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reported):</font><font style="DISPLAY: inline; FONT-WEIGHT: bold">&#160;&#160;December 10,
2009</font></font></div>
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pursuant to Rule&#160;13e-4(c) under the Exchange Act (17 CFR
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
1.01&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Entry
into a Material Definitive Agreement.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">On
December 10, 2009, Emeritus Corporation ("Emeritus" or the "Company") entered
into a First Amendment to Master Lease with National Health Investors, Inc.
("NHI"), effective as of December 1, 2009, amending the Master Lease dated
October 13, 2009 between the Company and NHI with respect to the lease of eight
senior living communities (collectively, the "Lease Agreement").&#160;&#160;The
communities, located in Arizona, South Carolina and Tennessee, consist of
approximately 258 assisted living units, 66 memory care units, and 12
independent living cottages (each, a "Facility" and collectively, the
"Facilities").</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Lease
Agreement has an initial term of 15 years with two available extension options
of five years each.&#160;&#160;The initial term is expected to commence on
January 1, 2010 upon the issuance to the Company of licenses to operate the
Facilities.&#160;&#160;The Lease Agreement also contains a purchase option for
the properties exercisable beginning on the first day of the eleventh year of
the initial lease term and expiring on the last day of the initial lease
term.&#160;&#160;The purchase option price is calculated at a base price of
either $37.5 million or $38.5 million, depending on the fair market value of the
Facilities at the time of exercise, plus 50% of the amount, if any, by which the
fair market value of the Facilities on the date of exercise exceeds the base
price, less any adjustments provided for in the Lease Agreement.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
annual lease payments begin at $3.4 million and increase through the initial
lease term on each anniversary date of the effectiveness of the Lease Agreement
in accordance with a fixed schedule ranging from 2.0% to 4.05% of the prior year
lease amount, and by 3.0% per year over the optional extended
terms.&#160;&#160;The Company and NHI have agreed to fund capital expenditures
for the Facilities totaling $1.5 million, $750,000 to be funded by Emeritus and
$750,000 to be funded by NHI, which NHI funding will be added to the lease basis
in determining future annual rents.&#160;&#160;It is expected that the $1.5
million in capital expenditures will be funded in year one of the initial term
of the lease.&#160;&#160;Minimum capital expenditures are set at $350 per unit
per year for the first five years of the initial term, $450 per unit for the
next five years, and $550 per unit thereafter, including any extended terms (the
"Targeted Expenditure Amounts").&#160;&#160;Any capital expenditures by Emeritus
in excess of the Targeted Expenditure Amounts for the immediately preceding two
year period, including the agreed Emeritus funding of $750,000, may be applied
to the then current year minimum requirement.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The Lease
Agreement contains a rent coverage ratio requirement of 1.0 to 1.0 in the first
year, 1.15 to 1.0 in years two through five, and 1.25 to 1.0
thereafter.&#160;&#160;In the event the rent coverage ratio is not achieved, the
Lease Agreement provides for a cure by the Company depositing funds with NHI
equal to the shortfall.&#160;&#160;Such deposit can be refunded upon the future
achievement of the required rent coverage ratio.&#160;&#160;The Lease Agreement
also contains events of default typically provided in a lease agreement of this
nature, including, but not limited to, non-payment of rents, the Company's
filing of a petition in bankruptcy or the Company's adjudication as bankrupt,
and default on any other agreement between the Company and NHI.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
Company expects this lease to be treated as a capital lease with a capital lease
asset of approximately $37.5 million depreciated on a straight-line basis over
the initial lease term of 15 years, and a capital lease obligations of $37.5
million amortized over the initial lease term at a rate of approximately
7.1%.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
security for the Company's lease payments and other obligations arising under
the Lease Agreement, the Company has granted NHI a first priority security
interest in its personal property, accounts, general intangibles, contract
rights and healthcare insurance receivables arising from the operation of each
Facility.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A press
release announcing the Lease Agreement is attached hereto as Exhibit
99.1.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Item
2.03&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
information set forth in Item 1.01 of this Current Report on Form&#160;8-K is
incorporated into this Item 2.03 by reference.</font></div><br>
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9.01&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Financial
Statements <font style="DISPLAY: inline; FONT-FAMILY: Times New Roman">and</font>
Exhibits.</font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; FONT-WEIGHT: bold">Exhibits</font></font></div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit
No.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Description</font></font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Press
      Release dated December 14, 2009, entitled<font style="DISPLAY: inline; FONT-STYLE: italic"> Emeritus Announces Lease
      Acquisition of Eight Senior Living
  Communities.</font></font></div>
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                <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">SIGNATURE</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%" style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman">
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              <td align="left" valign="bottom" width="35%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">December
      14, 2009</font></div>
              </td>
              <td valign="bottom" width="17%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></td>
              <td valign="bottom" width="40%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">EMERITUS
      CORPORATION</font></div>
              </td>
            </tr><tr>
              <td valign="bottom" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></td>
              <td valign="bottom" width="17%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></td>
              <td valign="bottom" width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></td>
            </tr><tr>
              <td valign="bottom" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></td>
              <td align="right" valign="bottom" width="17%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">By:</font></div>
              </td>
              <td align="left" valign="bottom" width="40%" style="BORDER-BOTTOM: black 2px solid">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;/s/
      Raymond R. Brandstrom</font></div>
              </td>
            </tr><tr>
              <td valign="bottom" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></td>
              <td valign="bottom" width="17%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></td>
              <td align="left" valign="bottom" width="40%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Raymond
      R. Brandstrom, Executive Vice President&#8212;</font></div>
              </td>
            </tr><tr>
              <td valign="bottom" width="35%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></td>
              <td valign="bottom" width="17%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;
      </font></td>
              <td align="left" valign="bottom" width="40%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Finance,
      Chief Financial Officer, and
Secretary</font></div>
              </td>
            </tr></table>
      </div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div><br>
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TO EXHIBITS</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; TEXT-INDENT: 0pt"><br></div>
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; TEXT-DECORATION: underline">Exhibit
No.</font>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font style="DISPLAY: inline; TEXT-DECORATION: underline">Description</font></font></div>
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                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">99.1</font></div>
              </td>
              <td>
                <div align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Press
      Release dated December 14, 2009, entitled<font style="DISPLAY: inline; FONT-STYLE: italic"> Emeritus Announces Lease
      Acquisition of Eight Senior Living
  Communities.</font></font></div>
              </td>
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nhilease8-k.htm
U.S.
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C.  20549
____________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date of report (Date of earliest event
reported):
December 10,
2009
EMERITUS
CORPORATION
(Exact
name of registrant as specified in charter)
Washington
1-14012
91-1605464
(State
      or other jurisdiction of incorporation)
(Commission
      File Number)
(IRS
      Employer Identification No.)
3131
Elliott Avenue, Suite 500
Seattle,
Washington 98121
(Address
of principal executive offices) (Zip Code)
(206)
298-2909
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01                      Entry
into a Material Definitive Agreement.
On
December 10, 2009, Emeritus Corporation ("Emeritus" or the "Company") entered
into a First Amendment to Master Lease with National Health Investors, Inc.
("NHI"), effective as of December 1, 2009, amending the Master Lease dated
October 13, 2009 between the Company and NHI with respect to the lease of eight
senior living communities (collectively, the "Lease Agreement").  The
communities, located in Arizona, South Carolina and Tennessee, consist of
approximately 258 assisted living units, 66 memory care units, and 12
independent living cottages (each, a "Facility" and collectively, the
"Facilities").
The Lease
Agreement has an initial term of 15 years with two available extension options
of five years each.  The initial term is expected to commence on
January 1, 2010 upon the issuance to the Company of licenses to operate the
Facilities.  The Lease Agreement also contains a purchase option for
the properties exercisable beginning on the first day of the eleventh year of
the initial lease term and expiring on the last day of the initial lease
term.  The purchase option price is calculated at a base price of
either $37.5 million or $38.5 million, depending on the fair market value of the
Facilities at the time of exercise, plus 50% of the amount, if any, by which the
fair market value of the Facilities on the date of exercise exceeds the base
price, less any adjustments provided for in the Lease Agreement.
The
annual lease payments begin at $3.4 million and increase through the initial
lease term on each anniversary date of the effectiveness of the Lease Agreement
in accordance with a fixed schedule ranging from 2.0% to 4.05% of the prior year
lease amount, and by 3.0% per year over the optional extended
terms.  The Company and NHI have agreed to fund capital expenditures
for the Facilities totaling $1.5 million, $750,000 to be funded by Emeritus and
$750,000 to be funded by NHI, which NHI funding will be added to the lease basis
in determining future annual rents.  It is expected that the $1.5
million in capital expenditures will be funded in year one of the initial term
of the lease.  Minimum capital expenditures are set at $350 per unit
per year for the first five years of the initial term, $450 per unit for the
next five years, and $550 per unit thereafter, including any extended terms (the
"Targeted Expenditure Amounts").  Any capital expenditures by Emeritus
in excess of the Targeted Expenditure Amounts for the immediately preceding two
year period, including the agreed Emeritus funding of $750,000, may be applied
to the then current year minimum requirement.
The Lease
Agreement contains a rent coverage ratio requirement of 1.0 to 1.0 in the first
year, 1.15 to 1.0 in years two through five, and 1.25 to 1.0
thereafter.  In the event the rent coverage ratio is not achieved, the
Lease Agreement provides for a cure by the Company depositing funds with NHI
equal to the shortfall.  Such deposit can be refunded upon the future
achievement of the required rent coverage ratio.  The Lease Agreement
also contains events of default typically provided in a lease agreement of this
nature, including, but not limited to, non-payment of rents, the Company's
filing of a petition in bankruptcy or the Company's adjudication as bankrupt,
and default on any other agreement between the Company and NHI.
The
Company expects this lease to be treated as a capital lease with a capital lease
asset of approximately $37.5 million depreciated on a straight-line basis over
the initial lease term of 15 years, and a capital lease obligations of $37.5
million amortized over the initial lease term at a rate of approximately
7.1%.
As
security for the Company's lease payments and other obligations arising under
the Lease Agreement, the Company has granted NHI a first priority security
interest in its personal property, accounts, general intangibles, contract
rights and healthcare insurance receivables arising from the operation of each
Facility.
A press
release announcing the Lease Agreement is attached hereto as Exhibit
99.1.
Item
2.03                      Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The
information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated into this Item 2.03 by reference.
2
Item
9.01                      Financial
Statements
and
Exhibits.
(d)
Exhibits
Exhibit
No.
Description
99.1
Press
      Release dated December 14, 2009, entitled
Emeritus Announces Lease
      Acquisition of Eight Senior Living
  Communities.
3
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
December
      14, 2009
EMERITUS
      CORPORATION
By:
/s/
      Raymond R. Brandstrom
Raymond
      R. Brandstrom, Executive Vice President—
Finance,
      Chief Financial Officer, and
Secretary
4
INDEX
TO EXHIBITS
Exhibit
No.
Description
99.1
Press
      Release dated December 14, 2009, entitled
Emeritus Announces Lease
      Acquisition of Eight Senior Living
  Communities.
5