SECOND AMENDMENT TO THE ASSET PURCHASE AGREEMENT BY AND AMONG VILLA HOMES WEST, INC., D/B/A WOODSIDEMANAGEMENT GROUP, RIDGEWOOD MANOR, LLC, PARKVIEW REAL ESTATE, LTD., WOODSIDE PROPERTIES I, LTD., AND WOODSIDE PROPERTIES H, LTD., (COLLECTIVELY AS...

Exhibit 10.38

SECOND AMENDMENT TO THE

ASSET PURCHASE AGREEMENT

BY AND AMONG

VILLA HOMES WEST, INC., D/B/A WOODSIDEMANAGEMENT GROUP,
RIDGEWOOD MANOR, LLC,
PARKVIEW REAL ESTATE, LTD.,
WOODSIDE PROPERTIES I, LTD., AND
WOODSIDE PROPERTIES H, LTD.,

(COLLECTIVELY AS “SELLER”)

AND

OP MAUMEE, INC.,
RE MAUMEE, INC.,
OP XXXXX, INC.,
RE XXXXX, INC.,
OP1 FREMONT, INC.,
RE1 FREMONT, INC.,
OP2 FREMONT, INC.,
RE2 FREMONT, INC.,
OP KENTON, INC.

(COLLECTIVELY AS “BUYER”)

Dated as of October 18, 2002

SECOND AMENDMENT TO THE
ASSET PURCHASE AGREEMENT

THIS SECOND AMENDMENT TO THE ASSET PURCHASE AGREEMENT (“Second Amendment”) is made and entered into as of October 18, 2002, by and among VILLA HOMES WEST, INC., D/B/A WOODSIDE MANAGEMENT GROUP, RIDGEWOOD MANOR, LLC, PARKVIEW REAL ESTATE, LTD., WOODSIDE PROPERTIES I, LTD., AND WOODSIDE PROPERTIES II, LTD. (collectively as “Seller”) and OP MAUMEE, INC., RE MAUMEE, INC., OP XXXXX, INC., RE XXXXX, INC., OP1 FREMONT, INC., RE1 FREMONT, INC., OP2 FREMONT, INC., RE2 FREMONT, INC., OP KENTON, INC. (collectively as “Buyer”).

WITNESSETH:

     WHEREAS, Seller and Buyer entered into a certain Asset Purchase Agreement as of August 30, 2002, whereby Buyer agreed to purchase from Seller certain nursing homes owned by Seller and located throughout Ohio, as specifically set forth in said Asset Purchase Agreement (the “Agreement”);

     WHEREAS, a set of facts had arisen that caused the parties to supplement and amend certain terms of the Agreement as of September 30, 2002, as set forth in a First Amendment to the Asset Purchase Agreement (“First Amendment”); and

     WHEREAS, a set of facts has arisen that has caused the parties to desire to supplement and further amend certain terms of the Agreement, as set forth in this Second Amendment.

     NOW, THEREFORE, for and in consideration of the premises, and the agreements, covenants, representations and warranties hereinafter set forth, and other good and valuable consideration, the receipt and adequacy of all of which are forever acknowledged and confessed, the parties hereto, intending to be legally bound hereby, agree as follows:

     1. Article 2, Financial Arrangements, Section 2.3, Purchase Price Adjustments, shall be amended by adding the following language, which is in addition to the language added by the First Amendment:

“As used in this paragraph, the “cost associated with compliance” may involve the loss of bed capacity at one of the Facilities. In the event that occurs, the parties agree that the sum of $50,000 per resident bed lost in a Facility due to the compliance requirements of Rules 3701-17-01 to 3701-17-26 of the Ohio Administrative Code shall be deducted from the amount due on the Note.”

     2. In all other respects, the parties hereby ratify and confirm the remaining term of the Agreement, as amended.

     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be executed in multiple originals by their duly authorized officers, all as of the date and year first

above written. This Second Amendment may be executed and delivered in multiple counterparts and each such counterpart shall be deemed an original, but all such counterparts shall together constitute one and the same Second Amendment.

BUYER:	OP MAUMEE, INC.
	By:	/s/ Xxxxxxxx X. Xxxxxxx
	Name:	Xxxxxxxx X. Xxxxxxx
	Title:	Chairman and Chief Executive Officer

	RE MAUMEE, INC.
	By:	/s/ Xxxxxxxx X. Xxxxxxx
	Name:	Xxxxxxxx X. Xxxxxxx
	Title:	Chairman and Chief Executive Officer

	OP XXXXX, INC.
	By:	/s/ Xxxxxxxx X. Xxxxxxx
	Name:	Xxxxxxxx X. Xxxxxxx
	Title:	Chairman and Chief Executive Officer

	RE XXXXX, INC.
	By:	/s/ Xxxxxxxx X. Xxxxxxx
	Name:	Xxxxxxxx X. Xxxxxxx
	Title:	Chairman and Chief Executive Officer

	OP1 FREMONT, INC.
	By:	/s/ Xxxxxxxx X. Xxxxxxx
	Name:	Xxxxxxxx X. Xxxxxxx
	Title:	Chairman and Chief Executive Officer

	RE1 FREMONT, INC.
	By:	/s/ Xxxxxxxx X. Xxxxxxx
	Name:	Xxxxxxxx X. Xxxxxxx
	Title:	Chairman and Chief Executive Officer

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	OP2 FREMONT, INC.
	By:	/s/ Xxxxxxxx X. Xxxxxxx
	Name:	Xxxxxxxx X. Xxxxxxx
	Title:	Chairman and Chief Executive Officer

	RE2 FREMONT, INC.
	By:	/s/ Xxxxxxxx X. Xxxxxxx
	Name:	Xxxxxxxx X. Xxxxxxx
	Title:	Chairman and Chief Executive Officer

	OP KENTON, INC.
	By:	/s/ Xxxxxxxx X. Xxxxxxx
	Name:	Xxxxxxxx X. Xxxxxxx
	Title:	Chairman and Chief Executive Officer

SELLER:	VILLA HOMES WEST, INC., D/B/A WOODSIDEMANAGEMENT GROUP
	By:	/s/ Xxxxxxx Xxxxxx
	Name:	Xxxxxxx Xxxxxx
	Title:	President

	RIDGEWOOD MANOR, LLC
	By:	/s/ Xxxxxxx Xxxxxx
	Name:	Xxxxxxx Xxxxxx
	Title:	Member

	PARKVIEW REAL ESTATE, LTD.
	By:	/s/ Xxxxxxx Xxxxxx
	Name:	Xxxxxxx Xxxxxx
	Title:	Member

	WOODSIDE PROPERTIES I, LTD.
	By:	/s/ Xxxxxxx Xxxxxx
	Name:	Xxxxxxx Xxxxxx
	Title:	Member

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	XXXXXXXX PROPERTIES II, LTD.
	By:	/s/ Xxxxxxx Xxxxxx
	Name:	Xxxxxxx Xxxxxx
	Title:	Member

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