Document:

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                                                                    EXHIBIT 4.11

                          REGISTRATION RIGHTS AGREEMENT

     This REGISTRATION RIGHTS AGREEMENT ("Agreement"), is dated as of September
18, 2001, among INTERNET AMERICA, INC., a Texas corporation (the "Company"), and
WILLIAM O. HUNT (the "Holder"Holder).

                                    RECITALS:

     A. The Holder and the Company are parties to that certain Letter of Credit
Security Commitment Agreement (the "Commitment Agreement") pursuant to which,
among other things, the Holder will provide security for a letter of credit to
be issued on behalf of the Company (the "Letter of Credit").

     B. In the event the Letter of Credit is funded or reduced by the Company,
the Company may be required to issue to Holder shares of the Company's common
stock, par value $0.01 per share (the "Common Stock") pursuant to the terms of
the Commitment Agreement or a Convertible Note or Warrant Agreement issued by
the Company in connection with the Commitment Agreement or in accordance with
certain preemptive rights granted to Holder under the Commitment Agreement
(collectively, the "Shares").

     C. For good and valuable consideration, the receipt of which is hereby
acknowledged, the Company is willing to grant the registration rights set forth
in this Agreement.

     NOW, THEREFORE, the parties hereby agree as follows:

     SECTION 1. Definitions. As used in this Agreement, the following terms
shall have the following meanings:

     Affiliate: the meaning set forth in Rule 12b-2 under the Exchange Act.

     Commitment Agreement: is defined in the Recitals.

     Effectiveness Period: is defined in Section 5.1(b).

     Exchange Act: the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.

     Incidental Registration: is defined in Section 3.1.

     Loan: is defined in the Recitals.

     Note: is defined in the Recitals.

     Piggy-Back Request: is defined in Section 3.1.

     Prospectus: the prospectus included in any Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A under the Securities Act), as

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amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all materials incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

     Registrable Securities: the Shares and any other securities issued or
issuable with respect to the Shares by way of a stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization or otherwise, provided that any particular
shares of such Registrable Securities shall cease to be Registrable Securities
when (i) a Registration Statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such Registration Statement, (ii) such
shares shall have become eligible to be sold to the public by the Holder
pursuant to Rule 144(k) under the Securities Act, (iii) subsequent disposition
of such shares shall not require registration or qualification of them under the
Securities Act or of any similar state law then in force; or (iv) such shares
shall have ceased to be outstanding.

     Registration: a registration of securities (including Registrable
Securities) under the Securities Act.

     Registration Expenses: any and all expenses incident to performance of or
compliance with this Agreement by the Company and its subsidiaries, including,
without limitation (i) all SEC, stock exchange, NASDAQ and other registration,
listing and filing fees (other than fees and expenses incurred in connection
with compliance with state securities or blue sky laws); (ii) all fees and
expenses incurred in connection with compliance with the rules for trading
securities on the NASDAQ or on any stock exchange on which the Common Stock is
traded (including reasonable fees and disbursements of counsel to the
underwriters in connection with such compliance and the preparation of a Blue
Sky Memorandum and legal investment survey), (iii) all expenses of printing,
distributing, mailing and delivering, any Registration Statement, any
Prospectus, any underwriting agreements, transmittal letters, securities sales
agreements, securities certificates and other documents relating to the
performance of or compliance with this Agreement, (iv) the fees and
disbursements of counsel for the Company and of the independent public
accountants of the Company, including the expenses of any "cold comfort" letters
required by or incident to such performance and compliance, (v) the fees and
expenses of any trustee, transfer agent, registrar, escrow agent or custodian,
(vi) the expenses customarily borne by the issuer incurred in connection with
making road show presentations, if any, to facilitate the distribution and sale
of Registrable Securities, and (vii) all internal expenses of the Company
(including all salaries and expenses of officers and employees performing legal
or accounting duties).

     Registration Request: is defined in Section 2.

     Registration Statement: any registration statement of the Company that
covers any Registrable Securities filed or to be filed pursuant to this
Agreement in connection with a Registration of Registrable Securities pursuant
to Sections 2 or 3, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.

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     Rule 144(k): Rule 144(k) (or any successor provision) under the Securities
Act.

     SEC: the Securities and Exchange Commission.

     Securities Act: the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

     Underwritten Registration or Underwritten Offering: a Registration in which
securities of the Company (including Registrable Securities) are sold to an
underwriter for reoffering to the public.

     SECTION 2. Registration Upon Demand.

     2.1 At any time during the term of this Agreement, the Holder of a majority
of the Registrable Securities then outstanding may deliver to the Company one,
and only one, written request that all, or a portion, of the Registrable
Securities be registered (in an underwritten public offering or otherwise)
pursuant to the terms of this Agreement (a "Demand Registration Request").

     2.2 In addition to the registration rights provided in Section 2.1 above,
at any time, and from time to time, during the term of this Agreement if at any
time the Company is eligible to use SEC Form S-3 (or any successor form) for
registration of secondary sales of Registrable Securities, the Holder of a
majority of the Registrable Securities then outstanding may deliver to the
Company a written request that all, or a portion, of the Registrable Securities
be registered (in an underwritten public offering or otherwise) on such form (an
"S-3 Registration Request, and together with a Demand Registration Request, a
"Registration Request"). The Company will use its best commercial efforts to
qualify and maintain its qualification for eligibility to use Form S-3 for such
purposes.

     2.3 Within 31 days after a Registration Request, the Company shall prepare
and file a Registration Statement on the appropriate SEC form to effect the
Registration of all Registrable Securities which the Company has been requested
to register pursuant to the Registration Request, to the extent requisite to
permit the public disposition of such Registrable Securities. The Company shall
use its best commercial efforts to cause the Registration Statement that is the
subject of this Section 2 to be declared effective by the SEC upon the earlier
to occur of (a) 90 days after the date of the Registration Request, (ii) 60 days
following the filing of the Registration Statement, or (iii) five business days
after receipt of a "no review" or similar letter from the SEC. Should the
Registration Statement not relate to the entire number of Registrable Securities
requested by the Holder in the Registration Request, the Company shall be
required to promptly file a separate Registration Statement (utilizing Rule 462
promulgated under the Exchange Act, where applicable) relating to such
Registrable Securities that then remain unregistered. The provisions of this
Agreement shall relate to such separate Registration Statement as if it were an
amendment to the Registration Statement filed pursuant to the Registration
Request.

     2.4 Notwithstanding the foregoing, if the Company furnishes to the Holder a
certificate signed by the President or Chief Executive Officer of the Company
stating that, in the good faith judgment of the Board of Directors of the
Company, it would be seriously detrimental to the Company and its stockholders
for a Registration Upon Demand to be effected at such time, then, the Company
shall have the right to defer the filing of the Registration Upon Demand for a
period of

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not more than one hundred twenty (120) days after receipt of the Registration
Request under Section 2.1.

     SECTION 3. Incidental Registration Rights.

     3.1 Requests for Incidental Registration. If the Company proposes to
register any of its equity securities (other than pursuant to a Registration on
Form S-4 or S-8 or any successor form) and the Registration form to be used may
be used for Registration of the Registrable Securities, it will give prompt
written notice to the Holder of its intention to effect such Registration (the
"Incidental Registration"). Within ten business days of receiving such written
notice of an Incidental Registration, the Holder may make a written request (the
"Piggy-Back Request") that the Company include in the proposed Incidental
Registration all, or a portion, of the Registrable Securities owned by the
Holder (which Piggy-Back Request shall set forth the Registrable Securities
intended to be disposed of by the Holder and the intended method of disposition
thereof).

     3.2 Obligation to Effect Incidental Registration..

         (a) The Company will use its best commercial efforts to include in any
Incidental Registration all Registrable Securities which the Company has been
requested to register pursuant to any timely Piggy-Back Request to the extent
required to permit the disposition (in accordance with the intended methods
thereof as aforesaid) of the Registrable Securities so to be registered.

         (b) Notwithstanding the preceding Sections 3.1 and 3.2(a):

               (i) the Company shall not be obligated pursuant to this Section 3
     to effect a Registration of Registrable Securities requested pursuant to a
     timely Piggy-Back Request if the Company discontinues the related
     Incidental Registration at any time prior to the effective date of any
     Registration Statement filed in connection therewith; and

               (ii) if a Registration pursuant to this Section 3 involves an
     underwritten offering, and the managing underwriter (or, in the case of an
     offering that is not underwritten, an investment banker) shall advise the
     Company that, in its opinion, the number of securities requested and
     otherwise proposed to be included in such Registration exceeds the number
     which can be sold in such offering without adversely affecting the
     marketability of the offering, the Company will include in such
     Registration to the extent of the number which the Company is so advised
     can be sold in such offering, first, the securities the Company proposes to
     sell for its own account in such Registration and second, the Registrable
     Securities of the Holder requesting to be included in such Registration and
     all other securities requested to be included in such Registration on a pro
     rata basis.

     SECTION 4. Underwriters.

     4.1 Underwritten Offers. The provisions of this Section 4 do not establish
additional registration rights but instead set forth procedures applicable, in
addition to those set forth in Sections 2, 3 and 5, to any Registration which is
an underwritten offering.

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     4.2 Selection of Underwriters. If a Registration of Registrable Securities
is being effected pursuant to Section 3 and such securities are to be
distributed by or through one or more underwriters, the Company shall have the
right to select one or more underwriters to administer the offering.

     4.3 Participation in Underwritten Registrations. A Holder may not
participate in any underwritten Registrations hereunder unless the Holder agrees
to sell the Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Company. 4.4 Holdback Agreement of the
Holder. If and whenever the Company proposes to register any of its equity
securities under the Securities Act for its own account (other than on Form S-4
or S-8 or any successor form) or is required to use reasonable efforts to effect
the Registration of any Registrable Securities under the Securities Act pursuant
to Section 3, each of the Holder agrees not to effect any public sale or
distribution, including any sale pursuant to Rule 144, of any Registrable
Securities, of any other equity securities of the Company, or of any securities
convertible into or exchangeable for any equity securities of the Company,
within 15 days prior to and 90 days (unless advised in writing by the managing
underwriter that a longer period, not to exceed 180 days, is required) after the
effective date of the Registration Statement relating to such Registration,
except as part of such Registration or with the prior written consent of the
Company and the managing underwriter, if any.

     SECTION 5. Registration Procedures.

     5.1 Obligations of the Company. If and whenever the Company is required
pursuant to Section 2 or Section 3 to effect a Registration of Registrable
Securities, the Company shall, subject to the provisions of Section 2 or Section
3:

     (a) prepare and file with the SEC a Registration Statement covering such
Registrable Securities and use commercially reasonable efforts to cause such
Registration Statement to become effective and remain effective as provided
herein;

     (b) use commercially reasonable efforts to prepare and file with the SEC
such amendments and supplements to such Registration Statement as may be
necessary to keep such Registration Statement and Prospectus used in connection
therewith effective at least until the earlier of (i) 90 days after the
effective date of such Registration Statement, and (ii) the completion of the
distribution by the Holder of all of the Registrable Securities covered by such
Registration Statement (the "Effectiveness Period");

     (c) use commercially reasonable efforts to register or qualify the
Registrable Securities covered by such Registration Statement under the
securities or blue sky laws of such states within the United States as the
Company determines, provided that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in any
state wherein it is not so qualified, subject itself to taxation in any state
wherein it is not so subject, or take any action which would subject it to
general service of process in any state wherein it is not so subject; and

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     (d) (i) notify the Holder of Registrable Securities covered by such
Registration Statement if, to its knowledge, such Registration Statement, at the
time it or any amendment thereto became effective, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and, as
promptly as practicable, prepare and file with the SEC a post-effective
amendment to such Registration Statement and use commercially reasonable efforts
to cause such post-effective amendment to become effective such that such
Registration Statement, as so amended, shall not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, and (ii) notify the
Holder of Registrable Securities covered by such Registration Statement, at any
time when a Prospectus relating thereto is required to be delivered under the
Securities Act, if, to its knowledge, the Prospectus included in such
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and, as promptly as practicable, prepare
and furnish to the Holder a reasonable number of copies of a supplement to or an
amendment of such Prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such Prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.

     The Holder agrees that upon receipt of any notice from the Company pursuant
to Section 5.1(d), the Holder will promptly discontinue the Holder's disposition
of Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until the Holder shall have received notice from the
Company that such Registration Statement has been amended and/or copies of the
supplemented or amended Prospectus contemplated by Section 5.1(d) have been
furnished. If so directed by the Company, the Holder of Registrable Securities
will deliver to the Company all copies, other than permanent file copies, in the
Holder's possession of the Prospectus covering such Registrable Securities at
the time of receipt of such notice.

     5.2 Seller Information. The Company may require the Holder of any
Registrable Securities as to which any Registration is being effected to furnish
to the Company such information regarding the Holder and the distribution of
such Registrable Securities as the Company may from time to time reasonably
request and as shall be required by law in connection therewith. The Holder
agrees to furnish promptly to the Company all information required to be
disclosed in order to make the information previously furnished to the Company
by the Holder not materially false or misleading.

     SECTION 6. Registration Expenses. The Company shall pay all Registration
Expenses arising from or incidental to the performance of, or compliance with,
this Agreement, provided that the Holder requesting such Registration shall bear
any transfer taxes applicable to its Registrable Securities registered
thereunder, customary (both as to type and amount) commissions, discounts or
other compensation payable to the underwriters (including fees and expenses of
underwriters' counsel), selling brokers, managers or other similar persons
engaged in the distribution of any of the Registrable Securities, and the fees
and expenses of the Holder's own counsel.

     SECTION 7. Indemnification.

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     7.1 Indemnification by the Holder of Registrable Securities. The Company
may require, as a condition to including any Registrable Securities in any
Registration Statement filed pursuant to this Agreement that the Company shall
have received an undertaking satisfactory to it from the Holder to indemnify,
defend and hold harmless, the Company, its directors and officers and each
person, if any, who controls (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) the Company from and against any and all
losses, claims, damages and liabilities, joint or several, to which any of the
foregoing may become subject, under the Securities Act or otherwise, based upon
or arising out of any untrue statement or alleged untrue statement of a material
fact in a Registration Statement, any preliminary prospectus, final Prospectus
or summary Prospectus, or any amendment or supplement thereto, or omission or
alleged omission to state therein any material fact required to be stated
therein or necessary to make the statements therein not misleading, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company by the Holder expressly for use in the preparation of such Registration
Statement, preliminary prospectus, final Prospectus, summary Prospectus,
amendment or supplement. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company or any such
director, officer or controlling person and shall survive the transfer of such
Registrable Securities by the Holder.

     7.2 Indemnification by the Holder of Registrable Securities. The Company
shall indemnify, defend and hold harmless, the Holder, its its heirs, assigns,
attorneys and representatives from and against any and all losses, claims,
damages and liabilities, joint or several, to which any of the foregoing may
become subject, under the Securities Act or otherwise, based upon or arising out
of any untrue statement or alleged untrue statement of a material fact in a
Registration Statement, any preliminary prospectus, final Prospectus or summary
Prospectus, or any amendment or supplement thereto, or omission or alleged
omission to state therein any material fact required to be stated therein or
necessary to make the statements therein not misleading, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished by the Company expressly for
use in the preparation of such Registration Statement, preliminary prospectus,
final Prospectus, summary Prospectus, amendment or supplement. Such indemnity
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Holder and shall survive the transfer of such Registrable
Securities by the Holder.

     7.3 Indemnification Payments. Any indemnification required to be made by an
indemnifying party pursuant to this Section 7 shall be made by periodic payments
to the indemnified party during the course of the action or proceeding, as and
when bills are received by such indemnifying party with respect to an
indemnifiable loss, claim, damage, liability or expense incurred by such
indemnified party.

     7.4 Other Remedies. If for any reason the foregoing indemnity is
unavailable, or is insufficient to hold harmless an indemnified party, other
than by reason of the exceptions provided therein, then the indemnifying party
shall contribute to the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities, actions, proceedings or
expenses in such proportion as is appropriate to reflect the relative benefits
to and faults of the indemnifying party on the one hand and the indemnified
party on the other in connection with the offering of Registrable Securities
(taking into account the portion of the proceeds of the offering

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realized by each such party) and the statements or omissions or alleged
statements or omissions which resulted in such loss, claim, damage, liability,
action, proceeding or expense, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or by
the indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statements or omissions.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. No party shall be
liable for contribution under this Section 7.3 except to the extent and under
such circumstances as such party would have been liable to indemnify under this
Section 7 if such indemnification were enforceable under applicable law.

     SECTION 8. Miscellaneous.

     8.1 Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement, and is intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

     8.2 Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election and unless notice is otherwise
given to the Company by the record owner, be treated as the Holder of such
Registrable Securities for purposes of any request or other action by the Holder
pursuant to this Agreement. If the beneficial owner of any Registrable
Securities so elects, the Company may require assurances reasonably satisfactory
to it of such owner's beneficial ownership of such Registrable Securities.

     8.3 Term. This Agreement shall be effective as of the date hereof and shall
continue in effect thereafter until the earlier of (a) its termination by the
consent of the parties hereto or their respective successors in interest and (b)
the date on which no Registrable Securities remain outstanding, and (c) the date
on which the Holder may resell all of the Registrable Securities under Rule
144(k); provided, however, that the parties' obligations under Section 7 shall
survive the termination of this Agreement.

     8.4 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, or (c) sent by next-day or overnight mail or
delivery or (d) sent by telecopy or telegram:

              (i)  If to the Holder, at:

                   William O. Hunt
                   17604 Woods Edge Drive
                   Dallas, Texas 75287

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                   with a copy to:

                   Vinson & Elkins L.L.P.
                   3700 Trammell Crow Center
                   2001 Ross Avenue
                   Dallas, Texas 75201
                   Attention: Winston Oxley

              (ii) If to the Company, at:

                   Internet America, Inc.
                   One Dallas Centre
                   350 N. St Paul, Suite 3000
                   Dallas, Texas 75201
                   Attention: Jack T. Smith

                   with a copy to:

                   Jackson Walker L.L.P.
                   901 Main Street
                   Suite 600
                   Dallas, Texas 75202
                   Attention: Richard Dahlson

or, in each case, at such other address as may be specified in writing to the
other parties hereto.

     All such notices, requests, demands, waivers and other communications shall
be deemed to have been received (w) if by personal delivery on the day after
such delivery, (x) if by certified or registered mail, on the seventh business
day after the mailing thereof, (y) if by next-day or overnight mail or delivery,
on the day delivered, (z) if by telecopy or telegram, on the next day following
the day on which such telecopy or telegram was sent, provided that a copy is
also sent by certified or registered mail.

     8.5 Amendments; Waivers; etc. No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought. Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder. The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies that any party may otherwise have at
law or in equity.

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     8.6 Severability. If any provision of this Agreement, including any phrase,
sentence, clause, Section or subsection is inoperative or unenforceable for any
reason, such circumstances shall not have the effect of rendering the provision
in question inoperative or unenforceable in any other case or circumstance, or
of rendering any other provision or provisions herein contained invalid,
inoperative, or unenforceable to any extent whatsoever.

     8.7 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.

     8.8 Successors, Assigns and Transferees. This Agreement shall be assignable
or otherwise transferable by the Holder upon written notice to the Company of
such assignment or transfer. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

     8.9 No Third Party Beneficiaries. Except as provided in Section 8 with
respect to indemnification of certain third parties hereunder, nothing in this
Agreement shall confer any rights upon any person or entity other than the
parties hereto and their respective heirs, successors and permitted assigns.

     8.10 Headings. The headings contained in this Agreement are for purposes of
convenience only and shall not affect the meaning or interpretation of this
Agreement.

     8.11 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original and all of which shall together
constitute one and the same instrument.

     8.12 Confidentiality. The Holder shall treat as confidential and shall not
use confidential information of the Company acquired from the Company pursuant
to this Agreement except in accordance with the terms and provisions of this
Agreement and the Holder's rights and obligations hereunder, and will not
disclose the same or any part thereof to any third party without the prior
written approval of the Company; provided, however, that nothing contained
herein shall in any way restrict or impair a Holder's right to use, disclose, or
otherwise deal with any information of the Company which:

         (a) at the time of the disclosure is generally available to the public
     or thereafter becomes generally available to the public by publication or
     otherwise through no act of the Holder;

         (b) was in the Holder's possession prior to the time of disclosure
     hereunder and was not acquired directly or indirectly from the Company;

         (c) is independently made available to the Holder as a matter of right
     by a third party, or

         (d) was developed independent of the confidential information obtained
     from the Company.

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                       INTERNET AMERICA, INC.

                                       By: /s/ Jack T. Smith
                                           -------------------------------------
                                       Name: Jack T. Smith
                                       Title: Chief Executive Officer

                                       /s/ William O. Hunt
                                       -----------------------------------------
                                       William O. Hunt

                                       11<PAGE>   1

                                                                    EXHIBIT 10.7

EMPLOYMENT AGREEMENT (Private)

BETWEEN:  LILT CANADA INC., a corporation duly incorporated under the laws of
          Canada, having its principal place of business at 9060 Ryan Avenue,
          Dorval, province of Quebec, Canada, H9P 2M8, represented herein by Dr.
          S. Iraj Najafi, its President duly authorized; (hereinafter referred
          to as the "Corporation");

AND:      Dr. Mark P. Andrews, domiciled and residing at 4390 Wilson Avenue in
          the city of Montreal; province of Quebec, Canada; H4A 2V2 (hereinafter
          referred to as the "Vice President and Chief Technical Officer');

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PREAMBLE

THE PARTIES, UPON ENTERING INTO THE PRESENT AGREEMENT, DECLARE THE FOLLOWING:

WHEREAS the Corporation wishes to hire a Vice-President and Chief Technical
Officer for its Research & Development Department;

WHEREAS the Vice-President and Chief Technical Officer possesses the necessary
qualifications and experience and wishes to provide the Corporation with the
benefit of such experience;

WHEREFORE, THE PARTIES AGREE AS FOLLOWS:

1.   OBJECT

     Subject to the terms, conditions and provisions hereunder, the Corporation
retains the services of the Vice President and Chief Technical Office who
accepts to work for the latter.

         Subject to Section 6, the present agreement shall be for a period of
three (3) years and will become effective on the first (1st) of January 1999.

2.   CONSIDERATION

     In consideration for the services which the Vice President and Chief
Technical Officer will render to the Corporation according to the provisions
stipulated in the present agreement, the Corporation agrees to pay said Vice
President and Chief Technical Officer the following remuneration:

2.1  SALARY

     A salary of one hundred and twenty-five thousand Canadian dollars
(Can$125,000), payable on a monthly basis, in the form of twelve equal and
consecutive payments of Can$10,416.67, less the salary deductions prescribed by
the applicable laws and regulations.

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2.2  SHARE OPTIONS

     As an incentive to the Vice President and Chief Technical Officer to remain
in the service of the Corporation, the Corporation grants to the Vice President
and Chief Technical Officer, an option to acquire up to a maximum of two hundred
thousand (200,000) common shares of the capital stock of the Corporation at a
sale price of one US dollar (US$1.00) per share provided that:

          2.2.1 no termination measures have been taken by the Corporation
          against the Vice-President and Chief Technical Officer;

          2.2.2 the Vice President and Chief Technical Officer has not taken any
          resignation measures as an employee.

     Such options cannot be assigned or transferred. Upon the death of the Vice
President and Chief Technical Officer, such options will be considered null and
void. Any outstanding option will automatically expire without compensation at
the end of the Vice President and Chief Technical Officer's employment with the
Corporation.

2.3  VACATION

     The Vice President and Chief Technical Officer has a right to paid
vacations of three weeks per year and he covenants to take such vacation during
the period of the year when it is least disturbing for the Corporation.

3.   OBLIGATIONS OF THE VICE PRESIDENT AND CHIEF TECHNICAL OFFICER

3.1  CONFIDENTIALITY

     The Vice President and Chief Technical Officer acknowledges that as a
result of his employment, he will be in a position to obtain confidential
information which is highly important to the Corporation. Such confidential
information includes, but is not limited to, all present and future technical
knowledge, unpatented or unpatentable inventions, manufacturing and trade
secrets, processes, manufacturing procedures, methods, discoveries, concepts,
formulas, techniques, systems, data, results, drawings, algorithms, models,
prototypes, products developed by and for the Corporation in whatever form,
codes, ideas, designs, integrated circuit topographies, trademarks, copyrights,
business information relating to the Corporation's inventions or products,
researches and developments, strategies and methods which are not standard
industry practices, proposals, industrial skills, operating and testing
procedures, production processes, finances, customers, marketing, and future
business plans (hereinafter referred to as the "Confidential Information").

     The Vice President and Chief Technical Officer agrees that he will maintain
in confidence and will not disclose or make use other than for the benefit of
the Corporation, at any time during or after the term of his employment with the
Corporation, without the prior written consent of the Corporation, any
Confidential Information whether or not the Confidential Information is in
writing or in any other form.

<PAGE>   3

                                       3

     Upon termination of his employment or upon request by the Corporation, the
Vice President and Chief Technical Officer will deliver to the Corporation any
and all written and tangible material in the Vice President and Chief Technical
Officer's possession incorporating the Confidential Information or otherwise
relating to the Corporation's business.

     This obligation with respect to the Confidential Information extends to
information belonging to the customers and suppliers of the Corporation, or
persons or entities who license Confidential Information or technology rights
from or to the Corporation, and who may have disclosed such information to the
Vice President and Chief Technical Officer.

3.2  PLEDGE OF NON-COMPETITION

     The Vice President and Chief Technical Officer undertakes, throughout the
employment period and for a period of three (3) years thereafter for any reason
whatsoever, not to either directly or indirectly, as principal, agent, employee,
consultant or investor, either work, invest or render any services to any
individual, partnership, company, government agency or others, who are or could
be competing either directly or indirectly with the Corporation.

3.3  NON-SOLICITATION

     Throughout the employment period and for a period of two (2) years
thereafter, the Vice President and Chief Technical Officer agrees that, directly
or indirectly, he will not solicit customers or suppliers of the Corporation or
try to profit from the contacts established by the Corporation, nor will he
encourage any person employed by the Corporation to leave the Corporation or
employ or solicit for employment any person who is, at the time of employment or
solicitation, employed by the Corporation.

3.4  VIOLATION OF UNDERTAKINGS

     The Vice President and Chief Technical Officer acknowledges that any
violation of the provisions of Sections 3.2, 3.3 and 3.4 may cause irreparable
harm to the Corporation and that damages are not an adequate remedy. Therefore,
the Vice President and Chief Technical Officer agrees that the Corporation shall
be entitled, in addition to all other rights provided by law or by this
agreement, to obtain an injunction to prevent the Vice President and Chief
Technical Officer or a person acting on his behalf, from violating these
provisions. The Vice President and Chief Technical Officer hereby agrees that
all restrictions contained in Sections 3.2, 3.3 and 3.4 are reasonable and will
not prevent the Vice President and Chief Technical Officer from earning his
living.

3.5  ASSIGNMENT

     The Vice President and Chief Technical Officer hereby assigns to the
Corporation, and confirms that the Vice President and Chief Technical Officer
has assigned all of his rights, title and interest throughout the world in and
to any invention, copyright, design, integrated circuit topography, discovery,
improvement to any of the Corporation's products and any other intellectual
property rights developed by the Vice President and Chief Technical Officer
during the course of his employment with the Corporation and for a period of six
(6) months thereafter. The Vice President and Chief Technical Officer hereby
waives his moral rights in all work created by the Vice President and Chief
Technical Officer during the course of his employment with the Corporation.

<PAGE>   4

                                       4

     Upon request by the Corporation, the Vice president and Chief Technical
Officer shall execute and deliver such additional or further documents,
assignments, concepts and other instrument as the Corporation may reasonably
request for the purpose of effectively carrying out this agreement including
without limitation, any instruments deemed necessary by the Corporation to
register any intellectual property rights in the Corporation's name or to
protect or to defend its rights on such intellectual property.

4.   FORCE MAJEURE

     None of the parties to the present agreement shall be considered in default
in the execution of the obligations herein imposed upon them, as long as such
execution is delayed, withheld or retained due to force majeure. Force majeure
shall include all acts not under the control of the parties to the present
agreement, which they could not reasonably foresee and against which they could
not defend themselves.

5.   GENERAL PROVISIONS

5.1  ARBITRATION

     In the event any dispute arises from this agreement, it is agreed between
the parties that such a dispute will have to be submitted to arbitration,
excluding recourse to the courts of law and according to the provisions of
Articles 940 and the following of the Code of Civil Procedure of the province of
Quebec.

5.2  NOTICE

     Any notice required to be given by either of the parties relating to this
agreement must be in writing and delivered in person or by registered mail with
acknowledgment of receipt at the address indicated in the present agreement,

5.3  NULLITY OF A PROVISION

     In the event of the illegality or nullity of a section, paragraph or a
provision, it shall not affect in any way the legality or validity of the other
provisions, paragraphs or sections, nor the rest of the agreement.

5.4  JURISDICTION

     The present agreement will be subject to the laws in the province of
Quebec, and the parties further agree, for any legal proceedings for any reason
whatsoever relating to this agreement, to elect domicile in the city and
district of Montreal, province of Quebec, Canada.

5.5  MODIFICATION OF THE AGREEMENT

     The present agreement may from time to time be modified, in whole or in
part, upon written approval by the parties hereto.

5.6  WAIVER OF RIGHTS

     Unless otherwise provided in this agreement, silence on the part of one
party or its negligence or tardiness in exercising a right or a recourse that
has been granted or made available to such party by this agreement shall never
be interpreted against or held against such party as a waiver of its rights and
recourses.

<PAGE>   5

                                       5

6.   TERMINATION OF AGREEMENT

6.1  WITHOUT NOTICE BY THE CORPORATION

     The present agreement shall be terminated, without need of notice or any
other formality, and the Vice President and Chief Technical Officer shall
receive no other compensation than that provided by law in any of the following
events:

          6.1.1 the bankruptcy of the Corporation;

          6.1.2 the liquidation and/or dissolution of the Corporation;

          6.1.3 upon the discretion of the Corporation, if the Vice President
          and Chief Technical Officer disposes of his shares in the capital
          stock of the Corporation;

          6.1.4 if any act of fraud is committed by the Vice President and Chief
          Technical Officer;

          6.1.5 if the Vice President and Chief Technical Officer commits an act
          of gross negligence which may cause serious prejudice to the
          Corporation or endanger its reputation;

          6.1.6 the Vice President and Chief Technical Officer's continuance of
          willful and repeated failure to perform his duties;

6.2  UPON THIRTY (30) DAYS NOTICE BY THE CORPORATION

     The present agreement shall be terminated upon expiration of a thirty (30)
days notice given by the Corporation in the event of any material breach of this
agreement by the Vice President and Chief Technical Officer (except for a breach
contemplated in paragraph 6.1) and the Vice President and Chief Technical
Officer does not remedy to the situation to the Corporation's satisfaction.

6.3  UPON NOTICE BY THE VICE PRESIDENT AND CHIEF TECHNICAL OFFICER

     The Vice President and Chief Technical Officer may terminate this agreement
at all times provided that the former gives a three (3) months prior written
notice to this effect to the Corporation. In such an event, the Vice President
and Chief Technical Officer agrees to cooperate and provide all the help
possible in order to facilitate his replacement.

7.   SCOPE

     This agreement is binding and enforceable not only with respect to the
contracting parties but also with respect to their successors, succession
liquidators, heirs and legal representatives, as the case may be.

<PAGE>   6

                                       6

8.   LANGUAGE

     The parties acknowledge having required that the present agreement be drawn
up in the English language.

LES PARTIES RECONNAISSENT AVOIR EXIGE LA REDACTION EN ANGLAIS DE LA PRESENTE
CONVENTION.

THE PARTIES HAVE SIGNED IN two (2) COPIES, IN THE CITY OF MONTREAL, THIS 7th DAY
OF THE MONTH OF JULY, 2000

       THE CORPORATION                           THE VICE PRESIDENT AND CHIEF
LUMENON INNOVATIVE LIGHTWAVE                           TECHNICAL OFFICER
       TECHNOLOGY INC.

/s/ Dr. S. Iraj Najafi                          /s/ Dr. Mark P. Andrews
-----------------------------------             --------------------------------
    Dr. S. Iraj Najafi                              Dr. Mark P. Andrews
    President and CEO

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