distribution & taxability

On October 21, 2009 Harvest suspended its Distribution, Premium Distribution, Distribution Reinvestment and Optional Trust Unit Purchase plans ("DRIP") effective immediately. The distribution of C$0.05 per Unit announced on October 8, 2009 was paid in cash on November 16, 2009 to all Harvest unitholders of record on October 22, 2009. There will be no further distributions due to the successful plan of arrangement between Harvest and KNOC.

General Tax Information & Qualified Dividend Status for U.S. Resident Unitholders

Because Harvest is considered a "corporation" for U.S. federal income tax purposes, distributions paid to U.S. unitholders, where the Harvest units are held outside of a qualified retirement plan, are treated as dividends. U.S. individuals must report the amount of such dividends on Internal Revenue Service ("IRS") Form 1040 "U.S. Individual Tax Return" ("Form 1040"). Distributions paid by Harvest on units held by a qualified retirement plan are not required to be reported on Form 1040.

Unitholders that hold their investment in Harvest through a broker or other intermediary will receive an IRS Form 1099-DIV "Dividends and Distributions" ("Form 1099-DIV") that contains information in respect of the distributions paid in that year. Unitholders are encouraged to review the Form 1099-DIV carefully as it may contain incorrect information. Registered unitholders will receive a T3 slip directly from Harvest's transfer agent, Valiant, that indicates the distributions paid denominated in Canadian dollars.

U.S. tax rules state that no portion of the distribution will be considered a tax deferred return of capital unless Harvest computes its current and accumulated earnings and profits in accordance with U.S. income tax principles. U.S. unitholders should note that Harvest does not prepare current and accumulated earnings and profits calculations in accordance with U.S. income tax principles.

Generally, the distributions paid by Harvest to a non-resident are subject to Canadian withholding tax under the Canadian Income Tax Act at a rate of 25%. The withholding tax rate is generally reduced to 15% for payments to unitholders who reside in the United States, as per the Canada- United States Income Tax Convention. The amount of Canadian withholding tax deducted from the cash distributions may be reported by U.S. individual unitholders on IRS Form 1116 "Foreign Tax Credit" to offset a portion of the U.S. tax liability as a result of the distributions.

Alternatively, U.S. unitholders may elect to deduct the Canadian withholding tax in the determination of taxable income. An NR4 tax slip ("Statement of Amounts Paid or Credited to Non-residents of Canada") indicating the amount of Canadian withholding tax deducted (in Canadian dollars) will be issued to U.S. and non-resident unitholders. For unitholders that hold their units through a broker or other intermediary, the broker or intermediary will receive the NR4 slip. Unitholders that hold their investment through a broker or other intermediary are likely to only receive a Form 1099-DIV (see above) that reflects the Canadian withholding tax deducted. Registered unitholders will receive an NR4 slip directly from Valiant.

Unitholders should note that Harvest does not nor is it obligated to prepare the Form 1099-DIV documents.

The information above is not an exhaustive list of all possible U.S. income tax considerations nor is it intended to provide legal or tax advice to any particular holder or potential holder of Harvest Trust Units. Holders or potential holders of Harvest units should consult their own legal and tax advisors as to their particular tax consequences of holding units and reporting income earned and tax withheld from distributions.