EXHIBIT 10.1

ASSET PURCHASE AGREEMENT

        THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is made as of May 12, 2006 by and among ACME Television of Florida, LLC, a Delaware limited liability company (“ ATF ”), ACME Television Licenses of Florida, a Delaware limited liability company (“ ATFL, ” and, with ATF, sometimes collectively referred to hereinafter as “ Seller ”), and Sun Broadcasting, Inc., a Florida corporation (“ Buyer ”).

Recitals

    A.        Seller owns and operates analog television broadcast station WTVK(TV) and associated digital television broadcast station WTVK-DT, each in Naples, Florida (collectively the “ Station ”) pursuant to certain licenses and other authorizations (the “ FCC Licenses ”) issued by the Federal Communications Commission (the “ FCC ”).

    B.        Pursuant to the terms and subject to the conditions set forth in this Agreement, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, certain assets used or useful in the operation of the Station.

Agreement

        NOW, THEREFORE, in view of the foregoing and the mutual promises and covenants set forth herein, the parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1: Purchase of Station Assets

    1.1.        Station Assets . On the terms and subject to the conditions set forth in this Agreement, at the Closing (defined below), Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase and acquire from Seller, all right, title and interest of Seller in and to all assets and properties of Seller, real and personal, tangible and intangible, that are used or useful in the operation of the Station (the “ Station Assets ”), other than those assets identified in Section 1.2 hereof, free and clear of all Liens except Permitted Liens (as defined below), including without limitation the following:

    (a)        all licenses, permits and other authorizations issued to ATFL by the FCC with respect to the Station (the “FCC Licenses ”), all of which are identified on Schedule 1.1(a) , including any renewals or modifications thereof between the date hereof and Closing;

    (b)        all of Seller’s equipment, transmitters, antennas, cables, towers, vehicles, furniture, fixtures, spare parts and other tangible personal property of every kind and description used or useful in the operation of the Station, including without limitation those listed on Schedule 1.1(b) , except for any retirements or dispositions thereof made between the date hereof and Closing in the ordinary course of business (the “ Tangible Personal Property ”);

    (c)        all of Seller’s real property used or held for use in the operation of the Stations (including any appurtenant easements and improvements located thereon), including without limitation those listed on Schedule 1.1(c) (the “ Real Property ”);

    (d)        agreements for the sale of advertising time on the Station, and all other contracts, agreements and leases used in the Station’s business, including without limitation those listed on Schedule 1.1(d) , together with all contracts, agreements and leases made between the date hereof and Closing in accordance with Article 4 (the “ Station Contracts ”);

    (e)        all of Seller’s rights in and to the Station’s call letters, as well as Seller’s rights in and to the trademarks, trade names, service marks, internet domain names, copyrights, programs and programming material, jingles, slogans, logos, and other intangible property which are used or useful in the operation of the Station (the “ Intangible Property ”), including without limitation those listed on Schedule 1.1(e) ; and

    (f)        Seller’s rights in and to all the files, documents, records, and books of account (or copies thereof) relating to the operation of the Station, including the Station’s local public inspection file, programming information and studies, engineering data, advertising studies, marketing and demographic data, sales correspondence, lists of advertisers, credit and sales reports, and logs, but excluding records relating to Excluded Assets (as defined below).

    1.2.        Excluded Assets . Notwithstanding anything to the contrary contained herein, the Station Assets shall not include the following assets or any rights, title and interest therein (the “ Excluded Assets ”):

    (a)        all cash and cash equivalents of Seller, including without limitation certificates of deposit, commercial paper, treasury bills, marketable securities, money market accounts and all such similar accounts or investments;

    (b)        all tangible and intangible personal property of Seller retired or disposed of between the date of this Agreement and Closing in accordance with Article 4;

    (c)        all Station Contracts that are terminated or expire prior to Closing in accordance with Article 4;

    (d)        Seller’s corporate and trade names unrelated to the operation of the Station (including the name “ACME”), charter documents, and books and records relating to the organization, existence or ownership of Seller, duplicate copies of the records of the Station, and all records not relating to the operation of the Station;

    (e)        all contracts of insurance, all coverages and proceeds thereunder and all rights in connection therewith, including without limitation rights arising from any refunds due with respect to insurance premium payments to the extent related to such insurance policies;

    (f)        all pension, profit-sharing plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any, maintained by Seller and any affiliates of Seller;

    (g)        the Station’s accounts receivable and any other rights to payment of cash consideration (including without limitation all rights to payments under the Station’s network affiliation agreements, whether or not offset) for goods or services sold or provided prior to the Effective Time (as defined below) or otherwise arising during or attributable to any period prior to the Effective Time (the “ A/R ”);

    (h)        any computer software and programs used in the operation of the Station that are not transferable;

    (i)        all rights and claims of Seller, whether mature, contingent or otherwise, against third parties with respect to the Station and the Station Assets, to the extent arising during or attributable to any period prior to the Effective Time;

    (j)        all deposits and prepaid expenses (and rights arising therefrom or related thereto), except to the extent Seller receives a credit therefor under Section 1.6;

    (k)        all claims of Seller with respect to any Tax (as defined below) refunds to the extent attributable to a taxable period ending on or prior to the Effective Time; and

    (l)        the assets listed on Schedule 1.2 .

    1.3.        Assumption of Obligations . On the Closing Date (as defined below), Buyer shall assume the obligations of Seller with respect to the ownership or holding of the Station Assets arising during, or attributable to, any period of time on or after the Closing Date, including but not limited to those liabilities under the Station Contracts and the FCC Licenses, the obligations described in Section 5.7 and any other liabilities of Seller to the extent Buyer receives a credit therefor under Section 1.6 (collectively, the “ Assumed Obligations ”). Except for the Assumed Obligations, Buyer does not assume, and will not be deemed by the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby to have assumed, any other liabilities or obligations of Seller, all of which shall remain the obligation of Seller (the “ Retained Obligations ”).

    1.4.        Purchase Price . In consideration for the conveyance of the Station Assets to Buyer, at Closing Buyer shall pay Seller, by wire transfer of immediately available funds, the sum of Forty-Five Million Dollars ($45,000,000), subject to adjustment pursuant to Sections 1.6 and 9.3(d) (the “ Purchase Price ”).

    1.5.        Escrow Deposit . Within one (1) business day of the date of this Agreement, Buyer shall make a deposit by wire transfer of immediately available funds or a letter of credit from a bank acceptable to Seller of Two Million Two Hundred Twenty-Five Thousand Dollars ($2,225,000) (the “ Escrow Deposit ”) with the escrow agent (the “ Escrow Agent ”) pursuant to the Escrow Agreement (the “ Escrow Agreement ”) of even date herewith by and among Buyer, Seller and the Escrow Agent. At Closing, the Escrow Deposit (if cash) shall be disbursed to Seller and applied to the Purchase Price, and any interest accrued thereon shall be disbursed to Buyer. If this Agreement is terminated by Seller pursuant to Section 10.1(c), the Escrow Deposit and all interest accrued thereon shall be disbursed to Seller (through distribution of monies being held by Escrow Agent or, as the case may be, by drawing down on the letter of credit) and credited as liquidated damages under Section 10.5 hereof. If this Agreement is terminated for any other reason, the Escrow Deposit and all interest accrued thereon shall be disbursed to Buyer (or, if a letter of credit, returned to Buyer). If the Escrow Deposit is a letter of credit, the Escrow Agent shall be instructed to draw down on the entire amount of the Escrow Deposit if the letter of credit is not replaced with one of equal duration at least thirty (30) days prior to its expiration and this Agreement has not been terminated in accordance with its terms or Seller has made a claim for the Escrow Deposit that is still subject to review by any court of competent jurisdiction based on a complaint or other request for relief that has been or may be filed. The parties shall each instruct the Escrow Agent to disburse the Escrow Deposit and all interest thereon to the party entitled thereto and shall not, by any act or omission, delay or prevent any such disbursement. Any failure by Buyer to make the Escrow Deposit within one (1) business day of the date hereof constitutes a material default as to which the Cure Period under Section 10.1 does not apply, thereby entitling Seller to immediately terminate this Agreement.

    1.6.        Prorations and Adjustments .

    (a)        All prepaid and deferred income and expenses relating to the Station Assets and arising from the operation of the Station shall be prorated between Buyer and Seller in accordance with accounting principles generally accepted in the United States (“ GAAP ”) as of 12:01 a.m. on the day of Closing (the “ Effective Time ”). Such prorations shall include without limitation all music and other license fees, employee performance incentives set forth in employment agreements or annual compensation plans, any vacation for Transferred Employees (as defined below) (except accruals for the fiscal year of Seller in which Closing occurs for which there shall be no adjustment), utility expenses, rent and other amounts under Station Contracts and similar prepaid and deferred items. Seller shall receive a credit for all of the Station’s deposits and prepaid expenses. Sales commissions related to the sale of advertisements broadcast on the Station prior to the Effective Time shall be the responsibility of Seller, and sales commissions related to the sale of advertisements broadcast on the Station after the Effective Time shall be the responsibility of Buyer. All Taxes, other than transfer taxes, related to the Station Assets accrued or accruable with respect to events occurring on or prior to the Effective Time shall be borne by Seller. All Taxes related to the Station Assets accrued or accruable with respect to events occurring after the Effective Time, including any transfer taxes, shall be borne by Buyer. Ad valorem, real estate and other property Taxes (except transfer taxes as provided by Section 11.1), if any, with respect to the Station Assets shall be pro-rated on a per diem basis.

    (b)        With respect to trade, barter or similar agreements for the sale of time for goods or services assumed by Buyer pursuant to Section 1.1(d), if at Closing the Station has an aggregate negative or positive barter balance ( i.e ., the amount by which the value of air time to be provided by the Station after the Effective Time exceeds, or conversely, is less than, the fair market value of corresponding goods and services), there shall be no proration or adjustment, unless the negative or positive barter balance of the Station as an aggregate exceeds $10,000, in which event such excess or deficiency, as the case may be, shall be treated either as prepaid time sales or a receivable of Seller, and adjusted for as a proration in Buyer’s or Seller’s favor, as applicable. In determining barter balances, the value of air time shall be based upon Seller’s rates as of the Closing Date, and corresponding goods and services shall include those to be received by the Station after Closing plus those received by the Station before Closing to the extent conveyed by Seller to Buyer as a part of the Station Assets.

    (c)        No later than three (3) business days prior to the Closing Date, Seller shall provide Buyer with a statement setting forth a reasonably detailed computation of Seller’s reasonable and good faith estimate of the Adjustment Amount (as defined below) as of Closing (the “ Preliminary Adjustment Report ”). As used herein, the “ Adjustment Amount ” means the net amount by which the Purchase Price is to be increased or decreased in accordance with this Section 1.6. If the Adjustment Amount reflected on the Preliminary Adjustment Report is a credit to Buyer, then the Purchase Price payable at Closing shall be reduced by the amount of the preliminary Adjustment Amount, and if the Adjustment Amount reflected on the Preliminary Adjustment Report is a charge to Buyer, then the Purchase Price payable at Closing shall be increased by the amount of such preliminary Adjustment Amount. For a period of ninety (90) days after Closing, Seller and its auditors and Buyer and its auditors may review the Preliminary Adjustment Report and the related books and records of Seller with respect to the Station, and Buyer and Seller will in good faith seek to reach agreement on the final Adjustment Amount. If agreement is reached within such 90-day period, then, within five (5) business days thereafter, Seller shall pay to Buyer or Buyer shall pay to Seller, as the case may be, an amount equal to the difference between (i) the agreed Adjustment Amount and (ii) the preliminary Adjustment Amount indicated in the Preliminary Adjustment Report. If agreement is not reached within such 90-day period, then the dispute resolutions of Section 1.6(d) shall apply.

    (d)        If the parties do not reach an agreement on the Adjustment Amount within the 90-day period specified in Section 1.6(c), then Seller and Buyer shall select an independent accounting firm of recognized national standing (the “ CPA ”) to resolve the disputed items. If Seller and Buyer do not agree on the CPA within five (5) business days after the end of such 90-day period, then the CPA shall be a nationally recognized independent accounting firm selected by lot (after excluding one firm designated by Seller and one firm designated by Buyer). Buyer and Seller shall each inform the CPA in writing as to their respective positions with respect to the Adjustment Amount, and each shall make available to the CPA any books and records and work papers relevant to the preparation of the CPA’s computation of the Adjustment Amount. The CPA shall be instructed to complete its analysis within thirty (30) days from the date of its engagement and upon completion to inform the parties in writing of its own determination of the Adjustment Amount and the basis for its determination. Any determination by the CPA shall be final and binding on the parties. Within five (5) business days after the CPA delivers to the parties its written determination of the Adjustment Amount, Seller shall pay to Buyer, or Buyer shall pay to Seller, as the case may be, an amount equal to the difference between (i) the Adjustment Amount as determined by the CPA and (ii) the preliminary Adjustment Amount indicated in the Preliminary Adjustment Report.

    (e)        Concurrently with the payment of any amount required to be paid under Section 1.6(c) or (d), the payor shall pay the payee interest on such amount for the period from the Closing Date until the date paid at a rate equal to seven percent (7%) per annum. All payments to be made under Section 1.6 shall be paid by wire transfer in immediately available funds to the account of the payee at a financial institution in the United States and shall for all purposes constitute an adjustment to the Purchase Price.

    1.7.        Allocation . After Closing, Buyer and Seller will allocate the Purchase Price in accordance with the respective fair market values of the Station Assets and the goodwill being purchased and sold in accordance with the requirements of Section 1060 of the Internal Revenue Code of 1986, as amended (the “ Code ”), based upon an appraisal by a nationally recognized broadcast appraiser selected by Buyer within sixty (60) days after Closing and acceptable to Seller (and whose fees and expenses shall be paid one-half by Seller and one-half by Buyer). Buyer and Seller each shall file its respective federal income tax returns and its other tax returns reflecting the allocation made pursuant to this Section.

    1.8.        Closing . The consummation of the sale and purchase of the Station Assets provided for in this Agreement (the “Closing ”) shall take place on a date (the “ Closing Date ”) that is the tenth (10th) business day after the date of public notice of the FCC Consent (as defined below), or on such earlier day after such public notice as Buyer and Seller may mutually agree, subject to the satisfaction or waiver of the conditions set forth in Articles 6 and 7 hereof.

    1.9.        Governmental Consents .

    (a)        Within five (5) business days of the date of this Agreement, Buyer and Seller shall file an application with the FCC (the “ FCC Application ”) requesting FCC consent (the “ FCC Consent ”) to the assignment of the FCC Licenses to Buyer. Buyer and Seller shall diligently prosecute the FCC Application and otherwise use their commercially reasonable efforts to obtain the FCC Consent at the earliest practicable date. To that end, the parties shall cooperate with each other in timely (i) providing any additional information requested by the FCC or in making any amendments to the FCC Application and (ii) opposing any petition to deny, informal objection, application for review, petition for reconsideration, or notice appeal with any court which objects to the issuance of the FCC Consent or which requests that the FCC Consent be reversed or modified.

    (b)        If applicable, within ten (10) business days after the date of this Agreement, Buyer and Seller shall make any required filings with the United States Department of Justice pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”) with respect to the transactions contemplated hereby (including a request for early termination of the waiting period thereunder), and shall thereafter promptly respond to all requests received from such agencies for additional information or documentation. Expiration or termination of any applicable waiting period under the HSR Act is referred to herein as “HSR Clearance .”

    (c)        Buyer and Seller shall promptly provide each other with copies of all documents filed with or received from the FCC or any other governmental agency with respect to this Agreement or the transactions contemplated hereby. Buyer and Seller shall furnish each other with such information and assistance as the other may reasonably request in connection with their preparation of any governmental filing hereunder.

    (d)        The FCC Consent and HSR Clearance are referred to herein collectively as the “ Governmental Consents .”

ARTICLE 2: Seller Representations and Warranties

        Seller makes the following representations and warranties to Buyer:

    2.1.        Organization . AFT and ATFL are each duly organized, validly existing and in good standing under the laws of the State of Delaware, and each is qualified to do business in the State of Florida. AFT and ATFL each has the requisite power and authority to execute, deliver and perform this Agreement and all of the other agreements and instruments to be made by Seller pursuant hereto (collectively, the “ Seller Ancillary Agreements ”) and to consummate the transactions contemplated hereby.

    2.2.        Authorization . The execution, delivery and performance of this Agreement and the Seller Ancillary Agreements by Seller have been duly authorized and approved by all necessary action of Seller and do not require any further authorization or consent of Seller. This Agreement is, and each Seller Ancillary Agreement when made by Seller and the other parties thereto will be, a legal, valid and binding agreement of Seller enforceable in accordance with its terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors’ rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

    2.3.        No Conflicts . Except as set forth on Schedule 2.3 and except for the Governmental Consents and consents to assign certain of the Station Contracts as set forth on Schedule 1.1(c) or Schedule 1.1(d) , the execution, delivery and performance by Seller of this Agreement and the Seller Ancillary Agreements and the consummation by Seller of any of the transactions contemplated hereby does not (a) conflict with any organizational documents of Seller, (b) conflict with, result in a breach of or give rise to a right of termination or acceleration or constitute a default under any Station Contracts, (c) conflict with any law, judgment, order, or decree to which Seller is subject, or (d) require the consent or approval of, or a filing by Seller with, any governmental authority or any third party.

    2.4.        FCC Licenses . Except as set forth on Schedule 1.1(a) :

    (a)        ATFL is the holder of the FCC Licenses identified on Schedule 1.1(a) , which are all of the FCC licenses, permits and authorizations required for the present operation of the Station. The FCC Licenses are in full force and effect and have not been revoked, suspended, canceled, rescinded or terminated and have not expired. There is not pending any action by or before the FCC to revoke, suspend, cancel, rescind or materially adversely modify any of the FCC Licenses (other than proceedings to amend FCC rules of general applicability). There is not issued or outstanding, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, or order of forfeiture against the Station or against Seller with respect to the Station that could result in any such action. The Station is operating in compliance in all material respects with the FCC Licenses, the Communications Act of 1934, as amended (the “ Communications Act ”), and the rules, regulations and published policies of the FCC (the “FCC Rules ”).

    (b)        The Station has been assigned a channel by the FCC for the provision of digital television (“ DTV ”) service, and the FCC Licenses include such authorization. The Station is broadcasting the DTV signal in accordance with such authorization in all material respects.

    2.5.        Taxes .

    (a)        Seller has, in respect of the Station’s business, filed all Tax Returns (as defined below) required to have been filed by it under applicable law, and has paid all Taxes which have become due pursuant to such Tax Returns or pursuant to any assessments which have become payable. Seller is not a foreign person within the meaning of Section 1445 of the Code.

    (b)        As used herein, (i) “ Tax ” (and, in the plural, “ Taxes ”) shall mean (A) any domestic or foreign federal, state or local taxes, charges, fees, levies, imposts, duties and governmental fees or other like assessments or charges of any kind whatsoever (including without limitation any income, net income, gross income, receipts, windfall profit, severance, property, production, sales, use, license, excise, registration, franchise, employment, payroll, withholding, alternative or add-on minimum, intangibles, ad valorem, transfer, gains, stamp, estimated, transaction, title, capital, paid-up capital, profits, occupation, premium, value-added, recording, real property, personal property, inventory and merchandise, business privilege, federal highway use, commercial rent or environmental tax), and (B) all interest, penalties, fines, additions to tax or additional amounts imposed by any taxing authority in connection with any item described in clause (i), and (ii) “ Tax Returns ” shall mean any return, report or statement required to be filed with respect to any Tax (including any attachments thereto and any amendments thereof) including without limitation any information return, claim for refund, amended return or declaration of estimated Tax, and including, where permitted or required, consolidated, combined or unitary returns for any group of entities that includes any Seller.

    2.6.        Personal Property . Schedule 1.1(b) contains a list of material items of Tangible Personal Property included in the Station Assets. Subject to Section 1.2(b), the Tangible Personal Property is all of the tangible personal property required to operate the Station’s business in the manner in which it is currently operated. Except as set forth on Schedule 1.1(b) , Seller has good and marketable title to the Tangible Personal Property free and clear of liens, claims and encumbrances (“ Liens ”) other than Permitted Liens (as defined below). Except as set forth on Schedule 1.1(b) , all material items of Tangible Personal Property are in operating condition, ordinary wear and tear excepted. As used herein, “ Permitted Liens ” means, collectively, the Assumed Obligations, liens for taxes not yet due and payable, liens that will be released at or prior to Closing, and such other easements, rights of way, building and use restrictions, exceptions, reservations and limitations that do not in any material respect detract from the value of the property subject thereto or impair the use thereof in the ordinary course of the business of the Station.

    2.7.        Intentionally Omitted .

    2.8.        Contracts . Schedule 1.1(d) contains a list of all material Station Contracts included in the Station Assets. Except as set forth on Schedule 1.1(d) , each of the Station Contracts (including without limitation each of the real property leases included in the Station Contracts) is in effect and is binding upon Seller and, to Seller’s knowledge, the other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors’ rights generally). Seller has performed its obligations under each of the Station Contracts in all material respects, and is not in material default thereunder, and to Seller’s knowledge, no other party to any of the Station Contracts is in default thereunder in any material respect. Subject to Section 1.2(c), the Station Contracts are all of the contracts required to operate the Station’s business in the manner in which it is currently operated.

    2.9.        Environmental . Except as set forth on Schedule 2.9 , to Seller’s knowledge, Seller has complied in all material respects with all environmental, health and safety laws applicable to the Station Assets, including without limitation Subpart I, Part 1 of the FCC Rules, 47 C.F.R. §§ 1.1301 et seq. There is no action, suit or proceeding pending or, to Seller’s knowledge, threatened, against Seller that asserts that Seller has violated any environmental, health or safety laws applicable to the Station Assets.

    2.10.        Intangible Property . Schedule 1.1(e) contains a description of the material Intangible Property included in the Station Assets. Except as set forth on Schedule 1.1(e) , (a) to Seller’s knowledge, Seller’s use of the Intangible Property does not infringe upon any third party’s rights in any material respect; (b) the Intangible Property is not the subject of any pending or, to Seller’s knowledge, threatened legal proceedings claiming infringement, unauthorized use or violation by Seller or the Station; and (c) Seller has not received any written notice that its use of the Intangible Property at the Station is unauthorized or violates or infringes upon the rights of any other person or challenging the ownership, use, validity or enforceability of any Intangible Property. Except as set forth on Schedule 1.1(e) , to Seller’s knowledge, Seller owns or has the right to use the Intangible Property free and clear of Liens other than Permitted Liens. Subject to the provisions of Section 1.2, the Intangible Property, together with the FCC Licenses and the Station Contracts, comprise all of the intangible personal property required to operate the Station’s business in the manner in which it is currently operated.

    2.11.        Employees . Except as set forth on Schedule 2.11 , (a) Seller has complied in all material respects with all labor and employment laws, rules and regulations applicable to the Station’s business, including without limitation those which relate to prices, wages, hours, discrimination in employment and collective bargaining, and (b) there is no unfair labor practice charge or complaint against Seller in respect of the