Epic (Barchester) plc (a public company with limited liability incorporated under the laws of England and Wales with registered number )

Epic (Barchester) plc (a public company with limited liability incorporated under the laws of England and Wales with registered number 5860894) Class 358,000,000 Class A Commercial Mortgage-Backed Floating Rate Notes due 2031 37,000,000 Class B Commercial Mortgage-Backed Floating Rate Notes due 2031 75,000,000 Class C Commercial Mortgage-Backed Floating Rate Notes due 2031 33,000,000 Class D Commercial Mortgage-Backed Floating Rate Notes due 2031 69,000,000 Class E Commercial Mortgage-Backed Floating Rate Notes due 2031 Principal Amount Reference Interest Rate A Notes 358,000,000 3 month LIBOR B Notes 37,000,000 3 month LIBOR C Notes 75,000,000 3 month LIBOR D Notes 33,000,000 3 month LIBOR E Notes 69,000,000 3 month LIBOR Margin 0.28% per annum 0.35% per annum 0.45% per annum 0.55% per annum 0.70% per annum Note Payment Dates 30 December, 30 March, 30 June and 30 September 30 December, 30 March, 30 June and 30 September 30 December, 30 March, 30 June and 30 September 30 December, 30 March, 30 June and 30 September 30 December, 30 March, 30 June and 30 September Issue Price Expected Ratings (S&P and Fitch) Estimated Weighted Average Lives of the Notes Expected Maturity Date 100% AAA/AAA 6.60 years 30 September 2013 100% AA/AAA 6.60 years 30 September 2013 100% AA/AA 6.60 years 30 September 2013 100% AA-/AA 6.60 years 30 September 2013 100% A/A 6.60 years 30 September 2013 Final Maturity Date 30 September 2031 30 September 2031 30 September 2031 30 September 2031 30 September 2031 Source of Payment On 30 November 2006 (or such other date as Epic (Barchester) plc (the Issuer )) and the Lead Manager agree (the Closing Date ), the Issuer will issue the 358,000,000 Class A Commercial Mortgage-Backed Floating Rate Notes due 2031 (the Class A Notes ), the 37,000,000 Class B Commercial Mortgage- Backed Floating Rate Notes due 2031 (the Class B Notes ), the 75,000,000 Class C Commercial Mortgage-Backed Floating Rate Notes due 2031 (the Class C Notes ), the 33,000,000 Class D Commercial Mortgage-Backed Floating Rate Notes due 2031 (the Class D Notes ) and the 69,000,000 Class E Commercial Mortgage-Backed Floating Rate Notes due 2031 (the Class E Notes and, together with the Class A Notes and the Class B Notes, the Class C Notes and the Class D Notes the Notes ). The primary source of funds for the payment of interest and principal on the Notes will be the right of the Issuer to receive payments of interest and repayments of principal in respect of a loan (the Term Loan )made under a secured facility agreement dated 13 July 2006, as modified or supplemented from time to time (the PropCo Facility Agreement ) between, amongst others, the Originator, the Borrower, the Original Guarantor, the Borrower Security Trustee and the Hedge Counterparty. The Originator s interest in the Term Loan will be purchased by the Issuer using the Note Proceeds and will be transferred to the Issuer on or about the Closing Date. Application to the Irish Financial Services Regulatory Authority and the Irish Stock Exchange Application has been made to the Irish Financial Services Regulatory Authority (the Irish Financial Services Regulatory Authority or IFSRA ), as competent authority under Directive 2003/71/EC (the Prospectus Directive ), for this Prospectus to be approved. Application has been made to the Irish Stock Exchange Limited (the Irish Stock Exchange ) for the Notes to be admitted to the official list of the Irish Stock Exchange (the Official List ) and trading on its regulated market. Such approval relates only to the Notes which are to be admitted to trading on the regulated market of the Irish Stock Exchange or other regulated markets for the purposes of Directive 93/22/EEC or which are to be offered to the public in any Member State of the European Economic Area. This document constitutes a prospectus for the purposes of the Prospectus Directive. Obligations of Issuer Only The Notes will be obligations of the Issuer only and will not be obligations or responsibilities of, or guaranteed by, any of the other parties to the transactions described in this Prospectus. It should be noted, in particular, that the Notes will not be obligations or responsibilities of the Arranger, the Managers, the Originator, the Note Trustee, the Paying Agents, the Agent Bank, the Liquidity Facility Provider, the Issuer Accounts Bank, the Cash Administrator, the Servicer, the Special Servicer, the Corporate Services Providers, the Share Trustees, the Borrower, the Original Guarantor, the Borrower Security Trustee, the Facility Agent, the Hedge Counterparty, the Property Monitor or any other party to the Transaction Documents or any person affiliated with them (other than the Issuer). Ratings The Class A Notes are expected upon issue to be rated AAA by Standard & Poor s Rating Services, a division of The McGraw Hill Companies, Inc. ( S&P ) and AAA by Fitch Ratings Ltd. ( Fitch and, together with S&P, the Rating Agencies ). The Class B Notes are expected upon issue to be rated AA by S&P and AAA by Fitch. The Class C Notes are expected upon issue to be rated AA by S&P and AA by Fitch. The Class D Notes are expected to be rated AA- by S&P and AA by Fitch. The Class E Notes are expected to be rated A by S&P and A by Fitch. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by any one or more of the Rating Agencies. Each credit rating should be evaluated independently of any other credit rating. Form of Notes The Notes of each Class will each initially be represented on issue by a temporary global note in bearer form (each, a Temporary Global Note ) without interest coupons or receipts attached, which will be deposited on or about the Closing Date with a common depositary for Clearstream Banking, société anonyme ( Clearstream, Luxembourg ) and Euroclear Bank S.A./N.V., as operator of the Euroclear System ( Euroclear ). Each Temporary Global Note will be exchangeable for interests in a permanent global note in bearer form (each, a Permanent Global Note ) representing the same Class of Notes, without interest coupons or receipts attached, not earlier than forty (40) days after the Closing Date (provided that certificates as to non-u.s. beneficial ownership have been received). Ownership interests in the Temporary Global Notes and the Permanent Global Notes will be shown on, and transfers thereof will only be effected through, records maintained by Clearstream, Luxembourg and Euroclear and their respective participants. Interests in the Permanent Global Notes will be exchangeable for Definitive Notes in bearer form only in certain limited circumstances as set forth therein. The Notes have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the Securities Act ), and are subject to U.S. tax law requirements. The Notes may not be offered, sold or delivered, directly or indirectly, in the United States or to any U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Notes are being offered for sale outside the United States in accordance with Regulation S ( Regulation S ) under the Securities Act. See Subscription And Sale. Risk Factors Each person contemplating making an investment in the Notes must make its own investigation and analysis of the creditworthiness of the Issuer, the Borrower and the Original Guarantor and its own determination of the suitability of any such investment, with particular reference to its own investment objectives and experience and any other factors which may be relevant to it in connection with such investment. A prospective investor who is in any doubt whatsoever as tothe risks involved in investing in the Notes should consult its own independent professional advisors. A discussion of certain factors, which should be considered by prospective Noteholders in connection with an investment in the Notes, is set out in the section entitled Risk Factors. Arranger and Lead Manager The Royal Bank of Scotland Co-Managers Banca Akros S.p.A. Gruppo Bipiemme, Banco Popolare di Milano The date of this Prospectus is 28 November 2006 Danske Bank

Responsibility Statements Except as described below, the Issuer accepts responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is the case) the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information. The information relating to each Obligor, which is set out in the Risk Factors, Description Of The Properties, The Borrower, The Master Leases and General Information, sections of this Prospectus, has been accurately reproduced from information made available by each Obligor. So far as the Issuer is aware and is able to ascertain from information published by each Obligor, no facts have been omitted which would render the reproduced information misleading. The information relating to The Royal Bank of Scotland plc, which is set out in the Description Of The Issuer Accounts Bank, Cash Administrator, Servicer, Special Servicer, Liquidity Facility Provider and Hedge Counterparty section of this Prospectus, has been accurately reproduced from information made available by The Royal Bank of Scotland plc. So far as the Issuer is aware and is able to ascertain from information published by The Royal Bank of Scotland plc, no facts have been omitted which would render the reproduced information misleading. This information relating to the OpCo Group, which is set out in Opcos and The Care Facilities Business section of this Prospectus, has been accurately reproduced from information made available by Barchester Healthcare Limited. So far as the Issuer is aware and is able to ascertain from information published by Barchester Healthcare Limited, no facts have been omitted which would render the reproduced information misleading. Representations about the Notes No person is or has been authorised in connection with the issue and sale of the Notes to make any representation or provide any information other than as contained in this Prospectus. Any such representation or information should not be relied upon as having been authorised by or on behalf of the Issuer, the Arranger, the Managers, the Originator, the Note Trustee, the Paying Agents, the Agent Bank, the Liquidity Facility Provider, the Issuer Accounts Bank, the Cash Administrator, the Servicer, the Special Servicer, the Corporate Services Providers, the Share Trustees, the Borrower, the Original Guarantor, the Borrower Security Trustee, the Facility Agent, the Hedge Counterparty, the Property Monitor or any other party to the Transaction Documents or any person affiliated with them. Other than with respect to the information referred to above and referable to it, none of the Arranger, the Managers, the Originator, the Note Trustee, the Paying Agents, the Agent Bank, the Liquidity Facility Provider, the Issuer Accounts Bank, the Cash Administrator, the Servicer, the Special Servicer, the Corporate Services Providers, the Share Trustees, the Borrower, the Original Guarantor, the Borrower Security Trustee, the Facility Agent, the Hedge Counterparty, the Property Monitor or any other party to the Transaction Documents or any person affiliated with them (other than the Issuer) have separately verified the information contained herein. Accordingly, no representation, warranty or undertaking, express or implied, is made and no responsibility or liability is accepted (other than with respect to the information referred to above and referable to it) by the Arranger, the Managers, the Originator, the Note Trustee, the Paying Agents, the Agent Bank, the Liquidity Facility Provider, the Issuer Accounts Bank, the Cash Administrator, the Servicer, the Special Servicer, the Corporate Services Providers, the Share Trustees, the Borrower, the Original Guarantor, the Borrower Security Trustee, the Facility Agent, the Hedge Counterparty, the Property Monitor or any other party to the Transaction Documents or any person affiliated with them (other than the Issuer) as to the accuracy or completeness of the information contained in this Prospectus or any other information supplied in connection with the Notes or their distribution. Other than with respect to the information referred to above, each person receiving this Prospectus acknowledges that such person has not relied on the Arranger, the Managers, the Originator, the Note Trustee, the Paying Agents, the Agent Bank, the Liquidity Facility Provider, the Issuer Accounts Bank, the Cash Administrator, the Servicer, the Special Servicer, the Corporate Services Providers, the Share Trustees, the Borrower, the Original Guarantor, the Borrower Security Trustee, the Facility Agent, the Hedge Counterparty, the Property Monitor or any other party to the Transaction Documents or any person affiliated with them (other than the Issuer) in connection with any investigation of the accuracy of the information on its investment decision. 2

Financial condition of the Issuer, the Borrower and the Original Guarantor Neither the delivery of this Prospectus nor the offer, sale, allocation, solicitation or delivery of any Note shall in any circumstances create any implication or constitute a representation that there has been no adverse change, or any event reasonably likely to involve any adverse change, in the condition (financial or otherwise) of the Issuer, the Borrower or any of the Original Guarantor or the information contained herein since the date of this Prospectus or that the information contained herein is correct as at any time subsequent to the date of this Prospectus. Selling Restrictions Other than the approval of the Irish Financial Services Regulatory Authority of this Prospectus as a prospectus in accordance with the Prospectus (Directive 2003/71/EC) Regulations 2005, no action has been or will be taken to permit a public offering of the Notes or the distribution of this Prospectus in any jurisdiction. The distribution of this Prospectus and the offering of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Prospectus (or any part thereof) comes are required by the Issuer and the Managers to inform themselves about and to observe any such restrictions. Neither this Prospectus nor any part hereof constitutes an offer of, or an invitation by, or on behalf of, the Issuer or the Managers to subscribe for or purchase any of the Notes. Neither this Prospectus, nor any part hereof, may be used for or in connection with an offer to, or solicitation by, any person in any jurisdiction or in any circumstance in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Accordingly, the Notes may not be offered or sold, directly or indirectly, and neither this Prospectus nor any part hereof nor any other prospectus, form of application, advertisement, other offering material or other information may be issued, distributed or published in any country or jurisdiction (including the United Kingdom), except in circumstances that will result in compliance with all applicable laws, orders, rules and regulations. None of the Issuer, the Managers or any of their representatives is making any representation to any purchaser of the Notes described by this Prospectus regarding the legality of an investment by such purchaser under appropriate legal, investment or similar laws. Prospective purchasers should consult with their advisers as to the legal, tax, business, financial and related aspects of a purchase of the Notes. For a further description of certain restrictions on offers and sales of the Notes and the distribution of this Prospectus, see Subscription And Sale. Interpretation References in this Prospectus to, Sterling and Pounds Sterling are references to the lawful currency for the time being of the United Kingdom of Great Britain and Northern Ireland. Certain figures included in this Prospectus have been subject to rounding adjustments. Accordingly, figures shown for the same category in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them. Capitalised terms used in this Prospectus, unless otherwise indicated, have the meanings set out in this Prospectus. Capitalised terms not otherwise defined in this Prospectus are defined in the section entitled Terms and Conditions of the Notes Definitions or the section entitled Glossary of Defined Terms. An index of defined terms and where those terms are defined appears at the end of this Prospectus. Stabilisation In connection with the issue of the Notes, The Royal Bank of Scotland plc (in such capacity the Stabilising Manager ) (or any person acting on behalf of any Stabilising Manager) may over-allot Notes (provided that the aggregate principal amount of the Notes allotted does not exceed 105 per cent. of the aggregate principal amount of the relevant Class) or effect transactions with a view to supporting the market price of the Notes at a level higher than that which might otherwise prevail. However, there is no assurance that the Stabilising Manager (or persons acting on behalf of the Stabilising Manager) will undertake stabilisation action. Any stabilising action may begin on or after the date on which adequate public disclosure of the terms of the offer of the Notes is made and, if begun, may be ended at any time, but it must end no later than the earlier of thirty (30) days after the issue of the Notes and sixty (60) days after the date of the allotment of the Notes. 3

TABLE OF CONTENTS Principal Characteristics Of The Notes 5 Overview Of The Transaction 6 The Parties 12 Key Characteristics Of The Notes 18 Risk Factors 30 Summary Of The Borrower Transaction Documents 53 Description Of The Properties 84 Summary of the Property Portfolio as at the Cut-Off Date 86 Description Of The Master Leases 93 The Property Valuation Report 98 Summary Of The Issuer Transaction Documents 123 Description Of The Issuer Accounts Bank, Cash Administrator, Servicer, Special Servicer, Liquidity Facility Provider And Hedge Counterparty 149 The Issuer 150 Holdings 152 Options 154 The Borrower 156 OpCos And The Care Facilities Business 157 Use Of Proceeds 164 Estimated Weighted Average Life Of The Notes And Assumptions 165 Summary Of Provisions Relating To The Notes While In Global Form 166 Terms And Conditions Of The Notes 167 EU Savings Directive 207 Taxation In The United Kingdom 208 Subscription And Sale 209 General Information 212 Glossary Of Defined Terms 214 Index Of Defined Terms 230 4

PRINCIPAL CHARACTERISTICS OF THE NOTES The following is a brief overview of the principal characteristics of the Notes offered under this Prospectus. This information is subject to and is more fully explained in the other sections of this Prospectus. Notes Class A Notes Class B Notes Class C Notes Class D Notes Class E Notes Minimum Denomination 50,000 50,000 50,000 50,000 50,000 Principal Amount 358,000,000 37,000,000 75,000,000 33,000,000 69,000,000 Reference Interest Rate 3 month LIBOR 3 month LIBOR 3 month LIBOR 3 month LIBOR 3 month LIBOR Margin 0.28% per annum 0.35% per annum 0.45% per annum 0.55% per annum 0.70% per annum Estimated Weighted Average 6.60 years 6.60 years 6.60 years 6.60 years 6.60 years Lives of the Notes* Expected Maturity Date 30 September 2013 30 September 2013 30 September 2013 30 September 2013 30 September 2013 Final Maturity Date 30 September 2031 30 September 2031 30 September 2031 30 September 2031 30 September 2031 Step-up Date 30 September 2013 30 September 2013 30 September 2013 30 September 2013 30 September 2013 Note Payment Dates 30 December, 30 March, 30 June and 30 September 30 December, 30 March, 30 June and 30 September 30 December, 30 March, 30 June and 30 September 30 December, 30 March, 30 June and 30 September 30 December, 30 March, 30 June and 30 September Interest Accrual Method Actual/365 Actual/365 Actual/365 Actual/365 Actual/365 Frequency of Redemption In accordance with Condition 7 In accordance with Condition 7 In accordance with Condition 7 In accordance with Condition 7 In accordance with Condition 7 Form of Notes Bearer Bearer Bearer Bearer Bearer Clearing Systems Clearstream, Luxembourg and Euroclear Clearstream, Luxembourg and Euroclear Clearstream, Luxembourg and Euroclear Clearstream, Luxembourg and Euroclear Clearstream, Luxembourg and Euroclear Credit Enhancement (provided by other Classes of Notes subordinated to the relevant Class) Subordination of the Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes Subordination of the Class C Notes, the Class D Notes and the Class E Notes Subordination of the Class D Notes and the Class E Notes Subordination of the Class E Notes Listing Ireland Ireland Ireland Ireland Ireland ISIN XS0274118198 XS0274118271 XS0274118602 XS0274200442 XS0274200954 Common Code 027411819 027411827 027411860 027420044 027420095 Expected Rating S&P AAA AA AA AA- A Expected Rating Fitch AAA AAA AA AA A *See Estimated Weighted Average Life Of The Notes And Assumptions for a description of the assumptions made in calculating the estimated weighted average lives of the Notes. 5

OVERVIEW OF THE TRANSACTION The following is an overview of the transaction. This summary does not purport to be complete and should be read in conjunction with, and is qualified in its entirety by reference to, the more detailed information which appears elsewhere in this Prospectus. Prospective purchasers of the Notes are advised to read carefully, and to rely solely on, the detailed information appearing elsewhere in this Prospectus in making any decision whether or not to invest in any Notes. Capitalised terms used in this Prospectus have the meanings set out at the Glossary of Defined Terms unless they are defined where they first appear in this prospectus. An index of defined terms is set out at the end of this Prospectus. Issue of the Notes and Use of Proceeds The Issuer has been incorporated as a special purpose entity for the purpose of issuing the Notes and entering into the Issuer Transaction Documents. The Issuer will issue the Notes on 30 November 2006 (the Closing Date ) and will apply the Note Proceeds to acquire the Loan Sale Assets (defined under Loan Sale Documents below in this Section) from The Royal Bank of Scotland plc (the Originator ) pursuant to the Loan Sale Documents. The fees and expenses in connection with the issue of the Notes will be met by the Borrower. See Use Of Proceeds. The Term Loan Pursuant to the terms of a facility agreement, which expression includes such agreement as from time to time modified or supplemented in accordance with the provisions therein contained (the PropCo Facility Agreement ), entered into on 13 July 2006 and amended and restated on 27 October 2006 between, amongst others, The Royal Bank of Scotland plc (the Original Lender ) and Barchester Holdco Limited (the Borrower ) the following Sterling term loan facilities have been made available by the Original Lender to the Borrower by way of loans: (c) (d) the tranche A1 facility in an aggregate principal amount of 572,000,000 (the Term Loan Facility and the corresponding loan under the Term Loan Facility being the Term Loan ); the tranche A2 facility is an aggregate principal amount of 86,078,000 (the Tranche A2 Facility and the corresponding loan under the Tranche A2 Facility being the Tranche A2 Loan ); the tranche B facility in an aggregate principal amount of 192,885,000 (the Tranche B Facility and the corresponding loan under the Tranche B Facility being the Tranche B Loan ); and the tranche C facility in an aggregate principal amount of 119,037,000 (the Tranche C Facility and the corresponding loan under the Tranche C Facility being the Tranche C Loan ). The Term Loan, the Tranche A2 Loan, the Tranche B Loan and the Tranche C Loan (together the Loans ) cannot exceed 970,000,000 in aggregate. The Term Loan is a six (6) year and eleven (11) month partially amortising bullet repayment loan. The Term Loan is scheduled to amortise by approximately eight (8) per cent. of its original aggregate principal amount, subject, pursuant to the terms of the PropCo Facility Agreement, after payments of scheduled principal amounts due on each Loan have been made, to a further cash sweep under which the outstanding principal amounts under the Tranche A2 Loan, the Tranche B Loan and the Tranche C Loan are to be repaid sequentially. The Borrower is required to maintain the following financial ratios in respect of the Term Loan, subject to the cure rights described in the paragraph in this section below entitled Borrower s Rights : Debt Service Cover Ratio 1 Loan to Value Ratio 1 Interest Cover Ratio 1 Rent Cover Test 1 Term Loan 1.73x 58% 1.96x 1.30x 1 See Summary of The Borrower Transaction Documents PropCo Facility Agreement for a description of how this ratio is calculated. 6

The Loans were used by the Borrower to make loans to Bluehood Limited (the PropCo ) pursuant to the terms of an unsecured facility agreement (the Borrower/PropCo Facility Agreement ). The loans made under the Borrower/PropCo Facility Agreement have been used by PropCo to finance or refinance the acquisition of the Properties (and to pay associated fees, costs and expenses). The primary source of funds for the payments of interest and principal in respect of the Term Loan will be net rental cashflows derived from PropCo s interests in care homes situated in England, Scotland and Jersey, which are leased to the OpCo Tenants (defined below). See Description Of The Properties. PropCo has entered into and will be required, in accordance with the terms of the PropCo Facility Agreement, to maintain both interest rate hedging arrangements (for a period of not less than seven (7) years from first utilisation under the Term Loan) with a view to ensuring that the Borrower will be able to continue to make payments of interest under the Term Loan notwithstanding variations in the floating rate of interest payable by the Borrower and inflation rate hedging to hedge against changes in rental payments (which are linked to changes in the retail price index). The interest rate hedging transaction was entered into for a term expiring in 2030 and the inflation rate hedging transaction was entered into for a term expiring in 2031. Payments in respect of the interest rate and inflation rate hedging transactions referable to the Term Loan rank senior to payments of interest and principal on the Term Loan whereas, in the case of the interest rate hedging transaction referable to the Tranche A2 Loan, the Tranche B Loan and the Tranche C Loan, the relevant payments rank pari passu with the respective interest payments on such loans and, in the case of the inflation rate hedging transaction referable to the Tranche A2 Loan, the Tranche B Loan and the Tranche C Loan, the relevant payments rank pari passu with the interest payments in the Tranche A2 Loan, subject to the exclusion, in each of the above cases, of certain subordinated hedge payment amounts (see Summary of the Borrower Transaction Documents Intercreditor Arrangements below). Loan Sale Documents On the Closing Date, the Issuer will use part of the Note Proceeds to acquire by means of novation from the Originator, pursuant to the terms of a loan sale agreement to be dated on or about the Closing Date (the Loan Sale Agreement ) and a transfer certificate (the Transfer Certificate and, together with the Loan Sale Agreement, the Loan Sale Documents ), the right, title, interest and benefit of the Originator in the Term Loan and the Borrower Level Security, together with any and all of the Originator s rights as a lender under the Borrower Finance Documents (together, the Loan Sale Assets ). See Summary Of The Issuer Transaction Documents Loan Sale Documents. The Term Loan and the Notes The payment of interest and repayment or, as the case may be, prepayment of principal by the Borrower in respect of the Term Loan will provide the primary source of funds for the Issuer to make payments of interest and repayments (or prepayments) of principal under the Notes. In certain circumstances, Noteholders may receive a Prepayment Premium where the Notes have been prepaid in accordance with the Conditions. See Condition 7(d) (Redemption and Cancellation Early Mandatory Redemption in Whole or in Part upon Prepayment of the Term Loan). In the event that the Issuer has insufficient funds to make payment on the Notes on any Note Payment Date it may, in certain circumstances, make drawings on the Liquidity Facility to cover shortfalls in the amounts available to the Issuer to make payments of, amongst other things, interest due on the Notes. See Summary Of The Issuer Transaction Documents Liquidity Facility Agreement. The obligations of the Issuer in respect of the Notes will rank in the following order in point of security, as to payments of interest and repayment (or prepayments) of principal under the Notes: (c) (d) (e) first, pro rata and pari passu without preference amongst themselves, the Class A Notes; second, pro rata and pari passu without preference amongst themselves, the Class B Notes; third, pro rata and pari passu without preference amongst themselves, the Class C Notes; fourth, pro rata and pari passu without preference or priority amongst themselves, the Class D Notes; fifth, pro rata and pari passu without preference or priority amongst themselves, the Class E Notes. 7

Relationship between the Leases, the Term Loan and the Notes Under the PropCo Facility Agreement, certain breaches by the OpCo Tenant under the Master Leases, including failure to pay any amount of rental income due and owing to PropCo (as Landlord), will cause or, in certain circumstances, may lead to, a Loan Event of Default. Although breaches of financial covenants and non-payment in respect of a loan which ranks junior to the Term Loan constitute an event of default under the Term Loan, the agent for the Term Loan (on behalf of the Controlling Lenders) cannot enforce the Term Loan in such circumstances unless the relevant junior lenders agree to such action. A Loan Event of Default will not, of itself, automatically cause a Note Event of Default but if the Loan Event of Default is or results in a failure to pay by the Borrower, the Issuer may not receive sufficient funds from the Borrower in respect of the Term Loan to pay the Noteholders thereby resulting in a Note Event of Default. Term Loan Maturity and Priorities of Payment in Respect of the Notes Since the Term Loan is a partially amortising loan with a maturity date of 30 September 2013, it is anticipated that the Notes will be repaid in full on that date (the Expected Maturity Date ). The Notes have a final maturity date of 30 September 2031 (the Final Maturity Date ). If the Term Loan is not repaid in full on the Expected Maturity Date, an event of default will occur under the Term Loan and all amounts will be immediately due and payable under the Term Loan. Moreover, default interest will be payable under the Term Loan. In such circumstances, as with any other circumstances in which a Loan Event of Default has occurred and is subsisting, the Borrower Security Trustee (at the direction of the Servicer or Special Servicer prior to delivery of Note Enforcement Notice or at the direction of the Note Trustee following delivery of a Note Enforcement Notice) will be required to make a decision on the manner in which it proceeds since, at that time, the security in respect of the Term Loan will be enforceable and the power of sale in respect of the Properties will be exercisable. The Borrower Security Trustee has, for example, the power to sell or, alternatively, to appoint a receiver and continue to collect income from the Property and continue to service the Term Loan, possibly in conjunction with a phased sale of the Properties. As a result, the following distinctions will be made in respect of the application of payments to be made in respect of the Notes in the differing circumstances listed below: Pre-enforcement and Prior to the Expected Maturity Date Under the Term Loan, all interest and fees and expenses referable to senior expenses of the Issuer (namely, items of a revenue nature) rank at all times senior to payments of principal under the Term Loan, whether prior to or after enforcement of the security. This separation of revenue payments and principal payments is mirrored in the payments which are made under or in respect of the Notes prior to the delivery of a Note Enforcement Notice in respect of the Notes in the period up to and including the Expected Maturity Date (i.e. revenue items service interest under the Notes and the principal payments under the Term Loan are available to repay principal under the Notes). See, in particular, the headings Issuer Pre-Enforcement (Pre-Maturity) Revenue Priority of Payments and Issuer Principal Pre-Enforcement Priority of Payments under Summary of the Issuer Transaction Documents Cash Administration Agreement. Pre-enforcement and During the Workout Period During the period commencing on the day following the Expected Maturity Date up to and including the Final Maturity Date (the Workout Period ), there will be no scheduled amortisation of the Notes. Prior to the delivery of a Note Enforcement Notice, during the Workout Period, the priority of payments under the Notes will remain substantially the same as that which applies in paragraph above, save that the Accelerated Principal Amount (as defined below) will be utilised to redeem the Most Senior Class of Notes from time to time outstanding. Property Portfolio PropCo acquired legal and beneficial title (and in Scotland, heritable title) to care homes (each a Property ) located in England and Wales, Scotland and Jersey (the Property Portfolio ) pursuant to a sale agreement dated 13 July 2006 and then leased these properties to Barchester Healthcare Homes Limited and, in the case of the lease of the Properties in England and Wales, Barchester Nominee (No.1) Limited (in each case, an OpCo Tenant ) pursuant to three lease agreements (the Master Leases ), each with a term of thirty (30) years, governed by English law, Scots law and Jersey law, respectively. The Leases have no tenant breaks, no security of tenure and are fully repairing and insuring leases. The relevant rental amounts under the Leases are reviewed annually (upwards only) in line with the changes to the UK retail price index subject to a maximum annual increase of five (5) per cent. 8

There are currently 160 Properties in the Property Portfolio. The sale of each Property to PropCo included, broadly, all moveable items and equipment utilised in the care home business other than items and equipment the subject of leasing or hire purchase agreements. See Description of the Properties. The investment value of the Property Portfolio, as valued by Colliers CRE plc (the Valuer ) as at 11 July 2006 in their valuation report (the Property Valuation ) was 1,135,000,000 based on an agreed aggregate rental value of the Properties of 66,000,000. The Valuer has assessed the market rental value of the Properties at 70,770,650. See The Property Valuation Report. Subject to certain criteria, PropCo will be entitled to dispose of a Property or to require a substitution of a Property. The maximum number of Properties which are permitted to be substituted under the above entitlement is sixteen (16). In certain circumstances, PropCo will be obliged to substitute a Property. See Summary of the Borrower Transaction Documents The Substitution Agreement. The Tenants The OpCo Tenants are subsidiaries of TopCo, which is also the parent company of the Borrower (see Abbreviated Corporate Structure of the Borrower ). The OpCo Tenant holds its leasehold interest under the relevant Master Lease on trust (save for the Jersey Lease) for certain members of the OpCo Group as described more fully in Description of the Master Leases. See OpCos and the Care Facilities Business for a description of the care homes business of the OpCo Group. The annualised six (6) month look back EBITDAR generated by the operation of the Properties for the period ending 30 September 2006 is 87,000,000. The OpCo Group currently has secured borrowings comprising a term loan of approximately 72,000,000 and a revolving facility of 15,000,000. Members of the OpCo Group may incur additional indebtedness, subject to the Total Debt Ratio. Change of Control Covenants The following change of control provisions exist: it is, inter alia, an event of default under the PropCo Facility Agreement if the shares in the Borrower or PropCo cease to be beneficially owned by TopCo; each Master Lease contains a right of forfeiture (irritancy in Scotland and a right to apply to the Court for cancellation in Jersey) upon a change in control of the relevant OpCo Group. Amendments, Waiver and Consents Subject to the certain provisions included in the Intercreditor Deed for the protection of the entrenched rights of the other lenders and the Hedge Counterparty, the agent for the Term Loan, acting on the instructions of the Controlling Lenders, (and, if the Term Loan is discharged, the agent for the next ranking loan that is outstanding) may (or may instruct the Borrower Security Trustee to) amend, waive or grant approval or consent under any term of the Borrower Finance Documents and each such amendment, waiver or consent will be binding on all other lenders and the Hedge Counterparty. For so long as the Issuer is the Controlling Lenders, such rights are delegated to the Servicer (or, as the case may be, the Special Servicer) under the Servicing Agreement. The way in which the Servicer (or, as the case may be, the Special Servicer) exercises such delegated rights is governed by the terms of the Servicing Agreement (as to which, see Servicing Agreement Modifications, Waivers, Amendments and Consents ). Junior Ranking Lenders Rights A Junior Ranking Lender has certain rights under the Intercreditor Deed, including, broadly: a right to require Loan Enforcement Action to be taken if the Controlling Lenders have not commenced enforcement action within 120 days of a Loan Event of Default and the Borrower Security Trustee is satisfied that net realisation proceeds will be at least 125 per cent. of the Borrower Secured Obligations ranking senior to the debt owed to that Junior Ranking Lender; (c) a right to require disposal of an individual Property after enforcement if the Borrower Security Trustee is satisfied that net realisation proceeds of all the Properties would be sufficient to discharge in full the outstanding debt (including related hedge transaction payments) senior to the debt of that Junior Ranking Lender; a right (limited to two (2) per annum and four (4) in aggregate) to cure certain defaults, subject to an ability on the part of the relevant senior lenders or the Borrower Security Trustee to override such right in order to avoid material prejudice to the relevant senior lenders position; 9

(d) following certain defaults and Loan Enforcement Action, purchase more senior ranking loans at a price, calculated by the Instructing Agent, to be the aggregate of the principal amount then outstanding of, and accrued interest due but unpaid on, the applicable senior ranking loan and any costs or expenses or other amounts then due or owing by the Obligors to the applicable senior ranking lender pursuant to the Borrower Finance Documents, and, if the senior ranking loan that is being purchased is the Term Loan, any amounts then due or payable by the Issuer, any other amount that the Issuer requires or will require to meet its obligations in full to the Noteholders or otherwise; and (e) following loan enforcement action and where the Borrower Security Trustee proposes to, or the Borrower Security Trustee becomes aware that a Receiver appointed by the Borrower Security Trustee proposes to dispose of a Property, certain pre-emption rights. (See Summary of the Borrower Transaction Documents Intercreditor Arrangements below.) Borrower s Rights The Borrower has certain rights (which can only be exercised three (3) times each, subject to a maximum of five (5) times in aggregate) under the PropCo Facility Agreement to cure certain breaches of financial covenants under that Agreement including, broadly: the ability to prepay the Loans, deposit money in an account or provide additional security over property to cure a breach of a LTVR covenant; and the ability to deposit money in an account in order to generate sufficient interest income to cure a breach of an EBITDAR Ratio covenant. (See Summary of the Borrower Transaction Documents PropCo Facility Agreement ). Intra-group lending To the extent that there exists at closing any intra-group lending in respect of which the Borrower is the relevant debtor, such lending is fully subordinated to the repayment of the Term Loan. Principal Security for the Borrower s Obligations The Borrower s obligations under the PropCo Facility Agreement and the other Borrower Finance Documents are secured primarily by each Obligor granting fixed and floating security over all their property, undertaking and assets in favour of the Borrower Security Trustee pursuant to the Borrower Security Documents. See Summary Of The Borrower Transaction Documents Borrower Level Security. Each Obligor, TopCo and the Borrower Security Trustee will also enter into a securitisation floating charge debenture on or about the Closing Date (the Securitisation Floating Charge Debenture ), whereby each Obligor and TopCo will grant to the Borrower Security Trustee a first floating charge over all of their present and future assets, property and undertakings for itself and for the Finance Parties. The floating charges created pursuant to the Securitisation Floating Charge Debenture will rank in point of priority ahead of the floating charges created by each Obligor and TopCo pursuant to the Borrower Security Documents. See Summary of the Issuer Transaction Documents Securitisation Floating Charge Debenture. PropCo, as Original Guarantor, has guaranteed the obligations of the Borrower pursuant to the terms of the PropCo Facility Agreement. For an abbreviated diagrammatic representation of the corporate structure of the Borrower, see Overview Of The Transaction Abbreviated Corporate Structure Diagram Of The Borrower. Security for the Issuer s Obligations The Issuer s obligations under the Notes and the Issuer Transaction Documents (other than the Trust Documents) will be secured by, amongst other things, the Issuer granting fixed and floating security over all its property, undertaking and assets and the Issuer assigning the benefit of certain security which it enjoys as a secured creditor under the Borrower Finance Documents in favour of the Note Trustee on behalf of the Issuer Secured Parties pursuant to the Issuer Deed of Charge. See Summary Of The Issuer Transaction Documents Issuer Deed Of Charge and Condition 4 (Security). The Issuer Deed of Charge will determine the post-enforcement priority of payments of the Issuer Secured Parties. See Summary Of The Issuer Transaction Documents Issuer Deed Of Charge Issuer Post- Enforcement Priority of Payments. For a diagrammatic overview of the transaction described in this Prospectus, see Overview Of The Transaction Structure Diagram Of The Transaction. 10

Structural Diagram Of The Transaction Charitable Trust Servicer and Special Servicer (The Royal Bank of Scotland plc) Holdings Grant of security under the Issuer Deed of Charge Note Trustee (Wilmington Trust (London) Limited) Note Trustee holds security granted by the Issuer on trust for the Issuer Secured Parties including the Noteholders Originator (The Royal Bank of Scotland plc) Loan Sale Documents Issuer (Epic ( Barchester ) plc) Notes Noteholders Swap Counterparty (The Royal Bank of Scotland plc) Tenant (Barchester Healthcare Homes Limited/ Barchester Nominee No.1 Limited) ( OpCo Tenant) Hedge Agreements Master Leases Term Loan Borrower ( Barchester Holdco Limited) Borrower/ PropCo Loan PropCo ( Bluehood Limited) Grant of security under the Borrower Security Documents Borrower Security Trustee holds security granted by, amongst others, the Borrower and the Original Guarantors on trust for the Finance Parties Borrower Security Trustee (The Royal Bank of Scotland plc) Liquidity Facility Provider (The Royal Bank of Scotland plc) Abbreviated Corporate Structure Diagram Of The Borrower Grove Ltd Borrower (Barchester Holdco Ltd) Topco (Barchester Holdco (Jersey) Ltd) Propco (Bluehood Ltd) Opco Holdco (Barchester Healthcare Ltd) Opco (Barchester Healthcare Homes Ltd) Opco Group Companies Opco Group Companies 11

Issuer: THE PARTIES Epic (Barchester) plc (the Issuer ), a public limited liability company incorporated under the laws of England and Wales on 28 June 2006, with registered number 5860894, having its registered office at c/o Wilmington Trust SP Services (London) Limited, Tower 42 (level 11), International Financial Centre, 25 Old Broad Street, London EC2N 1HQ. The Issuer is a special purpose entity with limited permitted activities. Its principal activities will comprise, amongst other things, issuing the Notes and applying the Note Proceeds to purchase the Loan Sale Assets pursuant to the Loan Sale Documents. See The Issuer. Holdings: Epic (Barchester) Holdings Limited ( Holdings ), a private limited liability company incorporated under the laws of England and Wales on 2 August 2006, with registered number 5894305, having its registered office at c/o Wilmington Trust SP Services (London) Limited, Tower 42 (level 11), International Financial Centre, 25 Old Broad Street, London EC2N 1HQ. Holdings is a special purpose entity with limited permitted activities. Holdings entire issued share capital is held by SPV Advisors Limited, a company registered in England and Wales with registered number 4374635 and having its registered address at Tower 42 (level 11), International Financial Centre, 25 Old Broad Street, London EC2N 1HQ. (in such capacity, the Holdings Share Trustee ). The shares held by the Holdings Share Trustee are held under the terms of a trust for charitable purposes established under English law pursuant to the terms of a declaration of trust. See Holdings. Holdings holds the entire issued share capital of the Issuer (other than one ordinary share in the Issuer which is held by SPV Advisors Limited, a company registered in England and Wales with registered number 4374635 and having its registered address at Tower 42 (level 11), International Financial Centre, 25 Old Broad Street, London EC2N 1HQ (in such capacity, the Issuer Share Trustee ) under the terms of a trust established under English law pursuant to the terms of a declaration of trust for Holdings). See The Issuer. Options: Epic (Barchester) Options Limited ( Options ), a private limited liability company incorporated under the laws of England and Wales on 2 August 2006, with registered number 5894089, having its registered office at c/o Wilmington Trust SP Services (London) Limited, Tower 42 (level 11), International Financial Centre, 25 Old Broad Street, London EC2N 1HQ. Options is a special purpose entity with limited permitted activities. Holdings holds the entire issued Share Capital of Options. See Options. Options will be the holder of the Note Post-Enforcement Call Option pursuant to the terms of the Note Post-Enforcement Call Option Agreement. See Key Characteristics Of The Notes Note Post-Enforcement Call Option and Condition 19 (Note-Post Enforcement Call Option). Note Trustee: Wilmington Trust (London) Limited, whose principal office is Tower 42 (level 11), International Financial Centre, 25 Old Broad Street, London EC2N 1HQ (in such capacity, the Note Trustee ) will be appointed as trustee for the holders from time to time of the Notes pursuant to a trust deed to be dated on or about the Closing Date (the Note Trust Deed ) between the Issuer and the Note Trustee. See Summary Of The Issuer Transaction Documents Note Trust Deed. 12

The Note Trustee will also hold the security granted by the Issuer pursuant to a deed of charge to be dated on or about the Closing Date (the Issuer Deed of Charge ) between the Issuer and the Issuer Secured Parties on trust for the Issuer Secured Parties and will be entitled to enforce the Issuer Security subject to and in accordance with the terms of the Issuer Deed of Charge. See Summary Of The Issuer Transaction Documents Issuer Deed of Charge and Condition 12 (Enforcement). Principal Paying Agent and Agent Bank: HSBC Bank plc, acting through its office at 8 Canada Square, London E14 5HQ, will provide certain services to the Issuer as principal paying agent (in such capacity, the Principal Paying Agent ) and as agent bank (in such capacity, the Agent Bank ) pursuant to the terms of an agency agreement to be dated on or about the Closing Date (the Agency Agreement ) between the Issuer, the Paying Agents, the Agent Bank and the Note Trustee. In accordance with the terms of the Agency Agreement, the Agent Bank will calculate the interest rates applicable to each Class of Notes in accordance with Condition 6 (Interest). See Summary Of The Issuer Transaction Documents Agency Agreement. Irish Paying Agent: HSBC Institutional Trust Services (Ireland) Limited, acting through its office at HSBC House, Harcourt Centre, Harcourt Street, Dublin 2, Ireland, will be appointed as the Irish paying agent (the Irish Paying Agent and, together with the Principal Paying Agent and any other paying agents appointed pursuant to the Agency Agreement, the Paying Agents ) pursuant to the terms of the Agency Agreement. In accordance with the terms of the Agency Agreement, the Paying Agents will make payments on behalf of the Issuer of interest and principal on each Class of Notes. See Summary Of The Issuer Transaction Documents Agency Agreement. Cash Administrator: The Royal Bank of Scotland plc, acting through its office at 135 Bishopsgate, London EC2M 3UR (in such capacity, the Cash Administrator ) will be appointed as cash administrator by the Issuer pursuant to the terms of a cash administration agreement to be dated on or about the Closing Date (the Cash Administration Agreement ) between the Issuer, the Note Trustee and the Cash Administrator. The Cash Administrator will operate the Issuer Accounts and will arrange for the making of payments (having determined the amounts thereof) due from the Issuer and keep certain records on behalf of, amongst others, the Issuer. See Summary Of The Issuer Transaction Documents Cash Administration Agreement. Issuer Accounts Bank: The Royal Bank of Scotland plc, acting through its office at London Corporate Service Centre, PO Box 39552, 3rd Floor, 2 1 /2 Devonshire Square, London EC2M 4XJ (in such capacity, the Issuer Accounts Bank ) will be appointed to provide certain banking services to the Issuer in relation to the transaction accounts to be opened with the Issuer Accounts Bank in the name of the Issuer (the Issuer Accounts ) pursuant to an account bank agreement to be dated on or about the Closing Date (the Issuer Accounts Bank Agreement ) between the Issuer, the Issuer Accounts Bank, the Cash Administrator and the Note Trustee. The Issuer is required to maintain the Issuer Accounts with a bank which has at least the Minimum Short-Term Rating. See Summary Of The Issuer Transaction Documents Issuer Accounts Bank Agreement. 13