Distribution Reinvestment Plan

Pursuant to the Fund's Distribution Reinvestment Plan ("DRIP"), unitholders who are resident in Canada can elect to reinvest their monthly distribution in additional units of the Fund. The DRIP provides unitholders with the potential to maximize the compound growth of their investment and provides other advantages including:

• Automatic reinvestment of monthly distributions at a high rate of return;
• Commission free acquisition of additional units; and
• Registered and non-registered accounts are eligible for the DRIP.

Pricing Mechanism

Distributions will be used to purchase units from treasury or in the market. If the weighted average trading price on the Toronto Stock Exchange for the 10 trading days immediately preceding the relevant distribution date plus commission (the "Market Price") is less than the net asset value per unit on the distribution date, the plan agent shall apply the distributions either to purchase units in the market or from treasury. Purchases in the market will be made by the plan agent on an orderly basis during the six trading day period following the distribution date and the price paid for those units will not exceed 115% of the Market Price. On the expiry of that period, the unused part, if any, of the distributions will be used to purchase units from the Fund at the net asset value per unit on the relevant distribution date.

If the market price is equal to or greater than the net asset value per unit on the distribution date, the plan agent shall apply the distributions to purchase units from the Fund through the issue of new units at the higher of (i) the net asset value per unit on the relevant distribution date and (ii) 95% of the Market Price on the relevant distribution date.

If the units are thinly traded, purchases in the market under the DRIP may significantly affect the market price. Depending on market conditions, direct reinvestment of cash distributions by unitholders in the market may be more, or less, advantageous than the reinvestment arrangements under the DRIP. The units purchased in the market or from the Fund will be allocated on a pro rata basis to the plan participants. The plan agent will furnish to each plan participant a report of the units purchased for the plan participant's account in respect of each distribution and the cumulative total purchased for that account. The plan agent's charges for administering the DRIP and all brokerage fees and commissions in connection with purchases in the market pursuant to the DRIP will be paid by the Fund.

How to Enrol

Unitholders can enrol in the DRIP program by contacting their Investment Advisor and requesting that they be enrolled in the Flaherty & Crumrine Investment Grade Fixed Income Fund Distribution Reinvestment Plan. Investment Advisors are required to notify their distribution/dividend department in order to enrol a client in the DRIP program.

Unitholders may opt in or out of the DRIP at any time, however elections must be received at least 2 business days prior to the record date to be considered for enrolment in the next distribution. The distribution record date is the last business day of the month. Certificates are not issued, including those acquired through the DRIP and a Unitholder's brokerage account is credited monthly with the units acquired via the DRIP.