebtedness (other than pursuant to any
pre-existing mortgage, deed of trust or deed to secure debt which will be cancelled and satisfied
of record in connection with the acquisition thereof by the applicable Loan Party); and

                    (iii) such Real Estate constitutes either (A) Timberland, (B) High Value Timberland, (C) Raw
Entitled Land, or (D) Entitled Land Under Development.

               (b) After giving effect to the inclusion of such Real Estate in the Borrowing Base Assets as a
Negative Pledge Property, each of the representations and warranties made by or on behalf of
Borrower and the other Loan Parties contained in this Agreement, the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with this Agreement shall be true in
all material respects both as of the date as of which it was made and shall also be true as of the
time of the addition of such Negative Pledge Property, with the same effect as if made at and as of
that time (it being understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall only be required to be true and correct in all material respects
only as of such specified date); and

               (c) Borrower shall pay or reimburse Agent and Agent’s Special Counsel for all fees, expenses
and costs in connection with the foregoing.

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          §5.6 Operating Account.

     Borrower shall cause its main operating account (the “Operating Account”) to be
subject to a Deposit Account Control Agreement reasonably acceptable to Agent among Agent, the
applicable Loan Party and the subject banking institution. Upon the occurrence and during the
continuation of any Event of Default, Agent may direct the Deposit Account Bank where such
Operating Account is held to sweep all funds on deposit in the Operating Account to an account
designated by Agent on a daily basis pursuant to the terms of the applicable Deposit Account
Control Agreement. Borrower hereby grants to Agent a first-in-priority security interest in and to
all funds now or at any time hereafter held on deposit in such Operating Account to secure the
payment and performance of the Obligations, and Agent shall have all rights and remedies available
to a secured party under the Uniform Commercial Code with respect to such funds.

          §5.7 Advance Account.

     On the Closing Date, Agent shall open an account at Agent’s Head Office in the name of
Borrower to facilitate the funding of the Loans (the “Advance Account”). The sole
signatory on the Advance Account shall be Borrower. The Advance Account shall be a non-interest
bearing account.

               (a) Deposits of Loans to the Advance Account. The proceeds of all Loans shall be
deposited by Agent to the Advance Account, and all Loans shall accrue interest from the date of
deposit in the Advance Account. Provided no Event of Default has occurred and is continuing,
Borrower shall have access to all funds contained in the Advance Account. Upon withdrawal of Loan
proceeds from the Advance Account, Borrower shall apply such Loan proceeds as permitted under §2.8.

               (b) Funds Following an Event of Default. Upon the occurrence of an Event of Default,
Agent may terminate Borrower’s rights to access or direct the application of funds on deposit in
the Advance Account. Thereafter, Agent shall either hold all or any portion of the funds on
deposit as security for the Obligations or apply all or any portion of such funds in satisfaction
of any part of the Obligations.

               (c) Security Interest. Borrower hereby grants to Agent a perfected, first-in-priority
security interest in and to all funds now or at any time hereafter held on deposit in the Advance
Account to secure the payment and performance of the Obligations, subject to Permitted Liens
described in section 8.2(i), and Agent shall have all rights and remedies available to a secured
party under the Uniform Commercial Code with respect to such funds.

          §5.8 Alabama Mortgage Tax.

               (a) Execution and Delivery of Documents. The parties acknowledge that, on the Closing
Date, Borrower will execute and deliver to Agent modifications of the Security Deeds covering
Mortgaged Property in Alabama more particularly described on Schedule 5.8 (the “Alabama
Mortgage Modifications”). In connection therewith, Agent will prepare at Borrower’s expense a
Petition for Ascertainment of Mortgage Tax (the “Alabama Mortgage Tax Petition”) with
respect to the Alabama Mortgage Privilege Tax payable with respect to the Alabama Mortgage
Modifications, and in support thereof, Borrower will execute and deliver to Agent on

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the Closing Date an Affidavit of Borrower (the “Mortgage Tax Affidavit”), in form and
substance satisfactory to Agent, with respect to valuations of the Mortgaged Property located in
Alabama relative to all Mortgaged Property.

               (b) Holding, Recording of Documents. In lieu of recording the Alabama Mortgage
Modifications on or about the Closing Date, Agent shall hold them, together with the Alabama
Mortgage Tax Petition and the Mortgage Tax Affidavit, until such time as Agent, in its sole and
absolute discretion, elects to record the Alabama Mortgage Modifications, at which time a Mortgage
Privilege Tax Order will be obtained by Agent from the Alabama Department of Revenue, and Borrower
shall pay to Agent all Alabama Mortgage Privilege Recording Taxes (the “Alabama Mortgage
Taxes”) as provided in such order, together with other recording costs, in connection with such
recording.

               (c) Maintenance of Funds on Deposit. Until such time as the Alabama Mortgage
Modifications are recorded as provided in §5.8(b), Borrower agrees to cause $75,000 to be on
deposit in an account maintained with Agent and which shall be under the control of Agent to cover
the Alabama Mortgage Taxes and other costs and expenses associated with recording the Alabama
Mortgage Modifications. Agent shall be entitled to withdraw amounts so deposited in such account
up to $75,000 to pay such amounts, and Agent agrees to promptly notify Borrower of any such
withdrawal.

               (d) Future Cooperation. Borrower agrees to cooperate as reasonably necessary to
assist Agent in obtaining the Mortgage Privilege Tax Order described in §5.8(b) from the Alabama
Department of Revenue, including, without limitation, providing a new or updated Mortgage Tax
Affidavit.

§6. REPRESENTATIONS AND WARRANTIES

     Borrower and each of the other Loan Parties (as applicable) represents and warrants to Agent
and Lenders as follows:

          §6.1 Corporate Authority, Etc.

               (a) Organization; Good Standing. Borrower is a Delaware corporation duly organized
pursuant to its certificate of incorporation filed with the Secretary of State of Delaware and is
validly existing under the laws of the State of Delaware. Each other Loan Party is a corporation,
partnership or limited liability company duly organized, validly existing, and in good standing
under the laws of its state of incorporation or formation. Each Loan Party (i) has all requisite
power to own its respective properties and conduct its respective business as now conducted and as
presently contemplated, and (ii) is duly authorized to do business in each other jurisdiction where
a failure to be so authorized in such other jurisdiction could reasonably be expected to have a
materially adverse effect on the business, assets or financial condition of such Person.

               (b) Subsidiaries and Joint Ventures. Except as disclosed to Agent in writing on or
before the Closing Date, as of the Closing Date, Forestar Group does not have any Subsidiaries or
Joint Ventures. Such written disclosure shall set forth as of the Closing Date, for each Person
set forth thereon, a complete and accurate statement of (a) the percentage ownership

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of each such Person by Forestar Group or any other Loan Party (as applicable), (b) the State
or other jurisdiction of incorporation, organization or formation, as appropriate, of each such
Person, and (c) each State in which each such Person is qualified to do business on the Closing
Date.

               (c) Authorization. The execution, delivery and performance of this Agreement and the
other Loan Documents to which the Loan Parties, or any of them, are or are to become a party and
the transactions contemplated hereby and thereby (i) are within the authority of such Person, (ii)
have been duly authorized by all necessary proceedings on the part of such Person, (including any
required stockholder, partner or member approval), (iii) do not and will not conflict with or
result in any breach or contravention of any provision of law, statute, rule or regulation to which
such Person is subject or any judgment, order, writ, injunction, license or permit applicable to
such Person, except for such conflicts or breaches that, individually and the aggregate, could not
reasonably be expected to have a Material Adverse Effect, (iv) do not and will not conflict with or
constitute a default (whether with the passage of time or the giving of notice, or both) under any
provision of the Organizational Documents of, or any mortgage, indenture, agreement, contract or
other instrument binding upon, such Person or any of its properties or to which such Person is
subject, except for such conflicts or defaults that, individually and in the aggregate, could not
reasonably be expected to have a Material Adverse Effect and (v) do not and will not result in or
require the imposition of any Lien or other encumbrance on any of the properties, assets or rights
of such Person except for the Liens and security title granted by the Loan Documents.

               (d) Enforceability. The execution and delivery of this Agreement and the other Loan
Documents to which the Loan Parties, or any of them, are or are to become a party are valid and
legally binding obligations of such Person enforceable in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the enforcement of
creditors’ rights and except to the extent that availability of the remedy of specific performance
or injunctive relief is subject to the discretion of the court before which any proceeding therefor
may be brought.

          §6.2 Approvals.

     The execution, delivery and performance by the Loan Parties, or any of them, of this Agreement
and the other Loan Documents to which they are or are to become a party and the transactions
contemplated hereby and thereby do not require the approval or consent of, or filing with, any
Person or the authorization, consent or approval of, or any license or permit issued by, or any
filing or registration with, or the giving of any notice to, any court, department, board,
commission or other governmental agency or authority other than those already obtained and the
filing of the Security Documents in the appropriate records office with respect thereto.

          §6.3 Title to Properties; Leases.

     The Loan Parties and their Subsidiaries own all of their respective assets reflected on the
consolidated balance sheet of Forestar Group (including, without limitation, the Mortgaged
Properties and the Negative Pledge Properties), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements, liens or other
encumbrances except Permitted Liens. Without limiting the foregoing, the Loan Parties and their

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Subsidiaries have good and marketable fee simple or leasehold title to all real and personal
property reasonably necessary for the operation of its business in whole, free from all liens or
encumbrances of any nature whatsoever, except for Permitted Liens.

          §6.4 Financial Statements.

     Borrower has furnished or caused to be furnished to each of Lenders: (a) the audited
financial statements filed by Forestar Group with the Securities and Exchange Commission for the
fiscal year ended December 31, 2009 and (b) projected profit and loss statements and cash flow
statements of Forestar Group and its Subsidiaries, prepared on a quarterly basis for the next two
(2) calendar years. Such audited financial statements described in clause (a) have been prepared
in accordance with GAAP and fairly present in all material respects the financial condition of
Borrower and its Subsidiaries as of such date and the results of the operations of Borrower and its
Subsidiaries, for such period. There are no liabilities, contingent or otherwise, of Borrower or
any Subsidiary of Borrower involving material amounts not disclosed in said financial statements
and the related notes thereto. All projections and estimates have been prepared in good faith on
the basis of reasonable assumptions and represent the best estimate of future performance by the
party supplying the same, it being agreed that projections are subject to uncertainties and
contingencies and that no assurance can be given that any projection will be realized.

          §6.5 No Material Changes.

     As of the Closing Date there has occurred no materially adverse change in the financial
condition or business of Forestar Group and any of its Subsidiaries, taken as a whole, as shown on
or reflected in the balance sheet of Forestar Group or its Subsidiaries as of March 31, 2010, or
its statement of income or cash flows for the fiscal quarter then ended, other than changes in the
ordinary course of business that have not had any materially adverse effect either individually or
in the aggregate on the business or financial condition of Borrower and its Subsidiaries.

          §6.6 Franchises, Patents, Copyrights, Etc.

     Each Loan Party and its Subsidiaries possesses all franchises, patents, copyrights,
trademarks, trade names, service marks, licenses and permits, and rights in respect of the
foregoing, adequate for the conduct of their business substantially as now conducted without known
conflict with any rights of others except where the failure to so possess could not, individually
and in the aggregate, reasonably be expected to have a Material Adverse Effect. The Mortgaged
Properties and the Negative Pledge Properties are not owned or operated under or by reference to
any registered or protected trademark, tradename, servicemark or logo.

          §6.7 Litigation.

     As of the Closing Date, except as described on Schedule 6.7 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or to the Borrower’s Knowledge,
threatened, against any Loan Party or their Subsidiaries or any of the Mortgaged Properties or the
Negative Pledge Properties before any court, tribunal, administrative agency or board, mediator or
arbitrator that, if adversely determined, individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, there are no judgments

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outstanding against or affecting any Loan Party, any of their respective Subsidiaries or any
of the Collateral.

          §6.8 No Materially Adverse Contracts, Etc.

     No Loan Party or any of their Subsidiaries is a party to any mortgage, indenture, or other
material contract or agreement or other instrument that has had or is reasonably expected, in the
judgment of the members, partners or officers of such Person, to have a Material Adverse Effect.

          §6.9 Compliance with Organizational Documents, Other Instruments, Laws, Etc.

     No Loan Party or any of its respective Subsidiaries is in violation of any provision of its
Organizational Documents, or any decree, order, judgment, statute, license, rule or regulation, in
any of the foregoing cases in a manner that could reasonably be expected to result in the
imposition of substantial penalties or materially and adversely affect the financial condition,
properties or business of such Person.

          §6.10 Tax Status.

     Each Loan Party and its Subsidiaries (a) has made or filed all federal and all other material
tax returns, reports and declarations required by any jurisdiction to which it is subject, except
to the extent such Person has obtained a valid extension of the deadline to file such return, (b)
has paid all material taxes and other material governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those being contested in
good faith and by appropriate proceedings, and (c) has set aside on its books provisions reasonably
adequate for the payment of all taxes for periods subsequent to the periods to which such returns,
reports or declarations apply, if applicable or required. There are no unpaid taxes or assessments
in any material amount claimed to be due by the taxing authority of any jurisdiction or pursuant to
any private agreement except for those that are being contested as permitted by this Agreement.
The charges, accruals and reserves on the books of the Loan Parties and their Subsidiaries in
respect of taxes are, in the reasonable good faith judgment of the Loan Parties, adequate. As of
the Closing Date, except as set forth on Schedule 6.10 hereto, no Loan Party or any of
their Subsidiaries has been audited, or has knowledge of any pending audit, by the Internal Revenue
Service or any other taxing authority.

          §6.11 No Event of Default.

     No Default or Event of Default has occurred and is continuing.

          §6.12 Investment Company Act.

     No Loan Party or any of their Subsidiaries is an “investment company”, or an “affiliated
company” or a “principal underwriter” of an “investment company”, as such terms are defined in the
Investment Company Act of 1940.

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          §6.13 Reserved.

          §6.14 Setoff, Etc.

     Borrower and Guarantors are the owners of the Collateral free from any lien, security
interest, encumbrance or other claim or demand, except those encumbrances permitted in the Security
Deeds or Permitted Liens.

          §6.15 Certain Transactions.

     Except as set forth in Schedule 6.15 hereto or as otherwise permitted pursuant to
§8.14, none of the partners, members, officers, trustees, directors, or employees of any Loan Party
or any of their respective wholly-owned Subsidiaries is a party to any transaction with any of
their Affiliates or their members, employees, officers, trustees and directors (other than
employment and severance agreements relating to services as partners, members, employees, officers,
trustees and directors), including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any Affiliate, partner, member, officer, trustee, director
or such employee or, to Borrower’s Knowledge, any limited liability company, corporation,
partnership, trust or other entity in which any Affiliate, partner, member, officer, trustee,
director, or any such employee has a substantial interest or is an officer, director, trustee,
partner or member.

          §6.16 Employee Benefit Plans.

     Borrower and each ERISA Affiliate has fulfilled its obligations under the minimum funding
standards of ERISA and the Code with respect to each Guaranteed Pension Plan and is in compliance
in all material respects with the presently applicable provisions of ERISA and the Code with
respect to each Employee Benefit Plan. Neither Borrower nor any ERISA Affiliate has (a) sought a
waiver of the minimum funding standard under Section 412 of the Code in respect of any Employee
Benefit Plan, (b) failed to make any contribution or payment to any Guaranteed Pension Plan, or
made any amendment to any Guaranteed Pension Plan, which has resulted in the imposition of a Lien
or the posting of a bond or other security under ERISA or the Code, or (c) incurred any liability
under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA. None of the assets of Borrower constitute a Plan Asset.

          §6.17 Regulations T, U and X.

     No portion of any Loan is to be used for the purpose of purchasing or carrying any “margin
security” or “margin stock” as such terms are used in Regulations T, U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224. The Loan Parties and
their Subsidiaries are not engaged, and will not engage, principally or as one of their important
activities in the business of extending credit for the purpose of purchasing or carrying any
“margin security” or “margin stock” as such terms are used in Regulations T, U and X of the Board
of Governors of the Federal Reserve System, 12 C.F.R. Parts 220, 221 and 224.

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          §6.18 Environmental Compliance.

     The Loan Parties have delivered to Agent true and complete copies of all written environmental
site assessment reports in the possession of any of the Loan Parties with respect to the Mortgaged
Properties (collectively, the “Environmental Reports”) and makes the following
representations and warranties:

               (a) Except as disclosed in the Forestar Form 10, to Borrower’s Knowledge, no Loan Party or any
of their respective Subsidiaries, is in material violation, or alleged material violation at the
Mortgaged Properties and the Negative Pledge Properties, of any applicable judgment, decree, code,
order, law, rule of common law, license, rule or regulation pertaining to environmental matters,
including without limitation, those arising under the Resource Conservation and Recovery Act
(“RCRA”), the Comprehensive Environmental Response, Compensation and Liability Act of 1980
as amended (“CERCLA”), the Superfund Amendments and Reauthorization Act of 1986
(“SARA”), the Federal Clean Water Act, the Federal Clean Air Act, the Toxic Substances
Control Act, or any applicable state or local statute, regulation, ordinance, order or decree
relating to the environment (hereinafter “Environmental Laws”). To Borrower’s Knowledge,
any violation reflected in the Environmental Reports involving any of the Real Estate would not
reasonably be expected to have a Material Adverse Effect.

               (b) Except as disclosed in the Forestar Form 10, to Borrower’s Knowledge, no Loan Party or any
of their respective Subsidiaries has received written notice from any third party including,
without limitation, any Governmental Authority, (i) that it has been identified by the United
States Environmental Protection Agency (“EPA”) as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B
(1986); (ii) that any hazardous waste, as defined by 42 U.S.C. §9601(5), any hazardous substances
as defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42 U.S.C. §9601(33)
or any toxic substances or hazardous materials or other chemicals or substances regulated by any
Environmental Laws (“Hazardous Substances”) which it has generated, transported or disposed
of have been found at any site at, on or under the Real Estate for which a federal, state or local
agency or other third party has conducted or has ordered that any Loan Party or their respective
Subsidiaries conduct a remedial investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any claim, action, cause of
action, complaint, or legal or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party’s incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances.

               (c) (i) To Borrower’s Knowledge, except as disclosed in any Environmental Reports provided to
Agent on or before the date hereof and except as disclosed in the Forestar Form 10, or with respect
to Real Estate which becomes a Mortgaged Property after the date hereof, the Environmental Reports
with respect thereto provided to Agent, (1) no portion of the Mortgaged Property or Negative Pledge
Property has been used by Borrower as a landfill or for dumping or for the handling, processing,
storage or disposal of Hazardous Substances except in material compliance with applicable
Environmental Laws, and (2) no underground tank for Hazardous Substances has been operated by
Borrower on the Mortgaged Property or Negative Pledge Property except in material compliance with
applicable Environmental Laws; (ii) in the course of any activities conducted by any Loan Party, or
any of its respective wholly-owned

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Subsidiaries, no Hazardous Substances have been generated or are being used on any Mortgaged
Property or Negative Pledge Property, except in the ordinary course of business and in material
compliance with applicable Environmental Laws; (iii) to Borrower’s Knowledge, there has been no
past or present releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, disposing or dumping (a “Release”) of Hazardous Substances on, upon,
into or from any Mortgaged Property or Negative Pledge Property, which Release could reasonably be
expected to have a Material Adverse Effect; (iv) to Borrower’s Knowledge, there have been no
Releases on, upon, from or into any real property in the vicinity of any Mortgaged Property or
Negative Pledge Property, which, through soil or groundwater contamination, may have come to be
located on, and which could reasonably be expected to have a Material Adverse Effect; and (v) to
Borrower’s Knowledge, any Hazardous Substances that have been generated on any Mortgaged Property
or Negative Pledge Property by Borrower have been transported off-site, treated and disposed of in
material compliance with applicable Environmental Laws.

               (d) To Borrower’s Knowledge and except as disclosed in the Forestar Form 10, no Loan Party or
any of its wholly-owned Subsidiaries or any Mortgaged Property or Negative Pledge Property is
subject to any applicable Environmental Law requiring the giving of notice to any governmental
agency or the recording or delivery to other Persons of an environmental disclosure document or
statement by virtue of the transactions set forth herein and contemplated hereby, or as a condition
to the recording of the Security Deeds or to the effectiveness of any other transactions
contemplated hereby.

               (e) This §6.18 shall set forth the sole and exclusive representations and warranties made by
the Borrower with regard to Environmental Laws, Hazardous Substances, or any other environmental,
health or safety matter.

          §6.19 Loan Documents.

     All of the representations and warranties of the Loan Parties made in this Agreement and the
other Loan Documents or any document or instrument delivered by any Loan Party to Agent or Lenders
pursuant to or in connection with any of such Loan Documents are true and correct in all material
respects, and no Loan Party has failed to disclose such information as is necessary to make such
representations and warranties not misleading. The information, reports, financial statements,
exhibits and schedules (excluding projections which have been proposed in good faith) furnished by
the Loan Parties to Agent and Lenders in connection with the negotiation, preparation or delivery
of this Agreement and the other Loan Documents or included herein or therein or delivered pursuant
hereto or thereto, do not contain any untrue statement of material fact or omit to state any
material fact necessary to make the statements herein or therein not misleading. All written
information furnished after the date hereof by the Loan Parties to Agent or Lenders in connection
with this Agreement and the other Loan Documents and the transactions contemplated hereby and
thereby will be true, correct and accurate in every material respect and shall not omit to state
any material fact necessary to make the statements herein or therein not misleading, or (in the
case of projections) based on reasonable estimates, on the date as of which such information is
stated or certified; it being recognized by Agent and Lenders that any projections and forecasts
provided by Loan Parties are subject to significant uncertainties and contingencies, many of which
are beyond the control of the Loan Parties.

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          §6.20 Mortgaged Properties and Negative Pledge Properties.

     The Loan Parties make the following representations and warranties concerning each Mortgaged
Property and each Negative Pledge Property:

               (a) No Required Mortgaged Property and Negative Pledge Property Consents, Permits,
Etc. Neither Borrower nor any other Loan Party has received any written notice of, has
Knowledge of, any approvals, consents, licenses, permits, utility installations and connections
(including, without limitation, drainage facilities), curb cuts and street openings, required by
applicable laws, rules, ordinances or regulations or any agreement affecting the Mortgaged Property
and the Negative Pledge Property for the maintenance, operation, servicing and use of the Mortgaged
Property and the Negative Pledge Property for its current use (hereinafter referred to as the
“Project Approvals”) which have not been granted, effected, or performed and completed (as
the case may be), or any fees or charges therefor which have not been fully paid, or which are no
longer in full force and effect. No Project Approvals (including, without limitation, any railway
siding agreements) will terminate, or become void or voidable or terminable on any foreclosure sale
of the Mortgaged Property and the Negative Pledge Property pursuant to the applicable Security
Deed. There are no outstanding suits, orders, decrees or judgments relating to building use and
occupancy, fire, health, sanitation or other violations affecting, against, or with respect to, the
Mortgaged Property and the Negative Pledge Property or any part thereof, which, if adversely
determined, either singly or in the aggregate could reasonably be expected to have a Material
Adverse Effect.

               (b) No Violations. Neither Borrower nor any other Loan Party has received notice of,
or has any Knowledge of, any violation of any applicable Requirements, Project Approvals or any
other restrictions or agreements by which any Loan Party or the Mortgaged Property or Negative
Pledge Property is bound which violation, either singly or in the aggregate with other such
violations, could reasonably be expected to have a Material Adverse Effect.

               (c) Insurance. Neither Borrower nor any other Loan Party has received any written
notice from any insurer or its agent requiring performance of any work with respect to the
Mortgaged Property and the Negative Pledge Property or canceling or threatening to cancel any
policy of insurance, and the Mortgaged Property and the Negative Pledge Property complies in all
material respects with the requirements of all of Borrower’s insurance carriers.

               (d) Real Property and other Taxes; Special Assessments. There are no unpaid or
outstanding real estate or other taxes or assessments on or against the Mortgaged Property and the
Negative Pledge Property or any part thereof, including, without limitation, any payments in lieu
of taxes, which are payable by Borrower, any other Loan Party or any of their respective
Subsidiaries (except only real estate or other taxes or assessments that are not yet delinquent or
subject to any penalties, interest or other late charges, or are being contested as permitted under
this Agreement, or which have been adequately reserved against in accordance with GAAP). There are
no unpaid or outstanding gross receipts, rent or sales taxes payable by Borrower, any other Loan
Party or any of their respective Subsidiaries with respect to the use and operation of the
Mortgaged Property and the Negative Pledge Property which are due and payable. No abatement
proceedings are pending with reference to any real estate taxes or private assessments assessed
against the Mortgaged Property and the Negative Pledge Property. There are no

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betterment assessments or other special assessments presently pending with respect to any
portion of the Mortgaged Property and the Negative Pledge Property, and neither Borrower nor any
other Loan Party has received any written notice of any such special assessment being contemplated.

               (e) Eminent Domain; Casualty. As of the Closing Date, there are no pending eminent
domain proceedings against the Mortgaged Property or the Negative Pledge Property or any part
thereof, and, to Borrower’s Knowledge, no such proceedings are presently threatened or contemplated
by any taking authority. Neither the Mortgaged Property, the Negative Pledge Property nor any part
thereof is, as of the Closing Date, materially damaged or injured as a result of any fire,
explosion, accident, flood or other casualty.

               (f) Unresolved Real Estate Disputes. Except as may be disclosed to Agent or on
Schedule 6.20(f), there are no unresolved claims or disputes relating to access to any
material portion of the Real Estate that could reasonably be expected to have a material adverse
effect on the intended use of such Real Estate by the Loan Parties or their respective
Subsidiaries, or otherwise have, either singly or in the aggregate, a Material Adverse Effect.

               (g) Material Real Property Agreements; No Options. Except as set forth in
Schedule 6.20(g), there are no material agreements pertaining to the management or
operation of the Mortgaged Property or the Negative Pledge Property other than as described in this
Agreement; and no person or entity has any right of first refusal, right of first offer or other
option to acquire the Mortgaged Property or any portion thereof or interest therein. Each
reaffirmation of the representation and warranty contained in this sub-paragraph (g) shall take
into account the most recent update of Schedule 6.20(g) delivered to Agent pursuant to
§7.4(i) and shall be deemed reaffirmed as of the most recent date any update to said Schedule
6.20(g) was required to have been delivered to Agent pursuant to §7.4(i), whether or not any
such update is so delivered.

               (h) Mineral Rights Leases. On or before the Closing Date, Borrower has delivered to
Agent a true and correct list of all Mineral Rights Leases constituting Leases or joint operating
agreements as of June 30, 2010 and, subsequent thereto, as of the most recent update of such list
delivered to Agent pursuant to §5.4.

          §6.21 Reserved.

          §6.22 Brokers.

     Borrower has not engaged or otherwise dealt with any broker, finder or similar entity in
connection with this Agreement or the Loans contemplated hereunder.

          §6.23 Ownership.

     As of the Closing Date, the Equity Interests owned by the Loan Parties in Borrower, in each
other Loan Party and in each other Person in which they own any Equity Interests are set forth in a
written disclosure delivered to Agent on or before the Closing Date. Except for Equity Interests
granted pursuant to the Equity Plan or as set forth on such written disclosure to Agent, as of the
Closing Date there are no (a) outstanding rights to purchase, options, warrants or similar rights
pursuant to which Forestar Group, Borrower or any of their respective Subsidiaries may be required
to issue, sell, repurchase or redeem any of its Equity Interests or (b) voting rights

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agreements with respect to such Equity Interests. The Equity Interests so specified on
Schedule 6.23 are fully paid and non-assessable and are owned by the applicable Person,
directly or indirectly, free and clear of all Liens (other than Permitted Liens).

          §6.24 OFAC.

     No Loan Party or any of their respective Subsidiaries or any Joint Venture is (or will be) a
person with whom Agent is restricted from doing business under OFAC (including, those Persons named
on OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order
(including, the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action
and is not and shall not engage in any dealings or transactions or otherwise be associated with
such persons. In addition, the Loan Parties hereby agree to provide Agent with any additional
information that Agent deems necessary from time to time in order to ensure compliance with all
applicable laws concerning money laundering and similar activities.

          §6.25 No Fraudulent Intent.

     Neither the execution and delivery of this Agreement or any of the other Loan Documents nor
the performance of any actions required hereunder or thereunder is being undertaken by Borrower or
any other Loan Party with or as a result of any actual intent by any of such Persons to hinder,
delay or defraud any entity to which any of such Persons is now or will hereafter become indebted.

          §6.26 Transaction in Best Interests of Loan Parties; Consideration.

     The transactions evidenced by this Agreement and the other Loan Documents are in the best
interests of the Loan Parties. The direct and indirect benefits to inure to the Loan Parties
pursuant to this Agreement and the other Loan Documents constitute substantially more than
“reasonably equivalent value” (as such term is used in Section 548 of the Bankruptcy Code) and
“valuable consideration,” “fair value,” and “fair consideration,” (as such terms are used in any
applicable state fraudulent conveyance law), in exchange for the Obligations of the Loan Parties
pursuant to this Agreement and the other Loan Documents.

          §6.27 Solvency.

     As of the Closing Date and after giving affect to the transactions contemplated by this
Agreement and the other Loan Documents, including all of the Loans made or to be made, and Letters
of Credit issued or to be issued, hereunder, with respect to the Loan Parties taken as a whole, (a)
the fair value of their assets on a going concern basis is greater than the amount of their
liabilities (including disputed, contingent and unliquidated liabilities) as such value is
established and liabilities evaluated, (b) the present fair saleable value of their assets is not
less than the amount that will be required to pay the probable liability on their debts as they
become absolute and matured, (c) they will be able to pay their debts and other liabilities
(including disputed, contingent and unliquidated liabilities) as they mature in the normal course
of business (taking into account all available financing options), (d) they do not intend to, and
do not believe that they will, incur debts or liabilities beyond their ability to pay as such debts
and liabilities mature

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and (e) they are not engaged in business or a transaction, and are not about to engage in
business or a transaction, for which their property would constitute unreasonably small capital.

          §6.28 No Bankruptcy Filing.

     No Loan Party is contemplating either the filing of a petition by it under any state or
federal bankruptcy or insolvency laws or the liquidation of its assets or property, and to
Borrower’s Knowledge, no Person is contemplating the filing of any such petition against any Loan
Party.

          §6.29 Other Debt.

     Neither any Loan Party nor any of their respective Subsidiaries nor any Joint Venture are in
default (after giving effect to applicable grace periods) in the payment of any Indebtedness or the
terms of any agreement, mortgage, deed of trust, security agreement, financing agreement, indenture
or other lease to which any of them is a party which default, either singly or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. Neither any Loan Party nor any of
their respective Subsidiaries are a party to or bound by any agreement, instrument or indenture
that may require the subordination in right or time of payment of any of the Obligations to any
other Indebtedness or obligation of Borrower, any other Loan Party or any of their respective
Subsidiaries. Prior to the Closing Date Borrower has provided to Agent a written disclosure
containing a description of the Permitted Existing Indebtedness, which Agent has approved. Nothing
in this §6.29 shall alter or affect the provisions of §8.1.

§7. AFFIRMATIVE COVENANTS OF LOAN PARTIES

     Borrower and the other Loan Parties (as applicable) covenant and agree that, so long as any
Loan, Note, Letter of Credit or other Obligation (other than contingent indemnification obligations
for which no claim has been asserted) is Outstanding or any Lender has any obligation to make any
Loans or Agent has any obligation to issue any Letter of Credit:

          §7.1 Punctual Payment.

     Borrower will duly and punctually pay or cause to be paid the principal and interest on the
Loans and all interest and fees provided for in this Agreement, all in accordance with the terms of
this Agreement and the Notes as well as all other sums owing pursuant to the Loan Documents.

          §7.2 Maintenance of Office.

     Each Loan Party will maintain its chief executive office at 6300 Bee Cave Road, Building Two,
Suite 500, Austin, Texas 78746, or at such other place in the United States of America as Borrower
or Forestar Group shall designate upon at least thirty (30) days (or such lesser number of days as
is acceptable to Agent) prior written notice to Agent, where notices, presentations and demands to
or upon the Loan Parties in respect of the Loan Documents may be given or made. The Loan Parties
agree that, in the event of any such change, they will execute and deliver such amendments and
other documents as Agent may request to maintain Agent’s perfected Lien on the Collateral.

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          §7.3 Records and Accounts.

     Each Loan Party will, and will cause its Subsidiaries to, keep true and accurate records and
books of account in which full, true and correct entries will be made in accordance with GAAP, as
revised from time to time. No Loan Party shall, without the prior written consent of Agent, make,
or permit any of its Subsidiaries to make, any material change to the accounting procedures used by
them in preparing the financial statements and other information described in §6.4 except as
required by law or as required by GAAP. No Loan Party shall change, or permit any of its
Subsidiaries to change, its fiscal year without the prior written consent of Agent.

          §7.4 Financial Statements, Certificates and Information.

     Forestar Group and Borrower will deliver to Agent:

               (a) not later than one hundred (100) days after the end of each fiscal year of Forestar Group,
the audited Consolidated balance sheet of Forestar Group and its Subsidiaries as of the end of
such year, and the related statements of income, changes in capital and cash flows for such year,
each setting forth in comparative form the figures for the previous fiscal year and all such
statements to be in reasonable detail, prepared in accordance with GAAP, and accompanied by an
auditor’s report prepared without qualification by a nationally recognized accounting firm
reasonably acceptable to Agent, and any other information Agent may require to complete a financial
analysis of Forestar Group and its Subsidiaries; provided that so long as Forestar Group is
required to file its audited financial statements with the Securities and Exchange Commission, the
delivery of such filed financial statements shall satisfy the foregoing requirements of this clause
(a);

               (b) not later than forty-five (45) days after the end of each fiscal quarter of Forestar Group
and its Subsidiaries (excluding the fourth fiscal quarter in each year), copies of the balance
sheet of Forestar Group and its Subsidiaries as of the end of such quarter, and the related
statements of income, changes in capital and cash flows for the portion of Forestar Group’s fiscal
year then elapsed, all in reasonable detail and prepared on a Consolidated basis in accordance with
GAAP (other than the inclusion of footnotes); provided that so long as Forestar Group is required
to file its quarterly financial statements with the Securities and Exchange Commission, the
delivery of such filed financial statements shall satisfy the foregoing requirements; together with
a certification by the Principal Financial Officer of Forestar Group that the information contained
in such financial statements fairly presents, in all material respects, the financial position of
Forestar Group and its Subsidiaries on the date thereof (subject to year-end adjustments);

               (c) simultaneously with the delivery of the financial statements referred to in subsections
(a) and (b) of this §7.4, a statement (a “Compliance Certificate”) certified by the
Principal Financial Officer of Forestar Group in the form of Exhibit B hereto (or in such
other form as Agent may approve from time to time) setting forth in reasonable detail computations
evidencing compliance with the covenants contained in §8.3(i), §8.7 and §9 and the other covenants
described therein, and (if applicable) reconciliations to reflect changes in GAAP since the Balance
Sheet Date;

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               (d) concurrently with the delivery of the financial statements described in subsections (a)
and (b) of this §7.4, a certificate signed by the Principal Financial Officer of Forestar Group to
the effect that, having read this Agreement, and based upon an examination which such officer deems
sufficient to enable such officer to make an informed statement, such officer is not aware of any
Default or Event of Default, or if such Default or Event of Default has occurred, specifying the
facts with respect thereto;

               (e) within twenty (20) days after the end of each calendar month, a certificate in the form of
Exhibit E attached hereto (a “Borrowing Base Certificate”), certified by a
Principal Financial Officer of Forestar Group, pursuant to which Forestar Group shall calculate the
amount of the Borrowing Base as of the end of the immediately preceding calendar month; provided
that Borrower may, at its option, deliver one additional Borrowing Base Certificate each month in
connection with a redesignation or addition of Borrowing Base Assets as contemplated hereunder.
All income, expense and value associated with Mortgaged Property or Negative Pledge Property or
other assets disposed of during such calendar month will be eliminated from calculations, where
applicable;

               (f) simultaneously with the delivery of the Compliance Certificate referred to in subsection
(c) of this §7.4, a statement, certified as true and correct by the Principal Financial Officer of
Forestar Group, of all Indebtedness of Forestar Group and its Subsidiaries as the end of such
fiscal quarter, including, with respect to each such Indebtedness, the original principal amount
thereof and outstanding principal amount as of the end of such fiscal quarter, the amount remaining
undisbursed, if any, the maturity date and any extension options, the required monthly payments of
principal and interest, the identity of the lender, the interest rate, the collateral for such
Indebtedness, whether such Indebtedness is recourse or Non-recourse Indebtedness, and whether any
default or event of default exists with respect to such Indebtedness;

               (g) if requested by Agent, copies of all annual federal income tax returns and amendments
thereto of Forestar Group and its Subsidiaries;

               (h) not later than March 1 of each year during the term of the Loan, the Budget for Forestar
Group and its Subsidiaries for such calendar year. Such Budget shall be in form reasonably
satisfactory to Agent and shall be submitted to Agent together with a narrative description of the
assumptions upon which the Budget is based and such other information as Agent may request;

               (i) not later than March 1 of each year during the term of the Loan, projected statements of
profit and loss and cash flows for Forestar Group and its Subsidiaries, prepared on a quarterly
basis, for the current calendar year and next succeeding calendar year. Such projections shall be
in form reasonably satisfactory to Agent and shall be submitted to Agent together with a narrative
description of the assumptions upon which such projections are based and such other information as
Agent may request;

               (j) simultaneously with the delivery of the Compliance Certificate referred to in subsection
(c) of this §7.4, an updated Schedule 6.20(g) reflecting the addition or the expiration or
termination of any material agreements described in §6.20(g) or a certification from Borrower that
there have been no changes in that Schedule; and

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               (k) from time to time such other financial data and information pertaining to Forestar Group,
its Subsidiaries, the Joint Ventures and the Mortgaged Properties and Negative Pledge Properties,
as Agent or any Lender may reasonably request from time to time.

          §7.5 Notices.

               (a) Defaults. Borrower or Forestar Group will promptly notify Agent in writing of the
occurrence of any Default or Event of Default. If any Person shall give any notice or take any
other action in respect of a claimed default (whether or not constituting an Event of Default)
under this Agreement or under any note, obligation or other evidence of Indebtedness in an
outstanding principal amount of at least $10,000,000, to which or with respect to which Borrower or
any other Loan Party is a party or obligor, whether as principal or surety, and such event of
default would permit the holder of such note or obligation or other evidence of Indebtedness to
accelerate the maturity thereof or the existence of which claimed default might become an Event of
Default under §12.1(f), Borrower shall forthwith give written notice thereof to Agent, describing
the notice or action and the nature of the claimed default. Borrower or Forestar Group shall also
promptly notify Agent in writing of any exercise of remedies by the holder of such note, obligation
or other evidence of Indebtedness (or any agent or representative thereof) with respect to such
event of default.

               (b) Environmental Events. Borrower or Forestar Group will promptly give notice to
Agent (i) upon Borrower or Forestar Group obtaining knowledge of any potential or known Release, or
threat of Release, of any Hazardous Substances at or from any Mortgaged Property, Negative Pledge
Property or other Real Estate that, either singly or in the aggregate, could reasonably be expected
to have a Material Adverse Effect; (ii) of any violation of any Environmental Law that any Loan
Party reports in writing or is reportable by any Loan Party in writing (or for which any written
report supplemental to any oral report is made) to any federal, state or local environmental agency
that, either singly or in the aggregate, could reasonably be expected to have a Material Adverse
Effect and (iii) upon becoming aware thereof, of any inquiry, proceeding, investigation, or other
action, including a notice from any agency of potential environmental liability, of any federal,
state or local environmental agency or board, that in either case could reasonably be expected to
have a Material Adverse Effect.

               (c) Notification of Claims Against Collateral. Borrower or Forestar Group will,
promptly upon obtaining Knowledge thereof, notify Agent in writing of any claims pertaining to the
Collateral or other property of the Loan Parties which, either singly or in the aggregate, could
reasonably be expected to exceed $1,000,000, as well as any setoff, withholdings or other defenses
to which any of the Collateral, or the rights of Agent or Lenders with respect to the Collateral,
are subject, in each case, other than related to Permitted Liens.

               (d) Notice of Litigation and Judgments. Borrower or Forestar Group will give notice
to Agent in writing within fifteen (15) days of becoming aware of any litigation or proceedings
threatened in writing or any pending litigation and proceedings affecting any of the Loan Parties
or their Subsidiaries or to which any of such Persons is or is to become a party involving an
uninsured claim against any of such Persons that could reasonably be expected to have a Material
Adverse Effect and stating the nature and status of such litigation or proceedings. Borrower or
Forestar Group will give notice to Agent, in writing, in form and detail satisfactory

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to Agent and each of Lenders, within ten (10) days of any judgment not covered by insurance,
whether final or otherwise, against any of the Loan Parties in an amount, whether singly or in the
aggregate, in excess of $1,000,000.

               (e) ERISA. Borrower or Forestar Group will give notice to Agent within five (5)
Business Days after Borrower or any ERISA Affiliate (i) gives or is required to give notice to the
PBGC of any ERISA Reportable Event with respect to any Guaranteed Pension Plan, or knows that the
plan administrator of any such plan has given or is required to give notice of any such ERISA
Reportable Event; (ii) receives a copy of any notice of withdrawal liability under Title IV of
ERISA with respect to a Multiemployer Plan; or (iii) receives any notice from the PBGC under Title
IV of ERISA of an intent to terminate or appoint a trustee to administer any Guaranteed Pension
Plan.

               (f) Notice of Material Adverse Effect. Borrower or Forestar Group will give notice to
Agent in writing within fifteen (15) days of becoming aware of the occurrence of any event or
circumstance which could reasonably be expected to have a Material Adverse Effect.

               (g) Notice of Tax-Sharing Agreement Claims. Borrower or Forestar Group will give
notice to Agent within fifteen (15) days after Forestar Group’s receipt of written notice of any
material claim for indemnity under the Spin-off Tax Sharing Agreement, together with copies of all
material correspondence and other information relating to such claim.

          §7.6 Existence; Maintenance of Properties.

     Except as permitted under §8.4, the Loan Parties will do or cause to be done all things
necessary to preserve and keep in full force and effect their respective legal existences and good
standing in their respective jurisdictions of incorporation, organization or formation (as the case
may be) and those of their respective Subsidiaries. Except as permitted under §8.4, the Loan
Parties will do or cause to be done all things necessary to preserve or establish their respective
good standing as a foreign entity and due authorization to do business in the jurisdictions
described in §6.1(a)(ii) and that of their respective Subsidiaries. Except as permitted under
§8.4, each Loan Party will do or cause to be done all things necessary to preserve and keep in full
force all of its rights and franchises and those of its Subsidiaries, except where the failure to
preserve such rights and franchises would not reasonably be expected to have a Material Adverse
Effect.

          §7.7 Insurance.

               (a) Maintenance of Insurance. Each Loan Party will maintain with financially sound
and reputable insurers not Affiliates of Borrower that are licensed to do business in the State
where the policy is issued and, with respect to any property and casualty insurance, also in the
States where the Mortgaged Property or Negative Pledge Property is located, insurance with respect
to its properties and business (including, without limitation, Mineral Activity conducted by a Loan
Party) against such casualties and contingencies, as shall be in accordance with the general
practices of businesses engaged in similar activities in similar geographic areas, and in amounts,
containing such terms, in such forms and for such periods as may be reasonable and prudent in
accordance with sound business practices and the determination of management of the Loan Parties.
On or before the Closing Date, Borrower shall furnish to Agent a certificate setting forth in
reasonable detail the nature and extent of all insurance maintained by Borrower and each

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other Loan Party, and shall cause each issuer of an insurance policy to provide Agent with an
endorsement (i) showing Agent as a loss payee with respect to each policy of property or casualty
insurance and naming Agent as an additional insured with respect to each policy of liability
insurance, (ii) providing that 30 days’ notice will be given to Agent prior to any cancellation of,
or material reduction or change in coverage provided by or other material modification to such
policy, and also a cross liability/severability endorsement. Forestar Group or the other Loan
Parties shall be responsible for all premiums on insurance policies. Upon Agent’s request,
Borrower or Forestar Group shall deliver duplicate originals or certified copies of all such
policies to Agent, and shall promptly furnish to Agent all renewal notices and evidence that all
premiums or portions thereof then due and payable have been paid. At least fifteen (15) days prior
to the expiration date of the policies, Forestar Group shall deliver to Agent evidence of continued
coverage, including a certificate of insurance, as may be satisfactory to Agent.

               (b) Endorsements. In addition to the endorsements referred to in §7.7(a), all
policies of insurance required by this Agreement shall contain clauses or endorsements to the
effect that (i) no act or omission of any Loan Party, anyone acting for any Loan Party (including,
without limitation, any representations made in the procurement of such insurance), which might
otherwise result in a forfeiture of such insurance or any part thereof, no occupancy or use of the
Mortgaged Property and the Negative Pledge Property for purposes more hazardous than permitted by
the terms of the policy, and no foreclosure or any other change in title to the Mortgaged Property
and the Negative Pledge Property or any part thereof, shall affect the validity or enforceability
of such insurance insofar as Agent is concerned, (ii) the insurer waives any right of setoff,
counterclaim, subrogation, or any deduction in respect of any liability of any of the Loan Parties,
and Agent, (iii) such insurance is primary and without right of contribution from any other
insurance which may be available, (iv) such policies shall not be modified, canceled or terminated
prior to the scheduled expiration date thereof without the insurer thereunder giving at least
thirty (30) days prior written notice to Agent by certified or registered mail, and (v) that Agent
or Lenders shall not be liable for any premiums thereon or subject to any assessments thereunder,
and shall in all events be in amounts sufficient to avoid any coinsurance liability. Upon request
by Borrower, Agent and Borrower may approve variations in the foregoing requirements from time to
time.

               (c) Blanket Policies. Such insurance may be provided under blanket policies of
insurance obtained by Forestar Group. Such blanket policies may cover additional locations and
property of Borrower and other Persons not included in the Mortgaged Properties or the Negative
Pledge Properties, provided that such blanket policies comply with all of the terms and provisions
of this §7.7 and contain endorsements or clauses assuring that any claim recovery will not be less
than that which a separate policy would provide, including, without limitation, a priority claim
provision with respect to property insurance and an aggregate limits of insurance endorsement in
the case of liability insurance. Upon request by Borrower, Agent and Borrower may approve
variations in the foregoing requirements from time to time.

               (d) No Separate Insurance. Borrower shall not carry separate insurance, concurrent in
kind or form or contributing in the event of loss, with any insurance required under this Agreement
unless such insurance complies with the terms and provisions of this §7.7.

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          §7.8 Taxes.

     Each Loan Party will duly pay and discharge, or cause to be paid and discharged, before the
same shall become delinquent, all taxes, assessments and other governmental charges imposed upon it
and the Mortgaged Properties and the Negative Pledge Properties owned by it, including, without
limitation, any payments in lieu of taxes, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials or supplies that if unpaid
might by law become a lien or charge upon any of its property or the property of any other Loan
Party or their respective Subsidiaries; provided that any such tax, assessment, charge,
levy or claim need not be paid if (a) the validity or amount thereof shall currently be contested
in good faith by appropriate proceedings, (b) no Mortgaged Property or Negative Pledge Property nor
any portion thereof or interest therein would be in any danger of sale, forfeiture or loss by
reason of such proceeding and (c) the Loan Party shall have set aside on its books adequate
reserves in accordance with GAAP with respect thereto; and provided further that
Borrower will pay, or cause to be paid, all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may have attached as
security therefor.

          §7.9 Inspection of Mortgaged Properties, Negative Pledge Properties and Books.

     Borrower shall permit or cause the other Loan Parties and their respective Subsidiaries to
permit, Lenders, through Agent or any representative designated by Agent, at Borrower’s expense and
upon reasonable prior notice to visit and inspect any of the Mortgaged Properties and the Negative
Pledge Properties, to examine the books of account of Borrower and the other Loan Parties and their
respective Subsidiaries (and to make copies thereof and extracts therefrom) and to discuss the
affairs, finances and accounts of Borrower and the other Loan Parties and their respective
Subsidiaries with, and to be advised as to the same by, its officers, all at such reasonable times
and intervals as Agent or any Lender may reasonably request (provided, however, that so long as no
Event of Default shall have occurred and be continuing, Borrower shall not be required to pay for
such visits and inspections more often than once in any twelve (12) month period).

          §7.10 Compliance with Laws, Contracts, Licenses, and Permits.

     Borrower will comply and cause each of the other Loan Parties and their respective
Subsidiaries to comply, in all respects with (i) all applicable laws, ordinances, regulations and
requirements now or hereafter in effect wherever its business is conducted, including all
Environmental Laws, (ii) the provisions of its Organizational Documents, (iii) all mortgages,
indentures, contracts, agreements and instruments to which it is a party or by which it or any of
its properties may be bound, (iv) all applicable decrees, orders, and judgments, and (v) all
licenses and permits required by applicable laws and regulations for the conduct of its business or
the ownership, use or operation of its properties, except in each case where the failure to so
comply would not reasonably be expected to have a Material Adverse Effect. If at any time while
any Loan, Note or Letter of Credit is outstanding or Lenders have any obligation to make Loans
hereunder, or Agent has any obligation to issue Letters of Credit hereunder, any authorization,
consent, approval, permit or license from any officer, agency or instrumentality of any government
shall become necessary or required in order that Borrower or any other Loan Party

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may fulfill any of their obligations hereunder or under the other Loan Documents, Borrower
will promptly take or cause to be taken all steps necessary to obtain such authorization, consent,
approval, permit or license and furnish Agent and Lenders with evidence thereof.

     §7.11 Sweep of Certain Funds in Operating Accounts of Loan Parties and
Subsidiaries.

     The Loan Parties each agree to take all necessary steps, including the execution and delivery
of all necessary notices and other documentation to the applicable Deposit Account Banks, to
establish and maintain in effect at all times instructions that all collected funds held in the
operating accounts of each Loan Party (other than Borrower) and its wholly-owned Subsidiaries
(other than SPE Subsidiaries) be swept on a daily basis into Borrower’s primary Operating Account
that is subject to a Deposit Account Control Agreement in favor of Agent, provided that such Loan
Parties and their wholly-owned Subsidiaries (other than SPE Subsidiaries) collectively may retain
an amount not exceeding $15,000,000 in their operating accounts at any time.

     §7.12 Further Assurances.

     Borrower will cooperate, and cause the other Loan Parties to cooperate, with Agent and Lenders
and execute such further instruments and documents as Lenders or Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Agreement and the other Loan
Documents.

     §7.13 Project Approvals.

     Borrower will give all such notices to, and take all such other actions with respect to, such
Governmental Athority as may be required under applicable Requirements to use, occupy and, where
applicable, develop, the Mortgaged Properties and the Negative Pledge Properties. Borrower will
duly perform and comply with, and cause each applicable other Loan Party to perform and comply
with, all of the terms and conditions of all Project Approvals obtained at any time.

     §7.14 Timber Affirmative Covenants.

               (a) Management. Borrower shall use its best efforts to operate the Timberland using
silvicultural and harvesting practices and non-binding guidance issued with respect to the
management and harvesting of timberlands by Governmental Authorities in the States where the Real
Property is located, it being understood, however, that Borrower does not intend to replant or
reseed for timber.

               (b) Damage. Borrower will promptly notify Agent of any damage to the Timberland
affecting more than 10,000 acres.

               (c) Fire Protection. Measures shall be taken which are reasonably necessary to
protect the Timberland from loss by fire.

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               (d) Notice of Appraisal. Borrower shall promptly provide to Lenders a copy of any
appraisal related to the Timberland.

               (e) Timber Purchase Agreement. Borrower shall not consent to, and shall not permit
any other Loan Party signatory thereto to consent to, any amendment, supplement, waiver or other
modification, termination or assignment of the Timber Purchase Agreement which could reasonably be
expected to be adverse to the interests of Agent and Lenders without the prior consent of Agent,
and shall furnish Agent all information available to Borrower, as well as any additional
information reasonably requested by Agent, with respect thereto.

               (f) Timber Sale and Release. Borrower shall be permitted to cut, or allow others to
cut, Timber from the Timberland on the terms and conditions set forth in this Agreement, and so as
not to result in a violation of the covenants contained in §9. The Lien of the Security Deeds (and
the related security interests under the Uniform Commercial Code) against any cut or severed Timber
(but not the proceeds thereof, it being the intent hereof that Agent’s Lien, on behalf of Lenders,
and security interest continue in the proceeds) shall be automatically released, without any action
by any of Borrower, any other Loan Party, Agent or Lenders, upon the sale thereof by the applicable
Loan Party. Borrower shall pay to Agent all reasonable fees, costs and expenses incurred by Agent
in connection with any such partial releases including, without limitation, legal, appraisal and
accounting fees incurred by Agent and all other expense, and recording and title insurance and
title expenses.

               (g) Post-Default Restrictions. Upon the occurrence and during the continuation of an
Event of Default, upon notice from Agent to Borrower to such effect, Borrower shall not enter into
any new Timber cutting or stumpage agreements pertaining to the Mortgaged Property or harvest
Timber (or permit Timber to be harvested) from the Mortgaged Property in excess of Borrower’s
harvesting plan then in effect, in each case without Agent’s prior written consent.

          §7.15 Plan Assets.

     Borrower will do, or cause to be done, all things necessary to ensure that none of the
Collateral will be deemed to be Plan Assets at any time.

          §7.16 [RESERVED]

          §7.17 Business Operations.

     Each Loan Party shall, and shall cause its Subsidiaries to operate its respective business
generally in substantially the same manner as has been previously conducted and businesses
reasonably related thereto, and the Loan Parties shall not, nor shall they cause or permit their
Subsidiaries to, materially change the nature of such business or engage in any other unrelated
businesses or activities. Each Loan Party shall further, and shall cause its Subsidiaries to,
operate their respective businesses in compliance with the terms and conditions of the Loan
Documents relating to such business.

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          §7.18 Registered Servicemark.

     Without the prior written consent of Agent, such consent not to be unreasonably withheld or
delayed, no Mortgaged Property or Negative Pledge Property shall be owned or operated by Borrower
or any other Loan Party under any registered or protected trademark, tradename, servicemark or
logo. Without limiting the foregoing, Agent may condition its consent to the use of any of the
foregoing upon the granting to Agent for the benefit of Lenders of a perfected first priority
security interest therein.

          §7.19 Mineral Activities.

               (a) Except as permitted in this §7.19, the Loan Parties shall not undertake or operate or
cause to be undertaken or operated for the benefit of, or as agent for, any Loan Party, or under
any lease of the Real Estate, whether directly or indirectly, any Mineral Activity. Any Mineral
Activity on the Real Estate, with respect to minerals owned by any Loan Party, if any, shall be
conducted in accordance with general industry operating standards and in such manner as would be
reasonably expected not to have a Material Adverse Effect and either (i) carried out by third party
lessees or operators (which may include Joint Ventures) under bona fide Mineral Rights Leases, or
(ii) conducted by a Loan Party.

               (b) Mineral Activity conducted on the Real Estate by any Loan Party shall be conducted in
accordance in all material respects with all applicable laws and regulations, including
specifically Environmental Laws, and the Loan Parties shall use commercially reasonable efforts to
require that Mineral Activity (including the clean up of Hazardous Materials) conducted on the Real
Estate by third party lessees or operators is conducted in accordance with all applicable laws and
regulations, including specifically Environmental Laws.

               (c) The Loan Parties shall (A) comply, and shall require any third parties engaged by a Loan
Party to conduct Mineral Activity to comply, in all material respects with all Laws concerning the
exploration, extraction, removal and transportation of Minerals, and (B) enforce the material terms
and conditions of the Mineral Rights Leases and use commercially reasonable efforts to require the
lessees and operators thereunder to comply with all material terms and conditions of the Mineral
Rights Leases. The Loan Parties shall furnish to Agent, promptly following a request therefor,
copies of its records with regard to the compliance by lessees and operators with all material
terms and conditions of the Mineral Rights Leases.

               (d) Any Mineral Activity on the Real Estate permitted hereunder shall not be undertaken or
permitted by the Loan Parties, except in such manner that would not reasonably be expected to
result in liability to Agent or the Lenders for any of such activities under applicable
Environmental Laws, including claims based upon the existence of any Hazardous Material,
non-hazardous wastes, discoloration or degradation of any water or streams, interference with the
bed of any stream or the natural flow thereof, reclamation or revegetation.

               (e) The Loan Parties shall, or use commercially reasonable efforts to cause third party
lessees or operators to, conduct Mineral Activity (A) with due regard for the present and future
value of the Real Estate as timber producing and/or oil and gas properties; (B) in compliance with
all material conditions, covenants and limitations contained in any of the

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instruments under which the Loan Parties hold title to the Real Estate or under which the Loan
Parties own minerals without ownership of the surface overlying said minerals.

               (f) Agent shall have the right, but not the duty, at any and all reasonable times to enter
upon the Real Estate for the purposes of inspecting the Mineral Activities being conducted thereon,
including the financial records, royalty summaries, mining reports, weighing devices and maps
related thereto. The Loan Parties agree to promptly furnish Agent, upon request and without cost
to Agent, the results of all core drilling and other exploratory openings and tests made for coal,
oil, gas or other minerals upon the Real Estate, including the results of any analytical test made
to determine the quality, type or characteristics thereof, to the extent such information is in the
possession of a Loan Party or otherwise available to it without unreasonable cost or expense.

               (g) Without limiting §16, the Loan Parties shall indemnify and hold harmless Agent and
Lenders and their respective officers, directors and employees and their respective successors,
from and against all fines, penalties, actions, suits, legal proceedings and all costs and expenses
associated therewith (including reasonable legal fees) arising out of or in any way connected with
any failure of the Loan Parties to perform their obligations under this §7.19, except to
the extent arising from Agent’s, any Lender’s or their officers’, directors’, employees’ or
successors’ gross negligence or willful misconduct.

          §7.20 More Restrictive Agreements.

     Without limiting the terms of §8.1, should Borrower or any Subsidiary enter into or modify any
agreements or documents pertaining to any existing or future Indebtedness which agreements or
documents include financial covenants which are individually or in the aggregate more restrictive
against Borrower or such Subsidiary than those set forth in §9, Borrower shall promptly notify
Agent and, if requested by the Required Lenders, Borrower, Agent, and the Required Lenders shall
promptly amend this Agreement and the other Loan Documents to include some or all of such more
restrictive provisions as determined by the Required Lenders in their sole discretion.

          §7.21 Additional Subsidiaries; Additional Guarantors.

               Within thirty (30) days of any Person becoming a wholly owned, direct or indirect Subsidiary
of Borrower after the Closing Date (other than an Excluded Subsidiary), or after an Excluded
Subsidiary ceases to qualify as such, Borrower will provide Agent with written notice thereof
setting forth information in reasonable detail describing the scope and approximate amount of all
assets of such Subsidiary and shall (a) cause such Subsidiary to execute and deliver to Agent a
Joinder Agreement (Guarantor), (b) cause the Equity Interests in such Subsidiary (other than an SPE
Subsidiary) to be pledged by joinder or amendment to the Pledge Agreement, and (c) cause such
Subsidiary and each required Loan Party to deliver such additional documents and certificates under
such clauses as Agent reasonably shall request, certified resolutions and other Organizational
Documents and authorizing documents of such Subsidiary and favorable opinions of counsel to such
Subsidiary, all in form and substance reasonably acceptable to Agent. Any document (other than
opinions) or certificate delivered in connection with this §7.21 shall constitute a Loan Document.
Forestar Group shall not create or acquire any Subsidiaries after the Closing Date unless such
Subsidiaries are direct or indirect Subsidiaries of Borrower.

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          §7.22 Future Advances Tax Payment.

     Borrower will pay to Agent, on demand, any (or any additional) mortgage, recording,
intangible, documentary stamp or other similar taxes and charges which Agent reasonably determines
to be payable to any state or any county or municipality thereof in which any of the Mortgaged
Properties are located, and will deliver to Agent, promptly upon request, such affidavits or other
information which Agent reasonably determines to be necessary in connection with any Loans or other
extensions of credit pursuant to this Agreement, the extension of the Maturity Date or any other
reason, in order to insure that the Mortgages on Mortgaged Property located in such state secure
Borrower’s Obligations.

§8. CERTAIN NEGATIVE COVENANTS OF LOAN PARTIES

     Borrower and the other Loan Parties (as applicable) covenant and agree that, so long as any
Loan, Note, Letter of Credit or other Obligation (other than contingent indemnification obligations
for which no claim has been asserted) is outstanding or any Lender has any obligation to make any
Loans or Agent has any obligation to issue any Letter of Credit:

          §8.1 Restrictions on Indebtedness.

     Subject to the further restrictions of §9.1, the Loan Parties will not, and will not permit
any of their respective Subsidiaries to, create, incur, assume, guarantee or be or remain liable,
contingently or otherwise, with respect to any Indebtedness other than:

                    (i) the Obligations;

                    (ii) Indebtedness of Borrower to any Subsidiary that is a Guarantor or Indebtedness of any
Subsidiary to Borrower or another Subsidiary that is a Guarantor;

                    (iii) to the extent constituting Indebtedness, liabilities in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and supplies to the extent that
payment therefor shall not at the time be required to be made in accordance with the provisions of
§7.8;

                    (iv) contingent obligations arising with respect to customary indemnification obligations in
favor of purchasers in connection with dispositions permitted under §8.8;

                    (v) Indebtedness in respect of judgments or awards that would not constitute an Event of
Default;

                    (vi) obligations under any Hedge Agreement incurred in the ordinary course of business for
bona fide hedging purposes;

                    (vii) Indebtedness owing to insurance carriers or finance companies and incurred to finance
insurance premiums of any Loan Party in the ordinary course of business in a principal amount not
to exceed at any time the amount of such insurance premiums to be paid by such Loan Party;

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                    (viii) Indebtedness arising from the honoring by a bank or other financial institution of a
check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary
course of business, or pursuant to netting services or otherwise in connection with deposit
accounts;

                    (ix) endorsements for collection, deposit or negotiation and warranties of products or
services, in each case incurred in the ordinary course of business;

                    (x) Indebtedness in connection with surety (or similar) bonds, letters of credit and
performance bonds obtained in the ordinary course of business in connection with workers’
compensation obligations of the Loan Parties and in connection with other surety and performance
bonds in the ordinary course of business;

                    (xi) Permitted Existing Indebtedness, including any Permitted Refinancing Indebtedness;

                    (xii) Non-Recourse Indebtedness (including the Loan Parties’ share of Non-Recourse
Indebtedness incurred by any Joint Venture) in an aggregate principal amount not exceeding
$250,000,000 at any time, provided that (a) such Non-Recourse Indebtedness is secured solely by
either (1) property wholly owned by Borrower or another Loan Party that is not included in the
Borrowing Base, or (2) by property wholly owned by a Joint Venture, (b) Borrower shall have
provided Agent (if requested by Agent) with true, correct and complete copies of the substantially
final operative loan documents with respect to such Indebtedness at least five (5) Business Days
prior to the incurrence of such Indebtedness, (c) Borrower shall have provided to Agent a
certificate that (i) no Default or Event of Default exists or would be caused by the incurrence of
such Indebtedness, (ii) the leverage ratio of such Non-Recourse Indebtedness relative to the value
of the Real Estate securing the same shall, at the time such Indebtedness is incurred, be less than
seventy-five percent (75%) (or eighty-five percent (85%) in the case of such Indebtedness in
respect of Multifamily Properties), and (iii) with respect to any Non-Recourse Indebtedness of a
Joint Venture, a portion of which is allocable to the Loan Parties for purposes of this §8.1(xii),
the leverage ratio of such Non-Recourse Indebtedness of such Joint Venture relative to the value of
the Real Estate of such Joint Venture securing the same, shall at the time such Indebtedness is
incurred, be less than seventy-five percent (75%) (or eighty-five percent (85%) in the case of such
Indebtedness in respect of Multifamily Properties); and (d) only Permitted Recourse Undertakings
shall be permitted in connection with such Non-Recourse Indebtedness;

                    (xiii) Indebtedness (other than Non-Recourse Indebtedness or Bond Indebtedness) in an
aggregate principal amount not exceeding $75,000,000 at any time (including the portion of all
Joint Venture Indebtedness that is recourse to any Loan Party), provided that (a) such Indebtedness
is secured solely by property wholly owned by either by Borrower or its Subsidiaries that is not
included in the Borrowing Base, or by property wholly owned by a Joint Venture, and (b) Borrower
shall have provided to Agent a certificate that (i) no Default or Event of Default exists or would
be caused by the incurrence of such Indebtedness, (ii) the leverage ratio of such Indebtedness
relative to the value of the property securing the same shall, at the time such Indebtedness is
incurred, be less than seventy-five percent (75%) (or eighty-five percent (85%) in the case of such
Indebtedness in respect of Multifamily Properties), and (iii) with

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respect to any Indebtedness of a Joint Venture, a portion of which is allocable to the Loan
Parties for purposes of this §8.1(xiii), the ratio of such Indebtedness of such Joint Venture
relative to the value of the Joint Venture’s property securing the same, shall, at the time such
Indebtedness is incurred, be less than seventy-five percent (75%) (or eighty-five percent (85%) in
the case of such Indebtedness in respect of Multifamily Properties); provided,
however, that the portion of any secured surety bond Indebtedness in excess of $15,000,000
permitted pursuant to §8.1(xiv) shall be counted against the $75,000,000 limit provided in this
paragraph;

                    (xiv) surety, statutory or appeal bonds or similar obligations incurred in the ordinary course
of business under which the Loan Parties’ collective potential exposure shall not at any time
exceed $75,000,000, of which up to $25,000,000 may be secured by Liens pursuant to §8.2(iii);

                    (xv) Indebtedness under Commodity Hedge Agreements incurred for bona fide hedging purposes up
to a maximum aggregate exposure at any time of $25,000,000; provided that the aggregate exposure
amount may exceed such maximum amount for a period not to exceed five (5) consecutive Business
Days; and

                    (xvi) Bond Indebtedness (including any guaranties in respect thereof by any Subsidiary of
Forestar Group) in an aggregate principal amount not exceeding $250,000,000 at any time, provided
that (a) such Indebtedness is unsecured, (b) Borrower shall have provided to Agent a certificate
that no Default or Event of Default exists or would be caused by the incurrence of such
Indebtedness, (c) if such Bond Indebtedness is not Convertible Bond Indebtedness, the net cash
proceeds from the issuance thereof must be applied first to the repayment in full of the Term Loan
and thereafter may be used for general corporate purposes (it being understood and agreed that the
net cash proceeds from the issuance of Convertible Bond Indebtedness shall not be required to be
applied to prepay the Loans), and (d) if such Bond Indebtedness is Convertible Bond Indebtedness
and a Call Option Overlay is entered into in conjunction therewith, the terms of such Call Option
Overlay shall be those customary for such transactions.

          §8.2 Restrictions on Liens, Etc.

     The Loan Parties will not, and will not permit any of their respective Subsidiaries to, (a)
create or incur or suffer to be created or incurred or to exist any lien, encumbrance, mortgage,
pledge, negative pledge, charge, restriction or other security interest of any kind upon any of its
property or assets of any character whether now owned or hereafter acquired, or upon the income or
profits therefrom; (b) transfer any of its property or assets or the income or profits therefrom
for the purpose of subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c) acquire, or agree or have an option
to acquire, any property or assets upon conditional sale or other title retention or purchase money
security agreement, device or arrangement; or (d) sell, assign, pledge or otherwise encumber any
accounts, contract rights, general intangibles, chattel paper or instruments, with or without
recourse (collectively the “Liens”); provided that the Loan Parties may, and may
permit their respective Subsidiaries to, create or incur or suffer to be created or incurred or to
exist any of the following (the “Permitted Liens”):

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                    (i) Liens for taxes, assessments and other governmental charges or claims for labor, material
or supplies in respect of obligations not overdue or being contested in good faith;

                    (ii) Liens in favor of Agent and Lenders under the Loan Documents;

                    (iii) Liens on properties of any Loan Party or their respective Subsidiaries other than the
Mortgaged Property, any other Collateral or any interest therein (including the rents, issues and
profits therefrom) in respect of Indebtedness which is permitted by §8.1(xi) §8.1(xii), §8.1(xiii)
or §8.1(xiv);

                    (iv) Liens arising in the ordinary course of business (including (A) Liens of carriers,
warehousemen, mechanics, landlords and materialmen and other similar Liens imposed by law and (B)
Liens incurred in connection with worker’s compensation, unemployment compensation and other types
of social security (excluding Liens arising under ERISA) or in connection with surety bonds, bids,
performance bonds and similar obligations) for sums not overdue or being diligently contested in
good faith by appropriate proceedings and not involving any deposits or advances or borrowed money
or the deferred purchase price of property or services and, in each case, for which it maintains
adequate reserves in accordance with GAAP and the execution or other enforcement of which is
effectively stayed;

                    (v) Liens described on Schedule 8.2 as of the Closing Date;

                    (vi) options on property and rights of transferees pending the transfer thereof otherwise
permitted by this Agreement;

                    (vii) attachments, appeal bonds, judgments and other similar Liens, with respect to judgments
that do not otherwise result in or cause an Event of Default;

                    (viii) easements, rights of way, zoning ordinances, entitlements, minor defects or
irregularities in title or survey, building codes and other land use laws and environmental
restrictions, regulations and ordinances, and other similar Liens regulating the use or occupancy
of real property or the activities conducted thereon which are imposed by a Governmental Authority
having jurisdiction over such real property which are not violated in any material respect by the
current use or occupancy of such real property and do not interfere in any material respect with
the ordinary operation of the business of any Loan Party;

                    (ix) leases or subleases granted to others not interfering in any material respect with the
business of any Loan Party and any interest or title of a lessor under any lease;

                    (x) licenses or sublicenses of intellectual property granted in the ordinary course of
business;

                    (xi) Liens arising under Article 2 or Article 4 of the Uniform Commercial Code and customary
banker’s liens and rights of set-off, revocation, refund or chargeback in favor of banks or other
financial institutions where the Loan Parties maintain deposits in the ordinary course of business;

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                    (xii) Liens arising from precautionary Uniform Commercial Code financing statements regarding
operating leases or consignments;

                    (xiii) Liens deemed to exist in connection with repurchase agreements and other similar
investments to the extent such Investments are permitted under this Agreement;

                    (xiv) the replacement, extension or renewal of any Lien permitted by clause (iii) above upon
or in the same property subject thereto arising out of the extension, renewal or replacement of the
Indebtedness secured thereby;

                    (xv) Liens existing on any asset of a Person at the time such Person becomes a Subsidiary of
Borrower and not created in contemplation of such event;

                    (xvi) other Liens, excluding Liens on Collateral, securing amounts (other than Indebtedness
for borrowed money) in an aggregate amount not to exceed $1,000,000; and

                    (xvii) Liens under Mineral Rights Leases which arise in the ordinary course of the Mineral
Business, which are usual and customary in respect of Mineral Activity and secure obligations of a
Loan Party under a Mineral Rights Lease not constituting Indebtedness for borrowed money.

          §8.3 Restrictions on Investments.

     The Loan Parties will not make or permit to exist or to remain outstanding any Investment
except Investments in:

               (a) marketable direct or guaranteed obligations of the United States of America that mature
within one (1) year from the date of purchase by any Loan Party;

               (b) marketable direct obligations of any of the following: Federal Home Loan Mortgage
Corporation, Student Loan Marketing Association, Federal Home Loan Banks, Federal National Mortgage
Association, Government National Mortgage Association, Bank for Cooperatives, Federal Intermediate
Credit Banks, Federal Financing Banks, Export-Import Bank of the United States, Federal Land Banks,
or any other agency or instrumentality of the United States of America;

               (c) demand deposits, certificates of deposit, bankers acceptances and time deposits of United
States banks having total assets in excess of $100,000,000; provided, however, that
the aggregate amount at any time so invested with any single bank having total assets of less than
$1,000,000,000 will not exceed $200,000;

               (d) securities commonly known as “commercial paper” issued by a corporation organized and
existing under the laws of the United States of America or any State which at the time of purchase
are rated by Moody’s or by S&P at not less than “P-1” if then rated by Moody’s, and not less than
“A-1”, if then rated by S&P;

               (e) mortgage-backed securities guaranteed by the Government National Mortgage Association, the
Federal National Mortgage Association or the Federal Home Loan

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Mortgage Corporation and other mortgage-backed bonds which at the time of purchase are rated
by Moody’s or by S&P at not less than “Aa” if then rated by Moody’s and not less than “AA” if then
rated by S&P;

               (f) shares of so-called “money market funds” registered with the SEC under the Investment
Company Act of 1940 which maintain a level per-share value, invest principally in investments
described in the foregoing subsections (a) through (e) and have total assets in excess of
$50,000,000;

               (g) the Mortgaged Properties and the Negative Pledge Properties and related personal property;

               (h) Investments in other Loan Parties or in wholly owned Subsidiaries of any Loan Party that
is or becomes a Guarantor substantially contemporaneously therewith pursuant to §7.21;

               (i) Investments in Joint Ventures that are not otherwise prohibited under this Agreement;

               (j) the acquisition of Real Estate and extensions of trade credit in the ordinary course of
business;

               (k) Investments of any Person existing at the time such Person becomes a Subsidiary or
consolidates or merges with Borrower or any of its Subsidiaries so long as such Investments were
not made in contemplation of such Person becoming a Subsidiary or of such consolidation or merger;

               (l) any Investments received in consideration for an asset sale permitted by this Agreement;

               (m) Investments (including Indebtedness and other obligations) received in connection with the
bankruptcy or reorganization of customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers in the ordinary course of business;

               (n) Investments listed on Schedule 8.3 as of the Closing Date;

               (o) Investments in an SPE Subsidiary in connection with Non-Recourse Indebtedness; provided
that (i) any such Investment in an SPE Subsidiary is in the form of a contribution of additional
Non-Recourse Assets or as common equity, and (ii) purchases of Non-Recourse Assets pursuant to
Permitted Recourse Undertakings in connection with Non-Recourse Indebtedness;

               (p) indemnities made and surety and performance bonds and letters of credit issued in the
ordinary course of business;

               (q) Investments in connection with Hedge Agreements and Commodity Hedge Agreements permitted
under this Agreement;

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               (r) the purchase or other acquisition of property and assets or businesses of any Person or of
assets constituting a business unit, a line of business or division of such Person, or Equity
Interests in a Person that, upon the consummation thereof, will be a Subsidiary of Borrower
(including as a result of a merger or consolidation); provided, that with respect to each
purchase or other acquisition made pursuant to this §8.3(r) (each, a “Permitted
Acquisition”):

                    (1) to the extent required by this Agreement, the Equity Interest of such Subsidiary shall
constitute Collateral and each applicable Loan Party and any such newly created or acquired
Subsidiary shall be a Guarantor; and

                    (2) (A) immediately before and after giving pro forma effect to any such purchase or other
acquisition, no Default or Event of Default shall exist and be continuing and (B) Borrower has
delivered to Agent a pro forma Compliance Certificate showing that after giving effect to such
Investment, Loan Parties remain in compliance with the financial covenants in §9.1;

               (s) in addition to Investments otherwise expressly permitted by this Section, Investments by
Borrower or any of its Subsidiaries in an aggregate amount not to exceed, at any time, 2% of
Consolidated Tangible Net Worth; and

               (t) Investments in connection with Distributions permitted by §8.7.

               (u) Investment in Real Estate to the extent of a fifty percent (50%) undivided interest in
approximately 6000 acres in the form of a distribution in respect of a fifty percent (50%) interest
in a Joint Venture with Cousins Properties (or an Affiliate of Cousins Properties) in a project
known as “TEMCO Associates” (the “TEMCO Investment”);

               (v) Investments constituting (i) interests in oil and gas minerals or otherwise in respect of
Mineral Activity and (ii) the acquisition of additional mineral interest acreage; and

               (w) Investments in Convertible Bond Hedge Transactions and Capped Call Transactions.

          §8.4 Merger, Consolidation.

     The Loan Parties will not, and will not permit their respective Subsidiaries to, become a
party to any dissolution, liquidation, merger, reorganization, consolidation or other business
combination, or agree to or effect any asset acquisition or stock acquisition or other acquisition
which may have a similar effect as any of the foregoing without the prior written consent of the
Required Lenders, except that:

               (a) any Subsidiary of the Borrower may be merged or consolidated with or into the Borrower
(provided that the Borrower shall be the continuing or surviving corporation) or with or
into any Subsidiary that is a Guarantor (provided that (i) such Guarantor shall be the
continuing or surviving corporation or (ii) simultaneously with such transaction, the continuing or
surviving corporation shall become a Guarantor and the Borrower shall comply with §7.21 in
connection therewith);

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               (b) any Subsidiary of the Borrower may dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to Borrower or any Subsidiary that is a Guarantor;

               (c) an Excluded Subsidiary pursuant to clause (i) of the definition thereof (i) may be merged
or consolidated with or into Borrower or any other Subsidiary of Borrower and (ii) may dispose of
any or all of its assets (upon voluntary liquidation or otherwise) pro rata to its equity holders;
and

               (d) Borrower or any Subsidiary may consummate any Investment otherwise permitted by §8.3(r) by
merger or consolidation, provided that if (i) such merger or consolidation involves the Borrower,
the Borrower is the continuing or surviving corporation and (ii) if such merger or consolidation
involves a Guarantor, such Guarantor is the continuing or surviving corporation.

          §8.5 Sale and Leaseback.

     The Loan Parties will not, and will not permit their respective Subsidiaries to, enter into
any arrangement, directly or indirectly, whereby such Person shall sell or transfer any Mortgaged
Property or Negative Pledge Property in order that then or thereafter such Person shall lease back
such Mortgaged Property or such Negative Pledge Property.

          §8.6 Compliance with Environmental Laws.

     The Loan Parties will not, and will not permit their respective Subsidiaries and will use good
faith efforts to not permit any tenants of any of the Mortgaged Properties or the Negative Pledge
Properties or any other Real Estate owned by a Loan Party to do any of the following: (a) use any
Mortgaged Property or Negative Pledge Property as a facility for the handling, processing, storage
or disposal of Hazardous Substances, except for quantities of Hazardous Substances used in the
ordinary course of business and in material compliance with all applicable Environmental Laws, (b)
cause or permit to be located on any Mortgaged Property or Negative Pledge Property any underground
tank or other underground storage receptacle for Hazardous Substances except in material compliance
with Environmental Laws, (c) generate any Hazardous Substances on any Mortgaged Property, Negative
Pledge Property or any other Real Estate owned by a Loan Party except as generated in the ordinary
course of business and in material compliance with Environmental Laws, (d) cause a Release of
Hazardous Substances on, upon or into the Mortgaged Property, the Negative Pledge Property or any
other Real Estate owned by a Loan Party which give rise to liability under CERCLA or any other
Environmental Law, or (e) transport or arrange for the transport of any Hazardous Substances
(except as required in the ordinary course of business and in material compliance with all
Environmental Laws).

     If any Loan Party causes any Release of Hazardous Substances in violation of Environmental
Laws to occur, such Loan Party shall cause the prompt containment and removal of such Hazardous
Substances and remediation of the Mortgaged Property or the Negative Pledge Property in material
compliance with all applicable Environmental Laws.

     At any time after an Event of Default shall have occurred and is continuing hereunder, at any
time that Agent or the Required Lenders shall have reasonable grounds to believe that a Release of
Hazardous Substances may have occurred relating to any Mortgaged Property or

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Negative Pledge Property, Agent may at its election (and will at the request of the Required
Lenders) obtain such assessments, including, without limitation, environmental assessments of such
Mortgaged Property or such Negative Pledge Property prepared by an Environmental Engineer as may be
reasonably necessary for the purpose of evaluating or confirming whether any Hazardous Substances
have been Released by any Loan Party on such Mortgaged Property or such Negative Pledge Property,
which Release will result in a Material Adverse Effect. Such assessments may include detailed
visual inspections of such Mortgaged Property or such Negative Pledge Property including, without
limitation, any and all storage areas, storage tanks, drains, dry wells and leaching areas, and the
taking of soil or other samples, as well as such other investigations or analyses as are reasonably
necessary for a determination of whether such Release results in a Material Adverse Effect. All
reasonable costs related to such environmental assessments shall be at the sole cost and expense of
Borrower.

     At any time after an Event of Default, Agent may, but shall never be obligated to, remove or
cause the removal of any Hazardous Substances which are in violation of any Environmental Law from
a Mortgaged Property or Negative Pledge Property (or if removal is prohibited by any Environmental
Law or any other applicable law, physical restriction or other reason, take or cause the taking of
such other action as is required to cause any Mortgaged Property or Negative Pledge Property to be
in material compliance with any Environmental Law) if any other Loan Party or any of its
Subsidiaries fails to materially comply with its obligations hereunder with respect thereto; and
Agent and its designees are hereby granted access to the Mortgaged Property and the Negative Pledge
Property at any reasonable time or times, upon reasonable notice, to remove or cause such removal
or to take or cause the taking of any such other action. All costs, including, without limitation,
the reasonable costs incurred by Agent in taking the foregoing action, damages, liabilities,
losses, claims, expenses (including attorneys’ fees and disbursements) which are incurred by Agent,
as the result of any Loan Party’s failure to comply with the provisions of this §8.6, shall be paid
by Borrower or the other applicable Loan Party to Agent upon demand by Agent and shall be
additional obligations secured by the Security Documents, except for costs resulting from or
related to Agent’s gross negligence or willful misconduct.

          §8.7 Distributions.

     No Distributions shall be made by the Loan Parties, or any of them, except as permitted in
this §8.7. Distributions are permitted as follows: (a) Borrower’s Subsidiaries may make
Distributions to Borrower (whether directly or indirectly through one or more intermediate
Distributions to Borrower’s other Subsidiaries), (b) so long as no Default or Event of Default
shall have occurred and be continuing, Forestar Group may purchase Forestar Group’s common stock or
common stock options from present or former officers, directors or employees of the Loan Parties
upon the death, disability or termination of employment of such officer or employer, and Borrower
may make Distributions to Forestar Group to enable Forestar Group to make such purchases, (c)
Forestar Group may make repurchases of its common stock which are deemed to occur upon the cashless
exercise of options or warrants and may repurchase restricted common stock held by present or
former officers, directors or employees to the extent representing such Person’s tax liability for
vested restricted stock, (d) Forestar Group may declare and make Distributions to its stockholders
in the form of equity securities pursuant to the Rights Agreement, (e) any Loan Party may declare
and make Distributions payable solely in its common stock, (f) any Subsidiary may make
Distributions to Borrower, and Borrower may make Distributions to

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Forestar Group, to pay any taxes that are due and payable, (g) Borrower may make Distributions
to Forestar Group and Forestar Group may make Distributions in connection with Permitted Bond
Indebtedness and the Call Option Overlay, and (h) so long as no Default or Event of Default shall
have occurred and be continuing, Borrower may make other Distributions to Forestar Group (and
Forestar Group may make Distributions to its stockholders), provided that, for purposes of this
clause (h), (i) the Total Leverage Ratio as of the last day of the most recently completed fiscal
quarter is less than thirty percent (30%), (ii) the Interest Coverage Ratio for the most recent
Test Period exceeds 3.0:1.0, (iii) the Revenues/Capital Expenditures Ratio for the most recent Test
Period is greater than 1.5:1.0, and (iv) Available Liquidity as of the last day of the most
recently completed fiscal quarter is not less than $125,000,000, all of the requirements of clauses
(i), (ii), (iii) and (iv) tested after giving pro forma effect to the proposed Distribution, as if
such Distribution had occurred on the last day of the most recently completed fiscal quarter or the
first day of the relevant Test Period, as applicable.

          §8.8 Asset Sales.

     The Loan Parties shall not, in any single transaction or series of related transactions,
directly or indirectly, hypothecate, sell, assign, transfer, mortgage, pledge, encumber or
otherwise dispose of any Mortgaged Property, Negative Pledge Property, any Equity Interests held by
a Loan Party in any other Loan Party or in any of their respective Subsidiaries or Joint Ventures,
or any other Collateral, or permit the same to be sold, assigned, transferred, conveyed, contracted
for or encumbered, or otherwise disposed of, or otherwise incur, create, assume or permit to exist
any mortgage, pledge, security interest, encumbrance, Lien or charge of any kind upon such assets
(other than to Agent or in respect of Permitted Liens), nor shall the Loan Parties, or any of them,
whether in a single transaction or a series of related transactions, convey, lease with option to
purchase, enter into a contract for sale, or grant an option to purchase all or any portion of such
assets, except as follows:

               (a) any Mortgaged Property, or any portion thereof or interest therein, may be sold,
transferred, conveyed or otherwise disposed of if such property is entitled to be released, and is
in fact released, from the Security Documents to which it is subject pursuant to the provisions of
§5.3;

               (b) the sale of Lots from inventory in the ordinary course of business or the donation,
dedication or other transfer of common areas, streets and similar areas in connection with the
Development of Real Estate;

               (c) the sale or transfer of any other Real Estate (i.e., other than Mortgaged Property and
other than Lots), in a single transaction or a series of related transactions; provided that if the
consideration for, or book value of, such Real Estate, whichever is greater, exceeds $25,000,000,
Borrower shall provide Agent with (i) notice prior to such sale or transfer, (ii) a pro forma
Compliance Certificate showing that no Default or Event of Default exists either immediately prior
to or after giving effect to such sale, transfer or disposition, and that immediately after giving
effect to such sale, transfer or disposition, Loan Parties remain in compliance with the financial
covenants in §9.1, and (iii) if the Real Estate in question is included in the Borrowing Base, a
pro forma Borrowing Base Certificate showing that after giving effect

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to such sale or transfer, Loan Parties remain in compliance with all Borrowing Base provisions
in §9.2.

               (d) transfers, conveyances or other dispositions of any Real Estate resulting from any
condemnation;

               (e) transfers, conveyances or other dispositions of any property resulting from the granting
of Permitted Liens;

               (f) sales of timber and mineral rights in the ordinary course of business or pursuant to
timber leases, timber cutting contracts and/or Mineral Rights Leases;

               (g) sales and dispositions of assets that are obsolete, worn out or no longer used or useful
in the applicable Loan Party’s business;

               (h) dispositions of assets by a Subsidiary of Borrower to Borrower or another Subsidiary of
Borrower that is a Guarantor;

               (i) the cancellation of intercompany Indebtedness with other Loan Parties permitted under this
Agreement;

               (j) dispositions or liquidations of cash and other Investments in the ordinary course of
business;

               (k) the termination, surrender or sublease of leases (as lessee), licenses (as licensee),
subleases (as sublessee) and sublicenses (as sublicensee) in the ordinary course of business;

               (l) the lease, sublease or license or sublicense of real or personal property, including
patents, trademarks and other intellectual property rights that do not materially interfere with
the business of such Loan Party;

               (m) the settlement or write-off of accounts receivable in the ordinary course of business;

               (n) the sale or other disposition of Equity Interests in Joint Ventures and Subsidiaries in a
single transaction or series of related transactions; provided that if the consideration exceeds
$10,000,000 Borrower shall provide Agent with (i) notice prior to such sale or disposition, and
(ii) a pro forma Compliance Certificate showing that no Default or Event of Default exists either
immediately prior to or after giving effect to such sale or disposition, and that immediately after
giving effect to such sale or disposition, the Loan Parties remain in compliance with the financial
covenants in §9.1; and

               (o) transactions permitted by §8.4.

          §8.9 [RESERVED]

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          §8.10 Restriction on Prepayment of Indebtedness.

     Without limiting the terms of §8.1, Borrower shall not prepay, redeem or purchase the
principal amount of, in whole or in part, or cause the acceleration of, any Indebtedness other than
(i) the Obligations after the occurrence and during the continuation of any Event of Default, (ii)
any mandatory prepayment required by the documents evidencing or securing such Indebtedness, or
(iii) any redemption and/or conversion or exchange required by the terms of any Permitted Bond
Indebtedness.

          §8.11 [RESERVED]

          §8.12 Negative Pledges, Restrictive Agreements, etc.

     The Loan Parties will not, and will not permit any of their respective Subsidiaries to, enter
into any agreement (excluding this Agreement and any other Loan Document) prohibiting or
restricting:

               (a) the creation or assumption of any Lien upon its properties, revenues or assets, whether
now owned or hereafter acquired, except for Liens expressly permitted pursuant to §8.2;

               (b) the ability of Borrower or any other Loan Party to amend or otherwise modify this
Agreement or any other Loan Document; or

               (c) the ability of any Subsidiary of Borrower (other than an SPE Subsidiary) to make any
payments, directly or indirectly, to Borrower by way of dividends, distributions, return on equity,
advances, repayments of loans or advances, reimbursements of management and other intercompany
charges, expenses and accruals or other returns on investments, or any other agreement or
arrangement which restricts the ability of any such Subsidiary to make any payment or transfer any
property or asset, directly or indirectly, to Borrower,

in each case other than (A) customary restrictions and conditions contained in agreements relating
to the sale of all or any part of the Equity Interests or assets of any Subsidiary pending such
sale, provided such restrictions and conditions apply only to the Subsidiary or assets to be sold
and such sale is permitted hereunder, (B) restrictions or conditions imposed by any agreement
relating to Indebtedness permitted under this Agreement if such restrictions or conditions apply
only to the property or assets securing such Indebtedness, (C) customary provisions in leases,
licenses and other contracts restricting the assignment thereof, (D) provisions relating to the
transfer, assignment or sublet of any lease or other agreement entered into in the ordinary course
of business, (E) restrictions or conditions on a Subsidiary existing prior to such Subsidiary
becoming a Subsidiary of a Borrower, so long as such restriction or condition only applies to such
Subsidiary, (F) restrictions contained in the operative agreements of any Joint Ventures against
transferring, assigning or pledging the Equity Interests in such Joint Ventures or any Real Estate
held by a Loan Party in connection with the TEMCO Investment and (G) restrictions contained in
agreements governing Permitted Bond Indebtedness so long as customary and usual for transactions of
that type.

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          §8.13 Organizational Documents.

     Neither Borrower nor any other Loan Party shall modify, amend, cancel, release, surrender,
terminate or permit the modification, amendment, cancellation, release, surrender or termination
of, any of its Organizational Documents if such action could reasonably be expected to adversely
affect the Agent and Lenders, it being understood and agreed that Forestar Group shall be permitted
to amend its Organizational Documents in order to incur Convertible Bond Indebtedness.

          §8.14 Affiliate Transactions.

     Except for the Loan Documents and the other agreements listed on Schedule 6.15, the
Loan Parties will not, and will not permit any of their respective Subsidiaries to, enter into, or
cause, suffer or permit to exist any arrangement or contract with, any of their respective
Affiliates unless such arrangement or contract:

               (a) is not otherwise prohibited by this Agreement or the other Loan Documents;

               (b) (i) is in the ordinary course of business of the applicable Loan Party or Loan Parties, or
the applicable Subsidiary or Subsidiaries and (ii) which is on terms which are not materially less
favorable to any such Loan Party or Subsidiary than are obtainable from any Person which is not one
of its Affiliates.

     The foregoing provisions of this §8.14 shall not prohibit any Loan Party from engaging in any
of the following transactions: (i) any transaction by and between or among the Loan Parties, (ii)
entering into any employment agreement or equity incentive arrangements, with any employee,
officer, director, member or consultant of any Loan Party, in each case, in the ordinary course of
business, (iii) any Distributions or other payments permitted under this Agreement, (iv) the
payment of fees and compensation to, and customary indemnities and reimbursements provided on
behalf of, officers, directors, employees and agents of any Loan Party or its Subsidiaries to the
extent not prohibited by this Agreement, (v) Investments in Joint Ventures permitted under this
Agreement and (vi) any disposition of Non-Recourse Assets in connection with any Non-Recourse
Indebtedness, as and to the extent otherwise permitted under this Agreement.

          §8.15 Management Fees, Expenses, etc.

     The Loan Parties will not, or will not permit any of their respective Subsidiaries, to pay
management, advisory, consulting, director or other similar fees, other than:

                    (i) fees payable to Agent, Lenders or any of their Affiliates as in effect on the date hereof;

                    (ii) fees payable to non-Affiliates engaged on an arm’s-length basis; or

                    (iii) director fees and reimbursement of out-of-pocket expenses.

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          §8.16 Deposit Account Control Agreements.

     Borrower will cause its primary operating account to be subject to a Deposit Account Control
Agreement with a Deposit Account Bank.

          §8.17 [RESERVED]

          §8.18 Modification of Certain Agreements.

               (a) Subject to clause (b) of this Section and other applicable terms, no Loan Party will enter
into or consent to any amendment, supplement, waiver or other modification of any of the terms or
provisions contained in, or applicable to, the Temple-Inland Agreements which in any case:

                    (i) is contrary to the terms of this Agreement or any other Loan Document; or

                    (ii) could reasonably be expected to result in a Material Adverse Effect.

               (b) No Loan Party will enter into or consent to any amendment, supplement, waiver or other
modification of any of the terms or provisions contained in, or applicable to, the Timber Purchase
Agreement in a manner contrary to §7.14(e).

               (c) No Loan Party will enter into or consent, or permit any of its Subsidiaries to enter into
or consent, to any amendment, supplement, waiver or other modification of any of the terms or
provisions contained in, or applicable to, any document, instrument or agreement evidencing,
guaranteeing, securing or otherwise relating to Indebtedness permitted pursuant to §8.1(xii) or
§8.1(xiii), or increase the amount of such Indebtedness if the effect would be to cause such
Indebtedness to no longer be permitted under the relevant clause of §8.1 if such Indebtedness were
deemed to be incurred on the date such amendment, supplement, waiver, modification, increase or
release is to be effective.

§9. FINANCIAL COVENANTS OF BORROWER

     The Loan Parties covenant and agree that, so long as any Loan, Note, Letter of Credit or other
Obligation is outstanding or any Lender has any obligation to make any Loans or Agent has any
obligation to issue any Letter of Credit:

          §9.1 Corporate Financial Covenants of Loan Parties.

               (a) Interest Coverage Ratio. The Loan Parties will not, as of the end of any fiscal
quarter of Forestar Group, permit the Interest Coverage Ratio for the fiscal quarter then ended and
the immediately preceding three (3) fiscal quarters (treated as a single accounting period) (the
“Test Period”), to be less than 1.05:1.0; provided, however, that unless
the Interest Coverage Ratio equals or exceeds 1.50:1.0 for the most recent Test Period (it being
understood that an Interest Coverage Ratio equal to or greater than 1.05:1.0 but less than 1.50:1.0
for any Test Period will not constitute, in and of itself, a Default or Event of Default), (i) the
Loan Parties may not (A) make additional Investments in the form of cash or other transfers of
assets of a Loan

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Party otherwise permitted under §8.3 (except those which the Loan Parties are contractually
obligated to make pursuant to agreements entered into previously) except with the prior written
approval of Agent who may, in its discretion, approve up to $10,000,000 of additional Investments,
(B) make Distributions otherwise permitted under §8.7(b) or (h), or (C) make Acquisition
Expenditures or Development Expenditures except those which the Loan Parties are contractually
obligated to make pursuant to agreements entered into previously, (ii) interest on the Loans shall
accrue at a rate per annum equal to two percent (2.0%) above the rate that would otherwise be
applicable, and (iii) Agent shall determine, in consultation with Borrower, an amount constituting
six (6) months of projected interest on the Loans plus six (6) months of projected general and
administrative expenses of the Loan Parties based on the budget submitted under §7.4(h), which
amount shall either be deposited in cash by the Loan Parties in a reserve account under Agent’s
control as security for the Loans or deducted as a reserve from the Borrowing Base, whichever
Borrower shall elect. Upon the Interest Coverage Ratio being equal to or in excess of 1.50:1.0 for
any subsequent Test Period, then all restrictions in the immediately preceding sentence shall cease
to exist and any cash deposited or any Borrowing Base reserve established shall be released,
subject to the automatic reinstatement of such restrictions (without the need for any notice or
other action by the Agent) in the event that the Interest Coverage Ratio for any subsequent Testing
Period is not at least 1.50:1.0.

               (b) Revenues/Capital Expenditures Ratio. The Loan Parties will not, for any Test
Period, permit the Revenues/Capital Expenditures Ratio as of the last day of such Test Period to be
less than 1.0:1.0.

               (c) Total Leverage Ratio. The Loan Parties will not permit the Total Leverage Ratio
as of the last day of any fiscal quarter to exceed forty percent (40%); provided,
however, that during the Extension Period, the Total Leverage Ratio as of the last day of
any fiscal quarter may not exceed thirty percent (30%).

               (d) Liquidity. In order for the Loan Parties to (i) make additional Investments in
the form of cash or other transfers of assets of a Loan Party otherwise permitted under §8.3 (other
than those which the Loan Parties are contractually obligated to make pursuant to agreements
entered into previously and other than as approved by Agent in writing), (ii) make Distributions
otherwise permitted under §8.7(b) or (h), or (iii) make Acquisition Expenditures or Development
Expenditures other than those which the Loan Parties are contractually obligated to make pursuant
to agreements entered into previously, Borrower must have Available Liquidity of at least the
lesser of (x) $35,000,000, or (y) ten percent (10%) of the aggregate Commitments then in effect.
For avoidance of doubt, the failure to have such minimum Available Liquidity shall not constitute,
in and of itself, a Default or Event of Default.

               (e) Net Worth. The Loan Parties will not, as of the last day of any fiscal quarter,
permit the Consolidated Tangible Net Worth of Forestar Group and its Subsidiaries to be less than
the sum of (i) $402,800,000, plus (ii) eighty-five percent (85%) of the aggregate net
proceeds received by Forestar Group after the Closing Date in connection with any Equity Offering
to any other Person (including for the purposes hereof, any proceeds received from any offering to
current stockholders of Forestar Group), plus (iii) seventy-five percent (75%) of all
positive Net Income, on a cumulative basis, for each fiscal quarter ended after the Closing Date
and on or before the fiscal quarter being tested.

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     The determination of the relevant Loan Parties’ compliance with the foregoing covenants and
the components thereof by Agent shall be conclusive and binding absent manifest error.

          §9.2 Borrowing Base Covenants.

               (a) All assets included in the Borrowing Base must be owned by Borrower or a Guarantor and
must be unencumbered except for Permitted Liens; provided, however, that for
purposes of this paragraph, the term “Permitted Liens” shall not include Liens permitted under
clauses (iii), (xiv) and (xv) of §8.2.

               (b) Borrower shall not at any time permit the sum of (i) the Outstanding principal balance of
the Loans, plus (ii) the Outstanding Letters of Credit, plus (iii) the aggregate outstanding
principal amount of Permitted Bond Indebtedness to be greater than the Borrowing Base;
provided, however, that Borrower may elect at any time to secure all of the
Borrowing Base Assets (other than the Mineral Business) by making them Mortgaged Properties, and
upon all such Borrowing Base Assets becoming Mortgaged Properties, the foregoing clause (iii) shall
no longer be included in such sum.

          §9.3 Value to Commitment.

     Borrower shall not at any time permit the ratio of (i) the sum of Timberland Value, plus High
Value Timberland Amount, plus the Raw Entitled Land Value with respect to any Raw Entitled Land
that is part of the Mortgaged Property, and plus Mineral Business Enterprise Value to (ii) the
aggregate Commitments (after giving effect to any reductions in the aggregate Commitments on such
day), to be less than 1.60:1.0.

§10. CLOSING CONDITIONS

     The obligations of Agent and Lenders to make the Loans and Agent to issue any Letters of
Credit shall be subject to the satisfaction of the following conditions precedent on or prior to
the Closing Date:

          §10.1 Loan Documents.

     Each of the Loan Documents shall have been duly executed and delivered by the respective
parties thereto, shall be in full force and effect and shall be in form and substance satisfactory
to the Required Lenders. Agent shall have received a fully executed copy of each such document,
except that each Lender shall have received a fully executed counterpart of its Note or Notes.

          §10.2 Certified Copies of Organizational Documents.

     Agent shall have received from Borrower a copy, certified as of a recent date by the
appropriate officer of each State in which Borrower, and any other Loan Party is organized or in
which the Mortgaged Properties are located and a duly authorized member, manager, partner or
officer of Borrower and each other Loan Party, as applicable, to be true and complete, of the
Organizational Documents of Borrower and each other Loan Party, as applicable, or its qualification
to do business, as applicable, as in effect on such date of certification.

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          §10.3 Resolutions.

     All action on the part of Borrower and each other Loan Party necessary for the valid
execution, delivery and performance by Borrower and each other Loan Party of this Agreement and the
other Loan Documents (as applicable) to which such Person is or is to become a party shall have
been duly and effectively taken, and evidence thereof satisfactory to Agent shall have been
provided to Agent. Agent shall have received from Borrower and each other Loan Party true copies
of their respective resolutions adopted by their respective board of directors or other governing
body authorizing the transactions described herein, each certified by its secretary, assistant
secretary or other appropriate representative as of a recent date to be true and complete.

          §10.4 Incumbency Certificate; Authorized Signers.

     Agent shall have received from Borrower and each other Loan Party, an incumbency certificate,
dated as of the Closing Date, signed by a duly authorized officer of Borrower or such other Loan
Party (as applicable) and giving the name and bearing a specimen signature of each individual who
shall be authorized to sign, in the name and on behalf of Borrower or such other Loan Party, each
of the Loan Documents to which such Person is or is to become a party. Agent shall have also
received from Borrower a certificate, dated as of the Closing Date, signed by a duly authorized
member of Borrower and giving the name and specimen signature of each individual who shall be
authorized to make Loan Requests, Letter of Credit Requests and Conversion Requests, and give
notices and to take other action on behalf of Borrower under the Loan Documents.

          §10.5 Opinion of Counsel.

     Agent shall have received a favorable opinion addressed to Lenders and Agent and dated as of
the Closing Date, in form and substance reasonably satisfactory to Agent, from counsel of Borrower
and the other Loan Parties, and counsel in such other states as may be requested by Agent, as to
such matters as Agent shall reasonably request.

          §10.6 Payment of Fees.

     Borrower shall have paid to Agent the fees payable pursuant to §4.2.

          §10.7 Insurance.

     Agent shall have received evidence satisfactory to it that the insurance coverages required by
this Agreement or the other Loan Documents are in effect.

          §10.8 Performance; No Default.

     Borrower and each of the other Loan Parties shall have performed and complied with all terms
and conditions herein required to be performed or complied with by them on or prior to the Closing
Date, and on the Closing Date there shall exist no Default or Event of Default.

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          §10.9 Representations and Warranties.

     The representations and warranties made by Borrower and each of the other Loan Parties in the
Loan Documents or otherwise made by or on behalf of Borrower and each of the other Loan Parties in
connection therewith on the date thereof shall have been true and correct in all material respects
when made and shall also be true and correct in all material respects on the Closing Date, and
Agent shall have received written confirmation thereof from the Loan Parties.

          §10.10 Proceedings and Documents.

     All proceedings in connection with the transactions contemplated by this Agreement and the
other Loan Documents shall be reasonably satisfactory to Agent and Agent’s Special Counsel in form
and substance, and Agent shall have received all information and such counterpart originals or
certified copies of such documents and such other certificates, opinions or documents as Agent and
Agent’s Special Counsel may reasonably require. No proceeding challenging or seeking to enjoin any
of the transactions contemplated by the Loan Documents, or which could reasonably be expected to
have a Material Adverse Effect shall be pending or shall have been threatened.

          §10.11 Mortgaged Property Documents.

     The Mortgaged Property Documents for each Mortgaged Property shall have been delivered to
Agent at Borrower’s expense, granting Agent a first-priority Lien on the Mortgaged Property,
subject only to Permitted Liens. Subject to §5.8, Borrower will have paid to Agent any mortgage,
recording, intangible, documentary stamp or other similar taxes and charges which Agent reasonably
determines to be payable as a result of the Loans made on the Closing Date or the recording of the
Mortgaged Property Documents to any state or any county or municipality thereof in which any of the
Mortgaged Properties are located, and deliver to Agent such affidavits or other information with
Agent reasonably determines to be necessary in connection with such payment in order to insure that
the Security Deeds on the Mortgaged Property located in such state secure Borrower’s obligation
with respect to the Loans made on the Closing Date.

          §10.12 Surveys and Title Policies.

     Agent shall have received the Surveys and Title Policies in the possession of Borrower or the
other Loan Parties as of the Closing Date.

          §10.13 Compliance Certificate.

     A Compliance Certificate dated as of the date of the Closing Date demonstrating compliance
with each of the covenants calculated therein as of the most recent fiscal quarter end for which
Borrower has provided financial statements under §6.4 adjusted in the best good faith estimate of
Borrower dated as of the date of the Closing Date shall have been delivered to Agent, and
calculated on a pro forma basis after giving effect to the Loans made or to be made on the Closing
Date and the application of the proceeds thereof, as if such Loans and application of proceeds were
made as of the first day of the relevant Test Period.

          §10.14 [RESERVED]

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           §10.15 Other Documents.

     Agent shall have received executed copies of all other material agreements as Agent may have
reasonably requested.

          §10.16 No Condemnation/Taking.

     Agent shall have received satisfactory evidence that no condemnation proceedings are pending
or, to Borrower’s Knowledge, threatened against any Mortgaged Property or any Negative Pledge
Property or, if any such proceedings are pending or threatened, identifying the same and the
Mortgaged Property or the Negative Pledge Property affected thereby and Agent shall have determined
that none of such proceedings is or will be material to the Mortgaged Property or the Negative
Pledge Property affected thereby.

          §10.17 [RESERVED]

          §10.18 No Litigation.

     Agent shall have received satisfactory evidence that there are no actions, suits,
investigations or proceedings pending or threatened, in any court or before any arbitrator or other
Governmental Authority that purports to adversely affect any Loan Party or Loan Parties, or any
Subsidiary or Joint Venture thereof, or any transaction contemplated hereby, that could reasonably
be expected to have a Material Adverse Effect.

          §10.19 Other.

     Agent shall have reviewed such other documents, instruments, certificates, opinions,
assurances, consents and approvals as Agent or Agent’s Special Counsel may reasonably have
requested.

§11. CONDITIONS TO ALL BORROWINGS AND LETTERS OF CREDIT

     The obligations of Lenders to make any Loan and the obligation of Agent to issue any Letter of
Credit, whether on or after the Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:

          §11.1 Representations True; No Default.

     Each of the representations and warranties made by Borrower or the other Loan Parties
contained in this Agreement, the other Loan Documents or in any document or instrument delivered
pursuant to or in connection with this Agreement shall be true in all material respects both as of
the date as of which they were made and shall also be true in all material respects as of the time
of the making of such Loan or the issuance of such Letter of Credit (as the case may be), with the
same effect as if made at and as of that time, 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), and no Default or
Event of

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Default shall have occurred and be continuing, or shall result from the making of such Loan or
the issuance of such Letter of Credit.

          §11.2 No Legal Impediment.

     No change shall have occurred in any law or regulations thereunder or interpretations thereof
that in the reasonable opinion of any Lender would make it illegal for such Lender to make such
Loan or for Agent to issue such Letter of Credit.

          §11.3 Borrowing Documents.

     Agent shall have received a fully completed Loan Request for such Loan and the other documents
and information as required by §2.6. In the case of any request for a Letter of Credit, Agent
shall have received a fully completed Letter of Credit Request.

§12. EVENTS OF DEFAULT; ACCELERATION; ETC.

          §12.1 Events of Default and Acceleration.

     If any of the following events (“Events of Default” or, if the giving of notice or the
lapse of time or both is required, then, prior to such notice or lapse of time, “Defaults”)
shall occur:

               (a) Borrower shall fail to pay any principal of the Loans when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment;

               (b) Borrower shall fail to pay any interest on the Loans or any other sums due hereunder or
under any of the other Loan Documents when the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any other date fixed for payment,
and such failure shall continue for ten (10) days (provided that such grace period will not apply
to interest due upon the maturity of the Obligations);

               (c) Borrower or any other Loan Party shall fail to comply with any covenant contained in §7.4,
§7.9, §7.11, §7.21, §8 or §9 (subject to the provisos contained in each of §9.1(a) and (d));

               (d) Borrower or any other Loan Party shall fail to perform any other term, covenant or
agreement contained herein or in any of the other Loan Documents (other than those specified in the
other subclauses of this §12); and such failure shall continue for thirty (30) days after written
notice thereof shall have been given to Borrower by Agent;

               (e) Any representation or warranty made by any Loan Party in this Agreement or any other Loan
Document, or in any report, certificate, financial statement, request for a Loan or a Letter of
Credit, or in any other document or instrument delivered pursuant to or in connection with this
Agreement, any advance of a Loan, the issuance of any Letter of Credit or any of the other Loan
Documents shall prove to have been false or misleading in any material respect upon the date when
made or deemed to have been made or repeated;

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               (f) Any Loan Party shall fail to pay at maturity or otherwise when due, or within any
applicable period of grace, any obligation for borrowed money or credit received or other
Indebtedness (other than Non-Recourse Indebtedness) having an aggregate principal amount
outstanding of at least $10,000,000, or fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound, evidencing or securing any such borrowed
money or credit received or other Indebtedness for such period of time as would permit (assuming
the giving of appropriate notice if required) the holder or holders thereof or of any obligations
issued thereunder to accelerate the maturity thereof;

               (g) Any Loan Party (1) shall make an assignment for the benefit of creditors, or admit in
writing its general inability to pay or generally fail to pay its debts as they mature or become
due, or shall petition or apply for the appointment of a trustee or other custodian, liquidator or
receiver of any Loan Party or of any substantial part of the assets of any thereof, including,
without limitation, any Mortgaged Property or any Negative Pledge Property, (2) shall commence any
case or other proceeding relating to any Loan Party under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or (3) shall take any action to authorize or in
furtherance of any of the foregoing;

               (h) A petition or application shall be filed for the appointment of a trustee or other
custodian, liquidator or receiver of any Loan Party, or any substantial part of the assets of any
thereof, including, without limitation, any Mortgaged Property or any Negative Pledge Property, or
a case or other proceeding shall be commenced against any Loan Party under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, and any Loan Party thereof shall
indicate its approval thereof, consent thereto or acquiescence therein or such petition,
application, case or proceeding shall not have been dismissed within ninety (90) days following the
filing or commencement thereof;

               (i) A decree or order is entered appointing any such trustee, custodian, liquidator or
receiver or adjudicating any Loan Party thereof bankrupt or insolvent, or approving a petition in
any such case or other proceeding, or a decree or order for relief is entered in respect of any
Loan Party thereof in an involuntary case under federal bankruptcy laws as now or hereafter
constituted;

               (j) There shall remain in force, undischarged, unsatisfied and unstayed, for more than thirty
(30) days, whether or not consecutive, any final judgment against any Loan Party, or any Subsidiary
thereof, that, with other outstanding final judgments, undischarged, against the Loan Parties and
their Subsidiaries (or any of them) exceeds in the aggregate $5,000,000 (to the extent not paid or
covered by insurance);

               (k) If any of the Loan Documents shall be canceled, terminated, revoked or rescinded otherwise
than in accordance with the terms thereof or with the express prior written agreement, consent or
approval of Lenders, or any action at law, suit in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on behalf of any Loan Party or
any of their respective stockholders, partners, members or beneficiaries, or any court or any other
governmental or regulatory authority or agency of

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competent jurisdiction shall make a determination that, or issue a judgment, order, decree or
ruling to the effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;

               (l) Any dissolution, termination, partial or complete liquidation, merger or consolidation of
any Loan Party, or any Subsidiary thereof, or any sale, transfer or other disposition of the assets
of any Loan Party, other than as permitted under the terms of this Agreement or the other Loan
Documents;

               (m) Any Loan Party shall be indicted for a federal crime, a punishment for which could include
the forfeiture of any assets of such Person included in the Collateral or the Property;

               (n) With respect to any Guaranteed Pension Plan, an ERISA Reportable Event shall have occurred
that reasonably could be expected to result in liability of any of any Loan Party to the PBGC or
such Guaranteed Pension Plan in an aggregate amount exceeding $1,000,000 and such event in the
circumstances occurring reasonably could constitute grounds for the termination of such Guaranteed
Pension Plan by the PBGC or for the appointment by the appropriate United States District Court of
a trustee to administer such Guaranteed Pension Plan; or a trustee shall have been appointed by the
United States District Court to administer such Guaranteed Pension Plan; or the PBGC shall have
instituted proceedings to terminate such Guaranteed Pension Plan;

               (o) A Change of Control shall occur without the prior written approval of all of Lenders
(which consent may be withheld by Lenders in their sole and absolute discretion);

               (p) Any Event of Default, as defined in any of the other Loan Documents, shall occur;

               (q) Any amendment to or termination of a financing statement naming any Loan Party as debtor
and Agent as secured party relating to the Collateral, or any correction statement with respect
thereto, is filed in any jurisdiction by, or caused by, or at the instance of any Loan Party
without the prior written consent of Agent (except to the extent of a release of Collateral
permitted by this Agreement); or any amendment to or termination of a financing statement naming
any Loan Party as debtor and Agent as secured party, or any correction statement with respect
thereto, is filed in any jurisdiction by any party other than Agent or Agent’s counsel (or by a
Loan Party at Agent’s direction) without the prior written consent of Agent and Borrower or the
affected other Loan Party fails to use its best efforts to cause the effect of such filing to be
completely nullified to the reasonable satisfaction of Agent within ten (10) days after notice to
Borrower thereof; or

               (r) Temple-Inland shall make any written claim for indemnity against Forestar Group under the
Spin-off Tax Sharing Agreement related to the taxable nature of the Spin-off Transaction in excess
of $25,000,000;

then, and in any such event, Agent may, and upon the request of the Required Lenders shall, by
notice in writing to Borrower declare all amounts owing with respect to this Agreement, the Notes
and the other Loan Documents to be, and they shall thereupon forthwith become,

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immediately due and payable without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by Borrower; provided that in the event of any Event
of Default specified in §12.1(g), §12.1(h) or §12.1(i), all such amounts shall become immediately
due and payable automatically and without any requirement of notice from any of Lenders or Agent.

          §12.2 Limitation of Cure Periods.

     Notwithstanding anything in this Agreement or any other Loan Document to the contrary, any
reference in this Agreement or any other Loan Document to “the continuance of a default” or “the
continuance of an Event of Default” or any similar phrase shall not create or be deemed to create
any right on the part of Borrower or any other party to cure any default following the expiration
of any applicable grace or notice and cure period.

          §12.3 Termination of Commitments.

     If any one or more Events of Default specified in §12.1(g), §12.1(h) or §12.1(i) shall occur,
then immediately and without any action on the part of Agent or any Lender any unused portion of
the credit hereunder shall terminate and Lenders shall be relieved of all obligations to make Loans
to Borrower, and Agent shall be relieved of any further obligation to issue Letters of Credit,
pursuant to this Agreement. If any other Event of Default shall have occurred and be continuing,
Agent may, and upon the election of the Required Lenders shall, by notice to Borrower terminate the
obligation to make Loans to Borrower and to issue Letters of Credit hereunder. No termination
under this §12.3 shall relieve Borrower or any other Loan Party of their respective obligations to
Lenders arising under this Agreement or the other Loan Documents. Nothing in this Section shall
limit or impair the terms of this Agreement (including §2.1) which provide that Revolving Lenders
shall have no obligation to make Revolving Loans upon the occurrence of a Default or Event of
Default.

          §12.4 Remedies.

               (a) In case any one or more of the Events of Default shall have occurred and be continuing,
and whether or not Lenders shall have accelerated the maturity of the Loans and other Obligations
pursuant to §12.1, Agent on behalf of Lenders may, and upon direction of the Required Lenders
shall, proceed to protect and enforce their rights and remedies under this Agreement, the Notes or
any of the other Loan Documents by suit in equity, action at law or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in this Agreement and
the other Loan Documents or any instrument pursuant to which the Obligations are evidenced,
including to the full extent permitted by applicable law the obtaining of the ex parte appointment
of a receiver, and, if such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right. No remedy herein conferred upon
Agent or the holder of any Note is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other provision of law. In the event
that all or any portion of the Obligations is collected by or through an attorney-at-law, Borrower
shall pay all costs of collection including, but not limited to, reasonable attorney’s fees.
Notwithstanding the provisions of this Agreement providing that the Loans may be evidenced by
multiple Notes in favor of Lenders, Lenders

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acknowledge and agree that only Agent may exercise any remedies arising by reason of a Default
or Event of Default, including without limitation, bringing any suit for collection of any Note.
Notwithstanding anything herein to the contrary, upon the occurrence of any Event of Default, an
amount equal to the aggregate amount of the Outstanding Letters of Credit shall, at the Required
Lenders’ option, without demand or further notice to Borrower, be deemed to have been paid or
disbursed by Agent under the Letter of Credit and a Revolving Loan to Borrower from the Revolving
Lenders in such amount to have been made and accepted, which Revolving Loan shall be immediately
due and payable.

          §12.5 Distribution of Collateral Proceeds.

     In the event that, following the occurrence or during the continuance of any Event of Default,
any monies are received in connection with the enforcement of any of the Loan Documents, or
otherwise with respect to the realization upon any of the assets of Borrower or any other Person
liable with respect to the Obligations (including the Collateral), such monies shall be distributed
for application as follows:

               (a) First, to the payment of, or (as the case may be) the reimbursement of, Agent for
or in respect of all reasonable costs, expenses, disbursements and losses which shall have been
incurred or sustained by Agent to protect or preserve the Collateral or in connection with the
collection of such monies by Agent, for the exercise, protection or enforcement by Agent of all or
any of the rights, remedies, powers and privileges of Agent under this Agreement or any of the
other Loan Documents or in respect of the Collateral or in support of any provision of adequate
indemnity to Agent against any taxes or liens which by law shall have, or may have, priority over
the rights of Agent to such monies;

               (b) Second, to all other Obligations in the following order: (i) first to the payment
of any fees or charges (other than Letter of Credit fees and Facility Fees) outstanding hereunder
or under the other Loan Documents (excluding any Hedge Agreements), (ii) next to any accrued and
outstanding Default Rate interest, (iii) next to any accrued and outstanding interest under the
Swing Line Loans, (iv) next to any accrued and outstanding Letter of Credit fees, Facility Fees,
and interest on the Loans (other than interest on the Swing Line Loans), (v) next to any
Outstanding principal on the Swing Line Loans, (vi) next to any Outstanding principal on the Loans
other than Swing Line Loans, and (vii) last to any remaining Obligations (including with respect to
any Hedge Agreement) in such order as the Required Lenders may determine; provided,
however, that (A) in the event that any Lender shall have wrongfully failed or refused to
make an advance under §2.6, §2.7 or §2.10 and such failure or refusal shall be continuing, advances
made by other Lenders during the pendency of such failure or refusal shall be entitled to be repaid
as to principal and accrued interest in priority to the other Obligations described in this
subsection (b), and (B) Obligations owing to Revolving Lenders and Term Lenders with respect to
each type of Obligation such as interest, principal, fees and expenses, shall be made among such
Lenders pro rata in accordance with their Commitment Percentages, without preference or priority of
Revolving Loans over Term Loans, or vice versa; and provided, further, that the
Required Lenders may in their discretion make proper allowance to take into account any Obligations
not then due and payable; and

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               (c) Third, the excess, if any, shall be returned to Borrower or to such other Persons
as are entitled thereto.

§13. SETOFF

     Regardless of the adequacy of any Collateral, during the continuance of any Event of Default,
any deposits (general or specific, time or demand, provisional or final, regardless of currency,
maturity, or the branch of where such deposits are held) or other sums credited by or due from
Agent or any of Lenders to any of the Loan Parties and any securities or other property of the Loan
Parties in the possession of Agent or any Lender may be applied to or set off against the payment
of Obligations and any and all other liabilities, direct, or indirect, absolute or contingent, due
or to become due, now existing or hereafter arising, of the Loan Parties to such Lender. Upon the
occurrence and during the continuance of an Event Default, any Lender, including Agent with respect
to the Advance Account, may, but shall not be obligated to freeze withdrawals from any account of
the Loan Parties held by such Lender. Each Lender agrees with each other Lender that if such
Lender shall receive from any Loan Party or Loan Parties, whether by voluntary payment, exercise of
the right of setoff, or otherwise, and shall retain and apply to the payment of the Note or Notes
held by such Lender any amount in excess of its ratable portion of the payments received by all of
Lenders with respect to the Notes held by all of Lenders, such Lender will make such disposition
and arrangements with the other Lenders with respect to such excess, either by way of distribution,
pro tanto assignment of claims, subrogation or otherwise as shall result in each Lender receiving
in respect of the Notes held by it its proportionate payment as contemplated by this Agreement;
provided that if all or any part of such excess payment is thereafter recovered from such
Lender, such disposition and arrangements shall be rescinded and the amount restored to the extent
of such recovery, but without interest.

§14. THE AGENT

          §14.1 Authorization.

     Each of the Lenders hereby irrevocably appoints KeyBank to act on its behalf as Agent
hereunder and under the other Loan Documents and authorizes Agent to take such actions on its
behalf and to exercise such powers as are delegated to Agent by the terms hereof or thereof,
together with such actions and powers as are reasonably incident thereto, provided that no
duties or responsibilities not expressly assumed herein or therein shall be implied to have been
assumed by Agent. The obligations of Agent hereunder are primarily administrative in nature, and
nothing contained in this Agreement or any of the other Loan Documents shall be construed to
constitute Agent as a trustee or fiduciary for any Lender or to create any agency or fiduciary
relationship. Agent shall act as the contractual representative of Lenders hereunder, and
notwithstanding the use of the term “Agent”, it is understood and agreed that Agent shall not have
any fiduciary duties or responsibilities to any Lender by reason of this Agreement or any other
Loan Document and is acting as an independent contractor, the duties and responsibilities of which
are limited to those expressly set forth in this Agreement and the other Loan Documents. Borrower
and any other Person shall be entitled to conclusively rely on a statement from Agent that it has
the authority to act for and bind Lenders pursuant to this Agreement and the other Loan Documents.

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          §14.2 Employees and Agents.

     Agent may exercise its rights and powers and execute any and all of its duties hereunder or
under any other Loan Document by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights and duties under this
Agreement and the other Loan Documents. Agent and any such agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related Parties. The
exculpatory provisions of this Section shall apply to any such agent and to the Related Parties of
Agent and any such agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities as Agent. Agent may
utilize the services of such Persons as Agent may reasonably determine, and all reasonable fees and
expenses of any such Persons shall be paid by Borrower.

          §14.3 No Liability.

     Neither Agent nor any of its shareholders, directors, officers or employees nor any other
Person assisting them in their duties nor any agent, or employee thereof, shall be liable to
Lenders for any waiver, consent or approval given or any action taken, or omitted to be taken, in
good faith by it or them hereunder or under any of the other Loan Documents, or in connection
herewith or therewith, or be responsible for the consequences of any oversight or error of judgment
whatsoever, except that Agent or such other Person, as the case may be, shall be liable for losses
due to its willful misconduct or gross negligence. Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate, consent, statement,
instrument, document or other writing (including any electronic message, Internet or intranet
website posting or other distribution) reasonably believed by it to be genuine and to have been
signed, sent or otherwise authenticated by the proper Person. Agent also may rely upon any
statement made to it orally or by telephone and reasonably believed by it to have been made by the
proper Person, and shall not incur any liability for relying thereon. In determining compliance
with any condition hereunder to the making of a Loan, that by its terms must be fulfilled to the
satisfaction of a Lender, Agent may presume that such condition is satisfactory to such Lender
unless Agent shall have received notice to the contrary from such Lender prior to the making of
such Loan. Agent may consult with legal counsel (who may be counsel for Borrower), independent
accountants and other experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or experts.

          §14.4 No Representations.

     Agent shall not have any duties or obligations except those expressly set forth herein and in
the other Loan Documents. Without limiting the generality of the foregoing, Agent:

               (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing;

               (b) shall not have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan
Documents that Agent is required to exercise as directed in writing by the Required Lenders (or
such other number or percentage of Lenders as shall be expressly provided for herein or in the
other Loan Documents), provided that Agent shall not be required to take any

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action that, in its opinion or the opinion of its counsel, may expose Agent to liability or
that is contrary to any Loan Document or applicable law; and

               (c) shall not, except as expressly set forth herein and in the other Loan Documents, have any
duty to disclose, and shall not be liable for the failure to disclose, any information relating to
Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as
Agent or any of its Affiliates in any capacity.

     Agent shall not be liable for any action taken or not taken by it (i) with the consent or at
the request of the Required Lenders (or such other number or percentage of Lenders as shall be
necessary, or as Agent shall believe in good faith shall be necessary, under the circumstances as
provided in §27 and §12.4) or (ii) in the absence of its own gross negligence or willful
misconduct. Agent shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to Agent by any Loan Party or any Lender.

     Agent shall not be responsible for the execution or validity or enforceability of this
Agreement, the Notes, any of the other Loan Documents or any instrument at any time constituting,
or intended to constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectibility of any such amounts owing
with respect to the Notes, or for any recitals or statements, warranties or representations made
herein, or any agreement, instrument or certificate delivered in connection therewith or in any of
the other Loan Documents or in any certificate or instrument hereafter furnished to it by or on
behalf of any of the Loan Parties, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or in any other of the
Loan Documents.

     Agent shall not be bound to ascertain whether any notice, consent, waiver or request delivered
to it by any Loan Party or any holder of any of the Notes shall have been duly authorized or is
true, accurate and complete. Agent has not made nor does it now make any representations or
warranties, express or implied, nor does it assume any liability to Lenders, with respect to the
creditworthiness or financial condition of Borrower or any other Loan Party or the value of the
Collateral or any other assets of such Persons.

     Each Lender acknowledges that it has, independently and without reliance upon Agent or any
other Lender or any of their Related Parties, and based upon such information and documents as it
has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.
Each Lender also acknowledges that it will, independently and without reliance upon Agent or any
other Lender or any of their Related Parties, based upon such information and documents as it deems
appropriate at the time, continue to make its own credit analysis and decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any related agreement
or any document furnished hereunder or thereunder.

          §14.5 Payments.

               (a) A payment by Borrower to Agent hereunder or under any of the other Loan Documents for the
account of any Lender shall constitute a payment to such Lender. Agent agrees to distribute to
each Lender not later than one (1) Business Day after Agent’s receipt of good funds, determined in
accordance with Agent’s customary practices, such Lender’s pro rata

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share of payments received by Agent for the account of Lenders except as otherwise expressly
provided herein or in any of the other Loan Documents. All payments of principal, interest, fees
and other amounts in respect of the Swing Line Loans shall be for the account of Swing Line Lender
only (except to the extent any Lender shall have acquired and funded a participating interest in
any such Swing Line Loan pursuant to §2.1(c), in which case such payments shall be pro rata in
accordance with such participating interests).

               (b) If in the opinion of Agent the distribution of any amount received by it in such capacity
hereunder, under the Notes or under any of the other Loan Documents might involve it in liability,
it may refrain from making distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to Agent its proportionate share of the
amount so adjudged to be repaid or shall pay over the same in such manner and to such Persons as
shall be determined by such court.

               (c) Notwithstanding anything to the contrary contained in this Agreement or any of the other
Loan Documents, any Lender that fails (i) to make available to Agent its pro rata share of any Loan
that it is obligated to make available under the terms of this Agreement, unless such obligation is
the subject of a bona fide, good faith dispute of which the Agent has received written notice from
such Lender (it being agreed that any such notice given later than three (3) Business Days after
such failure shall be ineffective for purposes of this paragraph (c)), or (ii) to comply with the
provisions of §13 with respect to making dispositions and arrangements with the other Lenders,
where such Lender’s share of any payment received, whether by setoff or otherwise, is in excess of
its pro rata share of such payments due and payable to all of Lenders, in each case as, when and to
the full extent required by the provisions of this Agreement, shall be deemed delinquent (a
“Delinquent Lender”) and shall be deemed a Delinquent Lender until such time as such
delinquency is satisfied. A Delinquent Lender shall be deemed to have assigned any and all
payments due to it from Borrower, whether on account of Outstanding Loans, interest, fees or
otherwise, to the remaining non-Delinquent Lenders for application to, and reduction of, their
respective pro rata shares of all outstanding Loans in accordance with the terms of this Agreement.
The Delinquent Lender hereby authorizes Agent to distribute such payments to the non-Delinquent
Lenders in proportion to their respective pro rata shares of all outstanding Loans in accordance
with the terms of this Agreement. A Delinquent Lender shall be deemed to have satisfied in full a
delinquency, and to no longer be a Delinquent Lender, when and if, as a result of application of
the assigned payments to all outstanding Loans of the non-Delinquent Lenders or as a result of
other payments by the Delinquent Lenders to the non-Delinquent Lenders, Lenders’ respective pro
rata shares of all outstanding Loans have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such delinquency.

          §14.6 Holders of Notes.

     Subject to the terms of §18, Agent may deem and treat the payee of any Note as the absolute
owner or purchaser thereof for all purposes hereof until it shall have been furnished in writing
with a different name by such payee or by a subsequent holder, assignee or transferee.

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          §14.7 Indemnity.

     Lenders ratably agree hereby to indemnify and hold harmless Agent from and against any and all
claims, actions and suits (whether groundless or otherwise), losses, damages, costs, expenses (to
the extent of any losses, damages, costs and expenses for which Agent has not been reimbursed by
Borrower as required by §15 or §16), and liabilities of every nature and character arising out of
or related to this Agreement, the Notes or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or Agent’s actions taken hereunder or thereunder,
except to the extent that any of the same shall be directly caused by Agent’s willful misconduct or
gross negligence.

          §14.8 Agent as Lender.

     In its individual capacity, KeyBank shall have the same obligations and the same rights,
powers and privileges in respect to its Revolving Commitment and Term Commitment and the Revolving
Loans and Term Loans made by it, and as the holder of any of the Notes as it would have were it not
also Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless
the context otherwise requires, include the Person serving as Agent hereunder in its individual
capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in any kind of
business with Borrower, any of the other Loan Parties or any Subsidiary or other Affiliate thereof
as if such Person were not Agent hereunder and without any duty to account therefor to Lenders.

          §14.9 Resignation.

     Agent may resign at any time by giving thirty (30) calendar days’ prior written notice thereof
to Lenders and Borrower. Upon any such resignation, the Required Lenders, subject to the terms of
§18.1, shall have the right to appoint as a successor Agent any Lender or any other bank whose
senior debt obligations are rated not less than “A” or its equivalent by Moody’s or not less than
“A” or its equivalent by S&P and which has a net worth of not less than $500,000,000. Any such
resignation shall be effective upon appointment and acceptance of a successor agent selected by the
Required Lenders. If no successor Agent shall have been so appointed and shall have accepted such
appointment within thirty (30) days after the retiring Agent’s giving of notice of resignation,
then the retiring Agent may, on behalf of Lenders, appoint a successor Agent, which shall be a bank
whose debt obligations are rated not less than “A” or its equivalent by Moody’s or not less than
“A” or its equivalent by S&P Corporation and which has a net worth of not less than $500,000,000,
provided that if Agent shall notify Borrower and Lenders that no qualifying Person has accepted
such appointment, then such resignation shall nonetheless become effective in accordance with such
notice and (1) the retiring Agent shall be discharged from its duties and obligations hereunder and
under the other Loan Documents (except that in the case of any collateral security held by Agent on
behalf of Lenders under any of the Loan Documents, the retiring Agent shall continue to hold such
collateral security until such time as a successor Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through Agent shall instead be made
by or to each Lender directly, until such time as the Required Lenders appoint a successor Agent as
provided for above in this paragraph. Unless a Default or Event of Default shall have occurred and
be continuing, such

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successor Agent shall be reasonably acceptable to Borrower. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and
the retiring Agent shall be discharged from its duties and obligations hereunder as Agent. The
fees payable by Borrowers to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between Borrower and such successor. After any retiring
Agent’s resignation, the provisions of this Agreement and the other Loan Documents shall continue
in effect for the benefit of such retiring Agent, its agents and their respective Related Parties
in respect of any actions taken or omitted to be taken by it while it was acting as Agent.

          §14.10 Duties in the Case of Enforcement.

     In case one or more Events of Default have occurred and shall be continuing, and whether or
not acceleration of the Obligations shall have occurred, Agent may and shall, if (a) so requested
by the Required Lenders and (b) Lenders have provided to Agent such additional indemnities and
assurances against expenses and liabilities as Agent may reasonably request, proceed to enforce the
provisions of the Security Documents authorizing the sale or other disposition of all or any part
of the Collateral and exercise all or any other legal and equitable and other rights or remedies as
it may have. The Required Lenders may direct Agent in writing as to the method and the extent of
any such exercise, Lenders hereby agreeing to indemnify and hold Agent harmless from all
liabilities incurred in respect of all actions taken or omitted in accordance with such directions,
provided that Agent need not comply with any such direction to the extent that Agent
reasonably believes Agent’s compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.

          §14.11 Request for Agent Action.

     Agent and Lenders acknowledge that in the ordinary course of business of Borrower, (a) the
Loan Parties may enter into Leases covering the Mortgaged Property and the Negative Pledge Property
that may require the execution of a subordination, attornment and non-disturbance agreement, (b)
the Mortgaged Property and the Negative Pledge Property may be subject to a condemnation or other
taking, (c) the Loan Parties may desire to enter into easements or other agreements affecting the
Mortgaged Property or the Negative Pledge Property, record a subdivision plat, dedicate roads or
utilities, or take other actions or enter into other agreements in the ordinary course of business
which similarly require the consent, approval or agreement of Agent. In connection with the
foregoing, Lenders hereby expressly authorize Agent to (a) execute and deliver with the applicable
Loan Party or Loan Parties and any tenant, subordination, attornment and non-disturbance agreements
with respect to any lease upon such terms as Agent in its good faith reasonable judgment determines
are appropriate (Agent in the exercise of its good faith reasonable judgment may agree to allow
some or all of the casualty, condemnation, restoration or other provisions of the applicable lease
to control over the applicable provisions of the Loan Documents), (b) execute releases of Liens of
Mortgaged Property and Equity Interests in connection with dispositions permitted in this Agreement
or in connection with any condemnation or other taking, (c) execute consents or subordinations in
form and substance reasonably satisfactory to Agent in connection with any easements, agreements,
plats, dedications or similar matters affecting the Mortgaged Property or Negative Pledge Property,
or (d) execute consents, approvals, or other agreements in form and substance reasonably
satisfactory to Agent

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in connection with such other actions or agreements as may be desirable by Agent or any tenant
necessary in the ordinary course of the Loan Parties’ respective businesses.

          §14.12 Removal of Agent.

     The Required Lenders may remove Agent from its capacity as agent in the event of Agent’s
willful misconduct or gross negligence. Such removal shall be effective upon appointment and
acceptance of a successor agent selected by the Required Lenders. Any successor Agent must satisfy
the conditions set forth in §14.9. Upon the acceptance of any appointment as agent hereunder by a
successor agent, such successor agent shall thereupon succeed to and become vested with all rights,
powers, privileges and duties of the removed Agent, and the removed Agent shall be discharged from
all further duties and obligations as Agent under this Agreement and the Loan Documents (subject to
Agent’s right to be indemnified as provided in the Loan Documents); provided that Agent shall
remain liable to the extent provided herein or in the Loan Documents for its acts or omissions
occurring prior to such removal or resignation.

          §14.13 Bankruptcy.

     In the event a bankruptcy or other insolvency proceeding is commenced by or against any of the
Loan Parties, Agent shall have the sole and exclusive right and duty to file and pursue a joint
proof of claim on behalf of all Lenders. Each Lender irrevocably waives its right to file or
pursue a separate proof of claim in any such proceedings.

§15. EXPENSES

     Borrower agrees to pay (a) the reasonable and documented costs of producing and reproducing
this Agreement, the other Loan Documents and the other agreements and instruments mentioned herein,
(b) any taxes (including any interest and penalties in respect thereto) payable by Agent or any of
Lenders, including any recording, mortgage, documentary or intangibles taxes in connection with the
Security Deeds and other Loan Documents, or other taxes payable on or with respect to the
transactions contemplated by this Agreement (other than Excluded Taxes, except that Agent and
Lenders shall be entitled to indemnification for any and all amounts paid by them in respect of
taxes based on income or other taxes assessed by any State in which Mortgaged Property or other
Collateral is located, such indemnification to be limited to taxes due solely on account of the
granting of Collateral under the Security Documents, including any such taxes payable by Agent or
any of Lenders after the Closing Date (Borrower hereby agreeing to indemnify Agent and each Lender
with respect thereto), (c) all appraisal fees, engineer’s fees, charges of Agent for commercial
finance exams and engineering and environmental reviews and the reasonable and documented fees,
expenses and disbursements of Agent, Agent’s Special Counsel and any other counsel to Agent,
counsel for KeyBank and any local counsel to Agent incurred in connection with the performance of
due diligence and the preparation, negotiation, administration, or interpretation of the Loan
Documents and other instruments mentioned herein, the addition and release of Collateral, each
closing hereunder, and amendments, modifications, approvals, consents, waivers or Collateral
releases hereto or hereunder, (d) the reasonable fees, expenses and disbursements of Agent incurred
by Agent in connection with the performance of due diligence, underwriting analysis, credit reviews
and the preparation, negotiation, administration, syndication or interpretation of the Loan
Documents and other instruments mentioned herein, credit and collateral evaluations, the release,
addition or substitution of

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additional Collateral, (e) all reasonable and documented out-of-pocket expenses (including
reasonable attorneys’ fees and costs, which attorneys may be employees of any Lender or Agent and
the fees and costs of appraisers, engineers, investment bankers or other experts retained by any
Lender or Agent) incurred by any Lender or Agent in connection with (i) the enforcement of or
preservation of rights under any of the Loan Documents against Borrower or other Loan Parties or
the administration thereof after the occurrence of a Default or Event of Default (including,
without limitation, the cost of all title examinations and title reports, Lien searches and related
costs and expenses in order specifically to identify the Mortgaged Properties and the state of the
Loan Parties’ title thereto), (ii) the sale of, collection from or other realization upon any of
the Collateral, (iii) the failure of Borrower or any other Loan Party to perform or observe any
provision of the Loan Documents, and (iv) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to Agent’s or any of Lenders’ relationships with any of
the Loan Parties, and (f) all reasonable fees, expenses and disbursements of Agent incurred in
connection with Uniform Commercial Code searches, Uniform Commercial Code filings or Security Deed
recordings and, after the occurrence and during the continuance of an Event of Default, title
rundowns and title searches. The covenants of this §15 shall survive payment or satisfaction of
payment of amounts owing with respect to the Notes.

§16. INDEMNIFICATION

     Borrower agrees to indemnify and hold harmless Agent and Lenders and each director, officer,
employee, agent and Person who controls Agent or any Lender from and against any and all claims,
actions and suits, whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of or relating to this
Agreement or any of the other Loan Documents or the transactions contemplated hereby and thereby
including, without limitation, (a) any leasing fees and any brokerage, finders or similar fees
asserted against any Person indemnified under this §16 based upon any agreement, arrangement or
action made or taken, or alleged to have been made or taken, by any of the Loan Parties, (b) any
condition, use, operation or occupancy of a Mortgaged Property or other Collateral other than with
respect to matters relating to such Mortgaged Property and/or the Collateral first occurring after
Agent or its nominee acquires title to such Mortgaged Property by the exercise of its foreclosure
remedies or transfer in lieu of foreclosure, (c) any actual or proposed use by Borrower of the
proceeds of any of the Loans or any actual or proposed use of a Letter of Credit by any beneficiary
of a Letter of Credit, (d) any actual or alleged infringement of any patent, copyright, trademark,
service mark or similar right of any of the Loan Parties comprised in the Collateral, (e) the Loan
Parties’ entering into or performing this Agreement or any of the other Loan Documents, (f) any
actual or alleged violation of any law, ordinance, code, order, rule, regulation, approval,
consent, permit or license relating to a Negative Pledge Property, a Mortgaged Property or the
other Collateral, or (g) with respect to the Loan Parties, their respective Subsidiaries and Joint
Ventures, and their respective properties and assets, including, without limitation, the Mortgaged
Properties and the Negative Pledge Properties, the violation of any Environmental Law, the Release
or threatened Release of any Hazardous Substances or any action, suit, proceeding or investigation
brought or threatened with respect to any Hazardous Substances (including, but not limited to
claims with respect to wrongful death, personal injury or damage to property), other than with
respect to matters relating to such Mortgaged Property and/or the Collateral first occurring after
Agent or its nominee acquires title to such Mortgaged Property by the exercise of its foreclosure
remedies or transfer in lieu of foreclosure, in each case

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including, without limitation, the reasonable fees and disbursements of counsel and allocated
costs of internal counsel incurred in connection with any such investigation, litigation or other
proceeding; provided, however, that Borrower shall not be obligated under this §16
to indemnify any Person for liabilities arising from such Person’s own gross negligence or willful
misconduct. In litigation, or the preparation therefor, Lenders and Agent shall be entitled to
select a single law firm as their own counsel and, in addition to the foregoing indemnity, Borrower
agrees to pay promptly all Court costs and other expenses of litigation incurred by Agent and
Lenders, including the reasonable fees and expenses of such counsel. If, and to the extent that
the obligations of Borrower under this §16 are unenforceable for any reason, Borrower hereby agrees
to make the maximum contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. There shall be specifically excluded from the foregoing
indemnification any claims, actions, suits, liabilities, losses, damages and expenses arising from
disputes among Lenders with respect to the Loans or the Loan Documents. In the event that any such
claims, actions, suits, liabilities, losses, damages and expenses involve both a dispute among
Lenders and other matters covered by this indemnification provision, Agent shall make a reasonable
good faith allocation of all losses, damages and expenses incurred between Lenders’ dispute and the
other matters covered by this indemnification provision, which allocation by Agent shall, absent
manifest error, be final and binding upon the parties hereto. All amounts payable by Borrower
pursuant to this Section shall constitute Obligations until paid in full by Borrower. The
provisions of this §16 shall survive the repayment of the Loans and the termination of the
obligations of Lenders hereunder.

§17. SURVIVAL OF COVENANTS, ETC

     All covenants, agreements, representations and warranties made herein, in the Notes, in any of
the other Loan Documents or in any documents or other papers delivered by or on behalf of Borrower
or any other Loan Party pursuant hereto or thereto shall be deemed to have been relied upon by
Lenders and Agent, notwithstanding any investigation heretofore or hereafter made by any of them,
and shall survive the making by Lenders of any of the Loans and the issuance by Agent of any Letter
of Credit, as herein contemplated, and shall continue in full force and effect so long as any
amount due under this Agreement or the Notes or any of the other Loan Documents remains outstanding
or any Letter of Credit is Outstanding or any Lender has any obligation to make any Loans or Agent
has any obligation to issue a Letter of Credit. The indemnification obligations of Borrower
provided herein and the other Loan Documents shall survive the full repayment of amounts due and
the termination of the obligations of Lenders hereunder and thereunder to the extent provided
herein and therein. All statements contained in any certificate or other paper delivered to any
Lender or Agent at any time by or on behalf of any of the Loan Parties pursuant hereto or in
connection with the transactions contemplated hereby shall constitute representations and
warranties as to the matters contained in such certificate or other paper by any of the Loan
Parties hereunder.

§18. ASSIGNMENT AND PARTICIPATION

          §18.1 Conditions to Assignment by Lenders.

               (a) Each Lender shall have the right to assign, transfer, sell, negotiate, pledge or otherwise
hypothecate this Agreement and any of its rights and security hereunder and under

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the other Loan Documents to any other Eligible Assignee with the prior written consent of
Agent and with the prior written consent of Borrower, which consents by Agent and Borrower shall
not be unreasonably withheld, conditioned or delayed (provided that no consent of Borrower shall be
required if the Eligible Assignee is also a Lender or an Affiliate thereof or if an Event of
Default then exists) and no consent of Agent shall be required if the Eligible Assignee is also a
Lender or an Affiliate thereof; provided, however, that (i) the parties to each
such assignment shall execute and deliver to Agent, for its approval and acceptance, an Assignment
and Assumption Agreement in the form of Exhibit C attached hereto and made a part hereof
(an “Assignment and Assumption Agreement”), (ii) each such assignment shall be of a
constant, and not a varying, percentage of the assigning Lender’s rights and obligations under this
Agreement, (iii) if the potential assignee is not already a Lender hereunder, at least ten (10)
days prior to the settlement date of the assignment, the potential assignee shall deliver to Agent
the fully completed Patriot Act and OFAC forms attached as Exhibit F attached hereto and
made a part hereof and such other information as Agent shall require to successfully complete
Agent’s Patriot Act Customer Identification Process and OFAC Review Process, (iv) unless Agent and,
so long as no Event of Default exists, Borrower otherwise consent, the aggregate amount of the
total Commitment of the assigning Lender being assigned pursuant to each such assignment shall in
no event be less than $2,000,000 and no less than $1,000,000 under either the Revolving Commitment
or the Term Commitment (or each of them, as applicable), (iv) Agent shall receive from the
assigning Lender a processing fee of $3,500, (vi) if the assignment is less than the assigning
Lender’s entire interest in the Loans, the assigning Lender (if a Revolving Lender) must retain at
least a $5,000,000 Revolving Commitment and (if a Term Loan Lender), must retain at least a
$1,000,000 interest in the Term Loans, unless the assigning Lender assigns its entire interest
under either the Revolving Commitment or the Term Loans, in which case, the assigning Lender must
retain at least a $5,000,000 Revolving Commitment (if such Lender is assigning its entire interest
in the Term Loans) or at least a $1,000,000 interest in the Term Loans (if such Lender is assigning
its entire Revolving Commitment). Upon such execution, delivery, approval and acceptance, and upon
the effective date specified in the applicable Assignment and Assumption Agreement, (a) the
Eligible Assignee thereunder shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and Assumption Agreement, have the
rights and obligations of a Lender hereunder and under the other Loan Documents, and Borrower
hereby agrees that all of the rights and remedies of Lenders in connection with the interest so
assigned shall be enforceable against Borrower by an Eligible Assignee with the same force and
effect and to the same extent as the same would have been enforceable but for such assignment
provided that no assignment shall increase the Borrower’s obligations under section 4.4 or section
4.9, (b) the assigning Lender thereunder shall, to the extent that rights and obligations hereunder
and under the other Loan Documents have been assigned by it pursuant to such Assignment and
Assumption Agreement, relinquish its rights and be released from its obligations hereunder and
thereunder, and (c) Agent may unilaterally amend Schedule 1.1 to reflect such assignment.
For purposes of this paragraph, in connection with any assignment or simultaneous, multiple
assignments by any Lender which is a fund to one or more of its Related Funds: (1) compliance with
the minimum amounts for assigned Commitments and Loans, and for retained Commitments and Loans
(both in the aggregate and within any particular Class of Loans) as hereinabove provided shall be
determined in the aggregate for such assigning fund and any of its Related Funds that are or are to
become Lenders as part of any assignment transaction or simultaneous, multiple assignment
transactions; (2) after giving effect to such assignment or assignments, no such assignor or
assignee fund in connection with a partial assignment of the

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assigning fund’s Revolving Commitment shall hold a Revolving Commitment of less than
$5,000,000, (3) after giving effect to such assignment or assignments, no such assignor or assignee
fund in connection with a partial assignment of the assigning fund’s Term Commitment shall hold a
Term Commitment of less than $1,000,000, and (4) only one processing fee shall be payable to Agent
in connection with simultaneous, multiple assignment transactions.

     (b) By executing and delivering an Assignment and Assumption Agreement, the assigning Lender
thereunder and the Eligible Assignee thereunder confirm to and agree with each other and the other
parties hereto as follows: (i) except as provided in such Assignment and Assumption Agreement,
such assigning Lender makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document or any other
instrument or document furnished in connection therewith; (ii) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the financial condition of
Borrower or any other Loan Party or the performance or observance by Borrower or any other Loan
Party of any of its obligations under any Loan Document or any other instrument or document
furnished in connection therewith; (iii) such Eligible Assignee confirms that it has received a
copy of this Agreement together with such financial statements, Loan Documents and other documents
and information as it has deemed appropriate to make its own credit analysis and decision to enter
into the Assignment and Assumption Agreement and to become a Lender hereunder; (iv) such Eligible
Assignee will, independently and without reliance upon Agent, the assigning Lender or any other
Lender, and based on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under this Agreement; (v)
such Eligible Assignee appoints and authorizes Agent to take such action as Agent on its behalf and
to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent
by the terms hereof and thereof, together with such powers as are reasonably incidental thereto;
(vi) such Eligible Assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by it as a Lender.

          §18.2 Register.

     Agent shall maintain a copy of each assignment delivered to it and a register or similar list
(the “Register”) for the recordation of the names and addresses of Lenders and the
Commitment Percentages, Revolving Commitment Percentages and Term Commitment Percentages of, and
principal amount of (and interest on) the Loans owing to Lenders from time to time. The entries in
the Register shall be conclusive, in the absence of manifest error, and the Loan Parties, Agent and
Lenders may treat each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by Borrower and Lenders
at any reasonable time and from time to time upon reasonable prior notice.

          §18.3 New Notes.

     Upon its receipt of an assignment executed by the parties to such assignment, together with
each Note (if any) subject to such assignment, Agent shall (a) record the information contained
therein in the Register, and (b) give prompt notice thereof to Borrower and Lenders

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(other than the assigning Lender). Within five (5) Business Days after receipt of such
notice, Borrower, upon Lender’s request and at Lender’s expense, shall execute and deliver to
Agent, in exchange for each surrendered Note, a new Revolving Loan Note, Term Loan Note or both, as
the case may be, to the order of such assignee in an amount equal to the amount assumed by such
assignee pursuant to such assignment and, if the assigning Lender has retained some portion of its
obligations hereunder, a new Revolving Loan Note, Term Loan Note or both, as the case may be, to
the order of the assigning Lender in an amount equal to the amount retained by it hereunder. Such
new Notes shall provide that they are replacements for the surrendered Notes of the same category,
shall be in an aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such assignment and shall otherwise be in
substantially the form of the assigned Notes. The surrendered Notes shall be canceled and returned
to Borrower.

          §18.4 Participations.

     Each Lender may sell participations to one or more banks or other entities in all or a portion
of such Lender’s rights and obligations under this Agreement and the other Loan Documents;
provided that (a) any such sale or participation shall not affect the rights and duties of
the selling Lender hereunder to Borrower, (b) such participation shall not entitle such participant
to any rights or privileges under this Agreement or the Loan Documents, including, without
limitation, the right to approve waivers, amendments or modifications, (c) such participant shall
have no direct rights against any of the Loan Parties except the rights granted to Lenders pursuant
to §13, (d) such sale is effected in accordance with all applicable laws, and (e) such participant
shall not be a Person controlling, controlled by or under common control with, or which is not
otherwise free from influence or control by, any of the Loan Parties. Any Lender which sells a
participation shall promptly notify Agent and Borrower of such sale and the identity of the
purchaser of the interest.

          §18.5 Pledge by Lender.

     Any Lender may at any time pledge all or any portion of its interest and rights under this
Agreement (including all or any portion of its Note) to secure obligations of such Lender,
including without limitation, (a) any pledge or assignment to secure obligations to any of the
twelve Federal Reserve Banks organized under §4 of the Federal Reserve Act, 12 U.S.C. §341, to any
Federal Home Loan Bank or to any institution within the Farm Credit System, and (b) for any Lender
that is a fund, any pledge or assignment to any holders of obligations owed, or securities issued,
by such Lender including any trustee for, or any other representative of, such holders. In
addition, any Lender may, with the consent of Agent (which may be granted or withheld in Agent’s
sole discretion) pledge all or any portion of its interests and rights under the Agreement
(including all or any portion of its Note or Notes) to a Person approved by Agent. Notwithstanding
anything to the contrary contained herein, no pledge permitted pursuant to this Section or the
enforcement thereof shall release the pledgor Lender from its obligations hereunder or under any of
the other Loan Documents.

          §18.6 No Assignment by Borrower.

     Borrower shall not assign or transfer any of its rights or obligations under any of the Loan
Documents without the prior written consent of each of Lenders.

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          §18.7 Cooperation; Disclosure.

     Borrower and the other Loan Parties agree to promptly cooperate with any Lender in connection
with any proposed assignment or participation of all or any portion of its Commitment. Borrower
and the other Loan Parties agree that in addition to disclosures made in accordance with standard
lending practices any Lender may disclose information obtained by such Lender pursuant to this
Agreement to assignees or participants and potential assignees or participants hereunder, subject
to the provisions of §18.10. Notwithstanding anything herein to the contrary, Agent and each
Lender may disclose to any and all Persons, without limitation of any kind, any information with
respect to the “tax treatment” and “tax structure” (in each case, within the meaning of Treasury
Regulation Section 1.6011-4) of the transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are provided to Agent or any Lender relating to
such tax treatment and tax structure; provided that with respect to any document or similar item
that in either case contains information concerning the tax treatment or tax structure of the
transaction as well as other information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax structure of the Loans and
transactions contemplated hereby. In order to facilitate assignments to Eligible Assignees and
sales to Eligible Assignees, the Loan Parties shall execute such further documents, instruments or
agreements as Lenders may reasonably require. In addition, the Loan Parties agree to cooperate
fully with Lenders in the exercise of Lenders’ rights pursuant to this Section, including providing
such information and documentation regarding the Loan Parties, their Subsidiaries and Joint
Ventures as any Lender or any potential Eligible Assignee or participant may reasonably request and
to meet with potential Eligible Assignees.

          §18.8 Mandatory Assignment.

     In the event (i) Borrower requests that certain amendments, modifications or waivers be made
to this Agreement or any of the other Loan Documents which request is approved by Agent or Required
Lenders but is not approved by one or more of Lenders (any such non-consenting Lender shall
hereafter be referred to as the “Non-Consenting Lender”), (ii) Borrower becomes obligated
to pay additional amounts to any Lender pursuant to §4.4 or §4.9, or any Lender
gives notice of the occurrence of any circumstances described in §4.10, (iii) any Lender
with a Revolving Loan Commitment defaults in the obligation to make Revolving loans hereunder or is
otherwise a Defaulting Lender (any such Lender shall hereafter be referred to as an “Affected
Lender”) then, within thirty (30) days after Borrower’s receipt of notice of such disapproval
by such Non-Consenting Lender, or, in the case of clause (ii), (iii) or (iv) above at any time
after the occurrence of such event, Borrower shall have the right as to such Affected Lender, to be
exercised by delivery of written notice delivered to Agent and the Affected Lender, to elect to
cause the Affected Lender to transfer its Loans and Commitments. Agent shall promptly notify the
remaining Lenders that each of such Lenders shall have the right, but not the obligation, to
acquire a portion of the Commitment, pro rata based upon their relevant Commitment Percentages, of
the Affected Lender (or if any of such Lenders does not elect to purchase its pro rata share, then
to such remaining Lenders in such proportion as approved by Agent). In the event that Lenders do
not elect to acquire all of the Affected Lender’s Loans and Commitment, then Agent shall use
commercially reasonable efforts to find a new Lender or Lenders to acquire such remaining Loans and
Commitment. Upon any such purchase of the Loans and Commitments of the Affected Lender, the
Affected Lender’s interests in the Obligations and its

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rights hereunder and under the Loan Documents shall terminate at the date of purchase, and the
Affected Lender shall promptly execute and deliver any and all documents reasonably requested by
Agent to surrender and transfer such interest, including, without limitation, an assignment and
assumption agreement in the form attached hereto as Exhibit C and such Affected Lender’s
original Note. The purchase price for the Affected Lender’s Commitment shall equal any and all
amounts outstanding and owed by Borrower to the Affected Lender, including principal and all
accrued and unpaid interest or fees, plus any applicable prepayment fees which would be owed to
such Affected Lender if the Loans were to be repaid in full on the date of such purchase of the
Affected Lender’s Commitment.

          §18.9 Co-Agents.

     Agent may designate any Lender to be a “Co-Agent”, an “Arranger” or similar title, but such
designation shall not confer on such Lender the rights or duties of Agent. Any such “Co-Agent” or
“Arranger” shall not have any additional rights or obligations under the Loan Documents, except for
those rights and obligations, if any, as a Lender.

          §18.10 Treatment of Certain Information; Confidentiality.

     Each of Agent and Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents, advisors and other
representatives (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority purporting to have
jurisdiction over it (including any self-regulatory authority, such as the National Association of
Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the same as those of
this Section, to (i) any assignee of or participant in, or, with Borrower’s consent, any
prospective assignee of or participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction
relating to Borrower and its obligations, (g) with the consent of Borrower or (h) to the extent
such Information (x) becomes publicly available other than as a result of a breach of this Section
or (y) becomes available to Agent, any Lender, or any of their respective Affiliates on a
nonconfidential basis from a source other than Borrower.

     For purposes of this Section, “Information” means all information received from the Loan
Parties or any of their Subsidiaries relating to the Loan Parties or any of their Subsidiaries or
Joint Ventures or any of their respective businesses, other than any such information that is
available to Agent or any Lender on a nonconfidential basis prior to disclosure by the Loan Parties
or any of their Subsidiaries. Any Person required to maintain the confidentiality of Information
as provided in this Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

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          §18.11 Withholding Tax.

               (a) If any Lender is a “foreign corporation, partnership or trust” within the meaning of the
Code and such Lender is entitled to claim exemption from, or a reduction of, United States
withholding tax under Sections 1441 or 1442 of the Code, such Lender agrees with and in favor of
Agent and Borrower, to deliver to Agent and Borrower:

                    (i) if such Lender claims an exemption from, or a reduction of, withholding tax under a United
States tax treaty, properly completed IRS Form W-8BEN before the payment of any interest in the
first calendar year and before the payment of any interest in each third succeeding calendar year
during which interest may be paid under this Agreement;

                    (ii) if such Lender claims that interest paid under this Agreement is exempt from United
States withholding tax because it is effectively connected with a United States trade or business
of such Lender, two (2) properly completed and executed copies of IRS Form W-8ECI before the
payment of any interest is due in the first taxable year of such Lender and in each succeeding
taxable year of such Lender during which interest may be paid under this Agreement;

                    (iii) such other form or forms as may be required under the Code or other laws of the United
States as a condition to exemption from, or reduction of, United States withholding tax; and

                    (iv) in the case of any Lender claiming exemption from United States withholding tax under
Sections 871(b) or 881(c) of the Code, with respect to payments of “Portfolio Interest,” a Form
W-8BEN, or any subsequent versions thereof or successors thereto, and if the Lender delivers a Form
W-8BEN, a certificate representing that such Lender is not a bank for purposes of Section 881(c) of
the Code, is not a ten percent (10%) shareholder (within the meaning of Section 871(h)(3)(b) of the
Code) of Borrower, and is not a controlled foreign corporation related to Borrower (within the
meaning of Section 864(d)(4) of the Code).

Each such certificate and form shall be properly completed and duly executed by such Lender
claiming complete exemption from or a reduced rate of United States withholding tax on payments by
Borrower under the Loan Documents. Each Lender agrees to promptly notify Agent and Borrower of any
change in circumstances which would modify or render invalid any claimed exemption or reduction.

               (b) If any Lender claims exemption from, or reduction of, withholding tax under a United
States tax treaty by providing IRS Form W-8BEN, and such Lender sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of Borrower and the other
Loan Parties to such Lender, such Lender agrees to notify Agent and Borrower of the percentage
amount in which it is no longer the beneficial owner of Obligations of Borrower to such Lender. To
the extent of such percentage amount, Agent will treat such Lender’s IRS Form W-8BEN as no longer
valid.

               (c) If any Lender claiming exemption from United States withholding tax by filing IRS Form
W-8ECI with Agent sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of Borrower to such Lender, such Lender agrees to undertake sole

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responsibility for complying with the withholding tax requirements imposed by Sections 1441
and 1442 of the Code.

               (d) If any Lender is entitled to a reduction in the applicable withholding tax, Agent may
withhold from any interest payment to such Lender an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms or other documentation
required by §18.11(a) above are not delivered to Agent, then Agent may withhold from any interest
payment to such Lender not providing such forms or other documentation an amount equivalent to the
applicable withholding tax.

               (e) If the IRS or any other Governmental Authority of the United States or other jurisdiction
asserts a claim that Agent or Borrower did not properly withhold tax from amounts paid to or for
the account of any Lender (because the appropriate form was not delivered, was not properly
executed, or because such Lender failed to notify Agent or Borrower of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify Agent and Borrower fully for all amounts paid, directly or
indirectly, by Agent or Borrower as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent or Borrower under
this §18.11, together with all costs and expenses (including reasonable attorneys’ fees and legal
expenses). The obligation of Lenders under this subsection (e) shall survive the payment of all
Obligations and the resignation or replacement of Agent.

§19. NOTICES

     Each notice, demand, election or request provided for or permitted to be given pursuant to
this Agreement (hereinafter in this §19 referred to as “Notice”), but specifically
excluding to the maximum extent permitted by law any notices of the institution or commencement of
foreclosure proceedings, must be in writing and shall be deemed to have been properly given or
served by personal delivery or by sending same by overnight courier or by depositing same in the
United States Mail, postpaid and registered or certified, return receipt requested, or as expressly
permitted herein, by telegraph, telecopy, telefax or telex, and, to the extent permitted by §23,
email addressed as follows:

     If to Agent or any Lender, at the address set forth on the signature page for Agent or such
Lender, and in the case of each notice to Agent pursuant to §7.5, with a copy to:

     Agent’s Special Counsel:

Bryan Cave LLP

1201 West Peachtree Street, NW

14th Floor

Atlanta, Georgia 30309-3488

Facsimile: (404) 572-6999

Attention: F. Donald Nelms, Jr.

and

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     if to Borrower:

Forestar (USA) Real Estate Group Inc.

6300 Bee Cave Road

Building Two, Suite 500

Austin, Texas 78746

Facsimile: (512) 433-5203

Attention: Chief Financial Officer

     with a copy to:

Forestar (USA) Real Estate Group Inc.

6300 Bee Cave Road

Building Two, Suite 500

Austin, Texas 78746

Facsimile: (512) 433-5203

Attention: General Counsel

and

     if to any of the other Loan Parties, to it at:

c/o Forestar (USA) Real Estate Group Inc.

6300 Bee Cave Road

Building Two, Suite 500

Austin, Texas 78746

Facsimile: (512) 433-5203

Attention: Chief Financial Officer

with a copy to:

c/o Forestar (USA) Real Estate Group Inc.

6300 Bee Cave Road

Building Two, Suite 500

Austin, Texas 78746

Facsimile: (512) 433-5203

Attention: General Counsel

and to each other Lender which may hereafter become a party to this Agreement at such address as
may be designated by such Lender. Each Notice shall be effective upon being personally delivered
or upon being sent by overnight courier or upon being deposited in the United States Mail as
aforesaid. The time period in which a response to such Notice must be given or any action taken
with respect thereto (if any), however, shall commence to run from the date of receipt if
personally delivered or sent by overnight courier, or if so deposited in the United States Mail,
the earlier of three (3) Business Days following such deposit or the date of receipt as disclosed
on the return receipt. Rejection or other refusal to accept or the inability to deliver

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because of changed address for which no notice was given shall be deemed to be receipt of the
Notice sent. By giving at least fifteen (15) days prior Notice thereof, Borrower, a Lender or
Agent shall have the right from time to time and at any time during the term of this Agreement to
change their respective addresses and each shall have the right to specify as its address any other
address within the United States of America.

§20. RELATIONSHIP

     Neither Agent nor any Lender has any fiduciary relationship with or fiduciary duty to any of
the Loan Parties arising out of or in connection with the Agreement or the other Loan Documents or
the transactions contemplated hereunder and thereunder, and the relationship between each Lender
and Borrower is solely that of a lender and borrower, and between each Lender and any Guarantor is
solely that of a lender and guarantor, and nothing contained herein or in any of the other Loan
Documents shall in any manner be construed as making the parties hereto partners, joint venturers
or any other relationship other than lender and borrower, or lender and guarantor (as the case may
be). In addition, each of the Loan Parties agrees that notwithstanding any other relationship that
KeyBank or any affiliate thereof may have with Borrower or any of the other Loan Parties or their
respective Subsidiaries and Affiliates, in any proceeding relating to the Loan Parties, or any of
them, under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution, liquidation or similar proceeding, such Loan Party will not challenge Lenders’ right
to receive payment of the Obligations as a creditor of Borrower and the other Loan Parties on the
grounds of the equitable subordination principles contained in §510 of the United States Bankruptcy
Code (11 U.S.C. §101 et seq.), as from time to time amended, or any similar provision under
any applicable law. The covenants contained in this §20 are a material consideration and
inducement to Lenders to enter into the Agreement.

§21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE

     THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE
TO CONFLICTS OR CHOICE OF LAW). EACH OF THE LOAN PARTIES AGREES THAT ANY SUIT FOR THE ENFORCEMENT
OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH
COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER AND THE OTHER
APPLICABLE LOAN PARTIES (IF ANY) BY MAIL AT THE ADDRESS SPECIFIED IN §19. EACH OF THE LOAN PARTIES
HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY
SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.

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§22. HEADINGS

     The captions in this Agreement are for convenience of reference only and shall not define or
limit the provisions hereof.

§23. COUNTERPARTS; INTEGRATION; EFFECTIVENESS; ELECTRONIC EXECUTION

     (a) Counterparts; Integration; Effectiveness. This Agreement and any amendment hereof
may be executed in several counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when taken together
shall constitute one instrument. In proving this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom enforcement is sought.
This Agreement and the other Loan Documents, any separate letter agreements with respect to fees
payable to Agent (including the Agreement Regarding Fees) and any provisions of any commitment
letter or similar letter relating to the transactions contemplated by this Agreement that expressly
survive the Closing Date, constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in §10, this Agreement shall become
effective when it shall have been executed by Agent and when Agent shall have received counterparts
hereof that, when taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

     (b) Electronic Execution of Assignments. The words “execution,” “signed,”
“signature,” and words of like import in any Assignment and Assumption Agreement shall be deemed to
include electronic signatures or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed signature or the use of
a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any
applicable law, including the Federal Electronic Signatures in Global and National Commerce Act,
the New York State Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.

     (c) Electronic Communication. Notices and other communications to Agent and Lenders
hereunder may be delivered or furnished by electronic communication (including e-mail and Internet
or intranet websites) pursuant to procedures approved by Agent, provided that the foregoing shall
not apply to notices to any Lender pursuant to Article 4 if such Lender has notified Agent that it
is incapable of receiving notices under such Article by electronic communication. Agent or
Borrower may, in its discretion, agree to accept notices and other communications to it hereunder
by electronic communications pursuant to procedures approved by it, provided that approval of such
procedures may be limited to particular notices or communications. Unless Agent otherwise
prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received
upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return
receipt requested” function, as available, return e-mail or other written acknowledgment), provided
that if such notice or other communication is not sent during the normal business hours of the
recipient, such notice or

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communication shall be deemed to have been sent at the opening of business on the next
business day for the recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the intended recipient at its
e-mail address as described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.

§24. ENTIRE AGREEMENT, ETC.

     The Loan Documents and any other documents executed in connection herewith or therewith
express the entire understanding of the parties with respect to the transactions contemplated
hereby. Neither this Agreement nor any term hereof may be changed, waived, discharged or
terminated, except as provided in §27.

§25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS

     TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE BORROWER, THE OTHER LOAN
PARTIES, AGENT AND THE LENDERS HEREBY WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION
OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER
LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS. EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED BY LAW, EACH OF BORROWER AND THE OTHER
LOAN PARTIES HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES. EACH OF BORROWER AND THE OTHER LOAN PARTIES (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY LENDER OR AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH LENDER
OR AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B)
ACKNOWLEDGES THAT AGENT AND THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS §25. EACH OF BORROWER AND THE OTHER LOAN PARTIES ACKNOWLEDGES
THAT IT HAS HAD AN OPPORTUNITY TO REVIEW THIS §25 WITH ITS LEGAL COUNSEL AND THAT EACH OF BORROWER
AND THE OTHER LOAN PARTIES AGREES TO THE FOREGOING AS ITS FREE, KNOWING AND VOLUNTARY ACT.

§26. DEALINGS WITH THE BORROWER

     The Lenders and their affiliates may accept deposits from, extend credit to and generally
engage in any kind of banking, trust or other business with Borrower, or any of its affiliates
regardless of the capacity of the Lender hereunder.

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§27. CONSENTS, AMENDMENTS, WAIVERS, ETC.

     Except as otherwise expressly provided in this Agreement, any consent or approval required or
permitted by this Agreement may be given, and any term of this Agreement or of any other Loan
Document may be amended, and the performance or observance by Borrower or any other Loan Party of
any terms of this Agreement or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Required Lenders. Notwithstanding
the foregoing provisions of this Section:

               (a) none of the following may occur without the written consent of each affected Lender:

                    (i) a decrease in the rate of interest on the Notes;

                    (ii) an increase in the amount of the Commitments of Lenders, except as provided in §2.9;

                    (iii) a forgiveness, reduction or waiver of the principal of any unpaid Loan or any interest
thereon or fee payable under the Loan Documents (other than in connection with the imposition or
rescission of the Default Rate);

                    (iv) a decrease in the amount of any fee payable to a Lender hereunder;

                    (v) an extension of a Maturity Date except as provided in §3.1(b) with respect to the
Revolving Credit Maturity Date;

                    (vi) the release of Borrower, any Guarantor or any of the Collateral except as otherwise
provided herein;

                    (vii) a change to this §27;

                    (viii) any postponement of any date fixed for any payment of principal of or interest on, or
fees in respect of, the Loans except as provided in §3.1(b) with respect to the Revolving Credit
Maturity Date;

                    (ix) any change in the manner of distribution of any payments to Lenders or Agent;

                    (x) an amendment of the definition of Required Lenders or of any requirement for consent by
all of Lenders; or

                    (xi) an amendment of any provision of this Agreement or the Loan Documents which requires the
approval of all of Lenders or the Required Lenders to require a lesser number of Lenders to approve
such action.

               (b) Other Consents. No amendment, modification, termination or waiver of any
provision of the Loan Documents, or consent to any departure by any Loan Party therefrom, shall:

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               (i) increase the Revolving Commitment of any Revolving Lender over the amount thereof
then in effect without the consent of such Lender; provided, no amendment,
modification or waiver of any condition precedent, covenant, Default or Event of Default
shall constitute an increase in any Revolving Commitment of any Lender;

               (ii) increase the aggregate Revolving Commitments or the aggregate Term Loan
Commitments over the amount thereof then in effect without the consent of the Requisite
Class Lenders (other than pursuant to and in accordance with §2.9);

               (iii) amend, modify, terminate or waive any provision hereof relating to the Swing Line
Commitment or the Swing Line Loans without the consent of Swing Line Lender;

               (iv) amend the definition of Requisite Class Lenders or Applicable Approval Percentage
without the consent of Requisite Class Lenders of each Class; provided, subject to
§27(b)(viii), additional extensions of credit pursuant hereto may be included in the
determination of such Requisite Class Lenders on substantially the same basis as the Term
Commitments, the Term Loans, the Revolving Commitments and the Revolving Loans are included
on the Closing Date;

               (v) alter the required application of any repayments or prepayments as between Classes
pursuant to §3.4 or §12.5 of this Agreement or pursuant to any other Loan Document without
the unanimous consent of all Lenders of each Class which is being allocated a lesser
repayment or prepayment as a result thereof; provided, Requisite Class Lenders may
waive, in whole or in part, any prepayment so long as the application, as between Classes,
of any portion of such prepayment which is still required to be made is not altered;

               (vi) amend, modify, terminate or waive any obligation of Revolving Lenders relating to
the purchase of participations in Letters of Credit as provided in §2.10(d) without the
written consent of Agent;

               (vii) waive any condition precedent to the initial Loans on the Closing Date, for which
it is expressly provided in such Section that satisfaction of such condition is to be
acceptable to or approved by Agent, without the consent of Agent, and in any such event it
shall not be necessary to obtain the consent of any other Lender to such waiver; or

               (viii) amend, modify, terminate or waive the amount or timing of payment of any fee
payable to Agent for its own account, any provision of §14 as the same applies to Agent, or
any other provision hereof as the same applies to the rights or obligations of Agent, in
each case without the consent of Agent;

               (ix) any modification to require a Revolving Lender to fund a pro rata share of a
request for a Revolving Loan made by Borrower other than based on its applicable Required
Commitment Percentage, or to require a Term Lender to fund a pro rata share of a request for
a Term Loan made by Borrower other than based on its

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     applicable Term Commitment Percentage, without the unanimous consent of all Lenders of
the Class affected by such modification Lenders; or

               (x) any amendment which would disproportionately affect the obligation of Borrower or
any Loan Party to make payment of the Revolving Loans or the Term Loans shall not be
effective without the unanimous approval of all Lenders of the Class affected by such
modification.

     No waiver shall extend to or affect any obligation not expressly waived or impair any right
consequent thereon. No course of dealing or delay or omission on the part of Agent or any Lender
in exercising any right shall operate as a waiver thereof or otherwise be prejudicial thereto. No
notice to or demand upon Borrower or the other Loan Parties shall entitle Borrower or any other
Loan Party to other or further notice or demand in similar or other circumstances. In the event any
Lender fails to expressly grant or deny any consent, amendment or waiver sought under this
Agreement within ten (10) days of a written request therefor submitted by Agent or Agent’s Special
Counsel, such Lender shall be deemed to have granted to Agent an irrevocable proxy with respect to
such specific matter. The right of any Lender to consent under subsections (a) and (b) of this §27
shall not apply to a Defaulting Lender, except for purposes of subsections (a)(v) and (b)(i) of
this §27.

§28. SEVERABILITY

     The provisions of this Agreement are severable, and if any one clause or provision hereof
shall be held invalid or unenforceable in whole or in part in any jurisdiction, then such
invalidity or unenforceability shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Agreement in any jurisdiction.

§29. NO UNWRITTEN AGREEMENTS

     THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES HERETO AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

§30. ACKNOWLEDGMENT OF INDEMNITY OBLIGATIONS

     BORROWER HEREBY ACKNOWLEDGES THAT THIS AGREEMENT CONTAINS INDEMNITY OBLIGATIONS OF THE
BORROWER.

§31. REPLACEMENT OF NOTES

     Upon receipt of evidence reasonably satisfactory to Borrower of the loss, theft, destruction
or mutilation of any Note, and in the case of any such loss, theft or destruction, upon delivery of
an indemnity agreement reasonably satisfactory to such Borrower or, in the case of any such
mutilation, upon surrender and cancellation of the applicable Note, such Borrower will execute and
deliver, in lieu thereof, a replacement Note, identical in form and substance to the applicable

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Note and dated as of the date of the applicable Note and upon such execution and delivery all
references in the Loan Documents to such Note shall be deemed to refer to such replacement Note.

§32. TIME IS OF THE ESSENCE

     Time is of the essence with respect to each and every covenant, agreement and obligation of
Borrower under this Agreement and the other Loan Documents.

§33. RIGHTS OF THIRD PARTIES

     This Agreement and the other Loan Documents are made and entered into for the sole protection
and legal benefit of Loan Parties, Lenders and Agent, and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement or any of the other Loan
Documents. All conditions to the performance of the obligations of Agent and Lenders under this
Agreement, including the obligation to make Loans, are imposed solely and exclusively for the
benefit of Agent and Lenders and no other Person shall have standing to require satisfaction of
such conditions in accordance with their terms or be entitled to assume that Agent and Lenders will
refuse to make Loans in the absence of strict compliance with any or all thereof and no other
Person shall, under any circumstances, be deemed to be a beneficiary of such conditions, any and
all of which may be freely waived in whole or in part by Agent and Lenders at any time if in their
sole discretion they deem it desirable to do so. In particular, Agent and Lenders make no
representations and assume no obligations as to third parties concerning the quality of the
construction by Borrower of any development or the absence therefrom of defects.

§34. GUARANTY

          §34.1 The Guaranty. 

               (a) Each of Guarantors hereby jointly and severally guarantees to Agent for the benefit of the
Lenders and each of the holders of the Obligations, as hereinafter provided, as primary obligor and
not as surety, the prompt payment of the Obligations (the “Guaranteed Obligations”) in full
when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) strictly in accordance with the terms thereof. Guarantors
hereby further agree that if any of the Guaranteed Obligations are not paid in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise), Guarantors will, jointly and severally, promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension of time of payment
or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory cash
collateralization or otherwise) in accordance with the terms of such extension or renewal.

               (b) Notwithstanding any provision to the contrary contained herein, in any other of the Loan
Documents or other documents relating to the Obligations, the obligations of each Guarantor under
this Agreement and the other Loan Documents shall be limited to an aggregate amount equal to the
largest amount that would not render such obligations subject to

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avoidance under the United States Bankruptcy Code and all other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership,
insolvency, reorganization or similar debtor relief laws of the United States from time to time in
effect and affecting the rights of creditors generally (collectively, “Debtor Relief Laws”)
or any comparable provisions of any applicable state law.

          §34.2 Obligations Unconditional.

     The obligations of Guarantors under §34.1 are joint and several, absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability of any of the Loan
Documents or other documents relating to the Obligations, or any substitution, compromise, release,
impairment or exchange of any other guarantee of or security for any of the Guaranteed Obligations,
and, to the fullest extent permitted by applicable law, irrespective of any other circumstance
whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this §34.2 that the obligations of Guarantors hereunder shall be
absolute and unconditional under any and all circumstances. Each Guarantor agrees that such
Guarantor shall have no right of subrogation, indemnity, reimbursement or contribution against
Borrower or any other Guarantor for amounts paid under this §34 until such time as the Obligations
have been irrevocably paid in full and the commitments relating thereto have expired or been
terminated. Without limiting the generality of the foregoing, it is agreed that, to the fullest
extent permitted by law, the occurrence of any one or more of the following shall not alter or
impair the liability of any Guarantor hereunder, which shall remain absolute and unconditional as
described above:

               (a) at any time or from time to time, without notice to any Guarantor, the time for any
performance of or compliance with any of the Guaranteed Obligations shall be extended, or such
performance or compliance shall be waived;

               (b) any of the acts mentioned in any of the provisions of any of the Loan Documents, or other
documents relating to the Guaranteed Obligations or any other agreement or instrument referred to
therein shall be done or omitted;

               (c) the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the
Obligations shall be modified, supplemented or amended in any respect, or any right under any of
the Loan Documents or other documents relating to the Guaranteed Obligations, or any other
agreement or instrument referred to therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released, impaired or exchanged in whole
or in part or otherwise dealt with;

               (d) any Lien granted to, or in favor of, Agent or any of the holders of the Guaranteed
Obligations as security for any of the Guaranteed Obligations shall fail to attach or be perfected;
or

               (e) any of the Guaranteed Obligations shall be determined to be void or voidable (including,
without limitation, for the benefit of any creditor of any Guarantor) or shall be subordinated to
the claims of any Person (including, without limitation, any creditor of any Guarantor).

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          With respect to its obligations hereunder, each Guarantor hereby expressly waives diligence,
presentment, demand of payment, protest notice of acceptance of the guaranty given hereby and of
Loans that may constitute obligations guaranteed hereby, notices of amendments, waivers and
supplements to the Loan Documents and other documents relating to the Guaranteed Obligations, or
the compromise, release or exchange of collateral or security, and all notices whatsoever, and any
requirement that Agent or any holder of the Guaranteed Obligations exhaust any right, power or
remedy or proceed against any Person under any of the Loan Documents or any other documents
relating to the Guaranteed Obligations or any other agreement or instrument referred to therein, or
against any other Person under any other guarantee of, or security for, any of the Obligations.

          §34.3 Reinstatement.

     Neither Guarantors’ obligations hereunder nor any remedy for the enforcement thereof shall be
impaired, modified, changed or released in any manner whatsoever by an impairment, modification,
change, release or limitation of the liability of Borrower or any other Guarantor, by reason of
Borrower’s or any other Guarantor’s bankruptcy or insolvency or by reason of the invalidity or
unenforceability of all or any portion of the Guaranteed Obligations. The obligations of
Guarantors under this §34 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of any Person in respect of the Guaranteed Obligations is
rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a
result of any proceedings pursuant to any Debtor Relief Law or otherwise, and each Guarantor agrees
that it will indemnify Agent and each holder of Guaranteed Obligations on demand for all reasonable
out-of-pocket costs and expenses (including all reasonable fees, expenses and disbursements of any
law firm or other outside counsel incurred by the Agent) incurred by Agent or such holder of
Guaranteed Obligations in connection with such rescission or restoration, including any such costs
and expenses incurred in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any Debtor Relief Law.

          §34.4 Certain Waivers.

     Each Guarantor acknowledges and agrees that (a) the guaranty given hereby may be enforced
without the necessity of resorting to or otherwise exhausting remedies in respect of any other
security or collateral interests, and without the necessity at any time of having to take recourse
against Borrower or any other Guarantor hereunder or against any collateral securing the Guaranteed
Obligations or otherwise, (b) it will not assert any right to require the action first be taken
against Borrower or any other Person (including any co-guarantor) or pursuit of any other remedy or
enforcement any other right, and (c) nothing contained herein shall prevent or limit action being
taken against Borrower or any other Guarantor hereunder, under the other Loan Documents or the
other documents and agreements relating to the Guaranteed Obligations or from foreclosing on any
security or collateral interests relating hereto or thereto, or from exercising any other rights or
remedies available in respect thereof, if none of Borrower nor Guarantors shall timely perform
their obligations, and the exercise of any such rights and completion of any such foreclosure
proceedings shall not constitute a discharge of Guarantors’ obligations hereunder unless as a
result thereof, the Guaranteed Obligations shall have been paid in full and the commitments
relating thereto shall have expired or been terminated, it being the

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purpose and intent that Guarantors’ obligations hereunder be absolute, irrevocable,
independent and unconditional under all circumstances.

          §34.5 Remedies.

     Guarantors agree that, to the fullest extent permitted by Law, as between Guarantors, on the
one hand, and Agent and the holders of the Guaranteed Obligations, on the other hand, the
Guaranteed Obligations may be declared to be forthwith due and payable as provided in §12.1 (and
shall be deemed to have become automatically due and payable in the circumstances provided in
§12.1) for purposes of §34.1, notwithstanding any stay, injunction or other prohibition preventing
such declaration (or preventing the Guaranteed Obligations from becoming automatically due and
payable) as against any other Person and that, in the event of such declaration (or the Guaranteed
Obligations being deemed to have become automatically due and payable), the Guaranteed Obligations
(whether or not due and payable by any other Person) shall forthwith become due and payable by
Guarantors for purposes of §34.1. Guarantors acknowledge and agree that if the Guaranteed
Obligations are secured pursuant to the terms of the Security Documents, the holders of the
Guaranteed Obligations may exercise their remedies thereunder in accordance with the terms thereof.

          §34.6 Rights of Contribution.

     Guarantors hereby agree as among themselves that, in connection with payments made hereunder,
each Guarantor shall have a right of contribution from each other Guarantor in accordance with
applicable law. Such contribution rights shall be subordinate and subject in right of payment to
the Guaranteed Obligations until such time as the Guaranteed Obligations have been irrevocably paid
in full and the commitments relating thereto shall have expired or been terminated, and none of
Guarantors shall exercise any such contribution rights until the Guaranteed Obligations have been
irrevocably paid in full and the commitments relating thereto shall have expired or been
terminated.

          §34.7 Guaranty of Payment; Continuing Guaranty.

     The guarantee in this §34 is a guaranty of payment and not of collection, and is a continuing
guarantee, and shall apply to all Guaranteed Obligations whenever arising.

          §34.8 Special Provisions Applicable to Guarantors.

     (a) Guarantors hereby agree, among themselves, that if any Guarantor shall become an Excess
Funding Guarantor (as defined below) by reason of the payment by such Guarantor of any Obligations,
each other Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the next
sentence), pay to such Excess Funding Guarantor an amount equal to such Guarantor’s Pro Rata Share
(as defined below and determined, for this purpose, without reference to the properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined below) in respect
of such Obligations. The payment obligation of a Guarantor to any Excess Funding Guarantor under
this §34.8(a) shall be subordinate and subject in right of payment to the prior payment in full of
the obligations of such Guarantor under the other
provisions of this Guaranty, and such Excess Funding Guarantor shall not exercise any right or
remedy with respect to such excess until payment and satisfaction in full of all such obligations.

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For purposes of this §34.8(a), (i) “Excess Funding Guarantor” shall mean, in respect of any
Obligations, a Guarantor that has paid an amount in excess of the amount of proceeds of Loans
advanced to it by Borrower that have not been repaid as of the date of determination, plus its Pro
Rata Share of the remaining portion of such Obligations, (ii) “Excess Payment” shall mean,
in respect of any Obligations, the amount paid by an Excess Funding Guarantor in excess of the
amount of proceeds of Loans advanced to it by Borrower that have not been repaid as of the date of
determination, plus its Pro Rata Share of the remaining portion of such Obligations and (iii)
“Pro Rata Share” shall mean, for any Guarantor, the ratio (expressed as a percentage) of
(x) the amount by which the aggregate present fair saleable value of all properties of such
Guarantor (excluding any shares of stock of any other Guarantor) exceeds the amount of all the
debts and liabilities of such Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Guarantor hereunder and any
obligations of any other Guarantor that have been guaranteed by such Guarantor) to (y) the amount
by which the aggregate fair saleable value of all properties of Borrower and all of Guarantors
exceeds the amount of all the debts and liabilities (including contingent, subordinated, unmatured
and unliquidated liabilities, but excluding the obligations of Borrower and Guarantors hereunder)
of Borrower and all of Guarantors, all as of the Closing Date.

               (b) Pursuant to §7.21 of this Agreement, each new wholly owned, direct or indirect Subsidiary
of Borrower (other than an Excluded Subsidiary), and each Excluded Subsidiary that is wholly-owned,
directly or indirectly, and that ceases to qualify as an Excluded Subsidiary, is required to enter
into this Agreement by executing and delivering to Agent a Joinder Agreement (Guarantor). Upon the
execution and delivery of a Joinder Agreement (Guarantor) by such Subsidiary, such Subsidiary shall
become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor
herein. The execution and delivery of any Joinder Agreement (Guarantor) adding an additional
Guarantor as a party to this Agreement shall not require the consent of any other party hereto.
The rights and obligations of each party hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor hereunder.

§35. EFFECTIVENESS OF AMENDMENT AND RESTATEMENT; NO NOVATION

     The amendment and restatement of the Original Credit Agreement pursuant to this Agreement
shall be effective upon the date hereof. All obligations and rights of the Loan Parties, Agent and
Lenders relating to the period commencing on the date hereof shall be governed by the terms and
provisions of this Agreement; the obligations and rights of the Loan Parties, Agent and Lenders
relating to the period prior to the date hereof shall continue to be governed by the Original
Credit Agreement without giving effect to the amendment and restatement provided for herein. The
“Obligations” under the Original Credit Agreement are in all respects continuing with only the
terms thereof being modified as provided in this Agreement and, except as expressly provided
herein, the Liens as granted under the Security Documents securing payment of such “Obligations”
are in all respects continuing and in full force and effect and secure the payment of the
Obligations defined herein and are fully ratified and affirmed. Except as expressly provided
hereinbelow, this Agreement shall not constitute a novation or termination of the Loan Parties’
obligations under the Original Credit Agreement (including, without limitation, the obligations of
the Guarantors under §34 of the Original Credit Agreement) or any document,
note or agreement executed or delivered in connection therewith, but shall constitute an
amendment and restatement of the obligations and covenants of the Loan Parties under such

127

 

documents, notes and agreements, and the Loan Parties hereby reaffirm all such obligations and
covenants, as amended and restated hereby. Notwithstanding the foregoing, all obligations of
Firstland Investment Corporation and LIC Ventures (collectively, the “Release Parties”) under the
“Loan Documents” (as defined in the Original Credit Agreement) are hereby released and all Liens
granted by the Release Parties under or in connection with such “Loan Documents” are terminated and
released without any further action by any party. It is expressly acknowledged and agreed that the
foregoing release and termination shall apply only with respect to the Release Parties and not with
respect to any other “Loan Party” under the Original Credit Agreement.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

128

 

     IN WITNESS WHEREOF, the undersigned have duly executed this Credit Agreement as of the date
first set forth above.

	 	 	 	 	 
	 	BORROWER:

FORESTAR (USA) REAL ESTATE GROUP INC., a Delaware corporation

 	 
	 	By:  	/s/ Christopher L. Nines
 	 
	 	 	Name:  	Christopher L. Nines 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

[SIGNATURES CONTINUED ON FOLLOWING PAGES]

 

 

[Execution of Revolving and Term Credit Agreement Continued]

	 	 	 	 	 
	 	GUARANTORS:

FORESTAR GROUP INC., a Delaware corporation

 	 
	 	By:  	/s/ Christopher L. Nines
 	 
	 	 	Name:  	Christopher L. Nines 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	FORESTAR MINERALS LLC, a Delaware limited liability company

 	 
	 	By:  	/s/ Christopher L. Nines
 	 
	 	 	Name:  	Christopher L. Nines 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	FORESTAR OIL & GAS LLC

 	 
	 	By:  	/s/ Christopher L. Nines
 	 
	 	 	Name:  	Christopher L. Nines 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

[SIGNATURES CONTINUED ON FOLLOWING PAGES]

 

 

[Execution of Revolving and Term Credit Agreement Continued]

	 	 	 	 	 
	 	FORESTAR REALTY INC.,

a Delaware corporation

 	 
	 	By:  	/s/ Christopher L. Nines
 	 
	 	 	Name:  	Christopher L. Nines 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	FORESTAR HOTEL HOLDING COMPANY INC.,

a Nevada corporation

 	 
	 	By:  	/s/ Christopher L. Nines
 	 
	 	 	Name:  	Christopher L. Nines 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	CAPITOL OF TEXAS INSURANCE GROUP INC., a Delaware corporation

 	 
	 	By:  	/s/ Christopher L. Nines
 	 
	 	 	Name:  	Christopher L. Nines 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

 

 

[Execution of Revolving and Term Credit Agreement Continued]

	 	 	 	 	 
	 	KEYBANK NATIONAL ASSOCIATION, as a Lender, as Swing Line Lender and as Agent

 	 
	 	By:  	/s/
Nathan Weyer	 
	 	 	Name:  	Nathan Weyer	 
	 	 	Title:  	Vice President	 
	 

KeyBank National Association

1200 Abernathy Road, NE

Suite 1550

Atlanta, Georgia 30328

Attn: Daniel Silbert

Facsimile: (770) 510-2195

 

 

[Execution Continued]

	 	 	 	 	 
	 	AgFIRST FARM CREDIT BANK, as a lender

 	 
	 	By:  	/s/ Matt Jeffords
 	 
	 	Name:  	Matt Jeffords 	 
	 	Title:  	Assistant Vice President 	 
	 

Address:

1401 Hampton Street

Columbia, SC 29201

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

 

 

[Execution Continued]

	 	 	 	 	 
	 	AMEGY BANK NATIONAL ASSOCIATION, as a lender

 	 
	 	By:  	/s/ Melinda N. Jackson
 	 
	 	Name:  	Melinda N. Jackson 	 
	 	Title:  	Senior Vice President 	 
	 

Address:

4400 Post Oak Parkway

Houston, TX 77027

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

 

 

[Execution Continued]

	 	 	 	 	 
	 	CAPITAL ONE N.A., as a lender

 	 
	 	By:  	/s/ Michael B. Perrine
 	 
	 	Name:  	Michael B. Perrine 	 
	 	Title:  	Commercial Banking President-Austin 	 
	 

Address:

901 South Mopac

Building 1, Suite 500

Austin, TX 78746

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

 

 

[Execution Continued]

	 	 	 	 	 
	 	GOLDMAN SACHS BANK USA, as a lender

 	 
	 	By:  	/s/ Mark Walton
 	 
	 	Name:  	Mark Walton 	 
	 	Title:  	Authorized Signatory 	 
	 

Address:

200 West Street

New York, NY 10282

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

 

 

[Execution Continued]

	 	 	 	 	 	 	 

	 	 	METROPOLITAN LIFE INSURANCE COMPANY, as a lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ C. Ray Smith
 

C. Ray Smith
	 	 
	 

	 	Title:
	 	Director	 	 

Address:

6750 Poplar Avenue

Suite 109

Germantown, TN 38138

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

 

 

[Execution Continued]

	 	 	 	 	 	 	 

	 	 	NORTHWEST FARM CREDIT SERVICES, PCA, as a lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Carol L. Sobson
 

Carol L. Sobson
	 	 
	 

	 	Title:
	 	Vice President	 	 

Address:

1700 South Assembly Street

Spokane, WA 99224

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

 

 

[Execution Continued]

	 	 	 	 	 	 	 

	 	 	TEXAS CAPITAL BANK,
NATIONAL ASSOCIATION, as a lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Mike McConnell
 

Mike McConnell
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

Address:

114 West 7th Street

Suite 300

Austin, TX 78701

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE]

 

 

[Execution Continued]

	 	 	 	 	 	 	 

	 	 	UNITED FCS, PCA, d/b/a FCS COMMERCIAL FINANCE GROUP,
successor in interest to AgCountry Farm Credit
Services, PCA, d/b/a FCS Commercial Financial [sic]
Group, as a lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Lisa Caswell
 

Lisa Caswell
	 	 
	 

	 	Title:
	 	Assistant Vice President	 	 

Address:

600 Highway 169 South

Suite 850

Minneapolis, MN 55426

 

 

Exhibit A-1

REVOLVING PROMISSORY NOTE

			
	U.S. $                                         
	 	as of
______ ___, 2010

     FOR VALUE RECEIVED, FORESTAR (USA) REAL ESTATE GROUP INC., a Delaware corporation, having an
address of 6300 Bee Cave Road, Building Two, Suite 500, Austin, Texas 78746 (hereinafter referred
to as “Maker”), promises to pay to                                                              (hereinafter referred
to as “Payee,” Payee and any and all other holders of this Note being hereinafter collectively
referred to as “Holder”), at the Agent’s Office (as defined in the Credit Agreement) or such other
place as Payee may designate in writing, the lesser of the principal sum of                                         
AND NO/100 DOLLARS (U.S. $                    .00), or so much thereof as may be advanced pursuant to the
Credit Agreement (defined herein), together with interest as provided in this note (this “Note”).
All capitalized terms in this Note not otherwise defined herein shall be defined as set forth in
the Credit Agreement (defined hereinafter). The terms of interest and repayment are as follows:

	1.	 	Interest. From and after the date hereof (until maturity, adjustment or default as
hereinafter provided), interest shall accrue on the principal amount of this Note which is
outstanding from time to time at the rate or rates provided in that certain Amended and
Restated Revolving and Term Credit Agreement dated of even date, among Maker, Payee, certain
guarantors party thereto, KeyBank National Association as Agent thereunder, the other lenders
party thereto and KeyBanc Capital Markets (as hereafter amended, modified, restated, renewed
or extended and in effect from time to time, hereinafter referred to as the “Credit
Agreement”). Interest shall be computed as set forth in the Credit Agreement. Accrued but
unpaid interest only shall be due and payable as set forth in the Credit Agreement, with a
final payment on the Revolving Credit Maturity Date.
	 
	2.	 	Principal. Principal shall be payable from time to time in the amounts and at the
times provided in the Credit Agreement, with the entire outstanding principal balance
hereunder becoming due and payable in full on the Revolving Credit Maturity Date.

     Notwithstanding any provisions in this Note, or in any instrument securing this Note, the
total liability for payments legally regarded as interest shall not exceed the maximum limits
imposed by applicable law, and any payment in excess of the amount allowed thereby shall, as of the
date of such payment, automatically be deemed to have been applied to the payment of the principal
evidenced hereby, or, if the principal has been fully repaid, shall be repaid to Maker upon demand.
Any notation or record of Holder with respect to such required application which is inconsistent
with the provisions of this paragraph shall be disregarded for all purposes and shall not be
binding upon either Maker or Holder.

     All sums payable under this Note shall be paid not later than 2:00 p.m. (Cleveland time) on
the day when due in immediately available funds in lawful money of the United States of America.
Whenever any payment to be made under this Note shall be stated to be due on a day

A(1)-1

 

other than a Business Day, such payment shall be made on the next succeeding Business Day and
such extension of time shall in such case be included in the computation of payment of interest.

     All payments under this Note shall be made to Holder without setoff or counterclaim and free
and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, restrictions or conditions of any nature now or hereafter imposed or
levied by any jurisdiction or any political subdivision thereof or any taxing or other authority
therein as and to the extent provided for in the Credit Agreement.

     At the option of Holder, upon the occurrence and during the continuance of an Event of Default
and subject to the provisions of the Credit Agreement, the entire principal amount outstanding
under this Note, together with all accrued interest thereon and all other sums due under this Note,
may be declared to be immediately due and payable in full, whereupon they shall become immediately
due and payable in full, without further notice or demand. Failure to exercise such option shall
not constitute a waiver of the right to exercise such option if an Event of Default has occurred
and is continuing. Upon the occurrence of an Event of Default, Maker shall pay Holder all
reasonable expenses and costs of collection, including, but not limited to, court costs and
reasonable attorney’s fees and disbursements as and to the extent provided for in the Credit
Agreement. Time is of the essence of this Note.

     To the extent permitted by applicable law and to the extent provided in the Credit Agreement,
any amount of principal of this Note which is not paid when due after the passage of any cure
period (whether at stated maturity, acceleration or otherwise) and any amount of interest under
this Note which is not paid when due after the passage of any cure period, shall bear interest,
from the date on which such overdue amount shall have become due and payable by Maker until payment
in full (whether before or after judgment), payable on demand, at the Default Rate.

     In addition, and without limiting the right of Holder to accelerate the Maturity Date, if any
payment under this Note, except upon maturity or acceleration, is not received by Holder within ten
(10) days of the date such payment is due, without notice or demand, Maker shall pay to Holder a
late charge equal to five percent (5%) of the amount of such payment.

     Maker may prepay the outstanding principal amount of this Note, or a portion thereof, only in
accordance with the terms of the Credit Agreement. To the extent provided in the Credit Agreement,
amounts so prepaid may be subject to reborrowing.

     The obligations of the Maker under this Note and the Credit Agreement are secured by the
Collateral. From time to time, without affecting the obligation of Maker or any sureties,
guarantors, endorsers, accommodation parties or other persons liable or to become liable on this
Note to pay the outstanding principal balance of this Note and observe the covenants of Maker
contained herein, without giving notice to or obtaining the consent of Maker or any such sureties,
guarantors, endorsers, accommodation parties or other persons, and without liability on the part of
Holder, Holder may, at the option of Holder, grant extensions or postponements of the time for
payment of the outstanding principal balance, interest or any part thereof, release anyone liable
on any of said outstanding principal balance, accept a renewal of this Note, release or

A(1)-2

 

accept a substitution of all or any Collateral, join in any extension or subordination
agreement, agree in writing with Maker to modify the rate of interest or terms and time of payment
of outstanding principal balance or period of amortization, if any, of this Note or change the
amount of the monthly installments, if any, payable hereunder, or grant any other indulgence or
forbearance whatsoever. No one or more of such actions shall constitute a novation.

     Maker and all sureties, guarantors, endorsers and accommodation parties hereof and all other
persons liable or to become liable on this Note hereby waive presentment, notice of dishonor,
protest and notice of protest and any and all lack of diligence or delays in collection or
enforcement of this Note. This Note shall be the joint and several obligation of Maker and all
sureties, guarantors, endorsers, accommodation parties and all other persons liable or to become
liable on this Note, and shall be binding upon them and their heirs, legal representatives,
successors and assigns.

     Each notice, demand, election or request provided for or permitted to be given pursuant to
this Note shall be given in the manner provided in the Credit Agreement.

     This Note is issued pursuant to, is entitled to the benefits of, is a “Revolving Loan Note” as
defined in, and is subject to the provisions of the Credit Agreement. In the event of any conflict
between the terms of this Note and the Credit Agreement, the terms of the Credit Agreement shall
control. The indebtedness evidenced by this Note is secured by, among other things, certain real
property.

     This Note may be transferred pursuant to and in accordance with the registration and other
provisions of the Credit Agreement.

     This Note and the obligations of Maker hereunder shall be governed by and interpreted and
determined in accordance with the laws of the State of New York (excluding the laws applicable to
conflicts or choice of law).

     MAKER HEREBY IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE
OF NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, AND (B)
WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY STATE (I) TO THE RIGHT, IF ANY, TO TRIAL
BY JURY, (II) TO OBJECT TO JURISDICTION WITHIN THE STATE OF NEW YORK OR VENUE IN ANY PARTICULAR
FORUM WITHIN THE STATE OF NEW YORK, AND (III) TO THE RIGHT, IF ANY, TO CLAIM OR RECOVER ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL DAMAGES.
MAKER AGREES THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE
LAW, ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO MAKER AT THE ADDRESS SET FORTH ABOVE, AND
SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL BE SO MAILED. NOTHING
CONTAINED HEREIN, HOWEVER, SHALL PREVENT HOLDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR
EXERCISING ANY RIGHTS AGAINST ANY SECURITY AND AGAINST MAKER, AND

A(1)-3

 

AGAINST ANY PROPERTY OF MAKER, IN ANY OTHER STATE. INITIATING SUCH SUIT, ACTION OR PROCEEDING
OR TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT CONSTITUTE A WAIVER OF THE AGREEMENT CONTAINED
HEREIN THAT THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE RIGHTS AND OBLIGATIONS OF MAKER AND
HOLDER HEREUNDER OR THE SUBMISSION HEREIN MADE BY MAKER TO PERSONAL JURISDICTION WITHIN THE STATE
OF NEW YORK.

     This Note may not be amended, modified, or changed, nor shall any waiver of any provision
hereof be effective, except only by an instrument in writing signed by the party against whom
enforcement of any waiver, amendment, change, modification or discharge is sought.

     Whenever used herein, the words “Maker,” “Payee” and “Holder” shall be deemed to include their
respective heirs, legal representatives, successors and assigns.

[EXECUTION ON FOLLOWING PAGE]

A(1)-4

 

     IN WITNESS WHEREOF, Maker has caused this Note to be executed and delivered as of the date
first above written.

	 	 	 	 	 
	 	MAKER:

FORESTAR (USA) REAL ESTATE GROUP INC.,

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

A(1)-5

 

	 	 	 	 	 

Exhibit A-2

TERM PROMISSORY NOTE

			
	U.S. $                                                            
	 	as of                      ___, 2010

     FOR VALUE RECEIVED, FORESTAR (USA) REAL ESTATE GROUP INC., a Delaware corporation, having an
address of 6300 Bee Cave Road, Building Two, Suite 500, Austin, Texas 78746 (hereinafter referred
to as “Maker”), promises to pay to                                                                     
             (hereinafter referred
to as “Payee,” Payee and any and all other holders of this Note being hereinafter collectively
referred to as “Holder”), at the Agent’s Office (as defined in the Credit Agreement) or such other
place as Payee may designate in writing, the lesser of the principal sum of                                                             
AND NO/100 DOLLARS (U.S. $                    .00), or so much thereof as may be advanced pursuant to the
Credit Agreement (defined herein), together with interest as provided in this note (this “Note”).
All capitalized terms in this Note not otherwise defined herein shall be defined as set forth in
the Credit Agreement (defined hereinafter). The terms of interest and repayment are as follows:

	3.	 	Interest. From and after the date hereof (until maturity, adjustment or default as
hereinafter provided), interest shall accrue on the principal amount of this Note which is
outstanding from time to time at the rate or rates provided in that certain Amended and
Restated Revolving and Term Credit Agreement dated of even date, among Maker, Payee, certain
guarantors party thereto, KeyBank National Association as Agent thereunder, the lenders party
thereto and KeyBanc Capital Markets (as hereafter amended, modified, restated, renewed or
extended and in effect from time to time, hereinafter referred to as the “Credit Agreement”).
Interest shall be computed as set forth in the Credit Agreement. Accrued but unpaid interest
only shall be due and payable as set forth in the Credit Agreement, with a final payment on
the Term Loan Maturity Date.
	 
	4.	 	Principal. Principal shall be payable from time to time in the amounts and at the
times provided in the Credit Agreement, with the entire outstanding principal balance
hereunder becoming due and payable in full on the Term Loan Maturity Date.

     Notwithstanding any provisions in this Note, or in any instrument securing this Note, the
total liability for payments legally regarded as interest shall not exceed the maximum limits
imposed by applicable law, and any payment in excess of the amount allowed thereby shall, as of the
date of such payment, automatically be deemed to have been applied to the payment of the principal
evidenced hereby, or, if the principal has been fully repaid, shall be repaid to Maker upon demand.
Any notation or record of Holder with respect to such required application which is inconsistent
with the provisions of this paragraph shall be disregarded for all purposes and shall not be
binding upon either Maker or Holder.

     All sums payable under this Note shall be paid not later than 2:00 p.m. (Cleveland time) on
the day when due in immediately available funds in lawful money of the United States of America.
Whenever any payment to be made under this Note shall be stated to be due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day

A(2)-1

 

and such extension of time shall in such case be included in the computation of payment of
interest.

     All payments under this Note shall be made to Holder without setoff or counterclaim and free
and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, restrictions or conditions of any nature now or hereafter imposed or
levied by any jurisdiction or any political subdivision thereof or any taxing or other authority
therein as and to the extent provided for in the Credit Agreement.

     At the option of Holder, upon the occurrence and during the continuance of an Event of Default
and subject to the provisions of the Credit Agreement, the entire principal amount outstanding
under this Note, together with all accrued interest thereon and all other sums due under this Note,
may be declared to be immediately due and payable in full, whereupon they shall become immediately
due and payable in full, without further notice or demand. Failure to exercise such option shall
not constitute a waiver of the right to exercise such option if an Event of Default has occurred
and is continuing. Upon the occurrence of an Event of Default, Maker shall pay Holder all
reasonable expenses and costs of collection, including, but not limited to, court costs and
reasonable attorney’s fees and disbursements as and to the extent provided for in the Credit
Agreement. Time is of the essence of this Note.

     To the extent permitted by applicable law and to the extent provided in the Credit Agreement,
any amount of principal of this Note which is not paid when due after the passage of any cure
period (whether at stated maturity, acceleration or otherwise) and any amount of interest under
this Note which is not paid when due after the passage of any cure period, shall bear interest,
from the date on which such overdue amount shall have become due and payable by Maker until payment
in full (whether before or after judgment), payable on demand, at the Default Rate.

     In addition, and without limiting the right of Holder to accelerate the Maturity Date, if any
payment under this Note, except upon maturity or acceleration, is not received by Holder within ten
(10) days of the date such payment is due, without notice or demand, Maker shall pay to Holder a
late charge equal to five percent (5%) of the amount of such payment.

     Maker may prepay the outstanding principal amount of this Note, or a portion thereof, only in
accordance with the terms of the Credit Agreement. Amounts prepaid or repaid may not be
reborrowed.

     The obligations of the Maker under this Note and the Credit Agreement are secured by the
Collateral. From time to time, without affecting the obligation of Maker or any sureties,
guarantors, endorsers, accommodation parties or other persons liable or to become liable on this
Note to pay the outstanding principal balance of this Note and observe the covenants of Maker
contained herein, without giving notice to or obtaining the consent of Maker or any such sureties,
guarantors, endorsers, accommodation parties or other persons, and without liability on the part of
Holder, Holder may, at the option of Holder, grant extensions or postponements of the time for
payment of the outstanding principal balance, interest or any part thereof, release anyone liable
on any of said outstanding principal balance, accept a renewal of this Note, release or accept a
substitution of all or any Collateral, join in any extension or subordination agreement,

A(2)-2

 

agree in writing with Maker to modify the rate of interest or terms and time of payment of
outstanding principal balance or period of amortization, if any, of this Note or change the amount
of the monthly installments, if any, payable hereunder, or grant any other indulgence or
forbearance whatsoever. No one or more of such actions shall constitute a novation.

     Maker and all sureties, guarantors, endorsers and accommodation parties hereof and all other
persons liable or to become liable on this Note hereby waive presentment, notice of dishonor,
protest and notice of protest and any and all lack of diligence or delays in collection or
enforcement of this Note. This Note shall be the joint and several obligation of Maker and all
sureties, guarantors, endorsers, accommodation parties and all other persons liable or to become
liable on this Note, and shall be binding upon them and their heirs, legal representatives,
successors and assigns.

     Each notice, demand, election or request provided for or permitted to be given pursuant to
this Note shall be given in the manner provided in the Credit Agreement.

     This Note is issued pursuant to, is entitled to the benefits of, is a “Term Loan Note” as
defined in, and is subject to the provisions of the Credit Agreement. In the event of any conflict
between the terms of this Note and the Credit Agreement, the terms of the Credit Agreement shall
control. The indebtedness evidenced by this Note is secured by, among other things, certain real
property.

     This Note may be transferred pursuant to and in accordance with the registration and other
provisions of the Credit Agreement.

     This Note and the obligations of Maker hereunder shall be governed by and interpreted and
determined in accordance with the laws of the State of New York (excluding the laws applicable to
conflicts or choice of law).

     MAKER HEREBY IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE
OF NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE, AND (B)
WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY STATE (I) TO THE RIGHT, IF ANY, TO TRIAL
BY JURY, (II) TO OBJECT TO JURISDICTION WITHIN THE STATE OF NEW YORK OR VENUE IN ANY PARTICULAR
FORUM WITHIN THE STATE OF NEW YORK, AND (III) TO THE RIGHT, IF ANY, TO CLAIM OR RECOVER ANY
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL DAMAGES.
MAKER AGREES THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE
LAW, ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO MAKER AT THE ADDRESS SET FORTH ABOVE, AND
SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL BE SO MAILED. NOTHING
CONTAINED HEREIN, HOWEVER, SHALL PREVENT HOLDER FROM BRINGING ANY SUIT, ACTION OR PROCEEDING OR
EXERCISING ANY RIGHTS AGAINST ANY SECURITY AND AGAINST MAKER, AND AGAINST ANY PROPERTY OF MAKER, IN
ANY OTHER STATE. INITIATING SUCH

A(2)-3

 

SUIT, ACTION OR PROCEEDING OR TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT CONSTITUTE A
WAIVER OF THE AGREEMENT CONTAINED HEREIN THAT THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
RIGHTS AND OBLIGATIONS OF MAKER AND HOLDER HEREUNDER OR THE SUBMISSION HEREIN MADE BY MAKER TO
PERSONAL JURISDICTION WITHIN THE STATE OF NEW YORK.

     This Note may not be amended, modified, or changed, nor shall any waiver of any provision
hereof be effective, except only by an instrument in writing signed by the party against whom
enforcement of any waiver, amendment, change, modification or discharge is sought.

     Whenever used herein, the words “Maker,” “Payee” and “Holder” shall be deemed to include their
respective heirs, legal representatives, successors and assigns.

[EXECUTION ON FOLLOWING PAGE]

A(2)-4

 

     IN WITNESS WHEREOF, Maker has caused this Note to be executed and delivered as of the date
first above written.

	 	 	 	 	 
	 	MAKER:

FORESTAR (USA) REAL ESTATE GROUP INC.,

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

A(2)-5

 

Exhibit A-3

SWING LINE NOTE

			
	U.S. $                                        .00
	 	as of                      ___, 2010

     FOR VALUE RECEIVED, FORESTAR (USA) REAL ESTATE GROUP INC., a Delaware corporation, having an
address of 6300 Bee Cave Road, Building Two, Suite 500, Austin, Texas 78746 (hereinafter referred
to as “Maker”), promises to pay to KEYBANK NATIONAL ASSOCIATION, a national Banking
association (hereinafter referred to as “Swing Line Lender,” Swing Line Lender and any and
all other holders of this Note being hereinafter collectively referred to as “Holder”), at
the Agent’s Office or such other place as Swing Line Lender may designate in writing, the lesser of
the principal sum of                    
                    
                    
  (U.S. $                    ), or so much thereof as may be
advanced as a Swing Line Loan pursuant to the Credit Agreement (defined herein), together with
interest as provided in this note (this “Swing Line Note”). All capitalized terms in this
Swing Line Note not otherwise defined herein shall be defined as set forth in the Credit Agreement
(defined hereinafter). The terms of interest and repayment are as follows:

	1.	 	Interest. From and after the date hereof (until maturity, adjustment or default as
hereinafter provided), interest shall accrue on the principal amount of this Swing Line Note
which is outstanding from time to time at the rate or rates provided in that certain Amended
and Restated Revolving and Term Credit Agreement dated of even date, among Maker, Swing Line
Lender, certain guarantors party thereto, KeyBank National Association, as Agent thereunder
and the other lenders party thereto (as hereafter amended, modified, restated, renewed or
extended and in effect from time to time, hereinafter referred to as the “Credit
Agreement”). Interest shall be computed as set forth in the Credit Agreement. Accrued
but unpaid interest only shall be due and payable as set forth in the Credit Agreement, with a
final payment on the Revolving Credit Maturity Date.
	 
	2.	 	Principal. Principal shall be payable from time to time in the amounts and at the
times provided in the Credit Agreement, with the entire outstanding principal balance
hereunder becoming due and payable in full on the Revolving Credit Maturity Date.

     Notwithstanding any provisions in this Swing Line Note, or in any instrument securing this
Swing Line Note, the total liability for payments legally regarded as interest shall not exceed the
maximum limits imposed by applicable law, and any payment in excess of the amount allowed thereby
shall, as of the date of such payment, automatically be deemed to have been applied to the payment
of the principal evidenced hereby, or, if the principal has been fully repaid, shall be repaid to
Maker upon demand. Any notation or record of Holder with respect to such required application
which is inconsistent with the provisions of this paragraph shall be disregarded for all purposes
and shall not be binding upon either Maker or Holder.

     All sums payable under this Swing Line Note shall be paid not later than 2:00 p.m.. (Cleveland
time) on the day when due in immediately available funds in lawful money of the

A(3)-1

 

United States of America. Whenever any payment to be made under this Swing Line Note shall be
stated to be due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall in such case be included in the
computation of payment of interest.

     All payments under this Swing Line Note shall be made to Holder without setoff or counterclaim
and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, restrictions or conditions of any nature now or hereafter imposed or
levied by any jurisdiction or any political subdivision thereof or any taxing or other authority
therein as and to the extent provided for in the Credit Agreement.

     At the option of Holder, upon the occurrence of an Event of Default and the expiration of any
applicable cure period relating thereto and subject to the provisions of the Credit Agreement, the
entire principal amount outstanding under this Swing Line Note, together with all accrued interest
thereon and all other sums due under this Swing Line Note, may be declared to be immediately due
and payable in full, whereupon they shall become immediately due and payable in full, without
further notice or demand. Failure to exercise such option shall not constitute a waiver of the
right to exercise such option if an Event of Default has occurred. Upon the occurrence of an Event
of Default, Maker shall pay Holder all expenses and costs of collection, including, but not limited
to, court costs and reasonable attorney’s fees and disbursements as and to the extent provided for
in the Credit Agreement. Time is of the essence of this Swing Line Note.

     To the extent permitted by applicable law and to the extent provided in the Credit Agreement,
any amount of principal of this Swing Line Note which is not paid when due (whether at stated
maturity, acceleration or otherwise) and any amount of interest under this Swing Line Note which is
not paid when due, shall bear interest, from the date on which such overdue amount shall have
become due and payable by Maker until payment in full (whether before or after judgment), payable
on demand, at the Default Rate.

     In addition, and without limiting the right of Holder to accelerate the Maturity Date, if any
payment under this Swing Line Note, except upon maturity or acceleration, is not received by Holder
within ten (10) days of the date such payment is due, without notice or demand, Maker shall pay to
Holder a late charge equal to five percent (5%) of the amount of such payment.

     Maker may prepay the outstanding principal amount of this Swing Line Note, or a portion
thereof, only in accordance with the terms of the Credit Agreement. To the extent provided in the
Credit Agreement, amounts so prepaid may be subject to reborrowing.

     The obligations of the Maker under this Swing Line Note and the Credit Agreement are secured
by the Collateral. From time to time, without affecting the obligation of Maker or any sureties,
guarantors, endorsers, accommodation parties or other persons liable or to become liable on this
Swing Line Note to pay the outstanding principal balance of this Swing Line Note and observe the
covenants of Maker contained herein, without giving notice to or obtaining the consent of Maker or
any such sureties, guarantors, endorsers, accommodation parties or other persons, and without
liability on the part of Holder, Holder may, at the option of Holder, grant

A(3)-2

 

extensions or postponements of the time for payment of the outstanding principal balance,
interest or any part thereof, release anyone liable on any of said outstanding principal balance,
accept a renewal of this Swing Line Note, release or accept a substitution of all or any
Collateral, join in any extension or subordination agreement, agree in writing with Maker to modify
the rate of interest or terms and time of payment of outstanding principal balance or period of
amortization of this Swing Line Note or change the amount of the monthly installments payable
hereunder, or grant any other indulgence or forbearance whatsoever. No one or more of such actions
shall constitute a novation.

     Maker and all sureties, guarantors, endorsers and accommodation parties hereof and all other
persons liable or to become liable on this Swing Line Note hereby waive presentment, notice of
dishonor, protest and notice of protest and any and all lack of diligence or delays in collection
or enforcement of this Swing Line Note. This Swing Line Note shall be the joint and several
obligation of Maker and all sureties, guarantors, endorsers, accommodation parties and all other
persons liable or to become liable on this Swing Line Note, and shall be binding upon them and
their heirs, legal representatives, successors and assigns.

     Each notice, demand, election or request provided for or permitted to be given pursuant to
this Swing Line Note shall be given in the manner provided in the Credit Agreement.

     This Swing Line Note is issued pursuant to, is entitled to the benefits of, is the “Swing Line
Note” as defined in, and is subject to the provisions of the Credit Agreement. In the event of any
conflict between the terms of this Swing Line Note and the Credit Agreement, the terms of the
Credit Agreement shall control. The indebtedness evidenced by this Swing Line Note is secured by,
among other things, certain real property.

     This Swing Line Note may only be transferred pursuant to and in accordance with the
registration and other provisions of the Credit Agreement.

     This Swing Line Note and the obligations of Maker hereunder shall be governed by and
interpreted and determined in accordance with the laws of the State of New York (excluding the laws
applicable to conflicts or choice of law).

     MAKER HEREBY IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO PERSONAL JURISDICTION IN THE STATE
OF NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SWING LINE NOTE,
AND (B) WAIVES ANY AND ALL PERSONAL RIGHTS UNDER THE LAWS OF ANY STATE (I) TO THE RIGHT, IF ANY, TO
TRIAL BY JURY, (II) TO OBJECT TO JURISDICTION WITHIN THE STATE OF NEW YORK OR VENUE IN ANY
PARTICULAR FORUM WITHIN THE STATE OF NEW YORK, AND (III) TO THE RIGHT, IF ANY, TO CLAIM OR RECOVER
ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN ACTUAL DAMAGES.
MAKER AGREES THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE
LAW, ALL SERVICE OF PROCESS IN ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE MADE BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO MAKER AT THE ADDRESS SET FORTH ABOVE, AND
SERVICE SO MADE SHALL BE COMPLETE FIVE (5) DAYS AFTER THE

A(3)-3

 

SAME SHALL BE SO MAILED. NOTHING CONTAINED HEREIN, HOWEVER, SHALL PREVENT HOLDER FROM
BRINGING ANY SUIT, ACTION OR PROCEEDING OR EXERCISING ANY RIGHTS AGAINST ANY SECURITY AND AGAINST
MAKER, AND AGAINST ANY PROPERTY OF MAKER, IN ANY OTHER STATE. INITIATING SUCH SUIT, ACTION OR
PROCEEDING OR TAKING SUCH ACTION IN ANY STATE SHALL IN NO EVENT CONSTITUTE A WAIVER OF THE
AGREEMENT CONTAINED HEREIN THAT THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE RIGHTS AND
OBLIGATIONS OF MAKER AND HOLDER HEREUNDER OR THE SUBMISSION HEREIN MADE BY MAKER TO PERSONAL
JURISDICTION WITHIN THE STATE OF NEW YORK.

     This Swing Line Note may not be amended, modified, or changed, nor shall any waiver of any
provision hereof be effective, except only by an instrument in writing signed by the party against
whom enforcement of any waiver, amendment, change, modification or discharge is sought.

     Whenever used herein, the words “Maker,” “Swing Line Lender” and “Holder” shall be deemed to
include their respective heirs, legal representatives, successors and assigns.

[EXECUTION ON FOLLOWING PAGE]

A(3)-4

 

     IN WITNESS WHEREOF, Maker has caused this Swing Line Note to be executed and delivered as of
the date first above written.

	 	 	 	 	 
	 	MAKER:

FORESTAR (USA) REAL ESTATE GROUP INC.

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[END OF SIGNATURES]

A(3)-5

 

Exhibit B

Compliance Certificate

[on Borrower’s letterhead]

	To:  	 	KeyBank National Association, as Administrative Agent

1200 Abernathy Road, N.E. — Suite 1550

Atlanta, Georgia 30328

Attn: Daniel Silbert
	 
	Re:  	 	Compliance Certificate dated

Ladies and Gentlemen:

     Reference is made to that certain Amended and Restated Revolving and Term Credit Agreement,
dated as of August ___, 2010, as amended from time to time (the “Loan Agreement”), among
Forestar (USA) Real Estate Group Inc. (“Borrower”), certain guarantors party thereto,
certain lenders party thereto and KeyBank National Association, as Agent. Capitalized terms used
in this Compliance Certificate have the meanings set forth in the Loan Agreement unless
specifically defined herein.

     Pursuant to Section 7.4(c) of the Loan Agreement, the undersigned Principal Financial
Officer of Forestar Group hereby certifies that:

     1. The financial information of Forestar Group furnished in Schedule 1 attached
hereto, has been prepared in accordance with GAAP [(other than the inclusion of footnotes)] and
fairly presents in all material respects the financial condition of Forestar Group and its
Subsidiaries [(subject to year end adjustments)].

     2. Such officer has reviewed the terms of the Loan Agreement and has made, or caused to be
made under his/her supervision, a review in reasonable detail of the transactions and condition of
Borrower during the accounting period covered by the financial statements delivered pursuant to
Section 7.4 of the Loan Agreement.

     3. Such review has not disclosed the existence on and as of the date hereof, and the
undersigned does not have knowledge of the existence as of the date hereof, of any event or
condition that constitutes a Default or Event of Default, except for such conditions or events
listed on Schedule 2 attached hereto, specifying the nature and period of existence thereof
and what action the Loan Parties have taken, are taking, or propose to take with respect thereto.
Without limiting the generality of the foregoing, the Loan Parties are in compliance with the
covenants contained in Section 8.3(s) and Section 8.7(h), if applicable, and
Section 9 of the Loan Agreement as demonstrated on Schedule 3 hereof.

B-1

 

     IN
WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned this ___ day
of                                         ,                     .

	 	 	 	 	 
	 	 	 
	 	  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

B-2

 

	 	 	 	 	 

Exhibit C

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

ASSIGNMENT AND ACCEPTANCE

     This Assignment and Acceptance (the “Assignment and Acceptance”) is dated as of the
Effective Date set forth below and is entered into by and between [the][each] Assignor identified
in item 1 below ([the][each, an] “Assignor”) and [the][each] Assignee identified in item 2
below ([the][each, an] “Assignee”). It is understood and agreed that the rights and
obligations of the Assignors and the Assignees hereunder are several and not joint. Capitalized
terms used but not defined herein shall have the meanings given to them in the Credit Agreement
identified in items below (as amended, restated, supplemented or otherwise modified, the
“Credit Agreement”), receipt of a copy of which is hereby acknowledged by [the][each]
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed
to and incorporated herein by reference and made a part of this Assignment and Acceptance as if set
forth herein in full.

     For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the
Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and
assumes from [the Assignor][the respective Assignors], subject to and in accordance with the
Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the
Agent as contemplated below (i) all of [the Assignor’s][the respective Assignors’] rights and
obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit
Agreement and any other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such outstanding rights and
obligations of [the Assignor][the respective Assignors] under the respective facilities identified
below (including without limitation any letters of credit, guarantees, and Swing Line loans
included in such facilities) and (ii) to the extent permitted to be assigned under applicable law,
all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a
Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person,
whether known or unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in
any way based on or related to any of the foregoing, including, but not limited to, contract
claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights
and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses
(i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”).
Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly
provided in this Assignment and Acceptance, without representation or warranty by [the][any]
Assignor.

	 	 	 	 	 	 	 

	1.

	 	 Assignor[s]:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 

C-1

 

	 	 	 	 	 	 	 

	2.

	 	Assignee[s]:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	[for each Assignee, indicate [Affiliate] of [identify Lender]
	 
	 	 	 	 	 	 
	3.

	 	Borrower:
	 	Forestar (USA) Real Estate Group Inc.	 	 
	 
	 	 	 	 	 	 
	4.

	 	Agent:
	 	KeyBank National Association, as the agent
under the Credit Agreement	 	 
	 
	 	 	 	 	 	 
	5.

	 	Credit Agreement:
	 	That certain Amended and Restated Revolving and
Term Credit Agreement dated as of August ___,
2010 among, the Guarantors (as defined therein)
party thereto from time to time, the Lenders
parties thereto, and KeyBank National
Association, as the Agent.
	 
	 	 	 	 	 	 
	6.

	 	Assigned Interest[s]:	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Aggregate Amount of	 	Amount of	 	Percentage Assigned of	 	 
	 	 	 	 	 	 	Commitment/ Loans	 	Commitment/	 	Commitment/	 	 
	Assignor[s]	 	Assignee[s]	Facility Assigned	for all Lenders	 	Loans Assigned	 	Loans	 	CUSIP Number
	 
	 

	 	 
	 	 
	 	 	$	 	 	 	$	 	 	 	%	 	 	 
	 

	 	 
	 	 
	 	 	$	 	 	 	$	 	 	 	%	 	 	 
	 

	 	 
	 	 
	 	 	$	 	 	 	$	 	 	 	%	 	 	 

	 	 	 	 	 

	[7.

	 	Trade Date:
	 	                                        ]

[Signature page follows]

C-2

 

Effective
Date:                                          ___, 20___ [TO BE INSERTED BY THE AGENT AND WHICH SHALL BE THE
EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Acceptance are hereby agreed to:

	 	 	 	 	 
	 	ASSIGNOR

[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 
	 	ASSIGNEE]

[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	[Consented to and] Accepted:

KeyBank National Association, a national

banking association, as Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	Forestar (USA) Real Estate Group Inc.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

C-3

 

ANNEX 1

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE

     1. Representations and Warranties.

     1.1 Assignor[s]. [The][Each] Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of [the][the relevant] Assigned Interest, (ii) [the][such] Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full
power and authority, and has taken all action necessary, to execute and deliver this Assignment and
Acceptance and to consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations made in or in
connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral
thereunder, (iii) the financial condition of the Borrower, any of its Subsidiaries or Affiliates or
any other Person obligated in respect of any Loan Document or (iv) the performance or observance by
the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

     1.2. Assignee[s]. [The][Each] Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and deliver this
Assignment and Acceptance and to consummate the transactions contemplated hereby and to become a
Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under §18
of the Credit Agreement (subject to such consents, if any, as may be required under § 27 of the
Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of
the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect
to decisions to acquire assets of the type represented by the Assigned Interest and either it, or
the person exercising discretion in making its decision to acquire the Assigned Interest, is
experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement,
and has received or has been accorded the opportunity to receive copies of the most recent
financial statements delivered pursuant to §7.4 thereof, as applicable, and such other documents
and information as it deems appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance and to purchase [the][such] Assigned Interest, (vi) it has,
independently and without reliance upon the Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and decision to enter
into this Assignment and Acceptance and to purchase [the][such] Assigned Interest, and (vii) if it
is a foreign lender (as contemplated by §18.11 of the Credit Agreement), attached to the Assignment
and Acceptance is any documentation required to be delivered by it pursuant to the terms of the
Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it
will, independently and without reliance on the Agent, [the][any] Assignor or any other Lender, and
based on such documents and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not

Annex(1)-C-1

 

taking action under the Loan Documents, and (ii) it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents are required to be performed
by it as a Lender.

     2. Payments. From and after the Effective Date, the Agent shall make all payments in
respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other
amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the
Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after
the Effective Date.

     3. General Provisions. This Assignment and Acceptance shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and assigns. This
Assignment and Acceptance may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Acceptance by telecopy shall be effective as delivery of a manually executed
counterpart of this Assignment and Acceptance. This Assignment and Acceptance shall be governed
by, and construed in accordance with, the law of the State of New York, without regard to the
conflict of laws principles thereof.

Annex(1) C-2

 

Exhibit D-1

Form of Loan Request

KeyBank National Association

1200 Abernathy Road, N.E. — Suite 1550

Atlanta, Georgia 30328

Attn: Daniel Silbert

Ladies and Gentlemen:

     Pursuant to the provisions of §2.6(a) of the Amended and Restated Revolving and Term Credit
Agreement dated as of August ___, 2010 (together with all amendments, modifications, restatements,
and supplements thereto, the “Credit Agreement”) among Forestar (USA) Real Estate Group
Inc.; the Guarantors from time to time party thereto; KeyBank National Association (the
“Agent”); and the other Lenders party thereto, the undersigned hereby certifies as follows
(all capitalized terms not otherwise defined herein shall have the meanings ascribed thereto under
the Credit Agreement):

     a. Loan. The Borrower hereby requests the following [Revolving/Term] Loan:

	 	 	 	 

	Principal Amount:
	$	 	 
	 
	 	 	 
	Type (LIBOR Rate Loan or Base Rate Loan):
	 	 	 
	 
	 	 	 
	 
	 	 	 
	Drawdown Date:
	 	 	 
	 
	 	 	 
	 
	 	 	 
	Interest Period (if LIBOR Rate Loan is selected):
	 	 	 
	 
	 	 	 

by wire transfer to the Advance Account.

     b. Use of Proceeds. Such Loan shall be used for a purpose permitted by §2.8 of the
Credit Agreement.

     c. No Default. The undersigned officer of Borrower certifies that no Default or Event
of Default has occurred and is continuing, except as may be disclosed in an attachment to this Loan
Request.

     d. Representations True. Each of the representations and warranties made by the Loan
Parties contained in the Loan Documents is true in all material respects at and as of the Drawdown
Date for the Loan requested hereby (except to the extent of changes resulting from transactions not
prohibited by the Loan Documents, or except to the extent that such representations and warranties
relate expressly to an earlier date, in which latter case such representations and warranties are
true in all material respects as of such earlier date).

D(1)-1

 

     e. Other Conditions. All other conditions to the making of the Loan requested hereby
set forth in §11 of the Credit Agreement have been satisfied.

[SIGNATURE PAGES FOLLOWS]

D(1)-2

 

     IN WITNESS WHEREOF, Borrower has executed this Loan Request as of this                      day of
                                        , 20___.

	 	 	 	 	 
	 	FORESTAR (USA) REAL ESTATE GROUP INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

D(1)-3

 

	 	 	 	 	 

Exhibit D-2

Form of Request for Swing Line Loan

KeyBank National Association

1200 Abernathy Road, N.E.

Suite 1550

Atlanta, Georgia 30328

Attn: Daniel Silbert

Ladies and Gentlemen:

          Pursuant to the provisions of §2.6(b) of the Amended and Restated Revolving and Term Credit
Agreement dated as of August ___, 2010 (together with all amendments, modifications, restatements,
and supplements thereto, the “Credit Agreement”) among FORESTAR (USA) REAL ESTATE GROUP INC., a
Delaware corporation (“Borrower”); certain guarantors party thereto KeyBank National Association
(“Agent”); the other lenders party thereto and KeyBanc Capital Markets, Borrower hereby requests
and certifies as follows (all capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto under the Credit Agreement):

     a. Loan. The Borrower hereby requests a Swing Line Loan in the principal amount of
$                     by wire transfer to the Advance Account.

     b. No Default. The undersigned officer of Borrower certifies that no Default or Event
of Default has occurred and is continuing, except as may be disclosed in an attachment to this Loan
Request.

     c. Representations True. Each of the representations and warranties made by the Loan
Parties contained in the Credit Agreement or in the other Loan Documents is true in all material
respects at and as of the Drawdown Date for the Loan requested hereby (except to the extent of
changes resulting from transactions permitted by the Credit Agreement and the other Loan Documents,
or except to the extent that such representations and warranties relate expressly to an earlier
date, in which latter case such representations and warranties are true in all material respects as
of such earlier date).

     d. Other Conditions. All other conditions to the making of the Loan requested hereby
set forth in §11 of the Credit Agreement have been satisfied.

[SIGNATURE PAGE FOLLOWS]

D(2)-1

 

     IN WITNESS WHEREOF, the Borrower has executed this Request for Swing Line Loan as of this
                     day of                                         , 20___.

	 	 	 	 	 
	 	BORROWER:

FORESTAR (USA) REAL ESTATE GROUP INC.,

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

D(2)-2

 

Exhibit E

Form of Borrowing Base Certificate

CERTIFICATE DATE:

To:        KeyBank National Association, as Agent

              1200 Abernathy Road, N.E. — Suite 1550

              Atlanta, Georgia 30328

Ladies and Gentlemen:

     Reference is made to that certain Amended and Restated Revolving and Term Credit Agreement,
dated as of August ___, 2010 (as amended, restated, extended, supplemented or otherwise modified
in writing from time to time, the “Credit Agreement”) among Forestar (USA) Real Estate
Group Inc., the Guarantors party thereto from time to time, KeyBank National Association (the
“Agent”) on behalf of itself and the other Lenders party thereto (all capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto under the Credit Agreement).

The undersigned Principal Financial Officer of Borrower, in his capacity as such, hereby certifies
and warrants to the Agent and the Lenders as follows:

	I.	 	The undersigned is a duly qualified and acting Principal Financial Officer of Borrower and is
familiar with the financial statements and financial affairs of Borrower and the other Loan
Parties. The undersigned is authorized to execute this Borrowing Base Certificate on behalf
of Borrower.

	II.	 	Attached hereto as Schedule 1 are true and correct computations of the Borrowing Base
under the Credit Agreement as of the date set forth below.

Borrower, on behalf of each Loan Party, further represents and warrants to the Agent and the
Lenders that the representations and warranties contained in §6 of the Credit Agreement are true
and correct in all material respects on and as of the date of this Borrowing Base Certificate as if
made on and as of the date hereof (except to the extent of changes resulting from transactions not
prohibited by the Loan Documents, or except to the extent that such representations and warranties
relate expressly to an earlier date, in which latter case such representations and warranties are
true and correct in all material respects as of such earlier date), and that no Default or Event of
Default has occurred and is continuing, except as disclosed in an attachment to this Borrowing Base
Certificate.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

E-1

 

     IN WITNESS WHEREOF, Borrower has caused this Borrowing Base Certificate to be executed and
delivered on this ___ day of                     , 20___.

	 	 	 	 	 
	 	FORESTAR (USA) REAL ESTATE GROUP INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Its: 	 

E-2

 

	 	 	 	 	 

Schedule 1 to Borrowing Base Certificate

E-3

 

EXHIBIT F

PATRIOT ACT AND OFAC TRANSFEREE AND

ASSIGNEE IDENTIFYING INFORMATION FORM

1. Patriot Act Checklist

	 	 	 

	ADDITIONAL LENDER REQUIRED INFORMATION
	 	 
	 
	 	 
	Name:
	 	 
	 
	 	 
	Identification
	 	                   
	(a) (US Company) TIN
	 	(a)                     
	(b) (Non-US) Gov’t issued document certifying existence
	 	(b)                     
	 
	 	 
	Phone Number
	 	 
	 
	 	 
	BUSINESS REPRESENTATIVE REQUIRED INFORMATION
PERSON WHO WILL EXECUTE DOCUMENTS
	 	 
	 
	 	 
	Name
	 	 
	 
	 	 
	Residential Address
	 	 
	 
	 	 
	Date of Birth
	 	 
	 
	 	 
	Form of Identification
	 	 
	(a) (US Citizen) Social Security Number
	 	(a)                     
	(b) (No-US) TIN, Passport Number (country of issuance,
number & date), or Alien Identification Number
	 	(b)                     
	 
	 	 
	2. OFAC Checklist:
	 	 
	 
	 	 
	Name:
	 	 
	 
	 	 
	Co-Lenders
	 	 
	 
	 	 
	General Partner/Managing Member/Trustee
	 	 
	 
	 	 
	Limited Partners/Members/Beneficiaries
	 	 

F-4

 

Exhibit G

Form of Letter of Credit Request

KeyBank National Association

1200 Abernathy Road, N.E. — Suite 1550

Atlanta, Georgia 30328

Attn: Daniel Silbert

Ladies and Gentlemen:

     Pursuant to the provisions of §2.10 of the Amended and Restated Revolving and Term Credit
Agreement dated as of August ___, 2010 (together with all amendments, modifications, restatements,
and supplements thereto, the “Credit Agreement”) among Forestar (USA) Real Estate Group
Inc., the Guarantors from time to time party thereto, KeyBank National Association (the
“Agent”), and the other Lenders party thereto, the Borrower hereby certifies as follows
(all capitalized terms not otherwise defined herein shall have the meanings ascribed thereto under
the Credit Agreement):

     a. Letter of Credit. The Borrower requests the following Letter of Credit:

	 	 	 	 	 

	 	Type (Standby or Trade):
	 	 
	 
	 	 	 	 
	 	 
	 	 
	 	Amount:
	$	 
	 	 
	 	 	 
	 	Term:
	 	 
	 
	 	 	 
	 
	 	 
	 	Issuance Date:
	 	 
	 
	 	 	 	 
	 
	 	 
	 	For the Account of:
	 	 
	 
	 	 	 	 

     b. Use of Proceeds. Such Letter of Credit shall be used for a purpose permitted by
the Credit Agreement.

     c. No Default. The undersigned officer of Borrower certifies that no Default or Event
of Default has occurred and is continuing or will be caused by the issuance of the Letter of Credit
requested hereby.

     d. Representations True. Each of the representations and warranties made by the Loan
Parties contained in the Loan Documents is true in all material respects as of the date as of which
it was made and shall also be true in all material respects at and as of the issuance date for the
Letter of Credit requested hereby, (except to the extent of changes resulting from transactions not
prohibited by the Loan Documents, or except to the extent that such representations and warranties
relate expressly to an earlier date, in which latter case such representations and warranties are
true in all material respects as of such earlier date).

G-1

 

     e. Other Conditions. All other conditions to the issuance of the Letter of Credit
requested hereby set forth in §11 of the Credit Agreement have been satisfied.

[SIGNATURE PAGES FOLLOWS]

G-2

 

     IN WITNESS WHEREOF, Borrower has executed this Letter of Credit Request as of this                      day
of                                                             , 20___.

	 	 	 	 	 
	 	FORESTAR (USA) REAL ESTATE GROUP INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

G-3

 

	 	 	 	 	 

Exhibit H

Form of Joinder Agreement (Guarantor)

     THIS JOINDER AGREEMENT (“Joinder Agreement”) is executed as of                                          ___,
20___, by                                                             , a                  
                        (“Joining Party”), and delivered to
KeyBank National Association (“KeyBank”), as Agent, pursuant to §7.21 of the Amended and
Restated Revolving and Term Credit Agreement dated as of August ___, 2010 (as amended, restated,
supplemented or modified from time to time, the “Credit Agreement”), among Forestar (USA)
Real Estate Group Inc., the Guarantors from time to time a party thereto, KeyBank, for itself and
as the Agent, and the other Lenders from time to time party thereto. Terms used but not defined in
this Joinder Agreement shall have the meanings defined for those terms in the Credit Agreement.

RECITALS

     (A) Joining Party is required, pursuant to §7.21 of the Credit Agreement, to become an
additional Guarantor under the Credit Agreement and a party to all the other Loan Documents to
which any such existing Guarantor is a party, including, without limitation, the Credit Agreement
and the guaranty provisions thereof.

     (B) Joining Party expects to realize direct and indirect benefits as a result of the
availability to Borrower of the credit facilities under the Credit Agreement.

     NOW, THEREFORE, for and in consideration of the foregoing premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Joining Party agrees
as follows:

AGREEMENT

     1. Joinder. By this Joinder Agreement, the Joining Party hereby becomes a “Guarantor”
under the Credit Agreement and agrees to be jointly and severally liable for all the Obligations of
a Guarantor now or hereafter incurred under the Credit Agreement and the other Loan Documents.
Joining Party agrees that Joining Party is and shall be bound by, and hereby assumes, all
representations, warranties, covenants, terms, conditions, duties and waivers applicable to a
Guarantor under the Credit Agreement and the other Loan Documents, including, without limitation,
the terms and provisions of §34 of the Credit Agreement.

     2. Representations and Warranties of Joining Party. Joining Party represents and
warrants to Agent and Lenders that, as of the Effective Date (as defined below), except as
disclosed in writing by Joining Party to Agent on or prior to the date hereof and approved by the
Agent in writing (which disclosures shall be deemed to amend the Schedules and other disclosures
delivered as contemplated in the Credit Agreement), the representations and warranties made by
Joining Party as a Guarantor under the Credit Agreement are true and correct in all material
respects as applied to Joining Party as a Guarantor on and as of date hereof (except to the extent
such representations and warranties expressly relate to an earlier date). As of the Effective Date,
Joining Party hereby represents and warrants that no Default or Event of Default shall be caused by
the joinder of it provided for hereunder.

H-1

 

     3. Further Assurances. Joining Party agrees to execute and deliver such other
instruments and documents and take such other action, as the Agent may reasonably request to
evidence its joinder as a Guarantor under the Loan Documents.

     4. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION
UNDER, AND SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).

     5. The effective date (the “Effective Date”) of this Joinder Agreement is                     
___, 20___.

     IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of the Effective
Date.

	 	 	 	 	 
	 	JOINING PARTY

 	 
	 	 	, 
	 	 	 	 
	a 	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

ACKNOWLEDGED:

KEYBANK NATIONAL ASSOCIATION, as Agent

	 	 	 	 	 
	 	 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 

H-2

 

	 	 	 	 	 

EXHIBIT I

FORESTAR (USA) REAL ESTATE GROUP INC.

OFFICER’S CERTIFICATE

[§5.3(d)(ii) Release]

     Reference is made to the Amended and Restated Revolving and Term Credit Agreement (as amended,
restated, supplemented or otherwise modified, the “Credit Agreement”) dated as of August
___, 2010, by and among Forestar (USA) Real Estate Group Inc., a Delaware corporation, as borrower
(“Borrower”), Forestar Group Inc., a Delaware corporation, and the wholly owned, direct and
indirect Subsidiaries of Borrower signatory thereto, as guarantors, the financial institutions
signatory thereto and KeyBank National Association, a national banking association, as
administrative agent. All capitalized terms used herein but not defined herein shall have the
meaning ascribed in the Credit Agreement.

     This Certificate is being delivered in connection with the donation, grant, dedication or
other transfer by Borrower of certain Real Property described on Exhibit A attached hereto
and made a part hereof (“Released Property”). In accordance with §5.3(d)(ii) of the Credit
Agreement, the undersigned hereby certifies to Agent and Lenders that:

     1. The undersigned is authorized to execute and deliver this Certificate on behalf of
Borrower.

     2. The donation, grant, dedication or other transfer of the Released Property is being made
for the following purpose:                                          [PROVIDE BRIEF DESCRIPTION], and for a value
or consideration (whether cash or non-cash, or any combination thereof) determined in good faith by
Borrower to be reasonable and appropriate taking into account the actual or expected benefits to be
received, directly or indirectly, by a Loan Party in respect of such donation, grant, dedication or
other transfer.

     This Certificate shall constitute a “Loan Document” for all purposes under the Credit
Agreement and the other Loan Documents.

[signature page follows]

I-1

 

     It is understood and acknowledged that the undersigned is executing this Certificate not
in an individual capacity but solely in the undersigned’s capacity as an officer and is without any
personal liability as to the matters contained in this Certificate.

     IN WITNESS WHEREOF, I have hereunto signed my name.

Dated:                     , 20___

	 	 	 	 	 
	 	FORESTAR (USA) REAL ESTATE GROUP INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

Attachments:

Exhibit A —  Description of Released Property

I-2

 

Schedule 1.1

Lenders and Commitments

(see attached)

 

Lenders commitments A & R 6.8.2010

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Forestar	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	A & R Revolver	 	 	 	 	 	 	 	 	 	A & R Term Facility	 	 	 	 	 	 
	Lenders	 	Commitment	 	 	%	 	 	Lenders	 	Commitment	 	 	%	 
	KEYBANK/KREC
	 	 	60,548,464.00	 	 	 	34.599122285714300	%	 	KEYBANK/KREC	 	 	40,451,535.00	 	 	 	32.361228000000000	%
	UNITED FCS, PCA, d/b/a FCS COMMERCIAL
	 	 	17,564,573.00	 	 	 	10.036898857142900	%	 	UNITED FCS, PCA, d/b/a FCS COMMERCIAL	 	 	7,435,427.00	 	 	 	5.948341600000000	%
	AGFIRST FARM CREDIT BANK
	 	 	39,232,275.00	 	 	 	22.418442857142900	%	 	AGFIRST FARM CREDIT BANK	 	 	15,767,725.00	 	 	 	12.614180000000000	%
	AMEGY BANK
	 	 	14,678,571.00	 	 	 	8.387754857142860	%	 	AMEGY BANK	 	 	5,321,429.00	 	 	 	4.257143200000000	%
	CAPITAL ONE
	 	 	19,700,287.00	 	 	 	11.257306857142900	%	 	CAPITAL ONE	 	 	9,299,713.00	 	 	 	7.439770400000000	%
	NORTHWEST FARM CREDIT SERV
	 	 	7,025,830.00	 	 	 	4.014760000000000	%	 	NORTHWEST FARM CREDIT SERV	 	 	2,974,171.00	 	 	 	2.379336800000000	%
	GOLDMAN SACHS
	 	 	6,500,000.00	 	 	 	3.714285714285710	%	 	GOLDMAN SACHS	 	 	3,500,000.00	 	 	 	2.800000000000000	%
	TEXAS CAPITAL
	 	 	9,750,000.00	 	 	 	5.571428571428570	%	 	TEXAS CAPITAL	 	 	5,250,000.00	 	 	 	4.200000000000000	%
	 
	 	 	 	 	 	 	 	 	 	METLIFE	 	 	35,000,000.00	 	 	 	28.000000000000000	%
	TOTAL
	 	 	175,000,000.00	 	 	 	100.00	%	 	TOTAL	 	 	125,000,000.00	 	 	 	100.00	%
	 
	 	 	0.00	 	 	 	 	 	 	 	 	 	0.00	 	 	 	 	 

 

Schedule 2

Mortgaged Property Documents

	1.	 	Each of the Security Deeds, including the following modifications thereto:

	 	a.	 	Second Modification of Mortgage, Assignment of Rents, Leases and Other
Agreements, Security Agreement and Fixture filing dated as of August ___, 2010, to be
recorded in the Office of the Judge of Probate of Cherokee County, Alabama;
	 
	 	b.	 	Third Modification of Mortgage, Assignment of Rents, Leases and Other
Agreements, Security Agreement and Fixture filing dated as of August ___, 2010, to be
recorded in the Office of the Judge of Probate of Cleburne County, Alabama;
	 
	 	c.	 	Second Modification of Mortgage, Assignment of Rents, Leases and Other
Agreements, Security Agreement and Fixture filing dated as of August ___, 2010, to be
recorded in the Office of the Judge of Probate of Etowah County, Alabama;
	 
	 	d.	 	Second Modification of Mortgage, Assignment of Rents, Leases and Other
Agreements, Security Agreement and Fixture filing dated as of August ___, 2010, to be
recorded in the Office of the Judge of Probate of Randolph County, Alabama;
	 
	 	e.	 	Modifications of Deed of Trust, Assignment of Rents, Leases and Other
Agreements, Security Agreement and Fixture Filing, each dated as of August ___, 2010,
and to be recorded in the official records of Anderson, Angelina, Cherokee, Hardin,
Harris, Houston, Jasper, Liberty, Nacogdoches, Rusk, Sabine, San Augustine and San
Jacinto Counties, Texas;
	 
	 	f.	 	Modification of Deed to Secure Debt, Assignment of Rents, Leases and Other
Agreements and Security Agreement dated as of August ___, 2010, original counterparts of
which to be recorded in the Office of the Clerk of the Superior Court of Banks, Bartow,
Carroll, Chattooga, Cherokee, Coweta, Dawson, Douglas, Elbert, Floyd, Franklin, Gilmer,
Gordon, Hall, Haralson, Harris, Hart, Heard, Jackson, Lumpkin, Madison, Murray,
Pickens, Polk, Stephens, Troup and Walker Counties, Georgia;
	 
	 	g.	 	Amended and Restated Mortgage, Assignment of Rents, Leases and Other
Agreements, Security Agreement and Fixture Filing dated as of August ___, 2010, to be
recorded in the Office of the Clerk of the Court of Sabine Parish, Louisiana;
	 
	 	h.	 	Modification of Deed of Trust, Assignment of Rents, Leases and Other
Agreements, Security Agreement and Fixture Filing dates as of August ___, 2010, to be
recorded in the official records of Los Angeles County, California; and

	2.	 	Petition for Ascertainment of Mortgage Tax executed by KeyBank, the Affidavit in Support of
Petition for Ascertainment of Mortgage Tax executed by an officer of Borrower and form of
Mortgage Tax Order pertaining to the Security Deeds encumbering the Mortgaged Properties
located in the State of Alabama.

 

Schedule 3

Mortgaged Properties

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	10002
	 	AL	 	Cherokee	 	 	455	 
	10008
	 	AL	 	Cherokee	 	 	165	 
	10030
	 	AL	 	Cherokee	 	 	619	 
	10032
	 	AL	 	Cherokee	 	 	67	 
	10058
	 	AL	 	Cherokee	 	 	74	 
	10068
	 	AL	 	Cherokee	 	 	55	 
	10080
	 	AL	 	Cherokee	 	 	1,011	 
	10093
	 	AL	 	Cherokee	 	 	999	 
	10094
	 	AL	 	Cherokee	 	 	191	 
	10504
	 	AL	 	Cherokee	 	 	81	 
	10509
	 	AL	 	Cherokee	 	 	614	 
	10514
	 	AL	 	Cherokee	 	 	1,018	 
	10553
	 	AL	 	Cherokee	 	 	694	 
	10593
	 	AL	 	Cherokee	 	 	68	 
	11001
	 	AL	 	Cherokee	 	 	724	 
	11004
	 	AL	 	Cherokee	 	 	522	 
	11035
	 	AL	 	Cherokee	 	 	1,039	 
	11062
	 	AL	 	Cherokee	 	 	868	 
	11200
	 	AL	 	Cherokee	 	 	191	 
	19000
	 	AL	 	Cherokee	 	 	408	 
	11083
	 	AL	 	Cleburne	 	 	482	 
	11143
	 	AL	 	Cleburne	 	 	733	 
	11144
	 	AL	 	Cleburne	 	 	555	 
	11149
	 	AL	 	Cleburne	 	 	1,254	 
	11184
	 	AL	 	Cleburne	 	 	77	 
	11209
	 	AL	 	Cleburne	 	 	210	 
	12144
	 	AL	 	Cleburne	 	 	1,106	 
	12146
	 	AL	 	Cleburne	 	 	88	 
	12148
	 	AL	 	Cleburne	 	 	139	 
	12152
	 	AL	 	Cleburne	 	 	226	 
	12153
	 	AL	 	Cleburne	 	 	83	 
	12154
	 	AL	 	Cleburne	 	 	87	 
	12155
	 	AL	 	Cleburne	 	 	119	 
	12161
	 	AL	 	Cleburne	 	 	668	 
	12165
	 	AL	 	Cleburne	 	 	41	 

Page 1 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	12170
	 	AL	 	Cleburne	 	 	107	 
	12177
	 	AL	 	Cleburne	 	 	366	 
	12181
	 	AL	 	Cleburne	 	 	79	 
	12183
	 	AL	 	Cleburne	 	 	39	 
	12184
	 	AL	 	Cleburne	 	 	80	 
	12193
	 	AL	 	Cleburne	 	 	63	 
	12195
	 	AL	 	Cleburne	 	 	119	 
	12197
	 	AL	 	Cleburne	 	 	800	 
	10569
	 	AL	 	Etowah	 	 	1,417	 
	12163
	 	AL	 	Randolph	 	 	36	 
	13010
	 	AL	 	Randolph	 	 	29	 
	13015
	 	AL	 	Randolph	 	 	211	 
	13026
	 	AL	 	Randolph	 	 	821	 
	13115
	 	AL	 	Randolph	 	 	146	 
	13127
	 	AL	 	Randolph	 	 	202	 
	13183
	 	AL	 	Randolph	 	 	194	 
	13184
	 	AL	 	Randolph	 	 	424	 
	15000
	 	GA	 	Banks	 	 	436	 
	15001
	 	GA	 	Banks	 	 	453	 
	15003
	 	GA	 	Banks	 	 	303	 
	15011
	 	GA	 	Banks	 	 	119	 
	15013
	 	GA	 	Banks	 	 	781	 
	15016
	 	GA	 	Banks	 	 	61	 
	15019
	 	GA	 	Banks	 	 	206	 
	15022
	 	GA	 	Banks	 	 	110	 
	13503
	 	GA	 	Bartow	 	 	32	 
	13504
	 	GA	 	Bartow	 	 	336	 
	13506
	 	GA	 	Bartow	 	 	814	 
	13507
	 	GA	 	Bartow	 	 	1,053	 
	13508
	 	GA	 	Bartow	 	 	516	 
	13509
	 	GA	 	Bartow	 	 	98	 
	13510
	 	GA	 	Bartow	 	 	18	 
	13514
	 	GA	 	Bartow	 	 	7	 
	14510
	 	GA	 	Bartow	 	 	477	 
	14511
	 	GA	 	Bartow	 	 	297	 

Page 2 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	14515
	 	GA	 	Bartow	 	 	59	 
	14518
	 	GA	 	Bartow	 	 	177	 
	14520
	 	GA	 	Bartow	 	 	51	 
	14521
	 	GA	 	Bartow	 	 	39	 
	14524
	 	GA	 	Bartow	 	 	451	 
	14525
	 	GA	 	Bartow	 	 	366	 
	14526
	 	GA	 	Bartow	 	 	598	 
	14527
	 	GA	 	Bartow	 	 	95	 
	14528
	 	GA	 	Bartow	 	 	615	 
	14529
	 	GA	 	Bartow	 	 	108	 
	14530
	 	GA	 	Bartow	 	 	181	 
	14531
	 	GA	 	Bartow	 	 	524	 
	14532
	 	GA	 	Bartow	 	 	562	 
	14533
	 	GA	 	Bartow	 	 	373	 
	14534
	 	GA	 	Bartow	 	 	433	 
	14535
	 	GA	 	Bartow	 	 	461	 
	14536
	 	GA	 	Bartow	 	 	155	 
	14537
	 	GA	 	Bartow	 	 	208	 
	14539
	 	GA	 	Bartow	 	 	248	 
	14543
	 	GA	 	Bartow	 	 	547	 
	14544
	 	GA	 	Bartow	 	 	515	 
	14546
	 	GA	 	Bartow	 	 	130	 
	14549
	 	GA	 	Bartow	 	 	163	 
	14552
	 	GA	 	Bartow	 	 	508	 
	14555
	 	GA	 	Bartow	 	 	74	 
	14561
	 	GA	 	Bartow	 	 	546	 
	14562
	 	GA	 	Bartow	 	 	617	 
	14563
	 	GA	 	Bartow	 	 	627	 
	14564
	 	GA	 	Bartow	 	 	501	 
	14570
	 	GA	 	Bartow	 	 	38	 
	14607
	 	GA	 	Bartow	 	 	158	 
	12035
	 	GA	 	Carroll	 	 	217	 
	12057
	 	GA	 	Carroll	 	 	423	 
	12064
	 	GA	 	Carroll	 	 	745	 
	12065
	 	GA	 	Carroll	 	 	877	 

Page 3 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	12066
	 	GA	 	Carroll	 	 	115	 
	12067
	 	GA	 	Carroll	 	 	37	 
	12068
	 	GA	 	Carroll	 	 	222	 
	12069
	 	GA	 	Carroll	 	 	121	 
	12070
	 	GA	 	Carroll	 	 	1,126	 
	12073
	 	GA	 	Carroll	 	 	426	 
	12074
	 	GA	 	Carroll	 	 	292	 
	12079
	 	GA	 	Carroll	 	 	725	 
	12080
	 	GA	 	Carroll	 	 	1,116	 
	12081
	 	GA	 	Carroll	 	 	244	 
	12082
	 	GA	 	Carroll	 	 	166	 
	12083
	 	GA	 	Carroll	 	 	624	 
	12084
	 	GA	 	Carroll	 	 	199	 
	12087
	 	GA	 	Carroll	 	 	195	 
	12091
	 	GA	 	Carroll	 	 	149	 
	12092
	 	GA	 	Carroll	 	 	201	 
	12093
	 	GA	 	Carroll	 	 	133	 
	12094
	 	GA	 	Carroll	 	 	88	 
	12095
	 	GA	 	Carroll	 	 	322	 
	12096
	 	GA	 	Carroll	 	 	719	 
	12097
	 	GA	 	Carroll	 	 	758	 
	12104
	 	GA	 	Carroll	 	 	330	 
	12106
	 	GA	 	Carroll	 	 	104	 
	12107
	 	GA	 	Carroll	 	 	750	 
	12108
	 	GA	 	Carroll	 	 	802	 
	12109
	 	GA	 	Carroll	 	 	92	 
	12110
	 	GA	 	Carroll	 	 	600	 
	12111
	 	GA	 	Carroll	 	 	152	 
	12112
	 	GA	 	Carroll	 	 	412	 
	12113
	 	GA	 	Carroll	 	 	307	 
	12118
	 	GA	 	Carroll	 	 	513	 
	12122
	 	GA	 	Carroll	 	 	733	 
	12125
	 	GA	 	Carroll	 	 	350	 
	12126
	 	GA	 	Carroll	 	 	488	 
	12127
	 	GA	 	Carroll	 	 	69	 

Page 4 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	12128
	 	GA	 	Carroll	 	 	58	 
	12129
	 	GA	 	Carroll	 	 	58	 
	12130
	 	GA	 	Carroll	 	 	50	 
	12131
	 	GA	 	Carroll	 	 	79	 
	12132
	 	GA	 	Carroll	 	 	239	 
	12133
	 	GA	 	Carroll	 	 	135	 
	12134
	 	GA	 	Carroll	 	 	20	 
	12135
	 	GA	 	Carroll	 	 	510	 
	12136
	 	GA	 	Carroll	 	 	710	 
	12138
	 	GA	 	Carroll	 	 	78	 
	12139
	 	GA	 	Carroll	 	 	500	 
	12206
	 	GA	 	Carroll	 	 	624	 
	12207
	 	GA	 	Carroll	 	 	261	 
	12208
	 	GA	 	Carroll	 	 	74	 
	12209
	 	GA	 	Carroll	 	 	37	 
	12211
	 	GA	 	Carroll	 	 	86	 
	12212
	 	GA	 	Carroll	 	 	49	 
	12213
	 	GA	 	Carroll	 	 	48	 
	12214
	 	GA	 	Carroll	 	 	124	 
	12215
	 	GA	 	Carroll	 	 	228	 
	12216
	 	GA	 	Carroll	 	 	115	 
	12217
	 	GA	 	Carroll	 	 	418	 
	12218
	 	GA	 	Carroll	 	 	191	 
	12219
	 	GA	 	Carroll	 	 	511	 
	12220
	 	GA	 	Carroll	 	 	203	 
	12221
	 	GA	 	Carroll	 	 	55	 
	12223
	 	GA	 	Carroll	 	 	107	 
	12224
	 	GA	 	Carroll	 	 	47	 
	12226
	 	GA	 	Carroll	 	 	107	 
	12227
	 	GA	 	Carroll	 	 	38	 
	12228
	 	GA	 	Carroll	 	 	91	 
	12229
	 	GA	 	Carroll	 	 	60	 
	12233
	 	GA	 	Carroll	 	 	311	 
	12234
	 	GA	 	Carroll	 	 	119	 
	12238
	 	GA	 	Carroll	 	 	102	 

Page 5 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	12239
	 	GA	 	Carroll	 	 	90	 
	12241
	 	GA	 	Carroll	 	 	154	 
	12243
	 	GA	 	Carroll	 	 	77	 
	12531
	 	GA	 	Carroll	 	 	85	 
	12532
	 	GA	 	Carroll	 	 	85	 
	12533
	 	GA	 	Carroll	 	 	777	 
	12627
	 	GA	 	Carroll	 	 	174	 
	13185
	 	GA	 	Carroll/Heard	 	 	88	 
	10023
	 	GA	 	Chattooga	 	 	996	 
	10024
	 	GA	 	Chattooga	 	 	932	 
	10032
	 	GA	 	Chattooga	 	 	76	 
	10036
	 	GA	 	Chattooga	 	 	40	 
	10039
	 	GA	 	Chattooga	 	 	163	 
	10041
	 	GA	 	Chattooga	 	 	59	 
	10042
	 	GA	 	Chattooga	 	 	104	 
	10049
	 	GA	 	Chattooga	 	 	32	 
	10050
	 	GA	 	Chattooga	 	 	122	 
	10051
	 	GA	 	Chattooga	 	 	34	 
	10053
	 	GA	 	Chattooga	 	 	79	 
	10072
	 	GA	 	Chattooga	 	 	143	 
	10083
	 	GA	 	Chattooga	 	 	523	 
	10084
	 	GA	 	Chattooga	 	 	277	 
	10085
	 	GA	 	Chattooga	 	 	269	 
	10088
	 	GA	 	Chattooga	 	 	686	 
	10092
	 	GA	 	Chattooga	 	 	127	 
	10101
	 	GA	 	Chattooga	 	 	649	 
	13505
	 	GA	 	Cherokee	 	 	161	 
	13509
	 	GA	 	Cherokee	 	 	470	 
	13510
	 	GA	 	Cherokee	 	 	327	 
	13511
	 	GA	 	Cherokee	 	 	166	 
	13514
	 	GA	 	Cherokee	 	 	50	 
	13515
	 	GA	 	Cherokee	 	 	177	 
	13521
	 	GA	 	Cherokee	 	 	149	 
	13523
	 	GA	 	Cherokee	 	 	94	 
	13524
	 	GA	 	Cherokee	 	 	1	 

Page 6 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	13525
	 	GA	 	Cherokee	 	 	377	 
	13526
	 	GA	 	Cherokee	 	 	385	 
	13527
	 	GA	 	Cherokee	 	 	632	 
	13528
	 	GA	 	Cherokee	 	 	327	 
	13529
	 	GA	 	Cherokee	 	 	141	 
	13530
	 	GA	 	Cherokee	 	 	1	 
	13531
	 	GA	 	Cherokee	 	 	420	 
	13532
	 	GA	 	Cherokee	 	 	1,066	 
	13533
	 	GA	 	Cherokee	 	 	414	 
	13534
	 	GA	 	Cherokee	 	 	299	 
	13535
	 	GA	 	Cherokee	 	 	149	 
	13537
	 	GA	 	Cherokee	 	 	131	 
	13546
	 	GA	 	Cherokee	 	 	72	 
	13548
	 	GA	 	Cherokee	 	 	32	 
	13549
	 	GA	 	Cherokee	 	 	226	 
	13550
	 	GA	 	Cherokee	 	 	256	 
	13551
	 	GA	 	Cherokee	 	 	171	 
	13553
	 	GA	 	Cherokee	 	 	104	 
	13556
	 	GA	 	Cherokee	 	 	696	 
	13557
	 	GA	 	Cherokee	 	 	74	 
	13564
	 	GA	 	Cherokee	 	 	346	 
	13564
	 	GA	 	Cherokee	 	 	4	 
	13566
	 	GA	 	Cherokee	 	 	504	 
	13571
	 	GA	 	Cherokee	 	 	166	 
	13572
	 	GA	 	Cherokee	 	 	792	 
	13573
	 	GA	 	Cherokee	 	 	99	 
	13574
	 	GA	 	Cherokee	 	 	453	 
	13575
	 	GA	 	Cherokee	 	 	222	 
	13576
	 	GA	 	Cherokee	 	 	175	 
	13577
	 	GA	 	Cherokee	 	 	515	 
	14593
	 	GA	 	Cherokee	 	 	513	 
	14596
	 	GA	 	Cherokee	 	 	190	 
	14606
	 	GA	 	Cherokee	 	 	319	 
	15503
	 	GA	 	Cherokee	 	 	327	 
	12060
	 	GA	 	Coweta	 	 	83	 

Page 7 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	12076
	 	GA	 	Coweta	 	 	102	 
	12077
	 	GA	 	Coweta	 	 	214	 
	12078
	 	GA	 	Coweta	 	 	105	 
	12088
	 	GA	 	Coweta	 	 	229	 
	12090
	 	GA	 	Coweta	 	 	1,512	 
	12098
	 	GA	 	Coweta	 	 	466	 
	12100
	 	GA	 	Coweta	 	 	238	 
	12101
	 	GA	 	Coweta	 	 	58	 
	12102
	 	GA	 	Coweta	 	 	153	 
	12120
	 	GA	 	Coweta	 	 	198	 
	12501
	 	GA	 	Coweta	 	 	101	 
	12507
	 	GA	 	Coweta	 	 	154	 
	12508
	 	GA	 	Coweta	 	 	125	 
	12510
	 	GA	 	Coweta	 	 	60	 
	12514
	 	GA	 	Coweta	 	 	40	 
	12515
	 	GA	 	Coweta	 	 	829	 
	12516
	 	GA	 	Coweta	 	 	367	 
	12517
	 	GA	 	Coweta	 	 	399	 
	12519
	 	GA	 	Coweta	 	 	41	 
	12520
	 	GA	 	Coweta	 	 	644	 
	12522
	 	GA	 	Coweta	 	 	88	 
	12524
	 	GA	 	Coweta	 	 	1,214	 
	12527
	 	GA	 	Coweta	 	 	205	 
	15500
	 	GA	 	Dawson	 	 	558	 
	15501
	 	GA	 	Dawson	 	 	808	 
	15508
	 	GA	 	Dawson	 	 	199	 
	15512
	 	GA	 	Dawson	 	 	408	 
	15513
	 	GA	 	Dawson	 	 	429	 
	15514
	 	GA	 	Dawson	 	 	220	 
	15515
	 	GA	 	Dawson	 	 	157	 
	15516
	 	GA	 	Dawson	 	 	290	 
	15518
	 	GA	 	Dawson	 	 	274	 
	15524
	 	GA	 	Dawson	 	 	49	 
	15529
	 	GA	 	Dawson	 	 	592	 
	15532
	 	GA	 	Dawson	 	 	459	 

Page 8 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	15535
	 	GA	 	Dawson	 	 	173	 
	15537
	 	GA	 	Dawson	 	 	430	 
	15539
	 	GA	 	Dawson	 	 	351	 
	15540
	 	GA	 	Dawson	 	 	485	 
	15541
	 	GA	 	Dawson	 	 	244	 
	15543
	 	GA	 	Dawson	 	 	422	 
	15548
	 	GA	 	Dawson	 	 	111	 
	12001
	 	GA	 	Douglas	 	 	52	 
	12002
	 	GA	 	Douglas	 	 	114	 
	12056
	 	GA	 	Douglas	 	 	634	 
	12085
	 	GA	 	Douglas	 	 	158	 
	15118
	 	GA	 	Elbert	 	 	123	 
	15130
	 	GA	 	Elbert	 	 	948	 
	15135
	 	GA	 	Elbert	 	 	196	 
	15180
	 	GA	 	Elbert	 	 	413	 
	10007
	 	GA	 	Floyd	 	 	329	 
	10019
	 	GA	 	Floyd	 	 	443	 
	10020
	 	GA	 	Floyd	 	 	271	 
	10045
	 	GA	 	Floyd	 	 	27	 
	10062
	 	GA	 	Floyd	 	 	367	 
	10066
	 	GA	 	Floyd	 	 	146	 
	10068
	 	GA	 	Floyd	 	 	494	 
	10077
	 	GA	 	Floyd	 	 	87	 
	10086
	 	GA	 	Floyd	 	 	134	 
	10100
	 	GA	 	Floyd	 	 	242	 
	11008
	 	GA	 	Floyd	 	 	42	 
	11045
	 	GA	 	Floyd	 	 	747	 
	11048
	 	GA	 	Floyd	 	 	46	 
	11049
	 	GA	 	Floyd	 	 	71	 
	11065
	 	GA	 	Floyd	 	 	370	 
	11169
	 	GA	 	Floyd	 	 	95	 
	11192
	 	GA	 	Floyd	 	 	307	 
	14538
	 	GA	 	Floyd	 	 	124	 
	14554
	 	GA	 	Floyd	 	 	424	 
	14556
	 	GA	 	Floyd	 	 	719	 

Page 9 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	14560
	 	GA	 	Floyd	 	 	648	 
	14563
	 	GA	 	Floyd	 	 	181	 
	14608
	 	GA	 	Floyd	 	 	316	 
	14609
	 	GA	 	Floyd	 	 	234	 
	16011
	 	GA	 	Floyd	 	 	145	 
	17011
	 	GA	 	Floyd	 	 	112	 
	15016
	 	GA	 	Franklin	 	 	128	 
	15023
	 	GA	 	Franklin	 	 	279	 
	15025
	 	GA	 	Franklin	 	 	57	 
	15026
	 	GA	 	Franklin	 	 	77	 
	15027
	 	GA	 	Franklin	 	 	124	 
	15028
	 	GA	 	Franklin	 	 	279	 
	15030
	 	GA	 	Franklin	 	 	73	 
	15032
	 	GA	 	Franklin	 	 	156	 
	15034
	 	GA	 	Franklin	 	 	110	 
	15039
	 	GA	 	Franklin	 	 	162	 
	15042
	 	GA	 	Franklin	 	 	115	 
	14001
	 	GA	 	Gilmer	 	 	1,061	 
	14015
	 	GA	 	Gilmer	 	 	45	 
	14016
	 	GA	 	Gilmer	 	 	465	 
	14017
	 	GA	 	Gilmer	 	 	733	 
	14022
	 	GA	 	Gilmer	 	 	95	 
	14033
	 	GA	 	Gilmer	 	 	649	 
	14035
	 	GA	 	Gilmer	 	 	982	 
	14036
	 	GA	 	Gilmer	 	 	99	 
	14052
	 	GA	 	Gilmer	 	 	345	 
	14053
	 	GA	 	Gilmer	 	 	206	 
	14054
	 	GA	 	Gilmer	 	 	56	 
	14055
	 	GA	 	Gilmer	 	 	283	 
	14066
	 	GA	 	Gilmer	 	 	483	 
	14070
	 	GA	 	Gilmer	 	 	95	 
	14074
	 	GA	 	Gilmer	 	 	269	 
	14075
	 	GA	 	Gilmer	 	 	826	 
	14080
	 	GA	 	Gilmer	 	 	170	 
	13500
	 	GA	 	Gordon	 	 	168	 

Page 10 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	13502
	 	GA	 	Gordon	 	 	74	 
	13503
	 	GA	 	Gordon	 	 	58	 
	14009
	 	GA	 	Gordon	 	 	85	 
	14010
	 	GA	 	Gordon	 	 	110	 
	14011
	 	GA	 	Gordon	 	 	8	 
	14045
	 	GA	 	Gordon	 	 	41	 
	14048
	 	GA	 	Gordon	 	 	895	 
	14063
	 	GA	 	Gordon	 	 	433	 
	14071
	 	GA	 	Gordon	 	 	181	 
	14073
	 	GA	 	Gordon	 	 	1,245	 
	14500
	 	GA	 	Gordon	 	 	221	 
	14501
	 	GA	 	Gordon	 	 	160	 
	14507
	 	GA	 	Gordon	 	 	45	 
	14508
	 	GA	 	Gordon	 	 	147	 
	14517
	 	GA	 	Gordon	 	 	400	 
	14518
	 	GA	 	Gordon	 	 	155	 
	14520
	 	GA	 	Gordon	 	 	267	 
	14521
	 	GA	 	Gordon	 	 	6	 
	15052
	 	GA	 	Hall	 	 	206	 
	15053
	 	GA	 	Hall	 	 	961	 
	15065
	 	GA	 	Hall	 	 	304	 
	11084
	 	GA	 	Haralson	 	 	573	 
	11086
	 	GA	 	Haralson	 	 	225	 
	11087
	 	GA	 	Haralson	 	 	163	 
	11088
	 	GA	 	Haralson	 	 	651	 
	11091
	 	GA	 	Haralson	 	 	448	 
	11092
	 	GA	 	Haralson	 	 	250	 
	11094
	 	GA	 	Haralson	 	 	178	 
	11095
	 	GA	 	Haralson	 	 	289	 
	11096
	 	GA	 	Haralson	 	 	188	 
	11097
	 	GA	 	Haralson	 	 	162	 
	11098
	 	GA	 	Haralson	 	 	554	 
	11099
	 	GA	 	Haralson	 	 	817	 
	11100
	 	GA	 	Haralson	 	 	776	 
	11103
	 	GA	 	Haralson	 	 	498	 

Page 11 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	11104
	 	GA	 	Haralson	 	 	104	 
	11105
	 	GA	 	Haralson	 	 	52	 
	11106
	 	GA	 	Haralson	 	 	99	 
	11108
	 	GA	 	Haralson	 	 	617	 
	11109
	 	GA	 	Haralson	 	 	61	 
	11110
	 	GA	 	Haralson	 	 	90	 
	11111
	 	GA	 	Haralson	 	 	231	 
	11115
	 	GA	 	Haralson	 	 	641	 
	11116
	 	GA	 	Haralson	 	 	721	 
	11117
	 	GA	 	Haralson	 	 	192	 
	11119
	 	GA	 	Haralson	 	 	239	 
	11120
	 	GA	 	Haralson	 	 	703	 
	11121
	 	GA	 	Haralson	 	 	742	 
	11138
	 	GA	 	Haralson	 	 	508	 
	11142
	 	GA	 	Haralson	 	 	134	 
	11172
	 	GA	 	Haralson	 	 	1,151	 
	11181
	 	GA	 	Haralson	 	 	303	 
	11215
	 	GA	 	Haralson	 	 	51	 
	11221
	 	GA	 	Haralson	 	 	60	 
	11222
	 	GA	 	Haralson	 	 	43	 
	11223
	 	GA	 	Haralson	 	 	113	 
	11227
	 	GA	 	Haralson	 	 	1,522	 
	11228
	 	GA	 	Haralson	 	 	806	 
	11229
	 	GA	 	Haralson	 	 	199	 
	11244
	 	GA	 	Haralson	 	 	93	 
	11245
	 	GA	 	Haralson	 	 	91	 
	11248
	 	GA	 	Haralson	 	 	18	 
	11249
	 	GA	 	Haralson	 	 	94	 
	11250
	 	GA	 	Haralson	 	 	22	 
	11251
	 	GA	 	Haralson	 	 	118	 
	11252
	 	GA	 	Haralson	 	 	93	 
	11253
	 	GA	 	Haralson	 	 	52	 
	11254
	 	GA	 	Haralson	 	 	335	 
	11255
	 	GA	 	Haralson	 	 	368	 
	11256
	 	GA	 	Haralson	 	 	75	 

Page 12 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	11257
	 	GA	 	Haralson	 	 	156	 
	11258
	 	GA	 	Haralson	 	 	42	 
	11260
	 	GA	 	Haralson	 	 	27	 
	11261
	 	GA	 	Haralson	 	 	88	 
	11262
	 	GA	 	Haralson	 	 	59	 
	11263
	 	GA	 	Haralson	 	 	38	 
	11264
	 	GA	 	Haralson	 	 	124	 
	11265
	 	GA	 	Haralson	 	 	86	 
	11266
	 	GA	 	Haralson	 	 	37	 
	11267
	 	GA	 	Haralson	 	 	201	 
	11268
	 	GA	 	Haralson	 	 	82	 
	11269
	 	GA	 	Haralson	 	 	107	 
	11270
	 	GA	 	Haralson	 	 	175	 
	11271
	 	GA	 	Haralson	 	 	104	 
	11274
	 	GA	 	Haralson	 	 	692	 
	11275
	 	GA	 	Haralson	 	 	858	 
	11276
	 	GA	 	Haralson	 	 	245	 
	11283
	 	GA	 	Haralson	 	 	111	 
	11284
	 	GA	 	Haralson	 	 	82	 
	12203
	 	GA	 	Haralson	 	 	121	 
	12204
	 	GA	 	Haralson	 	 	153	 
	12211
	 	GA	 	Haralson	 	 	3	 
	12242
	 	GA	 	Haralson	 	 	94	 
	12625
	 	GA	 	Haralson	 	 	202	 
	12700
	 	GA	 	Haralson	 	 	479	 
	12701
	 	GA	 	Haralson	 	 	532	 
	12702
	 	GA	 	Haralson	 	 	294	 
	12708
	 	GA	 	Haralson	 	 	248	 
	12709
	 	GA	 	Haralson	 	 	180	 
	12710
	 	GA	 	Haralson	 	 	30	 
	16084
	 	GA	 	Haralson	 	 	124	 
	13232
	 	GA	 	Harris	 	 	103	 
	15090
	 	GA	 	Hart	 	 	108	 
	15091
	 	GA	 	Hart	 	 	70	 
	12502
	 	GA	 	Heard	 	 	13	 

Page 13 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	12520
	 	GA	 	Heard	 	 	168	 
	13051
	 	GA	 	Heard	 	 	126	 
	13053
	 	GA	 	Heard	 	 	1,127	 
	13054
	 	GA	 	Heard	 	 	837	 
	13055
	 	GA	 	Heard	 	 	181	 
	13056
	 	GA	 	Heard	 	 	333	 
	13057
	 	GA	 	Heard	 	 	33	 
	13058
	 	GA	 	Heard	 	 	94	 
	13060
	 	GA	 	Heard	 	 	385	 
	13061
	 	GA	 	Heard	 	 	140	 
	13075
	 	GA	 	Heard	 	 	278	 
	13076
	 	GA	 	Heard	 	 	136	 
	13077
	 	GA	 	Heard	 	 	239	 
	13082
	 	GA	 	Heard	 	 	164	 
	13088
	 	GA	 	Heard	 	 	70	 
	13091
	 	GA	 	Heard	 	 	784	 
	13096
	 	GA	 	Heard	 	 	980	 
	13098
	 	GA	 	Heard	 	 	209	 
	13101
	 	GA	 	Heard	 	 	773	 
	13102
	 	GA	 	Heard	 	 	150	 
	13130
	 	GA	 	Heard	 	 	242	 
	13136
	 	GA	 	Heard	 	 	76	 
	13141
	 	GA	 	Heard	 	 	2,060	 
	13142
	 	GA	 	Heard	 	 	1,109	 
	13143
	 	GA	 	Heard	 	 	115	 
	13147
	 	GA	 	Heard	 	 	117	 
	13156
	 	GA	 	Heard	 	 	38	 
	13158
	 	GA	 	Heard	 	 	104	 
	13160
	 	GA	 	Heard	 	 	28	 
	13185
	 	GA	 	Heard	 	 	149	 
	15012
	 	GA	 	Jackson	 	 	82	 
	15022
	 	GA	 	Jackson	 	 	32	 
	15068
	 	GA	 	Jackson	 	 	575	 
	15069
	 	GA	 	Jackson	 	 	162	 
	15072
	 	GA	 	Jackson	 	 	173	 

Page 14 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	15076
	 	GA	 	Jackson	 	 	202	 
	15078
	 	GA	 	Jackson	 	 	498	 
	15078
	 	GA	 	Jackson	 	 	30	 
	15502
	 	GA	 	Lumpkin	 	 	775	 
	15509
	 	GA	 	Lumpkin	 	 	635	 
	15512
	 	GA	 	Lumpkin	 	 	121	 
	15513
	 	GA	 	Lumpkin	 	 	129	 
	15514
	 	GA	 	Lumpkin	 	 	433	 
	15519
	 	GA	 	Lumpkin	 	 	542	 
	15520
	 	GA	 	Lumpkin	 	 	42	 
	15527
	 	GA	 	Lumpkin	 	 	719	 
	15529
	 	GA	 	Lumpkin	 	 	53	 
	15533
	 	GA	 	Lumpkin	 	 	1,153	 
	15536
	 	GA	 	Lumpkin	 	 	389	 
	15538
	 	GA	 	Lumpkin	 	 	746	 
	15541
	 	GA	 	Lumpkin	 	 	672	 
	15547
	 	GA	 	Lumpkin	 	 	689	 
	15158
	 	GA	 	Madison	 	 	201	 
	15159
	 	GA	 	Madison	 	 	184	 
	14023
	 	GA	 	Murray	 	 	541	 
	14024
	 	GA	 	Murray	 	 	89	 
	14025
	 	GA	 	Murray	 	 	72	 
	14026
	 	GA	 	Murray	 	 	31	 
	14058
	 	GA	 	Murray	 	 	260	 
	14076
	 	GA	 	Murray	 	 	110	 
	13513
	 	GA	 	Pickens	 	 	268	 
	13516
	 	GA	 	Pickens	 	 	334	 
	13517
	 	GA	 	Pickens	 	 	491	 
	13518
	 	GA	 	Pickens	 	 	135	 
	13520
	 	GA	 	Pickens	 	 	348	 
	13523
	 	GA	 	Pickens	 	 	338	 
	13524
	 	GA	 	Pickens	 	 	900	 
	13525
	 	GA	 	Pickens	 	 	364	 
	13526
	 	GA	 	Pickens	 	 	128	 
	13528
	 	GA	 	Pickens	 	 	93	 

Page 15 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	13529
	 	GA	 	Pickens	 	 	265	 
	13530
	 	GA	 	Pickens	 	 	529	 
	13543
	 	GA	 	Pickens	 	 	323	 
	13544
	 	GA	 	Pickens	 	 	144	 
	13545
	 	GA	 	Pickens	 	 	162	 
	13548
	 	GA	 	Pickens	 	 	385	 
	13576
	 	GA	 	Pickens	 	 	131	 
	14000
	 	GA	 	Pickens	 	 	196	 
	14011
	 	GA	 	Pickens	 	 	241	 
	14013
	 	GA	 	Pickens	 	 	195	 
	14015
	 	GA	 	Pickens	 	 	361	 
	14016
	 	GA	 	Pickens	 	 	16	 
	14017
	 	GA	 	Pickens	 	 	240	 
	14031
	 	GA	 	Pickens	 	 	308	 
	14032
	 	GA	 	Pickens	 	 	442	 
	14035
	 	GA	 	Pickens	 	 	0	 
	14050
	 	GA	 	Pickens	 	 	388	 
	14051
	 	GA	 	Pickens	 	 	450	 
	14064
	 	GA	 	Pickens	 	 	297	 
	14064
	 	GA	 	Pickens	 	 	420	 
	14077
	 	GA	 	Pickens	 	 	291	 
	15523
	 	GA	 	Pickens	 	 	186	 
	11006
	 	GA	 	Polk	 	 	462	 
	11015
	 	GA	 	Polk	 	 	133	 
	11018
	 	GA	 	Polk	 	 	79	 
	11022
	 	GA	 	Polk	 	 	646	 
	11027
	 	GA	 	Polk	 	 	157	 
	11028
	 	GA	 	Polk	 	 	21	 
	11029
	 	GA	 	Polk	 	 	174	 
	11032
	 	GA	 	Polk	 	 	38	 
	11056
	 	GA	 	Polk	 	 	120	 
	11079
	 	GA	 	Polk	 	 	134	 
	11080
	 	GA	 	Polk	 	 	158	 
	11116
	 	GA	 	Polk	 	 	15	 
	11119
	 	GA	 	Polk	 	 	52	 

Page 16 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	11125
	 	GA	 	Polk	 	 	58	 
	11126
	 	GA	 	Polk	 	 	68	 
	11127
	 	GA	 	Polk	 	 	103	 
	11128
	 	GA	 	Polk	 	 	153	 
	11129
	 	GA	 	Polk	 	 	120	 
	11167
	 	GA	 	Polk	 	 	119	 
	11175
	 	GA	 	Polk	 	 	265	 
	11180
	 	GA	 	Polk	 	 	43	 
	11202
	 	GA	 	Polk	 	 	129	 
	11221
	 	GA	 	Polk	 	 	0	 
	11227
	 	GA	 	Polk	 	 	238	 
	11228
	 	GA	 	Polk	 	 	442	 
	11238
	 	GA	 	Polk	 	 	47	 
	11239
	 	GA	 	Polk	 	 	138	 
	11240
	 	GA	 	Polk	 	 	134	 
	11271
	 	GA	 	Polk	 	 	341	 
	11285
	 	GA	 	Polk	 	 	41	 
	11286
	 	GA	 	Polk	 	 	39	 
	16116
	 	GA	 	Polk	 	 	93	 
	15082
	 	GA	 	Stephens	 	 	131	 
	13142
	 	GA	 	Troup	 	 	18	 
	13144
	 	GA	 	Troup	 	 	304	 
	13147
	 	GA	 	Troup	 	 	211	 
	13175
	 	GA	 	Troup	 	 	546	 
	13186
	 	GA	 	Troup	 	 	188	 
	13191
	 	GA	 	Troup	 	 	219	 
	13194
	 	GA	 	Troup	 	 	120	 
	10026
	 	GA	 	Walker	 	 	56	 
	10055
	 	GA	 	Walker	 	 	12	 
	10056
	 	GA	 	Walker	 	 	48	 
	10099
	 	GA	 	Walker	 	 	93	 
	1396
	 	LA	 	Sabine	 	 	203	 
	1266
	 	TX	 	Anderson	 	 	1,572	 
	3273
	 	TX	 	Houston Only	 	 	31	 
	3275
	 	TX	 	Houston Only	 	 	33	 

Page 17 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	3427
	 	TX	 	Anderson	 	 	588	 
	3429
	 	TX	 	Anderson	 	 	1,414	 
	3430
	 	TX	 	Anderson	 	 	949	 
	3432
	 	TX	 	Anderson	 	 	1,628	 
	3433
	 	TX	 	Anderson	 	 	901	 
	3119
	 	TX	 	Angelina	 	 	243	 
	3129
	 	TX	 	Angelina	 	 	589	 
	3155
	 	TX	 	Angelina	 	 	574	 
	3156
	 	TX	 	Angelina	 	 	846	 
	3157
	 	TX	 	Angelina	 	 	23	 
	3160
	 	TX	 	Angelina	 	 	25	 
	4724
	 	TX	 	Angelina	 	 	411	 
	6057
	 	TX	 	Angelina	 	 	261	 
	6058
	 	TX	 	Angelina	 	 	294	 
	3363
	 	TX	 	Cherokee	 	 	889	 
	3369
	 	TX	 	Cherokee	 	 	562	 
	3370
	 	TX	 	Cherokee	 	 	1,141	 
	3372
	 	TX	 	Cherokee	 	 	709	 
	3373
	 	TX	 	Cherokee	 	 	615	 
	3515
	 	TX	 	Cherokee	 	 	889	 
	387
	 	TX	 	Hardin	 	 	361	 
	1177
	 	TX	 	Hardin	 	 	269	 
	1178
	 	TX	 	Hardin	 	 	571	 
	1179
	 	TX	 	Hardin	 	 	646	 
	1180
	 	TX	 	Hardin	 	 	974	 
	1181
	 	TX	 	Hardin	 	 	963	 
	1182
	 	TX	 	Hardin	 	 	395	 
	1553
	 	TX	 	Hardin	 	 	426	 
	3245
	 	TX	 	Houston	 	 	821	 
	3246
	 	TX	 	Houston	 	 	373	 
	3247
	 	TX	 	Houston	 	 	690	 
	3248
	 	TX	 	Houston	 	 	1,205	 
	3249
	 	TX	 	Houston	 	 	518	 
	3250
	 	TX	 	Houston	 	 	845	 
	3251
	 	TX	 	Houston	 	 	270	 

Page 18 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	3252
	 	TX	 	Houston	 	 	578	 
	3253
	 	TX	 	Houston	 	 	599	 
	3254
	 	TX	 	Houston	 	 	772	 
	3255
	 	TX	 	Houston	 	 	644	 
	3265
	 	TX	 	Houston	 	 	234	 
	3266
	 	TX	 	Houston	 	 	694	 
	3267
	 	TX	 	Houston	 	 	226	 
	3269
	 	TX	 	Houston	 	 	341	 
	3271
	 	TX	 	Houston	 	 	276	 
	3273
	 	TX	 	Houston	 	 	830	 
	3274
	 	TX	 	Houston	 	 	697	 
	3275
	 	TX	 	Houston	 	 	238	 
	1327
	 	TX	 	Jasper	 	 	362	 
	1227
	 	TX	 	Liberty	 	 	648	 
	1228
	 	TX	 	Liberty	 	 	1,605	 
	1229
	 	TX	 	Liberty	 	 	1,252	 
	3231
	 	TX	 	Rusk	 	 	697	 
	3233
	 	TX	 	Rusk	 	 	312	 
	3236
	 	TX	 	Rusk	 	 	286	 
	1232
	 	TX	 	Sabine	 	 	1,574	 
	1233
	 	TX	 	Sabine	 	 	17	 
	2147
	 	TX	 	Sabine	 	 	222	 
	2181
	 	TX	 	Sabine	 	 	3	 
	2182
	 	TX	 	Sabine	 	 	464	 
	2291
	 	TX	 	Sabine	 	 	61	 
	6051
	 	TX	 	Sabine	 	 	347	 
	1232
	 	TX	 	San Augustine	 	 	105	 
	1233
	 	TX	 	San Augustine	 	 	1,235	 
	1235
	 	TX	 	San Augustine	 	 	1,577	 
	1236
	 	TX	 	San Augustine	 	 	473	 
	2139
	 	TX	 	San Augustine	 	 	61	 
	2147
	 	TX	 	San Augustine	 	 	1,374	 
	2155
	 	TX	 	San Augustine	 	 	1,439	 
	2161
	 	TX	 	San Augustine	 	 	1,525	 
	2182
	 	TX	 	San Augustine	 	 	462	 

Page 19 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

PLEDGED PROPERTIES LIST

AS OF 2ND QUARTER 2010

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	6051
	 	TX	 	San Augustine	 	 	372	 
	1511
	 	TX	 	San Jacinto	 	 	397	 
	Terrace at Hidden Hills
	 	CA	 	Los Angeles	 	 	26	 
	Hidden Creek Estates
	 	CA	 	Los Angeles	 	 	702	 
	 
	 	 	 	 	 	 
	 
	 	TOTAL ACRES	 	 	 	 	225,849	 
	 
	 	 	 	 	 	 

Page 20 

 

Schedule 5

Timberland

 

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	10002
	 	AL	 	Cherokee	 	 	455	 
	10008
	 	AL	 	Cherokee	 	 	165	 
	10030
	 	AL	 	Cherokee	 	 	619	 
	10032
	 	AL	 	Cherokee	 	 	67	 
	10058
	 	AL	 	Cherokee	 	 	74	 
	10068
	 	AL	 	Cherokee	 	 	55	 
	10080
	 	AL	 	Cherokee	 	 	1,011	 
	10093
	 	AL	 	Cherokee	 	 	999	 
	10094
	 	AL	 	Cherokee	 	 	191	 
	10504
	 	AL	 	Cherokee	 	 	81	 
	10509
	 	AL	 	Cherokee	 	 	614	 
	10514
	 	AL	 	Cherokee	 	 	1,018	 
	10553
	 	AL	 	Cherokee	 	 	694	 
	10593
	 	AL	 	Cherokee	 	 	68	 
	11001
	 	AL	 	Cherokee	 	 	724	 
	11004
	 	AL	 	Cherokee	 	 	522	 
	11035
	 	AL	 	Cherokee	 	 	1,039	 
	11062
	 	AL	 	Cherokee	 	 	868	 
	11200
	 	AL	 	Cherokee	 	 	191	 
	19000
	 	AL	 	Cherokee	 	 	408	 
	11083
	 	AL	 	Cleburne	 	 	482	 
	11143
	 	AL	 	Cleburne	 	 	733	 
	11144
	 	AL	 	Cleburne	 	 	555	 
	11149
	 	AL	 	Cleburne	 	 	1,254	 
	11184
	 	AL	 	Cleburne	 	 	77	 
	11209
	 	AL	 	Cleburne	 	 	210	 
	12144
	 	AL	 	Cleburne	 	 	1,106	 
	12146
	 	AL	 	Cleburne	 	 	88	 
	12148
	 	AL	 	Cleburne	 	 	139	 
	12152
	 	AL	 	Cleburne	 	 	226	 
	12153
	 	AL	 	Cleburne	 	 	83	 
	12154
	 	AL	 	Cleburne	 	 	87	 
	12155
	 	AL	 	Cleburne	 	 	119	 
	12161
	 	AL	 	Cleburne	 	 	668	 
	12165
	 	AL	 	Cleburne	 	 	41	 

Page 1

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	12170
	 	AL	 	Cleburne	 	 	107	 
	12177
	 	AL	 	Cleburne	 	 	366	 
	12181
	 	AL	 	Cleburne	 	 	79	 
	12183
	 	AL	 	Cleburne	 	 	39	 
	12184
	 	AL	 	Cleburne	 	 	80	 
	12193
	 	AL	 	Cleburne	 	 	63	 
	12195
	 	AL	 	Cleburne	 	 	119	 
	12197
	 	AL	 	Cleburne	 	 	800	 
	10569
	 	AL	 	Etowah	 	 	1,417	 
	12163
	 	AL	 	Randolph	 	 	36	 
	13010
	 	AL	 	Randolph	 	 	29	 
	13015
	 	AL	 	Randolph	 	 	211	 
	13026
	 	AL	 	Randolph	 	 	821	 
	13115
	 	AL	 	Randolph	 	 	146	 
	13127
	 	AL	 	Randolph	 	 	202	 
	13183
	 	AL	 	Randolph	 	 	194	 
	13184
	 	AL	 	Randolph	 	 	424	 
	15000
	 	GA	 	Banks	 	 	436	 
	15001
	 	GA	 	Banks	 	 	453	 
	15003
	 	GA	 	Banks	 	 	303	 
	15011
	 	GA	 	Banks	 	 	119	 
	15016
	 	GA	 	Banks	 	 	61	 
	15022
	 	GA	 	Banks	 	 	110	 
	13503
	 	GA	 	Bartow	 	 	32	 
	13504
	 	GA	 	Bartow	 	 	336	 
	13506
	 	GA	 	Bartow	 	 	814	 
	13507
	 	GA	 	Bartow	 	 	1,053	 
	13508
	 	GA	 	Bartow	 	 	516	 
	13509
	 	GA	 	Bartow	 	 	98	 
	13514
	 	GA	 	Bartow	 	 	7	 
	14510
	 	GA	 	Bartow	 	 	477	 
	14511
	 	GA	 	Bartow	 	 	297	 
	14515
	 	GA	 	Bartow	 	 	59	 
	14518
	 	GA	 	Bartow	 	 	177	 
	14520
	 	GA	 	Bartow	 	 	51	 

Page 2

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	14521
	 	GA	 	Bartow	 	 	39	 
	14524
	 	GA	 	Bartow	 	 	451	 
	14527
	 	GA	 	Bartow	 	 	95	 
	14528
	 	GA	 	Bartow	 	 	615	 
	14529
	 	GA	 	Bartow	 	 	108	 
	14531
	 	GA	 	Bartow	 	 	524	 
	14532
	 	GA	 	Bartow	 	 	562	 
	14533
	 	GA	 	Bartow	 	 	373	 
	14534
	 	GA	 	Bartow	 	 	433	 
	14535
	 	GA	 	Bartow	 	 	461	 
	14536
	 	GA	 	Bartow	 	 	155	 
	14537
	 	GA	 	Bartow	 	 	208	 
	14539
	 	GA	 	Bartow	 	 	248	 
	14543
	 	GA	 	Bartow	 	 	547	 
	14544
	 	GA	 	Bartow	 	 	515	 
	14546
	 	GA	 	Bartow	 	 	130	 
	14549
	 	GA	 	Bartow	 	 	163	 
	14552
	 	GA	 	Bartow	 	 	508	 
	14555
	 	GA	 	Bartow	 	 	74	 
	14561
	 	GA	 	Bartow	 	 	546	 
	14562
	 	GA	 	Bartow	 	 	617	 
	14563
	 	GA	 	Bartow	 	 	627	 
	14570
	 	GA	 	Bartow	 	 	38	 
	14607
	 	GA	 	Bartow	 	 	158	 
	12066
	 	GA	 	Carroll	 	 	115	 
	12067
	 	GA	 	Carroll	 	 	37	 
	12068
	 	GA	 	Carroll	 	 	222	 
	12069
	 	GA	 	Carroll	 	 	121	 
	12081
	 	GA	 	Carroll	 	 	244	 
	12082
	 	GA	 	Carroll	 	 	166	 
	12083
	 	GA	 	Carroll	 	 	624	 
	12087
	 	GA	 	Carroll	 	 	195	 
	12093
	 	GA	 	Carroll	 	 	133	 
	12094
	 	GA	 	Carroll	 	 	88	 
	12095
	 	GA	 	Carroll	 	 	322	 

Page 3

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	12096
	 	GA	 	Carroll	 	 	719	 
	12108
	 	GA	 	Carroll	 	 	802	 
	12109
	 	GA	 	Carroll	 	 	92	 
	12110
	 	GA	 	Carroll	 	 	600	 
	12127
	 	GA	 	Carroll	 	 	69	 
	12128
	 	GA	 	Carroll	 	 	58	 
	12129
	 	GA	 	Carroll	 	 	58	 
	12130
	 	GA	 	Carroll	 	 	50	 
	12131
	 	GA	 	Carroll	 	 	79	 
	12132
	 	GA	 	Carroll	 	 	239	 
	12133
	 	GA	 	Carroll	 	 	135	 
	12134
	 	GA	 	Carroll	 	 	20	 
	12135
	 	GA	 	Carroll	 	 	510	 
	12136
	 	GA	 	Carroll	 	 	710	 
	12138
	 	GA	 	Carroll	 	 	78	 
	12206
	 	GA	 	Carroll	 	 	624	 
	12207
	 	GA	 	Carroll	 	 	261	 
	12208
	 	GA	 	Carroll	 	 	74	 
	12209
	 	GA	 	Carroll	 	 	37	 
	12211
	 	GA	 	Carroll	 	 	86	 
	12212
	 	GA	 	Carroll	 	 	49	 
	12213
	 	GA	 	Carroll	 	 	48	 
	12214
	 	GA	 	Carroll	 	 	124	 
	12215
	 	GA	 	Carroll	 	 	228	 
	12216
	 	GA	 	Carroll	 	 	115	 
	12217
	 	GA	 	Carroll	 	 	418	 
	12218
	 	GA	 	Carroll	 	 	191	 
	12219
	 	GA	 	Carroll	 	 	511	 
	12220
	 	GA	 	Carroll	 	 	203	 
	12221
	 	GA	 	Carroll	 	 	55	 
	12223
	 	GA	 	Carroll	 	 	107	 
	12224
	 	GA	 	Carroll	 	 	47	 
	12226
	 	GA	 	Carroll	 	 	107	 
	12227
	 	GA	 	Carroll	 	 	38	 
	12228
	 	GA	 	Carroll	 	 	91	 

Page 4

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	12229
	 	GA	 	Carroll	 	 	60	 
	12233
	 	GA	 	Carroll	 	 	311	 
	12234
	 	GA	 	Carroll	 	 	119	 
	12238
	 	GA	 	Carroll	 	 	102	 
	12239
	 	GA	 	Carroll	 	 	90	 
	12243
	 	GA	 	Carroll	 	 	77	 
	12531
	 	GA	 	Carroll	 	 	85	 
	12532
	 	GA	 	Carroll	 	 	85	 
	12533
	 	GA	 	Carroll	 	 	777	 
	12627
	 	GA	 	Carroll	 	 	174	 
	13185
	 	GA	 	Carroll/Heard	 	 	88	 
	10023
	 	GA	 	Chattooga	 	 	996	 
	10024
	 	GA	 	Chattooga	 	 	932	 
	10032
	 	GA	 	Chattooga	 	 	76	 
	10036
	 	GA	 	Chattooga	 	 	40	 
	10039
	 	GA	 	Chattooga	 	 	163	 
	10041
	 	GA	 	Chattooga	 	 	59	 
	10042
	 	GA	 	Chattooga	 	 	104	 
	10049
	 	GA	 	Chattooga	 	 	32	 
	10050
	 	GA	 	Chattooga	 	 	122	 
	10051
	 	GA	 	Chattooga	 	 	34	 
	10053
	 	GA	 	Chattooga	 	 	79	 
	10072
	 	GA	 	Chattooga	 	 	143	 
	10083
	 	GA	 	Chattooga	 	 	523	 
	10084
	 	GA	 	Chattooga	 	 	277	 
	10085
	 	GA	 	Chattooga	 	 	269	 
	10088
	 	GA	 	Chattooga	 	 	686	 
	10092
	 	GA	 	Chattooga	 	 	127	 
	10101
	 	GA	 	Chattooga	 	 	649	 
	13505
	 	GA	 	Cherokee	 	 	161	 
	13509
	 	GA	 	Cherokee	 	 	470	 
	13511
	 	GA	 	Cherokee	 	 	166	 
	13514
	 	GA	 	Cherokee	 	 	50	 
	13515
	 	GA	 	Cherokee	 	 	177	 
	13521
	 	GA	 	Cherokee	 	 	149	 

Page 5

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	13523
	 	GA	 	Cherokee	 	 	94	 
	13524
	 	GA	 	Cherokee	 	 	1	 
	13525
	 	GA	 	Cherokee	 	 	377	 
	13526
	 	GA	 	Cherokee	 	 	385	 
	13527
	 	GA	 	Cherokee	 	 	632	 
	13528
	 	GA	 	Cherokee	 	 	327	 
	13529
	 	GA	 	Cherokee	 	 	141	 
	13530
	 	GA	 	Cherokee	 	 	1	 
	13531
	 	GA	 	Cherokee	 	 	420	 
	13533
	 	GA	 	Cherokee	 	 	414	 
	13534
	 	GA	 	Cherokee	 	 	299	 
	13537
	 	GA	 	Cherokee	 	 	131	 
	13546
	 	GA	 	Cherokee	 	 	72	 
	13548
	 	GA	 	Cherokee	 	 	32	 
	13549
	 	GA	 	Cherokee	 	 	226	 
	13550
	 	GA	 	Cherokee	 	 	256	 
	13551
	 	GA	 	Cherokee	 	 	171	 
	13553
	 	GA	 	Cherokee	 	 	104	 
	13556
	 	GA	 	Cherokee	 	 	696	 
	13557
	 	GA	 	Cherokee	 	 	74	 
	13564
	 	GA	 	Cherokee	 	 	346	 
	13564
	 	GA	 	Cherokee	 	 	4	 
	13574
	 	GA	 	Cherokee	 	 	453	 
	13575
	 	GA	 	Cherokee	 	 	222	 
	13576
	 	GA	 	Cherokee	 	 	175	 
	13577
	 	GA	 	Cherokee	 	 	515	 
	14596
	 	GA	 	Cherokee	 	 	190	 
	14606
	 	GA	 	Cherokee	 	 	319	 
	15503
	 	GA	 	Cherokee	 	 	327	 
	12060
	 	GA	 	Coweta	 	 	83	 
	12076
	 	GA	 	Coweta	 	 	102	 
	12077
	 	GA	 	Coweta	 	 	214	 
	12078
	 	GA	 	Coweta	 	 	105	 
	12120
	 	GA	 	Coweta	 	 	198	 
	12501
	 	GA	 	Coweta	 	 	101	 

Page 6

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	12507
	 	GA	 	Coweta	 	 	154	 
	12508
	 	GA	 	Coweta	 	 	125	 
	12510
	 	GA	 	Coweta	 	 	60	 
	12514
	 	GA	 	Coweta	 	 	40	 
	12519
	 	GA	 	Coweta	 	 	41	 
	12520
	 	GA	 	Coweta	 	 	644	 
	12522
	 	GA	 	Coweta	 	 	88	 
	15500
	 	GA	 	Dawson	 	 	558	 
	15501
	 	GA	 	Dawson	 	 	808	 
	15512
	 	GA	 	Dawson	 	 	408	 
	15513
	 	GA	 	Dawson	 	 	429	 
	15514
	 	GA	 	Dawson	 	 	220	 
	15515
	 	GA	 	Dawson	 	 	157	 
	15516
	 	GA	 	Dawson	 	 	290	 
	15518
	 	GA	 	Dawson	 	 	274	 
	15524
	 	GA	 	Dawson	 	 	49	 
	15529
	 	GA	 	Dawson	 	 	592	 
	15535
	 	GA	 	Dawson	 	 	173	 
	15539
	 	GA	 	Dawson	 	 	351	 
	15540
	 	GA	 	Dawson	 	 	485	 
	15541
	 	GA	 	Dawson	 	 	244	 
	15543
	 	GA	 	Dawson	 	 	422	 
	15548
	 	GA	 	Dawson	 	 	111	 
	12001
	 	GA	 	Douglas	 	 	52	 
	12002
	 	GA	 	Douglas	 	 	114	 
	12085
	 	GA	 	Douglas	 	 	158	 
	15118
	 	GA	 	Elbert	 	 	123	 
	15130
	 	GA	 	Elbert	 	 	948	 
	15135
	 	GA	 	Elbert	 	 	196	 
	15180
	 	GA	 	Elbert	 	 	413	 
	10007
	 	GA	 	Floyd	 	 	329	 
	10019
	 	GA	 	Floyd	 	 	443	 
	10020
	 	GA	 	Floyd	 	 	271	 
	10045
	 	GA	 	Floyd	 	 	27	 
	10062
	 	GA	 	Floyd	 	 	367	 

Page 7

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	10066
	 	GA	 	Floyd	 	 	146	 
	10068
	 	GA	 	Floyd	 	 	494	 
	10077
	 	GA	 	Floyd	 	 	87	 
	10086
	 	GA	 	Floyd	 	 	134	 
	10100
	 	GA	 	Floyd	 	 	242	 
	11008
	 	GA	 	Floyd	 	 	42	 
	11011
	 	GA	 	Floyd	 	 	112	 
	11045
	 	GA	 	Floyd	 	 	747	 
	11048
	 	GA	 	Floyd	 	 	46	 
	11049
	 	GA	 	Floyd	 	 	71	 
	11065
	 	GA	 	Floyd	 	 	370	 
	11169
	 	GA	 	Floyd	 	 	95	 
	11192
	 	GA	 	Floyd	 	 	307	 
	14538
	 	GA	 	Floyd	 	 	124	 
	14554
	 	GA	 	Floyd	 	 	424	 
	14556
	 	GA	 	Floyd	 	 	719	 
	14560
	 	GA	 	Floyd	 	 	648	 
	14563
	 	GA	 	Floyd	 	 	181	 
	14608
	 	GA	 	Floyd	 	 	316	 
	14609
	 	GA	 	Floyd	 	 	234	 
	15016
	 	GA	 	Franklin	 	 	128	 
	15023
	 	GA	 	Franklin	 	 	279	 
	15025
	 	GA	 	Franklin	 	 	57	 
	15026
	 	GA	 	Franklin	 	 	77	 
	15027
	 	GA	 	Franklin	 	 	124	 
	15028
	 	GA	 	Franklin	 	 	279	 
	15030
	 	GA	 	Franklin	 	 	73	 
	15032
	 	GA	 	Franklin	 	 	156	 
	15034
	 	GA	 	Franklin	 	 	110	 
	15039
	 	GA	 	Franklin	 	 	162	 
	15042
	 	GA	 	Franklin	 	 	115	 
	14001
	 	GA	 	Gilmer	 	 	1,061	 
	14015
	 	GA	 	Gilmer	 	 	45	 
	14016
	 	GA	 	Gilmer	 	 	465	 
	14017
	 	GA	 	Gilmer	 	 	733	 

Page 8

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	14022
	 	GA	 	Gilmer	 	 	95	 
	14033
	 	GA	 	Gilmer	 	 	649	 
	14035
	 	GA	 	Gilmer	 	 	982	 
	14036
	 	GA	 	Gilmer	 	 	99	 
	14052
	 	GA	 	Gilmer	 	 	345	 
	14053
	 	GA	 	Gilmer	 	 	206	 
	14054
	 	GA	 	Gilmer	 	 	56	 
	14055
	 	GA	 	Gilmer	 	 	283	 
	14066
	 	GA	 	Gilmer	 	 	483	 
	14070
	 	GA	 	Gilmer	 	 	95	 
	14074
	 	GA	 	Gilmer	 	 	269	 
	14075
	 	GA	 	Gilmer	 	 	826	 
	14080
	 	GA	 	Gilmer	 	 	170	 
	13500
	 	GA	 	Gordon	 	 	168	 
	13502
	 	GA	 	Gordon	 	 	74	 
	13503
	 	GA	 	Gordon	 	 	58	 
	14009
	 	GA	 	Gordon	 	 	85	 
	14010
	 	GA	 	Gordon	 	 	110	 
	14011
	 	GA	 	Gordon	 	 	8	 
	14045
	 	GA	 	Gordon	 	 	41	 
	14048
	 	GA	 	Gordon	 	 	895	 
	14063
	 	GA	 	Gordon	 	 	433	 
	14071
	 	GA	 	Gordon	 	 	181	 
	14073
	 	GA	 	Gordon	 	 	1,245	 
	14500
	 	GA	 	Gordon	 	 	221	 
	14501
	 	GA	 	Gordon	 	 	160	 
	14507
	 	GA	 	Gordon	 	 	45	 
	14508
	 	GA	 	Gordon	 	 	147	 
	14517
	 	GA	 	Gordon	 	 	400	 
	14518
	 	GA	 	Gordon	 	 	155	 
	14520
	 	GA	 	Gordon	 	 	267	 
	14521
	 	GA	 	Gordon	 	 	6	 
	15052
	 	GA	 	Hall	 	 	206	 
	15053
	 	GA	 	Hall	 	 	961	 
	15065
	 	GA	 	Hall	 	 	304	 

Page 9

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	11084
	 	GA	 	Haralson	 	 	697	 
	11086
	 	GA	 	Haralson	 	 	225	 
	11087
	 	GA	 	Haralson	 	 	163	 
	11088
	 	GA	 	Haralson	 	 	651	 
	11091
	 	GA	 	Haralson	 	 	448	 
	11092
	 	GA	 	Haralson	 	 	250	 
	11094
	 	GA	 	Haralson	 	 	178	 
	11095
	 	GA	 	Haralson	 	 	289	 
	11096
	 	GA	 	Haralson	 	 	188	 
	11097
	 	GA	 	Haralson	 	 	162	 
	11098
	 	GA	 	Haralson	 	 	554	 
	11099
	 	GA	 	Haralson	 	 	817	 
	11100
	 	GA	 	Haralson	 	 	776	 
	11103
	 	GA	 	Haralson	 	 	498	 
	11104
	 	GA	 	Haralson	 	 	104	 
	11105
	 	GA	 	Haralson	 	 	52	 
	11106
	 	GA	 	Haralson	 	 	99	 
	11108
	 	GA	 	Haralson	 	 	617	 
	11109
	 	GA	 	Haralson	 	 	61	 
	11110
	 	GA	 	Haralson	 	 	90	 
	11111
	 	GA	 	Haralson	 	 	231	 
	11115
	 	GA	 	Haralson	 	 	641	 
	11116
	 	GA	 	Haralson	 	 	732	 
	11117
	 	GA	 	Haralson	 	 	192	 
	11119
	 	GA	 	Haralson	 	 	239	 
	11120
	 	GA	 	Haralson	 	 	703	 
	11121
	 	GA	 	Haralson	 	 	742	 
	11138
	 	GA	 	Haralson	 	 	508	 
	11142
	 	GA	 	Haralson	 	 	134	 
	11181
	 	GA	 	Haralson	 	 	303	 
	11215
	 	GA	 	Haralson	 	 	51	 
	11221
	 	GA	 	Haralson	 	 	60	 
	11222
	 	GA	 	Haralson	 	 	43	 
	11223
	 	GA	 	Haralson	 	 	113	 
	11227
	 	GA	 	Haralson	 	 	1,522	 

Page 10

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	11228
	 	GA	 	Haralson	 	 	806	 
	11229
	 	GA	 	Haralson	 	 	199	 
	11244
	 	GA	 	Haralson	 	 	93	 
	11245
	 	GA	 	Haralson	 	 	91	 
	11248
	 	GA	 	Haralson	 	 	18	 
	11249
	 	GA	 	Haralson	 	 	94	 
	11250
	 	GA	 	Haralson	 	 	22	 
	11251
	 	GA	 	Haralson	 	 	118	 
	11252
	 	GA	 	Haralson	 	 	93	 
	11253
	 	GA	 	Haralson	 	 	52	 
	11254
	 	GA	 	Haralson	 	 	335	 
	11255
	 	GA	 	Haralson	 	 	368	 
	11256
	 	GA	 	Haralson	 	 	75	 
	11257
	 	GA	 	Haralson	 	 	156	 
	11258
	 	GA	 	Haralson	 	 	42	 
	11260
	 	GA	 	Haralson	 	 	27	 
	11261
	 	GA	 	Haralson	 	 	88	 
	11262
	 	GA	 	Haralson	 	 	59	 
	11263
	 	GA	 	Haralson	 	 	38	 
	11264
	 	GA	 	Haralson	 	 	124	 
	11265
	 	GA	 	Haralson	 	 	86	 
	11266
	 	GA	 	Haralson	 	 	37	 
	11267
	 	GA	 	Haralson	 	 	201	 
	11268
	 	GA	 	Haralson	 	 	82	 
	11269
	 	GA	 	Haralson	 	 	107	 
	11270
	 	GA	 	Haralson	 	 	175	 
	11271
	 	GA	 	Haralson	 	 	104	 
	11274
	 	GA	 	Haralson	 	 	692	 
	11275
	 	GA	 	Haralson	 	 	858	 
	11276
	 	GA	 	Haralson	 	 	245	 
	11283
	 	GA	 	Haralson	 	 	111	 
	11284
	 	GA	 	Haralson	 	 	82	 
	12211
	 	GA	 	Haralson	 	 	3	 
	12242
	 	GA	 	Haralson	 	 	94	 
	12625
	 	GA	 	Haralson	 	 	202	 

Page 11

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	12700
	 	GA	 	Haralson	 	 	479	 
	12701
	 	GA	 	Haralson	 	 	532	 
	12702
	 	GA	 	Haralson	 	 	294	 
	12708
	 	GA	 	Haralson	 	 	248	 
	12709
	 	GA	 	Haralson	 	 	180	 
	12710
	 	GA	 	Haralson	 	 	30	 
	13232
	 	GA	 	Harris	 	 	103	 
	15090
	 	GA	 	Hart	 	 	108	 
	15091
	 	GA	 	Hart	 	 	70	 
	12502
	 	GA	 	Heard	 	 	13	 
	12520
	 	GA	 	Heard	 	 	168	 
	13051
	 	GA	 	Heard	 	 	126	 
	13053
	 	GA	 	Heard	 	 	1,127	 
	13054
	 	GA	 	Heard	 	 	837	 
	13055
	 	GA	 	Heard	 	 	181	 
	13056
	 	GA	 	Heard	 	 	333	 
	13057
	 	GA	 	Heard	 	 	33	 
	13058
	 	GA	 	Heard	 	 	94	 
	13060
	 	GA	 	Heard	 	 	385	 
	13061
	 	GA	 	Heard	 	 	140	 
	13075
	 	GA	 	Heard	 	 	278	 
	13076
	 	GA	 	Heard	 	 	136	 
	13077
	 	GA	 	Heard	 	 	239	 
	13082
	 	GA	 	Heard	 	 	164	 
	13088
	 	GA	 	Heard	 	 	70	 
	13091
	 	GA	 	Heard	 	 	784	 
	13096
	 	GA	 	Heard	 	 	980	 
	13098
	 	GA	 	Heard	 	 	209	 
	13101
	 	GA	 	Heard	 	 	773	 
	13102
	 	GA	 	Heard	 	 	150	 
	13130
	 	GA	 	Heard	 	 	242	 
	13136
	 	GA	 	Heard	 	 	76	 
	13141
	 	GA	 	Heard	 	 	2,060	 
	13142
	 	GA	 	Heard	 	 	1,109	 
	13143
	 	GA	 	Heard	 	 	115	 

Page 12

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	13147
	 	GA	 	Heard	 	 	117	 
	13156
	 	GA	 	Heard	 	 	38	 
	13158
	 	GA	 	Heard	 	 	104	 
	13160
	 	GA	 	Heard	 	 	28	 
	13185
	 	GA	 	Heard	 	 	149	 
	15012
	 	GA	 	Jackson	 	 	82	 
	15022
	 	GA	 	Jackson	 	 	32	 
	15068
	 	GA	 	Jackson	 	 	575	 
	15069
	 	GA	 	Jackson	 	 	162	 
	15072
	 	GA	 	Jackson	 	 	173	 
	15076
	 	GA	 	Jackson	 	 	202	 
	15078
	 	GA	 	Jackson	 	 	498	 
	15078
	 	GA	 	Jackson	 	 	30	 
	15502
	 	GA	 	Lumpkin	 	 	775	 
	15509
	 	GA	 	Lumpkin	 	 	635	 
	15512
	 	GA	 	Lumpkin	 	 	121	 
	15513
	 	GA	 	Lumpkin	 	 	129	 
	15514
	 	GA	 	Lumpkin	 	 	433	 
	15519
	 	GA	 	Lumpkin	 	 	542	 
	15520
	 	GA	 	Lumpkin	 	 	42	 
	15527
	 	GA	 	Lumpkin	 	 	719	 
	15529
	 	GA	 	Lumpkin	 	 	53	 
	15533
	 	GA	 	Lumpkin	 	 	1,153	 
	15536
	 	GA	 	Lumpkin	 	 	389	 
	15538
	 	GA	 	Lumpkin	 	 	746	 
	15541
	 	GA	 	Lumpkin	 	 	672	 
	15547
	 	GA	 	Lumpkin	 	 	689	 
	15158
	 	GA	 	Madison	 	 	201	 
	15159
	 	GA	 	Madison	 	 	184	 
	14023
	 	GA	 	Murray	 	 	541	 
	14024
	 	GA	 	Murray	 	 	89	 
	14025
	 	GA	 	Murray	 	 	72	 
	14026
	 	GA	 	Murray	 	 	31	 
	14058
	 	GA	 	Murray	 	 	260	 
	14076
	 	GA	 	Murray	 	 	110	 

Page 13

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	13513
	 	GA	 	Pickens	 	 	268	 
	13516
	 	GA	 	Pickens	 	 	334	 
	13517
	 	GA	 	Pickens	 	 	491	 
	13518
	 	GA	 	Pickens	 	 	135	 
	13520
	 	GA	 	Pickens	 	 	348	 
	13523
	 	GA	 	Pickens	 	 	338	 
	13524
	 	GA	 	Pickens	 	 	900	 
	13525
	 	GA	 	Pickens	 	 	364	 
	13526
	 	GA	 	Pickens	 	 	128	 
	13528
	 	GA	 	Pickens	 	 	93	 
	13529
	 	GA	 	Pickens	 	 	265	 
	13530
	 	GA	 	Pickens	 	 	529	 
	13543
	 	GA	 	Pickens	 	 	323	 
	13544
	 	GA	 	Pickens	 	 	144	 
	13576
	 	GA	 	Pickens	 	 	131	 
	14000
	 	GA	 	Pickens	 	 	196	 
	14011
	 	GA	 	Pickens	 	 	241	 
	14013
	 	GA	 	Pickens	 	 	195	 
	14015
	 	GA	 	Pickens	 	 	361	 
	14016
	 	GA	 	Pickens	 	 	16	 
	14017
	 	GA	 	Pickens	 	 	240	 
	14031
	 	GA	 	Pickens	 	 	308	 
	14032
	 	GA	 	Pickens	 	 	442	 
	14035
	 	GA	 	Pickens	 	 	0	 
	14050
	 	GA	 	Pickens	 	 	388	 
	14051
	 	GA	 	Pickens	 	 	450	 
	14077
	 	GA	 	Pickens	 	 	291	 
	15523
	 	GA	 	Pickens	 	 	186	 
	11006
	 	GA	 	Polk	 	 	462	 
	11015
	 	GA	 	Polk	 	 	133	 
	11018
	 	GA	 	Polk	 	 	79	 
	11022
	 	GA	 	Polk	 	 	646	 
	11027
	 	GA	 	Polk	 	 	157	 
	11028
	 	GA	 	Polk	 	 	21	 
	11029
	 	GA	 	Polk	 	 	174	 

Page 14

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	11032
	 	GA	 	Polk	 	 	38	 
	11056
	 	GA	 	Polk	 	 	120	 
	11079
	 	GA	 	Polk	 	 	134	 
	11080
	 	GA	 	Polk	 	 	158	 
	11116
	 	GA	 	Polk	 	 	113	 
	11119
	 	GA	 	Polk	 	 	52	 
	11125
	 	GA	 	Polk	 	 	58	 
	11126
	 	GA	 	Polk	 	 	68	 
	11127
	 	GA	 	Polk	 	 	103	 
	11128
	 	GA	 	Polk	 	 	153	 
	11129
	 	GA	 	Polk	 	 	120	 
	11167
	 	GA	 	Polk	 	 	119	 
	11175
	 	GA	 	Polk	 	 	265	 
	11180
	 	GA	 	Polk	 	 	43	 
	11202
	 	GA	 	Polk	 	 	129	 
	11221
	 	GA	 	Polk	 	 	0	 
	11227
	 	GA	 	Polk	 	 	238	 
	11228
	 	GA	 	Polk	 	 	442	 
	11238
	 	GA	 	Polk	 	 	47	 
	11239
	 	GA	 	Polk	 	 	138	 
	11240
	 	GA	 	Polk	 	 	134	 
	11271
	 	GA	 	Polk	 	 	341	 
	11285
	 	GA	 	Polk	 	 	41	 
	11286
	 	GA	 	Polk	 	 	39	 
	15082
	 	GA	 	Stephens	 	 	131	 
	13142
	 	GA	 	Troup	 	 	18	 
	13144
	 	GA	 	Troup	 	 	304	 
	13147
	 	GA	 	Troup	 	 	211	 
	13175
	 	GA	 	Troup	 	 	546	 
	13191
	 	GA	 	Troup	 	 	219	 
	13194
	 	GA	 	Troup	 	 	120	 
	10026
	 	GA	 	Walker	 	 	56	 
	10055
	 	GA	 	Walker	 	 	12	 
	10056
	 	GA	 	Walker	 	 	48	 
	10099
	 	GA	 	Walker	 	 	93	 

Page 15

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	1396
	 	LA	 	Sabine	 	 	203	 
	1266
	 	TX	 	Anderson	 	 	1,572	 
	3273
	 	TX	 	Houston Only	 	 	31	 
	3275
	 	TX	 	Houston Only	 	 	33	 
	3427
	 	TX	 	Anderson	 	 	588	 
	3429
	 	TX	 	Anderson	 	 	1,414	 
	3430
	 	TX	 	Anderson	 	 	949	 
	3432
	 	TX	 	Anderson	 	 	1,628	 
	3433
	 	TX	 	Anderson	 	 	901	 
	3119
	 	TX	 	Angelina	 	 	243	 
	3129
	 	TX	 	Angelina	 	 	589	 
	3155
	 	TX	 	Angelina	 	 	574	 
	3156
	 	TX	 	Angelina	 	 	846	 
	3157
	 	TX	 	Angelina	 	 	23	 
	3160
	 	TX	 	Angelina	 	 	25	 
	4724
	 	TX	 	Angelina	 	 	411	 
	6057
	 	TX	 	Angelina	 	 	261	 
	6058
	 	TX	 	Angelina	 	 	294	 
	3363
	 	TX	 	Cherokee	 	 	889	 
	3369
	 	TX	 	Cherokee	 	 	562	 
	3370
	 	TX	 	Cherokee	 	 	1,141	 
	3372
	 	TX	 	Cherokee	 	 	709	 
	3373
	 	TX	 	Cherokee	 	 	615	 
	3515
	 	TX	 	Cherokee	 	 	889	 
	387
	 	TX	 	Hardin	 	 	361	 
	1177
	 	TX	 	Hardin	 	 	269	 
	1178
	 	TX	 	Hardin	 	 	571	 
	1179
	 	TX	 	Hardin	 	 	646	 
	1180
	 	TX	 	Hardin	 	 	974	 
	1181
	 	TX	 	Hardin	 	 	963	 
	1182
	 	TX	 	Hardin	 	 	395	 
	1553
	 	TX	 	Hardin	 	 	426	 
	3245
	 	TX	 	Houston	 	 	821	 
	3246
	 	TX	 	Houston	 	 	373	 
	3247
	 	TX	 	Houston	 	 	690	 

Page 16

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	3248
	 	TX	 	Houston	 	 	1,205	 
	3249
	 	TX	 	Houston	 	 	518	 
	3250
	 	TX	 	Houston	 	 	845	 
	3251
	 	TX	 	Houston	 	 	270	 
	3252
	 	TX	 	Houston	 	 	578	 
	3253
	 	TX	 	Houston	 	 	599	 
	3254
	 	TX	 	Houston	 	 	772	 
	3255
	 	TX	 	Houston	 	 	644	 
	3265
	 	TX	 	Houston	 	 	234	 
	3266
	 	TX	 	Houston	 	 	694	 
	3267
	 	TX	 	Houston	 	 	226	 
	3269
	 	TX	 	Houston	 	 	341	 
	3271
	 	TX	 	Houston	 	 	276	 
	3273
	 	TX	 	Houston	 	 	830	 
	3274
	 	TX	 	Houston	 	 	697	 
	3275
	 	TX	 	Houston	 	 	238	 
	1327
	 	TX	 	Jasper	 	 	362	 
	1227
	 	TX	 	Liberty	 	 	648	 
	1228
	 	TX	 	Liberty	 	 	1,605	 
	1229
	 	TX	 	Liberty	 	 	1,252	 
	3231
	 	TX	 	Rusk	 	 	697	 
	3233
	 	TX	 	Rusk	 	 	312	 
	3236
	 	TX	 	Rusk	 	 	286	 
	1232
	 	TX	 	Sabine	 	 	1,574	 
	1233
	 	TX	 	Sabine	 	 	17	 
	2147
	 	TX	 	Sabine	 	 	222	 
	2181
	 	TX	 	Sabine	 	 	3	 
	2182
	 	TX	 	Sabine	 	 	464	 
	2291
	 	TX	 	Sabine	 	 	61	 
	6051
	 	TX	 	Sabine	 	 	347	 
	1232
	 	TX	 	San Augustine	 	 	105	 
	1233
	 	TX	 	San Augustine	 	 	1,235	 
	1235
	 	TX	 	San Augustine	 	 	1,577	 
	1236
	 	TX	 	San Augustine	 	 	473	 
	2139
	 	TX	 	San Augustine	 	 	61	 

Page 17

 

FORESTAR (USA) REAL ESTATE GROUP INC.

SCHEDULE 5 — TIMBERLAND

	 	 	 	 	 	 	 	 	 
	 	 	Property Location	 	 	 
	 	 	 	 	 	 	Approx.
	Comp No.	 	State	 	County	 	Acreage
	2147
	 	TX	 	San Augustine	 	 	1,374	 
	2155
	 	TX	 	San Augustine	 	 	1,439	 
	2161
	 	TX	 	San Augustine	 	 	1,525	 
	2182
	 	TX	 	San Augustine	 	 	462	 
	6051
	 	TX	 	San Augustine	 	 	372	 
	1511
	 	TX	 	San Jacinto	 	 	397	 
	 
	 	TOTAL ACRES
	 	 	196,408	 

Page 18

 

Schedule 6

High Value Timberland

 

 

Schedule 6

High Value Timberland — In Entitlement

as of 6/30/2010

	 	 	 	 	 	 	 	 	 
	 	 	 	 	County	 	Estimated Acres	 
	Wholly-Owned, Appraised
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Georgia
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 Atlanta	 	 	 	 	 	 
	 
	 	Ball Ground	 	Cherokee	 	 	500	 
	 
	 	Burt Creek (Gold Creek)	 	Dawson	 	 	970	 
	 
	 	Fincher Road (Ph I & Ph II) (Dry Pond)	 	Cherokee	 	 	3,890	 
	 
	 	Wolf Creek	 	Carroll/Douglas	 	 	12,230	 
	 
	 	Yellow Creek	 	Cherokee	 	 	1,060	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	Total Georgia	 	 	 	 	18,650	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	California
	 	 	 	 	 	 	 	 
	 
	 	 Los Angeles	 	 	 	 	 	 
	 
	 	Hidden Creeks Estates	 	Los Angeles	 	 	700	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	Total California	 	 	 	 	700	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Texas
	 	 	 	 	 	 	 	 
	 
	 	 Houston	 	 	 	 	 	 
	 
	 	Lake Houston	 	Harris/Liberty	 	 	3,700	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	Total Texas	 	 	 	 	3,700	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Total High Value Timberland — In Entitlement (Wholly-Owned, Appraised)	 	 	23,050	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Wholly-Owned, Non-Appraised
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Georgia
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Atlanta	 	 	 	 	 	 
	 
	 	Crossing	 	Coweta	 	 	230	 
	 
	 	Dallas Highway	 	Haralson	 	 	1,060	 
	 
	 	Fox Hall (Ph II)	 	Coweta	 	 	960	 
	 
	 	Garland Mountain	 	Cherokee/Bartow	 	 	350	 
	 
	 	Home Place	 	Coweta	 	 	1,510	 
	 
	 	Martin’s Bridge	 	Banks	 	 	970	 
	 
	 	Mill Creek	 	Coweta	 	 	770	 
	 
	 	Serenity (Bay Springs)	 	Carroll	 	 	440	 
	 
	 	Waleska	 	Cherokee	 	 	150	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	Total Georgia	 	 	 	 	6,440	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	California
	 	 	 	 	 	 	 	 
	 
	 	Los Angeles	 	 	 	 	 	 
	 
	 	Terrace at Hidden Hills	 	Los Angeles	 	 	30	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	Total California	 	 	 	 	30	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Texas
	 	 	 	 	 	 	 	 
	 
	 	Houston	 	 	 	 	 	 
	 
	 	San Jacinto	 	Montgomery	 	 	150	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	Total Texas	 	 	 	 	150	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total High Value Timberland — In Entitlement (Wholly-Owned, Non-Appraised)	 	 	6,620	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total High Value Timberland (Wholly-Owned, Appraised & Non-Appraised)	 	 	29,670	 
	 
	 	 	 	 	 	 	 

 

 

Schedule 7

Raw Entitled Land

 

 

Schedule 7

Raw-Entitled Land

as of 6/30/2010

	 	 	 	 	 	 	 	 	 
	 	 	 	 	County	 	Estimated Acres	 
	Wholly-Owned, Appraised
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Georgia
	 	 	 	 	 	 	 	 
	 
	 	   Atlanta	 	 	 	 	 	 
	 
	 	Corinth Landing (Four Seasons)	 	Coweta	 	 	382	 
	 
	 	Highgrove (High Grove)	 	Pickens	 	 	521	 
	 
	 	Pickens School	 	Pickens	 	 	591	 
	 
	 	Ridgeview (Lithia Springs)	 	Haralson	 	 	105	 
	 
	 	Towne West	 	Bartow	 	 	808	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Georgia	 	 	 	 	2,407	 
	 
	 	 	 	 	 	 	 
	California
	 	 	 	 	 	 	 	 
	 
	 	         Oakland	 	 	 	 	 	 
	 
	 	San Joaquin River	 	Contra Costa / Sacramento 	               288
	 
	 	 	 	 	 	 	 	 
	 
	 	Total California	 	 	 	 	288	 
	 
	 	 	 	 	 	 	 
	Colorado
	 	 	 	 	 	 	 	 
	 
	 	     Denver	 	 	 	 	 	 
	 
	 	Buffalo Highlands	 	Weld	 	 	270	 
	 
	 	Johnstown Farms	 	Weld	 	 	82	 
	 
	 	Pinery West	 	Douglas	 	 	134	 
	 
	 	Stonebraker	 	Weld	 	 	175	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Colorado	 	 	 	 	661	 
	 
	 	 	 	 	 	 	 
	Texas
	 	 	 	 	 	 	 	 
	 
	 	Austin	 	 	 	 	 	 
	 
	 	Hunter's Crossing	 	Bastrop	 	 	107	 
	 
	 	La Conterra	 	Williamson	 	 	136	 
	 
	 	The Colony	 	Bastrop	 	 	1,381	 
	 
	 	The Ridge at Ribelin Ranch	 	Travis	 	 	16	 
	 
	 	Westside at Buttercup Creek	 	Williamson	 	 	41	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Corpus Christi / Gulf Coast	 	 	 	 	 	 
	 
	 	Harbor Mist	 	Calhoun	 	 	1,034	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Dallas/Fort Worth	 	 	 	 	 	 
	 
	 	Caruth Lakes	 	Rockwall	 	 	92	 
	 
	 	Harbor Lakes	 	Hood	 	 	67	 
	 
	 	Maxwell Creek	 	Collin	 	 	96	 
	 
	 	The Preserve at Pecan Creek	 	Denton	 	 	146	 
	 
	 	 	 	 	 	 	 	 
	 
	 	San Antonio	 	 	 	 	 	 
	 
	 	Cibolo Canyons	 	Bexar	 	 	745	 
	 
	 	Oak Creek Estates (Oakcreek Estates)	 	Comal	 	 	105	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Texas	 	 	 	 	3,966	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Raw-Entitled Land (Wholly-Owned, Appraised)	 	 	7,322	 
	 
	 	 	 	 	 	 	 

 

 

Schedule 7

Raw-Entitled Land (Cont.)

as of 6/30/2010

	 	 	 	 	 	 	 	 	 
	 	 	 	 	County	 	Estimated Acres	 
	Wholly-Owned, Non-Appraised
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Georgia
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	   Atlanta	 	 	 	 	 	 
	 
	 	Birch House Farms	 	Bartow	 	 	120	 
	 
	 	Cedar Creek Preserve (Dunaway Gardens)	 	Coweta	 	 	102	 
	 
	 	Coweta South Industrial Park (Grove Park)	 	Coweta	 	 	171	 
	 
	 	Euharlee North (Euharlee II West)	 	Bartow	 	 	337	 
	 
	 	Genesee (Happy Valley Farm)	 	Coweta	 	 	359	 
	 
	 	Parkside at Woodbury (Triple C Road)	 	Bartow	 	 	159	 
	 
	 	Retreat at Cotton Crossroads	 	Troup	 	 	143	 
	 
	 	Terra Glen (Legion Lake)	 	Carroll	 	 	124	 
	 
	 	The Overlook (The Overlook at Waleska)	 	Cherokee	 	 	306	 
	 
	 	Woodlands at Burt Creek (Portion of Burt Creek Entitled)	 	Dawson	 	 	50	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Georgia	 	 	 	 	1,871	 
	Missouri
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	  Kansas City	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Somerbrook	 	Clay	 	 	82	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Missouri	 	 	 	 	82	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Colorado	 	 	 	 	—	 
	 
	 	 	 	 	 	 	 
	Texas
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	   Austin	 	 	 	 	 	 
	 
	 	Arrowhead Ranch	 	Hays	 	 	237	 
	 
	 	Onion Creek	 	Travis	 	 	2	 
	 
	 	Parkside at Slaughter Creek	 	Travis	 	 	2	 
	 
	 	Village at Western Oaks	 	Travis	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Dallas/Fort Worth	 	 	 	 	 	 
	 
	 	The Gables at North Hill	 	Collin	 	 	27	 
	 
	 	Windy Hill Farms	 	Collin	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Houston	 	 	 	 	 	 
	 
	 	Spring Lakes	 	Harris	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Texas	 	 	 	 	287	 
	 
	 	 	 	 	 	 	 
	Utah
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Salt Lake City	 	 	 	 	 	 
	 
	 	Fort Bingham Estates	 	Weber	 	 	28	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Utah	 	 	 	 	28	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Raw-Entitled Land (Wholly-Owned, Non-Appraised)	 	 	2,268	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Raw-Entitled Land (Wholly-Owned, Appraised & Non-Appraised)	 	 	9,590	 
	 
	 	 	 	 	 	 	 

 

 

Schedule 8

Entitled Land Under Development

 

 

Schedule 8

Entitled Land Under Development

as of 6/30/2010

	 	 	 	 	 	 	 	 	 
	 	 	 	 	County	 	Estimated Acres	 
	Wholly-Owned, Appraised
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Georgia	 	 	 	 	—	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total California	 	 	 	 	—	 
	Colorado
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	  Denver	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Johnstown Farms	 	Weld	 	 	13	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Colorado	 	 	 	 	13	 
	 
	 	 	 	 	 	 	 
	Texas
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	   Austin	 	 	 	 	 	 
	 
	 	Hunter's Crossing	 	Bastrop	 	 	3	 
	 
	 	La Conterra	 	Williamson	 	 	17	 
	 
	 	The Colony	 	Bastrop	 	 	124	 
	 
	 	Westside at Buttercup Creek	 	Williamson	 	 	22	 
	 
	 	 	 	 	 	 	 	 
	 
	 	  Dallas/Fort Worth	 	 	 	 	 	 
	 
	 	Caruth Lakes	 	Rockwall	 	 	20	 
	 
	 	Harbor Lakes	 	Hood	 	 	11	 
	 
	 	Maxwell Creek	 	Collin	 	 	16	 
	 
	 	The Preserve at Pecan Creek	 	Denton	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	   San Antonio	 	 	 	 	 	 
	 
	 	Cibolo Canyons	 	Bexar	 	 	66	 
	 
	 	Oak Creek Estates (Oakcreek Estates)	 	Comal	 	 	27	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Texas	 	 	 	 	314	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Entitled Land Under Development (Wholly-Owned, Appraised)	 	 	327	 
	 
	 	 	 	 	 	 	 

 

 

Schedule 8

Entitled Land Under Development (Cont.)

as of 6/30/2010

	 	 	 	 	 	 	 	 	 
	 	 	 	 	County	 	Estimated Acres	 
	Wholly-Owned, Non-Appraised
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Georgia
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Atlanta	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 Fox Hall (ent. Portion Fox Hall - Newberry Estates at Fox Hall)	 	Coweta	 	 	177	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Georgia	 	 	 	 	177	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Missouri
	 	 	 	 	 	 	 	 
	 
	 	Kansas City	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Somerbrook	 	Clay	 	 	4	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Missouri	 	 	 	 	4	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Colorado
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Denver	 	 	 	 	 	 
	 
	 	Westlake Highlands	 	Jefferson	 	 	—	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Colorado	 	 	 	 	—	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Texas
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Austin	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Double Horn Creek	 	Burnet	 	 	61	 
	 
	 	The Arbors at Dogwood Creek	 	Bastrop	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Dallas/Fort Worth	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	The Gables at North Hill	 	Collin	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Texas	 	 	 	 	71	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Utah
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Salt Lake City	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Fort Bingham Estates	 	Weber	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Utah	 	 	 	 	1	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Entitled Land Under Development (Wholly-Owned, Non-Appraised )	 	 	253	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Entitled Land Under Development (Wholly-Owned, Appraised & Non-Appraised)	 	 	580	 
	 
	 	 	 	 	 	 	 

 

 

Schedule 9

Non-Appraised Entitled Land

 

 

Schedule 9

Joint Venture

as of 6/30/2010

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Estimated	 
	 	 	 	 	County	 	Total Acres	 
	Joint Venture Entitled (Non-Appraised)
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Florida
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Tampa	 	 	 	 	 	 
	 
	 	Bridle Path Estates	 	Hillsborough	 	 	439	 
	 
	 	Creekside Preserve	 	Manatee	 	 	41	 
	 
	 	River Plantation	 	Manatee	 	 	32	 
	 
	 	 	 	 	 	 	 	 
	 
	 	     Total Florida	 	 	 	 	512	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Georgia
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Atlanta	 	 	 	 	 	 
	 
	 	Bentwater	 	Paulding	 	 	1	 
	 
	 	Happy Valley	 	Paulding	 	 	213	 
	 
	 	Harris Place	 	Paulding	 	 	3	 
	 
	 	Seven Hills	 	Paulding	 	 	267	 
	 
	 	The Georgian	 	Paulding	 	 	653	 
	 
	 	Westpark	 	Cobb	 	 	47	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Georgia	 	 	 	 	1,184	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Tennessee	 	 	 	 	—	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Texas
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Austin	 	 	 	 	 	 
	 
	 	Chandler Road	 	Williamson	 	 	19	 
	 
	 	Entrada	 	Travis	 	 	156	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Corpus Christi / Gulf Coast	 	 	 	 	 	 
	 
	 	Caracol	 	Calhoun	 	 	21	 
	 
	 	Padre Island	 	Nueces	 	 	15	 
	 
	 	Tortuga Dunes	 	Nueces	 	 	32	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Dallas/Fort Worth	 	 	 	 	 	 
	 
	 	Fannin Farms West	 	Tarrant	 	 	36	 
	 
	 	Lantana	 	Denton	 	 	517	 
	 
	 	Light Farms (Light Ranch)	 	Collin	 	 	625	 
	 
	 	Stillwater Canyon	 	Dallas	 	 	31	 
	 
	 	Stoney Creek	 	Dallas	 	 	663	 
	 
	 	Summer Creek Ranch	 	Tarrant	 	 	716	 
	 
	 	The Bar C Ranch	 	Tarrant	 	 	209	 
	 
	 	Timber Creek	 	Collin	 	 	179	 
	 
	 	Village Park	 	Collin	 	 	44	 
	 
	 	Village Park (North)	 	Collin	 	 	28	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Houston	 	 	 	 	 	 
	 
	 	City Park	 	Harris	 	 	148	 
	 
	 	Harper's Preserve (Woodlake Village)	 	Montgomery	 	 	538	 
	 
	 	Long Meadow Farms	 	Fort Bend	 	 	362	 
	 
	 	Southern Trails	 	Brazoria	 	 	145	 
	 
	 	Summer Lakes	 	Fort Bend	 	 	181	 
	 
	 	Waterford Park	 	Fort Bend	 	 	169	 
	 
	 	 	 	 	 	 	 	 
	 
	 	San Antonio	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Olympia Hills	 	Bexar	 	 	26	 
	 
	 	Stonewall Estates	 	Bexar	 	 	97	 
	 
	 	 	 	 	 	 	 	 
	 
	 	Total Texas	 	 	 	 	4,957	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Joint Venture Entitled (Non-Appraised)	 	 	6,653	 
	 
	 	 	 	 	 	 	 

 

 

Schedule 11

Excluded Subsidiaries as of Closing Date

Arrowhead Ranch Utility Company LLC (TX)

Double Horn Water Supply Corporation (TX)

Sabine Real Estate Company (DE)

Johnstown Farms, LLC (DE)

Top of Westgate, Inc. (TX)

CCA Hospitality, Inc. (TX)

Harbor Lakes Golf Club LLC (DE)

Harbor Lakes Club Management LLC (TX)

San Jacinto I LLC (TX)

Stoney Creek Properties LLC (DE)

Firstland Investment Corporation (TX)

LIC Ventures Inc. (DE)

 

 

Schedule 5.8

Alabama Mortgage Modifications

	1.	 	Second Modification of Mortgage, Assignment of Rents, Leases and Other Agreements,
Security Agreement and Fixture filing dated as of August ___, 2010, to be recorded in the
Office of the Judge of Probate of Cherokee County, Alabama
	 
	2.	 	Third Modification of Mortgage, Assignment of Rents, Leases and Other Agreements,
Security Agreement and Fixture filing dated as of August ___, 2010, to be recorded in the
Office of the Judge of Probate of Cleburne County, Alabama
	 
	3.	 	Second Modification of Mortgage, Assignment of Rents, Leases and Other Agreements,
Security Agreement and Fixture filing dated as of August ___, 2010, to be recorded in the
Office of the Judge of Probate of Etowah County, Alabama
	 
	4.	 	Second Modification of Mortgage, Assignment of Rents, Leases and Other Agreements,
Security Agreement and Fixture filing dated as of August ___, 2010, to be recorded in the
Office of the Judge of Probate of Randolph County, Alabama
	 
	5.	 	 

 

 

Schedule 6.7

Litigation

None

 

 

Schedule 6.10

Open Audit Periods

Pre-Spin Off Years

	 	 	 

	Federal
	 	 
	Pending:

	 	2006-2007 IRS exam of consolidated tax returns of Temple-Inland inclusive of Forestar
	 
	 	 
	Open:

	 	None
	 
	 	 
	 State
	 	 
	Pending: 

Open:

	 	None

Applicable state limitation period – 2010

Post-Spin Off Years (2008 and Forward)

	 	 	 

	 Federal
	 	 
	Pending: 

Open:

	 	2008

2009-2010
	 
	 	 
	State
	 	 
	Pending: 

Open:

	 	None

Applicable state limitation period – 2010

 

 

Schedule 6.15

Transactions with Affiliates

None

 

 

Schedule 6.20(f)

Unresolved Real Estate Claims with Affiliates

None

 

 

Schedule 6.20(g)

Material Real Estate Agreements

Hotel Services Agreement For Radisson Hotel and
Suites Austin, Texas by and between Temple-Inland
Insurance Corporation and Talbert Hotel Corporation,
executed as of November 30, 2000, as amended

 

 

Schedule 8.2

Permitted Liens

	 	 	 	 	 
	Entity	 	Non-KeyBank Liens	 	Collateral
	Forestar (USA) Real 

Estate Group Inc.

	 	UCC Financing
Statement No.
20081108529 -
Greatamerica Leasing
Corporation as
Secured Party; Filed
3/31/2008 with the
Delaware Secretary of
State
	 	Leased Sharp Equipment
	 
	 	 	 	 
	Harbor Lakes Golf 

Club LLC

	 	UCC Financing
Statement No.
20091989299 — Wells
Fargo Financing
Leasing, Inc. as
Secured Party; Filed
6/22/2009 with the
Delaware Secretary of
State (Leased
Equipment)
	 	Leased Equipment under

Master Lease Agreement

#019-0000588
	 
	 	 	 	 
	Capitol of Texas
Insurance Group Inc.

	 	UCC Financing
Statement No.
20083329248 — Bank of
America, N.A. as
Secured Party;Filed
10/1/2008 with the
Delaware Secretary of
State (Fixture
Filing)
	 	Land and Fixtures

 

 

Schedule 8.3

Investments

None other than as required by the Terms of

the Credit Agreementexv10w1

Exhibit 10.1

                    , 2010

<First Name> <Last Name>

<Address>

<City>, <State> <Zip>

Dear <First Name>:

Congratulations! You are eligible to participate in a Retention Bonus Program (the “Program”)
offered by Cricket Communications, Inc. (“Cricket”), as described further below.

Although a Change in Control is not imminent, the Company is proactively establishing this Program
to ensure that selected eligible employees clearly understand their critical importance to the
Company and the vital role they would play in any transition should a Change in Control occur.

The term “Board” means the Board of Directors of Leap Wireless International, Inc. (“Leap”) or a
duly authorized committee thereof. The term “Company” collectively refers to Cricket and any
successor to substantially all of the business or assets of Leap or Cricket. The term “Change in
Control” has the meaning set forth in the Leap Wireless International, Inc. 2004 Stock Option,
Restricted Stock and Deferred Stock Unit Plan, as amended, as in effect on the date hereof.

This letter summarizes your bonus amount, terms of payment, eligibility, and other key aspects of
the Program.

Bonus Amount and Terms of Payment

In the event that (1) a Change in Control occurs at any time on or before March 8, 2012 and (2) the
Board approves a payment of the retention bonus to you upon the completion of a successful
transaction, you are eligible to receive a retention bonus in the amount of $                    . This bonus
would be payable to you in two installments, with: (1) one third of the amount paid on the
Company’s first regular payroll date following the closing of such Change in Control; and (2) the
remaining two-thirds of the amount paid on the Company’s first regular payroll date following the
date that is six months after the closing of such Change in Control.

If a Change in Control does not occur on or before March 8, 2012, no amounts will be payable under
this letter. This date may be extended by the Company’s board of directors (or a duly authorized
committee thereof) in its sole and absolute discretion by written notice to you.

Eligibility for Bonus Payments

Eligibility for receipt of any bonus is contingent upon your complying with the following
requirements during the entire duration of the retention period, up to and including the applicable
payment dates: being an employee in “good standing” of the Company, complying with all applicable
employment policies, having a performance rating of “successful performer” or better, and not being
placed on a formal performance improvement plan. You will, however, continue to be considered
an employee of the Company for purposes of this letter and the Program if you are on a
Company-approved leave of absence.

 

 

Effect of Termination of Employment

If, at any time, you voluntarily terminate your employment with the Company without Good Reason
(except by reason of your death or disability, which for these purposes means that you are eligible
for benefits under the Company’s long-term disability plan), or if the Company terminates your
employment for Cause, then you will cease to have any right to receive any unpaid amounts not
already due to you under the Program. The terms “Cause” and “Good Reason” in this letter agreement
have the respective meanings set forth in the Severance Benefits Agreement between you and the
Company, as in effect on the date hereof.

If the Company terminates your employment without Cause or you resign with Good Reason more than
ninety (90) days prior to the occurrence of a Change in Control, then you will cease to have any
right to receive any amounts under the Program. Subject to the requirements under the paragraph
titled “Section 409A of the Internal Revenue Code” below, if the Company terminates your employment
without Cause or you resign with Good Reason within ninety (90) days prior to, or six months
following, the occurrence of a Change in Control that occurs on or before March 8, 2012, or if your
employment terminates due to your death or disability following the occurrence of such Change in
Control, then you will be entitled to receive the full amount of any remaining unpaid retention
bonus due to you. Any payments to be made to you following the termination of your employment in
accordance with this paragraph will be paid to you within thirty (30) days following your
termination of employment (or, in the event your date of termination precedes the consummation of a
Change in Control, the payments will be paid to you on the Company’s first regular payroll date
following the closing of such Change in Control.

Relationship to Other Compensation

The bonuses described herein are independent of all other compensation. You will also remain
eligible for severance payments under any applicable severance plan or policy of the Company or as
otherwise expressly agreed in a separate written contract between you and the Company, including,
without limitation, the Severance Benefits Agreement between you and the Company.

Tax and Other Deductions

The retention bonus payments will be paid in lump sums, less federal, state and local taxes
required to be withheld by the Company. Retention bonus payments are not considered eligible
compensation for purposes of employee contributions or employer matching contributions to the
Cricket Communications, Inc. 401(k) Plan, or any other benefit deductions (e.g., ESPP, medical
contributions, etc.).

Employment at Will

This Program does not affect your employment relationship with the Company; that is, employment
with the Company remains at-will unless otherwise expressly agreed in a separate written contract
between you and the Company.

Section 409A of the Internal Revenue Code

This letter agreement is not intended to provide for any deferral of compensation subject to
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly,
notwithstanding anything to the contrary contained in this letter agreement, the amount payable
hereunder shall be paid no later than the later of: (A) the fifteenth (15th) day of the
third month following your first taxable year in which such amount is no longer subject to a
substantial risk of forfeiture, and (B) the fifteenth (15th) day of the third month
following the first taxable year of the Company in which such amount is no longer subject to a
substantial risk of forfeiture, as determined in accordance with Section 409A of the Code and any
Department of Treasury Regulations and other interpretive guidance issued thereunder. This means
that, in the event that the date of your termination of employment without Cause or your
resignation for Good Reason precedes the occurrence of a Change in Control, such Change in Control and the payment in
respect of such Change in Control must occur prior to the payment deadline set forth in the
previous

2

 

sentence in order for you to receive any payment under this letter agreement. To the extent
applicable, this letter agreement shall be interpreted in accordance with Section 409A of the Code
and any Department of Treasury regulations and other interpretive guidance issued thereunder.

Miscellaneous

This letter agreement shall be binding upon and inure to the benefit of the successors of the
Company. This letter agreement will not give any rights or remedies to any person other than the
undersigned employee and the Company and its successors. This letter agreement will be governed by
the laws of the State of California, excluding any that mandate the use of another jurisdiction’s
laws. This letter agreement may only be amended with the written consent of an executive officer
of the Company and you. You shall have no rights under this letter agreement other than as an
unsecured general creditor of the Company.

The Program reflects the importance of your contributions and our desire to retain you as a key
member of our team. Thank you for your dedication. We are confident that we can look to you to
continue the important work that you are doing for the organization.

Sincerely,

Leonard C. Stephens

SVP, Human Resources

I acknowledge that I understand and agree to abide by the provisions set forth in the above stated
agreement.

Upon signature, please keep one copy for yourself and submit original to your HR Contact.

EMPLOYEE SIGNATURE:           
                      
                      
       

PRINT NAME:           
                     
                     
                      
      

CC: EMPLOYEE FILE

3

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