Document:

EXHIBIT
      4.2

      REGISTRATION
        RIGHTS AGREEMENT

       

      This
        Registration Rights Agreement (the “Agreement”)
        is
        made and entered into as of December 10, 2007 (the “Effective
        Date”)
        among
        Internet America, Inc., a Texas corporation (the “Company”),
        and
        the
        parties set forth
        on
Exhibit
        A
        hereto
        (each, an “Investor”
and
        collectively, whether one or more, the “Investors”).

      

      RECITALS:

      

      A. The
        Investors have purchased shares of common stock, $0.01 par value, of the
        Company
        pursuant to the Securities Purchase Agreement (the “Securities
        Purchase Agreement”),
        dated
        as of the date hereof,
        by and
        between the Company and each Investor.

      

      B. The
        Company and the Investors desire to set forth the registration rights to
        be
        granted by the Company to the Investors.

      

      NOW,
        THEREFORE,
        in
        consideration of the mutual promises, representations, warranties, covenants,
        and conditions set forth herein, in the Securities Purchase Agreement, or
        otherwise, the parties mutually agree as follows: 

      

      AGREEMENT:

      

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

      

      “Blackout
        Period”
means,
        with respect to a registration, a period in each case commencing on the day
        immediately after the Company notifies the Investors that they are required,
        pursuant to Section 4(f), to suspend offers and sales of Registrable Securities
        during which the Company, in the good faith judgment of its Board of Directors,
        determines (because of the existence of, or in anticipation of, any acquisition,
        financing activity, or other transaction involving the Company, or the
        unavailability for reasons beyond the Company’s control of any required
        financial statements, disclosure of information which is in its best interest
        not to publicly disclose, or any other event or condition of similar
        significance to the Company) that the registration and distribution of the
        Registrable Securities to be covered by such registration statement, if any,
        would be seriously detrimental to the Company and its shareholders and ending
        on
        the earlier of (1) the date upon which the material non-public information
        commencing the Blackout Period is disclosed to the public or ceases to be
        material and (2) such time as the Company notifies the selling Holders that
        the
        Company will no longer delay such filing of the Registration Statement and
        recommences taking steps to make such Registration Statement effective or
        allows
        sales pursuant to such Registration Statement to resume.

      

      “Business
        Day”
means
        any day of the year, other than a Saturday, Sunday, or other day on which
        the
        Commission is required or authorized to close.

       

      
        
          
          

        

        
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      “Closing
        Date”
means
        December 10, 2007, or such other time as is mutually agreed between the Company
        and the Investors for the closing of the sale referred to in Recital A
        above.

      

      “Commission”
means
        the Securities and Exchange Commission or any other federal agency at the
        time
        administering the Securities Act.

      

      “Common
        Stock”
means
        the common stock, $0.01 par value, of the Company and any and all shares
        of
        capital stock or other equity securities of: (i) the Company which are added
        to
        or exchanged or substituted for the Common Stock by reason of the declaration
        of
        any stock dividend or stock split, the issuance of any distribution or the
        reclassification, readjustment, recapitalization or other such modification
        of
        the capital structure of the Company; and (ii) any other corporation, now
        or
        hereafter organized under the laws of any state or other governmental authority,
        with which the Company is merged, which results from any consolidation or
        reorganization to which the Company is a party, or to which is sold all or
        substantially all of the shares or assets of the Company, if immediately
        after
        such merger, consolidation, reorganization or sale, the Company or the
        stockholders of the Company own equity securities having in the aggregate
        more
        than 50% of the total voting power of such other corporation.

      

      “Exchange
        Act”
means
        the Securities Exchange Act of 1934, as amended, and the rules and regulations
        of the Commission promulgated thereunder.

      

      “Family
        Member”
means
        (a) with respect to any individual, such individual’s spouse, any descendants
        (whether natural or adopted), any trust all of the beneficial interests of
        which
        are owned by any of such individuals or by any of such individuals together
        with
        any organization described in Section 501(c)(3) of the Internal Revenue Code
        of
        1986, as amended, the estate of any such individual, and any corporation,
        association, partnership or limited liability company all of the equity
        interests of which are owned by those above described individuals, trusts
        or
        organizations and (b) with respect to any trust, the owners of the beneficial
        interests of such trust.

      

      “Form
        S-1”
means
        such form under the Securities Act as in effect on the date hereof.

       

      “Holder”
means
        each Investor or any successor or Permitted Assignee of
        an
        Investor, who acquires rights in accordance with this Agreement with respect
        to
        the Registrable Securities directly or indirectly from an Investor, including
        from any Permitted Assignee.

      

      “Inspector”
means
        any attorney, accountant, or other agent retained by
        an
        Investor for the purposes provided in Section 4(j).

      

      “Permitted
        Assignee”
means
        (a) with respect to a partnership, its partners or former partners in accordance
        with their partnership interests, (b) with respect to a corporation, its
        shareholders in accordance with their interest in the corporation, (c) with
        respect to a limited liability company, its members or former members in
        accordance with their interest in the limited liability company, (d) with
        respect to an individual party, any Family Member of such party, (e) an entity
        that is controlled by, controls, or is under common control with a transferor,
        or (f) a party to this Agreement.

       

      
        
          
          

        

        
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      The
        terms
“register,”
        “registered,”
and
        “registration”
refers
        to a registration effected by preparing and filing a registration statement
        in
        compliance with the Securities Act, and the declaration or ordering of the
        effectiveness of such registration statement.

      

      “Registrable
        Securities”
means
        shares of Common Stock issued to each Investor pursuant to the Securities
        Purchase Agreement, but in each case excluding (A) any Registrable Securities
        that have been publicly sold or may be publicly sold immediately without
        registration under the Securities Act either pursuant to Rule 144 of the
        Securities Act or otherwise; (B) any Registrable Securities sold by a person
        in
        a transaction pursuant to a registration statement filed under the Securities
        Act or (C) any Registrable Securities that are at the time subject to an
        effective registration statement under the Securities Act. 

      

      “Registration
        Statement”
means
        the registration statement required to be filed by the Company pursuant to
        Section 3(a).

      

      “Securities
        Act”
means
        the Securities Act of 1933, as amended, or any similar federal statute
        promulgated in replacement thereof, and the rules and regulations of the
        Commission thereunder, all as the same shall be in effect at the
        time.

      

      “SEC
        Effective Date”
means
        the date the Registration Statement is declared effective by the
        Commission.

      

      2. Term.
        This
        Agreement shall continue in full force and effect for a period of two (2)
        years
        from the Effective Date, unless terminated sooner hereunder.

      

      3. Registration.

      

      (a) Piggyback
        Registration.
        If the
        Company shall determine to register for sale for cash any of its Common Stock,
        for its own account or for the account of others (other than the Holders),
        other
        than (i) a registration relating solely to employee benefit plans or securities
        issued or issuable to employees, consultants (to the extent the securities
        owned
        or to be owned by such consultants could be registered on Form S-8) or any
        of
        their Family Members (including a registration on Form S-8), (ii) a registration
        relating solely to a Commission Rule 145 transaction, a registration on Form
        S-4
        in connection with a merger, acquisition, divestiture, reorganization, or
        similar event, or (iii) a registration in which the only Common Stock being
        registered is Common Stock issuable upon conversion of debt securities that
        are
        also being registered, the Company shall promptly give to the Holders written
        notice thereof (and in no event shall such notice be given less than 20 calendar
        days prior to the filing of such registration statement), and shall, subject
        to
        Section 3(b), include in such registration (and any related qualification
        under
        blue sky laws or other compliance) (a “Piggyback
        Registration”),
        all
        of the Registrable Securities specified in a written request or requests,
        made
        within 10 calendar days after receipt of such written notice from the Company,
        by any Holder or Holders. However, the Company may, without the consent of
        the
        Holders, withdraw such registration statement prior to its becoming effective
        if
        the Company or such other shareholders have elected to abandon the proposal
        to
        register the securities proposed to be registered thereby. 

       

      
        
          
          

        

        
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      (b) Underwriting.
        If a
        Piggyback Registration is for a registered public offering involving an
        underwriting, the Company shall so advise the Holders in writing or as a
        part of
        the written notice given pursuant to Section 3(a). In such event the right
        of
        any Holder to registration pursuant to Section 3(a) shall be conditioned
        upon
        such Holder’s participation in such underwriting and the inclusion of such
        Holder’s Registrable Securities in the underwriting to the extent provided
        herein. All Holders proposing to distribute their securities through such
        underwriting shall (together with the Company and any other shareholders
        of the
        Company distributing their securities through such underwriting) enter into
        an
        underwriting agreement in customary form with the underwriter or underwriters
        selected for such underwriting by the Company or selling shareholders, as
        applicable. Notwithstanding any other provision of this Section 3(b), if
        the
        underwriter or the Company determines that marketing factors require a
        limitation of the number of shares to be underwritten, the underwriter may
        exclude some or all Registrable Securities from such registration and
        underwriting. The Company shall so advise all Holders (except those Holders
        who
        failed to timely elect to distribute their Registrable Securities through
        such
        underwriting or have indicated to the Company their decision not to do so),
        and
        the number of shares of Registrable Securities that may be included in the
        registration and underwriting, if any, shall be allocated among such Holders
        as
        follows: 

      

      (i) In
        the
        event of a Piggyback Registration that is initiated by the Company, the number
        of shares that may be included in the registration and underwriting shall
        be
        allocated first to the Company and then, subject to obligations and commitments
        existing as of the date hereof, to all selling shareholders, including the
        Holders, who have requested to sell in the registration on a pro rata basis
        according to the number of shares requested to be included; and

      

      (ii) In
        the
        event of a Piggyback Registration that is initiated by the exercise of demand
        registration rights by a shareholder or shareholders of the Company (other
        than
        the Holders), then the number of shares that may be included in the registration
        and underwriting shall be allocated first to such selling shareholders who
        exercised such demand and then, subject to obligations and commitments existing
        as of the date hereof, to all other selling shareholders, including the Holders,
        who have requested to sell in the registration, on a pro rata basis according
        to
        the number of shares requested to be included.

      

      No
        Registrable Securities excluded from the underwriting by reason of the
        underwriter’s marketing limitation shall be included in such registration. If
        any Holder disapproves of the terms of any such underwriting, such Holder
        may
        elect to withdraw therefrom by written notice to the Company and the
        underwriter. The Registrable Securities and/or other securities so withdrawn
        from such underwriting shall also be withdrawn from such registration;
provided,
        however,
        that,
        if by the withdrawal of such Registrable Securities a greater number of
        Registrable Securities held by other Holders may be included in such
        registration (up to the maximum of any limitation imposed by the underwriters),
        then the Company shall offer to all Holders who have included Registrable
        Securities in the registration the right to include additional Registrable
        Securities pursuant to the terms and limitations set forth herein in the
        same
        proportion used above in determining the underwriter limitation.

       

      
        
          
          

        

        
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      (c) Right
        to Terminate Registration. The
        Company shall have the right to terminate or withdraw any registration initiated
        by it under this Section 3 prior to the effectiveness of such registration
        whether or not any Holder has elected to include securities in such
        registration. The registration expenses of such withdrawn registration shall
        be
        borne by the Company in accordance with Section 6 hereof.

      

      4. Registration
        Procedures.
        In the
        case of each registration, qualification, or compliance effected by the Company
        pursuant to Section 3 hereof, the Company will keep each Holder including
        securities therein reasonably advised in writing (which may include e-mail)
        as
        to the initiation of each registration, qualification, and compliance and
        as to
        the completion thereof. With respect to any registration statement filed
        pursuant to Section 3, the Company will use its commercially reasonable best
        efforts to:

      

      (a) prepare
        and file with the Commission with respect to such Registrable Securities,
        a
        registration statement on Form S-1, or any other form for which the Company
        then
        qualifies or which counsel for the Company shall deem appropriate, and which
        form shall be available for the sale of the Registrable Securities in accordance
        with the intended method(s) of distribution thereof, and use its commercially
        reasonable efforts to cause such registration statement to become and remain
        effective at least for a period ending with the first to occur of (i) the
        sale
        of all Registrable Securities covered by the registration statement, (ii)
        the
        availability under Rule 144 for the Holder to immediately, freely resell
        without
        restriction all Registrable Securities covered by the registration statement,
        (iii) 90 days after a Piggyback Registration is declared effective by the
        Commission (in each case, the“Effectiveness
        Period”);
        provided
        that no
        later than two business days before filing with the Commission a registration
        statement or prospectus or any amendments or supplements thereto, the Company
        shall (i) furnish to one special counsel (“Holders’
        Counsel”)
        selected by the Company for the benefit of the Holders (which Holders’ Counsel
        shall be
        the
        same Holders’ Counsel selected under the Registration Rights Agreement of the
        Company dated October 17, 2007 so long as the Investors remain a party to
        that
        agreement),
        copies
        of all such documents proposed to be filed (excluding any exhibits other
        than
        applicable underwriting documents), in substantially the form proposed to
        be
        filed, which documents shall be subject to the review of such Holders’ Counsel,
        and (ii) notify each Holder of Registrable Securities covered by such
        registration statement of any stop order issued or threatened by the Commission
        and take all reasonable actions required to prevent the entry of such stop
        order
        or to remove it if entered;

      

      (b) if
        a
        registration statement is subject to review by the Commission, promptly respond
        to all comments and diligently pursue resolution of any comments to the
        satisfaction of the Commission;

      

      (c) prepare
        and file with the Commission such amendments and supplements to such
        registration statement and the prospectus used in connection therewith as
        may be
        necessary to keep such registration statement effective during the Effectiveness
        Period (but in any event at least until expiration of the 90-day period referred
        to in Section 4(3) of the Securities Act and Rule 174, or any successor thereto,
        thereunder, if applicable), and comply with the provisions of the Securities
        Act
        with respect to the disposition of all securities covered by such registration
        statement during such period in accordance with the intended method(s) of
        disposition by the sellers thereof set forth in such registration
        statement;

       

      
        
          
          

        

        
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      (d) furnish,
        without charge, to each Holder of Registrable Securities covered by such
        registration statement (i) a reasonable number of copies of such registration
        statement (including any exhibits thereto other than exhibits incorporated
        by
        reference), each amendment and supplement thereto as such Holder may request,
        (ii) such number of copies of the prospectus included in such registration
        statement (including each preliminary prospectus and any other prospectus
        filed
        under Rule 424 under the Securities Act) as such Holders may request, in
        conformity with the requirements of the Securities Act, and (iii) such other
        documents as such Holder may reasonably request in order to facilitate the
        disposition of the Registrable Securities owned by such Holder, but only
        during
        the Effectiveness Period;

      

      (e) use
        its
        commercially reasonable best efforts to register or qualify such Registrable
        Securities under such other applicable securities or blue sky laws of such
        jurisdictions as any Holder of Registrable Securities covered by such
        registration statement reasonably requests as may be necessary for the
        marketability of the Registrable Securities (such request to be made by the
        time
        the applicable registration statement is deemed effective by the Commission)
        and
        do any and all other acts and things which may be reasonably necessary or
        advisable to enable such Holder to consummate the disposition in such
        jurisdictions of the Registrable Securities owned by such Holder; provided
        that the
        Company shall not be required to (i) qualify generally to do business in
        any
        jurisdiction where it would not otherwise be required to qualify but for
        this
        paragraph (e), (ii) subject itself to taxation in any such jurisdiction,
        or
        (iii) consent to general service of process in any such
        jurisdiction;

      

      (f) as
        promptly as practicable after becoming aware of such event, notify each Holder
        of such Registrable Securities at any time when a prospectus relating thereto
        is
        required to be delivered under the Securities Act of the happening of any
        event
        which comes to the Company’s attention if as a result of such event the
        prospectus included in such registration statement contains an untrue statement
        of a material fact or omits to state any material fact required to be stated
        therein or necessary to make the statements therein not misleading and the
        Company shall promptly prepare and furnish to such Holder a supplement or
        amendment to such prospectus (or prepare and file appropriate reports under
        the
        Exchange Act) so that, as thereafter delivered to the purchasers of such
        Registrable Securities, such prospectus shall not contain an untrue statement
        of
        a material fact or omit to state any material fact required to be stated
        therein
        or necessary to make the statements therein not misleading, unless suspension
        of
        the use of such prospectus otherwise is authorized herein or in the event
        of a
        Blackout Period, in which case no supplement or amendment need be furnished
        (or
        Exchange Act filing made) until the termination of such suspension or Blackout
        Period; 

      

      (g) comply,
        and continue to comply during the period that such registration statement
        is
        effective under the Securities Act, in all material respects with the Securities
        Act and the Exchange Act and with all applicable rules and regulations of
        the
        Commission with respect to the disposition of all securities covered by such
        registration statement, and make available to its security holders, as soon
        as
        reasonably practicable, an earnings statement covering the period of at least
        12
        months, but not more than 18 months, beginning with the first full calendar
        month after the SEC Effective Date, which earnings statement shall satisfy
        the
        provisions of Section 11(a) of the Securities Act.

       

      
        
          
          

        

        
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      (h) as
        promptly as practicable after becoming aware of such event, notify each Holder
        of Registrable Securities being offered or sold pursuant to the Registration
        Statement of the issuance by the Commission of any stop order or other
        suspension of effectiveness of the Registration Statement at the earliest
        possible time;

      

      (i) permit
        the Holders of Registrable Securities being included in the Registration
        Statement and their legal counsel, at such Holders’ sole cost and expense
        (except as otherwise specifically provided in Section 6) to review and have
        a
        reasonable opportunity to comment on the Registration Statement and all
        amendments and supplements thereto at least
        two
        Business Days prior to their filing with the Commission;

      

      (j)
         make
        available for inspection by any Holder and any Inspector retained by such
        Holder, at such Holder’s sole expense, all records
        as shall
        be reasonably necessary to enable such Holder to exercise its due diligence
        responsibility, and cause the Company’s officers, directors, and employees to
        supply all information which such Holder or any Inspector may reasonably
        request
        for purposes of such due diligence; provided,
        however, that
        such
        Holder shall hold in confidence and shall not make any disclosure of any
        record
        or other information which the Company determines in good faith to be
        confidential, and of which determination such Holder is so notified at the
        time
        such Holder receives such information, unless (i) the disclosure of such
        record
        is necessary to avoid or correct a misstatement or omission in the Registration
        Statement and a reasonable time prior to such disclosure the Holder shall
        have
        informed the Company of the need to so correct such misstatement or omission
        and
        the Company shall have failed to correct such misstatement or omission, (ii)
        the
        release of such record is ordered pursuant to a subpoena or other order from
        a
        court or governmental body of competent jurisdiction or (iii) the information
        in
        such record has been made generally available to the public other than by
        disclosure in violation of this or any other agreement. The Company shall
        not be
        required to disclose any confidential information in such records to any
        Inspector until and unless such Inspector shall have entered into a
        confidentiality agreement with the Company with respect thereto, substantially
        in the form of this Section 4(j), which agreement shall permit such Inspector
        to
        disclose records to the Holder who has retained such Inspector. Each Holder
        agrees that it shall, upon learning that disclosure of such records
        is
        sought in or by a court or governmental body of competent jurisdiction or
        through other means, give prompt notice to the Company and allow the Company,
        at
        the Company’s expense, to undertake appropriate action to prevent disclosure of,
        or to obtain a protective order for, the records deemed confidential. The
        Company shall hold in confidence and shall not make any disclosure of
        information concerning a Holder provided to the Company pursuant to this
        Agreement unless (i) disclosure of such information is necessary to comply
        with
        federal or state securities laws, (ii) disclosure of such information to
        the
        Staff of the Division of Corporation Finance is necessary to respond to comments
        raised by the Staff in its review of the Registration Statement, (iii)
        disclosure of such information is necessary to avoid or correct a misstatement
        or omission in the Registration Statement, (iv) release of such information
        is
        ordered pursuant to a subpoena or other order from a court or governmental
        body
        of competent jurisdiction, or (v) such information has been made generally
        available to the public other than by disclosure in violation of this or
        any
        other agreement. The Company agrees that it shall, upon learning that disclosure
        of such information concerning a Holder is sought in or by a court or
        governmental body of competent jurisdiction or through other means, give
        prompt
        notice to such Holder and allow such Holder, at such Holder’s expense, to
        undertake appropriate action to prevent disclosure of, or to obtain a protective
        order for, such information;

       

      
        
          
          

        

        
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      (k) use
        its
        best efforts to cause all the Registrable Securities covered by the Registration
        Statement to be listed or quoted on the principal securities market on which
        securities of the same class or series issued by the Company are then listed
        or
        traded;

      

      (l) provide
        a
        transfer agent and registrar, which may be a single entity, for the Registrable
        Securities at all times;

      

      (m) cooperate
        with the Holders of Registrable Securities being offered pursuant to the
        Registration Statement to facilitate the timely preparation and delivery
        of
        certificates (not bearing any restrictive legends) representing Registrable
        Securities to be offered pursuant to the Registration Statement and enable
        such
        certificates to be in such denominations or amounts as the Holders may
        reasonably request and registered in such names as the Holders may request;
        and

      

      (n) take
        all
        other reasonable actions necessary to expedite and facilitate disposition
        by the
        Holders of the Registrable Securities pursuant to the Registration
        Statement.

      

      5. Suspension
        of Offers and Sales.
        Each
        Holder of Registrable Securities agrees that, upon receipt of any notice
        from
        the Company of the happening of any event of the kind described in Section
        4(f)
        hereof or of the commencement of
        a
        Blackout Period, such Holder shall discontinue disposition of Registrable
        Securities pursuant to the Registration Statement
        covering
        such Registrable Securities until such Holder’s receipt of the copies of the
        supplemented or amended prospectus contemplated by Section 4(f) hereof or
        notice
        of the end of the Blackout Period, and, if so directed by the Company, such
        Holder shall deliver to the Company (at the Company’s expense) all copies
        (including, without limitation, any and all drafts), other than permanent
        file
        copies, then in such Holder’s possession, of the prospectus covering such
        Registrable Securities current at the time of receipt of such notice.

      

      6. Registration
        Expenses.
        The
        Company shall pay all expenses in connection with any registration, including,
        without limitation, all registration, filing, stock exchange and Financial
        Industry Regulatory Authority (or FINRA)
        fees,
        printing expenses, all fees and expenses of complying with securities or
        blue
        sky laws, the fees and disbursements of counsel for the Company and of its
        independent accountants, and the reasonable fees and disbursements of a Holders’
Counsel; provided that, in any underwritten registration, each party shall
        pay
        for its own underwriting discounts and commissions and transfer taxes. Except
        as
        provided above in this Section 6 and Section 9, the Company shall not be
        responsible for the expenses of any attorney or other advisor employed by
        a
        Holder of Registrable Securities.

      

      7. Assignment
        of Rights.
        No
        Holder may assign its rights under this Agreement to any party without the
        prior
        written consent of the Company; provided,
        however,
        that a
        Holder may assign its rights under this Agreement without such restrictions
        to a
        Permitted Assignee as long as (a) such transfer or assignment is effected
        in
        accordance with applicable securities laws; (b) such transferee or assignee
        agrees in writing to become subject to the terms of this Agreement; and (c)
        the
        Company is given written notice by such Holder of such transfer or assignment,
        stating the name and address of the transferee or assignee and identifying
        the
        Registrable Securities with respect to which such rights are being transferred
        or assigned.

       

      
        
          
          

        

        
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      8. Information
        by Holder.
        The
        Holder or Holders of Registrable Securities included in any registration
        shall
        furnish to the Company such information regarding such Holder or Holders
        and the
        distribution proposed by such Holder or Holders as the Company may request
        in
        writing.

      

      9. Indemnification.

      

      (a) In
        the
        event of the offer and sale of Registrable Securities held by Holders under
        the
        Securities Act, the Company shall, and hereby does, indemnify and hold harmless,
        to the fullest extent permitted by law, each Holder, its directors, officers,
        partners,
        trustees, each
        other person who participates as an underwriter in the offering or sale of
        such
        securities, and each other person, if any, who controls or is under common
        control with such Holder or any such underwriter within the meaning of Section
        15 of the Securities Act, against any losses, claims, damages or liabilities,
        joint or several, and expenses to which the Holder or any such director,
        officer, partner,
        trustee,
        or
        underwriter or controlling person may become subject under the Securities
        Act or
        otherwise, insofar as such losses, claims, damages, liabilities or expenses
        (or
        actions or proceedings, whether commenced or threatened, in respect thereof)
        arise out of or are based upon any untrue statement or alleged untrue statement
        of any material fact contained in any registration statement under which
        such
        shares were registered under the Securities Act, any preliminary prospectus,
        final prospectus or summary prospectus contained therein, or any amendment
        or
        supplement thereto, or any omission or alleged omission to state therein
        a
        material fact required to be stated therein or necessary to make the statements
        therein in light of the circumstances in which they were made not misleading,
        and the Company shall reimburse the Holder, and each such director, officer,
        partner,
        trustee,
        underwriter and controlling person for any legal or any other expenses
        reasonably incurred by them in connection with investigating, defending or
        settling any such loss, claim, damage, liability, action or proceeding; provided
        that the foregoing shall not apply to, and the Company shall not be liable,
        in
        any such case (i) to the extent that any such loss, claim, damage, liability
        (or
        action or proceeding in respect thereof) or expense arises out of or is based
        upon an untrue statement or alleged untrue statement in or omission or alleged
        omission from such registration statement, any such preliminary prospectus,
        final prospectus, summary prospectus, amendment or supplement in reliance
        upon
        and in conformity with written information furnished to the Company through
        an
        instrument duly executed by or on behalf of such Holder specifically stating
        that it is for use in the preparation thereof, (ii) provided that the Company
        has complied with its obligations hereunder to furnish such Holder with copies
        of the applicable prospectus, if the person asserting any such loss, claim,
        damage, liability (or action or proceeding in respect thereof) who purchased
        the
        Registrable Securities that are the subject thereof did not receive a copy
        of an
        amended preliminary prospectus or the final prospectus (or the final prospectus
        as amended or supplemented) at or prior to the written confirmation of the
        sale
        of such Registrable Securities to such person because of the failure of such
        Holder or underwriter to so provide such amended preliminary or final prospectus
        and the untrue statement or alleged untrue statement or omission or alleged
        omission of a material fact made in such preliminary prospectus was corrected
        in
        the amended preliminary or final prospectus (or the final prospectus as amended
        or supplemented), or (iii) provided that the plan of distribution mechanics
        described in the applicable prospectus are, in form and substance, reasonable
        and customary for transactions of this type, to the extent that the Holders
        failed to comply with the terms of such plan of distribution mechanics. Such
        indemnity shall remain in full force and effect regardless of any investigation
        made by or on behalf of the Holders, or any such director, officer, partner,
        underwriter or controlling person and shall survive the transfer of such
        shares
        by the Holder.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      

      (b) As
        a
        condition to including any Registrable Securities to be offered by a Holder
        in
        any registration statement filed pursuant to this Agreement, each such Holder
        agrees to be bound by the terms of this Section 9 and to indemnify and hold
        harmless, to the fullest extent permitted by law, the Company, its directors
        and
        officers, and each other person, if any, who controls the Company within
        the
        meaning of Section 15 of the Securities Act, legal counsel and accountants
        for
        the Company, any underwriter, any other Holder selling securities in such
        registration statement and any controlling person within the meaning of the
        Securities Act of any such underwriter or other Holder, against any losses,
        claims, damages or liabilities, joint or several, to which the Company or
        any
        such director or officer or controlling person may become subject under the
        Securities Act or otherwise, insofar as such losses, claims, damages or
        liabilities (or actions or proceedings, whether commenced or threatened,
        in
        respect thereof) arise out of or are based upon (i) an untrue statement or
        alleged untrue statement in or omission or alleged omission from such
        registration statement, any preliminary prospectus, final prospectus or summary
        prospectus contained therein, or any amendment or supplement thereto, if
        such
        statement or alleged statement or omission or alleged omission was made in
        reliance upon and in conformity with written information about such Holder
        as
        that Holder
        furnished to the Company, (ii) provided that the Company has complied with
        its
        obligations hereunder to furnish such Holder with copies of the applicable
        prospectus, if the person asserting any such loss, claim, damage, liability
        (or
        action or proceeding in respect thereof) who purchased the Registrable
        Securities that are the subject thereof did not receive a copy of an amended
        preliminary prospectus or the final prospectus (or the final prospectus as
        amended or supplemented) at or prior to the written confirmation of the sale
        of
        such Registrable Securities to such person because of the failure of such
        Holder
        or underwriter to so provide such amended preliminary or final prospectus
        and
        the untrue statement or alleged untrue statement or omission or alleged omission
        of a material fact made in such preliminary prospectus was corrected in the
        amended preliminary or final prospectus (or the final prospectus as amended
        or
        supplemented), or (iii) provided that the plan of distribution mechanics
        described in the applicable prospectus are, in form and substance, reasonable
        and customary for transactions of this type, to the extent that the Holders
        failed to comply with the terms of such plan of distribution mechanics. Such
        indemnity shall remain in full force and effect regardless of any investigation
        made by or on behalf of the Holders, or any such director, officer, partner,
        underwriter or controlling person and shall survive the transfer of such
        shares
        by the Holder, and such Holder shall reimburse the Company, and each such
        director, officer, legal counsel and accountants, underwriter, other Holder,
        and
        controlling person for any legal or other expenses reasonably incurred by
        them
        in connection with investigating, defending, or settling and such loss, claim,
        damage, liability, action, or proceeding; provided,
        however,
        that
        such indemnity agreement found in this Section 9(b) shall in no event exceed
        the
        gross proceeds from the offering received by such Holder. 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 by any Holder of such shares.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      

      (c) Promptly
        after receipt by an indemnified party of notice of the commencement of any
        action or proceeding involving a claim referred to in Section 9(a) or (b)
        hereof
        (including any governmental action), such indemnified party shall, if a claim
        in
        respect thereof is to be made against an indemnifying party, give written
        notice
        to the indemnifying party of the commencement of such action; provided that
        the
        failure of any indemnified party to give notice as provided herein shall
        not
        relieve the indemnifying party of its obligations under Section 9(a) or (b)
        hereof, except to the extent that the indemnifying party is actually prejudiced
        by such failure to give notice. In case any such action is brought against
        an
        indemnified party, unless in the reasonable judgment of counsel to such
        indemnified party a conflict of interest between such indemnified and
        indemnifying parties may exist or the indemnified party may have defenses
        not
        available to the indemnifying party in respect of such claim, the indemnifying
        party shall be entitled to participate in and to assume the defense thereof,
        with counsel reasonably satisfactory to such indemnified party and, after
        notice
        from the indemnifying party to such indemnified party of its election so
        to
        assume the defense thereof, the indemnifying party shall not be liable to
        such
        indemnified party for any legal or other expenses subsequently incurred by
        the
        latter in connection with the defense thereof, unless in such indemnified
        party’s reasonable judgment a conflict of interest between such indemnified and
        indemnifying parties arises in respect of such claim after the assumption
        of the
        defenses thereof or the indemnifying party fails to defend such claim in
        a
        diligent manner, other than reasonable costs of investigation. Neither an
        indemnified nor an indemnifying party shall be liable for any settlement
        of any
        action or proceeding effected without its consent. No indemnifying party
        shall,
        without the consent of the indemnified party, consent to entry of any judgment
        or enter into any settlement, which does not include as an unconditional
        term
        thereof the giving by the claimant or plaintiff to such indemnified party
        of a
        release from all liability in respect of such claim or litigation.
        Notwithstanding anything to the contrary set forth herein, and without limiting
        any of the rights set forth above, in any event any party shall have the
        right
        to retain, at its own expense, counsel with respect to the defense of a
        claim.

      

      (d) In
        the
        event that an indemnifying party does or is not permitted to assume the defense
        of an action pursuant to Section 9(c) or in the case of the expense
        reimbursement obligation set forth in Section 9(a) and (b), the indemnification
        required by Section 9(a) and (b) hereof shall be made by periodic payments
        of
        the amount thereof during the course of the investigation or defense, as
        and
        when bills received or expenses, losses, damages, or liabilities are
        incurred.

      

      (e) If
        the
        indemnification provided for in this Section 9 is held by a court of competent
        jurisdiction to be unavailable to an indemnified party with respect to any
        loss,
        liability, claim, damage or expense referred to herein, the indemnifying
        party,
        in lieu of indemnifying such indemnified party hereunder, shall (i) contribute
        to the amount paid or payable by such indemnified party as a result of such
        loss, liability, claim, damage or expense as is appropriate to reflect the
        proportionate relative fault of the indemnifying party on the one hand and
        the
        indemnified party on the other (determined by reference to, among other things,
        whether the untrue or alleged untrue statement of a material fact or omission
        relates to information supplied by the indemnifying party or the indemnified
        party and the parties’ relative intent, knowledge, access to information and
        opportunity to correct or prevent such untrue statement or omission), or
        (ii) if
        the allocation provided by clause (i) above is not permitted by applicable
        law
        or provides a lesser sum to the indemnified party than the amount hereinafter
        calculated, not only the proportionate relative fault of the indemnifying
        party
        and the indemnified party, but also the relative benefits received by the
        indemnifying party on the one hand and the indemnified party on the other,
        as
        well as any other relevant equitable considerations. No indemnified party
        guilty
        of fraudulent misrepresentation (within the meaning of Section 11(f) of the
        Securities Act) shall be entitled to contribution from any indemnifying party
        who was not guilty of such fraudulent misrepresentation. 

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      

      (f) Other
        Indemnification.
        Indemnification similar to that specified in the preceding subsections of
        this
        Section 9 (with appropriate modifications) shall be given by the Company
        and
        each Holder of Registrable Securities with respect to any required registration
        or other qualification of securities under any federal or state law or
        regulation or governmental authority other than the Securities Act.

      

      10. Rule
        144 Reporting.
        With a
        view to making available to the Holders the benefits of certain rules and
        regulations of the Commission which may permit the sale of the Registrable
        Securities to the public without registration, the Company agrees to use
        its
        reasonable efforts to:

      

      (a)  Make
        and
        keep public information available, as those terms are understood and defined
        in
        Rule 144 or any similar or analogous rule promulgated under the Securities
        Act,
        at all times after the effective date of the first registration
        statement filed by the Company for an offering of its securities to the general
        public;

      

      (b) 
        File
        with the Commission, in a timely manner, all reports and other documents
        required of the Company under the Exchange Act; and

      

      (c)  So
        long
        as a Holder owns any Registrable Securities, furnish to such Holder forthwith
        upon request: a written statement by the Company as to its compliance with
        the
        reporting requirements of said Rule 144 of the Securities Act, and of the
        Exchange Act (at any time after it has become subject to such reporting
        requirements); a copy of the most recent annual or quarterly report of the
        Company; and such other reports and documents as a Holder may reasonably
        request
        in availing itself of any rule or regulation of the Commission allowing it
        to
        sell any such securities without registration.

      

      11. Miscellaneous

      

      (a) Governing
        Law.
        This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of Texas and the United States of America, both substantive and remedial.
        Any judicial proceeding brought against either of the parties to this agreement
        or any dispute arising out of this Agreement or any matter related hereto
        shall
        be brought in the courts of the State of Texas, Harris County, or in the
        United
        States District Court for the Southern District of Texas and, by its execution
        and delivery of this agreement, each party to this Agreement accepts the
        jurisdiction of such courts. The foregoing consent to jurisdiction shall
        not be
        deemed to confer rights on any person other than the parties to this
        Agreement.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      (b) Successors
        and Assigns.
        Except
        as otherwise provided herein, the provisions hereof shall inure to the benefit
        of, and be binding upon, the successors, Permitted Assigns, executors and
        administrators of the parties hereto. In the event the Company merges with,
        or
        is otherwise acquired by, a direct or indirect subsidiary of a publicly traded
        company, the Company shall condition the merger or acquisition on the assumption
        by such parent company of the Company’s obligations under this Agreement.

      

      (c) Entire
        Agreement.
        This
        Agreement constitutes the full and entire understanding and agreement between
        the parties with regard to the subjects hereof.

      

      (d) Notices,
        etc.
        All
        notices or other communications which are required or permitted under this
        Agreement shall be in writing and sufficient if delivered by hand, by facsimile
        transmission, by registered or certified mail, postage pre-paid, by electronic
        mail, or by courier or overnight carrier, to the persons at the addresses
        set
        forth below (or at such other address as may be provided hereunder), and
        shall
        be deemed to have been delivered as of the date so delivered: 

      

      
        	
                If
                  to the Company:

              	 	
                Internet
                  America, Inc. 

              
	
                 

              	 	10930
                W. Sam Houston Pwky., N.
	 	 	
                Suite
                  200

              
	 	 	
                Houston,
                  Texas, 77064

              
	 	 	
                Attn:
                  William E. Ladin, Jr.

              
	 	 	
                Facsimile:
                  (281) 469-6195

              
	 	 	 
	
                With
                  a copy to:

              	 	
                Boyer
                  & Ketchand

              
	 	 	
                Nine
                  Greenway Plaza, Suite 3100

              
	 	 	
                Houston,
                  Texas 77046

              
	 	 	
                Attention:
                  Rita J. Leader

              
	 	 	
                Fax:
                  (713) 871-2024

              
	 	 	 
	
                If
                  to an Investor:

              	 	
                To
                  the address set forth immediately below such Investor’s name on the
                  signature pages hereto.

              
	 	 	 
	
                With
                  a copy to:

              	 	
                Skadden,
                  Arps, Slate, Meagher & Flom LLP

              
	 	 	
                300
                  South Grand Ave., Suite 3400

              
	
                 

              	 	Los
                Angeles, CA 90071
	 	 	
                Attention:
                  Joseph
                  J. Giunta

              
	 	 	
                Facsimile:
                  (213)
                  621-5040 

              

      

       

      or
        at
        such other address as any party shall have furnished to the other parties
        in
        writing.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      (e) Delays
        or Omissions.
        No
        delay or omission to exercise any right, power or remedy accruing to any
        Holder
        of any Registrable Securities, upon any breach or default of the Company
        under
        this Agreement, shall impair any such right, power or remedy of such Holder
        nor
        shall it be construed to be a waiver of any such breach or default, or an
        acquiescence therein, or of or in any similar breach or default thereunder
        occurring; nor shall any waiver of any single breach or default be deemed
        a
        waiver of any other breach or default theretofore or thereafter occurring.
        Any
        waiver, permit, consent or approval of any kind or character on the part
        of any
        Holder of any breach or default under this Agreement, or any waiver on the
        part
        of any Holder of any provisions or conditions of this Agreement, must be
        in
        writing and shall be effective only to the extent specifically set forth
        in such
        writing. All remedies, either under this Agreement, or by law or otherwise
        afforded to any holder, shall be cumulative and not alternative.

      

      (f) Counterparts.
        This
        Agreement may be executed in any number of counterparts, each of which shall
        be
        enforceable against the parties actually executing such counterparts, and
        all of
        which together shall constitute one instrument.

      

      (g) Severability.
        In the
        case any provision of this Agreement shall be invalid, illegal or unenforceable,
        the validity, legality and enforceability of the remaining provisions shall
        not
        in any way be affected or impaired thereby.

      

      (h) Amendments.
        The provisions of this Agreement may be amended at any time and from time
        to
        time, and particular provisions of this Agreement may be waived, with and
        only
        with an agreement or consent in writing signed by the Company and by the
        holders
        of a majority of the number of shares of Registrable Securities outstanding
        as
        of the date of such amendment or waiver. The Investors acknowledge that by
        the
        operation of this Section
        11(h),
        the holders of a majority of the outstanding Registrable Securities may have
        the
        right and power to diminish or eliminate all rights of the Investors under
        this
        Agreement.

      

      This
        Registration Rights Agreement is hereby executed as of the date first above
        written.

      

      
        	
                COMPANY:

              
	 	 
	
                INTERNET
                  AMERICA, INC.

              
	 	 
	 	 
	
                By:

              	
                /s/
                  William E. Ladin, Jr.

              
	
                Name:
                  

              	William
                E. Ladin, Jr.,
                CEO
	 	 
	
                INVESTORS:

              
	 	 
	
                THE
                  STEVEN G. MIHAYLO TRUST 

              
	 	 
	 	 
	
                By:

              	
                /s/
                  Steven G. Mihaylo

              
	
                Name:
                  

              	
                Steven
                  G. Mihaylo, Trustee

              

      

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      Exhibit
        A

      

      Investor
        Information

      

      
        	
                Name
                  and Address

              	 	
                Shares

              	 
	 	 	 	 
	
                The
                  Steven G. Mihaylo Trust

                c/o
                  Steven G. Mihaylo, Trustee

                P.O.
                  Box 19790

                Reno,
                  Nevada 89511

              	 	 	
                4,000,000

              	 

      

       

      
        
          
          

        

        
          15EXHIBIT
      4.3

    AMENDMENT
      NO. 1 TO RIGHTS AGREEMENT

    

    This
      Amendment No. 1 to Rights Agreement (this “Amendment”) dated as of December 10,
      2007, amends the Rights Agreement between Internet America, Inc., a Texas
      corporation (the “Company”), and American Stock Transfer & Trust Company, a
      New York company (the “Rights Agent”) dated August 9, 2004 (the “Agreement”).
      Capitalized terms used but not defined herein shall have the meanings assigned
      to them in the Agreement.

    

    RECITALS

    

    1.
      Pursuant to the Agreement, the Board of Directors of the Company authorized
      and
      declared a dividend, and thereby directed the issuance, of a Right to purchase
      one Common Share for and in respect of each Common Share outstanding, upon
      the
      occurrence of the events and subject to the conditions set forth in the
      Agreement.

    

    2.
      One of
      the events triggering the issuance of Common Shares to holders of Rights under
      the Agreement is any Person becoming the Beneficial Owner of 15% or more of
      the
      Common Shares then outstanding, constituting such person an Acquiring Person
      under the Agreement. 

    

    3.
      The
      Board of Directors has approved the sale of 4,000,000 shares of Common Stock
      of
      the Company, representing in excess of 15% of the outstanding shares of Company
      Common Stock, to The Steven G. Mihayho Trust (the “Investor”) pursuant to the
      terms and conditions set forth in the Securities Purchase Agreement dated as
      of
      December 10, 2007 between the Company and the Investor (the “Sale”), which Sale
      would constitute the Investor an Acquiring Person and could result in the
      issuance of Common Shares to holders of the Rights under the
      Agreement.

    

    4.
      The
      Board of Directors has determined that it would be in the best interests of
      the
      Company and its shareholders to exempt the Sale to the Investor from the
      provisions of the Agreement, with the result that no Common Shares would be
      issuable to the holders of Rights upon the Sale, and has additionally approved
      the acquisition by the Investor of up to 25% of the outstanding Common Shares
      without triggering the issuance of Common Shares upon the exercise of Rights
      under the Agreement, so long as such acquisition is not made in connection
      with
      a tender or exchange offer.

    

    5.
      The
      Company and the Rights Agent have agreed to enter into this Amendment to the
      Agreement to accomplish the purposes set forth in the above recitals, and to
      make such additional and consequent amendments as are set forth
      herein.

     

    AGREEMENT

    

    Section
      1. Acquiring
      Person.
      The
      definition of Acquiring Person in Section 1(a) of the Agreement is hereby
      amended to read as follows (added or amended language is
      italicized):

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

    “(a)
      “Acquiring Person” shall mean any Person (as such term is hereinafter defined)
      who or which, together with all Affiliates and Associates (as such terms are
      hereinafter defined) of such Person, shall be the Beneficial Owner (as such
      term
      is hereinafter defined) of 15% or more of the Common Shares then outstanding,
      but shall not include (i) the Company, (ii)
      any
      Subsidiary (as such term is hereinafter defined) of the Company, (iii) Steven
      G. Mihaylo, together with his Affiliates and Associates (“Mihaylo”), to the
      extent they are the Beneficial Owner of up to 25% of the Common Shares then
      outstanding, (iv) any
      employee benefit plan of the Company or of any Subsidiary of the Company or
      (v)
      any
      Person holding Common Shares for or pursuant to the terms of any such plan
      to
      the extent, and only to the extent, of the Common Shares so held.
      Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as
      the result of an acquisition of Common Shares by the Company which, by reducing
      the number of shares outstanding, increases the proportionate number of shares
      beneficially owned by such Person other
      than Mihaylo
      to
      15%, or
      increases the proportionate number of shares beneficially owned by Mihaylo
      to
      25%,
      or more
      of the Common Shares then outstanding; provided,
      however,
      that if
      a Person other
      than Mihaylo
      becomes
      the Beneficial Owner of 15%, or
      Mihaylo becomes the Beneficial Owner of 25%,
      or more
      of the Common Shares then outstanding by reason of share acquisitions by the
      Company and shall, after such share acquisitions by the Company, become the
      Beneficial Owner of any additional Common Shares, then such Person shall be
      deemed to be an “Acquiring Person”. Notwithstanding the foregoing, if the Board
      of Directors of the Company determines in good faith that a Person who would
      otherwise be an “Acquiring Person”, as defined pursuant to the foregoing
      provisions of this Section 1(a), has become such inadvertently, and such Person
      divests as promptly as practicable a sufficient number of Common Shares so
      that
      such Person would no longer be an “Acquiring Person”, as defined pursuant to the
      foregoing provisions of this Section 1(a), then such Person shall not be deemed
      to be an “Acquiring Person” for any purposes of this Agreement.” 

    

    Section
      2. Issue
      of Right Certificates.
      Section
      3(a) of the Agreement is hereby amended to read as follows (added or amended
      language is italicized):

    

            “(a)
      Until the earlier (the earlier of such dates being herein referred to as the
      “Distribution Date”) of (i) the Close of Business on the tenth Business Day
      after the Shares Acquisition Date or (ii)
      the
      Close of Business on the tenth Business Day after the date of the commencement
      by any Person (other than the Company, any Subsidiary of the Company, any
      employee benefit plan of the Company or of any Subsidiary of the Company, or
      any
      entity holding Common Shares for or pursuant to the terms of any such plan
      to
      the extent such entity is so acting with the approval or consent of the Company)
      of, or of the first public announcement of the intention of any Person (other
      than the Company, any Subsidiary of the Company, any employee benefit plan
      of
      the Company or of any Subsidiary of the Company, or any entity holding Common
      Shares for or pursuant to the terms of any such plan to the extent such entity
      is so acting with the approval or consent of the Company) to commence, a tender
      or exchange offer the consummation of which would result in any Person
other
      than Mihaylo
      becoming
      the Beneficial Owner of 15% or more of the Common Shares then outstanding,
      or
      Mihaylo becoming the Beneficial Owner of 23% or more of the Common Shares then
      outstanding,
      including any such date that is after the date of this Agreement and prior
      to
      the issuance of the Rights, (x) the Rights will be evidenced (subject to the
      provisions of Section 3(b) hereof) by the certificates for Common Shares
      registered in the names of the holders thereof (which certificates shall also
      be
      deemed to be Right Certificates) and not by separate Right Certificates, and
      (y)
      the right to receive Right Certificates will be transferable only in connection
      with the transfer of Common Shares. As soon as practicable after the
      Distribution Date, the Company shall promptly notify in writing the Rights
      Agent
      of the occurrence thereof and, if the Rights Agent is not then also the transfer
      agent and registrar for the Common Shares, provide the Rights Agent with the
      names and addresses of all record holders of Common Shares (together with all
      other necessary information), and, if such notification is given orally, the
      Company shall confirm the same in writing on or prior to the Business Day next
      following (until such notice is received by the Rights Agent, the Rights Agent
      may presume conclusively for all purposes that the Distribution Date has not
      occurred), the Company will prepare and execute, the Rights Agent will
      countersign, and the Company will send or cause to be sent (and the Rights
      Agent
      will, if requested, send), by first-class, insured, postage prepaid mail, to
      each record holder of Common Shares as of the Close of Business on the
      Distribution Date, at the address of such holder shown on the records of the
      Company, a Right Certificate, in substantially the form of Exhibit
      A
      hereto
      (a “Right Certificate”), evidencing one Right for each Common Share so held. As
      of the Distribution Date, the Rights will be evidenced solely by such Right
      Certificates.” 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    Section
      3.   Rights
      Certificates.  Section
      3(c) of the Agreement is hereby amended to read as follows (added or
      amended language is italicized):

    

    “(c)
      Certificates for Common Shares that become outstanding (including, without
      limitation, reacquired Common Shares referred to in the last sentence of this
      paragraph (c)) after the Record Date but prior to the earliest of the
      Distribution Date, the Redemption Date or the Final Expiration Date shall have
      impressed on, printed on, written on or otherwise affixed to them the following
      legend or such similar legend as the Company may deem appropriate and as is
      not
      inconsistent with the provisions of this Agreement: 

     

    This
      certificate also evidences and entitles the holder hereof to certain rights
      as
      set forth in a Rights Agreement between Internet America, Inc. and American
      Stock Transfer & Trust Company, dated as of August 9, 2004 (the “Rights
      Agreement”), as
      amended,
      the
      terms of which are hereby incorporated herein by reference and a copy of which
      is on file at the principal executive offices of Internet America, Inc. Under
      certain circumstances, as set forth in the Rights Agreement, the Rights
      described therein will be evidenced by separate certificates and will no longer
      be evidenced by this certificate. Internet America, Inc. will mail to the holder
      of this certificate a copy of the Rights Agreement, as
      amended,
      without
      charge after receipt of a written request therefor. As described in the Rights
      Agreement, Rights issued to any Person who becomes an Acquiring Person (as
      those
      terms are defined in the Rights Agreement) shall become null and
      void.

     

    With
      respect to such certificates containing the foregoing legend, until the
      Distribution Date, the Rights associated with the Common Shares represented
      by
      such certificates shall be evidenced by such certificates alone, and the
      surrender for transfer of any such certificate shall also constitute the
      transfer of the Rights associated with the Common Shares represented thereby.
      In
      the event that the Company purchases or acquires any Common Shares after the
      Record Date but prior to the Distribution Date, any Rights associated with
      such
      Common Shares shall be deemed canceled and retired so that the Company shall
      not
      be entitled to exercise any Rights associated with the Common Shares which
      are
      no longer outstanding.”

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    Section
      4. Number
      of Shares or Number of Rights.
      Section
      11(a)(ii) of the Agreement is hereby amended to read as follows (added or
      amended language is italicized):

    

    “(ii)
      Subject to Sections 23 and 24 of this Agreement, in the event any Person shall
      become an Acquiring Person, proper provision shall be made so that each holder
      of a Right shall thereafter have a right to receive, upon exercise thereof
      in
      accordance with Section 7 hereof at a price equal to the then current Purchase
      Price multiplied by the number of Common Shares for which a Right is then
      exercisable, in accordance with the terms of this Agreement, such number of
      Common Shares as shall equal the result obtained by (A) multiplying the then
      current Purchase Price by the number of Common Shares for which a Right is
      then
      exercisable and dividing that product by (B) 50% of the then current per share
      market price of the Company’s Common Shares (determined pursuant to Section
      11(d) hereof) on the date such Person became an Acquiring Person. 

     

    Notwithstanding
      the foregoing or anything in this Agreement to the contrary, from and after
      the
      time any Person becomes an Acquiring Person, any Rights that are or were
      acquired or beneficially owned by such Acquiring Person (or any Associate or
      Affiliate of such Acquiring Person) shall be null and void without any further
      action by the Company, the Rights Agent, the Acquiring Person or any other
      Person, and any holder of such Rights shall thereafter have no rights whatsoever
      with respect to such Rights, whether under this Agreement (including the right
      to exercise such Rights under any provision of this Agreement) or otherwise.
      No
      Right Certificate shall be issued pursuant to Section 3 that represents Rights
      beneficially owned by an Acquiring Person whose Rights would be null and void
      pursuant to the preceding sentence or by any Associate or Affiliate thereof;
      no
      Right Certificate shall be issued at any time upon the transfer of any Rights
      to
      an Acquiring Person whose Rights would be null and void pursuant to the
      preceding sentence or to any Associate or Affiliate thereof or to any nominee
      of
      such Acquiring Person, Associate or Affiliate; and any Right Certificate
      delivered to the Rights Agent for
      transfer to an Acquiring Person whose Rights would be null and void pursuant
      to
      the preceding sentence shall be canceled.” 

     

    Notwithstanding
      the foregoing or anything in this Agreement to the contrary, if as a result
      of
      any Person other than Mihaylo becoming an Acquiring Person, Mihaylo (or any
      Associate or Affiliate of Mihaylo) acquires the right to
      receive, upon
      exercise of Rights in accordance with Section 7 hereof, Common Shares in
      accordance with this Section 11(a)(ii) which will cause Mihaylo, together with
      his Associates and Affiliates, to be the Beneficial Owner of more than 25%
      of
      the outstanding Common Shares, Mihaylo shall not be deemed an Acquiring Person
      for purposes of this Agreement; provided,
      however,
      that if Mihaylo becomes the Beneficial Owner of 25% or more of the Common Shares
      then outstanding by reason of the acquisition of the right to receive, upon
      exercise of Rights in accordance with Section 7 hereof, Common Shares in
      accordance with this Section 11(a)(ii) and shall, after such acquisition become
      the Beneficial Owner of any additional Common Shares, then Mihaylo shall be
      deemed to be an “Acquiring Person”.”

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    Section
      5. Form
      of Right Certificate.
      The
      first full sentence of Exhibit A (Form of Right Certificate) to the Agreement
      is
      hereby amended to read as follows (added or amended language is
      italicized):

    

    “This
      certifies that __________________, or registered assigns, is the registered
      owner of the number of Rights set forth above, each of which entitles the owner
      thereof, subject to the terms, provisions and conditions of the Rights Agreement
      dated as of August 9, 2004,
      as
      amended (the
      “Rights Agreement”), between Internet America, Inc., a Texas corporation (the
“Company”), and American Stock Transfer & Trust Company, a New
      York
      company
      (the “Rights Agent”), to purchase from the Company at any time after the
      Distribution Date (as such term is defined in the Rights Agreement) and prior
      to
      the Close of Business (as defined in the Rights Agreement) on August 4, 2014,
      at
      the principal offices of the Rights Agent, or at the offices of its successor
      as
      Rights Agent, one share of Common Stock, par value $.01 per share (the “Common
      Shares”), of the Company, at a purchase price of $7.00 per one Common Share (the
“Purchase Price”), upon presentation and surrender of this Right Certificate
      with the Form of Election to Purchase duly executed.”

    

    Section
      6. Summary
      of Right to Purchase Common Shares (Amendment No. 1).
      The
      first two full paragraphs of Exhibit B (Summary of Rights to Purchase Common
      Shares) to the Agreement are hereby amended to read as follows (added or amended
      language is italicized):

    

    “On
      August 4, 2004, the Board of Directors of Internet America, Inc. (the “Company”)
      declared a dividend of one common stock, $.01 par value (the “Common Shares”)
      purchase right (a “Right”) for each outstanding Common Share of the Company, and
      authorized the issuance of one Right for each Common Share which shall become
      outstanding between the Record Date and the earlier of the Distribution Date
      (as
      hereinafter defined) or the Final Expiration Date of the Rights (as hereinafter
      defined). The dividend is payable on August 13, 2004 (the “Record Date”) to the
      shareholders of record on that date. Each Right entitles the registered holder
      to purchase from the Company one additional
      Common Share
      at a
      price of $7.00 per one Common Share (the “Purchase Price”), subject to
      adjustment. The description and terms of the Rights are set forth in a Rights
      Agreement,
      as
      amended
      (the
“Rights Agreement”) between the Company and American Stock Transfer & Trust
      Company (the “Rights Agent”). 

    

    Until
      the
      earlier to occur of (i) ten business days following a public announcement that
      a
      person or group of affiliated or associated persons (an “Acquiring Person”) have
      acquired beneficial ownership of 15% or more of the outstanding Common Shares
      (unless
      such person is Steven G. Mihaylo and his affiliates and associates, in which
      case such threshold shall be 25% or more of the outstanding Common Shares)
      and
      (ii)
      ten business days following the commencement of, or announcement of an intention
      to make, a tender offer or exchange offer the consummation of which would result
      in the beneficial ownership by a person or group of 15% or more of such
      outstanding Common Shares (unless
      such person is Steven G. Mihaylo and his affiliates and associates, in which
      case such threshold shall be 23% or more of the outstanding Common
      Shares)
      (the
      earlier of such dates being called the “Distribution Date”), the Rights will be
      evidenced, with respect to any Common Share certificate outstanding as of the
      Record Date, by such Common Share certificate together with a copy of this
      Summary of Rights attached thereto. The Rights Agreement provides that, until
      the Distribution Date, the Rights will be transferred with and only with the
      Common Shares.”

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    Section
      7. Summary
      of Right to Purchase Common Shares (Amendment No. 2).
      The
      last full paragraph of Exhibit B (Summary of Rights to Purchase Common Shares)
      to the Agreement is hereby amended to read as follows (added or amended language
      is italicized):

    

    “A
      copy
      of the Rights Agreement (as
      originally adopted)
      has been
      filed with the Securities and Exchange Commission as an Exhibit to a
      Registration Statement on Form 8-A dated August 10, 2004. A
      copy of Amendment No. 1 to the Rights Agreement has been filed with the
      Securities and Exchange Commission as an Exhibit to Form 8-K dated December
      [ ],
      2007.
      A copy
      of the Rights Agreement is available free of charge from the Company. This
      summary description of the Rights does not purport to be complete and is
      qualified in its entirety by reference to the Rights Agreement, which is hereby
      incorporated herein by reference.”

    

    Section
      8. Binding
      Agreement.
      Except
      as expressly amended hereby, the Agreement remains in full force and effect
      as
      of the date hereof.

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
      executed and attested, all as of the day and year first above written.

    

      
        	
                INTERNET
                  AMERICA, INC.

              
	 	 
	
                By:

              	
                /s/
                  William E. Ladin, Jr.

              
	 	
                William
                  E. Ladin, Jr., Chief Executive Officer

              
	 	 
	
                AMERICAN
                  STOCK TRANSFER & TRUST COMPANY

              
	 	 
	
                By:

              	
                /s/
                  Herbert L. Lemmer

              
	 	
                Name:
                  Herbert L. Lemmer

              
	 	
                Title:
                  Vice President 

              

      

    

     

    
      
        
        

      

      
        6

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