In defualt or dispute on rent?, page-2

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Announcements - Arrow Primary InfrastructureFund

31July 2019: Default Notice served on Murray River Organics

Arrow directors advise thatsolicitors acting for Sandhurst Trustees Limited have served a Notice ofDefault on Murray River Organics (MRO), the tenant of the Fund’s Colignan Farmproperty near Mildura.

The Notice was served yesterdayin relation to rent and GST totalling $689,511.52 which was due on 1 July 2019and remains unpaid. The Fund holds rent security in the form of a bankguarantee for $824,750.00 as well as a Deed of Guarantee and Indemnity from thelisted company Murray River Organics Group Ltd. The Lease provides that if theabove material breach is not rectified within 30 days the Lessor has the rightto re-enter the property and eject the Lessee.

MRO are claiming thatIrrigation Works recently undertaken on the property should be treated as a “replacement”items by the Landlord and not new works, which would cause the rent toincrease. The amount of rent and GST included in the disputed invoice thatrelates to all Irrigation Works is $81,933. Despite written requests MRO havenot quantified their disputed amount nor provided any details of their claim.In regard to all capital works undertaken on the property Arrow believes it hasacted entirely within the terms of the Lease and as previously agreed inwriting with MRO’s senior management.

Arrow has also taken upwith MRO other breaches of the Lease by MRO and concerns about their managementof the property generally.