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AgU Sells Studio Property in Lauderdale
AgU Entertainment Corp. has entered into an agreement to sell its primary 4 acre facility and approximately 23 acre property, to Tarragon South Development Corp. for $15 million. Tarragon intends to develop the land for commercial and residential use. In connection with the Agreement for Purchase and Sale with Tarragon, the AgU also entered into a letter agreement, pursuant to which Tarragon agreed to provide a bridge loan of $2.5 million to the company, upon certain conditions being met, to be advanced as a third mortgage secured by the real estate. Net proceeds from the bridge loan plus the net proceeds from the sale of the property will be used to fund the working capital needs of AgU, the continued development and rollout of The Tube music network, the e-commerce platform and for general corporate purposes. Completion of both the sale and bridge loan transactions are subject to customary closing conditions. AgU anticipates the sale of the property will close by the end of December 2005.
David Levy, President of AgU commented, "The property being sold is not a part of the growth plans of AgU. The sale of the property will improve our balance sheet and should have a positive effect on our ability to obtain favorable financing for future growth. Our full attention is on the growth of The Tube and particularly expanding the reach of The Tube into additional U.S. households and major markets throughout the Country."
No comment could be obtained as to whether the company would be staying in the area or relocating.
The Lauderdale Lakes property was meant to become a studio. This was not the first attempt to turn the old building into a production studio.
We also did not receive a comment as to whether they planned on continuing to run a production studio.
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