Exhibit 10.1

PARTIAL ASSIGNMENT AND ASSUMPTION OF, AND FIFTH AMENDMENT TO, PURCHASE AND SALE
AGREEMENT AND JOINT ESCROW INSTRUCTIONS

THIS PARTIAL ASSIGNMENT AND ASSUMPTION OF, AND FIFTH AMENDMENT TO PURCHASE AND
SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this “Amendment” or the “Fifth
Amendment”) is made as of this 1st day of June, 2015, by and among the seller
entities party hereto (each, individually a “Seller” and collectively the
“Sellers”), and FOUNTAINS PORTFOLIO OWNER, LLC, a Delaware limited liability
company (“Original Buyer”), and WATERMARK FOUNTAINS OWNER, LLC, a Delaware
limited liability company as purchaser (“Watermark Fountains Owner”; from and
after the date hereof, Original Buyer and Watermark Fountains Owner are
collectively, “Buyer”).

R E C I T A L S:

A.    Seller and Buyer have entered into that certain Purchase and Sale
Agreement and Joint Escrow Instructions, dated as of February 18, 2015 (the
“Original Agreement”), as amended by an Amendment to Purchase and Sale Agreement
and Joint Escrow Instructions dated as of March 25, 2015 (the “First
Amendment”), a Second Amendment to Purchase and Sale Agreement and Joint Escrow
Instructions dated as of April 1, 2015 (the “Second Amendment”), a Third
Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as
of April 8, 2015 (the “Third Amendment”), and a Fourth Amendment to Purchase and
Sale Agreement and Joint Escrow Instructions dated as of April 9, 2015 (the
“Fourth Amendment”, and together with the Original Agreement, the First
Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment,
the “Existing Agreement”), pursuant to which Seller agreed to sell the
Properties (as defined in the Agreement), pursuant to and in accordance with the
terms of the Agreement.

B.    Pursuant to the Fourth Amendment, a new Section 15.1.17 was added to the
Agreement providing for Buyer to receive a credit at Closing against the
Purchase Price in an amount equal to the aggregate deposits that are required to
be funded by Buyer with any state in connection with obtaining any Required
Governmental Approval for any Community (the “Community Deposit Credit”), up to
a maximum aggregate credit of Six Million and no/100 Dollars ($6,000,000.00)
(the “Maximum Deposit Credit”).

C.    Seller and Buyer have agreed to modify the Existing Agreement in certain
respects, all as more particularly set forth in this Amendment.

NOW THEREFORE, for and in consideration of the recitals set forth above and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged and confessed, the parties do hereby agree as follows:

1.Recitals. The foregoing recitals are true and correct and are incorporated
herein in their entirety.

2.Construction; Effect of Amendment. This Amendment shall be deemed a part of,
but shall take precedence over and supersede any provisions to the contrary
contained in the Agreement. Except as specifically modified hereby, all of the
provisions of the Agreement which

1

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

are not in conflict with the terms of this Amendment shall remain in full force
and effect. From and after the date hereof, all references in the Existing
Agreement and this Amendment to the “Agreement” shall be deemed to refer to the
Existing Agreement, as amended by this Amendment.

3.Defined Terms. All initially capitalized terms used in this Amendment shall
have the same meaning as set forth in the Existing Agreement unless otherwise
provided.
4.Legal Descriptions. The Legal Descriptions attached as Exhibit A to the
Existing Agreement for each of the Properties are hereby deleted and replaced in
their entirety with Exhibits D-1 through D-22, respectively, attached hereto:
(Exhibit D‑1) the Albemarle Property; (Exhibit D-2) the Bellevue Property
(Parcel A); (Exhibit D-3) the Bellevue Property (Parcels B and C); (Exhibit D-4)
the Bellevue Property (Parcels D and D1); (Exhibit D-5) the Boca Ciega Property;
(Exhibit D-6) the Bronson Place Property (Parcels 1 and 3); (Exhibit D-7) the
Bronson Place Property (Parcel 2); (Exhibit D-8) the Canterbury Property;
(Exhibit D-9) the Carlotta Property; (Exhibit D-10) the Crystal Lake Property
(Lot 10); (Exhibit D-11) the Crystal Lake Property (Lots 6, 7, and 11);
(Exhibit D‑12) the Franklin Property; (Exhibit D-13) the Greenbriar Property;
(Exhibit D-14) the La Cholla Property; (Exhibit D-15) the La Jolla Property;
(Exhibit D-16) the Lake Pointe Woods Property; (Exhibit D-17) the Millbrook
Property (Parcel A); (Exhibit D-18) the Millbrook Property (Parcel B); (Exhibit
D-19) the Millbrook Property (Parcel C); (Exhibit D-20) the RiverVue Property;
(Exhibit D-21) the Sea Bluffs Property; and (Exhibit D-22) the Washington House
Property.
5.Updated Schedules. Pursuant to Section 9.2 of the Agreement, attached hereto
are updates of the following schedules: Schedule 1; Schedule 2; Schedule 2.4;
Schedule 2.5; Schedule 2.6; Schedule 2.9; Schedule 4; Schedule 5; Schedule 6;
Schedule 6.3; Schedule 7; Schedule 8; Schedule 9; Schedule 9.1; Schedule 9.1.4;
Schedule 9.1.9; Schedule 9.1.18; and Schedule 11.1.4. The Parties acknowledge
and agree that, except to the extent updated and attached hereto, the Schedules
attached to the Existing Agreement remain unchanged.
6.Community Deposit Credit. The Parties acknowledge and agree that the full
amount of the Community Deposit Credit will not be ascertainable at Closing due
to the fact that some of the Communities will be subject to an interim bridging
arrangement as reflected in the applicable Interim Bridging Document for such
Community (the “Bridged Communities”). Accordingly, the Parties agree that,
notwithstanding anything to the contrary set forth in Section 15.1.17 to the
Agreement, at Closing: (a) Buyer shall receive a credit (if any) for the
aggregate deposits that are required to be funded by Buyer with any state in
connection with obtaining any Required Governmental Approval for those
Communities that are not Bridged Communities; and (b) any remaining amount of
the Community Deposit Credit after the application of such credits pursuant to
the foregoing clause (a) (if any), and (b) shall be retained in Escrow pursuant
to the Holdback Agreement until the earlier of (i) such time as the Interim
Bridging Documents for all of the Bridged Communities have been terminated, or
(ii) the Community Deposit Credit has been fully depleted as provided herein. As
and when an Interim Bridging Document for a Bridged Community is terminated,
Buyer shall be entitled to a receive from the Escrow an amount equal to the
aggregate deposit that is required to be funded by Buyer with the applicable
state where such Bridged Community is located in connection with obtaining any
Required Governmental Approval for such Bridged Community, up to the remaining
amount of the Community Deposit Credit then remaining in the Escrow, and Escrow
Holder shall release such amount from the Escrow as directed by Buyer. Any
balance remaining in the Escrow attributable to the Community Deposit Credit
after the termination of the last Interim Bridging Document shall be disbursed
to Seller.

2

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

7.Proration True-Up for Bridged Communities. Notwithstanding anything to the
contrary contained in the Existing Agreement (including, without limitation, the
Survival Period and the provisions of Section 15.3 thereof), the Parties
acknowledge and agree that, within thirty (30) days after each Interim Bridging
Document for a Bridged Community is terminated, the Parties shall determine the
net operating income (or loss) for such Bridged Community for the period of the
term of the applicable Interim Bridging Document. The Parties shall determine
such net operating income (or loss) utilizing the same accounting methods and
practices as utilized at such Bridged Community immediately prior to the
Closing. If the aggregate amount paid by the “Lessee” as “rent” under the
applicable Interim Bridging Document is greater than the net operating income
(or loss) for such Bridged Community (the “Lessee Overpayment”), then Lessor
shall, within thirty (30) days after such amount is calculated, pay to Lessee an
amount equal to the Lessee Overpayment. If the aggregate amount paid by the
“Lessee” as “rent” under the applicable Interim Bridging Document is less than
the net operating income (or loss) for such Bridged Community (the “Lessee
Underpayment”), then Lessee shall, within thirty (30) days after such amount is
calculated, pay to Lessor an amount equal to the Lessee Underpayment.
8.Seller Closing Deliveries. Sections 13.1.10 and 13.1.11 of the Existing
Agreement are hereby deleted and replaced with the following:
“13.1.10    Assignment and Assumption of Membership Interest and Clubhouse
Lease. Two (2) originals of the Assignment and Assumption of Membership Interest
and Clubhouse Lease pursuant to which Fountains Sea Bluffs SL, LP assigns to
Watermark Sea Bluffs, LLC, and Watermark Sea Bluffs, LLC assumes all of
Fountains Sea Bluffs SL, LP’s right, title and interest in and to (i) the
membership interests in Fountains Sea Bluffs CH, LLC and (ii) that certain lease
pertaining to the clubhouse at the Sea Bluffs Community (the “Assignment and
Assumption of Membership Interest and Clubhouse Lease”) duly executed by
Fountains Sea Bluffs SL, LP.
13.1.11    Side Letter Agreement (Millbrook Agency Lease). Two (2) originals of
the Side Letter Agreement re Millbrook Agency Lease substantially in the form of
Exhibit C attached to the Fifth Amendment duly executed by the applicable
Seller.”
9.Buyer Closing Deliveries. A new Section 13.2.10 is hereby added to the
Existing Agreement as follows:
“13.2.10    Assignment and Assumption of Membership Interest and Clubhouse
Lease. Two (2) originals of the Assignment and Assumption of Membership Interest
and Clubhouse Lease duly executed by Fountains Sea Bluffs SL, LP and by
Watermark Sea Bluffs, LLC.
10.SEC Filings. Notwithstanding anything to the contrary set forth in Section
11.1.8 of the Agreement, the Parties agree that, in lieu of Sellers delivering
the signed representation letter and audit inquiry letter in the forms of
Exhibit J and Exhibit K, respectively, to the Existing Agreement, Buyers shall
have the right to request Sellers to deliver the signed representation letter
and audit inquiry letter, and Sellers will deliver the same, upon fifteen (15)
days’ request given on or prior to the expiration of the Survival Period.
Nothing contained herein shall require Seller to maintain its corporate
existence beyond the periods required in the Existing Agreement, and in no event
shall Seller be in breach of its obligations under this Agreement if Seller is
unable to deliver the requested signed representation letter and audit inquiry
letter due to the fact that it has been dissolved (so long as such dissolution
was not in violation of the Existing Agreement, including

3

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

with respect to the obligations of Fountains Senior Living Holdings, LLC to
assume any such Seller’s obligations as set forth in the Existing Agreement).
11.Assignment and Assumption of Agreement. As provided in Section 20 of the
Agreement, Buyer hereby assigns to Watermark Fountains Owner all of Buyer’s
right, title and interest as Buyer in, to and under the Agreement with respect
to the following Properties: (i) Albemarle, (ii) Boca Ciega Bay, (iii) Crystal
Lake, (iv) Franklin, (v) Greenbriar, (vi) La Cholla, (vii) Millbrook, (viii)
RiverVue, (ix) Washington House, and (x) La Jolla. Original Buyer shall retain
all right, title and interest as Buyer in, to and under the Agreement with
respect to: (a) Bellevue, (b) Bronson Place, (c) Canterbury, (d) Carlotta, (e)
Lake Pointe Woods, and (f) Sea Bluffs. Buyer and Seller hereby agree that, from
and after the date of this Amendment, each of Original Buyer and Watermark
Fountains Owner shall be jointly and severally liable as Buyer under the
Agreement, and that this section shall serve as Buyer’s notice to and Seller’s
acceptance of such assignment to the extent required by Section 20 of the
Agreement.
12.Execution and Counterparts. This Amendment may be executed in counterpart
originals, each of which when taken together shall be deemed an original and
shall constitute one and the same instrument. Signatures of the parties hereto
on copies of this Amendment transmitted by facsimile machine or electronic mail
shall be deemed originals for all purposes hereunder, and shall be binding upon
the parties hereto.

[SIGNATURES BEGIN ON THE FOLLOWING PAGES]

4

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

NOW THEREFORE, this Amendment has been executed as of the date and year first
above written.

 
 
 
BUYER:
 
 
 
 
 
 
FOUNTAINS PORTFOLIO OWNER, LLC,
 
 
 
a Delaware limited liability company
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ Ronald J. Lieberman
 
 
 
Name:
Ronald J. Lieberman
 
 
 
Title:
Executive Vice President, General Counsel and Secretary

[ADDITIONAL BUYER SIGNATURE FOLLOWS]

[Signature Page to Partial Assignment and Assumption of, and Fifth Amendment to,
Purchase and Sale Agreement and Joint Escrow Instructions]

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

 
 
WATERMARK FOUNTAINS OWNER, LLC,
 
 
 
a Delaware limited liability company
 
 
 
 
 
 
 
 
 
 
 
 
 
By:
/s/ Ronald J. Lieberman
 
 
 
Name:
Ronald J. Lieberman
 
 
 
Title:
Executive Vice President, General Counsel and Secretary

[SELLER SIGNATURES BEGIN ON NEXT PAGE]

[Signature Page to Partial Assignment and Assumption of, and Fifth Amendment to,
Purchase and Sale Agreement and Joint Escrow Instructions]

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

SELLER:            

FOUNTAINS ALBEMARLE SL, LLC
 
FOUNTAINS BOCA CIEGA SL, LLC
 
 
 
 
 
By:
/s/ Michael K. Casey
 
By:
/s/ Michael K. Casey
Name:
Michael K. Casey
 
Name:
Michael K. Casey
Title:
Vice President
 
Title:
Vice President
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FOUNTAINS BRONSON PLACE SL, LLC
 
FOUNTAINS CANTERBURY SL, LLC
 
 
 
 
 
By:
/s/ Michael K. Casey
 
By:
/s/ Michael K. Casey
Name:
Michael K. Casey
 
Name:
Michael K. Casey
Title:
Vice President
 
Title:
Vice President
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FOUNTAINS CARLOTTA SL, LP
 
FOUNTAINS CRYSTAL LAKE AP, LLC
 
 
 
 
 
By:
/s/ Michael K. Casey
 
By:
/s/ Michael K. Casey
Name:
Michael K. Casey
 
Name:
Michael K. Casey
Title:
Vice President
 
Title:
Vice President
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FOUNTAINS FRANKLIN SL, LLC
 
FOUNTAINS GREENBRIAR SL, LLC
 
 
 
 
 
By:
/s/ Michael K. Casey
 
By:
/s/ Michael K. Casey
Name:
Michael K. Casey
 
Name:
Michael K. Casey
Title:
Vice President
 
Title:
Vice President
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FOUNTAINS LA CHOLLA SL, LLC
 
FOUNTAINS LAKE POINTE WOODS SL, LLC
 
 
 
 
 
By:
/s/ Michael K. Casey
 
By:
/s/ Michael K. Casey
Name:
Michael K. Casey
 
Name:
Michael K. Casey
Title:
Vice President
 
Title:
Vice President
 
 
 
 
 

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

FOUNTAINS MILLBROOK SL, LLC
 
FOUNTAINS MILLBROOK AP, LLC
 
 
 
 
 
By:
/s/ Michael K. Casey
 
By:
/s/ Michael K. Casey
Name:
Michael K. Casey
 
Name:
Michael K. Casey
Title:
Vice President
 
Title:
Vice President
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FOUNTAINS RIVERVUE SL, LLC
 
FOUNTAINS SEA BLUFFS SL, LP
 
 
 
 
 
By:
/s/ Michael K. Casey
 
By:
/s/ Michael K. Casey
Name:
Michael K. Casey
 
Name:
Michael K. Casey
Title:
Vice President
 
Title:
Vice President
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FOUNTAINS WASHINGTON HOUSE SL, LLC
 
FOUNTAINS LA JOLLA SL, LP
 
 
 
 
 
By:
/s/ Michael K. Casey
 
By:
/s/ Michael K. Casey
Name:
Michael K. Casey
 
Name:
Michael K. Casey
Title:
Vice President
 
Title:
Vice President
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FOUNTAINS CRYSTAL LAKE SL, LLC
 
FOUNTAINS BELLEVUE SL, LLC
 
 
 
 
 
By:
/s/ Michael K. Casey
 
By:
/s/ Michael K. Casey
Name:
Michael K. Casey
 
Name:
Michael K. Casey
Title:
Vice President
 
Title:
Vice President
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FOUNTAINS BELLEVUE AP, LLC
 
 
 
 
 
 
 
 
By:
/s/ Michael K. Casey
 
 
 
Name:
Michael K. Casey
 
 
 
Title:
Vice President