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<SEC-DOCUMENT>0000913849-03-000526.txt : 20031031
<SEC-HEADER>0000913849-03-000526.hdr.sgml : 20031031
<ACCEPTANCE-DATETIME>20031031151921
ACCESSION NUMBER:		0000913849-03-000526
CONFORMED SUBMISSION TYPE:	N-2
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20031031

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TORTOISE ENERGY INFRASTRUCTURE CORP
		CENTRAL INDEX KEY:			0001268533
		STATE OF INCORPORATION:			MD

	FILING VALUES:
		FORM TYPE:		N-2
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-110143
		FILM NUMBER:		03969815

	MAIL ADDRESS:	
		STREET 1:		10801 MASTIN BLVD STE. 222
		CITY:			OVERLAND PARK
		STATE:			KS
		ZIP:			66210

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TORTOISE ENERGY INFRASTRUCTURE CORP
		CENTRAL INDEX KEY:			0001268533
		STATE OF INCORPORATION:			MD

	FILING VALUES:
		FORM TYPE:		N-2
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-21462
		FILM NUMBER:		03969816

	MAIL ADDRESS:	
		STREET 1:		10801 MASTIN BLVD STE. 222
		CITY:			OVERLAND PARK
		STATE:			KS
		ZIP:			66210
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-2
<SEQUENCE>1
<FILENAME>n2_102903.txt
<DESCRIPTION>FORM N-2
<TEXT>
      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION OCTOBER 31, 2003

                                                     1933 Act File No. 333-_____
                                                     1940 Act File No. 811-_____

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM N-2
|X|      REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
|_|      PRE-EFFECTIVE AMENDMENT NO. ___
|_|      POST-EFFECTIVE AMENDMENT NO. ___
                                       AND
|X|      REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
|_|      AMENDMENT NO. ___

                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                        10801 Mastin Boulevard, Suite 222
                           Overland Park, Kansas 66210
                                 (913) 981-1020
                                AGENT FOR SERVICE
                                David J. Schulte
                        10801 Mastin Boulevard, Suite 222
                           Overland Park, Kansas 66210
                          COPIES OF COMMUNICATIONS TO:

         John R. Short, Esq.                   Deborah Bielicke Eades, Esq.
Blackwell Sanders Peper Martin, LLP      Vedder, Price, Kaufman & Kammholz, P.C.
        720 Olive Street                        222 North LaSalle Street
    St. Louis, Missouri 63101                   Chicago, Illinois 60601

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after the
effective date of this Registration Statement

If any of the securities being registered on this form will be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act of
1933, other than securities offered in connection with a dividend reinvestment
plan, check the following box. |_|

It is proposed that this filing will become effective (check appropriate box):

|_|  when declared effective pursuant to section 8(c).

<TABLE>
<CAPTION>
        CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
======================================================================================================================
                                                 PROPOSED MAXIMUM       PROPOSED MAXIMUM
  TITLE OF SECURITIES         AMOUNT BEING        OFFERING PRICE            AGGREGATE                 AMOUNT OF
    BEING REGISTERED         REGISTERED (1)         PER UNIT (1)         OFFERING PRICE (1)      REGISTRATION FEE (2)
- ------------------------- --------------------- ---------------------- ---------------------- ------------------------
<S>                       <C>                   <C>                    <C>                    <C>
      Common Stock              100,000                $25.00               $2,500,000                $316.75
======================================================================================================================
<FN>
(1)     Estimated solely for the purpose of calculating the registration fee.
(2)     Transmitted to the Securities and Exchange Commission's account at
        Mellon Bank, Pittsburgh, Pennsylvania via wire transfer (Fed. Reference
        #1016).
</FN>
</TABLE>

THE REGISTRANT CURRENTLY INTENDS TO AMEND THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATES AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

<PAGE>

The information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.

                              SUBJECT TO COMPLETION
                PRELIMINARY PROSPECTUS DATED __________ __, 2003

                                 _______ SHARES

                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION
                                  COMMON SHARES
                                $25.00 PER SHARE

         Tortoise Energy Infrastructure Corporation (the "Company") is a newly
organized, nondiversified, closed-end management investment company. The Company
is designed to provide a tax efficient means for investing in a portfolio of
publicly traded master limited partnerships in the energy infrastructure sector
("MLPs"). An investment in the Company involves special considerations not
normally associated with investment companies. The Company's investment
objective is to seek a high level of total return with an emphasis on income.
There is no assurance that the Company will achieve its objective.

         Under normal circumstances, the Company will invest at least 90% of its
total assets in income-producing securities of energy infrastructure companies,
including at least 70% of total assets in income-producing equity securities of
MLPs. Energy infrastructure companies engage in the business of transporting,
processing, storing, distributing or marketing natural gas, natural gas liquids
(primarily propane), coal, crude oil or refined petroleum products, or
exploring, developing, managing or producing such commodities and include
companies that provide services or products to the foregoing businesses. The
Company may also invest in debt securities of MLPs and other energy
infrastructure companies, including securities rated below investment grade
(commonly referred to as "junk bonds").

         The Company expects to list its Common Shares on the New York Stock
Exchange under the trading or "ticker" symbol "______".

         Unlike most other investment companies, the Company will not be treated
as a regulated investment company under the Internal Revenue Code. Therefore,
the Company will be subject to federal and applicable state corporate income
taxes. The Company expects that a substantial portion of its distributions to
shareholders will constitute a return of capital.

                                               (continued on the following page)

         THE COMPANY'S STRATEGY OF CONCENTRATING ITS INVESTMENTS IN THE ENERGY
INFRASTRUCTURE INDUSTRY, ITS ABILITY TO INVEST UP TO 30% OF TOTAL ASSETS IN
RESTRICTED SECURITIES AND UP TO 25% OF TOTAL ASSETS IN SECURITIES RATED BELOW
INVESTMENT GRADE, AND ITS EXPECTED USE OF LEVERAGE INVOLVE A HIGH DEGREE OF
RISK. SEE "RISKS" BEGINNING ON PAGE [___] OF THIS PROSPECTUS.

         NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                                        PER SHARE          TOTAL(1)
                                    -----------------  ----------------
Public offering price...............      $25.000         $[________]
Sales load..........................       $1.125         $[________]
Proceeds, before expenses, to the
   Company(2).......................      $23.875         $[________]

- ------------------
(1)     The underwriters named in this Prospectus have the option to purchase up
        to [_______] additional Common Shares at the public offering price, less
        the sales load, within 45 days from the date of this Prospectus to cover
        over-allotments.
(2)     The aggregate expenses of the offering are estimated to be $[_______],
        which represents $0.[___] per common share issued.

 The Common Shares will be ready for delivery on or about __________, ___ 2003.

                           STIFEL, NICOLAUS & COMPANY
                                  INCORPORATED

         The date of this Prospectus is __________, ___ 2003

<PAGE>

         Because the Company is newly organized, its shares have no history of
public trading. Shares of closed-end management investment companies frequently
trade at prices lower than their net asset value. The risk of loss due to this
discount may be greater for initial investors expecting to sell their shares in
a relatively short period after completion of the initial public offering.

         Tortoise Capital Advisors, LLC (the "Adviser") will serve as the
investment adviser to the Company. The Adviser was formed in 2002 and has
limited independent resources. The Adviser has three full-time employees and
four non-employee members of its investment committee. Accordingly, the Adviser
has relied to a significant degree on the officers, employees, and resources of
certain affiliated entities. All four outside members of the investment
committee of the Adviser have significant other responsibilities with such
affiliated entities. The Adviser's affiliates conduct businesses and activities
of their own in which the Adviser has no economic interest. If these separate
activities are significantly greater than the Adviser's activities, there could
be material competition for the efforts of key personnel. The Adviser has not
previously acted as an investment adviser to a registered investment company and
its affiliates have limited experience managing the assets of registered
investment companies.

         The Company may borrow money, issue preferred shares, or issue other
debt securities to the extent permitted by the Investment Company Act of 1940,
as amended, (the "1940 Act"). These practices are known as leverage. The Company
may engage in leverage in an amount up to 33 1/3% of total assets (including the
amount obtained through leverage). The Company generally will not use leverage
if it anticipates that a leveraged capital structure would result in a lower
return to shareholders than the Company could obtain over time without leverage.
Leverage creates an opportunity for increased income and capital appreciation
for common shareholders, but at the same time it creates special risks. Because
the Adviser's fee is based on total assets (including assets obtained through
leverage), the Adviser's fee will be higher if the Company is leveraged. There
can be no assurance that a leveraged strategy will be successful during any
period in which it is used. See "Leverage" and "Risks--Leverage Risks."

         The prospectus sets forth concisely the information about the Company
that a prospective investor should know before investing. You should read this
Prospectus, which contains important information about the Company, before
deciding whether to invest in the Company's Common Shares, and retain it for
future reference. A Statement of Additional Information, dated [___________
___], 2003, containing additional information about the Company, has been filed
with the Securities and Exchange Commission and is incorporated by reference in
its entirety into this Prospectus. You may request a free copy of the Statement
of Additional Information, the table of contents of which is on page [___] of
this Prospectus, by calling 1-800-[_____] or by writing to the Company at 10801
Mastin Boulevard, Suite 222, Overland Park, Kansas 66210. You can review and
copy documents the Company has filed at the Securities and Exchange Commission's
Public Reference Room in Washington, D.C. Call 1-202-942-8090 for information.
The Securities and Exchange Commission charges a fee for copies. You can get the
same information free from the Securities and Exchange Commission's website
(http://www.sec.gov). You may also e-mail requests for these documents to
publicinfo@sec.gov or make a request in writing to the Securities and Exchange
Commission's Public Reference Section, Washington, D.C. 20549-0102.

         The Company's Common Shares do not represent a deposit or obligation
of, and are not guaranteed or endorsed by, any bank or other insured depository
institution and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other government agency.

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                            <C>
Prospectus Summary...............................................................................................1

Summary of Company Expenses......................................................................................8

Use of Proceeds..................................................................................................9

The Company......................................................................................................9

Leverage .......................................................................................................13

Risks    .......................................................................................................15

Management of the Company.......................................................................................20

Dividends.......................................................................................................22

Closed-End Company Structure....................................................................................24

Tax Matters.....................................................................................................24

Net Asset Value.................................................................................................26

Description of Common Shares....................................................................................26

Certain Anti-Takeover Provisions in the Company's Articles of Incorporation and ByLaws..........................27

Underwriting....................................................................................................28

Direct Placements...............................................................................................30

Administrator, Custodian, Transfer Agent and Dividend Disbursement Agent........................................30

Legal Matters...................................................................................................30

Table of Contents of the Statement of Additional Information....................................................31
</TABLE>

         YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. THE COMPANY HAS NOT, AND THE UNDERWRITERS HAVE
NOT, AUTHORIZED ANY OTHER PERSON TO PROVIDE YOU WITH DIFFERENT INFORMATION. IF
ANYONE PROVIDES YOU WITH DIFFERENT OR INCONSISTENT INFORMATION, YOU SHOULD NOT
RELY ON IT. THE COMPANY IS NOT, AND THE UNDERWRITERS ARE NOT, MAKING AN OFFER TO
SELL THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT
PERMITTED. YOU SHOULD ASSUME THAT THE INFORMATION APPEARING IN THIS PROSPECTUS
IS ACCURATE ONLY AS OF THE DATE OF THIS PROSPECTUS. THE COMPANY'S BUSINESS,
FINANCIAL CONDITION AND PROSPECTS MAY HAVE CHANGED SINCE THAT DATE.

         Until [___________ ___], 2004 (25 days after the date of this
prospectus) all dealers that buy, sell or trade the Common Shares, whether or
not participating in this offering, may be required to deliver a prospectus.
This is in addition to the dealer's obligation to deliver a prospectus when
acting as an underwriter and with respect to their unsold allotments or
subscriptions.

<PAGE>

                               PROSPECTUS SUMMARY

         This is only a summary. This summary may not contain all of the
information that you should consider before investing in the Company's shares of
common stock ("Common Shares"). You should review the more detailed information
contained in this prospectus and in the statement of additional information,
especially the information set forth under the heading "Risks" on page ___ of
this prospectus.


THE COMPANY

         Tortoise Energy Infrastructure Corporation (the "Company") is a newly
organized, non diversified, closed-end management investment company. Tortoise
Capital Advisors, L.L.C. (the "Adviser") will serve as the Company's investment
adviser. The Adviser was formed by Fountain Capital Management, L.L.C.
("Fountain Capital") and Kansas City Equity Partners, L.C. ("KCEP") in November
2002 to provide portfolio management services exclusively with respect to energy
infrastructure investments.

THE OFFERING

         The Company is offering _________ Common Shares at an initial offering
price of $25.00 per share through a group of underwriters (the "Underwriters")
led by Stifel, Nicolaus & Company, Incorporated ("Stifel, Nicolaus & Co."). An
investor must purchase at least 100 Common Shares ($2,500) in order to
participate in this offering. The Company has given the Underwriters an option
to purchase up to _________ additional Common Shares at the public offering
price, less the sales load, within 45 days from the date of this prospectus to
cover over-allotments. See "Underwriting."

INVESTMENT OBJECTIVE

         The Company's investment objective is to seek a high level of total
return with an emphasis on income. There is no assurance the Company will
achieve its objective.

TAX STATUS OF COMPANY

         The Company is a taxable "C" corporation. Unlike most investment
companies, the Company will not be treated as a regulated investment company
under the U.S. Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code"). Therefore, the Company will be subject to federal and applicable state
corporate income taxes. The Company will invest a substantial portion of its
assets in publicly traded master limited partnerships in the energy
infrastructure sector ("MLPs"). Although the MLPs will generate taxable income
to the Company, the Company expects that the MLPs may pay cash distributions in
excess of the taxable income reportable by the Company. To the extent the
Company's distributions to shareholders are from current or accumulated earnings
and profits, the Company's distributions will constitute "qualified dividends"
for federal income tax purposes and thus will be eligible for the favorable
capital gains tax rates under The Jobs Growth and Tax Relief Act of 2003. See
"Tax Matters."

SHAREHOLDER TAX FEATURES

         Unlike a direct investment in MLPs, shareholders will receive a Form
1099 (rather than a Form K-1) from the Company and will recognize dividend
income only to the extent of the Company's current or accumulated earnings and
profits. Based upon the historic performance of MLPs, the Company expects that a
substantial portion of dividends it pays to its shareholders will exceed its
current or accumulated earnings and profits and will constitute a return of
capital to shareholders to the extent of the shareholder's basis in the Common
Shares, and capital gain to the extent of the excess distribution. There is no
assurance that such performance will continue. If the Company's allocable share
of the MLPs taxable income constitutes a greater portion of the MLPs'
distributions, a greater portion of the Company's distributions will be treated
as a taxable dividend.

         Upon the sale of Common Shares, a shareholder generally will recognize
capital gain or loss measured by the difference between the sales proceeds
received and the shareholder's federal income tax basis of Common Shares sold.
Generally such capital gain or loss will be long-term capital gain or loss if
Common Shares were held as a capital asset for more than twelve months.

                                       1

<PAGE>

         For individual shareholders, a shareholder's basis in Common Shares
will be stepped up upon death. For tax-exempt investors, dividends paid by the
Company generally will not constitute unrelated business taxable income
("UBTI"). Accordingly, pension plans, 401(k) plans and other tax exempt
investors generally will not be subject to federal income taxes for UBTI as a
result of their ownership of Common Shares. See "Tax Matters."

INVESTMENT POLICIES

         The Company is designed to provide a tax efficient means for investing
in a portfolio of MLPs. As of the date of this prospectus, the Company believes
that it will be the only publicly traded investment vehicle offering access to
energy infrastructure MLPs. "The Company further believes that an investor who
directly invests in these MLPs is not able to obtain the portfolio and tax
features available through an investment in the Company."

         Under normal circumstances, the Company will invest at least 90% of its
total assets in securities of energy infrastructure companies, including at
least 70% of total assets of income-producing equity securities of MLPs. Equity
securities currently consist of common units, convertible subordinated units and
pay-in-kind units of MLPs, and may be publicly traded or privately placed.
Energy infrastructure companies engage in the business of transporting,
processing, storing, distributing or marketing natural gas, natural gas liquids
(primarily propane), coal, crude oil or refined petroleum products, or
exploring, developing, managing or producing such commodities and include
companies that provide services or products to the foregoing businesses. The
Company intends to invest in energy infrastructure companies principally through
common units, convertible subordinated units and debt securities of MLPs. MLPs
are partnerships whose common units trade on a national securities exchange or
in the over-the-counter market. Convertible subordinated units are generally
initially issued to sponsors and other related persons upon formation of the
MLP, and they convert to common units upon the passage of time and/or the
satisfaction of certain financial tests. The Company will invest solely in
energy infrastructure companies organized in the United States. All MLPs in
which the Company will invest will have a common unit market capitalization
greater than $100 million.

         The Company has adopted the following nonfundamental policies:

         o        Under normal circumstances, the Company will invest at least
                  70% and up to 100% of total assets in income-producing equity
                  units issued by MLPs.

         o        The Company may invest up to 30% of total assets in direct
                  placements of restricted securities. The types of direct
                  placements that the Company may purchase include MLP
                  convertible subordinated units, MLP common units and
                  securities of private companies (i.e., non-MLPs). Investments
                  in private companies that do not have any publicly traded
                  shares or units are limited to 5% of total assets.

         o        The Company may invest up to 25% of total assets of debt
                  securities of energy infrastructure companies, including
                  corporate debt securities and debt securities of MLPs. The
                  Company may invest in debt securities rated below investment
                  grade ("junk bonds"). Below investment grade debt securities
                  will be rated at least B3 by Moody's Investors Service, Inc.
                  ("Moody's") and at least B- by Standard & Poor's Ratings Group
                  ("S&P") at the time of purchase, or comparably rated by
                  another statistical rating organization or if unrated,
                  determined to be of comparable quality by the Adviser.

         o        The Company will not invest more than 10% of total assets in
                  any single issuer.

         o        The Company will not engage in short sales.

         Unless otherwise stated, all investment restrictions apply at the time
of purchase and the Company will not be required to reduce a position due solely
to market value fluctuations.

USE OF LEVERAGE BY THE COMPANY

         The Company may borrow money, issue preferred shares, or issue other
debt securities to the extent permitted by the 1940 Act. These practices are
known as leverage. The Company may engage in leverage in an amount up to 33 1/3%
of total assets (including the amount obtained through leverage). Subject to
market conditions, the Company generally intends to be leveraged to the extent
permitted by law.  The Company may not be leveraged

                                       2

<PAGE>

at all times and the amount of leverage, if any, may vary depending on a variety
of factors, including the costs that the Company would incur as a result of
leverage. The Company currently intends to engage in leverage primarily through
borrowings from banks and other financial institutions, and through reverse
repurchase agreements.

         The Company may, but is not required to, hedge general interest rate
exposure arising from its leverage transactions. Under current market
conditions, hedging would be accomplished principally by entering into interest
rate swap or cap transactions. The use of interest rate swaps and caps is a
highly specialized activity that involves investment techniques and risks
different from those associated with ordinary portfolio security transactions.

         Because the Adviser's fee is based upon a percentage of the Company's
Managed Assets (as defined below), the Adviser's fee will be higher if the
Company is leveraged. Therefore, the Adviser will have a financial incentive to
leverage the Company, which may create a conflict of interest between the
Adviser and the holders of the Common Shares. Subject to oversight of the Board
of Directors, the Adviser intends to leverage only when it believes that the
potential return on such additional investments is likely to exceed the costs
incurred in connection with the leverage. There can be no assurance that a
leveraging strategy will be used or that it will be successful during any period
in which it is used. The use of leverage involves risks, which can be
significant. See "Leverage" and "Risks--Leverage Risk."

INVESTMENT ADVISER

         The Adviser was formed in 2002 to provide portfolio management services
to high net worth investors seeking professional management of their MLP
investments. The Adviser has $50 million of fully converted market value of
client assets under management and in private equity investment vehicles.
Affiliates of the Adviser have an additional $225 million of energy
infrastructure investment assets under management. The Adviser's investment
committee is comprised of five seasoned portfolio managers led by David J.
Schulte, CFA, CPA. As an investment banker with a broker-dealer and as a
Managing Director of KCEP, Mr. Schulte has fourteen years of experience in
providing growth companies with acquisition and capital market financings, and
while at KCEP and the Adviser he has overseen the investment in privately placed
common units and convertible subordinated units which, if valued on an
unrestricted and/or fully converted basis, would have an approximate value of
$90 million.

         The Adviser is owned equally by Fountain Capital and KCEP. The
principal business address of the Adviser is 10801 Mastin Boulevard, Suite 222,
Overland Park, Kansas 66210.

         Fountain Capital was formed in 1990 and is focused primarily on
providing investment advisory services to institutional investors with respect
to below investment grade debt. Atlantic Asset Management LLC ("Atlantic") is a
minority owner, and an affiliate, of Fountain Capital. Fountain Capital had $2.4
billion of client assets under management as of September 30, 2003.

         KCEP was formed in 1993 and is focused solely on managing two private
equity funds, which have combined committed capital of $110 million. KCEP
focuses on private equity investments in the Consumer, Telecom/Media and Natural
Resource Distribution and Services industries.

         Atlantic was formed in 1992 and provides, directly or through
affiliates, a variety of fixed-income investment advisory services including
investment grade bond and high-yield bond strategies, investment grade CDOs and
mortgage hedge funds. Including Fountain Capital, the Atlantic group had
approximately $8.5 billion in assets under management as of September 30, 2003.

         The Adviser will be responsible for the investment of the Company's
portfolio in accordance with the Company's investment objective and policies.
The Adviser will make all investment decisions for the Company, subject to
oversight by the Company's Board of Directors. Day-to-day management of the
Company's portfolio will be the responsibility of a team of investment analysts
and portfolio managers led by David J. Schulte. Each outside member of the
Adviser's investment committee also has significant responsibilities with KCEP,
Fountain Capital and their affiliates. The Company will pay the Adviser a fee
for its investment management services equal to an annual rate of 0.95% of the
Company's average monthly total assets (including any assets attributable to any
leverage) minus the sum of accrued liabilities, other than deferred taxes or
debt entered into for purposes of leverage ("Managed Assets"). This fee is
calculated monthly and paid quarterly.

                                       3

<PAGE>

DIVIDENDS

         Distributable Cash Flow ("DCF") is the amount received by the Company
as cash or paid-in-kind distributions from MLPs and interest payments on debt
securities, less current or anticipated operating expenses, taxes on Company
taxable income, and leverage costs paid by the Company. The Company intends to
pay out substantially all of its DCF to holders of Common Shares through
quarterly dividends. The Board of Directors has established a target for
dividend payments to holders of Common Shares in an amount of at least 95% of
DCF on an annual basis. The Company expects to complete the purchase of direct
placements of MLP securities as soon as practicable after the closing of the
offering with a portion of the proceeds of the offering, and expects to invest
the balance in securities of energy infrastructure companies consistent with the
investment policies described above within three to six months after the
closing. The Company expects that it will declare and pay a dividend no later
than May 31, 2004. Subsequent dividends will be paid each fiscal quarter. The
Company intends to have a fiscal year ending November 30.

         Unless a shareholder elects to receive dividends in cash, the dividends
will be used to purchase additional Common Shares of the Company. See
"Distributions--Dividend Reinvestment Plan."

LISTING

         The Company expects to list its Common Shares on the New York Stock
Exchange ("NYSE") under the trading or "ticker" symbol "___."

ADMINISTRATOR, CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSEMENT AGENT

         The Company will engage _____________ to serve as the Company's
administrator, transfer agent, dividend disbursement agent, and agent for the
dividend reinvestment plan. _________ will serve as the Company's Custodian. See
"Administrator, Custodian, Transfer Agent and Dividend Disbursement Agent."

MARKET PRICE OF COMMON SHARES

         Common shares of closed-end management investment companies frequently
trade at prices lower than their net asset value. This characteristic is
separate and distinct from the risk that the Company's net asset value could
decrease as a result of investment activities. Because of its investment
policies and its tax features, the Adviser believes that the Company's net asset
value and market value could be less correlated than conventional closed-end
funds. Accordingly, there is no assurance that the Board of Directors will
engage in open-market purchases, tender offers, or other activities designed to
reduce any discount, and it does not currently intend to do so. The Company
cannot assure shareholders that its Common Shares will trade at a price higher
than or equal to net asset value. The Company's net asset value will be reduced
immediately following this offering by the sales load and the amount of the
organization and offering expenses paid by the Company. In addition to net asset
value, the market price of Common Shares may be affected by factors such as the
performance of MLPs, expected distribution levels of MLPs, the tax character of
MLP distributions, leverage, as well as interest rate movement and other market
factors. Shareholders should not purchase Common Shares if they intend to sell
them shortly after purchase. See "Closed-End Company Structure."

RISKS

         No Operating History. The Company is a newly organized closed-end
management investment company and has no operating history or history of public
trading of it Common Shares.

         Management Risk. The Adviser was formed in 2002 and has limited
independent resources. Including Mr. Schulte, the Adviser has three full-time
employees and four non-employee members of its investment committee.
Accordingly, the Adviser has relied to a significant degree on the officers,
employees, and resources of Fountain Capital, KCEP and their affiliates. All
four outside members of the investment committee of the Adviser have other
significant responsibilities with such affiliated entities. Fountain Capital,
KCEP and their affiliates conduct businesses and activities of their own in
which the Adviser has no economic interest. If these separate activities are
significantly greater than the Adviser's activities, there could be material
competition for the efforts of

                                       4

<PAGE>

key personnel. The Adviser has not previously acted as an investment adviser to
a registered investment company and its affiliates have limited experience
managing the assets of registered investment companies.

         Energy Infrastructure Market. The Company concentrates its investments
in the energy infrastructure sector, with an emphasis on securities issued by
MLPs. The prices of energy infrastructure MLPs may fluctuate with changes in
their underlying operating companies, commodity price levels, changes in
interest rates, changes in inflation and with general movements in the economy.
The Company will be subject to the risks affecting energy infrastructure
companies, including deterioration in business fundamentals reducing
profitability and distributions to unitholders; unexpectedly prolonged or
precipitous changes in commodity prices; increased regulatory risk requirements
that increase costs and/or reduce revenue tariff rates; increased competition
that takes market share and reduces profitability; the general level of economic
activity; and demographic growth and trends. The Adviser believes that high
quality MLPs are able to mitigate or manage direct margin exposure to commodity
price levels.

         MLP Common Units. Although common units issued by MLPs have
historically generated higher average total returns than fixed-income and other
equity securities, common units also have experienced more volatility than
fixed-income securities and less volatility than other equity securities. An
adverse event, such as an unfavorable earnings report, may depress the value of
a particular common unit held by the Company. Also, the price of common units is
sensitive to general movements in the stock market. A drop in the stock market
may depress the price of common units held by the Company or to which it has
exposure. In the event of liquidation, common shareholders have rights to a
company's assets after obligations to bondholders, other debt holders, and
preferred shareholders have been satisfied.

         MLP Convertible Subordinated Units. MLP convertible subordinated units
generally offer greater dividend yields than common units of MLPs. However,
convertible subordinated units generally are not entitled to distributions until
holders of common units have received specified minimum distributions, plus any
arrearages, and may receive less in distribution upon liquidation. In addition,
subordinated units generally are not entitled to arrearage rights during certain
periods when specified minimum distributions are not paid with respect to the
common units of the MLP.

         MLP Pay-In-Kind Units. Pay-in-kind or I-Units are equity securities
issued by MLPs or their affiliates, which provide that the issuer will pay
distributions on such units in the form of additional units. Such investments
benefit the issuer by mitigating its need for cash to meet distribution
obligations, but also require a higher rate of return to attract investors who
are willing to defer receipt of such cash.

         Tax Risk. The ability of the Company to meet its investment objective
depends on the level of taxable income and distributions of the MLPs in which it
invests. The Company has no control over the taxable income of underlying MLPs.
Future changes in tax laws or regulations, or related interpretations of such
laws and regulations, could adversely affect the Company or MLPs, which could
negatively impact the Company's shareholders and dividends they receive from the
Company.

         Portfolio Turnover Risk. The Company's annual portfolio turnover rate
may vary greatly from year to year. Although the Company cannot accurately
predict its annual portfolio turnover rate, it is not expected to exceed 30%
under normal circumstances. However, portfolio turnover rate is not considered a
limiting factor in the execution of investment decisions for the Company. High
portfolio turnover may result in the Company's realization of gains that will be
taxable as ordinary income to the Company. In addition, high portfolio turnover
may increase the Company's current and accumulated earnings and profits,
resulting in a greater portion of the Company's distributions being treated as a
dividend to the Company's shareholders. See "The Company--Portfolio Turnover"
and "Tax Matters."

         Liquidity Risk. Although the Company invests primarily in listed
securities, it may invest up to 30% of total assets in direct placements, which
are subject to legal or other restrictions on transfer. Direct placements will
consist primarily of MLP convertible subordinated units and MLP common units. In
addition, publicly traded securities of MLPs may be less liquid than many other
types of securities such as government securities or conventional common stock.
At a particular time, securities of certain MLPs may not be actively traded on a
secondary market, even though they may be listed on a securities exchange. The
sale price of securities that are restricted or otherwise not readily marketable
may be lower or higher than the Company's most recent fair valuation. See "The
Company - Investment Policies/Restricted and Illiquid Securities."

                                       5

<PAGE>

         Valuation Risk. Market prices generally will not be available for
direct placements of MLP convertible subordinated units, MLP common units or
non-MLP securities, and the value of such investments will ordinarily be
determined based on fair valuations determined by the Adviser pursuant to
procedures adopted by the Board of Directors. Restrictions on resale or the
absence of a liquid secondary market may adversely affect the ability of the
Company to determine its net asset value. In addition, the Company will rely on
information provided by MLPs to estimate taxable income allocable to MLP units
held by the Company and to estimate associated deferred tax liability. The fair
value procedures adopted by the Board of Directors include provisions for
reviewing such estimates. See "Tax Matters" and "Net Asset Value."

         Nondiversification. The Company is a nondiversified company under the
1940 Act and will not be treated as a regulated investment company under the
Internal Revenue Code. Accordingly, there are no regulatory limits under the
1940 Act or the Code on the number or size of securities held by the Company.
There currently are only fifty-five (55) companies presently organized as MLPs
and only a limited amount of those companies operate energy infrastructure
assets. The Company intends to select MLP investments from this small pool of
issuers. The Company may invest in non-MLP securities to a lesser degree,
consistent with its investment objective and policies.

         Leverage Risk. Leverage creates an opportunity for an increased return
to common shareholders, but it is a speculative technique because it increases
the Company's exposure to capital risk. Unless the income and capital
appreciation, if any, on securities acquired with borrowed funds or other
leverage proceeds exceed the costs of the leverage, the use of leverage will
diminish the Company's investment performance. When leverage is used, the net
asset value and market value of Common Shares will be more volatile. There is no
assurance that the use of leverage will be successful during any period in which
it is used.

         Common shareholders will bear the costs of any borrowing. Such costs
include interest payments on any borrowings and other fees in connection with
borrowing (such as loan syndication fees or commitment and administrative fees
in connection with a line of credit). The issuance of debt securities by the
Company would involve offering expenses and other costs, including interest
payments, which would be borne by the common shareholders. Fluctuations in
interest rates on borrowings and short-term debt could reduce cash available for
dividends on Common Shares. In addition, borrowings pursuant to credit
agreements may result in the Company being subject to certain covenants, such as
those relating to asset coverage and portfolio composition, that may affect the
Company's ability to pay dividends and other distributions on Common Shares in
certain instances. The Company may also be required to pledge its assets to the
lenders in connection with certain types of borrowing.

         Investment techniques that the Company may employ for hedging purposes
will expose the Company to certain risks. There are economic costs of hedging
reflected in the price of interest rate swaps, caps and similar techniques, the
costs of which can be significant. In addition, the Company's success in using
hedging instruments is subject to the Adviser's ability to predict correctly
changes in the relationships of such hedging instruments to the Company's
leverage risk, and there can be no assurance that the Adviser's judgment in this
respect will be accurate.

         Depending on the state of interest rates in general, the Company's use
of interest rate swaps or caps could enhance or decrease the net income of the
Common Shares. To the extent there is a decline in interest rates, the value of
interest rate swaps or caps could decline, and could result in a decline in the
net asset value of the Common Shares. In addition, if the counterparty to an
interest rate swap or cap defaults, the Company would not be able to use the
anticipated net receipts under the interest rate swap or cap to offset the
Company's cost of financial leverage. See "Risks-Leverage Risks."

         Investment Risk. An investment in the Company is subject to investment
risk, including the risk of loss of the entire amount that a shareholder
invests. At any point in time the Company's shares may be worth less than the
amount originally paid for them, even after taking into account the reinvestment
of dividends and other distributions. An investment in the Company's Common
Shares represents an indirect investment in the securities owned by the Company.
The value of these securities, like other market investments, may move up or
down, sometimes rapidly and unpredictably.

         Stock Market Risk. Because the Common Shares are expected to be listed
on the NYSE and the Company will invest in U.S. equity securities, the Common
Shares are subject to stock market risk. Stock prices typically fluctuate more
than the values of other types of securities such as U.S. government securities,
corporate bonds and preferred stock. These fluctuations are typically in
response to changes in particular issuers' financial condition and

                                       6

<PAGE>

factors affecting the market in general. For example, unfavorable or
unanticipated poor earnings performance of a company may result in a decline in
its stock's price, and a broad-based market drop may also cause a stock's price
to fall. The Company intends to use leverage, which magnifies stock market
risks. See "Leverage."

         Effects of Terrorism. The U.S. securities markets are subject to
disruption as a result of terrorist activities, such as the terrorist attacks on
the World Trade Center on September 11, 2001; war, such as the war in Iraq and
its aftermath; and other geopolitical events. Such events have led, and in the
future may lead, to short-term market volatility and may have long-term effects
on the U.S. economy and markets.

         Interest Rate and Related Risk. Interest rate risk is the risk that
debt securities will decline in value because of changes in market interest
rates. Generally, when market interest rates rise, the values of debt securities
decline, and vice versa. The Company's investment in such securities means that
the net asset value and market price of the Common Shares will tend to decline
if market interest rates rise. During periods of declining interest rates, the
issuer of a security may exercise its option to prepay principal earlier than
scheduled, forcing the Company to reinvest in lower yielding securities. This is
known as call or prepayment risk. Lower grade securities frequently have call
features that allow the issuer to repurchase the security prior to its stated
maturity. An issuer may redeem a lower grade obligation if the issuer can
refinance the debt at a lower cost due to declining interest rates or an
improvement in the credit standing of the issuer.

         Below Investment Grade Securities. Below investment grade debt
securities are commonly referred to as "junk bonds." Below investment grade
quality securities are considered speculative with respect to an issuer's
capacity to pay interest and repay principal while they are outstanding. Below
investment grade debt securities are susceptible to default or decline in market
value due to adverse economic and business developments. The Company does not
intend to invest in distressed securities (securities issued by a company in a
bankruptcy reorganization, subject to a public or private debt restructuring or
otherwise in default or in significant risk of default in the payment of
interest and principal). However, in the event any below investment grade debt
security becomes distressed while held by the Company, the Company may be
required to incur extraordinary expenses in order to protect and recover its
investment, and there will be significant uncertainty as to when, in what manner
and for what value, if any, the distressed obligations will be satisfied.

         Delay in Use of Proceeds. Although the Company currently intends to
invest the proceeds of any sales of Common Shares as soon as practicable
following the closing, such investments may be delayed if suitable investments
are unavailable at the time or for other reasons or if the Company is unable to
secure firm commitments for direct placements. Due to the trading markets and
volumes for MLPs, it may take the Company a period of time to accumulate
positions in certain securities. As a result, the proceeds may be invested in
cash, cash equivalents, high-quality debt instruments, or other securities
pending investment in MLPs or securities of energy infrastructure companies.

         Other Accounts of Adviser. The Adviser and its affiliates manage other
accounts and portfolios with investment strategies similar to those of the
Company. As a result, the Company may compete against other accounts for the
same trade the Company might otherwise make, including the priority of trading
order. This could make it difficult or impossible to fill a desired position in
its entirety or liquidate a position in a particular security. The Adviser, in
managing accounts other than the Company, may employ trading methods, policies
and strategies that differ from those of the Company. The Adviser and its
affiliates may have interests in other accounts that differ from their interest
in the Company and may manage such accounts on terms that are more favorable to
the Adviser (e.g., it may receive higher fees or performance allocations).

         Anti-Takeover Provisions. The Company's Articles of Incorporation and
Bylaws include provisions that could limit the ability of other entities or
persons to acquire control of the Company, to cause it to engage in certain
transactions or to modify its structure. These provisions may be regarded as
"anti-takeover" provisions. Such provisions could limit the ability of
shareholders to sell their shares at a premium over the then-current market
prices by discouraging a third party from seeking to obtain control of the
Company. See "Certain Anti-Takeover Provisions in the Company's Articles of
Incorporation and Bylaws."

         For more information on the risks of investing in the Company, see
"Risks."

                                       7

<PAGE>

                           SUMMARY OF COMPANY EXPENSES

         The following table assumes leverage through borrowing or other
transactions involving indebtedness in an amount equal to thirty three and one
third percent (33-1/3%) of the Company's total assets (including the amount
obtained through leverage) and shows Company expenses as a percentage of net
assets attributable to the Company's Common Shares. Footnote 4 to the table also
shows Company expenses as a percentage of net assets attributable to the
Company's Common Shares, but assumes that the Company does not use any form of
leverage.

SHAREHOLDER TRANSACTION EXPENSE

<TABLE>
<S>                                                                                                    <C>
Sales Load (as a percentage of offering price)(1)...................................................   4.5%
Offering Expenses Borne by the Company (as a percentage of offering price)(2).......................   [__]
Dividend Reinvestment Plan Fees(3)..................................................................   None
</TABLE>


<TABLE>
<CAPTION>
                                                                                      PERCENTAGE OF NET ASSETS
                                                                                   ATTRIBUTABLE TO COMMON SHARES
                                                                                         (ASSUMES LEVERAGE
                                                                                          IS OUTSTANDING)
                                                                                   -----------------------------
<S>                                                                               <C>
Management Fee................................................................                  1.42%
Interest Payments on Borrowed Funds(4)........................................                  1.50%
Other Expenses(5).............................................................                  0.25%
Total Annual Expenses.........................................................                  3.17%
Fee and Expense Reimbursement (Years 1 through 5)(6)..........................                  0.34%
Net Annual Expenses...........................................................                  2.83%
<FN>
- ------------------
(1)     For a description of the manner in which the sales load may be reduced
        and of other compensation paid to the underwriters by the Company and
        others, see "Underwriting."
(2)     The total of other expenses and distribution to be incurred by the
        Company in connection with the offering described in this prospectus
        is $_______.
(3)     Shareholders will pay brokerage charges if they direct the plan agent to
        sell their Common Shares held in a dividend reinvestment account. See
        "Distributions--Dividend Reinvestment Plan."
(4)     The table presented in this footnote estimates what the Company's annual
        expenses would be, stated as percentages of the Company's net assets
        attributable to Common Shares but, unlike the table above, assumes that
        the Company does not utilize any form of leverage, as would be the case,
        for instance, prior to the Company's expected borrowing. In accordance
        with these assumptions, the Company's expenses would be estimated as
        follows:

                                                                               PERCENTAGE OF NET ASSETS
                                                                             ATTRIBUTABLE TO COMMON SHARES
                                                                               (ASSUMES NO LEVERAGE IS
                                                                                     OUTSTANDING)
                                                                             -----------------------------
           Management Fee..............................................                  0.95%
           Other Expenses..............................................                  0.25%
           Total Annual Expenses.......................................                  1.20%
           Fee and Expense Reimbursement (Years 1 through 5)(6)........                  0.23%
           Net Annual Expenses.........................................                  0.97%

(5)     Does not include tax expense, which is estimated to be insignificant.
(6)     For each of the first two years following the commencement of the
        Company's operations, the Adviser has agreed to reimburse the Company
        for fees and expenses in an amount equal to 0.23% of the average monthly
        Managed Assets of the Company. For years three through five, the Adviser
        has agreed to reimburse the Company for fees and expenses in an amount
        equal to 0.10% of the average monthly Managed Assets of the Company.
</FN>
</TABLE>

         The purpose of the table above and the example below is to help
investors understand the fees and expenses that they, as common shareholders,
would bear directly or indirectly. As of the date of this prospectus, the
Company has not commenced investment operations. The Other Expenses shown in the
table and related footnotes are based on estimated amounts for the Company's
first year of operations unless otherwise indicated and assume that the Company
issues approximately ten million Common Shares. If the Company issues fewer
Common Shares, all other

                                       8

<PAGE>

things being equal, these expenses would increase. For additional information
with respect to the Company's expenses, see "Management of the Company" and
"Distributions--Dividend Reinvestment Plan."

EXAMPLE:

         The following example illustrates the expenses (including the sales
load of $____ and estimated offering costs of this offering of $[__]) that
shareholders would pay on a $1,000 investment in Common Shares, assuming (1)
total annual expenses of [1.20]% of net assets attributable to Common Shares and
(2) a 5% annual return:*

                            1 YEAR   3 YEARS   5 YEARS   10 YEARS(1)
                            ------   -------   -------   --------
Total Expenses Incurred      $74      $133       $195      $370

- ------------------
(1)     Assumes reimbursement of fees and expense of 0.23% of average monthly
        Managed Assets in years one and two, and 0.10% of average monthly
        Managed Assets in years three through five. The Adviser has not agreed
        to reimburse the Company for any year beyond ____.

* The example assumes that the estimated Other Expenses set forth in the fee
table are accurate and that all dividends and other distributions are reinvested
at net asset value. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE ASSUMED.
MOREOVER, THE COMPANY'S ACTUAL RATE OF RETURN MAY BE GREATER OR LESS THAN THE
HYPOTHETICAL 5% RETURN SHOWN IN THE EXAMPLE.

                                 USE OF PROCEEDS

         The net proceeds of this offering will be approximately $[__________]
(or approximately $[__________] assuming the Underwriters exercise the
over-allotment option in full) after payment of offering costs estimated to be
approximately $[__________] and the deduction of the sales load. The Company
will pay all of its organizational costs and Common Share offering costs, which
are estimated to be approximately $___ per Common Share. The Company will invest
the net proceeds of the offering in accordance with its investment objectives
and policies described below. Approximately ___% of net proceeds of the offering
(excluding the over-allotment option) is expected to be used to complete the
purchase of Direct Placements immediately after the closing of the offering. The
Company estimates that the remaining net proceeds of this offering will be fully
invested in accordance with the Company's investment objectives and policies
within three to six months of the closing. Pending such investment, those
proceeds may be invested in U.S. Government securities or high-quality,
short-term money market instruments. See "The Company - Investment Objectives"
and "- Investment Policies."

                                   THE COMPANY

         The Company is a newly organized, nondiversified, closed-end management
investment company registered under the 1940 Act. The Company was organized as a
Maryland corporation on October [__], 2003. As a newly organized entity, the
Company has no operating history. The Company's principal office is located at
10801 Mastin Boulevard, Suite 222, Overland Park, Kansas.

INVESTMENT OBJECTIVE

         The Company's investment objective is to seek a high level of total
return with an emphasis on income. There is no assurance that the Company will
achieve its objective. The investment objective of the Company is
nonfundamental. The Board of Directors of the Company may change the investment
objective of the Company without a shareholder vote, provided that shareholders
receive prior notice of such change.

ENERGY INFRASTRUCTURE INDUSTRY

         The Company will concentrate its investments in the energy
infrastructure industry. The Company will pursue its objective by investing
principally in a portfolio of income-producing equity units issued by MLPs. MLP
common units historically have generated higher average total returns than other
equity securities and fixed income

                                        9

<PAGE>

securities. A more detailed description of investment policies and restrictions
and more detailed information about portfolio investments are contained in the
SAI.

         Energy Infrastructure Companies. For purposes of the Company's
investment policies, an energy infrastructure company is one that derives at
least 50% of its revenues from "Qualifying Income" under Section 7704 of the
Internal Revenue Code or derives at least 50% of its revenues from the provision
of goods or services to such companies. Qualifying Income is defined as any
income and/or gains from the exploration, development, mining or production,
processing, refining, transportation (including pipelines transporting natural
gas, oil or products thereof), or the marketing of any mineral or natural
resource (including fertilizer, geothermal energy, and timber); or the
transportation, delivery or processing of natural resources or minerals.

         The business of energy infrastructure companies is affected by supply
and demand for energy commodities. Most MLPs derive revenue and income based
upon the volume of the underlying commodity transported, processed distributed,
and/or marketed. The general level of commodity prices may affect the volume of
the commodity that the MLP delivers to its customers, and the cost of providing
services such as processing or distributing NGLs. The Adviser believes that
high-quality MLPs are able to mitigate or manage direct margin exposure to
commodity price levels.

         Energy infrastructure companies may be subject to state and/or federal
regulation affecting tariff rates; however, they do not operate as "public
utilities" or "local distribution companies," which are subject to rate
regulation by state or federal utility commissions. As such, investors in energy
infrastructure companies may be subject to greater competitive factors than
utility companies.

         Master Limited Partnerships. Under normal circumstances, the Company
will invest at least 70% of total assets in income-producing equity securities
of MLPs. An MLP is a publicly traded company that derives at least 90% of its
income from energy infrastructure operations and is organized as a partnership,
thereby eliminating tax at the entity level. The MLP has two classes of
partners, the general partner, and the limited partners. Typically the general
partner is owned by company management or another publicly traded sponsoring
corporation. Limited partnership interests of an MLP, called units, generally
are traded on an exchange or over-the-counter. Most MLPs do not have direct
commodity exposure to oil and gas price volatility; however, they could be
influenced by investor psychology toward the energy sector.

         The MLP asset structure essentially transfers cash flows from
long-lived assets directly to limited partner unitholders such as the Company.
MLPs tend to pay relatively higher distributions than other types of companies,
and the Company intends to use these MLP distributions in an effort to meet its
investment objective.

         Energy infrastructure MLPs in which the Company will invest can
generally be classified in the following categories:

                  Pipeline MLPs are common carrier transporters of natural gas,
         natural gas liquids (primarily propane, ethane, butane and natural
         gasoline), crude oil or refined petroleum products (gasoline, diesel
         fuel and jet fuel). Pipeline MLPs also may operate ancillary businesses
         such as storage and marketing of such products. Revenue is derived from
         capacity and transportation fees. Historically, pipeline output has
         been less exposed to cyclical economic forces due to its low cost
         structure and government-regulated nature. In addition, most pipeline
         MLPs have limited direct commodity price exposure because they do not
         own the product being shipped.

                  Processing MLPs are gatherers and processors of natural gas as
         well as providers of transportation, fractionation and storage of
         natural gas liquids ("NGLs"). Revenue is derived from providing
         services to natural gas producers, which require treatment or
         processing before their natural gas commodity can be marketed to
         utilities and other end user markets. Revenue for the processor is fee
         based, although it is not uncommon to have some participation in the
         prices of the natural gas and NGL commodities for a portion of revenue.

                  Propane MLPs are distributors of propane to homeowners for
         space and water heating. Revenue is derived from the resale of the
         commodity on a margin over wholesale cost. The ability

                                       10

<PAGE>

         to maintain margin is a key to profitability. Propane serves
         approximately 3% of the household energy needs in the United States,
         largely for homes beyond the geographic reach of natural gas
         distribution pipelines. Approximately 70% of annual cash flow is earned
         during the winter heating season (October through March). Accordingly,
         volumes are weather dependent, but have utility type functions similar
         to electricity and natural gas.

                  Coal MLPs own, lease and manage coal reserves. Revenue is
         derived from production and sale of coal, or from royalty payments
         related to leases to coal producers. Electricity generation is the
         primary use of coal in the United States. Demand for electricity and
         supply of alternative fuels to generators are the primary drivers of
         coal demand. As natural gas prices increase, the relative
         attractiveness to utilities of coal as a fuel source increases.
         Coal reserves are long-lived assets.

INVESTMENT PROCESS

         Under normal circumstances, the Company will invest at least 90% of
total assets in securities of energy infrastructure companies. The Adviser seeks
securities that offer a combination of quality, growth and yield intended to
result in superior total returns over the long run. To determine whether a
company meets these criteria, the Adviser generally looks to a strong record of
distribution growth, as well as to an MLP's ratio of debt to equity and coverage
ratio with respect to distributions to unit holders and the track record,
incentive structure and quality of its management. All MLPs in which the Company
will invest will have a common unit market capitalization greater than $100
million.

         The Adviser's investment approach is to focus the portfolio on
energy-related MLP securities that the Adviser believes offer a combination of
quality, growth and yield intended to result in superior total returns over the
long run. The Adviser's securities selection process includes a comparison of
quantitative, qualitative, and relative value factors. Although the Adviser
utilizes research provided by broker-dealer and investment firms, primary
emphasis is placed on proprietary analysis and valuation models conducted and
maintained by the Adviser's in-house investment analysts.

INVESTMENT POLICIES

         The Company will seek to achieve its investment objective by investing
primarily in securities of MLPs that the Adviser believes offer attractive
distribution rates and capital appreciation potential. The Company also may
invest in other securities set forth below providing the potential for high
income or a combination of high income and capital growth if the Adviser expects
to achieve the Company's objective with such investments.

         The Company's policy of investing at least 90% of its total assets in
securities of energy infrastructure companies is nonfundamental and may be
changed by the Board of Directors without shareholder approval, provided that
shareholders receive at least 60 days' prior written notice of any change.

         The Company has adopted the following additional nonfundamental
policies:

         o        Under normal circumstances, the Company will invest at least
                  70% and up to 100% of total assets in income-producing equity
                  units issued by MLPs. Equity units currently consist of common
                  units, convertible subordinated units and pay-in-kind units of
                  MLPs, and may be publicly traded or privately placed.

         o        The Company may invest up to 30% of total assets in direct
                  placements of restricted securities. The types of restricted
                  securities that the Company may purchase include MLP
                  convertible subordinated units, MLP common units and
                  securities of private companies (i.e., non-MLPs). Investments
                  in private companies that do not have any publicly traded
                  shares or units are limited to 5% of total assets.

         o        The Company may invest up to 25% of total assets in debt
                  securities of energy infrastructure companies, including
                  corporate debt securities and debt securities of MLPs. The
                  Company may invest in debt securities rated below investment
                  grade ("junk bonds"). Below investment grade debt securities
                  will be rated at least B3 by Moody's Investors Service, Inc.
                  ("Moody's") and at least B- by

                                       11
<PAGE>

                  Standard & Poor's Ratings Group ("S&P") at the time of
                  purchase, or comparably rated by another statistical rating
                  organization or if unrated, determined to be of comparable
                  quality by the Adviser.

         o        The Company will not invest more than 10% of total assets in
                  any single issuer.

         o        The Company will not engage in short sales.

         Unless otherwise stated, all investment restrictions apply at the time
of purchase and the Company will not be required to reduce a position due solely
to market value fluctuations. The types of securities in which the Company may
invest include, but are not limited to, the following:

         Equity Securities. Consistent with its investment objectives, the
Company may invest up to 100% of its total assets in equity securities issued by
energy infrastructure MLPs, including common units, convertible subordinated
units and pay-in-kind units (each discussed below).

         MLP Common Units. MLP common units represent an equity ownership
interest in a partnership, providing voting rights and entitling the holder to a
share of the company's success through distributions and/or capital
appreciation. These units trade on a national exchange or over the counter. MLPs
are required to distribute a large percentage of their current operating
earnings. In the event of liquidation, MLP common unitholders have rights to the
partnership's remaining assets after bondholders, other debt holders, and
preferred unitholders have been paid in full. MLP common unitholders voting
rights are limited to significant partnership matters such as mergers and change
of control of the general partner of the MLP. The prices of energy
infrastructure MLPs may fluctuate with changes in the underlying companies or
commodity price levels, changes in interest rates, changes in inflation and with
general movements in the economy.

         MLP Convertible Subordinated Units. MLP convertible subordinated units
are issued by MLPs to founders and other related persons upon formation of the
MLP. They generally are not entitled to distributions until holders of common
units have received specified minimum distributions, plus any arrearages, and
may receive less in distributions upon liquidation. Therefore, they generally
entail greater risk than MLP common units. They are convertible automatically
into the senior common units of the same or a different issuer at a one-to-one
ratio upon the passage of time or the satisfaction of certain financial tests.
These units do not trade on a national exchange or over the counter, and there
is no active market for convertible subordinated units. The value of a
convertible security often reflects variations in the price of the underlying
common units. The value of a convertible security is a function of (i) its yield
in comparison to the yields of other securities of comparable quality that do
not have a conversion privilege and (ii) its worth if converted into the
underlying common units. Convertible subordinated units generally have similar
voting rights to MLP common units.

         MLP Pay-In-Kind Units. Pay-in-kind or I-Units are equity securities
issued by MLPs or their affiliates, which provide that the issuer will pay
distributions on such units in the form of additional units. Such investments
benefit the issuer by mitigating its need for cash to meet distribution
obligations. There is no allocation of income or loss to I-Units by the issuer.

         Debt Securities. The Company may invest up to 25% of its assets in debt
securities of energy infrastructure companies, including securities rated below
investment grade. The Company's debt securities may have fixed or variable
principal payments and all types of interest rate and dividend payment and reset
terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred,
payment in kind and auction rate features. To the extent that the Company
invests in below investment grade debt securities, such securities will be
rated, at the time of investment, at least B- by S&P's or B3 by Moody's or a
comparable rating by at least one other rating agency or, if unrated, determined
by the Adviser to be of comparable quality. If a security satisfies the
Company's minimum rating criteria at the time of purchase and is subsequently
downgraded below such rating, the Company will not be required to dispose of
such security. If a downgrade occurs, the Adviser will consider what action,
including the sale of such security, is in the best interest of the Company and
its shareholders.

         Because the risk of default is higher for below investment grade
securities than investment grade securities, the Adviser's research and credit
analysis is an especially important part of managing securities of this type.
The Adviser will attempt to identify those issuers of below investment grade
securities whose financial condition the Adviser believes are adequate to meet
future obligations or have improved or is expected to improve in the future.

                                       12

<PAGE>

The Adviser's analysis focuses on relative values based on such factors as
interest or dividend coverage, asset coverage, earnings prospects and the
experience and managerial strength of the issuer.

         Direct Placements (Restricted Securities). The Company may invest up to
30% of total assets in direct placements. Securities obtained by means of direct
placements are less liquid than securities traded in the open market because of
statutory and contractual restrictions on resale. Such securities are,
therefore, unlike securities that are traded in the open market which can be
expected to be sold immediately if the market is adequate. This lack of
liquidity creates special risks for the Company. However, the Company could sell
such securities, in privately negotiated transactions with a limited number of
purchasers or in public offerings under the Securities Act of 1933. MLP
convertible subordinated units also convert to publicly traded common units upon
the passage of time and/or satisfactions of certain financial tests.

         Direct placements of securities frequently result in higher yields to
purchasers and more restrictive covenants to issuers, which may provide greater
protection for the purchaser than comparable registered securities. Because it
has avoided the expense and delay involved in a public offering of securities,
an issuer is often willing to offer the purchaser more attractive features with
respect to securities issued in direct placements. Adverse conditions in the
public securities markets may also preclude a public offering of securities.
MLP convertible subordinated units are typically purchased from affiliates of
the issuer or their related persons rather than directly from the issuer.

         The sale price of securities that are not readily marketable may be
lower or higher than the Company's most recent determination of their fair
value. Additionally, the value of these securities typically requires more
reliance on the judgment of the Adviser than that required for securities for
which there is an active trading market. Due to the difficulty in valuing these
securities and the absence of an active trading market for these investments,
the Company may not be able to realize these securities' true value, or may have
to delay their sale in order to do so.

         Defensive and Temporary Investments. Under adverse market or economic
conditions or for temporary defensive purposes, the Company may invest up to
100% of its total assets in securities issued or guaranteed by the U.S.
Government or its instrumentalities or agencies, short-term debt securities,
certificates of deposit, bankers' acceptances and other bank obligations,
commercial paper rated in the highest category by a rating agency or other fixed
income securities deemed by the Adviser to be consistent with a defensive
posture, or may hold cash. The Adviser also may invest in such instruments to
meet working capital needs including, but not limited to, for collateral in
connection with certain investment techniques, to hold a reserve pending payment
of dividends, and to facilitate the payments of expenses and settlement of
trades. The yield on such securities may be lower than the returns on MLPs or
yields on lower rated fixed income securities. To the extent the Company uses
this strategy, it may not achieve its investment objective.

PORTFOLIO TURNOVER

         The Company's annual portfolio turnover rate may vary greatly from year
to year. Although the Company cannot accurately predict its annual portfolio
turnover rate, it is not expected to exceed 30% under normal circumstances.
However, portfolio turnover rate is not considered a limiting factor in the
execution of investment decisions for the Company. A higher turnover rate
results in correspondingly greater brokerage commissions and other transactional
expenses that are borne by the Company. High portfolio turnover may result in
the Company's recognition of gains that will increase the Company's current and
accumulated earnings profits, resulting in a greater portion of the Company's
distributions being treated as taxable dividends for Federal income tax
purposes. See "Tax Matters."

                                    LEVERAGE

         The Company may borrow money, issue preferred shares, or issue other
debt securities to the extent permitted by the 1940 Act. These practices are
known as leverage. The Company may engage in leverage in an amount up to 33 1/3%
of total assets (including the amount obtained through leverage). Subject to
market conditions, the Company generally intends to be leveraged to the extent
permitted by law. The Company generally will not use leverage if it anticipates
that a leveraged capital structure would result in a lower return to
shareholders than the Company could obtain over time without leverage. The
Company currently intends to engage in leverage primarily through borrowing from
banks and financial institutions, and through reverse repurchase agreements. The
Company

                                       13

<PAGE>

may also borrow up to an additional 5% of its total assets (not including the
amount so borrowed) for temporary purposes, including the settlement and
clearance of securities transactions, which otherwise might require untimely
dispositions of portfolio holdings.

         Under the 1940 Act, the Company is not permitted to borrow or otherwise
incur indebtedness constituting senior securities unless immediately thereafter
the Company has total assets (including the proceeds of the indebtedness) at
least equal to 300% of the amount of the indebtedness. Stated another way, the
Company may not borrow for investment purposes more than 33 1/3% of its total
assets, including the amount borrowed. The Company also must maintain this 300%
"asset coverage" for as long as the indebtedness is outstanding. The 1940 Act
provides that the Company may not declare any cash dividend or other
distribution on its shares, or purchase any of its shares of capital stock
(through tender offers or otherwise), unless it would satisfy this 300% asset
coverage after deducting the amount of the dividend, other distribution or share
purchase price, as the case may be.

         The company currently intends to leverage primarily through borrowings
from banks and financial institutions, and through reverse repurchase
agreements. The establishment of a borrowing facility by the Company would
involve expenses and other costs, including interest payments, which would be
borne by the Company's common shareholders. In addition, the terms of any
borrowing or other indebtedness issued by the Company may impose asset coverage
requirements, dividend limitations and voting right requirements on the Company
that are more stringent than those imposed under the 1940 Act. Such terms may
also impose special restrictions on the Company's portfolio composition or on
its use of various investment techniques or strategies or its ability to pay
dividends on Common Shares in some instances. The Company also may be required
to pledge its assets to lenders in connection with certain types of borrowings.
Due to these restrictions, the Company may be forced to liquidate investments at
times or prices that are not favorable to the Company, or the Company may be
forced to forgo investments that the Adviser otherwise views as favorable.

         Although leverage creates an opportunity for increased income and
capital appreciation for shareholders, at the same time it creates special
risks. Leverage will increase the Company's exposure to capital risk. Successful
use of leverage depends on the Adviser's ability to predict correctly interest
rates and market movements and the Company's continued access to bank
borrowings, or other vehicles for leverage on favorable terms. There is no
assurance that the use of a leveraging strategy will be successful during any
period in which it is used.

         The premise underlying the use of leverage is that the costs of
leveraging generally will be based on short-term rates, which normally will be
lower than the return (including the potential for capital appreciation) that
the Company can earn on the longer-term portfolio investments that it makes with
the proceeds obtained through the leverage. Thus, the shareholders would benefit
from an incremental return. However, if the differential between the return on
the Company's investments and the cost of leverage were to narrow, the
incremental benefit would be reduced and could be eliminated or even become
negative. Furthermore, if long-term rates rise, the net asset value of the
Company's Common Shares will reflect the resulting decline in the value of a
larger aggregate amount of portfolio assets than the Company would hold if it
had not leveraged. Thus, leveraging exaggerates changes in the value and in the
yield on the Company's portfolio. This, in turn, may result in greater
volatility of both the net asset value and the market price of the Common
Shares.

         To the extent the income or capital appreciation derived from
securities purchased with funds received from leverage exceeds the cost of
leverage, the Company's return will be greater than if leverage had not been
used. Conversely, if the income or capital appreciation from the securities
purchased with such funds is not sufficient to cover the cost of leverage, the
Company's return will be less than if leverage had not been used, and therefore
the amount available for distribution to shareholders as dividends and other
distributions will be reduced. Nevertheless, the Adviser may determine to
maintain the Company's leveraged position if it deems such action to be
appropriate under the circumstances.

         The Company may, but is not required to, hedge general interest rate
exposure arising from its leverage transactions. Under current market
conditions, hedging would be accomplished principally by entering into interest
rate transactions. Interest rate transactions are hedging transactions such as
interest rate swaps and the purchase of interest rate caps and floors. Interest
rate swaps involve the exchange by the Company with another party of their
respective commitments to pay or receive interest (e.g., an exchange of floating
rate payments for fixed payments). The purchase of an interest rate cap entitles
the purchaser, to the extent that a specified index exceeds a predetermined
interest rate, to receive payments of interest on a notional principal amount
from the party selling

                                       14

<PAGE>

such interest rate cap. The purchase of an interest rate floor entitles the
purchaser, to the extent that a specified index falls below a predetermined
interest rate, to receive payments of interest on a notional principal amount
from the party selling such interest rate floor. The Company will use interest
rate transactions for hedging purposes only. The use of interest rate
transactions is a highly specialized activity that involves investment
techniques and risks different from those associated with ordinary portfolio
security transactions. See "Risks--Hedging Strategy Risk."

EFFECTS OF LEVERAGE

         Assuming borrowings in the amount of 33 1/3% of the Company's total
assets (including the amount borrowed), and an annual interest rate of 3%
payable on such borrowing based on market rates of __ [state a maturity] as of
the date of this prospectus, the annual return that the Company's portfolio must
experience (net of expenses) in order to cover those interest payments would be
[__]%.

         The following table is designed to illustrate the effect of the
foregoing level of leverage on the return to a shareholder, assuming
hypothetical annual returns (net of expenses) of the Company's portfolio of -10%
to 10%. As the table shows, the leverage generally increases the return to
shareholders when portfolio return is positive and greater than the cost of
leverage and decreases the return when the portfolio return is negative or less
than the cost of leverage. The figures appearing in the table are hypothetical,
and actual returns may be greater or less than those appearing in the table.

Assumed Portfolio Return
   (net of expenses).........    (10%)     (5%)        0%        5%        10%
Corresponding Common Share
   Return....................  (16.50)%   (9.00)%    (1.50)%    6.00%    13.50%

         During the time in which the Company is utilizing leverage, the amount
of the fees paid to the Adviser for investment advisory and management services
will be higher than if the Company did not utilize leverage because the fees
paid will be calculated based on the Company's Managed Assets, which include
assets purchased with leverage. Therefore, the Adviser will have a financial
incentive to leverage the Company, which may create a conflict of interest
between the Adviser and the common shareholders. Because payments on any
borrowings would be paid by the Company at a specified rate, only the Company's
common shareholders would bear the Company's fees and expenses.

         Until the Company incurs indebtedness the Company's Common Shares will
not be leveraged, and the risks and special considerations related to leverage
described in this prospectus will not apply. Any benefits of leverage cannot be
fully achieved until the proceeds resulting from the use of leverage have been
invested in accordance with the Company's investment objectives and policies.
The Company's willingness to use leverage and the extent to which it uses it at
any time will depend on many factors, the most important of which are investment
outlook, market conditions and interest rates. For further information about
leveraging, see "Risks-Leverage Risk."

                                      RISKS

         General. The Company is a nondiversified, closed-end management
investment company designed primarily as a long-term investment vehicle and not
as a trading tool. The Company's strategy of concentrating its investments in
the energy infrastructure industry, its ability to invest in restricted
securities and below investment grade debt to a significant degree, and its
expected use of leverage involve a high degree of risk. An investment in the
Company's Common Shares should not constitute a complete investment program for
any investor. Due to the uncertainty in all investments, there can be no
assurance that the Company will achieve its investment objective.

         No Operating History. The Company is a newly organized closed-end
management investment company and has no operating history or history of public
trading of its Common Shares.

         Management Experience. The Adviser was formed in 2002 and has limited
independent resources. Including Mr. Schulte, the Adviser has three fulltime
employees and four non-employee members of its investment committee.
Accordingly, the Adviser has relied to a significant degree on the officers,
employees, and resources of Fountain Capital, KCEP and their affiliates. All
four outside members of the investment committee of the Adviser

                                       16

<PAGE>

have significant other responsibilities with such affiliates. Fountain Capital,
KCEP and their affiliates conduct businesses and activities of their own in
which the Adviser has no economic interest. If these separate activities are
significantly greater than the Adviser's activities, there could be material
competition for the efforts of key personnel. The Adviser has not previously
acted as investment adviser to a registered investment company, and its
affiliates have limited experience managing the assets of registered investment
companies.

         Energy Infrastructure Market. Because the Company concentrates its
investments in the energy infrastructure industry, the shares of the Company
could be subject to price fluctuations based on perceived or real changes in the
energy markets. The Company will not invest directly in energy infrastructure
assets, but only in securities issued by energy infrastructure companies,
primarily MLPs. However, because of the Company's policy of concentration in the
securities of companies in the energy infrastructure industry, it is also
subject to the same risks as ownership of the underlying assets. These risks
include:

         o        deterioration in business fundamentals reducing profitability

         o        unexpectedly prolonged or precipitous changes in commodity
                  prices

         o        increased regulatory risk requirements that increase costs
                  and/or reduce revenue tariff rates

         o        increased competition that takes market share and reduces
                  profitability

         o        general level of economic activity

         o        demographic growth and trends

         o        interest rate risks

The value of the Common Shares may change at different rates compared to the
value of shares of companies with investments in a different mix of industries.

         Energy infrastructure companies are also subject to risks that are
specific to the industry they serve.

                  Pipeline MLPs are subject to demand for crude oil or refined
         products in the markets served by the pipeline, sharp decreases in
         crude oil or natural gas prices that cause producers to curtail
         production or reduce capital spending for exploration activities, and
         environmental regulation. Demand for gasoline, which accounts for a
         substantial portion of refined product transportation, depends on
         price, prevailing economic conditions in the markets served, and
         demographic and seasonal factors.

                  Processing MLPs are subject to declines in production of
         natural gas fields, which utilize the processing facilities as a way to
         market the gas, prolonged depression in the price of natural gas or
         crude oil refining, which curtails production due to lack of drilling
         activity and declines in the prices of NGL products and natural gas
         prices, resulting in lower processing margins.

                  Propane MLPs are subject to earnings variability based upon
         weather patterns in the locations where the company operates and the
         wholesale cost of propane sold to end customers.

                  Coal MLPs are subject to demand variability based on favorable
         weather conditions, strong or weak domestic economy, the level of coal
         stockpiles in the customer base, and the general level of prices of
         competing sources of fuel for electric generation. They are also
         subject to supply variability based on the geological conditions that
         reduce productivity of mining operations, regulatory permits for mining
         activities and the availability of coal that meets Clean Air Act
         standards.

         Purchasing Risk of MLPs. The average daily trading volume of MLPs is
relatively low compared to many other stock investments. Depending on the size
of the offering, it could take many months to accumulate the

                                       16

<PAGE>

securities for the portfolio, which would hurt initial returns. Additionally,
trading in the secondary market is also fairly limited. Buying or selling large
positions could take a considerable length of time.

         MLP Common Units. Although common units historically have generated
higher average returns than fixed-income and other equity securities, common
units also have experienced more volatility than fixed income and less
volatility than other equity securities in those returns. An adverse event, such
as an unfavorable earnings report, may depress the value of a particular common
unit held by the Company. Also, the price of common units is sensitive to
general movements in the stock market. A drop in the stock market may depress
the price of common units held by the Company or to which it has exposure. In
the event of liquidation, common shareholders have rights to a company's assets
after obligations to bondholders, other debt holders and preferred shareholders
have been satisfied.

         MLP Convertible Subordinated Units. Convertible subordinated units of
MLPs generally offer greater dividend yields than common units. However,
convertible subordinated units generally are not entitled to distributions until
holders of common units have received specified minimum distributions, plus any
arrearages, and may receive less in distributions upon liquidation. In addition,
subordinated units are not generally entitled to arrearage rights during periods
where common equivalent distributions are not paid to the holder. Convertible
subordinated units also are illiquid.

         MLP Payment-in-Kind/I-Units. I-Units pay dividends in the form of
additional shares rather than cash. There is no allocation of income or loss to
I-Units by the issuer. The price of I-Units generally varies with the price of
MLP common units, although the degree of correllation may be large or small
depending on market conditions.

         Tax Risk. The ability of the Company to meet its objective depends on
the level of taxable income and distributions of the MLPs in which it invests.
The Company has no control over the taxable income of underlying MLPs. Future
changes in tax laws or regulations, or related interpretations of such laws and
regulations, could adversely affect the Company or MLPs, which could negatively
impact the Company's shareholders and dividends they receive from the Company.

         Leverage Risk. Borrowings or other transactions involving Company
indebtedness (other than for temporary or emergency purposes) and any preferred
shares issued by the Company all would be considered "senior securities" for
purposes of the 1940 Act and would constitute leverage. Leverage creates an
opportunity for an increased return to shareholders, but it is a speculative
technique in that it will increase the Company's exposure to capital risk.
Unless the income and capital appreciation, if any, on securities acquired with
borrowed funds or other leverage proceeds exceed the cost of the leverage, the
use of leverage will diminish the Company's investment performance. Successful
use of leverage depends on the Adviser's ability to predict or hedge correctly
interest rates and market movements, and there is no assurance that the use of a
leveraging strategy will be successful during any period in which it is used.

         Capital raised through leverage will be subject to interest costs or
dividend payments, which could exceed the income and appreciation on the
securities purchased with the proceeds of the leverage. The Company may also be
required to pay fees in connection with borrowings (such as loan syndication
fees or commitment and administrative fees in connection with a line of credit),
and it might be required to maintain minimum average balances with a bank
lender, either of which would increase the cost of borrowing over the stated
interest rate. The issuance of debt securities by the Company would involve
offering expenses and other costs, including interest payments, which would be
borne by the common shareholders. Fluctuations in interest rates on borrowings
and short-term debt could reduce cash available for dividends on Common Shares.
Increased operating costs, including the financing cost associated with any
leverage, may reduce the Company's total return.

         The terms of any borrowing, other indebtedness or preferred shares
issued by the Company may impose asset coverage requirements, dividend
limitations and voting right requirements on the Company that are more stringent
than those imposed under the 1940 Act. Such terms may also impose special
restrictions on the Company's portfolio composition or on its use of various
investment techniques or strategies. The Company may be further limited in any
of these respects by guidelines established by any rating agencies that issue
ratings for debt securities or preferred shares issued by the Company. These
requirements may have an adverse effect on the Company. To the extent necessary,
the Company intends to repay indebtedness to maintain the required asset
coverage. Doing so may require the Company to liquidate portfolio securities at
a time when it would not otherwise

                                       18

<PAGE>

be desirable to do so. Nevertheless, it is not anticipated that the 1940 Act
requirements, the terms of any senior securities or the rating agency guidelines
will impede the Adviser in managing the Company's portfolio in accordance with
the Company's investment objectives and policies. For additional information
about leverage, see "Leverage."

         Hedging Strategy Risk. Interest rate transactions that the Company may
use for hedging purposes will expose the Company to certain risks that differ
from the risks associated with its portfolio holdings. There are economic costs
of hedging reflected in the price of interest rate swaps, caps and similar
techniques, the costs of which can be significant, particularly when long-term
interest rates are substantially above short-term rates. In addition, the
Company's success in using hedging instruments is subject to the Adviser's
ability to predict correctly changes in the relationships of such hedging
instruments to the Company's leverage risk, and there can be no assurance that
the Adviser's judgment in this respect will be accurate. Consequently, the use
of hedging transactions might result in a poorer overall performance for the
Company, whether or not adjusted for risk, than if the Company had not engaged
in such transactions.

         Depending on the state of interest rates in general, the Company's use
of interest rate transactions could enhance or decrease the net income of the
Common Shares. To the extent there is a decline in interest rates, the value of
interest rate swaps or caps could decline, and could result in a decline in the
net asset value of the Common Shares. In addition, if the counterparty to an
interest rate swap or cap defaults, the Company would not be able to use the
anticipated net receipts under the interest rate swap or cap to offset the
Company's cost of financial leverage.

         Restricted and Illiquid Securities. Restricted securities have
contractual restrictions on their public resale, which may make it more
difficult to value them, may limit the Company's ability to dispose of them and
may lower the amount the Company could realize upon their sale. To enable the
Company to sell its holdings of a restricted security not registered under the
1933 Act, the Company may have to cause those securities to be registered. The
expenses of registering restricted securities may be negotiated by the Company
with the issuer at the time the Company buys the securities. When the Company
must arrange registration because the Company wishes to sell the security, a
considerable period may elapse between the time the decision is made to sell the
security and the time the security is registered so that the Company could sell
it. The Company would bear the risks of any downward price fluctuation during
that period.

         Illiquid securities may be difficult to dispose of at a fair price at
the times when the Company believes it is desirable to do so. Illiquid
securities are also more difficult to value, and the Adviser's judgment as to
value will often be given greater weight than market quotations, if any exist.
If market quotations are not available, illiquid securities will be valued in
accordance with procedures established by the Board of Directors. Investment of
the Company's capital in illiquid securities may restrict the Company's ability
to take advantage of market opportunities.

         Investment Risk. An investment in the Company is subject to investment
risk, including the risk of loss of the entire amount that a shareholder
invests. At any point in time the Company's shares may be worth less than the
amount originally paid for them, even after taking into account the reinvestment
of dividends and other distributions. An investment in the Company's Common
Shares represents an indirect investment in the securities owned by the Company.
The value of these securities, like other market investments, may move up or
down, sometimes rapidly and unpredictably.

         Stock Market Risk. Because the Company's Common Shares are expected to
be listed on the NYSE and the Company will invest in equity securities traded on
U.S. securities markets, it is subject to stock market risk. Stock prices
typically fluctuate more than the values of other types of securities such as
U.S. government securities, corporate bonds and preferred stock. These
fluctuations are typically in response to changes in the particular issuer's
financial condition and factors affecting the market in general. For example,
unfavorable or unanticipated poor earnings performance of a company may result
in a decline in its stock's price, and a broad-based market drop may also cause
a stock's price to fall. The Company intends to utilize leverage, which
magnifies stock market risks. See "--Risk of Leverage" above.

         Effect of Terrorism. As a result of the terrorist attacks on the World
Trade Center and the Pentagon on September 11, 2001, some of the U.S. securities
markets were closed for a four-day period. These terrorist attacks and related
events have led to increased short-term market volatility and may have long-term
effects on U.S. and

                                       18

<PAGE>

world economies and markets. A similar disruption of the financial markets could
impact interest rates, auctions, secondary trading, ratings, credit risk,
inflation and other factors relating to the Common Stock.

         Equity Securities Risk. The value of equity securities will be affected
by changes in the stock markets, which may be the result of domestic or
international political or economic news, changes in interest rates or changing
investor sentiment. At times, stock markets can be volatile and stock prices can
change substantially. Equity securities risk will affect the Company's net asset
value per share, which will fluctuate as the value of the securities held by the
Company change. Not all stock prices change uniformly or at the same time, and
not all stock markets move in the same direction at the same time. Other factors
affect a particular stock's prices, such as poor earnings reports by an issuer,
loss of major customers, major litigation against an issuer, or changes in
governmental regulations affecting an industry. Adverse news affecting one
company can sometimes depress the stock prices of all companies in the same
industry. Not all factors can be predicted.

         Interest Rate and Related Risks. The value of a portion of the
Company's portfolio could be subject to interest rate risk. Interest rate risk
is the risk that debt securities will decline in value because of changes in
market interest rates. Generally, when market interest rates rise, the values of
debt securities decline, and vice versa. The Company's investment in such
securities means that the net asset value and market price of the Common Shares
will tend to decline if market interest rates rise. During periods of declining
interest rates, the issuer of a security may exercise its option to prepay
principal earlier than scheduled, forcing the Company to reinvest in lower
yielding securities. This is known as call or prepayment risk. Lower grade
securities frequently have call features that allow the issuer to repurchase the
security prior to its stated maturity. An issuer may redeem a lower grade
obligation if the issuer can refinance the debt at a lower cost due to declining
interest rates or an improvement in the credit standing of the issuer.

         Below Investment Grade Securities Risk. Investing in lower grade debt
instruments involves additional risks than investment grade securities. Adverse
changes in economic conditions are more likely to lead to a weakened capacity of
a below investment grade issuer to make principal payments and interest payments
than an investment grade issuer. An economic downturn could adversely affect the
ability of highly leveraged issuers to service their obligations or to repay
their obligations upon maturity. Similarly, downturns in profitability in the
energy infrastructure industry could adversely affect the ability of below
investment grade issuers in that industry to meet their obligations. The market
values of lower quality securities tend to reflect individual developments of
the issuer to a greater extent than do higher quality securities, which react
primarily to fluctuations in the general level of interest rates.

         The secondary market for below investment grade securities may not be
as liquid as the secondary market for more highly rated securities. There are
fewer dealers in the market for below investment grade securities than
investment grade obligations. The prices quoted by different dealers may vary
significantly, and the spread between the bid and asked price is generally much
larger than for higher quality instruments. Under adverse market or economic
conditions, the secondary market for below investment grade securities could
contract further, independent of any specific adverse change in the condition of
a particular issuer, and these instruments may become illiquid. As a result, the
Company could find it more difficult to sell these securities or may be able to
sell the securities only at prices lower than if such securities were widely
traded. Prices realized upon the sale of such lower-rated or unrated securities,
under these circumstances, may be less than the prices used in calculating the
Company's net asset value.

         Because investors generally perceive that there are greater risks
associated with lower quality securities of the type in which the Company may
invest a portion of its assets, the yields and prices of such securities may
tend to fluctuate more than those for higher rated securities. In the lower
quality segments of the debt securities market, changes in perceptions of
issuers' creditworthiness tend to occur more frequently and in a more pronounced
manner than do changes in higher quality segments of the debt securities market,
resulting in greater yield and price volatility.

         Factors having an adverse impact on the market value of below
investment grade securities may have an adverse effect on the Company's net
asset value and the market value of its Common Shares. In addition, the
Company may incur additional expenses to the extent it is required to seek
recovery upon a default in payment of principal or interest on its portfolio
holdings. In certain circumstances, the Company may be required to foreclose

                                       20

<PAGE>

on an issuer's assets and take possession of its property or operations. In such
circumstances, the Company would incur additional costs in disposing of such
assets and potential liabilities from operating any business acquired.

         Nondiversification. The Company is a nondiversified company under the
1940 Act and will not be treated as a regulated investment company under the
Internal Revenue Code. Accordingly, there are no regulatory limits under the
1940 Act or the Code on the number or size of securities held by the Company.
There currently are only fifty-five (55) companies presently organized as MLPs
and only a limited amount of those companies operate energy infrastructure
assets. The Company intends to select MLP investments from this small pool of
issuers. The Company may invest in non-MLP securities to a lesser degree,
consistent with its investment objective and policies.

         Anti-Takeover Provisions. The Company's Articles of Incorporation and
Bylaws include provisions that could limit the ability of other entities or
persons to acquire control of the Company, to cause it to engage in certain
transactions or to modify its structure. These provisions may be regarded as
"anti-takeover" provisions. Such provisions could limit the ability of
shareholders to sell their shares at a premium over the then-current market
prices by discouraging a third party from seeking to obtain control of the
Company. See "Certain Anti-Takeover Provisions in the Company's Articles of
Incorporation and Bylaws."

         Market Discount Risk. Shares of closed-end management investment
companies frequently trade at prices lower than their net asset value. This is
characteristic of shares of closed-end management investment companies and is a
risk separate and distinct from the risk that the Company's net asset value may
decrease. This risk may be greater for shareholders who sell their shares within
a relatively short period after completion of the public offering. Accordingly,
the Company is designed primarily for long-term investors and should not be
considered a vehicle for trading purposes.

         Whether shareholders will realize a gain or loss upon the sale of the
Company's Common Shares will depend upon whether the market value of the shares
at the time of sale is above or below the price the investor paid, taking into
account transaction costs for the shares, and is not directly dependent upon the
Company's net asset value. Because the market value of the Company's Common
Shares will be determined by factors such as the relative demand for and supply
of the shares in the market, general market conditions and other factors beyond
the control of the Company, the Company cannot predict whether its Common Shares
will trade at, below or above net asset value, or below or above the initial
offering price for the Common Shares.

                           MANAGEMENT OF THE COMPANY

DIRECTORS AND OFFICERS

         The Company's Board of Directors provides broad supervision over the
affairs of the Company, including supervision of the duties performed by the
Adviser. The officers of the Company are responsible for the Company's
operations. The names and business addresses of the directors and officers of
the Company, together with their principal occupations and other affiliations
during the past five years, are set forth in the Statement of Additional
Information. The Board of Directors of the Company will consist of at least a
majority of directors who are not interested persons (as defined in the 1940
Act) of the Adviser or its affiliates.

INVESTMENT ADVISER

         Pursuant to an Advisory Agreement dated [________ __], 2003, the
Adviser will provide the Company with investment research and advice and furnish
the Company with an investment program consistent with the Company's investment
objectives and policies, subject to the supervision of the Board. The Adviser
will determine which portfolio securities will be purchased or sold, arrange for
the placing of orders for the purchase or sale of portfolio securities, select
brokers or dealers to place those orders, maintain books and records with
respect to the Company's securities transactions and report to the Board on the
Company's investments and performance.

         The Adviser is located at 10801 Mastin Boulevard, Suite 222, Overland
Park, Kansas 66210. The Adviser specializes in managing portfolios of MLPs and
other energy infrastructure companies. As of September 30, 2003, the Adviser and
its affiliates (including the Atlantic group) had approximately $ 275 million in
assets under

                                       21

<PAGE>

management and private equity investments in the energy infrastructure industry,
and had approximately $8.5 billion in total assets under management and private
equity investments.

         The investment management of the Company's portfolio will be the
responsibility of a team of portfolio managers consisting of David J. Schulte,
H. Kevin Birzer, Zachary A. Hamel, Kenneth P. Malvey, and Terry C. Matlack.

         David J. Schulte. Mr. Schulte is a Managing Director of KCEP and a
         Manager of the Adviser. Mr. Schulte focuses on acquisition financings
         primarily for natural resource distribution and service companies.
         Prior to joining KCEP in 1993, Mr. Schulte had over five years of
         experience completing acquisition and public equity financings as an
         investment banker at Fahnestock & Co., Inc. From 1986 to 1989 he was an
         attorney focusing on securities law. He serves on the Board of
         Directors of Inergy, L.P. Mr. Schulte holds a Bachelor of Science
         degree in Business Administration from Drake University and a Juris
         Doctorate degree from the University of Iowa. He earned his CFA
         designation in 1992, and is a member of the Financial Accounting Policy
         Committee of AIMR.

         H. Kevin Birzer. Mr. Birzer is a Partner/Senior Analyst with Fountain
         Capital and a Manager of the Adviser. Mr. Birzer, who has 20 years of
         investment experience including 16 in high-yield securities, began his
         career with Peat Marwick. His subsequent experience includes three
         years working as a Vice President for F. Martin Koenig & Co., focusing
         on equity and option investments, and three years at Drexel Burnham
         Lambert, where he was a Vice President in the Corporate Finance
         Department. Mr. Birzer graduated Magna Cum Laude with a Bachelor of
         Business Administration degree from the University of Notre Dame and
         holds a Master of Business Administration degree from New York
         University. He earned his CFA designation in 1988.

         Zachary A. Hamel. Mr. Hamel is a Partner/Senior Analyst with Fountain
         Capital and a Manager of the Adviser. Mr. Hamel joined Fountain in
         1997. He covers energy, chemicals and utilities. Prior to joining
         Fountain, Mr. Hamel worked for the Federal Deposit Insurance
         Corporation for eight years as a Bank Examiner and a Regional Capital
         Markets Specialist. Mr. Hamel graduated from Kansas State University
         with a Bachelor of Science in Business Administration. He also attained
         a Master in Business Administration from the University of Kansas
         School of Business. He earned his CFA designation in 1998.

         Kenneth P. Malvey. Mr. Malvey joined Fountain Capital as an Investment
         Analyst in June of 2002 and is a Manager of the Adviser. Prior to
         joining Fountain Capital, Mr. Malvey was one of three members of the
         Global Office of Investments for GE Capital's Employers Reinsurance
         Corporation. Most recently he was the Global Investment Risk Manager
         for a portfolio of approximately $24 billion of fixed-income, public
         equity and alternative investment assets. Prior to joining GE in 1996,
         Mr. Malvey was a Bank Examiner and Regional Capital Markets Specialist
         with the FDIC for nine years. Mr. Malvey graduated Magna Cum Laude with
         a Bachelor of Science degree in Finance from Winona State University,
         Winona, Minnesota. He received his CFA designation in 1996.

         Terry C. Matlack. Mr. Matlack is a Managing Director of KCEP and
         Manager of the Adviser. Prior to joining KCEP in 2001, Mr. Matlack was
         President and CEO of GreenStreet Capital and its controlled affiliates
         in the telecommunications service industry. Prior to 1995, he was
         Executive Vice President and a member of the Board of Directors of W.
         K. Communications, Inc., a cable television acquisition company, and
         Chief Operating Officer of W. K. Cellular, a cellular rural service
         area operator. He has also served as a specialist in corporate finance
         with George K. Baum & Company, and as Executive Vice President, Head of
         Corporate Finance at B.C. Christopher Securities Company. Mr. Matlack
         graduated with a Bachelor of Science in Business Administration from
         Kansas State University and holds a Masters of Business Administration
         and a Juris Doctorate from the University of Kansas. He earned his CFA
         designation in 1985.


                                       21

<PAGE>

COMPENSATION AND EXPENSES

         Under the Advisory Agreement, the Company will pay to the Adviser
quarterly, as compensation for the services rendered and expenses paid by it, a
fee equal on an annual basis to 0.95% of the Company's average monthly Managed
Assets. Because the fee to be paid to the Adviser is determined on the basis of
the Company's Managed Assets, the Adviser's interest in determining whether to
leverage the Company may differ from the interests of the Company. The Company's
average monthly Managed Assets are determined for the purpose of calculating the
management fee by taking the average of the monthly determinations of Managed
Assets during a given calendar quarter. The fees are payable for each calendar
quarter as soon as practicable after the end of that quarter.

         The Company will bear all expenses not specifically assumed by the
Adviser incurred in the Company's operations and the offering of its Common
Shares. Expenses borne by the Company will include, but not be limited to, the
following: (i) organizational expenses; (ii) legal and audit expenses; (iii)
borrowing expenses; (iv) interest; (v) taxes; (vi) governmental fees; (vii)
fees, voluntary assessments and other expenses incurred in connection with
membership in investment company organizations; (viii) the cost (including
brokerage commissions or charges, if any) of securities purchased or sold by the
Company and any losses incurred in connection therewith; (ix) fees of
custodians, transfer agents, registrars or other agents; (x) expenses of
preparing share certificates; (xi) expenses of registering and qualifying shares
for sale under applicable federal law and maintaining such registrations and
qualifications; (xii) expenses of preparing, setting in print, printing and
distributing prospectuses, proxy statements, reports, notices and dividends to
shareholders; (xiii) cost of stationery; (xiv) costs of shareholders and other
meetings of the Company; (xv) compensation and expenses of the independent
directors of the Company; (xvi) the Company's pro rata portion of premiums of
any fidelity bond and other insurance covering the Company and its officers and
directors; and (xvii) the fees and other expenses of listing and maintaining the
Company's shares on the NYSE or any other national stock exchange.

                                   DIVIDENDS

DIVIDEND POLICY

         Distributable Cash Flow ("DCF") is the amount received by the Company
as cash or paid-in-kind distributions from MLPs and interest payments on debt
securities, less current or anticipated operating expenses, income taxes, and
leverage costs paid by the Company. The Company intends to pay out substantially
all of its DCF to holders of Common Shares through quarterly dividends. The
Board of Directors has adopted a policy to target dividend payments to common
shareholders in an amount of at least 95% of DCF on an annual basis. It is
expected that the Company will declare and pay a dividend to holders of Common
Shares no later than the quarter ended May 31, 2004 and each fiscal quarter
thereafter. All net realized capital gains, if any, will be retained by the
Company. Unless a shareholder elects to receive dividends in cash, the dividends
will be used to purchase additional Common Shares of the Company. The tax status
of dividends is the same whether they are reinvested in shares of the Company or
received in cash. See "Dividend Reinvestment Plan."

         The yield on Common Shares will vary from period to period depending on
factors including market conditions, the timing of the Company's investments in
portfolio securities, the securities comprising the Company's portfolio, changes
in interest rates (including changes in the relationship between short-term
rates and long-term rates), the amount and timing of the use of borrowings and
other leverage by the Company, the effects of leverage on the Common Shares
(discussed above under "Leverage"), the timing of the investment of offering
proceeds and leverage proceeds in portfolio securities and the Company's net
assets and its operating expenses. Consequently, the Company cannot guarantee
any particular yield on its Common Shares, and the yield for any given period is
not an indication or representation of future yields on the Common Shares.

DIVIDEND REINVESTMENT PLAN

         Pursuant to the Company's dividend reinvestment plan (the "Plan"), all
common shareholders whose shares are registered in their own names will have all
dividends reinvested automatically in additional Common Shares by [___________],
as agent for the common shareholders (the "Plan Agent"), except shareholders who
elect to receive cash. An election to receive cash may be revoked or reinstated
at a shareholder's option. In the case of record

                                       22

<PAGE>

shareholders such as banks, brokers or other nominees (each a "nominee") that
hold Common Shares for others who are the beneficial owners, the Plan Agent will
administer the Plan on the basis of the number of Common Shares certified from
time to time by each nominee as representing the total amount registered in such
nominee's name and held for the account of beneficial owners who participate in
the Plan. Common shareholders whose shares are held in the name of a nominee
should contact the nominee for details about the Plan. Such shareholders may not
be able to transfer their shares to another nominee and continue to participate
in the Plan. All dividends to shareholders who elect not to participate in the
Plan (or whose nominee elects not to participate on the shareholder's behalf),
will be paid in cash by wire or check mailed to the record holder by [_____], as
the Company's dividend disbursement agent.

         The number of shares that common shareholders (other than those, or
their nominees, that elect not to participate in the Plan) will receive as a
result of a Company dividend will be determined as follows:

         (1)      If Common Shares are trading at or above their net asset value
(minus estimated brokerage commissions that would be incurred upon the purchase
of Common Shares on the open market) on the payment date, the Company will issue
new Common Shares at the greater of (i) the net asset value per common share on
the payment date or (ii) 95% of the market price per common share on the payment
date. Because Common Shares may be issued at less than their market price, Plan
participants may get a benefit that non-participants do not.

         (2)      If Common Shares are trading below their net asset value
(minus estimated brokerage commissions that would be incurred upon the purchase
of Common Shares on the open market) on the payment date, the Plan Agent will
receive the dividend in cash and will purchase Common Shares in the open market,
on the NYSE or elsewhere, for the participants' accounts. It is possible that
the market price for the Common Shares may increase before the Plan Agent has
completed its purchases. Therefore, the average purchase price per Common Share
the Plan Agent pays may exceed the market price thereof on the payment date. If
the market price per Common Share increases so that it equals or exceeds the net
asset value per Common Share (minus estimated brokerage commissions), the Plan
Agent will cease its purchases. Otherwise, the Plan Agent will use all dividends
received in cash to purchase Common Shares in the open market on or shortly
after the payment date, but in no event later than the ex-dividend date for the
next dividend. If the Plan Agent is unable to invest the full dividend amount
through open-market purchases during the purchase period, the Plan Agent shall
request that, with respect to the uninvested portion of such dividend amount,
the Company issue new Common Shares at the close of business on the earlier of
the last day of the purchase period or the first day during the purchase period
on which the net asset value per Common Share (minus estimated brokerage
commissions) equals or is less than the market price per Common Share. Interest
will not be paid on any uninvested cash payments. If shareholders own Common
Shares directly, they may withdraw from the Plan at any time and may also rejoin
the Plan later. Shareholders should contact the Plan Agent at the address below
for information on how to do so. If requested, the Plan Agent will sell the
Common Shares and send shareholders the proceeds, minus brokerage commissions.

         The Plan Agent maintains all record shareholders' accounts in the Plan
and gives written confirmation of all transactions in the accounts, including
information shareholders may need for tax records. The Plan Agent will hold
Common Shares in non-certificated form. Any proxy shareholders receive will
include all Common Shares held for them under the Plan.

         There is no brokerage charge by the Company for reinvestment of
dividends in Common Shares. However, all participants will pay a pro rata share
of the brokerage commissions incurred by the Plan Agent when it makes open
market purchases.

         Automatically reinvested dividends are taxed in the same manner as cash
dividends. See "Tax Matters."

         The Company and the Plan Agent reserve the right to amend or terminate
the Plan. There is no direct service charge to participants in the Plan;
however, the Company reserves the right to amend the Plan to include a
service charge payable by the participants. Shareholders may obtain additional
information about the Plan from their broker. To obtain information on how to
change their dividend option from the Plan to cash distributions, or vice versa,
shareholders should contact their broker or, if they own Common Shares directly,
call the Plan Agent at 1-800-______. The Plan Agent's address is [__________].

                                       23

<PAGE>


                          CLOSED-END COMPANY STRUCTURE

         The Company is a newly organized, nondiversified, closed-end management
investment company (commonly referred to as a closed-end fund). Closed-end
companies differ from open-end companies (which are generally referred to as
mutual funds) in that closed-end companies generally list their shares for
trading on a stock exchange and do not redeem their shares at the request of the
shareholder. This means that if a shareholder wishes to sell shares of a
closed-end company, he or she must trade them on the market like any other stock
at the prevailing market price at that time. In a mutual fund, if the
shareholder wishes to sell shares of the company, the mutual fund will redeem or
buy back the shares at net asset value. Also, mutual funds generally offer new
shares on a continuous basis to new investors, and closed-end companies
generally do not. The continuous inflows and outflows of assets in a mutual fund
can make it difficult to manage the company's investments. By comparison,
closed-end companies are generally able to stay more fully invested in
securities that are consistent with their investment objectives and also have
greater flexibility to make certain types of investments and to use certain
investment strategies, such as financial leverage and investments in illiquid
securities.

         Shares of closed-end companies frequently trade at a discount to their
net asset value. This characteristic of shares of closed-end management
investment companies is a risk separate and distinct from the risk that the
Company's net asset value may decrease. This risk may be greater for
shareholders who sell their shares within a relatively short period after
completion of the public offering. Accordingly, the Company is designed
primarily for long-term investors and should not be considered a vehicle for
trading purposes. Because of its investment policies and tax features, the Board
of Directors does not expect to use certain techniques (such as tender offers or
repurchase offers) to manage the discount.

         Whether shareholders will realize a gain or loss upon the sale of the
Company's Common Shares will depend upon whether the market value of the shares
at the time of sale is above or below the investor's current basis in the
shares. Because the market value of the Company's Common Shares will be
determined by factors such as the relative demand for and supply of the shares
in the market, general market conditions and other factors beyond the control of
the Company, the Company cannot predict whether its Common Shares will trade at,
below or above net asset value, or below or above the initial offering price for
the Common Shares.

                                  TAX MATTERS

         The following is a general summary of certain federal tax
considerations affecting the Company and its shareholders. This discussion does
not purport to be complete or to deal with all aspects of federal income
taxation that may be relevant to shareholders in light of their particular
circumstances or who are subject to special rules, such as banks, thrift
institutions and certain other financial institutions, real estate investment
trusts, regulated investment companies, insurance companies, brokers and dealers
in securities or currencies, certain securities traders, tax-exempt investors,
individual retirement accounts and certain tax-deferred accounts, and foreign
investors. Unless otherwise noted, this discussion assumes that shareholders are
U.S. persons and hold Common Shares as a capital asset. More detailed
information regarding the tax consequences of investing in the Company is in the
Statement of Additional Information.

         Company Federal Income Taxation. The Company will be treated as a
regular "C" corporation for federal and state income tax purposes. Thus, the
Company will compute and pay Federal and state income tax on its taxable income.
The Company intends to invest its assets in MLPs, which generally are treated as
partnerships for federal income tax purposes. As a partner in the MLPs, the
Company will have to report its proportionate share of the MLPs income in
computing its taxable income. Based upon the historic performance of MLPs, the
Company anticipates that the cash flow received by the Company on its MLP
investments will exceed the taxable income allocated to the Company. There is no
assurance that such performance will continue. In addition, the Company will
take into account in its taxable income gain or loss recognized on the sale of
MLP interests. Currently, the
maximum regular federal income tax rate for a corporation is 35 percent. The
Company may be subject to a 20 percent alternative minimum tax on its
alternative minimum taxable income to the extent that the alternative minimum
tax exceeds the Company's regular income tax.

         The Company will not be treated as a regulated investment company under
the federal income tax rules. The federal income tax rules generally provide
that a regulated investment company does not pay an entity level

                                       24


<PAGE>

income tax, provided that it distributes all or substantially all of its income.
The regulated investment company taxation rules have no application to the
Company or shareholders of the Company.

         Shareholder Federal Income Taxation. Unlike a direct interest in MLPs,
a shareholder will not report the allocable share of the Company's income,
gains, losses or deductions. Shareholders will receive a Form 1099 (rather than
a Form K-1) from the Company and will recognize dividend income only to the
extent of the Company's current or accumulated earnings and profits. The Company
expects to distribute to its common shareholders at least 95% of DCF. The
Company's distribution of its DCF will be treated as a dividend-type
distribution. A dividend-type distribution is treated as a taxable dividend to
the shareholder to the extent of the distributing corporation's current or
accumulated earnings and profits. If the distribution exceeds the earnings and
profits, the distribution is treated as a return of capital to the shareholder,
to the extent of the shareholder's basis in the Common Shares, and then as
capital gain.

         Generally, a corporation's earnings and profits are computed based upon
taxable income, with certain specified adjustments. As explained above, based
upon the historic performance of the MLPs, the Company anticipates that the
distributed cash from the MLPs will exceed the Company's proportionate share of
the MLP income and the Company's gain on the sale of MLP interests. Thus, the
Company anticipates that only a portion of its dividend-type distributions will
be treated as a dividend income to its shareholders. To the extent of the excess
distribution, a shareholder's basis in Common shares will be reduced and, if a
shareholder has no further basis in its shares, a shareholder will report any
excess as capital gain.

         The Jobs Growth and Tax Relief Reconciliation Act of 2003 amended the
federal income tax law generally to reduce the maximum federal income tax rate
of qualifying dividend income to the rate applicable to long-term capital gains,
which is generally fifteen percent. The portion of the Company's dividend-type
distributions treated as a dividend for federal income tax purposes should be
treated as a qualifying dividend for federal income tax purposes.

         If a shareholder participates in the Company's dividend reinvestment
plan, such shareholder will be taxed upon the amount received as if such amount
is received by the participating shareholder and the participating shareholder
reinvested such amount in additional Company common stock.

         Investment by Tax-Exempt Investors and Regulated Investment Companies.
Employee benefit plans and most other organizations exempt from federal income
tax, including individual retirement accounts and other retirement plans, are
subject to federal income tax on UBTI. Because the Company is a corporation for
federal income tax purposes, an owner of shares will not report on its federal
income tax return any of the Company's items of income, gain, loss and
deduction. Therefore, a tax-exempt investor generally will not have UBTI
attributable to its ownership or sale of Common Shares unless its ownership of
the shares is debt financed. In general, a share would be debt financed if the
tax-exempt owner of shares incurs debt to acquire a share or otherwise incurs or
maintains a debt that would not have been incurred or maintained if that share
had not been acquired.

         A regulated investment company, or "mutual fund," is required to derive
90% or more of its gross income from interest, dividends and gains from the sale
of stocks or securities or foreign currency or specified related sources. As
stated above, an owner of shares will not report on its federal income tax
return any of the Company's items of income, gain, loss and deduction. Thus,
ownership of shares will not result in income that is not qualifying income to a
mutual fund. Furthermore, any gain from the sale or other disposition of the
shares, and the associated purchase and exchange rights, will constitute gain
from the sale of stock or securities and will qualify for purposes of that 90%
test. Finally, shares, and the associated purchase and exchange rights, will
constitute qualifying assets to mutual funds, which also must own at least 50%
qualifying assets at the end of each quarter.

         Sale of the Common Shares. Upon sale of Common Shares, a shareholder
generally will recognize capital gain or loss measured by the difference between
the sales proceeds received and the shareholder's federal income tax basis of
Common Shares sold. Generally such capital gain or loss will be long-term
capital gain or loss if Common Shares were held as a capital asset for more than
twelve months.

         Backup Withholding and Information Reporting. Backup withholding of
U.S. federal income tax may apply to the dividend type distribution to be made
by the Company if you fail to timely provide taxpayer

                                       25

<PAGE>

identification numbers or if the Company is so instructed by the Internal
Revenue Service. Any amounts withheld from a payment to a U.S. holder under the
backup withholding rules are allowable as a refund or credit against the
holder's U.S. federal income tax, provided that the required information is
furnished to the IRS in a timely manner.

         State and Local Taxes. Company dividends also may be subject to state
and local taxes.

         Tax matters are very complicated, and the federal tax consequences of
an investment in and holding of the Common Shares will depend on the facts of
each investor's situation. Investors are encouraged to consult their own tax
advisers regarding the specific tax consequences that may affect such investors.

                                NET ASSET VALUE

         The Company will compute its net asset value for its Common Shares as
of the close of trading of the NYSE (normally 4:00 p.m. Eastern time) no less
frequently than the last business day of each calendar month and will make its
net asset value available for publication quarterly. Domestic debt securities
will normally be priced using data reflecting the earlier closing of the
principal markets for those securities. For purposes of determining the net
asset value of a Common Share, the net asset value of the Company will equal the
value of the total assets of the Company (the value of the securities the
Company holds plus cash or other assets, including interest accrued but not yet
received) less (i) all of its liabilities, (including accrued expenses and
taxes, including both current and deferred income taxes), (ii) accumulated and
unpaid dividends on any outstanding preferred shares, (iii) the aggregate
liquidation value of any outstanding preferred shares and (iv) any dividends
payable on the common shares. The net asset value per Common Share of the
Company will equal the net asset value of the Company divided by the number of
outstanding Common Shares.

         The assets in the Company's portfolio will be valued monthly in
accordance with Valuation Procedures adopted by the Board of Directors. The
Adviser anticipates that a majority of the Company's assets, including common
units of MLPs, will be valued closing market prices or readily available market
quotations supplied by third parties. Debt securities are valued on the basis of
valuations furnished by a principal market maker, or pricing service, or both,
both of which generally use electronic data processing techniques to determine
valuation for institutional size trading units of debt securities without
exclusive reliance on quoted prices. Short-term debt instruments which have a
remaining maturity of 60 days or less are generally valued at amortized cost.
The value of interest rate swaps, caps and flows is determined in accordance
with a formula and confirmed periodically with bank quotations. In the event
that market quotations are not readily available, the pricing service does not
provide a valuation for a particular asset, or the valuations are deemed
unreliable, or if events occurring after the close of the principal markets for
particular securities (e.g., domestic debt), but before the Company values its
assets, would materially affect net asset value, the Adviser may use a fair
value method to value certain assets. The use of fair value pricing will be
governed by Valuation Procedures established by the Board of Directors.

         The Valuation Procedures also provide that the Adviser will review the
valuation of the obligation for income taxes separately for current taxes and
deferred taxes due to the differing impact of each on (i) the anticipated timing
of required tax payments and (ii) the impact of each on the treatment of
distributions by the Company to its shareholders.

                          DESCRIPTION OF COMMON SHARES

         The Company is authorized to issue _______ shares of capital stock,
$.001 par value. The Company's Board is authorized to classify and reclassify
any unissued shares of capital stock from time to time by setting or changing
the preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or terms and conditions of redemption of such shares
by the Company. The information contained under this heading is subject to the
provisions contained in the Company's Articles of Incorporation and Bylaws. The
Company may issue preferred shares, but does not currently intend to do so.

         The Common Shares have no preemptive, conversion, exchange or
redemption rights. All Common Shares have equal voting, dividend, distribution
and liquidation rights. The Common Shares, when issued, will be fully paid and
non-assessable. Common shareholders are entitled to one vote per share. All
voting rights for the election

                                       26

<PAGE>

of directors are non-cumulative, which means that the holders of more than 50%
of the shares of capital stock can elect 100% of the directors then nominated
for election if they choose to do so and, in such event, the holders of the
remaining shares will not be able to elect any director.

         Under the rules of the NYSE applicable to listed companies, the Company
normally will be required to hold an annual meeting of shareholders in each
fiscal year. If the Company is converted to an open-end company or if for any
other reason the shares are no longer listed on the NYSE (or any other national
securities exchange the rules of which require annual meetings of shareholders),
the Company may decide not to hold annual meetings of shareholders.

         The Company has no present intention of offering additional shares,
except as described herein and under the Plan, as it may be amended from time to
time. See "Distributions--Dividend Reinvestment Plan." Other offerings of
shares, if made, will require approval of the Company's Board and will be
subject to the requirement of the 1940 Act that shares may not be sold at a
price below the then-current net asset value, exclusive of underwriting
discounts and commissions, except, among other things, in connection with an
offering to existing shareholders or with the consent of a majority of the
holders of the Company's outstanding voting securities. For a discussion of the
potential characteristics of a preferred shares offering, see "Description of
Preferred Shares" in the SAI.

         The Adviser provided the initial capital for the Company by purchasing
[_________] shares of Common Shares of the Company for $[___________]. As of the
date of this prospectus, the Adviser owned 100% of the outstanding Common
Shares. The Adviser may be deemed to control the Company until such time as it
owns less than 25% of the outstanding shares of the Company.

               CERTAIN ANTI-TAKEOVER PROVISIONS IN THE COMPANY'S
                      ARTICLES OF INCORPORATION AND BYLAWS

         The Company's Articles of Incorporation and Bylaws include provisions
that could limit the ability of other entities or persons to acquire control of
the Company, to cause it to engage in certain transactions or to modify its
structure. These provisions may be regarded as "anti-takeover" provisions. Such
provisions could limit the ability of shareholders to sell their shares at a
premium over the then-current market prices by discouraging a third party from
seeking to obtain control of the Company.

         The Company's Articles of Incorporation require an affirmative vote by
at least a majority of the Company's Board and by at least __% of the holders of
the Company's shares outstanding and entitled to vote, except as described
below, to authorize: (i) the Company's conversion from a closed-end to an
open-end management investment company; (ii) a change in the nature of the
business of the Company such that it would cease to be an investment company
registered under the 1940 Act; (iii) any merger or consolidation or share
exchange of the Company with or into any other company; (iv) a sale of all or
substantially all of the Company's assets (other than in the regular course of
the Company's investment activities); (v) the dissolution or liquidation of the
Company; (vi) the sale, lease or exchange of all or substantially all of the
Company's assets having an aggregate value of $1,000,000 or more to or with any
Principal Shareholder (as defined below); (vii) with certain exceptions, the
issuance of any securities of the Company to any Principal Shareholder for cash;
and (viii) the sale, lease or exchange to the Company, in exchange for
securities of the Company, of any assets of any Principal Shareholder having an
aggregate value of $1,000,000 or more; provided that if such action has been
authorized by the affirmative vote of at least two-thirds of the Company's
directors fixed in accordance with the Company's Articles of Incorporation or
Bylaws, then the required shareholder vote will be reduced or eliminated as
follows: with respect to (i) and (ii) above, the affirmative vote of the holders
of "a majority of the outstanding voting securities" (as defined in the 1940
Act) of the Company shall be required; with respect to (iii) through (vi) above,
the affirmative vote of the holders of a majority of the outstanding shares of
the Company shall be required; and with respect to (vii) and (viii) above, no
shareholder vote shall be required. The term "Principal Shareholder" means any
person, entity or group that, directly or indirectly, owns 5% or more of the
outstanding shares of the Company, and includes any associates or affiliates of
such person or entity or of any member of the group.

         None of the foregoing provisions may be amended except by the vote of
at least __% of the shares outstanding and entitled to vote thereon. The
percentage vote required under these provisions is higher than that required
under Maryland law or by the 1940 Act. The Board believes that the provisions of
the Articles of

                                       27

<PAGE>

Incorporation relating to such a higher vote are in the best interest of the
Company and its shareholders. Even if agreed to by the Company, certain of the
transactions described above may be prohibited by the 1940 Act.

         The Board is divided into three classes of approximately equal size.
The terms of the directors of the different classes are staggered so that the
shareholders elect approximately one third of the Board each year. The Bylaws
provide that directors may be removed from office only for cause and only by
vote of at least __% of the shares entitled to be voted on the matter in an
election of directors.

         The Company's Bylaws also require that advance notice be given to the
Company in the event a shareholder desires to nominate a person for election to
the Board or to transact any other business at an annual meeting of
shareholders. With respect to an annual meeting following the first annual
meeting of shareholders, notice of any such nomination or business must be
delivered to or received at the principal executive offices of the Company not
less than 120 calendar days prior to the anniversary date of the prior year's
annual meeting. In the case of the first annual meeting of shareholders, the
notice must be given no later than the tenth calendar day following public
disclosure as specified in the Bylaws of the date of the meeting. Any notice by
a shareholder must be accompanied by certain information as provided in the
Bylaws. Reference should be made to the Company's Articles of Incorporation and
Bylaws on file with the Securities and Exchange Commission for the full text of
these provisions.

                                  UNDERWRITING

         Subject to the terms and conditions of an underwriting agreement dated
[_________ __ ], 2003, each underwriter named below has severally agreed to
purchase, and the Company has agreed to sell to such underwriter, the number of
Common Shares set forth opposite the name of such underwriter.

                          UNDERWRITER                   NUMBER OF COMMON SHARES
          ----------------------------------------      -----------------------
          STIFEL, NICOLAUS & COMPANY, INCORPORATED
  TOTAL

         The underwriting agreement provides that the obligations of the
Underwriters to purchase the shares included in this offering are subject to the
approval of certain legal matters by counsel and to certain other conditions.
The Underwriters are obligated to purchase all the Common Shares listed in the
table above if any of the Common Shares are purchased. In the underwriting
agreement, the Company and Adviser have agreed to indemnify the Underwriters
against certain liabilities, including liabilities arising under the 1933 Act,
or to contribute payments the Underwriters may be required to make for any of
those liabilities.

         The Company expects to list its Common Shares on the NYSE under the
symbol "__." In order to meet the requirements for listing the Common Shares on
the NYSE, the Underwriters have undertaken to sell lots of 100 or more Common
Shares to a minimum of 2,000 beneficial owners. The minimum investment
requirement is 100 Common Shares ($2,500). Prior to this offering, there has
been no public market for the Common Shares or any other securities of the
Company. Consequently, the offering price for the Common Shares was determined
by negotiation between the Company and the Representatives. Investors must pay
for any shares purchased in the initial public offering on or before _________,
2003.

         The Underwriters propose initially to offer some of the Common Shares
directly to the public at the public offering price set forth on the cover page
of this Prospectus and some of the Common Shares to certain dealers at the
public offering price less a concession not in excess of $1.125 per share. The
sales load the Company will pay of $1.125 per share is equal to 4.5% of the
initial offering price. The Underwriters may allow, and the dealers may
reallow, a discount not in excess of $_____ per share on sales to other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.

         The Company has granted the Underwriters an option to purchase up to
[_____] additional Common Shares at the public offering price, less the sales
load, within 45 days from the date of this Prospectus, solely to cover any
over-allotments. If the Underwriters exercise this option, each will be
obligated, subject to conditions contained in the underwriting agreement, to
purchase a number of additional shares proportionate to that underwriter's
initial amount reflected in the table below.

                                       28

<PAGE>


         The following table shows the public offering price, sales load and
proceeds before expenses to the Company. The information assumes either no
exercise or full exercise by the Underwriters of their over-allotment option.

                   PER SHARE                  WITHOUT OPTION       WITH OPTION
- ----------------------------------------      --------------       -----------
Public offering price                             $                   $
Sales load                                        $                   $
Proceeds, before expenses to the Company          $                   $

         The expenses of the offering are estimated to be $[_____]. The Company
will pay all of its organizational and offering expenses.

         Until the distribution of the Common Shares is complete, the Securities
and Exchange Commission rules may limit Underwriters and selling group members
from bidding for and purchasing the Company's Common Shares. However, the
representatives may engage in transactions that stabilize the price of Common
Shares, such as bids or purchases to peg, fix or maintain that price.

         If the Underwriters create a short position in the Company's Common
Shares in connection with the offering (i.e., if they sell more Common Shares
than are listed on the cover of this prospectus), the representatives may reduce
that short position by purchasing Common Shares in the open market. The
representatives may also elect to reduce any short position by exercising all or
part of the over-allotment option described above. Purchases of Common Shares to
stabilize its price or to reduce a short position may cause the price of the
Company's Common Shares to be higher than it might be in the absence of such
purchases.

         Neither the Company nor any of the Underwriters make any representation
or prediction as to the direction or magnitude of any effect that the
transaction described above may have on the price of Common Shares. In addition,
neither the Company nor any of the Underwriters make any representation that the
representatives will engage in these transactions or that these transactions,
once commenced, will not be discontinued without notice.

         The Company has agreed not to offer or sell any additional Common
Shares for a period of 180 days after the date of the underwriting agreement
without the prior written consent of the Underwriters, except for the sale of
Common Shares to the Underwriters pursuant to the underwriting agreement.

         The Company anticipates that the Underwriters may from time to time act
as brokers or dealers in executing the Company's portfolio transactions after
they have ceased to be Underwriters and, subject to certain restrictions may so
act while they are underwriters. The Underwriters are active underwriters of,
and dealers in, securities and act as market makers in a number of such
securities, and therefore can be expected to engage in portfolio transactions
with the Company.

         The Company may use the net proceeds of this offering to purchase,
immediately after the closing of this offering, MLP common units issued in
direct placements to the Company. The Company may engage Stifel, Nicolaus & Co.
and other broker-dealers who may or may not be underwriters in this offering, to
assist the Company in the direct placements for which Stifel, Nicolaus & Co. or
such other broker-dealers would receive customary compensation. Stifel, Nicolaus
& Co. has provided financial advisory services in connection with structuring
the offering for which it will receive customary compensation from the offering
proceeds.

                                       29

<PAGE>

                               DIRECT PLACEMENTS

         As of the date of this prospectus, the Company has entered into binding
direct placement contracts with the following companies (contingent upon the
closing of the Common Share offering):

         NAME OF ISSUER          PRICE PER SHARE TO PORTFOLIO     TOTAL COST
- -------------------------------  ----------------------------   ---------------





                    ADMINISTRATOR, CUSTODIAN, TRANSFER AGENT
                         AND DIVIDEND DISBURSEMENT AGENT


         The Company will retain [____________], [address], to provide
administrative services for the Company. The custodian of the Company's assets
will be [name] [address]. [Name], [address], will serve as the Company's
transfer agent and dividend disbursement agent, as well as the Plan Agent for
the Company's Plan. The Company will pay ___________ a [monthly/quarterly] fee
computed at an annual rate of ____% of the Company's average monthly Managed
Assets.

                                 LEGAL MATTERS

         Blackwell Sanders Peper Martin, LLP ("Blackwell"), Kansas City,
Missouri, serves as counsel to the Company. Vedder, Price, Kaufman & Kammholz,
P.C. ("Vedder Price"), Chicago, Illinois, is serving as special counsel to the
Company in connection with the offering. Kaye Scholer LLP serves as counsel to
the underwriters. Stroock & Stroock & Lavan LLP is serving as special counsel to
the underwriters in connection with the offering. Certain legal and tax matters
in connection with the Common Shares offered hereby are passed on for the
Company by Blackwell, and for the Underwriters by Kaye Scholer LLP. Vedder Price
and Blackwell may rely on the opinion of Venable LLP, Baltimore, Maryland, on
matters of Maryland law.

                                       30

<PAGE>

                            TABLE OF CONTENTS OF THE

                       STATEMENT OF ADDITIONAL INFORMATION

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
Investment Limitations.............................................................................................
Investment Objective and Policies..................................................................................
Management of the Company..........................................................................................
Portfolio Transactions.............................................................................................
Net Asset Value....................................................................................................
Leverage...........................................................................................................
Description of Preferred Shares....................................................................................
U.S. Federal Income Tax Matters....................................................................................
Proxy Voting Policies..............................................................................................
Independent Accountants............................................................................................
Additional Information.............................................................................................
Report of Independent Accountants..................................................................................
Financial Statements...............................................................................................
Appendix - Ratings of Investments..................................................................................
</TABLE>


<PAGE>


         The information in this statement of additional information is not
complete and may be changed. We may not sell these securities until the
registration statement filed with the Securities and Exchange Commission is
effective. This statement of additional information is not an offer to sell
these securities and it is not soliciting an offer to buy these securities in
any state where an offer or sale is not permitted.

                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                       STATEMENT OF ADDITIONAL INFORMATION

         Tortoise Energy Infrastructure Corporation (the "Company") is a newly
organized, non-diversified, closed-end management investment company. This
statement of additional information relating to the Company's shares of common
stock ("Common Shares") is not a prospectus, but should be read in conjunction
with the prospectus relating to the Common Shares dated __________, 2003. This
statement of additional information does not include all information that a
prospective investor should consider before purchasing Common Shares of the
Company, and investors should obtain and read the prospectus prior to purchasing
such shares. A copy of the prospectus is available without charge from the
Company by calling 1-800-___-____. You may also obtain a copy of the prospectus
on the Securities and Exchange Commission's web site (http://www.sec.gov).
Capitalized terms used but not defined in this statement of additional
information have the meanings ascribed to them in the prospectus.

         No person has been authorized to give any information or to make any
representations not contained in the prospectus or in this statement of
additional information in connection with the offering made by the prospectus,
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company. The prospectus and this statement
of additional information do not constitute an offering by the Company in any
jurisdiction in which such offering may not lawfully be made.

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                               PAGE
<S>                                                                                                            <C>
Investment Limitations...........................................................................................2
Investment Objective and Policies................................................................................4
Management of the Company.......................................................................................15
Portfolio Transactions..........................................................................................20
Net Asset Value.................................................................................................21
Leverage........................................................................................................21
Description of Preferred Shares.................................................................................23
U.S. Federal Income Tax Matters.................................................................................24
Proxy Voting Policies...........................................................................................28
Independent Accountants.........................................................................................28
Additional Information..........................................................................................28
Report Of Independent Accountants...............................................................................29
Financial Statements............................................................................................29
Appendix A--Rating of Investments...............................................................................A-1
</TABLE>

       This statement of additional information is dated ___________, 2003

                                       1


<PAGE>


                             INVESTMENT LIMITATIONS

         This section supplements the disclosure in the prospectus and provides
additional information on the Company's investment limitations. Investment
limitations identified as fundamental may not be changed without the approval of
the holders of a majority of the Company's outstanding voting securities (which
for this purpose and under the Investment Company Act of 1940, as amended (the
"1940 Act") means the lesser of (1) 67% of the Common Shares represented at a
meeting at which more than 50% of the outstanding Common Shares are represented
or (2) more than 50% of the outstanding Common Shares). If the Company were to
issue shares of preferred stock ("preferred shares"), the investment limitations
could not be changed without the approval of a majority of the outstanding
common and preferred shares, voting together as a class, and the approval of a
majority of the outstanding preferred shares, voting separately as a class.

         Investment limitations stated as a maximum percentage of the Company's
assets are only applied immediately after, and because of, an investment or a
transaction by the Company to which the limitation is applicable (other than the
limitations on borrowing). Accordingly, any later increase or decrease resulting
from a change in values, net assets or other circumstances will not be
considered in determining whether the investment complies with the Company's
investment limitations.

         THE FOLLOWING ARE THE COMPANY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE COMPANY MAY NOT:

         (1)      issue senior securities, except as permitted by the 1940 Act
and the rules and interpretive positions of the SEC thereunder;

         (2)      borrow money, except as permitted by the 1940 Act and the
rules and interpretive positions of the SEC thereunder.

         (3)      make loans, except by the purchase of debt obligations, by
entering into repurchase agreements or through the lending of portfolio
securities and as otherwise permitted by the 1940 Act and the rules and
interpretive positions of the SEC thereunder.

         (4)      underwrite securities issued by others, except to the extent
that the Company may be considered an underwriter within the meaning of the
Securities Act of 1933, as amended (the "1933 Act") in the disposition of
restricted securities held in its portfolio;

         (5)      purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments, except that the Company may invest
in securities or other instruments backed by real estate or securities of
companies that invest in real estate or interests therein; and

         (6)      purchase or sell physical commodities unless acquired as a
result of ownership of securities or other instruments, except that the Company
may purchase or sell options and futures contracts or invest in securities or
other instruments backed by physical commodities.

         All other investment policies of the Company are considered
non-fundamental and may be changed by the Board of Directors (the "Board")
without prior approval of the Company's outstanding voting shares.

         As a non-fundamental policy, the Company will not enter into short
sales.

                                       2


<PAGE>


         Currently under the 1940 Act, the Company is not permitted to incur
indebtedness unless immediately after such borrowing the Company has asset
coverage of at least 300% of the aggregate outstanding principal balance of
indebtedness (i.e., such indebtedness may not exceed 33 1/3% of the value of the
Company's total assets). Additionally, currently under the 1940 Act, the Company
may not declare any dividend or other distribution upon its Common Shares, or
purchase any such shares, unless the aggregate indebtedness of the Company has,
at the time of the declaration of any such dividend or distribution or at the
time of any such purchase, an asset coverage of at least 300% after deducting
the amount of such dividend, distribution, or purchase price, as the case may
be. Currently under the 1940 Act, the Company is not permitted to issue
preferred shares unless immediately after such issuance the net asset value of
the Company's portfolio is at least 200% of the liquidation value of the
outstanding preferred shares (i.e., such liquidation value may not exceed 50% of
the value of the Company's total assets). In addition, currently under the 1940
Act, the Company is not permitted to declare any cash dividend or other
distribution on its Common Shares unless, at the time of such declaration, the
net asset value of the Company's portfolio (determined after deducting the
amount of such dividend or distribution) is at least 200% of such liquidation
value.

         Currently under the 1940 Act, the Company is not permitted to lend
money or property to any person, directly or indirectly, if such person controls
or is under common control with the Company, except for a loan from the Company
to a company which owns all of the outstanding securities of the Company, except
directors' qualifying shares. Currently, under interpretative positions of the
SEC, the Company may not have on loan at any given time securities representing
more than one-third of its total assets.

         Under the 1940 Act, a "senior security" does not include any promissory
note or evidence of indebtedness where such loan is for temporary purposes only
and in an amount not exceeding 5% of the value of the total assets of the issuer
at the time the loan is made. A loan is presumed to be for temporary purposes if
it is repaid within sixty days and is not extended or renewed. Both transactions
involving indebtedness and any preferred shares issued by the Company would be
considered senior securities under the 1940 Act. The Company may only enter into
transactions involving indebtedness if the asset coverage (as defined in the
1940 Act) would be at least 300% of the indebtedness. The Company may only issue
preferred shares if the asset coverage (as defined in the 1940 Act) would be at
least 200% after such issuance.

         Currently, the Company is deemed to "concentrate" in the energy
infrastructure industry because it invests at least 90% of its total assets in
energy infrastructure companies organized in the United States.

         Under the 1940 Act, the Company may, but does not intend to, invest up
to 10% of its total assets in the aggregate in shares of other investment
companies and up to 5% of its total assets in any one investment company,
provided the investment does not represent more than 3% of the voting stock of
the acquired investment company at the time such shares are purchased. As a
shareholder in any investment company, the Company will bear its ratable share
of that investment company's expenses, and would remain subject to payment of
the Company's advisory fees and other expenses with respect to assets so
invested. Holders of Common Shares would therefore be subject to duplicative
expenses to the extent the Company invests in other investment companies. In
addition, the securities of other investment companies may also be leveraged and
will therefore be subject to the same leverage risks described herein and in the
prospectus. As described in the prospectus in the section entitled "Leverage,"
the net asset value and market value of leveraged shares will be more volatile
and the yield to shareholders will tend to fluctuate more than the yield
generated by unleveraged shares.

                                       3


<PAGE>


         The Company interprets its policies with respect to borrowing and
lending to permit such activities as may be lawful for the Company, to the full
extent permitted by the 1940 Act or by exemption from the provisions therefrom
pursuant to an exemptive order of the SEC.

                        INVESTMENT OBJECTIVE AND POLICIES

         The prospectus presents the investment objective and the principal
investment strategies and risks of the Company. This section supplements the
disclosure in the Company's prospectus and provides additional information on
the Company's investment policies or restrictions. Restrictions or policies
stated as a maximum percentage of the Company's assets are only applied
immediately after a portfolio investment to which the policy or restriction is
applicable (other than the limitations on borrowing). Accordingly, any later
increase or decrease resulting from a change in values, net assets or other
circumstances will not be considered in determining whether the investment
complies with the Company's restrictions and policies.

         The Company's investment objective is to seek a high level of total
return with an emphasis on income. There is no assurance that the Company will
achieve its objective. The investment objective and the investment policies
discussed below are nonfundamental. The Board of Directors of the Company may
change the investment objective, or any policy or limitation that is not
fundamental without a shareholder vote, provided that shareholders receive at
least 60 days' prior written notice of any change. Unlike most other investment
companies, the Company will not be treated as a regulated investment company
under the U.S. Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code"). Therefore, the Company will be subject to federal and applicable state
corporate income taxes. The Company expects that a substantial portion of its
distributions to shareholders will constitute a return of capital.

         Under normal circumstances, the Company will invest at least 90% of
total assets in securities of energy infrastructure companies. Energy
infrastructure companies engage in the business of transporting, processing,
storing, distributing or marketing natural gas, natural gas liquids (primarily
propane), coal, crude oil or refined petroleum products, or exploring,
developing, managing or producing such commodities. Companies that provide
services or products to the foregoing businesses are also considered energy
infrastructure companies. The Company intends to invest principally in a
portfolio of income-producing equity units of energy infrastructure companies
that are master limited partnerships ("MLPs") that the Adviser believes offer
attractive distribution rates and capital appreciation potential. Equity units
currently consist of common units, convertible subordinated units and
pay-in-kind units of MLPs, and may be publicly traded or privately placed. The
Company also may invest in other securities set forth below, providing the
potential for high income or a combination of high income and capital growth if
the Adviser expects to achieve the Company's objective with such investments.

         The Company has adopted the following nonfundamental policies:

         o        Under normal circumstances, the Company will invest at least
                  70% and up to 100% of total assets in income-producing equity
                  units issued by MLPs.

         o        The Company may invest up to 30% of total assets in direct
                  placements of restricted securities. The types of direct
                  placements that the Company may purchase include MLP
                  convertible subordinated units, MLP common units and
                  securities of private companies (i.e., non-MLPs). Investments
                  in private companies that do not have any publicly traded
                  shares or units are limited to 5% of total assets.

                                       4


<PAGE>


         o        The Company may invest up to 25% of total assets in debt
                  securities of energy infrastructure companies, including
                  corporate debt securities and debt securities of MLPs. The
                  Company may invest in debt securities rated below investment
                  grade ("junk bonds"). Below investment grade debt securities
                  will be rated at least B3 by Moody's Investors Service, Inc.
                  ("Moody's") and at least B- by Standard & Poor's Ratings Group
                  ("S&P") at the time of purchase, or comparably rated by
                  another statistical rating organization or if unrated,
                  determined to be of comparable quality by the Adviser.

         o        The Company will not invest more than 10% of total assets in
                  any single issuer.

         The following pages contain more detailed information about the types
of issuers and instruments in which the Company may invest, strategies the
Adviser may employ in pursuit of the Company's investment objective and a
discussion of related risks. The Adviser may not buy these instruments or use
these techniques unless it believes that doing so will help the Company achieve
its objective.

ENERGY INFRASTRUCTURE COMPANIES

         For purposes of the Company's investment policies, an energy
infrastructure company is one that derives at least 50% of its revenues from
"Qualifying Income" under Section 7704 of the Internal Revenue Code or derives
at least 50% of its revenues from the provision of goods or services to such
companies. Qualifying Income is defined as any income and/or gains from the
exploration, development, mining or production, processing, refining,
transportation (including pipelines transporting natural gas, oil or products
thereof), or the marketing of any mineral or natural resource (including
fertilizer, geothermal energy, and timber); or the transportation, delivery or
processing of natural resources or minerals.

         Energy Infrastructure MLPs are limited partnerships that derive at
least 90% of their income from energy infrastructure operations. The business of
energy infrastructure MLPs is affected by supply and demand for energy
commodities. Most MLPs derive revenue and income based upon the volume of the
underlying commodity transported, processed, distributed, and/or marketed. The
general level of commodity prices may affect the volume of the commodity which
the MLP delivers to its customers, and the cost of providing services such as
processing or distributing natural gas liquids. The Adviser believes that high
quality MLPs are able to mitigate or manage direct margin exposure to commodity
price levels.

         Energy infrastructure companies may be subject to state and/or federal
regulation affecting tariff rates, however, they do not operate as "public
utilities" or "local distribution companies," which are subject to rate
regulation by state or federal utility commissions. As such, investors in energy
infrastructure companies may be subject to greater competitive failure than
utility companies.

         Energy infrastructure MLPs in which the Company will invest can
generally be classified in the following categories:

         Pipeline MLPs are common carrier transporters of natural gas, natural
gas liquids (primarily propane, ethane, butane and natural gasoline), crude oil
or refined petroleum products (gasoline, diesel fuel and jet fuel). Pipeline
MLPs also may operate ancillary businesses such as storage and marketing of such
products. Revenue is derived from capacity and transportation fees.
Historically, pipeline output has been less exposed to cyclical economic forces
due to its low cost structure and government-regulated nature. In addition, most
pipeline MLPs have limited direct commodity price exposure because they do not
own the product being shipped.

         Processing MLPs are gatherers and processors of natural gas as well as
providers of transportation, fractionation and storage of natural gas liquids
("NGLs"). Revenue is derived from

                                       5


<PAGE>


providing services to natural gas producers, which require treatment or
processing before their natural gas commodity can be marketed to utilities and
other end user markets. Revenue for the processor is fee based, although it is
not uncommon to have some participation in the prices of the natural gas and NGL
commodities for a portion of revenue.

         Propane MLPs are distributors of propane to homeowners for space and
water heating. Revenue is derived from the resale of the commodity on a margin
over wholesale cost. The ability to maintain margin is a key to profitability.
Propane serves approximately 3% of the household energy needs in the United
States, largely for homes beyond the geographic reach of natural gas
distribution pipelines. Approximately 70% of annual cash flow is earned during
the winter heating season (October through March). Accordingly, volumes are
weather dependent, but have utility type functions similar to electricity and
natural gas.

         Coal MLPs own, lease and manage coal reserves. Revenue is derived from
production and sale of coal, or from royalty payments related to leases to coal
producers. Electricity generation is the primary use of coal in the United
States. Demand for electricity and supply of alternative fuels to generators are
the primary drivers of coal demand. As natural gas prices increase, the relative
attractiveness of coal as a fuel source increases to utilities. Coal reserves
are long-lived assets.

         Energy Infrastructure MLPs are subject to various federal, state and
local environmental laws and health and safety laws as well as laws and
regulations specific to their particular activities. Such laws and regulations
address: health and safety standards for the operation of facilities,
transportation systems and the handling of materials; air and water pollution
requirements and standards; solid waste disposal requirements; land reclamation
requirements; and requirements relating to the handling and disposition of
hazardous materials. Energy infrastructure MLPs are subject to the costs of
compliance with such laws applicable to them, and changes in such laws and
regulations may adversely affect their results of operations.

         MLPs operating interstate pipelines and storage facilities are subject
to substantial regulation by the Federal Energy Regulatory Commission ("FERC"),
which regulates interstate transportation rates, services and other matters
regarding natural gas pipelines including: the establishment of rates for
service; regulation of pipeline storage and liquified natural gas facility
construction; issuing certificates of need for companies intending to provide
energy services or constructing and operating interstate pipeline and storage
facilities; and certain other matters. FERC also regulates the interstate
transportation of crude oil, including: regulation of rates and practices of oil
pipeline companies; establishing equal service conditions to provide shippers
with equal access to pipeline transportation; and establishment of reasonable
rates for transporting petroleum and petroleum products by pipeline.

         Energy Infrastructure MLPs may be subject to liability relating to the
release of substances into the environment, including liability under federal
"SuperFund" and similar state laws for investigation and remediation of releases
and threatened releases of hazardous materials, as well as liability for injury
and property damage for accidental events, such as explosions or discharges of
materials causing personal injury and damage to property. Such potential
liabilities could have a material adverse effect upon the financial condition
and results of operations of energy infrastructure MLPs.

         Energy infrastructure MLPs are subject to numerous business related
risks, including: deterioration of business fundamentals reducing profitability
due to development of alternative energy sources, changing demographics in the
markets served, unexpectedly prolonged and precipitous changes in commodity
prices and increased competition which takes market share; the lack of growth of
markets requiring growth through acquisitions; disruptions in transportation
systems; the dependence of certain

                                       6


<PAGE>


MLPs upon the energy exploration and development activities of unrelated third
parties; availability of capital for expansion and construction of needed
facilities; and the general level of the economy.

         The energy industry and particular energy infrastructure companies may
be adversely affected by possible terrorist attacks, such as the attacks that
occurred on September 11, 2001. It is possible that facilities of energy
infrastructure companies, due to the critical nature of their energy businesses
to the United States, could be direct targets of terrorist attacks or be
indirectly affected by attacks on others. They may have to incur significant
additional costs in the future to safeguard their assets. In addition, changes
in the insurance markets after September 11, 2001 may make certain types in
insurance more difficult to obtain or obtainable only at significant additional
cost. To the extent terrorism results in a lower level economic activity, energy
consumption could be adversely affected, which would reduce revenues and impede
growth. Terrorist or war related disruption of the capital markets could also
affect the ability of energy infrastructure companies to raise needed capital.

MASTER LIMITED PARTNERSHIPS

         Under normal circumstances the Company will invest at least 70% of
total assets in income producing equity securities of MLPs. An MLP, also known
as a publicly traded partnership, is a limited partnership the interests in
which (known as units) are traded on securities exchanges or over-the-counter.
Organization as a partnership eliminates tax at the entity level.

         An MLP has one or more general partners (who may be individuals,
corporations, or other partnerships) which manage the partnership, and limited
partners, which provide capital to the partnership but have no role in its
management. Typically, the general partner is owned by company management or
another publicly traded sponsoring corporation. When an investor buys units in a
MLP, he or she becomes a limited partner. Most MLPs do not have direct commodity
exposure to oil and gas price volatility, however, they could be influenced by
investor psychology toward the energy sector.

         MLPs are formed in several ways. A nontraded partnership may decide to
go public. Several nontraded partnerships may roll up into a single MLP. A
corporation may spin off a group of assets or part of its business into a MLP of
which it is the general partner, either to realize the assets' full value on the
marketplace or as an alternative to debt. A corporation may fully convert to a
MLP, although since 1986 the tax consequences have made this an unappealing
option for most corporations. Also, a newly formed company may operate as a MLP
from its inception.

         The MLP asset structure essentially transfers cash flows from
long-lived assets directly to limited partner unitholders such as the Company.
MLPs tend to pay relatively higher distributions than other types of companies
and the Company intends to use these MLP distributions in an effort to meet its
investment objective.

         Because the MLP itself does not pay tax, its income or loss is
allocated to its investors, irrespective of whether the investors receive any
cash payment from the MLP. An MLP typically makes quarterly cash distributions.
Although they resemble corporate dividends, MLP distributions are treated
differently for tax purposes. The MLP distribution is treated as a return of
capital to the extent of the investor's basis in his MLP interest and, to the
extent the distribution exceeds the investor's basis in the MLP, capital gain.
The investor's original basis is the price paid for the units. The basis is
adjusted downwards with each distribution and allocation of deductions (such as
depreciation) and losses, and upwards with each allocation of income.

         When the units are sold, the difference between the sales price and the
investor's adjusted basis equals taxable gain. The partner will not be taxed on
distributions until (1) he sells his MLP units and

                                       7


<PAGE>


pays tax on his gain, which gain is increased due to the basis decrease due to
prior distributions; or (2) his basis reaches zero.

         For a further discussion and a description of MLP tax matters, see the
section entitled "U.S. Federal Income Tax Matters."

THE COMPANY'S INVESTMENTS

         The types of securities in which the Company may invest includes, but
are not limited to the following:

         Equity Securities. Consistent with its investment objectives, the
Company may invest up to 100% of its total assets in equity securities issued by
energy infrastructure MLPs, including common units, convertible subordinated
units and pay-in-kind units (each discussed below).

         The value of equity securities will be affected by changes in the stock
markets, which may be the result of domestic or international political or
economic news, changes in interest rates or changing investor sentiment. At
times, stock markets can be volatile and stock prices can change substantially.
Equity securities risk will affect the Company's net asset value per share,
which will fluctuate as the value of the securities held by the Company change.
Not all stock prices change uniformly or at the same time, and not all stock
markets move in the same direction at the same time. Other factors affect a
particular stock's prices, such as poor earnings reports by an issuer, loss of
major customers, major litigation against an issuer, or changes in governmental
regulations affecting an industry. Adverse news affecting one company can
sometimes depress the stock prices of all companies in the same industry. Not
all factors can be predicted.

         MLP Common Units. MLP common units represent an equity ownership
interest in a partnership, entitling the holder to a share of the company's
success through distributions and/or capital appreciation. These units trade on
a national exchange or over the counter. MLPs are required to distribute a large
percentage of their current operating earnings. In the event of liquidation, MLP
common unitholders have rights to the partnership's remaining assets after
bondholders, other debt holders, and preferred unitholders have been paid in
full. The prices of energy infrastructure MLPs may fluctuate with changes in the
underlying companies, commodity price levels, changes in interest rates, changes
in inflation and with general movements in the economy.

         Holders of common units usually have limited voting rights that relate
to significant partnership matters. Such rights may include voting on such
matters as: a sale or exchange of all or substantially all of the assets of the
MLP; dissolution of the MLP; merger transactions; removal of a general partner
and election of a successor general partner; and certain amendments to the
partnership agreements, particularly any amendment that would cause the
partnership to be taxed as a corporation.

         Although common units historically have generated higher average
returns than fixed-income and other equity securities, common units also have
experienced more volatility than fixed income and less volatility than other
equity securities in those returns. An adverse event, such as an unfavorable
earnings report, may depress the value of a particular common unit held by the
Company. Also, the price of common units is sensitive to general movements in
the stock market. A drop in the stock market may depress the price of common
units held by the Company or to which it has exposure. In the event of
liquidation, common shareholders have rights to a company's assets after
obligations to bondholders, other debt holders and preferred shareholders have
been satisfied.

         MLP Convertible Subordinated Units. MLP convertible subordinated units
are issued by MLPs to founders and other related persons upon formation of the
MLP. They generally are not entitled to

                                       8


<PAGE>


distribution until holders of common units have received specified minimum
distributions, plus any arrearages, and may receive less in distributions upon
liquidation. Therefore, they generally entail greater risk than MLP common
units. They are convertible automatically into the senior common units of the
same or a different issuer at a one-to-one ratio upon the passage of time or the
satisfaction of certain financial tests. These units do not trade on a national
exchange or over the counter and there is no active market for convertible
subordinated units. The value of a convertible security often reflects
variations in the price of the underlying common units. The value of a
convertible security is a function of (i) its yield in comparison to the yields
of other securities of comparable quality that do not have a conversion
privilege and (ii) its worth if converted into the underlying common units.
Convertible subordinated units generally have similar voting rights to MLP
common units, except voting may be limited with respect to removal of a general
partner and election of a successor general partner.

         Convertible subordinated units of MLPs generally offer greater dividend
yields than common units. However, convertible subordinated units generally are
not entitled to distributions until holders of common units have received
specified minimum distributions, plus any arrearages, and may receive less in
distributions upon liquidation. In addition, subordinated units are not
generally entitled to arrearage rights during periods where common equivalent
distributions are not paid to the holder. Convertible subordinated units also
are illiquid.

         MLP Pay-In-Kind Units. Pay-in-kind or I-Units are equity securities
issued by MLPs or their affiliates, which provide that the issuer will pay
distributions on such units in the form of additional units. Such investments
benefit the issuer by mitigating its need for cash to meet distribution
obligations. I-Units pay dividends in the form of additional shares rather than
cash. There is no allocation of income or loss to I-Units by the issuer. The
price of I-Units generally varies with the price of MLP Common Units, although
the degree of correlation may be large or small depending on market conditions.

         Debt Securities. The Company may invest up to 25% of its assets in debt
securities of energy infrastructure companies, including securities rated below
investment grade. The Company's debt securities may have fixed or variable
principal payments and all types of interest rate and dividend payment and reset
terms, including fixed rate, adjustable rate, zero coupon, contingent, deferred,
payment in kind and auction rate features. To the extent that the Company
invests in below investment grade debt securities, such securities purchased by
the Company will be rated, at the time of investment, at least B- by S&P or B3
by Moody's or a comparable rating by at least one other rating agency or, if
unrated, determined by the Adviser to be of comparable quality. If a security
satisfies the Company's minimum rating criteria at the time of purchase and is
subsequently downgraded below such rating, the Company will not be required to
dispose of such security. If a downgrade occurs, the Adviser will consider what
action, including the sale of such security, is in the best interest of the
Company and its shareholders.

         Because the risk of default is higher for below investment grade
securities than investment grade securities, the Adviser's research and credit
analysis is an especially important part of managing securities of this type.
The Adviser will attempt to identify those issuers of below investment grade
securities whose financial condition the Adviser believes are adequate to meet
future obligations or have improved or is expected to improve in the future. The
Adviser's analysis focuses on relative values based on such factors as interest
or dividend coverage, asset coverage, earnings prospects and the experience and
managerial strength of the issuer.

         Below Investment Grade Debt Securities. Although the Company does not
currently intend to do so, up to 25% of the Company's assets may be invested in
below investment grade securities. The below investment grade debt securities in
which the Company invests are rated from B3 to Ba1 by Moody's, from B- to BB+ by
Standard & Poor's, are comparably rated by another nationally recognized rating
agency or are unrated but determined by the Adviser to be of comparable quality.
Debt securities rated

                                       9


<PAGE>


below investment grade are commonly referred to as "junk bonds" and are
considered speculative with respect to the issuer's capacity to pay interest and
repay principal.

         Investment in below investment grade securities involves substantial
risk of loss. Below investment grade debt securities or comparable unrated
securities are commonly referred to as "junk bonds" and are considered
predominantly speculative with respect to the issuer's ability to pay interest
and principal and are susceptible to default or decline in market value due to
adverse economic and business developments. The market values for high yield
securities tend to be very volatile, and these securities are less liquid than
investment grade debt securities. For these reasons, your investment in the
Company is subject to the following specific risks:

         o        increased price sensitivity to changing interest rates and to
                  a deteriorating economic environment;

         o        greater risk of loss due to default or declining credit
                  quality;

         o        adverse company specific events are more likely to render the
                  issuer unable to make interest and/or principal payments; and

         o        if a negative perception of the below investment grade debt
                  market develops, the price and liquidity of below investment
                  grade debt securities may be depressed. This negative
                  perception could last for a significant period of time.

         See Appendix A to this statement of additional information for a
description of Moody's and Standard & Poor's ratings.

         Adverse changes in economic conditions are more likely to lead to a
weakened capacity of a below investment grade debt issuer to make principal
payments and interest payments than an investment grade issuer. The principal
amount of below investment grade securities outstanding has proliferated in the
past decade as an increasing number of issuers have used below investment grade
securities for corporate financing. An economic downturn could severely affect
the ability of highly leveraged issuers to service their debt obligations or to
repay their obligations upon maturity. Similarly, down-turns in profitability in
specific industries, such as the energy infrastructure industry, could adversely
affect the ability of below investment grade debt issuers in that industry to
meet their obligations. The market values of lower quality debt securities tend
to reflect individual developments of the issuer to a greater extent than do
higher quality securities, which react primarily to fluctuations in the general
level of interest rates. Factors having an adverse impact on the market value of
lower quality securities may have an adverse effect on the Company's net asset
value and the market value of its Common Shares. In addition, the Company may
incur additional expenses to the extent it is required to seek recovery upon a
default in payment of principal or interest on its portfolio holdings. In
certain circumstances, the Company may be required to foreclose on an issuer's
assets and take possession of its property or operations. In such circumstances,
the Company would incur additional costs in disposing of such assets and
potential liabilities from operating any business acquired.

         The secondary market for below investment grade securities may not be
as liquid as the secondary market for more highly rated securities, a factor
which may have an adverse effect on the Company's ability to dispose of a
particular security when necessary to meet its liquidity needs. There are fewer
dealers in the market for below investment grade securities than investment
grade obligations. The prices quoted by different dealers may vary significantly
and the spread between the bid and asked price is generally much larger than
higher quality instruments. Under adverse market or economic conditions, the
secondary market for below investment grade securities could contract further,
independent of any specific adverse changes in the condition of a particular
issuer, and these instruments

                                       10


<PAGE>


may become illiquid. As a result, the Company could find it more difficult to
sell these securities or may be able to sell the securities only at prices lower
than if such securities were widely traded. Prices realized upon the sale of
such lower rated or unrated securities, under these circumstances, may be less
than the prices used in calculating the Company's net asset value.

         Because investors generally perceive that there are greater risks
associated with lower quality debt securities of the type in which the Company
may invest a portion of its assets, the yields and prices of such securities may
tend to fluctuate more than those for higher rated securities. In the lower
quality segments of the debt securities market, changes in perceptions of
issuers' creditworthiness tend to occur more frequently and in a more pronounced
manner than do changes in higher quality segments of the debt securities market,
resulting in greater yield and price volatility.

         The Company will not invest in distressed, below investment grade
securities (those that are in default or the issuers of which are in
bankruptcy). If a debt security becomes distressed while held by the Company,
the Company may be required to bear certain extraordinary expenses in order to
protect and recover its investment if it is recoverable at all.

         Restricted and Illiquid Securities. The Company may invest up to 30% of
total assets in direct placements. Securities obtained by means of direct
placement are less liquid than securities traded in the open market. The Company
may therefore not be able to readily sell such securities. Investments currently
considered by the Adviser to be illiquid because of such restrictions include
subordinated convertible units and direct placements of common units. Such
securities are unlike securities that are traded in the open market and which
can be expected to be sold immediately if the market is adequate. The sale price
of securities that are not readily marketable may be lower or higher than the
Company's most recent determination of their fair value. Additionally, the value
of these securities typically requires more reliance on the judgment of the
Adviser than that required for securities for which there is an active trading
market. Due to the difficulty in valuing these securities and the absence of an
active trading market for these investments, the Company may not be able to
realize these securities' true value, or may have to delay their sale in order
to do so.

         Restricted securities generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the 1933 Act, or
in a registered public offering. The Advisor has the ability to deem restricted
securities as liquid. To enable the Company to sell its holdings of a restricted
security not registered under the 1933 Act, the Company may have to cause those
securities to be registered. The expenses of registering restricted securities
may be negotiated by the Company with the issuer at the time the Company buys
the securities. When the Company must arrange registration because the Company
wishes to sell the security, a considerable period may elapse between the time
the decision is made to sell the security and the time the security is
registered so that the Company could sell it. The Company would bear the risks
of any downward price fluctuation during that period.

         In recent years, a large institutional market has developed for certain
securities that are not registered under the 1933 Act, including private
placements, repurchase agreements, commercial paper, foreign securities and
corporate bonds and notes. These instruments are often restricted securities
because the securities are either themselves exempt from registration or sold in
transactions not requiring registration. Institutional investors generally will
not seek to sell these instruments to the general public, but instead will often
depend on an efficient institutional market in which such unregistered
securities can be readily resold or on an issuer's ability to honor a demand for
repayment. Therefore, the fact that there are contractual or legal restrictions
on resale to the general public or certain institutions is not dispositive of
the liquidity of such investments.

         Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. Institutional markets for

                                       11


<PAGE>


restricted securities that might develop as a result of Rule 144A could provide
both readily ascertainable values for restricted securities and the ability to
liquidate an investment. An insufficient number of qualified institutional
buyers interested in purchasing Rule 144A-eligible securities held by the
Company, however, could affect adversely the marketability of such portfolio
securities and the Company might be unable to dispose of such securities
promptly or at reasonable prices.

         The Company may also invest in securities that may not necessarily
restricted, but are nonetheless illiquid. Illiquid securities may be difficult
to dispose of at a fair price during times when the Company believes it is
desirable to do so. Illiquid securities are also more difficult to value and the
Adviser's judgment as to value will often be given greater weight than market
quotations, if any exist. If market quotations are not available, illiquid
securities will be valued in accordance with procedures established by the
Board. Investment of the Company's capital in illiquid securities may restrict
the Company's ability to take advantage of market opportunities. The risks
associated with illiquid securities may be particularly acute in situations in
which the Company's operations require cash and could result in the Company
borrowing to meet its short term needs or incurring losses on the sale of
illiquid securities.

         Commercial Paper. The Company may invest in commercial paper.
Commercial paper is a debt obligation usually issued by corporations and may be
unsecured or secured by letters of credit or a surety bond. Commercial paper is
usually repaid at maturity by the issuer from the proceeds of the issuance of
new commercial paper. As a result, investment in commercial paper is subject to
the risk that the issuer cannot issue enough new commercial paper to satisfy its
outstanding commercial paper, also known as rollover risk.

         Asset-backed commercial paper is a debt obligation generally issued by
a corporate-sponsored special purpose entity to which the corporation has
contributed cash-flowing receivables like credit card receivables, auto and
equipment leases, and other receivables. Investment in asset-backed commercial
paper is subject to the risk that insufficient proceeds from the projected cash
flows of the contributed receivables are available to repay the commercial
paper.

         U.S. Government Securities. The Company may invest in U.S. Government
Securities. There are two broad categories of U.S. Government-related debt
instruments: (a) direct obligations of the U.S. Treasury, and (b) securities
issued or guaranteed by U.S. Government agencies.

         Examples of direct obligations of the U.S. Treasury are Treasury Bills,
Notes, Bonds and other debt securities issued by the U.S. Treasury. These
instruments are backed by the "full faith and credit" of the United States. They
differ primarily in interest rates, the length of maturities and the dates of
issuance. Treasury bills have original maturities of one year or less. Treasury
notes have original maturities of one to ten years and Treasury bonds generally
have original maturities of greater than ten years.

         Some agency securities are backed by the full faith and credit of the
United States and others are backed only by the rights of the issuer to borrow
from the U.S. Treasury (such as Federal Home Loan Bank Bonds and Federal
National Mortgage Association Bonds), while still others, such as the securities
of the Federal Farm Credit Bank, are supported only by the credit of the issuer.
With respect to securities supported only by the credit of the issuing agency or
by an additional line of credit with the U.S. Treasury, there is no guarantee
that the U.S. Government will provide support to such agencies and such
securities may involve risk of loss of principal and interest.

         Repurchase Agreements. The Company may enter into "repurchase
agreements" pertaining to U.S. Government securities with member banks of the
Federal Reserve System or primary dealers (as designated by the Federal Reserve
Bank of New York) in such securities. A repurchase agreement arises when the
Company purchases a security and simultaneously agrees to resell it to the
vendor at an agreed

                                       12


<PAGE>


upon future date. The resale price is greater than the purchase price,
reflecting an agreed upon market rate of return that is effective for the period
of time the Company holds the security and that is not related to the coupon
rate on the purchased security. Such agreements generally have maturities of no
more than seven days and could be used to permit the Company to earn interest on
assets awaiting long term investment. The Company requires continuous
maintenance by the custodian for the Company's account in the Federal
Reserve/Treasury Book Entry System of collateral in an amount equal to, or in
excess of, the market value of the securities that are the subject of a
repurchase agreement. Repurchase agreements maturing in more than seven days are
considered illiquid securities. In the event of a bankruptcy or other default of
a seller of a repurchase agreement, the Company could experience both delays in
liquidating the underlying security and losses, including: (a) possible decline
in the value of the underlying security during the period while the Company
seeks to enforce its rights thereto; (b) possible subnormal levels of income and
lack of access to income during this period; and (c) expenses of enforcing its
rights.

         Reverse Repurchase Agreements. The Company may enter into reverse
repurchase agreements for temporary purposes with banks and securities dealers
if the creditworthiness of the bank or securities dealer has been determined by
the Adviser to be satisfactory. A reverse repurchase agreement is a repurchase
agreement in which the Company is the seller of, rather than the investor in,
securities and agrees to repurchase them at an agreed-upon time and price. Use
of a reverse repurchase agreement may be preferable to a regular sale and later
repurchase of securities because it avoids certain market risks and transaction
costs.

         At the time when the Company enters into a reverse repurchase
agreement, liquid assets (cash, U.S. Government securities or other "high-grade"
debt obligations) of the Company having a value at least as great as the
purchase price of the securities to be purchased will be segregated on the books
of the Company and held by the custodian throughout the period of the
obligation. Under the 1940 Act, reverse repurchase agreements are considered
borrowings by the Company; accordingly, the Company will limit its investments
in these transactions, together with any other borrowings, to no more than 33
1/3% of its total assets. The use of reverse repurchase agreements by the
Company creates leverage which increases the Company's investment risk. If the
income and gains on securities purchased with the proceeds of these transactions
exceed the cost, the Company's earnings or net asset value will increase faster
than otherwise would be the case; conversely, if the income and gains fail to
exceed the cost, earnings or net asset value would decline faster than
otherwise would be the case. The Company intends to enter into reverse
repurchase agreements only if the income from the investment of the proceeds is
greater than the expense of the transaction, because the proceeds are invested
for a period no longer than the term of the reverse repurchase agreement.

         Margin Borrowing. The Company may use margin borrowing of up to ____%
of total assets for investment purposes when the Advisor believes it will
enhance returns. Margin borrowings by the Company create certain additional
risks. For example, should the securities that are pledged to brokers to secure
margin accounts decline in value, or should brokers from which the Company has
borrowed increase their maintenance margin requirements (i.e., reduce the
percentage of a position that can be financed), then the Company could be
subject to a "margin call," pursuant to which it must either deposit additional
funds with the broker or suffer mandatory liquidation of the pledged securities
to compensate for the decline in value. In the event of a precipitous drop in
the value of the assets of the Company, it might not be able to liquidate assets
quickly enough to pay off the margin debt and might suffer mandatory liquidation
of positions in a declining market at relatively low prices, thereby incurring
substantial losses. For these reasons, the use of borrowings for investment
purposes is considered a speculative investment practice.

         Interest Rate Transactions. In an attempt to reduce the interest rate
risk arising from the Company's underlying investments and leveraged capital
structure, the Company may enter into interest

                                       13


<PAGE>


rate swap or cap transactions. The use of interest rate swaps and caps is a
highly specialized activity that involves investment techniques and risks
different from those associated with ordinary portfolio security transactions.
In an interest rate swap, the Company would agree to pay to the other party to
the interest rate swap (which is known as the "counterparty") a fixed rate
payment in exchange for the counterparty agreeing to pay to the Company a
variable rate payment that is intended to approximate the Company's variable
rate payment obligation on any variable rate borrowings. The payment obligations
would be based on the notional amount of the swap. In an interest rate cap, the
Company would pay a premium to the counterparty to the interest rate cap and, to
the extent that a specified variable rate index exceeds a predetermined fixed
rate, would receive from the counterparty payments of the difference based on
the notional amount of such cap. Depending on the state of interest rates in
general, the Company's use of interest rate swaps or caps could enhance or
decrease the net income of the Common Shares. To the extent there is a decline
in interest rates, the value of the interest rate swap or cap could decline, and
could result in a decline in the net asset value of the Common Shares. In
addition, if the counterparty to an interest rate swap or cap defaults, the
Company would not be able to use the anticipated net receipts under the interest
rate swap or cap to offset the Company's cost of financial leverage.

         Delayed-Delivery Transactions. Securities may be bought and sold on a
delayed-delivery or when-issued basis. These transactions involve a commitment
to purchase or sell specific securities at a predetermined price or yield, with
payment and delivery taking place after the customary settlement period for that
type of security. Typically, no interest accrues to the purchaser until the
security is delivered. The Company may receive fees or price concessions for
entering into delayed-delivery transactions.

         When purchasing securities on a delayed-delivery basis, the purchaser
assumes the rights and risks of ownership, including the risks of price and
yield fluctuations and the risk that the security will not be issued as
anticipated. Because payment for the securities is not required until the
delivery date, these risks are in addition to the risks associated with the
Company's investments. If the Company remains substantially fully invested at a
time when delayed-delivery purchases are outstanding, the delayed-delivery
purchases may result in a form of leverage. When delayed-delivery purchases are
outstanding, the Company will set aside appropriate liquid assets in a
segregated custodial account to cover the purchase obligations. When the Company
has sold a security on a delayed-delivery basis, the Company does not
participate in further gains or losses with respect to the security. If the
other party to a delayed-delivery transaction fails to deliver or pay for the
securities, the Company could miss a favorable price or yield opportunity or
suffer a loss.

         Securities Lending. The Company may lend securities to parties such as
broker-dealers or institutional investors. Securities lending allows the Company
to retain ownership of the securities loaned and, at the same time, to earn
additional income. Since there may be delays in the recovery of loaned
securities, or even a loss of rights in collateral supplied should the borrower
fail financially, loans will be made only to parties deemed by the Adviser to be
of good credit and legal standing. Furthermore, loans of securities will only be
made if, in the Adviser's judgment, the consideration to be earned from such
loans would justify the risk.

         The Adviser understands that it is the current view of the Commission
staff that the Company may engage in loan transactions only under the following
conditions: (1) the Company must receive 100% collateral in the form of cash or
cash equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the
borrower must increase the collateral whenever the market value of the
securities loaned (determined on a daily basis) rises above the value of the
collateral; (3) after giving notice, the Company must be able to terminate the
loan at any time; (4) the Company must receive reasonable interest on the loan
or a flat fee from the borrower, as well as amounts equivalent to any dividends,
interest, or other distributions on the securities loaned and to any increase in
market value; (5) the Company may pay only

                                       14


<PAGE>


reasonable custodian fees in connection with the loan; and (6) the Board must be
able to vote proxies on the securities loaned, either by terminating the loan or
by entering into an alternative arrangement with the borrower.

         Defensive and Temporary Investments. Under adverse market or economic
conditions or for temporary defensive purposes, the Company may invest up to
100% of its total assets in securities issued or guaranteed by the U.S.
Government or its instrumentalities or agencies, short-term debt securities,
certificates of deposit, bankers' acceptances and other bank obligations,
commercial paper rated in the highest category by a rating agency or other fixed
income securities deemed by the Adviser to be consistent with a defensive
posture, or may hold cash. The Adviser also may invest in such instruments to
meet working capital needs including, but not limited to, the need for
collateral in connection with certain investment techniques, to hold a reserve
pending payment of dividends, and to facilitate the payments of expenses and
settlement of trades. The yield on such securities may be lower than the returns
on MLPs or yields on lower rated fixed income securities. To the extent the
Company uses this strategy, it may not achieve its investment objective.

                           MANAGEMENT OF THE COMPANY

DIRECTORS AND OFFICERS

         The Company's Board of Directors provides broad supervision over the
affairs of the Company, including supervision of the duties performed by the
Adviser. The officers of the Company are responsible for the Company's
operations. The directors and officers of the Company and their principal
occupations and other affiliations during the past five years are set forth
below. Each director and officer will hold office until his successor is duly
elected and qualified, or until he resigns or is removed in the manner provided
by law. The address of each director and officer is [address].

<TABLE>
<CAPTION>

                                            POSITION(S) HELD WITH             PRINCIPAL                 OTHER
                                            COMPANY AND LENGTH OF         OCCUPATION DURING         DIRECTORSHIPS
             NAME AND AGE                        TIME SERVED               PAST FIVE YEARS        HELD BY DIRECTOR
             ------------                        -----------               ---------------        ----------------
<S>                                         <C>                           <C>                     <C>
INDEPENDENT DIRECTORS






INTERESTED DIRECTORS AND OFFICERS
Terry C. Matlack*





<FN>
- ------------------
* Mr. Matlack is an interested person by virtue of his position with the
Company.
</FN>
</TABLE>

         The Company has a standing Audit Committee that consists of _____
directors of the Company who are not "interested persons" (within the meaning of
the 1940 Act) of the Company ("Independent Directors"). The Audit Committee's
function is to select independent accountants to conduct the annual audit of the
Company's financial statements; review with the independent accountants the
outline, scope and results of this annual audit and review the performance and
approval of all fees charged by the

                                       15


<PAGE>


independent accountants for audit, audit-related and other professional
services. In addition, the Audit Committee meets with the independent
accountants and representatives of management to review accounting activities
and areas of financial reporting and control. For purposes of the Sarbanes-Oxley
Act, the Audit Committee has at least one member who is deemed to be a financial
expert. The Audit Committee operates under a written charter approved by the
Board. The Audit Committee will meet periodically, as necessary. The Audit
Committee members are _________.

         [The Company also has a Nominating Committee that consists of all
Independent Directors. The Nominating Committee's function is to nominate and
evaluate Independent Director candidates and review the compensation
arrangements for each of the directors. The Nominating Committee does not
consider nominees recommended by shareholders. The Nominating Committee members
are _________, and will meet periodically, as necessary.]

         As the Company is a newly-organized closed-end management investment
company, no meetings of the above committees have been held in the current
fiscal year.

         Directors and officers of the Company who are interested persons of the
Company will receive no salary or fees from the Company. Each Independent
Director is expected to receive from the Company an annual retainer of $______
and a fee of $_____ (and reimbursement for related expenses) for each meeting of
the Board he or she attends. No director or officer will be entitled to receive
pension or retirement benefits from the Company.

         The table below sets forth the estimated compensation to be paid to the
directors by the Company for the period beginning on the commencement of
operations and ending on [November 30], 2004. As of _____________, 200_, the
Company was not operational and did not pay compensation to the directors.

<TABLE>
<CAPTION>

        NAME AND POSITION WITH THE COMPANY                AGGREGATE COMPENSATION FROM THE COMPANY*
        ----------------------------------                ----------------------------------------
<S>                                                       <C>
INDEPENDENT DIRECTORS
                                                                              $
                                                                              $
                                                                              $
                                                                              $
                                                                              $
                                                                              $
INTERESTED DIRECTORS
Terry C. Matlack                                                             $0

<FN>
- ------------------
*       Since the Company has not completed its first fiscal year, compensation
        is estimated based upon payments to be made by the Company during the
        current fiscal year.
</FN>
</TABLE>

         Because the Company has not yet commenced operations, none of the
directors own Company shares as of the date of this statement of additional
information. The following table sets forth the dollar range of equity
securities beneficially owned by each director in the Company as of _________,
2003.

<TABLE>
<CAPTION>

                                                                           AGGREGATE DOLLAR RANGE OF
                    NAME OF DIRECTOR                           COMPANY SECURITIES BENEFICIALLY OWNED BY DIRECTOR
                    ----------------                           -------------------------------------------------
<S>                                                            <C>


INTERESTED DIRECTORS
</TABLE>

                                       16


<PAGE>


INVESTMENT ADVISER AND ADMINISTRATOR

         Tortoise Capital Advisors, L.L.C. (the "Adviser") will serve as the
Company's investment adviser. The Adviser was formed by Fountain Capital
Management, L.L.C. ("Fountain Capital") and Kansas City Equity Partners, L.C.
("KCEP") in November 2002 to provide portfolio management services exclusively
with respect to energy infrastructure investments.

         The Adviser is located at 10801 Mastin Boulevard, Suite 222, Overland
Park, Kansas 66210. The Adviser specializes in managing portfolios of MLPs and
other energy infrastructure companies. As of September 30, 2003, the Adviser and
its affiliates (including the Atlantic group) had approximately $275 million in
assets under management and private equity investments in the energy
infrastructure industry, and had approximately $8.5 billion in total assets
under management and private equity investments.

         Pursuant to an advisory agreement dated ____________, 2003, the Adviser
shall, subject to overall supervision by the Board, manage the investments of
the Company. The Adviser will be responsible for the investment of the Company's
portfolio consistent with the Company's investment objective, policies and
limitations described in the prospectus and this statement of additional
information.

         Day-to-day management of the Company's portfolio will be the
responsibility of a team of investment analysts and portfolio managers led by
David J. Schulte. Each outside member of the Adviser's investment committee also
has significant responsibilities with KCEP, Fountain Capital and their
affiliates.

         In addition, the Adviser will be obligated to supply the Board and
officers of the Company with certain statistical information and reports, to
oversee the maintenance of various books and records and to arrange for the
preservation of records in accordance with applicable federal law and
regulations. Under the advisory agreement, the Company will pay to the Adviser
quarterly, as compensation for the services rendered and expenses paid by it, a
fee equal on an annual basis to 0.95% of the Company's average monthly Managed
Assets (including the assets attributable to the proceeds from any leverage)
minus the sum of accrued liabilities (other than deferred taxes of debt entered
into for purposes of leverage) ("Managed Assets").

         ______________ will provide facilities, services, and personnel to the
Company pursuant to an administration agreement with the Company dated
___________, 2003. Under the administration agreement, _____________ will
provide certain shareholder, shareholder-related, and other services.
_________________ will solicit and gather shareholder proxies, perform services
connected with the Company's exchange listing and furnish other services the
parties agree from time to time should be provided under the administration
agreement. For administrative services, the Company has agreed to pay
_____________ at the annual rate of ___% of average daily Managed Assets.

         Because the management fees paid to the Adviser are based upon a
percentage of the Company's Managed Assets, fees paid to the Adviser will be
higher if the Company is leveraged; thus, the Adviser will have an incentive to
leverage the Company. The Adviser intends to leverage the Company only when it
believes that the potential return on such additional investments is likely to
exceed the costs incurred in connection with the leverage. The Company's average
monthly Managed Assets are determined for the purpose of calculating the
management fee by taking the average of the monthly determinations of managed
assets during a given calendar quarter. The fees are payable for each calendar
quarter as soon as practicable after the end of that quarter.

         The Company will bear all expenses not specifically assumed by the
Adviser incurred in the Company's operations and in the offering of its Common
Shares. Expenses borne by the Company will

                                       17


<PAGE>


include, but not be limited to, the following: (i) organizational expenses; (ii)
legal and audit expense; (iii) borrowing expenses; (iv) interest; (v) taxes;
(vi) governmental fees; (vii) fees, voluntary assessments and other expenses
incurred in connection with membership in investment company organizations;
(viii) the cost (including brokerage commissions or charges, if any) of
securities purchased or sold by the Company and any losses incurred in
connection therewith; (ix) fees of custodians, transfer agents, registrars or
other agents; (x) expenses of preparing share certificates; (xi) expenses of
registering and qualifying Company shares for sale under applicable federal laws
and maintaining such registrations and qualifications; (xii) expenses of
preparing, setting in print, printing and distributing prospectuses, proxy
statements, reports, notices and dividends to the Company's shareholders; (xiii)
costs of stationery; (xiv) costs of shareholders and other meetings of the
Company; (xv) compensation and expenses of the independent directors of the
Company; (xvi) the Company's pro rata portion of premiums of any fidelity bond
and other insurance covering the Company and its officers and directors; and
(xvii) the fees and other expenses of listing and maintaining the Company's
shares on the NYSE or any other national stock exchange. The Company is also
liable for such nonrecurring expenses as may arise, including litigation to
which the Company may be party. The Company may also have an obligation to
indemnify its directors and officers with respect to any such litigation.

         The advisory agreement provides that the Adviser shall not be subject
to any liability in connection with the performance of its services under those
agreements in the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations and duties. In the event that litigation
against the Adviser, in connection with its obligations under the advisory
agreement, ends with a determination that the Adviser acted without culpability,
the Company will reimburse the Adviser for reasonable attorneys' fees and other
expenses. In the event a matter ends without a court ruling the Adviser's
culpability, the issue of whether the Company can reimburse the Adviser will be
determined by a committee of Independent Directors who were not party to the
suit or by an opinion of independent legal counsel. The Company may advance
expenses to the Adviser if (1) a committee of non-party Independent Directors or
independent legal counsel determine that the Adviser is likely to prevail, and
(2) the Company is adequately assured of repayment in the event of an adverse
result.

         The advisory agreement will continue in force until _____________,
2004, and from year to year thereafter, provided such continuance is approved by
a majority of the Board or by vote of the holders of a majority of the
outstanding voting securities of the Company. Additionally, the advisory
agreement must be approved annually by vote of a majority of the Independent
Directors. The administration agreement will continue in force until
_______________, 2004, and from year to year thereafter, provided such
continuance is approved by a majority of the Board, including a majority of the
Independent Directors. The advisory and administrative agreements may be
terminated by the Adviser, Administrator or the Company, without penalty, on
sixty (60) days' written notice to the other. The advisory and administration
agreements will terminate automatically in the event of their assignment.

         The advisory agreement was considered and approved by the Board of
Directors, including a majority of the Independent Directors. In considering the
advisory agreement, the Board, including a majority of the Independent
Directors, determined that the terms of the agreement are fair and reasonable
and that approval of the advisory agreement on behalf of the Company is in the
best interests of the Company. In evaluating the advisory agreement, the Board
reviewed materials furnished by the Adviser, including information regarding its
affiliates and its personnel, operations and financial condition. The Board also
specifically considered the following as relevant to its determination to
approve the advisory agreement: (1) the history, reputation, qualification and
background of the Adviser and the team of analysts and portfolio managers; (2)
the breadth of the securities, including energy infrastructure company
securities, from which the Adviser would select investments for the Company and
the analysis related to those securities; (3) that the fee and expense ratios of
the Company are reasonable given the quality of services expected to be provided
and are comparable to the fee and expense ratios of similar closed-end

                                       18


<PAGE>


funds with similar investment objectives and policies; and (4) other factors
deemed relevant by the Board. The Board noted and approved that the fee rate
would be applicable to all assets under management, including amounts
representing borrowings by the Company, and the potential conflict of the
Adviser in determining the amount of those borrowings.

POTENTIAL CONFLICTS OF INTEREST

         The Adviser and its affiliates manage other accounts and portfolios
with investment strategies similar to those of the Company. Securities
frequently meet the investment objectives of the Company and such other accounts
and the Company may compete against other accounts for the same trade the
Company might otherwise make, including the priority of the trading order. In
such cases, when practical, the Adviser will attempt to allocate securities
purchased on a pro rata basis, weighted by the asset value of each account.
Other factors considered in the allocation of securities include cash balances,
risk tolerances and other guideline restrictions.

         It is possible that at times identical securities will be held by the
Company and other accounts. However, positions in the same issuer may vary and
the length of time that the Company or other accounts may choose to hold their
investment in the same issuer may likewise vary. To the extent that one or more
of the accounts managed by the Adviser seeks to acquire the same security at
about the same time, the Company may not be able to acquire as large a position
in such security as it desires or it may have to pay a higher price for the
security. Similarly, the Company may not be able to obtain as large an execution
of an order to sell or as high a price for any particular portfolio security if
the Adviser decides to sell on behalf of another account the same portfolio
security at the same time. On the other hand, if the same securities are bought
or sold at the same time by the Company and other accounts, the resulting
participation in volume transactions could produce better executions for the
Company. In the event more than one account purchases or sells the same security
on a given date, the purchases and sales will normally be made as nearly as
practicable on a pro rata basis in proportion to the amounts desired to be
purchased or sold by each account. Although the other accounts may have the same
or similar investment objectives and policies as the Company, their portfolios
may not necessarily consist of the same investments as the Company or each
other, and their performance results are likely to differ from those of the
Company.

CUSTODIAN AND TRANSFER AGENT

         ________________________, [address], will serve as the custodian of the
Company's cash and investment securities. _________________________, [address],
will serve as transfer agent and dividend disbursement agent for the Company, as
well as the Plan Agent for the Company's Plan.

CODE OF ETHICS

         The Company, the Adviser and the Company's principal underwriter have
adopted a Code of Ethics under Rule 17j-1 of the 1940 Act, which is applicable
to officers, directors and designated employees of the Company. Subject to
certain limitations, the Code permits covered persons to invest in securities,
including securities that may be purchased or held by the Company. The Code
contains provisions and requirements designed to identify and address certain
conflicts of interest between personal investment activities of covered persons
and the interests of investment advisory clients such as the Company. Among
other things, the Code prohibits certain types of transactions absent prior
approval, imposes time periods during which personal transactions may not be
made in certain securities, and requires submission of duplicate broker
confirmations and statements and quarterly reporting of securities transactions.
Additional restrictions apply to portfolio managers, traders, research analysts
and others involved in the investment advisory process. Exceptions to these and
other provisions of the Code may be granted in particular circumstances after
review by appropriate personnel. The foregoing description is

                                       19


<PAGE>


qualified in its entirety by the Code, a copy of which has been filed with the
Securities and Exchange Commission.

         The Code of Ethics of the Company can be reviewed and copied at the
Securities and Exchange Commission's Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be obtained by
calling the Securities and Exchange Commission at (202) 942-8090. The Code of
the Company is also available on the EDGAR Database on the Securities and
Exchange Commission's Internet site at http://www.sec.gov, and, upon payment of
a duplicating fee, by electronic request at the following e-mail address:
publicinfo@sec.gov or by writing the Securities and Exchange Commission's Public
Reference Section, Washington, D.C. 20549-0102.

                             PORTFOLIO TRANSACTIONS



EXECUTION OF PORTFOLIO TRANSACTIONS

         As of the date of this statement of additional information, the Company
has not commenced operations and therefore has not engaged in any portfolio
transactions or paid any brokerage commissions.

         The Adviser is responsible for the execution of the Company's portfolio
transactions and must seek the most favorable price and execution for such
transactions, subject to the possible payment, as described below, of higher
commissions to brokers who provide research and analysis. The Company may not
always pay the lowest commission or spread available. Rather, the Company will
also take into account such factors as size of the order, difficulty of
execution, efficiency of the executing broker's facilities (including the
services described below) and any risk assumed by the executing broker.

         The Adviser may give consideration to research, statistical and other
services furnished by broker-dealers to the Adviser for its use, may place
orders with broker-dealers who provide supplemental investment and market
research and securities and economic analysis, and may pay to those brokers a
higher brokerage commission or spread than may be charged by other brokers. Such
research and analysis may be useful to the Adviser in connection with services
to clients other than the Company. The Adviser's fee is not reduced by reason of
its receipt of such brokerage and research services.

         The Adviser may also select other brokers to execute portfolio
transactions. In the OTC market, the Company will generally deal with
responsible primary market-makers unless a more favorable execution can
otherwise be obtained through brokers.

PORTFOLIO TURNOVER

         The Company's annual portfolio turnover rate may vary greatly from year
to year. Although the Company cannot accurately predict its annual portfolio
turnover rate, it is not expected to exceed 30% under normal circumstances.
However, portfolio turnover rate is not considered a limiting factor in the
execution of investment decisions for the Company. A higher turnover rate
results in correspondingly greater brokerage commissions and other transactional
expenses that are borne by the Company. High portfolio turnover may result in
the Company's recognition of gains that will increase the Company's current and
accumulated earnings profits resulting in a greater portion of the Company's
distributions being treated as taxable dividends for Federal income tax
purposes. See "U.S. Federal Income Tax Matters."

                                       20


<PAGE>


                                 NET ASSET VALUE

         The Company will compute its net asset value for its Common Shares as
of the close of trading of the NYSE (normally 4:00 p.m. Eastern time) no less
frequently than the last business day of each calendar month and will make its
net asset value available for publication quarterly. Domestic debt securities
will normally be priced using data reflecting the earlier closing of the
principal markets for those securities. For purposes of determining the net
asset value of a Common Share, the net asset value of the Company will equal the
value of the total assets of the Company (the value of the securities the
Company holds plus cash or other assets, including interest accrued but not yet
received) less (i) all of its liabilities, (including accrued expenses and
taxes, including both current and deferred income taxes), (ii) accumulated and
unpaid dividends on any outstanding preferred shares, (iii) the aggregate
liquidation value of any outstanding preferred shares and (iv) any dividends
payable on the Common Shares. The net asset value per Common Share of the
Company will equal the net asset value of the Company divided by the number of
outstanding Common Shares.

         The assets in the Company's portfolio will be valued monthly in
accordance with Valuation Procedures adopted by the Board of Directors. The
Adviser anticipates that a majority of the Company's assets, including common
units of MLPs, will be valued using closing market prices or readily available
market quotations supplied by third parties. Debt securities are valued on the
basis of valuations furnished by a principal market maker, or pricing service,
or both, both of which generally use electronic data processing techniques to
determine valuation for institutional size trading units of debt securities
without exclusive reliance on quoted prices. Short-term debt instruments which
have a remaining maturity of 60 days or less are generally valued at amortized
cost. The value of interest rate swaps, caps and flows is determined in
accordance with a formula and confirmed periodically with bank quotations. In
the event that market quotations are not readily available, the pricing service
does not provide a valuation for a particular asset, or the valuations are
deemed unreliable, or if events occurring after the close of the principal
markets for particular securities (e.g., domestic debt), but before the Company
values its assets, would materially affect net asset value, the Adviser may use
a fair value method to value certain assets. The use of fair value pricing will
be governed by Valuation Procedures established by the Board of Directors.

         The Valuation Procedures also provide that the Adviser will review the
valuation of the obligation for income taxes separately for current taxes and
deferred taxes due to the differing impact of each on (i) the anticipated timing
of required tax payments and (ii) the impact of each on the treatment of
distributions by the Company to its shareholders.

                                    LEVERAGE

         The Company may borrow money, issue preferred shares, or issue other
debt securities to the extent permitted by the 1940 Act. These practices are
known as leverage. Under the 1940 Act, the Company may engage in leverage in an
amount up to 33 1/3% of total assets (including the amount obtained through
leverage). Subject to market conditions, the Company generally intends to be
leveraged to the extent permitted by law, however, there may be a delay of up to
nine (9) to twelve (12) days following the closing before the Company fully
establishes borrowing facilities or other means of leverage. The Company
generally will not use leverage if it anticipates that a leveraged capital
structure would result in a lower return to shareholders than the Company could
obtain over time without leverage. The Company currently intends to engage in
leverage primarily through borrowing from banks and financial institutions, and
through reverse repurchase agreements. The Company may also borrow up to an
additional 5% of its total assets (not including the amount so borrowed) for
temporary purposes, including the settlement and clearance of securities
transactions, which otherwise might require untimely dispositions of portfolio
holdings.

                                       21


<PAGE>


         Under the 1940 Act, the Company is not permitted to borrow or otherwise
incur indebtedness constituting senior securities unless immediately thereafter
the Company has total assets (including the proceeds of the indebtedness) at
least equal to 300% of the amount of the indebtedness. Stated another way, the
Company may not borrow for investment purposes more than 33 1/3% of its total
assets, including the amount borrowed. The Company also must maintain this 300%
"asset coverage" for as long as the indebtedness is outstanding. The 1940 Act
provides that the Company may not declare any cash dividend or other
distribution on its shares, or purchase any of its shares of capital stock
(through tender offers or otherwise), unless it would satisfy this 300% asset
coverage after deducting the amount of the dividend, other distribution or share
purchase price, as the case may be.

         The company currently intends to leverage primarily through borrowings
from banks and financial institutions, and through reverse repurchase
agreements. The establishment of a borrowing facility by the Company would
involve expenses and other costs, including interest payments, which would be
borne by the Company's common shareholders. In addition, the terms of any
borrowing or other indebtedness issued by the Company may impose asset coverage
requirements, dividend limitations and voting right requirements on the Company
that are more stringent than those imposed under the 1940 Act. Such terms may
also impose special restrictions on the Company's portfolio composition or on
its use of various investment techniques or strategies or its ability to pay
dividends on Common Shares in some instances. The Company also may be required
to pledge its assets to lenders in connection with certain types of borrowings.
Due to these restrictions, the Company may be forced to liquidate investments at
times or prices that are not favorable to the Company, or the Company may be
forced to forgo investments that the Adviser otherwise views as favorable.

         Although leverage creates an opportunity for increased income and
capital appreciation for shareholders, at the same time it creates special
risks. Leverage will increase the Company's exposure to capital risk. Successful
use of leverage depends on the Adviser's ability to predict correctly interest
rates and market movements and the Company's continued access to bank
borrowings, or other vehicles for leverage on favorable terms. There is no
assurance that the use of a leveraging strategy will be successful during any
period in which it is used.

         The premise underlying the use of leverage is that the costs of
leveraging generally will be based on short-term rates, which normally will be
lower than the return (including the potential for capital appreciation) that
the Company can earn on the longer-term portfolio investments that it makes with
the proceeds obtained through the leverage. Thus, the shareholders would benefit
from an incremental return. However, if the differential between the return on
the Company's investments and the cost of leverage were to narrow, the
incremental benefit would be reduced and could be eliminated or even become
negative. Furthermore, if long-term rates rise, the net asset value of the
Company's Common Shares will reflect the resulting decline in the value of a
larger aggregate amount of portfolio assets than the Company would hold if it
had not leveraged. Thus, leveraging exaggerates changes in the value and in the
yield on the Company's portfolio. This, in turn, may result in greater
volatility of both the net asset value and the market price of the Common
Shares.

         To the extent the income or capital appreciation derived from
securities purchased with funds received from leverage exceeds the cost of
leverage, the Company's return will be greater than if leverage had not been
used. Conversely, if the income or capital appreciation from the securities
purchased with such funds is not sufficient to cover the cost of leverage, the
Company's return will be less than if leverage had not been used, and therefore
the amount available for distribution to shareholders as dividends and other
distributions will be reduced. Nevertheless, the Adviser may determine to
maintain the Company's leveraged position if it deems such action to be
appropriate under the circumstances.

                                       22


<PAGE>


         The Company may, but is not required to, hedge general interest rate
exposure arising from its leverage transactions. Under current market
conditions, hedging would be accomplished principally by entering into interest
rate transactions. Interest rate transactions are hedging transactions such as
interest rate swaps and the purchase of interest rate caps and floors. Interest
rate swaps involve the exchange of by the Company with another party of their
respective commitments to pay or receive interest (e.g., an exchange of floating
rate payments for fixed payments). The purchase of an interest rate cap entitles
the purchaser, to the extent that a specified index exceeds a predetermined
interest rate, to receive payments of interest on a notional principal amount
from the party selling such interest rate cap. The purchase of an interest rate
floor entitles the purchaser, to the extent that a specified index falls below a
predetermined interest rate, to receive payments of interest on a notional
principal amount from the party selling such interest rate floor. The Company
will use interest rate transactions for hedging purposes only. The use of
interest rate transactions is a highly specialized activity that involves
investment techniques and risks different from those associated with ordinary
portfolio security transactions.

EFFECTS OF LEVERAGE

         Assuming borrowings in the amount of 33 1/3% of the Company's total
assets (including the amount borrowed), and an annual interest rate of 3%
payable on such borrowing based on market rates of __ [state a maturity] as of
the date of this prospectus, the annual return that the Company's portfolio must
experience (net of expenses) in order to cover those interest payments would be
[__]%.

                         DESCRIPTION OF PREFERRED SHARES

         The Company's Articles of Incorporation authorize the Board to create
additional classes of stock. Preferred shares may be issued in one or more
classes or series, with such rights as determined by action of the Board without
the approval of the common shareholders.

         Although the terms of any preferred shares, including their dividend
rate, voting rights, liquidation preference and redemption provisions, will be
determined by the Board (subject to applicable law and the Articles of
Incorporation) if and when it authorizes a preferred shares offering, it is
likely that any such preferred shares would pay cumulative dividends for
relatively short-term periods (such as 7 days) and would provide for the
periodic redetermination of the dividend rate through an auction process or
remarketing procedure. The liquidation preference, preference on distribution,
voting rights and redemption provisions of the preferred shares would likely be
as stated below.

         As used in this statement of additional information, unless otherwise
noted, the Company's "net assets" include assets of the Company attributable to
any outstanding Common Shares and preferred shares, with no deduction for the
liquidation preference of the preferred shares. Solely for financial reporting
purposes, however, the Company would be required to exclude the liquidation
preference of preferred shares from "net assets," so long as the preferred
shares have redemption features that are not solely within the control of the
Company. For all regulatory and tax purposes, the Company's preferred shares
will be treated as stock (rather than indebtedness).

         Limited Issuance of Preferred Shares. Under the 1940 Act, the Company
could issue preferred shares with an aggregate liquidation value of up to
one-half of the value of the Company's net assets, measured immediately after
issuance of the preferred shares.

         Distribution Preference. The preferred shares would have complete
priority over the Common Shares as to distribution of assets.

                                       23


<PAGE>


         Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, holders of
preferred shares ("preferred shareholders") would be entitled to receive a
preferential liquidating distribution (expected to equal the original purchase
price per share plus accumulated and unpaid dividends thereon, whether or not
earned or declared) before any distribution of assets is made to holders of
Common Shares. After payment of the full amount of the liquidating distribution
to which they are entitled, preferred shareholders would not be entitled to any
further participation in any distribution of assets by the Company. A
consolidation or merger of the Company with or into any business trust or
corporation or a sale of all or substantially all of the assets of the Company
would not be deemed to be a liquidation, dissolution or winding up of the
Company.

         Voting Rights. In connection with any issuance of preferred shares, the
Company must comply with Section 18(i) of the 1940 Act, which requires, among
other things, that preferred shares be voting shares. Except as otherwise
provided in the Articles of Incorporation or the Company's By-laws or otherwise
required by applicable law, preferred shareholders would vote together with
common shareholders as a single class.

         In connection with the election of the Company's directors, preferred
shareholders, voting as a separate class, would also be entitled to elect two of
the Company's directors, and the remaining directors would be elected by common
shareholders and preferred shareholders, voting together as a single class. In
addition, if at any time dividends on the Company's outstanding preferred shares
would be unpaid in an amount equal to two full years' dividends thereon, the
holders of all outstanding preferred shares, voting as a separate class, would
be entitled to elect a majority of the Company's directors until all dividends
in arrears have been paid or declared and set apart for payment.

         The affirmative vote of the holders of a majority of the outstanding
preferred shares, voting as a separate class, would be required to approve any
action requiring a vote of security holders under Section 13(a) of the 1940 Act
including, among other things, the conversion of the Company from a closed-end
to an open-end company or changes in the investment limitations described as
fundamental policies under "Investment Limitations." The class or series vote of
preferred shareholders described above would in each case be in addition to any
separate vote of the requisite percentage of Common Shares and preferred shares
necessary to authorize the action in question.

         Holders of preferred shares would not be entitled to vote on matters
placed before shareholders if, at or prior to the time when a vote is required,
such shares shall have been (1) redeemed or (2) called for redemption and
sufficient funds shall have been deposited in trust to effect such redemption.

         The discussion above describes the terms related to a possible offering
of preferred shares. The Board currently expects to leverage through borrowing
or other forms of indebtedness rather than by issuing preferred shares. If the
Board does determines to authorize an offering of preferred shares, the terms
thereof may be the same as, or different from, the terms described above,
subject to applicable law and the Articles of Incorporation and By-laws.

                         U.S. FEDERAL INCOME TAX MATTERS

         Set forth below is a discussion of the material federal income tax
aspects concerning the Company and the purchase, ownership and disposition of
Common Shares. This discussion does not purport to be complete or to deal with
all aspects of federal income taxation that may be relevant to shareholders in
light of their particular circumstances or who are subject to special rules,
such as banks, thrift institutions and certain other financial institutions,
real estate investment trusts, regulated investment companies, insurance
companies, brokers and dealers in securities or currencies, certain securities
traders, tax-exempt investors, individual retirement accounts and certain
tax-deferred accounts, and foreign

                                       24


<PAGE>


investors. Unless otherwise noted, this discussion assumes that you are a U.S.
person and hold your Common Shares as a capital asset. This discussion is based
on present provisions of the Code and the regulations promulgated thereunder and
existing judicial decisions and administrative pronouncements, all of which are
subject to change or differing interpretations (possibly with retroactive
effect). Prospective investors should consult their own tax advisers with regard
to the federal income tax consequences of the purchase, ownership or disposition
of Common Shares, as well as the tax consequences arising under the laws of any
state, locality, foreign country or other taxing jurisdiction.

TAXATION OF THE COMPANY

         The Company will be treated as a regular C corporation for federal and
state income tax purposes. Thus, the Company will compute and pay federal and
state income tax on its taxable income. Thus, the Company will be subject to
federal income tax on its taxable income at tax rates up to 35%. Additionally,
in certain instances the Company could be subject to the alternative minimum tax
of 20% on its alternative minimum taxable income to the extent that the
alternative minimum tax exceeds its regular federal income tax.

         As indicated above, the Company intends to invest its assets primarily
in MLPs. MLPs generally are treated as partnerships for federal income tax
purposes. Since partnerships are generally not subject to federal income tax,
the partnership's partners must report their proportionate share of partnership
income. Thus, as a partner in MLPs, the Company will report its proportionate
share of the MLPs' income in computing its federal taxable income, irrespective
of whether any cash distributions are made by the MLP to the Company. The
Company will also take into account any other items of Company income, gain,
deduction or loss. The Company anticipates that these may include interest
income earned on the Company's investment in debt securities, deductions for
Company operating expenses and gain or loss recognized by the Company on the
sale of MLP interests or any other security.

         As explained further below, based upon the historic performance of
MLPs, the Company anticipates initially that its proportionate share of the
MLPs' taxable income will be less than twenty percent of the cash distributions
received by the Company from the MLPs. In such case, the Company anticipates
that it will not incur federal income tax on a significant portion of its cash
flow, particularly after taking into account the Company's current operational
expenses. If the MLPs' taxable income is a significantly greater portion of the
MLPs' cash distributions, the Company will incur additional current federal
income tax.

         The Company anticipates that each year it will turn over a certain
portion of its investment assets. The Company will recognize gain or loss on the
disposition of all or a portion of its interest in MLPs in an amount equal to
the difference between the sales price and the Company's basis in the MLP
interests sold. To the extent the Company receives MLP cash distributions in
excess of the taxable income reportable by the Company with respect to each
respective MLP interest, the Company's basis in the MLP interest will be reduced
and the Company's gain on the sale of an MLP interest likewise will be
increased.

         The Company will not be treated as a regulated investment company under
the federal income tax rules. The federal income tax rules generally provide
that a regulated investment company does not pay an entity level income tax,
provided that it distributes all or substantially all of its income. The
regulated investment company taxation rules have no application to the Company
or shareholders of the Company.

TAXATION OF THE SHAREHOLDERS

         Distributions. The Company expects to distribute to its common
shareholders an amount equal to the distributable cash flow, ("DCF"). The
Company's distribution of its DCF will be treated as a dividend-type
distribution. A dividend-type distribution is treated as a taxable dividend to
the shareholder

                                       25


<PAGE>


to the extent of the distributing corporation's current or accumulated earnings
and profits. If the distribution exceeds the distributing corporation's current
or accumulated earnings and profits, the distribution is treated as a return of
capital to the shareholder, to the extent of the shareholder's basis in the
Common Shares, and then as capital gain.

         Generally, a corporation's earnings and profits are computed based upon
taxable income, with certain specified adjustments, and reduced for
distributions made by the distributing corporation. As explained above, based
upon the historic performance of the MLPs, the Company annually anticipates that
the distributed cash from the MLPs will exceed the Company's proportionate share
of the MLP income and the Company's gain on its sale of MLP interests. Thus, the
Company anticipates that only a portion of its dividend-type distributions will
be treated as dividend income to its shareholders. To the extent of the excess
distribution, a shareholder's basis in the Common Shares will be reduced and, if
a shareholder has no further basis in its shares, a shareholder will report any
excess as capital gain.

         Thus, the taxable portion of the Company's dividend distributions will
be affected by (1) the portion of the Company's share of MLP taxable income to
the Company's amount of MLP cash distributions and (2) the Company's annual
portfolio turnover rate. A higher percentage of MLP taxable income to MLP cash
distributions or a higher annual portfolio turnover rate will result in a
greater portion of the Company's dividend-type distributions being treated as
dividend income.

         The Jobs Growth and Tax Relief Reconciliation Act of 2003 (the "2003
Act") amended the federal income tax law generally to reduce the maximum federal
income tax rate on qualifying dividend income to the rate applicable to
long-term capital gains, which is generally fifteen percent. The portion of the
Company's dividend-type distributions treated as a dividend for federal income
tax purposes should be treated as a qualifying dividend for federal income tax
purposes.

         If a shareholder participates in the Company's dividend reinvestment
plan, such shareholder will be taxed upon the amount received as if such amount
is received by the participating shareholder and the participating shareholder
reinvested such amount in additional Company Common Stock.

         The Company will notify shareholders annually as to the federal income
tax status of Company distributions to them.

         Sale of Shares. Upon the sale of Common Shares, a shareholder generally
will recognize capital gain or loss measured by the difference between the sales
proceeds received and the shareholder's federal income tax basis of Common
Shares sold. Generally such capital gain or loss will be long-term capital gain
or loss if Common Shares were held as a capital asset for more than twelve
months.

         Backup Withholding. The Company generally is required to withhold and
remit to the U.S. Treasury 28% (except as noted below) of all distributions
(including Capital Gain Dividends) and redemption or repurchase proceeds
otherwise payable to any individual or certain other non-corporate shareholder
who fails to properly furnish the Company with a correct taxpayer identification
number. Withholding at that rate also is required from all distributions
otherwise payable to such a shareholder who has under-reported dividend or
interest income or who fails to certify to the Company that he or she is not
otherwise subject to that withholding (together with the withholding described
in the preceding sentence, "backup withholding"). The backup withholding rate
will increase to 31% for amounts paid after December 31, 2010, unless Congress
enacts tax legislation providing otherwise. Backup withholding is not an
additional tax, and any amounts withheld with respect to a shareholder may be
credited against the shareholder's federal income tax liability.

                                       26


<PAGE>


TAX CONSEQUENCES OF CERTAIN INVESTMENTS

         Federal Income Taxation of MLPs. MLPs are similar to corporations in
many respects, but differ in others, especially in the way they are taxed for
federal income tax purposes. A corporation is a distinct legal entity, separate
from its shareholders and employees and is treated as a separate entity for
federal income tax purposes as well. Like individual taxpayers, a corporation
must pay a federal income tax on its income. To the extent the corporation
distributes its income to its shareholders in the form of dividends, the
shareholders may pay federal income tax on the dividends they receive. For this
reason, it is said that corporate income is double-taxed, or taxed at two
levels.

         An MLP, as a partnership, is not considered to be a separate entity,
but is rather an aggregate of all the partners. An MLP is treated for federal
income tax purposes as a pass-through entity. No federal income tax is paid at
the partnership level. A partnership's income is considered earned by all the
partners; it is allocated among all the partners in proportion to their
interests in the partnership, and each partner pays tax on his or her share of
the partnership income. All the other items that go into determining taxable
income and tax owed are passed through to the partners as well - capital gains
and losses, deductions, credits, etc. Partnership income is thus said to be
single-taxed or taxed only at one level - that of the individual partner.

         The Internal Revenue Code generally requires all publicly-traded
partnerships to be treated as a corporation for federal income tax purposes.
However, if the publicly-traded partnership satisfies certain requirements, the
publicly-traded partnership will be taxed as partnership for federal income tax
purposes, referred to herein as an MLP. Under these requirements, an MLP must
receive 90 percent of its income from specified sources as qualifying income.

         Qualifying income for MLPs includes interest, dividends, real estate
rents, gain from the sale or disposition of real property, income and gain from
commodities or commodity futures, and income and gain from mineral or natural
resources activities. Mineral or natural resources activities include
exploration, development, production, mining, refining (including fertilizers),
marketing and transportation (including pipelines), of oil and gas, minerals,
geothermal energy, or timber. This means that most MLPs today are in energy,
timber, or real estate related (including mortgage securities) businesses.

         Because the MLP itself does not pay tax, its income or loss is
allocated to its investors, irrespective of whether the investors receive any
cash payment from the MLP. MLPs generally make quarterly cash distributions.
Although they resemble corporate dividends, MLP distributions are treated
differently. The MLP distribution is treated as a return of capital to the
extent of the investor's basis in his MLP interest and, to the extent the
distribution exceeds the investor's basis in the MLP, capital gain. The
investor's original basis is the price paid for the units. The basis is adjusted
downwards with each distribution and allocation of deductions (such as
depreciation) and losses, and upwards with each allocation of income.

         It is important to note that an MLP investor is taxed on his share of
partnership income whether or not he actually receives any cash from the
partnership. The tax is based not on money he actually receives, but his
proportionate share of what the partnership earns. However, most MLPs make it a
policy to make quarterly distributions to their partners that will comfortably
exceed any tax owed.

         When the units are sold, the difference between the sales price and the
investor's adjusted basis equals taxable gain. The partner will not be taxed on
distributions until (1) he sells his MLP units and pays tax on his gain, which
gain is increased due to the basis decrease due to prior distributions; or (2)
his basis reaches zero.

                                       27


<PAGE>


       At tax filing season an MLP investor will receive a K-1 form showing
his share of each item of partnership income, gain, loss, deductions and
credits. He will use that information to figure his taxable partnership income
(MLPs provide their investors with material that walks them through all the
steps). If the result is net income, the partner pays tax on it at his
individual tax rate. If the result is a net loss, it is considered a "passive
loss" under the tax code and generally may not be used to offset income from
other sources, but must be carried forward.

         Because the Company is a corporation, the Company, and not its
shareholders, will report the income or loss of the MLPs. Thus, the Company's
shareholders will not have to deal with any K-1 reporting by the MLP.
Shareholders, instead, will receive a Form 1099 from the Company. In addition,
due to the Company's anticipated broad public ownership, the Company will not be
subject to the passive activity loss limitation rules mentioned in the preceding
paragraph.

                              PROXY VOTING POLICIES

         Subject to the oversight of the Board, the Board has delegated
responsibility for voting proxies to the Adviser. Proxy voting decisions will be
made by the investment committee of the Adviser. Unlike holders of common stock
in a corporation, holders of MLP equity units have only limited voting rights on
matters affecting MLPs. Holders of MLP equity units typically have voting rights
only for extraordinary events, such as the issuance of additional common units,
the issuance of any preferred units, a merger, a sale of all or substantially
all of an MLP's assets, amendment of the partnership agreement or the
dissolution of an MLP. As a result, the Company expects to receive a limited
number of proxies from the MLPs in which the Company will invest and the Company
expects that proxies will relate only to extraordinary events. The Adviser will
decide how to vote any proxies it receives on a case by case basis in
furtherance of the best economic interests of the Company's shareholders.

         If a request for proxy presents a conflict of interest between the
Company's shareholders on one hand, and the Adviser, the principal underwriters,
or any affiliated persons of the Company, the Adviser or the principal
underwriters, on the other hand, the independent directors of the Company will
review and must ratify any decision before any proxies will be voted.

                             INDEPENDENT ACCOUNTANTS

         Ernst & Young, LLP will serve as independent public accountants for the
Company. Ernst & Young, LLP will provide audit services, tax return preparation
and assistance and consultation in connection with review of the Company's
filings with the Commission.

                             ADDITIONAL INFORMATION

         A Registration Statement on Form N-2, including amendments thereto,
relating to the Common Shares offered hereby, has been filed by the Company with
the Commission. The prospectus and this statement of additional information do
not contain all of the information set forth in the Registration Statement,
including any exhibits and schedules thereto. For further information with
respect to the Company and the shares offered hereby, reference is made to the
Registration Statement. Statements contained in the prospectus and this
statement of additional information as to the contents of any contract or other
document referred to are not necessarily complete and in each instance reference
is made to the copy of such contract or other document filed as an exhibit to
the Registration Statement, each such statement being qualified in all respects
by such reference. A copy of the Registration Statement may be inspected without
charge at the Commission's principal office in Washington, D.C., and copies of
all or

                                       28


<PAGE>


any part thereof may be obtained from the Commission upon the payment of certain
fees prescribed by the Commission.

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholder and
Board of Directors of
Tortoise Energy Infrastructure Corporation




                              FINANCIAL STATEMENTS

                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                       STATEMENT OF ASSETS AND LIABILITIES

                              ______________, 2003


ASSETS:
Cash................................................................  $
Deferred offering costs.............................................
Total assets........................................................  $

LIABILITIES:
Payable for offering costs..........................................
Net assets..........................................................

NET ASSETS CONSIST OF:
Common stock (_____ shares of $.0001 par value common stock
   issued and outstanding; 1,000,000,000 shares authorized).........  $

Paid-in capital in excess of par....................................

Net Assets..........................................................  $

Net asset value per share...........................................  $

Maximum offering price per share ($23.875/95.5%)....................  $


                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                          NOTES TO FINANCIAL STATEMENT

                            __________________, 2003

         The accompanying notes are an integral part of the financial statement.

1.       Organization

         Tortoise Energy Infrastructure Corporation (the "Company") was
organized as a Maryland corporation on ______________, 2003, and is registered
as a non-diversified, closed-end management investment company under the
Investment Company Act of 1940, as amended, and the rules and

                                       29


<PAGE>


regulations thereunder (the "1940 Act"). The Company has had no operations other
than the sale to _____________________ of an aggregate of ____ shares for
$___________ on __________, 2003.

2.       Accounting Policies

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amount of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements. Actual results could differ from those
estimates.

3.       Concentration of Risk

         The Company's investment objective is to seek a high level of total
return with an emphasis on income. The Company will seek to achieve its
investment objective by investing at least 70% of its total assets in a
portfolio of common equity units and convertible subordinated equity units
issued by master limited partnerships ("MLPs"). The Company may invest up to 25%
of its assets in debt securities, which may include below investment grade
securities.

         The Company may, for defensive purposes, temporarily invest all or a
significant portion of its assets in investment grade securities, short-term
debt securities and cash or cash equivalents. To the extent the Company uses
this strategy, it may not achieve its investment objectives.

4.       Agreements

         The Company has entered into an Investment Advisory Agreement with
Tortoise Capital Advisors, LLC (the "Adviser"). Under the terms of the
agreement, the Company will pay the Adviser a fee equal to an annual rate of
[0.95]% of the Company's average monthly total assets (including any assets
attributable to leverage) minus the sum of accrued liabilities other than
deferred taxes or debt entered into for purposes of leverage ("Managed Assets")
in exchange for the investment advisory services provided. The Company has also
entered into an Administration Agreement with the __________. Under the terms of
the Administration Agreement, ________________ will receive a fee at an annual
rate of _____% of the Company's average __________ Managed Assets in exchange
for administrative services provided.

5.       Organization Expenses and Offering Costs

         The Company is responsible for paying all organizational expenses.
Offering costs (other than sales load of $_____ or ____% of the offering price)
in excess of $______ per share will also be paid by the Adviser. Based on an
estimated Company offering of ___________ shares, offering costs incurred by the
Company are estimated to be $________. Offering costs paid by the Company will
be charged as a reduction of paid-in capital at the completion of the Company
offering.

6.       [Federal Income Taxes]

                                       30


<PAGE>


                        APPENDIX A--RATING OF INVESTMENTS

COMMERCIAL PAPER RATINGS

         An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt considered short-term in the relevant
market. The following summarizes the rating categories used by S &P's for
commercial paper:

         "A-1" - Issue's degree of safety regarding timely payment is strong.
Those issues determined to possess extremely strong safety characteristics are
denoted "A-1+."

         "A-2" - Issue's capacity for timely payment is satisfactory. However,
the relative degree of safety is not as high as for issues designated "A-1."

         "A-3" - Issue has an adequate capacity for timely payment. It is,
however, somewhat more vulnerable to the adverse effects of changes in
circumstances than an obligation carrying a higher designation.

         "B" - Issue has only a speculative capacity for timely payment.

         "C" - Issue has a doubtful capacity for payment.

         "D" - Issue is in payment default.

         Moody's commercial paper ratings are opinions of the ability of issuers
to repay punctually promissory obligations not having an original maturity in
excess of 9 months. The following summarizes the rating categories used by
Moody's for commercial paper:

         "Prime-1" - Issuer or related supporting institutions are considered to
have a superior capacity for repayment of short-term promissory obligations.
Prime-1 repayment capacity will normally be evidenced by the following
characteristics: leading market positions in well established industries; high
rates of return on funds employed; conservative capitalization structures with
moderate reliance on debt and ample asset protection; broad margins in earning
coverage of fixed financial charges and high internal cash generation; and well
established access to a range of financial markets and assured sources of
alternate liquidity.

         "Prime-2" - Issuer or related supporting institutions are considered to
have a strong capacity for repayment of short-term promissory obligations. This
will normally be evidenced by many of the characteristics cited above but to a
lesser degree. Earnings trends and coverage ratios, while sound, will be more
subject to variation. Capitalization characteristics, while still appropriate,
may be more affected by external conditions. Ample alternative liquidity is
maintained.

         "Prime-3" - Issuer or related supporting institutions have an
acceptable capacity for repayment of short-term promissory obligations. The
effects of industry characteristics and market composition may be more
pronounced.

         Variability in earnings and profitability may result in changes in the
level of debt protection measurements and the requirement for relatively high
financial leverage. Adequate alternate liquidity is maintained.

         "Not Prime" - Issuer does not fall within any of the Prime rating
categories.

                                      A-1


<PAGE>


CORPORATE AND MUNICIPAL LONG-TERM DEBT RATINGS

         The following summarizes the ratings used by S&P for corporate and
municipal debt:

         "AAA" - This designation represents the highest rating assigned by S&P
to a debt obligation and indicates an extremely strong capacity to pay interest
and repay principal.

         "AA" - Debt is considered to have a very strong capacity to pay
interest and repay principal and differs from AAA issues only in small degree.

         "A" - Debt is considered to have a strong capacity to pay interest and
repay principal although such issues are somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than debt in
higher-rated categories.

         "BBB" - Debt is regarded as having an adequate capacity to pay interest
and repay principal. Whereas such issues normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher-rated categories.

         "BB," "B," "CCC," "CC" and "C" - Debt is regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. "BB" indicates the
lowest degree of speculation and "C" the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

         "BB" - Debt has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The "BB"
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BBB-" rating.

         "B" - Debt has a greater vulnerability to default but currently has the
capacity to meet interest payments and principal repayments. Adverse business,
financial or economic conditions will likely impair capacity or willingness to
pay interest and repay principal. The "B" rating category is also used for debt
subordinated to senior debt that is assigned an actual or implied "BB" or "BB-"
rating.

         "CCC" - Debt has a currently identifiable vulnerability to default, and
is dependent upon favorable business, financial and economic conditions to meet
timely payment of interest and repayment of principal. In the event of adverse
business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The "CCC" rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
"B" or "B-" rating.

         "CC" - This rating is typically applied to debt subordinated to senior
debt that is assigned an actual or implied "CCC" rating.

         "C" - This rating is typically applied to debt subordinated to senior
debt that is assigned an actual or implied "CCC-" debt rating. The "C" rating
may be used to cover a situation where a bankruptcy petition has been filed, but
debt service payments are continued "CI." This rating is reserved for income
bonds on which no interest is being paid.

                                      A-2


<PAGE>


         "D" - Debt is in payment default. This rating is used when interest
payments or principal payments are not made on the date due, even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. "D" rating is also used upon the filing
of a bankruptcy petition if debt service payments are jeopardized.

         PLUS (+) OR MINUS (-) - The ratings from "AA" through "CCC" may be
modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.

         "r" - This rating is attached to highlight derivative, hybrid, and
certain other obligations that S&P believes may experience high volatility or
high variability in expected returns due to non-credit risks. Examples of such
obligations are: securities whose principal or interest return is indexed to
equities, commodities, or currencies; certain swaps and options; and interest
only and principal only mortgage securities. The absence of an "r" symbol should
not be taken as an indication that an obligation will exhibit no volatility or
variability in total return.

         The following summarizes the ratings used by Moody's for corporate and
municipal long-term debt:

         "Aaa" - Bonds are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

         "Aa" - Bonds are judged to be of high quality by all standards.
Together with the "Aaa" group, they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in "Aaa" securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in "Aaa"
securities.

         "A" - Bonds possess many favorable investment attributes and are to be
considered as upper medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.

         "Baa" - Bonds considered medium-grade obligations, I.E., they are
neither highly protected nor poorly secured. Interest payments and principal
security appear adequate for the present but certain protective elements may be
lacking or may be characteristically unreliable over any great length of time.
Such bonds lack outstanding investment characteristics and in fact have
speculative characteristics as well.

         "Ba," "B," "Caa," "Ca," and "C" - Bonds that possess one of these
ratings provide questionable protection of interest and principal ("Ba"
indicates some speculative elements; "B" indicates a general lack of
characteristics of desirable investment; "Caa" represents a poor standing; "Ca"
represents obligations which are speculative in a high degree; and "C"
represents the lowest rated class of bonds). "Caa," "Ca" and "C" bonds may be in
default.

         Con. (---) - Bonds for which the security depends upon the completion
of some act or the fulfillment of some condition are rated conditionally. These
are bonds secured by (1) earnings of projects under construction, (2) earnings
of projects unseasoned in operation experience, (3) rentals which begin when
facilities are completed, or (4) payments to which some other limiting condition
attaches. Parenthetical rating denotes probable credit stature upon completion
of construction or elimination of basis of condition.

                                      A-3


<PAGE>


         (P) - When applied to forward delivery bonds, indicates that the rating
is provisional pending delivery of the bonds. The rating may be revised prior to
delivery if changes occur in the legal documents or the underlying credit
quality of the bonds.

         Note: Those bonds in the Aa, A, Baa, Ba and B groups which Moody's
believes possess the strongest investment attributes are designated by the
symbols, Aa1, A1, Ba1 and B1.

                                      A-4


<PAGE>


                           PART C - OTHER INFORMATION

ITEM 24:  FINANCIAL STATEMENTS AND EXHIBITS

         1.       Financial Statements:

         The Registrant's financial statements dated _________ __, 200_, notes
to the financial statements and report of independent public accountants thereon
will be filed with a pre-effective amendment to the Registrant's Registration
Statement.

         2. Exhibits:

            a.    Articles of Incorporation. (*)
            b.    By-laws. (*)
            c.    None.
            d.    Form of Share Certificate. (**)
            e.    Terms and Conditions of the Dividend Reinvestment Plan. (**)
            f.    Not applicable.
            g.    Investment Advisory Agreement with Tortoise Capital Advisors,
                  L.L.C., (**)
            h.1.  Form of Underwriting Agreement. (**)
            h.2.  Form of Standard Dealer Agreement. (**)
            h.3.  Master Agreement Among Underwriters. (**)
            i.    None.
            j.    Form of Custody Agreement. (**)
            k.1   Form of Transfer Agency Agreement. (**)
            k.2   Form of Administration Agreement. (**)
            l.    Opinion of Venable LLP (**)
            m.    Not applicable.
            n.1.  Opinion related to Tax Matters of Blackwell Sanders Peper
                  Martin, L.L.P. (**)
            n.2.  Consent of Auditors. (**)
            o.    Not applicable.
            p.    Subscription Agreement. (**)
            q.    None.
            r.1.  Code of Ethics for the Registrant. (**)
            r.2.  Code of Ethics for the Adviser. (**)
            s.    Powers of Attorney. (**)

(*) Filed herewith.
(**) To be filed by amendment.

ITEM 25:  MARKETING ARRANGEMENTS

         See the Underwriting Agreement to be filed by amendment as Exhibit
2.h.(1) of this Registration Statement.


<PAGE>


ITEM 26:  OTHER EXPENSES AND DISTRIBUTION

         The following table sets forth the estimated expenses to be incurred in
connection with the offering described in this Registration Statement:

Registration fees.......................................   $
Federal Taxes...........................................
State Taxes.............................................
Directors' Fees and Expenses............................
Transfer Agency Fees....................................
_________ Stock Exchange listing fee....................
Printing (other than certificates)......................
Engraving and printing certificates.....................
Accounting fees and expenses............................
Legal fees and expenses.................................
NASD fee................................................
Miscellaneous...........................................
                                                            ---------
   Total................................................   $
                                                            =========



ITEM 27.  PERSONS CONTROLLED BY OR UNDER COMMON CONTROL

         None.

ITEM 28.  NUMBER OF HOLDERS OF SECURITIES

         As of ____________ __, 200_, the number or record holders of each class
of securities of the Registrant was

               Title of Class                   Number of Record Holders
               --------------                   ------------------------
Common Shares (no par value).............                 --



ITEM 29.  INDEMNIFICATION

         Article 10 of the Registrant's Articles of Incorporation and Article 12
of the Registrant's By-laws provide that the Company shall indemnify its present
and past directors, officers, employees and agents, and persons who are serving
or have served at the Registrant's request in similar capacities for other
entities to the maximum extent permitted by applicable law (including the laws
of the State of Maryland and the Investment Company Act of 1940, as amended
("1940 Act")), provided, however, that a transfer agent is not entitled to such
indemnification unless specifically approved by the Registrant's Board of
Directors. Section 2-418(b) of the Maryland Corporations and Associations Code
("Maryland Code") permits the Registrant to indemnify its directors unless it is
proved that the act or omission of the director was material to the cause of
action adjudicated in the proceeding, and (a) the act or omission was committed
in bad faith or was the result of active or deliberate dishonesty or (b) the
director actually received an improper personal benefit in money, property or
services or (c) in the case of a criminal proceeding, the director had
reasonable cause to believe the act or omission was unlawful. Indemnification
may be made against judgments, penalties, fines, settlements and reasonable
expenses incurred in connection with a proceeding, in accordance with the
Maryland Code. Pursuant to Section 2-418(j)(1) and Section 4-418(j)(2) of the
Maryland Code, the Registrant is permitted to indemnify its officers, employees
and agents to the same extent. The provisions set forth above apply insofar as
they are consistent with Section 17(h) of the 1940 Act, which prohibits
indemnification of any director or officer of the Registrant against any
liability to the Registrant or its shareholders to which such director or
officer otherwise would be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office.


<PAGE>


Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended ("1933 Act"), may be provided to directors, officers and
controlling persons of the Registrant, pursuant to the foregoing provisions or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 1933 Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in connection with the successful defense
of any action, suit or proceeding or payment pursuant to any insurance policy)
is asserted against the Registrant by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.

ITEM 30.  BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

         The information in the Statement of Additional Information under the
caption "Management of the Company--Directors and Officers" is hereby
incorporated by reference.

ITEM 31.  LOCATION OF ACCOUNTS AND RECORDS

         All such accounts, books, and other documents are maintained at the
offices of the Registrant, at the offices of the Registrant's investment
adviser, Tortoise Capital Advisors, L.L.C., 10801 Mastin Boulevard, Suite 222,
Overland Park, Kansas 66210, at the offices of the custodian,
______________________ or at the offices of the transfer agent,
________________________.

ITEM 32.  MANAGEMENT SERVICES

         Not applicable.

ITEM 33.  UNDERTAKINGS

         1.       The Registrant undertakes to suspend the offering of shares
until the prospectus is amended if (1) subsequent to the effective date of its
registration statement, the net asset value declines more than ten percent from
its net asset value as of the effective date of the registration statement or
(2) the net asset value increases to an amount greater than its net proceeds as
stated in the prospectus.

         2.       Not applicable.

         3.       Not applicable.

         4.       Not applicable.

         5.       (a) For the purposes of determining any liability under the
1933 Act, the information omitted from the form of prospectus filed as part of a
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the Registrant under Rule 497(h) under the 1933 Act shall be
deemed to be part of the Registration Statement as of the time it was declared
effective.

                  (b) For the purpose of determining any liability under the
1933 Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of the securities at that time shall be deemed to be
the initial bona fide offering thereof.


<PAGE>

         6.  The Registrant undertakes to send by first class mail or other
means designed to ensure equally prominent delivery within two business days of
receipt of a written or oral request the Registrant's statement of additional
information.


<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Overland Park and State of Kansas, on the 31st day
of October, 2003.

                           Tortoise Energy Infrastructure Corporation


                           By:  /s/ Terry C. Matlack
                              --------------------------------------------------
                              Terry C. Matlack, Director

         Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the date indicated.

<TABLE>
<CAPTION>

<S>                                       <C>                                             <C>
/s/ Terry C. Matlack                      Director and Treasurer (Principal
- ---------------------------------          Financial and Accounting Officer)              October 31, 2003
Terry C. Matlack

/s/ David J. Schulte                            Chief Executive Officer
- ---------------------------------            (Principal Executive Officer)                October 31, 2003
David J. Schulte
</TABLE>


<PAGE>


                                  EXHIBIT INDEX

  Exhibit         Document
  -------         --------

  a.              Articles of Incorporation
  b.              By-laws
  d.              Form of Share Certificate
  e.              Terms and Conditions of the Dividend Reinvestment Plan
  g.              Investment Advisory Agreement with Tortoise Capital Advisors,
                  L.L.C.
  h.1.            Form of Underwriting Agreement
  h.2.            Form of Standard Dealer Agreement
  h.3.            Master Agreement Among Underwriters
  j.              Form of Custody Agreement
  k.1             Form of Transfer Agency Agreement
  k.2.            Form of Administration Agreement
  l.1.            Opinion of Venable LLP
  n.1.            Opinion related to Tax Matters of Blackwell Sanders Peper
                  Martin, L.L.P.
  n.2.            Consent of Auditor
  p.              Subscription Agreement
  r.1             Code of Ethics for the Registrant
  r.2.            Code of Ethics for the Adviser
  s.              Powers of Attorney


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.A
<SEQUENCE>3
<FILENAME>ex99-a_102903.txt
<DESCRIPTION>ARTICLES OF INCORPORATION
<TEXT>
                                                                    EXHIBIT 99.A
                                                                    ------------


                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION
                   ------------------------------------------

                            ARTICLES OF INCORPORATION

THIS IS TO CERTIFY THAT:

         FIRST: The undersigned, Terry C. Matlack, whose address is 10801 Mastin
Boulevard, Suite 222, Overland Park, Kansas 66210, being at least 18 years of
age, does hereby form a corporation under the general laws of the State of
Maryland.

         SECOND: The name of the corporation (which is hereinafter called the
"Corporation") is:

                   Tortoise Energy Infrastructure Corporation

         THIRD: The purposes for which the Corporation is formed are to conduct
and carry on the business of a closed-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), and to engage in any lawful act or activity for which corporations may be
organized under the general laws of the State of Maryland as of now or hereafter
in force.

         FOURTH: The address of the principal office of the Corporation in this
State is c/o The Corporation Trust Incorporated, 300 East Lombard Street,
Baltimore, Maryland 21202.

         FIFTH: The name and address of the resident agent of the Corporation
are c/o The Corporation Trust Incorporated, 300 East Lombard Street, Baltimore,
Maryland 21202. The resident agent is a Maryland corporation.

         SIXTH: The total number of shares of stock which the Corporation has
authority to issue is 1,000 shares of Common Stock, $.001 par value per share.
The aggregate par value of all authorized shares of stock having a par value is
$1.

         SEVENTH: The Corporation shall have a board of one director unless the
number is increased or decreased in accordance with the Bylaws of the
Corporation. However, the number of directors shall never be less than the
minimum number required by the Maryland General Corporation Law. The initial
director is Terry C. Matlack.

         EIGHTH: (a) The Corporation reserves the right to make any amendment of
the charter, now or hereafter authorized by law, including any amendment which
alters the contract rights, as expressly set forth in the charter, of any shares
of outstanding stock.

                 (b) The Board of Directors of the Corporation may authorize the
issuance from time to time of shares of its stock of any class, whether now or
hereafter authorized, or securities convertible into shares of its stock of any
class, whether now or hereafter authorized, for such consideration as the Board
of Directors may deem advisable, subject to such restrictions or limitations, if
any, as may be set forth in the Bylaws of the Corporation.


<PAGE>


                (c) The Board of Directors of the Corporation may, by articles
supplementary, classify or reclassify any unissued stock from time to time by
setting or changing the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption of the stock.

         NINTH: No holder of shares of stock of any class shall have any
preemptive right to subscribe to or purchase any additional shares of any class,
or any bonds or convertible securities of any nature; provided, however, that
the Board of Directors may, in authorizing the issuance of shares of stock of
any class, confer any preemptive right that the Board of Directors may deem
advisable in connection with such issuance.

         TENTH: To the maximum extent that Maryland law in effect from time to
time permits limitation of the liability of directors and officers, no director
or officer of the Corporation shall be liable to the Corporation or its
stockholders for money damages. Neither the amendment nor repeal of this
Article, nor the adoption or amendment of any other provision of the charter or
Bylaws inconsistent with this Article, shall apply to or affect in any respect
the applicability of the preceding sentence with respect to any act or failure
to act which occurred prior to such amendment, repeal or adoption. No provision
of this Article X shall be effective to protect or purport to protect any
director or officer of the Corporation against liability to the Corporation or
its stockholders to which he or she would otherwise be subject by reason of
willfulness misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his or her office.

                            [SIGNATURE PAGE FOLLOWS]


<PAGE>


         IN WITNESS WHEREOF, I have signed these Articles of Incorporation and
acknowledge the same to be my act on this 29th day of October, 2003.




                                                       /s/ Terry C. Matlack
                                                       -------------------------
                                                       Terry C. Matlack
                                                       Incorporator


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.B
<SEQUENCE>4
<FILENAME>ex99-b_102903.txt
<DESCRIPTION>BY-LAWS
<TEXT>
                                                                    EXHIBIT 99.B
                                                                    ------------


                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                                     BYLAWS

                                    ARTICLE I

                                     OFFICES

         Section 1. PRINCIPAL OFFICE. The principal office of the Corporation in
the State of Maryland shall be located at such place as the Board of Directors
may designate.

         Section 2. ADDITIONAL OFFICES. The Corporation may have additional
offices, including a principal executive office, at such places as the Board of
Directors may from time to time determine or the business of the Corporation may
require.

                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

         Section 1. PLACE. All meetings of stockholders shall be held at the
principal executive office of the Corporation or at such other place as shall be
set by the Board of Directors and stated in the notice of the meeting.

         Section 2. ANNUAL MEETING. An annual meeting of the stockholders for
the election of directors and the transaction of any business within the powers
of the Corporation shall be held on a date and at the time set by the Board of
Directors during the month of June in each year.

         Section 3. SPECIAL MEETINGS. The chairman of the board, president,
chief executive officer or Board of Directors may call a special meeting of the
stockholders. A special meeting of stockholders shall also be called by the
secretary of the Corporation upon the written request of stockholders entitled
to cast not less than a majority of all the votes entitled to be cast at such
meeting. Such request shall state the purpose of such meeting and the matters
proposed to be acted on at such meeting. The secretary shall inform such
stockholders of the reasonably estimated cost of preparing and mailing notice of
the meeting and, upon payment to the Corporation by such stockholders of such
costs, the secretary shall give notice to each stockholder entitled to notice of
the meeting.

         Section 4. NOTICE. Not less than ten nor more than 90 days before each
meeting of stockholders, the secretary shall give to each stockholder entitled
to vote at such meeting and to each stockholder not entitled to vote who is
entitled to notice of the meeting written or printed notice stating the time and
place of the meeting and, in the case of a special meeting or as otherwise may
be required by any statute, the purpose for which the meeting is called, either
by mail, by presenting it to such stockholder personally, by leaving it at the
stockholder's residence or usual place of business or by any other means
permitted by Maryland


<PAGE>


law. If mailed, such notice shall be deemed to be given when deposited in the
United States mail addressed to the stockholder at the stockholder's address as
it appears on the records of the Corporation, with postage thereon prepaid.

         Any business of the Corporation may be transacted at an annual meeting
of stockholders without being specifically designated in the notice, except such
business as is required by any statute to be stated in such notice. No business
shall be transacted at a special meeting of stockholders except as specifically
designated in the notice.

         Section 5. ORGANIZATION AND CONDUCT. Every meeting of stockholders
shall be conducted by an individual appointed by the Board of Directors to be
chairman of the meeting or, in the absence of such appointment, by the chairman
of the board or, in the case of a vacancy in the office or absence of the
chairman of the board, by one of the following officers present at the meeting:
the vice chairman of the board, if there be one, the president, the vice
presidents in their order of rank and seniority, or, in the absence of such
officers, a chairman chosen by the stockholders by the vote of a majority of the
votes cast by stockholders present in person or by proxy. The secretary, or, in
the secretary's absence, an assistant secretary, or in the absence of both the
secretary and assistant secretaries, a person appointed by the Board of
Directors or, in the absence of such appointment, a person appointed by the
chairman of the meeting shall act as secretary. In the event that the secretary
presides at a meeting of the stockholders, an assistant secretary, or in the
absence of assistant secretaries, an individual appointed by the Board of
Directors or the chairman of the meeting, shall record the minutes of the
meeting. The order of business and all other matters of procedure at any meeting
of stockholders shall be determined by the chairman of the meeting. The chairman
of the meeting may prescribe such rules, regulations and procedures and take
such action as, in the discretion of such chairman, are appropriate for the
proper conduct of the meeting, including, without limitation, (a) restricting
admission to the time set for the commencement of the meeting; (b) limiting
attendance at the meeting to stockholders of record of the Corporation, their
duly authorized proxies and other such individuals as the chairman of the
meeting may determine; (c) limiting participation at the meeting on any matter
to stockholders of record of the Corporation entitled to vote on such matter,
their duly authorized proxies and other such individuals as the chairman of the
meeting may determine; (d) limiting the time allotted to questions or comments
by participants; (e) maintaining order and security at the meeting; (f) removing
any stockholder or any other individual who refuses to comply with meeting
procedures, rules or guidelines as set forth by the chairman of the meeting; and
(g) recessing or adjourning the meeting to a later date and time and place
announced at the meeting. Unless otherwise determined by the chairman of the
meeting, meetings of stockholders shall not be required to be held in accordance
with the rules of parliamentary procedure.

         Section 6. QUORUM. At any meeting of stockholders, the presence
in person or by proxy of stockholders entitled to cast a majority of all the
votes entitled to be cast at such meeting shall constitute a quorum; but this
section shall not affect any requirement under any statute or the charter of the
Corporation for the vote necessary for the adoption of any measure. If, however,
such quorum shall not be present at any meeting of the stockholders, the
chairman of the meeting or the stockholders entitled to vote at such meeting,
present in person or by proxy, shall have the power to adjourn the meeting from
time to time to a date not more than


                                       2
<PAGE>


120 days after the original record date without notice other than announcement
at the meeting. At such adjourned meeting at which a quorum shall be present,
any business may be transacted which might have been transacted at the meeting
as originally notified.

         The stockholders present either in person or by proxy, at a meeting
which has been duly called and convened, may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum.

         Section 7. VOTING. A plurality of all the votes cast at a meeting of
stockholders duly called and at which a quorum is present shall be sufficient to
elect a director. Each share may be voted for as many individuals as there are
directors to be elected and for whose election the share is entitled to be
voted. A majority of the votes cast at a meeting of stockholders duly called and
at which a quorum is present shall be sufficient to approve any other matter
which may properly come before the meeting, unless more than a majority of the
votes cast is required by statute or by the charter of the Corporation. Unless
otherwise provided in the charter, each outstanding share, regardless of class,
shall be entitled to one vote on each matter submitted to a vote at a meeting of
stockholders.

         Section 8. PROXIES. A stockholder may cast the votes entitled to be
cast by the shares of stock owned of record by the stockholder in person or by
proxy executed by the stockholder or by the stockholder's duly authorized agent
in any manner permitted by law. Such proxy or evidence of authorization of such
proxy shall be filed with the secretary of the Corporation before or at the
meeting. No proxy shall be valid more than eleven months after its date unless
otherwise provided in the proxy.

         Section 9. VOTING OF STOCK BY CERTAIN HOLDERS. Stock of the Corporation
registered in the name of a corporation, partnership, trust or other entity, if
entitled to be voted, may be voted by the president or a vice president, a
general partner or trustee thereof, as the case may be, or a proxy appointed by
any of the foregoing individuals, unless some other person who has been
appointed to vote such stock pursuant to a bylaw or a resolution of the
governing body of such corporation or other entity or agreement of the partners
of a partnership presents a certified copy of such bylaw, resolution or
agreement, in which case such person may vote such stock. Any director or other
fiduciary may vote stock registered in his or her name as such fiduciary, either
in person or by proxy.

         Shares of stock of the Corporation directly or indirectly owned by it
shall not be voted at any meeting and shall not be counted in determining the
total number of outstanding shares entitled to be voted at any given time,
unless they are held by it in a fiduciary capacity, in which case they may be
voted and shall be counted in determining the total number of outstanding shares
at any given time.

         The Board of Directors may adopt by resolution a procedure by which a
stockholder may certify in writing to the Corporation that any shares of stock
registered in the name of the stockholder are held for the account of a
specified person other than the stockholder. The resolution shall set forth the
class of stockholders who may make the certification, the purpose for which the
certification may be made, the form of certification and the information to


                                       3
<PAGE>


be contained in it; if the certification is with respect to a record date or
closing of the stock transfer books, the time after the record date or closing
of the stock transfer books within which the certification must be received by
the Corporation; and any other provisions with respect to the procedure which
the Board of Directors considers necessary or desirable. On receipt of such
certification, the person specified in the certification shall be regarded as,
for the purposes set forth in the certification, the stockholder of record of
the specified stock in place of the stockholder who makes the certification.

         Section 10. INSPECTORS. The Board of Directors, in advance of any
meeting, may, but need not, appoint one or more individual inspectors or one or
more entities that designate individuals as inspectors to act at the meeting or
any adjournment thereof. If an inspector or inspectors are not appointed, the
person presiding at the meeting may, but need not, appoint one or more
inspectors. In case any person who may be appointed as an inspector fails to
appear or act, the vacancy may be filled by appointment made by the Board of
Directors in advance of the meeting or at the meeting by the chairman of the
meeting. The inspectors, if any, shall determine the number of shares
outstanding and the voting power of each, the shares represented at the meeting,
the existence of a quorum, the validity and effect of proxies, and shall receive
votes, ballots or consents, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes,
ballots or consents, determine the result, and do such acts as are proper to
conduct the election or vote with fairness to all stockholders. Each such report
shall be in writing and signed by him or her or by a majority of them if there
is more than one inspector acting at such meeting. If there is more than one
inspector, the report of a majority shall be the report of the inspectors. The
report of the inspector or inspectors on the number of shares represented at the
meeting and the results of the voting shall be prima facie evidence thereof.

         Section 11. VOTING BY BALLOT. Voting on any question or in any election
may be viva voce unless the presiding officer shall order or any stockholder
shall demand that voting be by ballot.

                                   ARTICLE III

                                    DIRECTORS

         Section 1. GENERAL POWERS. The business and affairs of the Corporation
shall be managed under the direction of its Board of Directors.

         Section 2. NUMBER, TENURE AND QUALIFICATIONS. At any regular meeting or
at any special meeting called for that purpose, a majority of the entire Board
of Directors may establish, increase or decrease the number of directors,
provided that the number thereof shall never be less than the minimum number
required by the Maryland General Corporation Law, nor more than 15, and further
provided that the tenure of office of a director shall not be affected by any
decrease in the number of directors.

         Section 3. ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board
of Directors shall be held immediately after and at the same place as the annual


                                       4
<PAGE>


meeting of stockholders, no notice other than this Bylaw being necessary. In the
event such meeting is not so held, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors.

         Section 4. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by or at the request of the chairman of the board, the chief
executive officer, the president or by a majority of the directors then in
office. The person or persons authorized to call special meetings of the Board
of Directors may fix any place as the place for holding any special meeting of
the Board of Directors called by them. The Board of Directors may provide, by
resolution, the time and place for the holding of special meetings of the Board
of Directors without other notice than such resolution.

         Section 5. NOTICE. Notice of any special meeting of the Board of
Directors shall be delivered personally or by telephone, electronic mail,
facsimile transmission, United States mail or courier to each director at his or
her business or residence address. Notice by personal delivery, telephone,
electronic mail or facsimile transmission shall be given at least 24 hours prior
to the meeting. Notice by United States mail shall be given at least three days
prior to the meeting. Notice by courier shall be given at least two days prior
to the meeting. Telephone notice shall be deemed to be given when the director
or his or her agent is personally given such notice in a telephone call to which
the director or his or her agent is a party. Electronic mail notice shall be
deemed to be given upon transmission of the message to the electronic mail
address given to the Corporation by the director. Facsimile transmission notice
shall be deemed to be given upon completion of the transmission of the message
to the number given to the Corporation by the director and receipt of a
completed answer-back indicating receipt. Notice by United States mail shall be
deemed to be given when deposited in the United States mail properly addressed,
with postage thereon prepaid. Notice by courier shall be deemed to be given when
deposited with or delivered to a courier properly addressed. Neither the
business to be transacted at, nor the purpose of, any annual, regular or special
meeting of the Board of Directors need be stated in the notice, unless
specifically required by statute or these Bylaws.

         Section 6. QUORUM. A majority of the directors shall constitute a
quorum for transaction of business at any meeting of the Board of Directors,
provided that, if less than a majority of such directors are present at said
meeting, a majority of the directors present may adjourn the meeting from time
to time without further notice, and provided further that if, pursuant to the
charter of the Corporation or these Bylaws, the vote of a majority of a
particular group of directors is required for action, a quorum must also include
a majority of such group.

         The directors present at a meeting which has been duly called and
convened may continue to transact business until adjournment, notwithstanding
the withdrawal of enough directors to leave less than a quorum.

         Section 7. VOTING. The action of the majority of the directors present
at a meeting at which a quorum is present shall be the action of the Board of
Directors, unless the concurrence of a greater proportion is required for such
action by applicable statute or the charter. If enough directors have withdrawn
from a meeting to leave less than a quorum but the


                                       5
<PAGE>


meeting is not adjourned, the action of a majority of the directors necessary to
constitute a quorum at such meeting shall be the action of the Board of
Directors, unless the concurrence of a greater proportion is required for such
action by applicable statute or the charter.

         Section 8. ORGANIZATION. At each meeting of the Board of Directors, the
chairman of the board or, in the absence of the chairman, the vice chairman of
the board, if any, shall act as Chairman. In the absence of both the chairman
and vice chairman of the board, the chief executive officer or in the absence of
the chief executive officer, the president or in the absence of the president, a
director chosen by a majority of the directors present, shall act as Chairman.
The secretary or, in his or her absence, an assistant secretary of the
Corporation, or in the absence of the secretary and all assistant secretaries, a
person appointed by the Chairman, shall act as Secretary of the meeting.

         Section 9. TELEPHONE MEETINGS. Directors may participate in a meeting
by means of a conference telephone or similar communications equipment if all
persons participating in the meeting can hear each other at the same time.
Participation in a meeting by these means shall constitute presence in person at
the meeting.

         Section 10. WRITTEN CONSENT BY DIRECTORS. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting, if a consent in writing to such action is signed by each
director and such written consent is filed with the minutes of proceedings of
the Board of Directors.

         Section 11. VACANCIES. If for any reason any or all the directors cease
to be directors, such event shall not terminate the Corporation or affect these
Bylaws or the powers of the remaining directors hereunder (even if fewer than
three directors remain). Any vacancy on the Board of Directors for any cause
other than an increase in the number of directors shall be filled by a majority
of the remaining directors, even if such majority is less than a quorum. Any
vacancy in the number of directors created by an increase in the number of
directors may be filled by a majority vote of the entire Board of Directors. Any
individual so elected as director shall serve until the next annual meeting of
stockholders and until his or her successor is elected and qualifies.

         Section 12. COMPENSATION. Directors shall not receive any stated salary
for their services as directors but, by resolution of the Board of Directors,
may receive compensation per year and/or per meeting and/or per visit to real
property or other facilities owned or leased by the Corporation and for any
service or activity they performed or engaged in as directors. Directors may be
reimbursed for expenses of attendance, if any, at each annual, regular or
special meeting of the Board of Directors or of any committee thereof and for
their expenses, if any, in connection with each property visit and any other
service or activity they performed or engaged in as directors; but nothing
herein contained shall be construed to preclude any directors from serving the
Corporation in any other capacity and receiving compensation therefor.


                                       6
<PAGE>


         Section 13. LOSS OF DEPOSITS. No director shall be liable for any loss
which may occur by reason of the failure of the bank, trust company, savings and
loan association, or other institution with whom moneys or stock have been
deposited.

         Section 14. SURETY BONDS. Unless required by law, no director shall be
obligated to give any bond or surety or other security for the performance of
any of his or her duties.

         Section 15. RELIANCE. Each director, officer, employee and agent of the
Corporation shall, in the performance of his or her duties with respect to the
Corporation, be fully justified and protected with regard to any act or failure
to act in reliance in good faith upon the books of account or other records of
the Corporation, upon an opinion of counsel or upon reports made to the
Corporation by any of its officers or employees or by the adviser, accountants,
appraisers or other experts or consultants selected by the Board of Directors or
officers of the Corporation, regardless of whether such counsel or expert may
also be a director.

                                   ARTICLE IV

                                   COMMITTEES

         Section 1. NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors
may appoint from among its members an Executive Committee, an Audit Committee, a
Compensation Committee and other committees, composed of one or more directors,
to serve at the pleasure of the Board of Directors.

         Section 2. POWERS. The Board of Directors may delegate to committees
appointed under Section 1 of this Article any of the powers of the Board of
Directors, except as prohibited by law.

         Section 3. MEETINGS. Notice of committee meetings shall be given in the
same manner as notice for special meetings of the Board of Directors. A majority
of the members of the committee shall constitute a quorum for the transaction of
business at any meeting of the committee. The act of a majority of the committee
members present at a meeting shall be the act of such committee. The Board of
Directors may designate a chairman of any committee, and such chairman or, in
the absence of a chairman, any two members of any committee (if there are at
least two members of the Committee) may fix the time and place of its meeting
unless the Board shall otherwise provide. In the absence of any member of any
such committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint another director to act in the place of such
absent member. Each committee shall keep minutes of its proceedings.

         Section 4. TELEPHONE MEETINGS. Members of a committee of the Board of
Directors may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting can
hear each other at the same time. Participation in a meeting by these means
shall constitute presence in person at the meeting.


                                       7
<PAGE>


         Section 5. WRITTEN CONSENT BY COMMITTEES. Any action required or
permitted to be taken at any meeting of a committee of the Board of Directors
may be taken without a meeting, if a consent in writing to such action is signed
by each member of the committee and such written consent is filed with the
minutes of proceedings of such committee.

         Section 6. VACANCIES. Subject to the provisions hereof, the Board of
Directors shall have the power at any time to change the membership of any
committee, to fill all vacancies, to designate alternate members to replace any
absent or disqualified member or to dissolve any such committee.

                                    ARTICLE V

                                    OFFICERS

         Section 1. GENERAL PROVISIONS. The officers of the Corporation shall
include a president, a secretary and a treasurer and may include a chairman of
the board, a vice chairman of the board, a chief executive officer, one or more
vice presidents, a chief operating officer, a chief financial officer, one or
more assistant secretaries and one or more assistant treasurers. In addition,
the Board of Directors may from time to time elect such other officers with such
powers and duties as they shall deem necessary or desirable. The officers of the
Corporation shall be elected annually by the Board of Directors, except that the
chief executive officer or president may from time to time appoint one or more
vice presidents, assistant secretaries and assistant treasurers or other
officers. Each officer shall hold office until his or her successor is elected
and qualifies or until his or her death, or his or her resignation or removal in
the manner hereinafter provided. Any two or more offices except president and
vice president may be held by the same person. Election of an officer or agent
shall not of itself create contract rights between the Corporation and such
officer or agent.

         Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the
Corporation may be removed, with or without cause, by the Board of Directors if
in its judgment the best interests of the Corporation would be served thereby,
but such removal shall be without prejudice to the contract rights, if any, of
the person so removed. Any officer of the Corporation may resign at any time by
giving written notice of his or her resignation to the Board of Directors, the
chairman of the board, the president or the secretary. Any resignation shall
take effect immediately upon its receipt or at such later time specified in the
notice of resignation. The acceptance of a resignation shall not be necessary to
make it effective unless otherwise stated in the resignation. Such resignation
shall be without prejudice to the contract rights, if any, of the Corporation.

         Section 3. VACANCIES. A vacancy in any office may be filled by the
Board of Directors for the balance of the term.

         Section 4. CHIEF EXECUTIVE OFFICER. The Board of Directors may
designate a chief executive officer. In the absence of such designation, the
chairman of the board shall be the chief executive officer of the Corporation.
The chief executive officer shall have


                                       8
<PAGE>


general responsibility for implementation of the policies of the Corporation, as
determined by the Board of Directors, and for the management of the business and
affairs of the Corporation.

         Section 5. CHIEF OPERATING OFFICER. The Board of Directors may
designate a chief operating officer. The chief operating officer shall have the
responsibilities and duties as set forth by the Board of Directors or the chief
executive officer.

         Section 6. CHIEF FINANCIAL OFFICER. The Board of Directors may
designate a chief financial officer. The chief financial officer shall have the
responsibilities and duties as set forth by the Board of Directors or the chief
executive officer.

         Section 7. CHAIRMAN OF THE BOARD. The Board of Directors shall
designate a chairman of the board. The chairman of the board shall preside over
the meetings of the Board of Directors and of the stockholders at which he shall
be present. The chairman of the board shall perform such other duties as may be
assigned to him or her by the Board of Directors.

         Section 8. PRESIDENT. In the absence of a chief executive officer, the
president shall in general supervise and control all of the business and affairs
of the Corporation. In the absence of a designation of a chief operating officer
by the Board of Directors, the president shall be the chief operating officer.
He may execute any deed, mortgage, bond, contract or other instrument, except in
cases where the execution thereof shall be expressly delegated by the Board of
Directors or by these Bylaws to some other officer or agent of the Corporation
or shall be required by law to be otherwise executed; and in general shall
perform all duties incident to the office of president and such other duties as
may be prescribed by the Board of Directors from time to time.

         Section 9. VICE PRESIDENTS. In the absence of the president or in the
event of a vacancy in such office, the vice president (or in the event there be
more than one vice president, the vice presidents in the order designated at the
time of their election or, in the absence of any designation, then in the order
of their election) shall perform the duties of the president and when so acting
shall have all the powers of and be subject to all the restrictions upon the
president; and shall perform such other duties as from time to time may be
assigned to such vice president by the president or by the Board of Directors.
The Board of Directors may designate one or more vice presidents as executive
vice president or as vice president for particular areas of responsibility.

         Section 10. SECRETARY. The secretary shall (a) keep the minutes of the
proceedings of the stockholders, the Board of Directors and committees of the
Board of Directors in one or more books provided for that purpose; (b) see that
all notices are duly given in accordance with the provisions of these Bylaws or
as required by law; (c) be custodian of the corporate records and of the seal of
the Corporation; (d) keep a register of the post office address of each
stockholder which shall be furnished to the secretary by such stockholder; (e)
have general charge of the stock transfer books of the Corporation; and (f) in
general perform such other duties as from time to time may be assigned to him by
the chief executive officer, the president or by the Board of Directors.


                                       9
<PAGE>


         Section 11. TREASURER. The treasurer shall have the custody of the
funds and securities of the Corporation and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the Corporation and
shall deposit all moneys and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be designated by the Board
of Directors. In the absence of a designation of a chief financial officer by
the Board of Directors, the treasurer shall be the chief financial officer of
the Corporation.

         The treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the president and Board of Directors, at the
regular meetings of the Board of Directors or whenever it may so require, an
account of all his or her transactions as treasurer and of the financial
condition of the Corporation.

         If required by the Board of Directors, the treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his or her office and for the restoration to the Corporation, in case
of his or her death, resignation, retirement or removal from office, of all
books, papers, vouchers, moneys and other property of whatever kind in his or
her possession or under his or her control belonging to the Corporation.

         Section 12. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
assistant secretaries and assistant treasurers, in general, shall perform such
duties as shall be assigned to them by the secretary or treasurer, respectively,
or by the president or the Board of Directors. The assistant treasurers shall,
if required by the Board of Directors, give bonds for the faithful performance
of their duties in such sums and with such surety or sureties as shall be
satisfactory to the Board of Directors.

         Section 13. SALARIES. The salaries and other compensation of the
officers shall be fixed from time to time by the Board of Directors and no
officer shall be prevented from receiving such salary or other compensation by
reason of the fact that he is also a director.

                                   ARTICLE VI

                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

         Section 1. CONTRACTS. The Board of Directors may authorize any officer
or agent to enter into any contract or to execute and deliver any instrument in
the name of and on behalf of the Corporation and such authority may be general
or confined to specific instances. Any agreement, deed, mortgage, lease or other
document shall be valid and binding upon the Corporation when authorized or
ratified by action of the Board of Directors and executed by an authorized
person.

         Section 2. CHECKS AND DRAFTS. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the


                                       10
<PAGE>


Corporation shall be signed by such officer or agent of the
Corporation in such manner as shall from time to time be determined by the Board
of Directors.

         Section 3. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board of Directors
may designate.

                                   ARTICLE VII

                                      STOCK

         Section 1. CERTIFICATES. In the event that the Corporation issues
shares of stock represented by certificates, each stockholder shall be entitled
to a certificate or certificates which shall represent and certify the number of
shares of each class of stock held by him, her or it in the Corporation. Each
certificate shall be signed by the chief executive officer, the president or a
vice president and countersigned by the secretary or an assistant secretary or
the treasurer or an assistant treasurer and may be sealed with the seal, if any,
of the Corporation. The signatures may be either manual or facsimile.
Certificates shall be consecutively numbered; and if the Corporation shall, from
time to time, issue several classes of shares, each class may have its own
number series. A certificate is valid and may be issued whether or not an
officer who signed it is still an officer when it is issued. Each certificate
representing shares which are restricted as to their transferability or voting
powers, which are preferred or limited as to their dividends or as to their
allocable portion of the assets upon liquidation or which are redeemable at the
option of the Corporation, shall have a statement of such restriction,
limitation, preference or redemption provision, or a summary thereof, plainly
stated on the certificate. In lieu of such statement or summary, the Corporation
may set forth upon the face or back of the certificate a statement that the
Corporation will furnish to any stockholder, upon request and without charge, a
full statement of such information.

         Section 2. TRANSFERS. Upon surrender to the Corporation or the transfer
agent of the Corporation of a stock certificate duly endorsed or accompanied by
proper evidence of succession, assignment or authority to transfer, the
Corporation shall issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.

         The Corporation shall be entitled to treat the holder of record of any
share of stock as the holder in fact thereof and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such share or
on the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of the State of
Maryland.

         Notwithstanding the foregoing, transfers of shares of any class of
stock will be subject in all respects to the charter of the Corporation and all
of the terms and conditions contained therein.

         Section 3. REPLACEMENT CERTIFICATE. Any officer designated by the Board
of Directors may direct a new certificate to be issued in place of any
certificate previously


                                       11
<PAGE>


issued by the Corporation alleged to have been lost, stolen or destroyed upon
the making of an affidavit of that fact by the person claiming the certificate
to be lost, stolen or destroyed. When authorizing the issuance of a new
certificate, an officer designated by the Board of Directors may, in his or her
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or the owner's legal
representative to advertise the same in such manner as he shall require and/or
to give bond, with sufficient surety, to the Corporation to indemnify it against
any loss or claim which may arise as a result of the issuance of a new
certificate.

         Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The
Board of Directors may set, in advance, a record date for the purpose of
determining stockholders entitled to notice of or to vote at any meeting of
stockholders or determining stockholders entitled to receive payment of any
dividend or the allotment of any other rights, or in order to make a
determination of stockholders for any other proper purpose. Such date, in any
case, shall not be prior to the close of business on the day the record date is
fixed and shall be not more than 90 days and, in the case of a meeting of
stockholders, not less than ten days, before the date on which the meeting or
particular action requiring such determination of stockholders of record is to
be held or taken.

         In lieu of fixing a record date, the Board of Directors may provide
that the stock transfer books shall be closed for a stated period but not longer
than 20 days. If the stock transfer books are closed for the purpose of
determining stockholders entitled to notice of or to vote at a meeting of
stockholders, such books shall be closed for at least ten days before the date
of such meeting.

         If no record date is fixed and the stock transfer books are not closed
for the determination of stockholders, (a) the record date for the determination
of stockholders entitled to notice of or to vote at a meeting of stockholders
shall be at the close of business on the day on which the notice of meeting is
mailed or the 30th day before the meeting, whichever is the closer date to the
meeting; and (b) the record date for the determination of stockholders entitled
to receive payment of a dividend or an allotment of any other rights shall be
the close of business on the day on which the resolution of the directors,
declaring the dividend or allotment of rights, is adopted.

         When a determination of stockholders entitled to vote at any meeting of
stockholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, except when (i) the determination has been
made through the closing of the transfer books and the stated period of closing
has expired or (ii) the meeting is adjourned to a date more than 120 days after
the record date fixed for the original meeting, in either of which case a new
record date shall be determined as set forth herein.

         Section 5. STOCK LEDGER. The Corporation shall maintain at its
principal office or at the office of its counsel, accountants or transfer agent,
an original or duplicate share ledger containing the name and address of each
stockholder and the number of shares of each class held by such stockholder.


                                       12
<PAGE>


         Section 6. FRACTIONAL STOCK; ISSUANCE OF UNITS. The Board of Directors
may issue fractional stock or provide for the issuance of scrip, all on such
terms and under such conditions as they may determine. Notwithstanding any other
provision of the charter or these Bylaws, the Board of Directors may issue units
consisting of different securities of the Corporation. Any security issued in a
unit shall have the same characteristics as any identical securities issued by
the Corporation, except that the Board of Directors may provide that for a
specified period securities of the Corporation issued in such unit may be
transferred on the books of the Corporation only in such unit.

                                  ARTICLE VIII

                                 ACCOUNTING YEAR

         The Board of Directors shall have the power, from time to time, to fix
the fiscal year of the Corporation by a duly adopted resolution.

                                   ARTICLE IX

                                  DISTRIBUTIONS

         Section 1. AUTHORIZATION. Dividends and other distributions upon the
stock of the Corporation may be authorized by the Board of Directors, subject to
the provisions of law and the charter of the Corporation. Dividends and other
distributions may be paid in cash, property or stock of the Corporation, subject
to the provisions of law and the charter.

         Section 2. CONTINGENCIES. Before payment of any dividends or other
distributions, there may be set aside out of any assets of the Corporation
available for dividends or other distributions such sum or sums as the Board of
Directors may from time to time, in its absolute discretion, think proper as a
reserve fund for contingencies, for equalizing dividends or other distributions,
for repairing or maintaining any property of the Corporation or for such other
purpose as the Board of Directors shall determine to be in the best interest of
the Corporation, and the Board of Directors may modify or abolish any such
reserve.

                                    ARTICLE X

                                INVESTMENT POLICY

         Subject to the provisions of the charter of the Corporation, the Board
of Directors may from time to time adopt, amend, revise or terminate any policy
or policies with respect to investments by the Corporation as it shall deem
appropriate in its sole discretion.


                                       13
<PAGE>


                                   ARTICLE XI

                                      SEAL

         Section 1. SEAL. The Board of Directors may authorize the adoption of a
seal by the Corporation. The seal shall contain the name of the Corporation and
the year of its incorporation and the words "Incorporated Maryland." The Board
of Directors may authorize one or more duplicate seals and provide for the
custody thereof.

         Section 2. AFFIXING SEAL. Whenever the Corporation is permitted or
required to affix its seal to a document, it shall be sufficient to meet the
requirements of any law, rule or regulation relating to a seal to place the word
"(SEAL)" adjacent to the signature of the person authorized to execute the
document on behalf of the Corporation.

                                   ARTICLE XII

                     INDEMNIFICATION AND ADVANCE OF EXPENSES

         To the maximum extent permitted by Maryland law in effect from time to
time, the Corporation shall indemnify and, without requiring a preliminary
determination of the ultimate entitlement to indemnification, shall pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any individual who is a present or former director or officer of the
Corporation and who is made a party to the proceeding by reason of his or her
service in that capacity or (b) any individual who, while a director of the
Corporation and at the request of the Corporation, serves or has served as a
director, officer, partner or trustee of such corporation, real estate
investment trust, partnership, joint venture, trust, employee benefit plan or
other enterprise and who is made a party to the proceeding by reason of his or
her service in that capacity. The Corporation may, with the approval of its
Board of Directors, provide such indemnification and advance for expenses to a
person who served a predecessor of the Corporation in any of the capacities
described in (a) or (b) above and to any employee or agent of the Corporation or
a predecessor of the Corporation. No provision of this Article XII shall be
effective to protect or purport to protect any director or officer of the
Corporation against liability to the Corporation or its stockholders to which he
or she would otherwise be subject by reason of willfulness misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of his or her office.

         Neither the amendment nor repeal of this Article, nor the adoption or
amendment of any other provision of the Bylaws or charter of the Corporation
inconsistent with this Article, shall apply to or affect in any respect the
applicability of the preceding paragraph with respect to any act or failure to
act which occurred prior to such amendment, repeal or adoption.


                                       14
<PAGE>


                                  ARTICLE XIII

                                WAIVER OF NOTICE

         Whenever any notice is required to be given pursuant to the charter of
the Corporation or these Bylaws or pursuant to applicable law, a waiver thereof
in writing, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice. Neither the business to be transacted at nor the purpose
of any meeting need be set forth in the waiver of notice, unless specifically
required by statute. The attendance of any person at any meeting shall
constitute a waiver of notice of such meeting, except where such person attends
a meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting is not lawfully called or convened.

                                   ARTICLE XIV

                               AMENDMENT OF BYLAWS

         The Board of Directors shall have the exclusive power to adopt, alter
or repeal any provision of these Bylaws and to make new Bylaws.



                                       15


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