<DOCUMENT>
<TYPE>N-2/A
<SEQUENCE>1
<FILENAME>n2a_061804.txt
<DESCRIPTION>FORM N-2/A
<TEXT>

      AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 28, 2004
                                                   1933 ACT FILE NO. 333-114545

                                                    1940 ACT FILE NO. 811-21462
===============================================================================
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                    FORM N-2
                        (CHECK APPROPRIATE BOX OR BOXES)



[X]  REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X]  PRE-EFFECTIVE AMENDMENT NO. 1
[ ]  POST-EFFECTIVE AMENDMENT NO. __


                                       AND


[X]  REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X]  AMENDMENT NO. 7


                   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:
<TABLE>
<S>                                                <C>                                          <C>
          Deborah Bielicke Eades, Esq.                     John R. Short, Esq.                      Anna T. Pinedo, Esq.
     Vedder, Price, Kaufman & Kammholz, P.C.       Blackwell Sanders Peper Martin LLP             Morrison & Foerster LLP
              222 N. LaSalle Street                         720 Olive Street                    1290 Avenue of the Americas
                Chicago, IL 60601                          St. Louis, MO 63101                       New York, NY 10104
</TABLE>

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 are 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
           TITLE OF SECURITIES                  AMOUNT           PROPOSED MAXIMUM        AGGREGATE OFFERING        AMOUNT OF
             BEING REGISTERED                 REGISTERED      OFFERING PRICE PER UNIT         PRICE             REGISTRATION FEE(1)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                      <C>                  <C>                     <C>

Tortoise Notes..........................     $110,000,000             100%                 $110,000,000            $13,937
===================================================================================================================================
 (1)    Transmitted to the Securities and Exchange Commission via Fed wire (Fed wire #2173), $126.70 of which
        has already been paid.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT TO DELAY ITS EFFECTIVE
  DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH 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 COMMISSION,
              ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
===================================================================================================================================
</TABLE>
<PAGE>


This 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, DATE JUNE , 2004


PROSPECTUS
                                                                 [Tortoise Logo]
                                  $110,000,000
                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION
                  AUCTION RATE SENIOR NOTES ("TORTOISE NOTES")
                   $60,000,000 SERIES A, DUE _________, 2044
                   $50,000,000 SERIES B, DUE _________, 2044
                              $25,000 DENOMINATIONS
                                 _______________

         Tortoise Energy Infrastructure Corporation (the "Company") is a
recently organized, nondiversified, closed-end management investment company.
The Company's investment objective is to seek a high level of total return with
an emphasis on current distributions to stockholders.

         The Company is offering $60,000,000 and $50,000,000 aggregate principal
amount of auction rate senior notes Series A and Series B, respectively
(collectively, the "Tortoise Notes"). The Tortoise Notes will be issued without
coupons in denominations of $25,000 and any integral multiple thereof. The
principal amount of the Tortoise Notes will be due and payable on ___________,
2044 (the "Stated Maturity"). There is no sinking fund with respect to the
Tortoise Notes. The Tortoise Notes will be unsecured obligations of the Company
and, upon liquidation, dissolution or winding up of the Company, will rank: (1)
senior to all of the Company's outstanding common shares and any preferred
shares; (2) on a parity with any unsecured creditors of the Company and any
unsecured senior securities representing indebtedness of the Company, including
additional Tortoise Notes; and (3) junior to any secured creditors of the
Company. The Company may redeem the Tortoise Notes prior to their Stated
Maturity in certain circumstances described in this Prospectus.

         Holders of Tortoise Notes will be entitled to receive cash interest
payments at an annual rate that may vary for each rate period. The initial rate
period is from the date of issuance through ____, 2004 for Series A and through
____, 2004 for Series B. The interest rate for the initial rate period from and
including the issue date through _____________, [2004], will be _____% for
Tortoise Notes Series ____ . The interest rate for the initial rate period from
and including the issue date through ___________, [2004], will be ____% for
Series ___. For each subsequent rate period, the interest rate will be
determined by an auction conducted in accordance with the procedures described
in this Prospectus. Generally, following the initial rate period, each rate
period will be twenty-eight (28) days.

         Tortoise Notes will not be listed on any exchange or automated
quotation system. Generally, investors may only buy and sell Tortoise Notes
through an order placed at an auction with or through a broker-dealer that has
entered into an agreement with the auction agent or in a secondary market that
those broker-dealers may maintain. These broker-dealers are not required to
maintain a market in the Tortoise Notes, and a secondary market, if one
develops, may not provide investors with liquidity.


                                                        (continued on next page)


                                 _______________
         INVESTING IN TORTOISE NOTES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 27 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.
                                 _______________

                                               $25,000 PRINCIPAL
                                               AMOUNT OF TORTOISE
                                                     NOTES               TOTAL
                                               -----------------         -----
Public offering price.........................       $25,000              $
Underwriting discounts and commissions........             $              $
Proceeds to the Company (before expenses)(1)..             $              $


------------------
(1)      Does not include offering expenses payable by the Company estimated to
         be $______________.


         The underwriters expect to deliver the Tortoise Notes in book-entry
form, through the facilities of The Depository Trust Company, to broker-dealers
on or about , 2004.
                                 _______________
                                                      STIFEL NICOLAUS & COMPANY
 LEHMAN BROTHERS                                                   INCORPORATED

                                     , 2004



<PAGE>


         The Company intends to issue Money Market Cumulative Preferred Shares
("MMP(R) Shares"), $25,000 liquidation preference per share, in an aggregate
amount representing approximately 8% of total assets as soon as practicable
following the investment of proceeds from the offering of Tortoise Notes. The
MMP Shares will be offered pursuant to a separate prospectus. In addition, the
Company may issue additional Tortoise Notes in the future. The MMP Shares and
the Tortoise Notes are intended to increase funds available for investment. This
practice, which is known as leverage, is speculative and involves significant
risks.

         The offering is conditioned upon the Tortoise Notes receiving a rating
of "Aaa" from Moody's Investors Service Inc. and "AAA" from Fitch Ratings. The
Company's common stock is traded on the New York Stock Exchange under the symbol
"TYG."

         The Company's investment objective is to seek a high level of total
return with an emphasis on current distributions paid to stockholders. Under
normal circumstances, the Company invests at least 90% of total assets
(including assets obtained through leverage) in securities of energy
infrastructure companies, and invests at least 70% of total assets in 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.
There can be no assurance that the Company will achieve its investment
objective. Tortoise Capital Advisors, LLC serves as the Company's investment
adviser.

         You should read this Prospectus, which contains important information
about the Company, before deciding whether to invest and retain it for future
reference. A Statement of Additional Information, dated            , 2004,
and as it may be supplemented, containing additional information about the
Company, has been filed with the Securities and Exchange Commission (the
"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 63 of this
Prospectus, by calling (888) 728-8784 or by writing to the Company, or you may
obtain a copy (and other information regarding the Company) from the
Commission's web site (http://www.sec.gov). You may also e-mail requests for
these documents to the Commission at publicinfo@sec.gov or make a request in
writing to the Commission's Public Reference Section, Washington, D.C.
20549-0102.


         The Tortoise Notes 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.

                                                              Copyright (c) 2004

<PAGE>


                                 _______________

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                                              PAGE


<S>                                                                                                            <C>
Prospectus Summary...............................................................................................1
Financial Highlights............................................................................................16
The Company.....................................................................................................17
Use of Proceeds.................................................................................................17
Capitalization..................................................................................................18
Investment Objective and Principal Investment Strategies........................................................19
Risk Factors....................................................................................................27
Management of the Company.......................................................................................35
Rating Agency Guidelines........................................................................................38
Description of Tortoise Notes...................................................................................40
The Auction.....................................................................................................50
Description of Stock............................................................................................53
Certain Provisions in the Company's Charter and Bylaws..........................................................55
Federal Income Tax Matters......................................................................................56
Administrator, Custodian, Transfer Agent, Paying Agent, Trustee and Auction Agent...............................60
Underwriting....................................................................................................60
Legal Opinions..................................................................................................62
Intellectual Property Rights....................................................................................62
Available Information...........................................................................................62
Table of Contents for the Statement of Additional Information...................................................63
</TABLE>

         You should rely on the information contained in or incorporated by
reference in this Prospectus. Neither the Company nor the underwriters have
authorized anyone to provide you with different or inconsistent 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 notes in any jurisdiction where the offer or sale is not permitted.
You should assume that the information in this Prospectus is accurate only as of
the date of this Prospectus, and that the Company's business, financial
condition and prospects may have changed since this date. The Company will amend
or supplement this Prospectus to reflect material changes to the information
contained in this Prospectus to the extent required by applicable law.



                                       i

<PAGE>


                               PROSPECTUS SUMMARY


         This is only a summary. You should review the more detailed information
contained elsewhere in this Prospectus and in the Statement of Additional
Information, including "Summary of Certain Provisions of the Indenture" included
in Appendix A to the Statement of Additional Information. Capitalized terms used
but not defined in this Prospectus shall have the meanings given to such terms
in Appendix A to the Statement of Additional Information.

The Company.................        Tortoise Energy Infrastructure Corporation
                                    (the "Company") is a recently organized,
                                    nondiversified, closed-end management
                                    investment company. The Company's common
                                    stock, $0.001 par value per share, is traded
                                    on the New York Stock Exchange (the "NYSE")
                                    under the symbol "TYG." See "Description of
                                    Stock." As of May 31, 2004, the Company had
                                    12,623,047 shares of common stock
                                    outstanding and net assets applicable to
                                    shares of common stock of $286 million.

The Adviser.................        Tortoise Capital Advisors, LLC (the
                                    "Adviser") was formed in October 2002 to
                                    provide portfolio management services to
                                    institutional and high-net-worth investors
                                    seeking professional management of their MLP
                                    investments. The Adviser is controlled
                                    equally by Fountain Capital Management,
                                    L.L.C. ("Fountain Capital") and Kansas City
                                    Equity Partners LC ("KCEP"). As of May 31,
                                    2004, the Adviser had approximately $370
                                    million of client assets under management.
                                    Affiliates of the Adviser had an additional
                                    $285 million of energy infrastructure
                                    investment assets under management. The
                                    Adviser's investment committee is comprised
                                    of five portfolio managers led by David J.
                                    Schulte, CFA.

                                    The principal business address of the
                                    Adviser is 10801 Mastin Boulevard, Suite
                                    222, Overland Park, Kansas 66210. Prior to
                                    forming the Company, the Adviser had no
                                    prior experience managing a registered
                                    investment company.

The Offering................        The Company is offering $60,000,000 and
                                    $50,000,000 aggregate principal amount of
                                    Tortoise Notes Series A and Series B,
                                    respectively, in denominations of $25,000
                                    and any integral multiple thereof. The
                                    Tortoise Notes are being offered by Lehman
                                    Brothers Inc. ("Lehman Brothers") and
                                    Stifel, Nicolaus & Company, Inc. ("Stifel
                                    Nicolaus") as underwriters. See
                                    "Underwriting."

                                    It is a condition of the underwriters'
                                    obligation to purchase the Tortoise Notes
                                    that each series of Tortoise Notes receive a
                                    rating of "Aaa" from Moody's Investors

<PAGE>

                                    Service Inc. ("Moody's") and "AAA" from
                                    Fitch Ratings ("Fitch").

                                    The issuance of the Tortoise Notes represent
                                    the leveraging of the Company's common
                                    stock. See "Risk Factors - General Risks of
                                    Investing in the Company - Leverage Risk."

                                    The Tortoise Notes will be unsecured
                                    obligations of the Company and, upon
                                    liquidation, dissolution or winding up of
                                    the Company, will rank: (1) senior to all of
                                    the Company's outstanding common stock and
                                    any preferred stock, including MMP Shares;
                                    (2) on a parity with any unsecured creditors
                                    of the Company and any unsecured senior
                                    securities representing indebtedness of the
                                    Company, including additional Tortoise
                                    Notes; and (3) junior to any secured
                                    creditors of the Company.

                                    Unsecured creditors of the Company may
                                    include service providers to the Company,
                                    including the Adviser, Custodian, Auction
                                    Agent, Broker-Dealers and the Trustee, as
                                    such parties are defined herein, pursuant to
                                    the terms of various contracts with the
                                    Company. Secured creditors of the Company
                                    may include, without limitation, parties
                                    entering into any interest rate swaps, floor
                                    or cap transactions, forward rate
                                    transactions, or other similar transactions
                                    with the Company that create liens, pledges,
                                    charges, security interests, security
                                    agreements or other encumbrances on the
                                    assets of the Company.

                                    The interest rate for the initial Rate
                                    Period from and including the Original Issue
                                    Date through _________, 2004, will be ___%
                                    per year for Series A. The interest rate
                                    for the initial Rate Period from and
                                    including the Original Issue Date through
                                    ______, 2004 will be __% for Series B. The
                                    first Auction Date for Tortoise Notes will
                                    be _________, 2004, and the initial Interest
                                    Payment Date will be __________, 2004.
                                    Subsequent Auctions generally will be held
                                    on every fourth ________ for Series A and
                                    every fourth ________ for Series B
                                    (unless the then current Rate Period is a
                                    Special Rate Period, the day that normally
                                    would be the Auction Date is not a Business
                                    Day or unforeseen events preclude the
                                    holding of an Auction.)


                                    Each Subsequent Rate Period normally will
                                    begin on the Business Day following an
                                    Auction Date.


Auction Procedures..........        You may buy, sell or hold Tortoise Notes
                                    through an Auction. Beneficial Owners and
                                    Potential Beneficial Owners of Tortoise
                                    Notes may participate in Auctions


                                       2
<PAGE>


                                    only by submitting Orders through their
                                    Broker-Dealers. In general, the types of
                                    Orders that may be placed with a
                                    Broker-Dealer include: Hold Orders, Sell
                                    Orders, Bids to sell and Bids to purchase.
                                    The following is a brief summary of the
                                    Auction Procedures for both Beneficial
                                    Owners and Potential Owners. See "The
                                    Auction--Auction Procedures" for more
                                    detailed information.

                                    Beneficial Owners. Prior to the Submission
                                    Deadline on each Auction Date for a series
                                    of Tortoise Notes, each Beneficial Owner may
                                    submit Orders with respect to Tortoise Notes
                                    of such series to a Broker-Dealer as
                                    follows:

                                    o Hold Order - indicating its desire to hold
                                    Tortoise Notes of such series without regard
                                    to the Applicable Rate for Tortoise Notes of
                                    such series for the next Rate Period.

                                    o Bid - indicating its desire to sell the
                                    principal amount of Outstanding Tortoise
                                    Notes, if any, of such series held by such
                                    Beneficial Owner if the Applicable Rate for
                                    Tortoise Notes of such series for the next
                                    succeeding Rate Period of Tortoise Notes of
                                    such series shall be less than the rate per
                                    annum specified by such Beneficial Owner
                                    (also known as a hold at rate order).

                                    o Sell Order - indicating its desire to sell
                                    the principal amount of Outstanding Tortoise
                                    Notes, if any, of such series held by such
                                    Beneficial Owner without regard to the
                                    Applicable Rate for Tortoise Notes of such
                                    series for the next succeeding Rate Period
                                    of Tortoise Notes of such series.

                                    Orders submitted (or the failure to do so)
                                    by Beneficial Owners under certain
                                    circumstances will have the effects
                                    described below:

                                    o A Beneficial Owner of Tortoise Notes of
                                    such series that submits a Bid with respect
                                    to Tortoise Notes of such series to its
                                    Broker-Dealer having a rate higher than the
                                    Maximum Rate for Tortoise Notes of such
                                    series on the Auction Date will be treated
                                    as having submitted a Sell Order with
                                    respect to such Tortoise Notes.

                                    o A Beneficial Owner of Tortoise Notes of
                                    such series that fails to submit an Order
                                    with respect to such Tortoise Notes to its
                                    Broker-Dealer will be deemed to have
                                    submitted a Hold Order with respect to such
                                    Tortoise Notes of such series.


                                       3
<PAGE>

                                    Potential Beneficial Owners. A customer of a
                                    Broker-Dealer that is not a Beneficial Owner
                                    of a series of Tortoise Notes but that
                                    wishes to purchase Tortoise Notes of such
                                    series, or that is a Beneficial Owner of
                                    Tortoise Notes of such series that wishes to
                                    purchase additional Tortoise Notes of such
                                    series (in each case, a "Potential
                                    Beneficial Owner"), may submit Bids to its
                                    Broker-Dealer in which it offers to purchase
                                    such principal amount of Outstanding
                                    Tortoise Notes of such series specified in
                                    such bid if the Applicable Rate for Tortoise
                                    Notes of such series determined on such
                                    Auction Date shall be higher than the rate
                                    specified in such Bid. A Bid placed by a
                                    Potential Beneficial Owner of Tortoise Notes
                                    of such series specifying a rate higher than
                                    the Maximum Rate for Tortoise Notes of such
                                    series on the Auction Date will not be
                                    accepted.

                                    The Auction Process. If Sufficient Clearing
                                    Bids for a series of Tortoise Notes exist
                                    (that is, the aggregate principal amount of
                                    Outstanding Tortoise Notes of such series
                                    subject to Submitted Bids of Potential
                                    Beneficial Owners specifying one or more
                                    rates between the Minimum Rate (for Standard
                                    Rate Periods or less, only) and the Maximum
                                    Rate (for all Rate Periods) for Tortoise
                                    Notes of such series exceeds, or is equal
                                    to, the sum of the aggregate principal
                                    amount of Outstanding Tortoise Notes of such
                                    series subject to Submitted Sell Orders),
                                    the Applicable Rate for Tortoise Notes of
                                    such series for the next succeeding Rate
                                    Period will be the lowest rate specified in
                                    the Submitted Bids which, taking into
                                    account such rate and all lower rates bid by
                                    Broker-Dealers as or on behalf of Beneficial
                                    Owners and Potential Beneficial Owners,
                                    would result in Beneficial Owners and
                                    Potential Beneficial Owners owning the
                                    aggregate principal amount of Tortoise Notes
                                    of such series available for purchase in the
                                    Auction. If Sufficient Clearing Bids for a
                                    series of Tortoise Notes do not exist (other
                                    than because all of the Outstanding Tortoise
                                    Notes of such series are subject to
                                    Submitted Hold Orders), then the Applicable
                                    Rate for all Tortoise Notes of such series
                                    for the next succeeding Rate Period will be
                                    the Maximum Rate for Tortoise Notes of such
                                    series.

                                    The Auction Procedures include a pro rata
                                    allocation of Tortoise Notes for purchase
                                    and sale, which may result in a Beneficial
                                    Owner continuing to hold or selling, or a
                                    Potential Beneficial Owner purchasing, a
                                    number of Tortoise Notes of a series of
                                    Tortoise Notes that is less than the number
                                    of Tortoise Notes of such series specified
                                    in its Order. To the extent the allocation


                                       4
<PAGE>

                                    procedures have that result, Broker-Dealers
                                    will be required to make appropriate pro
                                    rata allocations among their respective
                                    customers.


                                    Settlement of purchases and sales will be
                                    made on the next Business Day (also an
                                    Interest Payment Date) after the Auction
                                    Date through the Securities Depository in
                                    accordance with the Securities Depository's
                                    normal procedures.


Interest and Rate Periods...        Subsequent to the initial Rate Period,
                                    Tortoise Notes will bear interest at an
                                    annual rate that the Auction Agent advises
                                    results from an Auction. The initial Rate
                                    Period shall be ______ days for Tortoise
                                    Notes Series A and ______ days for
                                    Tortoise Notes Series B. Subsequent to the
                                    initial Rate Period, each Rate Period
                                    generally will be twenty-eight (28) days in
                                    length (a "Standard Rate Period"). The
                                    Applicable Rate for a particular Rate Period
                                    usually will be determined by an Auction
                                    conducted on the Business Day immediately
                                    preceding the start of the Rate Period. In
                                    most instances, interest also is payable
                                    every twenty-eight (28) days, on the day
                                    following the end of the Rate Period. A
                                    Special Rate Period (any period other than a
                                    Rate Period of 28 days) will not be
                                    effective unless Sufficient Clearing Bids
                                    exist at the Auction in respect of a Special
                                    Rate Period. See "Description of Tortoise
                                    Notes--Interest and Rate
                                    Periods--Determination of Interest Rate" and
                                    "The Auction."

Determination of
Applicable Rate.............        Except during a Default Period, the
                                    Applicable Rate for any Rate Period for
                                    Tortoise Notes will not be more than the
                                    Maximum Rate. The Maximum Rate will depend
                                    on the credit rating assigned to the
                                    Tortoise Notes and on the duration of the
                                    Rate Period. The Maximum Rate will be the
                                    Applicable Percentage of the Reference Rate,
                                    subject to upward but not downward
                                    adjustment in the discretion of the Board of
                                    Directors after consultation with the
                                    Broker-Dealers. The Applicable Percentage
                                    will be determined based on the lower of the
                                    credit ratings assigned on that date to the
                                    Tortoise Notes by Moody's and Fitch as
                                    follows:


                                      MOODY'S           FITCH         APPLICABLE
                                    CREDIT RATING    CREDIT RATING    PERCENTAGE
                                    -------------    -------------    ----------


                                    Aa3 or above     AA- or above        200%
                                      A3 to A1         A- to A+          250%
                                    Baa3 to Baa1     BBB- to BBB+        275%
                                     Below Baa3       Below BBB-         300%


                                       5
<PAGE>



                                    For Standard Rate Periods or less only, the
                                    Applicable Rate resulting from an Auction
                                    will not be less than the Minimum Rate. The
                                    Applicable Rate for any Rate Period
                                    commencing during any Default Period, and
                                    the Default Rate described under
                                    "Description of Tortoise Notes-- Interest
                                    and Rate Periods," initially will be 300% of
                                    the Reference Rate. The Reference Rate is
                                    the greater of:

                                    (1) the applicable AA Composite Commercial
                                    Paper Rate (for a Rate Period of fewer than
                                    184 days) or the applicable Treasury Index
                                    Rate (for a Rate Period of 184 days or
                                    more), or


                                    (2) the applicable London-Interbank Offered
                                    Rate ("LIBOR").


Payment Restrictions on
Shares of the Company.......        Upon issuance of the Tortoise Notes, which
                                    constitute senior securities representing
                                    indebtedness under the Investment Company
                                    Act of 1940, as amended (the "1940 Act"),
                                    the Company will not be permitted to declare
                                    any dividend (except a dividend payable in
                                    stock of the Company), or declare any other
                                    distribution, upon any outstanding common
                                    stock or declare any distribution upon any
                                    preferred stock of the Company, or purchase
                                    any such stock, unless, in every such case,
                                    the Tortoise Notes have, 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. Dividends may, however, be declared
                                    upon any preferred stock provided the
                                    Tortoise Notes have an asset coverage of at
                                    least 200% at the time of declaration after
                                    deducting the amount of such dividend.
                                    Dividends or other distributions on, or
                                    redemptions or purchases of, common stock
                                    and preferred stock also would be prohibited
                                    at any time that an event of default under
                                    the Tortoise Notes (which includes a default
                                    in the payment of interest on the Tortoise
                                    Notes, when due) has occurred and is
                                    continuing. See "Description of Tortoise
                                    Notes--Payment Restrictions on Shares."

Asset Maintenance...........        The Company must maintain Eligible Assets
                                    having an aggregated Discounted Value at
                                    least equal to the Tortoise Notes Basic
                                    Maintenance Amount as of each Valuation
                                    Date. The Company also must maintain asset
                                    coverage for the Tortoise Notes on a
                                    non-discounted basis of at least 300% as of
                                    the last business day of each month. See
                                    "Rating Agency Guidelines." The Discount


                                       6
<PAGE>

                                    Factors and guidelines for calculating the
                                    Discounted Value of the Company's portfolio
                                    for purposes of determining whether the
                                    Tortoise Notes Basic Maintenance Amount has
                                    been satisfied have been established by
                                    Moody's and Fitch in connection with the
                                    Company's receipt from Moody's and Fitch of
                                    the "Aaa" and "AAA" Credit Ratings,
                                    respectively, with respect to the Tortoise
                                    Notes on their Original Issue Date.

Redemption..................        Although the Company ordinarily will not
                                    redeem Tortoise Notes prior to their Stated
                                    Maturity, it may be required to redeem
                                    Tortoise Notes if, for example, the Company
                                    does not meet an asset coverage ratio
                                    required by law or in order to correct a
                                    failure to meet Rating Agency Guidelines in
                                    a timely manner. The Company may voluntarily
                                    redeem Tortoise Notes in certain
                                    circumstances. See "Description of Tortoise
                                    Notes--Redemption."


Events of Default;                  Any one of the following events constitutes
Remedies....................        an "event of default" under the Indenture
                                    (as defined herein):


                                    o        default in the payment of any
                                             interest upon any series of
                                             Tortoise Notes when it becomes due
                                             and payable and the continuance of
                                             such default for thirty (30) days;


                                    o        default in the payment of the
                                             principal of, or any premium on,
                                             any series of Tortoise Notes at its
                                             Stated Maturity;


                                    o        default in the performance, or
                                             breach, of any covenant or warranty
                                             of the Company in the Indenture,
                                             and continuance of such default or
                                             breach for a period of ninety (90)
                                             days after written notice has been
                                             given to the Company by the
                                             Trustee;


                                    o        certain voluntary or involuntary
                                             proceedings involving the Company
                                             and relating to bankruptcy,
                                             insolvency or other similar laws;


                                    o        if, on the last business day of
                                             each of twenty-four (24)
                                             consecutive calendar months, the
                                             1940 Act Tortoise Notes Asset
                                             Coverage of a series is less than
                                             100%; or

                                    o        any other "event of default"
                                             provided with respect to any
                                             series, including a default in the
                                             payment of any Redemption Price
                                             payable on the Redemption Date.



                                       7
<PAGE>

                                    Upon the occurrence and continuance of an
                                    event of default with respect to a series,
                                    the holders of a majority in principal
                                    amount of that series of outstanding
                                    Tortoise Notes or the Trustee may declare
                                    the principal amount of Tortoise Notes of
                                    that series immediately due and payable.
                                    Upon an event of default relating to
                                    bankruptcy, insolvency, or other similar
                                    laws, acceleration of maturity occurs
                                    automatically.


                                    At any time after a declaration of
                                    acceleration with respect to Tortoise Notes
                                    of any series has been made and before a
                                    judgment or decree for payment of the money
                                    due has been obtained by the Trustee, the
                                    holders of a majority in principal amount of
                                    the outstanding Tortoise Notes of that
                                    series, by written notice to the Company and
                                    the Trustee, may rescind and annul such
                                    declaration and its consequences if certain
                                    conditions are met. See "Description of
                                    Tortoise Notes--Event of Default and
                                    Acceleration of Maturity; Remedies."

Investment Objective and
Principal Investment
Strategies..................        The Company's investment objective is to
                                    seek a high level of total return with an
                                    emphasis on current distributions to
                                    stockholders. There is no assurance that the
                                    Company will attain its investment
                                    objective. See "Investment Objective and
                                    Principal Investment Strategies" and "Risk
                                    Factors."

                                    Under normal circumstances, the Company
                                    invests at least 90% of its total assets
                                    (including assets obtained through leverage)
                                    in securities of energy infrastructure
                                    companies, and invests at least 70% of its
                                    total assets in 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. The Company invests solely in
                                    energy infrastructure companies organized in
                                    the United States. All publicly traded
                                    companies in which the Company invests have
                                    an equity market capitalization greater than
                                    $100 million.

                                    MLP Securities. The Company invests
                                    primarily in equity securities of MLPs,
                                    which currently consist of the following
                                    instruments: common units, convertible
                                    subordinated units and I-Shares. As of the
                                    date of this Prospectus, all MLP common
                                    units in which the Company invests are
                                    listed and traded on the NYSE, American
                                    Stock Exchange ("AMEX") or Nasdaq National
                                    Market. The Company also may purchase


                                       8
<PAGE>

                                    MLP common units through direct placements.
                                    MLP convertible subordinated units are not
                                    listed or publicly traded, and typically are
                                    purchased in directly negotiated
                                    transactions with MLP affiliates or
                                    institutional holders of such shares. As of
                                    the date of this Prospectus, I-Shares in
                                    which the Company invests are listed and
                                    traded on the NYSE.

                                    MLP common unit holders have typical limited
                                    partner rights, including limited management
                                    and voting rights. MLP common units have
                                    priority over convertible subordinated units
                                    upon liquidation. Common unit holders are
                                    entitled to minimum quarterly distributions
                                    ("MQD"), including arrearage rights, prior
                                    to any distribution payments to convertible
                                    subordinated unit holders or incentive
                                    distribution payments to the general
                                    partner. MLP convertible subordinated units
                                    are convertible to common units on a
                                    one-to-one basis after the passage of time
                                    and/or achievement of specified financial
                                    goals. MLP convertible subordinated units
                                    are entitled to MQD after the payments to
                                    holders of common units and before incentive
                                    distributions to the general partner. MLP
                                    convertible subordinated units do not have
                                    arrearage rights. I-Shares have similar
                                    features to common units except that
                                    distributions are payable in additional
                                    I-Shares rather than cash. The Company
                                    invests in I-Shares only if it believes it
                                    will have adequate cash to satisfy its
                                    distribution targets.

                                    Other Securities. Although the Company also
                                    may invest in equity and debt securities of
                                    energy infrastructure companies that are
                                    organized and/or taxed as corporations, it
                                    is likely that any such investments will be
                                    in debt securities because the dividends
                                    from equity securities from such
                                    corporations typically do not meet the
                                    Company's investment objective. The Company
                                    also may invest in securities of general
                                    partners or other affiliates of MLPs and
                                    private companies operating energy
                                    infrastructure assets.


                                    Nonfundamental Policies. The Company has
                                    adopted the following additional
                                    nonfundamental investment policies:


                                    o        The Company may invest up to 30% of
                                             its total assets in restricted
                                             securities, primarily through
                                             direct placements. The Company may,
                                             however, invest without limitation
                                             in illiquid securities that are not
                                             restricted. The types of direct
                                             placements that the Company may
                                             purchase consist of MLP convertible
                                             subordinated units, MLP common
                                             units and securities of private
                                             energy infrastructure


                                       9
<PAGE>

                                             companies (i.e., non-MLPs).
                                             Investments in private companies
                                             that do not have any publicly
                                             traded shares or units outstanding
                                             are limited to 5% of total assets.

                                    o        The Company may invest up to 25% of
                                             its total assets in debt securities
                                             of energy infrastructure companies,
                                             including securities rated below
                                             investment grade (commonly referred
                                             to as "junk bonds"). Below
                                             investment grade debt securities
                                             will be rated at least B3 by
                                             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 its total assets in any
                                             single issuer.

                                    o        The Company will not engage in
                                             short sales.


                                    The Company may change its nonfundamental
                                    investment policies without stockholder
                                    approval and will provide notice to
                                    stockholders of material changes (including
                                    notice through stockholder reports);
                                    provided, however, that a change in the
                                    policy of investing at least 90% of its
                                    total assets in energy infrastructure
                                    companies requires 60 days' prior written
                                    notice to stockholders. Unless otherwise
                                    stated, all investment restrictions apply
                                    only at the time of purchase and the Company
                                    will not be required to reduce a position
                                    due solely to market value fluctuations.
                                    Total assets includes assets obtained
                                    through leverage for the purpose of each
                                    investment restriction. The Company may
                                    deviate temporarily from its investment
                                    policies pending investment of the initial
                                    public offering and leverage proceeds.
                                    Pending investment of the offering proceeds
                                    the Board of Directors has approved an
                                    interim policy permitting investments in a
                                    single issuer in excess of 10% of total
                                    assets under limited circumstances.


                                    Under adverse market or economic conditions
                                    or pending investment of offering or
                                    leverage proceeds, 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.


                                       10
<PAGE>

                                    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 distributions, and to
                                    facilitate the payment 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.


Hedging Transactions........        The Company may use interest rate
                                    transactions for hedging purposes only, in
                                    an attempt to reduce the interest rate risk
                                    arising from the Company's leveraged capital
                                    structure. The Company does not intend to
                                    hedge interest rate risk of portfolio
                                    holdings. 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. See "Investment
                                    Objective and Principal Investment
                                    Strategies--Hedging Transactions" and "Risk
                                    Factors--General Risks of Investing in the
                                    Company--Hedging Risk."

Use of Leverage.............        The Company intends to issue Tortoise Notes
                                    in an amount representing approximately 25%
                                    of total assets and to issue MMP Shares
                                    representing approximately 8% of its total
                                    assets. The Company intends to use leverage
                                    proceeds primarily for investment purposes.
                                    The Company also may leverage through other
                                    borrowings, including the issuance of
                                    additional Tortoise Notes, the issuance of
                                    MMP Shares or commercial paper. The timing
                                    and terms of any leverage transactions will
                                    be determined by the Company's Board of
                                    Directors. Throughout this Prospectus,
                                    Tortoise Notes, commercial paper or other
                                    borrowings are collectively referred to as
                                    "Borrowings."


Risks.......................        The following discussion summarizes the
                                    principal risks that you should consider
                                    before investing in Tortoise Notes and the
                                    Company. For additional information about
                                    the risks associated with Tortoise Notes and
                                    the Company, see "Risk Factors."

                                    Risks of Tortoise Notes. The primary risks
                                    of investing in Tortoise Notes are as
                                    follows:


                                    Interest Rate Risk. Tortoise Notes pay
                                    interest based on short-term interest rates.
                                    If short-term interest rates rise, interest
                                    rates on the Tortoise Notes may rise so that
                                    the amount of interest payable to holders of
                                    Tortoise Notes would exceed the amount of
                                    income from the


                                       11
<PAGE>


                                    Company's portfolio securities. This might
                                    require that the Company sell portfolio
                                    securities at a time when it would otherwise
                                    not do so, which may affect adversely the
                                    Company's future earnings ability. In
                                    addition, rising market interest rates could
                                    impact negatively the value of the Company's
                                    investment portfolio, reducing the amount of
                                    assets serving as asset coverage for the
                                    Tortoise Notes.

                                    Auction Risk. You may not be able to sell
                                    your Tortoise Notes at an Auction if the
                                    Auction fails; that is, if there are more
                                    Tortoise Notes offered for sale than there
                                    are buyers for those Tortoise Notes. Also,
                                    if you place hold orders (orders to retain
                                    Tortoise Notes) at an Auction only at a
                                    specified rate, and the bid rate exceeds the
                                    rate set at the Auction, you will not retain
                                    your Tortoise Notes. Finally, if you buy
                                    Tortoise Notes or elect to retain Tortoise
                                    Notes without specifying a rate below which
                                    you would not wish to buy or continue to
                                    hold those Tortoise Notes, and the Auction
                                    sets a below-market rate, you may receive a
                                    lower rate of return on your Tortoise Notes
                                    than the market rate of interest. See
                                    "Description of Tortoise Notes" and "The
                                    Auction--Auction Procedures."

                                    Secondary Market Risk. If you try to sell
                                    your Tortoise Notes between Auctions, you
                                    may not be able to sell any or all of your
                                    Tortoise Notes, or you may not be able to
                                    sell them in the $25,000 increments in which
                                    they were purchased plus accrued and unpaid
                                    interest. If the Company has designated a
                                    Special Rate Period (a rate period other
                                    than twenty-eight (28) days), changes in
                                    interest rates could affect the price you
                                    would receive if you sold your Tortoise
                                    Notes in the secondary market. Lehman
                                    Brothers and broker-dealers that maintain a
                                    secondary trading market for Tortoise Notes
                                    are not required to maintain this market and
                                    the Company has no control over the
                                    establishment or maintenance of this market.
                                    The Company is not required to redeem
                                    Tortoise Notes if an Auction or an attempted
                                    secondary market sale fails. Tortoise Notes
                                    are not listed on an exchange or automated
                                    quotation system. If you sell your Tortoise
                                    Notes to a broker-dealer between Auctions,
                                    you may receive less than the price you paid
                                    for them, especially when market interest
                                    rates have risen since the last Auction.

                                    Ratings and Asset Coverage Risk. While
                                    Moody's and Fitch have assigned ratings of
                                    "Aaa" and "AAA," respectively, to Tortoise
                                    Notes, the ratings do not eliminate or
                                    necessarily mitigate the risks of investing
                                    in


                                       12
<PAGE>

                                    Tortoise Notes. A rating may not fully or
                                    accurately reflect all of the credit and
                                    market risks associated with a security. A
                                    rating agency could downgrade Tortoise
                                    Notes, which may make your securities less
                                    liquid at an Auction or in the secondary
                                    market, though probably with higher
                                    resulting interest rates. If a rating agency
                                    downgrades the ratings assigned to Tortoise
                                    Notes, the Company may alter its portfolio
                                    or redeem Tortoise Notes. The Company may
                                    voluntarily redeem Tortoise Notes under
                                    certain circumstances. See "Description of
                                    Tortoise Notes--Redemption."

                                    Inflation Risk. Inflation is the reduction
                                    in the purchasing power of money resulting
                                    from the increase in the price of goods and
                                    services. Inflation risk is the risk that
                                    the inflation adjusted (or "real") value of
                                    your Tortoise Notes investment or the income
                                    from that investment will be worth less in
                                    the future. As inflation occurs, the real
                                    value of the Tortoise Notes and the interest
                                    on the Tortoise Notes declines. In an
                                    inflationary period, however, it is expected
                                    that, through the Auction process, interest
                                    rates would increase, tending to offset this
                                    risk. See "Risk Factors--Risks of Investing
                                    in Tortoise Notes--Inflation Risk."

                                    Company Risks. The Company's net asset
                                    value, its ability to pay interest and
                                    principal on Tortoise Notes, and its ability
                                    to meet asset coverage requirements depends
                                    on the performance of the Company's
                                    investment portfolio. The performance of the
                                    Company's investment portfolio is subject to
                                    a number of risks, including the following:

                                    Concentration Risk. The Company intends to
                                    concentrate its investments in the energy
                                    infrastructure industry, with an emphasis on
                                    securities issued by MLPs. The primary risks
                                    inherent in the energy infrastructure
                                    industry include the following: (1) the
                                    performance and level of distributions of
                                    MLPs can be affected by direct and indirect
                                    commodity price exposure, (2) a decrease in
                                    market demand for natural gas or other
                                    energy commodities could adversely affect
                                    MLP revenues or cash flows, (3) energy
                                    infrastructure assets deplete over time and
                                    must be replaced, and (4) a rising interest
                                    rate environment could increase an MLP's
                                    cost of capital.

                                    Nondiversification Risk. The Company is a
                                    nondiversified investment company under the
                                    1940 Act, and it is not a regulated
                                    investment company under the U.S. Internal
                                    Revenue Code of 1986, as amended (the
                                    "Internal Revenue Code"). Accordingly, there
                                    are no

                                       13
<PAGE>

                                    limits under the 1940 Act or Internal
                                    Revenue Code with respect to the number or
                                    size of issuers held by the Company.
                                    Liquidity Risk. Certain MLP securities may
                                    trade less frequently than those of other
                                    companies due to their smaller
                                    capitalizations. Investment in securities
                                    that are less actively traded or over time
                                    experience decreased trading volume may be
                                    difficult to dispose of when the Company
                                    believes it is desirable to do so, may
                                    restrict the ability of the Company to take
                                    advantage of other opportunities, and may be
                                    more difficult to value.

                                    Valuation Risk. The Company may invest up to
                                    30% of total assets in restricted
                                    securities, which are subject to
                                    restrictions on resale. The value of such
                                    investments ordinarily will 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 affect adversely the ability of
                                    the Company to determine net asset value.
                                    The sale price of securities that are
                                    restricted or otherwise not readily
                                    marketable may be higher or lower than the
                                    Company's most recent valuations.

                                    Leverage Risk. Subject to limits imposed by
                                    the 1940 Act and the Rating Agency
                                    Guidelines, the Company may increase its
                                    leverage above the amount estimated after
                                    issuance of the Tortoise Notes and the
                                    anticipated offering of MMP Shares as
                                    previously described. The Company intends to
                                    use leverage primarily for investment
                                    purposes. The Company's use of leverage may
                                    result in risks and can magnify the effect
                                    of any losses. There is no assurance that a
                                    leveraging strategy will be successful.

Federal Income Tax Matters..        Holders of Tortoise Notes will receive
                                    interest payments from the Company and will
                                    not receive any distributions to which
                                    holders of common stock or preferred stock
                                    of the Company are entitled. Interest
                                    payments generally will be taxed as ordinary
                                    income for federal income tax purposes and
                                    will not be eligible for the reduced rates
                                    of taxation available for "qualified
                                    dividend income." See "Federal Income Tax
                                    Matters."

Tax Status of the Company...        Unlike most investment companies, the
                                    Company will not be treated as a regulated
                                    investment company under the Internal
                                    Revenue Code. Therefore, the Company will be
                                    obligated to pay federal and applicable
                                    state corporate taxes on its taxable income.
                                    On the other hand, the Company is not
                                    subject to the "qualifying


                                       14
<PAGE>

                                    income" rules applicable to regulated
                                    investment companies. Under current federal
                                    income tax law, the qualifying income rules
                                    substantially limit the ability of regulated
                                    investment companies to invest directly in
                                    MLPs. Unlike regulated investment companies,
                                    the Company is not required by the Internal
                                    Revenue Code to distribute substantially all
                                    of its income and capital gains.

Trading Market..............        Tortoise Notes are not listed on an exchange
                                    or automated quotation system. Instead, you
                                    may buy or sell Tortoise Notes at an Auction
                                    that normally is held every twenty-eight
                                    (28) days by submitting orders to a
                                    broker-dealer that has entered into an
                                    agreement with the Auction Agent and the
                                    Company (a "Broker-Dealer"), or to a
                                    broker-dealer that has entered into a
                                    separate agreement with a Broker-Dealer. In
                                    addition to the Auctions, Broker-Dealers and
                                    other broker-dealers may maintain a
                                    secondary trading market in Tortoise Notes
                                    outside of Auctions, but may discontinue
                                    this activity at any time. There is no
                                    assurance that a secondary market will
                                    provide Tortoise Note holders with
                                    liquidity. You may transfer Tortoise Notes
                                    outside of Auctions only to or through a
                                    Broker-Dealer, or a broker-dealer that has
                                    entered into a separate agreement with a
                                    Broker-Dealer or to the Company or any of
                                    its affiliates, in certain cases.

Trustee and Auction Agent...        BNY Midwest Trust Company, N.A. will serve
                                    as the Trustee under the Indenture and The
                                    Bank of New York will serve as the
                                    Auction Agent under the Auction Agency
                                    Agreement.



                                       15
<PAGE>

                              FINANCIAL HIGHLIGHTS


         Information contained in the table below under the headings "Per Share
Operating Performance" and "Ratios/Supplemental Data" shows the unaudited
operating performance of the Company's common stock from the commencement of the
Company's investment operations on February 27, 2004 until May 31, 2004. Since
the Company commenced operations on February 27, 2004, the table covers
approximately three (3) months of operations, during which a substantial portion
of the Company's assets were held in cash pending investment in securities that
meet the Company's investment objective and policies. Accordingly, the
information presented may not provide a meaningful picture of the Company's
operating performance.


<TABLE>
<CAPTION>
                                                                                         PERIOD FROM
                                                                                      FEBRUARY 27, 2004 (5)
                                                                                           THROUGH
                                                                                        MAY 31, 2004

<S>                                                                             <C>
PER SHARE DATA (2)
 Net Asset Value
     Beginning of Period (6)                                                    $                    23.88
                                                                                --------------------------

 Income from Investment Operations:
     Net investment loss (1)                                                                         (0.01)
     Net realized and unrealized loss on investments                                                 (0.99)
                                                                                --------------------------
         Total loss from investment operations                                                       (1.00)
                                                                                --------------------------
 Less Distributions to Shareholders                                                                  (0.20)
                                                                                --------------------------

 Net Asset Value, end of period                                                 $                    22.68
                                                                                ==========================

 Per share market value, end of period                                          $                    24.20
 Total Investment Return Based on Market Value (3)                                                   (2.40)%


 SUPPLEMENTAL DATA AND RATIOS (4)
     Net assets, end of period (000's)                                          $                  286,302
     Ratio of expenses to average net assets before waiver:                                           1.65%
     Ratio of expenses to average net assets after waiver:                                            1.42%

     Ratio of expenses, without regard to non-recurring organizational
       expenses, to average net assets before waiver:                                                 1.26%
     Ratio of expenses, without regard to non-recurring organizational
       expenses, to average net assets after waiver:                                                  1.03%

     Ratio of investment loss to average net assets before waiver:                                   (0.42)%
     Ratio of investment loss to average net assets after waiver:                                    (0.19)%

     Portfolio turnover rate                                                                           -  %

-----------------------
<FN>
(1)  Net investment income per share is calculated using ending balances prior to consideration
     of adjustments for permanent financial reporting and tax differences.
(2)  Information presented relates to a share of capital stock outstanding for the entire period.
(3)  Not Annualized. Total investment return is calculated assuming a purchase of common stock
     at the current market price on the first day and a sale at the current market price on the last
     day of the period reported. Total investment return does not reflect brokerage commissions.
(4)  Information is annualized for periods less than one full year.
(5)  Commencement of Operations.
(6)  Represents net asset value on February 27, 2004, including the effect of the Company's initial
     public offering on that date, after deduction of offering costs.
</FN>
</TABLE>



                                       16
<PAGE>


                                   THE COMPANY


         The Company is a recently organized, nondiversified, closed-end
management investment company registered under the 1940 Act. The Company was
organized as a Maryland corporation on October 30, 2003, pursuant to a charter
(the "Charter") governed by the laws of the State of Maryland. On February 24,
2004, the Company issued an aggregate of 11,000,000 shares of common stock, par
value $0.001 per share, in an initial public offering. On March 23, 2004 and
April 8, 2004, the Company issued an additional 1,100,000 shares of common stock
and 500,000 shares of common stock, respectively, in connection with partial
exercises by the underwriters of their over allotment option. The proceeds of
the initial public offering and subsequent exercises of the over allotment
option of common stock was approximately $300,000,000 after the payment of
offering expenses. The Company's common stock is listed on the NYSE under the
symbol "TYG." The Company's principal office is located at 10801 Mastin
Boulevard, Suite 222, Overland Park, Kansas 66210 and its telephone number is
(913) 981-1020.

         The following provides information about the Company's outstanding
shares as of June 30, 2004:


<TABLE>
<CAPTION>
                                                                                       AMOUNT
                                                                                    HELD BY THE
                                                                                     COMPANY OR
                                                                      AMOUNT            FOR            AMOUNT
                         TITLE OF CLASS                             AUTHORIZED      ITS ACCOUNT      OUTSTANDING
----------------------------------------------------------------   ------------   ---------------   -------------


<S>                                                                 <C>                   <C>              <C>
Common Shares..................................................     100,000,000           0
Tortoise Notes.................................................
   Series A....................................................     $60,000,000           0                0
   Series B....................................................     $50,000,000           0                0
</TABLE>


                                 USE OF PROCEEDS


         The net proceeds of the offering of Tortoise Notes will be
approximately $108,564,500 after payment of the underwriting discounts and
commissions and estimated offering costs. The Company will invest the net
proceeds of the offering in accordance with the Company's investment objective
and policies as described under "Investment Objective and Principal Investment
Strategies" as soon as practicable. It is presently anticipated that the Company
will be able to invest substantially all of the net proceeds in securities of
energy infrastructure companies that meet the Company's investment objective and
policies within approximately three (3) months after the completion of the
offering. Pending such investment, it is anticipated that the proceeds will be
invested in short-term securities issued by the U.S. government or its agencies
or instrumentalities or in high quality, short-term money market instruments.

         The Company currently intends to issue Money Market Cumulative
Preferred Shares, $25,000 liquidation preference per share, ("MMP(R) Shares") in
an amount representing approximately 8% of total assets as soon as practicable
following the investment of substantially all of the proceeds from the Tortoise
Notes offering.



                                       17
<PAGE>


                                 CAPITALIZATION


         The following table sets forth the capitalization of the Company as of
May 31, 2004 and as adjusted to give effect to the issuance of the Tortoise
Notes offered hereby. MMP Shares will be offered by separate prospectus as soon
as practicable following the investment of substantially all of the proceeds
from the offering of Tortoise Notes.

<TABLE>
<CAPTION>
                                                                                          AS
                                                                       ACTUAL           ADJUSTED
                                                                     (UNAUDITED)      (UNAUDITED)
                                                                     -----------      -----------
<S>                                                                  <C>              <C>

 LONG-TERM DEBT:
   Tortoise Notes, denominations of $25,000 or any multiple
      thereof*................................................      $          -     $110,000,000
COMMON STOCKHOLDERS' EQUITY:
   Common Stock, $.001 par value per share; 100,000,000
      shares authorized, 12,623,047 shares outstanding*.......      $     12,623     $     12,623
   Additional paid-in capital**...............................      $300,495,985     $300,495,985**
   Net investment loss and realized loss on investments.......      $ (2,662,530)    $ (2,662,530)
   Unrealized depreciation on investments.....................      $(11,544,258)    $(11,544,258)
   Net assets applicable to common shares.....................      $286,301,820     $286,301,820
<FN>
------------------
*        None of these outstanding securities are held by or for the account of
         the Company.
**       Underwriting discounts and commissions and estimated offering costs of
         the Tortoise Notes will be capitalized and amortized over the life
         of the Tortoise Notes.
</FN>
</TABLE>


                                       18
<PAGE>

            INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES


INVESTMENT OBJECTIVE


         The Company's investment objective is to seek a high level of total
return with an emphasis on current distributions paid to stockholders. For
purposes of the Company's investment objective, total return includes capital
appreciation of, and all distributions received from, securities in which the
Company invests regardless of the tax character of the distributions. The
Company seeks to provide its stockholders with an efficient vehicle to invest in
a portfolio of MLPs. Similar to the tax characterization of cash distributions
made by MLPs to its unit holders, the Company believes that its common
stockholders will have relatively high levels of the deferred taxable income
associated with cash distributions made by the Company to stockholders.


ENERGY INFRASTRUCTURE INDUSTRY

         The Company concentrates its investments in the energy infrastructure
sector. The Company pursues its objective by investing principally in a
portfolio of equity securities issued by MLPs. MLP common units historically
have generated higher average total returns than domestic common stock (as
measured by the S&P 500) and fixed income securities. A more detailed
description of investment policies and restrictions and more detailed
information about portfolio investments are contained in the Statement of
Additional Information.


         Energy Infrastructure Companies. For purposes of the Company's policy
of investing 90% of total assets in securities of energy infrastructure
companies, an energy infrastructure company is one that derives each year at
least 50% of its gross income from "Qualifying Income" under Section 7704 of the
Internal Revenue Code or one that derives at least 50% of its revenues from the
provision of services directly related to the generation of Qualifying Income.
Qualifying Income is defined as including any income and gains from the
exploration, development, mining or production, processing, refining,
transportation (including pipelines transporting 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 companies (other than most pipeline MLPs) do not
operate as "public utilities" or "local distribution companies," and therefore
are not subject to rate regulation by state or federal utility commissions.
However, energy infrastructure companies may be subject to greater competitive
factors than utility companies, including competitive pricing in the absence of
regulated tariff rates, which could cause a reduction in revenue and which could
affect adversely profitability. Most pipeline MLPs are subject to government
regulation concerning the construction, pricing and operation of pipelines.
Pipeline MLPs are able to set prices (rates or tariffs) to cover operating
costs, depreciation and taxes, and provide a return on investment. These rates
are monitored by the Federal Energy Regulatory Commission (FERC) which seeks to
ensure that consumers receive adequate and reliable supplies of energy at the
lowest possible price while providing energy suppliers and transporters a just
and reasonable return on capital investment and the opportunity to adjust to
changing market conditions.

         Master Limited Partnerships. Under normal circumstances, the Company
invests at least 70% of its total assets in equity securities of MLPs that
derive each year at least 90% of their gross income from Qualifying Income and
are taxed as partnerships, thereby eliminating federal income tax at the entity
level. The MLPs have two classes of partners, the general partner, and the
limited partners. The general partner is usually a major energy company,
investment fund or the direct management of the MLP. The general partner
normally controls the MLP through a 2% equity interest plus units that are
subordinated to the common (publicly traded) units for at least the first five
years of the partnership's existence and then only converting to common if
certain financial tests are met.



                                       19
<PAGE>

         As a motivation for the general partner to successfully manage the MLP
and increase cash flows, the terms of most MLPs typically provide that the
general partner receives a larger portion of the net income as distributions
reach higher target levels. As cash flow grows, the general partner receives a
greater interest in the incremental income compared to the interest of limited
partners. The general partner's incentive compensation typically increases up to
50% of incremental income. Nevertheless, the aggregate amount distributed to
limited partners will increase as MLP distributions reach higher target levels.
Given this incentive structure, the general partner has an incentive to
streamline operations and undertake acquisitions and growth projects in order to
increase distributions to all partners.


         Energy infrastructure MLPs in which the Company invests generally can
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, pipeline MLPs
         do not have 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. 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 natural gas liquid 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. Coal MLPs are subject to operating and production risks,
         such as: the MLP or a lessee meeting necessary production volumes;
         federal, state and local laws and regulations which may limit the
         ability to produce coal; the MLP's ability to manage production costs
         and pay mining reclamation costs; and the effect on demand that the
         Clean Air Act standards have on coal-end users.

         Although the Company also may invest in equity and debt securities of
energy infrastructure companies that are organized and/or taxed as corporations,
it is likely that any such investments will be in debt securities because the
equity dividends from such corporations typically do not meet the Company's
investment objective. The Company also may invest in securities of general
partners or other affiliates of MLPs and private companies operating energy
infrastructure assets.


                                       20
<PAGE>

INVESTMENT PROCESS

         Under normal circumstances, the Company invests at least 90% of its
total assets (including assets obtained through leverage) 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. The Adviser's securities selection process includes a
comparison of quantitative, qualitative, and relative value factors. Although
the Adviser uses research provided by broker-dealers and investment firms,
primary emphasis is placed on proprietary analysis and valuation models
conducted and maintained by the Adviser's in-house investment analysts. To
determine whether a company meets its criteria, the Adviser generally will look
for a strong record of distribution growth, a solid ratio of debt to equity and
coverage ratio with respect to distributions to unit holders, and a proven track
record, incentive structure and management team. It is anticipated that all of
the public energy infrastructure companies in which the Company will invest will
have a market capitalization greater than $100 million.

INVESTMENT POLICIES

         The Company seeks 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 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
(including assets obtained through leverage) in securities of energy
infrastructure companies is nonfundamental and may be changed by the Board of
Directors without stockholder approval, provided that stockholders 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 invests at least 70%
                  and up to 100% of its total assets in equity securities issued
                  by MLPs. Equity units currently consist of common units,
                  convertible subordinated units, and pay-in-kind units.

         o        The Company may invest up to 30% of its total assets in
                  restricted securities, primarily through direct placements.
                  The Company may, however, invest without limitation in
                  illiquid securities that are not restricted. The types of
                  restricted securities that the Company may purchase include
                  MLP convertible subordinated units, unregistered 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 its total assets in debt
                  securities of energy infrastructure companies, including
                  certain securities rated below investment grade ("junk
                  bonds"). Below investment grade debt securities will be rated
                  at least B3 by Moody's and at least B- by 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 its 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 Company may temporarily deviate from its
investment policies pending investment of its initial public offering and


                                       21
<PAGE>

leverage proceeds. Pending investment of the offering proceeds the Board of
Directors has approved an interim policy permitting investments in a single
issuer in excess of 10% of total assets under limited circumstances.



TYPES OF SECURITIES

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


         Equity Securities of MLPs. Consistent with its investment objective,
the Company may invest up to 100% of total assets in equity securities issued by
energy infrastructure MLPs, including common units, convertible subordinated
units and I-Shares. The table below summarizes the features of these securities,
and a further discussion of these securities follows.



                                       22
<PAGE>



<TABLE>
<CAPTION>
                                                               CONVERTIBLE
                                  COMMON UNITS              SUBORDINATED UNITS
                               (FOR MLPS TAXED AS           (FOR MLPS TAXED AS
                                  PARTNERSHIPS)                PARTNERSHIPS)                   I-SHARES
                           ---------------------------  ---------------------------  ----------------------------
<S>                        <C>                                <C>                            <C>
VOTING RIGHTS........      Limited to certain                 Same as common units           No direct MLP voting
                           significant decisions;                                            rights
                           no annual election of
                           directors


DIVIDEND                   First right to minimum             Second right to MQD;           Equal in amount and
   PRIORITY..........      quarterly distribution             no arrearage rights            priority to common
                           ("MQD") specified in                                              units but paid in
                           Partnership Agreement;                                            additional I-Shares
                           arrearage rights                                                  at current market
                                                                                             value of I-Shares

DIVIDEND RATE........      Minimum set in                     Equal in amount to             Equal in amount to
                           Partnership Agreement;             common units;                  common units
                           participate pro rata               participate pro rata
                           with subordinated after            with common units
                           both MQDs are met                  above the MQD


TRADING..............      Listed on NYSE, AMEX or            Not publicly traded            Listed on NYSE
                           Nasdaq National Market

FEDERAL                    Ordinary income to the             Same as common units           Full distribution
   INCOME TAX              extent of taxable                                                 treated as return of
   TREATMENT.........      income allocated to                                               capital; since
                           holder; tax-free return                                           distribution is in
                           of capital thereafter                                             shares, total basis
                           to extent of holder's                                             is not reduced
                           basis; remainder as
                           capital gain


TYPE OF                    Retail; creates                    Same as common units           Institutional; does
   INVESTOR...             unrelated business                                                not create unrelated
                           taxable income for                                                business taxable
                           tax-exempt investor;                                              income; qualifying
                           not qualifying income                                             income for regulated
                           for regulated                                                     investment companies
                           investment companies

LIQUIDITY                  Intended to receive                Second right to                Same as common units
   PRIORITY...             return of all capital              return of capital;             (indirect right through
                           first                              pro rata with common           I-share issuer)
                                                              units thereafter

CONVERSION                 Not applicable                     One-to-one ratio into          None
   RIGHTS.....                                                common units

</TABLE>


         MLP Common Units. MLP common units represent an equity ownership
interest in a partnership, providing limited voting rights and entitling the
holder to a share of the company's success through distributions and/or capital
appreciation. Unlike stockholders of a corporation, common unit holders do not
elect directors annually and generally have the right to vote only on certain
significant events, such as mergers, a sale of substantially all of the assets,
removal of the general partner or material amendments to the partnership
agreement. MLPs are required by their partnership agreements to distribute a
large percentage of their current operating earnings. Common unit holders
generally have first right to a MQD prior to distributions to the convertible
subordinated unit holders or the general partner (including incentive
distributions). Common unit holders typically have arrearage rights if the MQD
is not met. In the event of liquidation, MLP common unit holders have first
rights to the partnership's remaining assets


                                       23
<PAGE>

after bondholders, other debt holders, and preferred unit holders have been paid
in full. MLP common units trade on a national securities exchange or
over-the-counter.

         MLP Convertible Subordinated Units. MLP convertible subordinated units
typically are issued by MLPs to founders, corporate general partners of MLPs,
entities that sell assets to the MLP, and institutional investors. The purpose
of the convertible subordinated units is to increase the likelihood that during
the subordination period there will be available cash to be distributed to
common unit holders. The Company expects to purchase convertible subordinated
units in direct placements from such persons. Convertible subordinated units
generally are not entitled to distributions until holders of common units have
received specified MQD, plus any arrearages, and may receive less in
distributions upon liquidation. Convertible subordinated unit holders generally
are entitled to MQD prior to the payment of incentive distributions to the
general partner, but are not entitled to arrearage rights. Therefore, they
generally entail greater risk than MLP common units. They are generally
convertible automatically into the senior common units of the same 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 is a function of its worth if
converted into the underlying common units. Convertible subordinated units
generally have similar voting rights to MLP common units.


         MLP I-Shares. I-Shares represent an indirect investment in MLP I-units.
I-units are equity securities issued to affiliates of MLPs, typically a limited
liability company, that owns an interest in and manages the MLP. The issuer has
management rights but is not entitled to incentive distributions. The I-Share
issuer's assets consist exclusively of MLP I-units. Distributions by MLPs to
I-unit holders are made in the form of additional I-units, generally equal in
amount to the cash received by common unit holders of MLPs. The issuer of the
I-Share is taxed as a corporation for federal income tax purposes, however, the
MLP does not allocate income or loss to the I-Share issuer. Accordingly,
investors receive a Form 1099, are not allocated their proportionate share of
income of the MLPs and are not subject to state filing obligations.


         Debt Securities. The Company may invest up to 25% of its total 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 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 subsequently is
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 stockholders.


         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 attempts 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.


         Restricted Securities. The Company may invest up to 30% of its total
assets in restricted securities, primarily through direct placements of MLP
securities. An issuer may be willing to offer the


                                       24
<PAGE>

purchaser more attractive features with respect to securities issued in direct
placements because it has avoided the expense and delay involved in a public
offering of securities. Adverse conditions in the public securities markets also
may preclude a public offering of securities. MLP convertible subordinated units
typically are purchased from affiliates of the issuer or other existing holders
of convertible units rather than directly from the issuer.

         Restricted 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 satisfaction of certain financial tests.


         Defensive and Temporary Investments. Under adverse market or economic
conditions or pending investment of offering or leverage proceeds, 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.

USE OF LEVERAGE


         The Company currently intends to issue Tortoise Notes in an aggregate
amount representing approximately 25% of the Company's total assets and to issue
MMP Shares in an amount currently anticipated to represent approximately 8% of
the Company's total assets. The Company also may leverage through other
Borrowings, including the issuance of commercial paper or additional notes. The
Company employs financial leverage for investment purposes when the Adviser
believes that such use of proceeds will enhance the Company's ability to achieve
its investment objective. The timing and terms of any leverage transactions will
be determined by the Company's Board of Directors. The amount of outstanding
financial leverage may vary with prevailing market or economic conditions.
Leverage entails special risks. See "Risk Factors--General Risks of Investing in
the Company--Leverage Risk." The management fee paid to the Adviser will be
calculated on the basis of the Company's Managed Assets (which includes the
proceeds of any financial leverage), so the fee will be higher when leverage is
used.


HEDGING TRANSACTIONS


         In an attempt to reduce the interest rate risk arising from the
Company's leveraged capital structure, the Company may enter into interest rate
transactions such as swaps, caps and floors. 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. 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 up to the
interest



                                       25
<PAGE>

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. In an interest rate floor,
the Company would be entitled to receive, to the extent that a specified index
falls below a predetermined interest rate, payments of interest on a notional
principal amount from the party selling the interest rate floor. Depending on
the state of interest rates in general, the Company's use of interest rate
transactions could affect the Company's ability to make required interest
payments on the Tortoise Notes. To the extent there is a decline in interest
rates, the value of the interest rate transactions could decline. If the
counterparty to an interest rate transaction defaults, the Company would not be
able to use the anticipated net receipts under the interest rate transaction to
offset the Company's cost of financial leverage.

CONFLICTS OF INTEREST

         Conflicts of interest may arise from the fact that the Adviser and its
affiliates generally will be carrying on substantial investment activities for
other clients, in which the Company will have no interest. The Adviser or its
affiliates may have financial incentives to favor certain of such accounts over
the Company. Any of their proprietary accounts and other customer accounts may
compete with the Company for specific trades. The Adviser or its affiliates may
give advice and recommend securities to, or buy or sell securities for the
Company which advice or securities may differ from advice given to, or
securities recommended or bought or sold for, other accounts and customers, even
though their investment objectives may be the same as, or similar to, those of
the Company.


         The Adviser will evaluate a variety of factors in determining whether a
particular investment opportunity or strategy is appropriate and feasible for
the relevant account at a particular time, including, but not limited to, the
following: (1) the nature of the investment opportunity taken in the context of
the other investments at the time; (2) the liquidity of the investment relative
to the needs of the particular entity or account; (3) the availability of the
opportunity (i.e., size of obtainable position); (4) the transaction costs
involved; and (5) the investment or regulatory limitations applicable to the
particular entity or account. Because these considerations may differ when
applied to the Company and relevant accounts under management in the context of
any particular investment opportunity, the investment activities of the Company,
on the one hand, and other managed accounts, on the other hand, may differ
considerably from time to time. In addition, the fees and expenses of the
Company will differ from those of the other managed accounts. Accordingly,
stockholders should be aware that the future performance of the Company and
other accounts of the Adviser may vary.

         Situations may occur when the Company could be disadvantaged because of
the investment activities conducted by the Adviser and its affiliates for its
other accounts. Such situations may be based on, among other things, the
following: (1) legal or internal restrictions on the combined size of positions
that may be taken for the Company or the other accounts, thereby limiting the
size of the Company's position; or (2) the difficulty of liquidating an
investment for the Company or the other accounts where the market cannot absorb
the sale of the combined position. The Company's investment opportunities may be
limited by affiliations of the Adviser or its affiliates with energy
infrastructure companies. In particular, a private equity fund managed by KCEP
holds a significant subordinated equity position in one MLP and as a result of
such ownership, holds a board position that currently is filled by Mr. Schulte,
that may limit or preclude the Company's investment in securities of that MLP.


         The Adviser and its principals, officers, employees, and affiliates may
buy and sell securities or other investments for their own accounts and may have
actual or potential conflicts of interest with respect to investments made on
behalf of the Company. As a result of differing trading and investment
strategies or constraints, positions may be taken by principals, officers,
employees, and affiliates of the


                                       26
<PAGE>

Adviser that are the same as, different from, or made at a different time than
positions taken for the Company.

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 tax
liability and thereby lower the amount of after-tax cash available for the
payment of interest on the Tortoise Notes.

                                  RISK FACTORS


         Risk is inherent in all investing. Investing in any investment company
security, like the Tortoise Notes, involves risk, including the risk that you
may receive little or no return on your investment or even that you may lose
part or all of your investment. Therefore, before investing you should consider
carefully the following risks that you assume when you invest in Tortoise Notes.


RISKS OF INVESTING IN TORTOISE NOTES


         Unsecured Investment. The Tortoise Notes represent an unsecured
obligation of the Company to pay interest and principal, when due. The Company
cannot assure you that it will have sufficient funds or that it will be able to
arrange for additional financing to pay interest on the Tortoise Notes when due
or to repay the Tortoise Notes at the Stated Maturity. The Company's failure to
pay interest on the Tortoise Notes when due or to repay the Tortoise Notes upon
the Stated Maturity would, subject to the cure provisions under the Indenture,
constitute an event of default under the Indenture and could cause a default
under other agreements that the Company may enter into from time to time. There
is no sinking fund with respect to the Tortoise Notes, and at the Stated
Maturity, the entire outstanding principal amount of the Tortoise Notes will
become due and payable. See "Description of Tortoise Notes--Event of Default and
Acceleration of Maturity; Remedies."

         Interest Rate Risk. Tortoise Notes pay interest based on short-term
interest rates. If short-term interest rates rise, interest rates on the
Tortoise Notes may rise so that the amount of interest payable to holders of
Tortoise Notes would exceed the amount of income from the Company's portfolio
securities. This might require that the Company sell portfolio securities at a
time when it otherwise would not do so, which may affect adversely the Company's
future earnings ability. While the Company intends to manage this risk through
interest rate transactions, there is no guarantee these strategies will be
implemented or will be successful in reducing or eliminating interest rate risk.
In addition, rising market interest rates could impact negatively the value of
the Company's investment portfolio, reducing the amount of assets serving as
asset coverage for the Tortoise Notes.


         Auction Risk. You may not be able to sell your Tortoise Notes at an
Auction if the Auction fails; that is, if there are more Tortoise Notes offered
for sale than there are buyers for those Tortoise Notes. Also, if you place hold
orders (orders to retain Tortoise Notes) at an Auction only at a specified rate,
and that bid rate exceeds the rate set at the Auction, you will not retain your
Tortoise Notes. Finally, if you buy Tortoise Notes or elect to retain Tortoise
Notes without specifying a rate below which you would not wish to buy or
continue to hold those Tortoise Notes, and the Auction sets a below-market rate,
you may


                                       27
<PAGE>

receive a lower rate of return on your Tortoise Notes than the market rate. See
"Description of Tortoise Notes" and "The Auction--Auction Procedures."

         Secondary Market Risk. If you try to sell your Tortoise Notes between
Auctions, you may not be able to sell any or all of your Tortoise Notes, or you
may not be able to sell them in the $25,000 increments for which they were
purchased or $25,000 increments for which they were purchased plus accrued and
unpaid interest. If the Company has designated a Special Rate Period (a rate
period other than twenty-eight (28) days), changes in interest rates could
affect the price you would receive if you sold your Tortoise Notes in the
secondary market. Lehman Brothers and broker-dealers that maintain a secondary
trading market for Tortoise Notes are not required to maintain this market and
the Company has no control over the establishment or maintenance of this market.
The Company is not required to redeem Tortoise Notes if an Auction or an
attempted secondary market sale fails. Tortoise Notes are not listed on an
exchange or automated quotation system. If you sell your Tortoise Notes to a
broker-dealer between Auctions, you may receive less than the price you paid for
them, especially when market interest rates have risen since the last Auction.


         Ratings and Asset Coverage Risk. While Moody's and Fitch have assigned
ratings of "Aaa" and "AAA," respectively, to Tortoise Notes, the ratings do not
eliminate or necessarily mitigate the risks of investing in Tortoise Notes. A
rating agency could downgrade Tortoise Notes, which may make your securities
less liquid at an Auction or in the secondary market, though probably with
higher resulting interest rates. If a rating agency downgrades the ratings
assigned to Tortoise Notes, the Company may alter its portfolio or redeem
Tortoise Notes. The Company may voluntarily redeem Tortoise Notes under certain
circumstances. See "Rating Agency Guidelines" for a description of the asset
maintenance tests and other requirements the Company must meet.

         Inflation Risk. Inflation is the reduction in the purchasing power of
money resulting from the increase in the price of goods and services. Inflation
risk is the risk that the inflation adjusted (or "real") value of your Tortoise
Notes investment or the income from that investment will be worth less in the
future. As inflation occurs, the real value of the Tortoise Notes and interest
declines. In an inflationary period, however, it is expected that, through the
Auction process, Tortoise Notes interest rates would increase, tending to offset
this risk.

         Decline in Net Asset Value Risk. A material decline in the Company's
net asset value may impair the Company's ability to maintain required levels of
asset coverage for Tortoise Notes. For a description of risks affecting the
Company, please see "--General Risks of Investing in the Company" below.


GENERAL RISKS OF INVESTING IN THE COMPANY


         Limited Operating History. The Company is a recently organized,
nondiversified, closed-end management investment company that began operations
on February 27, 2004. As of May 31, 2004, the Company had invested approximately
$244 million or 85% of its assets in energy infrastructure companies. As a
result, it is difficult to estimate whether the Company will meet its investment
objective at this time.


         Management Risk. The Adviser was formed in October 2002 and has limited
independent resources. The Adviser relies to a significant degree on the
officers, employees, and resources of Fountain Capital, KCEP and their
affiliates. Three of the five members of the investment committee are affiliates
of, but not employees of, the Adviser, and each 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 key personnel. Prior to


                                       28
<PAGE>

forming the Company, the Adviser had no previous experience managing a
registered investment company.

         Concentration Risk. The Company concentrates its investments in the
energy infrastructure sector, with an emphasis on securities issued by MLPs.
Certain risks inherent in the energy infrastructure business of these types of
MLPs include the following:

         o        Processing and coal MLPs may be directly affected by energy
                  commodity prices. The volatility of commodity prices can
                  indirectly affect certain other MLPs due to the impact of
                  prices on volume. Pipeline MLPs are not subject to direct
                  commodity price exposure because they do not own the
                  underlying energy commodity. While propane MLPs do own the
                  underlying energy commodity, the Adviser seeks high quality
                  MLPs that are able to mitigate or manage direct margin
                  exposure to commodity price levels. The MLP sector can be hurt
                  by market perception that MLPs performance and distributions
                  are directly tied to commodity prices.

         o        The profitability of MLPs, particularly processing and
                  pipeline MLPs, may be materially impacted by the volume of
                  natural gas or other energy commodities available for
                  transporting, processing, storing or distributing. A
                  significant decrease in the production of natural gas, oil,
                  coal or other energy commodities, due to the decline of
                  production from existing facilities, import supply disruption,
                  depressed commodity prices or otherwise, would reduce revenue
                  and operating income of MLPs and, therefore, the ability of
                  MLPs to make distributions to partners.

         o        A sustained decline in demand for crude oil, natural gas and
                  refined petroleum products could adversely affect MLP revenues
                  and cash flows. Factors that could lead to a decrease in
                  market demand include a recession or other adverse economic
                  conditions, an increase in the market price of the underlying
                  commodity, higher taxes or other regulatory actions that
                  increase costs, or a shift in consumer demand for such
                  products.

         o        A portion of any one MLP's assets may be dedicated to natural
                  gas reserves and other commodities that naturally deplete over
                  time. Often the MLPs are dependent upon exploration and
                  development activities by third parties. MLPs employ a variety
                  of means of increasing cash flow, including increasing
                  utilization of existing facilities, expanding operations
                  through new construction, expanding operations through
                  acquisitions, or securing additional long-term contracts.
                  Thus, some MLPs may be subject to construction risk,
                  acquisition risk or other risk factors arising from their
                  specific business strategies. A significant slowdown in large
                  energy companies' disposition of energy infrastructure assets
                  and other merger and acquisition activity in the energy MLP
                  industry could reduce the growth rate of cash flows received
                  by the Company from MLPs that grow through acquisitions.

         o        The profitability of MLPs could be adversely affected by
                  changes in the regulatory environment. Most MLPs' assets are
                  heavily regulated by federal and state governments in diverse
                  matters such as the way in which their assets are constructed
                  and the prices they may charge for their services. Such
                  regulation can change over time in scope and intensity. For
                  example, a particular byproduct of an MLP process may be
                  declared hazardous by a regulatory agency and unexpectedly
                  increase production costs. Moreover, many state and federal
                  environmental laws provide for civil as well as regulatory
                  remediation, thus adding to the potential exposure an MLP may
                  face.


                                       29
<PAGE>

         o        A rising interest rate environment could adversely impact the
                  performance of MLPs. Rising interest rates could limit the
                  capital appreciation of equity units of MLPs as a result of
                  the increased availability of alternative investments at
                  competitive yields with MLPs. Rising interest rates may also
                  increase an MLP's cost of capital. A higher cost of capital
                  could limit growth from acquisition/expansion projects and
                  limit MLP distribution growth rates.

         o        Since the September 11th attacks, the U.S. government has
                  issued public warnings indicating that energy assets,
                  specifically those related to pipeline infrastructure,
                  production facilities and transmission and distribution
                  facilities, might be specific targets of terrorist activity.
                  The continued threat of terrorism and related military
                  activity will likely increase volatility for prices in natural
                  gas and oil and could affect the market for products of MLPs.


         o        Holders of MLP units are subject to certain risks inherent in
                  the partnership structure of MLPs including (1) tax risks
                  (described below), (2) limited ability to elect or remove
                  management, (3) limited voting rights, except with respect to
                  extraordinary transactions, and (4) conflicts of interest of
                  the general partner including those arising from incentive
                  distribution payments.


         Industry Specific Risk. 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. Pipeline MLP unit prices are
         primarily driven by distribution growth rates and prospects for
         distribution growth.

                  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. Propane MLP unit
         prices are based on safety in distribution coverage ratios, interest
         rate environment and, to a lesser extent, distribution growth.


                  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 also are
         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.

         Cash Flow Risk. The Company will derive substantially all of its cash
flow from investments in equity securities of MLPs. The amount of cash that the
Company has available to distribute to holders of Tortoise Notes and
stockholders depends entirely on the ability of MLPs held by the Company to make
distributions to its partners and the tax character of those distributions. The
Company has no control over the actions of underlying MLPs. The amount of cash
that each individual MLP can distribute to its partners will depend on the
amount of cash it generates from operations, which will vary from quarter to

                                       30
<PAGE>

quarter depending on factors affecting the energy infrastructure market
generally and on factors affecting the particular business lines of the MLP.
Available cash will also depend on the MLP's level of operating costs (including
incentive distributions to the general partner), level of capital expenditures,
debt service requirements, acquisition costs (if any), fluctuations in working
capital needs and other factors.


         Equity Securities Risk. MLP common units and other equity securities
can be affected by macro economic and other factors affecting the stock market
in general, expectations of interest rates, investor sentiment towards MLPs or
the energy sector, changes in a particular issuer's financial condition, or
unfavorable or unanticipated poor performance of a particular issuer (in the
case of MLPs, generally measured in terms of distributable cash flow). Prices of
common units of individual MLPs and other equity securities can also be affected
by fundamentals unique to the partnership or company, including earnings power
and coverage ratios.

         Investing in securities of smaller companies may involve greater risk
than is associated with investing in more established companies. Smaller
capitalization companies may have limited product lines, markets or financial
resources; may lack management depth or experience; and may be more vulnerable
to adverse general market or economic developments than larger more established
companies.

         Because convertible subordinated units generally convert to common
units on a one-to-one ratio, the price that the Company can be expected to pay
upon purchase or to realize upon resale is generally tied to the common unit
price less a discount. The size of the discount varies depending on a variety of
factors including the likelihood of conversion, and the length of time remaining
to conversion, and the size of the block purchased.

         The price of I-Shares and their volatility tend to be correlated to the
price of common units, although the price correlation is not precise.

         Nondiversification Risk. The Company is a nondiversified, closed-end
management investment 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 Internal Revenue Code on the
number or size of securities held by the Company. There currently are only
fifty-five 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 issued by energy infrastructure companies to a lesser
degree, consistent with its investment objective and policies.

         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, and the character of these distributions. 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 holders of
Tortoise Notes and interest payments they receive from the Company.


         Historically, MLPs generally have made cash flow payments that have
significantly exceeded taxable income due, in part, to their ability to offset
income with tax deductions. This aspect of MLPs, and the Company's anticipated
issuance of Tortoise Notes (whose interest is tax deductible to the Company),
will likely reduce the Company's current income taxes and, concomitantly,
increase the Company's cash distributions to its common stockholders. The
Company will accrue deferred income taxes for the anticipated potential future
income tax liability attributable to the different treatment of MLP cash flow
distributions for book versus tax purposes. In addition, the Company will accrue
deferred income taxes with respect to any appreciation of interests in MLPs or
other investments. If the amount of MLP income tax deductions that may be
claimed by the Company is smaller than anticipated or the Company turns over its
portfolio more rapidly than anticipated, the Company will incur greater current


                                       31
<PAGE>

income taxes. This may reduce the amount of assets available to the Company for
investment and possibly impact the Company's ability to make interest payments.

         Leverage Risk. The issuance of Tortoise Notes, MMP Shares, or engaging
in other Borrowings or other transactions involving Company indebtedness (other
than for temporary or emergency purposes) and any other preferred stock issued
by the Company all would be considered "senior securities" for purposes of the
1940 Act and would constitute leverage. If the return on securities acquired
with borrowed funds or other leverage proceeds does not exceed the cost of the
leverage, the use of leverage could cause the Company to lose money. 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.

         The Company intends to use financial leverage in an amount currently
anticipated to represent approximately 33% of its total assets. In addition to
the issuance of Tortoise Notes, which the Company currently expects to represent
approximately 25% of its total assets, the Company intends to make further use
of financial leverage through the issuance of MMP Shares in an amount currently
anticipated to represent approximately 8% of the Company's total assets. The
Company also may leverage through Borrowings, including the issuance of
commercial paper or additional notes. In addition, the Company may also borrow
funds in an amount up to 5% of its total assets for temporary purposes only. In
the event of a default under any secured Borrowings, the lenders may have the
right to cause a liquidation of the collateral (i.e., sell portfolio securities)
and if any such default is not cured, the lenders may be able to control the
liquidation as well.

         Upon issuance of the Tortoise Notes, which constitute senior securities
representing indebtedness, under the requirements of the 1940 Act, the value of
the Company's total assets, less all liabilities and indebtedness of the Company
not represented by senior securities, must be at least equal to 300% of the
aggregate value of the Tortoise Notes and any other senior securities
representing indebtedness.

         In order to maintain the ratings of "Aaa" and "AAA" of the Tortoise
Notes by Moody's and Fitch, respectively, the Rating Agencies impose asset
coverage and portfolio composition requirements in addition to and more
stringent than those required by the 1940 Act in connection with the issuance of
such a rating. See "Rating Agency Guidelines." In addition, the Rating Agencies
impose restrictions on certain investment practices in which the Company may
otherwise engage. If the Company seeks an investment grade rating from one or
more nationally recognized statistical rating organizations for any preferred
stock (which the Company expects to do if it issues any such preferred stock),
additional asset coverage and portfolio composition requirements may be imposed
by such rating organizations.

         The Company reserves the right at any time, if it believes that market
conditions are appropriate, to increase its level of debt to maintain or
increase the Company's current level of leverage to the extent permitted by the
1940 Act, Rating Agency Guidelines and existing agreements between the Company
and third parties.

         Because the fee paid to the Adviser will be calculated on the basis of
Managed Assets, the fee will be higher when leverage is utilized, giving the
Adviser an incentive to utilize leverage.


         Hedging Risk. The Company may use interest rate transactions for
hedging purposes only, in an attempt to reduce the interest rate risk arising
from the Company's leveraged capital structure. 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,
floors, 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


                                       32
<PAGE>

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 cash available for
distribution to common stockholders and/or the net assets available for coverage
of Tortoise Notes. 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
net assets available for coverage of the Tortoise Notes. 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 Security Risk. The Company may invest up to 30% of its total
assets in restricted securities, primarily through direct placements of MLP
securities. Restricted securities obtained by means of direct placements are
often 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. As discussed further below, 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, as amended
(the "1933 Act"). MLP convertible subordinated units also convert to publicly
traded common units upon the passage of time and/or satisfaction of certain
financial tests.


         Restricted securities are subject to statutory and 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.


         Liquidity Risk. Although common units of MLPs trade on the NYSE, AMEX,
and the Nasdaq National Market, certain MLP securities may trade less frequently
than those of larger companies due to their smaller capitalizations. In the
event certain MLP securities experience limited trading volumes, the prices of
such MLPs may display abrupt or erratic movements at times. Additionally, it may
be more difficult for the Company to buy and sell significant amounts of such
securities without an unfavorable impact on prevailing market prices. As a
result, these securities may be difficult to dispose of at a fair price at the
times when the Company believes it is desirable to do so. These securities also
are more difficult to value, and the Adviser's judgment as to value will often
be given greater weight than market quotations, if any exist. Investment in
securities that are less actively traded or over time experience decreased
trading volume may restrict the Company's ability to take advantage of other
market opportunities or to dispose of securities in order to make required
payments of interest on the Tortoise Notes or to redeem such notes.

         Valuation Risk. Market prices generally will not be available for MLP
convertible subordinated units, or securities of private companies, and the
value of such investments ordinarily will be determined based on fair valuations
determined by the Adviser pursuant to procedures adopted by the Board of


                                       33
<PAGE>

Directors. Similarly, common units acquired through direct placements will be
valued based on fair value determinations if they are subject to legal and
contractual restrictions on resale; however, the Adviser expects that such
values will be based on a discount from publicly available market prices.
Restrictions on resale or the absence of a liquid secondary market may affect
adversely the ability of the Company to determine its net asset value. 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. This may affect adversely the Company's ability to make
required payments of interest on the Tortoise Notes or redemption payments on
such notes.


         Interest Rate Risk. 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. This may affect adversely the Company's ability to make required
payments of interest on the Tortoise Notes or redemption payments on such notes.
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


                                       34
<PAGE>

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 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.

         Counterparty Risk. The Company may be subject to credit risk with
respect to the counterparties to certain derivative agreements entered into by
the Company. If a counterparty becomes bankrupt or otherwise fails to perform
its obligations under a derivative contract due to financial difficulties, the
Company may experience significant delays in obtaining any recovery under the
derivative contract in a bankruptcy or other reorganization proceeding. The
Company may obtain only a limited recovery or may obtain no recovery in such
circumstances.

         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.


                           MANAGEMENT OF THE COMPANY

DIRECTORS AND OFFICERS

         The business and affairs of the Company are managed under the direction
of the Board of Directors. Accordingly, 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 day-to-day 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 consists of 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, the Adviser provides the Company
with investment research and advice and furnishes the Company with an investment
program consistent with the Company's investment objective and policies, subject
to the supervision of the Board. The Adviser determines which portfolio
securities will be purchased or sold, arranges for the placing of orders for the
purchase or sale of portfolio securities, selects brokers or dealers to place
those orders, maintains books and records with respect to the Company's
securities transactions and reports 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. The Adviser was formed in October 2002 to
provide portfolio management services to institutional and high net worth
investors seeking professional management of their MLP investments. The Adviser
is controlled equally by Fountain Capital Management, L.L.C. ("Fountain
Capital") and Kansas City Equity


                                       35
<PAGE>

Partners LC ("KCEP"). As of May 31, 2004, the Adviser had approximately $370
million of client assets under management. Affiliates of the Adviser have an
additional $285 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. As an investment banker and as
a managing director of KCEP, Mr. Schulte has fourteen years of experience in
advising growth companies with respect to acquisition and capital market
financings. While at KCEP and the Adviser he has overseen the investment in
privately placed common units and convertible subordinated units issued by
propane and natural gas processing MLPs.

         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. Fountain Capital had $2.3 billion of client
assets under management as of May 31, 2004. Atlantic Asset Management LLC
("Atlantic") is a minority owner, and an affiliate, of Fountain Capital.
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 collateralized debt
obligations and mortgage hedge funds. Including Fountain Capital, the Atlantic
group had approximately $9.6 billion in assets under management as of May 31,
2004. KCEP was formed in 1993 and is focused solely on managing two private
equity funds, which have had combined committed capital of $110 million. KCEP
focuses on private equity investments in the consumer, telecom/media and natural
resource distribution and services industries.

         The Adviser has limited independent resources. Accordingly, the Adviser
has relied to a significant degree on the officers, employees, and resources of
certain affiliated entities. Three of the five members of the investment
committee of the Adviser are affiliates of, but not employees of, the Adviser.
Each member of the investment committee has other significant responsibilities
with such affiliated entities. The affiliated entities 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. Prior to
forming the Company, the Adviser had no prior experience managing a registered
investment company.


         The investment management of the Company's portfolio is 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 the predecessor of Oppenheimer & Co, Inc.
         From 1986 to 1989, he was a securities law attorney. 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 the CFA Institute.

                  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



                                       36
<PAGE>

         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 of GreenStreet Capital and its 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 also has served as a specialist in corporate finance with
         George K. Baum & Company, and as Executive Vice President 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.


COMPENSATION AND EXPENSES


         Under the Advisory Agreement, the Company pays to the Adviser
quarterly, as compensation for the services rendered by it, a fee equal on an
annual basis to 0.95% of the Company's average monthly Managed Assets. Managed
Assets means the total assets of the Company (including any assets attributable
to leverage that may be outstanding) minus accrued liabilities other than (1)
deferred taxes, (2) debt entered into for the purpose of leverage and (3) the
aggregate liquidation preference of any outstanding preferred stock. Because the
fee 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 conflict with 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 within
five days after the end of that quarter. The Adviser has contractually agreed to
waive or reimburse the Company for fees and expenses, including the investment
advisory fee and other expenses in the amount of 0.23% of average monthly
Managed Assets for the first two years of the Company's operations and 0.10% of
average monthly Managed Assets in years three through five.

The Company bears all expenses not specifically assumed by the Adviser incurred
in the Company's operations and will bear the expenses of the offering of its
Tortoise Notes. Expenses borne by the Company include, but are not limited to,
the following: (1) expenses of maintaining the Company


                                       37
<PAGE>

and continuing its existence, (2) registration of the Company under the 1940
Act, (3) commissions, spreads, fees and other expenses connected with the
acquisition, holding and disposition of securities and other investments,
including placement and similar fees in connection with direct placements
entered into on behalf of the Company, (4) auditing, accounting and legal
expenses, (5) taxes and interest, (6) governmental fees, (7) expenses of listing
shares of the Company with a stock exchange, and expenses of the issue, sale,
repurchase and redemption (if any) of interests in the Company, including
expenses of conducting tender offers for the purpose of repurchasing Company
interests, (8) expenses of registering and qualifying the Company and its shares
under federal and state securities laws and of preparing and filing registration
statements and amendments for such purposes, (9) expenses of reports and notices
to stockholders and of meetings of stockholders and proxy solicitations
therefor, (10) expenses of reports to governmental officers and commissions,
(11) insurance expenses, (12) association membership dues, (13) fees, expenses
and disbursements of custodians and subcustodians for all services to the
Company (including without limitation safekeeping of funds, securities and other
investments, keeping of books, accounts and records, and determination of net
asset values), (14) fees, expenses and disbursements of transfer agents,
dividend paying agents, stockholder servicing agents and registrars for all
services to the Company, (15) compensation and expenses of directors of the
Company who are not members of the Adviser's organization, (16) pricing and
valuation services employed by the Company, (17) all expenses incurred in
connection with leveraging of the Company's assets through a line of credit, or
issuing and maintaining preferred shares, (18) all expenses incurred in
connection with the organization of the Company and the initial public offering
of Company shares, and (19) such non-recurring items as may arise, including
expenses incurred in connection with litigation, proceedings and claims and the
obligation of the Company to indemnify its directors, officers and stockholders
with respect thereto.


                            RATING AGENCY GUIDELINES


         The Ratings Agencies impose asset coverage requirements, which may
limit the Company's ability to engage in certain types of transactions and may
limit the Company's ability to take certain actions without confirming that such
action will not impair the ratings.

         The Company may, but is not required to, adopt any modifications to the
guidelines that may hereafter be established by any Rating Agency. Failure to
adopt any modifications, however, may result in a change in the ratings
described above or a withdrawal of ratings altogether. In addition, any Rating
Agency may, at any time, change or withdraw any rating. The Board may, without
stockholder approval, amend, alter or repeal certain of the definitions and
related provisions which have been adopted by the Company pursuant to the Rating
Agency Guidelines only in the event the Company receives written confirmation
from the Rating Agency or Agencies that any amendment, alteration or repeal
would not impair the ratings then assigned to the Tortoise Notes.


         Tortoise Notes Basic Maintenance Amount. The Company must maintain, as
of each Valuation Date on which any Tortoise Notes are outstanding, Eligible
Assets having an aggregate Discounted Value at least equal to the Tortoise Notes
Basic Maintenance Amount, which is calculated separately for each Rating Agency
that is then rating the Tortoise Notes and so requires. If the Company fails to
maintain Eligible Assets having an aggregated Discounted Value at least equal to
the Tortoise Notes Basic Maintenance Amount as of any Valuation Date and such
failure is not cured on or before the related Asset Coverage Cure Date, the
Company will be required in certain circumstances to redeem certain of the
Tortoise Notes. See "--Redemption--Mandatory Redemption."

         The Tortoise Notes Basic Maintenance Amount as of any Valuation Date is
currently defined in the Rating Agency Guidelines as the dollar amount equal to:


                                       38
<PAGE>


                  (1) the sum of


                           (A) the product resulting from multiplying the number
                  of outstanding Tortoise Notes of each series on such date by
                  $25,000 plus any redemption premium;

                           (B) the aggregate amount of accrued interest at the
                  Applicable Rate to and including the first Interest Payment
                  Date that follows such Valuation Date (or to the 30th day
                  after such Valuation Date, if such 30th day occurs before the
                  first following Interest Payment Date);

                           (C) the amount of anticipated Company non-interest
                  expenses for the 90 days subsequent to such Valuation Date;

                           (D) the amount of the current outstanding balances of
                  any indebtedness senior to the Tortoise Notes plus interest
                  actually accrued together with 30 days' additional interest on
                  the current outstanding balances calculated at the current
                  rate; and

                           (E) any current liabilities, payable during the 30
                  days subsequent to such Valuation Date, including, without
                  limitation, indebtedness due within one year and any
                  redemption premium due with respect to Tortoise Notes for
                  which a Notice of Redemption has been given, as of such
                  Valuation Date, to the extent not reflected in any of (i)(A)
                  through (i)(D); less


                  (2) any cash plus the value of any of the Company's assets
         irrevocably deposited by the Company for the payment of any (1)(B)
         through (1)(E) ("value," for purposes of this clause (2), means the
         Discounted Value of the security, except that if the security matures
         prior to the relevant redemption payment date and is either fully
         guaranteed by the U.S. Government or is rated at least P-1 by Moody's,
         it will be valued at its face value).


Each Rating Agency may amend the definition of Tortoise Notes Basic Maintenance
Amount from time to time.


         The Market Value of the Company's portfolio securities (used in
calculating the Discounted Value of Eligible Assets) is calculated using readily
available market quotations when appropriate, and in any event, consistent with
the Company's Valuation Procedures. For the purpose of calculating the Tortoise
Notes Basic Maintenance Amount, portfolio securities are valued in the same
manner as the Company calculates its net asset value. See "Net Asset Value" in
the Statement of Additional Information.

         Each Rating Agency's Discount Factors, the criteria used to determine
whether the assets held in the Company's portfolio are Eligible Assets, and the
guidelines for determining the Discounted Value of the Company's portfolio
holdings for purposes of determining compliance with the Tortoise Notes Basic
Maintenance Amount are based on Rating Agency Guidelines established in
connection with assigning a rating to the Tortoise Notes. The Discount Factor
relating to any asset of the Company, the Tortoise Notes Basic Maintenance
Amount, the assets eligible for inclusion in the calculation of the Discounted
Value of the Company's portfolio and certain definitions and methods of
calculation relating thereto may be changed from time to time by the applicable
Rating Agency, without the approval of the Company, Board of Directors or
stockholders.

         A Rating Agency's Guidelines will apply to Tortoise Notes only so long
as such Rating Agency is rating such Tortoise Notes. The Company will pay
certain fees to Moody's and Fitch and any Other Rating Agency that may provide
a rating for the Tortoise Notes. The ratings assigned to Tortoise Notes


                                       39
<PAGE>

are not recommendations to buy, sell or hold Tortoise Notes. Such ratings may be
subject to revision or withdrawal by the assigning Rating Agency at any time.

         1940 Act Tortoise Notes Asset Coverage. The Company also is required to
maintain, with respect to Tortoise Notes, as of the last Business Day on any
month in which any Tortoise Notes are outstanding, asset coverage of at least
300% (or such other percentage as may in the future be specified in or under the
1940 Act as the minimum asset coverage for senior securities representing
indebtedness of a closed-end investment company as a condition of declaring
dividends on its common shares) ("1940 Act Tortoise Notes Asset Coverage"). If
the Company fails to maintain the 1940 Act Tortoise Notes Asset Coverage as of
the last Business Day of any month and such failure is not cured as of the last
business day of the following month (the "Asset Coverage Cure Date"), the
Company will be required to redeem certain Tortoise Notes. See
"--Redemption--Mandatory Redemption."

         The Company estimates that based on the composition of its portfolio as
of May 31, 2004, assuming the issuance of all Tortoise Notes offered hereby and
giving effect to the deduction of underwriting discounts and sales commissions
and estimated offering costs related thereto estimated at $1,435,500, the 1940
Act Tortoise Notes Asset Coverage would be:


  Value of Company assets less all liabilities and
  indebtedness not represented by senior securities    $394,866,320
---------------------------------------------------- = ------------  =  359%
    Senior securities representing indebtedness,       $110,000,000
     including the aggregate principal amount
                  of Tortoise Notes


         The subsequent issuance of preferred stock, such as the MMP Shares,
would have the effect of increasing the percentage of the 1940 Act Tortoise
Notes Asset Coverage.


         Notices. Under the current Rating Agency Guidelines, after the Original
Issue Date and in certain other circumstances, the Company is required to
deliver to any Rating Agency which is then rating the Tortoise Notes (i) a
certificate with respect to the calculation of the Tortoise Notes Basic
Maintenance Amount; (ii) a certificate with respect to the calculation of the
1940 Act Tortoise Notes Asset Coverage and the value of the portfolio holdings
of the Company; and (iii) a letter prepared by the Company's independent
accountants regarding the accuracy of such calculations.


         Notwithstanding anything herein to the contrary, the Rating Agency
Guidelines, as they may be amended from time to time by each Rating Agency, will
be reflected in a written document and may be amended by each Rating Agency
without the vote, consent or approval of the Company, the Board of Directors and
any holder of Tortoise Notes, or any stockholder of the Company.

         A copy of the current Rating Agency Guidelines will be provided to any
holder of Tortoise Notes promptly upon written request by such holder to the
Company at 10801 Mastin Boulevard, Suite 222, Overland Park, Kansas 66210.


                         DESCRIPTION OF TORTOISE NOTES


         The Tortoise Notes will be issued by the Company pursuant to the terms
of an Indenture dated as of July ___, 2004, and a Supplemental Indenture dated
as of July ___, 2004 (referred to herein collectively as the "Indenture")
between the Company and BNY Midwest Trust Company, N.A., as Trustee (the
"Trustee"). The following summaries of certain significant provisions of the
Indenture are not complete and are qualified in their entirety by the provisions
of the Indenture, a more detailed summary of which is contained in Appendix A to
the Statement of Additional Information, which is on file with the Commission
and is incorporated herein by reference. Whenever defined terms are used, but



                                       40
<PAGE>

not defined in this Prospectus, the terms have the meaning given to them in
Appendix A to the Statement of Additional Information.

GENERAL


         The Board of Directors has authorized the Company to issue notes
representing indebtedness pursuant to the terms of the Indenture. Currently, the
Indenture provides for the issuance of up to $60,000,000 and $50,000,000
aggregate principal amount of Tortoise Notes Series A and Series B,
respectively. The principal amount of the Tortoise Notes of each series are due
and payable on __________, 2044. The Tortoise Notes, when issued and sold
pursuant to the terms of the Indenture, will be issued in fully registered form
without coupons and in denominations of $25,000 and any integral multiple
thereof, unless otherwise provided in the Indenture. The Tortoise Notes will be
unsecured obligations of the Company and, upon liquidation, dissolution or
winding up of the Company, will rank: (1) senior to the Company's outstanding
common stock and any preferred stock, including the MMP Shares; (2) on a parity
with any unsecured creditors of the Company and any additional Tortoise Notes;
and (3) junior to any secured creditors of the Company. The Tortoise Notes will
be subject to optional and mandatory redemption as described below under
"--Redemption," and acceleration of maturity, as described below under "--Events
of Default and Acceleration of Maturity; Remedies."

         While serving as the Auction Agent in connection with the Auction
Procedures described below, the Auction Agent generally will serve merely as the
agent of the Company, acting in accordance with the Company's instructions.


         The Company has the right (to the extent permitted by applicable law)
to purchase or otherwise acquire any Tortoise Notes, so long as the Company is
current in the payment of interest on the Tortoise Notes and on any other notes
of the Company ranking on a parity with the Tortoise Notes with respect to the
payment of interest.

         The Tortoise Notes have no voting rights, except to the extent required
by law or as otherwise provided in the Indenture relating to the acceleration of
maturity upon the occurrence and continuance of an event of default.

SECURITIES DEPOSITORY


         The nominee of the Securities Depository is expected to be the sole
Holder of record of the Tortoise Notes. Accordingly, each purchaser of Tortoise
Notes must rely on (1) the procedures of the Securities Depository and, if such
purchaser is not a member of the Securities Depository, such purchaser's Agent
Member, to receive interest payments and notices and (2) the records of the
Securities Depository and, if such purchaser is not a member of the Securities
Depository, such purchaser's Agent Member, to evidence its ownership of the
Tortoise Notes.

         Purchasers of Tortoise Notes will not receive certificates representing
their ownership interest in such securities. DTC initially will act as
Securities Depository for the Agent Members with respect to the Tortoise Notes.


INTEREST AND RATE PERIODS


         General. Each series of Tortoise Notes will bear interest at the
Applicable Rate determined as set forth below under "--Determination of Interest
Rate." Interest on the Tortoise Notes shall be payable when due as described
below. If the Company does not pay interest when due, it will trigger an event
of default under the Indenture (subject to the cure provisions), and the Company
will be restricted from


                                       41
<PAGE>


declaring dividends and making other distributions with respect to its common
stock and any preferred stock.


         On the Business Day next preceding each Interest Payment Date, the
Company is required to deposit with the Paying Agent sufficient funds for the
payment of interest. The Company does not intend to establish any reserves for
the payment of interest.


         All moneys paid to the Paying Agent for the payment of interest shall
be held in trust for the payment of such interest to the Holder. Interest will
be paid by the Paying Agent to the Holders as their names appear on the
securities ledger or securities records of the Company, which Holder is expected
to be the nominee of the Securities Depository. The Securities Depository will
credit the accounts of the Agent Members of the Beneficial Owners in accordance
with the Securities Depository's normal procedures. The Securities Depository's
current procedures provide for it to distribute interest in same-day funds to
Agent Members who are, in turn, expected to distribute such interest to the
persons for whom they are acting as agents. The Agent Member of a Beneficial
Owner will be responsible for holding or disbursing such payments on the
applicable Interest Payment Date to such Beneficial Owner in accordance with the
instructions of such Beneficial Owner.

         Interest in arrears for any past Rate Period may be subject to a
Default Rate of interest (described below) and may be paid at any time, without
reference to any regular Interest Payment Date, to the Holder as name appear on
the securities ledger or securities records of the Company on such date, not
exceeding fifteen (15) days preceding the payment date thereof, as may be fixed
by the Board of Directors. Any interest payment shall first be credited against
the earliest accrued but unpaid interest. No interest will be payable in respect
of any payment or payments which may be in arrears. See "--Default Period"
below.

         The amount of interest payable on each Interest Payment Date (or in
respect of interest on another date in connection with a redemption during such
Rate Period) shall be computed by multiplying the Applicable Rate (or the
Default Rate) for such Rate Period (or a portion thereof) by a fraction, the
numerator of which will be the number of days in such Rate Period (or portion
thereof) that such Tortoise Notes were outstanding and for which the Applicable
Rate or the Default Rate was applicable and the denominator of which will be
360, multiplying the amount so obtained by $25,000, and rounding the amount so
obtained to the nearest cent.

         Determination of Interest Rate. The interest rate for the initial Rate
Period (i.e., the period from and including the Original Issue Date to and
including the initial Auction Date) and the initial Auction Date are set forth
on the cover page of the Prospectus. After the initial Rate Period, subject to
certain exceptions, the Tortoise Notes will bear interest at the Applicable Rate
that the Auction Agent advises the Company has resulted from an Auction.

         The initial Rate Period for the Tortoise Notes shall be ___ days for
Tortoise Notes Series A and ___ days for Series B. Rate Periods after the
initial Rate Period shall either be Standard Rate Periods or, subject to certain
conditions and with notice to Holders, Special Rate Periods.

         A Special Rate Period will not be effective unless, among other things,
Sufficient Clearing Bids exist at the Auction in respect of such Special Rate
Period (that is, in general, the aggregate amount of Tortoise Notes subject to
Buy Orders by Potential Holders is at least equal to the aggregate amount of
Tortoise Notes subject to Sell Orders by Existing Holders).


         Interest will accrue at the Applicable Rate from the Original Issue
Date and shall be payable on each Interest Payment Date thereafter. For Rate
Periods of less than 30 days, Interest Payment Dates shall occur on the first
Business Day following such Rate Period and, if greater than 30 days, then on a
monthly basis on the first Business Day of each month within such Rate Period
and on the Business Day


                                       42
<PAGE>


following the last day of such Rate Period. Interest will be paid through the
Securities Depository on each Interest Payment Date.


         Except during a Default Period as described below, the Applicable Rate
resulting from an Auction will not be greater than the Maximum Rate, which is
equal to the Applicable Percentage of the Reference Rate, subject to upward but
not downward adjustment in the discretion of the Board of Directors after
consultation with the Broker-Dealers. The Applicable Percentage will be
determined based on the lower of the credit ratings assigned on that date to the
Tortoise Notes by Moody's and Fitch, as follows:

              MOODY'S                  FITCH                  APPLICABLE
           CREDIT RATING           CREDIT RATING              PERCENTAGE
           -------------           -------------            --------------
           Aa3 or above             AA- or above                200%
             A3 to A1                 A- to A+                  250%
           Baa3 to Baa1             BBB- to BBB+                275%
            Below Baa3               Below BBB-                 300%

         The Reference Rate is the greater of (1) the applicable AA Composite
Commercial Paper Rate (for a Rate Period of fewer than 184 days) or the
applicable Treasury Index Rate (for a Rate Period of 184 days or more), or (2)
the applicable LIBOR. For Standard Rate Periods or less only, the Applicable
Rate resulting from an Auction will not be less than the Minimum Rate, which is
70% of the applicable AA Composite Commercial Paper Rate. No Minimum Rate is
specified for Auctions in respect to Rate Periods of more than the Standard Rate
Period.

         The Maximum Rate for the Tortoise Notes will apply automatically
following an Auction for the notes in which Sufficient Clearing Bids have not
been made (other than because all Tortoise Notes were subject to Submitted Hold
Orders). If an Auction for any subsequent Rate Period is not held for any
reason, including because there is no Auction Agent or Broker-Dealer, then the
Interest Rate on the Tortoise Notes for any such Rate Period shall be the
Maximum Rate (except for circumstances in which the Interest Rate is the Default
Rate, as described below).


         The All Hold Rate will apply automatically following an Auction in
which all of the outstanding Tortoise Notes are subject to (or are deemed to be
subject to) Submitted Hold Orders. The All Hold Rate is 80% of the applicable AA
Composite Commercial Paper Rate.


         Prior to each Auction, Broker-Dealers will notify Holders and the
Trustee of the term of the next succeeding Rate Period as soon as practicable
after the Broker-Dealers have been so advised by the Company. After each
Auction, on the Auction Date, Broker-Dealers will notify Holders of the
Applicable Rate for the next succeeding Rate Period and of the Auction Date of
the next succeeding Auction.

         Notification of Rate Period. The Company will designate the duration of
subsequent Rate Periods of each series of Tortoise Notes; provided, however,
that no such designation is necessary for a Standard Rate Period and, provided
further, that any designation of a Special Rate Period shall be effective only
if (i) notice thereof shall have been given as provided herein, (ii) any failure
to pay in a timely manner to the Trustee the full amount of any interest on, or
the redemption price of, Tortoise Notes shall have been cured as provided above,
(iii) Sufficient Clearing Bids shall have existed in an Auction held on the
Auction Date immediately preceding the first day of such proposed Special Rate
Period, (iv) if the Company shall have mailed a Notice of Redemption with
respect to any Tortoise Notes, the redemption price with respect to such
Tortoise Notes shall have been deposited with the Paying Agent, and (v) the
Company has confirmed that as of the Auction Date next preceding the first day
of such Special Rate Period, it has Eligible Assets with an aggregate Discounted
Value at least equal to the


                                       43
<PAGE>

Tortoise Notes Basic Maintenance Amount, and the Company has consulted with the
Broker-Dealers and has provided notice of such designation and otherwise
complied with the Rating Agency Guidelines.

         Designation of a Special Rate Period. If the Company proposes to
designate any Special Rate Period, not fewer than seven (7) (or two (2) Business
Days in the event the duration of the Rate Period prior to such Special Rate
Period is fewer than eight (8) days) nor more than thirty (30) Business Days
prior to the first day of such Special Rate Period, notice shall be (i) made by
press release and (ii) communicated by the Company by telephonic or other means
to the Trustee and confirmed in writing promptly thereafter. Each such notice
shall state (A) that the Company proposes to exercise its option to designate a
succeeding Special Rate Period, specifying the first and last days thereof and
(B) that the Company will by 3:00 p.m., New York City time, on the second
Business Day next preceding the first day of such Special Rate Period, notify
the Auction Agent and the Trustee, who will promptly notify the Broker-Dealers,
of either (x) its determination, subject to certain conditions, to proceed with
such Special Rate Period, subject to the terms of any Specific Redemption
Provisions, or (y) its determination not to proceed with such Special Rate
Period, in which latter event the succeeding Rate Period shall be a Standard
Rate Period.

         No later than 3:00 p.m., New York City time, on the second Business Day
next preceding the first day of any proposed Special Rate Period, the Company
shall deliver to the Trustee and the Auction Agent, who will promptly deliver to
the Broker-Dealers and Existing Holders, either:


                  (i) a notice stating (A) that the Company has determined to
         designate the next succeeding Rate Period as a Special Rate Period,
         specifying the first and last days thereof and (B) the terms of any
         Specific Redemption Provisions; or

                  (ii) a notice stating that the Company has determined not to
         exercise its option to designate a Special Rate Period.

         If the Company fails to deliver either such notice with respect to any
designation of any proposed Special Rate Period to the Auction Agent and the
Auction Agent is unable to make the confirmation described above by 3:00 p.m.,
New York City time, on the second Business Day next preceding the first day of
such proposed Special Rate Period, the Company shall be deemed to have delivered
a notice to the Auction Agent with respect to such Rate Period to the effect set
forth in clause (ii) above, thereby resulting in a Standard Rate Period.

         Default Period. Subject to cure provisions, a Default Period with
respect to a particular series of Tortoise Notes will commence on any date the
Company fails to deposit irrevocably in trust in same-day funds, with the Paying
Agent by 12:00 noon, New York City time,


                  (A) the full amount of any accrued interest on that series
         payable on the Interest Payment Date (an "Interest Default"), or


                  (B) the full amount of any redemption price (the "Redemption
         Price") payable on the date fixed for redemption (the "Redemption
         Date") (a "Redemption Default" and together with an Interest Default,
         hereinafter referred to as "Default").

         Subject to cure provisions, a Default Period with respect to an
Interest Default or a Redemption Default shall end on the Business Day on which,
by 12:00 noon, New York City time, all unpaid interest and any unpaid Redemption
Price shall have been deposited irrevocably in trust in same-day funds with the
Paying Agent. In the case of an Interest Default, the Applicable Rate for each
Rate Period commencing during a Default Period will be equal to the Default
Rate, and each subsequent Rate Period commencing after the beginning of a
Default Period shall be a Standard Rate Period; provided, however,


                                       44
<PAGE>

that the commencement of a Default Period will not by itself cause the
commencement of a new Rate Period.

         No Auction shall be held during a Default Period with respect to an
Interest Default applicable to that series of Tortoise Notes. No Default Period
with respect to an Interest Default or Redemption Default shall be deemed to
commence if the amount of any interest or any Redemption Price due (if such
default is not solely due to the willful failure of the Company) is deposited
irrevocably in trust, in same-day funds with the Paying Agent by 12:00 noon, New
York City time within three Business Days after the applicable Interest Payment
Date or Redemption Date, together with an amount equal to the Default Rate
applied to the amount of such non-payment based on the actual number of days
comprising such period divided by 360 for each series. The Default Rate shall be
equal to the Reference Rate multiplied by three.


EVENTS OF DEFAULT AND ACCELERATION OF MATURITY; REMEDIES

         Any one of the following events constitutes an "event of default" under
the Indenture:

         o        default in the payment of any interest upon any series of
                  Tortoise Notes when it becomes due and payable and the
                  continuance of such default for 30 days;

         o        default in the payment of the principal of, or premium on, any
                  series of Tortoise Notes at its Stated Maturity;

         o        default in the performance, or breach, of any covenant or
                  warranty of the Company in the Indenture, and continuance of
                  such default or breach for a period of 90 days after written
                  notice has been given to the Company by the Trustee;

         o        certain voluntary or involuntary proceedings involving the
                  Company and relating to bankruptcy, insolvency or other
                  similar laws;

         o        if, on the last business day of each of twenty-four
                  consecutive calendar months, the Tortoise Notes have an 1940
                  Act Tortoise Notes Asset Coverage under the 1940 Act of less
                  than 100%; and

         o        any other "event of default" provided with respect to any
                  series, including a default in the payment of any Redemption
                  Price payable on the Redemption Date.

         Upon the occurrence and continuance of an event of default, the holders
of a majority in principal amount of a series of outstanding Tortoise Notes or
the Trustee may declare the principal amount of that series of Tortoise Notes
immediately due and payable upon written notice to the Company. Upon an event of
default relating to bankruptcy, insolvency or other similar laws, acceleration
of maturity occurs automatically. At any time after a declaration of
acceleration with respect to any series of Tortoise Notes has been made, and
before a judgment or decree for payment of the money due has been obtained, the
holders of a majority in principal amount of a series of the outstanding
Tortoise Notes of that series, by written notice to the Company and the Trustee,
may rescind and annul the declaration of acceleration and its consequences if
all events of default with respect to that series of Tortoise Notes, other than
the non-payment of the principal of that series of Tortoise Notes which has
become due solely by such declaration of acceleration, have been cured or waived
and other conditions have been met.




                                       45
<PAGE>

REDEMPTION


         Optional Redemption. To the extent permitted under the 1940 Act and
Maryland law, the Company at its option may redeem Tortoise Notes having a Rate
Period of one year or less, in whole or in part, out of funds legally available
therefor, on the Interest Payment Date upon not less than 15 days' and not more
than 40 days' prior notice. This optional redemption is not available during the
initial Rate Period or during other limited circumstances. The optional
redemption price shall be equal to the aggregate principal amount of the
Tortoise Notes to be redeemed, plus an amount equal to accrued interest to the
date fixed for redemption. Tortoise Notes having a Rate Period of more than one
year are redeemable at the option of the Company, in whole or in part, out of
funds legally available therefor, prior to the end of the relevant Rate Period,
upon not less than 15 days, and not more than 40 days, prior notice, subject to
any Specific Redemption Provisions, which may include the payment of redemption
premiums in the sole discretion of the Board of Directors. The Company shall not
effect any optional redemption unless after giving effect thereto (1) the
Company has available on such date fixed for the redemption certain Deposit
Securities with maturity or tender dates not later than the day preceding the
applicable redemption date and having a value not less than the amount
(including any applicable premium) due to Holders of a series of Tortoise Notes
by reason of the redemption of a series of Tortoise Notes and (2) the Company
would have Eligible Assets with an aggregate Discounted Value at least equal to
the Tortoise Notes Basic Maintenance Amount immediately subsequent to such
redemption.

         Mandatory Redemption. If the Company fails to maintain Eligible Assets
with an aggregate Discounted Value at least equal to the Tortoise Notes Basic
Maintenance Amount as of any Valuation Date or, fails to satisfy the 1940 Act
Tortoise Notes Asset Coverage as of the last Business Day of any month, and such
failure is not cured within ten Business Days following such Valuation Date in
the case of a failure to maintain the Tortoise Notes Basic Maintenance Amount or
on the last Business Day of the following month in the case of a failure to
maintain the 1940 Act Tortoise Notes Asset Coverage as of such last Business Day
(each an "Asset Coverage Cure Date"), the Tortoise Notes will be subject to
mandatory redemption out of funds legally available therefor. See "Rating Agency
Guidelines."

         The principal amount of Tortoise Notes to be redeemed in such
circumstances will be equal to the lesser of (1) the minimum principal amount of
Tortoise Notes the redemption of which, if deemed to have occurred immediately
prior to the opening of business on the relevant Asset Coverage Cure Date, would
result in the Company having Eligible Assets with an aggregated Discounted Value
at least equal to the Tortoise Notes Basic Maintenance Amount or sufficient to
satisfy the 1940 Act Tortoise Notes Asset Coverage, as the case may be, in
either case as of the relevant Asset Coverage Cure Date (provided that, if there
is no such minimum principal amount of Tortoise Notes the redemption of which
would have such result, all Tortoise Notes then outstanding will be redeemed),
and (2) the maximum principal amount of Tortoise Notes that can be redeemed out
of funds expected to be available therefor on the Mandatory Redemption Date (as
defined below) at the Mandatory Redemption Price (as defined below).

         Any redemption of less than all of the outstanding Tortoise Notes of a
series will be made from Tortoise Notes designated by the Company. The Company
shall designate Tortoise Notes to be redeemed on a pro rata basis among the
Holders in proportion to the principal amount of Tortoise Notes they hold, by
lot or such other method as the Company shall deem equitable. No optional or
mandatory redemption of less than all outstanding Tortoise Notes of a series
will be made unless the aggregate principal amount of Tortoise Notes to be
redeemed is equal to $25,000 or integral multiples thereof. Any redemption of
less than all Tortoise Notes outstanding will be made in such a manner that all
Tortoise Notes outstanding after such redemption are in authorized
denominations.

         The Company is required to effect such a mandatory redemption not later
than 40 days after the Asset Coverage Cure Date, as the case may be (the
"Mandatory Redemption Date"), except that if

                                       46
<PAGE>

the Company does not have funds legally available for the redemption of, or is
not otherwise legally permitted to redeem, all of the outstanding Tortoise Notes
of a series, which are subject to mandatory redemption, or the Company otherwise
is unable to effect such redemption on or prior to such Mandatory Redemption
Date, the Company will redeem those Tortoise Notes on the earliest practicable
date on which the Company will have such funds available, upon notice to record
owners of Tortoise Notes and the Paying Agent. The Company's ability to make a
mandatory redemption may be limited by the provisions of the 1940 Act or
Maryland law. The redemption price per Tortoise Note in the event of any
mandatory redemption will be the principal amount, plus an amount equal to
accrued but unpaid interest to the date fixed for redemption, plus (in the case
of a Rate Period of more than one year) a redemption premium, if any, determined
by the Board of Directors in its sole discretion after consultation with the
Broker-Dealers and set forth in any applicable Specific Redemption Provisions
(the "Mandatory Redemption Price").

         Redemption Procedure. Pursuant to Rule 23c-2 under the 1940 Act, the
Company will file a notice of its intention to redeem with the Commission so as
to provide at least the minimum notice required by such Rule or any successor
provision (notice currently must be filed with the Commission generally at least
30 days prior to the redemption date). The Company shall deliver a notice of
redemption to the Auction Agent and the Trustee containing the information
described below one Business Day prior to the giving of notice to Holders in the
case of an optional redemption and on or prior to the 30th day preceding the
Mandatory Redemption Date in the case of a mandatory redemption. The Trustee
will use its reasonable efforts to provide notice to each Holder of Tortoise
Notes called for redemption by electronic means not later than the close of
business on the Business Day immediately following the Business Day on which the
Trustee determines the principal amount of Tortoise Notes to be redeemed (or,
during a Default Period with respect to such Tortoise Notes, not later than the
close of business on the Business Day immediately following the day on which the
Trustee receives notice of redemption from the Company). Such notice will be
confirmed promptly by the Trustee in writing not later than the close of
business on the third Business Day preceding the redemption date by providing
the notice to each Holder of record of Tortoise Notes called for redemption, the
Paying Agent (if different from the Trustee) and the Securities Depository
("Notice of Redemption"). The Notice of Redemption will be addressed to the
registered owners of the Tortoise Notes at their addresses appearing on the
books or share records of the Company. Such notice will set forth (1) the
redemption date, (2) the principal amount and identity of Tortoise Notes to be
redeemed, (3) the redemption price (specifying the amount of accrued interest to
be included therein and the amount of the redemption premium, if any), (4) that
interest on the Tortoise Notes to be redeemed will cease to accrue on such
redemption date, and (5) the 1940 Act provision under which redemption shall be
made. No defect in the Notice of Redemption or in the transmittal or mailing
thereof will affect the validity of the redemption proceedings, except as
required by applicable law.

         If less than all of the outstanding Tortoise Notes of a series are
redeemed on any date, the amount per Holder to be redeemed on such date will be
selected by the Company on a pro rata basis in proportion to the principal
amount of Tortoise Notes held by such Holder, by lot or by such other method as
is determined by the Company to be fair and equitable, subject to the terms of
any Specific Redemption Provisions and subject to maintaining authorized
denominations as described above. Tortoise Notes may be subject to mandatory
redemption as described herein notwithstanding the terms of any Specific
Redemption Provisions. The Auction Agent will give notice to the Securities
Depository, whose nominee will be the record Holder of all of the Tortoise
Notes, and the Securities Depository will determine the Tortoise Notes to be
redeemed from the account of the Agent Member of each Beneficial Owner. Each
Agent Member will determine the principal amount of Tortoise Notes to be
redeemed from the account of each Beneficial Owner for which it acts as agent.
An Agent Member may select for redemption Tortoise Notes from the accounts of
some Beneficial Owners without selecting for redemption any Tortoise Notes from
the accounts of other Beneficial Owners. In this case, in selecting the Tortoise
Notes to be


                                       47
<PAGE>

redeemed, the Agent Member will select by lot or by other fair and equitable
method. Notwithstanding the foregoing, if neither the Securities Depository nor
its nominee is the record Holder of all of the Tortoise Notes, the particular
principal amount to be redeemed shall be selected by the Company by lot, on a
pro rata basis between each series or by such other method as the Company shall
deem fair and equitable, as contemplated above.

         If Notice of Redemption has been given, then upon the deposit of funds
with the Paying Agent sufficient to effect such redemption, interest on such
Tortoise Notes will cease to accrue and such Tortoise Notes will no longer be
deemed to be outstanding for any purpose and all rights of the holders of the
Tortoise Notes so called for redemption will cease and terminate, except the
right of the holders of such Tortoise Notes to receive the redemption price, but
without any interest or additional amount. The Company shall be entitled to
receive from the Paying Agent, promptly after the date fixed for redemption, any
cash deposited with the Paying Agent in excess of (1) the aggregate redemption
price of the Tortoise Notes called for redemption on such date and (2) such
other amounts, if any, to which owners of Tortoise Notes called for redemption
may be entitled. The Company will be entitled to receive, from time to time
after the date fixed for redemption, from the Paying Agent the interest, if any,
earned on such funds deposited with the Paying Agent and the owners of Tortoise
Notes so redeemed will have no claim to any such interest. Any funds so
deposited which are unclaimed two years after such redemption date will be paid,
to the extent permitted by law, by the Paying Agent to the Company upon its
request. After such payment, Holders of Tortoise Notes called for redemption may
look only to the Company for payment.


         So long as any Tortoise Notes are held of record by the nominee of the
Securities Depository, the redemption price for such Tortoise Notes will be paid
on the redemption date to the nominee of the Securities Depository. The
Securities Depository's normal procedures provide for it to distribute the
amount of the redemption price to Agent Members who, in turn, are expected to
distribute such funds to the persons for whom they are acting as agent.


         Notwithstanding the provisions for redemption described above, no
Tortoise Notes may be redeemed unless all interest in arrears on the Outstanding
Tortoise Notes, and any indebtedness of the Company ranking on a parity with the
Tortoise Notes, have been or are being contemporaneously paid or set aside for
payment, except in connection with the liquidation of the Company in which case
all Tortoise Notes and all indebtedness ranking on a parity with the Tortoise
Notes must receive proportionate amounts and that the foregoing shall not
prevent the purchase or acquisition of all the Outstanding Tortoise Notes
pursuant to the successful completion of an otherwise lawful purchase or
exchange offer made on the same terms to, and accepted by, Holders of all
Outstanding Tortoise Notes.


         Except for the provisions described above, nothing contained in the
Indenture limits any legal right of the Company to purchase or otherwise acquire
Tortoise Notes outside of an Auction at any price, whether higher or lower than
the price that would be paid in connection with an optional or mandatory
redemption, so long as, at the time of any such purchase, there is no arrearage
in the payment of interest on or the mandatory or optional redemption price with
respect to, any Tortoise Notes for which Notice of Redemption has been given,
and the Company is in compliance with the 1940 Act Tortoise Notes Asset Coverage
and has Eligible Assets with an aggregate Discounted Value at least equal to the
Tortoise Notes Basic Maintenance Amount after giving effect to such purchase or
acquisition on the date thereof. If less than all outstanding Tortoise Notes are
redeemed or otherwise acquired by the Company, the Company shall give notice of
such transaction to the Auction Agent, in accordance with the procedures agreed
upon by the Board of Directors.


PAYMENT OF PROCEEDS UPON DISSOLUTION, ETC.


         In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the

                                       48
<PAGE>

Company or to its creditors, as such, or to its assets, or (b) any liquidation,
dissolution or other winding up of the Company, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, or (c) any assignment for
the benefit of creditors or any other marshalling of assets and liabilities of
the Company, then (after any payments with respect to any secured creditor of
the Company outstanding at such time) and in any such event the holders of
Tortoise Notes shall be entitled to receive payment in full of all amounts due
or to become due on or in respect of all Tortoise Notes (including any interest
accruing thereon after the commencement of any such case or proceeding), or
provision shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of the Tortoise Notes, before
the holders of any common or preferred stock of the Company are entitled to
receive any payment on account of any redemption proceeds, liquidation
preference or dividends from such shares, and to that end the holders of
Tortoise Notes shall be entitled to receive, for application to the payment
thereof, any payment or distribution of any kind or character, whether in cash,
property or securities, including any such payment or distribution which may be
payable or deliverable by reason of the payment of any other indebtedness of the
Company being subordinated to the payment of the Tortoise Notes, which may be
payable or deliverable in respect of the Tortoise Notes in any such case,
proceeding, dissolution, liquidation or other winding up event.

         Unsecured creditors of the Company may include, without limitation,
service providers to the Company including the Adviser, Custodian, Auction
Agent, Broker-Dealers and the Trustee, pursuant to the terms of various
contracts with the Company. Secured creditors of the Company may include without
limitation parties entering into any interest rate swap, floor or cap
transactions, or other similar transactions with the Company that create liens,
pledges, charges, security interests, security agreements or other encumbrances
on the assets of the Company.


         A consolidation, reorganization or merger of the Company with or into
any other company, or a sale, lease or exchange of all or substantially all of
the assets of the Company in consideration for the issuance of equity securities
of another company shall not be deemed to be a liquidation, dissolution or
winding up of the Company.

PAYMENT RESTRICTIONS ON SHARES


         Under the 1940 Act, the Company may not declare any dividend on common
stock or make any distribution with respect to the common stock or any preferred
stock of the Company or purchase or redeem any common or preferred stock if, at
the time of such declaration (and after giving effect thereto), asset coverage
with respect to the Tortoise Notes and any other senior securities representing
indebtedness (as defined in the 1940 Act), would be less than 300% (or such
other percentage as may in the future be specified in or under the 1940 Act as
the minimum asset coverage for senior securities representing indebtedness of a
closed-end investment company as a condition of declaring distributions,
purchases or redemptions of shares of its common or preferred stock). Dividends
may be declared upon preferred stock, provided, however, that the Tortoise Notes
and any other senior securities representing indebtedness have an asset coverage
of at least 200% at the time of declaration after deducting the amount of such
dividend.


         "Senior securities representing indebtedness" generally means any bond,
debenture, note or similar obligation or instrument constituting a security
(other than shares of beneficial interest) and evidencing indebtedness and could
include the Company's obligations under any Borrowings. For purposes of
determining asset coverage for senior securities representing indebtedness in
connection with the payment of dividends or other distributions on or purchases
or redemptions of stock, the term "senior security" does not include any
promissory note or other evidence of indebtedness issued in consideration of any
loan, extension or renewal thereof, made by a bank or other person and privately
arranged, and not intended to be publicly distributed. The term "senior
security" also does not include any such promissory


                                       49
<PAGE>

note or other evidence of indebtedness in any case where such a loan is for
temporary purposes only and in an amount not exceeding 5% of the value of the
total assets of the Company at the time when the loan is made; a loan is
presumed under the 1940 Act to be for temporary purposes if it is repaid within
60 days and is not extended or renewed; otherwise it is presumed not to be for
temporary purposes. For purposes of determining whether the 200% and 300% asset
coverage requirements described above apply in connection with interest payments
or distributions on or purchases or redemptions of stock, such asset coverage
may be calculated on the basis of values calculated as of a time within 48 hours
(not including Sundays or holidays) next preceding the time of the applicable
determination.


         In addition, a declaration of a dividend or other distribution on or
purchase or redemption of common or preferred stock is prohibited (i) at any
time that an event of default under the Tortoise Notes or any other Borrowings
has occurred and is continuing; or (ii) if, after giving effect to such
declaration, the Company would not have eligible portfolio holdings with an
aggregated Discounted Value at least equal to any asset coverage requirements
associated with such Tortoise Notes or other Borrowings; or (iii) the Company
has not redeemed the full amount of Tortoise Notes or other Borrowings, if any,
required to be redeemed by any provision for mandatory redemption.


                                  THE AUCTION

GENERAL


         Auction Agency Agreement. The Company has entered into an Auction
Agency Agreement (the "Auction Agency Agreement") with the Auction Agent
(currently, The Bank of New York) which provides, among other things,
that the Auction Agent will follow the Auction Procedures for purposes of
determining the Applicable Rate for Tortoise Notes so long as the Applicable
Rate for Tortoise Notes is to be based on the results of an Auction.


         The Auction Agent may terminate the Auction Agency Agreement upon
notice to the Company on a date no earlier than 60 days after the notice. If the
Auction Agent should resign, the Company will use its best efforts to enter into
an agreement with a successor Auction Agent containing substantially the same
terms and conditions as the Auction Agency Agreement. The Company may remove the
Auction Agent provided that prior to such removal the Company shall have entered
into such an agreement with a successor Auction Agent.


         Broker-Dealer Agreements. Each Auction requires the participation of
one or more Broker-Dealers. The Auction Agent has entered into agreements
(collectively, the "Broker-Dealer Agreements") with several Broker-Dealers
selected by the Company, which provide for the participation of those
Broker-Dealers in Auctions for Tortoise Notes.

         After each Auction for Tortoise Notes the Auction Agent will pay to
each Broker-Dealer, from funds provided by the Company, a service charge at the
annual rate of 1/4 of 1% in the case of any Auction immediately preceding a Rate
Period of less than one year, or a percentage agreed to by the Company and the
Broker-Dealers in the case of any Auction immediately preceding a Rate Period of
one year or longer, of the purchase price of Tortoise Notes placed by such
Broker-Dealer at such Auction. For the purposes of the preceding sentence,
Tortoise Notes will be placed by a Broker-Dealer if such Tortoise Notes were (a)
the subject of Hold Orders deemed to have been submitted to the Auction Agent by
the Broker-Dealer and were acquired by such Broker-Dealer for its own account or
were acquired by such Broker-Dealer for its customers who are Beneficial Owners
or (b) the subject of an Order submitted by such Broker-Dealer that is (i) a
Submitted Bid of an Existing Holder that resulted in such Existing Holder
continuing to hold such Tortoise Notes as a result of the Auction or (ii) a
Submitted Bid of a potential Holder that resulted in


                                       50
<PAGE>

such potential Holder purchasing such Tortoise Notes as a result of the Auction
or (iii) a valid Hold Order.

         The Company may request the Auction Agent to terminate one or more
Broker-Dealer Agreements at any time, provided that at least one Broker-Dealer
Agreement is in effect after such termination.


AUCTION PROCEDURES


         Beneficial Owners. Prior to the Submission Deadline on each Auction
Date for a series of Tortoise Notes, each customer of a Broker-Dealer who is
listed on the records of that Broker-Dealer (or, if applicable, the Auction
Agent) as a holder of Tortoise Notes of such series (a "Beneficial Owner") may
submit orders ("Orders") with respect to Tortoise Notes of such series to that
Broker-Dealer as follows:


         o        Hold Order - indicating its desire to hold Tortoise Notes of
                  such series without regard to the Applicable Rate for Tortoise
                  Notes of such series for the next Rate Period thereof.


         o        Bid - indicating its desire to sell the principal amount of
                  Outstanding Tortoise Notes, if any, of such series held by
                  such Beneficial Owner which such Beneficial Owner offers to
                  sell if the Applicable Rate for Tortoise Notes of such series
                  for the next succeeding Rate Period of Tortoise Notes of such
                  series shall be less than the rate per annum specified by such
                  Beneficial Owner (also known as a hold at rate order).

         o        Sell Order - indicating its desire to sell the principal
                  amount of Outstanding Tortoise Notes, if any, of such series
                  held by such Beneficial Owner which such Beneficial Owner
                  offers to sell without regard to the Applicable Rate for
                  Tortoise Notes of such series for the next succeeding Rate
                  Period of Tortoise Notes of such series.

         Orders submitted (or the failure to do so) by Beneficial Owners under
certain circumstances will have the effects described below. A Beneficial Owner
of Tortoise Notes of such series that submits a Bid with respect to Tortoise
Notes of such series to its Broker-Dealer having a rate higher than the Maximum
Rate for Tortoise Notes of such series on the Auction Date therefore will be
treated as having submitted a Sell Order with respect to such Tortoise Notes. A
Beneficial Owner of Tortoise Notes of such series that fails to submit an Order
with respect to such Tortoise Notes to its Broker-Dealer will be deemed to have
submitted a Hold Order with respect to such Tortoise Notes of such series;
provided, however, that if a Beneficial Owner of Tortoise Notes of such series
fails to submit an Order with respect to Tortoise Notes of such series to its
Broker-Dealer for an Auction relating to a Special Rate Period of more than
twenty-eight (28) days, such Beneficial Owner will be deemed to have submitted a
Sell Order with respect to such Tortoise Notes. A Sell Order shall constitute an
irrevocable offer to sell the Tortoise Notes subject thereto. A Beneficial Owner
that offers to become the Beneficial Owner of additional Tortoise Notes is, for
purposes of such offer, a Potential Beneficial Owner as discussed below.

         Potential Beneficial Owners. A customer of a Broker-Dealer that is not
a Beneficial Owner of a series of Tortoise Notes but that wishes to purchase
Tortoise Notes of such series, or that is a Beneficial Owner of Tortoise Notes
of such series that wishes to purchase additional Tortoise Notes of such series
(in each case, a "Potential Beneficial Owner"), may submit Bids to its
Broker-Dealer in which it offers to purchase such principal amount of
Outstanding Tortoise Notes of such series specified in such Bid if the
Applicable Rate for Tortoise Notes of such series determined on such Auction
Date shall be higher than the rate specified in such Bid. A Bid placed by a
Potential Beneficial Owner of Tortoise Notes of such series specifying a rate
higher than the Maximum Rate for Tortoise Notes of such series on the Auction
Date therefor will not be accepted.


                                       51
<PAGE>

         The Auction Process. Each Broker-Dealer shall submit in writing, which
shall include a writing delivered via e-mail or other electronic means to the
Auction Agent, prior to the Submission Deadline on each Auction Date, all Orders
for Tortoise Notes of a series subject to an Auction on such Auction Date
obtained by such Broker-Dealer, designating itself (unless otherwise permitted
by the Company) as an Existing Holder in respect of Tortoise Notes subject to
Orders submitted or deemed submitted to it by Beneficial Owners and as a
Potential Holder in respect of Tortoise Notes subject to Orders submitted to it
by Potential Beneficial Owners. However, neither the Company nor the Auction
Agent will be responsible for a Broker-Dealer's failure to comply with the
foregoing. Any Order placed with the Auction Agent by a Broker-Dealer as or on
behalf of an Existing Holder or a Potential Holder will be treated in the same
manner as an Order placed with a Broker-Dealer by a Beneficial Owner or
Potential Beneficial Owner. Similarly, any failure by a Broker-Dealer to submit
to the Auction Agent an Order in respect of Tortoise Notes held by it or
customers who are Beneficial Owners will be treated in the same manner as a
Beneficial Owner's failure to submit to its Broker-Dealer an Order in respect of
Tortoise Notes held by it. A Broker-Dealer may also submit Orders to the Auction
Agent for its own account as an Existing Holder or Potential Holder, provided it
is not an affiliate of the Company.

         If Sufficient Clearing Bids for a series of Tortoise Notes exist (that
is, the aggregate principal amount of Outstanding Tortoise Notes of such series
subject to Submitted Bids of Potential Holders specifying one or more rates
between the Minimum Rate (for Standard Rate Periods or less, only) and the
Maximum Rate (for all Rate Periods) for Tortoise Notes of such series exceeds or
is equal to the sum of the aggregate principal amount of Outstanding Tortoise
Notes of such series subject to Submitted Sell Orders), the Applicable Rate for
Tortoise Notes of such series for the next succeeding Rate Period thereof will
be the lowest rate specified in the Submitted Bids which, taking into account
such rate and all lower rates bid by Broker-Dealers as or on behalf of Existing
Holders and Potential Holders, would result in Existing Holders and Potential
Holders owning the aggregate principal amount of Tortoise Notes of such series
available for purchase in the Auction. If Sufficient Clearing Bids for a series
of Tortoise Notes do not exist (other than because all of the Outstanding
Tortoise Notes of such series are subject to Submitted Hold Orders), then the
Applicable Rate for all Tortoise Notes of such series for the next succeeding
Rate Period thereof will be equal to the Maximum Rate for Tortoise Notes of such
series. In such event, Holders of Tortoise Notes of such series that have
submitted or are deemed to have submitted Sell Orders may not be able to sell in
such Auction all aggregate principal amount of Tortoise Notes of such series
subject to such Sell Orders. If Broker-Dealers submit or are deemed to have
submitted to the Auction Agent Hold Orders with respect to all Existing Holders
of a series of Tortoise Notes, the Applicable Rate for all Tortoise Notes of
such series for the next succeeding Rate Period will be the All Hold Rate.

         The Auction Procedures include a pro rata allocation of Tortoise Notes
for purchase and sale, which may result in an Existing Holder continuing to hold
or selling, or a Potential Holder purchasing, a number of Tortoise Notes of a
series of Tortoise Notes that is less than the number of Tortoise Notes of such
series specified in its Order. To the extent the allocation procedures have that
result, Broker-Dealers that have designated themselves as Existing Holders or
Potential Holders in respect of customer Orders will be required to make
appropriate pro rata allocations among their respective customers.


         Settlement of purchases and sales will be made on the next Business Day
(also an Interest Payment Date) after the Auction Date through the Securities
Depository. Purchasers will make payment through their Agent Members in same-day
funds to the Securities Depository against delivery to their respective Agent
Members. The Securities Depository will make payment to the sellers' Agent
Members in accordance with the Securities Depository's normal procedures, which
now provide for payment against delivery by their Agent Members in same-day
funds.


                                       52
<PAGE>

SECONDARY MARKET TRADING AND TRANSFER OF TORTOISE NOTES


         The Broker-Dealers may maintain a secondary trading market of Tortoise
Notes outside of Auctions, but are not obligated to do so, and may discontinue
such activity at any time. There can be no assurance that such secondary trading
market of Tortoise Notes will provide owners with liquidity of investment.
Tortoise Notes are not listed on any exchange or automated quotation system.
Investors who purchase Tortoise Notes in an Auction for a Special Rate Period
should note that because the interest rate on such Tortoise Notes will be fixed
for the length of such Rate Period, the value of the Tortoise Notes may
fluctuate in response to changes in interest rates, and may be more or less than
their original cost if sold on the open market in advance of the next Auction,
depending upon market conditions.

         A Beneficial Owner or an Existing Holder may sell, transfer or
otherwise dispose of an aggregate principal amount of Tortoise Notes only in
$25,000 increments and only as follows:


         (1)      pursuant to a Bid or Sell Order placed with the Auction Agent
                  in accordance with the Auction Procedures,


         (2)      to or through a Broker-Dealer, or

         (3)      to the Company or any affiliate; provided, however, that (a) a
                  sale, transfer or other disposition of an aggregate principal
                  amount of Tortoise Notes from a customer of a Broker-Dealer
                  who is listed on the records of that Broker-Dealer as the
                  holder of such Tortoise Notes to that Broker-Dealer or another
                  customer of that Broker-Dealer shall not be deemed to be a
                  sale, transfer or other disposition for purposes of the
                  foregoing if such Broker-Dealer remains the Existing Holder of
                  the Tortoise Notes so sold, transferred or disposed of
                  immediately after such sale, transfer or disposition and (b)
                  in the case of all transfers other than pursuant to Auctions,
                  the Broker-Dealer (or other person, if permitted by the
                  Company) to whom such transfer is made shall advise the
                  Auction Agent of such transfer.

                              DESCRIPTION OF STOCK

COMMON STOCK

         The Company's Charter authorizes the issuance of 100,000,000 shares of
common stock, par value $0.001 per share. All shares of common stock have equal
rights to the payment of dividends and the distribution of assets upon
liquidation. Shares of common stock will, when issued, be fully paid and,
subject to matters discussed in "Certain Provisions in the Company's Charter and
Bylaws," non-assessable, and will have no pre-emptive or conversion rights or
rights to cumulative voting. At any time when Tortoise Notes are outstanding,
common stockholders will not be entitled to receive any cash distributions from
the Company unless all accrued interest on Tortoise Notes has been paid, and
unless asset coverage (as defined in the 1940 Act) with respect to Tortoise
Notes would be at least 300% after giving effect to the distributions. At any
time when MMP Shares are outstanding, common stockholders will not be entitled
to receive any cash distributions from the Company unless all accrued interest
on MMP Shares has been paid, and unless asset coverage (as defined in the 1940
Act) with respect to MMP Shares would be at least 200% after giving effect to
the distributions.

         The common stock is listed on the NYSE. The Company intends to hold
annual meetings of stockholders so long as the common stock is listed on a
national securities exchange and such meetings are required as a condition to
such listing.

                                       53
<PAGE>

PREFERRED STOCK

         The Company's Charter authorizes the issuance of 10,000,000 shares of
preferred stock, par value $.001 per share, with such preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms and conditions of redemption, as
determined by the Board of Directors, by action of the Board of Directors
without the approval of the common stockholders.

         Under the 1940 Act, the Company could issue preferred stock with an
aggregate liquidation value of up to one-half of the value of the Company's
total assets measured immediately after issuance of the preferred stock. Any
decision to offer preferred stock is subject to market conditions and to the
Board's continuing belief that leveraging the Company's capital structure
through the issuance of preferred stock is likely to achieve benefits to the
common stockholders. Although the terms of the preferred stock will be
determined by the Board of Directors (subject to applicable law and the
Company's Charter), if and when it authorizes the issuance of preferred stock,
the Board has determined that the preferred stock, at least initially, would
likely pay cumulative dividends at rates determined over relatively longer
periods (such as 60 days), by providing for the periodic determination of the
dividend rate through an auction procedure. As soon as practicable, following
the investment of proceeds from this offering, the Company currently intends to
issue MMP Shares, $25,000 liquidation preference per share, in an amount
currently anticipated to represent approximately 8% of the Company's total
assets. The MMP Shares will be offered pursuant to a separate prospectus.

         "Liquidation value" means the original purchase price, less the value
of any senior securities representing indebtedness then outstanding, of the
shares being liquidated plus any accumulated and unpaid dividends. In addition,
the Company is not permitted to declare any cash dividend or other distribution
on its common stock unless the liquidation value of the preferred stock is less
than one-half of the value of the Company's total assets (determined after
deducting the amount of such dividend or distribution) immediately after the
distribution.

         The preferred stock will have complete priority over the common stock
as to distribution of assets, but will be subordinate to all Tortoise Notes or
other Borrowings.

         In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Company, holders of preferred stock will 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 stock. The preferred stock will have complete priority
over the common stock as to distribution of assets upon liquidation, dissolution
or winding up, but will be subordinate to any outstanding Tortoise Notes or
other Borrowings.

         Preferred stock is required to be voting stock and to have equal voting
rights with common stock. Except as otherwise indicated in any prospectus or
statement of additional information relating to the issuance of preferred stock
and except as otherwise required by applicable law, holders of preferred stock
will vote together with common stockholders as a single class.

         Holders of preferred stock, voting as a separate class, will be
entitled to elect two of the Company's directors. The remaining directors will
be elected by common stockholders and holders of preferred stock, voting
together as a single class. In the unlikely event that two full years of
accumulated dividends are unpaid on the preferred stock, the holders of all
outstanding shares of preferred stock, voting as a separate class, will 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. In order for the
Company to


                                       54
<PAGE>

take certain actions or enter into certain transactions, a separate class vote
of holders of preferred stock will be required, in addition to the single class
vote of the holders of preferred stock and common stock.

         The terms of the preferred stock may provide that it is redeemable at
certain times, in whole or in part, at the original purchase price per share
plus accumulated dividends. The terms also may state that the Company may tender
for or purchase preferred stock and resell any shares so tendered. Any
redemption or purchase of preferred stock by the Company will reduce the
leverage applicable to common stock, while any resale of preferred stock by the
Company will increase such leverage.

         The Company would be subject to certain restrictions imposed by
guidelines of one or more rating agencies which may issue ratings for preferred
stock issued by the Company. These guidelines may impose asset coverage or
Company composition requirements that are more stringent than those imposed on
the Company by the 1940 Act. The Adviser does not believe that these covenants
or guidelines will impede it from managing the Company's portfolio in accordance
with the Company's investment objective and policies.


             CERTAIN PROVISIONS IN THE COMPANY'S CHARTER AND BYLAWS


         The following description of certain provisions of the Charter and
Bylaws is only a summary. For a complete description, please refer to the
Charter and Bylaws, which have been filed as exhibits to the Company's
registration statement.

         The Charter and Bylaws include provisions that could delay, defer or
prevent other entities or persons from acquiring control of the Company, causing
it to engage in certain transactions or modifying its structure. These
provisions may be regarded as "anti-takeover" provisions. The holders of
Tortoise Notes have no voting rights, except to the extent required by law or as
otherwise provided in the Indenture relating to the acceleration of maturity
upon the occurrence and continuance of an event of default.


CLASSIFICATION OF THE BOARD OF DIRECTORS; ELECTION OF DIRECTORS


         The Charter provides that the number of directors may be established
only by the Board of Directors pursuant to the Bylaws, but may not be less than
one. The Bylaws provide that the number of directors may not be greater than
nine. Subject to any applicable limitations of the 1940 Act, any vacancy may be
filled, at any regular meeting or at any special meeting of stockholders called
for that purpose, only by a majority of the remaining directors, even if those
remaining directors do not constitute a quorum. Pursuant to the Charter, the
Board of Directors is divided into three classes: Class I, Class II and Class
III. The initial terms of Class I, Class II and Class III directors will expire
in 2005, 2006 and 2007, respectively. Beginning in 2005, upon the expiration of
their current terms, directors of each class will be elected to serve for
three-year terms and until their successors are duly elected and qualified.
Holders of Tortoise Notes do not have any right with respect to the election of
directors. Each year only one class of directors will be elected by the
stockholders. The classification of the Board of Directors should help to assure
the continuity and stability of the Company's strategies and policies as
determined by the Board of Directors.

         The classified Board provision could have the effect of making the
replacement of incumbent directors more time-consuming and difficult. At least
two annual meetings of stockholders, instead of one, generally will be required
to effect a change in a majority of the Board of Directors. Thus, the classified
Board provision could increase the likelihood that incumbent directors will
retain their positions. The staggered terms of directors may delay, defer or
prevent a change in control of the Board, even though a change in control might
be in the best interests of the stockholders.




                                       55
<PAGE>

REMOVAL OF DIRECTORS


         The Charter provides that a director may be removed only for cause and
only by the affirmative vote of at least two-thirds of the votes entitled to be
cast in the election of directors. This provision, when coupled with the
provision in the Bylaws authorizing only the Board of Directors to fill vacant
directorships, precludes stockholders from removing incumbent directors, except
for cause and by a substantial affirmative vote, and filling the vacancies
created by the removal with nominees of stockholders.


AMENDMENT TO THE CHARTER AND BYLAWS


         The Charter provides that amendments to the Charter must be declared
advisable by the Board of Directors and generally approved by the affirmative
vote of stockholders entitled to cast at least a majority of the votes entitled
to be cast on the matter. Certain provisions of the Charter, including its
provisions on classification of the Board of Directors, election and removal of
directors and conversion of the Company to an open-end investment company, may
be amended only by the affirmative vote of the stockholders entitled to cast at
least 80% the votes entitled to be cast on the matter. However, if such a
proposal is approved by at least two-thirds of the continuing directors (as that
term is defined in the Charter) in addition to approval by the full Board of
Directors, such proposal may be approved by a majority of the votes entitled to
be cast on such matter. The Board of Directors has the exclusive power to adopt,
alter or repeal any provision of the Bylaws and to make new Bylaws.


DISSOLUTION OF THE COMPANY


         The Charter provides that any proposal to liquidate or dissolve the
Company requires the approval of the stockholders entitled to cast at least 80%
the votes entitled to be cast on such matter. However, if such a proposal is
approved by at least two-thirds of the continuing directors (in addition to
approval by the full Board), such proposal may be approved by a majority of the
votes entitled to be cast on such matter.


ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS


         The Bylaws provide that with respect to an annual meeting of
stockholders, nominations of persons for election to the Board of Directors and
the proposal of business to be considered by stockholders may be made only (1)
pursuant to notice of the meeting, (2) by the Board of Directors or (3) by a
stockholder who is entitled to vote at the meeting and who has complied with the
advance notice procedures of the Bylaws. With respect to special meetings of
stockholders, only the business specified in the Company's notice of the meeting
may be brought before the meeting. Nominations of persons for election to the
Board of Directors at a special meeting may be made only (1) pursuant to notice
of the meeting by the Company, (2) by the Board of Directors, or (3) provided
that the Board of Directors has determined that Directors will be elected at the
meeting, by a stockholder who is entitled to vote at the meeting and who has
complied with the advance notice provisions of the Bylaws.

                           FEDERAL INCOME TAX MATTERS

         The following is a general summary of certain federal income tax
considerations affecting the Company and Beneficial Owners of Tortoise Notes.
This discussion does not purport to be complete or to deal with all aspects of
federal income taxation that may be relevant to Beneficial Owners 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


                                       56
<PAGE>

investors, individual retirement accounts, certain tax-deferred accounts, and
foreign investors. Unless otherwise noted, this discussion assumes that
Beneficial Owners are U.S. persons and hold Tortoise Notes as capital assets.
More detailed information regarding the federal income tax consequences of
investing in the Company is in the Statement of Additional Information.


FEDERAL INCOME TAX TREATMENT OF THE COMPANY


         The Company will be treated as a corporation for federal and state
income tax purposes. Thus, the Company will be obligated to pay federal and
state income tax on its taxable income. The Company intends to invest its assets
primarily 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 allocable share of the MLP's taxable income in computing its taxable income.
Based upon the Company's review of the historic results of the type of MLPs in
which the Company intends to invest, the Company expects that the cash flow
received by the Company with respect to its MLP investments will exceed the
taxable income allocated to the Company. There is no assurance that the
Company's expectation regarding the tax character of MLP distributions will be
realized. If this expectation is not realized, there will be greater tax expense
borne by the Company and less cash available to make required interest,
principal and redemption payments to Beneficial Owners of Tortoise Notes. In
addition, the Company will take into account in its taxable income amounts of
gain or loss recognized on the sale of MLP interests. Currently, the maximum
regular federal income tax rate for a corporation is 35%. The Company may be
subject to a 20% 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 Internal Revenue Code. The Internal Revenue Code generally provides that a
regulated investment company does not pay an entity level income tax, provided
that it distributes all or substantially all of its income and capital gains.
The regulated investment company taxation rules have no application to the
Company or to stockholders of the Company.


FEDERAL INCOME TAX TREATMENT OF HOLDERS OF TORTOISE NOTES

         Under present law, the Company is of the opinion that Tortoise Notes
will constitute indebtedness of the Company for federal income tax purposes,
which the below discussion assumes. The Company intends to treat all payments
made with respect to the Tortoise Notes consistent with this characterization.

         Taxation of Interest. Payments or accruals of interest on Tortoise
Notes generally will be taxable to you as ordinary interest income at the time
such interest is received (actually or constructively) or accrued, in accordance
with your regular method of accounting for federal income tax purposes.


         Purchase, Sale and Redemption of Tortoise Notes. Initially, your tax
basis in Tortoise Notes acquired generally will be equal to your cost to acquire
such Tortoise Notes. This basis will increase by the amounts, if any, that you
are required to include in income under the rules governing market discount, and
will decrease by the amount of any amortized premium on such Tortoise Notes, as
discussed below. When you sell or exchange any of your Tortoise Notes, or if any
of your Tortoise Notes are redeemed, you generally will recognize gain or loss
equal to the difference between the amount you realize on the transaction (less
any accrued and unpaid interest, which will be subject to tax in the manner
described above under "Taxation of Interest") and your tax basis in the Tortoise
Notes relinquished.

         Except as discussed below with respect to market discount, the gain or
loss that you recognize on the sale, exchange or redemption of any of your
Tortoise Notes generally will be capital gain or loss. Such gain or loss will
generally be long-term capital gain or loss if the disposed Tortoise Notes were
held for more than one year and will be short-term capital gain or loss if the
disposed Tortoise Notes were held

                                       57
<PAGE>

for one year or less. Net long-term capital gain recognized by a noncorporate
U.S. holder generally will be subject to tax at a lower rate (currently a
maximum rate of 15% although this rate will increase to 20% after 2008) than net
short-term capital gain or ordinary income (currently a maximum rate of 35%). A
holder's ability to deduct capital losses may be limited.

         Amortizable Premium. If you purchase Tortoise Notes at a cost greater
than their stated principal amount, plus accrued interest, you will be
considered to have purchased the Tortoise Notes at a premium, and you generally
may elect to amortize this premium as an offset to interest income, using a
constant yield method, over the remaining term of the Tortoise Notes. If you
make the election to amortize the premium, it generally will apply to all debt
instruments that you hold at the time of the election, as well as any debt
instruments that you subsequently acquire. In addition, you may not revoke the
election without the consent of the Internal Revenue Service ("IRS"). If you
elect to amortize the premium, you will be required to reduce your tax basis in
the Tortoise Notes by the amount of the premium amortized during your holding
period. If you do not elect to amortize premium, the amount of premium will be
included in your tax basis in the Tortoise Notes. Therefore, if you do not elect
to amortize the premium and you hold the Tortoise Notes to maturity, you
generally will be required to treat the premium as a capital loss when the
Tortoise Notes are redeemed.


         Market Discount. If you purchase Tortoise Notes at a price that
reflects a "market discount," any principal payments on, or any gain that you
realize on the disposition of the Tortoise Notes generally will be treated as
ordinary interest income to the extent of the market discount that accrued on
the Tortoise Notes during the time you held such Tortoise Notes. "Market
discount" is defined under the Internal Revenue Code as, in general, the excess
of the stated redemption price at maturity over the purchase price of the note,
except that if the market discount is less than 0.25% of the stated redemption
price at maturity multiplied by the number of complete years to maturity, the
market discount is considered to be zero. In addition, you may be required to
defer the deduction of all or a portion of any interest paid on any indebtedness
that you incurred or continued to purchase or carry the Tortoise Notes that were
acquired at a market discount. In general, market discount will be treated as
accruing ratably over the term of the Tortoise Notes, or, at your election,
under a constant yield method.


         You may elect to include market discount in gross income currently as
it accrues (on either a ratable or constant yield basis), in lieu of treating a
portion of any gain realized on a sale of the Tortoise Notes as ordinary income.
If you elect to include market discount on a current basis, the interest
deduction deferral rule described above will not apply. If you do make such an
election, it will apply to all market discount debt instruments that you acquire
on or after the first day of the first taxable year to which the election
applies. This election may not be revoked without the consent of the IRS.

INFORMATION REPORTING AND BACKUP WITHHOLDING


         In general, information reporting requirements will apply to payments
of principal, interest, and premium, if any, paid on Tortoise Notes and to the
proceeds of the sale of Tortoise Notes paid to U.S. holders other than certain
exempt recipients (such as certain corporations). Information reporting
generally will apply to payments of interest on the Tortoise Notes to non-U.S.
Holders and the amount of tax, if any, withheld with respect to such payments.
Copies of the information returns reporting such interest payments and any
withholding may also be made available to the tax authorities in the country in
which the non-U.S. Holder resides under the provisions of an applicable income
tax treaty. In addition, for non-U.S. Holders, information reporting will apply
to the proceeds of the sale of Tortoise Notes within the United States or
conducted through United States-related financial intermediaries unless the
certification requirements described below have been complied with and the
statement described below in "Taxation of Non-U.S. Holders" has been received
(and the payor does not have actual knowledge or



                                       58
<PAGE>

reason to know that the holder is a United States person) or the holder
otherwise establishes an exemption.

         The Company may be required to withhold, for U.S. federal income tax
purposes, a portion of all taxable payments (including redemption proceeds)
payable to holders of Tortoise Notes who fail to provide the Company with their
correct taxpayer identification number, who fail to make required certifications
or who have been notified by the IRS that they are subject to backup withholding
(or if the Company has been so notified). Certain corporate and other
shareholders specified in the Internal Revenue Code and the regulations
thereunder are exempt from backup withholding. Backup withholding is not an
additional tax. Any amounts withheld may be credited against the holder's U.S.
federal income tax liability provided the appropriate information is furnished
to the IRS. If you are a non-U.S. Holder, you may have to comply with
certification procedures to establish your non-U.S. status in order to avoid
backup withholding tax requirements. The certification procedures required to
claim the exemption from withholding tax on interest income described below will
satisfy these requirements.


TAXATION OF NON-U.S. HOLDERS


         If you are a non-resident alien individual or a foreign corporation (a
"non-U.S. Holder"), the payment of interest on the Tortoise Notes generally will
be considered "portfolio interest" and thus generally will be exempt from United
States federal withholding tax. This exemption will apply to you provided that
(i) interest paid on the Tortoise Notes is not effectively connected with your
conduct of a trade or business in the United States, (ii) you are not a bank
whose receipt of interest on the Tortoise Notes is described in Section
881(c)(3)(A) of the Internal Revenue Code, (iii) you do not actually or
constructively own 10 percent or more of the combined voting power of all
classes of the Company's stock entitled to vote, (iv) you are not a controlled
foreign corporation that is related, directly or indirectly to the Company
through stock ownership, or (v) you satisfy the certification requirements
described below.

         To satisfy the certification requirements, either (1) the holder of any
Tortoise Notes must certify, under penalties of perjury, that such holder is a
non-U.S. person and must provide such owner's name, address and taxpayer
identification number, if any, on IRS Form W-8BEN, or (2) a securities clearing
organization, bank or other financial institution that holds customer securities
in the ordinary course of its trade or business and holds the Tortoise Notes on
behalf of the holder thereof must certify, under penalties of perjury, that it
has received a valid and properly executed IRS Form W-8BEN from the beneficial
holder and comply with certain other requirements. Special certification rules
apply for Tortoise Notes held by a foreign partnership and other intermediaries.

         Interest on Tortoise Notes received by a non-U.S. Holder which is not
excluded from U.S. federal withholding tax under the portfolio interest
exemption as described above generally will be subject to withholding at a 30%
rate, except where a non-U.S. Holder can claim the benefits of an applicable tax
treaty to reduce or eliminate such withholding tax and such non-U.S. Holder
provides the Company with a properly executed IRS Form W-8BEN claiming such
exemption or reduction.

         Any capital gain that a non-U.S. Holder realizes on a sale, exchange or
other disposition of Tortoise Notes generally will be exempt from United States
federal income tax, including withholding tax. This exemption will not apply to
you if your gain is effectively connected with your conduct of a trade or
business in the U.S. or you are an individual holder and are present in the U.S.
for 183 days or more in the taxable year of the disposition and either your gain
is attributable to an office or other fixed place of business that you maintain
in the U.S. or you have a tax home in the United States.


                                       59
<PAGE>

                    ADMINISTRATOR, CUSTODIAN, TRANSFER AGENT,
                     PAYING AGENT, TRUSTEE AND AUCTION AGENT


         The Company has engaged U.S. Bancorp Fund Services, LLC to serve as the
Company's administrator. The Company will pay the administrator a monthly fee
computed at an annual rate of 0.07% of the first $300 million of the Company's
Managed Assets, 0.06% on the next $500 million of Managed Assets and 0.04% on
the balance of the Company's Managed Assets, subject to a minimum annual fee of
$45,000.

         Computershare Investor Services, LLC serves as the Company's transfer
agent and dividend paying agent of common shares.

         U.S. Bank N.A. serves as the Company's custodian. The Company will pay
the custodian a monthly fee computed at an annual rate of 0.015% on the first
$100 million of the Company's Managed Assets and 0.01% on the balance of the
Company's Managed Assets, subject to a minimum annual fee of $4,800.


         BNY Midwest Trust Company, N.A. is the Trustee under the Indenture and
acts as transfer agent, registrar, paying agent and redemption agent with
respect to the Tortoise Notes. The Bank of New York serves as the Auction Agent
with respect to the Tortoise Notes.


                                  UNDERWRITING


         Lehman Brothers Inc. and Stifel Nicolaus & Company, Inc. are acting as
underwriters in this offering (the "Underwriters"). Subject to the terms and
conditions contained in the underwriting agreement by and among the
Underwriters, the Adviser and the Company, dated the date of this Prospectus (a
copy of which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part), the Underwriters have agreed to purchase from the
Company, and the Company has agreed to sell to the Underwriters, the principal
amount of Tortoise Notes offered hereby.

         The underwriting agreement provides that the Underwriters are obligated
to purchase, subject to certain conditions, all of the Tortoise Notes being
offered if any are purchased. The conditions contained in the underwriting
agreement include requirements that (1) the representations and warranties made
by the Company to the Underwriters are true, (2) there has been no material
change in the financial markets, and (3) the Company and the Adviser deliver
customary closing documents to the Underwriters.


         After the first Auction that includes Tortoise Notes issued pursuant to
this Prospectus, payment by each purchaser of Tortoise Notes sold through the
Auction will be made in accordance with the procedures described under "The
Auction."

DISCOUNTS AND COMMISSIONS


         The Underwriters have advised the Company that they propose to offer
the Tortoise Notes directly to the public at the public offering price presented
on the cover page of this Prospectus less a selling concession equal to ___% per
note which is equal to __ % of the initial offering price. Investors must pay
for any Tortoise Notes purchased on or before ______________, 2004. After the
offering, the Underwriters may change the offering price and other selling
terms.



                                       60
<PAGE>
INDEMNIFICATION


         The Company and the Adviser have agreed to indemnify the Underwriters
against certain liabilities relating to this offering, including liabilities
under the 1933 Act and liabilities arising from breaches of the representations
and warranties contained in the underwriting agreement and to contribute to
payments that the Underwriters may be required to make for those liabilities.


LISTING


         The Tortoise Notes, which have no history of public trading, will not
be listed on an exchange or automated quotation system. Broker-Dealers may
maintain a secondary trading market in the Tortoise Notes outside of Auctions;
however, they have no obligation to do so, and there can be no assurance that a
secondary market for the Tortoise Notes will develop or, if it does develop,
that it will provide holders with a liquid trading market (i.e., trading will
depend on the presence of willing buyers and sellers and the trading price will
be subject to variables to be determined at the time of the trade by such
Broker-Dealers). The Underwriters are not obligated to make a market in the
Tortoise Notes between Auctions and the market making may be discontinued at any
time at their sole discretion.


ELECTRONIC DISTRIBUTION


         A Prospectus in electronic format may be made available on the Internet
sites or through other online services maintained by the Underwriters or their
affiliates. In those cases, prospective investors may view offering terms online
and prospective investors may be allowed to place orders online. The
Underwriters may allocate a specific number of shares for sale to online
brokerage account holders. Any such allocation for online distributions will be
made by the representative on the same basis as other allocations.

         Other than the Prospectus in electronic format, the information on the
Underwriters' web sites and any information contained in any other web site
maintained by the Underwriters is not part of the Prospectus or the registration
statement of which this Prospectus forms a part, has not been approved and/or
endorsed by the Company and should not be relied upon by investors.


CERTAIN RELATIONSHIPS AND FEES


         To the extent permitted under the 1940 Act and the rules and
regulations promulgated thereunder, the Company anticipates that the
Underwriters may from time to time act as a broker or dealer and receive fees in
connection with the execution of the Company's portfolio transactions after the
Underwriters have ceased to be the Underwriters and, subject to certain
restrictions, each may act as a broker while it is an Underwriter. The Company
anticipates that the Underwriters or one of their affiliates may from time to
time act in Auctions as a Broker-Dealer or dealer and receive fees as described
under "Description of the Tortoise Notes."

         Pursuant to a letter dated November 26, 2003, the Company agreed that
until November 26, 2004, Lehman Brothers Inc. shall have a right, but not the
obligation to act as exclusive underwriter, arranger, and/or advisor with
respect to the issuance of any indebtedness by the Company or other security
that ranks senior to the common stock, other than bank loans. The Company also
has agreed that until November 26, 2004, the Company will not make direct or
indirect minority investments in certain MLPs, or enter into any transaction
that results in the acquisition of any equity investment in these MLPs (other
than open market purchases on a national securities exchange) unless Lehman
Brothers has acted as placement agent in connection with such investment. Any
direct placement fees the issuers of the MLPs in which the Company invests pay
to Lehman Brothers Inc. for acting as placement agent are separate and distinct
from the discounts and commissions that will be paid by the Company in
connection with this

                                       61
<PAGE>

offering. It is anticipated that Lehman Brothers Inc. will pay to Stifel a
mutually agreed upon portion of any such direct placement fees that Lehman
Brothers Inc. receives in connection with the minority investments described
above.


ADDRESS

         Lehman Brothers Inc.'s principal office is located at 745 Seventh
Avenue, New York, New York 10019.


         Stifel, Nicolaus & Company, Inc.'s principal office is located at 501
North Broadway, St. Louis, Missouri 63102.


                                 LEGAL OPINIONS

         Certain legal matters in connection with the Tortoise Notes offered
hereby will be passed upon for the Company by Vedder, Price, Kaufman & Kammholz,
P.C., Chicago, Illinois, and for the Underwriters by Morrison & Foerster LLP,
New York, New York. Vedder, Price, Kaufman & Kammholz, P.C. and Morrison &
Foerster LLP may rely as to certain matters of Maryland law on the opinion of
Venable LLP, Baltimore, Maryland.

                          INTELLECTUAL PROPERTY RIGHTS

         The Company has filed a patent application with the United States
Patent and Trademark Office on aspects of its system and method for managing a
portfolio of master limited partnerships.

                             AVAILABLE INFORMATION


         The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 and the 1940 Act and is required to file
reports, proxy statements and other information with the Commission. These
documents can be inspected and copied for a fee at the Commission's public
reference room, 450 Fifth Street, N.W., Washington, D.C. 20549. Reports, proxy
statements, and other information about the Company can be inspected at the
offices of the Commission.

         This Prospectus does not contain all of the information in the
Company's registration statement, including amendments, exhibits, and schedules.
Statements in this Prospectus about the contents of any contract or other
document are not necessarily complete and in each instance reference is made to
the copy of the contract or other document filed as an exhibit to the
registration statement, each such statement being qualified in all respects by
this reference.

         Additional information about the Company and Tortoise Notes can be
found in the Company's Registration Statement (including amendments, exhibits,
and schedules) on Form N-2 filed with the Commission. The Commission maintains a
web site (http://www.sec.gov) that contains the Company's Registration
Statement, other documents incorporated by reference, and other information the
Company has filed electronically with the Commission, including proxy statements
and reports filed under the Securities Exchange Act of 1934.


                                       62
<PAGE>


                                TABLE OF CONTENTS
                   FOR THE STATEMENT OF ADDITIONAL INFORMATION


Use of Proceeds..............................................................S-1
Investment Limitations.......................................................S-1
Investment Objective and Principal Investment Strategies.....................S-3
Management of the Company...................................................S-15
Net Asset Value.............................................................S-23
Portfolio Transactions......................................................S-24
Additional Information Concerning the Auction...............................S-25
Certain Federal Income Tax Matters..........................................S-26
Proxy Voting Policies.......................................................S-31
Independent Registered Public Accounting Firm...............................S-32
Custodian...................................................................S-32
Additional Information......................................................S-32
Financial Statements.........................................................F-1
Appendix A- Summary of Certain Provisions of the Indenture...................A-1
Appendix B- Tortoise Notes Auction Procedures................................B-1
Appendix C- Rating of Investments............................................C-1



                                       63
<PAGE>



         Until _________, 2004 (25 days after the date of this Prospectus) all
dealers that buy, sell or trade the Tortoise Notes, 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.


================================================================================









                                  $110,000,000
                                 TORTOISE ENERGY
                           INFRASTRUCTURE CORPORATION

                  AUCTION RATE SENIOR NOTES ("TORTOISE NOTES")
                          $________, SERIES A, DUE 2044
                          $________, SERIES B, DUE 2044
                              ____________________



                                   PROSPECTUS

                                               , 2004

                              ____________________



                                 LEHMAN BROTHERS
                            STIFEL NICOLAUS & COMPANY
                                  INCORPORATED






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                 SUBJECT TO COMPLETION, DATED ___________, 2004

         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 the offer or sale is not permitted.

                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                       STATEMENT OF ADDITIONAL INFORMATION


         Tortoise Energy Infrastructure Corporation, a Maryland corporation (the
"Company"), is a recently organized, nondiversified, closed-end management
investment company.

         This Statement of Additional Information relating to the Company's
auction rate senior notes ("Tortoise Notes"), Series A and Series B, does not
constitute a prospectus, but should be read in conjunction with the Company's
Prospectus relating thereto dated ___________, 2004. This Statement of
Additional Information does not include all information that a prospective
investor should consider before purchasing Tortoise Notes. Investors should
obtain and read the Company's Prospectus prior to purchasing Tortoise Notes. A
copy of the Company's Prospectus may be obtained without charge by calling (888)
728-8784. You also may obtain a copy of the Company's 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. This Statement of Additional
Information is dated ____________, 2004.


<PAGE>

                                TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----


Use of Proceeds..............................................................S-1
Investment Limitations.......................................................S-1
Investment Objective and Principal Investment Strategies.....................S-3
Management of the Company...................................................S-15
Net Asset Value.............................................................S-23
Portfolio Transactions......................................................S-24
Additional Information Concerning the Auction...............................S-25
Certain Federal Income Tax Matters..........................................S-26
Proxy Voting Policies.......................................................S-31
Independent Registered Public Accounting Firm...............................S-32
Custodian...................................................................S-32
Additional Information......................................................S-32
Financial Statements.........................................................F-1
Appendix A- Summary of Certain Provisions of the Indenture...................A-1
Appendix B- Tortoise Notes Auction Procedures................................B-1
Appendix C- Rating of Investments............................................C-1


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                                 USE OF PROCEEDS


         The net proceeds of the offering of Tortoise Notes (the "Offering")
will be approximately $108,564,500 after the payment of the underwriting
discounts and commissions and estimated offering costs. The Company will invest
the net proceeds of the Offering as soon as practicable in accordance with the
Company's investment objective and policies as stated below. The Company
anticipates that it will be able to invest substantially all of the net proceeds
in securities that meet its investment objective and policies within three
months after completion of the Offering. Pending such investment, the Company
anticipates that the proceeds will be invested in short-term securities issued
by the U.S. government or its agencies or instrumentalities or in high quality,
short-term money market instruments.


                             INVESTMENT LIMITATIONS


         This section supplements the disclosure in the Prospectus and provides
additional information on the Company's investment limitations. Fundamental
investment limitations 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 shares represented at a meeting at
which more than 50% of the outstanding shares are represented or (2) more than
50% of the outstanding shares).


         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.

FUNDAMENTAL 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) concentrate (invest 25% or more of total assets) its
         investments in any particular industry, except that the Company will
         concentrate its assets in the group of industries constituting the
         energy infrastructure sector;


                  (5) 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;


                                      S-1

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                  (6) 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

                  (7) 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.

NONFUNDAMENTAL INVESTMENT POLICIES

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

         The Company has adopted the following nonfundamental policies:

         (1)      Under normal circumstances, the Company will invest at least
                  90% of its total assets (including assets obtained through
                  leverage) in securities of energy infrastructure companies.

         (2)      The Company will invest at least 70% and up to 100% of its
                  total assets in equity securities issued by master limited
                  partnerships ("MLPs").


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

         (4)      The Company may invest up to 25% of its total assets in debt
                  securities of energy infrastructure companies, including
                  securities rated below investment grade (commonly referred to
                  as "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.

         (5)      The Company will not invest more than 10% of its total assets
                  in any single issuer.


         (6)      The Company will not engage in short sales.


         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 or preferred
stock, or purchase any such stock, 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 stock unless immediately after such issuance the Company has asset
coverage of at least 200% of the liquidation value of the outstanding

                                      S-2

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preferred stock (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 stock unless, at the time of such declaration, the Company's total
assets less liabilities and indebtedness not represented by senior securities
(determined after deducting the amount of such dividend or distribution) are at
least 200% of such liquidation value.

         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 stock issued by the Company would be
considered senior securities under the 1940 Act, and as such, are subject to the
asset coverage requirements discussed above.


         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.
Currently, under interpretative positions of the staff of the SEC, the Company
may not have on loan at any given time securities representing more than
one-third of its total assets.

         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.


         The Company interprets its policy with respect to concentration to
include energy infrastructure companies, as defined in the Prospectus and below.
See "Investment Objective and Principal Investment Strategies."

         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 stock 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. 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. A material decline in net asset value may
impair the Company's ability to maintain asset coverage on Tortoise Notes or to
make interest or principal payments thereon.

            INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES


         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, strategies and risks. 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.

                                      S-3

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         The Company's investment objective is to seek a high level of total
return with an emphasis on current distributions paid to stockholders. For
purposes of the Company's investment objective, total return includes capital
appreciation of, and all distributions received from, securities in which the
Company will invest regardless of the tax character of the distribution. 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 the Company may change the investment objective, or any policy or
limitation that is not fundamental, without a stockholder vote. Stockholders
will receive at least 60 days' prior written notice of any change to the
nonfundamental investment policy of investing at least 90% of total assets in
energy infrastructure companies. 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 taxed as a regular "C" corporation and will be
subject to federal and applicable state corporate income taxes.

         Under normal circumstances, the Company invests at least 90% of total
assets (including assets obtained through leverage) 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 energy-related services to the foregoing businesses also
are considered energy infrastructure companies, if they derive at least 50% of
revenues from the provision of energy-related services to such companies. The
Company invests at least 70% of its total assets in a portfolio of equity
securities of energy infrastructure companies that are MLPs that the Adviser
believes offer attractive distribution rates and capital appreciation potential.
MLP equity securities (known as units) currently consist of common units,
convertible subordinated units and pay-in-kind units or I-Shares ("I-Shares").
The Company also may invest in other securities, consistent with its investment
objective and fundamental and nonfundamental policies.


         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 policy of investing 90% of its total
assets in securities of energy infrastructure companies, an energy
infrastructure company is one that derives each year at least 50% of its gross
income from "Qualifying Income" under Section 7704 of the Internal Revenue Code
or one that derives at least 50% of its revenues from the provision of services
directly related to the generation of Qualifying Income. Qualifying Income is
defined as any income and gains from the exploration, development, mining or
production, processing, refining, transportation (including pipelines
transporting 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 each
year at least 90% of their gross income from Qualifying Income and are taxed as
partnerships, thereby, eliminating federal income tax at the entity level. The
business of energy infrastructure MLPs is affected by supply and demand for
energy commodities because most MLPs derive revenue and income based upon the
volume of the underlying commodity transported, processed, distributed, and/or
marketed. Specifically, processing and coal MLPs may be directly affected by
energy commodity prices. Propane MLPs own the underlying energy commodity, and
therefore have direct exposure to energy commodity prices, although the Adviser
seeks high quality MLPs that are able to mitigate or manage direct margin
exposure to commodity prices.

                                      S-4

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Pipeline MLPs have indirect commodity exposure to oil and gas price volatility
because although they do not own the underlying energy commodity, the general
level of commodity prices may affect the volume of the commodity the MLP
delivers to its customers and the cost of providing services such as
distributing natural gas liquids. The MLP sector in general could be hurt by
market perception that MLP's performance and valuation are tied directly to
commodity prices.

         Energy infrastructure companies (other than most pipeline MLPs) do not
operate as "public utilities" or "local distribution companies," and therefore
are not subject to rate regulation by state or federal utility commissions.
However, energy infrastructure companies may be subject to greater competitive
factors than utility companies, including competitive pricing in the absence of
regulated tariff rates, which could cause a reduction in revenue and which could
affect adversely profitability. Most pipeline MLPs are subject to government
regulation concerning the construction, pricing and operation of pipelines.
Pipeline MLPs are able to set prices (rates or tariffs) to cover operating
costs, depreciation and taxes, and provide a return on investment. These rates
are monitored by the Federal Energy Regulatory Commission (FERC) which seeks to
ensure that consumers receive adequate and reliable supplies of energy at the
lowest possible price while providing energy suppliers and transporters a just
and reasonable return on capital investment and the opportunity to adjust to
changing market conditions.

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

                  Pipeline MLPs. 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. 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. 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. 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. Coal MLPs are subject to operating and production
         risks, such as: the MLP or a lessee meeting necessary production
         volumes; federal, state and local laws and regulations which may limit
         the ability to


                                      S-5

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         produce coal; the MLP's ability to manage production costs and pay
         mining reclamation costs; and the effect on demand that the Clean Air
         Act standards have on coal-end users.

         MLPs typically achieve distribution growth by internal and external
means. MLPs achieve growth internally by experiencing higher commodity volume
driven by the economy and population, and through the expansion of existing
operations including increasing the use of underutilized capacity, pursuing
projects that can leverage and gain synergies with existing infrastructure and
pursuing so called "greenfield projects." External growth is achieved by making
accretive acquisitions. While opportunities for growth by acquisition appear
abundant based on current market conditions, especially for smaller MLPs, the
Adviser expects MLPs to grow primarily through internal means.


         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 affect
adversely their results of operations.


         MLPs operating interstate pipelines and storage facilities are subject
to substantial regulation by 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 liquefied
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 MLPs upon the energy exploration and
development activities of unrelated third parties; availability of capital for
expansion and construction of needed facilities; a significant decrease in
natural gas production due to depressed commodity prices or otherwise; the
inability of MLPs to successfully integrate recent or future acquisitions; and
the general level of the economy.

         Although the Company emphasizes investments in MLPs, it also may invest
in energy infrastructure companies that are not organized as MLPs. Non-MLP
companies may include companies that operate energy assets but which are
organized in corporate rather than in partnership form. Generally, the
partnership form is more suitable for companies that operate assets which
generate more stable cash flows. Companies that operate "midstream" assets
(e.g., transporting, processing, storing, distributing and marketing) tend to
generate more stable cash flows than those that engage in exploration

                                      S-6

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and development or delivery of products to the end consumer. Non-MLP companies
also may include companies that provide services directly related to the
generation of income from energy-related assets, such as oil drilling services,
pipeline construction and maintenance, and compression services.


         The energy industry and particular energy infrastructure companies may
be affected adversely 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
affected indirectly by attacks on others. They may 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 of 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 invests at least 70% of its
total assets in equity securities of MLPs. An MLP is an entity that is taxed as
a partnership and that derives each year at least 90% of its gross income from
Qualifying Income. An MLP is a limited partnership the interests in which (known
as units) are traded on securities exchanges or over-the-counter. Organization
as a partnership and compliance with the Qualifying Income rules eliminates
federal income 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.

         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, to realize the assets' full value on the
marketplace by selling the assets and using the cash proceeds received from the
MLP to address debt obligations or to invest in higher growth opportunities,
while retaining control of the MLP. 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 sponsor or general partner of an MLP, other energy companies, and
utilities may sell assets to MLPs in order to generate cash to fund expansion
projects or repay debt. The MLP structure essentially transfers cash flows
generated from these acquired assets directly to MLP limited partner unit
holders.


         In the case of an MLP buying assets from its sponsor or general partner
the transaction is intended to be based upon comparable terms in the acquisition
market for similar assets. To help insure that appropriate protections are in
place, the board of the MLP generally creates an independent committee to review
and approve the terms of the transaction. The committee often obtains a fairness
opinion and can retain counsel or other experts to assist its evaluation. Since
both parties normally have a significant equity stake in the MLP, both parties
are aligned to see that the transaction is accretive and fair to the MLP.


         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.

                                      S-7

<PAGE>

         As a motivation for the general partner to successfully manage the MLP
and increase cash flows, the terms of MLPs typically provide that the general
partner receives a larger portion of the net income as distributions reach
higher target levels. As cash flow grows, the general partner receives a greater
interest in the incremental income compared to the interest of limited partners.
Although the percentages vary among MLPs, the general partner's marginal
interest in distributions generally increases from 2% to 15% at the first
designated distribution target level moving up to 25% and ultimately 50% as
pre-established distribution per unit thresholds are met. Nevertheless, the
aggregate amount distributed to limited partners will increase as MLP
distributions reach higher target levels. Given this incentive structure, the
general partner has an incentive to streamline operations and undertake
acquisitions and growth projects in order to increase distributions to all
partners.


         Because the MLP itself does not pay federal income 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 federal income 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 is gain or loss for federal income tax purposes. The
partner generally 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 resulting from prior distributions; or (2) his basis reaches zero.

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


THE COMPANY'S INVESTMENTS

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


         Equity Securities. Consistent with its investment objective, 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 I-Shares (each discussed below). The Company also may invest up to 30%
of total assets in equity securities of non-MLPs.


         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.

         Investing in securities of smaller companies may involve greater risk
than is associated with investing in more established companies. Smaller
capitalization companies may have limited product

                                      S-8

<PAGE>

lines, markets or financial resources; may lack management depth or experience;
and may be more vulnerable to adverse general market or economic developments
than larger more established companies.

         MLP Common Units. MLP common units represent an equity ownership
interest in a partnership, providing limited voting rights and entitling the
holder to a share of the company's success through distributions and/or capital
appreciation. Unlike shareholders of a corporation, common unit holders do not
elect directors annually and generally have the right to vote only on certain
significant events, such as mergers, a sale of substantially all of the assets,
removal of the general partner or material amendments to the partnership
agreement. MLPs are required by their partnership agreements to distribute a
large percentage of their current operating earnings. Common unit holders
generally have first right to a minimum quarterly distribution ("MQD") prior to
distributions to the convertible subordinated unit holders or the general
partner (including incentive distributions). Common unit holders typically have
arrearage rights if the MQD is not met. In the event of liquidation, MLP common
unit holders have first rights to the partnership's remaining assets after
bondholders, other debt holders, and preferred unit holders have been paid in
full. MLP common units trade on a national securities exchange or
over-the-counter.


         MLP Convertible Subordinated Units. MLP convertible subordinated units
typically are issued by MLPs to founders, corporate general partners of MLPs,
entities that sell assets to the MLP, and institutional investors. The purpose
of the convertible subordinated units is to increase the likelihood that during
the subordination period there will be available cash to be distributed to
common unit holders. The Company expects to purchase subordinated units in
direct placements from such persons. Convertible subordinated units generally
are not entitled to distributions until holders of common units have received
specified MQD, plus any arrearages, and may receive less in distributions upon
liquidation. Convertible subordinated unit holders generally are entitled to MQD
prior to the payment of incentive distributions to the general partner, but are
not entitled to arrearage rights. Therefore, they generally entail greater risk
than MLP common units. They are generally convertible automatically into the
senior common units of the same 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 is a
function of its worth if it were converted into the underlying common units.
Convertible subordinated units generally have similar voting rights to MLP
common units.

         MLP I-Shares. I-Shares represent an indirect investment in MLP common
units. I-Shares are equity securities issued by affiliates of MLPs, typically a
limited liability company, that owns an interest in and manages the MLP. The
issuer has management rights but is not entitled to incentive distributions. The
I-Share issuer's assets consist exclusively of MLP common units. Distributions
to I-Share holders are made in the form of additional I-Shares, generally equal
in amount to the cash distribution received by common unit holders of the MLP.
The issuer of the I-Share is taxed as a corporation, however, the MLP does not
allocate income or loss to the I-Share issuer. Accordingly, investors receive a
Form 1099, are not allocated their proportionate share of income of the MLP and
are not subject to state income tax filing obligations solely as a result of
holding such I-Shares. Distributions of I-Shares do not generate unrelated
business taxable income and are qualifying income for mutual fund investors.

         Debt Securities. The Company may invest up to 25% of its total assets
in debt securities of energy infrastructure companies, including certain
securities rated below investment grade ("junk bonds"). 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. 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

                                      S-9

<PAGE>


consider what action, including the sale of such security, is in the best
interest of the Company and its stockholders.


         Below Investment Grade Debt Securities. The Company may invest up to
25% of the Company's assets 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 S&P's, are comparably rated by another
nationally recognized rating agency or are unrated but determined by the Adviser
to be of comparable quality.

         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, 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.


         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 affect severely
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 stock. 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

                                      S-10

<PAGE>

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 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 extraordinary expenses in order to protect
and recover its investment if it is recoverable at all.


         See Appendix C to this Statement of Additional Information for a
description of Moody's, Fitch Ratings ("Fitch")'s and S&P's ratings.

         Restricted, Illiquid and Thinly-Traded Securities. The Company may
invest up to 30% of its total assets in restricted securities, primarily through
direct placements of MLP securities. Restricted securities obtained by means of
direct placement are less liquid than securities traded in the open market,
therefore, the Company may not be able to readily sell such securities.
Investments currently considered by the Adviser to be illiquid because of such
restrictions include convertible subordinated units and certain 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 Adviser 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. 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, such as Rule 144A transactions.
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

                                      S-11

<PAGE>

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 restricted securities
that exist or may develop as a result of Rule 144A may 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 not be able to dispose of such securities promptly or at reasonable
prices.


         The Company also may invest in securities that may not be restricted,
but are thinly-traded. Although securities of certain MLPs trade on the NYSE,
the AMEX, the Nasdaq National Market or other securities exchanges or markets,
such securities may trade less than those of larger companies due to their
relatively smaller capitalizations. Such securities may be difficult to dispose
of at a fair price during times when the Company believes it is desirable to do
so. Thinly-traded 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, thinly-traded securities
will be valued in accordance with procedures established by the Board.
Investment of the Company's capital in thinly-traded securities may restrict the
Company's ability to take advantage of market opportunities. The risks
associated with thinly-traded 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
thinly-traded 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
usually is 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

                                      S-12

<PAGE>

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" backed by U.S. Government Securities. A repurchase agreement arises
when the Company purchases a security and simultaneously agrees to resell it to
the vendor at an agreed 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. 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. Although it does not currently intend to, the Company
may in the future use margin borrowing of up to 33 1/3% of total assets for
investment purposes when the Adviser believes it will enhance returns. Any use
of margin borrowing by the Company would be subject to the asset leverage
requirements discussed earlier in this Statement of Additional Information. See
"Investment Limitations." 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

                                      S-13

<PAGE>

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 leveraged capital structure, the Company may
enter into interest rate transactions such as swaps, caps and floors. 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. 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. In an interest rate
floor, the Company would be entitled to receive, to the extent that a specified
index falls below a predetermined interest rate, payments of interest on a
notional principal amount from the party selling the interest rate floor.
Depending on the state of interest rates in general, the Company's use of
interest rate transactions could enhance or decrease Distributable Cash Flow
available to the shares of common stock. To the extent there is a decline in
interest rates, the value of the interest rate transactions could decline, and
could result in a decline in the net asset value of the shares of the common
stock. In addition, if the counterparty to an interest rate transaction
defaults, the Company would not be able to use the anticipated net receipts
under the interest rate transaction 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

                                      S-14

<PAGE>

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 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 pending investment of offering or leverage proceeds, 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 MLP securities 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 business and affairs of the Company are managed under the direction
of the Board of Directors. Accordingly, 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 day-to-day 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. Unless otherwise indicated,
the address of each director and officer is 10801 Mastin Boulevard, Overland
Park, Kansas 66210.

                                      S-15

<PAGE>

<TABLE>
<CAPTION>


                            POSITION(S) HELD
                            WITH COMPANY AND                                                          OTHER
    NAME AND AGE            LENGTH OF TIME         PRINCIPAL OCCUPATION DURING PAST                DIRECTORSHIPS
INDEPENDENT DIRECTORS            SERVED                        FIVE YEARS                         HELD BY DIRECTOR
---------------------       ----------------       --------------------------------            ----------------------
<S>                         <C>                    <C>                                         <C>
Conrad S. Ciccotello, 44    Director since 2003    Associate Professor of Risk                 None
                                                   Management and Insurance,
                                                   Robinson College of Business,
                                                   Georgia State University;
                                                   Director of Graduate Personal
                                                   Financial Planning (PFP)
                                                   Programs, Editor, "Financial
                                                   Services Review," (an
                                                   academic journal dedicated to
                                                   the study of individual
                                                   financial management);
                                                   formerly, faculty member,
                                                   Pennsylvania State University.


John R. Graham, 58          Director since 2003    Executive-in-Residence and Professor of     Erie Indemnity
                                                   Finance, College of Business                Company; Erie Family
                                                   Administration, Kansas State University     Life Insurance
                                                   (has served as a professor or adjunct       Company; Kansas State
                                                   professor since 1970); Chairman of the      Bank
                                                   Board, President and CEO, Graham Capital
                                                   Management, Inc.  and Owner of Graham
                                                   Ventures; formerly, CEO, Kansas Farm
                                                   Bureau Financial Services, including
                                                   seven affiliated insurance or financial
                                                   service companies (1979-2000).

Charles E. Heath, 61        Director since 2003    Retired in 1999.  Formerly, Chief           None
                                                   Investment Officer, General Electric's
                                                   Employers Reinsurance Corporation
                                                   (1989-1999).  CFA since 1974.

INTERESTED DIRECTORS AND OFFICERS

H. Kevin Birzer(1), 44      Director and Chairman  Partner/Senior Analyst, Fountain            None
                            of the Board since     Capital; Manager of the Adviser;
                            2003                   formerly, President, F. Martin Koenig &
                                                   Co.; Vice President, Corporate Finance
                                                   Department, Drexel Burnham Lambert
                                                   (1986-1989).


Terry C. Matlack(1), 48     Director, Treasurer    Managing Director, KCEP; Manager of the     ACT
Address:                    and Chief Financial    Adviser; formerly, President,               Telecommunication,
233 West 47th Street,       Officer since 2003     GreenStreet Capital.                        Inc.; Trendstar
Kansas City, MO 64112                                                                          Investment Trust
                                                                                               (open-end small cap
                                                                                               investment fund)

David J. Schulte, 43        President and Chief    Managing Director, KCEP (1993-present);     Inergy, L.P.
                            Executive Officer      Manager of the Adviser. CFA since 1992;
                            since 2003             Member, Financial Accounting Policy
                                                   Committee of CFA Institute.



                                      S-16

<PAGE>

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


Zachary A. Hamel, 38        Secretary since 2003   Partner/Senior Analyst with Fountain        None
                                                   Capital (1997-present); Manager of the
                                                   Adviser.

Kenneth P. Malvey, 38       Assistant Treasurer    Partner/Senior Analyst, Fountain Capital    None
                            since 2003             Management (2002-present); Manager of
                                                   the Adviser.  Formerly, Investment Risk
                                                   Manager and member of the Global Office
                                                   of Investments, GE Capital's Employers
                                                   Reinsurance Corporation.

Andrew P. Chica, 28         Assistant Secretary    Assistant Vice President, U.S. Bancorp      None
                            since 2003             Fund Services, LLC (since 2004).
                                                   Assistant Vice President and Treasurer,
                                                   The Mexico Equity and Income Fund, Inc.;
                                                   Assistant Treasurer, Kinetics Mutual
                                                   Funds, Inc. and Kinetics Portfolio
                                                   Trust.  Formerly Compliance Officer,
                                                   U.S. Bancorp Fund Services, LLC
                                                   (2002-2003).

Kristina Hilson, 24         Assistant Secretary    Compliance Administrator, U.S. Bancorp      None
                            since 2004             Fund Services, LLC (since 2002);
                                                   Assistant Secretary, AIP Alternative
                                                   Strategies Funds.
<FN>
------------------
(1)     As a result of their respective positions held with the Adviser or its
        affiliates, these individuals are considered "interested persons" of the
        Company within the meaning of the 1940 Act.
</FN>
</TABLE>

         The Company has an audit committee that consists of three directors of
the Company (the "Audit Committee") who are not "interested persons" of the
Company within the meaning of the 1940 Act ("Independent Directors"). The Audit
Committee members are Charles E. Heath (Chairman), Conrad S. Ciccotello and John
R. Graham. The Audit Committee's function is to oversee the Company's accounting
policies, financial reporting and internal control system. The Audit Committee
makes recommendations regarding the selection of independent auditors of the
Company, reviews the independence of such firm, reviews the scope of the audit
and internal controls, considers and reports to the Board on matters relating to
the Company's accounting and financial reporting practices, and performs such
other tasks as the full Board deems necessary or appropriate. The Audit
Committee has held one meeting 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 $4,000
($6,000 for the Chairman of the Audit Committee) and a fee of $2,000 (and
reimbursement for related expenses) for each meeting of the Board or committee
meeting he or she attends. Each Independent Director will also receive $500 for
each telephone committee meeting. 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 current calendar year.

                                      S-17

<PAGE>

<TABLE>
<CAPTION>


                                                                   AGGREGATE COMPENSATION
                     NAME AND POSITION WITH THE COMPANY                FROM THE COMPANY*
                     ----------------------------------            ----------------------
                  <S>                                              <C>
                  INDEPENDENT DIRECTORS
                  Conrad S. Ciccotello..................                   $16,000
                  John R. Graham........................                   $16,000
                  Charles E. Heath......................                   $18,000


                  INTERESTED DIRECTORS
                  H. Kevin Birzer.......................                       $ 0
                  Terry C. Matlack......................                       $ 0
<FN>
------------------
*       Because 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>

         The following table sets forth the dollar range of equity securities
beneficially owned by each director in the Company as of the date of this
Statement of Additional Information.

<TABLE>
<CAPTION>

                                                                                 AGGREGATE DOLLAR RANGE OF
                                                                                      COMPANY SECURITIES
                                                                                     BENEFICIALLY OWNED BY
                                                NAME OF DIRECTOR                           DIRECTOR*
                                    --------------------------------------         -------------------------
                                    <S>                                            <C>
                                    INDEPENDENT DIRECTORS
                                    Conrad S. Ciccotello..................             $10,001 - $50,000

                                    John R. Graham........................             $10,001 - $50,000
                                    Charles E. Heath......................            $50,001 - $100,000

                                    INTERESTED DIRECTORS
                                    H. Kevin Birzer.......................               Over $100,000
                                    Terry C. Matlack......................             $10,001 - $50,000
<FN>
*       As of the date of this Statement of Additional Information, the officers and directors of the Company, as
        a group, own ____% of the Company's outstanding shares of common stock.
</FN>
</TABLE>


CONTROL PERSONS


         As of June 30, 2004, the following individuals owned of record or
beneficially more than 5% of the Company's common stock:

         The officers and directors of the Company, as a group, owned less than
one percent of the Company's outstanding common stock.


INDEMNIFICATION OF DIRECTORS AND OFFICERS


         Maryland law permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty which is
established by a final judgment as being material to the cause of action. The
Charter contains such a provision which eliminates directors' and officers'
liability to the maximum extent permitted by Maryland law.

         The Charter authorizes the Company, to the maximum extent permitted by
Maryland law and the 1940 Act, to obligate itself to indemnify any present or
former director or officer or any individual who, while a director or officer of
the Company and at the request of the Company, serves or has served another
corporation, real estate investment trust, partnership, joint venture, trust,
employee benefit plan or other enterprise as a director, officer, partner or
trustee, from and against any claim or liability to which

                                      S-18

<PAGE>

that person may become subject or which that person may incur by reason of his
or her status as a present or former director or officer of the Company and to
pay or reimburse his or her reasonable expenses in advance of final disposition
of a proceeding. The Bylaws obligate the Company, to the maximum extent
permitted by Maryland law and the 1940 Act, to indemnify any present or former
director or officer or any individual who, while a director of the Company and
at the request of the Company, serves or has served another corporation, real
estate investment trust, partnership, joint venture, trust, employee benefit
plan or other enterprise as a director, officer, partner or trustee and who is
made a party to the proceeding by reason of his or her service in that capacity
from and against any claim or liability to which that person may become subject
or which that person may incur by reason of his or her status as a present or
former director or officer of the Company and to pay or reimburse his or her
reasonable expenses in advance of final disposition of a proceeding. The Charter
and Bylaws also permit the Company to indemnify and advance expenses to any
person who served a predecessor of the Company in any of the capacities
described above and any employee or agent of the Company or a predecessor of the
Company.

         Maryland law requires a corporation (unless its charter provides
otherwise, which the Company's Charter does not) to indemnify a director or
officer who has been successful in the defense of any proceeding to which he is
made, or threatened to be made, a party by reason of his or her service in that
capacity. Maryland law permits a corporation to indemnify its present and former
directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection with
any proceeding to which they may be made, or threatened to be made, a party by
reason of their service in those or other capacities unless it is established
that (a) the act or omission of the director or officer was material to the
matter giving rise to the proceeding and (i) was committed in bad faith or (ii)
was the result of active and deliberate dishonesty, (b) the director or officer
actually received an improper personal benefit in money, property or services or
(c) in the case of any criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful. However,
under Maryland law, a Maryland corporation may not indemnify for an adverse
judgment in a suit by or in the right of the corporation or for a judgment of
liability on the basis that personal benefit was improperly received, unless in
either case a court orders indemnification and then only for expenses. In
addition, Maryland law permits a corporation to advance reasonable expenses to a
director or officer upon the corporation's receipt of (a) a written affirmation
by the director or officer of his or her good faith belief that he or she has
met the standard of conduct necessary for indemnification by the corporation and
(b) a written undertaking by him or her or on his or her behalf to repay the
amount paid or reimbursed by the corporation if it is ultimately determined that
the standard of conduct was not met.


INVESTMENT ADVISER

         Tortoise Capital Advisers, 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 October 2002 to provide portfolio management services exclusively
with respect to energy infrastructure investments. The Adviser is controlled
equally by Fountain Capital and KCEP, each of which own half of all of the
voting shares of the Adviser.


         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 $2.3
billion of client assets under management as of May 31, 2004.

         KCEP was formed in 1993 and is focused solely on managing two private
equity funds, which have had combined committed capital of $110 million. KCEP
focuses on private equity investments in the consumer, telecom/media and natural
resource distribution and services industries.

                                      S-19

<PAGE>

         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
collateralized debt obligations and mortgage hedge funds. Including Fountain
Capital, the Atlantic group had approximately $9.6 billion in assets under
management as of May 31, 2004.

         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 May 31, 2004, the Adviser and its
affiliates had approximately $655 million in assets under management in the
energy infrastructure industry.

         Pursuant to an Investment Advisory Agreement (the "Advisory
Agreement"), the Adviser shall, subject to overall supervision by the Board,
manage the investments of the Company. The Adviser regularly will provide the
Company with investment research advice and supervision and will furnish
continuously an investment program for the Company, consistent with the
investment objective and policies of the Company.

         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. The Adviser has established a five member Investment
Committee. The members of the Committee are David J. Schulte, H. Kevin Birzer,
Terry C. Matlack, Zachary A. Hamel and Kenneth P. Malvey. Each member of the
committee, other than Mr. Schulte, has significant responsibilities with respect
to KCEP and/or Fountain Capital. All members of the Investment Committee have
undertaken to provide such services as necessary to fulfill the obligations of
the Adviser to the Company.

         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. Managed Assets means the total assets of the Company (including any
assets attributable to leverage that may be outstanding) minus accrued
liabilities other than (i) deferred taxes, (ii) debt entered into for the
purpose of leverage and (iii) the aggregate liquidation preference of any
outstanding preferred stock.

         The Adviser has agreed contractually to waive or reimburse the Company
for fees and expenses, including the investment advisory fee and other expenses
in the amount of 0.23% of average monthly Managed Assets for the first two years
of the Company's operations and 0.10% of average monthly Managed Assets in years
three through five.

         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. Because the fee reimbursement agreement is based on
Managed Assets, to the extent the Company is engaged in leverage, the gross
dollar amount of the Adviser's fee reimbursement obligations to the Company will
increase. The Adviser intends to leverage the Company only when it believes it
will serve the best interests of the stockholders. 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 within 5
days of the end of that quarter.

         The Advisory Agreement provides that the Company will pay all expenses
other than those expressly stated to be payable by the Adviser, which expenses
payable by the Company shall include, without implied limitation: (1) expenses
of maintaining the Company and continuing its existence,

                                      S-20

<PAGE>

(2) registration of the Company under the 1940 Act, (3) commissions, spreads,
fees and other expenses connected with the acquisition, holding and disposition
of securities and other investments including placement and similar fees in
connection with direct placements entered into on behalf of the Company, (4)
auditing, accounting and legal expenses, (5) taxes and interest, (6)
governmental fees, (7) expenses of listing shares of the Company with a stock
exchange, and expenses of issue, sale, repurchase and redemption (if any) of
interests in the Company, including expenses of conducting tender offers for the
purpose of repurchasing Company interests, (8) expenses of registering and
qualifying the Company and its shares under federal and state securities laws
and of preparing and filing registration statements and amendments for such
purposes, (9) expenses of reports and notices to stockholders and of meetings of
stockholders and proxy solicitations therefore, (10) expenses of reports to
governmental officers and commissions, (11) insurance expenses, (12) association
membership dues, (13) fees, expenses and disbursements of custodians and
subcustodians for all services to the Company (including without limitation
safekeeping of funds, securities and other investments, keeping of books,
accounts and records, and determination of net asset values), (14) fees,
expenses and disbursements of transfer agents, dividend paying agents,
stockholder servicing agents and registrars for all services to the Company,
(15) compensation and expenses of directors of the Company who are not members
of the Adviser's organization, (16) pricing and valuation services employed by
the Company, (17) all expenses incurred in connection with leveraging of the
Company's assets through a line of credit, or issuing and maintaining preferred
stock or instruments evidencing indebtedness of the Company, (18) all expenses
incurred in connection with the organization of the Company and the initial
public offering of common stock, and (19) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Company to indemnify its directors, officers
and stockholders with respect thereto.

         The Advisory Agreement provides that the Adviser will not be liable in
any way for any default, failure or defect in any of the securities comprising
the Company's portfolio if it has satisfied the duties and the standard of care,
diligence and skill set forth in the Advisory Agreement. However, the Adviser
shall be liable to the Company for any loss, damage, claim, cost, charge,
expense or liability resulting from the Adviser's willful misconduct, bad faith
or gross negligence or disregard by the Adviser of the Adviser's duties or
standard of care, diligence and skill set forth in the Agreement or a material
breach or default of the Adviser's obligations under the Advisory Agreement.


         The Advisory Agreement will continue in force until December 31, 2005,
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
Advisory Agreement may be terminated by the Adviser or the Company, without
penalty, on sixty (60) days' written notice to the other. The Advisory Agreement
will terminate automatically in the event of its assignment.


         The Advisory Agreement was considered and approved by the Board,
including a majority of the Independent Directors, at the organizational meeting
of the Company held on December 12, 2003. 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 and met with senior advisory personnel. 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
responsible for the Company's investment program; (2) the Adviser's reliance on
the personnel and resources of affiliates; (3) the unique nature of the product
and the specialized expertise of the Adviser in a niche market (MLPs); (4) that
the fee and expense ratios of the Company are reasonable given the quality of
services expected to be provided and are comparable

                                      S-21

<PAGE>

to the fee and expense ratios of similar closed-end funds with similar
investment objectives and policies; and (5) 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 attributable to leverage, and the
potential conflict of the Adviser in determining the amount of leverage.


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.

         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
as the Company on a given date, the purchases and sales will normally be
allocated as nearly as practicable on a pro rata basis in proportion to the
amounts desired to be purchased or sold by each account and the Company. Other
factors considered in the allocation of securities include cash balances, risk
tolerances and other guideline restrictions. 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.

CODE OF ETHICS


         The Company and the Adviser 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 and the Adviser (the "Code"). 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. Exceptions to
these and other provisions of the Code may be granted in particular
circumstances after review by appropriate personnel.


         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.

                                      S-22

<PAGE>

                                 NET ASSET VALUE


         The Company will compute its net asset value for its shares of common
stock as of the close of trading on 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 monthly. 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 (1) all of its liabilities (including accrued
expenses and both current and deferred income taxes), (2) accumulated and unpaid
interest payments and dividends on any outstanding debt or preferred stock,
respectively, (3) the aggregate liquidation value of any outstanding preferred
stock, (4) the aggregate principal amount of any outstanding senior notes,
including Tortoise Notes, and (5) any distributions payable on the common stock.
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 shares of common
stock.

         Pursuant to an agreement with U.S. Bancorp Fund Services, LLC (the
"Accounting Services Provider"), the Accounting Services Provider will value the
assets in the Company's portfolio in accordance with Valuation Procedures
adopted by the Board of Directors. The Accounting Services Provider will obtain
securities market quotations from independent pricing services approved by the
Adviser and ratified by the Board. Securities for which market quotations are
readily available shall be valued at "market value." Any other securities shall
be valued at "fair value."

         Valuation of certain assets at market value will be as follows. For
equity securities, the Accounting Services Provider will first use readily
available market quotations and will obtain direct written broker-dealer
quotations if a security is not traded on an exchange or quotations are not
available from an approved pricing service. For fixed income securities, the
Accounting Services Provider will use readily available market quotations based
upon the last updated sale price or market value from a pricing service or by
obtaining a direct written broker-dealer quotation from a dealer who has made a
market in the security. For options, futures contracts and options on futures
contracts, the Accounting Services Provider will use readily available market
quotations. If no sales are reported on any exchange or OTC market, the
Accounting Services Provider will use the calculated mean based on bid and asked
prices obtained from the primary exchange or OTC market. Other assets will be
valued at market value pursuant to the Valuation Procedures.

         If the Accounting Services Provider cannot obtain a market value or the
Adviser determines that the value of a security as so obtained does not
represent a fair value as of the valuation time (due to a significant
development subsequent to the time its price is determined or otherwise), fair
value for the security shall be determined pursuant to methodologies established
by the Board. The Valuation Procedures provide that direct placements of
securities of private companies (i.e., companies with no outstanding public
securities) ordinarily will be valued at cost. The Valuation Procedures provide
that securities that are convertible into publicly traded securities (i.e.,
convertible subordinated units) ordinarily will be valued at the market value of
the publicly traded security less a discount equal in amount to the discount
negotiated at the time of purchase. The Adviser and the Board will consider a
variety of factors with respect to the individual issuer and security in
determining and monitoring the continued appropriateness of fair value,
including, without limitation, financial statements and fundamental data with
respect to the issuer, cost, the amount of any discount, restrictions on
transfer and registration rights and other information deemed relevant. A report
of any prices determined pursuant to such methodologies will be presented to the
Board or a designated committee thereof for approval no less frequently than
quarterly.

                                      S-23

<PAGE>

         In computing net asset value, the Company 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 stockholders.

         The allocation between current and deferred income taxes is determined
based upon the value of assets reported for book purposes compared to the
respective net tax bases of assets as recognized for federal income tax
purposes. It is anticipated that cash distributions from MLPs in which the
Company invests will not equal the amount of taxable income allocable to the
Company primarily as a result of depreciation and amortization recorded by the
MLPs. This may result in a portion of the cash distribution received by the
Company not being treated as income for federal income tax purposes. The
relative portion of such distributions not treated as income for tax purposes
will vary among the MLPs, and also will vary year by year for each MLP. The
Adviser will be able to directly confirm the portion of each distribution
recognized as taxable income when it receives annual tax reporting information
from each MLP.


                             PORTFOLIO TRANSACTIONS

EXECUTION OF PORTFOLIO TRANSACTIONS

         The Adviser is responsible for decisions to buy and sell securities for
the Company, broker-dealer selection, and negotiation of brokerage commission
rates. The Adviser's primary consideration in effecting a security transaction
will be to obtain the best execution. In selecting a broker-dealer to execute
each particular transaction, the Adviser will take the following into
consideration: the best net price available; the reliability, integrity and
financial condition of the broker-dealer; the size of and the difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the investment performance of the Company on a continuing
basis. Accordingly, the price to the Company in any transaction may be less
favorable than that available from another broker-dealer if the difference is
reasonably justified by other aspects of the execution services offered.

         Subject to such policies as the Board may from time to time determine,
the Adviser shall not be deemed to have acted unlawfully or to have breached any
duty solely by reason of its having caused the Company to pay a broker or dealer
that provides brokerage and research services to the Adviser an amount of
commission for effecting a Company investment transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Adviser determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
particular transaction or the Adviser's overall responsibilities with respect to
the Company and to other clients of the Adviser as to which the Adviser
exercises investment discretion. The Adviser is further authorized to allocate
the orders placed by it on behalf of the Company to such brokers and dealers who
also provide research or statistical material or other services to the Company
or the Adviser. Such allocation shall be in such amounts and proportions as the
Adviser shall determine and the Adviser will report on said allocations
regularly to the Board indicating the brokers to whom such allocations have been
made and the basis therefor.

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


                                      S-24

<PAGE>

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 taxable income, possibly resulting in an
increased tax liability, as well as increasing the Company's current and
accumulated earnings and profits resulting in a greater portion of the Company's
distributions on its stock being treated as taxable dividends for federal income
tax purposes. See "Certain Federal Income Tax Matters."

                  ADDITIONAL INFORMATION CONCERNING THE AUCTION

GENERAL


         Auction Agency Agreement. The Company has entered into an Auction
Agency Agreement (the "Auction Agency Agreement") with the Auction Agent
(currently, The Bank of New York) which provides, among other things, that the
Auction Agent will follow the Auction Procedures for purposes of determining the
Applicable Rate for each series of Tortoise Notes so long as the Applicable Rate
for Tortoise Notes of such series is to be based on the results of an Auction.


         Broker-Dealer Agreements. Each Auction requires the participation of
one or more Broker-Dealers. The Auction Agent has entered into agreements
(collectively, the "Broker-Dealer Agreements") with several Broker-Dealers
selected by the Company, which provide for the participation of those
Broker-Dealers in Auctions for Tortoise Notes. See "Broker-Dealers" below.


         Securities Depository. The Depository Trust Company ("DTC") will act as
the Securities Depository for the Agent Members with respect to each series of
Tortoise Notes. One certificate for each series of Tortoise Notes will be
registered in the name of Cede & Co., as nominee of the Securities Depository.
Such certificate will bear a legend to the effect that such certificate is
issued subject to the provisions restricting transfers of Tortoise Notes
contained in the Indenture. The Company also will issue stop-transfer
instructions to the transfer agent for each series of Tortoise Notes. Cede & Co.
will be the Holder of record of each series of all Tortoise Notes and owners of
such Tortoise Notes will not be entitled to receive certificates representing
their ownership interest in such Tortoise Notes.


         DTC, a New York-chartered limited purpose trust company, performs
services for its participants (including the Agent Members), some of whom
(and/or their representatives) own DTC. DTC maintains lists of its participants
and will maintain the positions (ownership interests) held by each such
participant (the "Agent Member") in Tortoise Notes, whether for its own account
or as a nominee for another person.

CONCERNING THE AUCTION AGENT

         The Auction Agent is acting as agent for the Company in connection with
Auctions. In the absence of bad faith or negligence on its part, the Auction
Agent will not be liable for any action taken, suffered, or omitted or for any
error of judgment made by it in the performance of its duties under the Auction
Agency Agreement and will not be liable for any error of judgment made in good
faith unless the Auction Agent will have been negligent in ascertaining the
pertinent facts.

         The Auction Agent may rely upon, as evidence of the identities of the
Existing Holders of Tortoise Notes, the Auction Agent's registry of Existing
Holders, the results of Auctions and notices from any Broker-Dealer (or other
Person, if permitted by the Company) with respect to transfers described under
"The Auction" in the Prospectus and notices from the Company. The Auction Agent
is not required to accept any such notice for an Auction unless it is received
by the Auction Agent by 3:00 p.m., New York City time, on the Business Day
preceding such Auction.

                                      S-25

<PAGE>

         The Auction Agent may terminate the Auction Agency Agreement upon
notice to the Company on a date no earlier than 60 days after such notice. If
the Auction Agent should resign, the Company will use its best efforts to enter
into an agreement with a successor Auction Agent containing substantially the
same terms and conditions as the Auction Agency Agreement. The Company may
remove the Auction Agent provided that prior to such removal the Company shall
have entered into such an agreement with a successor Auction Agent.

BROKER-DEALERS


         After each Auction for Tortoise Notes, the Auction Agent will pay to
each Broker-Dealer, from funds provided by the Company, a service charge at the
annual rate of 1/4 of 1% in the case of any Auction immediately preceding a Rate
Period of less than one year, or a percentage agreed to by the Company and the
Broker-Dealers in the case of any Auction immediately preceding a Rate Period of
one year or longer, of the purchase price of Tortoise Notes placed by such
Broker-Dealer at such Auction. For the purposes of the preceding sentence,
Tortoise Notes will be placed by a Broker-Dealer if such Tortoise Notes were (a)
the subject of Hold Orders deemed to have been submitted to the Auction Agent by
the Broker-Dealer and were acquired by such Broker-Dealer for its own account or
were acquired by such Broker-Dealer for its customers who are Beneficial Owners
or (b) the subject of an Order submitted by such Broker-Dealer that is (i) a
Submitted Bid of an Existing Holder that resulted in such Existing Holder
continuing to hold such Tortoise Notes as a result of the Auction or (ii) a
Submitted Bid of a Potential Holder that resulted in such Potential Holder
purchasing such Tortoise Notes as a result of the Auction or (iii) a valid Hold
Order.


         The Company may request the Auction Agent to terminate one or more
Broker-Dealer Agreements at any time, provided that at least one Broker-Dealer
Agreement is in effect after such termination.


         The Broker-Dealer Agreement provides that a Broker-Dealer (other than
an affiliate of the Company) may participate in Auctions for its own account.
However, the Company, by notice to all Broker-Dealers, may prohibit all
Broker-Dealers from submitting Bids in Auctions for their own accounts, provided
that they may continue to submit Hold Orders and Sell Orders for their own
accounts. Any Broker-Dealer that is an affiliate of the Company may submit
orders in Auctions, but only if such Orders are not for its own account. If a
Broker-Dealer submits an Order for its own account in any Auction, it might have
an advantage over other Bidders because it would have knowledge of all Orders
submitted by it in that Auction; such Broker-Dealer, however, would not have
knowledge of orders submitted by other Broker-Dealers in that Auction.

                       CERTAIN FEDERAL INCOME TAX MATTERS



         The following is a summary of certain material U.S. federal income tax
considerations relating to the purchase, ownership and disposition of Tortoise
Notes. Except as discussed under "Taxation of Non-U.S. Holders" and "Information
Reporting and Backup Withholding," the discussion generally applies only to
holders of Tortoise Notes that are U.S. holders. You will be a U.S. holder if
you are an individual who is a citizen or resident of the United States, a U.S.
domestic corporation, or any other person that is subject to U.S. federal income
tax on a net income basis in respect of an investment in Tortoise Notes. This
summary deals only with U.S. holders that hold Tortoise Notes as capital assets
and who purchase Tortoise Notes in connection with this offering. It does not
address considerations that may be relevant to you if you are an investor that
is subject to special tax rules, such as a financial institution, insurance
company, regulated investment company, real estate investment trust, investor in
pass-through entities, U.S. holder of Tortoise Notes whose "functional currency"
is not the United States dollar, tax-exempt organization, dealer in securities
or currencies, trader in securities or commodities that elects mark to


                                      S-26

<PAGE>

market treatment, a person who holds Tortoise Notes in a qualified tax deferred
account such as an IRA, or a person who will hold Tortoise Notes as a position
in a "straddle," "hedge" or as part of a "constructive sale" for federal income
tax purposes. In addition, this discussion does not address the possible
application of the U.S. federal alternative minimum tax.

         This summary is based on the provisions of the Internal Revenue Code,
the applicable Treasury regulations promulgated thereunder, judicial authority
and current administrative rulings, as in effect on the date of this Statement
of Additional Information, all of which may change. Any change could apply
retroactively and could affect the continued validity of this summary.


         As stated above, this discussion does not discuss all aspects of U.S.
federal income taxation that may be relevant to a particular holder of Tortoise
Notes in light of such holder's particular circumstances and income tax
situation. Prospective holders should consult their own tax advisors as to the
specific tax consequences to them of the purchase, ownership and disposition of
Tortoise Notes, including the application and the effect of state, local,
foreign and other tax laws and the possible effects of changes in U.S. or other
tax laws.

FEDERAL INCOME TAX TREATMENT OF THE COMPANY

         The Company will be treated as a regular C corporation for federal and
state income tax purposes. 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 as their income, 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. Cash distributions by such MLPs will not be eligible for the
dividends received deduction when received by the Company. The Company also will
take into account in computing its taxable income 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 below, based upon the historic performance of MLPs, the
Company anticipates initially that its proportionate share of the MLPs' taxable
income will be significantly less than the amount of cash distributions received
by the Company from the MLPs. In such case, the Company anticipates that it will
not incur a current federal income tax on a significant portion of its cash
flow, particularly after taking into account the Company's current operating
expenses. If the MLPs' taxable income is greater than the MLPs' cash
distributions, the Company will incur current federal income tax liability,
possibly in excess of the cash distributions it receives.

         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 received MLP cash distributions in
excess of the taxable income reportable by the Company with respect to the
respective MLP interest, the Company's basis in the MLP interest will be reduced
and the Company's gain on the sale of such MLP interest likewise will be
increased.

                                      S-27

<PAGE>

        The Company will not be treated as a regulated investment company under
the federal income tax laws. The federal income tax laws 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 and capital gains.
The regulated investment company taxation rules have no application to the
Company or stockholders of the Company.


FEDERAL INCOME TAX TREATMENT OF HOLDERS OF TORTOISE NOTES


         Under present law, the Company believes that Tortoise Notes will
constitute indebtedness of the Company for federal income tax purposes, which
the below discussion assumes. The Company intends to treat all payments made
with respect to the Tortoise Notes consistent with this characterization.

         Taxation of Interest. Payments or accruals of interest on Tortoise
Notes generally will be taxable to you as interest income at the time such
interest is received (actually or constructively) or accrued, in accordance with
your regular method of accounting for federal income tax purposes.

         Purchase, Sale and Redemption of Tortoise Notes. Initially, your tax
basis in Tortoise Notes acquired generally will be equal to your cost to acquire
such Tortoise Notes. This basis will increase by the amounts, if any, that you
are required or elect to include in income under the rules governing market
discount, and will decrease by the amount of any amortized premium on such
Tortoise Notes, as discussed below. When you sell or exchange any of your
Tortoise Notes, or if any of your Tortoise Notes are redeemed, you generally
will recognize gain or loss equal to the difference between the amount you
realize on the transaction (less any accrued and unpaid interest, which will be
subject to tax in the manner described above under "Taxation of Interest") and
your tax basis in the Tortoise Notes relinquished.

         Except as discussed below with respect to market discount, the gain or
loss that you recognize on the sale, exchange or redemption of any of your
Tortoise Notes generally will be capital gain or loss. Such gain or loss will be
long-term capital gain or loss if the disposed Tortoise Notes were held for more
than one year and will be short-term capital gain or loss if the disposed
Tortoise Notes were held for one year or less. Net long-term capital gain
recognized by a noncorporate U.S. holder generally will be subject to tax at a
lower rate (currently a maximum rate of 15%, although this rate will increase to
20% for taxable years beginning after 2008) than net short-term capital gain or
ordinary income (currently a maximum rate of 35%). A holder's ability to deduct
capital losses may be limited.

         Amortizable Premium. If you purchase Tortoise Notes at a cost greater
than the Tortoise Notes' stated principal amount, plus accrued interest, you
will be considered to have purchased the Tortoise Notes at a premium, and you
generally may elect to amortize this premium as an offset to interest income,
using a constant yield method, over the remaining term of the Tortoise Notes. If
you make the election to amortize the premium, it generally will apply to all
debt instruments that you hold at the time of the election, as well as any debt
instruments that you subsequently acquire. In addition, you may not revoke the
election without the consent of the Internal Revenue Service ("IRS"). If you
elect to amortize the premium, you will be required to reduce your tax basis in
the Tortoise Notes by the amount of the premium amortized during your holding
period. If you do not elect to amortize premium, the amount of premium will be
included in your tax basis in the Tortoise Notes. Therefore, if you do not elect
to amortize the premium and you hold the Tortoise Notes to maturity, you
generally will be required to treat the premium as a capital loss when the
Tortoise Notes are redeemed.

         Market Discount. If you purchase Tortoise Notes at a price that
reflects a "market discount," any principal payments on, or any gain that you
realize on the disposition of the Tortoise Notes generally will be treated as
ordinary interest income to the extent of the market discount that accrued on
the Tortoise Notes during the time you held such Tortoise Notes. "Market
discount" is defined under the Internal Revenue Code as, in general, the excess
of the stated redemption price at maturity over the purchase price

                                      S-28

<PAGE>

of the note, except that if the market discount is less than 0.25% of the stated
redemption price at maturity multiplied by the number of complete years to
maturity, the market discount is considered to be zero. In addition, you may be
required to defer the deduction of all or a portion of any interest paid on any
indebtedness that you incurred or continued to purchase or carry the Tortoise
Notes that were acquired at a market discount. In general, market discount will
be treated as accruing ratably over the term of the Tortoise Notes, or, at your
election, under a constant yield method.


         You may elect to include market discount in gross income currently as
it accrues (on either a ratable or constant yield basis), in lieu of treating a
portion of any gain realized on a sale of the Tortoise Notes as ordinary income.
If you elect to include market discount on a current basis, the interest
deduction deferral rule described above will not apply. If you do make such an
election, it will apply to all market discount debt instruments that you acquire
on or after the first day of the first taxable year to which the election
applies. This election may not be revoked without the consent of the IRS.

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 stockholders 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 stockholders in the form of dividends, the
stockholders must 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, that satisfies the Qualifying Income rules 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 (generally as provided in the partnership
agreement), 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 partner.

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

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

         Because the MLP itself does not pay federal income 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 interest, capital gain. The
investor's original basis is the price paid for the units. The basis is adjusted

                                      S-29

<PAGE>

downward 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 income tax owed.

         When the units are sold, the difference between the sales price and the
investor's adjusted basis is the gain or loss for federal income tax purposes.
The partner generally 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 resulting from prior distributions; or (2) his basis reaches zero.

         At tax filing season an MLP investor will receive a Schedule K-1 form
showing the investor's share of each item of partnership income, gain, loss,
deductions and credits. The investor will use that information to figure the
investor's taxable income (MLPs generally provide their investors with material
that walks them through all the steps). If there is net income derived from the
MLP, the investor pays federal income tax at his, her or its tax rate. If there
is a net loss derived from the MLP, it is generally considered a "passive loss"
under the Internal Revenue 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
stockholders, will report the income or loss of the MLPs. Thus, the Company's
stockholders will not have to deal with any Schedule K-1 reporting income and
loss items of the MLPs. Stockholders, instead, will receive a Form 1099 from the
Company. In addition, due to the Company's anticipated broad public ownership,
the Company does not expect to be subject to the passive activity loss
limitation rules mentioned in the preceding paragraph.


INFORMATION REPORTING AND BACKUP WITHHOLDING

         In general, information reporting requirements will apply to payments
of principal, interest, and premium paid on Tortoise Notes (including redemption
proceeds) and to the proceeds of the sale of Tortoise Notes paid to U.S. holders
other than certain exempt recipients (such as corporations). Information
reporting will generally apply to payments of interest on the Tortoise Notes to
non-U.S. holders and the amount of tax, if any, withheld with respect to such
payments. Copies of the information returns reporting such interest payments and
any withholding may also be made available to the tax authorities in the country
in which the non-U.S. holder resides under the provisions of an applicable
income tax treaty. In addition, for non-U.S. holders, information reporting will
apply to the proceeds of the sale of Tortoise Notes within the United States or
conducted through United States-related financial intermediaries unless the
certification requirements described below have been complied with and the
statement described below in "Taxation of Non-U.S. Holders" has been received
(and the payor does not have actual knowledge or reason to know that the
beneficial owner is a United States person) or the holder otherwise establishes
an exemption.


         The Company may be required to withhold, for U.S. federal income tax
purposes, a portion of all taxable payments (including redemption proceeds)
payable to holders of Tortoise Notes who fail to provide the Company with their
correct taxpayer identification number, who fail to make required certifications
or who have been notified by the IRS that they are subject to backup withholding
(or if the Company has been so notified). Certain corporate and other
stockholders specified in the Internal Revenue Code and the regulations
thereunder are exempt from backup withholding. Backup withholding is not an
additional tax. Any amounts withheld may be credited against the holder's U.S.
federal income tax liability provided the appropriate information is furnished
to the IRS. If you are a non-U.S. Holder, you may have to comply with
certification procedures to establish your non-U.S. status in order to avoid

                                      S-30

<PAGE>

backup withholding tax requirements. The certification procedures required to
claim the exemption from withholding tax on interest income described below will
satisfy these requirements.


TAXATION OF NON-U.S. HOLDERS


         If you are a non-resident alien individual or a foreign corporation (a
"non-U.S. Holder"), the payment of interest on the Tortoise Notes generally will
be considered "portfolio interest" and thus generally will be exempt from United
States federal withholding tax. This exemption will apply to you provided that
(i) interest paid on the Tortoise Notes is not effectively connected with your
conduct of a trade or business in the United States, (ii) you are not a bank
whose receipt of interest on the Tortoise Notes is described in Section
881(c)(3)(A) of the Internal Revenue Code, (iii) you do not actually or
constructively own 10 percent or more of the combined voting power of all
classes of the Company's stock entitled to vote, (iv) you are not a controlled
foreign corporation that is related, directly or indirectly to the Company
through stock ownership, or (v) you satisfy the certification requirements
described below.

         To satisfy the certification requirements, either (1) the holder of any
Tortoise Notes must certify, under penalties of perjury, that such holder is a
non-U.S. person and must provide such owner's name, address and taxpayer
identification number, if any, on IRS Form W-8BEN, or (2) a securities clearing
organization, bank or other financial institution that holds customer securities
in the ordinary course of its trade or business and holds the Tortoise Notes on
behalf of the holder thereof must certify, under penalties of perjury, that it
has received a valid and properly executed IRS Form W-8BEN from the beneficial
holder and comply with certain other requirements. Special certification rules
apply for Tortoise Notes held by a foreign partnership and other intermediaries.

         Interest on Tortoise Notes received by a non-U.S. Holder which is not
excluded from U.S. federal withholding tax under the portfolio interest
exemption as described above generally will be subject to withholding at a 30%
rate, except where a non-U.S. Holder can claim the benefits of an applicable tax
treaty to reduce or eliminate such withholding tax and such non-U.S. Holder
provides the Company with a properly executed IRS Form W-8BEN claiming such
exemption or reduction.

         Any capital gain that a non-U.S. Holder realizes on a sale, exchange or
other disposition of Tortoise Notes generally will be exempt from United States
federal income tax, including withholding tax. This exemption will not apply to
you if your gain is effectively connected with your conduct of a trade or
business in the U.S. or you are an individual holder and are present in the U.S.
for 183 days or more in the taxable year of the disposition and either your gain
is attributable to an office or other fixed place of business that you maintain
in the U.S. or you have a tax home in the United States.


                              PROXY VOTING POLICIES


         The Company and the Adviser have adopted proxy voting policies and
procedures ("Proxy Policy"), which they believe are reasonably designed to
ensure that proxies are voted in the best interests of the Company and its
stockholders. Subject to the oversight of the Board, the Board has delegated
responsibility for implementing the Proxy Policy to the Adviser. Because of the
unique nature of MLPs in which the Company primarily invests, the Adviser shall
evaluate each proxy on a case-by-case basis. Because proxies of MLPs are
expected to relate only to extraordinary measures, the Company does not believe
it is prudent to adopt pre-established voting guidelines.

         In the event requests for proxies are received with respect to the
voting of equity securities other than MLP equity units, on routine matters,
such as election of directors or approval of auditors, the proxies usually will
be voted with management unless the Adviser determines it has a conflict or the

                                      S-31

<PAGE>

Adviser determines there are other reasons not to vote with management. On
non-routine matters, such as amendments to governing instruments, proposals
relating to compensation and stock option and equity compensation plans,
corporate governance proposals and stockholder proposals, the Adviser will vote,
or abstain from voting if deemed appropriate, on a case by case basis in a
manner it believes to be in the best economic interest of the Company's
stockholders. In the event requests for proxies are received with respect to
debt securities, the Adviser will vote on a case by case basis in a manner it
believes to be in the best economic interest of the Company's stockholders.

         The Chief Executive Officer is responsible for monitoring Company
actions and ensuring that (1) proxies are received and forwarded to the
appropriate decision makers; and (2) proxies are voted in a timely manner upon
receipt of voting instructions. The Company is not responsible for voting
proxies it does not receive, but will make reasonable efforts to obtain missing
proxies. The Chief Executive Officer shall implement procedures to identify and
monitor potential conflicts of interest that could affect the proxy voting
process, including (1) significant client relationships; (2) other potential
material business relationships; and (3) material personal and family
relationships. All decisions regarding proxy voting shall be determined by the
Investment Committee of the Adviser and shall be executed by the Chief Executive
Officer. Every effort shall be made to consult with the portfolio manager and/or
analyst covering the security. The Company may determine not to vote a
particular proxy, if the costs and burdens exceed the benefits of voting (e.g.,
when securities are subject to loan or to share blocking restrictions).

         If a request for proxy presents a conflict of interest between the
Company's stockholders on one hand, and the Adviser, the principal underwriters,
or any affiliated persons of the Company, on the other hand, Company management
may (i) disclose the potential conflict to the Board of Directors and obtain
consent; or (ii) establish an ethical wall or other informational barrier
between the persons involved in the conflict and the persons making the voting
decisions.

                  INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


         Ernst & Young, LLP serves as the independent registered public
accounting firm for the Company. Ernst & Young, LLP provides audit services, tax
return preparation and assistance and consultation in connection with review of
the Company's filings with the Commission.

                                    CUSTODIAN

         U.S. Bank National Association, 425 Walnut Street, Cincinnati, OH 45202
serves as the custodian of the Company's cash and investment securities. The
Company will pay the custodian a monthly fee computed at an annual rate of
0.015% on the first $100 million of the Company's Managed Assets and 0.01% on
the balance of the Company's Managed Assets, subject to a minimum annual fee of
$4,800.

                             ADDITIONAL INFORMATION


         A Registration Statement on Form N-2, including amendments thereto,
relating to the Tortoise Notes offered hereby, has been filed by the Company
with the Commission. The Company's 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. Please refer to the
Registration Statement for further information with respect to the Company and
the offering of the Tortoise Notes. Statements contained in the Company's
Prospectus and this Statement of Additional Information as to the

                                      S-32

<PAGE>

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 a Registration Statement, each such
statement being qualified in all respects by such reference. Copies of the
Registration Statement may be inspected without charge at the Commission's
principal office in Washington, D.C., and copies of all or any part thereof may
be obtained from the Commission upon the payment of certain fees prescribed by
the Commission.


                                      S-33

<PAGE>

                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                              FINANCIAL STATEMENTS

                        STATEMENT OF ASSETS & LIABILITIES
                                   (Unaudited)

                                  MAY 31, 2004

ASSETS:
    Investments at value (cost $302,832,921) ...................$ 291,288,663
    Dividends and interest receivable ..........................       75,497
    Prepaid expenses ...........................................       60,247
                                                                -------------
       Total assets ...........................................   291,424,407
                                                                -------------


LIABILITIES:
    Dividend payable ...........................................    2,524,609
    Payable for securities purchased ...........................    1,918,120
    Advisory fee payable .......................................      348,513
    Accrued expenses and other liabilities .....................      331,345
                                                                -------------
       Total liabilities .......................................    5,122,587
                                                                -------------

       Net assets ..............................................$ 286,301,820
                                                                =============

NET ASSETS CONSIST OF:
    Capital stock, $0.001 par value; 12,623,047
       shares issued and outstanding (100,000,000
       shares authorized) ......................................$      12,623
    Additional paid-in capital .................................  300,495,985
    Net investment loss and realized loss on investments........   (2,662,530)
    Unrealized depreciation on investments......................  (11,544,258)

                                                                -------------
       Net assets ..............................................$ 286,301,820
                                                                =============

       Net Asset Value per share ...............................$       22.68
                                                                =============


                                      F-1

<PAGE>


                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                             STATEMENT OF OPERATIONS
                                  (Unaudited)

           PERIOD FROM FEBRUARY 27, 2004 (COMMENCEMENT OF OPERATIONS)
                              THROUGH MAY 31, 2004


INVESTMENT INCOME
  Dividends and distributions .................................$     442,722
  Interest ....................................................      458,453
                                                               -------------
          TOTAL INVESTMENT INCOME .............................      901,175
                                                               -------------

EXPENSES
  Advisory fees ...............................................      697,176
  Organizational fees .........................................      286,344
  Professional fees ...........................................       74,486
  Administration fees .........................................       51,371
  Reports to shareholders .....................................       22,170
  Custodian fees and expenses .................................       18,291
  Other expenses ..............................................       15,094
  Directors' fees .............................................       14,718
  Fund accounting fees ........................................       14,124
  Registration fees ...........................................        9,484
  Transfer agent fees .........................................        4,341
                                                               -------------
          TOTAL EXPENSES ......................................    1,207,599
                                                               -------------

  Less, expense reimbursement by Adviser ......................     (168,790)

          NET EXPENSES ........................................    1,038,809
                                                               -------------
NET INVESTMENT LOSS ...........................................     (137,634)
                                                               -------------

REALIZED AND UNREALIZED LOSS ON INVESTMENTS
  Net realized loss on investments                                      (287)
  Net change in unrealized depreciation of investments ........  (11,544,258)
                                                               -------------
          NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS .....  (11,544,545)
                                                               -------------

NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ..........$ (11,682,179)
                                                               =============


                                      F-2

<PAGE>


                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                       STATEMENT OF CHANGES IN NET ASSETS
                                  (Unaudited)

             PERIOD FROM FEBRUARY 27, 2004 (1) THROUGH MAY 31, 2004

OPERATIONS:
   Net investment loss .........................................$    (137,634)
   Net realized loss on sale of investments ....................         (287)
   Net change in unrealized depreciation of investments ........  (11,544,258)
                                                                -------------
       Net decrease in net assets resulting from operations ....  (11,682,179)
                                                                -------------

DISTRIBUTIONS TO SHAREHOLDERS:                                     (2,524,609)

CAPITAL SHARE TRANSACTIONS
   Proceeds from initial public offering of 11,000,000
     common shares .............................................  275,000,000
   Proceeds from issuance of 1,600,000 common shares in
     connection with exercising an overallotment option
     granted to underwriters of the initial public offering ....   40,000,000
   Underwriting discounts and offering expenses associated
     with the issuance of common shares ........................  (14,889,978)
                                                                -------------
   Net increase in net assets from capital
     share transactions ........................................  300,125,104
                                                                -------------

Total increase in net assets ...................................  285,918,316

NET ASSETS:
   Beginning of period .........................................      368,422
                                                                -------------
   End of period ...............................................$ 286,301,820
                                                                =============

---------------
(1)  Commencement of Operations.


                                      F-3

<PAGE>


                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                             SCHEDULE OF INVESTMENTS
                                   (unaudited)

                                  MAY 31, 2004

<TABLE>
<CAPTION>

MASTER LIMITED PARTNERSHIPS - 77.39%                               SHARES                 VALUE
------------------------------------                               ------                 -----
<S>                                                                 <C>               <C>
COAL - 3.36%
Natural Resource Partners L.P............................             253,700         $    9,615,230
                                                                                      --------------
Natural Gas and Petroleum Midstream - 74.03%
Enbridge Energy Partners, L.P............................             248,600             11,177,056
Energy Transfer Partners, L.P............................             160,700              6,138,740
Enterprise Products Partners L.P.........................             735,700             15,412,915
GulfTerra Energy Partners, L.P...........................             195,895              7,471,435
Kaneb Pipe Line Partners, L.P............................             250,000             11,242,500
Kinder Morgan Energy Parners, L.P........................             118,400              4,849,664
Kinder Morgan Management, LLC*...........................             757,110             28,353,770
K-Sea Transportation Partners L.P........................              57,000              1,443,810
Magellan Midstream Partners, L.P.........................             520,417             25,068,487
Markwest Energy Partners, LP.............................             119,900              4,472,270
Pacific Energy Partners, LP..............................             379,000              9,774,410
Plains All American Pipeline, L.P........................              13,100                417,235
Plains All American Pipeline, L.P. - Unregistered ^......           1,142,760             34,945,601
Sunoco Logistics Partners L.P............................             838,200             27,903,678
TEPPCO Partners, L.P.....................................             303,600             11,354,640
Valero L.P...............................................             249,100             11,916,944
                                                                                      --------------
                                                                                         211,943,155
                                                                                      --------------
TOTAL MASTER LIMITED PARTNERSHIPS (Cost $233,102,642)                                    221,558,385
                                                                                      --------------

                                                                  PRINCIPAL
PROMISSORY NOTES - 2.99%                                           AMOUNT
------------------------                                          ---------

K-Sea Transportation Partners L.P.-Unregistered, 8.000%,
  Due 03/31/2009 (Cost $8,571,055) ^.....................         $ 8,700,000              8,571,055
                                                                                      --------------

                                                                  PRINCIPAL
              SHORT-TERM INVESTMENTS - 21.36%                       AMOUNT                 VALUE
              -------------------------------                       ------                 -----
U.S. TREASURY BILLS - 12.22%
0.784%, 06/03/2004                                                $35,000,000             34,998,483
                                                                                      --------------
INVESTMENT COMPANIES - 9.14%                                        SHARES
First American Prime Obligations Fund - Class Z                    13,080,370             13,080,370
First American Treasury Obligations Fund - Class Z                 13,080,370             13,080,370
                                                                                      --------------
                                                                                          26,160,740
                                                                                      --------------
TOTAL SHORT-TERM INVESTMENTS (Cost $61,159,224)                                           61,159,223
                                                                                      --------------
TOTAL INVESTMENTS - 101.74% (Cost $302,832,921)                                          291,288,663
LIABILITIES IN EXCESS OF ASSETS - (1.74)%                                                 (4,986,843)
                                                                                      --------------
TOTAL NET ASSETS - 100.00%                                                              $286,301,820
                                                                                      --------------
<FN>
------------------
Footnotes and Abbreviations
 * Non-Income producing security.
 ^ Fair valued securities amount to $43,516,656 which represent 15.2% of the
   Company's net assets.
</FN>
</TABLE>

                                      F-4

<PAGE>

                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                          NOTES TO FINANCIAL STATEMENTS
                                    UNAUDITED

                                  MAY 31, 2004

1.   ORGANIZATION

Tortoise Energy Infrastructure Corporation (the "Company") was organized as a
Maryland corporation on October 29, 2003, and is a non-diversified, closed-end
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Company's investment objective is to seek a high
level of total return with an emphasis on current distributions paid to
shareholders. The Company seeks to provide its shareholders with an efficient
vehicle to invest in a portfolio of publicly traded master limited partnerships
in the energy infrastructure sector. The Company commenced operations on
February 27, 2004. The Company's shares are listed on the New York Stock
Exchange under the symbol "TYG".

2. SIGNIFICANT ACCOUNTING POLICIES

A. Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States 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.

B. Investment Valuation - The Company primarily owns securities that are listed
on a securities exchange. The Company values those securities at their last sale
price on that exchange on the valuation date. If the security is listed on more
than one exchange, the Company will use the price of that exchange that it
generally considers to be the principal exchange on which the security is
traded. Securities listed on the NASDAQ Stock Market, Inc. ("NASDAQ") will be
valued at the NASDAQ Official Closing Price, which may not necessarily represent
the last sale price. If there has been no sale on such exchange or NASDAQ on
such day, the security will be valued at the closing bid price on such day.

The Company may invest up to 30% of its total assets in restricted securities.
Restricted securities may be subject to statutory and contractual restrictions
on their public resale, which may make it more difficult to obtain a valuation
and may limit the Company's ability to dispose of them. Investments in private
placement securities and other securities for which market quotations are not
readily available will be valued in good faith by using fair value procedures
approved by the Board of Directors. Such fair value procedures consider factors
such as securities with similar yields, quality, type of issue, coupon, duration
and rating.

                                       F-5
<PAGE>

The Company generally values short-term debt securities at prices based on
market quotations for such securities, except those securities purchased with 60
days or less to maturity are valued on the basis of amortized cost, which
approximates market value. If events occur that will affect the value of the
Company's portfolio securities before the net asset value has been calculated (a
"significant event"), the portfolio securities so affected will generally be
priced using a fair value procedure.

C. Security Transactions and Investment Income - Security transactions are
accounted for on the date the securities are purchased or sold (trade date).
Realized gains and losses are reported on an identified cost basis. Dividend and
distribution income is recorded on the ex-dividend date. Distributions received
from the Company's investments in master limited partnerships ("MLPs"),
generally are comprised of income and return of capital from the MLP. The
Company records investment income and return of capital based on estimates made
at the time such distributions are received. Such estimates are based on
historical information available from each MLP and other industry sources. These
estimates may subsequently be revised based on information received from MLPs
after their tax reporting periods are concluded. Interest income is recognized
on the accrual basis, including amortization of premiums and accretion of
discounts.

D. Distributions to Shareholders - Distributions to shareholders are recorded on
the ex-dividend date. The character of distributions made during the year from
earnings and profits may differ from their ultimate characterization for federal
income tax purposes. The Company estimates that the current dividend
distribution, for book purposes, is comprised of 80% return of capital and 20%
ordinary income. For tax purposes, the Company estimates the current dividend
distribution is comprised of 100% return of capital. The Company is unable to
make final determinations as to the characteristics of the distribution until
after the end of the calendar year. The Company will inform shareholders of the
final characteristics of the distribution during the month of January 2005.

E. Federal Income Taxation - The Company is treated as a corporation for federal
and state income tax purposes. Thus, the Company is obligated to pay federal and
state income tax on its taxable income. The Company invests its assets primarily
in MLPs, which generally are treated as partnerships for federal income tax
purposes. As a partner in the MLPs, the Company reports its allocable share of
the MLP's taxable income in computing its own taxable income. The Company's tax
expense or benefit will be included in the Statement of Operations based on the
component of income or gains (losses) to which such expense or benefit relates.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. A valuation allowance is
recognized if, based on the weight of available evidence, it is more likely than
not that some portion or all of the deferred income tax asset will not be
realized. Future realization of deferred income tax assets ultimately depends on
the existence of sufficient taxable income of the appropriate character in
either the carryback or carryforward period under the tax law.

                                       F-6
<PAGE>

F. Organization Expenses and Offering Costs - The Company is responsible for
paying all organization expenses. Organization costs are expensed as incurred,
and are reported in the accompanying statement of operations.

3. CONCENTRATION OF RISK

The Company's investment objective is to seek a high level of total return with
an emphasis on current distributions paid to its shareholders. Under normal
circumstances, the Company intends to invest at least 90% of its total assets in
securities of domestic energy infrastructure companies, and will invest at least
70% of its total assets in equity securities of 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 income
taxes, debt entered into for purposes of leverage and the aggregate liquidation
preference of outstanding preferred shares) ("Managed Assets"), if any, in
exchange for the investment advisory services provided. For the period following
the commencement of the Company's operations through January 31, 2006, the
Adviser has agreed to waive or 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 ending January 31, 2007, 2008 and 2009, the Adviser has agreed to waive or
reimburse the Company for fees and expenses in an amount equal to 0.10% of the
average monthly Managed Assets of the Company.

The Company has engaged U.S. Bancorp Fund Services, LLC to serve as the
Company's administrator. The Company will pay the administrator a monthly fee
computed at an annual rate of 0.07% of the first $300 million of the Company's
Managed Assets, 0.06% on the next $500 million of Managed Assets and 0.04% on
the balance of the Company's Managed Assets, subject to a minimum annual fee of
$45,000.

Computershare Investor Services, LLC will serve as the Company's transfer agent,
dividend paying agent, and agent for the automatic dividend reinvestment plan.

U.S. Bank N.A. will serve as the Company's custodian. The Company will pay the
custodian a monthly fee computed at an annual rate of 0.015% on the first $100
million of the Company's Managed Assets and 0.01% on the balance of the
Company's Managed Assets, subject to a minimum annual fee of $4,800.

                                       F-7
<PAGE>

5.   INCOME TAXES

Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amount of assets and liabilities for financial reporting
purposes and the amounts used for tax purposes. However, the Company has an
equal and offsetting valuation allowance against its net deferred income tax
asset, since the Company has not developed a history of taxable income, based on
available evidence. Components of the Company's deferred tax assets and
liabilities as of May 31, 2004 are as follows:

Total deferred tax assets                             $  4,746,879
Total deferred tax liabilities                            (172,661)
Valuation allowance                                     (4,574,218)
                                                      ------------
Total                                                 $        ---
                                                      ============

The Company has deferred tax assets of $106,044 related to organizational costs
that have been deferred and are amortizable in future periods for tax purposes.
In addition, the Company has deferred tax assets of $4,520,587 and $120,248
related to the unrealized depreciation on the securities held by the Company and
net operating loss carryforwards, respectively. The Company's deferred tax
liability of $172,661 related to the amount received from MLPs that is recorded
as net investment income for financial statement purposes. The amount of taxes
anticipated based on statutory rates differs from tax expense actually recorded
due to the Company's valuation allowance on the net deferred tax asset.

6.   INVESTMENT TRANSACTIONS

For the period ended May 31, 2004, the Company purchased securities in the
amount of $235,169,503 (excluding short-term debt securities). There were no
sales of securities during the period.

At May 31, 2004, gross unrealized appreciation and depreciation of investments
for federal income tax purposes were as follows:

Gross unrealized appreciation                         $  1,346,291
Gross unrealized depreciation                          (12,447,827)
                                                      ------------
Net unrealized depreciation                           $(11,101,536)
                                                      ============

7.   COMMON STOCK

There are 100,000,000 shares of beneficial interest authorized and 12,623,047
shares outstanding at May 31, 2004. Transactions in common shares were as
follows:

Beginning shares                                            23,047
Shares sold                                             12,600,000
Shares issued through reinvestment of distributions            ---
                                                        ----------
Ending shares                                           12,623,047
                                                        ==========

                                       F-8
<PAGE>

8.   SUBSEQUENT EVENT

On June 14, 2004 the Company's Board of Directors approved plans to issue notes
payable and preferred stock. The Company has filed a registration statement
related to such offering of notes payable, and expects that the notes will be
issued during the third quarter of 2004, subject to obtaining required
regulatory approvals. The Company intends to issue series A and B auction rate
senior notes in the amount of $110,000,000.

                                       F-9
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS


The Shareholders and Board of Directors
Tortoise Energy Infrastructure Corporation

         We have audited the accompanying statement of assets and liabilities of
Tortoise Energy Infrastructure Corporation (referred to herein as "the Company")
as of February 6, 2004, and the related statement of operations for the period
from October 29, 2003 (date of organization) through February 6, 2004. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

         We conducted our audit in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of cash as of February 6, 2004, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company at
February 6, 2004, and the results of its operations from October 29, 2003 to
February 6, 2004 in conformity with accounting principles generally accepted in
the United States.

                                             /s/ Ernst & Young LLP

Kansas City, Missouri
February 13, 2004

                                      F-10

<PAGE>

                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                       STATEMENT OF ASSETS AND LIABILITIES

                                FEBRUARY 6, 2004

<TABLE>
<CAPTION>

             <S>                                                                               <C>
             ASSETS:
             Cash....................................................................          $550,250
             Deferred Offering Costs.................................................           386,649

             TOTAL ASSETS............................................................           936,899
             LIABILITIES:
             Accrued Offering Costs..................................................           386,649
             Payable to Adviser......................................................            31,967
             Payable for Organization Costs..........................................           134,379
             Payable to Transfer Agent...............................................               400
                                                                                               --------
             TOTAL LIABILITIES.......................................................           553,395
             NET ASSETS APPLICABLE TO COMMON SHARES..................................          $383,504
                                                                                               ========
             NET ASSETS APPLICABLE TO COMMON SHARES REPRESENT:
             Common Shares, $.001 par value; 100,000,000 shares authorized, 23,047
                shares outstanding...................................................          $     23
             Additional Paid-In Capital..............................................           550,227
             Retained Deficit........................................................          (166,746)
                                                                                               --------
             TOTAL...................................................................          $383,504
                                                                                               ========
             NET ASSET VALUE PER COMMON SHARE OUTSTANDING ($383,504 divided by
                23,047 common shares outstanding)....................................          $  16.64
                                                                                               ========
</TABLE>

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

                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                             STATEMENT OF OPERATIONS

               PERIOD FROM OCTOBER 29, 2003 (DATE OF ORGANIZATION)
                            THROUGH FEBRUARY 6, 2004


     Investment Income...........................    $      --
     Expenses:
        Organization Costs....................       $ 166,346
        Transfer Agent Fees...................             400
                                                     ---------
     Total Expenses..............................      166,746
     Net Investment Loss Before Taxes............     (166,746)
                                                     ---------
     Income taxes................................           --
                                                     ---------
     Net investment loss.........................    $(166,746)

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

                                      F-11

<PAGE>

                   TORTOISE ENERGY INFRASTRUCTURE CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

                                FEBRUARY 6, 2004

1.       Organization

         Tortoise Energy Infrastructure Corporation (the "Company") was
organized as a Maryland corporation on October 29, 2003, and is a
non-diversified, closed-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"). The Company has had no
operations other than the sale of 23,047 shares to the aggregate Subscribers for
$550,250 on January 22, 2004. The Company is planning a public offering of its
common stock as soon as practicable after the effective date of its registration
statement.

2.       Significant Accounting Policies

         The following is a listing of the significant accounting policies that
the Company will implement upon the commencement of its operations:

         A.       Use of Estimates - The preparation of financial statements in
conformity with accounting principles generally accepted in the United States
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.

         B.       Investment Valuation - The Company intends to own securities
that are listed on a securities exchange. The Company will value those
securities at their last sale price on that exchange on the valuation date. If
the security is listed on more than one exchange, the Company will use the price
of that exchange that it generally considers to be the principal exchange on
which the stock is traded. Securities listed on the NASDAQ Stock Market, Inc.
("NASDAQ") will be valued at the NASDAQ Official Closing Price, which may not
necessarily represent the last sale price. If there has been no sale on such
exchange or NASDAQ on such day, the security will be valued at the mean between
the bid and ask price on such day.

         The Company may invest up to 30% of its total assets in direct private
placement securities. Direct private placement securities are subject to
statutory and contractual restrictions on their public resale, which may make it
more difficult to obtain a valuation and may limit the Company's ability to
dispose of them. Investments in private placement securities and other
securities for which market quotations are not readily available will be valued
in good faith by using fair value procedures approved by the Board of Directors.
Such fair value procedures consider factors such as securities with similar
yields, quality, type of issue, coupon, duration and rating.

         The Company generally will value short-term debt securities at prices
based on market quotations for such securities, except those securities
purchased with 60 days or less to maturity are valued on the basis of amortized
cost, which approximates market value. If events occur that will affect the
value of the Company's portfolio securities before the net asset value has been

                                      F-12
<PAGE>

calculated (a "significant event"), the portfolio securities so affected will
generally be priced using a fair value procedure.

         C.       Security Transaction and Investment Income - Security
transactions will be accounted for on the date the securities are purchased or
sold (trade date). Realized gains and losses will be reported on an identified
cost basis. Dividend and distribution income will be recorded on the ex-dividend
date. Interest income will be recognized on the accrual basis, including
amortization of premiums and accretion of discounts.

         D.       Distributions to Shareholders - Distributions to shareholders
will be recorded on the ex-dividend date. The character of distributions made
during the year from net investment income or net realized gains may differ from
their ultimate characterization for federal income tax purposes.

         E.       Federal Income Taxation - The Company is treated as a
corporation for federal and state income tax purposes. Thus, the Company will be
obligated to pay federal and state income tax on its taxable income. The Company
intends to invest its assets primarily in Master Limited Partnerships ("MLPs"),
which generally are treated as partnerships for federal income tax purposes. As
a partner in the MLPs, the Company will report its allocable share of the MLP's
taxable income in computing its own taxable income. The Company's tax expense or
benefit will be included in the Statement of Operations based on the component
of income or gains (losses) to which such expense or benefit relates. Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. A valuation allowance is recognized
if, based on the weight of available evidence, it is more likely than not that
some portion or all of the deferred income tax asset will not be realized.
Future realization of deferred income tax assets ultimately depends on the
existence of sufficient taxable income of the appropriate character in either
the carryback or carryforward period under the tax law.

         F.       Organization Expenses and Offering Costs - The Company is
responsible for paying all organization and offering expenses. Offering costs
paid by the Company will be charged as a reduction of paid-in capital at the
completion of the Company's initial public offering. Organization costs are
expensed as incurred, and are reported in the accompanying statement of
operations.

3.       Concentration of Risk

         The Company's investment objective is to seek a high level of total
return with an emphasis on current distributions paid to its shareholders. Under
normal circumstances, the Company intends to invest at least 90% of its total
assets in securities of energy infrastructure companies, and will invest at
least 70% of its total assets in equity securities of 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.

                                      F-13

<PAGE>

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 income taxes, debt entered into for purposes of leverage and the
aggregate liquidation preference of outstanding preferred shares, if any,
("Managed Assets") in exchange for the investment advisory services provided.
For the period following the commencement of the Company's operations through
January 31, 2006, the Adviser has agreed to waive or 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 ending January 31, 2007, 2008 and 2009, the
Adviser has agreed to waive or reimburse the Company for fees and expenses in an
amount equal to 0.10% of the average monthly Managed Assets of the Company.

         As of February 6, 2004, the Company owes the Adviser $31,967 for costs
incurred in connection with the registration statement and organization of the
Company. This amount is payable to the Adviser upon the closing date of the
public offering.

         The Company has engaged U.S. Bancorp Fund Services, LLC to serve as the
Company's administrator. The Company will pay the administrator a monthly fee
computed at an annual rate of 0.07% of the first $300 million of the Company's
Managed Assets, 0.06% on the next $500 million of Managed Assets and 0.04% on
the balance of the Company's Managed Assets, subject to a minimum annual fee of
$45,000.

         Computershare Investor Services, LLC will serve as the Company's
transfer agent, dividend paying agent, and agent for the automatic dividend
reinvestment plan.

         U.S. Bank N.A. will serve as the Company's custodian. The Company will
pay the custodian a monthly fee computed at an annual rate of 0.015% on the
first $100 million of the Company's Managed Assets and 0.01% on the balance of
the Company's Managed Assets, subject to a minimum annual fee of $4,800.

5.       Income Taxes

         As of February 6, 2004, the Company has a deferred income tax asset in
the amount of approximately $61,000 related to organization costs incurred by
the Company, which cannot be deducted for income tax purposes. However, the
Company has an equal and offsetting valuation allowance against its deferred
income tax asset, since the Company has not developed a history of taxable
income, based on available evidence.


                                      F-14

<PAGE>

                                   APPENDIX A-
                 SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE


         The following is a summary of certain provisions of the Indenture and
Supplemental Indenture. This summary does not purport to be complete and is
qualified in its entirety by reference to the Indenture, a copy of which is on
file with the Commission.


                                   DEFINITIONS


         "`AA' COMPOSITE COMMERCIAL PAPER RATE" on any date means (i) the
interest equivalent of the 30-day rate, in the case of a Rate Period which is a
Standard Rate Period or shorter, or the 180-day rate, in the case of all other
Rate Periods on commercial paper on behalf of issuers whose corporate bonds are
rated "AA" by S&P, or the equivalent of such rating by another nationally
recognized rating agency, as announced by the Federal Reserve Bank of New York
for the close of business on the Business Day immediately preceding such date;
or (ii) if the Federal Reserve Bank of New York does not make available such a
rate, then the arithmetic average of the interest equivalent of such rates on
commercial paper placed on behalf of such issuers, as quoted on a discount basis
or otherwise by the Commercial Paper Dealers to the Auction Agent for the close
of business on the Business Day immediately preceding such date (rounded to the
next highest .001 of 1%). If any Commercial Paper Dealer does not quote a rate
required to determine the "AA" Composite Commercial Paper Rate, such rate shall
be determined on the basis of the quotations (or quotation) furnished by the
remaining Commercial Paper Dealers (or Dealer), if any, or, if there are no such
Commercial Paper Dealers, by the Auction Agent. For purposes of this definition,
(A) "Commercial Paper Dealers" shall mean (1) Citigroup Global Markets Inc.,
Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Goldman Sachs & Co.; (2) in lieu of any thereof, its respective Affiliate or
successor; and (3) in the event that any of the foregoing shall cease to quote
rates for commercial paper of issuers of the sort described above, in
substitution therefor, a nationally recognized dealer in commercial paper of
such issuers then making such quotations selected by the Corporation, and (B)
"interest equivalent" of a rate stated on a discount basis for commercial paper
of a given number of days' maturity shall mean a number equal to the quotient
(rounded upward to the next higher one-thousandth of 1%) of (1) such rate
expressed as a decimal, divided by (2) the difference between (x) 1.00 and (y) a
fraction, the numerator of which shall be the product of such rate expressed as
a decimal, multiplied by the number of days in which such commercial paper shall
mature and the denominator of which shall be 360.

         "AFFILIATE" means any person controlled by, in control of or under
common control with the Company; provided that no Broker-Dealer controlled by,
in control of or under common control with the Company shall be deemed to be an
Affiliate nor shall any corporation or any person controlled by, in control of
or under common control with such corporation one of the directors or executive
officers of which also is a Director of the Company be deemed to be an Affiliate
solely because such director or executive officer also is a Director of the
Company.


         "AGENT MEMBER" means a member of or participant in the Securities
Depository that will act on behalf of a Bidder.

         "ALL HOLD RATE" means 80% of the "AA" Composite Commercial Paper Rate.


         "APPLICABLE RATE" means, with respect to each Series of Tortoise Notes
for each Rate Period (i) if Sufficient Clearing Orders exist for the Auction in
respect thereof, the Winning Bid Rate, (ii) if Sufficient Clearing Orders do not
exist for the Auction in respect thereof, the Maximum Rate, (iii) in the case
where all the Tortoise Notes of a series are the subject of Hold Orders for the
Auction in respect thereof, the All Hold Rate, and (iv) if an Auction is not
held for any reason (including the circumstance where there is no Auction Agent
or Broker-Dealer), the Maximum Rate.


                                      A-1

<PAGE>

         "AUCTION" means each periodic operation of the procedures set forth in
Appendix B--Auction Procedures.

         "AUCTION AGENT" means The Bank of New York unless and until another
commercial bank, trust company, or other financial institution appointed by a
resolution of the Board of Directors enters into an agreement with the Company
to follow the Auction Procedures for the purpose of determining the Applicable
Rate.


         "AUCTION DATE" means the first Business Day next preceding the first
day of a Rate Period for each Series of Tortoise Notes.


         "AUCTION PROCEDURES" means the procedures for conducting Auctions set
forth in Appendix B hereto.


         "AUTHORIZED DENOMINATIONS" means $25,000 and any integral multiple
thereof.

         "BENEFICIAL OWNER," with respect to each Series of Tortoise Notes,
means a customer of a Broker-Dealer who is listed on the records of that
Broker-Dealer (or, if applicable, the Auction Agent) as a holder of such Series
of Tortoise Notes.


         "BID" shall have the meaning specified in Appendix B--Auction
Procedures.

         "BIDDER" shall have the meaning in Appendix B--Auction Procedures;
provided, however, that neither the Company nor any affiliate thereof shall be
permitted to be a Bidder in an Auction, except that any Broker-Dealer that is an
affiliate of the Company may be a Bidder in an Auction, but only if the Orders
placed by such Broker-Dealer are not for its own account.


         "BOARD OF DIRECTORS" or "BOARD" means the Board of Directors of the
Company or any duly authorized committee thereof as permitted by applicable law.

         "BROKER-DEALER" means any broker-dealer or broker-dealers, or other
entity permitted by law to perform the functions required of a Broker-Dealer by
the Auction Procedures, that has been selected by the Company and has entered
into a Broker-Dealer Agreement that remains effective.

         "BROKER-DEALER AGREEMENT" means an agreement among the Auction Agent
and a Broker-Dealer, pursuant to which such Broker-Dealer agrees to follow the
Auction Procedures.

         "BUSINESS DAY" means a day on which the New York Stock Exchange is open
for trading and which is not a Saturday, Sunday or other day on which banks in
the City of New York, New York are authorized or obligated by law to close.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COMMERCIAL PAPER DEALERS" has the meaning set forth in the definition
of AA Composite Commercial Paper Rate.

         "COMMISSION" means the Securities and Exchange Commission.

         "DEFAULT RATE" means the Reference Rate multiplied by three (3).

         "DEPOSIT SECURITIES" means cash and any obligations or securities,
including short term money market instruments that are Eligible Assets, rated at
least AAA, A-2 or SP-2 by Fitch, except that such

                                      A-2

<PAGE>

obligations or securities shall be considered "Deposit Securities" only if they
are also rated at least P-2 by Moody's.

         "DISCOUNT FACTOR" means the Moody's Discount Factor (if Moody's is then
rating the Tortoise Notes), Fitch Discount Factor (if Fitch is then rating the
Tortoise Notes) or an Other Rating Agency Discount Factor, whichever is
applicable.

         "DISCOUNTED VALUE" means the quotient of the Market Value of an
Eligible Asset divided by the applicable Discount Factor, provided that with
respect to an Eligible Asset that is currently callable, Discounted Value will
be equal to the quotient as calculated above or the call price, whichever is
lower, and that with respect to an Eligible Asset that is prepayable, Discounted
Value will be equal to the quotient as calculated above or the par value,
whichever is lower.

         "ELIGIBLE ASSETS" means Moody's Eligible Assets or Fitch's Eligible
Assets (if Moody's or Fitch are then rating the Tortoise Notes) and/or Other
Rating Agency Eligible Assets, whichever is applicable.

         "EXISTING HOLDER," with respect to Tortoise Notes of a series, shall
mean a Broker-Dealer (or any such other Person as may be permitted by the
Company) that is listed on the records of the Auction Agent as a holder of
Tortoise Notes of such series.

         "FITCH" means Fitch Ratings and its successors at law.

         "FITCH DISCOUNT FACTOR" means the discount factors set forth in the
Fitch Guidelines for use in calculating the Discounted Value of the Company's
assets in connection with Fitch's ratings of Tortoise Notes.

         "FITCH ELIGIBLE ASSET" means assets of the Company set forth in the
Fitch Guidelines as eligible for inclusion in calculating the Discounted Value
of the Company's assets in connection with Fitch's ratings of Tortoise Notes.

         "FITCH GUIDELINES" mean the guidelines provided by Fitch, as may be
amended from time to time, in connection with Fitch's ratings of Tortoise Notes.


         "HOLD ORDER" shall have the meaning specified in Appendix B--Auction
Procedures.


         "HOLDER" means, with respect to Tortoise Notes, the registered holder
of notes of each series of Tortoise Notes as the same appears on the books or
records of the Company.


         "MARKET VALUE" means the market value of an asset of the Company as
determined as follows:

         For equity securities, the value obtained from readily available market
quotations. If an equity security is not traded on an exchange or not available
from a Board-approved pricing service, the value obtained from written
broker-dealer quotations. For fixed-income securities, the value obtained from
readily available market quotations based on the last updated sale price or the
value obtained from a pricing service or the value obtained from a written
broker-dealer quotation from a dealer who has made a market in the security.
Market value for other securities will mean the value obtained pursuant to the
Company's Valuation Procedures. If the market value of a security cannot be
obtained, or the Company's investment adviser determines that the value of a
security as so obtained does not represent the fair value of a security, fair
value for that security shall be determined pursuant to methodologies
established by the Board of Directors.


                                      A-3

<PAGE>

         "MAXIMUM RATE" means, on any date on which the Applicable Rate is
determined, the rate equal to the applicable percentage of the Reference Rate,
subject to upward but not downward adjustment in the discretion of the Board of
Directors after consultation with the Broker-Dealers, provided that immediately
following any such increase the Company would be in compliance with the Tortoise
Notes Basic Maintenance Amount.


         "MINIMUM RATE" means, on any Auction Date with respect to a Rate Period
of 28 days or fewer, 70% of the AA Composite Commercial Paper Rate at the close
of business on the Business Day next preceding such Auction Date. There shall be
no Minimum Rate on any Auction Date with respect to a Rate Period of more than
the Standard Rate Period.

         "MOODY'S" means Moody's Investors Service, Inc., a Delaware
corporation, and its successors at law.

         "MOODY'S DISCOUNT FACTOR" means the discount factors set forth in the
Moody's Guidelines for use in calculating the Discounted Value of the Company's
assets in connection with Moody's ratings of Tortoise Notes.

         "MOODY'S ELIGIBLE ASSETS" means assets of the Company set forth in the
Moody's Guidelines as eligible for inclusion in calculating the Discounted Value
of the Company's assets in connection with Moody's ratings of Tortoise Notes.

         "MOODY'S GUIDELINES" mean the guidelines provided by Moody's, as may be
amended from time to time, in connection with Moody's ratings of Tortoise Notes.


         "1940 ACT TORTOISE NOTES ASSET COVERAGE" means asset coverage, as
determined in accordance with Section 18(h) of the 1940 Act, of at least 300%
with respect to all outstanding senior securities representing indebtedness of
the Company, including all Outstanding Tortoise Notes (or such other asset
coverage as may in the future be specified in or under the 1940 Act as the
minimum asset coverage for senior securities representing indebtedness of a
closed-end investment company as a condition of declaring dividends on its
common stock), determined on the basis of values calculated as of a time within
48 hours next preceding the time of such determination.


         "NOTES" means Securities of the Company ranking on a parity with the
Tortoise Notes that may be issued from time to time pursuant to the Indenture.


         "ORDER" shall have the meaning specified in Appendix B--Auction
Procedures.

         "ORIGINAL ISSUE DATE" means, with respect to Series A and Series B
Tortoise Notes, _________, 2004.


         "OTHER RATING AGENCY" means each rating agency, if any, other than
Moody's or Fitch then providing a rating for the Tortoise Notes pursuant to the
request of the Company.

         "OTHER RATING AGENCY DISCOUNT FACTOR" means the discount factors set
forth in the Other Rating Agency Guidelines of each Other Rating Agency for use
in calculating the Discounted Value of the Company's assets in connection with
the Other Rating Agency's rating of Tortoise Notes.

         "OTHER RATING AGENCY ELIGIBLE ASSETS" means assets of the Company set
forth in the Other Rating Agency Guidelines of each Other Rating Agency as
eligible for inclusion in calculating the Discounted Value of the Company's
assets in connection with the Other Rating Agency's rating of Tortoise Notes.

                                      A-4

<PAGE>

         "OTHER RATING AGENCY GUIDELINES" mean the guidelines provided by each
Other Rating Agency, as may be amended from time to time, in connection with the
Other Rating Agency's rating of Tortoise Notes.

         "OUTSTANDING" or "outstanding" means, as of any date, Tortoise Notes
theretofore issued by the Company except, without duplication, (i) any Tortoise
Notes theretofore canceled, redeemed or repurchased by the Company, or delivered
to the Trustee for cancellation or with respect to which the Company has given
notice of redemption and irrevocably deposited with the Paying Agent sufficient
funds to redeem such Tortoise Notes and (ii) any Tortoise Notes represented by
any certificate in lieu of which a new certificate has been executed and
delivered by the Company. Notwithstanding the foregoing, (A) in connection with
any Auction, any Series of Tortoise Notes as to which the Company or any person
known to the Auction Agent to be an Affiliate of the Company shall be the
Existing Holder thereof shall be disregarded and deemed not to be Outstanding;
and (B) for purposes of determining the Tortoise Notes Basic Maintenance Amount,
Tortoise Notes held by the Company shall be disregarded and not deemed
Outstanding but Tortoise Notes held by any Affiliate of the Company shall be
deemed Outstanding.


         "PAYING AGENT" means BNY Midwest Trust Company, N.A. unless and until
another entity appointed by a resolution of the Board of Directors enters into
an agreement with the Company to serve as paying agent, which paying agent may
be the same as the Trustee or the Auction Agent.


         "PERSON" or "person" means and includes an individual, a partnership, a
trust, a company, an unincorporated association, a joint venture or other entity
or a government or any agency or political subdivision thereof.

         "POTENTIAL BENEFICIAL OWNER," with respect to a series of Tortoise
Notes, shall mean a customer of a Broker-Dealer that is not a Beneficial Owner
of Tortoise Notes of such series but that wishes to purchase Tortoise Notes of
such series, or that is a Beneficial Owner of Tortoise Notes of such series that
wishes to purchase additional Tortoise Notes of such series.


         "POTENTIAL HOLDER," with respect to Tortoise Notes of such series,
shall mean a Broker-Dealer (or any such other person as may be permitted by the
Company) that is not an Existing Holder of Tortoise Notes of such series or that
is an Existing Holder of Tortoise Notes of such series that wishes to become the
Existing Holder of additional Tortoise Notes of such series.


         "RATE PERIOD" means, with respect to a Series of Tortoise Notes, the
period commencing on the Original Issue Date thereof and ending on the date
specified for such series on the Original Issue Date thereof and thereafter, as
to such series, the period commencing on the day following each Rate Period for
such series and ending on the day established for such series by the Company.

         "RATING AGENCY" means each of Fitch (if Fitch is then rating Tortoise
Notes), Moody's (if Moody's is then rating Tortoise Notes) and any Other Rating
Agency.

         "RATING AGENCY GUIDELINES" mean Fitch Guidelines (if Fitch is then
rating Tortoise Notes), Moody's Guidelines (if Moody's is then rating Tortoise
Notes) and any Other Rating Agency Guidelines.


         "REFERENCE RATE" means, with respect to the determination of the
Maximum Rate and Default Rate, the greater of (1) applicable AA Composite
Commercial Paper Rate (for a Rate Period of fewer than 184 days) or the
applicable Treasury Index Rate (for a Rate Period of 184 days or more), or (2)
the applicable LIBOR Rate.


         "SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.

                                      A-5

<PAGE>

         "SECURITIES DEPOSITORY" means The Depository Trust Company and its
successors and assigns or any successor securities depository selected by the
Company that agrees to follow the procedures required to be followed by such
securities depository in connection with the Tortoise Notes Series A and Series
B.


         "SELL ORDER" shall have the meaning specified in Appendix B--Auction
Procedures.


         "SPECIAL RATE PERIOD" means a Rate Period that is not a Standard Rate
Period.

         "SPECIFIC REDEMPTION PROVISIONS" means, with respect to any Special
Rate Period of more than one year, either, or any combination of a period (a
"Non-Call Period") determined by the Board of Directors after consultation with
the Broker-Dealers, during which the Tortoise Notes subject to such Special Rate
Period are not subject to redemption at the option of the Company consisting of
a number of whole years as determined by the Board of Directors after
consultation with the Broker-Dealers, during each year of which the Tortoise
Notes subject to such Special Rate Period shall be redeemable at the Company's
option and/or in connection with any mandatory redemption at a price equal to
the principal amount plus accumulated but unpaid interest plus a premium
expressed as a percentage or percentages of $25,000 or expressed as a formula
using specified variables as determined by the Board of Directors after
consultation with the Broker-Dealers.

         "STANDARD RATE PERIOD" means a Rate Period of 28 days.


         "STATED MATURITY" with respect to Tortoise Notes Series A and Series
B, shall mean ___________, 2044 and __________, 2044, respectively.


         "SUBMISSION DEADLINE" means 1:00 p.m., Eastern Standard time, on any
Auction Date or such other time on any Auction Date by which Broker-Dealers are
required to submit Orders to the Auction Agent as specified by the Auction Agent
from time to time.


         "SUBMITTED BID" shall have the meaning specified in Appendix B--Auction
Procedures.

         "SUBMITTED HOLD ORDER" shall have the meaning specified in Appendix
B--Auction Procedures.

         "SUBMITTED ORDER" shall have the meaning specified in Appendix
B--Auction Procedures.

         "SUBMITTED SELL ORDER" shall have the meaning specified in Appendix
B--Auction Procedures.

         "SUFFICIENT CLEARING BIDS" shall have the meaning specified in Appendix
B--Auction Procedures.


         "TORTOISE NOTES BASIC MAINTENANCE AMOUNT" as of any Valuation Date has
the meaning set forth in the Rating Agency Guidelines.


         "TORTOISE NOTES SERIES A AND SERIES B" means the Series A and Series
B of the Tortoise Notes or any other Notes hereinafter designated as Series A
and Series B of the Tortoise Notes.


         "TREASURY INDEX RATE" means the average yield to maturity for actively
traded marketable U.S. Treasury fixed interest rate securities having the same
number of 30-day periods to maturity as the length of the applicable Rate
Period, determined, to the extent necessary, by linear interpolation based upon
the yield for such securities having the next shorter and next longer number of
30-day periods to maturity treating all Rate Periods with a length greater than
the longest maturity for such securities as having a length equal to such
longest maturity, in all cases based upon data set forth in the most recent
weekly statistical release published by the Board of Governors of the Federal
Reserve System (currently in H.15(519)); provided, however, if the most recent
such statistical release shall not have been published

                                      A-6

<PAGE>

during the 15 days preceding the date of computation, the foregoing computations
shall be based upon the average of comparable data as quoted to the Company by
at least three recognized dealers in U.S. Government securities selected by the
Company.


         "TRUSTEE" means BNY Midwest Trust Company, N.A. or such other person
who is named as a trustee pursuant to the terms of the Indenture.

         "VALUATION DATE" means every ____________, or, if such day is not a
Business Day, the next preceding Business Day; provided, however, that the first
Valuation Date may occur on any other date established by the Company; provided,
further, however, that such first Valuation Date shall be not more than one week
from the date on which Tortoise Notes Series A and Series B initially are
issued.



               NOTE DETAILS, FORM OF NOTES AND REDEMPTION OF NOTES

INTEREST

         (a) The Holders of any Series of Tortoise Notes shall be entitled to
receive interest payments on their Tortoise Notes at the Applicable Rate,
determined as set forth in paragraph (c) below, and no more, payable on the
respective dates determined as set forth in paragraph (b) below. Interest on the
Outstanding Tortoise Notes of any series issued on the Original Issue Date shall
accumulate from the Original Issue Date.

         (b)(i) Interest shall be payable, subject to subparagraph (b)(ii)
below, on each series of Tortoise Notes, with respect to any Rate Period on the
first Business Day following the last day of such Rate Period; provided,
however, if the Rate Period is greater than 30 days then on a monthly basis on
the first Business Day of each month within such Rate Period and on the Business
Day following the last day of such Rate Period.


                  (ii) If a day for payment of interest resulting from the
         application of subparagraph (b)(i) above is not a Business Day, (A)
         then the Interest Payment Date shall be the first Business Day
         following such day for payment of interest in the case of a Series of
         Tortoise Notes designated as "Series A" or "Series B" or (B) then
         the Interest Payment Date shall be the first Business Day that falls
         prior to such day for payment of interest in the case of a Series of
         Tortoise Notes designated as "Series A" or "Series B".

                  (iii) The Company shall pay to the Paying Agent not later than
         3:00 p.m., New York City time, on the Business Day next preceding each
         Interest Payment Date for each Series of Tortoise Notes, an aggregate
         amount of funds available on the next Business Day in the City of New
         York, New York, equal to the interest to be paid to all Holders of such
         Tortoise Notes on such Interest Payment Date. The Company shall not be
         required to establish any reserves for the payment of interest.


                  (iv) All moneys paid to the Paying Agent for the payment of
         interest shall be held in trust for the payment of such interest by the
         Paying Agent for the benefit of the Holders specified in subparagraph
         (b)(v) below. Any moneys paid to the Paying Agent in accordance with
         the foregoing but not applied by the Paying Agent to the payment of
         interest, including interest earned on such moneys, will, to the extent
         permitted by law, be repaid to the Company at the end of 90 days from
         the date on which such moneys were to have been so applied.

                  (v) Each interest payment on a Series of Tortoise Notes shall
         be paid on the Interest Payment Date therefor to the Holders of that
         series as their names appear on the security ledger or

                                      A-7

<PAGE>

         security records of the Company on the Business Day next preceding such
         Interest Payment Date. Interest in arrears for any past Rate Period may
         be declared and paid at any time, without reference to any regular
         Interest Payment Date, to the Holders as their names appear on the
         books or records of the Company on such date, not exceeding 15 days
         preceding the payment date thereof, as may be fixed by the Board of
         Directors. No interest will be payable in respect of any Interest
         Payment or payments which may be in arrears.


         (c)(i) The interest rate on Outstanding Tortoise Notes of each series
during the period from and after the Original Issue Date to and including the
last day of the initial Rate Period therefor shall be equal to the rate per
annum set forth under (a) above. For each subsequent Rate Period with respect to
the Tortoise Notes Outstanding thereafter, the interest rate shall be equal to
the rate per annum that results from an Auction; provided, however, that if an
Auction for any subsequent Rate Period of a Series of Tortoise Notes is not held
for any reason or if Sufficient Clearing Bids have not been made in an Auction
(other than as a result of all Series of Tortoise Notes being the subject of
Submitted Hold Orders), then the interest rate on a Series of Tortoise Notes for
any such Rate Period shall be the Maximum Rate (except during a Default Period
when the interest rate shall be the Default Rate, as set forth in (c)(ii)
below). The All Hold Rate will apply automatically following an Auction in which
all of the Outstanding Series of Tortoise Notes are subject (or are deemed to be
subject) to Hold Orders. The rate per annum at which interest is payable on a
Series of Tortoise Notes as determined pursuant to this paragraph (c)(i) shall
be the "Applicable Rate." For Standard Rate Periods or less only, the Applicable
Rate resulting from an Auction will not be less than the Minimum Rate.


                  (ii) Subject to the cure provisions below, a "Default Period"
         with respect to a particular Series will commence on any date the
         Company fails to deposit irrevocably in trust in same-day funds, with
         the Paying Agent by 12:00 noon, New York City time, (A) the full amount
         of any declared interest on that Series payable on the Interest Payment
         Date (an "Interest Default") or (B) the full amount of any redemption
         price (the "Redemption Price") payable on the date fixed for redemption
         (the "Redemption Date") (a "Redemption Default") and together with an
         Interest Default, hereinafter referred to as "Default"). Subject to the
         cure provisions of (c)(iii) below, a Default Period with respect to an
         Interest Default or a Redemption Default shall end on the Business Day
         on which, by 12:00 noon, New York City time, all unpaid interest and
         any unpaid Redemption Price shall have been deposited irrevocably in
         trust in same-day funds with the Paying Agent. In the case of an
         Interest Default, the Applicable Rate for each Rate Period commencing
         during a Default Period will be equal to the Default Rate, and each
         subsequent Rate Period commencing after the beginning of a Default
         Period shall be a Standard Rate Period; provided, however, that the
         commencement of a Default Period will not by itself cause the
         commencement of a new Rate Period. No Auction shall be held during a
         Default Period with respect to an Interest Default applicable to that
         series of Tortoise Notes.

                  (iii) No Default Period with respect to an Interest Default or
         Redemption Default shall be deemed to commence if the amount of any
         interest or any Redemption Price due (if such default is not solely due
         to the willful failure of the Company) is deposited irrevocably in
         trust, in same-day funds with the Paying Agent by 12:00 noon, New York
         City time within three Business Days after the applicable Interest
         Payment Date or Redemption Date, together with an amount equal to the
         Default Rate applied to the amount of such non-payment based on the
         actual number of days comprising such period divided by 360 for each
         Series. The Default Rate shall be equal to the Reference Rate
         multiplied by three (3).


                  (iv) The amount of interest payable on each Interest Payment
         Date of each Rate Period of less than one (1) year (or in respect of
         interest on another date in connection with a redemption during such
         Rate Period) shall be computed by multiplying the Applicable Rate (or


                                      A-8

<PAGE>

         the Default Rate) for such Rate Period (or a portion thereof) by a
         fraction, the numerator of which will be the number of days in such
         Rate Period (or portion thereof) that such Tortoise Notes were
         outstanding and for which the Applicable Rate or the Default Rate was
         applicable and the denominator of which will be 360, multiplying the
         amount so obtained by $25,000, and rounding the amount so obtained to
         the nearest cent. During any Rate Period of one (1) year or more, the
         amount of interest per Tortoise Note payable on any Interest Payment
         Date (or in respect of interest on another date in connection with a
         redemption during such Rate Period) shall be computed as described in
         the preceding sentence.


         (d) Any Interest Payment made on any Series of Tortoise Notes shall
first be credited against the earliest accrued but unpaid interest due with
respect to such Series.

REDEMPTION


         (a)(i) After the initial Rate Period, subject to the provisions of the
Indenture and to the extent permitted under the 1940 Act, the Company may, at
its option, redeem in whole or in part out of funds legally available therefor a
series of Tortoise Notes designated in the Indenture as (A) having a Rate Period
of one year or less, on the Business Day after the last day of such Rate Period
by delivering a notice of redemption not less than 15 days and not more than 40
days prior to the date fixed for such redemption, at a redemption price equal to
the aggregate principal amount, plus an amount equal to accrued but unpaid
interest thereon (whether or not earned) to the date fixed for redemption
("Redemption Price"), or (B) having a Rate Period of more than one year, on any
Business Day prior to the end of the relevant Rate Period by delivering a notice
of redemption not less than 15 days and not more than 40 days prior to the date
fixed for such redemption, at the Redemption Price, plus a redemption premium,
if any, determined by the Board of Directors after consultation with the
Broker-Dealers and set forth in any applicable Specific Redemption Provisions at
the time of the designation of such Rate Period as set forth in the Indenture;
provided, however, that during a Rate Period of more than one year no series of
Tortoise Notes will be subject to optional redemption except in accordance with
any Specific Redemption Provisions approved by the Board of Directors after
consultation with the Broker-Dealers at the time of the designation of such Rate
Period. Notwithstanding the foregoing, the Company shall not give a notice of or
effect any redemption pursuant to this paragraph (a)(i) unless, on the date on
which the Company intends to give such notice and on the date of redemption (a)
the Company has available certain Deposit Securities with maturity or tender
dates not later than the day preceding the applicable redemption date and having
a value not less than the amount (including any applicable premium) due to
Holders of a series of Tortoise Notes by reason of the redemption of such
Tortoise Notes on such date fixed for the redemption and (b) the Company would
have Eligible Assets with an aggregate Discounted Value at least equal the
Tortoise Notes Basic Maintenance Amount immediately subsequent to such
redemption, if such redemption were to occur on such date, it being understood
that the provisions of paragraph (d) below shall be applicable in such
circumstances in the event the Company makes the deposit and takes the other
action required thereby.


                  (ii) If the Company fails to maintain, as of any Valuation
         Date, Eligible Assets with an aggregate Discounted Value at least equal
         to the Tortoise Notes Basic Maintenance Amount or, as of the last
         Business Day of any month, the 1940 Act Tortoise Notes Asset Coverage,
         and such failure is not cured within ten Business Days following such
         Valuation Date in the case of a failure to maintain the Tortoise Notes
         Basic Maintenance Amount or on the last Business Day of the following
         month in the case of a failure to maintain the 1940 Act Tortoise Notes
         Asset Coverage as of such last Business Day (each an "Asset Coverage
         Cure Date"), the Tortoise Notes will be subject to mandatory redemption
         out of funds legally available therefor. The principal amount of
         Tortoise Notes to be redeemed in such circumstances will be equal to
         the lesser of (A) the minimum principal amount of Tortoise Notes the
         redemption of which, if deemed to have


                                      A-9

<PAGE>

         occurred immediately prior to the opening of business on the relevant
         Asset Coverage Cure Date, would result in the Company having Eligible
         Assets with an aggregate Discounted Value at least equal to the
         Tortoise Notes Basic Maintenance Amount, or sufficient to satisfy 1940
         Act Tortoise Notes Asset Coverage, as the case may be, in either case
         as of the relevant Asset Coverage Cure Date (provided that, if there is
         no such minimum principal amount of Tortoise Notes the redemption of
         which would have such result, all Tortoise Notes then Outstanding will
         be redeemed), and (B) the maximum principal amount of Tortoise Notes
         that can be redeemed out of funds expected to be available therefor on
         the Mandatory Redemption Date at the Mandatory Redemption Price set
         forth in subparagraph (a)(iii) below.

                  (iii) In determining the Tortoise Notes required to be
         redeemed in accordance with the foregoing subparagraph (a)(ii), the
         Company shall allocate the principal amount of Tortoise Notes required
         to be redeemed to satisfy the Tortoise Notes Basic Maintenance Amount
         or the 1940 Act Tortoise Notes Asset Coverage, as the case may be, pro
         rata among the Holders of Tortoise Notes in proportion to the principal
         amount of Tortoise Notes they hold, by lot or such other method as the
         Company shall deem equitable, subject to the further provisions of this
         subparagraph (iii). The Company shall effect any required mandatory
         redemption pursuant to subparagraph (a)(ii) above no later than 40 days
         after the Asset Coverage Cure Date (the "Mandatory Redemption Date"),
         except that if the Company does not have funds legally available for
         the redemption of, or is not otherwise legally permitted to redeem, the
         principal amount of Tortoise Notes which would be required to be
         redeemed by the Company under clause (A) of subparagraph (a)(ii) above
         if sufficient funds were available, or the Company otherwise is unable
         to effect such redemption on or prior to such Mandatory Redemption
         Date, the Company shall redeem those Tortoise Notes, and other Notes,
         on the earliest practicable date on which the Company will have such
         funds available, upon notice pursuant to paragraph (b) below to record
         owners of the Tortoise Notes to be redeemed and the Paying Agent. The
         Company will deposit with the Paying Agent funds sufficient to redeem
         the specified principal amount of Tortoise Notes with respect to a
         redemption required under subparagraph (a)(ii) above, by 1:00 p.m., New
         York City time, of the Business Day immediately preceding the Mandatory
         Redemption Date. If fewer than all of the Outstanding Tortoise Notes
         are to be redeemed pursuant to this subparagraph (iii), the principal
         amount of Tortoise Notes to be redeemed shall be redeemed pro rata from
         the Holders of such Tortoise Notes in proportion to the principal
         amount of such Tortoise Note held by such Holders, by lot or by such
         other method as the Company shall deem fair and equitable, subject,
         however, to the terms of any applicable Specific Redemption Provisions.
         "Mandatory Redemption Price" means the Redemption Price plus (in the
         case of a Rate Period of one year or more only) a redemption premium,
         if any, determined by the Board of Directors after consultation with
         the Broker-Dealers and set forth in any applicable Specific Redemption
         Provisions.


         (b) In the event of a redemption pursuant to paragraph (a) above, the
Company will file a notice of its intention to redeem with the Commission so as
to provide at least the minimum notice required under Rule 23c-2 under the 1940
Act or any successor provision. In addition, the Company shall deliver a notice
of redemption to the Auction Agent and the Trustee (the "Notice of Redemption")
containing the information set forth below (i) in the case of an optional
redemption pursuant to subparagraph (a)(i) above, one Business Day prior to the
giving of notice to the Holders and (ii) in the case of a mandatory redemption
pursuant to subparagraph (a)(ii) above, on or prior to the 30th day preceding
the Mandatory Redemption Date. The Trustee will use its reasonable efforts to
provide notice to each Holder of Tortoise Notes called for redemption by
electronic or other reasonable means not later than the close of business on the
Business Day immediately following the day on which the Trustee
determines the Tortoise Notes to be redeemed (or, during a Default Period with
respect to such Tortoise Notes, not later than the close of business on the
Business Day immediately following the day on which the Trustee receives Notice
of Redemption from the Company). The Trustee shall confirm such notice in

                                      A-10

<PAGE>

writing not later than the close of business on the third Business Day preceding
the date fixed for redemption by providing the Notice of Redemption to each
Holder of Tortoise Notes called for redemption, the Paying Agent (if different
from the Trustee) and the Securities Depository. Notice of Redemption will be
addressed to the registered owners of each Series of Tortoise Notes at their
addresses appearing on the books or records of the Company. Such Notice of
Redemption will set forth (i) the date fixed for redemption, (ii) the principal
amount and identity of Tortoise Notes to be redeemed, (iii) the redemption price
(specifying the amount of accrued interest to be included therein), (iv) that
interest on the Tortoise Notes to be redeemed will cease to accrue on such date
fixed for redemption, and (v) the 1940 Act provision under which redemption
shall be made. No defect in the Notice of Redemption or in the transmittal or
mailing thereof will affect the validity of the redemption proceedings, except
as required by applicable law. If fewer than all Tortoise Notes held by any
Holder are to be redeemed, the Notice of Redemption mailed to such Holder shall
also specify the principal amount of Tortoise Notes to be redeemed from such
Holder.


         (c) Notwithstanding the provisions of paragraph (a) above, no Tortoise
Notes may be redeemed unless all interest on the Outstanding Tortoise Notes and
all Notes of the Company ranking on a parity with the Tortoise Notes, have been
or are being contemporaneously paid or set aside for payment; provided, however,
that the foregoing shall not prevent the purchase or acquisition of all
Outstanding Tortoise Notes pursuant to the successful completion of an otherwise
lawful purchase or exchange offer made on the same terms to, and accepted by,
Holders of all Outstanding Tortoise Notes.


         (d) Upon the deposit of funds sufficient to redeem any Tortoise Notes
with the Paying Agent and the giving of the Notice of Redemption to the Trustee
under paragraph (b) above, interest on such Tortoise Notes shall cease to accrue
and such Tortoise Notes shall no longer be deemed to be Outstanding for any
purpose (including, without limitation, for purposes of calculating whether the
Company has maintained the requisite Tortoise Notes Basic Maintenance Amount or
the 1940 Act Tortoise Notes Asset Coverage), and all rights of the Holder of the
Tortoise Notes so called for redemption shall cease and terminate, except the
right of such Holder to receive the redemption price specified in the Indenture,
but without any interest or other additional amount. Such redemption price shall
be paid by the Paying Agent to the nominee of the Securities Depository. The
Company shall be entitled to receive from the Paying Agent, promptly after the
date fixed for redemption, any cash deposited with the Paying Agent in excess of
(i) the aggregate redemption price of the Tortoise Notes called for redemption
on such date and (ii) such other amounts, if any, to which Holders of the
Tortoise Notes called for redemption may be entitled. Any funds so deposited
that are unclaimed at the end of two years from such redemption date shall, to
the extent permitted by law, be paid to the Company, after which time the
Holders of Tortoise Notes so called for redemption may look only to the Company
for payment of the redemption price and all other amounts, if any, to which they
may be entitled. The Company shall be entitled to receive, from time to time
after the date fixed for redemption, any interest earned on the funds so
deposited.


         (e) To the extent that any redemption for which Notice of Redemption
has been given is not made by reason of the absence of legally available funds
therefor, or is otherwise prohibited, such redemption shall be made as soon as
practicable to the extent such funds become legally available or such redemption
is no longer otherwise prohibited. Failure to redeem any Series of Tortoise
Notes shall be deemed to exist at any time after the date specified for
redemption in a Notice of Redemption when the Company shall have failed, for any
reason whatsoever, to deposit in trust with the Paying Agent the redemption
price with respect to any Tortoise Notes for which such Notice of Redemption has
been given. Notwithstanding the fact that the Company may not have redeemed any
Tortoise Notes for which a Notice of Redemption has been given, interest may be
paid on a Series of Tortoise Notes and shall include those Tortoise Notes for
which Notice of Redemption has been given but for which deposit of funds has not
been made.

                                      A-11

<PAGE>



         (f) All moneys paid to the Paying Agent for payment of the redemption
price of any Tortoise Notes called for redemption shall be held in trust by the
Paying Agent for the benefit of Holders of Tortoise Notes to be redeemed.


         (g) So long as any Tortoise Notes are held of record by the nominee of
the Securities Depository, the redemption price for such Tortoise Notes will be
paid on the date fixed for redemption to the nominee of the Securities
Depository for distribution to Agent Members for distribution to the persons for
whom they are acting as agent.

         (h) Except for the provisions described above, nothing contained in the
Indenture limits any right of the Company to purchase or otherwise acquire any
Tortoise Notes outside of an Auction at any price, whether higher or lower than
the price that would be paid in connection with an optional or mandatory
redemption, so long as, at the time of any such purchase, there is no arrearage
in the payment of interest on, or the mandatory or optional redemption price
with respect to, any series of Tortoise Notes for which Notice of Redemption has
been given and the Company is in compliance with the 1940 Act Tortoise Notes
Asset Coverage and has Eligible Assets with an aggregate Discounted Value at
least equal to the Tortoise Notes Basic Maintenance Amount after giving effect
to such purchase or acquisition on the date thereof. If less than all the
Outstanding Tortoise Notes of any series are redeemed or otherwise acquired by
the Company, the Company shall give notice of such transaction to the Trustee,
in accordance with the procedures agreed upon by the Board of Directors.


         (i) The Board of Directors may, without further consent of the holders
of the Tortoise Notes or the holders of shares of capital stock of the Company,
authorize, create or issue any class or series of Notes, including other series
of Tortoise Notes, ranking prior to or on a parity with the Tortoise Notes to
the extent permitted by the 1940 Act, if, upon issuance, either (A) the net
proceeds from the sale of such Notes (or such portion thereof needed to redeem
or repurchase the Outstanding Tortoise Notes) are deposited with the Trustee in
accordance with paragraph (d) above, Notice of Redemption as contemplated by
paragraph (b) above has been delivered prior thereto or is sent promptly
thereafter, and such proceeds are used to redeem all Outstanding Tortoise Notes
or (B) the Company would meet the 1940 Act Tortoise Notes Asset Coverage, the
Tortoise Notes Basic Maintenance Amount and the requirements set forth below in
"Certain Other Restrictions."


DESIGNATION OF RATE PERIOD


         The initial Rate Period for each series of Tortoise Notes shall be
_____ and ____ days for Tortoise Notes Series A and Series B, respectively. The
Company will designate the duration of subsequent Rate Periods of each series of
Tortoise Notes; provided, however, that no such designation is necessary for a
Standard Rate Period and, provided further, that any designation of a Special
Rate Period shall be effective only if (i) notice thereof shall have been given
as provided in the Indenture, (ii) any failure to pay in a timely manner to the
Trustee the full amount of any interest on, or the redemption price of, Tortoise
Notes shall have been cured as provided above, (iii) Sufficient Clearing Bids
shall have existed in an Auction held on the Auction Date immediately preceding
the first day of such proposed Special Rate Period, (iv) if the Company shall
have mailed a Notice of Redemption with respect to any Tortoise Notes, the
redemption price with respect to such Tortoise Notes shall have been deposited
with the Paying Agent, and (v) in the case of the designation of a Special Rate
Period, the Company has confirmed that as of the Auction Date next preceding the
first day of such Special Rate Period, it has Eligible Assets with an aggregate
Discounted Value at least equal to the Tortoise Notes Basic Maintenance Amount,
and the Company has consulted with the Broker-Dealers and has provided notice of
such designation and otherwise complied with the Rating Agency Guidelines.

         If the Company proposes to designate any Special Rate Period, not fewer
than 7 (or two Business Days in the event the duration of the Rate Period prior
to such Special Rate Period is fewer than 8 days)

                                      A-12

<PAGE>

nor more than 30 Business Days prior to the first day of such Special Rate
Period, notice shall be (i) made by press release and (ii) communicated by the
Company by telephonic or other means to the Trustee and confirmed in writing
promptly thereafter. Each such notice shall state (A) that the Company proposes
to exercise its option to designate a succeeding Special Rate Period, specifying
the first and last days thereof and (B) that the Company will by 3:00 p.m., New
York City time, on the second Business Day next preceding the first day of such
Special Rate Period, notify the Auction Agent and Trustee, who will promptly
notify the Broker-Dealers, of either (x) its determination, subject to certain
conditions, to proceed with such Special Rate Period, subject to the terms of
any Specific Redemption Provisions, or (y) its determination not to proceed with
such Special Rate Period, in which latter event the succeeding Rate Period shall
be a Standard Rate Period.

         No later than 3:00 p.m., New York City time, on the second Business Day
next preceding the first day of any proposed Special Rate Period, the Company
shall deliver to the Auction Agent and Trustee, who will promptly deliver to the
Broker-Dealers and Existing Holders, either:

                  (i) a notice stating (A) that the Company has determined to
         designate the next succeeding Rate Period as a Special Rate Period,
         specifying the first and last days thereof and (B) the terms of any
         Specific Redemption Provisions; or

                  (ii) a notice stating that the Company has determined not to
         exercise its option to designate a Special Rate Period.

If the Company fails to deliver either such notice with respect to any
designation of any proposed Special Rate Period to the Auction Agent or is
unable to make the confirmation described above by 3:00 p.m., New York City
time, on the second Business Day next preceding the first day of such proposed
Special Rate Period, the Company shall be deemed to have delivered a notice to
the Auction Agent with respect to such Rate Period to the effect set forth in
clause (ii) above, thereby resulting in a Standard Rate Period.

RESTRICTIONS ON TRANSFER

         Tortoise Notes may be transferred only (a) pursuant to an order placed
in an Auction, (b) to or through a Broker-Dealer or (c) to the Company or any
Affiliate. Notwithstanding the foregoing, a transfer other than pursuant to an
Auction will not be effective unless the selling Existing Holder or the Agent
Member of such Existing Holder, in the case of an Existing Holder whose Tortoise
Notes are listed in its own name on the books of the Auction Agent, or the
Broker-Dealer or Agent Member of such Broker-Dealer, in the case of a transfer
between persons holding Tortoise Notes through different Broker-Dealers, advises
the Auction Agent of such transfer. The certificates representing the Tortoise
Notes issued to the Securities Depository will bear legends with respect to the
restrictions described above and stop-transfer instructions will be issued to
the Transfer Agent and/or Registrar.

1940 ACT TORTOISE NOTES ASSET COVERAGE

         The Company shall maintain, as of the last Business Day of each month
in which any Tortoise Notes are Outstanding, asset coverage with respect to the
Tortoise Notes which is equal to or greater than the 1940 Act Tortoise Notes
Asset Coverage; provided, however, that subparagraph (a)(ii) of "Redemption"
above shall be the sole remedy in the event the Company fails to do so.

TORTOISE NOTES BASIC MAINTENANCE AMOUNT

         So long as the Tortoise Notes are Outstanding and any Rating Agency is
then rating the Tortoise Notes, the Company shall maintain, as of each Valuation
Date, Eligible Assets having an aggregate Discounted Value equal to or greater
than the Tortoise Notes Basic Maintenance Amount; provided,

                                      A-13

<PAGE>

however, that subparagraph (a)(ii) of "Redemption" above shall be the sole
remedy in the event the Company fails to do so.

CERTAIN OTHER RESTRICTIONS

         For so long as any Tortoise Notes are Outstanding and any Rating Agency
is then rating the Tortoise Notes, the Company will not engage in certain
proscribed transactions set forth in the Rating Agency Guidelines, unless it has
received written confirmation from each such Rating Agency that proscribes the
applicable transaction in its Rating Agency Guidelines that any such action
would not impair the rating then assigned by such Rating Agency to a Series of
Tortoise Notes.


         For so long as any Tortoise Notes are Outstanding, the Company will not
declare, pay or set apart for payment any dividend or other distribution (other
than a dividend or distribution paid in shares of, or options, warrants or
rights to subscribe for or purchase, common shares or other shares of capital
stock of the Company) upon any class of shares of capital stock of the Company,
unless, in every such case, immediately after such transaction, the 1940 Act
Tortoise Notes Asset Coverage would be achieved after deducting the amount of
such dividend, distribution, or purchase price, as the case may be; provided,
however, that dividends may be declared upon any preferred shares of capital
stock of the Company if the Tortoise Notes and any other senior securities
representing indebtedness of the Company have an asset coverage of at least 200%
at the time of declaration thereof, after deducting the amount of such dividend.


COMPLIANCE PROCEDURES FOR ASSET MAINTENANCE TESTS

         For so long as any Tortoise Notes are Outstanding and any Rating Agency
is then rating such Tortoise Notes:

         (a) As of each Valuation Date, the Company shall determine in
accordance with the procedures specified in the Indenture (i) the Market Value
of each Eligible Asset owned by the Company on that date, (ii) the Discounted
Value of each such Eligible Asset using the Discount Factors, (iii) whether the
Tortoise Notes Basic Maintenance Amount is met as of that date, (iv) the value
of the total assets of the Company, less all liabilities, and (v) whether the
1940 Act Tortoise Notes Asset Coverage is met as of that date.

         (b) Upon any failure to maintain the required Tortoise Notes Basic
Maintenance Amount or 1940 Act Tortoise Notes Asset Coverage on any Valuation
Date, the Company may use reasonable commercial efforts (including, without
limitation, altering the composition of its portfolio, purchasing Tortoise Notes
outside of an Auction or in the event of a failure to file a Rating Agency
Certificate (as defined below) on a timely basis, submitting the requisite
Rating Agency Certificate) to re-attain (or certify in the case of a failure to
file on a timely basis, as the case may be) the required Tortoise Notes Basic
Maintenance Amount or 1940 Act Tortoise Notes Asset Coverage on or prior to the
Asset Coverage Cure Date.

         (c) Compliance with the Tortoise Notes Basic Maintenance Amount and
1940 Act Tortoise Notes Asset Coverage tests shall be determined with reference
to those Tortoise Notes which are deemed to be Outstanding.

         (d) The Company shall deliver to each Rating Agency which is then
rating Tortoise Notes and any other party specified in the Rating Agency
Guidelines all certificates that are set forth in the respective Rating Agency
Guidelines regarding 1940 Act Tortoise Notes Asset Coverage, Tortoise Notes
Basic Maintenance Amount and/or related calculations at such times and
containing such information as set forth in the respective Rating Agency
Guidelines (each, a "Rating Agency Certificate").

                                      A-14

<PAGE>

         (e) In the event that any Rating Agency Certificate is not delivered
within the time periods set forth in the Rating Agency Guidelines, the Company
shall be deemed to have failed to maintain the Tortoise Notes Basic Maintenance
Amount or the 1940 Act Tortoise Notes Asset Coverage, as the case may be, on
such Valuation Date for purposes of paragraph (b) above. In the event that any
Rating Agency Certificate with respect to an applicable Asset Coverage Cure Date
is not delivered within the time periods set forth in the Rating Agency
Guidelines, the Company shall be deemed to have failed to have Eligible Assets
with an aggregate Discounted Value at least equal to the Tortoise Notes Basic
Maintenance Amount or to meet the 1940 Tortoise Notes Asset Coverage, as the
case may be, as of the related Valuation Date, and such failure shall be deemed
not to have been cured as of such Asset Coverage Cure Date for purposes of the
mandatory redemption provisions.

DELIVERY OF NOTES


         Upon the execution and delivery of the Indenture, the Company shall
execute and deliver to the Trustee, and the Trustee shall authenticate, the
Tortoise Notes and deliver them to The Depository Trust Company as provided in
the Indenture.


         Prior to the delivery by the Trustee of any of the Tortoise Notes,
there shall have been filed with or delivered to the Trustee the following:

         (a) A resolution duly adopted by the Company, certified by the
Secretary or other Authorized Officer thereof, authorizing the execution and
delivery of the Supplemental Indenture and the issuance of the Tortoise Notes;

         (b) Duly executed copies of the Supplemental Indenture and a copy of
the Indenture;

         (c) Rating letters from each Rating Agency rating the Tortoise Notes;
and


         (d) An opinion of counsel pursuant to the requirements of the
Indenture.


TRUSTEE'S AUTHENTICATION CERTIFICATE


         The Trustee's authentication certificate upon the Tortoise Notes shall
be substantially in the form provided. No Tortoise Note shall be secured hereby
or entitled to the benefit hereof, or shall be valid or obligatory for any
purpose, unless a certificate of authentication, substantially in such form, has
been duly executed by the Trustee; and such certificate of the Trustee upon any
Tortoise Note shall be conclusive evidence and the only competent evidence that
such Bond has been authenticated and delivered. The Trustee's certificate of
authentication shall be deemed to have been duly executed by it if manually
signed by an authorized officer of the Trustee, but it shall not be necessary
that the same person sign the certificate of authentication on all of the
Tortoise Notes issued.


                           EVENTS OF DEFAULT; REMEDIES

EVENTS OF DEFAULT

         An "Event of Default" means any one of the following events set forth
below (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body:


         (a) default in the payment of any interest upon any series of Tortoise
Notes when it becomes due and payable and the continuance of such default for
thirty (30) days; or

                                      A-15

<PAGE>


         (b) default in the payment of the principal of, or any premium on, any
series of Tortoise Notes at its Stated Maturity; or

         (c) default in the performance, or breach, of any covenant or warranty
of the Company in the Indenture, and continuance of such default or breach for a
period of ninety (90) days after there has been given, by registered or
certified mail, to the Company by the Trustee a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default;" or


         (d) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days; or

         (e) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State law, or
the consent by it to the filing of such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial part
of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the Company
in furtherance of any such action;


         (f) if, pursuant to Section 18(a)(1)(c)(ii) of the 1940 Act on the last
business day of each of twenty-four (24) consecutive calendar months, the 1940
Act Tortoise Notes Asset Coverage is less than 100%; or

         (g) any other Event of Default provided with respect to any series of
Tortoise Notes, including a default in the payment of any Redemption Price
payable on the date fixed for redemption.

ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT

         If an Event of Default with respect to Tortoise Notes of any series at
the time Outstanding occurs and is continuing, then in every such case the
Trustee or the holders of not less than a majority in principal amount of the
Outstanding Tortoise Notes of that series may declare the principal amount of
all the Tortoise Notes of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by holders), and
upon any such declaration such principal amount (or specified amount) shall
become immediately due and payable. If an Event of Default specified in
paragraphs (d) and (e) above with respect to Tortoise Notes of any series at the
time Outstanding occurs, the principal amount of all the Tortoise Notes of that
series shall automatically, and without any declaration or other action on the
part of the Trustee or any holder, become immediately due and payable.

         At any time after such a declaration of acceleration with respect to
Tortoise Notes of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the

                                      A-16

<PAGE>

Trustee, the holders of a majority in principal amount of the Outstanding
Tortoise Notes of that series, by written notice to the Company and the Trustee,
may rescind and annul such declaration and its consequences if:

         (a) the Company has paid or deposited with the Trustee a sum sufficient
to pay


                  (i) all overdue interest on all Tortoise Notes of that series,

                  (ii) the principal of (and premium, if any, on) any Tortoise
         Notes of that series which have become due otherwise than by such
         declaration of acceleration and any interest thereon at the rate or
         rates prescribed therefor in such Tortoise Notes,


                  (iii) to the extent that payment of such interest is lawful,
         interest upon overdue interest at the rate or rates prescribed therefor
         in such Tortoise Notes,

                  (iv) all sums paid or advanced by the Trustee and the
         reasonable compensation, expenses, disbursements and advances of the
         Trustee, its agents and counsel; and


         (b) all Events of Default with respect to Tortoise Notes of that
series, other than the non-payment of the principal of Tortoise Notes of that
series which have become due solely by such declaration of acceleration, have
been cured or waived.

         No such rescission shall affect any subsequent default or impair any
right consequent thereon.

COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE

         The Company covenants that if:

         (a) default is made in the payment of any interest on any Tortoise
Notes when such interest becomes due and payable and such default continues for
a period of 90 days, or


         (b) default is made in the payment of the principal of (or premium, if
any, on) any Tortoise Notes at the Maturity thereof, the Company will, upon
demand of the Trustee, pay to it, for the benefit of the holders of such
Tortoise Notes, the whole amount then due and payable on such Tortoise Notes for
principal and any premium and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and
premium and on any overdue interest, at the rate or rates prescribed therefor in
such Tortoise Notes, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

         If an Event of Default with respect to Tortoise Notes of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the holders of Tortoise Notes of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in the Indenture or in aid of the
exercise of any power granted in the Indenture, or to enforce any other proper
remedy.


APPLICATION OF MONEY COLLECTED

         Any money collected by the Trustee pursuant to the provisions of the
Indenture relating to an Event of Default shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or any premium or interest,
upon
                                      A-17

<PAGE>

presentation of the Tortoise Notes and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:

         FIRST: To the payment of all amounts due the Trustee under the
Indenture;

         and

         SECOND: To the payment of the amounts then due and unpaid for principal
of and any premium and interest on the Tortoise Notes in respect of which or for
the benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Tortoise Notes for principal and any premium and interest, respectively.

LIMITATION ON SUITS


         No holder of any Tortoise Notes of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to the Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless

         (a) such holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Tortoise Notes of that series;

         (b) the holders of not less than a majority in principal amount of the
Outstanding Tortoise Notes of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;

         (c) such holder or holders have offered to the Trustee indemnity
reasonably satisfactory to it against the costs, expenses and liabilities to be
incurred in compliance with such request;


         (d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and


         (e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the holders of a majority in
principal amount of the Outstanding Tortoise Notes of that series;

it being understood and intended that no one or more of such holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of the Indenture to affect, disturb or prejudice the rights of any other
of such holders, or to obtain or to seek to obtain priority or preference over
any other of such holders or to enforce any right under the Indenture, except in
the manner provided and for the equal and ratable benefit of all of such
holders.


UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST


         Notwithstanding any other provision in the Indenture, the holder of any
Tortoise Notes shall have the right, which is absolute and unconditional, to
receive payment of the principal of and any premium and (subject to the
provisions of any supplemental indenture) interest on such Tortoise Notes on the
respective Stated Maturities expressed in such Tortoise Notes (or, in the case
of redemption, on the Redemption Date), and to institute suit for the
enforcement of any such payment and such rights shall not be impaired without
the consent of such holder.


                                      A-18

<PAGE>


RESTORATION OF RIGHTS AND REMEDIES


         If the Trustee or any holder has instituted any proceeding to enforce
any right or remedy under the Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the holders shall
be restored severally and respectively to their former positions and thereafter
all rights and remedies of the Trustee and the holders shall continue as though
no such proceeding had been instituted.


RIGHTS AND REMEDIES CUMULATIVE


         Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Tortoise Notes, no right or remedy
conferred upon or reserved to the Trustee or to the holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy, or otherwise, shall not prevent
the concurrent assertion or employment of any other appropriate right or remedy.


CONTROL BY HOLDERS


         The holders of not less than a majority in principal amount of the
Outstanding Tortoise Notes of any series shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Tortoise Notes of such series, provided that


         (1) such direction shall not be in conflict with any rule of law or
with the Indenture, and

         (2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.

WAIVER OF PAST DEFAULTS


         The holders of not less than a majority in principal amount of the
Outstanding Tortoise Notes of any series may on behalf of the holders of all the
Tortoise Notes of such series waive any past default hereunder with respect to
such series and its consequences, except a default


         (1) in the payment of the principal of or any premium or interest on
any Tortoise Notes of such series, or


         (2) in respect of a covenant or provision which cannot be modified or
amended without the consent of the holder of each Outstanding Tortoise Notes of
such series affected.


Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of the Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.



                     SATISFACTION AND DISCHARGE OF INDENTURE

         The Indenture shall upon request of the Company cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of any Tortoise Notes expressly provided for

                                      A-19

<PAGE>

herein or in the terms of such Security), and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of the Indenture, when

         (a) Either:


                  (i) all Tortoise Notes theretofore authenticated and delivered
         (other than (1) securities which have been destroyed, lost or stolen
         and which have been replaced or paid as provided in the Indenture; and
         (2) Tortoise Notes for whose payment money has theretofore been
         deposited in trust or segregated and held in trust by the Company and
         thereafter repaid to the Company or discharged from such trust, as
         provided in the Indenture) have been delivered to the Trustee for
         cancellation; or

                  (ii) all such Tortoise Notes not theretofore delivered to the
         Trustee for cancellation have become due and payable, or will become
         due and payable at their Stated Maturity within one year, or are to be
         called for redemption within one year under arrangements satisfactory
         to the Trustee for the giving of notice of redemption by the Trustee in
         the name, and at the expense, of the Company, and the Company, in the
         case of this subsection (ii) has deposited or caused to be deposited
         with the Trustee as trust funds in trust money in an amount sufficient
         to pay and discharge the entire indebtedness on such Securities not
         theretofore delivered to the Trustee for cancellation, for principal
         and any premium and interest to the date of such deposit (in the case
         of Securities which have become due and payable) or to the Stated
         Maturity or Redemption Date, as the case may be;


         (b) the Company has paid or caused to be paid all other sums payable
hereunder by the Trust; and

         (c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of the Indenture have
been complied with.

Notwithstanding the satisfaction and discharge of the Indenture, the obligations
of the Company to the Trustee under the Indenture and, if money shall have been
deposited with the Trustee pursuant to subparagraph (ii) of paragraph (a) above,
the obligations of the Trustee under certain provisions of the Indenture shall
survive.

                                   THE TRUSTEE

CERTAIN DUTIES AND RESPONSIBILITIES

         (1) Except during the continuance of an Event of Default,

                  (A) the Trustee undertakes to perform such duties and only
         such duties as are specifically set forth in the Indenture and as
         required by the Trust Indenture Act, and no implied covenants or
         obligations shall be read into the Indenture against the Trustee; and

                  (B) in the absence of bad faith on its part, the Trustee may
         conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         the Indenture; but in the case of any such certificates or opinions
         which by any provision of the Indenture are specifically required to be
         furnished to the Trustee, the Trustee shall be under a duty to examine
         the same to

                                      A-20

<PAGE>

         determine whether or not they conform to the requirements of the
         Indenture (but need not confirm or investigate the accuracy of
         mathematical calculations or other facts stated therein).

         (2) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by the
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.

         (3) In no event shall the Trustee be responsible or liable for special,
indirect, or consequential loss or damage of any kind whatsoever (including, but
not limited to, loss of profit) irrespective of whether the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of
action.


         (4) In no event shall the Trustee be responsible or liable for any
failure or delay in the performance of its obligations arising out of or caused
by, directly or indirectly, forces beyond its control, including, without
limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil
or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services; it being understood that the Trustee shall use
reasonable efforts which are consistent with accepted practices in the banking
industry to resume performance as soon as practicable under the circumstances.


         (5) No provision of the Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:


                  (A) this Subsection shall not be construed to limit the effect
         of Subsection (1)(A) of this Section;


                  (B) the Trustee shall not be liable for any error of judgment
         made in good faith by a Responsible Officer, unless it shall be proved
         that the Trustee was negligent in ascertaining the pertinent facts;


                  (C) the Trustee shall not be liable with respect to any action
         taken or omitted to be taken by it in good faith in accordance with the
         direction of the holders of a majority in principal amount of the
         Outstanding Securities of any series, determined as provided in the
         Indenture, relating to the time, method and place of conducting any
         proceeding for any remedy available to the Trustee, or exercising any
         trust or power conferred upon the Trustee, under the Indenture with
         respect to the Securities of such series; and


                  (D) no provision of the Indenture shall require the Trustee to
         expend or risk its own funds or otherwise incur any financial liability
         in the performance of any of its duties, or in the exercise of any of
         its rights or powers, if it shall have reasonable grounds for believing
         that repayment of such funds or adequate indemnity against such risk or
         liability is not reasonably assured to it.


NOTICE OF DEFAULTS


         If a default occurs hereunder with respect to Tortoise Notes of any
series, the Trustee shall give the Holders of Tortoise Notes of such series
notice of such default as and to the extent provided by the Trust Indenture Act;
provided, however, that in the case of any default with respect to Tortoise
Notes of such series, no such notice to Holders shall be given until at least 90
days after the occurrence thereof. For the purpose hereof, the term "default"
means any event which is, or after notice or lapse of time or both would become,
an Event of Default with respect to Tortoise Notes of such series.

                                      A-21

<PAGE>


CERTAIN RIGHTS OF TRUSTEE


         Subject to the provisions under "Certain Duties and Responsibilities"
above:

         (a) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;

         (b) any request or direction of the Company shall be sufficiently
evidenced by a Company Request or Company Order, and any resolution of the Board
of Trustees shall be sufficiently evidenced by a Board Resolution;

         (c) whenever in the administration of the Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;

         (d) the Trustee may consult with counsel of its selection and the
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it in good faith and in reliance thereon;


         (e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by the Indenture at the request or direction of
any of the holders pursuant to the Indenture, unless such holders shall have
offered to the Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;


         (f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;

         (g) the Trustee may execute any of the trusts or powers or perform any
duties hereunder either directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder;

         (h) the Trustee shall not be liable for any action taken, suffered or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by the
Indenture;

         (i) the Trustee shall not be deemed to have notice of any default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee,
and such notice references the Tortoise Notes and the Indenture;

         (j) the rights, privileges, protections, immunities and benefits given
to the Trustee, including its rights to be indemnified, are extended to, and
shall be enforceable by, the Trustee in each of its capacities hereunder; and

         (k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant

                                      A-22

<PAGE>

to the Indenture, which Officers' Certificate may be signed by any person
authorized to sign an Officers' Certificate, including any person specified as
so authorized in any such certificate previously delivered and not superceded.


COMPENSATION AND REIMBURSEMENT


         The Company agrees:

         (a) to pay to the Trustee from time to time such compensation as shall
be agreed in writing between the parties for all services rendered by it (which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);

         (b) except as otherwise expressly provided, to reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of the
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and


         (c) to indemnify each of the Trustee or any predecessor Trustee for,
and to hold it harmless against, any and all losses, liabilities, damages,
claims or expenses including taxes (other than taxes imposed on the income of
the Trustee) incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim (whether asserted by the Company, a holder or any other Person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.


         When the Trustee incurs expenses or renders services in connection with
an Event of Default, the expenses (including the reasonable charges and expenses
of its counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable Federal or State bankruptcy,
insolvency or other similar law.

         The provisions hereof shall survive the termination of the Indenture.

CONFLICTING INTERESTS

         If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and the Indenture. To
the extent not prohibited by the Trust Indenture Act, the Trustee shall not be
deemed to have a conflicting interest by virtue of being a trustee under the
Indenture with respect to Tortoise Notes of more than one series.

RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR

         No resignation or removal of the Trustee and no appointment of a
successor Trustee shall become effective until the acceptance of appointment by
the successor Trustee in accordance with the applicable requirements.

         The Trustee may resign at any time with respect to the Tortoise Notes
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 60 days after the giving of such notice of resignation, the
resigning Trustee may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Tortoise Notes of such series.

                                      A-23

<PAGE>


         The Trustee may be removed at any time with respect to the Tortoise
Notes of any series by Act of the holders of a majority in principal amount of
the Outstanding Tortoise Notes of such series, delivered to the Trustee and to
the Company. If the instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of a notice
of removal pursuant to this paragraph, the Trustee being removed may petition,
at the expense of the Company, any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Tortoise Notes of such
series.


         If at any time:


         (a) the Trustee shall fail to comply after written request therefor by
the Company or by any holder who has been a bona fide holder of Tortoise Notes
for at least six months, or

         (b) the Trustee shall cease to be eligible and shall fail to resign
after written request therefor by the Company or by any such holder, or

         (c) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (i) the Company by a Board Resolution may
remove the Trustee with respect to all Tortoise Notes, or (ii) any holder who
has been a bona fide holder of Tortoise Notes for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all
Tortoise Notes and the appointment of a successor Trustee or Trustees.

         If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Tortoise Notes of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Tortoise Notes of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Tortoise Notes of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Tortoise Notes of any particular series) and shall comply
with the applicable requirements. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Tortoise Notes of any series shall be appointed by Act of
the holders of a majority in principal amount of the Outstanding Tortoise Notes
of such series delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements, become the successor Trustee with
respect to the Tortoise Notes of such series and to that extent supersede the
successor Trustee appointed by the Company.

         If no successor Trustee with respect to the Tortoise Notes of any
series shall have been so appointed by the Company or the holders and accepted
appointment in the manner required, any holder who has been a bona fide holder
of Tortoise Notes of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Tortoise Notes of such series.

         The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Tortoise Notes of any series and each
appointment of a successor Trustee with respect to the Tortoise Notes of any
series to all holders of Tortoise Notes of such series in the manner provided.
Each notice shall include the name of the successor Trustee with respect to the
Tortoise Notes of such series and the address of its Corporate Trust Office.


                                      A-24

<PAGE>


ACCEPTANCE OF APPOINTMENT BY SUCCESSOR

         In case of the appointment hereunder of a successor Trustee with
respect to all Tortoise Notes, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.

         In case of the appointment hereunder of a successor Trustee with
respect to the Tortoise Notes of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the Tortoise
Notes of one or more series shall execute and deliver a supplemental indenture
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Tortoise Notes of
that or those series to which the appointment of such successor Trustee relates,
(2) if the retiring Trustee is not retiring with respect to all Tortoise Notes,
shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Tortoise Notes of that or those series as to which the
retiring Trustee is not retiring shall continue to be vested in the retiring
Trustee, and (3) shall add to or change any of the provisions of the Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, it being understood that nothing in
the Indenture shall constitute such Trustees co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Tortoise Notes of that or
those series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Tortoise Notes
of that or those series to which the appointment of such successor Trustee
relates.

         Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.

         No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible.

MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
In case any Tortoise Notes shall have been authenticated, but not delivered, by
the Trustee then in office, any successor by merger, conversion or consolidation
to such
                                      A-25

<PAGE>

authenticating Trustee may adopt such authentication and deliver the Tortoise
Notes so authenticated with the same effect as if such successor Trustee had
itself authenticated such Tortoise Notes.


              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS

         The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company, unless:

         (a) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust, shall be organized and
validly existing under the laws of any domestic or foreign jurisdiction and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest on all the
Tortoise Notes and the performance or observance of every covenant of the
Indenture on the part of the Company to be performed or observed;

         (b) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or any subsidiary as
a result of such transaction as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing;

         (c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply and that
all conditions precedent in the Indenture provided for relating to such
transaction have been complied with.

SUCCESSOR SUBSTITUTED

         Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety, the successor Person
formed by such consolidation or into which the Company is merged or to which
such conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under the Indenture
with the same effect as if such successor Person had been named as the Company
in the Indenture, and thereafter, except in the case of a lease, the predecessor
Person shall be relieved of all obligations and covenants under the Indenture
and the Tortoise Notes.


                       DEFEASANCE AND COVENANT DEFEASANCE

DEFEASANCE AND DISCHARGE


         Upon the Company's exercise of its option (if any) to have the
provisions of the Indenture relating to Defeasance applied to any Tortoise Notes
or any series of Tortoise Notes, as the case may be,

                                      A-26

<PAGE>

the Company shall be deemed to have been discharged from its obligations, with
respect to such Tortoise Notes as provided in the Indenture on and after the
date the conditions set forth are satisfied (hereinafter called "Defeasance").
For this purpose, such Defeasance means that the Company shall be deemed to have
paid and discharged the entire indebtedness represented by such Tortoise Notes
and to have satisfied all its other obligations under such Tortoise Notes and
the Indenture insofar as such Tortoise Notes are concerned (and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise terminated
or discharged hereunder: (1) the rights of holders of such Tortoise Notes to
receive, solely from the trust fund, payments in respect of the principal of and
any premium and interest on such Tortoise Notes when payments are due, (2) the
Company's obligations with respect to such Tortoise Notes, (3) the rights,
powers, trusts, duties and immunities of the Trustee.


COVENANT DEFEASANCE


         Upon the Company's exercise of its option (if any) to have provisions
of the Indenture relating to Covenant Defeasance applied to any Tortoise Notes
or any series of Tortoise Notes, as the case may be, (1) the Company shall be
released from its obligations under certain provisions of the Indenture for the
benefit of the holders of such Tortoise Notes and (2) the occurrence of any
event specified in the Indenture, and any such covenants provided pursuant to
certain provisions of the Indenture shall be deemed not to be or result in an
Event of Default, in each case with respect to such Tortoise Notes as provided
in the Indenture on and after the date the conditions are satisfied (hereinafter
called "Covenant Defeasance"). For this purpose, such Covenant Defeasance means
that, with respect to such Tortoise Notes, the Company may omit to comply with
and shall have no liability in respect of any term, condition or limitation set
forth in any such specified section of the Indenture, whether directly or
indirectly by reason of any reference elsewhere in the Indenture, or by reason
of any reference in any such section or article of the Indenture to any other
provision in the Indenture or in any other document, but the remainder of the
Indenture and such Tortoise Notes shall be unaffected thereby.


CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE


         (a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee which satisfies the requirements
and agrees to comply with the provisions of the relevant Article of the
Indenture applicable to it) as trust funds in trust for the purpose of making
the following payments, specifically pledged as security for, and dedicated
solely to, the benefits of the holders of such Tortoise Notes, (i) money in an
amount, or (ii) U.S. Government Obligations which through the scheduled payment
of principal and interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment, money in an
amount, or (iii) such other obligations or arrangements as may be specified with
respect to such Tortoise Notes, or (iv) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, and which shall be applied by the Trustee (or any
such other qualifying trustee) to pay and discharge, the principal of and any
premium and interest on such Tortoise Notes on the respective Stated Maturities,
in accordance with the terms of the Indenture and such Tortoise Notes. As used
in the Indenture, "U.S. Government Obligation" means (x) any security which is
(i) a direct obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged or (ii) an
obligation of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case (i) or (ii), is not callable or
redeemable at the option of the Company thereof, and (y) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Tortoise Notes Act) as
custodian with respect to any U.S. Government Obligation which is specified in
Clause (x) above and held by such bank for the account of

                                      A-27

<PAGE>

the holder of such depositary receipt, or with respect to any specific payment
of principal of or interest on any U.S. Government Obligation which is so
specified and held, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depositary receipt from any amount received by the custodian in respect of
the U.S. Government Obligation or the specific payment of principal or interest
evidenced by such depositary receipt.

         (b) In the event of an election to have Defeasance and Discharge apply
to any Tortoise Notes or any series of Tortoise Notes, as the case may be, the
Company shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the Internal
Revenue Service a ruling or (ii) since the date of this instrument, there has
been a change in the applicable Federal income tax law, in either case (i) or
(ii) to the effect that, and based thereon such opinion shall confirm that, the
holders of such Tortoise Notes will not recognize gain or loss for Federal
income tax purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to such Tortoise Notes and will be subject to Federal
income tax on the same amount, in the same manner and at the same times as would
be the case if such deposit, Defeasance and discharge were not to occur.

         (c) In the event of an election to have Covenant Defeasance apply to
any Tortoise Notes or any series of Tortoise Notes, as the case may be, the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that the holders of such Tortoise Notes will not recognize gain or loss for
Federal income tax purposes as a result of the deposit and Covenant Defeasance
to be effected with respect to such Tortoise Notes and will be subject to
Federal income tax on the same amount, in the same manner and at the same times
as would be the case if such deposit and Covenant Defeasance were not to occur.


         (d) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that neither such Tortoise Notes nor any other
Tortoise Notes of the same series, if then listed on any Tortoise Notes
exchange, will be delisted as a result of such deposit.

         (e) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Tortoise Notes or any other
Tortoise Notes shall have occurred and be continuing at the time of such deposit
or, with regard to any such event specified, at any time on or prior to the 90th
day after the date of such deposit (it being understood that this condition
shall not be deemed satisfied until after such 90th day).

         (f) Such Defeasance or Covenant Defeasance shall not cause the Trustee
to have a conflicting interest within the meaning of the Trust Indenture Act
(assuming all Tortoise Notes are in default within the meaning of such Act).

         (g) Such Defeasance or Covenant Defeasance shall not result in a breach
or violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.

         (h) Such Defeasance or Covenant Defeasance shall not result in the
trust arising from such deposit constituting an investment company within the
meaning of the Investment Company Act unless such trust shall be registered
under the Investment Company Act or exempt from registration thereunder.

         (i) No event or condition shall exist that would prevent the Company
from making payments of the principal of (and any premium) or interest on the
Tortoise Notes of such series on the date of such deposit or at any time on or
prior to the 90th day after the date of such deposit (it being understood that
this condition shall not be deemed satisfied until after such 90th day).

                                      A-28

<PAGE>

         (j) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent with respect to such Defeasance or Covenant Defeasance have been
complied with.


         (k) The Company shall have delivered to the Trustee an Opinion of
Counsel substantially to the effect that (i) the trust funds deposited pursuant
hereto will not be subject to any rights of any holders of indebtedness or
equity of the Company, and (ii) after the 90th day following the deposit, the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally, except that if a court were to rule under any such law in any case or
proceeding that the trust funds remained property of the Company, no opinion is
given as to the effect of such laws on the trust funds except the following: (A)
assuming such trust funds remained in the possession of the trustee with whom
such funds were deposited prior to such court ruling to the extent not paid to
holders of such Tortoise Notes, such trustee would hold, for the benefit of such
holders, a valid and perfected security interest in such trust funds that is not
avoidable in bankruptcy or otherwise and (B) such holders would be entitled to
receive adequate protection of their interests in such trust funds if such trust
funds were used.


                                      A-29

<PAGE>

                                   APPENDIX B-
                        TORTOISE NOTES AUCTION PROCEDURES

         1     ORDERS.

               (a) Prior to the Submission Deadline on each Auction Date for a
series of Tortoise Notes:


                  (i)      each Beneficial Owner of Tortoise Notes of such
                           series may submit to its Broker-Dealer information as
                           to:

                           (A)      the principal amount of Outstanding Tortoise
                                    Notes, if any, of such series held by such
                                    Beneficial Owner which such Beneficial Owner
                                    desires to continue to hold without regard
                                    to the Applicable Rate for Tortoise Notes of
                                    such series for the next succeeding Rate
                                    Period of such series;

                           (B)      the principal amount of Outstanding Tortoise
                                    Notes, if any, of such series held by such
                                    Beneficial Owner which such Beneficial Owner
                                    offers to sell if the Applicable Rate for
                                    Tortoise Notes of such series for the next
                                    succeeding Rate Period of Tortoise Notes of
                                    such series shall be less than the rate per
                                    annum specified by such Beneficial Owner;
                                    and/or

                           (C)      the principal amount of Outstanding Tortoise
                                    Notes, if any, of such series held by such
                                    Beneficial Owner which such Beneficial Owner
                                    offers to sell without regard to the
                                    Applicable Rate for Tortoise Notes of such
                                    series for the next succeeding Rate Period
                                    of Tortoise Notes of such series;


                  and


                  (ii)     one or more Broker-Dealers, using lists of Potential
                           Beneficial Owners, shall in good faith for the
                           purpose of conducting a competitive Auction in a
                           commercially reasonable manner, contact Potential
                           Beneficial Owners (by telephone or otherwise),
                           including Persons that are not Beneficial Owners, on
                           such lists to determine the principal amount of
                           Tortoise Notes, if any, of such series which each
                           such Potential Beneficial Owner offers to purchase if
                           the Applicable Rate for Tortoise Notes of such series
                           for the next succeeding Rate Period of Tortoise Notes
                           of such series shall not be less than the rate per
                           annum specified by such Potential Beneficial Owner.

                           For the purposes hereof, the communication by a
                           Beneficial Owner or Potential Beneficial Owner to a
                           Broker-Dealer, or by a Broker-Dealer to the Auction
                           Agent, of information referred to in clause (i) (A),
                           (i) (B), (i) (C) or (ii) of this paragraph (a) is
                           hereinafter referred to as an "Order" and
                           collectively as "Orders" and each Beneficial Owner
                           and each Potential Beneficial Owner placing an Order
                           with a Broker-Dealer, and such Broker-Dealer placing
                           an Order with the Auction Agent, is hereinafter
                           referred to as a "Bidder" and collectively as
                           "Bidders"; an Order containing the information
                           referred to in clause (i)(A) of this

                                      B-1

<PAGE>

                           paragraph (a) is hereinafter referred to as a "Hold
                           Order" and collectively as "Hold Orders"; an Order
                           containing the information referred to in clause
                           (i)(B) or (ii) of this paragraph (a) is hereinafter
                           referred to as a "Bid" and collectively as "Bids";
                           and an Order containing the information referred to
                           in clause (i)(C) of this paragraph (a) is hereinafter
                           referred to as a "Sell Order" and collectively as
                           "Sell Orders."

               (b) (i) A Bid by a Beneficial Owner or an Existing Holder of
Tortoise Notes of a series subject to an Auction on any Auction Date shall
constitute an irrevocable offer to sell:


                           (A)      the principal amount of Outstanding Tortoise
                                    Notes of such series specified in such Bid
                                    if the Applicable Rate for Tortoise Notes of
                                    such series determined on such Auction Date
                                    shall be less than the rate specified
                                    therein;

                           (B)      such principal amount or a lesser principal
                                    amount of Outstanding Tortoise Notes of such
                                    series to be determined as set forth in
                                    clause (iv) of paragraph (a) of Section 4 of
                                    this Appendix B if the Applicable Rate for
                                    Tortoise Notes of such series determined on
                                    such Auction Date shall be equal to the rate
                                    specified therein; or

                           (C)      the principal amount of Outstanding Tortoise
                                    Notes of such series specified in such Bid
                                    if the rate specified therein shall be
                                    higher than the Maximum Rate for Tortoise
                                    Notes of such series, or such principal
                                    amount or a lesser principal amount of
                                    Outstanding Tortoise Notes of such series to
                                    be determined as set forth in clause (iii)
                                    of paragraph (b) of Section 4 of this
                                    Appendix B if the rate specified therein
                                    shall be higher than the Maximum Rate for
                                    Tortoise Notes of such series and Sufficient
                                    Clearing Bids for Tortoise Notes of such
                                    series do not exist.


                  (ii)     A Sell Order by a Beneficial Owner or an Existing
                           Holder of Tortoise Notes of a series of Tortoise
                           Notes subject to an Auction on any Auction Date shall
                           constitute an irrevocable offer to sell:


                           (A)      the principal amount of Outstanding Tortoise
                                    Notes of such series specified in such Sell
                                    Order; or

                           (B)      such principal amount or a lesser principal
                                    amount of Outstanding Tortoise Notes of such
                                    series as set forth in clause (iii) of
                                    paragraph (b) of Section 4 of this Appendix
                                    B if Sufficient Clearing Bids for Tortoise
                                    Notes of such series do not exist;


                           PROVIDED, HOWEVER, that a Broker-Dealer that is an
                           Existing Holder with respect to a series of Tortoise
                           Notes shall not be liable to any Person for failing
                           to sell such Tortoise Notes pursuant to a Sell Order
                           described in the proviso to paragraph (c) of Section
                           2 of this Appendix B if (1) such Tortoise Notes were
                           transferred by the Beneficial Owner thereof without
                           compliance by such Beneficial Owner or its transferee
                           Broker-Dealer (or other transferee person, if
                           permitted by the Company)

                                      B-2

<PAGE>

                           with the provisions of the Indenture or (2) such
                           Broker-Dealer has informed the Auction Agent pursuant
                           to the terms of its Broker-Dealer Agreement that,
                           according to such Broker-Dealer's records, such
                           Broker-Dealer believes it is not the Existing Holder
                           of such Tortoise Notes.

                  (iii)    A Bid by a Potential Beneficial Owner or a Potential
                           Holder of Tortoise Notes of a series subject to an
                           Auction on any Auction Date shall constitute an
                           irrevocable offer to purchase:


                           (A)      the principal amount of Outstanding Tortoise
                                    Notes of such series specified in such Bid
                                    if the Applicable Rate for Tortoise Notes of
                                    such series determined on such Auction Date
                                    shall be higher than the rate specified
                                    therein; or

                           (B)      such principal amount or a lesser principal
                                    amount of Outstanding Tortoise Notes of such
                                    series as set forth in clause (v) of
                                    paragraph (a) of Section 4 of this Appendix
                                    B if the Applicable Rate for Tortoise Notes
                                    of such series determined on such Auction
                                    Date shall be equal to the rate specified
                                    therein.

         2     SUBMISSION OF ORDERS BY BROKER-DEALERS TO AUCTION AGENT.


               (a) Each Broker-Dealer shall submit in writing to the Auction
Agent prior to the Submission Deadline on each Auction Date all Orders for
Tortoise Notes of a series subject to an Auction on such Auction Date obtained
by such Broker-Dealer, designating itself (unless otherwise permitted by the
Company) as an Existing Holder in respect of Tortoise Notes subject to Orders
submitted or deemed submitted to it by Beneficial Owners and as a Potential
Holder in respect of Tortoise Notes subject to Orders submitted to it by
Potential Beneficial Owners, and shall specify with respect to each such Order:


                  (i)      the name of the Bidder placing such Order (which
                           shall be the Broker-Dealer unless otherwise permitted
                           by the Company);

                  (ii)     the aggregate principal amount of Tortoise Notes of
                           such series that are the subject of such Order;

                  (iii)    to the extent that such Bidder is an Existing Holder
                           of Tortoise Notes of such series:

                           (A)      the principal amount of Tortoise Notes, if
                                    any, of such series subject to any Hold
                                    Order of such Existing Holder;

                           (B)      the principal amount of Tortoise Notes, if
                                    any, of such series subject to any Bid of
                                    such Existing Holder and the rate specified
                                    in such Bid; and

                           (C)      the principal amount of Tortoise Notes, if
                                    any, of such series subject to any Sell
                                    Order of such Existing Holder; and

                  (iv)     to the extent such Bidder is a Potential Holder of
                           Tortoise Notes of such series, the rate and principal
                           amount of Tortoise Notes of such series specified in
                           such Potential Holder's Bid.

                                      B-3

<PAGE>

               (b) If any rate specified in any Bid contains more than three
figures to the right of the decimal point, the Auction Agent shall round such
rate up to the next highest one thousandth (.001) of 1%.

               (c) If an Order or Orders covering all of the Outstanding
Tortoise Notes of a series held by any Existing Holder is not submitted to the
Auction Agent prior to the Submission Deadline, the Auction Agent shall deem a
Hold Order to have been submitted by or on behalf of such Existing Holder
covering the principal amount of Outstanding Tortoise Notes of such series held
by such Existing Holder and not subject to Orders submitted to the Auction
Agent; provided, however, that if an Order or Orders covering all of the
Outstanding Tortoise Notes of such series held by any Existing Holder is not
submitted to the Auction Agent prior to the Submission Deadline for an Auction
relating to a Special Rate Period consisting of more than 28 Rate Period Days,
the Auction Agent shall deem a Sell Order to have been submitted by or on behalf
of such Existing Holder covering the principal amount of outstanding Tortoise
Notes of such series held by such Existing Holder and not subject to Orders
submitted to the Auction Agent.

               (d) If one or more Orders of an Existing Holder is submitted to
the Auction Agent covering in the aggregate more than the principal amount of
Outstanding Tortoise Notes of a series subject to an Auction held by such
Existing Holder, such Orders shall be considered valid in the following order of
priority:

                  (i)      all Hold Orders for Tortoise Notes of such series
                           shall be considered valid, but only up to and
                           including in the aggregate principal amount of
                           Outstanding Tortoise Notes of such series held by
                           such Existing Holder, and if the aggregate principal
                           amount of Tortoise Notes of such series subject to
                           such Hold Orders exceeds the aggregate principal
                           amount of Outstanding Tortoise Notes of such series
                           held by such Existing Holder, the principal amount of
                           Tortoise Notes subject to each such Hold Order shall
                           be reduced pro rata to cover the principal amount of
                           Outstanding Tortoise Notes of such series held by
                           such Existing Holder;

                  (ii)     (A) any Bid for Tortoise Notes of such series shall
                           be considered valid up to and including the excess of
                           the principal amount of Outstanding Tortoise Notes of
                           such series subject to any Hold Orders referred to in
                           clause (i) above;

                           (B)      subject to subclause (A), if more than one
                                    Bid of an Existing Holder for Tortoise Notes
                                    of such series is submitted to the Auction
                                    Agent with the same rate and the aggregate
                                    principal amount of Outstanding Tortoise
                                    Notes of such series subject to such Bids is
                                    greater than such excess, such Bids shall be
                                    considered valid up to and including the
                                    amount of such excess, and the principal
                                    amount of Tortoise Notes of such series
                                    subject to each Bid with the same rate shall
                                    be reduced pro rata to cover the principal
                                    amount of Tortoise Notes of such series
                                    equal to such excess;

                           (C)      subject to subclauses (A) and (B), if more
                                    than one Bid of an Existing Holder for
                                    Tortoise Notes of such series is submitted
                                    to the Auction Agent with different rates,
                                    such Bids shall be considered valid in the
                                    ascending order of their respective rates up
                                    to and including the amount of such excess;
                                    and

                                      B-4

<PAGE>

                           (D)      in any such event, the principal amount, if
                                    any, of such Outstanding Tortoise Notes of
                                    such series subject to any portion of Bids
                                    considered not valid in whole or in part
                                    under this clause (ii) shall be treated as
                                    the subject of a Bid for Tortoise Notes of
                                    such series by or on behalf of a Potential
                                    Holder at the rate therein specified; and

                  (iii)    all Sell Orders for Tortoise Notes of such series
                           shall be considered valid up to and including the
                           excess of the principal amount of Outstanding
                           Tortoise Notes of such series held by such Existing
                           Holder over the aggregate principal amount of
                           Tortoise Notes of such series subject to valid Hold
                           Orders referred to in clause (i) above and valid Bids
                           referred to in clause (ii) above.


               (e) If more than one Bid for one or more Tortoise Notes of a
series is submitted to the Auction Agent by or on behalf of any Potential
Holder, each such Bid submitted shall be a separate Bid with the rate and
principal amount therein specified.

               (f) Any Order submitted by a Beneficial Owner or a Potential
Beneficial Owner to its Broker-Dealer, or by a Broker-Dealer to the Auction
Agent, prior to the Submission Deadline on any Auction Date, shall be
irrevocable.


         3     DETERMINATION OF SUFFICIENT CLEARING BIDS, WINNING BID RATE AND
APPLICABLE RATE.

               (a) Not earlier than the Submission Deadline on each Auction Date
for a series of Tortoise Notes, the Auction Agent shall assemble all valid
Orders submitted or deemed submitted to it by the Broker-Dealers in respect of
Tortoise Notes of such series (each such Order as submitted or deemed submitted
by a Broker-Dealer being hereinafter referred to individually as a "Submitted
Hold Order," a "Submitted Bid" or a "Submitted Sell Order," as the case may be,
or as a "Submitted Order" and collectively as "Submitted Hold Orders,"
"Submitted Bids" or "Submitted Sell Orders," as the case may be, or as
"Submitted Orders") and shall determine for such series:

                  (i)      the excess of the aggregate principal amount of
                           Outstanding Tortoise Notes of such series over the
                           principal amount of Outstanding Tortoise Notes of
                           such series subject to Submitted Hold Orders (such
                           excess being hereinafter referred to as the
                           "Available Tortoise Notes" of such series);

                  (ii)     from the Submitted Orders for Tortoise Notes of such
                           series whether:

                           (A)      the aggregate principal amount of
                                    Outstanding Tortoise Notes of such series
                                    subject to Submitted Bids of Potential
                                    Holders specifying one or more rates between
                                    the Minimum Rate (for Standard Rate Periods
                                    or less, only) and the Maximum Rate (for all
                                    Rate Periods) for Tortoise Notes of such
                                    series; exceeds or is equal to the sum of:

                           (B)      the aggregate principal amount of
                                    Outstanding Tortoise Notes of such series
                                    subject to Submitted Bids of Existing
                                    Holders specifying one or more rates between
                                    the Minimum Rate (for Standard Rate Periods
                                    or less, only) and the Maximum Rate (for all
                                    Rate Periods) for Tortoise Notes of such
                                    series; and

                                      B-5

<PAGE>

                           (C)      the aggregate principal amount of
                                    Outstanding Tortoise Notes of such series
                                    subject to Submitted Sell Orders (in the
                                    event such excess or such equality exists
                                    (other than because all of the Outstanding
                                    Tortoise Notes of such series are subject to
                                    Submitted Hold Orders), such Submitted Bids
                                    in subclause (A) above being hereinafter
                                    referred to collectively as "Sufficient
                                    Clearing Bids" for Tortoise Notes of such
                                    series); and

                  (iii)    if Sufficient Clearing Bids for Tortoise Notes of
                           such series exist, the lowest rate specified in such
                           Submitted Bids (the "Winning Bid Rate" for Tortoise
                           Notes of such series) which if:

                           (A)      (I) each such Submitted Bid of Existing
                                    Holders specifying such lowest rate and

                                    (II)     all other such Submitted Bids of
                                             Existing Holders specifying lower
                                             rates were rejected, thus entitling
                                             such Existing Holders to continue
                                             to hold the Tortoise Notes of such
                                             series that are subject to such
                                             Submitted Bids; and

                           (B)      (I) each such Submitted Bid of Potential
                                    Holders specifying such lowest rate and

                                    (II)     all other such Submitted Bids of
                                             Potential Holders specifying lower
                                             rates were accepted; would result
                                             in such Existing Holders described
                                             in subclause (A) above continuing
                                             to hold an aggregate principal
                                             amount of Outstanding Tortoise
                                             Notes of such series which, when
                                             added to the aggregate principal
                                             amount of Outstanding Tortoise
                                             Notes of such series to be
                                             purchased by such Potential Holders
                                             described in subclause (B) above,
                                             would equal not less than the
                                             Available Tortoise Notes of such
                                             series.

               (b) Promptly after the Auction Agent has made the determinations
pursuant to paragraph (a) of this Section 3, the Auction Agent shall advise the
Company of the Minimum Rate and Maximum Rate for the series of Tortoise Notes
for which an Auction is being held on the Auction Date and, based on such
determination, the Applicable Rate for Tortoise Notes of such series for the
next succeeding Rate Period thereof as follows:

                  (i)      if Sufficient Clearing Bids for Tortoise Notes of
                           such series exist, that the Applicable Rate for all
                           Tortoise Notes of such series for the next succeeding
                           Rate Period thereof shall be equal to the Winning Bid
                           Rate for Tortoise Notes of such series so determined;

                  (ii)     if Sufficient Clearing Bids for Tortoise Notes of
                           such series do not exist (other than because all of
                           the Outstanding Tortoise Notes of such series are
                           subject to Submitted Hold Orders), that the
                           Applicable Rate for all Tortoise Notes of such series
                           for the next succeeding Rate Period thereof shall be
                           equal to the Maximum Rate for Tortoise Notes of such
                           series; or

                                      B-6

<PAGE>

                  (iii)    if all of the Outstanding Tortoise Notes of such
                           series are subject to Submitted Hold Orders, that the
                           Applicable Rate for all Tortoise Notes of such series
                           for the next succeeding Rate Period thereof shall be
                           All Hold Rate.

         4     ACCEPTANCE AND REJECTION OF SUBMITTED BIDS AND SUBMITTED SELL
ORDERS AND ALLOCATION OF TORTOISE NOTES. Existing Holders shall continue to hold
the Tortoise Notes that are subject to Submitted Hold Orders, and, based on the
determinations made pursuant to paragraph (a) of Section 3 of this Appendix B,
the Submitted Bids and Submitted Sell Orders shall be accepted or rejected by
the Auction Agent and the Auction Agent shall take such other action as set
forth below:

               (a) If Sufficient Clearing Bids for a series of Tortoise Notes
have been made, all Submitted Sell Orders with respect to Tortoise Notes of such
series shall be accepted and, subject to the provisions of paragraphs (d) and
(e) of this Section 4, Submitted Bids with respect to Tortoise Notes of such
series shall be accepted or rejected as follows in the following order of
priority and all other Submitted Bids with respect to Tortoise Notes of such
series shall be rejected:

                  (i)      Existing Holders' Submitted Bids for Tortoise Notes
                           of such series specifying any rate that is higher
                           than the Winning Bid Rate for Tortoise Notes of such
                           series shall be accepted, thus requiring each such
                           Existing Holder to sell the Tortoise Notes subject to
                           such Submitted Bids;

                  (ii)     Existing Holders' Submitted Bids for Tortoise Notes
                           of such series specifying any rate that is lower than
                           the Winning Bid Rate for Tortoise Notes of such
                           series shall be rejected, thus entitling each such
                           Existing Holder to continue to hold the Tortoise
                           Notes subject to such Submitted Bids;

                  (iii)    Potential Holders' Submitted Bids for Tortoise Notes
                           of such series specifying any rate that is lower than
                           the Winning Bid Rate for Tortoise Notes of such
                           series shall be accepted;

                  (iv)     each Existing Holder's Submitted Bid for Tortoise
                           Notes of such series specifying a rate that is equal
                           to the Winning Bid Rate for Tortoise Notes of such
                           series shall be rejected, thus entitling such
                           Existing Holder to continue to hold the Tortoise
                           Notes subject to such Submitted Bid, unless the
                           aggregate principal amount of Outstanding Tortoise
                           Notes subject to all such Submitted Bids shall be
                           greater than the principal amount of Tortoise Notes
                           ("remaining Tortoise Notes") in the excess of the
                           Available Tortoise Notes of such series over the
                           principal amount of Tortoise Notes subject to
                           Submitted Bids described in clauses (ii) and (iii) of
                           this paragraph (a), in which event such Submitted Bid
                           of such Existing Holder shall be rejected in part,
                           and such Existing Holder shall be entitled to
                           continue to hold Tortoise Notes subject to such
                           Submitted Bid, but only in an amount equal to the
                           principal amount of Tortoise Notes of such series
                           obtained by multiplying the remaining principal
                           amount by a fraction, the numerator of which shall be
                           the principal amount of Outstanding Tortoise Notes
                           held by such Existing Holder subject to such
                           Submitted Bid and the denominator of which shall be
                           the aggregate principal amount of Outstanding
                           Tortoise Notes subject to such Submitted Bids made by
                           all such Existing Holders that specified a rate equal
                           to the Winning Bid Rate for Tortoise Notes of such
                           series; and

                                      B-7

<PAGE>

                  (v)      each Potential Holder's Submitted Bid for aggregate
                           principal amount of such series specifying a rate
                           that is equal to the Winning Bid Rate for aggregate
                           principal amount of such series shall be accepted but
                           only in an amount equal to the principal amount of
                           Tortoise Notes of such series obtained by multiplying
                           the principal amount of Tortoise Notes in the excess
                           of the Available Tortoise Notes of such series over
                           the principal amount of Tortoise Notes subject to
                           Submitted Bids described in clauses (ii) through (iv)
                           of this paragraph (a) by a fraction, the numerator of
                           which shall be the principal amount of Outstanding
                           Tortoise Notes subject to such Submitted Bid and the
                           denominator of which shall be the aggregate principal
                           amount of Outstanding Tortoise Notes subject to such
                           Submitted Bids made by all such Potential Holders
                           that specified a rate equal to the Winning Bid Rate
                           for Tortoise Notes of such series.

               (b) If Sufficient Clearing Bids for a series of Tortoise Notes
have not been made (other than because all of the Outstanding Tortoise Notes of
such series are subject to Submitted Hold Orders), subject to the provisions of
paragraph (d) of this Section 4, Submitted Orders for Tortoise Notes of such
series shall be accepted or rejected as follows in the following order of
priority and all other Submitted Bids for Tortoise Notes of such series shall be
rejected:

                  (i)      Existing Holders' Submitted Bids for Tortoise Notes
                           of such series specifying any rate that is equal to
                           or lower than the Maximum Rate for Tortoise Notes of
                           such series shall be rejected, thus entitling such
                           Existing Holders to continue to hold the Tortoise
                           Notes subject to such Submitted Bids;

                  (ii)     Potential Holders' Submitted Bids for Tortoise Notes
                           of such series specifying any rate that is equal to
                           or lower than the Maximum Rate for Tortoise Notes of
                           such series shall be accepted; and

                  (iii)    Each Existing Holder's Submitted Bid for Tortoise
                           Notes of such series specifying any rate that is
                           higher than the Maximum Rate for Tortoise Notes of
                           such series and the Submitted Sell Orders for
                           Tortoise Notes of such series of each Existing Holder
                           shall be accepted, thus entitling each Existing
                           Holder that submitted or on whose behalf was
                           submitted any such Submitted Bid or Submitted Sell
                           Order to sell the Tortoise Notes of such series
                           subject to such Submitted Bid or Submitted Sell
                           Order, but in both cases only in an amount equal to
                           the principal amount of Tortoise Notes of such series
                           obtained by multiplying the principal amount of
                           Tortoise Notes of such series subject to Submitted
                           Bids described in clause (ii) of this paragraph (b)
                           by a fraction, the numerator of which shall be the
                           principal amount of Outstanding Tortoise Notes of
                           such series held by such Existing Holder subject to
                           such Submitted Bid or Submitted Sell Order and the
                           denominator of which shall be the aggregate principal
                           amount of Outstanding Tortoise Notes of such series
                           subject to all such Submitted Bids and Submitted Sell
                           Orders.

               (c) If all of the Outstanding Tortoise Notes of a series are
subject to Submitted Hold Orders, all Submitted Bids for Tortoise Notes of such
series shall be rejected.

               (d) If, as a result of the procedures described in clause (iv) or
(v) of paragraph (a) or clause (iii) of paragraph (b) of this Section 4, any
Existing Holder would be entitled or required to sell, or

                                      B-8

<PAGE>

any Potential Holder would be entitled or required to purchase, less than an
Authorized Denomination of Tortoise Notes on any Auction Date, the Auction Agent
shall, in such manner as it shall determine in its sole discretion, round up or
down the principal amount of Tortoise Notes of such series to be purchased or
sold by any Existing Holder or Potential Holder on such Auction Date as a result
of such procedures so that the principal amount of Tortoise Notes so purchased
or sold by each Existing Holder or Potential Holder on such Auction Date shall
be equal to an Authorized Denomination.

               (e) If, as a result of the procedures described in clause (v) of
paragraph (a) of this Section 4, any Potential Holder would be entitled or
required to purchase less than an Authorized Denomination of Tortoise Notes on
any Auction Date, the Auction Agent shall, in such manner as it shall determine
in its sole discretion, allocate Tortoise Notes of such series or purchase among
Potential Holders so that only Tortoise Notes of such series in Authorized
Denominations are purchased on such Auction Date as a result of such procedures
by any Potential Holder, even if such allocation results in one or more
Potential Holders not purchasing Tortoise Notes of such series on such Auction
Date.

               (f) Based on the results of each Auction for a series of Tortoise
Notes, the Auction Agent shall determine the aggregate principal amount of
Tortoise Notes of such series to be purchased and the aggregate principal amount
of Tortoise Notes of such series to be sold by Potential Holders and Existing
Holders and, with respect to each Potential Holder and Existing Holder, to the
extent that such aggregate principal amount of Tortoise Notes and such aggregate
principal amount of Tortoise Notes to be sold differ, determine to which other
Potential Holder(s) or Existing Holder(s) they shall deliver, or from which
other Potential Holder(s) or Existing Holder(s) they shall receive, as the case
may be, Tortoise Notes of such series. Notwithstanding any provision of the
Auction Procedures or the Settlement Procedures to the contrary, in the event an
Existing Holder or Beneficial Owner of Tortoise Notes of a series with respect
to whom a Broker-Dealer submitted a Bid to the Auction Agent for such Tortoise
Notes that was accepted in whole or in part, or submitted or is deemed to have
submitted a Sell Order for such Tortoise Notes that was accepted in whole or in
part, fails to instruct its Agent Member to deliver such Tortoise Notes against
payment therefor, partial deliveries of Tortoise Notes that have been made in
respect of Potential Holders' or Potential Beneficial Owners' Submitted Bids for
Tortoise Notes of such series that have been accepted in whole or in part shall
constitute good delivery to such Potential Holders and Potential Beneficial
Owners.

               (g) Neither the Company nor the Auction Agent nor any affiliate
of either shall have any responsibility or liability with respect to the failure
of an Existing Holder or a Potential Holder to deliver Tortoise Notes of any
series or to pay for Tortoise Notes of any series sold or purchased pursuant to
the Auction Procedures or otherwise.

                                      B-9

<PAGE>

                                   APPENDIX C-
                              RATING OF INVESTMENTS




                         MOODY'S INVESTORS SERVICE, INC.

         Moody's long-term obligation ratings are opinions of the relative
credit risk of fixed-income obligations with an original maturity of one year or
more. They address the possibility that a financial obligation will not be
honored as promised. Such ratings reflect both the likelihood of default and any
financial loss suffered in the even of default.

         "Aaa" Obligations rated Aaa are judged to be of the highest quality,
with minimal credit risk.

         "Aa" Obligations rated Aa are judged to be of high quality and are
subject to very low credit risk.

         "A" Obligations rated A are considered upper-medium grade and are
subject to low credit risk.

         "Baa" Obligations rated Baa are subject to moderate credit risk. They
are considered medium-grade and as such may possess certain speculative
characteristics.

         "Ba" Obligations rated Ba are judged to have speculative elements and
are subject to substantial credit risk.

         "B" Obligations rated B are considered speculative and are subject to
high credit risk.

         "Caa" Obligations rated Caa are judged to be of poor standing and are
subject to very high credit risk.

         "Ca" Obligations rated Ca are highly speculative and are likely in, or
very near, default, with some prospect of recovery of principal and interest.

         "C" Obligations rated C are the lowest rated class of bonds and are
typically in default, with little prospect for recovery of principal and
interest.

         Note: Moody's appends numerical modifiers 1, 2, and 3 to each generic
rating classification from Aa through Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range; and the modifier 3 indicates a ranking in the lower end
of that generic rating category.

         US MUNICIPAL AND TAX-EXEMPT RATINGS

         Municipal ratings are based upon the analysis of four primary factors
relating to municipal finance: economy, debt, finances, and
administration/management strategies. Each of the factors is evaluated
individually and for its effect on the other factors in the context of the
municipality's ability to repay its debt.

         "Aaa" Issuers or issues rated Aaa demonstrate the strongest
creditworthiness relative to other US municipal or tax-exempt issuers or issues.

         "Aa" Issuers or issues rated Aa demonstrate very strong
creditworthiness relative to other US municipal or tax-exempt issuers or issues.

         "A" Issuers or issues rated A present above average creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

         "Baa" Issuers or issues rated Baa represent average creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

                                      C-1

<PAGE>

         "Ba" Issuers or issues rated Ba demonstrate below-average
creditworthiness relative to other US municipal or tax-exempt issuers or issues.

         "B" Issuers or issues rated B demonstrate weak creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

         "Caa" Issuers or issues rated Caa demonstrate very weak
creditworthiness relative to other US municipal or tax-exempt issuers or issues.

         "Ca" Issuers or issues rated Ca demonstrate extremely weak
creditworthiness relative to other US municipal or tax-exempt issuers or issues.

         "C" Issuers or issues rated C demonstrate the weakest creditworthiness
relative to other US municipal or tax-exempt issuers or issues.

         Note: Moody's appends numerical modifiers 1, 2, and 3 to each generic
rating category from Aa through Caa. The modifier 1 indicates that the issuer or
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of that generic rating category.

         DESCRIPTION OF MOODY'S HIGHEST RATINGS OF STATE AND MUNICIPAL NOTES AND
OTHER SHORT-TERM LOANS

         Moody's ratings for state and municipal notes and other short-term
loans are designated "Moody's Investment Grade" ("MIG" or, for variable or
floating rate obligations, "VMIG"). Such ratings recognize the differences
between short-term credit risk and long-term risk. Factors affecting the
liquidity of the borrower and short-term cyclical elements are critical in
short-term ratings. Symbols used will be as follows:

         "MIG-1" This designation denotes superior credit quality. Excellent
protection is afforded by established cash flows, highly reliable liquidity
support, or demonstrated broad-based access to the market for refinancing.

         "MIG-2" This designation denotes strong credit quality. Margins of
protection are ample, although not as large as in the preceding group.

         "MIG-3" This designation acceptable credit quality. Liquidity and
cash-flow protection may be narrow, and market access for refinancing is likely
to be less well-established.

         "SG" This designation denotes speculative-grade credit quality. Debt
instruments in this category may lack sufficient margins of protection. Demand
features rated in this category may be supported by a liquidity provider that
does not have an investment grade short-term rating or may lack the structural
and/or legal protections necessary to ensure the timely payment of purchase
price upon demand.

         "VMIG 1" This designation denotes superior credit quality. Excellent
protection is afforded by the superior short-term credit strength of the
liquidity provider and structural and legal protections that ensure the timely
payment of purchase price upon demand.

         "VMIG 2" This designation denotes strong credit quality. Good
protection is afforded by the strong short-term credit strength of the liquidity
provider and structural and legal protections that ensure the timely payment of
purchase price upon demand.

         "VMIG 3" This designation denotes acceptable credit quality. Adequate
protection is afforded by the satisfactory short-term credit strength of the
liquidity provider and structural and legal protections that ensure the timely
payment of purchase price upon demand.

                                      C-2

<PAGE>

         DESCRIPTION OF MOODY'S SHORT TERM RATINGS

         Moody's short-term ratings are opinions of the ability of issuers to
honor short-term financial obligations. Ratings may be assigned to issuers,
short-term programs or to individual short-term debt instruments. Such
obligations generally have an original maturity not exceeding thirteen months,
unless explicitly noted.

         "P-1" Issuers (or supporting institutions) rated Prime-1 have a
superior ability to repay short-term debt obligations.

         "P-2" Issuers (or supporting institutions) rated Prime-2 have a strong
ability to repay short-term debt obligations.

         "P-3" Issuers (or supporting institutions) rated Prime-3 have an
acceptable ability to repay short-term obligations.

         "NP" Issuers (or supporting institutions) rated Not Prime do not fall
within any of the Prime rating categories.

                                  FITCH RATINGS

         A brief description of the applicable Fitch Ratings ("Fitch") ratings
symbols and meanings (as published by Fitch) follows:

LONG-TERM CREDIT RATINGS

INVESTMENT GRADE

         "AAA" -- Highest credit quality. `AAA' ratings denote the lowest
expectation of credit risk. They are assigned only in case of exceptionally
strong capacity for timely payment of financial commitments. This capacity is
highly unlikely to be affected adversely by foreseeable events.

         "AA" -- Very high credit quality. `AA' ratings denote a very low
expectation of credit risk. They indicate very strong capacity for timely
payment of financial commitments. This capacity is not significantly vulnerable
to foreseeable events.

         "A" -- High credit quality. `A' ratings denote a low expectation of
credit risk. The capacity for timely payment of financial commitments is
considered strong. This capacity may, nevertheless, be more vulnerable to
changes in circumstances or in economic conditions than is the case for higher
ratings.

         "BBB" -- Good credit quality. `BBB' ratings indicate that there is
currently a low expectation of credit risk. The capacity for timely payment of
financial commitments is considered adequate, but adverse changes in
circumstances and in economic conditions are more likely to impair this
capacity. This is the lowest investment-grade category.

SPECULATIVE GRADE

         "BB" -- Speculative. `BB' ratings indicate that there is a possibility
of credit risk developing, particularly as the result of adverse economic change
over time; however, business or financial alternatives may be available to allow
financial commitments to be met. Securities rated in this category are not
investment grade.

                                      C-3

<PAGE>

         "B" -- Highly speculative. `B' ratings indicate that significant credit
risk is present, but a limited margin of safety remains. Financial commitments
are currently being met; however, capacity for continued payment is contingent
upon a sustained, favorable business and economic environment.

         "CCC", "CC", "C" -- High default risk. Default is a real possibility.
Capacity for meeting financial commitments is solely reliant upon sustained,
favorable business or economic developments. A `CC' rating indicates that
default of some kind appears probable. `C' ratings signal imminent default.

         "DDD", "DD", And "D" Default -- The ratings of obligations in this
category are based on their prospects for achieving partial or full recovery in
a reorganization or liquidation of the obligor. While expected recovery values
are highly speculative and cannot be estimated with any precision, the following
serve as general guidelines. `DDD' obligations have the highest potential for
recovery, around 90%-100% of outstanding amounts and accrued interest. `DD'
indicates potential recoveries in the range of 50%-90%, and `D' the lowest
recovery potential, i.e., below 50%. Entities rated in this category have
defaulted on some or all of their obligations. Entities rated `DDD' have the
highest prospect for resumption of performance or continued operation with or
without a formal reorganization process. Entities rated `DD' and `D' are
generally undergoing a formal reorganization or liquidation process; those rated
`DD' are likely to satisfy a higher portion of their outstanding obligations,
while entities rated `D' have a poor prospect for repaying all obligations.

SHORT-TERM CREDIT RATINGS

         A short-term rating has a time horizon of less than 12 months for most
obligations, or up to three years for U.S. public finance securities, and thus
places greater emphasis on the liquidity necessary to meet financial commitments
in a timely manner.

         "F1" -- Highest credit quality. Indicates the strongest capacity for
timely payment of financial commitments; may have an added "+" to denote any
exceptionally strong credit feature.

         "F2" -- Good credit quality. A satisfactory capacity for timely payment
of financial commitments, but the margin of safety is not as great as in the
case of the higher ratings.

         "F3" -- Fair credit quality. The capacity for timely payment of
financial commitments is adequate; however, near-term adverse changes could
result in a reduction to non-investment grade.

         "B" -- Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in financial and
economic conditions.

         "C" -- High default risk. Default is a real possibility. Capacity for
meeting financial commitments is solely reliant upon a sustained, favorable
business and economic environment.

         "D" -- Default. Denotes actual or imminent payment default.

         Notes to Long-term and Short-term ratings:

         "+" or "-" may be appended to a rating to denote relative status within
major rating categories. Such suffixes are not added to the `AAA' Long-term
rating category, to categories below `CCC', or to Short-term ratings other than
`F1'.

         "NR" indicates that Fitch Ratings does not rate the issuer or issue in
question.

         "Withdrawn" -- A rating is withdrawn when Fitch Ratings deems the
amount of information available to be inadequate for rating purposes, or when an
obligation matures, is called, or refinanced.

                                      C-3

<PAGE>

         "Rating Watch" -- Ratings are placed on Rating Watch to notify
investors that there is a reasonable probability of a rating change and the
likely direction of such change. These are designated as "Positive", indicating
a potential upgrade, "Negative", for a potential downgrade, or "Evolving", if
ratings may be raised, lowered or maintained. Rating Watch typically is resolved
over a relatively short period.

         A Rating Outlook indicates the direction a rating is likely to move
over a one to two year period. Outlooks may be positive, stable, or negative. A
positive or negative Rating Outlook does not imply a rating change is
inevitable. Similarly, ratings for which outlooks are `stable' could be
downgraded before an outlook moves to positive or negative if circumstances
warrant such an action. Occasionally, Fitch Ratings may be unable to identify
the fundamental trend. In these cases, the Rating Outlook may be described as
evolving.


                          STANDARD & POOR'S CORPORATION

A brief description of the applicable Standard & Poor's Corporation, a division
of The McGraw-Hill Companies ("Standard & Poor's" or "S&P"), rating symbols and
their meanings (as published by S&P) follows:

         A Standard & Poor's issue credit rating is a current opinion of the
creditworthiness of an obligor with respect to a specific financial obligation,
a specific class of financial obligations, or a specific financial program
(including ratings on medium term note programs and commercial paper programs).
It takes into consideration the creditworthiness of guarantors, insurers, or
other forms of credit enhancement on the obligation. The issue credit rating is
not a recommendation to purchase, sell, or hold a financial obligation, inasmuch
as it does not comment as to market price or suitability for a particular
investor.

         Issue credit ratings are based on current information furnished by the
obligors or obtained by Standard & Poor's from other sources it considers
reliable. Standard & Poor's does not perform an audit in connection with any
credit rating and may, on occasion, rely on unaudited financial information.
Credit ratings may be changed, suspended, or withdrawn as a result of changes
in, or unavailability of, such information, or based on other circumstances.

         Issue credit ratings can be either long-term or short-term. Short-term
ratings are generally assigned to those obligations considered short-term in the
relevant market. In the U.S., for example, that means obligations with an
original maturity of no more than 365 days - including commercial paper.

         Short-term ratings are also used to indicate the creditworthiness of an
obligor with respect to put features on long-term obligations. The result is a
dual rating, in which the short-term ratings address the put feature, in
addition to the usual long-term rating. Medium-term notes are assigned long-term
ratings.

LONG-TERM ISSUE CREDIT RATINGS

         Issue credit ratings are based in varying degrees, on the following
considerations:

         1. Likelihood of payment - capacity and willingness of the obligor to
meet its financial commitment on an obligation in accordance with the terms of
the obligation;

         2. Nature of and provisions of the obligation; and

         3. Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization, or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights. The issue ratings
definitions are expressed in terms of default risk. As such, they pertain to
senior

                                      C-5

<PAGE>

obligations of an entity. Junior obligations are typically rated lower than
senior obligations, to reflect the lower priority in bankruptcy, as noted above.

         "AAA" -- An obligation rated `AAA' has the highest rating assigned by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is extremely strong.

         "AA" -- An obligation rated `AA' differs from the highest-rated
obligations only in small degree. The obligor's capacity to meet its financial
commitment on the obligation is very strong.

         "A" -- An obligation rated `A' is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher-rated categories. However, the obligor's capacity to meet
its financial commitment on the obligation is still strong.

         BBB -- An obligation rated `BBB' exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.

         BB, B, CCC, CC, AND C -- Obligations rated `BB', `B', `CCC', `CC', and
`C' are regarded as having significant speculative characteristics. `BB'
indicates the least degree of speculation and `C' the highest. While such
obligations will likely have some quality and protective characteristics, these
may be outweighed by large uncertainties or major exposures to adverse
conditions.

         BB -- An obligation rated `BB' is less vulnerable to nonpayment than
other speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions, which could
lead to the obligor's inadequate capacity to meet its financial commitment on
the obligation.

         B -- An obligation rated `B' is more vulnerable to nonpayment than
obligations rated `BB', but the obligor currently has the capacity to meet its
financial commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.

         CCC -- An obligation rated `CCC' is currently vulnerable to nonpayment
and is dependent upon favorable business, financial, and economic conditions for
the obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

         CC -- An obligation rated `CC' is currently highly vulnerable to
nonpayment.

         C -- The `C' rating may be used to cover a situation where a bankruptcy
petition has been filed or similar action has been taken, but payments on this
obligation are being continued.

         D -- An obligation rated `D' is in payment default. The `D' rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The `D'
rating also will be used upon the filing of a bankruptcy petition or the taking
of a similar action if payments on an obligation are jeopardized.

         "+/-" -- Plus (+) or minus (-). The ratings from `AA' to `CCC' may be
modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.

                                      C-6

<PAGE>

         "c" -- The `c' subscript is used to provide additional information to
investors that the bank may terminate its obligation to purchase tendered bonds
if the long-term credit rating of the issuer is below an investment-grade level
and/or the issuer's bonds are deemed taxable.

         "P" -- The letter `p' indicates that the rating is provisional. A
provisional rating assumes the successful completion of the project financed by
the debt being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful, timely completion of the
project. This rating, however, while addressing credit quality subsequent to
completion of the project, makes no comment on the likelihood of or the risk of
default upon failure of such completion. The investor should exercise his own
judgment with respect to such likelihood and risk.

         "*" -- Continuance of the ratings is contingent upon Standard & Poor's
receipt of an executed copy of the escrow agreement or closing documentation
confirming investments and cash flows.

         "r" -- The `r' highlights derivative, hybrid, and certain other
obligations that Standard & Poor's believes may experience high volatility or
high variability in expected returns as a result of noncredit risks. Examples of
such obligations are securities with principal or interest return 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.

         N.R. -- Not rated.

         Debt obligations of issuers outside the United States and its
territories are rated on the same basis as domestic corporate and municipal
issues. The ratings measure the creditworthiness of the obligor but do not take
into account currency exchange and related uncertainties.

BOND INVESTMENT QUALITY STANDARDS

         Under present commercial bank regulations issued by the Comptroller of
the Currency, bonds rated in the top four categories (`AAA', `AA', `A', `BBB',
commonly known as investment-grade ratings) generally are regarded as eligible
for bank investment. Also, the laws of various states governing legal
investments impose certain rating or other standards for obligations eligible
for investment by savings banks, trust companies, insurance companies, and
fiduciaries in general.

SHORT-TERM ISSUE CREDIT RATINGS

NOTES

         A Standard & Poor's note ratings reflects the liquidity factors and
market access risks unique to notes. Notes due in three years or less will
likely receive a note rating. Notes maturing beyond three years will most likely
receive a long-term debt rating. The following criteria will be used in making
that assessment:

         Amortization schedule -- the larger the final maturity relative to
other maturities, the more likely it will be treated as a note; and

         Source of payment -- the more dependent the issue is on the market for
its refinancing, the more likely it will be treated as a note.

         Note rating symbols are as follows:

                                      C-7

<PAGE>

         "SP-1" -- Strong capacity to pay principal and interest. An issue
determined to possess a very strong capacity to pay debt service is given a plus
(+) designation.

         "SP-2" -- Satisfactory capacity to pay principal and interest, with
some vulnerability to adverse financial and economic changes over the term of
the notes.

         "SP-3" -- Speculative capacity to pay principal and interest.

         A note rating is not a recommendation to purchase, sell, or hold a
security inasmuch as it does not comment as to market price or suitability for a
particular investor. The ratings are based on current information furnished to
S&P by the issuer or obtained by S&P from other sources it considers reliable.

         S&P does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended, or withdrawn as a result of changes in or unavailability of such
information or based on other circumstances.

COMMERCIAL PAPER

         An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more than
365 days. Ratings are graded into several categories, ranging from `A-1' for the
highest quality obligations to `D' for the lowest. These categories are as
follows:

         "A-1" -- A short-term obligation rated `A-1' is rated in the highest
category by Standard & Poor's. The obligor's capacity to meet its financial
commitment on the obligation is strong. Within this category, certain
obligations are designated with a plus sign (+). This indicates that the
obligor's capacity to meet its financial commitment on these obligations is
extremely strong.

         "A-2" -- A short-term obligation rated `A-2' is somewhat more
susceptible to the adverse effects of changes in circumstances and economic
conditions than obligations in higher rating categories. However, the obligor's
capacity to meet its financial commitment on the obligation is satisfactory.

         "A-3" -- A short-term obligation rated `A-3' exhibits adequate
protection parameters. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of the obligor to
meet its financial commitment on the obligation.

         "B" -- A short-term obligation rated `B' is regarded as having
significant speculative characteristics. The obligor currently has the capacity
to meet its financial commitment on the obligation; however, it faces major
ongoing uncertainties which could lead to the obligor's inadequate capacity to
meet its financial commitment on the obligation.

         "C" -- A short-term obligation rated `C' is currently vulnerable to
nonpayment and is dependent upon favorable business, financial, and economic
conditions for the obligor to meet its financial commitment on the obligation.

         "D" -- A short-term obligation rated `D' is in payment default. The `D'
rating category is used when payments on an obligation are not made on the date
due even if the applicable grace period has not expired, unless Standard &
Poor's believes that such payments will be made during such grace period. The
`D' rating also will be used upon the filing of a bankruptcy petition or the
taking of a similar action if payments on an obligation are jeopardized.

                                      C-8

<PAGE>

         A commercial rating is not a recommendation to purchase, sell, or hold
a security inasmuch as it does not comment as to market price or suitability for
a particular investor. The ratings are based on current information furnished to
S&P by the issuer or obtained by S&P from other sources it considers reliable.

         S&P does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended, or withdrawn as a result of changes in or unavailability of such
information or based on other circumstances.


                                      C-9

<PAGE>

                   Tortoise Energy Infrastructure Corporation

              _____________________________________________________

                       STATEMENT OF ADDITIONAL INFORMATION

              _____________________________________________________

                               ____________, 2004


<PAGE>

                           PART C - OTHER INFORMATION

ITEM 24: FINANCIAL STATEMENTS AND EXHIBITS

         1.       Financial Statements:


         The Registrant's audited financial statements dated February 6, 2004
and unaudited financial statements dated May 31, 2004 and notes to the financial
statements are filed herein and appear in the Statement of Additional
Information.


         2.       Exhibits:


                  a.1.     Articles of Incorporation.1
                  a.2.     Articles of Amendment and Restatement.2
                  b.1.     By-laws. 1
                  b.2.     Amended and Restated Bylaws. 2
                  c.       None.
                  d.1.     Form of Note.*
                  d.2.     Form of Indenture of Trust.*
                  d.3.     Form of Supplemental Indenture of Trust.*
                  d.4.     Statement of Eligibility of Trustee on Form T-1.*
                  d.5.     Fitch Guidelines and Moody's Guidelines.*
                  e.       Terms and Conditions of the Dividend Reinvestment
                           Plan.*
                  f.       Not applicable.
                  g.1.     Investment Advisory Agreement with Tortoise Capital
                           Advisors, L.L.C. *
                  g.2.     Reimbursement Agreement. *
                  h.       Form of Underwriting Agreement. *
                  i.       None.
                  j.       Custody Agreement. *
                  k.1      Stock Transfer Agency Agreement. *
                  k.2      Administration Agreement. *
                  k.3      Fund Accounting Agreement. *
                  k.4      Form of Auction Agency Agreement. *
                  k.5      Form of Broker-Dealer Agreement. *
                  k.6      Form of DTC Representations Letter. *
                  l.       Opinion of Venable LLP *
                  m.       Not applicable.
                  n.       Consent of Auditors. *
                  o.       Not applicable.
                  p.       Subscription Agreement. *
                  q.       None.
                  r.       Code of Ethics for the Registrant and the Adviser. 2
                  s.       Powers of Attorney. 2

-----------------
(*)      Filed herewith.
(1)      Incorporated by reference to Registrant's Registration Statement on
         Form N-2, filed on October 31, 2003 (File Nos. 333-110143 and
         811-21462).
(2)      Incorporated by reference to Pre-Effective Amendment No. 1 to
         Registrant's Registration Statement on Form N-2, filed on January 30,
         2004 (File Nos. 333-110143 and 811-21462).
(3)      Incorporated by reference to Pre-Effective Amendment No. 3 to
         Registrant's Registration Statement on Form N-2, filed on February 20,
         2004 (File Nos. 333-110143 and 811-21462).




<PAGE>


ITEM 25: MARKETING ARRANGEMENTS


         Reference is made to the underwriting agreement for the Registrant's
Tortoise Notes filed herewith as exhibit h.1 to the Registrant's Registration
Statement.


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:


      Securities and Exchange Commission Fees.................    $ 14,000
      Directors' Fees and Expenses............................       6,500
      Printing (other than certificates)......................       5,000
      Accounting fees and expenses............................      15,000
      Legal fees and expenses.................................     170,000
      Rating Agency fees......................................      83,500
      Trustee fees...........................................       10,000
      Auction Agent fees.....................................       21,500
      Miscellaneous...........................................      10,000
                                                                  --------
        Total................................................     $335,500
                                                                  ========


ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL

         None.

ITEM 28. NUMBER OF HOLDERS OF SECURITIES


         As of May 26, 2004, the number of record holders of each class
of securities of the Registrant was


              TITLE OF CLASS                         NUMBER OF RECORD HOLDERS
-------------------------------------------------  -----------------------------
Common Shares (par value $.001 per share)                       80


ITEM 29. INDEMNIFICATION


         Maryland law permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty which is
established by a final judgment as being material to the cause of action. The
Registrant's charter contains such a provision which eliminates directors' and
officers' liability to the maximum extent permitted by Maryland law.

         The Registrant's charter authorizes it, to the maximum extent permitted
by Maryland law and the Investment Company Act of 1940, as amended (the "1940
Act"), to obligate itself to indemnify any present or former director or officer
or any individual who, while a director or officer of the Registrant and at the
request of the Registrant, serves or has served another corporation, real estate
investment trust, partnership, joint venture, trust, employee benefit plan or
other enterprise as a director, officer, partner or trustee, from and against
any claim or liability to which that person may become subject or which that
person may incur by reason of his or her status as a present or former director
or officer of the Registrant and to pay or reimburse his or her reasonable
expenses in advance of final disposition of a proceeding. The Registrant's
Bylaws obligate it, to the maximum extent permitted by Maryland law and the 1940
Act,

<PAGE>

to indemnify any present or former director or officer or any individual who,
while a director of the Registrant and at the request of the Registrant, serves
or has served another corporation, real estate investment trust, partnership,
joint venture, trust, employee benefit plan or other enterprise as a director,
officer, partner or trustee and who is made a party to the proceeding by reason
of his or her service in that capacity from and against any claim or liability
to which that person may become subject or which that person may incur by reason
of his or her status as a present or former director or officer of the
Registrant and to pay or reimburse his or her reasonable expenses in advance of
final disposition of a proceeding. The charter and Bylaws also permit the
Registrant to indemnify and advance expenses to any person who served a
predecessor of the Registrant in any of the capacities described above and any
employee or agent of the Registrant or a predecessor of the Registrant.

         Maryland law requires a corporation (unless its charter provides
otherwise, which the Registrant's charter does not) to indemnify a director or
officer who has been successful in the defense of any proceeding to which he is
made, or threatened to be made, a party by reason of his or her service in that
capacity. Maryland law permits a corporation to indemnify its present and former
directors and officers, among others, against judgements, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection with
any proceeding to which they may be made, or threatened to be made, a party by
reason of their service in those or other capacities unless it is established
that (a) the act or omission of the director or officer was material to the
matter giving rise to the proceeding and (i) was committed in bad faith or (ii)
was the result of active and deliberate dishonesty, (b) the director or officer
actually received an improper personal benefit in money, property or services or
(c) in the case of any criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful. However,
under Maryland law, a Maryland corporation may not indemnify for an adverse
judgement in a suit by or in the right of the corporation or for a judgement of
liability on the basis that personal benefit was improperly received, unless in
either case a court orders indemnification and then only for expenses. In
addition, Maryland law permits a corporation to advance reasonable expenses to a
director or officer upon the corporation's receipt of (a) a written affirmation
by the director or officer of his or her good faith belief that he or she has
met the standard of conduct necessary for indemnification by the corporation and
(b) a written undertaking by him or her or on his or her behalf to repay the
amount paid or reimbursed by the corporation if it is ultimately determined that
the standard of conduct was not met.

         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 stockholders 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.


         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.

<PAGE>

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, U.S. Bank National
Association, 425 Walnut Street, M.L. CN-OH-W6TC, Cincinnati, Ohio 45202, at the
offices of the transfer agent, Computershare Investor Services, LLC, Two North
LaSalle Street, Chicago, Illinois 60602, at the offices of the administrator,
U.S. Bankcorp Fund Services, LLC, 615 East Michigan Street, Milwaukee, WI 53202,
at the offices of the Auction Agent, The Bank of New York, 101 Barclay Street,
7W, New York, NY 10286 or at the offices of the Trustee, BNY Midwest Trust
Company, N.A., 2 N. LaSalle Street, Chicago, IL 60602.


ITEM 32. MANAGEMENT SERVICES

         Not applicable.

ITEM 33. UNDERTAKINGS


         1. The Registrant undertakes to suspend the offering of Tortoise Notes
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.

         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 28th day
of June, 2004.

                                      Tortoise Energy Infrastructure Corporation


                                      By:  /s/ David J. Schulte
                                           -------------------------------------
                                           David J. Schulte, President

         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>
<S>                                        <C>                                          <C>
/s/ Terry C. Matlack*                      Director and Treasurer (Principal
-----------------------------              Financial and Accounting Officer)            June 28, 2004
Terry C. Matlack

/s/ Conrad S. Ciccotello*                              Director                         June 28, 2004
-----------------------------
Conrad S. Ciccotello

/s/ John R. Graham*                                    Director                         June 28, 2004
-----------------------------
John R. Graham

/s/ Charles E. Heath*                                  Director                         June 28, 2004
-----------------------------
Charles E. Heath

/s/ H. Kevin Birzer*                                   Director                         June 28, 2004
-----------------------------
H. Kevin Birzer

/s/ David J. Schulte                              President and Chief
-----------------------------                      Executive Officer
David J. Schulte                              (Principal Executive Officer)             June 28, 2004

<FN>
*        David J. Schulte pursuant to power of attorney, filed on January 30,
         2004 in connection with Pre-Effective Amendment No. 1 to Registrant's
         Registration Statement on Form N-2, filed on January 30, 2004 (File
         Nos. 333-110143 and 811-21462) and is hereby incorporated by reference.
</FN>
</TABLE>

<PAGE>


                                  EXHIBIT INDEX

a.1.     Articles of Incorporation.1
a.2.     Articles of Amendment and Restatement. 2
b.1.     By-laws. 1

b.2.     Amended and Restated Bylaws. 2

c.       None.
d.1.     Form of Note.*
d.2.     Form of Indenture of Trust.*
d.3.     Form of Supplemental Indenture of Trust.*
d.4.     Statement of Eligibility of Trustee on Form T-1.*
d.5.     Fitch Guidelines and Moody's Guidelines.*

e.       Terms and Conditions of the Dividend Reinvestment Plan.*

f.       Not applicable.

g.1.     Investment Advisory Agreement with Tortoise Capital Advisors, L.L.C.*
g.2.     Reimbursement Agreement. *

h.       Form of Underwriting Agreement. *

i.       None.
j.       Custody Agreement. *
k.1      Stock Transfer Agency Agreement. 2
k.2      Administration Agreement. *
k.3      Fund Accounting Agreement. *
k.4      Form of Auction Agency Agreement. *
k.5      Form of Broker-Dealer Agreement. *
k.6      Form of DTC Representations Letter. *

l.       Opinion of Venable LLP *
m.       Not applicable.

n        Consent of Auditors. *
o.       Not applicable.
p.       Subscription Agreement. *

q.       None.
r.       Code of Ethics for the Registrant and the Adviser. 2
s.       Powers of Attorney. 2

------------------
(*)      Filed herewith.
(1)      Incorporated by reference to Registrant's Registration Statement on
         Form N-2, filed on October 31, 2003 (File Nos. 333-110143 and
         811-21462).
(2)      Incorporated by reference to Pre-Effective Amendment No. 1 to
         Registrant's Registration Statement on Form N-2, filed on January 30,
         2004 (File Nos. 333-110143 and 811-21462).
(3)      Incorporated by reference to Pre-Effective Amendment No. 3 to
         Registrant's Registration Statement on Form N-2, filed on February 20,
         2004 (File Nos. 333-110143 and 811-21462).


</TEXT>
</DOCUMENT>
