Macquarie Atlas 3. Macquarie Atlas Service Centre GPO Box 3423 Sydney NSW 2001

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1 Macquarie Atlas 3 Thank you for downloading the Product Disclosure Statement for the Macquarie Atlas 3 investment. This is a capital guaranteed investment designed to provide income with 130% exposure to movement in the Australian Stock Markets. Cash Rebate There are no entry fees on this investment. However we will be providing a 1.5% cash rebate (this will be paid direct to you once our brokerage is received) on applications that are lodged with our stamp. It is important to note that this cash rebate is a bonus that does not come from your funds invested. How to Apply Please have a read through the PDS and if you would like to invest you will need to print pages and complete. Note that the minimum investment is $10,000 and cheques are made payable to Macquarie Atlas Series Trust Account <investors name> or complete the direct debit details and funds will be taken direct from your account. If you are using the 100% finance option you will need to download and complete that application form. Please fax a copy of the completed application to us on , if you do not fax us a copy of the application we will not be able to provide the rebate. Once you have faxed us a copy of the application you can post the completed original direct to Macquarie at the following address: Macquarie Atlas Service Centre GPO Box 3423 Sydney NSW 2001 Alternatively, you welcome to mail the completed application directly to us for lodgment: Xavax Pty Ltd PO Box A2202 Sydney South NSW 1235 Xavax Pty Ltd AFSL Web: contact@xavax.biz Postal address: XavaX PO Box A2202 Sydney South NSW 1235

2 ATLAS 3 Product Disclosure Statement 13 April 2006 MACQUARIE ATLAS SERIES 3 TRUST ARSN SERIES 3 (JULY 2006) UNITS

3 IMPORTANT NOTICE Investments in the Fund are not deposits with, or other liabilities of, Macquarie Bank Limited ABN ( Macquarie ) or any Macquarie Group company, and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. None of Macquarie, Macquarie Portfolio Management Limited or any other member of the Macquarie Group guarantees the performance of the Fund, the repayment of capital from the Fund or any particular rate of return. Macquarie provides Capital Protection to the Fund on the terms and conditions of the EMIs. This PDS This PDS is dated 13 April 2006, when the preparation of this PDS was completed, and is issued by Macquarie Portfolio Management Limited ABN in its capacity as responsible entity of the Fund (referred to as "MPML", "we" or "us"). MPML holds Australian Financial Services Licence no This Product Disclosure Statement (including the Updated Information defined in 'Currency of information' below) ("PDS") and the Application Form contain the only terms on which Units will be issued to retail clients in Australia. To the extent permitted by law, we accept no liability whatsoever for any loss or damage arising from you relying on any other information when investing. In this PDS, MPML invites you to apply for Units in the Macquarie Atlas Series Trust ARSN ( Fund ). The Fund is a registered managed investment scheme. Applications Units to which this PDS relate will only be issued on receipt of an Application Form included in or accompanying this PDS. This PDS is also available in electronic form at the Atlas website: Investors who wish to invest in Units must: complete an Application Form which accompanies this PDS (this may be done by completing the Application Form attached to a PDS printed off the Atlas website); or complete an online Application Form available at Applications will be processed only: on receipt of a signed Application Form; or on submission of an online Application Form through We may reject an application for Units for any reason. Offers made in Australia This offer is open to persons receiving this PDS, whether in paper or electronic form, in Australia. This PDS does not constitute an offer or invitation in any place outside Australia where, or to any person to whom, it would be unlawful to make such an offer or invitation. The distribution of this PDS (electronically or otherwise) in any jurisdiction outside Australia may be restricted by law and persons who come into possession of this PDS should seek advice on and observe any such restrictions. Any failure to comply with such restrictions may constitute a violation of applicable law. Currency of information The information in this PDS is current as at 13 April We may, however, change any information in this PDS if the change is not materially adverse to Unitholders by posting updated information at You may access this information at any time. Alternatively you can call the Macquarie Atlas Service Centre on If the change is materially adverse, we will issue a supplementary PDS. We will provide you with a paper copy of any updates that are posted to our website or supplementary PDSs ( Updated Information ) on request, free of charge. Representations This PDS has been prepared and issued by MPML. Potential investors should only rely on information in this PDS. No person, including any distributor of this PDS, is authorised to give any information or to make any representation in connection with the offer of Units that is not contained in this PDS. Any information or representation not in this PDS must not be relied on as having been authorised by MPML. Electronic copies This PDS is available at Any person receiving this PDS electronically should note that applications can only be accepted if we receive a completed Application Form which was included in or accompanied the electronic or paper copy of this PDS. Indirect investment service disclosure We authorise the use of this PDS as disclosure for investors who wish to access the Fund through an investor directed portfolio service ("IDPS") or IDPS-like scheme (commonly a master trust or wrap account) or a nominee or custody service approved by us ("Indirect Investment Services"), where the operator has provided us with a written undertaking in accordance with ASIC requirements. Listed Entities References in this PDS to Listed Entities are included solely to identify the Securities in the Reference Basket; Deliverable Securities to which Equity Markets Investments ( EMIs ) relate; and the issuers of those securities. Such references should not be construed as any express or implied endorsement by any Listed Entity of the Fund, Units or EMIs. No Listed Entity accepts any responsibility for any statement in this PDS nor undertakes any liability in respect of the Fund, Units or EMIs. We have prepared this PDS only from publicly available information on Listed Entities and Securities. The Listed Entities have not been involved in preparing the PDS and have not provided any information specifically to us for this PDS. Nothing in this PDS should be relied on as implying the affairs of a Listed Entity, Macquarie, MPML or any member of the Macquarie Group have not changed since this PDS or any Updated Information was given, or as a representation as to the future in relation to a Listed Entity, Macquarie, MPML or any member of the Macquarie Group. Information in this PDS concerning Listed Entities has not been independently verified. Accordingly, we do not accept any liability or responsibility for, and make no representation or warranty, express or implied, as to the accuracy or completeness of such information. You should make your own enquiries. Glossary of Terms At the end of this PDS is a Glossary of Terms in which various words and phrases used in this PDS are defined. If you do not understand a word or phrase you should refer to the Glossary of Terms. Capitalised words that are used in this PDS have the meaning given to those words in the Glossary of Terms, unless the context requires otherwise. Unless stated otherwise: (a) all dollar amounts and performance data in this PDS are quoted in Australian dollars; and (b) all references to time are to time in Sydney. Experienced investor Investors should be familiar with stocks and options and with investments in the equity securities markets generally. Global and domestic economic, financial and political developments might materially affect the prices of the Securities in the Reference Basket which may in turn affect the amount of the Distributions received by a Unitholder, and may affect the S&P/ASX 200 Index which may in turn affect a Unitholder s capital growth potential. Unitholders should not invest in the Fund unless they are familiar with stocks and options, and understand and are comfortable with the risks associated with investing in the Fund. Further advice recommendation An investment in the Fund involves financial and other risks and is suitable for investors for whom an investment in the Fund does not represent a complete investment portfolio or programme and who fully understand the risks of investing in the Fund. Before making an investment in the Fund, you should: carefully read all of this PDS; seek professional legal, taxation and financial advice to determine whether an investment in Units is appropriate for you; and carefully consider the potential benefits and the risks involved in investing in the Fund, in light of your particular investment needs, objectives and financial and taxation circumstances.

4 Contents At a Glance 2 Investment Overview 4 Section 1 Details of the Investment 8 Section 2 Return Scenarios 15 Section 3 Risks You Should Consider 19 Section 4 Fees and other Costs 23 Section 5 Taxation for Australian Residents 27 Section 6 Reference Basket Trading History 32 Section 7 Transacting your account 35 Section 8 Additional Information 39 Section 9 About Macquarie 42 Section 10 Glossary Of Terms 43 Section 11 How to Apply 47 Application Form 49 Key Dates Offer Opens 18 April 2006 Offer Close Date 23 June 2006* Capital Protection Date 31 December 2013 *Subject to change refer Offer Close Date in the At a Glance section 1

5 At a Glance To find information on the topics listed below, see the section number listed. These "highlights" indicate the kind of information you can find in the PDS, but are not intended to be a complete summary. You should read all of the PDS carefully and seek professional legal, taxation and financial advice to determine whether an investment in Units is appropriate for you. TOPIC Fund Responsible Entity Portfolios Units Offered Atlas 3 Portfolio s Investments Reference Basket EMI Term EMI potential capital growth Capital Protection Date HIGHLIGHTS Macquarie Atlas Series Trust, an Australian unit trust and registered managed investment scheme ( Fund ). Macquarie Portfolio Management Limited ("MPML"), a wholly owned subsidiary of Macquarie Bank Limited ("Macquarie"). The Fund is divided into a series of investment portfolios, each referable to a particular class of units. Units offered under this PDS relate to the Atlas 3 Portfolio. Series 3 (July 2006) units. We will invest contributions for Units only in Equity Markets Investments ( EMIs ) issued by Macquarie. EMIs are deferred purchase agreements to buy a portfolio of ASX-listed stocks in approximately 7.5 years. They provide the Atlas 3 Portfolio with: potential capital growth referable to the Australian stockmarket (S&P/ASX 200 Index) with a level of capital protection on 31 December 2013 ( Capital Protection Date ); and semi-annual income determined by the performance of a reference basket of 80 ASX-listed securities ( Periodic Returns ). After the Capital Protection Date, the Atlas 3 Portfolio will invest either in a basket of ASX-listed securities or cash at call. The Atlas 3 Portfolio may invest in these assets earlier if an Early Delivery occurs. The Fund may hold cash from time to time to cover, for example, withdrawals and Fund expenses. Details of the individual stocks comprising the Reference Basket by reference to which semi-annual income will be determined are set out in Section 1 of the PDS. The pricing of the Reference basket is scheduled to take place on 18 August July 2006 to 19 December 2013 inclusive ( Term ). 130% of any positive difference between the average level of the S&P/ASX 200 Index over the Term (as measured on 30 Quarterly Averaging Dates) and the starting level of that index. 31 December Capital protection is only available on this date (when final delivery applies under EMIs) and may not apply in certain circumstances. Capital protection is provided to the Fund and not directly to investors. MORE INFORMATION Investment Overview, Section 1.2 Section 1.1, Section 8 Investment Overview Section 3.7 Section 1, Section 3.7 Section 1.6 "Investment Overview" "Investment Overview" Section 1.10 Section 1.9 Section 3.9 2

6 TOPIC Distributions Unit issue Price Minimum Unit Application Issue Size Offer Opens Offer Close Date Unit Issue Date Cooling Off Period Withdrawals Adviser Remuneration Fees and Expenses HIGHLIGHTS Distributions to Unitholders are intended to be paid semi-annually and will be related to the Periodic Returns the Fund receives. Distributions in respect of the year to 30 June 2007 are fixed at the rate of 6.00% 1. Thereafter, Distributions are variable, and may fall if Knockout Events 2 occur. $1.00 per Unit. $10,000 (i.e. 10,000 Units) and multiples of $1,000 thereafter. Up to 100 million Units (but we reserve the right to accept over-subscriptions). 18 April June We may accept Applications under this PDS after this time, as notified on the Atlas website ( but no later than 13 July July If you are a retail client, you have cooling off rights when investing initially in the Fund. If you are investing through an Indirect Investment Service, you should contact the operator of that service to find out about any cooling-off rights you may have. Monthly 3 Macquarie Bank Limited may pay, to your Adviser, out of its own funds, an upfront placement fee of up to 2% of the amount you invest in Units. We will charge: a management fee of 0.20% per annum of the total Issue Price of all Units on issue; a withdrawal fee of between $0.00 and $0.02 per Unit on withdrawals of Units. As at the date of this PDS, we do not intend to charge transaction costs as part of the issue or withdrawal price of Units. MORE INFORMATION Section 1.3, Section 2.1 Section 7.3 Section 3.7 Section 7.2 Section 7.2 Section 8.2 Section 8.3 Section 4 Section 4 How do I invest? Carefully read all of this PDS; Consult your professional legal, taxation and financial adviser; Complete and submit the Application Form at the back of this PDS, or an online Application Form, in accordance with Section 11 of this PDS. If you are investing through an Indirect Investment Service, please contact your Indirect Investment Service operator for details on how to invest. 1 Subject to any unanticipated expenses of the relevant Portfolio see Section A Knockout Event occurs if the Closing Price of a Security in the Reference Basket remains below 55% of its Initial Price for three consecutive Trading Days, where the third Trading Day occurs on or after 1 July Subject to receipt of a Withdrawal Form at least 10 Business Days before the end of the month. Withdrawals may be subject to delays in certain circumstances see Sections 7.2 and

7 Investment Overview 4 What is the Macquarie Atlas Series Trust? The Macquarie Atlas Series Trust is an Australian unit trust that is a registered managed investment scheme under the Corporations Act. The Fund comprises several investment portfolios. Each investment portfolio consists of the assets and liabilities of the Fund we determine are referable to a particular class of units we issue in the Fund. By investing in Series 3 (July 2006) units, you will gain exposure to the assets and liabilities of the Atlas 3 Portfolio. What is the Atlas 3 Portfolio? An investment in Series 3 (July 2006) Units provides access to returns from the Atlas 3 Portfolio, which derives its returns from a Reference Basket of ASXlisted stocks, and to potential capital growth linked to the performance of the S&P/ASX 200 Index. The Atlas 3 Portfolio acquires this exposure by investing in EMIs issued by Macquarie. The Atlas 3 Portfolio will be dealt with, and accounted for, in accordance with the Constitution and otherwise as described under this PDS. What are EMIs? EMIs, or Equity Markets Investments Agreements, are deferred purchase agreements - that is, agreements under which we agree to buy shares on a deferred basis from Macquarie. EMIs offer the Fund (and the Atlas 3 Portfolio): potential capital growth referable to the Australian stockmarket (in particular, the S&P/ASX 200 Index) with a level of capital protection on 31 December 2013; and semi-annual income (known as Periodic Returns ) determined by the performance of a reference basket of 80 ASX-listed securities during the Term. The Fund receives potential capital growth through the delivery of the Shares purchased under the EMIs. On 31 December 2013, unless an Early Delivery occurs, Macquarie will deliver ASX listed shares, known as Deliverable Securities, to the Fund under each EMI. The number of Deliverable Securities delivered will vary depending on the capital growth and capital protection provided (further details below). If you choose to stay invested in the Fund after the Capital Protection Date or an Early Delivery occurring (see Section 3.14), you will have an indirect investment in ASX-listed shares or cash. You will no longer have an investment that references the S&P/ASX 200 Index. You should consider carefully whether such an investment is suitable for you if you are considering withdrawing after the Capital Protection Date or an Early Delivery. Capital Protection In addition to the potential for capital growth, EMIs offer the Atlas 3 Portfolio capital protection on 31 December The level of capital protection is 100% of the amount the Atlas 3 Portfolio invests in EMIs. We intend to pass this benefit on to Unitholders. Subject to the matters described below, this means that, if you withdraw on 31 December 2013, for every $1.00 you invest in Units, you will receive at least $1.00 back. You should be aware that: Capital Protection is only available to the Fund on 31 December If you withdraw your investment in Units before or after the Capital Protection Date, the benefit of this feature will not apply to you and the amount you receive for each Unit may be less than the Unit s issue price; if an event is nominated by Macquarie as an Extraordinary Event (see Section 3.14 below), and EMIs are terminated before 19 December 2013, Capital Protection will not apply; if the Atlas 3 Portfolio has fees or expenses which are unable to be met out of the Portfolio s income, the expenses will be funded out of the Portfolio s assets. This would require a portion of the Portfolio s EMIs to be terminated and the amount received by the Atlas 3 Portfolio on redemption may be less than the Investment Amount. Accordingly, you may receive less than your initial investment amount back; Capital Protection is provided to the Fund and not to Unitholders directly. In addition, the capital protected amount receivable on the Capital Protection Date - potentially $1.00 per Series 3 (July 2006) Unit - is unlikely to have the same real value as it would on the date of investment due to the likely effect of inflation and the time value of money over the 7 1/2 year term of the EMIs.

8 Capital Protection is offered to the Fund by Macquarie Bank (see Sections 3.10 and 9). Capital Protection is provided to the Fund through the EMIs and not to each individual investor. Distributions Periodic Returns Unitholders will receive Distributions based on the Periodic Returns we receive under the EMIs during the Term. For Unitholders, these amounts should be equal to those amounts less: (a) any expenses of the Atlas 3 Portfolio; and (b) the management fee payable to us in respect of the Atlas 3 Portfolio. As we do not anticipate at the date of this PDS that any expenses will be charged against the Atlas 3 Portfolio, the total Distributions payable each half-year should equal the most recent Periodic Return payment, less half of our 0.2% annual management fee. For example, the first two Periodic Return payments are fixed at $31.00 per EMI (a rate of 3.1%) meaning that the first two Distributions should equal 0.03 cents per Unit (a rate of 3.0%), reflecting a reduction for half of the management fee. Subsequent Distributions made on or before the Capital Protection Date will depend on the Periodic Returns we receive; so, it is important you understand how these returns might vary. Other than for the first two Return Periods, each Periodic Return is calculated by reference to a Headline Periodic Return Rate which increases over time but may be reduced if certain events occur in relation to a Security in the Reference Basket. These events are known as Knockout Events (see below) and the rate of Periodic Return falls by one-seventh each time a Knockout Event occurs. If seven or more Knockout Events occur, your Distributions will fall to zero for the remainder of the Term. After the Capital Protection Date, we will pay Distributions to Unitholders to the extent there is Fund income referable to Unitsand available to be distributed. A table of Distributions based on Periodic Return Rates is set out in Section 1.5 of this PDS. Reference Basket The Reference Basket, on which Knockout Events are determined, is a basket of 80 ASX-listed Securities. As at the date of this PDS, each Security is contained in the S&P/ASX 200 Index, with the exception of News Corporation, which is a member of the S&P 500 Index. The Reference Basket has been constructed to be diversified across a number of sectors and to include liquid and actively traded stocks. The stocks which comprise the Reference Basket at the date of this PDS are listed in Section 1.6 of the PDS. Knockout Events A Knockout Event occurs if any Security in the Reference Basket has a Closing Price on three consecutive Trading Days below 55% of its Initial Price (a fall of more than 45%). The third consecutive Trading Day must occur on or after 1 July 2007 and on or before the Maturity Date. The Initial Price for a Security will be based on the volume weighted average prices for that Security on the ASX over the 5 trading days leading up to and including the Reference Basket Pricing Date (18 August 2006). If a Knockout Event occurs, all future Distribution amounts paid to you will fall because the Periodic Return income from the Atlas 3 Portfolios investments in EMIs will be reduced by one-seventh of the prevailing Headline Periodic Return Rate. If seven or more Knockout Events occur, the Fund will only receive funds to pay our management fee and your Distributions will fall to zero. Any Distributions paid after the Capital Protection Date or Early Delivery will reflect returns received from the Atlas 3 Portfolio s investments at that time. What is the exposure to the sharemarket that EMIs provide? Generally In addition to the potential for Distributions described above, EMIs offer the potential for capital growth by providing exposure to any increase in the average level of the Australian sharemarket over the Term of the EMIs. The Atlas 3 Portfolio acquires a 130% exposure to any increases in the average level of the Index over the Term. If you withdraw Units before the Capital Protection Date, the level of exposure to the increase in the average level of the Index at the withdrawal date may be less than 130% in respect of those Units - see Sections 3.11 and

9 Investment Overview continued The increase is calculated by comparing: the average of the 5 daily closing prices of the S&P/ASX 200 Index from July 2006 inclusive (the start level); with the average of the closing levels of the Index on the 30 Quarterly Averaging Dates (the end level). If the end level is higher than the start level, the percentage increase is multiplied by 130% and the resulting percentage is included in the value of the Deliverable Parcel receivable by the Fund on the Capital Protection Date under the EMIs. If the end level is lower than the start level, only Deliverable Securities representing the value of any Capital Protection will be received by the Fund on the Capital Protection Date. So, the Atlas 3 Portfolio s exposure to the S&P/ASX 200 Index is only to growth in the average level of the Index. If the Index on average decreases in value over the Term, the Fund will not receive any value under the EMIs for the change in the Index s levels. However, the Fund will also not have to make up this negative growth. The effect of averaging and 130% exposure You should note that the exposure you receive is not point-to-point. That is, the Index is not measured at one point in time and compared to the Index at a later point in time. Rather the start level of the Index is compared to the average of the closing level of the Index on 30 different days during the term, known as Quarterly Averaging Dates. The two methods can have different results. For example, if the Index steadily rose across the Term (see Figure 1), the averaging feature would result in a lower end level than would have been received under point-to-point. However, if the Index peaked during the Term and then fell before the Maturity Date (see Figure 2), the averaging feature would generally result in a higher end level than comparing the Index on a point-to-point basis. Because of the effect described above, averages can potentially "dampen" returns in particular circumstances. Mitigating against this downward effect, EMIs provide for the Portfolio to receive a 130% exposure, which boosts the averaged return. You should note this 130% exposure does not mean the Fund gets 130% of the difference between the level of the Index on the Maturity Date and the initial level it is 130% of the difference between the beginning level of the Index and the averaged return over the Term. Figure 1 Figure 2 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3, Example The start level of the Index is 4,000 points and the level increases to 4,075 points after the first quarter, to 4,150 points after the second quarter and increases by 75 points on each subsequent quarter, so that it closes at 6,250 points at Maturity. The end level is the average of the closing level of the Index on the 30 Quarterly Averaging Dates - that is, one-thirtieth (1/30) of the sum of (4, , ,250) which equals 5, The percentage increase is 29.1%. The percentage increase of 29.1% is multiplied by 130% resulting in capital growth of 37.8%. The Atlas 3 Portfolio is entitled to a Deliverable Parcel worth 137.8% x $1,000 or $1,378 per EMI, representing capital growth of $378 per EMI. 6

10 How do I withdraw my investment? Unitholders can withdraw their investment by requesting that their Units be redeemed. Withdrawals will be effected monthly. However, Capital Protection is only available on 31 December 2013 (refer Section 3.11). The value of Units prior to and after the Capital Protection Date may be affected by a number of factors. Please refer to Section 3.6 for further details. Unitholders can request withdrawals of their Units by sending a duly completed Withdrawal Form to: Macquarie Atlas Service Centre GPO Box 3423 Sydney NSW 2001 A Withdrawal Form must be received at least 10 Business Days before the end of a calendar month. If a Withdrawal Form is received by us less than 10 Business Days before the relevant month end the relevant Units will not be considered for redemption until the next calendar month. A withdrawal fee may be payable (see Section 4). Please refer to Section 7.2 for further details on how to withdraw your investment. Can Units be sold during the term? Unitholders may be able to sell Units to other persons, to the extent that a liquid secondary market for Units develops (refer Section 3.5 of this PDS). Any such sales will require our approval, and also may require Macquarie s approval, if the intending seller of Units has financed the acquisition of Units using a loan from Macquarie. Note that there may be different tax implications depending on whether you dispose of your investment by selling your Units or redeeming your Units. Please consult your tax or financial adviser. How can I find out the value of my investment? We calculate the Net Asset Value per Unit each month and post it on the Atlas website Further details on how we calculate Unit prices is set out in Section 7.3 of this PDS. You should note that when we value Units, the level of exposure to the increase in the average level of the Index Basket reflected in the Unit price may be less than 130% see section

11 SECTION 1 Details of the Investment 1.1 Who is the Fund s Responsible Entity and Issuer of this PDS? Macquarie Portfolio Management Limited is the responsible entity of the Fund and the issuer of this PDS. It is a wholly-owned subsidiary of Macquarie Bank Limited. It is referred to as "MPML", "we" or "us" in this PDS. 1.2 What does the Atlas 3 Portfolio invest in? We will invest contributions for Units in Equity Markets Investments ( EMIs ) issued by Macquarie. The following diagram summarises the investment structure of the Atlas 3 Portfolio: INVESTORS IN SERIES 3 (JULY 2006) UNITS Application Amount $ $ Issue Series 3 (July 2006) Units MPML as Responsible Entity MACQUARIE ATLAS SERIES TRUST (ATLAS 3 PORTFOLIO) Macquarie Bank Distributions Issue EMIs Agreement to deliver Deliverable Parcel on the Capital Protection Date (incorporates capital protection and Index exposure) Periodic Returns EMIs are designed to provide the Atlas 3 Portfolio with the following benefits: Periodic Returns Potential capital growth Capital protection on the Capital Protection Date (31 December 2013). 1.3 Distributions We discussed Distributions briefly in the Investment Overview (see page 5). Distributions based on Periodic Return Rates are shown in the table in Section 1.5. You should remember that Distributions are subject to certain risks for example, the incurring of unanticipated expenses for which we reimburse ourselves out of the assets of the Fund (see Section 3.6) - and will not be paid if a Periodic Return is not paid (see Counterparty Risk - Section 3.10). They are also reduced when a Knockout Event occurs (see Sections 1.4 and 1.5 below). Macquarie may withhold part or all of a Periodic Return where an Adjustment Event (see Section 1.8) continues in effect at the end of a Return Period. Macquarie will either keep or pay the retained Periodic Return with interest to MPML depending on whether the Adjustment Event results in the occurrence of a Knockout Event. We intend to adjust Distributions accordingly. We expect to pay Distributions within 10 Business Days after we receive a Periodic Return from Macquarie. Periodic Return income will be paid within 10 Business Days after the end of each Return Period, and will be referable to that Return Period. Return Period means each six month period during the Term ending 30 June and 31 December and commencing on the preceding 1 January and 1 July as relevant, with two exceptions: the first Return Period, which commences on 14 July 2006 and ends on 31 December 2006, and the final Return Period, which commences on 1 July 2013 and ends on 19 December After 31 December 2013, Distributions will depend on income derived from the Fund assets referable to the Atlas 3 Portfolio. These assets will not include EMIs, but may include the parcel of ASX-listed securities or the amount of cash deliverable by Macquarie to the Fund under the EMIs refer Section

12 Once a Knockout Event has occurred in relation to a Security the Distribution Rate will be affected for the rest of the Term of the EMI, even if the Closing Price of the Security subsequently exceeds the Knockout Price. Prospective Unitholders should note that Macquarie is able to offer the Fund a relatively high initial yield in respect of EMIs because of the number and volatility of the Securities in the Reference Basket. Prospective Unitholders should be aware that there is a high likelihood that one or more Knockout Events will occur during the Term and consequently there is a high likelihood that Periodic Returns and therefore Distributions will be reduced over the Term. It is possible that the Distributions will be reduced to zero. 1.4 What is a Knockout Event? If a Security in the Reference Basket has a Closing Price of less than the Knockout Price (as determined below) for three consecutive Trading Days, a Knockout Event occurs under the EMIs. When determining if the Knockout Event has occurred, Trading Days will include days on which trading in the relevant Security is suspended or, in Macquarie s opinion, is materially disrupted but the ASX is open for regular trading. Only one Knockout Event can occur with respect to any one Security. If during the period up until 30 June 2007 a Security closes below the Knockout Price for three consecutive days, no Knockout Event will have occurred. The earliest at which a Knockout Event can occur in relation to a Security is 1 July The Knockout Price in respect of a Security will be determined according to the following formula: (55/100) x IP IP = the Initial Price of the Security. This means that the Closing Price of a Security must fall by more than 45% from its Initial Price and close below this price for three consecutive Trading Days for a Knockout Event to occur. For example, if a Security has an Initial Price of $20 per Security the Knockout Price will be $11 ($20 x 55/100) for that Security. Assuming no Adjustment Events have occurred (see below), if the Closing Price of the Security for three consecutive Trading Days is below $11 (and the Closing Time on the third consecutive Trading Day occurs on or after 1 July 2007) then a Knockout Event will occur and the Periodic Return will be reduced for the remainder of the Term. See Section 1.8 for examples of how Adjustment Events would affect the calculations. The Initial Price for each Security in the Reference Basket will be determined as the arithmetic average of the volume weighted average prices for the Security for each of the 5 Trading Days up to and including the Reference Basket Pricing Date (18 August 2006). The Closing Price of a Security will be determined as follows: (MP x RF) + OC MP = the closing price of the Security on the relevant Trading Day (normally) as published by the ASX 4 RF = the Relevant Fraction for the Security OC = the value of any other consideration as determined by Macquarie in accordance with the EMI Initially the value of RF will be 1 and OC will be zero for each Security. However, over the Term the occurrence of Adjustment Events (such as share splits, special dividends, capital returns, consolidation and merger events) may result in Macquarie adjusting these amounts or the Closing Price generally - see Section If trading in the Security is suspended or in Macquarie's opinion is materially disrupted on that Trading Day, the closing price of the Security on the most recent Trading Day on which trading was not suspended or materially disrupted will be used. 9

13 1.5 Distribution Rates and effect of Knockout Events on Distributions The following table shows the rate at which Distributions will be paid based on corresponding Headline Periodic Return Rates and the number of Knockout Events that have occurred on the underlying EMIs. We have assumed that the only amounts deducted from the Atlas 3 Portfolio assets are our 0.20% p.a. (GST inclusive) management fee and no Adjustment Events have occurred. Return Headline Distribution Rate # after number of Period** Periodic Knockout Events Return Rate 0 Events 1 Event 2 Events 3 Events 4 Events 5 Events 6 Events 7 Events 1 * N/A 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 2 * N/A 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% % 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% % 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% % 4.00% 3.43% 2.86% 2.29% 1.71% 1.14% 0.57% 0.00% % 4.00% 3.43% 2.86% 2.29% 1.71% 1.14% 0.57% 0.00% % 4.50% 3.86% 3.21% 2.57% 1.93% 1.29% 0.64% 0.00% % 4.50% 3.86% 3.21% 2.57% 1.93% 1.29% 0.64% 0.00% % 5.00% 4.29% 3.57% 2.86% 2.14% 1.43% 0.71% 0.00% % 5.00% 4.29% 3.57% 2.86% 2.14% 1.43% 0.71% 0.00% % 5.00% 4.71% 3.93% 3.14% 2.36% 1.57% 0.79% 0.00% % 5.50% 4.71% 3.93% 3.14% 2.36% 1.57% 0.79% 0.00% % 5.50% 5.14% 4.29% 3.43% 2.57% 1.71% 0.86% 0.00% % 6.00% 5.14% 4.29% 3.43% 2.57% 1.71% 0.86% 0.00% % 6.50% 5.57% 4.64% 3.71% 2.79% 1.86% 0.93% 0.00% * A Knockout Event cannot occur in Period 1 or 2 ** Return Period means each six month period during the Term ending 30 June and 31 December and commencing on the preceding 1 January and 1 July as relevant, with two exceptions: the first Return Period, which commences on 14 July 2006 and ends on 31 December 2006, and the final Return Period, which commences on 1 July 2013 and ends on 19 December # The distribution rate per Unit can be converted to a dollar amount by applying the percentage to the issue price of a Unit. For example, a 3% distribution, i.e. 3.0% x $1.00 is equal to a distribution of $0.03 per Unit. For an investment of $50,000 this is equivalent to $1,500. Unitholders should note that if a Knockout Event occurs within a Return Period this will reduce the amount of Periodic Return (or consequently a Distribution) paid for a Return Period. However, the time at which a Knockout Event occurs within the Return Period is not relevant to the amount of the reduction. For example, if a Knockout Event occurs just before the end of a Return Period the Periodic Return Rate (and the relevant Distribution) will be adjusted downwards for that entire Return Period. 10

14 1.6 What is the Reference Basket? The Reference Basket in relation to EMIs is a basket of 80 Securities (as adjusted), all of which are quoted on the ASX. As at the date of preparation of this PDS, each Security is contained in the S&P/ASX 200 Index, with the exception of News Corporation, which is in the S&P 500 Index. The Reference Basket has been constructed by Macquarie as counterparty to the EMIs to give the Atlas 3 Portfolio a diversified exposure across a number of sectors to liquid and actively traded stocks. Neither Macquarie nor MPML hold the securities comprising the Reference Basket on trust for, or for the benefit of, Unitholders. The stocks in the Reference Basket were selected by us using quantitative measures of volatility, correlation and diversification. The stocks were not chosen on qualitative grounds, nor on the basis that the stocks would outperform over the Term. The Reference Basket is not a managed fund, and stocks within the Reference Basket have not been chosen by investment managers within Macquarie. Macquarie makes no representation as to the future performance of any Securities in the Reference Basket. The composition of the Reference Basket for the EMIs as at the date of preparation of this PDS is set out in the following table: ABS ALL AMC AMP ANN ANZ APN ASX AWC AXA BBG BHP BIL BLD BNB BSL CCL CEY CGF CML COH CPU CSL CSR CTX DOW DVC EXL FCL FGL FXJ GFF GNS HVN IAG ILU JBM JHX LEI LHG ABC Learning Centres Limited Aristocrat Leisure Limited Amcor Limited AMP Limited Ansell Limited Australia and New Zealand Banking Group Limited APN News & Media Limited Australian Stock Exchange Limited Alumina Limited AXA Asia Pacific Holdings Billabong International Limited BHP Billiton Limited Brambles Industries Limited Boral Limited Babcock & Brown Limited Bluescope Steel Limited Coca-Cola Amatil Limited Centennial Coal Company Limited Challenger Financial Services Group Limited Coles Myer Limited Cochlear Limited Computershare Limited CSL Limited CSR Limited Caltex Australia Limited Downer EDI Limited DCA Group Limited Excel Coal Limited Futuris Corporation Limited Foster's Group Limited John Fairfax Holdings Limited Goodman Fielder Limited Gunns Limited Harvey Norman Holdings Limited Insurance Australia Group Limited Iluka Resources Limited Jubilee Mines NL James Hardie Industries NV Leighton Holdings Limited Lihir Gold Limited LLC LNN MAP MIG MTS NAB NCM NWSLV ORG ORI OSH OST OXR PBG PBL PMN PPX QAN QBE RIN RIO SGB SGM SHL STO SUN SYB TAH TCL TEL TEN TLS TOL TTS WDC WES WOR WOW WPL ZFX Lend Lease Corporation Limited Lion Nathan Limited Macquarie Airports Macquarie Infrastructure Group Metcash Limited National Australia Bank Limited Newcrest Mining Limited News Corporation - CDI Origin Energy Limited Orica Limited Oil Search Limited Onesteel Limited Oxiana Limited Pacific Brands Limited Publishing & Broadcasting Limited Promina Group Limited PaperlinX Limited Qantas Airways Limited QBE Insurance Group Limited Rinker Group Limited Rio Tinto Limited St George Bank Limited Sims Group Limited Sonic Healthcare Limited Santos Limited Suncorp-Metway Limited Symbion Health Limited Tabcorp Holdings Limited Transurban Group Telecom Corporation Of New Zealand Limited Ten Network Holdings Limited Telstra Corp Limited Toll Holdings Limited Tattersall's Limited Westfield Group Wesfarmers Limited WorleyParsons Limited Woolworths Limited Woodside Petroleum Limited Zinifex Limited 11

15 1.7 Breakdown of the Reference Basket by Sector The following table shows the sector breakdown of the stocks in the Reference Basket according to the Global Industry Classification Standard (GICS): Consumer Discretionary % Consumer Staples % Energy % Financials % Healthcare 6 7.5% Industrials % Information Technology 1 1.3% Materials % Telecommunications Services 2 2.5% Total % 1.8 When will the stocks in the Reference Basket be adjusted? If a Security is Suspended or becomes the subject of an announcement of an intention to either make a takeover offer between the date of preparation of this PDS and the Reference Basket Pricing Date, Macquarie may remove that Security from the Reference Basket and replace it with another Security which is a member of the S&P/ASX 200 Index. We will provide notice of any such change to the Reference Basket before the Reference Basket Pricing Date on the Atlas website and will provide a paper copy of this information free on request. What is an Adjustment Event? This occurs in relation to a Security or a Deliverable Security where there is a corporate action or event that may dilute or concentrate the theoretical value of that security. For example, this includes: (a) a special or abnormal dividend; (b) capital reconstructions (e.g. subdivision, reclassification or consolidation of a Listed Entity s capital); (c) a cancellation or re-purchase of any of the Securities; (d) rights and bonus issues; (e) takeovers and buy-backs; and (f) a Suspension or delisting. After 14 July 2006, Macquarie may add a Security to, or remove a Security from, the Reference Basket if there is an Adjustment Event in relation to a Security. If an Adjustment Event occurs Macquarie might: adjust or amend the calculation of the Closing Price by determining (acting reasonably) that the Relevant Fraction for the Security is a number other than one; adjust or amend the Closing Price of a Security by taking into account an amount of other consideration; suspend or delay payment of a portion of the Periodic Return in accordance with the terms of the EMI; adjust or amend the composition of the Reference Basket; deem a Knockout Event to have occurred; or take any other action or make any other adjustment that in the reasonable opinion of Macquarie is appropriate to put both Macquarie and MPML in substantially the same economic position as Macquarie and MPML would have been in had the Adjustment Event not occurred. 12

16 See the examples below to see how this might work in practice. MPML will notify Unitholders by a notice posted on the Macquarie Atlas website of any adjustments that are made by Macquarie as a result of an Adjustment Event. ADJUSTMENT EVENT A Security in Company X has an Initial Price of $40. The Knockout Price is therefore $22 (55/100 x 40). Company X announces a 2 for 1 share split. ADJUSTMENT When calculating whether or not a Knockout Event has occurred, the value of "RF" in the formula used to determine the Closing Price will be 2. For example if the closing price on the ASX following the split is $12 then the Closing Price for the purposes of determining if a Knockout Event has occurred on that date is $24 ($12 x 2). In spite of the Adjustment Event, the Knockout Price remains at $22, and therefore no Knockout Event will have occurred in respect of that Security on that date. This adjustment will take into account that a holder of the Security would now be holding 2 Securities rather than one. A Security in Company X has an Initial Price of $30. The Knockout Price is therefore $16.50 (55/100 x 30). Company X is the subject of a successful share for share takeover by Company Y under which a holder of a Security in Company X will receive 2 Securities in Company Y. When calculating whether or not a Knockout Event has occurred, the value of "RF" in the formula used to determine the Closing Price will be 2 and "MP" will be the price of the Securities in Company Y. For example if the Closing Price of Company Y Securities on the ASX following the takeover is $10, the Closing Price will be $20 ($10 x 2) therefore no Knockout Event will have occurred. A Security in Company X has an Initial Price of $30. The Knockout Price is therefore $16.50 (55/100 x 30). Company X is the subject of a successful cash and share takeover by Company Y under which a holder of a Security in Company X will receive 1 Security in Company Y and $5 cash. Securities in Company X are delisted or suspended by reason of an insolvency of the Company. Securities in Company X are subject to a successful cash takeover and the Securities are delisted. When calculating whether or not a Knockout Event has occurred, the value of "RF" in the formula used to determine the Closing Price will be 1 and "OC" will be 5 and "MP" will be the price of the Securities in Company Y. For example if the closing price of Company Y Securities on the ASX following the takeover is $6 for three consecutive Trading Days, the Closing Price will be $11 ($6 x 1) + $5) therefore a Knockout Event will have occurred in respect of that Security. The Periodic Return would therefore be reduced for the remainder of the Term. Within 30 days of the suspension or delisting Macquarie will determine whether or not the suspension results in a Knockout Event. If so, a Knockout Event will be deemed to have occurred on the date the Security was suspended. Assuming that no Knockout Event has occurred prior to the delisting then the Security will be removed from the Reference Basket and no Knockout Event will have occurred. The above examples are illustrative only and are not exhaustive of the types of adjustments that could be made. 13

17 1.9 Can Macquarie terminate the EMIs early without our approval? What is an Extraordinary Event? An Extraordinary Event occurs if it becomes unlawful (other than as a result of Macquarie s actions) for Macquarie to perform any of its obligations to pay or deliver or to receive a payment or delivery in respect of an EMI due to the adoption of, or change in, a law, or the official publication of, or any change in, the interpretation by any court, tribunal or regulatory authority within a competent jurisdiction of any law after 14 July Macquarie may terminate the EMIs if an Extraordinary Event occurs. If Macquarie determines that an Extraordinary Event has occurred the normal delivery procedures will be brought forward (i.e. delivery of the Deliverable Parcel or use of the EMI Sale Facility) or Macquarie will make a cash payment to MPML. EMIs may also be terminated by MPML at any time during the term of the EMIs, by notice to Macquarie (clause 7). MPML will exercise this right to give effect to withdrawal requests made by Unit holders in the Fund during the Term. Extraordinary Events may affect Capital Protection see Section 3.14 below Capital Growth and Capital Protection Generally On the Capital Protection Date (31 December 2013), we will either: (i) take delivery of a parcel of shares under the EMIs ( Deliverable Parcel ) which are assets of the Atlas 3 Portfolio, consisting of roughly equal holdings in the top 10 ASX-listed stocks by market capitalisation at that time 5 ; or (ii) have Macquarie or its nominee sell that parcel of shares and receive a cash payment. In either case, the Atlas 3 Portfolio will derive proceeds or property at least equal to the amount paid by us to acquire the EMIs. Where we elect for Macquarie to sell the Deliverable Parcel on our behalf and pay us the proceeds, any costs in selling the shares are paid by Macquarie and are not expenses of the Atlas 3 Portfolio. The value of the Deliverable Parcel on 31 December 2013 in respect of EMIs acquired (and still held) will equal the higher of: (i) the Face Value of the EMIs acquired (and still held) as part of the Atlas 3 Portfolio; and (ii) the Face Value as per (i) above, multiplied by a percentage equal to (100 + x) where x is 130% of the percentage increase in the average level of the Index over the period from July 2006 to the Maturity Date. For example, if the average level of the Index increased by 30%, the value received by the Fund would be $1.39 per Unit, with $0.39 (130% of 30%, multiplied by $1.00) representing capital growth to Unit holders. Capital Protection is subject to certain risks and limitations see Investment Overview and Section 3. You should also note that the use of the Index is subject to certain limitations and in certain circumstances the EMI may use a different method of calculation or Index see Section 3. After the Capital Protection Date or an Early Delivery The investments of the Atlas 3 Portfolio will change after the Capital Protection Date or an Early Delivery, as the EMIs will have expired, and the Portfolio will have taken delivery of the Deliverable Parcel, or alternatively will have sold some or all of the stocks in the Deliverable Parcel (which may occur in order to satisfy Unitholder withdrawals as at the Capital Protection Date or when Early Delivery occurs). The Atlas 3 Portfolio s direct exposure to the performance of the Reference Basket and to the Index will cease after the Capital Protection Date or an Early Delivery. After that date the Atlas 3 Portfolio s assets will consist of the basket of shares delivered as the Deliverable Parcel or cash at call. Before the Capital Protection Date, we will ask you to confirm whether you wish to withdraw your investment on that date or to continue to hold Units beyond that date. Units not withdrawn or sold by the Capital Protection Date or when an Early Delivery occurs will be held until such time as the Fund is wound up, the Units are compulsorily redeemed or Unitholders choose to request a withdrawal If Macquarie reasonably determines it is not possible to transfer the Deliverable Parcels to MPML, it may deliver other securities quoted and trading on the ASX the Listed Entity of which is in the top 50 listed entities on the ASX by market capitalisation and whose securities comprise part of the S&P/ASX 200 Index (or its successor) instead.

18 SECTION 2 Return Scenarios The returns from an investment in the Fund comprise two elements - Distributions of income and potential capital growth. Both elements are discussed below. These scenarios are based on a 7.5 year investment term only. 2.1 Distributions During the term of the EMIs, Distributions primarily depend on the performance of the underlying Reference Basket of the EMIs and in particular the number of Knockout Events. There can be no certainty as to the number of Knockout Events that might occur. Historical back testing of the Reference Basket that underpins EMIs is the only available guide to the risk of Knockout Events occurring. However, historical back testing is of limited relevance, for the following reasons: 1. the market conditions that have given rise to Knockout Events in the past are by their nature unique; 2. the Reference Basket has been constructed to include several stocks which have recently had a share price decline of more than 45%, but have since exhibited a steady recovery in share price - and a historical analysis of a portfolio containing such stocks may tend to show more Knockout Events than an analysis of a portfolio that does not include such stocks; 3. a significant proportion of the stocks in the Reference Basket have not been in existence for 7.5 years, making a 7.5-year back test for the whole portfolio impossible. The trading history of each Security in the Reference Basket is available from the ASX. In addition, an analysis of the performance of stocks in the Reference Basket is set out in Section 6. However, to assist prospective Unitholders, some "what if?" scenarios are included in Section Capital Growth Any growth accruing to the Fund on delivery of the Deliverable Parcel under the EMIs depends on the average increase (if any) in the Index up until the Maturity Date. 6,000 5,000 4,000 3,000 2,000 1,000 0 Jun 92 Dec 92 Jun 93 Dec 93 Jun 94 Dec 94 Jun 95 Dec 95 Jun 96 Dec 96 Jun 97 Dec 97 Jun 98 Dec 98 Jun 99 Dec 99 Jun 00 Dec 00 Jun 01 Dec 01 Jun 02 Dec 02 Jun 03 Dec 03 Jun 04 Dec 04 Jun 05 Dec 05 The chart above shows the S&P/ASX 200 Index from 30 June 1992 to 31 December Note that the chart shows the actual Index level, whilst the capital growth component of the EMI depends on the average Index level exceeding the Index Start level. Historical back testing comparing the average Index level with the Index Start level over rolling 7.5-year periods from 30 June 1992 to 31 December 2005 has been undertaken, with the following results: Median increase: 34.27% (4.01% p.a) Highest increase: 55.54% (6.07% p.a) Lowest increase: 16.62% (2.07% p.a) With a 130% exposure to the average increase in the Index the capital growth on EMIs to the Atlas 3 Portfolio on the same basis would have been: Median gain: 44.55% (5.04% p.a) Highest gain: 72.20% (7.52% p.a) Lowest gain: 21.60% (2.64% p.a) These returns would have been in addition to any Periodic Returns received from the Atlas 3 Portfolio's investment in EMIs. Remember: Past performance is not a reliable indicator of future performance. Securities comprising the Index change from time to time and the Index may not now or in the future include the same securities as those in relation to which the Index was determined in the past. 15

19 2.3 What If? scenarios The following section contains an analysis of possible returns based on a range of "what if?" scenarios to assist prospective Unitholders in assessing the impact of Knockout Events and Index movements on potential investment returns. We have calculated Distributions assuming that Distribution Rates are equal to Periodic Return Rates on the EMIs (less 0.10%), and assuming there are no unanticipated Fund liabilities, in the following alternative scenarios: 1. A Knockout Event occurs approximately every year at the end of each two Return Periods (except the first year) and the Index achieves its median historical 7.5-year average return; 2. A Knockout Event occurs approximately every six months at the end of each Return Period (except the first year) and the Index achieves its median historical 7.5-year average return; 3. 7 or more Knockout Events occur in Return Period 3, and the Index achieves its worst historical 7.5-year average return ( pessimistic scenario ); 4. No Knockout Events occur and the Index achieves its best historical 7.5-year average return ( optimistic scenario ). These scenarios are subject to the risks set out in Section 3. Note that there can be no assurance that the Closing Price of a Security will not fall below the Knockout Price, and no certainty as to the future performance of the S&P/ASX 200 Index. We accept no liability or responsibility for, and make no representation or warranty, whether express or implied, as to: (i) the affairs of or future prospects of any Listed Entity included in this PDS; or (ii) the future performance of the Index. Past performance is not a reliable indicator of future performance. 16

20 Scenario 1: A Knockout Event occurs every year and Index achieves historical median average return Return Cumulative Distribution Return Periods Cumulative Distribution Periods Knockout Rate cont d Knockout Rate Events Events % % % % % % % % % % % % % % % Distributions 7% 6% 5% 4% 3% 2% 1% 0% % 90% 80% 70% 60% 50% 40% 30% 20% 10% Total distributions paid: 37.00% Growth at Maturity: 44.55% Average Annual Return: 10.87% Distribution Rate (LHS) Growth at Maturity (RHS) Information is illustrative only. No figures represent a prediction or forecast of actual performance. Distributions are shown net of management fees and assume that there are no unanticipated Fund liabilities. For example, for a $50,000 investment in Units under this scenario you would receive $18, in distributions and capital growth of $22, over a 7.5 year period. Scenario 2: A Knockout Event occurs every 6 months and Index achieves historical median average return Return Cumulative Distribution Return Periods Cumulative Distribution Periods Knockout Rate cont d Knockout Rate Events Events % % % % % % % % % % % % % % % Distributions 7% 6% 5% 4% 3% 2% 1% 0% % 90% 80% 70% 60% 50% 40% 30% 20% 10% Total distributions paid: 17.43% Growth at Maturity: 44.55% Average Annual Return: 8.26% Distribution Rate (LHS) Growth at Maturity (RHS) For example, for a $50,000 investment in Units under this scenario you would receive $8, in distributions and capital growth of $22, over a 7.5 year period. Information is illustrative only. No figures represent a prediction or forecast of actual performance. Distributions are shown net of management fees and assume that there are no unanticipated Fund liabilities. 17

21 Scenario 3: Pessimistic scenario 7 or more Knockout Events early in year 2 and lowest historical average index return Distributions Return Cumulative Distribution Return Periods Cumulative Distribution Periods Knockout Rate cont d Knockout Rate Events Events % % % % % % % % % % % % % % % 7% 6% 5% 4% 3% 2% 1% 0% Distribution (LHS) Rate Growth at Maturity (RHS) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% Total distributions paid: 6.00% Growth at Maturity: 21.60% Average Annual Return: 3.68% For example, for a $50,000 investment in Units under this scenario you would receive $3, in distributions and capital growth of $10, over a 7.5 year period. Information is illustrative only. No figures represent a prediction or forecast of actual performance. Distributions are shown net of management fees and assume that there are no unanticipated Fund liabilities. Scenario 4: Optimistic Scenario no Knockout Events occur and highest historical average index return Return Cumulative Distribution Return Periods Cumulative Distribution Periods Knockout Rate cont d Knockout Rate Events Events % % % % % % % % % % % % % % % Distributions 7% 6% 5% 4% 3% 2% 1% 0% % 90% 80% 70% 60% 50% 40% 30% 20% 10% Total distributions paid: 69.50% Growth at Maturity: 72.20% Average Annual Return: 18.89% Distribution Rate (LHS) Growth at maturity (RHS) For example, for a $50,000 investment in Units under this scenario you would receive $34, in distributions and capital growth of $36, over a 7.5 year period. Information is illustrative only. No figures represent a prediction or forecast of actual performance. Distributions are shown net of management fees and assume that there are no unanticipated Fund liabilities. While the outcome shown in this Scenario 4 is possible, given the high likelihood of one or more Knockout Events occurring during the Term of EMIs (as discussed in Section 3.10 of this PDS) the probability of such an outcome occurring is extremely low. 18

22 SECTION 3 Risks You Should Consider RISKS An investment in Units may be considered speculative as the value of your investment may decrease as well as increase in value. Units should not be seen as predictable low risk investments. Before investing in Units you should carefully consider the significant risks that may affect the performance or value of your investment. You should be aware that you may lose some or all of the money you invested and there is no guarantee that you will receive any income. Your investment may be exposed to risks including the following risks which we have divided into categories: (a) general investment risks (Sections ); (b) risks specific to the Fund (Sections ); (c) investment risks specific to EMIs (Sections ); and (d) risks specific to the Index (Sections ). GENERAL INVESTMENT RISKS 3.1 General market Your returns may be adversely affected by market conditions, including but not limited to market volatility, interest rates, economic variables, political events, war, natural events and changes in law which may occur globally or at a country, industry or asset class specific level. 3.2 Taxation Changes in tax laws or their interpretation could adversely affect the tax treatment of the Atlas 3 Portfolio, the Fund, its investments and Unitholders. Refer to Section 5 of this PDS for significant taxation implications of investing in Units. 3.3 Familiarity with stocks and options A Unitholder should be familiar with stocks and options and with investments in the equity securities markets generally. Unitholders should understand that global and domestic economic, financial and political developments might have a material effect on the prices of the Securities in the Reference Basket which may in turn affect the amount of the Distributions received by a Unitholder, and may affect the S&P/ASX 200 Index which may in turn affect an investor s capital growth potential. RISKS SPECIFIC TO THE FUND 3.4 No operating history Although Series 2 (December 2005) units have been issued in the Fund, these units were referable to different underlying assets. As such, the Fund has no relevant operating history and the Atlas 3 Portfolio itself has no financial operating history. 3.5 Liquidity There is not now, and there is unlikely to develop, a formal market for the resale of Units. The Fund will not be listed on any exchange at the time the Units are issued and there are no plans to list the Fund. Units may be redeemed as at the end of each calendar month. You should be aware of the conditions applicable to such redemptions or sales (refer Section 7.2). 3.6 Value of Units and Distributions Units The value of Units from time to time is expected to depend largely on factors affecting the value of EMIs, such as the number of Knockout Events which have occurred, the current Periodic Return Rate, the current Index level, the time remaining to the next Periodic Return Payment Date and the Maturity Date, interest rates and other factors. EMIs may become significantly less valuable over time. This could happen because of one or more of the following, amongst other things: market interest rates have increased since the issue of Units; the level of the Index has fallen; share price volatilities have increased; or one or more Knockout Events have occurred or it has become more likely that one or more Knockout Events will occur due to a reduction in the Closing Price of one or more of the Securities. Investors should note that due to the effect of the factors listed above (among others), it is unlikely that the value of their Units at a month end will be equal to the Capital Protected amount plus 130% of the increase in the average of the Index Basket to that month end. 19

23 20 Distributions Distributions and Distribution Rates will generally reflect Periodic Returns and Periodic Return Rates on the EMIs (less 0.20% per annum) because we do not anticipate (at the date of this PDS) that the Atlas 3 Portfolio will have any liabilities other than the 0.20% management fees payable to us each year. However, unanticipated liabilities may occur (for example, legal costs or liability we incur in connection with legal proceedings taken against us in our capacity as responsible entity of the Fund). In addition, while we do not currently intend to do so, we are entitled to increase our management fee (see Section 4). If such expenses or liabilities are incurred and we are reimbursed for those liabilities from assets referable to the Atlas 3 Portfolio or our management fee increases, Distributions and Distribution Rates will not reflect Periodic Returns and Periodic Return Rates in the same way and may be less than they otherwise would be. As described in Section 1, there may be occasions where there will be no Distributions. Neither MPML nor any other person gives any guarantee or assurance as to whether any distributions from the Fund will be sufficient to enable Investors who borrow to invest to meet the interest payments on their loan. 3.7 Additional unit classes We have previously issued a class of units in the Fund Series 2 (December 2005) Units - and may at the same time or in the future issue additional classes of units including Series 4 (July 2006) units offered under a PDS dated on or about the same dates as this PDS. For each additional class issued, including the issue of Units under this PDS, we will create separate portfolios of Fund assets and liabilities. We intend to calculate the net asset value of each class exclusively by reference to the assets and liabilities we determine to be referable to the investment portfolio maintained in respect of the class (for Units, this is the Atlas 3 Portfolio). Subject to the Corporations Act, each such portfolio will be managed separately from and independently of the other portfolios. The holders of one unit class (including Unitholders) in their capacity as holders with respect to a particular portfolio will have no rights whatsoever in respect of the assets of other portfolios. However, if one or more portfolios becomes insolvent, any creditors in respect of the insolvent portfolios, (unless those creditors were contracted on a limited recourse basis), would be creditors of the Fund as a whole. Accordingly, they could proceed against any assets of the Fund, including the Atlas 3 Portfolio. Similarly, the holders of units in different classes would be subject to the insolvency of the Fund as a whole. 3.8 Fund risk The Fund may terminate before the Capital Protection Date. The suggested minimum time frame for investment in the Units is 7.5 years. MPML has discretion to terminate the Fund before that time frame ends. Investing in the Fund may give different results than investing directly in the market because investing in the Fund may have a different income, capital gains and expense profile outcome compared to direct investment. Furthermore the results of investing in the Fund may be affected by investment and withdrawal of other investors, refer to 'How we calculate unit prices?' on page 36 for more information. 3.9 Compulsory redemption At any time, we may cause the redemption of any or all of a Unitholder s Units. Circumstances where this could occur include, but are not limited to: (a) the Capital Protection Date or an Early Delivery has occurred; (b) the Fund is restructured; (c) we are required to do so by law; or (d) we decide or are advised it would be necessary or desirable for anti-money laundering purposes or to otherwise stop illegal or suspicious activity. Our decision to exercise this right remains subject to our duties as responsible entity. However, in limited circumstances where urgent action is required, this may need to occur without prior notice to you. If your Units are compulsorily redeemed, we may be required by law to withhold the value of your investment in whole or part. INVESTMENT RISKS SPECIFIC TO EMIs 3.10 Counterparty risk By purchasing EMIs from Macquarie, the Atlas 3 Portfolio will be taking significant counterparty risk on Macquarie. For the Atlas 3 Portfolio to derive Periodic Returns, or to be able to realise the value of its investment in EMIs, Macquarie must perform its obligations under the deferred purchase agreements which constitute the EMIs. If Macquarie were to become insolvent, it may be unable to perform its obligations under the EMIs, making the Capital Protection feature of the investment, and the value of the EMIs, potentially worthless. The obligations of Macquarie under EMIs are not deposit liabilities of Macquarie, and they are not guaranteed by any other party. They are unsecured contractual obligations of Macquarie which will rank equally with Macquarie's other unsecured contractual obligations and with its unsecured debt liabilities (other than liabilities mandatorily preferred by law). In this regard section 13A(3) of the Banking Act 1959 provides that in the event of Macquarie becoming unable to meet its obligations the assets of Macquarie in Australia shall be available to meet its deposit liabilities in Australia in priority to all other liabilities of Macquarie (which include the obligations of Macquarie under EMIs). As Unitholders returns depend on Macquarie performing its obligations under the EMIs, Unitholders must make their own assessment of Macquarie s ability to meet its obligations to MPML. A description of Macquarie is set out in Section 9 to assist Unitholders to make this assessment.

24 3.11 Capital Protection Capital Protection provided to the Atlas 3 Portfolio applies only at the Capital Protection Date, which is 31 December Capital Protection is provided to the Fund and not directly to Unitholders. The benefit of the Capital Protection feature will flow through to Unitholders on the Capital Protection Date provided that the Atlas 3 Portfolio does not have any liabilities as at that date and Macquarie has not nominated an Extraordinary Event (see Section 3.14 below). Unitholders who sell or redeem Units before 31 December 2013 will not receive the benefit of Capital Protection. In addition, whilst Units held after 31 December 2013 will have had the benefit of Capital Protection on that date, they will not have ongoing protection. Unitholders should be aware that if an event is nominated by Macquarie as an Extraordinary Event (see Section 3.14 below), and EMIs are redeemed before 19 December 2013, Capital Protection will not apply. The amount received by the Fund on redemption of EMIs in these circumstances may be less than the Investment Amount. If the Atlas 3 Portfolio has fees or expenses which are unable to be met out of income referable to the Portfolio, they will be funded out of the Portfolio s assets. This would require a portion of the Atlas 3 Portfolio s EMIs to be terminated, which could result in the amount received by the Fund on redemption of remaining EMIs on the Capital Protection Date being less than the Investment Amount and you receiving less than the Issue Price per Unit on that date Inflation and the time value of money You should be aware that the capital protected amount receivable on the Capital Protection Date potentially $1.00 per Series 3 (July 2006) Unit - is unlikely to have the same real value as it would on the date of investment due to the likely effect of inflation and the time value of money over the 7.5 year term of the EMIs. The Atlas 3 Portfolio s capital growth component is valued using an option pricing model (see Section 7.3). While the Fund will receive 130% exposure to the average increase in the Index on the Capital Protection Date (which we intend to pass on to Unitholders), you may receive a lesser exposure to the Index if you withdraw Units before that date due to the time value component of the option pricing model Knockout Events The size of Distributions paid to Unit holders after 30 June 2007 is determined by the number of Knockout Events that have occurred with respect to the Reference Basket that underlies the EMIs. We give no assurance as to the performance or volatility of the Closing Price of the Securities which comprise the Reference Basket. You should form your own view as to the likelihood of a Knockout Event occurring in relation to any Security. The example scenarios set out in Section 2 are based on the stated assumptions, and are not a guide to the probability that Knockout Events will occur. You should note that Macquarie is able to offer MPML a relatively high initial yield in respect of EMIs because of the number and volatility of the Securities in the Reference Basket. You also should be aware that there is a high likelihood that one or more Knockout Events will occur during the Term and consequently there is a high likelihood that Distributions will be reduced over the Term. It is possible that the Distributions will be reduced to zero Early Delivery Date in respect of EMIs If Macquarie determines that an Extraordinary Event has occurred, Macquarie may terminate each EMI (see Section 1.9 of this PDS). The amount received by us on termination of an EMI due to an Extraordinary Event will be equal to the EMI Purchase Price plus an adjustment amount (which may be positive or negative) calculated by Macquarie to reflect the difference between the fair value of MPML s rights and obligations under the EMI at the time of termination and the Purchase Price. It will be based on prevailing market values and costs incurred by Macquarie in relation to the EMI, its obligations under the EMI, and termination of the EMI. The amount received by us may be less than the EMI Purchase Price as Capital Protection will not apply Corporate Actions Under the terms of the EMIs, Macquarie has broad discretions to deal with Adjustment Events in relation to Securities. When an Adjustment Event occurs Macquarie may, without limitation, deem a Knockout Event to have occurred in respect of the relevant Securities; adjust the factors taken into account in determining the Closing Price; or remove the relevant Security from the Reference Basket and substitute a new Security. Unitholders should familiarise themselves with the terms of EMIs as discussed in this PDS. Adjustment Events do not give us a right to redeem EMIs Exercise of discretion by Macquarie You should note that EMIs confer discretions on Macquarie which could affect the value of the EMIs. These include the powers to: nominate Extraordinary Events (see Section 3.14); adjust the determination of the Closing Price or deem a Knockout Event to have occurred as a result of an Adjustment Event; or vary or make any adjustments to the terms of the EMIs contemplated in the terms of the EMI Agreements. 21

25 3.17 Amendment of the terms of the Equity Markets Investments Agreements Macquarie may make changes to the terms of the EMIs provided that: the change is necessary or desirable in the reasonable opinion of Macquarie to comply with any statutory or other legal requirements; or the change is to be made for the purpose of curing an ambiguity, correcting a manifest error, or curing, correcting or supplementing any defective provision of the EMIs or effecting a modification of a formal, minor or technical nature, that has not been disputed by us and does not materially prejudice our interests. RISKS SPECIFIC TO THE INDEX 3.18 Likelihood of Index Increase Until the Capital Protection Date, any capital growth to be realised by the Atlas 3 Portfolio depends on the extent of any increase in the average level of the Index over the period from July 2006 to the Maturity Date. Prospective Unitholders should form their own view as to the likelihood and extent of any increase in this Index over this period Replacement of S&P/ASX 200 Index If: (a) Macquarie reasonably determines that it is unlawful, impractical or inappropriate to continue to use the S&P/ASX 200 Index; (b) the S&P/ASX 200 Index is no longer calculated or announced; or (c) there is a material change in the formula for or the method of calculating the S&P/ASX 200 Index or that index is in any way modified (other than as prescribed in the formula or method to maintain the index in the event of changes in constituent shares and capitalisation or other routine event), after consulting us, Macquarie must replace the S&P/ASX 200 Index with another Australian share price index which is calculated in a substantially similar manner as the replaced Index and perform all calculations relating to EMIs as if the definition of Index was amended to refer to the replacement index ASX and Index disruptions The operation of the ASX or the Index may be disrupted, for example, if: (a) the ASX fails to open for regular trading; (b) brokers cannot trade or value ASX-listed securities which comprise a material part of the Index; (c) the ASX or another person limits the ability to trade securities comprising the Index; or (d) the ASX closes early. If Macquarie determines that a disruption affecting ASX, the Index or trading in securities comprising the Index occurred on a Quarterly Averaging Date or when the start level of the Index is set (see Investment Overview ), it may calculate the start level or end level using values from the next nondisrupted day or, in limited circumstances, determine those values itself using the same methods as the Index or a good faith estimate of values. Macquarie will only determine the values on the basis of its own calculations (in whole or part) if: (a) for the start level, all the trading days between July 2006 are disrupted; and (b) for the end level, if one or more of the Quarterly Averaging Dates is disrupted and that disruption continues for at least eight successive Trading Days. HOW YOU CAN MANAGE RISK You can seek to manage your investment risk in a number of ways including: Obtain professional advice Professional legal, taxation and financial advice can help you determine whether an investment in Units is appropriate for you bearing in mind your investment objectives, financial and personal situation, risk tolerance and level of investment experience. Diversification Diversifying your investments, spreading them across asset classes, securities and markets, can help reduce the impact that events affecting one asset class, security or market will have on your overall investment portfolio. 22

26 SECTION 4 Fees and Other Costs DID YOU KNOW? Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns. For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs, where applicable. Ask the fund or your financial adviser. TO FIND OUT MORE If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website ( has a managed investment fee calculator to help you check out different fee options. Fees and other costs This document shows fees and other costs that you may be charged. These fees and costs may be deducted from your money, from the returns on your investment or from the fund assets as a whole. Taxes are set out in another part of this PDS (refer Section 5 of this PDS). You should read all the information about fees and costs because it is important to understand their impact on your investment. TYPE OF FEE OR COST AMOUNT HOW AND WHEN PAID Fees when your money moves in and out of the Trust Establishment fee 1 The fee to open your investment Contribution fee The fee on each amount contributed to your investment. Withdrawal fee The fee on each amount you take out of your investment Termination fee The fee to close your investment Nil (but note 'Adviser Remuneration' below) Nil A withdrawal fee of: $0.02 per Unit applies for withdrawals effective on or before 30 June 2007; $ per Unit applies for withdrawals effective on or after 1 July 2007 and on or before 30 June 2008; $ per Unit applies for withdrawals effective on or after 1 July 2008 and on or before 31 December 2013; Note: No withdrawal fee applies after 31 December Nil (but note 'Adviser Withdrawal' below) Not applicable Not applicable This amount is deducted at the time withdrawal proceeds are to be paid to you when you withdraw your investment. Not applicable 23

27 TYPE OF FEE OR COST AMOUNT HOW AND WHEN PAID Management costs The fees and costs for managing your investment Service fees Investment switching fee The fee for changing investment options 0.2% per annum of the aggregate Issue Price of Units on issue at the date of calculation. For an investment of $50,000, this is equivalent to a fee of $100 per annum. Not applicable Payable from Fund income six-monthly in arrears approximately 10 days after the end of the relevant Return Period (and if income is insufficient, payable from Fund assets). The amount of this fee may be negotiated, see 'Changing and waiving fees' in the 'Additional explanation of fees and other costs' section. Not applicable 1 On establishment, Macquarie will pay an amount to your adviser. (See 'Adviser remuneration' under the heading 'Additional explanation of fees and costs'.) Example of annual fees and costs This table gives an example of how fees and costs for this product can affect your investment over a 1 year period. You should use this table to compare this product with other managed investment products. EXAMPLE BALANCE OF $50,000 WITH A CONTRIBUTION OF $5,000 DURING YEAR Contribution Fees 0% For every additional $5,000 you put in, you will be charged $0. PLUS Management 0.2% Costs EQUALS Cost of fund * Additional fees may apply: And, for every $50,000 you have in the fund you will be charged $100 each year. If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during that year, you would be charged fees of: $100* What it costs you will depend on the investment option you choose and the fees you negotiate with your fund or financial adviser. If you leave the fund, you may also be charged withdrawal fees of between 0% and 2% of your investment (between $0 and $1 000 for every 50,000 Units (with an issue price of $50 000) that you withdraw). Additional explanation of fees and costs The following important additional information has been provided to assist you in understanding the Table of Fees and other costs (above). Ongoing expenses We are entitled to be reimbursed out of the assets of the Fund for the ongoing expenses incurred by us in the proper performance of our duties in relation to the Fund, such as audit fees, a share of compliance committee fees and incidental expenses such as amounts charged by third party service providers, which will depend on our arrangements with them (which are unknown and could not be found out by us at the date of this PDS). We will, however, negotiate commercial fee terms wherever possible. Despite our entitlement to be reimbursed, we have decided we will pay such expenses out of our management fee, and will only be reimbursed out of the assets of the Fund where such expenses exceed that fee (which we do not expect to occur). Adviser remuneration Your adviser will be paid an upfront commission of 2% of the amount invested by you in Units. This remuneration is payable by Macquarie using its own resources and does not affect your Investment Amount. For an investment of $50,000, this is equivalent to $1,000. If you do not have an adviser, no commission payment is made by Macquarie. 24

28 This remuneration may be in addition to any other fees or expenses you may have agreed with your adviser for their services. Your adviser should give you details of their remuneration arrangements. Depending on your arrangements with your financial adviser, the amount of the adviser remuneration may be negotiated with your adviser and they may agree to reduce or rebate all or part of this remuneration. Macquarie or a member of the Macquarie Group may also make further discretionary payments to your financial adviser. These further payments (if any) are based on a number of factors including the volume of Macquarie Group products sold to your financial adviser's clients and the relationship between your financial adviser and the Macquarie Group. As the factors on which these payments are based may be unrelated to the Fund and are not recovered from the assets of the Fund or deducted from your investment, it is not possible to express these payments as a percentage of your investment in the Fund. These payments are made using Macquarie Group's own resources and do not affect your Investment Amount. You should ask your financial adviser for further details of any such arrangements. MPML or any member of the Macquarie Bank Group may from time to time provide or receive non-monetary benefits, sometimes known as soft dollar commissions. These may be provided to (or received from), for example, financial advisers or brokers. These benefits may include, but are not restricted to research and market information, free or subsidised services, accommodation, broking arrangements, software and sponsorship of seminars and conferences. These benefits, when provided, will be paid by MPML or any member of the Macquarie Bank Group out of their own resources. Transactional and operational costs The application or withdrawal price of units may be adjusted to recover transaction costs incurred by the Fund associated with disposing of underlying investments held in the Fund (such as brokerage, settlement fees and taxes) when you apply for or withdraw units. Currently, it is not expected that any transaction costs will be incurred by the Fund on acquisition or disposal of assets, and so it is not proposed to adjust the application or withdrawal price at all. If this situation changes and transaction costs are incurred, a corresponding change to the application and withdrawal prices may be made. This cost would be an additional cost to you, and would be retained in the assets of the Fund rather than paid to us. Tax For information on significant tax implications relating to investing in the Fund, refer Section 5 of this PDS. Goods and Services Tax (GST) The Fund may be charged GST on management and other fees and expenses. However, where available, the Fund will claim input tax credits or reduced input tax credits for the GST charged. Unless otherwise stated, fees and charges quoted in this PDS are inclusive of GST less any reduced input tax credits. Changing and waiving fees We reserve the right to waive or increase fees, without Unitholders consent. Factors which may lead us to vary the fees to the Fund include legal, economic, policy and procedural changes. The right to vary is at our discretion and this is not an exhaustive list of circumstances which would lead us to vary the fees of the Fund. We will give you at least 30 days prior notice of any change to the current fee and/or the introduction of any additional fee. Fees charged by third party service providers as part of the management costs may be indexed to rise with inflation. We cannot charge more than the maximum fees under the constitution (and to increase the fees in the constitution we would need to have members approval). These maximums are: FEE MAXIMUM FEE ENTITLEMENT* Application fee 3% per annum of all (establishment fee) application money Management fee Redemption fee (withdrawal fee) 5.125% per annum of the aggregate application price of units on issue 5% of the greater of: (a) the application price at which units being redeemed were issued to the Unitholder; or (b) the withdrawal price of the units that are being redeemed *The Management fee is stated on the assumption that GST applies, the fee is inclusive of GST and Reduced Input Tax Credits are available. The Application fee and the Redemption fee are not expected to attract GST. As such, those fees have been calculated without any GST. However, should GST apply to the Application fee or the Redemption fee, the maximum amount of those fees would increase to take into account GST. 25

29 Macquarie or MPML may charge or rebate fees: (a) by negotiation with investors who are wholesale clients, as defined in section 761G of the Corporations Act; and/or (b) to investors who are also employees of MPML or a related body corporate of MPML, on a different basis to that applied to other members of the Fund where permitted under the Corporations Act or relevant ASIC policy. In the case referred to in paragraph (b), the amount of adviser remuneration that relates to an investment in the Fund by an employee of MPML or of any related body corporate may be rebated by Macquarie in part or in full to that employee. MPML will only rebate or waive a fee for employees where the number of votes that may be cast on a resolution of the Fund's unitholders by employee Fund unitholders is no more than 5% of all votes of Fund unitholders or as otherwise permitted by law. Wholesale clients wanting to negotiate fees should contact the Macquarie Atlas Service Centre on the number listed in the Directory. The level of any negotiated fee may depend on the amount invested by the client. Fees negotiated with wholesale clients will be agreed privately by us with the relevant wholesale client. We are not obliged to offer the same terms to, or make similar arrangements with, any other client. 26

30 SECTION 5 Taxation for Australian Residents Taxation issues are complex and taxation laws, their interpretation and associated administrative practices may change over the term of an investment in the Fund. We do not provide financial or tax advice and this PDS cannot address all of the taxation issues which may be relevant to a particular investor. Each investor must take full and sole responsibility for their own investment in the Fund, the associated taxation implications arising from that investment and any changes in those taxation implications during the course of that investment. The following opinion on some of the taxation implications that may arise for investors in the Fund has been obtained from Clayton Utz. 27

31 This summary outlines the main Australian income tax implications for Australian resident investors who subscribe for Units pursuant to this PDS and who hold their Units on capital account. This summary does not address the taxation consequences for non- Australian investors or investors who acquire Units in the course of carrying on a business or otherwise with the intention of making a profit and who hold the Units on revenue account or as trading stock. The information in this summary is of a general nature only and does not purport to constitute legal or tax advice. As the taxation implications for each potential investor may be different, we recommend that each prospective investor obtains their own independent professional taxation advice on the full range of taxation implications applicable to their own individual facts and circumstances. Assumptions This summary of the taxation implications assumes that: each Unitholder will hold the Units in the Fund on capital account and will not be a person who is carrying on a business of either trading in securities or investing in securities in the course of which they regularly acquire and dispose of securities; all transactions entered into by the Unitholders will be at prevailing market prices and otherwise on arm's length terms; the Units will be denominated in Australian dollars; Unitholders do not acquire Units in substitution for economically equivalent investments that they would otherwise be expected to enter into; Unitholders will not acquire any equity interests in Macquarie or a company that is a connected entity of Macquarie; at all times MPML will be an Australian tax resident and the management and control of the Fund will be in Australia; the Fund will only enter into transactions in respect of the Atlas 3 Portfolio of the kind described in this PDS and all such transactions will be entered into at prevailing market prices and otherwise on arm's length terms; all investments made by the Fund in respect of the Atlas 3 Portfolio will be denominated in Australian dollars; all of the distributable income of the Fund will be distributed each financial year; the distributable income of the Fund for any financial year will either be: i. a positive amount; or ii. if negative, an amount equal to or exceeding the net income of the Fund for tax purposes; it is not the case that 75% or more of the units in the Fund are held, directly or indirectly, by 20 or fewer individuals (counting associates as a single entity); the capital protected amount will not be more than 100% of the Issue Price; the Deliverable Securities will not be shares in a foreign company or units in a foreign trust; and there is nothing in the circumstances of the transaction, or in the way it is implemented, that would indicate at commencement of an investment that the Fund would elect to utilise the EMI Sale Facility, and there is nothing in the conduct of the Fund prior to or during the term of the transaction that would indicate such an intention. This summary is based on Australian taxation laws in force and administrative practices generally accepted as at the date of this PDS. Any of these may change in future without notice and legislation introduced to give effect to announcements may contain provisions that are currently not contemplated. Future changes in taxation laws, their interpretation or associated administrative practices could affect the treatment of the Unitholders investment in Units. All references in this summary to legislative provisions are to provisions of the Income Tax Assessment Act 1936 or the Income Tax Assessment Act 1997 (together, the Tax Act). 1. TAXATION OF THE FUND 1.1 Taxation of Responsible Entity MPML should not be liable for tax in respect of the income or capital gains of the Fund. Rather, all of the net income of the Fund should be included in the assessable income of the Unitholders as described below. 1.2 Net income of the Fund The income of the Fund will include the Periodic Returns. The Fund should be entitled to a deduction for management fees paid to MPML. 1.3 Early Termination - Capital Gains Tax The Fund may realise a capital gain or loss at the time of any early termination of the EMIs equal to the difference between the amount received in respect of the cancellation and the cost base for the EMI terminated. A capital gains tax event will also occur if, at maturity of the EMI (or any early termination where the normal Delivery process applies), the Fund elects to use the EMI Sale Facility to sell the Deliverable Parcel. This will give rise to a capital gain or loss for the Fund equal to the difference between the sale proceeds of the securities disposed of and the cost to the Fund of entering into the EMI. 28

32 If the Fund does not elect to use the EMI Sale Facility, the Deliverable Parcel will be delivered to the Fund on the Capital Protection Date. There should be no income or capital gains tax consequences for the Fund at this time. In particular, the Fund should not be treated as deriving a capital gain on Macquarie satisfying its obligation under the EMI to deliver the Deliverable Parcel (refer National Tax Liaison Group CGT Subcommittee meeting minutes). The cost base in the Securities comprising the Deliverable Parcel should be equal to the amount invested under the EMI plus the incidental costs of acquiring the Deliverable Parcel. Unitholders should note that views expressed by the National Tax Liaison Group CGT Subcommittee are not binding on the ATO and, although we are not aware of any proposal to change these views, it is possible that the ATO may change its view in the future. If that occurs, we would expect that the ATO would treat the Fund as realising a taxable capital gain on the Capital Protection Date and to treat the Fund's cost base in the securities comprising the Deliverable Parcel as being equal to their value on the Capital Protection Date to prevent double taxation, however, the position is uncertain. 1.4 Qualifying securities and traditional securities Under current income tax laws, returns on "qualifying securities" may be taxable on an accruals basis over the term of that security. Securities that are not "qualifying securities" may be "traditional securities" for income tax purposes, with any gains or losses on the disposal of that security taxable on revenue account. These rules take precedence over the capital gains tax regime. An EMI should not be characterised as either a "qualifying security" or a "traditional security", on the basis that it is a contract for the purchase of the Deliverable Parcel, and therefore should not be a "security" as defined for these purposes. Accordingly, these rules should have no application to the Fund in relation to the EMIs. 1.5 Proposed Amendments - Taxation of Financial Arrangements The proposed legislative changes set out in exposure draft legislation Tax Laws Amendment (Taxation of Financial Arrangements) Bill 2006 ( TOFA ) may, if they are enacted in their current form, apply to MPML in relation to the EMIs. One of the main features of the proposed TOFA regime is to tax gains from financial arrangements on a revenue basis and in some cases on an accruals basis over the term of the arrangement. If enacted in their current form, the proposed provisions may therefore require the calculation of the net income of the Fund (which will be included in the assessable income of Unitholders as described below) in a manner different to that outlined above. In particular, the realisation of the capital value of the EMIs may give rise to assessable income rather than capital gains and may be included in the net income of the Trust on an accruals basis over the term of the EMIs. The Explanatory Memorandum to the exposure draft indicates an intention for the proposed changes to apply only to arrangements entered into after the start date for the proposed legislation, but to allow for taxpayers to elect to apply the rules to arrangements existing at that time. We understand that MPML intends to seek specific tax advice in relation to the application of the provisions if they are enacted. 2. TAXATION OF UNITHOLDERS 2.1 Assessable Income - Distributions Unitholders who are presently entitled to a share of the income of the Fund for any income year will include in their assessable income their pro-rata share of the net income of the Fund for that income year (as outlined above). Such Unitholders must include this amount regardless of whether or not the amount is received from the Fund in the form of a Distribution. A Unitholder who receives a Distribution in excess of their proportionate entitlement to the net income of the Fund will not include the amount of the excess in their assessable income. However the Unitholder's CGT cost base and CGT reduced cost base in their Units (discussed further below) will be reduced by the non-assessable amount. 2.2 Capital Gains Tax Redemption of Units Upon redemption of a Unit, a Unitholder will receive the redemption price which will include a distribution of any capital gains made by the Fund. Any capital gain so distributed will be included in the calculation of the Unitholder's net capital gain for the income year. If the Fund capital gain is a discount capital gain, this amount will also be treated as a discount capital gain in the hands of any Unitholder entitled to discount capital gains treatment (that is, where the Unitholder is an individual or trustee of a trust who has held their Units for at least 12 months). A Unitholder who is not entitled to discount capital gains treatment must take into account the full capital gain when making its net capital gain calculation. Any excess of the remainder of the redemption price over the CGT cost base of that Unit will also be treated as a capital gain in the hands of the Unitholder. If the remainder of the redemption price is less than the CGT reduced cost base of the Unit, the Unitholder will realise a capital loss equal to the amount of the shortfall. For the purpose of this calculation, the CGT cost base of a Unit would be the Issue Price of the relevant Unit (being $1.00 for Units issued on 14 July 2006 under this PDS), or where the Unit is acquired in the secondary market, the relevant acquisition cost of that Unit, plus certain incidental costs incurred in acquiring the Unit such as fees paid to a financial adviser. In the case of a Unit (and unlike some other assets), the CGT reduced cost base should normally be the same as the CGT cost base. As discussed above, the CGT cost base and CGT reduced cost base of a Unit will be reduced by the amount of any Distributions received in excess of the Unitholder's proportionate entitlement to the net income of the Fund. 29

33 This discussion assumes that the redemption price will be equal to the market value of the Unit at the time of redemption. Where this is not the case the resulting CGT consequences may differ from those outlined above. 2.3 Capital Gains Tax Transfer or sale of Units For CGT purposes, a Unitholder will derive a capital gain on the disposal of a Unit to another person to the extent that the capital proceeds on disposal exceed the CGT cost base of the Unit (as discussed above). A Unitholder will incur a capital loss on the disposal of a Unit to another person to the extent that the capital proceeds on disposal are less than the CGT reduced cost base of the Unit. 2.4 Net capital gain or net capital loss All capital gains and capital losses arising in a year are added together to determine whether a taxpayer has derived a net capital gain or incurred a net capital loss in a year. If an investor is entitled to discount CGT treatment in respect of a capital gain (for example if the investor is an individual or trustee of a trust who derives a capital gain on Units held for at least 12 months), only 50% (or 662/3% for a complying superannuation entity) of the amount of such gain will be included in the calculation of the investor's net capital gain or loss. In making this calculation Unitholders will be entitled to apply any capital losses against non-discount gains before their application against discount capital gains. If a Unitholder derives a net capital gain in a year, this amount is generally included in the Unitholder s assessable income for the relevant year. If a Unitholder incurs a net capital loss in a year, this amount is carried forward and is available to offset capital gains derived in subsequent years, subject in some cases to the Unitholder satisfying certain rules relating to the recoupment of carried forward losses. 2.5 Qualifying securities and Traditional securities As discussed above, the rules applying to "qualifying securities" and "traditional securities" will take precedence over the capital gains tax regime and will result in a differing taxation treatment of the instruments to which they apply. A Unit in the Fund should not be characterised as either a "qualifying security" or a "traditional security", on the basis that it is a unit in a unit trust and therefore should not be a "security" as defined for these purposes. Accordingly, these rules should have no application to a Unitholder in the Fund. 2.6 Proposed Amendments - Taxation of Financial Arrangements As they are currently drafted, the proposed legislative changes set out in the TOFA exposure draft legislation should not apply to a financial arrangement that is constituted by an interest in a trust where the trust has issued only one class of interests or where the interest in the trust would be an "equity interest" as defined by the Income Tax Assessment Act 1997 (Cth) if the trust were a company. On this basis, the proposed amendments should not, if they are enacted in their current form, apply to Unitholders in relation to their Units. The proposed amendments may however affect the calculation of the net income derived by the Fund, as described above, which would in turn affect each Unitholder's share of the net income. The Explanatory Memorandum to the exposure draft indicates an intention for the proposed changes to apply only to arrangements entered into after the start date for the proposed legislation, but to allow for taxpayers to elect to apply the rules to arrangements existing at that time. Prospective investors should however seek their own tax advice in relation to the potential application of the TOFA proposals in light of their own individual facts and circumstances. 2.7 Interest deductions A Unitholder should generally be able to claim a tax deduction for interest expenses incurred on any loan used to fund the acquisition of Units provided that the Unitholder has incurred that interest for the purpose of deriving assessable income from the holding of the Units, being the Distributions (or other assessable income other than capital gains) that are expected to be derived from the investment in the Units. Where expenses are deductible under this test, the deductions should be available against all types of assessable income of the Unitholder. Such expenses should be deductible in the income year of payment if the total interest expense is $1,000 or less or all of the following requirements are met: (a) the Fund has 300 or more beneficiaries and it is not the case that 20 or fewer individuals are entitled to 75% or more of the Fund's income or capital; (b) the interest expense relates to a period of 12 months or less which ends in the year of payment or before the end of the next income year; and (c) the investor is either a STS taxpayer or is an individual who incurs the interest otherwise than in the course of carrying on a business. In all other circumstances, interest deductibility will be apportioned on a straight line basis over the period to which the interest relates. 30

34 On 16 April 2003, an announcement was made of the Government's intention to legislate to deny deductibility of some of the interest incurred by investors under "capital protected products". If the legislation is introduced in the terms of the announcement, the amendments will apply to deny deductibility of a proportion of the interest expense incurred in respect of a limited recourse loan applied to acquire listed shares, units and stapled securities. Unitholders utilising any loan to subscribe for Units should consider this announcement and consult their own tax adviser where necessary. 2.8 Tax File Number Declaration An investor in Units in the Fund is not required to quote their tax file number ( TFN ) in relation to the investment. However, if the investor does not quote their TFN, or alternatively in certain circumstances their Australian Business Number, and does not provide information in relation to any available exemption from quoting their TFN, MPML will be required to withhold tax from any Distribution at the highest marginal tax rate plus the Medicare levy (currently 48.5%). 3. PART IVA Part IVA of the Income Tax Assessment Act 1936 (Cth.) contains general anti-avoidance provisions and should be considered by Unitholders in respect of all investments. In general, Part IVA may apply where a taxpayer obtains a tax benefit as a consequence of entering into or carrying out a scheme (or part of a scheme), whether devised by the taxpayer or somebody else, and the dominant purpose of one or more parties who entered into or carried out the scheme (or part of the scheme) was to secure the tax benefit for the taxpayer. The application of Part IVA to a taxpayer can only be conclusively determined in light of each individual taxpayer's own facts and circumstances. Unitholders should therefore seek their own independent professional tax advice in relation to the potential application of Part IVA in their own individual facts and circumstances. 5. GOODS AND SERVICES TAX (GST) No GST should be payable in respect of the subscription, acquisition, disposal or redemption of Units, nor in respect of any Distributions paid in respect of the Units. GST may apply to fees charged to Unitholders. Unitholders should obtain their own advice as to whether an input tax credit is available for any such GST, as it will depend on their personal circumstances. Where GST applies to fees which are charged to the Fund and recoverable from the Fund's assets, those fees plus any applicable GST may be recovered from the assets of the Fund. However, the Fund may be entitled to claim input tax credits or reduced input tax credits for that GST, depending on the precise nature of the fee. 6. TAX REFORM It should be noted that Australia is in the process of major taxation reform. There is considerable uncertainty as to the breadth and ultimate impact of this reform. The precise meaning of much of the new legislation is unclear and, of course, it has not been tested before the courts. Accordingly, there is a degree of uncertainty applying to matters impacted by such legislation. The above taxation comments have been based on current Australian taxation legislation, and on changes announced but not yet legislated, at the time of this PDS. 4. STAMP DUTY Under current laws, for so long as the Unit register is maintained in Victoria, the acquisition of Units by an investor, the sale of Units by an investor, and the redemption of Units by MPML should not be liable to stamp duty. 31

35 SECTION 6 Reference Basket Trading History Set out below is some information about the prices of Securities in the Reference Basket over the past 7.5 years. For each Security we have included: the closing price on the ASX on 15 March 2006 ("15 March Price"); the closing price on the ASX on 16 September 1998, or, if the Security was first quoted on the ASX after 16 September 1998, the closing price on the first day the Security was quoted on that exchange ( Starting Price ) ; the highest price ("High Price") at which the Security traded on the ASX between 16 September 1998 (or, if the Security first became quoted on the ASX after 16 September 1998, the date on which the Security was first quoted) and 15 March 2006; the percentage determined by dividing the High Price by the Starting Price and multiplying the resulting fraction by 100 (i.e. if the High Price of a Security is $2.00 and the Starting Price is $1.00, the percentage will be 200%); the lowest price ("Low Price") at which the Security traded between 16 September 1998 (or, if the Security first became quoted on the ASX after 16 September 1998, the date on which the Security was first quoted) and 15 March 2006; and the percentage determined by dividing the Low Price by the Starting Price and multiplying the resulting fraction by 100 (i.e. if the Low Price of a Security is $0.50 and the Starting Price is $1.00, the percentage will be 50%). Generally, the length of the period to which the data relates is the same as the expected term of the EMIs (the data relates to the last 7.5 years leading up to 15 March 2006). However, many stocks in the Reference Basket have not been quoted on the ASX for 7.5 years in which case the data relates only to the period of time the Security has been quoted. This information has been included in this PDS in an attempt to assist Unitholders to have a better understanding of the market movements of the Securities that comprise the Reference Basket (i.e. their historical trading performance and trading range over a similar term to that of the EMIs in the past). However, for each Security, the extracted data is only a very brief summary. Unitholders can obtain the full trading history for each Security from the ASX. Historical trading performance and trading ranges for a Security are not accurate indicators of future trading performance. We make no representation and express no opinion as to the likely future trading performance of any Security. 32

36 Code Stock Name First Listed Price as at Starting High % of Low % of (if after 15 Mar 2006 Price Price Starting Price Starting 16 Sep 1998) Price Price ABS ABC Learning Centres Limited 21-Mar % % ALL Aristocrat Leisure Limited % % AMC Amcor Limited % % AMP AMP Limited % % ANN Ansell Limited % % ANZ Australia and New Zealand Banking Group Limited % % APN APN News & Media Limited % % ASX Australian Stock Exchange Limited 14-Oct % % AWC Alumina Limited % % AXA AXA Asia Pacific Holdings % % BBG Billabong International Limited 11-Aug % % BHP BHP Billiton Limited % % BIL Brambles Industries Limited % % BLD Boral Limited 21-Feb % % BNB Babcock & Brown Limited 06-Oct % % BSL Bluescope Steel Limited 15-Jul % % CCL Coca-Cola Amatil Limited % % CEY Centennial Coal Company Limited % % CGF Challenger Financial Services Group Limited % % CML Coles Myer Limited % % COH Cochlear Limited % % CPU Computershare Limited % % CSL CSL Limited % % CSR CSR Limited % % CTX Caltex Australia Limited % % DOW Downer Edi Limited % % DVC DCA Group Limited % % EXL Excel Coal Limited 03-May % % FCL Futuris Corporation Limited % % FGL Foster's Group Limited % % FXJ John Fairfax Holdings Limited % % GFF Goodman Fielder Limited 19-Dec % % GNS Gunns Limited % % HVN Harvey Norman Holdings Limited % % IAG Insurance Australia Group Limited 08-Aug % % ILU Iluka Resources Limited % % JBM Jubilee Mines NL % % JHX James Hardie Industries NV % % LEI Leighton Holdings Limited % % LHG Lihir Gold Limited % % LLC Lend Lease Corporation Limited % % LNN Lion Nathan Limited % % 33

37 Code Stock Name First Listed Price as at Starting High % of Low % of (if after 15 Mar 2006 Price Price Starting Price Starting 16 Sep 1998) Price Price MAP Macquarie Airports 14-Aug % % MIG Macquarie Infrastructure Group % % MTS Metcash Limited % % NAB National Australia Bank Limited % % NCM Newcrest Mining Limited % % NWSLV News Corporation - CDI % % ORG Origin Energy Limited % % ORI Orica Limited % % OSH Oil Search Limited % % OST Onesteel Limited 23-Oct % % OXR Oxiana Limited % % PBG Pacific Brands Limited 02-Apr % % PBL Publishing & Broadcasting Limited % % PMN Promina Group Limited 12-May % % PPX PaperlinX Limited 17-Apr % % QAN Qantas Airways Limited % % QBE QBE Insurance Group Limited % % RIN Rinker Group Limited 31-Mar % % RIO Rio Tinto Limited % % SGB St George Bank Limited % % SGM Sims Group Limited % % SHL Sonic Healthcare Limited % % STO Santos Limited % % SUN Suncorp-Metway Limited % % SYB Symbion Health Limited % % TAH Tabcorp Holdings Limited % % TCL Transurban Group % % TEL Telecom Corporation Of New Zealand % % TEN Ten Network Holdings Limited % % TLS Telstra Corp Limited % % TOL Toll Holdings Limited % % TTS Tattersall's Limited 07-Jul % % WDC Westfield Group 05-Jul % % WES Wesfarmers Limited % % WOR WorleyParsons Limited 28-Nov % % WOW Woolworths Limited % % WPL Woodside Petroleum Limited % % ZFX Zinifex Limited 05-Apr % % Source: Bloomberg L.P. Past performance is not a reliable indicator of future performance. This is a summary only. Full trading histories can be obtained from the ASX. Note that historical prices have been adjusted for corporate actions such as stock splits. 34

38 SECTION 7 Transacting your Account 7.1 Indirect Investment Service Where an Indirect Investment Service investor directs the responsible entity or operator of an Indirect Investment Service to acquire Units on their behalf they do not become Unitholders in the Fund and accordingly have no rights as a Unitholder. The responsible entity or custodian of the Indirect Investment Service is the direct investor and becomes a Unitholder. Whether the responsible entity or custodian will exercise its rights as a Unitholder in the Fund on behalf of the Indirect Investment Service investor will depend on the arrangements between the Indirect Investment Service investor and the Indirect Investment Service responsible entity or operator. You should be able to request reports on your investment from the operator, and you should direct any enquiries to them. Certain provisions of the Fund's constitution are not relevant to indirect investors. For example, indirect investors cannot attend Unitholder meetings. Indirect Investment Service investors should contact their Indirect Investment Service operator for details on the minimum initial investment amount, minimum additional investment amount, minimum withdrawal amount and minimum investment balance. 7.2 Transacting your account Unit Classes The Fund may issue different classes of units from time to time. Different classes of units may have different rights including as to fees, minimum investments, and the ability to withdraw and terms attaching to them. Series 3 (July 2006) units are offered under this PDS. The unit price for each unit in the Fund will be determined by reference to the portion of assets and liabilities referable to the relevant class or unit in accordance with the Constitution. No additional investments Once the offer made under this PDS closes, we will not accept any further applications for Units unless we issue a new PDS or otherwise make an offer in accordance with the Corporations Act. How we confirm applications Where you have supplied an address with your application, a confirmation of receipt of your application will be sent to you via generally within 10 Business Days of receiving your application. A confirmation of the number of Units issued to you will be generally sent to you within 10 Business Days of the Unit Issue Date. We reserve the right not to accept any application either wholly or in part. We may require additional information before accepting any application. Units issued are void if application monies paid are not subsequently cleared within one month. No interest will be paid to applicants on any Application Amounts received. While we must pay your Application Amount into a trust account under the Corporations Act, any interest earned will not be paid to you but rather will be retained for the benefit of the Fund. We will refund your Application Amount if your application isn t accepted, but any interest earned on any application money will be retained by the Fund. Investors who choose to pay by direct debit will be charged a processing fee if there are insufficient funds for the direct debit to be processed at the time of processing. Due dates for receipt of investment applications The due date for receipt of Application Forms and the Application Amounts is the Offer Close Date. We may change the due date at our discretion. Provided we receive your completed Application Form and the Application Amount by the relevant due date and we accept your application, you will receive an interest in the Fund when we invest your monies in the Fund, which will occur on the Unit Issue Date. Cooling off period If you decide that your initial investment in the Fund does not suit your needs, you can request in writing to have it cancelled within a 14 day cooling off period. The cooling off period begins when your transaction confirmation is received by you or five Business Days after your Units are issued, whichever is earlier. When calculating the amount to be returned to you, contribution and withdrawal fees are not charged. However, you will bear any fluctuation in the unit price in the period since the date of your application and we may deduct costs and taxes that relate to the exercise of your cooling off right as the Corporations Act allows. 35

39 36 Your right to cooling off will not apply in respect of Units if: you are a wholesale client; or you exercise any of your rights as an investor in the Fund. If you wish to exercise your cooling off rights, please call the Macquarie Atlas Service Centre on the number listed in the Directory. If you have invested via an Indirect Investment Service, you should consult the operator of that service about any cooling off rights you may have. How to withdraw your investment You can withdraw your investment in the Fund by withdrawing some or all of your Units at the unit price at the time your withdrawal takes effect. The withdrawal proceeds will not be paid to you by cheque, but rather will be directly credited to your nominated bank account when finalised. To withdraw some or all of your Units in the Fund, you must send a completed, signed withdrawal form available from Macquarie ( Withdrawal Form ) to the Administrator whose address is set out in the Directory. The due date for receipt of Withdrawal Forms is 10 Business Days before the calendar month end (excluding the last Business Day of the month). We may change the due dates at our discretion. Provided we receive your Withdrawal Form by the relevant due date, your withdrawal generally will take effect on the last day of that month, subject to delayed withdrawals and illiquidity as described below. The minimum withdrawal amount is 1,000 Units and you must withdraw multiples of 1,000 Units at a time (eg. 1,000 Units or 2,000 Units but not 1,300 or 2,200 Units). If immediately after your withdrawal of Units, the value of your investment in Units would be less than 10,000 Units, your withdrawal request will be treated as a request to withdraw your entire investment. Until the unit price is determined, the return you receive on withdrawal will continue to be subject to changes in the value of the investments of the Fund referable to the Atlas 3 Portfolio. See Section 7.3 "When do we calculate unit prices" to determine when the unit price will be determined for your withdrawal. Assuming that the Fund is liquid and withdrawals have not been delayed, we intend to pay the withdrawal proceeds generally within 60 days after the determination of the unit price. The unit price is generally determined within 10 Business Days of the first Business Day of the month following the month in which your withdrawal is accepted. This may take longer where, for example, distributions are being calculated, audited and paid. Where we are required to withhold an amount under applicable tax laws on a withdrawal or you owe us money, by requesting a withdrawal, you authorise us to deduct an amount from your withdrawal proceeds to cover any outstanding tax liability or moneys you owe us. A withdrawal fee also may be deducted from your withdrawal proceeds see Section 4. Withdrawal proceeds, at our discretion, may be paid by transferring assets to you rather than paying an amount. If you are a joint Unitholder, we will only accept requests for withdrawal from all parties. Transfers Units may be transferred to another person by completing and signing a standard transfer form, which can be obtained from MPML. MPML may impose conditions on any transfer in its sole discretion and may refuse to facilitate a transfer for any reason. Transfers of Units may have tax implications (see Section 5 - "Taxation for Australian residents"). You should obtain your own legal and tax advice before requesting a transfer. Delayed withdrawals and illiquidity We may extend the period for processing a withdrawal in certain circumstances such as if: we cannot realise sufficient assets to satisfy a withdrawal request; we believe it is not in the best interests of investors as a whole to realise assets; we are unable to calculate the unit price or fairly determine the Net Asset Value due to circumstances outside our control. If the Fund becomes illiquid (as defined in the Corporations Act), you will only be able to withdraw from the Fund if we make an offer of withdrawal. If we do make an offer of withdrawal, you may only be able to withdraw part of your investment. There is no obligation for us to make such an offer. If we receive withdrawal requests comprising more than 30% of the Units on issue in a Class, we may pro rata the withdrawal requests and stagger the processing of remaining unsatisfied withdrawal requests on such dates as we choose. 7.3 How we calculate unit prices What are unit prices? Units prices determine how many Units you receive pursuant to any application and the value of Units you withdraw from time to time. We determine how many Units you receive pursuant to a successful application by dividing your Application Amount by the unit price applicable to the relevant Class. Similarly, the number of Units withdrawn as a result of any withdrawal is calculated by dividing the amount of the investment to be withdrawn (if specified) by the unit price applicable to the relevant Class at the time of withdrawal. You can also request a number of Units to withdraw when withdrawing part or all of your investment.

40 When do we calculate unit prices? The unit price applied to your application is set at $1.00. Unit prices for withdrawals are calculated monthly. The unit price applied to your withdrawal will be the price based on the Net Asset Value referable to the relevant Class in the Fund as at the close of business on the last day of the calendar month in which the Withdrawal Form is received, if the form is received before the cut-off date for that month (otherwise, the unit price as determined for the next calendar month). Compulsory redemptions (see Section 3.9) may use a unit price calculated on a date other than the last day of the applicable calendar month. If withdrawals from the Fund are suspended for any reason (see "Delayed withdrawals and illiquidity" above), unit prices will be based on the Net Asset Value applicable when the suspension ends. The latest unit prices (including a monthly Unit price) are available on-line at or can be obtained by phoning the Macquarie Atlas Service Centre on or by ing us at atlas@macquarie.com.au. Alternatively, your financial adviser may be able to provide you with details. How do we calculate unit prices? For each Class we divide the Net Asset Value referable to the Class of Units in the Fund by the number of all Units on issue in that Class at the relevant time ( NAV per Unit ). All unit prices are rounded to four decimal places. While we will charge withdrawal fees (see Section 4), MPML does not currently intend to charge any transaction costs (sometimes known as a sell spread ) for the withdrawal of Units; however, it reserves the right to do so (for example, in the case of compulsory redemption see Section 3.9). If transaction costs are charged, then the withdrawal price will be the NAV per Unit less a per Unit estimate of the total cost of selling the assets referable to the relevant Class. MPML s estimate of total costs referred to above must be an estimate of the average amount of costs in the previous year or an estimate of the actual amount of costs, appropriate to avoid an adverse impact on other Unitholders due to the disposal of assets because of the withdrawal of Units. Valuation of the Fund We generally value the Fund as at the close of business on the last day of each month. The Net Asset Value of the Atlas 3 Portfolio (up until the Capital Protection Date) is calculated using the value of EMIs (being the Portfolio s only assets other than cash before the Capital Protection Date) and takes into account management fees. Macquarie determines the value of EMIs on a monthly basis using an option pricing model, in which the main pricing inputs are current interest rates, starting and current stock and Index prices, stock correlations, estimated future dividends and estimated share price volatility. There is a risk that EMIs may become less valuable over time see Section 3.6. We do not intend to exercise our right to reimbursement for expenses from the assets of the Atlas 3 Portfolio for expenses that we anticipate (at the date of this PDS) we will incur during the ordinary course of operating the Portfolio. However, we may, in our sole discretion, decide to exercise our right of reimbursement or indemnity in the future for unanticipated expenses and liabilities that we incur in connection with the Fund (including the Atlas 3 Portfolio). If unanticipated expenses or liabilities were incurred, this would reduce the NAV per Unit. 37

41 7.4 Accessing information about your investment How we keep you informed It is important that you know exactly what is happening with your investment. To help you stay informed we send you: Transaction confirmations Annual tax statement Reporting Where you have supplied an address, you will generally receive confirmation that your application or withdrawal request has been received within 10 Business Days of receiving your application or withdrawal request. You will receive confirmation if your application or withdrawal has been transacted. Confirmations will be mailed to you generally within 10 Business Days of the Unit Issue Date (for applications) or determination of the unit price (for withdrawals). You will receive a tax statement containing a summary of your distributions and tax components for the year ended 30 June to help you prepare your tax return. Investor update: You will receive an annual investor update that provides relevant general investment information as well as a performance update for the Atlas 3 Portfolio. Annual financial statements: You will receive the concise reports for each financial year for the Fund generally within four months after the end of each financial year, which includes a director s report, auditor s report and concise financial report. The full annual financial reports for the Fund and the half-yearly statements for the Fund are available on request. Disclosing entity The Fund is expected to become a disclosing entity under the Corporations Act, in which case it will be subject to regular reporting and disclosure obligations. Copies of documents lodged with ASIC in relation to the Fund may be obtained from, or inspected at, any ASIC office. If and when the Fund becomes a disclosing entity, you may obtain a copy of the Fund's annual and half year financial reports, which will be lodged with ASIC and any continuous disclosure notices given by the Fund. Copies of the financial reports and any continuous disclosure notices can be obtained from MPML free of charge. MPML will comply with this request as soon as practicable, and in any event within 5 days after receiving that request. If you would like more information on the Fund or any aspect of investing with the Macquarie Bank Group please talk to your financial adviser. Alternatively, you can contact the Macquarie Atlas Service Centre on , or visit our website at 38

42 SECTION 8 Additional information Macquarie Portfolio Management Limited is the responsible entity of the Fund. The role of the responsible entity includes: holding scheme property on trust for the investors; managing and investing scheme property; and ensuring scheme property is managed and dealt with in accordance with the scheme's constitution and the Corporations Act. Our legal relationship with you is governed by this PDS, the Constitution, the Corporations Act and other laws such as case law, general law relating to trusts and legislation about the duties of trustees. Copies of the Constitution are available free of charge, on request. To obtain a copy, simply telephone the Macquarie Atlas Service Centre on The following brief summary does not refer to every provision of the Constitutions, and should be read in conjunction with other references contained in this PDS. Your rights as a Unitholder The Constitution for the Fund: provides that each unit in the Fund confers an equal undivided interest in the assets of the Fund subject to any rights, obligation and restrictions attaching to any particular Class. The rights and obligations attaching to units in the Fund may vary among the Classes. provides that you are entitled to transfer all or any of your Units that you hold to another person in the manner prescribed by MPML. sets out your rights to receive distributions of any income of the Fund. defines your rights to withdraw from the Fund: subject to the Fund being liquid investors can request withdrawal of some or all of the Units they hold in the Fund. define what you are entitled to receive when you withdraw your Units. define when the Fund may be wound up - the Fund will generally continue for a set period of not more than 80 years unless, for example, MPML terminates it at an earlier time by written notice to Unitholders. define what you are entitled to receive if the Fund is wound up - Unitholders are entitled to receive a share of the net proceeds of the Fund for the Class in which they hold Units pro rata to the number of Units they hold in that Class, after deducting the costs of realising the Fund's investments and any amounts owed to us. state that your liability as a Unitholder is limited to the amount you paid for your Units however, higher courts are yet to determine the effectiveness of provisions of this kind (see page 40). states that the quorum required for meetings of Unitholders is two Unitholders holding at least 10% of all units or units in the relevant Class, unless the Class has only one member who may vote on a resolution, in which case that one member constitutes the quorum. Your rights to requisition, attend and vote at meetings are mainly contained in the Corporations Act. Our rights and obligations as responsible entity As responsible entity, we are subject to many duties under the Corporations Act including duties to act honestly, exercise care and diligence, and treat investors in the same class equally. Subject to the Corporations Act, the Constitution of the Fund gives us the following powers, duties and liabilities as responsible entity of the Fund: allow us to refuse applications for Units, in whole or in part, at our discretion and without giving reasons. MPML may determine from time to time not to accept applications for Units in the Fund. The decision not to accept applications for the Fund may be made by MPML in its absolute discretion. allow us to set a minimum investment to be made or held in the Fund or a Class of Units where applicable. allow us to extend the period for the withdrawal of Units in limited circumstances. allow us to compulsorily redeem Units in the Fund. provide that, subject to the Corporations Act and proper performance by us in relation to the Fund, we are not liable in contract, tort or otherwise to investors for any loss relating to the Fund. provide that, where we have acted in good faith, we are not liable for loss suffered in relation to the Fund as a result of reliance on documents or advice provided by another person. 39

43 provide that we are entitled to be indemnified out of Fund assets for any expense or liability incurred in properly performing our duties in relation to the Fund. subject to relevant laws and provided that there are no restrictions on us, or our associates, holding or dealing with Units in the Fund, dealing with ourselves, any related company or an investor and contracting and acting in any capacity in relation to Units. We will not be liable to account for any profits or benefits gained in connection with these activities. allow us to, in our absolute discretion, invest, borrow and generally manage the Fund, including by giving authority to another party to act as our agent or delegate in relation to the Fund. allow us to change the Constitution, but only with investor approval if the change would adversely affect investors' rights. allow us to retire, but only in accordance with the law. allow us to recover expenses incurred by us in relation to the proper performance of our duties to the Fund out of the assets of the Fund. give us the right to terminate the Fund by notice to investors and then to sell the Fund's investments, pay expenses and pay your share of net proceeds to you. Compliance plan The compliance plan for the Fund describes procedures that we apply in operating the Fund to ensure compliance with the Corporations Act, the Constitution and other applicable laws. A compliance committee with a majority of external representation oversees our procedures for complying with the compliance plan, the Constitution and the Corporations Act. Unitholder's liability The Constitution and the Corporations Act are designed to limit a Unitholder's liability to the value of the Units held in the Fund. Unitholders should not therefore be personally liable for the obligations and liabilities of the Fund beyond their investment value. However, the law in this particular area is complicated and not certain; therefore we cannot give any assurances that the liability of the Unitholder as discussed above will be limited in all circumstances. In particular, the position may be different for Unitholders who have participated in the establishment of the Fund if the Fund is or becomes highly geared or leveraged. Unitholders of the Fund have no right or power to take part in the Fund's day-to-day management. Accordingly, no person should purchase Units unless such person is willing to entrust all investment decisions to us. Borrowing The Constitution for the Fund allows MPML to borrow. Dealing with other Macquarie entities or related parties Potential conflicts of interest arise because a number of entities involved in this offer are related parties. MPML is a wholly-owned subsidiary of Macquarie Bank Limited, and has one or more directors who are also senior executives of Macquarie Bank Limited. Macquarie Bank will enter into EMIs with MPML on arm's length commercial terms, with the expectation of making an arm's length commercial profit from the EMIs. In particular, MPML has been informed by Macquarie that Macquarie will target an annual profit margin of 1.5% in respect of EMIs, although this margin may vary significantly depending on market conditions. Having reviewed pricing on comparable products, MPML s board of directors is satisfied that this is an acceptable margin. MPML, and members of the Macquarie Group, or their directors, employees or affiliates may, subject to law, hold shares in members of the Macquarie Group and/or units (including Units) in the Fund. The directors and employees of MPML and Macquarie Bank may receive remuneration based on the performance of MPML or the Fund, in whole or part. MPML may act in the same or similar capacity in relation to other managed investment schemes or forms of managed account, as well as other portfolios in the Fund - see Section 3.7. Members of the Macquarie Bank Group or their directors, employees or affiliates may buy and sell instruments or securities or other financial products which are related to the investments or underlying investments of the Fund. In addition, companies in the Macquarie Bank Group may have business relationships or alliances (including joint ventures) with Listed Entities or advise on transactions concerning such instruments, securities or other financial products. Such dealings may or may not affect the value of the investments in the Fund. MPML may enter into further agreements with Macquarie Bank and its subsidiaries provided that such agreements are on commercial terms. Further all dealings between Macquarie Bank and its subsidiaries and MPML must take place on an arm's length basis. We have delegated all marketing, legal and administration functions to other members of the Macquarie Bank Group of companies. These professional organisations may receive payments at prevailing market rates for these services. All services are provided on arm's length terms. 40

44 Anti-money laundering regulations MPML reserves the right to require any investor to provide appropriate detailed proof of identity as well as documented evidence of the source of proceeds being used for investment in the Fund. Such proof and evidence may be considered necessary by MPML to ensure that it fulfils its antimoney laundering obligations. Amendment to this PDS and the Constitution MPML reserves the right to change, subject to the law and the amendment powers in the Fund's Constitution, any of the terms and conditions of this PDS (including investment approach, fees and charges) and the Fund s Constitution. Investors who withdraw prior to the date on which such changes take effect will not be bound by the changes. Enquiries and complaints MPML has procedures for dispute resolution, and they are available to investors free of charge. Investors may make a complaint relating to the Fund directly to MPML in writing. MPML will always acknowledge any complaint promptly and provide a substantive response within no more than 45 days. If the outcome is unsatisfactory, investors may refer their complaint to the Banking and Financial Services Ombudsman at: Banking and Financial Services Ombudsman GPO Box 3 Melbourne VIC 3001 Toll free: Fax: (03) website: bfso.org.au Privacy statement By completing the Application Form included in or accompanying this PDS, you agree to MPML collecting and using personal information about you to process your application, and administer and manage the products and services we provide to you. This includes monitoring, auditing and evaluating those products and services, modelling data, data testing, communicating with and dealing with any complaints or enquiries. You need not give us any personal information requested in the Application Form or in any other document or communication relating to the products or services we supply you. However, if you do not provide us with this complete information, we may not be able to process your application or provide you with an appropriate level of service. You agree to allow us to provide access to your personal information to other companies in the Macquarie Bank Group as well as external service providers, which provide services in connection with our products and services, for example, mail houses and professional advisers. If an adviser's stamp appears on the Application Form (or you subsequently notify us of a new adviser), we will supply that adviser with information about your investments. We may also disclose your personal information: if, acting in good faith, we believe that the law requires or permits us to do so; if you consent; or to any person proposing to acquire an interest in our business. We and other companies in the Macquarie Bank Group may use your personal information to offer products or services that may be of interest to you unless you request us not to. Under the Privacy Act 1988, you may request access to your personal information that we hold. You can contact us to make such a request or for any other reason relating to the privacy of your personal information by telephoning the Macquarie Atlas Service Centre on or writing to the Macquarie Atlas Service Centre whose address is set out in the Directory. Macquarie's privacy statement and details on how you may access or update your personal information can be accessed at macquarie.com.au/au/privacy_policy.htm. Ethical Considerations Labour standards or social, environmental or ethical considerations are not taken into account when selecting, retaining or realising investments on behalf of the Fund. Consents Clayton Utz has given its consent to be named in this PDS as legal adviser and tax adviser to the Fund on Australian income tax in relation to subscriptions under this offer of Units in the form and context in which it is named. It has also given its consent to the inclusion of, and takes responsibility for, the taxation report in Section 5 and all references to that report in this PDS in the form and context in which they are included. Macquarie has given its consent to be named in this PDS in the form and context in which it is named and to the inclusion of each statement about Macquarie and its role in the form and context in which it is included. Bloomberg L.P. has given, and not withdrawn its written consent to being named in this PDS, but has not been involved in the preparation of this PDS, has not authorised or caused its issue, makes no representations as to its accuracy and, to the extent permitted by law, otherwise takes no responsibility for the PDS. 41

45 SECTION 9 About Macquarie Macquarie Bank Limited Macquarie Bank Limited ( Macquarie ) is an authorised deposit taking institution under s9 of the Banking Act 1959 (Commonwealth). As at 30 September 2005 Macquarie had total assets of A$84.2 billion and equity attributable to ordinary equity holders of Macquarie of A$3.7 billion on a consolidated basis. For the half year ended 30 September 2005 Macquarie reported profit from ordinary activities after income tax attributable to ordinary equity holders of A$482 million on a consolidated basis. Macquarie s Australian financial services licence number is Rating Agencies Macquarie is rated by Standard & Poor s, Moody s Investors Service and Fitch Ratings. Current ratings are available from various sources including Macquarie. The ratings agencies do not independently verify information provided to them by Macquarie, and therefore, the rating agencies make no representation or warranty with respect to the accuracy of their ratings. The rating agencies have not been involved in the preparation, or authorised the issue of, this PDS. Unitholders should note that credit ratings assigned by the rating agencies address only credit risk, which is only one element of any investment decision and should not be construed as relating to EMIs issued by Macquarie, which are discussed in this PDS. Ratings are not recommendations to buy, hold or sell any EMIs. By publishing a rating, the rating agencies are not inducing or advising investors to take any action with respect to EMIs or any other security. Ratings and rating reports should not be construed as investment advice, personalised or other. Accordingly, each investor should conduct their own evaluation of EMIs and consult with their investment adviser. Ratings are subject to change or withdrawal at anytime, and such change or withdrawal is within each rating agency s sole discretion. Disclosure Obligations Macquarie, as a company whose shares are quoted on the stock market of the ASX, is a disclosing entity under the Corporations Act and the ASX Listing Rules and has a continuous disclosure obligation. This means that, subject to certain exceptions, Macquarie must disclose to the ASX any information concerning it that a reasonable person would expect to have a material effect on the price or value of Macquarie s securities which are quoted by ASX. Copies of the information disclosed to the ASX can be viewed on the public file of Macquarie at the ASX. 42

46 SECTION 10 Glossary of Terms In this PDS, unless the context requires otherwise: Adjustment Event has the meaning set out in Section 1.8. Applicant means a person who completes an Application Form and lodges it with us. Application means an offer by the Unitholder to acquire Units in the Fund pursuant to this PDS. Application Amount means the amount specified by a Unitholder in an Application and received in immediately available funds by MPML. Application Form means the application form attached to or accompanying this PDS or the screens comprising the online application available at ASIC means Australian Securities and Investments Commission. ASX means the Australian Stock Exchange Limited (ABN ) or the stock market conducted by Australian Stock Exchange Limited, as the context requires. Atlas 3 Portfolio or Portfolio means the assets and liabilities of the Fund MPML determines is properly referable to Units from time to time. AUD and $A and $ means Australian Dollars. Business Day means a Trading Day on which commercial banks are open for general business in Sydney or Melbourne. Capital Protection Date means the date set out as such in At a Glance. Class means a class of units in the Fund. Closing Price means, in respect of a Security on a given day, the amount calculated according to the formula set out for Closing Price in Section 1.4. "Closing Time" means 5.00pm or such other time as Macquarie reasonably determines. Constitution means the Constitution for the Fund dated 1 September 2005, as amended or replaced from time to time. Corporations Act means the Corporations Act 2001 (Cth) as amended from time to time. Deliverable Parcel means a parcel of Deliverable Securities and cash to be delivered by Macquarie to MPML on the Capital Protection Date in respect of each outstanding EMI calculated and comprised in accordance with the formulas set out below. The number of Deliverable Securities of a single Listed Entity comprised in the Deliverable Parcel will be calculated as follows (then rounded down to the nearest whole number): Number of Deliverable Securities of a single Listed Entity = FV / (CP x 10) where: FV = the Final Value CP = the Deliverable Security Closing Price of the relevant Deliverable Security on the Capital Protection Date. The amount of cash comprised in the Deliverable Parcel = FV - S where: FV = the Final Value S = the sum of the Deliverable Security Closing Prices on the Capital Protection Date of each Deliverable Security comprised in the Deliverable Parcel. Deliverable Security means each of the ten largest stocks by market capitalisation contained in the S&P/ASX 200 as at the Closing Time on the Maturity Date (19 December 2013), unless Macquarie substitutes shares or units in any other ASX-listed stock in accordance with the Equity Markets Investments Agreement in which case the Deliverable Securities will mean those units or shares. Deliverable Security Closing Price means, in relation to a Deliverable Security on a given day, the last traded price for securities of the same class as the Deliverable Security at the close of normal trading hours on the ASX on that day, excluding special, late or overseas trades and option exercises. Delivery means either: (a) exercise of the EMI Sale Facility; or (b) the completion by MPML and Macquarie of the deferred purchase of the Deliverable Parcel in accordance with the terms of the EMIs. 43

47 Distribution means a payment to Unit holders by MPML. Distribution Rate means the rate calculated by dividing the relevant Distribution per Unit by $1.00. Early Delivery means the termination of EMIs before the Maturity Date as a consequence of an Extraordinary Event in accordance with the terms of the EMIs. Early Delivery Date means the date notified to MPML as the early delivery date in the Early Delivery Notice. Early Delivery Notice means the notice provided by Macquarie to MPML pursuant to the terms of the EMIs. EMI Sale Facility means the facility available to MPML, under the Equity Markets Investments Agreement. EMI or Equity Markets Investments or Equity Markets Investments Agreement means each of the agreements under which MPML agrees to purchase the Deliverable Parcel from Macquarie in respect of the Atlas 3 Portfolio on a deferred basis on the terms and conditions set out in those agreements as amended from time to time. Extraordinary Event has the meaning set out Section 1.9. Face Value in relation to an EMI means $1,000. Final Value means: (a) if there is Early Delivery the value of an EMI as determined by Macquarie on the Early Delivery Date in accordance with the terms of the EMIs (see Section 1.9); or (b) if there is no Early Delivery the value of an EMI as calculated on the Maturity Date in accordance with the following formula: FV = $1,000 x ( % x (Index End/Index Start -1)) where: FV = Final Value Index End = one-thirtieth (1/30) of the sum of the 30 daily closing levels of the Index on each Quarterly Averaging Date. Index Start = the average of the 5 daily closing levels of the Index on July 2006 (inclusive) providing that if the value of FV on the Maturity Date as calculated with the foregoing would be less than $1,000, Final Value shall be deemed to be $1,000. Fund means the Macquarie Atlas Series Trust, ARSN GST means goods and services tax. Headline Periodic Return Rate means the rate that relates to a particular Return Period, as determined from the following table: Return Period: Headline Periodic Return Rate: 1 not applicable 2 not applicable 3 3.5% 4 3.5% 5 4.0% 6 4.0% 7 4.5% 8 4.5% 9 5.0% % % % % % % Index means the S&P/ASX 200 Index or a replacement index (see Section 3.19). Indirect Investment Services has the meaning set out on the inside cover of this PDS. Initial Price means in relation to a Security: (a) the arithmetic average of the volume weighted average prices of the Security for the 5 Trading Days up to and including the Reference Basket Pricing Date; or (b) if Macquarie determines, in its absolution discretion, that the price under paragraph (a) cannot be determined, the arithmetic average of the volume weighted average prices over such number of Trading Days as determined by Macquarie, up to and including the Reference Basket Pricing Date; or (c) if Macquarie determines, in its absolute discretion, that neither paragraphs (a) or (b) shall apply, the price determined by Macquarie as the good faith estimate of the price that would have prevailed under paragraph (a), as adjusted in accordance with the terms of the EMIs. Investment Amount means, in relation to the Atlas 3 Portfolio on any date, the aggregate Face Value of EMIs comprising part of the Portfolio. Issue Price in relation to Units in the Fund means $1.00 per Unit. Knockout Event occurs in relation to a Security if, the Security has a Closing Price on three consecutive Trading Days which is less than the Knockout Price with the proviso that only one Knockout Event can occur with respect to a particular Security, and any subsequent instance of the Security having a Closing Price which is less than the Knockout Price is disregarded, and with the further proviso that the third consecutive Trading Day must occur on or after 1 July Knockout Price means the price of a Security calculated by the formula set out for Knockout Price in Section

48 Listed Entity means an entity listed on the ASX, the securities of which are either Securities or Deliverable Securities and entities the securities of which are quoted together as stapled securities are deemed to be a single Listed Entity. Macquarie, Macquarie Bank and MBL means Macquarie Bank Limited (ABN and AFSL ). Macquarie Atlas Series Trust means the Fund, Units in which are offered for subscription under this PDS. Maturity Date means 19 December MPML, us or we means Macquarie Portfolio Management Limited ABN AFSL Net Asset Value or NAV means, in relation to the Fund, the market value of the gross assets of the Fund less all present liabilities of the Fund, other than liabilities: (i) attached to application moneys or property for unissued Units; or (ii) to Unit holders arising from the right to redeem Unit or participate in the Fund s winding up; including any provisions which MPML decides should be taken into account in determining the liabilities of the Fund. When used in relation to the Atlas 3 Portfolio, these terms mean the Net Asset Value of the Fund that MPML determines is properly referable to Units. Net Asset Value per Unit or NAV per Unit means, at any time, the Net Asset Value of the Atlas 3 Portfolio divided by the number of Units then on issue. Offer means the offer by MPML to investors to apply for Units made under this PDS. Offer Close Date or Offer Closes in relation to Units in the Fund means the date set out as such in "At A Glance". Periodic Return means, in relation to MPML as holder of an EMI, in relation to each Return Period, an amount payable on the Periodic Return Payment Date equal to the amount calculated in accordance with the following formula: F x R Where: F = Face Value of the EMI R = Periodic Return Rate for the Return Period Periodic Return Determination Date means, in relation to a Return Period, the last Business Day of the Return Period. Periodic Return Payment Date means the date which is 10 Business Days after the Periodic Return Determination Date. Periodic Return Rate means, in respect of a Periodic Return Period, the rate calculated as follows: For Return Period 1, the rate is 3.1% For Return Period 2 the rate is 3.1% For subsequent Return Periods, the rate is calculated in accordance with the following formula: R x (7-K)/ % Where: R = Headline Periodic Return Rate applying to the relevant Return Period K = aggregate number of Knockout Events that have occurred from and including 1 July 2007 until the Periodic Return Determination Date, or 7, whichever is less. Product Disclosure Statement or PDS means this product disclosure statement issued by MPML in relation to the invitation to invest in Units dated 13 April 2006, as amended by such replacement or supplementary PDS issued by MPML from time to time. Purchase Price in respect of each EMI means $1,000. Quarterly Averaging Date means each of the following dates: 1 September 28, December 28, March 29, June 28, September 27, December 27, March 27, June 26, September 25, December 25, March 26, June 25, September 24, December 24, March 25, June 24, September 23, December 30, March 24, June 23, September 29, December 29, March 29, June 28, September 27, December 27, March 28, June 27, September 26, December 19,

49 Redemption Price in relation to a Unit means the price at which the Unit is redeemed. Reference Basket means all of the Securities listed in the table in Section 1.5 of this PDS as varied by Macquarie from time to time (see Section 1.8). Reference Basket Pricing Date means 18 August Relevant Fraction means, in relation to a Security: (a) where no Adjustment Event has occurred in relation to the Security, 1; or (b) where an Adjustment Event has occurred in relation to the Security, the fraction reasonably determined by Macquarie in accordance with the terms of the EMIs. Return Period means each of the periods described as such in Section 1.3. Security means any of the shares, units or other securities which comprise the Reference Basket (as adjusted or replaced in accordance with the terms of the EMIs). Securities quoted as stapled securities are deemed to be a single Security. Suspension means any temporary cessation of the trading or quotation of any Security including a trading halt on the ASX. Term means the period from 14 July 2006 to (and including) the Maturity Date. Trading Day means a day when the ASX is open for business in Sydney or Melbourne. Unit means a Series 3 (July 2006) unit in the Fund issued pursuant to this PDS. Unitholder means the person whose name is entered into the register for the Fund from time to time as the holder of a Unit. Unit Issue Date means the date set out as such in At A Glance. 46

50 SECTION 11 How to Apply 11.1 Who can invest in the Fund? You may only apply for Units if you are: an individual of 18 years or older; a company; an incorporated body; or a trustee or nominee of another entity, such as a family trust, superannuation fund or Indirect Investment Service operator. A trust is not permitted to apply for Units in the Fund. A trust conducts all of its legal activities through its trustee and it is the trustee who must apply. We may require you to provide other supporting documentation before processing your application. MPML may reject or accept an application for any reason in its sole discretion How to apply Online You may find it easier to apply for Units via our online Application Form. The online Application Form is available at Paper form A paper Application Form can be found at the back of this PDS (including the PDS available on the Atlas website: macquarie.com.au/atlas - if accessing this PDS from the website, please print the form from the website and complete it by hand); If you complete a paper Application form, send it, together with direct debit instructions, any applicable Macquarie investment loan application, or a cheque made payable to Macquarie Portfolio Management Limited Macquarie Atlas Series Trust Account. Completed forms should be sent to: Macquarie Atlas Service Centre GPO Box 3423 Sydney NSW Other instructions on paper form applications Addresses We have included a space for you to complete your address on the Application Form. You must specify your residential address (or registered office address, if you are company, trust partnership, or other nonindividual investor). If your mailing address is care of a third party such as your adviser, please be aware that all correspondence will be sent to this address. Who should sign the Application Form? The signatory section is in section 9 of the Application Form. Individual and joint accounts The individual(s) who appear in sections 1.2 and 1.3 of the Application Form should sign. Joint applicants will be deemed to be joint tenants. Company or corporate trustee applicants Company or corporate trustee applications must be signed under seal or by: two directors or a director and secretary on behalf of the company or corporate trustee by authority of the directors; or the sole director (if applicable), unless the company's or corporate trustee s constituent documents or trust deed specify otherwise. If this is the case, please attach a certified copy of the relevant constituent documents or trust deed. This requirement does not apply to sole directors. Incorporated associations must sign under seal and attach a certified copy of the association's certificate of incorporation. Power of attorney If you are applying under a power of attorney, please attach a certified copy of the power of attorney and specimen signature(s) of all attorneys. Financial advisers' stamps If a licensed financial adviser's stamp appears on the Application Form Macquarie may pay them an Adviser Placement Fee and other fees (see Section 4 "Fees and Other Costs"). We will also supply them with information about the account unless you instruct us not to do so. 47

51 If you are investing on behalf of others. Application instructions If you are your Application for example like not like this... investing as must be in the this (the numbers name of refer to those on the Application Form) A trust The trustee(s), rather than the name of the trust 1.2 Yvette Mary Jones and 1.3 Jack Michael Jones 1.4 Jones Family A/C Jones Family Trust A superannuation fund The trustee(s) of the superannuation fund 1.1 Yvette Jones Limited 1.4 Jones Super Fund A/C Jones Super Fund A partnership The partners (you must supply account operating instructions which indicate how partners are to sign) 1.2 Jack Michael Jones 1.3 James David Smith 1.4 Jones Smith Partnership A/C Jones Smith Partners A deceased estate The executors of the estate (you must supply a certified copy of the probate) 1.2 Yvette Mary Jones 1.4 Estate of the late Fred Brown A/C Estate of Fred Brown An unincorporated body A person on behalf of the unincorporated body 1.2 Jack Michael Jones 1.4 Rolling Hills under 12 Cricket Club A/C Rolling Hills under 12 Cricket Club A business The proprietor trading as the Business Name (you must supply a certified copy of the Certificate of Business Registration and a certified copy of the drivers licence) 1.2 Jack Michael Jones 1.4 Jones Corner Store A/C Jones Corner Store Checklist PART 1 PART 2 PART 3 PART 4 PART 5 PART 6 PART 7 PART 8 PART 9 Applicant Details - all applicants listed Application Amount Payment Method Bank Account Details Future Operating Instructions Application Source Adviser Details Privacy Consents, Declarations and Signatures Cross out and initial any changes made to the form. Do not use correction fluid to amend. Send your completed Application Form to: Macquarie Atlas Service Centre GPO Box 3423 Sydney NSW 2001 Telephone: use a black pen write in BLOCK LETTERS complete all relevant sections sign section 9 If you make an error while completing your Application Form, do not use correction fluid. Cross out your mistakes and initial your changes. 48

52 Macquarie Atlas Series Trust Application Form Atlas 3 Portfolio This Application Form is included in the Atlas 3 Product Disclosure Statement issued by Macquarie Portfolio Management Limited (ABN AFSL ) for the offer of Series 3 (July 2006) Units in the Macquarie Atlas Series Trust, dated 13 April 2006 ( PDS ). An Application for Units will only be considered where a valid Application Form has been completed and delivered as set out in the PDS. The PDS provides details of the offer to issue Series 3 (July 2006) Units in the Macquarie Atlas Series Trust. It is important that you have read the PDS and considered its content before lodging an Application Form. This Application Form must not be provided to any person unless at the same time access is given to the PDS. Unless otherwise defined in this Application Form, capitalised terms have the same meaning as defined in the PDS. APPLICATION FORMS MUST BE COMPLETED IN ACCORDANCE WITH THE INSTRUCTIONS ON PAGE 49 OF THE PDS. OFFICE USE ONLY Application number ATL3 For Australian residents only. Complete this form using BLACK INK and print well within the boxes in CAPITAL LETTERS. Mark answer boxes with a cross (X). Start at the left of each answer space and leave a one box gap between words. CROSS OUT AND INITIAL ANY CHANGES MADE TO THE FORM. DO NOT USE CORRECTION FLUID TO AMEND. Each Application Form has a unique reference number. If you are completing more than one application form, do not photocopy. IRN 1 APPLICANT DETAILS 1.1 COMPANY/CORPORATE TRUSTEE Name of company, corporate trustee, incorporated association, or incorporated body ABN / ACN / ARBN if applicable Tax File Number (if ABN not provided, OR reason for exemption) If applying in the name of the company Go to 1.5 Contact Details If applying as a corporate trustee Go to 1.4 Account Description. 1.2 INDIVIDUAL/NON CORPORATE TRUSTEE Mr Given name(s) Mrs Miss Ms Other Tax File Number / ARBN if applicable Tax File Numbers Collection of tax file numbers is authorised, and their use and disclosure are strictly regulated, by the tax laws and Privacy Act. Quotation is not compulsory, and declining to quote a tax file number is not an offence, but tax may be withheld at the maximum rate of 48.5% if you do not quote your tax file number or claim an exemption. Contact your nearest tax office for more information. 1.5 CONTACT DETAILS Name of Applicant to be contacted regarding Application If company, position in company Work phone number Home phone number Surname Mobile phone number Fax number Tax File Number OR reason for exemption Macquarie staff member address Date of birth D D M M Y Y Y Y If applying as an individual Go to 1.5 Contact Details If applying as a non-corporate trustee Go to 1.4 Account Description. 1.3 JOINT APPLICANT/TRUSTEE 2 Mr Given Name(s) Surname Mrs Miss Ms Other By providing an address on this Application Form, you agree to receive notices (including transaction confirmations) electronically, including by Macquarie Portfolio Management Limited posting a notice to an internet based standing facility. Please tick box if you wish to receive via confirmation of receipt of Application Half-Yearly and Annual Reports 1.6 ADDRESS DETAILS Residential Address (you must specify a residential address). Company, trust, partnership or other non-individual Applicants must specify their registered address. Tax File Number OR reason for exemption Macquarie staff member Street No. & Name Date of birth D D M M Y Y Y Y If applying in joint names make sure both 1.2 Individual/Non-corporate trustee and 1.3 Joint Applicants/Trustee 2 sections are completed. 1.4 ACCOUNT DESCRIPTION Name of trust, superannuation fund, partnership, deceased estate, unincorporated association or business. If trust or partnership specify account. < a / c > Mailing Address (if different to above. All correspondence will be sent to this address) Street No. & Name OR PO Box Postcode Postcode 49

53 2 APPLICATION AMOUNT $,, Note that the minimum investment is $10,000 and amounts thereafter must be in multiples of $1, PAYMENT METHOD Please indicate via which method you will be paying your investment amount; Investing via the Structured Product Investment Loan offered by Macquarie Cheque made out to Macquarie Atlas Series Trust Account <insert Applicant name here>. Third party cheques will not be accepted. Cheque must be in the same name as the investment. Direct debit from an account held with an Australian financial institution (complete section 4) NOTE: Direct debiting is not available on the full range of accounts. If in doubt, please refer to your financial institution. Third party bank accounts will not be accepted. Bank account must be in the same name as the investment. 4 BANK ACCOUNT DETAILS FOR DIRECT DEBIT OF APPLICATION AMOUNT AND FOR CREDIT OF DISTRIBUTIONS AND REDEMPTIONS Name of financial institution Branch Address I/We can modify or defer our direct debit instructions at any time by giving Macquarie Portfolio Management Limited 14 days notice in writing. If at any time I/we feel that a direct debit against my/our nominated account is inappropriate or wrong it is my/our responsibility to notify Macquarie Portfolio Management Limited as soon as possible. Direct debiting through the Bulk Electronic System ("BECS") in not available on all accounts. I/We can check my/our account details against a regular statement or check with the financial institution as to whether I/we can request a direct debit from my/our account. Macquarie Portfolio Management Limited will give me/us 14 days notice in writing if they intend to cancel my instructions. Macquarie Portfolio Management Limited may need to pass on details of my/our direct instructions to their sponsor bank in BECS to assist with the checking of any incorrect or wrongful debits to my/our nominated accounts. 5 FUTURE OPERATING INSTRUCTIONS Joint Applicants Please cross the appropriate box to indicate how you wish to issue future written instructions to us in relation to your investment such as change of address or redemption requests. If you do not cross any box we will assume that all Applicants must sign all written instructions. All joint Unitholders will be registered as joint tenants. Any to sign All to sign Company Applicants This form is to be executed under seal or by two directors or a director and secretary. If the officers signing this form are authorised to transact without common seal, please select from the following options. Please note that either one or both of the Applicants signing this form must sign all written instructions. If you do not complete this section, all future written instructions regarding your investment must be executed under common seal. Any one officer to sign All directors to sign Other (please specify): BSB Number Account Number Account name (if joint account, all names required) Common Seal 6 APPLICATION SOURCE I/We understand and acknowledge that in providing the direct debit and credit instructions to Macquarie Portfolio Management Limited ABN that: I/We authorise Macquarie Portfolio Management Limited to make a debit from or credit to my/our nominated account for transactions in relation to my Units in the Macquarie Atlas Series Trust including the payment of distributions and redemption proceeds. I/We understand that it is my/our responsibility to ensure that there are sufficient cleared funds in my/our nominated account to honour any direct debit instruction. I/We understand that the instruction will be automatically cancelled if the payment is dishonoured because of insufficient funds. Macquarie Portfolio Management Limited will charge the cost of dishonoured direct debits against my/our account. I/We acknowledge and agree that until the instructions are modified or deferred by me/us, Macquarie Portfolio Management Limited may act on the instructions to discharge its obligations under this PDS. My/our nominated financial institution may in its absolute discretion decide the order of priority of payment by it of any moneys pursuant to the request made pursuant to the direct debit instruction or any other authority or mandate. Please indicate how you first heard of the Macquarie Atlas Series Trust by crossing one box below. Brochure Print advertising Online advertising Other (please specify): Website Financial Adviser 50

54 7 ADVISER DETAILS (for adviser use only) Contact phone number Contact address Adviser/ Dealer group stamp 8 PRIVACY The Responsible Entity is required to collect certain personal information about you in order to process your Application, keep you up to date on the performance of your investment and to comply with certain laws and regulations. This information may also be used to communicate with you from time to time regarding its other products and services. The Corporations Regulations 2001 require the collection in this Application Form, of your name, date of birth and address. The Responsible Entity s policy in relation to your privacy is contained in Privacy Statement in the PDS ("Privacy Statement"). All investors should the Privacy Statement in order to understand how information provided RCTI agreement for commission payments This section concerns any investor referral services ( the Supplies ) provided by investors is used and how investors can ask for it. the Adviser (acting on behalf of the entity which holds the requisite Australian By signing this Application Form investors consent to the Responsibl Financial Services Licence for the Supplies (the Supplier )) to the Macquarie Entity disclosing their information as per the terms set out in the Priv Group company identified as the entity paying commissions to advisers for this Statement in the PDS. By supplying your Tax File Number(s) in this financial product ( the Recipient ). By completing the details below and/or Application Form you are authorising the disclosure of this informat affixing the relevant stamp to this application form, and in consideration of being the Responsible Entity where subscription monies are placed in inter bearing short term deposits. paid any remuneration in relation to this application, the Adviser (a) represents and warrants that it is duly authorised to enter into the agreement set out below on behalf of the Supplier; (b) declares that the Supplier holds an Australian Business Number and is registered for GST and will notify the Recipient if the Supplier ceases to be registered for GST; and (c) agrees, on behalf of the Supplier, that the Recipient will produce tax invoices (known as Recipient Created Tax Invoices or RCTIs ) for the Supplies and the Supplier will not issue tax invoices for those Supplies unless agreed otherwise with the Recipient in relation to a particular supply 9 CONSENTS, DECLARATIONS AND SIGNATURES I/we acknowledge and declare that I/we have read and understand the On acquiring Units in the Trust, I/we agree to be bound by the provision the PDS and the Constitution of the Trust. I/we further acknowledge and declare that: a) I/We am/are at least 18 years of age (if applying as an individual); b) all information provided as part of this Application is true and correc c) Macquarie Bank Limited: The Recipient acknowledges that it is registered for GST and that it will notify the Supplier if it ceases to be so registered or it ceases to satisfy any of the i. has not authorised or caused the issue of the PDS; requirements under A New Tax System (Goods and Services Tax) Act 1999 ii. takes no responsibility for any part of the PDS other than the Classes of Recipient Created Tax Invoice Determination No.1 (2000). reference to their name and a statement or report included in t PDS with their consent; and This section forms a separate binding agreement between the Supplier and the Recipient. iii. does not endorse or recommend investment under the PDS; d) I/we am/are not in the United States or a US Person and I/we am/are Name of Firm or Dealer Group holding the Australian Financial Services acting for the account or benefit of a US Person; I/we am/are not Licence or AFSL engaged in the business of distributing Units and will not offer, sell o resell in the United States or to any US Person (as defined under Regulation 5 under the United States Securities Act 1933, as amende a) any Units I/we acquire under or pursuant to the offer under the PDS or b) any Units I/we acquire other than under or pursuant Firm Australian Financial Services Licence (AFSL) number to the offer under the PDS until the end of 40 days after the date on which the Units are allocated under the PDS; e) I/we understand the risks associated with an investment in the ABN Trust as they are outlined in the PDS. I/we further acknowledge that Units redeemed prior to the Capital Protection Date will not gain acc to the benefits of the Capital Protection provided by Macquarie to th Responsible Entity for the benefit of the Trust and that Units held be Adviser Name (and Adviser Firm name if different from AFSL entity specified above) I give you permission for a member of the Macquarie Atlas service centre team to contact my client directly to confirm incomplete details on this Application Form. Yes No Xavax Pty Ltd AFSL PO Box A2202 Sydney South NSW the Capital Protection Date will not have the benefit of ongoing cap protection; f) I/we have read, understood and agree to be bound by the Privacy Statement contained in the PDS; g) I/we am/are not aware of any liquidation or bankruptcy proceeding that have been commenced or are intended to be commenced by a person against me/us or which are intended or anticipated by me/u h) by completing this Application Form, I/we am/are accepting an offe made by the Responsible Entity for the issue of Units and at the sam time applying to the Responsible Entity for the issue of those Units. I acknowledge that the Responsible Entity, at its sole discretion, reserv the right not to issue Units in accordance with any Application or to fewer Units than subscribed for; i) the Responsible Entity is required to comply with the anti-money laundering laws in force in a number of jurisdictions (including the Financial Transactions Reports Act 1988 (Cth) and I/we must provide the Responsible Entity with such additional information or documentation as the Responsible Entity may request of me/us from time to time to ensure its compliance with such requirements. Shou I/we fail to provide the Responsible Entity with any such information documentation as the Responsible Entity may request of me/us, my Application for Units may be refused, any Units I/we hold may be compulsorily redeemed, and any disposal request by me/us may be delayed or refused and the Responsible Entity will not be liable for any loss arising as a result thereof; ALL APPLICANTS MUST SIGN THE APPLICATION FORM IN THE SECTIONS PROVIDED ON THE FOLLOWING PAGE. IF THERE ARE MORE THAN TWO DIRECTORS/TRUSTEES PLEASE PHOTOCOPY THE FOLLOWING PAGE AND COMPLETE ACCORDINGLY. 51

55 j) I/we will not receive any interest on my/our Application Amount, k) I/We: (i) consent to the recording of all telephone conversations in connection with the PDS or with future dealings in relation to my/our investment in the Trust; (ii) agree to obtain any necessary consent of, and give notice of such recording to, my/our affected personnel; (iii) agree that recordings may be submitted in evidence in any proceedings relating to the PDS or my/our investment in the Trust; and (iv) agree that neither Macquarie nor any member of the Macquarie Group is obliged to maintain copies of such recordings and transcripts for the benefit of the other party. l) Investments in the Trust are not deposits with, or other liabilities of, Macquarie Bank Limited ABN or of any entity in the Macquarie Bank Group, and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. Neither Macquarie, the Responsible Entity nor any member company of the Macquarie Bank Group guarantees any particular rate of return on, or the performance of, the Trust, nor do they guarantee repayment of capital from the Trust. Further, I/we hereby authorise the Responsible Entity to complete any blanks and make any amendments or additions with respect to any part of this Application Form on my/our behalf. Authorisation of Applicant (Individual or Company Officer) SIGN HERE Name of Company Officer or Applicant 1.2 If a company officer, you must specify your corporate title Director Other Secretary Name of Company Officer or Applicant 1.3 DATE Authorisation of Joint Applicant (Individual or Company Officer) SIGN HERE DATE If a company officer, you must specify your corporate title Director Secretary Other 52

56 Corporate Directory Responsible Entity Macquarie Portfolio Management Limited ABN Australian Financial Services Licence No Registered Office No. 1 Martin Place Sydney NSW 2000 AUSTRALIA Phone: Tax Adviser to the Responsible Entity Clayton Utz 1 O Connell Street Sydney NSW 2000 AUSTRALIA Solicitors to the Offer Clayton Utz 1 O Connell Street Sydney NSW 2000

57 Directory For further information please contact: Macquarie Atlas Service Centre GPO Box 3423 Sydney NSW 2001 MACQUARIE ATLAS SERIES 3 atlas@macquarie.com.au macquarie.com.au/atlas OFD /06