H&R REAL ESTATE INVESTMENT TRUST  H&R FINANCE TRUST  Notes to Combined Financial Statements   (In thousands of dollars, except unit and per unit amounts)  Years ended December 31, 2010 and 2009  *  Relates to seven non-recourse mortgages to the REIT for income properties in which the tenants, Boscov’s Department Store, Bruno’s  Supermarkets LLC and Great Atlantic and Pacific Tea Company (“A&P”), have filed for protection under Chapter 11 of the United States  Bankruptcy Code. The REIT has handed over control of three of these income properties to the lenders and therefore expects to be  released from any further obligations under these non-recourse mortgages upon the transfer of title to the lenders. 8. Debentures payable:  7.  Mortgages payable (continued):  Years ending December 31: 2011 170,601 $ 2012 363,792 2013 203,380 2014 278,761 2015 320,217 Thereafter 1,296,418 2,633,169 M ortgages pay able due on demand * 77,365 Financing costs and mark-to-market adjustment arising on acquisitions  (3,827) 2,706,707 $  Future principal mortgage pay ments are as follow s: 2010 2009 Maturity Contractual  interest rate Effective  interest  rate Conversion  price Face  value Carrying  value Carrying  value 2013 C onv ertible Debentures (a) June 30, 2013 6.65% 9.10% 23.11 $ $115,000 $108,840 $106,734 2014 C onv ertible Debentures (b) December 31, 2014 6.75% 12.30% 14.00 145,027 120,153 119,427 2017 C onv ertible Debentures  (c) June 30, 2017 6.00% 8.60% 19.00 175,000 153,266 150,830 2020 C onv ertible Debentures (d) June 30, 2020 5.90% 7.53% 23.50 100,000 89,241 - Series A Senior Debentures (e) February 3, 2015 5.20% 5.40% - 115,000 114,154 - Series B Senior Debentures (e) February 3, 2017 5.90% 6.06% - 115,000 114,073 - Series C Senior Debentures (e) December 1, 2018 5.00% 5.30% - 125,000 122,613 - Non-Convertible Debentures (f) - 11.50% 12.90% - - - 188,767 $890,027 $822,340 $565,758 14 