**Exhibit 10.12****ASSUMPTION AND MODIFICATION OF NOTE AND LOAN AGREEMENT**     THIS ASSUMPTION AND MODIFICATION OF NOTE AND LOAN AGREEMENT (“Agreement”) executed this25th day of October 2007, by and among LEVITT AND SONS, LLC, a Florida limitedliability company (“Original Borrower”), LEVITT CORPORATION, a Florida corporation (“NewBorrower”), and AMTRUST BANK, a federal savings bank, f/k/a OHIO SAVINGS BANK, a federal savingsbank (“Lender”).WITNESSETH:     WHEREAS, Original Borrower executed and delivered to Lender a Revolving Promissory Note datedMarch 21, 2007 in the original principal amount of One Hundred Million Dollars ($100,000,000)(“Original Note”); and     WHEREAS, in connection with the Original Note the Original Borrower and Lender executed aRevolving Working Capital, Land Acquisition and Development and Residential Construction BorrowingBase Facility Agreement dated March 21, 2007 in connection with Loan No. 1001839 (“LoanAgreement”); and     WHEREAS, the Original Note is secured by a Mortgage and Security Agreement dated March 22,2007 executed by Levitt and Sons of Jasper County, LLC, a South Carolina limited liability company(“Mortgagor”) recorded in OR Volume 531, Page 168 of the Public Records of Jasper County, SouthCarolina (“Mortgage”), and an Assignment of Rents and Leases and Agreements Effecting Real Estateexecuted by Mortgagor in favor of Lender dated March 21, 2007, recorded in OR Volume 531, Page 179of the Public Records of Jasper County, South Carolina (“Assignment of Rents and Leases”); and     WHEREAS, New Borrower has acquired all of the issued and outstanding membership interest inMortgagor (“Membership Interest”) and the Lender has consented to the transfer of such MembershipInterest from Original Borrower to New Borrower; and     WHEREAS, New Borrower, by and through the conveyance of the Membership Interest from OriginalBorrower, is desirous of assuming all of Original Borrower’s rights, interest and obligations underthe Original Note, the Loan Agreement and the other Loan Documents (as hereinafter defined) as suchdocuments have been modified simultaneously herewith (collectively “Other Loan Documents”);     NOW, THEREFORE, in consideration of the premises and for Ten and 00/100 Dollars ($10.00) andother good and valuable consideration, receipt of which is hereby acknowledged, the parties heretocovenant and agree as follows:     1. The New Borrower hereby assumes all of Original Borrower’s obligations under the OriginalNote, the Loan Agreement and the Other Loan Documents all as modified by this Agreement and agreesto pay Lender the outstanding principal balance due on the Original Note secured by the Mortgageand Assignment of Rents and Leases. As of the date hereof, the current
 

 
aggregate outstanding principal balance under the Original Note is Thirty-Four Million OneHundred Seven Thousand Nine Hundred Dollars ($34,107,900) which includes the Fifteen MillionDollars ($15,000,000) outstanding pursuant to the Working Capital Line and advances under the LoanAgreement. New Borrower agrees to repay such principal indebtedness and all interest which accruesthereon in accordance with the terms of the Original Note as modified hereby and as hereafterevidenced by that certain Amended and Restated Note in the amount of One Hundred Million Dollars($100,000,000). Original Borrower and New Borrower acknowledge and agree that as of the datehereof there is no default under the Note, Loan Agreement, the Mortgage, Assignment of Rents andLeases or any other document executed in connection with the Note (collectively, “Loan Documents”).Original Borrower and New Borrower waive any claims under the Loan Documents and release theLender for any claims thereunder (other than the obligations of the Lender under the Loan Documentsto be performed after the date hereof).     2. Simultaneous with the execution of this Agreement, the New Borrower shall execute anddeliver to Lender an amended and restated promissory note evidencing the assumption of the OriginalNote set forth herein (“Amended and Restated Note”), which Amended and Restated Note shall be inthe form of **Exhibit A** attached hereto.     3. The Loan Agreement is amended as follows:          (i) Omitted Intentionally.          (ii) The Borrower is hereby amended from Levitt and Sons, LLC to Levitt Corporation.          (iii) Omitted Intentionally.          (iv) Sections 1.31 and 2.4 are deleted in their entirety. Accordingly, the Expiration Dateshall be March 20, 2009 and the Maturity Date shall be March 20, 2011.          (v) Section 1.34 is amended to read: Guaranty means the Unconditional Continuing Guaranty AndIndemnity Agreement executed by the Project Guarantors as required herein and shall no longer applyto the Unconditional Continuing Limited Guaranty of the Working Capital Line Guarantor.          (vi) The A&D Addendum for Tradition South Carolina consisting of approximately one hundredfifty (150) acres within a master plan community located in the City of Hardeeville, Jasper County,South Carolina is hereby amended to be in the form of the A&D Project Allocation set forth on**Exhibit B** attached hereto and made a part hereof.          (vii) Section 1.42 is amended to reflect that the Amended and Restated Note is a Note. TheNote evidences all monies owed pursuant to the Loan including the outstanding balance of theWorking Capital Line. The Note (which includes the outstanding amount of the Working Capital Line)shall be secured by the Mortgage and Assignment of Rents and Leases.*ExecutionCopy*
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          (viii) Section 1.48 is amended to add the term “Released Property”. The term “ReleasedProperty” shall mean any portion of the Property encumbered by any Mortgage which is released fromthe lien and encumbrance of the Mortgage.          (ix) Sections 1.56, 1.59 and 1.60 are all deleted in their entirety.          (x) The provisions of Sections 1.22, 1.54, 5.7 and 5.9 and other applicable sections of theLoan Agreement are amended to reflect that the time period for proceeding with development and/orconstruction and with respect to any Curtailment Requirements (including the dates for Curtailment)and Maximum Holding Periods shall be abated until Borrower or Project Guarantor, with Lender’sconsent, commences construction of improvements, other than the up to the 14 models andinfrastructure improvements, and at which time all abated time periods shall be extended by a timeto be reasonably determined by the Lender (“Abatement Period”). If the Borrower commencesconstruction of any model(s), the Borrower or Project Guarantor shall proceed diligently tocomplete such model. The Borrower shall determine in its business judgment what portions of theinfrastructure improvements it shall construct.          (xi) Section 2.6 is amended to reflect that the Working Capital Line shall remain in fullforce and effect; provided, however, simultaneous with the execution of this Agreement, the WorkingCapital Line shall no longer be a revolving line and there shall be no additional advances of theWorking Capital Line after the date hereof but shall be paid as provided in the Note, the WorkingCapital Line guarantor’s guaranty has been terminated and the Lender’s security interest in theWorking Capital Line Collateral has been terminated and released.          (xii) Section 4.4.1 is amended to reflect that the Lender will fund one hundred percent (100%)of the hard and soft costs incurred from time to time in connection with the Project (subject tothe appraisal tests as set forth in the Loan Agreement) and the Borrower is not required to fundtwenty percent (20%) of Equity Funds (except to the extent the appraisal test would require theBorrower to fund to satisfy such appraisal requirement for a funding).          (xiii) Sections 5.5 is deleted in its entirety.          (xiv) Partial Releases. In addition to the provisions already set forth in Paragraph6, the Borrower shall be entitled to release portions of the Property encumbered by the Mortgageupon payment to Lender of a partial release price equal to the greater of: (i) the “Minimum Amount”(as hereinafter defined); or (ii) sixty-five percent (65%) of the sales price paid for such portionof the Property (if applicable) without regard to whether or not the Property being released orremaining to be released has been legally subdivided; provided that the Property remaining to bereleased after the release of any Property from the lien of the Mortgage shall be a commerciallydevelopable parcel having access for ingress, egress and utilities over dedicated roads and/orperpetual easements. The “Minimum Amount” shall mean an amount reasonably agreed to by Borrowerand Lender, which amount is one hundred twenty percent (120%) of the product of (a) the “CollateralReduction Percentage,” multiplied by (b) the then outstanding principal balance of the Loan(excluding the Working Capital Line portion of the Note). As used herein, the term “CollateralReduction Percentage” shall mean the percentage equal to (a) the appraised value of the ReleasedProperty, divided by (b) the appraised value of*ExecutionCopy*
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 all of the Property then encumbered by the Mortgage, each as determined by a currentAppraisal. The parties agree to act reasonably to compute the Minimum Amount. It is the intent ofthe parties that the Lender will not be funding any Units other than up to fourteen (14) models ascontemplated by the Budget.               The Lender acknowledges that a plat in the form of **Exhibit J** has been recorded. TheLender consents to Mortgagor exchanging deeds in the form of deeds attached as **Exhibit J**and will release the portion of the Property being conveyed to Core Communities of South Carolina,LLC (“Core”) on **Exhibit J** at such time as Core conveys to the Mortgagee the property asprovided on **Exhibit J** (“Extra Land”) free of mortgages subject to exceptions to titlesimilar to the balance of the Property and the Extra Land is spread and encumbered by the LoanDocuments including the Mortgage and Assignment of Rents and Leases. The exchange contemplated inthis section is subject to the Lender’s reasonable approval of the lands being exchanged.          (xv) Section 6.10 is amended to add that the Lender hereby consents to the creation of amunicipal improvement district (“MID”) with respect to the Property encumbered by the Mortgage inaccordance with the notice of proposed creation of municipal improvement district, a copy of whichis attached hereto and made a part hereof as **Exhibit C**.          (xvi) Section 7.4, 8.1, 8.10, 9.2 and 12 are amended to reflect that the Lender consents tothe creation of MID and such lien is a Permitted Exception under the Loan Documents.          (xvii) Section 7.7 is amended to reflect and consent to any litigation set forth in theBorrower’s SEC filings. There is no litigation against New Borrower that would have a MaterialAdverse Effect.          (xviii) Sections 9.1, 9.3, 9.4 and 9.5 are all deleted in their entirety.          (xix) Omitted Intentionally.          (xx) Schedule 1 of the Loan Agreement is deleted in its entirety and **Exhibit D**attached hereto and made a part hereof is substituted in lieu thereof as the **Schedule 1**.          (xxi) Schedule 2 of the Loan Agreement is deleted in its entirety and the following**Exhibit E** attached hereto and made a part hereof is substituted in lieu thereof as the**Schedule 2**.          (xxii) Exhibit A to the Loan Agreement is deleted and **Exhibit F** attached hereto andmade a part hereof is inserted in lieu thereof as Exhibit A to the Loan Agreement.          (xxiii) Exhibit B to the Loan Agreement is deleted and **Exhibit G** attached hereto andmade a part hereof is substituted in lieu thereof as Exhibit B.          (xxiv) Exhibit C to the Loan Agreement is deleted in its entirety and **Exhibit H**attached hereto and made a part hereof is substituted in lieu thereof as Exhibit C.*ExecutionCopy*
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          (xxv) The Collateral Verification Certificate is amended to delete reference to Levitt andSons, Inc. and to substitute Levitt Corporation in lieu thereof.          (xxvi) Exhibit D to the Loan Agreement is deleted in its entirety and **Exhibit I**attached hereto and made a part hereof is substituted in lieu thereof as Exhibit D.     4. The parties hereto intend that except as provided in this Agreement this Agreement shallnot disturb the existing priority of the Mortgage and Loan Documents which this Agreement modifiesas described above. The parties hereto further intend that this Agreement shall not constitute anovation and shall in no way adversely affect or impair the lien priority of the Mortgage orAssignment of Rents and Leases.     5. Unless otherwise specifically provided herein, all notices to be given hereunder shall bein writing and sent to the parties as hereinafter provided, certified mail, return receiptrequested, postage prepaid. Unless otherwise specifically provided herein, said notices shall beeffective on the day such notice is deposited in the United States mails. No change of addressshall be valid unless forwarded in accordance with the provisions of this Paragraph.Notices as to New Borrower shall be sent to:Levitt Corporation