TRANSACTION SUPPLEMENT

Blue Granite Investments No. 4 (Proprietary) Limited(Incorporated with limited liability under registration number 2006/032191/07 in the Republic of South Africa)

ZAR6 000 000 000Asset Backed Note Programme

R350 000 000 Class A0 Notes due March 2015Rated Aaa by Moody’s Investors Service LimitedRated AAA(zaf) by Fitch Southern Africa (Proprietary) LimitedIssue Price 100%

R1 450 000 000 Class A2 Notes due March 2037Rated [Aaa] by Moody’s Investors Service LimitedRated [AAA(zaf)] by Fitch Southern Africa (Proprietary) LimitedIssue Price 100%

R192 000 000 Class B Notes due March 2037Rated [Aa2] by Moody’s Investors Service LimitedRated [AA (zaf)] by Fitch Southern Africa (Proprietary) LimitedIssue Price 100%

R100 000 000 Class C Notes due March 2037Rated [A2] by Moody’s Investors Service LimitedIssue Price 100%

R47 000 000 Class D Notes due March 2037Rated [Baa2] by Moody’s Investors Service LimitedIssue Price 100%

R45 000 000 Class E Notes due March 2037Rated [Ba2] by Moody’s Investors Service LimitedIssue Price 100%

R14 000 000 Class F Notes due March 2037Rated [B2] by Moody’s Investors Service LimitedIssue Price 100%

Arranger and Dealer Attorneys to Arranger and Issuer

This document constitutes the Transaction Supplement, relating to the Issuer described in this Transaction Supplement.

By executing this Transaction Supplement the Issuer binds itself to the terms and conditions of the Master Programmeand, accordingly, this Transaction Supplement must be read in conjunction with the Programme Memorandum issued byBlue Granite Investments No. 1 (Proprietary) Limited dated 28 October 2005. To the extent that there is any conflict orinconsistency between the contents of this Transaction Supplement and the Programme Memorandum, the provisions ofthis Transaction Supplement shall prevail.

In addition to disclosing information about the Issuer and the Issuer Programme, this Transaction Supplement mayspecify other terms and conditions of Notes (which replace, modify or supplement the Terms and Conditions), in whichevent such other terms and conditions shall, to the extent so specified in this Transaction Supplement, or to the extentinconsistent with the Terms and Conditions, replace, modify or supplement the Terms and Conditions.

Any capitalised terms not defined in this Transaction Supplement shall have the meanings ascribed to them in the sectionof the Programme Memorandum headed “Glossary of Definitions”. References in this Transaction Supplement to theTerms and Conditions are to the section of the Programme Memorandum headed “Terms and Conditions of the Notes”.A reference to any Condition in this Transaction Supplement is to that Condition of the Terms and Conditions.

Arranger and Dealer

The Standard Bank of South Africa Limited

The date of this Transaction Supplement is 6 March 2007

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TABLE OF CONTENTS

Page

GENERAL DESCRIPTION OF THE ISSUER PROGRAMME 3

TRANSACTION PARTIES 5

TRANSACTION DOCUMENTS 6

THE ISSUER 7

THE SECURITY SPV 8

THE ORIGINATOR AND THE ORIGINATOR’S CREDIT OPERATIONS 9

THE HOME LOAN POOL 16

THE SERVICER, THE SERVICING AGREEMENT AND SERVICER UNDERTAKING AGREEMENT 19

THE ADMINISTRATOR AND THE ADMINISTRATION AGREEMENT 20

STRUCTURAL FEATURES 21

PRIORITY OF PAYMENTS 26

THE SALE AGREEMENT 29

SUBSCRIPTION AND SALE 32

TRANSACTION SPECIFIC DEFINITIONS 34

ADDITIONAL/AMENDED TERMS AND CONDITIONS 47

GENERAL INFORMATION 48

CORPORATE INFORMATION 50

Appendix 1: ASSET POOL STRATIFICATION 52

Appendix 2: AUDITORS’ REPORT 58

Appendix 3: ESTIMATED AVERAGE LIVES OF THE NOTES 59

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3

GENERAL DESCRIPTION OF THE ISSUER PROGRAMME

A general description of the Issuer Programme is set out below. The general description does not purport to be completeand is taken from, and is qualified by, the remainder of this Transaction Supplement and, in relation to any particularTranche of Notes, the Applicable Pricing Supplement.

A brief overview of the Issuer Programme is as follows:

Issuer Programme Steps:

1. SBSA carries on the business of, amongst other things, originating Home Loans against the security of IndemnityBonds registered in SBSA’s favour over the Property by the relevant Borrower.

2. SBSA, as Seller, will sell Participating Assets to a newly created, insolvency remote Issuer on the Initial EffectiveDate. During the Revolving Period, the Issuer may acquire Additional Assets from the Seller on the terms set out inthe Sale Agreement.

3. The Borrower Indemnities and Indemnity Bonds held by SBSA pertaining to Participating Assets sold to the Issuerwill be transferred by SBSA to the Guarantee Entity. The Guarantee Entity will, in respect of each ParticipatingAsset transferred, issue to the Issuer a limited recourse Guarantee Entity Guarantee, guaranteeing the obligations ofthe relevant Borrower to the Issuer.

4. The Issuer will fund the purchase of Participating Assets on the Initial Effective Date using the funds raised throughthe issuance of the Notes on the Initial Issue Date and, if applicable, the funds raised through the Subsequent Issue.The Initial Effective Date will be determined in accordance with the provisions of the Sale Agreement and will bea date no later than 30 days after the Initial Issue Date. The funds raised by the Issuer on the Initial Issue Date willbe invested in Permitted Investments until the Initial Effective Date. The Subsequent Issue will be subject to thewritten consent of the Security SPV and the Rating Agency not advising the Issuer that such Subsequent Issue willcause the downgrading of the Notes in issue or result in the Notes in issue being placed on negative watch. The Issuermay issue further Notes to fund the acquisition of Additional Assets.

Borrower Indemnity and first ranking (and ifapplicable, lower ranking)Indemnity Bond over theBorrower’s Property

Sale ofParticipating

Assets

Limited Recourse

Guarantee

Participating Assets(Payments) Notes Issue

Proceeds

ExcessSpread andServicingFee

SubordinatedLoans

Security Cessionand Indemnity

SBSASecurity

SPV

Borrower

Blue GraniteInvestments No. 4

(Proprietary)Limited

Investors

SBSASubordinated

Lenders

GuaranteeEntity

Assignment

Limited RecourseGuarantee

5. SBSA, as Servicer to the Issuer, will administer, manage and service on behalf of the Issuer the Participating Assetssold and transferred to the Issuer. Pending registration of the transfer of Indemnity Bonds in relation to ParticipatingAssets sold to the Issuer, the Servicer will furthermore provide the Servicer Indemnity Undertaking, in terms ofwhich the Servicer undertakes, on request by the Issuer, to pay over all amounts collected from the Borrower interms of the Borrower Indemnity and the Indemnity Bond. Upon registration of transfer of an Indemnity Bond tothe Guarantee Entity, the rights and obligations of SBSA under the relevant Borrower Indemnity and the IndemnityBond and of the Servicer under the Servicer Indemnity Undertaking in relation to that Borrower Indemnity andIndemnity Bond will be transferred to the Guarantee Entity, and such rights and obligations under the ServicerUndertaking Agreement will be replaced by the Guarantee Entity Guarantee issued by the Guarantee Entity in favourof the Issuer with effect from the Transfer Date.

6. SBSA, as Administrator to the Issuer, will provide financial administration services to the Issuer, includingadministering the Priority of Payments.

7. SBSA, as the Derivative Counterparty, will enter into Derivative Contracts with the Issuer to hedge all of the Issuer’sinterest rate risk exposure arising from any mismatch between the basis of the interest earned on the PerformingAssets and that payable on the Notes.

8. SBSA and any member of the Standard Bank Group, as Subordinated Lenders, will advance Subordinated Loans tothe Issuer to provide part of the initial funding for the Issuer on the Initial Issue Date.

9. On the Initial Issue Date and from time to time thereafter, the Issuer will pay an amount into the Cash Reserve, suchthat the Cash Reserve shall be funded at 2.75% of the greater of the aggregate of the Principal Balances of theParticipating Assets of the Issuer, or the Outstanding Principal Amount of the Notes in issue, from time to time.

10. On the Initial Issue Date and thereafter, the Issuer will pay an amount into the Redraw Reserve, such that the RedrawReserve shall be funded at 2.25% of the greater of the aggregate of the Principal Balances of the Participating Assetsof the Issuer, or the Outstanding Principal Amount of the Notes in issue, from time to time.

11. Additional credit enhancement is provided for the Notes by the Issuer trapping cash in the Arrears Reserve in termsof the Priority of Payments, if certain delinquency levels are triggered.

12. SBSA, as Preference Shareholder, will be entitled to receive dividends in respect of the Preference Shares, subjectto the Priority of Payments.

13. The Security SPV has been incorporated for the purpose of holding and realising security for the benefit of SecuredCreditors, including Noteholders, subject to the Priority of Payments.

14. The Security SPV will furnish a limited recourse Guarantee to the Noteholders and other Secured Creditors. TheIssuer will indemnify the Security SPV in respect of claims made under the Guarantee. As security for suchIndemnity, the Issuer will cede and pledge the assets of the Issuer to the Security SPV.

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TRANSACTION PARTIES

Programme Wide

Owner Trustee Maitland Trust Limited

Security SPV Owner Trustee Maitland Trust Limited

Arranger SBSA

Administrator SBSA, acting through its Corporate and Investment Banking Division

Servicer SBSA, acting through its Home Loans Division

Transaction Wide

Originator SBSA

Seller SBSA, acting through its Home Loans Division

Issuer Blue Granite Investments No. 4 (Proprietary) Limited, registration number2006/032191/07

Security SPV Blue Granite No. 4 Security SPV (Proprietary) Limited, registration number2006/034129/07

Dealer SBSA

Subordinated Lenders SBSA and any member of the Standard Bank Group

Preference Shareholder SBSA

Calculation Agent SBSA

Transfer Agent Computershare Investor Services 2004 (Proprietary) Limited

Settlement Agent SBSA

Account Bank SBSA

GIC Provider SBSA

Guarantee Entity SB Guarantee Company (Proprietary) Limited, registration number 2006/021576/07

Guarantee Entity Servicer SBSA

Guarantee Entity Administrator SBSA

Derivative Counterparty SBSA

Rating Agencies Fitch and Moody’s

Such parties may be replaced in accordance with the provisions of the Transaction Documents.

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TRANSACTION DOCUMENTS

Programme Wide

1. Programme Memorandum dated 28 October 2005, incorporating the Terms and Conditions of the Notes

2. Trust deed of the Owner Trust

3. Trust deed of the Security SPV Owner Trust

Transaction Wide

4. Memorandum and articles of association of the Issuer

5. Memorandum and articles of association of the Security SPV

6. Trust Deed of the Guarantee Entity Owner Trust

7. Memorandum and articles of association of the Guarantee Entity

8. This Transaction Supplement dated 6 March 2007

9. Common Terms Agreement dated on or about 5 March 2007

10. Sale Agreement dated on or about 5 March 2007

11. Servicing Agreement dated on or about 5 March 2007

12. Servicer Undertaking Agreement dated on or about 5 March 2007

13. Common Terms Guarantee Agreement dated on or about 5 March 2007

14. Guarantee Entity Servicing Agreement dated on or about 5 March 2007

15. Guarantee Entity Administration Agreement dated 14 November 2006

16. Assignment Agreement dated on or about 5 March 2007

17. Administration Agreement (including appointment of Administrator as Calculation Agent) dated on or about5 March 2007

18. Owner Trust Suretyship dated on or about 5 March 2007

19. Pledge and Cession dated on or about 5 March 2007

20. Security Cession dated on or about 5 March 2007

21. Guarantee dated on or about 5 March 2007

22. Indemnity dated on or about 5 March 2007

23. Bank Agreement dated on or about 5 March 2007

24. Preference Share Subscription Agreement dated on or about 5 March 2007

25. Transfer Agent Agreement dated on or about 5 March 2007

26. Subordinated Loan Agreement (First Loss) dated on or about 5 March 2007

27. Subordinated Loan Agreement (Second Loss) dated on or about 5 March 2007

28. Safe Custody Agreement dated on or about 5 March 2007

29. Derivative Contracts dated on or about 5 March 2007

30. Guaranteed Investment Contract dated on or about 5 March 2007

31. Programme Agreement dated on or about 5 March 2007

32. Guarantee Entity Guarantees in respect of each Participating Asset

33. Note Subscription Agreements from time to time

34. Applicable Pricing Supplements from time to time

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THE ISSUER

1. INTRODUCTION

The Issuer was incorporated and registered in South Africa on 17 October 2006 under Registration number2006/032191/07 under the Companies Act as a private company with limited liability. The authorised share capitalof the Issuer is ZAR1 001.00 divided into 1000 ordinary par value shares of ZAR1.00 each and 100 cumulativeredeemable preference shares of ZAR0.01 each. The issued ordinary share capital of the Issuer comprises onehundred and twenty ordinary shares with a par value of ZAR1.00, held by the Owner Trust and the issued preferenceshare capital of the Issuer comprises of one Preference Share with a par value of ZAR0.01 held by the PreferenceShareholder. The Issuer has no subsidiaries.

2. DIRECTORS

The Directors of the Issuer are Francois Johan Schindehutte, Paul Werner Behrens and Edwin Marcus Letty, onlyone of whom is nominated by SBSA. The board of directors of the Issuer is accordingly independent of SBSA ascontemplated in paragraph 4(2)(m) of the Securitisation Regulations.

3. REGISTERED OFFICE

The registered office of the Issuer is situated at Standard Bank Centre, 9th Floor, Reception 3, 5 Simmonds Street,Johannesburg, 2001.

4. AUDITOR

The current auditors of the Issuer are KPMG Inc. and PricewaterhouseCoopers Inc.

5. ACTIVITIES

The activities of the Issuer will be restricted by the Transaction Documents and will be limited to the issue of Notes,the purchase of Participating Assets meeting the Eligibility Criteria, the exercise of related rights and powers andother activities referred to in the Transaction Documents or reasonably incidental to such activities.

As at the date of this Transaction Supplement, save as disclosed herein, the Issuer has no loan capital outstandingor created but unissued, no term loans outstanding and no other borrowings or indebtedness in the nature ofborrowing nor any contingent liabilities or guarantees.

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THE SECURITY SPV

1. INTRODUCTION

The Security SPV was incorporated and registered in South Africa on 31 October 2006, under Registration number2006/034129/07 under the Companies Act as a private company with limited liability. The authorised share capitalof the Security SPV is ZAR1 000.00 divided into 1000 ordinary par value shares of ZAR1.00 each. The issued sharecapital of the Security SPV comprises one hundred and twenty ordinary shares with a par value of ZAR1.00, heldby the Security SPV Owner Trust. The Security SPV has no subsidiaries.

2. DIRECTORS

The Directors of the Security SPV are Paul Werner Behrens and Edwin Marcus Letty.

3. REGISTERED OFFICE

The registered office of the Security SPV is situated at c/o Maitland Trust Limited, 1st Floor, 32 Fricker Road, IllovoBoulevard, Johannesburg, 2196.

4. AUDITOR

The current auditors of the Security SPV are KPMG Inc. and PricewaterhouseCoopers Inc.

5. ACTIVITIES

The activities of the Security SPV are described in the section of the Programme Memorandum headed “Security”and restricted in terms of its memorandum and articles of association.

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THE ORIGINATOR AND THE ORIGINATOR’S CREDIT OPERATIONS

This section should be read in conjunction with, and is qualified in its entirety by, the detailed information containedelsewhere in this Transaction Supplement and the Programme Memorandum and in particular, the section of theProgramme Memorandum headed “The Originator and the Originator’s Credit Operations”.

GROUP FINANCIAL HIGHLIGHTS

The financial highlights are set out below.

June Change June December2006 % 2005 2005

Standard Bank Group

Earnings

Headline earnings Rm 4 869 18 4 126 9 013Profit attributable to ordinary shareholders Rm 5 121 27 4 036 8 981

Other indicators

Headline EPS cents 359,0 18 304,8 666,0Fully diluted headline EPS cents 353,0 18 300,4 654,5EPS cents 377,9 27 298,1 663,6Fully diluted EPS cents 371,3 26 293,8 652,2Dividend cover times 2,5 2,5 2,5Total dividends per share cents 144,0 18 122,0 267,0Net asset value per share cents 3 231 22 2 644 2 830Ordinary shareholders’ funds Rm 43 907 23 35 794 38 270ROE % 24,2 23,7 25,2Capital adequacy % 14,7 15,0 14,2Number of ordinary shares– weighted average thousands 1 356 202 1 353 703 1 353 382– fully diluted weighted average thousands 1 379 172 1 373 708 1 377 085Number of employees 40 601 40 514 40 245

Banking activities

Earnings

Headline earnings Rm 4 539 18 3 850 8 393Profit attributable to ordinary shareholders Rm 4 671 20 3 877 8 479

Balance sheet

Total assets Rm 755 112 34 564 891 601 738Loans and advances (net of credit Rm 415 585 38 301 546 342 870impairments)Deposit and current accounts Rm 498 994 33 374 063 412 309

Other indicators 24,4 24,2 25,6

ROE % 2,75 2,92 2,97Net interest margin times 54,2 55,0 54,4Non-interest revenue to total income % 1 300 >100 638 1 207Credit impairment charges Rm 0,70 0,45 0,40Credit loss ratio % 54,2 56,4 56,0Cost-to-income ratio %Effective tax rate (including indirect taxation) % 25,3 25,6 26,1Number of employees 36 524 1 36 113 36 131

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10

GROUP BUSINESS UNITS

The Standard Bank Group key business units report as follows:

Personal andBusiness Banking

Vehicle andAsset Finance

Global markets Liberty Life

Mortgage lendingBanking and trade finance

Stanlib

Card products

Transactional products

Bancassurance

Investmentbanking

Corporate andInvestment Banking

Standard Bank Group

Investment Managementand Life Insurance

The business units are briefly described below.

Personal and Business banking

This includes banking and other financial services to individual customers and small to medium-sized enterprisesthroughout South Africa and in the rest of Africa.

June 2006 June 2005

External net advances (Rm) 229 966 180 238Headline earnings (Rm) 2 086 1 683Headline earnings growth (%) 24 26ROE (%) 28,9 27,3Cost-to-income ratio (%) 57,2 60,3Credit loss ratio (%) 1,02 0,85Headline earnings contribution (%) 43 41

The major product areas within Personal and Business banking are represented as follows:

Total income Headline earningsJune June December June June December2006 Change 2005 2005 2006 Change 2005 2005Rm % Rm Rm Rm % Rm Rm

Mortgage lending 1 379 18 1 171 2 425 501 14 440 793Instalment sales and finance leases 811 18 685 1 458 95 4 91 307Card products 1 471 38 1 066 2 363 172 16 148 402Transactional products 5 746 14 5 033 10 588 1 040 20 870 2 025Bancassurance 681 49 457 1 163 278 >100 134 463

Personal and Business Banking 10 088 20 8 412 17 997 2 086 24 1 683 3 990

Corporate and Investment Banking

This includes commercial and investment banking services to larger corporates, financial institutions and internationalcounterparties, focused on emerging markets through South Africa, 16 other African countries and 21 countries outsideAfrica.

June 2006 June 2005

External net advances (Rm) 179 469 115 040Headline earnings (Rm) 2 210 1 896Headline earnings growth (%) 17 7ROE (%) 27,9 25,5Cost-to-income ratio (%) 52,7 54,2Credit loss ratio (%) 0,26 (0,16)Headline earnings contribution (%) 45 46

The major product areas within Corporate and Investment Banking are represented as follows:

Total income Headline earningsJune June December June June December2006 Change 2005 2005 2006 Change 2005 2005Rm % Rm Rm Rm % Rm Rm

Global markets 2 653 25 2 129 4 428 816 11 735 1 417Banking and trade finance 2 333 12 2 077 4 433 742 6 700 1 560Investment banking 1 083 36 795 1 859 652 41 461 1 073

Corporate and Investment Banking 6 069 21 5 001 10 720 2 210 17 1 896 4 050

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Investment Management and Life Insurance

This includes life insurance and asset management activities by group companies Liberty Life and Stanlib.

June 2006 June 2005

Total assets (Rm) 185 395 149 001Third party funds under management (Rm) 182 000 160 000Normalised embedded value (Rm)1 20 511 17 233Normalised headline earnings (Rm) 330 276Headline earnings growth (%) 20 93ROE (%) 21,2 18,8Headline earnings contribution (%) 7 7

1 Liberty Life as published.

External assets under management

June June December2006 Change 2005 2005Rbn % Rbn Rbn

Asset management assets under managementSegregated funds 90 30 69 83Properties 2 – 2 2

Total asset management assets under management 92 30 71 85

CREDIT RATINGS

The latest credit ratings for SBSA are detailed below:

Short term Long term Outlook

Fitch Ratings (July 2006)

Foreign currency F2 BBB+ StableLocal currency A- StableNational F1+(zaf) AA+(zaf) Stable

Standard & Poor’s (November 2005) Public information rating

Local currency BBBpi

Moody’s Investors Services (January 2005) Public information rating

Bank deposit rating P-2 Baa1 Stable

STANDARD BANK HOME LOANS DIVISION

SBSA utilised the opportunity created by changed legislation, allowing Banks to offer residential mortgages, and startedHome Loans Division (SBHL) in December 1986. A significant component of the basis for business process and staffwas created out of the existing structure of Standard Building Society. From humble beginnings of 7 take-on staff, SBHLis now a versatile, competitive business unit with a residential mortgage market share currently close to 28%.

SBHL forms part of the Personal & Business Banking Division of SBSA as highlighted above.

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The SBHL organogram reflects the business unit’s structure, below

Note:

(i) Shaahien Mottiar has a direct reporting line into the centralised Credit function headed by the Global Head, Personal& Business Banking Credit.

(ii) Francois Schindehutte has a direct reporting line into the centralised Finance function headed by the Director,Personal & Business Banking Finance.

(iii) James Cullen has a direct reporting line into the centralised processing function headed by the Director, Personaland Business Banking Integrated Processing.

Origination and Customer Interaction: Products, Acquisition and Operations:

Products

Home Loans Product and Low Income Housing units deliver development and management services. Product diversityis required to cover a wide range of customer profiles and income ranges based on the country’s social demographics, inthe following key categories/segments:

• Affinity & Mass;

• Private;

• Affordable Housing; and

• Fully Guaranteed (pension-backed) Lending.

Acquisition

SBSA follows a multi-channel strategy that involves partnerships on internal and external fronts, as follows:

Internal:

• Branch network;

• Private Bank and Priority Suites;

• Internet;

• Call centre;

• Home Loans mobile consultants; and

• Business banking.

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Shaahien Mottiar

Head, Credit (i)

Staff Comp: 69

FrancoisSchindehutte

Director,Finance (ii)

Staff Comp: 18

JohnRivers-Moore

Director, SalesSupport

Staff Comp: 4

Dennis Lupambo

Director

Shaheen Adam

Director, Product

Staff Comp: 10

Rob Pellizzer

Head, LegalCompliance andOperational Risk

Staff Comp: 2

Linda Sing

Director,AffordableHousing

Staff Comp: 103

Jenny Price

Head, CustomerRetention

Staff Comp: 77

Trevor Biggs

Head, BusinessDelivery

Enablement

Staff Comp: 14

James Cullen

Director,Operations (iii)

Staff Comp: 1 153

Leon Barnard

Director

Home Loans

External:

• Corporate partnerships;

• Mortgage originators;

• Estate agencies; and

• Developers.

Operations

Application processing and customer management involves five provincial home loans offices. The new loans team isresponsible for application, processing and granting; the assessors are responsible for property valuation and theregistration team is responsible for the legal fulfilment process.

Once application information has been validated it is input into credit application scorecards. The scorecard decisionoutcome is an approval, decline or referral to the credit granting team to make the final grant decision. A credit qualityassurance team validate key data inputs on a sample (±20%) of monthly grants. Results of the monthly assuranceassessments are distributed to key credit and operations staff for further action.

Provincial operations are supported by the retention unit; securities and cancellations; client services departments andthe customer contact centre. Further business management and support involves SBHL finance, SBHL credit,compliance and risk, legal and various other centralised service teams.

Home Loans Credit

Governance and Structure

Credit risk is managed in a governance structure supported by clearly defined mandates and delegated authorities. TheGroup Credit Committee delegates authority to the African Credit Committee for the approval of credit proposals. ThePersonal and Business Banking Credit department is responsible for the credit operations within the Personal andBusiness Banking Division of the group and is managed and mandated by the Personal and Business Banking CreditCommittee. Credit decision making is independent of other business areas.

Underwriting

The underwriting team consists of four provincial processing units in Johannesburg, Pretoria, Cape Town and Durban.These processing units cover all business origination processes and effectively assess loan applications where a manualcredit assessment is required. Credit scoring and policy rules are applied against all applications and each applicant inthe case of multiple (joint) applicants. Governance committees and processes ensure the effective evaluation of, andchanges to credit policies.

Application scorecards were first introduced in mid-1997 to support the entire underwriting process. The scorecarddevelopment team has used expertise from Experian/Scorex although most development is now done in-house withguidance from international scorecard consultants. The Experian Strategy Manager software application is used insupport of bespoke Personal & Business Banking Credit software and systems, managing both application andbehavioural scorecards. Internal and external data is used in the scoring process. Ongoing and regular reviews ofscorecards are conducted using analytical methods. Cut-offs are adjusted depending on SBSA’s risk appetite.

A dual credit bureau strategy is utilised. The outcome of the process is ‘a credit score’ associated with a predeterminedrisk profile including the probability of default. Credit scores are categorised by risk-bands which are then used todetermine interest-rate pricing and terms and conditions extended to the applicant. Acceptance or rejection of theapplication offered to the customer is largely driven by scorecard outcomes.

Credit policies and procedures supplement the scorecard and enhance the business’ ability to best manage exceptions oroutliers, commonly known as ‘refers’. The granting area that assesses the refers is staffed by qualified and experiencedpersonnel of appropriate seniority with appropriate mandates. This ensures that all referred applications found tocontravene policy rules or supported by compelling circumstances i.e. marginal affordability, are comprehensivelyreviewed. Acceptance rates and the relative performance of referred applications are monitored, maintaining establishedparameters.

Collections

The Home Loan Collections Department is centralised in Johannesburg. The primary objective of the arrearsmanagement process is to rehabilitate arrear accounts. An account is deemed to be in arrears if any payment or portionsthereof have not been made in a timely manner.

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Accounts are differentiated into two broad categories in the collections process depending on their arrears status.These are:

• Pre-Legal or Pre-Non-Performing Loans (NPL), including collectors; and

• Legal or Non-Performing Loans (NPL), including deceased estates and insolvencies.

Accounts in pre-legal/pre-NPL are those which are one instalment or more in arrears and have not yet been placed in theforeclosure process. Deceased estates and insolvencies will move directly to Legal/NPL as soon as they have beenidentified as such.

It should be noted that accounts could be in the pre-legal process after 90-days in arrears as a result of transfer beingawaited for the sale of the related property. In most of these instances a property guarantee will be held.

Legal or NPL accounts are those on which the foreclosure process has been initiated. Once accounts have been flaggedas legal/NPL, interest income is suspended and specific debt provisions are raised against these accounts according tothe agreed policy. Most legal/NPL accounts are outsourced to SBSA’s panel of attorneys as part of the debt collectionprocess.

Differentiated collection strategies are used to ensure an effective and efficient process. The risk determines thecollection procedure to be followed with respect to each account including the type of contact (phone call, physical calls,letters, SMS, etc) as well as frequency of contact. There is a dedicated credit call centre located in Johannesburg.

SBHL was the first area in credit to implement an automated collections system (CACS). The CACS was implementedin November 2005 and is performing to expectations.

Systems

All aspects of SBHL business are operated through systems that are continually reviewed and updated to supportbusiness requirements. These systems are integrated into SBSA’s branch network and third party originators. Thisfacilitates the comprehensive management of origination, customer management, legal, credit and retention processes.

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THE HOME LOAN POOL

This section should be read in conjunction with, and is qualified in its entirety by, the detailed information containedelsewhere in this Transaction Supplement and the Programme Memorandum and in particular the loan pool informationdisclosed under Appendix I of this Transaction Supplement.

1. HOME LOAN POOL

1.1 The Home Loans included in this transaction were originated by SBSA directly through its network ofbranches or indirectly through third party originators since 10 March 2006 (selected by the date on which theIndemnity Bond was registered). The loan pool is a subset that was randomly selected from of all loans thatwere originated and complied with the Eligibility Criteria. All loans that were included in the loan pool havebeen evaluated and approved in terms of SBSA’s standard credit procedures applicable to residential mortgageloans at the time they were granted. The majority of property valuations are performed by valuers employedby SBSA or, in some cases, by accredited independent valuers.

1.2 All Home Loans are amortising and the Borrower is required to repay the loan in equal instalments over theterm of the loan. The loans generally bear a variable interest rate, and when that rate changes, the instalmentwill be recalculated to ensure that the loan is amortised over the remaining term of that loan. Where the loansare linked to a variable rate, this will be SBSA’s Prime Rate as determined from time to time. Historically allthe major banks have charged similar prime rates. However, SBSA is not obliged to change its rate when otherbanks do or to charge a similar rate.

1.3 Some Home Loans are subject to a fixed rate of interest (or the rate may be capped) for part of the term ofsuch loans. The remainder of the Home Loans are typically granted at a variable rate that is a concession toSBSA’s Prime Rate (i.e. on a Prime minus basis). The magnitude of the concession (discount) is determinedby SBSA when the loan is granted and reflects, to some extent, the creditworthiness of the Borrower. In termsof the Eligibility Criteria, the minimum interest rate payable on each loan is the Prime Rate less 2.2% (or, inthe case of a fixed rate loan, the net yield paid by the Hedge Counterparty). The Home Loans comprising therelevant Asset Pool (as defined in the Sale Agreement) at the Initial Effective Date will not be subject tointerest rates which are capped or fixed.

1.4 All of the Home Loans included in the Initial Asset Pool are Guaranteed Home Loans.

2. HISTORICAL DATA

2.1 The tables in Appendix 1 set out statistical information representative of the characteristics of the portfolio ofHome Loans on the Cut-Off Date, being 13 January 2007. The aggregate balance of the portfolio of HomeLoans on the Cut-Off Date is R4 627 214 381.40. In the event that the Subsequent Issue does not take place,the portfolio of Home Loans sold to the Issuer on the Initial Effective Date, shall comprise an initial pool ofHome Loans to the value of at least R2 114 225 000.00. The information is derived from information suppliedby the Seller, which reflects the position as at the Cut-Off Date. The characteristics of the Initial Asset Poolas at the Initial Effective Date may differ from those set out in the tables as a result of, inter alia, Repaymentsand Prepayments of Home Loans prior to the Initial Effective Date.

2.2 At the Cut-Off Date, 78.05% (78.56% in the event that the Subsequent Issue does not take place) of Borrowersunder the entire pool of Home Loans were not self-employed, the remainder being self-employed. Informationin respect of employment and use of the Property is derived from information supplied to the Seller by theBorrowers which cannot be independently verified.

3. ELIGIBILITY CRITERIA

On origination of each Participating Asset from time to time, the Seller’s standard credit approval policies andprocedures will have been applied. The general criteria that each Participating Asset must satisfy in order to qualifyfor acquisition by the Issuer, include, inter alia, the following, all as at the Effective Date:

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Programme Wide

3.1 each Home Loan Agreement:

3.1.1 constitutes legal, valid and binding obligations of the Borrower under such Home Loan Agreement,enforceable against such Borrower in accordance with the terms of such Home Loan Agreement;

3.1.2 is in full force and effect and, at the date such Home Loan Agreement was entered into, each party tosuch Home Loan Agreement had the capacity and authority to execute such Home Loan Agreement;

3.1.3 is entered into with a Borrower who may only be a natural person, company, close corporation or atrust;

3.1.4 is one in respect of which:

3.1.4.1 there are no facts or circumstances which give rise to any right of rescission, set-off,counterclaim or defence, to the obligations of the Borrower;

3.1.4.2 neither the operation of any of the terms of the Home Loan Agreement nor the exercise of anyright under the Home Loan Agreement will render such Home Loan Agreementunenforceable in whole or in part or subject to any right of rescission, set-off, counterclaimor defence;

3.1.4.3 no such right of rescission, set-off, counterclaim or defence has been asserted with respect tosuch Home Loan Agreement;

3.1.4.4 the Seller has no knowledge of any challenge, dispute or claim by or against the Borrowerunder or affecting such Home Loan Agreement or of the liquidation or insolvency of theapplicable Borrower;

3.1.4.5 neither the Seller nor the Borrower is (nor would with the giving of notice or lapse of time orthe satisfaction of any other condition or any combination thereof be) in breach of, or indefault under, its obligations arising under such Home Loan Agreement;

3.1.4.6 no amounts due with respect to such Home Loan Agreement shall be reduced or impaired, asa result of:

3.1.4.6.1 any action or inaction by the Seller in respect of periods prior to the Effective Date;or

3.1.4.6.2 any claim by any Borrower against the Seller in respect of periods prior to theEffective Date;

3.1.5 is capable of being assigned without the prior consent of, or notice to, the Borrower;

3.1.6 is not subject to any option, right of first refusal, pre-emptive right or other agreement giving anyperson a right (whether exercisable now or in the future and whether contingent or not) to call for thesale and transfer to them or any third party of such Home Loan Agreement, and each such Home LoanAgreement is free and capable of being assigned;

3.1.7 the Properties subject thereto are not subject to any Encumbrance, save as expressly contemplated inany Transaction Document;

3.1.8 has not been ceded, assigned, transferred, made-over, sold and/or discounted by the Seller to any thirdparty, bank, discount house, finance house and/or factoring house;

3.1.9 is upon terms and conditions substantially and materially the same as those disclosed in writing to theIssuer;

3.1.10 is Rand denominated;

3.1.11 has been concluded with a Borrower who is a citizen of South Africa;

3.1.12 was originated by or on behalf of the Seller in the ordinary course of the Seller’s business, applyingthe Seller’s standard credit approval policies and procedures at the time when the relevant Home LoanAgreement was concluded;

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3.1.13 has not been amended or modified, except in writing, and copies of all such amendments andmodifications are attached to the relevant Home Loan Agreement;

3.1.14 can be segregated and is a separately identifiable agreement on the system of the Servicer at any timeafter the Effective Date;

3.1.15 is capable of cession and assignment to the Issuer free of any Encumbrances in terms of a legal, validand binding Sale Agreement;

3.2 each Borrower has executed a Borrower Indemnity in favour of the Seller, its successors in title or assigns andeach such Borrower Indemnity requires the Borrower to secure its obligations under the Borrower Indemnityby a first ranking Indemnity Bond or such other lower ranking bond, provided that all mortgage bondsregistered against the title deeds of the Property are registered in favour of the Seller, its successors in title orassigns and the registration of such first ranking Indemnity Bond or other lower ranking bond, if applicablehas taken place;

3.3 each document in respect of Related BG4 Security:

3.3.1 is a legal, valid and binding obligation of the provider of such security, enforceable against suchprovider in accordance with the terms of such document;

3.3.2 is in full force and effect and each party to such document had capacity and authority to execute suchdocument;

3.3.3 is capable of being assigned without the prior consent of, or notice to, the provider of such security;

3.3.4 has not been amended or modified, except in writing, and copies of all such amendments andmodifications are attached to the relevant Home Loan Agreement; and

3.3.5 can be segregated and is a separately identifiable agreement on the system of the Servicer at any timeafter the Effective Date.

Transaction Specific

3.4 each Home Loan:

3.4.1 provides that payments under such agreement are not subject to deduction or withholding;

3.4.2 complies with all requirements of any Applicable Laws;

3.4.3 has a maximum LTV Ratio (“LTV Ratio Maximum”) of not more than 100% in relation to thecommitted loan balance provided that if the Arrears Reserve Threshold is greater than 0.8%, theMaximum LTV Ratio is not more than 80% in relation to the committed loan balance. If the ArrearsReserve Threshold reduces to below 0.8%, the LTV Ratio Maximum shall again not be more than100% in relation to the committed loan balance;

3.4.4 has an ITI Ratio of less than 30%;

3.4.5 has a maximum term of 25 years from the date of the first advance of funds to a Borrower in terms ofthe relevant Home Loan Agreement;

3.4.6 is Fully Performing as at the date of purchase thereof by the Issuer;

3.4.7 is not more than 0.5 months in arrears;

3.4.8 is repayable in equal instalments over the term of the Home Loan;

3.4.9 is a loan agreement secured directly or indirectly by, at least, a first ranking Indemnity Bond over animmovable property;

3.4.10 requires the Borrower, or the relevant body corporate on behalf of the Borrower, to take out andmaintain homeowners’ insurance;

3.4.11 is a loan agreement not secured by a dwelling or building under construction;

3.4.12 has a minimum interest rate yield (or in the case of a fixed rate loan, the net yield paid by the DerivativeCounterparty) of the Prime Rate less 2.2%; and

3.4.13 has a maximum loan amount of R3 500 000.

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THE SERVICER, THE SERVICING AGREEMENT AND SERVICER UNDERTAKINGAGREEMENT

This section should be read in conjunction with, and is qualified in its entirety by, the detailed information containedelsewhere in this Transaction Supplement and the Programme Memorandum and in particular the section of theProgramme Memorandum headed “The Servicer and the Servicing Agreement”.

The Issuer will appoint SBSA as the Servicer in terms of the Servicing Agreement. The Servicer is required to administerthe Participating Assets as the agent of the Issuer in accordance with the terms of the Servicing Agreement as readtogether with the Master Servicing Agreement.

The description of the Servicer’s duties contained in the Programme Memorandum applies to the Servicer’s duties interms of this Transaction provided that, in addition to such duties:

• in terms of the Servicing Agreement, the Servicer undertakes to advise and assist the Issuer in relation to all such stepswhich need to be taken in order to procure that the Issuer complies with all Applicable Laws, including, whereapplicable, the National Credit Act, No 34 of 2005; and

• in terms of the Servicer Undertaking Agreement, pending registration of the transfer of the Indemnity Bonds to theGuarantee Entity in relation to Participating Assets sold to the Issuer, the Servicer will provide the Servicer IndemnityUndertaking in terms of which the Servicer undertakes, on request by the Issuer in terms of the Servicer UndertakingAgreement, to pay over all amounts collected from the Borrower in terms of the Borrower Indemnity and/or theIndemnity Bond. Upon registration of transfer of an Indemnity Bond to the Guarantee Entity, the rights andobligations of SBSA under the relevant Borrower Indemnity and the Indemnity Bond and of the Servicer under theServicer Undertaking Agreement in relation to that Indemnity Bond will be transferred to the Guarantee Entity, andsuch rights and obligations under the Servicer Undertaking Agreement will be replaced by the Guarantee EntityGuarantee, issued by the Guarantee Entity in favour of the Issuer with effect from the Transfer Date.

The Servicing Agreement provides for the manner in which the Servicer will collect all monies from Borrowers due tothe Issuer, on the Issuer’s behalf. Monies collected will be transferred from the Collections Account to the TransactionAccount on the 5th Business Day of the month following the month during which the amounts were collected by theServicer, unless an Enforcement Notice has been delivered to the Issuer, the Servicer no longer has the Required CreditRating and/or upon the occurrence of an Event of Default by the Servicer under the Servicing Agreement, in which eventmonies collected will be transferred to the Transaction Account on a daily basis.

SBSA is entitled to charge a Servicing Fee (exclusive of VAT) for its services under the Servicing Agreement payableon each Payment Date in accordance with the Priority of Payments. For so long as SBSA is the Servicer, the ServicingFee payable to SBSA in accordance with the Priority of Payments will be capped at the Servicing Fee Cap.

The appointment of SBSA may be terminated by the Issuer (with the consent of the Security SPV) on the happening ofcertain events of default, insolvency on the part of SBSA or pursuant to a breach by the Servicer of its obligations. TheServicer is entitled to resign on not less than 12 months’ written notice.

SBSA has disaster recovery systems and back up arrangements in place. In the event of a “disaster” (for these purposes,any event which disrupts on-line availability for more than 48 consecutive hours), SBSA’s software will be loaded onone or more computers in a secure offsite location. The completion of recovery is to take place within 48 hours.

The Servicer is not under any obligation to fund payments owed in respect of the Securitisation Scheme, absorb lossesincurred in respect of the Participating Assets transferred to the Issuer or otherwise to recompense investors for lossesincurred in respect of the Securitisation Scheme.

On each Determination Date the Servicer is entitled, but not obliged, to pay into the Transaction Account an amount (a “Servicer Advance”) equal to any instalments owing under a Participating Asset but unpaid prior to suchDetermination Date, but only if the Servicer confirms in writing that, in its reasonable opinion, the failure of theBorrower to make timeous payment of the instalment is for non credit-related reasons and is not due to a lack of fundsor an invalid refusal on the part of the Borrower to make that payment. The Issuer shall reimburse the Servicer Advancetogether with market related interest which has accrued on such Servicer Advance (from the date of the Servicer Advanceto the date of reimbursement) forthwith upon, but only to the extent that, such late instalments are paid by or on behalfof the relevant Borrower to the Issuer. Such amounts shall be paid as an Excluded Item from available funds in theTransaction Account. The obligations of the Servicer in regard to the advance of Servicer Advances do not significantlyextend beyond the salient features disclosed in this Transaction Supplement and the Servicer will not support theSecuritisation Scheme beyond such obligations within the meaning of the Securitisation Regulations.

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THE ADMINISTRATOR AND THE ADMINISTRATION AGREEMENT

This section should be read in conjunction with, and is qualified in its entirety by, the detailed information containedelsewhere in this Transaction Supplement and the Programme Memorandum and in particular the section of theProgramme Memorandum headed “The Administrator and the Administration Agreement”.

The Issuer will appoint SBSA as the Administrator and as its agent, to advise the Issuer in relation to the managementof the Issuer Programme and to exercise the Issuer’s respective rights, powers and duties under the TransactionDocuments, upon the terms and conditions of the Administration Agreement.

SBSA is entitled to charge an Administrator Fee (exclusive of VAT) for its services under the Administration Agreementpayable on each Payment Date in accordance with the Priority of Payments.

The appointment of SBSA as Administrator may be terminated by the Issuer (with the consent of the Security SPV) onthe happening of certain events of default, insolvency on the part of SBSA or pursuant to a breach by the Administratorof its obligations. The Administrator is entitled to resign on not less than 12 months’ written notice.

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STRUCTURAL FEATURES

1. CASH MANAGEMENT

Cash is managed in the manner set out below.

1.1 Account Bank

In the event that the Account Bank ceases to hold the Required Credit Rating, a replacement Account Bankwill be appointed in accordance with the provisions of the Bank Agreement.

1.2 Transaction Account

All amounts due to the Issuer (other than amounts referred to in 1.3 below) will be paid directly on receiptthereof into the Transaction Account. Certain cash reserves of the Issuer if established, will be held in theTransaction Account. Prior to the delivery of an Enforcement Notice, the Administrator and the Servicer willhave joint signing authority in respect of the Transaction Account. After the delivery of an EnforcementNotice, the Security SPV will have sole signing authority in respect of the Transaction Account.

1.3 Collections Account

The Servicer undertakes to procure that amounts paid by or on behalf of Borrowers in respect of theParticipating Assets sold to the Issuer and paid for or to the account of the Issuer will be paid into theCollections Account and transferred, together with any interest earned, to the Transaction Account on the5th Business Day of the month following the month during which the amounts were collected by the Servicer,unless an Enforcement Notice has been delivered to the Issuer, the Servicer no longer has the Required CreditRating and/or upon the occurrence of an Event of Default by the Servicer under the Servicing Agreement, inwhich event monies collected will be transferred to the Transaction Account on a daily basis.

1.4 Other payments

The Servicer shall procure that all amounts received by the Servicer under the Participating Assets which havenot specifically been provided for under 1.2 and 1.3 above and which are attributable to the ParticipatingAssets sold to the Issuer shall be paid into the Transaction Account on a daily basis. Where such amounts arenot immediately identifiable as being attributable to such Participating Assets, the amounts (together with anyinterest earned) shall be paid into the Transaction Account immediately upon their being identified as beingattributable to such Participating Assets.

1.5 Permitted Investments

The Administrator may, on behalf of the Issuer and on the instructions of the Servicer, invest cash from timeto time standing to the credit of the Issuer’s Bank Accounts in Permitted Investments, provided that for so longas the GIC Provider has the Required Credit Rating all cash from time to time standing to the credit of theIssuer’s Bank Accounts will be invested with the GIC Provider. The proceeds from the Initial Issue of Notesshall be invested in Permitted Investments until the Initial Effective Date on which date such proceeds shallbe applied to purchase the eligible Participating Assets.

2. CASH RESERVE

On any Payment Date, the Issuer will be required to pay an amount into the Cash Reserve, in terms of the Priorityof Payments, up to the Cash Reserve Required Amount. The Cash Reserve will be available to meet certain seniorfees and expenses and interest on the most senior Notes as more fully specified in the Pre-Enforcement Priority ofPayments (which is summarised in the section headed “Priority of Payments”) and set out in more detail in theAdministration Agreement, on any Payment Date, in the event of a shortfall in available funds for that purpose interms of the Priority of Payments. On each Payment Transfer Date, interest accrued on the Cash Reserve balance upto the Payment Date, will be paid to the Transaction Account. In the event of the delivery of an Enforcement Notice,all monies in the Cash Reserve will be applied in accordance with the Post-Enforcement Priority of Payments.

3. ARREARS RESERVES

3.1 The Issuer will be obliged to pay an amount into the Arrears Reserve up to the Arrears Reserve RequiredAmount on each Payment Date immediately succeeding the relevant Determination Date pursuant to therelevant provisions of the Pre-Enforcement Priority of Payments. The Arrears Reserve will be funded out ofexcess spread and not out of Principal Collections.

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3.2 If at any time the amount standing to the credit of the Arrears Reserve exceeds the Arrears Reserve RequiredAmount, the amount of such excess shall be paid to the Transaction Account. If an Enforcement Notice isdelivered, all monies in the Arrears Reserve will be applied in accordance with the Post-Enforcement Priorityof Payments. On each Payment Transfer Date, interest accrued on the Arrears Reserve balance up to thePayment Date, will be paid into the Transaction Account.

4. PURCHASE RESERVE

On any Payment Date during the Revolving Period, the Issuer will be required to pay Principal Collections notapplied, in terms of the Pre-Enforcement Priority of Payments, to meet certain senior fees and expenses, the paymentof capital and interest on the most senior Notes and the funding of Further Advances, as more fully specified in thePre-Enforcement Priority of Payments, (which is summarised in the section headed “Priority of Payments”) and setout in more detail in the Administration Agreement, into the Purchase Reserve in terms of the Priority of Payments.Funds in the Purchase Reserve may be used during each Interest Period (i) to fund Redraws; (ii) to fund theacquisition of Additional Assets during the Revolving Period or the advance of Further Advances, during theRevolving Period and (iii) to meet certain senior fees and expenses, the payment of capital and interest on the mostsenior Notes in the Pre-Enforcement Priority of Payments, on any Payment Date, in the event of a shortfall inavailable funds for that purpose in terms of the Priority of Payments. Any amounts in excess of R10 000 000standing to the credit of the Purchase Reserve for two consecutive Payment Dates shall be added to the RedemptionAmount and applied in redeeming the Notes. On each Payment Transfer Date, interest accrued on the PurchaseReserve balance from the Determination Date up to the Payment Date, will be paid to the general funds in theTransaction Account. In the event of the delivery of an Enforcement Notice, all monies in the Purchase Reserve willbe applied in accordance with the Post-Enforcement Priority of Payments.

5. REDRAW RESERVE

On any Payment Date, the Issuer will be required to pay an amount into the Redraw Reserve, in terms of the Priorityof Payments, up to the Redraw Reserve Required Amount. The Redraw Reserve will be available to (i) fund Redrawsand (ii) meet certain senior fees and expenses, the payment of capital and interest on the most senior Notes and thefunding of Redraws, as more fully specified in the Pre-Enforcement Priority of Payments, (which is summarised inthe section headed “Priority of Payments”) and set out in more detail in the Administration Agreement) in the Pre-Enforcement Priority of Payments, on any Payment Date, in the event of a shortfall in available funds for thatpurpose in terms of the Priority of Payments. On each Payment Transfer Date, interest accrued on the RedrawReserve balance up to the Payment Date, will be paid to the Transaction Account. In the event of the delivery of anEnforcement Notice, all monies in the Redraw Reserve will be applied in accordance with the Post-EnforcementPriority of Payments.

6. INTEREST DEFERRAL EVENT

In the event of the occurrence of an Interest Deferral Event on any Class of Notes, interest will not accrue nor bepaid on the amount of the deferred interest in respect of such Class of Notes.

7. SUBORDINATED LOAN AGREEMENTS

7.1 SBSA and any member of the Standard Bank Group will be appointed as Subordinated Lenders in terms ofthe Subordinated Loan Agreements. The advances in terms of the Subordinated Loan Agreements shall beused to provide part of the initial funding for the Issuer on the Initial Issue Date.

7.2 The Subordinated Loans will be in the following amounts:

7.2.1 Subordinated Loan No. 1: R9 000 000; and

7.2.2 Subordinated Loan No. 2: R18 500 000.

7.3 The Subordinated Loans will be repaid as and when cash is available to make such repayment in accordancewith, and to the extent permitted by, the Priority of Payments, with the final repayment date being the FinalMaturity Date of the last Tranche of Notes in issue.

7.4 There is no recourse to the Subordinated Lenders, as lenders under the Subordinated Loan Agreements,beyond the fixed contractual obligations provided for in such agreements.

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7.5 The Subordinated Lenders will bear a first-loss interest in the Issuer through Subordinated Loan No. 1 and asecond-loss interest in the Issuer through Subordinated Loan No. 2, respectively.

8. REDRAWS AND FURTHER ADVANCES

8.1 Redraws

8.1.1 The Issuer may advance Redraws to Borrowers on any date (whether in terms of a Redraw Facility oras otherwise agreed between the Home Loan Lender and the Borrower), subject to the satisfaction ofcertain conditions, including that the Borrower is not then in unremedied default of any of suchBorrower’s obligations in terms of the Home Loan Agreement and that the Redraw will be repaidwithin the original duration of the Home Loan Agreement, unless rescheduled by agreement betweenthe Home Loan Lender and the Borrower.

8.1.2 The Issuer, is entitled in its discretion, to cancel the Access Bond facility. The Issuer may exercise thisdiscretion to cancel the facility if, inter alia, the Issuer has insufficient funds available to fund suchRedraws and a Redraw Notification Trigger Event has occurred.

8.1.3 Upon the occurrence of a Redraw Notification Trigger Event, the Servicer on behalf of the Issuer shallbe obliged to notify Borrowers of any action which the Issuer intends to take in respect of the Redrawobligations as provided for in the Servicing Agreement (including, but not limited to, terminating therelevant Redraw Facility in accordance with its terms).

8.2 Further Advances

8.2.1 The Issuer may, in its discretion, advance Further Advances to Borrowers on any given day inaccordance with the provisions of the relevant Home Loan Agreements, provided that the conditionsset out in the Servicing Agreement are met. Such conditions include, inter alia, that:

8.2.1.1 the Revolving Period is continuing and no Stop Purchase Event has occurred;

8.2.1.2 the Issuer has funds available to make such Further Advance;

8.2.1.3 following the making of the Further Advance, the Portfolio Covenants are met;

8.2.1.4 each relevant Further Advance, together with the balance outstanding under the relevantHome Loan Agreement immediately prior to the making of such Further Advance, does notexceed the capital amount secured by the relevant Indemnity Bond(s);

8.2.1.5 each relevant Further Advance, together with the balance outstanding under the existingHome Loan Agreement (with the Borrower in respect of whom such Further Advance ismade) immediately prior to the making of such Further Advance, satisfies the EligibilityCriteria, assessed as if such Further Advance had been acquired by the Issuer; and

8.2.1.6 in respect of each Further Advance, the Home Loan Agreement with the relevant Borrower isamended, in accordance with the provisions of such Home Loan Agreement, to reflect theamended capital amount which, for the avoidance of doubt, does not exceed the capitalamount secured by the relevant Indemnity Bond(s), as the case may be, in respect of therelevant Property (excluding any amount identified as an additional sum in the relevantIndemnity Bond(s)).

9. ADDITIONAL ASSETS

9.1 The Issuer may, during the Revolving Period, acquire Additional Assets from the Seller on the terms of theSale Agreement using monies available for this purpose in accordance with the Pre-Enforcement Priority ofPayments.

9.2 Each sale and transfer of Additional Assets is subject to the satisfaction of the criteria set out in the SaleAgreement including, inter alia, the following: (i) the Additional Asset is an Eligible Asset; and (ii) as aconsequence of giving effect to the sale and transfer of such Additional Asset, the Portfolio Covenants aresatisfied.

9.3 The Issuer may acquire Eligible Assets originated by or on behalf of SBSA subject to the Issuer entering intosuitable Derivative Contracts with Derivative Counterparties so as to ensure that no interest rate basismismatch will exist between the Notes in issue and the Participating Assets. The purchase of such loans isfurther subject to, inter alia, (i) the relevant provisions of the Sale Agreement being applicable to such sale,thereby constituting a legal, valid, binding and enforceable agreement; and (ii) the Participating Assetscomplying with the Eligibility Criteria.

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10. PRINCIPAL DEFICIENCY LEDGER

10.1 A Principal Deficiency Ledger will be established to record the Principal Deficiency (if any) on eachDetermination Date, calculated by deducting the Assets expected to exist (after having made all payments inaccordance with the Priority of Payments) as at the close of business on the immediately succeeding InterestPayment Date from the Liabilities expected to exist (after having made all payments in accordance with thePriority of Payments) as at the close of business on the immediately succeeding Interest Payment Date,

where “Liabilities” means:

10.1.1 the aggregate Outstanding Principal Amount of the Notes on the last day of the immediately precedingCollection Period; less

10.1.2 the amount allocated in the Pre-Enforcement Priority of Payments for the redemption of the Notes onthe immediately succeeding Interest Payment Date;

and “Assets” means:

10.1.3 the aggregate outstanding Principal Balances of the Participating Assets sold to the Issuer on the lastday of the immediately preceding Collection Period, excluding any Non-Performing Loans, providedthat, for the purpose of this 10.1.3 and notwithstanding the definitions set out in the section headed“Transaction Specific Definitions”, “Non-Performing Loans” means Participating Assets of the Issuerin respect of which there are arrears of an amount greater than 6 instalments; provided further that forthe purpose of this definition: (i) a Borrower shall not be deemed to be in arrears if the obligations ofthe Borrower under the Home Loan Agreement are guaranteed by a financial institution; and (ii) for aslong as Participating Assets are under rehabilitation in accordance with the Servicer’s standard policiesand procedures, such Participating Assets shall not be regarded as “Non-Performing” for the purposeof this 10.1.3; plus

10.1.4 the amount allocated in the Pre-Enforcement Priority of Payments to advance Redraws and advanceFurther Advances and purchase Additional Assets on the immediately succeeding Interest PaymentDate; plus

10.1.5 the aggregate principal amount of Redraws and Further Advances advanced since the previousCollection Period and expected to be made up to the immediately succeeding Interest Payment Date;plus

10.1.6 the aggregate of the credit balances, if any, in each of the:

10.1.6.1 Cash Reserve;

10.1.6.2 Arrears Reserve;

10.1.6.3 Purchase Reserve; and

10.1.6.4 Redraw Reserve,

provided that the Principal Deficiency shall never be less than zero.

11. REVOLVING PERIOD

11.1 The Revolving Period comprises the period commencing on (and including) the Initial Effective Date andending on the occurrence of a Stop Purchase Event or upon the first Business Day following the expiry of3 years commencing from the Initial Effective Date, whichever occurs first, unless the Issuer elects to shortenthe Revolving Period by giving 5 Business Days’ notice to the Security SPV, the Noteholders and the Servicerin which case the Revolving Period will end on the date on which such notice expires.

11.2 During the Revolving Period, if the amount allocated for the purchase of Additional Assets or the advance ofFurther Advances is not fully utilised due to insufficient Eligible Assets offered to the Issuer for purchase orinsufficient Further Advances advanced by the Issuer then such unutilised cash shall be paid into the PurchaseReserve. Any amounts in excess of R10 000 000 standing to the credit of the Purchase Reserve for twoconsecutive Payment Dates shall be added to the Redemption Amount and applied in redeeming the Notes.

12. GUARANTEED HOME LOANS

12.1 All Participating Assets sold to the Issuer will be Guaranteed Home Loans.

12.2 Upon the purchase of a Guaranteed Home Loan, only the Home Loan is transferred to the Issuer in terms ofthe provisions of the Sale Agreement. The Issuer’s rights against the Borrower on default under the HomeLoan Agreement are secured initially, pending the Transfer Date, in terms of the Servicer Undertaking

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Agreement, and with effect from the Transfer Date by a Guarantee Entity Guarantee issued by the GuaranteeEntity in favour of the Issuer. The Borrower indemnifies the Seller (and/or its successor-in-title) in terms ofthe Borrower Indemnity against, amongst other things, any claims by the Issuer under the ServicerUndertaking Agreement and the Guarantee Entity Guarantee, as the case may be. As security for theBorrower’s obligations under the Borrower Indemnity, the Borrower registers an Indemnity Bond in favour ofthe Seller. With effect from the Transfer Date, the rights and obligations of SBSA under the correspondingBorrower Indemnity and Indemnity Bond and of the Servicer under the Servicer Undertaking Agreementapplicable to the relevant Participating Asset will be assigned to the Guarantee Entity, and such rights andobligations under the Servicer Undertaking Agreement are replaced by those under the Guarantee EntityGuarantee issued by the Guarantee Entity in favour of the Issuer in terms of the Common Terms GuaranteeAgreement. If the registration of transfer of the relevant Indemnity Bond does not take place:

12.2.1 in respect of Indemnity bonds relating to the Home Loans comprising the Initial Asset Pool within aperiod of 6 months from the Initial Effective Date;

12.2.2 in respect of Indemnity Bond relating to a Warranty Replacement Asset, Replacement Asset orAdditional Asset as the case may be, within a period of 6 months from the corresponding Sale Date ordate of replacement of such Warranty Replacement Asset, Replacement Asset or Additional Asset asthe case may be; or

12.2.3 in respect of any particular Indemnity Bond, such later period as the case may be agreed in writingbetween the parties to the Assignment Agreement and the Rating Agency, if applicable

the Assignment Agreement provides that there will be no assignment of the relevant Indemnity Bond andBorrower Indemnity and SBSA will continue to be the holder of the rights and obligations under the relevantIndemnity Bond and Borrower Indemnity.

12.3 The Servicer Undertaking Agreement and the Guarantee Entity Guarantee is limited to the amounts theServicer or the Guarantee Entity, as the case may be, is able to recover from the Borrower under the BorrowerIndemnity and the Indemnity Bond. The Guarantee Entity Guarantee also provides that, if requested by theIssuer or upon the happening of certain events, the Guarantee Entity shall transfer all Borrower Indemnitiesand Indemnity Bonds to the Issuer’s nominee.

12.4 In terms of the Guarantee Entity Servicing Agreement and the Guarantee Entity Administration Agreement,the Guarantee Entity appoints SBSA to render certain services related to the servicing and administration ofthe Guarantee Entity’s rights and obligations under the Common Terms Guarantee Agreement including,amongst other things, enforcing the Guarantee Entity’s rights under the relevant Borrower Indemnity and/orthe Indemnity Bond.

13. HEDGING

13.1 Home Loans held by the Issuer may yield income in accordance with a fixed rate of interest whilst a Series ofNotes may pay a floating rate of interest, or vice versa, resulting in interest rate mismatches.

13.2 The Issuer may also be exposed to basis risk in that the reset dates of the interest rates payable in respect ofits assets may be different to the reset dates of the interest payable in respect of the Notes.

13.3 In order to hedge against, amongst others, interest rate mismatches and basis risk, the Issuer will enter intoone or more hedging agreements from time to time with a Derivative Counterparty (with the Required CreditRating, if applicable) to ensure that such risks are appropriately hedged.

14. NATIONAL CREDIT ACT, 34 of 2005 (“NCA”)

In terms of the relevant provisions of the NCA (which takes effect on 1 June 2007, unless a later date is promulgatedsubsequently), the Home Loan Agreements and Related BG4 Security comprising Participating Assets sold to theIssuer will need to be reviewed on or before 1 June 2007 to ensure that the provisions contained in such Home LoanAgreements and/or Related BG4 Security comply with the requirements of the NCA. In terms of the ServicingAgreement, the Servicer has undertaken to take all such steps as may be reasonably necessary to ensure that suchHome Loan Agreements and Related BG4 Security comply with the NCA on or before 1 June 2007 (or such laterdate as may be promulgated in terms of the NCA). In addition, the NCA requires any entity granting credit, such asthe Seller and upon assignment of the Home Loan Agreements to the Issuer, the Issuer, to be registered with theNational Credit Regulator.

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PRIORITY OF PAYMENTS

1. PRE-ENFORCEMENT PRIORITY OF PAYMENTS

1.1 On each Payment Date, monies standing to the credit of the Transaction Account as of the immediatelypreceding Determination Date and, to the extent that such monies are insufficient, all monies standing to thecredit of the Cash Reserve, the Arrears Reserves, the Redraw Reserve and the Purchase Reserve as of theimmediately preceding Determination Date (save that such monies shall only be applied to meet the relevantexpenses set out in the Administration Agreement), shall after making payment of or providing for amountsowing in respect of the Excluded Items, until enforcement of the Security for the Notes, be transferred fromthe Transaction Account and the Cash Reserve, the Arrears Reserves, the Redraw Reserve and the PurchaseReserve in accordance with the procedures provided for in the Administration Agreement. Such monies shallbe applied on each Payment Date in the detailed order set out in Appendix 2 to the Administration Agreement,an abridged and simplified version of which is set out below:

1.1.1 to pay or provide for (in the order set out in Appendix 2 to the Administration Agreement) seniorexpenses such as Taxes and any statutory fees, costs and expenses due and payable by the Issuer inorder to preserve the corporate existence of the Issuer; the remuneration due and payable to theSecurity SPV and/or the Security SPV Owner Trustee and to the Owner Trustee; all fees, costs,charges, liabilities and expenses (inclusive of VAT, if any) due and payable by the Issuer to third partiesand incurred without breach by the Issuer of its obligations under the Transaction Documents and notprovided for payment elsewhere and the Servicing Fee up to the Servicing Fee Cap;

1.1.2 to pay pari passu and pro rata all amounts due and payable in respect of the Class A Notes other thanin respect of principal and any net settlement amounts and Derivative Termination Amounts due andpayable to any Derivative Counterparty in accordance with the Derivative Contracts (but excluding anyDerivative Termination Amounts where the Derivative Counterparty is in default);

1.1.3 to pay or provide for in descending order of rank all amounts due and payable in respect of the Class Bto Class F Notes other than in respect of principal on such Notes, subject to an Interest Deferral Eventnot occurring;

1.1.4 subject to an Interest Deferral Event not occurring, to credit pari pasu and pro rata each of the ArrearsReserves up to the relevant portion of the Arrears Reserve Required Amount. In the event that anInterest Deferral Event occurs in respect of a Class of Notes, the Arrears Reserve in respect of suchClass of Notes will not be credited;

1.1.5 while the Class A Notes remain outstanding:

1.1.5.1 to credit the Cash Reserve up to the Cash Reserve Required Amount;

1.1.5.2 to credit the Redraw Reserve up to the Redraw Reserve Required Amount;

1.1.5.3 to fund the advance by the Issuer of Redraws up to an amount equal to the PotentialRedemption Amount less the amounts specified in the Priority of Payments;

1.1.5.4 during the Revolving Period only:

1.1.5.4.1 to fund the advance by the Issuer of Further Advances up to an amount equal to thePotential Redemption Amount less the amounts specified in the Pre-EnforcementPriority of Payments;

1.1.5.4.2 to fund the purchase by the Issuer of Additional Assets or to set aside cash for suchfunding;

1.1.5.4.3 to credit Principal Collections received and not applied in items 1.1.1 to 1.1.5.4.2above to the Purchase Reserve;

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1.1.5.5 to redeem, in descending order of rank as to Class, the Notes equal to the greater of zero andthe difference between the Potential Redemption Amount and the sum of the amountsspecified in the Priority of Payments. Within a particular Class of Notes (and to the extentapplicable) the Notes in that particular Class will also be redeemed sequentially indescending order of rank. By way of example, the Class A Notes will be redeemedsequentially in descending order of rank so that the Class A0 Notes will be redeemed in fulland thereafter the Class A1 Notes and thereafter the Class A2 Notes and so forth;

1.1.6 if there are no Class A Notes outstanding, 1.4.4, 1.1.5.1 and 1.1.5.2 are repeated in respect of theremaining Classes of Notes in descending order of rank and the remaining Notes are redeemed indescending order of rank as set out in 1.1.5.5, provided that an amount to be applied in redeeming theClass B Notes up to an amount equal to the Principal Deficiency on such Payment Date will beallocated before the Cash Reserve and the Redraw Reserve are credited;

1.1.7 similarly, if there are no Class A and Class B Notes outstanding (and thereafter no Class C, Class DNotes and Class E Notes outstanding, respectively), 1.1.4, 1.1.5.1 and 1.1.5.2 are repeated in respectof the remaining Classes of Notes in descending order of rank and the remaining Notes are redeemedin descending order of rank as set out in 1.1.5.5, provided that an amount to be applied in redeemingin descending order of rank the remaining Notes up to an amount equal to the Principal Deficiency onsuch Interest Payment Date will be allocated before the Cash Reserve and the Redraw Reserve arecredited;

1.1.8 if a Class B Interest Deferral Event occurs on such Interest Payment Date, to pay all amounts due andpayable in respect of Class B Notes other than in respect of principal on the Class B Notes;

1.1.9 if a Class B Interest Deferral Event occurs on such Interest Payment Date, to credit the Arrears Reserve Bup to the relevant proportion of the Arrears Reserve Required Amount;

1.1.10 if an Interest Deferral Event occurs on such Interest Payment Date in respect of the Class C, to pay indescending order of rank all amounts due in respect of the Class C Notes other than in respect ofprincipal on such Notes;

1.1.11 if a Class D Interest Deferral Event occurs on such Interest Payment Date, to pay pari passu andpro rata:

1.1.11.1 all amounts due and payable in respect of the Class D Notes other than in respect of principalon the Class D Notes; and

1.1.11.2 in the event that a substitute Servicer assumes the role of Servicer, the SubordinatedServicing Fee due and payable to the substitute Servicer on such Interest Payment Date, ifany (inclusive of VAT);

1.1.12 to pay or provide for any capital amounts due and payable to the Subordinated Lender in accordancewith the provisions of the Subordinated Loan Agreements, provided that the Notes have beenredeemed in full;

1.1.13 to pay or provide for the Derivative Termination Amounts due and payable to any DerivativeCounterparty under the Derivative Contracts where the Derivative Counterparty is in Default;

1.1.14 provided that the Issuer has not exercised the Early Redemption Option to pay or provide for anyamounts, other than capital, due and payable to the Subordinated Lender in accordance with theprovisions of the Subordinated Loan Agreements in descending order of rank;

1.1.15 to pay or to provide for the dividend due and payable to the Preference Shareholder; and

1.1.16 while any amounts (whether actual or contingent) are outstanding to Secured Creditors, the surplus, ifany, to be invested in Permitted Investments and, only once all the obligations (whether contingent orotherwise) to Secured Creditors have been discharged in full, to pay the surplus, if any, to the ordinaryshareholders of the Issuer.

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2. POST-ENFORCEMENT PRIORITY OF PAYMENTS

2.1 After the Security SPV has given notice to the Issuer pursuant to an Event of Default, declaring the Notes tobe due and payable, no Additional Assets may be purchased and no Further Advances or Redraws may beadvanced. The available funds in the Transaction Account on each Payment Date (including monies in theCash Reserve, the Arrears Reserves, the Redraw Reserve and the Purchase Reserve) will be applied on eachPayment Date in the order set out in Appendix 2 to the Administration Agreement, an abridged and simplifiedversion of which is set out below:

2.1.1 to pay or provide for senior expenses referred to in 1.1.1 above;

2.1.2 to pay or provide for any net settlement amounts and Derivative Termination Amounts due and payableto any Derivative Counterparty in accordance with the Derivative Contracts (but excluding anyDerivative Termination Amounts where the Derivative Counterparty is in default);

2.1.3 to pay or provide for interest, principal and all other amounts due and payable in respect of each of theClass A0 notes;

2.1.4 to pay or provide for interest, principal and all other amounts due and payable in respect of each of theClass A1 Notes;

2.1.5 to pay or provide for pari passu and pro rata interest, principal and all other amounts due and payablein respect of each Series of the Class A Notes other than the Class A0 Notes and Class A1 Notes;

2.1.6 to pay or provide for interest, principal and all other amounts due and payable in respect of each Classof Notes (other than the Class A Notes), in descending order of rank and with Notes of equal rankbeing paid pari passu and pro rata, until all such amounts due and payable in respect of each suchClass of Notes have been paid in full; it being recorded that no payment of any amount shall be paidto any Noteholders of a Class of Notes until such time as the amounts due and payable in respect ofall Classes of Notes having a higher rank have been paid in full;

2.1.7 to pay or provide for the Derivative Termination Amounts due and payable to any DerivativeCounterparty under the Derivative Contracts where the Derivative Counterparty is in default;

2.1.8 to pay or provide for any fees, interest and capital amounts due and payable to the Subordinated Lenderin accordance with the provisions of the Subordinated Loan Agreements in descending order of rank,until all amounts due and payable in respect of the Subordinated Loan Agreement (Second Loss) havebeen paid in full and thereafter to pay or provide for fees, interest and capital amounts due and payableunder the Subordinated Loan Agreement (First Loss);

2.1.9 to pay or provide for the dividend due and payable to the Preference Shareholder; and

2.1.10 to pay the surplus, if any, to the ordinary shareholders of the Issuer.

2.2 In respect of the Post-Enforcement Priority of Payments, the amount allocated for payment of each Class ofNotes shall first be allocated to interest and then to principal.

3. GENERAL

3.1 In respect of each Priority of Payments, the monies available for distribution shall, after making payment ofor providing for Excluded Items, be applied in making payments or provisions in accordance with the relevantPriority of Payments, on the basis that a Secured Creditor which ranks subsequent to any other creditors in therelevant Priority of Payments will not be paid unless and until all the creditors which rank prior to it in therelevant Priority of Payments have been paid all of the amounts then due and payable to them by the Issuer oramounts accrued up to the relevant Payment Date, but not yet payable, have been provided for (by setting asidecash for this purpose in the Transaction Account).

3.2 The Excluded Items shall be paid when such amounts are due and payable.

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THE SALE AGREEMENT

1. SALE AGREEMENT

The Issuer will enter into the Sale Agreement with the Seller in terms of which the Issuer purchases, and the Seller sells, all of the Seller’s right, title and interest in and to a portfolio of Participating Assets. The portfolio will be identified in a schedule to the Sale Agreement. In the event that the Issuer issues the Notes under theSubsequent Issue, the portfolio of Participating Assets on the Initial Effective Date shall comprise a pool cut of R4 627 214 381.40 as at 13 January 2007. In the event that the Issuer (for any reason) does not issue the Notes underthe Subsequent Issue, the portfolio of Participating Assets on the Initial Effective Date shall comprise an extract fromthe portfolio of Home Loans on the Cut-Off Date to the value of at least R2 114 225 000.00.

Additional Assets which satisfy the Eligibility Criteria may be purchased by the Issuer during the Revolving Period.

2. ELIGIBILITY CRITERIA

On origination of each Participating Asset from time to time, the Seller’s standard credit approval policies andprocedures will have been applied. The general criteria that each Participating Asset must satisfy in order to qualifyfor acquisition by the Issuer are set out in the Sale Agreement and include, inter alia, the criteria set out in the sectionof this Transaction Supplement headed “The Home Loan Pool”.

3. WAIVER IN RELATION TO INDEMNITY BONDS

The Sale Agreement provides that the Seller waives all and any rights to proceed against the Borrower under theIndemnity Bond after transfer of the relevant Guaranteed Home Loan save in respect of a claim made against theServicer by the Issuer in terms of the Servicer Undertaking Agreement.

4. PORTFOLIO COVENANTS

The criteria that the aggregate portfolio of Participating Assets owned by the Issuer must satisfy, at the EffectiveDate of the acquisition of each Participating Asset following the acquisition of such Participating Asset, andfollowing the substitution of a Participating Asset by the Seller as set out in the Sale Agreement are as follows:

4.1 the weighted average self-employed Borrowers will not exceed the weighted average self-employedBorrowers of the Initial Asset Pool by more than 1.0%;

4.2 the aggregate Principal Balance of the Participating Assets where Properties securing such Participating Assetsare not owner occupied will not exceed 20% of the aggregate Principal Balance of the portfolio ofParticipating Assets owned by the Issuer;

4.3 the weighted average interest rate yield earned on the Participating Assets will not drop to a level lower than0.2% below the level of the interest rate yield of the Initial Asset Pool determined relative to the prevailingPrime Rate;

4.4 the weighted average LTV Ratio of the Participating Assets will not exceed the weighted average LTV Ratioof the Initial Asset Pool as at the later of the date of origination thereof and the date of the most recentvaluation of the Participating Asset by more than 1.0%; and

4.5 the weighted average ITI Ratio of the Participating Assets will not exceed the weighted average ITI Ratio ofthe Initial Asset Pool as at the later of the date of origination thereof and the date of the most recent proof ofincome by more than 1.0%.

In respect of 4.1 and 4.2, the Seller and the Issuer will be relying on information furnished by the Borrower to theSeller and the Issuer. Neither the Seller nor the Issuer will independently verify the accuracy or correctness of theinformation supplied by the Borrowers in this regard.

5. EFFECTIVE DATE AND PURCHASE PRICE

5.1 The Effective Date of the sale by the Seller to the Issuer of each Participating Asset shall be the InitialEffective Date and thereafter shall be the Top-Up Date subject to payment of the Purchase Price to the Seller.

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5.2 The Purchase Price payable by the Issuer to the Seller in respect of each Participating Asset, shall be equal to:

5.2.1 the Principal Balance of such Participating Asset on the Principal Balance Date; plus

5.2.2 any amounts charged in respect of such Participating Asset to the Borrower’s account but unpaid onsuch Principal Balance Date (including, for the avoidance of doubt, Accrued Interest).

5.3 Such Purchase Price shall be paid on the Effective Date.

6. WARRANTIES AND PURCHASE

6.1 The Sale Agreement contains certain warranties given by the Seller to the Issuer at the Effective Date inrelation to, inter alia, the Participating Assets sold and transferred to the Issuer pursuant to the SaleAgreement. The warranties do not relate to the future credit-worthiness of the Borrowers in terms of theParticipating Assets and do not relate to matters that do not fall within the control of the Seller.

6.2 No searches, enquiries or independent investigation of title have been or will be made by the Issuer or theSecurity SPV, each of whom is relying entirely on the warranties set out in the Sale Agreement.

6.3 If there is an unremedied breach of any of the warranties set out in the Sale Agreement then the Seller will beobliged to purchase the relevant Participating Asset and its Related BG4 Security for a consideration in cashequal to the Outstanding Principal and all other sums due or owing thereunder including accrued interest as atthe date of purchase and pay to the Issuer such damages as the Issuer may have suffered in connection withsuch breach of warranty to the extent to which those damages have not been extinguished by that purchase.The Seller also indemnifies the Issuer in respect of any claims made against the Issuer by any third party as aresult of or arising out of or in connection with such breach. Performance of such purchase, payment ofdamages (if applicable) and indemnification will be in full satisfaction of the liabilities of the Seller in respectof the relevant breach.

6.4 The warranties of the Seller referred to above include warranties that, prior to making an advance to aBorrower, the Borrower complied in full with all the Credit Criteria.

6.5 Save as set out above, the Issuer has no right of recourse against the Seller, acting in a primary role, in respectof losses incurred in connection with the Participating Assets after the transfer thereof to the Issuer in termsof the Securitisation Scheme.

7. NOTIFICATION TRIGGER

On the happening of a Notification Trigger Event, the Servicer shall notify each of the Borrowers of, amongst otherthings, the sale and transfer of the Participating Assets to the Issuer in terms of the Sale Agreement and therequirement for repayment to be made directly to the Issuer.

8. REPURCHASE OPTION

8.1 The Seller has the right, but not the obligation (save as contemplated in 6.3 above), to repurchase ParticipatingAssets from the Issuer.

8.2 Such repurchase will only be permitted to the extent that the aggregate Principal Balances of the Home LoanAgreements repurchased during the term of the Sale Agreement do not, in the aggregate, exceed 10% of theaggregate Principal Balances of the Home Loan Agreements on the Cut-Off Date, unless the Registrar ofBanks grants written approval to allow such 10% limit to be exceeded.

8.3 The repurchase is subject to the normal credit approval and review processes of the Seller.

8.4 Where a Participating Asset to be repurchased is a Performing Asset, the Seller may only repurchase suchPerforming Asset where the Issuer has given notice of the exercise of the Clean-Up Call Option.

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8.5 The Seller may repurchase a Non-Performing Loan only if the external auditors of the Seller have certified inwriting that such Non-Performing Loan is being acquired at fair market value, which value reflects the non-performing status of such Participating Asset.

9. REPLACEMENT ASSETS

The Seller has the right, but not the obligation, to replace a Performing Asset with another Eligible Asset(s) ofequivalent credit quality provided that the Portfolio Covenants are satisfied after replacement of such PerformingAsset with the Eligible Asset.

10. SERVICER CALL OPTION

The Servicer has been granted the Servicer Call Option in the Sale Agreement.

11. RIGHT OF FIRST REFUSAL

In the event that the Issuer wishes to sell all but not some only of its Participating Assets, the Issuer shall serve noticein writing upon the Servicer of its intention to sell such Participating Assets and shall first offer the ParticipatingAssets to the Servicer. The Sale Agreement sets out the terms and conditions for the exercise of the right of firstrefusal by the Servicer.

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SUBSCRIPTION AND SALE

This section should be read in conjunction with, and is qualified in its entirety by, the detailed information containedelsewhere in this Transaction Supplement and the Programme Memorandum and in particular the section of theProgramme Memorandum headed “Subscription and Sale”.

In addition to the selling restrictions provided for in the Programme Memorandum under the heading “Subscription andSale”, the following selling restrictions shall be applicable:

1. EUROPEAN ECONOMIC AREA

1.1 In relation to each member state of the European Economic Area which has implemented the ProspectusDirective (each, a “Relevant Member State”), each Dealer for that Tranche of Notes will be required torepresent and agree that with effect from and including the date on which the Prospectus Directive isimplemented in that Member State (the “Relevant Implementation Date”) it will not have made and will notmake an offer of the Notes to the public in that Relevant Member State, except that it may, with effect fromand including the Relevant Implementation Date, make an offer of the notes to the public in that RelevantMember State:

1.1.1 in the period beginning on the date of publication of a prospectus in relation to those Notes which hasbeen approved by the competent authority in that Relevant Member State or, where appropriate,approved in another Relevant Member State and notified to the competent authority in that RelevantMember State, all in accordance with the Prospectus Directive and ending on the date which is 12 months after the date of such publication;

1.1.2 at any time to legal entities which are authorised or regulated to operate in the financial markets or, ifnot so authorised or regulated, whose corporate purpose is solely to invest in securities;

1.1.3 at any time to any legal entity which has two or more of: (1) an average of at least 250 employeesduring the last financial year; (2) a total balance sheet of more than i43,000,000 and (3) an annual netturnover of more than i50,000,000 as shown in its last annual or consolidated accounts; or

1.1.4 at any time in any other circumstances which do not require the publication by the Issuer of aprospectus pursuant to article 3 of the Prospectus Directive.

1.2 For the purposes of this provision, the expression an “offer of Notes to the public” in relation to any Notes inany Relevant Member State means the communication in any form and by any means of sufficient informationon the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase orsubscribe the Notes, as the same may be varied in that Member State by any measure implementing theProspectus Directive in that Member State and the expression “Prospectus Directive” means Directive2003/71/EC and includes any relevant implementing measure in each Relevant Member State.

1.3 No offer of Notes to the public may be made in Germany, Austria or any other Relevant Member State wherethe competent authority of that Relevant Member State requires any action in addition to that set out in sub-paragraph 1.1 above, including without limitation the filing of final terms or publication of newspaper notices,unless and until the Issuer advises such action has been taken.

2. IRELAND

2.1 Except in the circumstances referred to above in the section entitled “European Economic Area”, each Dealerhas represented, warranted and agreed that it has not offered or sold and will not offer or sell any Notes otherthan pursuant to a ‘prospectus’ approved and filed with the Irish Financial Services Regulatory Authority (orany delegated Competent Authority as defined in S.I. No. 324, Prospectus Directive 2003/71/EC Regulations2005) and Irish Prospectus law (as such term is defined in the Irish Investment Funds, Companies andMiscellaneous Provisions Act, 2005).

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2.2 To the extent applicable, each Dealer has not and will not offer or sell any Notes other than in compliance withthe EU Directive 2003/6/EC on insider dealing and market manipulation and S.I. No. 342 of 2005.

2.3 To the extent applicable, it will not underwrite the issue of or place the Notes otherwise than in conformitywith the provisions of the Irish Investment Intermediaries Act, 1995 (as amended), including, withoutlimitation, Sections 9, 23 (including any advertising restrictions made thereunder) and Section 37 (includingany codes of conduct issued thereunder) the provisions of the Irish Investor Compensation Act, 1998,including, without limitation, Section 21.

2.4 Where the Issuer wishes to issue Notes with a maturity of less than one year it shall ensure that it is in fullcompliance with notice by the Irish Financial Regulatory Authority notice BJD C01/02.

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TRANSACTION SPECIFIC DEFINITIONS

1. Terms and expressions set out below will have the meanings set out below in the Terms and Conditions and the otherTransaction Documents, unless such term is separately defined in the Applicable Pricing Supplement or theTransaction Documents or the context otherwise requires:

1.1 “Accredited Valuer” any of those property valuers appointed by the Servicer from time to timein accordance with SBSA’s customary policy regarding the appointmentof valuers, as updated from time to time;

1.2 “Adjusted Principal Deficiency” the Principal Deficiency having taken account of any credit balance of theArrears Reserves, the Cash Reserve, the Redraw Reserve and thePurchase Reserve in the Transaction Account;

1.3 “Applicable Laws” in relation to a person, all and any:

1.3.1 present or future common law;

1.3.2 statutes, statutory instruments, treaty and subordinate legislation;

1.3.3 regulations, ordinances and directives;

1.3.4 by-laws;

1.3.5 codes of practice, circulars, guidance notices, judgments anddecisions any competent authority; and

1.3.6 other similar provisions from time to time,

compliance with which is mandatory for that person;

1.4 “Arrears Reserve” the Arrears Reserve A, the Arrears Reserve B, the Arrears Reserve C, theArrears Reserve D, the Arrears Reserve E and the Arrears Reserve F,which are funded from excess spread and not Principal Collections;

1.5 “Arrears Reserve A” as defined in the Common Terms Agreement;

1.6 “Arrears Reserve B” as defined in the Common Terms Agreement;

1.7 “Arrears Reserve C” as defined in the Common Terms Agreement;

1.8 “Arrears Reserve D” as defined in the Common Terms Agreement;

1.9 “Arrears Reserve E” as defined in the Common Terms Agreement;

1.10 “Arrears Reserve F” as defined in the Common Terms Agreement;

1.11 “Arrears Reserve Required shall be zero if the Arrears Reserve Threshold is equal to or less thanAmount” 0.8%. If the Arrears Reserve Threshold exceeds 0.8%, the Arrears Reserve

Required Amount shall be an amount equal to the aggregate PrincipalBalances of the Participating Assets of the Issuer in respect of which thereare arrears of an amount greater than 3 instalments, plus Accrued Intereston such Participating Assets, less 60% of the values of the Properties inrespect of such Participating Assets based on the lower of the originalvaluation by an Accredited Valuer and, if applicable, a subsequentvaluation by an Accredited Valuer; provided that for the purposes of thiscalculation, a Borrower shall not be deemed to be in arrears if theobligations of the Borrower under the Home Loan Agreement areguaranteed by a financial institution;

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1.12 “Arrears Reserve Threshold” on any Determination Date, the ratio, calculated as a percentage,determined by dividing the aggregate Principal Balances of ParticipatingAssets of the Issuer in respect of which there are arrears of an amountgreater than 3 instalments, by the aggregate Principal Balances of theParticipating Assets in the Initial Asset Pool, provided that for thepurposes of this calculation, a Borrower shall not be deemed to be inarrears if the obligations of the Borrower under the Home LoanAgreement are guaranteed by a financial institution;

1.13 “Arrears Trigger” shall occur on any Determination Date where the Arrears ReserveThreshold exceeds 1.2%;

1.14 “Assignment Agreement” the agreement between the Guarantee Entity, SBSA, the Issuer and theSecurity SPV in terms of which SBSA assigns to the Guarantee Entityof all SBSA’s rights and obligations under the relevant BorrowerIndemnity and the relevant Indemnity Bond and all the rights andobligations of the Servicer under the Servicer Undertaking Agreementin relation to the relevant Indemnity Bond and Borrower Indemnity(such assignment to take effect on the date of registration of the cessionof the Indemnity Bond to the Guarantee Entity), as amended, novatedand/or substituted from time to time in accordance with its terms;

1.15 “Bank Accounts” the Transaction Account;

1.16 “Cash Management Trigger” the Servicer is notified by any Rating Agency or Standard & Poor’s, asthe case may be, of a down-grade in the Required Credit Rating of theServicer, as more fully contemplated in Appendix 5 to the ServicingAgreement;

1.17 “Cash Reserve Capture Trigger” will occur if, and for so long as, the credit rating of the Servicer fallsbelow the Required Credit Rating;

1.18 “Cash Reserve Required Amount” on the Initial Issue Date and any subsequent Interest Payment Date, thegreater of:

1.18.1 an amount equal to 2.75% (or such lower percentage as isnotified in writing to the Rating Agencies and which therelevant Rating Agency does not notify the Issuer in writingmay cause it to downgrade or withdraw its respective currentRatings of the Notes in issue) of the greater of:

1.18.1.1 the aggregate of the Principal Balances of theParticipating Assets of the Issuer; and

1.18.1.2 the Outstanding Principal Amount of the Notes inissue from time to time after the application offunds on the relevant Payment Date;

1.18.2 if a Cash Reserve Capture Trigger occurs, an amount equal tothe amount of interest due and payable on the Notes on thenext following Interest Payment Dates for the next 2 InterestPeriods funded from excess spread; and

1.18.3 1% of the Outstanding Principal Amount of the Notes in issueon the Initial Issue Date;

1.19 “Class A Redemption Amount” as defined in the Common Terms Agreement;

1.20 “Class B Interest Deferral Event” as defined in the Common Terms Agreement;

1.21 “Class B Principal Lock-Out” as defined in the Common Terms Agreement;

1.22 “Class B Redemption Amount” as defined in the Common Terms Agreement;

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1.23 “Class C Interest Deferral Event” as defined in the Common Terms Agreement;

1.24 “Class C Principal Lock-Out” as defined in the Common Terms Agreement;

1.25 “Class C Redemption Amount” as defined in the Common Terms Agreement;

1.26 “Class D Interest Deferral Event” as defined in the Common Terms Agreement;

1.27 “Class D Principal Lock-Out” as defined in the Common Terms Agreement;

1.28 “Class D Redemption Amount” as defined in the Common Terms Agreement;

1.29 “Class E Interest Deferral Event” as defined in the Common Terms Agreement;

1.30 “Class E Principal Lock-Out” as defined in the Common Terms Agreement;

1.31 “Class E Redemption Amount” as defined in the Common Terms Agreement;

1.32 “Class F Interest Deferral Event” as defined in the Common Terms Agreement;

1.33 “Class F Principal Lock-Out” as defined in the Common Terms Agreement;

1.34 “Class F Redemption Amount” as defined in the Common Terms Agreement;

1.35 “Collection Period” in relation to the first Collection Period the period beginning on (andincluding) the Initial Effective Date and ending on (and including) theimmediately succeeding Determination Date and in relation to subsequentCollection Periods, the period beginning on (but excluding) theDetermination Date and ending on (and including) the next DeterminationDate;

1.36 “Collections Account” a bank account in the name of the Servicer held at SBSA or such otherbank with the Required Credit Rating;

1.37 “Common Terms Guarantee the Agreement between, amongst others, the Guarantee Entity and the Agreement” Issuer providing for the terms under which each Guarantee Entity

Guarantee will be issued by the Guarantee Entity in favour of the Issuer,as amended, novated and/or substituted from time to time in accordancewith its terms;

1.38 “Cut-Off Date” 13 January 2007;

1.39 “Derivative Counterparty” SBSA or any other person (provided it has the Required Credit Rating, ifapplicable) with whom the Administrator concludes Derivative Contractson behalf of the Issuer;

1.40 “Determination Date” the 10th Business Day preceding (but excluding) a Payment Date;

1.41 “Dividend Payment Date” the same date as the Interest Payment Date;

1.42 “Excluded Items” means:

1.42.1 monies which properly belong to third parties (including moniesowing to any party in respect of reimbursement for direct debitrecalls and insurance premiums owing to Insurers);

1.42.2 amounts payable to the Seller under the Sale Agreement inrespect of reconciliations of the amounts paid in respect of thepurchase and/or substitution of any Participating Assets;

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1.42.3 the acquisition of Participating Assets from the Seller using thenet proceeds received by the Issuer from a Tranche(s) of Notesissued for this purpose;

1.42.4 the redemption of Notes using the net proceeds received by theIssuer from a Tranche(s) of Notes issued for this purpose;

1.42.5 amounts corresponding to the aggregate Redraws which areadvanced by the Issuer to Borrowers on any day, in accordancewith the terms and conditions of the Servicing Agreement;

1.42.6 during the Revolving Period only, amounts corresponding to theaggregate Further Advances which are advanced by the Issuer toBorrowers on any day, in accordance with the terms andconditions of the Servicing Agreement;

1.42.7 any amounts paid by the Servicer into the Transaction Accountin terms of the Servicing Agreement in respect of instalmentsowing under a Participating Asset but unpaid on anyDetermination Date for non credit-related reasons, whichinstalments have subsequently been received by the Issuer,

all of which items rank above all other items in the Priority of Payments;

1.43 “Fully Performing” means, in respect of all Participating Assets, other than ParticipatingAssets where 1.42.3 and 1.42.4 are applicable, a Participating Asset wherea full month’s payment has been received within the last 38 calendar daysand based on scheduled payments for the previous 12 months or, wherethe loan was granted within the last 12 months, then for the period sincepayments were scheduled to commence, as at the date of any month endcalculation, none of the following criteria with regard to such Home Loanhas occurred during such period:

1.43.1 the ratio of the Arrears Balance to the then monthly instalmentis 2 or more; or

1.43.2 no scheduled payments or Repayments have been made for morethan 60 calendar days in circumstances where a Borrower has anArrears Credit.

For the purposes of this definition, “Arrears Balance” means in respectof a Participating Asset, the balance based on the cumulative scheduledpayments missed or short paid. “Arrears Credit” means in respect of aParticipating Asset that has an Arrear Balance, the cumulative paymentscredited to the applicable Borrower’s Home Loan account to reduce theArrears Balance;

1.44 “Further Advance” an advance by the Home Loan Lender of an additional loan in accordancewith the terms of the relevant Home Loan Agreement;

1.45 “Guaranteed Home Loan” a Home Loan granted by a Home Loan Lender against, where the HomeLoan Lender is SBSA, the security of, inter alia, a Borrower Indemnityand corresponding Indemnity Bond and where the Home Loan Lender isthe Issuer, the security of, inter alia, the Servicer Undertaking Agreementand/or a Guarantee Entity Guarantee, as the case may be;

1.46 “Guarantee Entity” SB Guarantee Company (Proprietary) Limited, a company with limitedliability registered and incorporated in accordance with the laws of SouthAfrica under registration number 2006/021576/07 and its successors-in-title or assigns;

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1.47 “Guarantee Entity the Agreement entered into between the Guarantee Entity, the GuaranteeAdministration Agreement” Entity Administrator and the Issuer, in terms of which the Guarantee

Entity Administrator agrees to render certain administrative duties inrelation to, amongst other things, the Guarantee Entity Guarantee issuedin terms of the Common Terms Guarantee Agreement as amended,novated and/or substituted from time to time in accordance with its terms;

1.48 “Guarantee Entity SBSA;Administrator”

1.49 “Guarantee Entity Owner The SB Guarantee Company Owner Trust, a trust established andTrust” registered in accordance with the laws of South Africa with Master’s

Reference Number IT 12474/06 which owns all the issued shares in theshare capital of the Guarantee Entity;

1.50 “Guarantee Entity Servicer” SBSA;

1.51 “Guarantee Entity Servicing the Agreement entered into between the Guarantee Entity, the GuaranteeAgreement” Entity Servicer and the Issuer, in terms of which the Guarantee Entity

Servicer agrees to exercise the Guarantee Entity’s rights and obligationsin relation to each Guarantee Entity Guarantee issued in terms of theCommon Terms Guarantee Agreement, as amended, novated and/orsubstituted from time to time in accordance with its terms;

1.52 “Home Loan” a loan (being an Initial Asset, Replacement Asset, Warranty ReplacementAsset or an Additional Asset), in each case comprising the aggregate of alladvances, Redraws (including those funded by the Issuer) and FurtherAdvances, less Prepayments and Repayments, made in terms of the relevantHome Loan Agreement (including, where applicable, the relevant RedrawFacility) by a Home Loan Lender to a Borrower and from time to timeoutstanding (including all capital sums), which are secured against, wherethe Home Loan Lender is SBSA, the security of, inter alia, a BorrowerIndemnity and corresponding Indemnity Bond and where the Home LoanLender is the Issuer, the security of, inter alia, the Servicer UndertakingAgreement and/or a Guarantee Entity Guarantee, as the case may be;

1.53 “Indemnity Bond” notwithstanding the definition in the Programme Memorandum, in respect of each Borrower, the indemnity bond/s or mortgage bond/s (including those registered originally in favour of SBSA) registered overthe Property of the Borrower and identified in the Borrower’scorresponding Home Loan Agreement, as security for, inter alia, theBorrower’s obligations under the corresponding Borrower Indemnity;

1.54 “Initial Asset Pool” notwithstanding the definition in the Programme Memorandum, the poolof Participating Assets sold and transferred to the Issuer on the InitialEffective Date;

1.55 “Initial Effective Date” the effective date of the sale of the Participating Assets in the relevantAsset Pool (as such term is defined in clause 3.1 of the Sale Agreement)determined in accordance with the provisions of clause 3.2 of the SaleAgreement;

1.56 “Interest Deferral Event” a Class B Interest Deferral Event, a Class C Interest Deferral Event, aClass D Interest Deferral Event, a Class E Interest Deferral Event or aClass F Interest Deferral Event;

1.57 “Issuer” Blue Granite Investments No. 4 (Proprietary) Limited, a company withlimited liability registered and incorporated in accordance with the lawsof South Africa under registration number 2006/032191/07 and itssuccessors-in-title and assigns;

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1.58 “ITI Ratio” instalment to income ratio, being the ratio of the minimum requiredinstalment payable under a Home Loan Agreement as at the date ofregistration of the relevant Indemnity Bond in favour of SBSA, to thecombined gross monthly income of the Borrower concerned and suchBorrower’s spouse and/or live-in partner and/or any Surety for suchBorrower (which income comprises basic salary, travel allowance, one-twelfth of any guaranteed thirteenth cheque, plus or minus any maintenanceamounts, administration orders or garnishee amounts payable by or to theBorrower, such Borrower’s spouse and/or live-in partner and/or any Suretyfor such Borrower, investment income (to the extent approved by theSecurity SPV) the average of the last 6 months’ commission and the netrental income from any property other than the Property in respect of whichthe Indemnity Bond concerned is to be registered);

1.59 “Non-Performing Loan” at the end of the most recent Collection Period, a Participating Assetwhich is classified by the Servicer as being non-performing in accordancewith the Servicer’s standard procedures from time to time;

1.60 “Notification Trigger Event” any one or more of the following events:

1.60.1 SBSA is notified by Fitch of a downgrade in the Required CreditRating of SBSA; and/or

1.60.2 SBSA is notified by Moody’s that its rating has fallen belowBaa3; and/or

1.60.3 SBSA suffers a Material Adverse Effect, as reasonablydetermined by the Issuer or the Security SPV;

1.61 “Originator” SBSA;

1.62 “Participating Assets” as defined in the Programme Memorandum, save that Mortgaged HomeLoans are excluded and the reference to “Related Security” shall beconstrued as “Related BG4 Security”;

1.63 “Payment Date” the 21st day of March, June, September and December, each year or, ifsuch day is not a Business Day, the immediately succeeding Business Day;

1.64 “Payment Transfer Date” the Business Day preceding (but excluding) a Payment Date;

1.65 “Performing Asset” a Participating Asset which is not a Non-Performing Loan;

1.66 “Potential Redemption Amount” an amount determined on each Determination Date as follows:

1.66.1 Principal Collections (less Recoveries) received during theimmediately preceding Collection Period; plus

1.66.2 Repayments and Prepayments used to advance Redraws andFurther Advances during the immediately preceding CollectionPeriod; plus

1.66.3 the difference between the Redraw Reserve Required Amountand the balance in the Redraw Reserve expressed as a positiveamount; plus

1.66.4 any amounts in excess of R10 000 000 standing to the credit ofthe Purchase Reserve for the previous two consecutive InterestPayment Dates; plus

1.66.5 the difference between the Cash Reserve Required Amount and theRedraw Reserve Required Amount at the previous Interest PaymentDate and the Cash Reserve Required Amount and the RedrawReserve Required Amount on the following Interest Payment Date,provided that the difference is a positive amount; plus

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1.66.6 an amount equal to the balance recorded on the AdjustedPrincipal Deficiency Ledger on the previous Determination Date,

provided that the Potential Redemption Amount shall never be less thanzero;

1.67 “Prime” the Prime Rate, as defined in the Programme Memorandum;

1.68 “Principal Balance Date” in relation to:

1.68.1 Participating Assets sold and transferred on the Initial EffectiveDate, the close of business on the Business Day immediatelypreceding the Initial Effective Date; and

1.68.2 Participating Assets sold and transferred in terms of the SaleAgreement during the Revolving Period or any other date otherthan the Initial Effective Date, the close of business on theEffective Date of such sale;

1.69 “Principal Deficiency” on any Determination Date an amount equal to the ‘Liabilities’ expectedto exist, after having made all payments in accordance with the Priority ofPayments, as at close of business on the immediately succeeding InterestPayment Date less the ‘Assets’ expected to exist, after having made allpayments in accordance with the Priority of Payments, as at close ofbusiness on the immediately succeeding Interest Payment Date, where‘Liabilities’ and ‘Assets’ have the meanings set out in paragraph 9 underthe section of this Transaction Supplement headed ‘Structural Features’;

1.70 “Purchase Price” subject to the terms of the Sale Agreement, in respect of each ParticipatingAsset, an amount equal to:

1.70.1 the Principal Balance of such Home Loan Agreement on thePrincipal Balance Date; plus

1.70.2 the Accrued Interest on such Participating Asset on the PrincipalBalance Date; plus

1.70.3 any amounts charged in respect of such Participating Asset to theBorrower’s account but unpaid on the Principal Balance Date;

1.71 “Recoveries” proceeds from the sale of Properties and the amount of any Non-Performing Loans which were taken into account to determine thePrincipal Deficiency which have subsequently been recovered;

1.72 “Redemption Amount” the amount allocated for redemption of the Notes in terms of the Pre-Enforcement Priority of Payments;

1.73 “Redraw” a re-advance to a Borrower including a re-advance in terms of the RedrawFacility;

1.74 “Redraw Facility” in relation to any Home Loan, the facility (whether described as an“Access Bond Facility” or otherwise) which, if granted by the Seller (orits assignee) enables the Borrower to make a Redraw, subject to the termsof the Home Loan Agreement;

1.75 “Redraw Notification Trigger will occur when:Event”

1.75.1 the monies standing to the credit of the Redraw Reserve drops tobelow one third of the Redraw Reserve Required Amount“Redraw Threshold” and remains below the Redraw Thresholdfor a continuous period of 10 Business Days prior to butexcluding, the relevant Determination Date; and/or

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1.75.2 on the relevant Determination Date, the aggregate PrincipalBalances of Home Loans of the Issuer in respect of which thereare arrears of an amount greater than 3 months’ instalmentsexceeds 1.2% of the aggregate Principal Balances of theParticipating Assets in the Initial Asset Pool but shall cease whensuch percentage reduces to 0.9%;

1.76 “Redraw Reserve Required on the Initial Issue Date and any subsequent Interest Payment Date, anAmount” amount equal to 2.25% of the greater of the aggregate of the Principal

Balances of the Participating Assets of the Issuer and the OutstandingPrincipal Amount of the Notes in issue from time to time after theapplication of funds on the relevant Payment Date, or such lower amountas may be notified in writing by each Rating Agency provided such loweramount will not cause the relevant Rating Agency to downgrade orwithdraw its current Ratings of the Notes in Issue;

1.77 “Related BG4 Security” all security documents in relation to a Home Loan, including cession orendorsement or right to payment in respect of Insurance Contracts,suretyships, guarantees, indemnities, pledges, cessions of rights(including claims, rights of action, receivables and/or insurance policies)and any other collateral security for a Borrower’s obligations under aHome Loan Agreement, but excluding, all rights, title, interest, benefitand obligations under the Servicer Undertaking Agreement, eachcorresponding Borrower Indemnity and all rights and obligations undereach corresponding Indemnity Bond save in relation to any cession ofrights in relation to rental proceeds or SASRIA claims in respect of therelevant Property provided for in such Indemnity Bond (collectively, the“Ceded Rights”), which Ceded Rights will be assigned to the Issuer interms of the Sale Agreement, notwithstanding that the terms of the CededRights are contained in the corresponding Indemnity Bond;

1.78 “Required Credit Rating” means:

1.78.1 where the Rating Agency is Moody’s:

1.78.1.1 in the case of Permitted Investments, the AccountBank or the GIC Provider if the Notes are assigned a,local currency global scale rating, and (i) if the entityis assigned a local currency global scale rating then atleast Prime -1 (local currency global rate), or (ii) if theentity is not assigned a local currency global scalecredit rating, then at least Prime -2 (foreign currencyglobal scale) by Moody’s on a short-term scale and atleast Baa2 (foreign currency global scale) by Moody’son a long term;

1.78.1.2 in respect of the Derivative Counterparty if the Notesare assigned a, local currency global scale rating, and(i) if the entity is assigned a local currency globalscale rating, then at least A1 (local currency globalscale) on a long-term only scale and if a short-termand long scale applies, then at least A2 (local currencyglobal scale) on a long-term scale and Prime -1 (localcurrency global scale) on a short-term sale; or (ii) ifthe entity is not assigned a local currency global scalecredit rating, then at least Prime -2 (foreign currencyglobal scale) by Moody’s on a short-term scale and atleast Baa1 (foreign currency global scale) by Moody’son a long term;

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1.78.1.3 in respect of the Servicer if the Notes are assigned alocal currency. global scale rating, and (i) if the entityis assigned a local currency global scale rating, then atleast Baa2 or (ii) if the entity is not assigned a localcurrency global scale credit rating, then at least Prime -2 (foreign currency global scale) by moody’son a short-term scale and at least Baa2 (foreigncurrency global scale) by moody’s on a long-term(foreign currency global scale);

1.78.1.4 in respect of the Servicer in relation to the CashReserve Capture Trigger, (i) if the Notes are assigneda local currency global scale rating, then at least Baa3(local currency global scale) or (ii) if the entity is notassigned a local currency global scale credit rating,then at least Prime -2 (foreign currency global scale)by Moody’s on a short-term scale and at least Baa3(foreign currency global scale) by Moody’s on a long-term (foreign currency global scale);

in each case, such other rating, if any, which the Rating Agencyconfirms in writing will not adversely affect its respectivecurrent Ratings of the Notes in issue; provided that if aninvestment or entity is not rated by the Rating Agency, then suchinvestment or entity that the Rating Agency confirms in writingwill not adversely affect its respective current Ratings of theNotes in issue;

1.78.2 where the Rating Agency is Fitch:

1.78.2.1 in the case of the Servicer (i) if a national scale,national currency credit rating has been assigned tothe investment or entity, then at least F1+(zaf) by Fitchon a short-term scale and at least AA-(zaf) on a long-term scale or, in the case of any other Rating Agency(where applicable) the equivalent short-term or long-term national scale rating of such Rating Agency,(ii) in the absence of such a national scale, nationalcurrency credit rating, if a global scale credit ratinghas been assigned to the investment or entity, then theequivalent short-term or long-term global scale creditrating of such Rating Agency; or

1.78.2.2 in the case of Permitted Investments with a term of 30 days or less (i) if a national scale, national currencycredit rating has been assigned to the investment orentity, then at least F1(zaf) by Fitch on a short-term scaleand at least A(zaf) on a long-term scale or, in the case ofany other Rating Agency (where applicable) theequivalent short-term or long-term national scale ratingof such Rating Agency, (ii) in the absence of such anational scale, national currency credit rating, if a globalscale credit rating has been assigned to the investment orentity, then the equivalent short-term or long-term globalscale credit rating of such Rating Agency; or

1.78.2.3 in the case of Permitted Investments with a term ofmore than 30 days but less than 364 days (i) if anational scale, national currency credit rating has beenassigned to the investment or entity, then at leastF1+(zaf) by Fitch on a short-term scale and at least AA-(zaf) on a long term scale or, in the case of any otherRating Agency (where applicable) the equivalent short-term or long-term national scale credit rating of such

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Rating Agency, (ii) in the absence of such a nationalscale, national currency credit rating, if a global scalecredit rating has been assigned to the investment orentity, then the equivalent short-term or long-termglobal scale credit rating of such Rating Agency; or

1.78.2.4 in respect of the Derivative Counterparty (i) if anational scale, national currency credit rating has beenassigned to the entity, then at least F1(zaf) by Fitch ona short-term scale and at least A(zaf) on a long-termscale or, in the case of any other Rating Agency(where applicable) the equivalent short-term or long-term national scale credit rating of such RatingAgency. (ii) In the absence of such a national scale,national currency credit rating, if a global scale creditrating has been assigned to the entity, then theequivalent short-term or long-term global scale creditrating of such Rating Agency;

1.78.2.5 in respect of the Account Bank (i) if a national scale,national currency credit rating has been assigned tothe entity, then at least F1(zaf) by Fitch on a short-term scale or, in the case of any other Rating Agency(where applicable) the equivalent national scale creditrating of such Rating Agency. (ii) In the absence ofsuch a national scale, national currency credit rating,if a global scale credit rating has been assigned to theentity, then the equivalent short-term or long-termglobal scale credit rating of such Rating Agency;

1.78.2.6 in respect of the GIC Provider (i) if a national scale,national currency credit rating has been assigned tothe entity, then at least F1(zaf) by Fitch on a short-term scale. (ii) In the absence of such a national scale,national currency credit rating, if a global scale creditrating has been assigned to the entity, then theequivalent short-term or long-term global scale creditrating of such Rating Agency;

1.78.2.7 in each case, such other rating, if any, which theRating Agency confirms in writing will not adverselyaffect its respective current Ratings of the Notes inissue; provided that if an investment or entity is notrated by the Rating Agency, then such investment orentity that the rating Agency confirms in writing willnot adversely affect its respective current Ratings ofthe Notes in issue; or

in the case of other transaction parties required to hold theRequired Credit Rating in terms of the Transaction Documents,the same national scale, national currency credit rating as thatassigned, if any, by the Rating Agency to the highest-rankingNotes in issue at any point in time (or the equivalent short-termor long-term global scale credit rating, as the case may be);

1.78.3 where Standard & Poor’s has assigned a rating:

1.78.3.1 in the case of the Servicer: (i) if a national scale,national currency credit rating has been assigned tothe investment or entity, then at least zaA-1 byStandard & Poor’s on a short-term scale and at leastzaAA- on a long-term scale or, in the case of any otherRating Agency (where applicable) the equivalentshort-term or long-term national scale rating of suchRating Agency, (ii) in the absence of such a national

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scale, national currency credit rating, if a global scalecredit rating has been assigned to the investment orentity, then at least A-2 by Standard & Poor’s on ashort-term scale and at least BBB by Standard &Poor’s on a long-term scale; or

1.78.3.2 in the case of Permitted Investments if a nationalscale, national currency credit rating has beenassigned to the investment or entity, then at least zaA-1by Standard & Poor’s on a short-term scale;

1.78.3.3 in respect of the Derivative Counterparty: (i) if anational scale, national currency credit rating has beenassigned to the entity, then at least zaA-1 by Standard& Poor’s on a short-term scale and at least zaAA on along-term scale or, in the case of any other RatingAgency (where applicable) the equivalent short-termor long-term national scale credit rating of such RatingAgency. (ii) In the absence of such a national scale,national currency credit rating, if a global scale creditrating has been assigned to the entity, then at least A-2by Standard & Poor’s on a short-term scale and at leastBBB by Standard & Poor’s on a long-term scale;

1.78.3.4 in respect of the Account Bank: (i) if a national scale,national currency credit rating has been assigned tothe entity, then at least zaA-1 by Standard & Poor’s ona short-term scale or, in the case of any other RatingAgency (where applicable) the equivalent nationalscale credit rating of such Rating Agency. (ii) In theabsence of such a national scale, national currencycredit rating, if a global scale credit rating has beenassigned to the entity, then at least A-2 by Standard &Poor’s on a short-term scale and at least BBB byStandard & Poor’s on a long-term scale; or

1.78.3.5 in respect of the GIC Provider: (i) if a national scale,national currency credit rating has been assigned tothe entity, then at least zaA-1 by Standard & Poor’s ona short-term scale. (ii) In the absence of such anational scale, national currency credit rating, if aglobal scale credit rating has been assigned to theentity, then at least A-2 by Standard & Poor’s on ashort-term scale and at least BBB by Standard &Poor’s on a long-term scale;

1.79 “Revolving Period” the period commencing on (and including) the Initial Effective Date andending on the occurrence of a Stop Purchase Event or, upon the firstBusiness Day following the expiry of 3 years commencing from the InitialIssue Date, whichever occurs earlier, unless the Issuer elects to shorten theRevolving Period by giving 5 Business Days’ notice to the Security SPV,the Noteholders and the Servicer in which case the Revolving Period willend on the date on which such notice expires;

1.80 “Security” the security constituted by the Security Agreements, or any one or morethereof, as the context dictates;

1.81 “Security Interest” any mortgage, pledge, lien, equity option, Encumbrance, right of set-off,adverse right or interest whatsoever, howsoever created or arising;

1.82 “Servicer Advance” the amount which the Servicer is entitled, but not obliged, to pay into theTransaction Account equal to any instalments owing under a ParticipatingAsset but unpaid prior to such Determination Date, as more fullycontemplated in the Servicing Agreement;

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1.83 “Servicer Indemnity the undertaking by the Servicer in terms of the Servicer UndertakingUndertaking” Agreement to collect from the Borrower in terms of the Borrower

Indemnity and Indemnity Bond, all amounts owed to SBSA under theBorrower Indemnity and to pay over such amounts to the Issuer on requestfrom the Issuer or the Security SPV in terms of the Servicer UndertakingAgreement;

1.84 “Servicer Undertaking the agreement entered into between the Servicer, the Seller, the Issuer andAgreement” the Security SPV, as amended, novated and/or substituted from time to

time in accordance with its terms, pursuant to which, inter alia, theServicer gives the Servicer Indemnity Undertaking;

1.85 “Security SPV” Blue Granite No. 4 Security SPV (Proprietary) Limited registered andincorporated in accordance with the laws of South Africa under registrationnumber 2006/034129/07 and its successors-in-title and assigns;

1.86 “Seller” SBSA;

1.87 “Servicing Fee Cap” 0.1% per annum of the aggregate Principal Balances of the ParticipatingAssets of the Issuer at the beginning of each Collection Period;

1.88 “Standard & Poors” Standard & Poor’s Rating Services, a division of The McGraw-HillCompanies Inc, its successors-in-title and assigns;

1.89 “Standard Bank Group” the group comprising all the subsidiary and associated companies ofSBSA’s holding company as reflected in the most current auditedfinancial statements of the Standard Bank Group Limited;

1.90 “Stop Purchase Event” the occurrence of any of the following events:

1.90.1 enforcement of the Security in accordance with the provisions ofthe Security Agreements;

1.90.2 the removal of SBSA as Servicer;

1.90.3 the date on which the Notes are redeemed in full;

1.90.4 any Determination Date on which there is a lack of availablefunds, in terms of the Pre-Enforcement Priority of Payments, tocredit the Cash Reserve up to the Cash Reserve RequiredAmount;

1.90.5 the Arrears Reserves are not funded at the Arrears ReserveRequired Amount on 2 consecutive Payment Dates;

1.90.6 the Class A Notes no longer being outstanding;

1.90.7 an Arrears Trigger has occurred;

1.90.8 the Issuer amending the Eligibility Criteria, unless the relevantRating Agency notifies the Issuer in writing that suchamendments may not cause it to downgrade or withdraw itsrespective current Ratings of the Notes in issue;

1.90.9 the end of the Revolving Period other than pursuant to a StopPurchase Event; and/or

1.90.10 the Principal Deficiency calculated on the Determination Dateimmediately preceding the date on which Additional Assets arepurchased does exceed zero;

1.91 “Subordinated Lender(s)” Subordinated Lender No. 1 and/or Subordinated Lender No. 2, as thecontext may indicate;

1.92 “Subordinated Lender No. 1” the member of the Standard Bank Group, as specified in the SubordinatedLoan Agreement (First Loss) and its successors-in-title and/or assignees;

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1.93 “Subordinated Lender No. 2” SBSA and its successors-in-title and/or assignees;

1.94 “Subordinated Loan the Subordinated Loan Agreement between the Issuer, SubordinatedAgreement (First Loss)” Lender No. 1, the Administrator and the Security SPV, as amended,

novated, and/or substituted from time to time in accordance with its terms,in terms of which Subordinated Lender No. 1 will bear a first-loss interestin the Issuer and which ranks subsequent to the Subordinated LoanAgreement (Second Loss) in the Priority of Payments;

1.95 “Subordinated Loan the Subordinated Loan Agreement between the Issuer, SubordinatedAgreement (Second Loss)” Lender No. 2, the Administrator and the Security SPV, as amended,

novated and/or substituted from time to time in accordance with its terms,in terms of which Subordinated Lender No. 2 will bear a second-lossinterest in the Issuer;

1.96 “Subordinated Loan No. 1” the subordinated loan contemplated in the Subordinated Loan Agreement(First Loss);

1.97 “Subordinated Loan No. 2” the subordinated loan contemplated in the Subordinated Loan Agreement(Second Loss);

1.98 “Subsequent Issue” the second issue of Notes (if any) on the Initial Effective Date, andprovided that the Security SPV has consented to the second issue of Notesand the Rating Agency does not advise the Issuer that such second issuewill cause the downgrading of the Notes in issue or result in the Notes inissue being placed on negative watch;

1.99 “Substitution Date” any Business Day of a month;

1.100 “Top-Up Date” any Business Day during the Revolving Period;

1.101 “Transaction Documents” the Common Terms Agreement, the Sale Agreement, the ServicingAgreement, the Servicer Undertaking Agreement, the AdministrationAgreement, the Assignment Agreement, the Common Terms GuaranteeAgreement, the Guarantee Entity Servicing Agreement, the Letter ofUndertaking in respect of the Guarantee Entity Administration Agreement,the trust deed of the Owner Trust, the trust deed of the Security SPV OwnerTrust, the trust deed of the Guarantee Entity Owner Trust, the memorandumand articles of association of the Issuer, the memorandum and articles ofassociation of the Security SPV and the memorandum and articles ofassociation of the Guarantee Entity, the Bank Agreement, the Owner TrustSuretyship, the Pledge, the Security Cession, the Guarantee, the Indemnity,the Preference Share Subscription Agreement, the Subordinated LoanAgreement (First Loss), the Subordinated Loan Agreement (Second Loss),the Guaranteed Investment Contract, the Guarantee Entity Guarantees inrespect of each Participating Asset, the agreements entered into from timeto time with Derivative Counterparties, the letter of appointment of theSecurity SPV, the Notes, the Note Subscription Agreements, theProgramme Agreement, the Transfer Agent Agreement, the Safe CustodyAgreement, the Programme Memorandum, the Applicable TransactionSupplement and the Applicable Pricing Supplements;

1.102 “Transfer Date” the date of registration by the Registrar of Deeds of the cession of therelevant Indemnity Bond into the name of Guarantee Entity; and

1.103 “Warranty Replacement Asset” a Participating Asset transferred by the Seller to the Issuer subject to aor “Warranty Asset” warranty breach on the terms and conditions of the Sale Agreement in

substitution for a Participating Asset sold and transferred by the Seller tothe Issuer in terms of the Sale Agreement.

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ADDITIONAL/AMENDED TERMS AND CONDITIONS

The Terms and Conditions set out in the Programme Memorandum are applicable.

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GENERAL INFORMATION

Authorisation

All consents, approvals, authorisations or other orders of all regulatory authorities required by the Issuer under the lawsof South Africa have been given for the establishment of the Issuer Programme and the issue of Notes under the IssuerProgramme and for the Issuer to undertake and perform its obligations under the Transaction Documents.

SBSA has approved the accession of the Issuer to the Master Programme.

Banks Act

The Registrar of Banks has confirmed in writing that the Issuer is authorised to issue commercial paper in terms of theIssuer Programme, pursuant to a securitisation scheme in terms of paragraph 13(1)(b)(ii) of the SecuritisationRegulations, subject, inter alia, to the Registrar of Banks:

(i) being provided with a copy of the Transaction Supplement upon its publication; and

(ii) being provided with written confirmation by auditors, duly appointed by the Issuer in terms of paragraph 14 of the Securitisation Regulations, that there will be compliance with the relevant provisions thereof with regard to theconduct of the Securitisation Scheme.

Compliance with the scheme remains the responsibility of the Issuer.

Listing

The Programme Memorandum has been registered by BESA. Each Tranche of Notes will be listed on BESA or anysuccessor exchange or such other or further exchanges as may be agreed between the Issuer and the Dealer(s) and subjectto any Applicable Laws.

Clearing systems

The Notes have been accepted for clearance through the Central Securities Depository which, as the operator of anelectronic clearing system, has been appointed by BESA to match, clear and facilitate the settlement of transactionsconcluded on BESA. The Notes may be accepted for clearance through any additional clearing system as may be agreedbetween BESA and the Issuer.

Settlement agents

As at the date of this Transaction Supplement, the participants which are approved by BESA as Settlement Agents, arethe South African Reserve Bank, SBSA, FirstRand Bank Limited, Nedbank Limited and Absa Bank Limited. EuroclearBank S.A./N.V. as operator of the Euroclear System and Clearstream Banking Societe Anonyme will settle transactionsthrough South African Settlement Agents.

Material Change

Save as disclosed in this Transaction Supplement and save as required pursuant to the Transaction Documents, the Issuerhas not traded from the date of its incorporation on 17 October 2006 to the Initial Issue Date and no transactions haveoccurred during such period.

Litigation

The Issuer is not engaged (whether as defendant or otherwise) in any legal, arbitration, administration or otherproceedings other than those disclosed in this Transaction Supplement, if any, the results of which might have or havehad a significant effect on the financial position or the operations of the Issuer, nor is it aware of any such proceedingsbeing threatened or pending.

49

Auditors

The current auditors of the Issuer are KPMG Inc. and PricewaterhouseCoopers Inc.

Documents

For so long as any note remains outstanding, one copy of the Programme Memorandum and each of the documentsreferred to in the section of the Programme Memorandum headed “Documents incorporated by Reference” and thesection of this Transaction Supplement headed “Transaction Documents” will be available for inspection by theNoteholders at the Specified Office of the Issuer.

By our signature of this Transaction Supplement, we confirm that the Issuer accedes to the Master Programme.

BLUE GRANITE INVESTMENTS NO. 4 (PROPRIETARY) LIMITED

By: ______________________________________ By: ______________________________________

Date: _________________________________ 2007 Date: _________________________________ 2007

50

CORPORATE INFORMATION

ISSUER SECURITY SPV

Blue Granite Investments No. 4 (Proprietary) Limited Blue Granite No. 4 Security SPV (Proprietary) Limited(Registration Number 2006/032191/07) (Registration Number 2006/034129/07)

Standard Bank Centre Maitland Trust Limited4th Floor, Entrance 3 1st Floor, 32 Fricker Road3 Simmonds Street Illovo BoulevardJohannesburg, 2001 Sandton 2196

Contact: Ms Adri Fuhri Contact: Mr Werner Behrens

ARRANGER, DEALER ANDSPONSORING MEMBER SERVICER

The Standard Bank of South Africa Limited The Standard Bank of South Africa Limited(Registration Number 1962/000738/06) (Registration Number 1962/000738/06)

3 Simmonds Street Standard Bank CentreJohannesburg, 2001 3rd Floor, 6 Simmonds Street

Contact: The Director: Securitisation Johannesburg, 2001Contact: The Financial Director: Home Loans

SELLER ORIGINATOR

The Standard Bank of South Africa Limited The Standard Bank of South Africa Limited(Registration Number 1962/000738/06) (Registration Number 1962/000738/06)

Standard Bank Centre Standard Bank Centre3rd Floor 3rd Floor

6 Simmonds Street 6 Simmonds StreetJohannesburg, 2001 Johannesburg, 2001

Contact: The Financial Director: Home Loans Contact: The Financial Director: Home Loans

ATTORNEYS TO THE ARRANGER TRANSFER AGENT

Webber Wentzel Bowens Computershare Investor Services 2004 (Proprietary) Limited10 Fricker Road (Registration Number 2004/003647/07)Illovo Boulevard Ground Floor

Johannesburg, 2196 70 Marshall StreetContact: Mrs Lindi Marais Johannesburg, 2001

Contact: The Company SecretaryFax (011) 688-5315

SETTLEMENT AGENT ADMINISTRATOR AND CALCULATION AGENT

The Standard Bank of South Africa Limited The Standard Bank of South Africa Limited(Registration Number 1962/000738/06) (Registration Number 1962/000738/06)

25 Sauer Street Standard Bank CentreJohannesburg, 2001 4th Floor, Entrance 3

Contact: Ms Prabashni Howard 3 Simmonds StreetJohannesburg, 2001

Contact: Ms Adri Fuhri

AUDITORS TO THE ISSUER AUDITORS TO THE SECURITY SPV

PricewaterhouseCoopers Inc. PricewaterhouseCoopers Inc.2 Eglin Road 2 Eglin Road

Sunninghill, 2157 Sunninghill, 2157KPMG Inc. KPMG Inc.

85 Empire Road 85 Empire RoadParktown, 2193 Parktown, 2193

51

GUARANTEE ENTITY GUARANTEE ENTITY SERVICER

SB Guarantee Company (Proprietary) Limited, The Standard Bank of South Africa Limited(Registration Number 2006/021576/07) (Registration Number 1962/000738/06)

Standard Bank Centre Standard Bank Centre4th Floor, Entrance 3 3rd Floor, 6 Simmonds Street3 Simmonds Street Johannesburg, 2001Johannesburg, 2001 Contact: The Financial Director: Home Loans

Contact: Ms Adri Fuhri

GUARANTEE ENTITY ADMINISTRATOR

The Standard Bank of South Africa Limited(Registration Number 1962/000738/06)

Standard Bank Centre4th Floor, Entrance 33 Simmonds StreetJohannesburg, 2001

Contact: Ms Adri Fuhr

52

Appendix 1

ASSET POOL STRATIFICATION ASSET POOL STRATIFICATION WHERE THERE IS A SUBSEQUENT ISSUE

Loan Size (Rands)

Count % Value %

0 – 100,000 178 2.10% R15 900 728.26 0.34%100,001 – 200,000 1,074 12.65% R165 352 745.13 3.57%200,001 – 300,000 1,223 14.41% R306 510 372.58 6.62%300,001 – 400,000 1,253 14.76% R440 321 963.78 9.52%400,001 – 500,000 1,141 13.44% R516 119 041.48 11.15%500,001 – 750,000 1,853 21.83% R1 130 589 106.55 24.43%750,001 – 1,000,000 895 10.54% R767 293 211.08 16.58%1,000,001 – 1,250,000 359 4.23% R397 442 666.93 8.59%1,250,001 – 1,500,000 230 2.71% R316 483 765.32 6.84%1,500,001 – 2,000,000 173 2.04% R298 074 226.46 6.44%2,000,001 – 2,500,000 67 0.79% R150 627 040.65 3.26%2,500,001 – 3,000,000 33 0.39% R90 515 814.97 1.96%> 3,000,000 10 0.12% R31 983 698.21 0.69%

Total 8,489 100.00% R4 627 214 381.40 100.00%

Loan to Value (LTV)

Count % Value %

0% – 50% 1,959 23.08% R737 178 232.52 15.93%50% – 60% 691 8.14% R365 427 012.25 7.90%60% – 70% 723 8.52% R433 556 397.72 9.37%70% – 75% 459 5.41% R286 253 357.47 6.19%75% –80% 501 5.90% R344 872 867.35 7.45%80% – 85% 364 4.29% R212 508 217.59 4.59%85% – 90% 394 4.64% R237 995 186.44 5.14%90% – 95% 488 5.75% R308 191 903.49 6.66%95% – 100 2,910 34.28% R1 701 231 206.57 36.77%> 100% 0 0.00% R0.00 0.00%

Total 8,489 100.00% R4 627 214 381.40 100.00%

Instalment to Income (ITI)

Count % Value %

0% – 5% 544 6.41% R169 140 218.62 3.66%5% – 10% 1,291 15.21% R533 049 433.55 11.52%10% – 15% 1,557 18.34% R739 996 126.54 15.99%15% – 20% 1,595 18.79% R910 233 845.44 19.67%20% – 25% 1,732 20.40% R1 092 239 723.48 23.60%25% – 30% 1,770 20.85% R1 182 555 033.76 25.56%> 30% 0 0.00% R0.00 0.00%

Total 8,489 100.00% R4 627 214 381.40 100.00%

53

Interest Rate Distribution (%)

Count % Value %

0% – 8.0% 0 0.00 R0.00 0.00%8.0% – 8.5% 0 0.00% R0.00 0.00%8.5% – 9.0% 0 0.00% R0.00 0.00%9.0% – 9.5% 0 0% 0 0%9.5% – 10.0% 0 0% 0 0%10.0% – 10.5% 1,191 14.03% R1 242 164 976.61 26.84%10.5% – 11.0% 3,616 42.60% R2 193 145 901.79 47.40%11.0% – 11.5% 2,912 34.30% R972 403 532.13 21.01%11.5% – 12.0% 504 5.94% R132 105 880.00 2.85%> 12.0% 236 2.78% R75 654 847.57 1.63%12.5% – 13.0% 21 0.25% R7 688 412.13 0.17%>13.0 9 0.11% R4 050 831.18 0.09%

Total R8 489 100.00% R4 627 214 381.40 100.00%

Borrower Income (Rands)

Count % Value %

0 – 10,000 467 5.50% R82 676 249.95 1.79%10,001 – 20,000 2,141 25.22% R619 525 702.59 13.39%20,001 – 30,000 1,823 21.47% R861 585 879.78 18.62%30,001 – 40,000 1,274 15.01% R737 492 690.97 15.94%40,001 – 50,000 835 9.84% R568 755 369.13 12.29%50,001 – 60,000 516 6.08% R389 425 368.74 8.42%60,001 – 70,000 359 4.23% R297 455 947.97 6.43%70,001 – 80,000 274 3.23% R249 049 071.32 5.38%80,001 – 90,000 182 2.14% R173 494 461.93 3.75%> 90,000 618 7.28% R647 753 639.02 14.00%

Total 8,489 100.00% R4 627 214 381.40 100.00%

Borrower Age

Count % Value %

> 55 648 7.63% R302 355 636.35 6.53%50 – 55 646 7.61% R337 546 592.96 7.29%45 – 50 960 11.31% R526 091 969.78 11.37%40 – 45 1,191 14.03% R685 516 143.93 14.81%35 – 40 1,338 15.76% R751 319 026.89 16.24%30 – 35 1,593 18.77% R890 790 441.49 19.25%25 – 30 1,357 15.99% R723 468 304.43 15.64%< 25 556 6.55% R263 296 461.29 5.69%Unspecified 200 2.36% R146 829 804.29 3.17%

Total 8,489 100.00% R4 627 214 381.40 100.00%

Geographic Distribution

Count % Value %

Gauteng 4,655 54.84% R2 612 560 710.44 56.46%Eastern Cape 343 4.04% R162 659 234.01 3.52%Free State 318 3.75% R124 071 365.64 2.68%KwaZulu-Natal 1,041 12.26% R616 852 545.10 13.33%Mpumalanga 385 4.54% R164 804 335.10 3.56%North West 235 2.77% R115 234 932.90 2.49%Northern Cape 121 1.43% R46 110 576.70 1.00%Northern 167 1.97% R65 740 459.07 1.42%Western Cape 1,224 14.42% R719 180 222.43 15.54%

Total 8,489 100.00% R4 627 214 381.40 100.00%

54

Property Use

Count % Value %

Primary/Main residence 8,056 94.90% R4 380 412 705.17 94.67%Secondary residence 73 0.86% R44 043 440.97 0.95%Holiday home 14 0.16% R11 089 777.01 0.24%Residential and business 8 0.09% R9 927 067.76 0.21%Business purposes 30 0.35% R23 524 254.62 0.51%Vacant land 0 0.00% R0.00 0.00%Vacant land (buildings plans) 0 0.00% R0.00 0.00%Building loan 0 0.00% R0.00 0.00%Smallholding (> 8.56 ha) 5 0.06% R3 755 815.49 0.08%Renting/Investment 198 2.33% R100 118 166.35 2.16%Unspecified 105 1.24% R54 343 154.02 1.17%

Total 8,489 100.00% R4 627 214 381.40 100.00%

Payment Method

Count % Value %

Debit Orders 8,053 94.86% R4 448 693 735.87 96.14%Other 436 5.14% R178 520 645.52 3.86%

Total 8,489 100.00% R4 627 214 381.40 100.00%

Access Bond

Count % Value %

Redraws available 3,019 35.56% R1 780 439 664.66 38.48%No redraws 5,470 64.44% R2 846 774 716.74 61.52%

Total 8,489 100.00% R4 627 214 381.40 100.00%

Loan Portfolio Summary

Pool Cut Date 13 January 2007Standard Bank’s Prime Rate 12.50%Number of Loans 8 489Aggregate Balance Outstanding R4 627 214 381.40Average Loan Size R545 083.56Minimum Loan Balance R75 498.49Maximum Loan Balance R3 366 877.52Average Monthly Borrower Income R42 297.58Minimum Monthly Borrower Income R8 200.00Average Interest Yield (weighted by value) 10.83%Minimum Interest Yield 10.30%Maximum Interest Yield 14.00%Average Loan to Value Ratio (weighted by value) 77.31%Minimum Loan to Value Ratio 7.01%Maximum Loan to Value Ratio 100.00%Average Instalment to Income Ratio (weighted by value) 18.87%Minimum Instalment to Income Ratio 0.00%Maximum Instalment to Income Ratio 30.00%Self-employed Borrowers (percentage of pool) 21.95%Borrowers with Redraw Facility (percentage of pool) 38.48%

55

ASSET POOL STRATIFICATION WHERE THERE IS NO SUBSEQUENT ISSUE

Loan Size (Rands)

Count % Value %

0 – 100,000 112 2.33% R9 964 278.14 0.38%100,001 – 200,000 638 13.25% R98 828 570.23 3.81%200,001 – 300,000 698 14.49% R174 670 724.69 6.74%300,001 – 400,000 696 14.45% R245 332 303.49 9.47%400,001 – 500,000 653 13.56% R294 987 725.64 11.38%500,001 – 750,000 1,050 21.80% R641 226 418.60 24.75%750,001 – 1,000,000 485 10.07% R414 339 283.54 15.99%1,000,001 – 1,250,000 199 4.13% R220 396 008.50 8.51%1,250,001 – 1,500,000 116 2.41% R159 484 919.08 6.15%1,500,001 – 2,000,000 112 2.33% R192 881 436.08 7.44%2,000,001 – 2,500,000 37 0.77% R83 768 846.85 3.23%2,500,001 – 3,000,000 20 0.42% R55 450 750.84 2.14%> 3,000,000 0 0.00% R0.00 0.00%

Total 4,816 100.00% R2 591 331 265.68 100.00%

Loan to Value (LTV)

Count % Value %

0% – 50% 1,200 24.92% R459 207 495.51 17.72%50% – 60% 410 8.51% R208 435 785.07 8.04%60% – 70% 447 9.28% R268 175 748.79 10.35%70% – 75% 279 5.79% R184 128 599.39 7.11%75% – 80% 230 4.78% R143 223 166.23 5.53%80% – 85% 230 4.78% R130 370 616.47 5.03%85% – 90% 233 4.84% R139 617 066.35 5.39%90% – 95% 301 6.25% R183 270 572.58 7.07%95% – 100% 1,486 30.86% R874 902 215.28 33.76%> 100% 0 0.00% R0.00 0.00%

Total 4,816 100.00% R2 591 331 265.68 100.00%

Installment to Income (ITI)

Count % Value %

0% – 5% 318 6.60% R95 979 423.48 3.70%5% – 10% 715 14.85% R286 509 282.33 11.06%10% – 15% 941 19.54% R438 486 530.63 16.92%15% – 20% 912 18.94% R519 994 063.68 20.07%20% – 25% 967 20.08% R604 047 431.51 23.31%25% – 30% 963 20.00% R646 314 534.04 24.94%> 30% 0 0.00% R0.00 0.00%

Total 4,816 100.00% R2 591 331 265.68 100.00%

56

Interest Rate Distribution (%)

Count % Value %

8.5% – 9.0% 0 0.00% R0.00 0.00%9.0% – 9.5% 0 0.00% R0.00 0.00%9.5% – 10.0% 0 0.00% R0.00 0.00%10.0% – 10.5% 668 13.87% R690 528 306.31 26.65%10.5% – 11.0% 2,069 42.96% R1 232 902 912.46 47.58%11.0% – 11.5% 1,650 34.26% R543 542 058.21 20.98%11.5% – 12.0% 271 5.63% R72 606 012.17 2.80%12.0% – 12.5% 150 3.11% R48 676 359.01 1.88%12.5% – 13.0% 7 0.15% R1 905 083.51 0.07%> 13.0% 1 0.02% R1 170 534.02 0.05%

Total 4,816 100.00% R2 591 331 265.68 100.00%

Borrower Income (Rands)

Count % Value %

0 – 10,000 263 5.46% R45 825 406.33 1.77%10,001 – 20,000 1,250 25.96% R358 167 586.78 13.82%20,001 – 30,000 1,009 20.95% R475 100 944.93 18.33%30,001 – 40,000 726 15.07% R414 460 175.58 15.99%40,001 – 50,000 485 10.07% R325 238 946.80 12.55%50,001 – 60,000 290 6.02% R222 358 901.08 8.58%60,001 – 70,000 206 4.28% R174 716 707.29 6.74%70,001 – 80,000 152 3.16% R137 223 357.32 5.30%80,001 – 90,000 104 2.16% R100 070 438.79 3.86%> 90,000 331 6.87% R338 168 800.79 13.05%

Total 4,816 100.00% R2 591 331 265.68 100.00%

Borrower Age

Count % Value %

> 55 372 7.72% R172 851 318.62 6.67%50 – 55 379 7.87% R190 965 958.38 7.37%45 – 50 556 11.54% R295 304 532.61 11.40%40 – 45 676 14.04% R386 903 838.90 14.93%35 – 40 730 15.16% R416 032 110.21 16.05%30 – 35 888 18.44% R495 357 358.42 19.12%25 – 30 786 16.32% R406 209 001.48 15.68%< 25 308 6.40% R140 161 252.36 5.41%Unspecified 121 2.51% R87 545 894.69 3.38%

Total 4,816 100.00% R2 591 331 265.68 100.00%

Geographic Distribution

Count % Value %

Gauteng 2,671 55.46% R1 491 467 987.06 57.56%Eastern Cape 186 3.86% R87 545 536.18 3.38%Free State 172 3.57% R63 946 353.04 2.47%KwaZulu-Natal 577 11.98% R337 595 054.84 13.03%Mpumalanga 215 4.46% R94 555 564.40 3.65%North West 129 2.68% R61 477 768.84 2.37%Northern Cape 65 1.35% R21 656 227.49 0.84%Northern 105 2.18% R37 910 272.69 1.46%Western Cape 696 14.45% R395 176 501.14 15.25%

Total 4,816 100.00% R2 591 331 265.68 100.00%

57

Property use

Count % Value %

Primary/Main residence 4,579 95.08% R2 460 467 131.12 94.95%Secondary residence 38 0.79% R20 957 254.80 0.81%Holiday home 6 0.12% R3 004 682.27 0.12%Residential and business 2 0.04% R2 342 615.54 0.09%Business purposes 17 0.35% R12 455 171.89 0.48%Vacant land 0 0.00% R0.00 0.00%Vacant land (building plans) 0 0.00% R0.00 0.00%Building loan 0 0.00% R0.00 0.00%Small holding (> 8.56 ha) 4 0.08% R3 499 747.59 0.14%Renting/Investment 113 2.35% R57 946 679.72 2.24%Unspecified 57 1.18% R30 657 982.74 1.18%

Total 4,816 100.00% R2 591 331 265.68 100.00%

Payment Method

Count % Value %

Debit Orders 4,562 94.73% R2 487 349 909.30 95.99%Other 254 5.27% R103 981 356.39 4.01%

Total 4,816 100.00% R2 591 331 265.68 100.00%

Access Bond

Count % Value %

Redraws available 1,710 35.51% R993 683 103.31 38.35%No Redraws 3,106 64.49% R1 597 648 162.37 61.65%

Total 4,816 100.00% R2 591 331 265.68 100.00%

Loan Portfolio Summary

Pool Cut Date 13-Jan-07Standard Bank’s Prime Interest Rate 12.50%Number of Loans 4816Aggregate Balance Outstanding R2 591 331 265.68Average Loan Size R538 067.12Minimum Loan Balance R75 689.89Maximum Loan Balance R2 991 820.60Average Monthly Borrower Income R42 534.39Minimum Monthly Borrower Income R8 200.00Average Interest Yield (weighted by value) 10.83%Minimum Interest Yield 10.30%Maximum Interest Yield 14.00%Average Loan to Value Ratio (weighted by value) 75.76%Minimum Loan to Value Ratio 7.01%Maximum Loan to Value Ratio 99.97%Average Installment to Income Ratio (weighted by value) 18.87%Minimum Installment to Income Ratio 0.00%Maximum Installment to Income Ratio 30.00%Self-employed Borrowers (percentage of pool) 21.44%Borrowers with Redraw Facility (percentage of pool) 38.35%

58

Appendix 2

AUDITORS’ REPORT

The following is the text of the report to the Issuer, by the auditors appointed for this purpose by the Issuer, confirmingthat each issue of Notes by the Issuer under the Issuer Programme as detailed in the Programme Memorandum and theTransaction Supplement complies in all respects with the provisions of the Securitisation Regulations promulgated inGovernment Notice 681 (Government Gazette No. 2645, 4 June 2004) pursuant to the provisions of the Banks Act,1990.

“REPORT OF THE INDEPENDENT AUDITORS OF BLUE GRANITE INVESTMENTS NO. 4(PROPRIETARY) LIMITED ON COMPLIANCE OF THE ISSUE BY BLUE GRANITE INVESTMENTS NO. 4 (PROPRIETARY) LIMITED OF SECURED NOTES PURSUANT TO THE ASSET BACKED NOTEPROGRAMME AS DESCRIBED IN THE PROGRAMME MEMORANDUM DATED 28 OCTOBER 2005 ANDTHE TRANSACTION SUPPLEMENT DATED 6 MARCH 2007 WITH THE RELEVANT PROVISIONS OFTHE SECURITISATION REGULATIONS (GOVERNMENT NOTICE 681, GOVERNMENT GAZETTE 26415 OF 4 JUNE 2004) ISSUED BY THE REGISTRAR OF BANKS, AS REQUIRED BY PARAGRAPHS 14(1)(a)(ii)AND 15(2)(a)(vii) OF THE SAID NOTICE.

1. INTRODUCTION

As required by Paragraphs 14(1)(a)(ii) and 15(2)(a)(vii) of the Securitisation Regulations (Government Notice 681,Government Gazette 26415 of 4 June 2004) issued by the Registrar of Banks (the “Securitisation Regulations”),we have reviewed whether or not the issue of limited recourse secured registered Notes by Blue Granite InvestmentsNo. 4 (Proprietary) Limited (the “Issuer”) with an aggregate Principal Amount of up to R6 000 000 000(the “Notes”) pursuant to the Asset Backed Note Programme (the “Issuer Programme”), as documented in theProgramme Memorandum dated 28 October 2005 (the “Programme Memorandum”) and the TransactionSupplement dated 6 March 2007 (the “Transaction Supplement”), will be compliant with the relevant provisionsof the Securitisation Regulations. We conducted our review in accordance with the statement of South AfricanAuditing Standards applicable to review engagements.

Compliance with the relevant provisions of the Securitisation Regulations is the responsibility of the Issuer. We report on such compliance.

2. SCOPE

Our review was generally limited to an examination of the Programme Memorandum and the TransactionSupplement, with regard to compliance with the relevant provisions of the Securitisation Regulations.

It should be recognised that our review did not constitute an audit and may not necessarily have revealed all materialfacts.

3. FINDINGS

Our review revealed nothing which caused us to believe that the Issuer will not be in compliance with the relevantprovisions of the Securitisation Regulations with regard to the issue of the Notes, pursuant to the Issuer Programmeand with regard to the conduct of the scheme, as described in the Programme Memorandum and the TransactionSupplement.

Yours faithfully

KPMG Inc. Registered Accountants and AuditorsChartered Accountants (SA)

Johannesburg• 2007”

59

Appendix 3

ESTIMATED WEIGHTED AVERAGE LIVES OF THE NOTES

This section should be read in conjunction with, and is qualified in its entirety by, the detailed information containedelsewhere in this Transaction Supplement and the Programme Memorandum.

The average lives of the Notes cannot be predicted, as the actual rate of Repayments, Prepayments, Redraws and FurtherAdvances under the Participating Assets, and a number of other relevant factors, are unknown. Calculations of the estimatedaverage lives of the Notes can be made based on certain assumptions. For example, based on the assumptions that:

(i) Call Options

(a) the option to redeem the Notes in accordance with Condition 7.3.2 is exercised on the Interest Payment Datefalling in March 2012 and that the Revolving Period endures for three years from the Initial Effective Date;

(b) the Early Redemption Option is not exercised;

(ii) the Participating Assets are subject to total repayments (net of Redraws and Further Advances) at annualised ratesexpressed as a percentage of the Principal Balances of the Participating Assets assumed to fall into the rangeindicated below;

(iii) total repayments on the Participating Assets are expected to partially represent Repayments and partiallyPrepayments. The resulting annualised rate is assumed to fall into the range indicated below;

(iv) during the Revolving Period, the Issuer may acquire Additional Assets to the extent of Repayments andPrepayments in each Collection Period. The resulting rate of repayment on the Notes during the Revolving Periodis assumed to be zero. Thereafter, the rate of repayment on the Notes is assumed to equal the total repayment onthe Participating Assets (net of Redraws and Further Advances);

(v) there are no enforcements after the Initial Effective Date;

(vi) no Participating Assets are sold by the Issuer;

(vii) no Notes are purchased by the Issuer, other than as contemplated under (i)(a);

(viii) the Participating Assets continue to be Fully Performing;

(ix) no Principal Deficiency arises.

Assumed Rate of total Prepayments on the Home Loans 10.00% 20.00% 30.00%

Estimated Average Life of Class A0 Notes (years)(*) [3.16]/[3.02] [3.05]/[3.00] [3.00]/[3.00]Estimated Average Life of Class A1 Notes (years)(*) [0.00]/[4.61] [0.00]/[4.26] [0.00]/[3.96]Estimated Average Life of Class A2 Notes (years)(*) [4.69]/[4.61] [4.33]/[4.26] [4.01]/[3.96]Estimated Average Life of Class B Notes (years) [5.00] [5.00] [5.00]Estimated Average Life of Class C Notes (years) [5.00] [5.00] [5.00]Estimated Average Life of Class D Notes (years) [5.00] [5.00] [5.00]Estimated Average Life of Class E Notes (years) [5.00] [5.00] [5.00]Estimated Average Life of Class F Notes (years) [5.00] [5.00] [5.00]

• Assumptions (i)(a) and (i)(b): no assurance can be given that redemption of the Notes will occur as described.

• Assumptions (ii) and (iii) state the annualised Repayment and Prepayment rates on the Participating Assets. Each ofthese rates may substantially vary from one Interest Period to another. The annualised Repayment and Prepayment ratesshown above are purely illustrative and do not represent the full range of possibilities for such Participating Assets.

• Assumption (iv) states annualised repayment rates on the Notes during and after the Revolving Period. Each of theserates may substantially vary from one Interest Period to another. The annualised repayment rates on the Notes shownare purely illustrative and do not reflect the full range of possibilities for such rates.

• Assumptions (v), (vi), (vii), (viii) and (ix) relate to circumstances which are not predictable.

The average lives of the Notes are subject to factors largely outside the control of the Issuer and consequently noassurance can be given that the above assumptions and estimates will prove in any way to be realistic and the aboveestimated average lives must therefore be viewed with caution.

(*) Alternative Estimated Average Life numbers are indicative of the two alternative asset pools.

6060 PRINTED BY INCE (PTY) LTD REF. W2CF02512