Unassociated Document


    EXHIBIT
      4.3

     

    STATEMENT
      OF RESOLUTION

    OF

    SERIES
      A PREFERRED STOCK

    


    TO
      THE SECRETARY OF STATE

    OF
      THE STATE OF TEXAS


    Pursuant
      to Article 2.13 of the Texas Business Corporation Act, Internet America, Inc.,
      a
      corporation organized and existing under the laws of the State of Texas (the
      “Corporation”), submits the following statement for the purpose of establishing
      and designating a series of shares and fixing and determining the preferences,
      limitations and relative rights thereof:

     

    1.     The
      name
      of the Corporation is Internet America, Inc.

     

    2.     The
      following resolution, establishing and designating a series of shares and fixing
      and determining the preferences, limitations and relative rights thereof, was
      duly adopted by the Board of Directors of the Corporation on October 11,
      2007.

     

    WHEREAS,
      Article
      IV of the Articles of Incorporation, as amended, of the Corporation (the
      "Articles of Incorporation") provides for a class of authorized shares known
      as
      "Common Stock, comprising 45,000,000 shares, with a par value of $.01 per share
      (the “Common Stock”), issuable from time to time, and for a class of authorized
      shares known as “Preferred Stock”, comprising 5,000,000 shares, with a par value
      of $.01 per share, issuable from time to time in one or more
      series;

     

    WHEREAS,
      pursuant to Article IV of the Articles of Incorporation, the Board of Directors
      of the Corporation is authorized to fix and determine the preferences,
      limitations and relative rights of any wholly unissued series of Preferred
      Stock, and to fix the number of shares constituting such series, and to increase
      or decrease the number of shares of an such series (but not below the number
      of
      shares then outstanding); and

     

    WHEREAS,
      it is
      the desire of the Board of Directors of the Corporation, pursuant to its
      authority as aforesaid, to establish, designate and issue an additional series
      of such Preferred Stock and to fix and determine the preferences, limitations
      and relative rights relating thereto;

     

    NOW,
      THEREFORE, BE IT RESOLVED,
      that
      the Board of Directors does hereby establish and designate a series of Preferred
      Stock of the Corporation and does hereby fix and determine the preferences,
      limitations and relative rights relating to said series of Preferred Stock,
      as
      follows:

    


    Series
      A Preferred Stock

    


    
      	1.  	
              Designation
                and Number of Shares.
                There shall be a series of preferred stock that shall be designated
                as
                “Series A Preferred Stock” and the number of shares constituting such
                series shall be 4,000,000. Such number of shares may be increased
                or
                decreased by resolution of the Board; provided,
                however,
                that no decrease shall reduce the number of shares of the Series
                A
                Preferred Stock to less than the number of shares then issued and
                outstanding plus the number of shares issuable upon exercise of
                outstanding rights, options or warrants or upon conversion of outstanding
                securities issued by the
                Corporation.

            


    

     

    
      
        
        

      

      
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      	2.  	
              Rank.
                The Series A Preferred Stock shall rank senior to the Common Stock
                with
                respect to the payment of dividends and as to the distribution of
                assets
                upon a liquidation, dissolution or winding up of the
                Corporation.

            


    

     

    
      	3.  	
               Dividends
                and Distribution.

            


    

     

    
      	(a)  	
              The
                holders of Series A Preferred Stock shall be entitled to receive
                out of
                the assets of the Corporation, when and if declared by the Board
                out of
                funds legally available for that purpose, cumulative preferred cash
                dividends at a rate per annum of 10% for each share of the Series
                A
                Preferred Stock. Such dividends shall be cumulative from the date
                the
                Series A Preferred Stock is issued to the holder (the “Issue Date”) and
                shall be payable in arrears, when and as declared by the Board, on
                March
                31, June 30, September 30 and December 31 of each year (each such
                date
                being referred to herein as a “Dividend Payment Date”), commencing on the
                first Dividend Payment Date following the Issue Date; provided,
                however,
                that if any Dividend Payment Date shall not be a Business Day, then
                the
                Dividend Payment Date shall be on the next succeeding day that is
                a
                Business Day. The period from the Issue Date to the next Dividend
                Payment
                Date and each quarterly period between consecutive Dividend Payment
                Dates
                shall hereinafter be referred to as “Dividend Periods.” “Business Day”
                means any day except Saturday, Sunday and any day which shall be
                a legal
                holiday or a day which banking institutions in Houston, Texas generally
                are authorized or required by law or other governmental actions to
                close.

            


    

     

    
      	(b)  	
              If,
                on any Dividend Payment Date, the Corporation fails to pay dividends,
                then
                until the dividends that were scheduled to be paid on such date are
                paid,
                such dividends shall cumulate. 

            


    

     

    
      	(c)  	
              Dividends
                on account of arrears for any past Dividend Periods may be declared
                and
                paid at any time, without reference to any Dividend Payment Date,
                to
                holders of record on a date designated by the Board, not exceeding
                30 days
                preceding the payment date thereof, as may be fixed by the
                Board.

            


    

     

    
      	(d)  	
              The
                Corporation may not declare a dividend or distribution on the Common
                Stock
                unless it first declares a dividend or distribution on the Series
                A
                Preferred Stock. 

            


    

     

    
      	(e)  	
              The
                Board may fix a record date for the determination of the holders
                of shares
                of Series A Preferred Stock entitled to receive payment of a dividend
                or
                distribution declared thereon, which record date shall be no more
                than 60
                days prior to the date fixed for the payment
                thereof.

            


    

     

    
      	4.  	
              Voting
                Rights.
                The holders of the Series A Preferred Stock shall vote (on an as-converted
                basis) together with the Common Stock, and not as a separate class,
                except:

            


    

     

    
      	(a)  	
              as
                provided under “Certain Restrictions” below;
                or

            


    

     

    
      	(b)  	
              as
                required by law.

            


    

     

    
      
        
        

      

      
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      	5.  	
              Certain
                Restrictions.

            


    

     

    
      	(a)  	
              Whenever
                quarterly dividends or other dividends or distributions payable on
                the
                Series A Preferred Stock are in arrears, thereafter and until all
                accrued
                and unpaid dividends and distributions, whether or not declared,
                on shares
                of the Series A Preferred Stock outstanding shall have been paid
                in full,
                the Corporation shall not:

            


    

     

    
      	(i)  	
              Declare
                or pay dividends on, make any other distributions on, or redeem or
                purchase or otherwise acquire for consideration any shares of stock
                ranking junior (either as to dividends or upon liquidation, dissolution
                or
                winding up of the Corporation) to the Series A Preferred
                Stock;

            


    

     

    
      	(ii)  	
              Declare
                or pay dividends on or make any other distributions on any shares
                of stock
                ranking on a parity (either as to dividends or upon the liquidation,
                dissolution or winding up of the Corporation) with the Series A Preferred
                Stock, except dividends paid ratably with the Series A Preferred
                Stock and
                all such parity stock on which dividends are payable or in arrears
                in
                proportional to the total amounts to which the holders of all such
                shares
                are then entitled; or

            


    

     

    
      	(iii)  	
              Purchase
                or otherwise acquire for consideration any shares of Series A Preferred
                Stock, or any shares of stock ranking on a parity with the Series
                A
                Preferred Stock, except in accordance with a purchase offer made
                in
                writing or by publication (as determined by the Board) to all holders
                of
                Series A Preferred Stock, or to such holders and holders of any such
                shares ranking on a parity therewith, upon such terms as the Board,
                after
                consideration of the respective annual dividend rates and other relative
                rights and preferences of the respective series and classes shall
                determine in good faith will result in fair and equitable treatment
                among
                the respective series or classes.

            


    

     

    
      	(b)  	
              So
                long as any shares of Series A Preferred Stock are outstanding, the
                Corporation shall not, without the prior written consent of the holders
                of
                at least 66.66% of the Series A Preferred Stock, either directly
                or by
                amendment, merger, consolidation or otherwise:


            


    

     

    
      	(i)  	
              amend,
                alter, or repeal any provision of the Articles of Incorporation or
                Bylaws
                of the Corporation relating to the Series A Preferred Stock;
                or

            


    

     

    
      	(ii)  	
              create
                or authorize the creation of or issue any other security convertible
                into
                or exercisable for any equity security, having rights, preferences
                or
                privileges senior to or on parity with the Series A Preferred Stock,
                or
                increase the authorized number of shares of Series A Preferred
                Stock.

            


    

     

    
      	6.  	
              Liquidation
                Preference.

            


    

     

    
      
        
        

      

      
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      	(a)  	
              In
                the event of any liquidation of the Corporation, after payment or
                provision by the Corporation of the debts and other liabilities of
                the
                Corporation, each holder shall be entitled to receive an amount in
                case
                for each share of the then outstanding Series A Preferred Stock held
                by
                such holder equal to $.586 per share, plus an amount equal to all
                accrued
                but unpaid dividends thereon, whether or not earnings are available
                in
                respect of such dividends or such dividends have been declared, to
                and
                including, the date full payment is tendered to the holders with
                respect
                to such liquidation, and no more (such amount being referred to herein
                as
                the “Liquidation Preference”), before any distribution shall be made to
                the holders of any Common Stock upon the liquidation of the
                Corporation.

            


    

     

    
      	(b)  	
              In
                the case the assets of the Corporation available for payment to the
                holders upon a liquidation are insufficient to pay the full Liquidation
                Preference on all outstanding shares of the Series A Preferred Stock,
                then
                the entire assets of the Corporation available for payment to the
                holders
                will be distributed ratably. 

            


    

     

    
      	(c)  	
              Written
                notice of any liquidation of the Corporation, stating a payment date
                and
                the place where the distributable amounts shall be payable, shall
                be given
                by mail, postage prepaid, not less than 30 days prior to the payment
                date
                stated therein, to the holders of record at their respective addresses
                as
                the same shall appear on the books of the
                Corporation.

            


    

     

    
      	7.  	
              Reacquired
                Shares.
                Any shares of the Series A Preferred Stock purchased or otherwise
                acquired
                by the Corporation in any manner whatsoever shall be retired promptly
                upon
                the acquisition thereof. All such shares shall upon retirement become
                authorized but unissued shares of preferred stock and may be reissued
                as
                part of a new series of preferred stock to be created by resolution
                or
                resolutions of the Board, subject to any conditions and restrictions
                on
                issuance set forth herein.

            


    

     

    
      	8.  	
              Conversion
                Rights.

            


    

     

    
      	(a)  	
              Optional
                Conversion. The
                Series A Preferred Stock shall be convertible, without the payment
                of any
                additional consideration, into an equal number of fully paid and
                nonassessable shares of Common Stock, at the option of the holder
                at any
                time, subject to adjustments for stock dividends, splits, combinations
                and
                similar events and as described below under “Anti-dilution
                Provisions.” 

            


    

     

    
      	(b)  	
              Mandatory
                Conversion.
                In
                the event that the per share trading price of the Common Stock is
                equal to
                or greater than $3.00 per share for 90 consecutive trading days,
                the
                Series A Preferred Stock shall convert, automatically, without any
                further
                action on the part of the holders thereof and whether or not the
                certificates representing such shares are surrendered to the Corporation
                or its transfer agent and without the payment of any additional
                consideration, into an equal number of fully paid and nonassessable
                shares
                of Common Stock, subject to adjustments for stock dividends, splits,
                combinations and similar events and as described below under
                “Anti-dilution Provisions.” 

            


    

     

    
      
        
        

      

      
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      	(c)  	
              Conversion
                Procedure.
                The holder of any shares of Series A Preferred Stock may exercise
                the
                conversion right specified in Section 8(a) hereof, or may receive
                a
                certificate representing the shares of Common Stock into which such
                shares
                were converted automatically pursuant to Section 8(b) hereof, by
                surrendering to the Corporation or the transfer agent of the Corporation
                the certificate(s) representing the share(s) of Series A Preferred
                Stock
                to be converted, accompanied by written notice specifying the number
                of
                such shares to be converted. If the certificates representing such
                shares
                of Series A Preferred Stock are to be issued in a name other than
                the name
                on the face of the certificates representing such shares of Series
                A
                Preferred Stock, such certificates shall be accompanied by such evidence
                of assignment and such evidence of the signatory’s authority with respect
                thereto. Conversions shall be deemed to have been effected with respect
                to
                conversions pursuant to (i) Section 8(a) hereof on the date when
                the
                notice of an election to convert pursuant to Section 8(a) hereof
                and the
                certificates representing the shares being converted are actually
                received
                by the Corporation or any transfer agent of the Corporation and (ii)
                Section 8(b) on the 90th
                day referred to therein. Such date that the conversion shall be deemed
                to
                be effective shall be referred to herein as the “Conversion Date.”
                

            


    

     

    
      	(d)  	
              As
                promptly as possible after the Conversion Date, upon surrender by
                the
                holder thereof of the certificate(s) formerly representing the shares
                of
                Series A Preferred Stock, the Corporation shall issue and deliver
                to or
                upon the written order of such holder a certificate or certificates
                for
                the number of shares of Common Stock to which such holder is entitled
                upon
                such conversion. The person in whose name the certificate(s) for
                shares of
                Common Stock to be issued shall be deemed to have become a holder
                of
                record of such shares of Common Stock on the applicable Conversion
                Date.

            


    

     

    
      	(e)  	
              Upon
                conversion of only a portion of the shares covered by a certificate
                representing shares of Series A Preferred Stock surrendered for conversion
                pursuant to Section 8(a) hereof, the Corporation shall issue and
                deliver
                to or upon the written order to the holder of the certificate so
                surrendered for conversion, at the expense of the Corporation, a
                new
                certificate representing the number of shares of Series A Preferred
                Stock
                representing the unconverted portion of the certificate so surrendered.
                

            


    

     

    
      	(f)  	
              The
                Corporation covenants and agrees
                that:

            


    

     

    
      	(i)  	
              The
                shares of Common Stock issuable upon any conversion of any shares
                of
                Series A Preferred Stock will be deemed to have been issued to the
                Person
                exercising such conversion rights set forth herein on the Conversion
                Date,
                and the Person exercising such conversion rights will be deemed for
                all
                purposes to have become the record holder of such shares of Common
                Stock
                on the Conversion Date. “Person” means an individual or entity of any
                kind;

            


    

     

    
      
        
        

      

      
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      	(ii)  	
              All
                shares of Common Stock which may be issued upon any conversion of
                any
                Series A Preferred Stock will, upon issuance, be fully paid and
                non-assessable and free from all taxes, liens and charges with respect
                to
                the issue thereof;

            


    

     

    
      	(iii)  	
              The
                Corporation will take all such action as may be necessary to assure
                that
                all shares of Common Stock issuable upon conversion of shares of
                Series A
                Preferred Stock may be issued without violation of any applicable
                law or
                regulation or any requirements of any domestic securities exchange,
                if
                any, upon which the outstanding Common Stock is listed at the time
                of such
                delivery;

            


    

     

    
      	(iv)  	
              The
                Corporation will at all times reserve and keep available, out of
                its
                authorized but unissued shares of Common Stock or out of shares of
                Common
                Stock held in its treasury, the full number of shares of Common Stock
                into
                which all shares of the Series A Preferred Stock having conversion
                privileges from time to time outstanding are convertible;
                and

            


    

     

    
      	(v)  	
              The
                Corporation will at no time close its transfer books against the
                transfer
                of the Series A Preferred Stock or of any shares of Common Stock
                issued or
                issuable upon the conversion of the Series A Preferred Stock in any
                manner
                which interferes with the timely conversion of the Series A Preferred
                Stock.

            


    

     

    
      	9.  	
              Anti-Dilution
                Provisions.

            


    

     

    
      	(a)  	
              In
                the event that the Corporation issues additional securities the conversion
                price shall be adjusted in accordance with the following
                formula:

            


    

     

    
      	 	 	 	 


      	 	CP2 	  = CP1	*
              (A+B) / (A+C)


      	 	 	
            	 


      	 	CP2 	
              =

            	New Series A Conversion Price


      	 	 	 	 


      	 	CP1 	
              =

            	Series A Conversion Price in effect immediately
              prior to
              new issue


      	 	 	 	 


      	 	
              A

            	
              =

            	
              Number
                of shares of Common Stock deemed to be outstanding immediately prior
                to
                new issue (includes all shares of outstanding common stock, all shares
                of
                outstanding preferred stock on an as-converted basis, and all outstanding
                options on an as-exercised basis; and does not include any convertible
                securities converting into this round of financing)
                

            


      	 	 	 	 


    

    
      	 	
              B

            	 	
              =

            	
              Aggregate
                consideration received by the Corporation with respect to the new
                issue
                divided by CP1

            


      	 	 	 	 	 


      	 	C	 	=	Number of shares of stock issued in the subject
              transaction.


    

     

    
      	(b)  	
              The
                following issuances shall not trigger anti-dilution
                adjustment:

            


    

     

    
      	(i)  	
              securities
                issuable upon conversion of any of the Series A Preferred Stock,
                or as a
                dividend or distribution on the Series A Preferred
                Stock;

            


    

     

    
      
        
        

      

      
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      	(ii)  	
              securities
                issued upon the conversion of any currently outstanding debenture,
                warrant, option, or other convertible
                security;

            


    

     

    
      	(iii)  	
              Common
                Stock issuable upon a stock split, stock dividend, or any subdivision
                of
                shares of Common Stock;

            


    

     

    
      	(iv)  	
              shares
                of Common Stock (or options to purchase such shares of Common Stock)
                issued or issuable to employees or directors of, or consultants to,
                the
                Corporation pursuant to any plan approved by the Corporation’s Board,
                including the Series A Director, but in no event exceeding 1,000,000
                shares; 

            


    

     

    
      	(v)  	
              shares
                of Common Stock issued or issuable to banks, equipment lessors pursuant
                to
                a debt financing, equipment leasing or real property leasing transaction
                approved by the Board of the
                Corporation;

            


    

     

    
      	(vi)  	
              shares
                of Common Stock issued or issuable pursuant to an acquisition of
                another
                corporation or other business entity by the Corporation, or formation
                of a
                joint venture, in each instance expressly approved by the Board of
                the
                Corporation; and

            


    

     

    
      	(vii)  	
              shares
                of Common Stock issued to suppliers of goods or services pursuant
                to
                transactions approved by the Board of the
                Corporation.

            


    

     

    
      	10.  	
              No
                Redemption.
                Except as expressly set forth herein, the shares of the Series A
                Preferred
                Stock shall not be subject to redemption by the
                Corporation.

            


    

     

    
      	11.  	
              Fractional
                Shares.
                The Series A Preferred Stock may not be issued in fractions of a
                share.

            


    

     

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    IN
      WITNESS WHEREOF, the undersigned has executed this Statement of Resolution
      on
      behalf of the Corporation as of this 15th day of October, 2007.

     

    
      	 	 	 
	 	INTERNET
              AMERICA, INC.
	 
 	 
 	 
 
	 	By:  	/s/ William
              E. Ladin, Jr. 
	 	
              
Name: William
              E. Ladin, Jr.
	 	Title:Chairman
              and Chief Executive  Officer



      
        
          


          
          

        

        
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