-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GSZzvVtRde2rAFnRSYZylf/Y8FO/RyCxriCIRRBp++Vh7rP7BsPxH4JpCvKBgfek Ix4a3o26PRp4paiJrzzGeA== 0000909143-03-000065.txt : 20030912 0000909143-03-000065.hdr.sgml : 20030912 20030912154309 ACCESSION NUMBER: 0000909143-03-000065 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20030912 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INTERNET AMERICA INC CENTRAL INDEX KEY: 0001001279 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 860778979 STATE OF INCORPORATION: TX FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-55559 FILM NUMBER: 03893943 BUSINESS ADDRESS: STREET 1: 350 N ST PAUL STE 3000 CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 2148612500 MAIL ADDRESS: STREET 1: ONE DALLAS CENTRE 350 N. ST. PAUL STREET 2: SUITE 3000 CITY: DALLAS STATE: TX ZIP: 75201 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HUNT WILLIAM O CENTRAL INDEX KEY: 0000923731 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 860778979 STATE OF INCORPORATION: TX FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 17604 WOODS EDGE DR CITY: DALLAS STATE: TX ZIP: 75287 BUSINESS PHONE: 2148612500 MAIL ADDRESS: STREET 1: 2155 CHENAULT STREET 2: STE 410 CITY: CARROLLTON STATE: TX ZIP: 75006 SC 13D/A 1 geek_amendment-3.txt AMENDMENT NO. 3 TO SCHEDULE 13D OF WILLLIAM O. HUNT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D/A Under the Securities Exchange Act of 1934 (Amendment No. 3) Internet America, Inc. -------------------------------------------------------------- (Name of Issuer) Common Stock, $.01 par value -------------------------------------------------------------- (Title of Class of Securities) 46058Y109 ---------------------------- (CUSIP Number) William O. Hunt 17604 Woods Edge Drive Dallas, Texas 75287 (972) 931-8559 -------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 3, 2003 ----------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d- 1(b)(3) or (4), check the following box [ ]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Section 240.13d-7 for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO. 46058Y109 Page 2 of 9 (1) NAME OF REPORTING PERSON. SS OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON William O. Hunt (2) CHECK THE APPROPRIATE BOX IF A (A) [ ] MEMBER OF A GROUP (SEE INSTRUCTIONS) (B) [ ] (3) SEC USE ONLY (4) SOURCE OF FUNDS PF (5) CHECK IF DISCLOSURE OF LEGAL [ ] PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) (6) CITIZENSHIP OR PLACE OF ORGANIZATION United States NUMBER OF SHARES (7) SOLE VOTING POWER 55,000 BENEFICIALLY (8) SHARED VOTING POWER OWNED BY EACH 0 REPORTING PERSON (9) SOLE DISPOSITIVE POWER 55,000 WITH: (10) SHARED DISPOSITIVE POWER 0 (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 55,000 (12) CHECK IF THE AGGREGATE AMOUNT IN [ ] ROW (11) EXCLUDES CERTAIN SHARES (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.5% (14) TYPE OF REPORTING PERSON IN CUSIP NO. 46058Y109 Page 3 of 9 (1) NAME OF REPORTING PERSON. SS OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON B&G Partnership, Ltd. (2) CHECK THE APPROPRIATE BOX IF A (A) [ ] MEMBER OF A GROUP (SEE INSTRUCTIONS) (B) [ ] (3) SEC USE ONLY (4) SOURCE OF FUNDS (5) CHECK IF DISCLOSURE OF LEGAL [ ] PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) (6) CITIZENSHIP OR PLACE OF ORGANIZATION Texas NUMBER OF SHARES (7) SOLE VOTING POWER 0 BENEFICIALLY (8) SHARED VOTING POWER OWNED BY EACH 0 REPORTING PERSON (9) SOLE DISPOSITIVE POWER 0 WITH: (10) SHARED DISPOSITIVE POWER 0 (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0 (12) CHECK IF THE AGGREGATE AMOUNT IN [ ] ROW (11) EXCLUDES CERTAIN SHARES (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.0% (14) TYPE OF REPORTING PERSON PN CUSIP NO. 46058Y109 Page 4 of 9 (1) NAME OF REPORTING PERSON. SS OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Grace A. Hunt (2) CHECK THE APPROPRIATE BOX IF A (A) [ ] MEMBER OF A GROUP (SEE INSTRUCTIONS) (B) [ ] (3) SEC USE ONLY (4) SOURCE OF FUNDS (5) CHECK IF DISCLOSURE OF LEGAL [ ] PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) (6) CITIZENSHIP OR PLACE OF ORGANIZATION United States NUMBER OF SHARES (7) SOLE VOTING POWER 0 BENEFICIALLY (8) SHARED VOTING POWER OWNED BY EACH 0 REPORTING PERSON (9) SOLE DISPOSITIVE POWER 0 WITH: (10) SHARED DISPOSITIVE POWER 0 (11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 0 (12) CHECK IF THE AGGREGATE AMOUNT IN [ ] ROW (11) EXCLUDES CERTAIN SHARES (13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.0% (14) TYPE OF REPORTING PERSON IN CUSIP NO. 46058Y109 Page 5 of 9 The summary descriptions contained in this report of certain agreements and documents are qualified in their entirety by reference to the complete texts of those agreements and documents filed as Exhibits to this Schedule 13D, as amended, and incorporated herein by reference. Item 1. SECURITY AND ISSUER. The title and class of equity securities to which this Schedule 13D relates is the shares of common stock, par value $0.01 per share (the "Common Stock"), of Internet America, Inc., a Texas corporation (the "Issuer"). The address of the principal executive offices of the Issuer is One Dallas Centre, 350 North St. Paul, Suite 3000, Dallas, Texas 75201. Item 2. IDENTITY AND BACKGROUND. This statement is being filed on behalf of William O. Hunt, B&G Partnership, Ltd. and Grace A. Hunt. The principal business address for each of the Reporting Persons is 17604 Woods Edge Drive, Dallas, Texas 75287. Mr. Hunt is a private investor who served on the Issuer's Board of Directors until his resignation on July 26, 2003. Mr. Hunt is a citizen of the United States. None of the Reporting Persons have been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) in the past five years. In the past five years, the Reporting Persons have not been a party to a civil proceeding of a judicial or administrative body of a competent jurisdiction which resulted in such person being subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. On September 18, 2001, Mr. Hunt and the Issuer entered into a Letter of Credit Security Commitment Agreement (the "Commitment Agreement") to finance an appeal bond in the approximate amount of $3.3 million in connection with a judgment entered against the Issuer, Mr. Hunt and a former officer and director of the Issuer. Under this agreement, Mr. Hunt collateralized a letter of credit in the amount of $3.3 million and the Issuer paid Mr. Hunt a commitment fee of 8% per annum, paid quarterly. On May 6, 2003, the Issuer reached a settlement of the judgment and gave Mr. Hunt notice that it was reducing the commitment in full in accordance with the terms of the Commitment Agreement. Under the Commitment Agreement, Mr. Hunt held a transferable option during the period beginning May 7, 2003 and ending September 4, 2003, to purchase up to 9,428,571 shares of the Company's Common Stock for $0.35 per share. Had Mr. Hunt exercised the option in full, this would have constituted approximately 47.8% of the Company's issued and outstanding stock immediately following the purchase. The obligations to Mr. Hunt are secured by the Issuer's assets other than accounts receivable. Under a registration agreement, Mr. Hunt held demand and piggyback registration rights with respect to any shares issued under the Commitment Agreement. The demand registration right was subject to a 120 day deferral if the Issuer's Board of Directors determined that such registration would be seriously detrimental to the Issuer or its shareholders. The Commitment Agreement, the Security Agreement and the Registration Rights Agreement were attached as Exhibits A, B and C, respectively, to the Schedule 13D filed by Mr. Hunt on October 9, 2001, and are incorporated herein by reference. A letter agreement amending the Letter of Credit Security Commitment Agreement was attached as Exhibit F to the Amendment No. 1 to Schedule 13D filed by Mr. Hunt on May 7, 2003, and is incorporated herein by reference. CUSIP NO. 46058Y109 Page 6 of 9 Item 4. PURPOSE OF TRANSACTION. On August 25, 2003, Mr. Hunt publicly announced he was negotiating with independent third parties as well as the Issuer to effect a transfer or redemption of the purchase option, as well as the potential sale of the 732,063 shares of the Issuer's common stock Mr. Hunt beneficially owns through B&G Partnership, Ltd. On August 29, 2003, the Issuer filed suit against Mr. Hunt, seeking to enjoin his transfer of the purchase option. After negotiations, Mr. Hunt and the Issuer entered into a Redemption Agreement on September 3, 2003 (the "Redemption Agreement"). Under the terms of the Redemption Agreement, Mr. Hunt transferred certain of his rights under the Letter of Credit Security Commitment Agreement, including the right to exercise the purchase option, in exchange for the Issuer dismissing the August 29, 2003 lawsuit and making a payment to Mr. Hunt in the amount of $150,000. On September 8, 2003, each of the Reporting Persons entered into a Purchase Agreement (the "Purchase Agreement") with Micro Capital Fund, L.P. whereby Micro Capital Fund, L.P. purchased all 732,063 shares of the Issuer's Common Stock held by B&G Partnership, Ltd. for the purchase price of $0.65 per share. Micro Capital Fund's purchase of these shares was consummated on September 11, 2003. Except as otherwise set forth herein, no Reporting Person has any plans or proposals that relate to or that would result in any of the following actions: (a) The acquisition by an person of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) Any change in the present board of directors or management of the Issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) Any material change in the present capitalization or dividend policy of the Issuer; (f) Any other material change in the Issuer's business or corporate structure; (g) Changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (h) Causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) A class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or (j) Any action similar to any of those enumerated above. Item 5. INTEREST IN SECURITIES OF THE ISSUER. (a) As of September 12, 2003, Mr. Hunt is deemed to beneficially own 55,000 shares of the Issuer's Common Stock by virtue of options he holds. (b) With respect to the 55,000 shares of Common Stock of the Issuer beneficially owned by Mr. Hunt by virtue of his ownership of options, upon exercise of those options, Mr. Hunt would have the sole power to vote, dispose or to direct the disposition of such shares of Common Stock. (c) Since the filing of Amendment No. 2 to this Statement on Schedule 13D, the Reporting Persons have effected the transactions contemplated by the Purchase Agreement and described in Item 4 above. Pursuant to the Purchase Agreement, B&G Partnership, Ltd. disposed of 732,063 shares of Common Stock in exchange for aggregate cash consideration of $475,840.95, or $0.65 per share. (d) Not Applicable. (e) Each of the Reporting Persons ceased to be the beneficial owner of more than five percent (5%) of the Issuer's Common Stock on September 11, 2003. CUSIP NO. 46058Y109 Page 7 of 9 Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. Mr. Hunt owns fully vested options to purchase 22,500 shares of Common Stock at $1.67 per share, 22,500 shares of Common Stock at $13.00 per share pursuant to Stock Option Agreements (which were filed as Exhibits D and E to the Schedule 13D filed by Mr. Hunt on October 10, 2001 and are incorporated herein by reference). Mr. Hunt also holds options to purchase 20,000 shares of Common Stock (with 10,000 options fully vested as of the date of this filing) shares of Common Stock at $0.34 per share pursuant to the Stock Option Agreement, a copy of which is filed as Exhibit G to this Schedule 13D/A. Except as previously described herein and in Item 3, and as set forth in Exhibits A, B and C to the Schedule 13D filed by Mr. Hunt on October 10, 2001, Exhibit F to the Schedule 13D/A filed by Mr. Hunt on May 7, 2003, the Redemption Agreement, a copy of which is filed as Exhibit H to this Schedule 13D/A, and the Purchase Agreement, a copy of which is filed as Exhibit I to this Schedule 13D/A, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Person and any other person with respect to any securities of the Issuer. Item 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit G Internet America Nonqualified Stock Option Agreement dated August 12, 2002. Exhibit H Redemption Agreement dated September 3, 2003 by and between William O. Hunt and Internet America, Inc. Exhibit I Purchase Agreement dated September 9, 2003 among William O. Hunt, Grace A. Hunt, B&G Partnership, Ltd. and Micro Capital Fund, L.P. CUSIP NO. 46058Y109 Page 8 of 9 SIGNATURE --------- After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Date: September 12, 2003 /s/ WILLIAM O. HUNT ------------------------------- WILLIAM O. HUNT Date: September 12, 2003 B&G PARTNERSHIP, LTD. By: /s/ WILLIAM O. HUNT ---------------------------- William O. Hunt, General Partner Date: September 12, 2003 /s/ GRACE A. HUNT ------------------------------- GRACE A. HUNT CUSIP NO. 46058Y109 Page 9 of 9 Index to Exhibits ----------------- Item Description - ------------ -------------------------------------- Exhibit G Internet America Nonqualified Stock Option Agreement dated August 12, 2002. Exhibit H Redemption Agreement dated September 3, 2003, by and between William O. Hunt and Internet America, Inc. Exhibit I Purchase Agreement dated September 9, 2003 among William O. Hunt, Grace A. Hunt, B&G Partnership, Ltd. and Micro Capital Fund, L.P. EX-99.1 3 exhibit-g.txt STOCK OPTION AGREEMENT INTERNET AMERICA, INC. NONQUALIFIED STOCK OPTION AGREEMENT This Nonqualified Stock Option Agreement (this "Agreement") is entered into between INTERNET AMERICA, INC., a Texas corporation (the "Company"), and WILLIAM O. HUNT (the "Optionee") as of August 12, 2002. In consideration of the mutual promises and covenants made herein, the parties hereby agree as follows: 1. GRANT OF OPTION. Under the terms and conditions of the Company's 1998 Nonqualified Stock Option Plan (the "Plan"), which is incorporated herein by reference, the Company grants to the Optionee an option (the "Option") to purchase from the Company all or any part of a total of twenty thousand (20,000) shares of the Company's Common Stock, par value $0.01 per share, at a price of $0.34 per share. The Option is granted as of December 10 (the "Date of Grant"). Any term used herein with an initial capital letter and not defined herein shall have the meanings provided for such term in the Plan. 2. CHARACTER OF OPTION. The Option is not an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"). 3. TERM. The Option will expire on the day prior to the tenth anniversary of the Date of Grant or, in the event of the Optionee's termination of service as an employee, director, or advisor of the Company, on such earlier date as may be provided in the Plan. 4. VESTING. Subject to any provisions of the Plan concerning exercisability of options, the Option may be exercised according to the following schedule: Percentage Exercisable Date Exercisable ------------- ---------------------------------- 25% On the date of Grant 50% One year after the Date of Grant 75% Two years after the Date of Grant 100% Three years after the Date of Grant The unexercised portion of the Option from one period may be carried over to a subsequent period or periods, and the right of the Optionee to exercise the Option as to such unexercised portion shall continue for the entire term. 5. PROCEDURE FOR EXERCISE. Exercise of the Option or a portion thereof shall be effected by the giving of written notice to the Company by the Optionee in accordance with the Plan and payment of the purchase price prescribed in Section 1 above for the shares to be acquired pursuant to the exercise. -1- 6. PAYMENT OF PURCHASE PRICE. Payment of the purchase price for any shares purchased pursuant to the Option shall be in accordance with the provisions of the Plan. 7. TRANSFER OF OPTIONS. The Option may not be transferred, except by will or the laws of descent and distribution and, during the lifetime of the Optionee, may be exercised only by the Optionee or by the Optionee's legally authorized representative. 8. TERMINATION. The Option shall terminate on the earlier of (i) the expiration date set forth in Section 3 above or, (ii) in the event of the termination of the Optionee's service as an employee, director, or advisor of the Company, the date provided in the Plan. 9. ACCEPTANCE OF THE PLAN. The Option is granted subject to all of the applicable terms and provisions of the Plan, and such terms and provisions are incorporated by reference herein. The Optionee hereby accepts and agrees to be bound by all the terms and conditions of the Plan. 10. RETURN OF VALUE OF OPTION. The Optionee agrees to pay to the Company in cash within five business days of written demand therefore an amount equal to the excess of (A) the Fair Market Value per share of Common Stock on the date of exercise of all or part of this Option multiplied by the number of shares purchased upon such exercise over (B) the aggregate price paid for the shares of Common Stock in connection with such exercise if (i) the Optionee ceases to be an employee of the Company or a Subsidiary for any reason (whether voluntary or involuntary) and, within one year after such termination of employment, either Optionee or any of its affiliates, directly or indirectly, for itself or on behalf of any other corporation, firm, partnership, association or other entity (whether as an individual, agent, servant, employee, employer, partner, member, officer, director, shareholder, investor, principal, consultant or in any other capacity) engages or participates in any business which engages in any types of businesses being conducted, or proposed to be conducted in the next twelve months, by the Company, in any State in which the Company is, or is proposing in the following twelve months to be, conducting its business (as determined by the Board in its sole discretion and in good faith); or (ii) the Optionee ceases to be an employee voluntarily (without the Company's prior consent) or by reason of discharge for Cause and if the Optionee exercises all or part of this Option within six months before or after the date of such termination of employment. Amounts due the Company pursuant to this section shall be payable in Dallas County, Texas. If the Optionee fails to pay any amount as required in this section and if the Company institutes litigation to enforce or interpret its rights under this section, the Optionee shall pay the Company for its reasonable attorneys' fees, disbursements, and other costs incurred in enforcing or interpreting the Optionee's obligation and shall pay interest on the amount due the Company at a rate of eighteen percent per annum (or, if lower, the highest rate of interest permitted by law) from the date such amount became due until paid in full. As used herein, an "affiliate" of Optionee means any person or entity controlling, controlled by or under common control with Optionee. 11. AMENDMENT. This Agreement may be amended by an instrument in writing signed by both the Company and the Optionee. -2- 12. MISCELLANEOUS. This Agreement will be construed and enforced in accordance with the laws of the State of Texas and will be binding upon and inure to the benefit of any successor or assign of the Company and any executor, administrator, trustee, guarantor, or other legal representative of the Optionee. Executed as of the date first set forth above. INTERNET AMERICA, INC. By: /s/ JACK T. SMITH ------------------------------ Jack T. Smith President and Chief Executive Officer OPTIONEE /s/ WILLIAM O. HUNT --------------------------------- WILLIAM O. HUNT --------------------------------- Social Security Number of Optionee -3- EX-99.2 4 exhibit-h.txt REDEMPTION AGREEMENT Exhibit H REDEMPTION AGREEMENT This Redemption Agreement, dated as of September 3, 2003 (this "Agreement"), is by and among William O. Hunt ("Hunt" or the "Seller") and Internet America, Inc., a Texas corporation (the "Purchaser" or the "Company"). WHEREAS, Hunt and the Company, are parties to that certain Letter of Credit Security Commitment Agreement, dated as of September 18, 2001, as amended pursuant to that certain amendment thereto dated April 23, 2003 (the "Letter of Credit Agreement"), pursuant to which, among other things, and in accordance with Section 2.3 thereof, Hunt and his assigns may elect to purchase 9,428,571 shares of Common Stock (the "Option Shares") from the Company at a purchase price of $0.35 per share (the "Option"); and WHEREAS, Hunt desires to transfer and assign to Purchaser the Option, and Purchaser desires to acquire and redeem the Option and such other rights on the terms and subject to the conditions set forth herein; and NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS 1.1 DEFINED TERMS. The following terms, as used herein, shall have the following meanings: "Affiliate" means, as to a Person, any other Person controlling, controlled by, or under common control with such first Person. As used in this definition, the term "control" means the power, directly or indirectly, to vote more than ten percent (10%) of the outstanding voting equity of an entity, or the right, directly or indirectly, to designate a majority of the directors of a Person (in the case of a corporation) or the Persons exercising similar functions (in the case of an unincorporated Person). All officers and directors of a Person shall be Affiliates of such Person. "Agreement" has the meaning set forth in the first paragraph of this Agreement. "Business Day" means any day other than a Saturday, Sunday, or other day on which federally chartered commercial banks in Dallas, Texas, are authorized by law to close. "Claims" means all claims, demands, lawsuits, proceedings, losses, assessments, fines, penalties, administrative orders, obligations, costs, expenses, liabilities and damages, including interest, penalties and reasonable attorneys' fees and costs of investigation asserted against or incurred by Purchaser. "Common Stock" means the Company's Common Stock. -1- "Company" has the meaning set forth in the recitals of this Agreement. "Contractual Rights" means all of the rights of the Holder (as defined in the Letter of Credit Agreement) that are set forth in Section 2.3, Article VI, Article IX, Article XI, Article XII and Article XIII of the Letter of Credit Agreement, as well as all of the rights of the Holder set forth in or otherwise evidenced by the Registration Rights Agreement, the Security Agreement and the Financing Statements. "Hunt" has the meaning set forth in the first paragraph of this Agreement. "Law" or "Laws" means any and all applicable statutes, laws, ordinances, proclamations, regulations, published requirements, orders, decrees, and rules of any foreign, federal, state, or local government, political subdivision, or governmental or regulatory authority, agency, board, bureau, commission, instrumentality, or court or quasi-governmental authority, including, without limitation, those covering environmental, tax, energy, safety, health, transportation, bribery, record keeping, zoning, discrimination, antitrust, and wage and hour matters, and in each case as amended and in effect from time to time. "Letter of Credit Agreement" has the meaning set forth in the recitals of this Agreement. "Lien" means any lien, pledge, claim, charge, security interest, mortgage, or encumbrance of any nature whatsoever. "Option" has the meaning set forth in the recitals of this Agreement. "Person" means a corporation, an association, a partnership, a limited liability company, an organization, a business, any other entity, an individual, a government or political subdivision thereof, or a government agency. "Purchaser" has the meaning set forth in the first paragraph of this Agreement. "Purchaser's Representatives" means Purchaser and its respective officers, directors, employees, agents, attorneys and Affiliates. "Schedule" means a schedule accompanying this Agreement. The Schedules shall correspond to the numbered sections of this Agreement to which each Schedule relates. An item disclosed in a particular Schedule shall be deemed disclosed under the Schedule to which it is contained only. "SEC" means the Securities and Exchange Commission. "Security Agreement" means that certain Security Agreement, dated as of September 18, 2001, by and among the Company and Hunt. "Seller" has the meaning set forth in the first paragraph of this Agreement. "Transactions" means the transactions contemplated by this Agreement. -2- 1.2 INTERPRETATION. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in Section 1.1 and elsewhere in this Agreement include the plural as well as the singular; (b) all references to "Articles" and "Sections" shall be to Articles and Sections of this Agreement unless otherwise clearly indicated otherwise; and (c) the words "herein," "hereof," and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. ARTICLE II THE TRANSACTIONS 2.1 DESCRIPTION OF THE TRANSACTIONS. Concurrently with the execution and delivery of this Agreement and subject to the terms and conditions hereof: (a) Hunt hereby sells, transfers and assigns to Purchaser the Contractual Rights, free and clear of all Liens. (b) Purchaser shall pay Hunt by wire transfer the sum of $150,000. (c) The Company shall dismiss with prejudice the lawsuit against Hunt filed August 29, 2003, in the 44th Judicial District Court, Dallas County, Texas, by submitting to such court a Notice of Nonsuit with Prejudice and proposed Order for Dismissal with Prejudice in substantially the forms set forth as Exhibits A and B hereto, respectively. The Company and Hunt shall further execute mutual releases in the form as set forth as Exhibit C hereto. 2.2 FURTHER ASSURANCES. The parties shall, concurrently herewith and from time to time hereafter at the request of another party and without further consideration, execute and deliver or cause to be executed and delivered to the other party such further instruments of transfer, assignment and conveyance, and shall take or cause to be taken such other action as reasonably requested, as may be necessary to effectively transfer to Purchaser the Contractual Rights, and to implement and carry into effect the Transactions. ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER Seller represents and warrants to Purchaser as follows: 3.1 POWER; AUTHORIZATION. Seller has all requisite power and authority to execute and deliver this Agreement, to perform fully his obligations hereunder, and to consummate the Transactions. The execution and delivery by Seller of this Agreement, and the consummation of the Transactions, have been duly authorized by all requisite action of Seller. Seller has duly executed and delivered this Agreement. This Agreement is a legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting generally the enforcement of creditors' rights and by general principles of equity. -3- 3.2 NO CONFLICTS. The execution, delivery and performance by Seller of this Agreement, and the consummation of the Transactions, do not and will not conflict with or result in a violation of or under (with or without the giving of notice or the lapse of time or both) (a) any Law applicable to a Seller or any of its respective properties or assets, or (b) any contract, agreement or other instrument applicable to a Seller or any of its respective properties or assets, including without limitation the Contractual Rights. 3.3 LITIGATION. Other than the lawsuit filed on August 29, 2003 by the Company, there is no action, claim, suit or proceeding pending, or to any Seller's knowledge threatened, by or against or affecting Seller in connection with or relating to the Transactions or any action taken or to be taken in connection herewith or the consummation of the Transactions. 3.4 BROKERS. All negotiations relating to this Agreement, and the Transactions, have been carried on without the participation of any Person acting on behalf of Seller or his Affiliates in such manner as to give rise to any valid claim against Purchaser for any brokerage or finder's commission, fee or similar compensation upon consummation of the Transactions. 3.5 OWNERSHIP, VALID ISSUANCE, TRANSFERABILITY AND ENFORCEABILITY; CAPITALIZATION. Hunt is the sole valid holder of any and all rights and interest as the "Holder" under the Letter of Credit Agreement and the Registration Rights Agreement (as such term is defined in each of such agreements), including, without limitation, the holder of the sole right to exercise the Option and to exercise the rights of a "Holder" under the Registration Rights Agreement, and such rights and interest were granted to Hunt in compliance with all applicable Laws and Hunt's right to exercise the Option is fully enforceable by Hunt as against the Company. Hunt's rights and interest as the "Holder" under the Letter of Credit Agreement, include, without limitation, the right to exercise the Option. ARTICLE IV INDEMNIFICATION 4.1 INDEMNIFICATION BY SELLER. Seller shall defend, indemnify, and hold Purchaser and the Purchaser's Representatives harmless from, against and in respect of any and all Claims, which arise or result from or relate to: (a) the untruth, breach, or failure of any representation or warranty made by Sellers under or contained in this Agreement or in any other document executed and delivered in connection with this Agreement; or (b) the breach by Seller of or failure of Seller to perform any of his covenants, commitments, agreements or obligations under or contained in this Agreement or in any other document executed and delivered in connection with this Agreement. -4- 4.2 INDEMNIFICATION BY PURCHASER. Purchaser shall defend, indemnify and hold Seller and his heirs, successors, assigns, agents and Affiliates, harmless from, against and in respect of any and all Claims, which arise or result from or relate to: (a) the breach by Purchaser of or failure of Purchaser to perform any of its covenants, commitments, agreements or obligations under or contained in this Agreement or any other document executed and delivered in connection with this Agreement; or (b) any Claim by or on behalf of the Company or its shareholders against Seller or his Affiliates based on any theory of recovery arising from or related to the Transactions hereby. The obligations of Purchaser to indemnify Sellers under this Section shall include the obligation to defend any action subject hereto, including the fees of counsel to Sellers, even if separate counsel is required because of conflicts of interest. The obligations of Purchaser under this Section shall survive the closing of this Agreement. 4.3 NEGLIGENCE OF INDEMNITEE. THE RIGHTS OF A PARTY TO INDEMNIFICATION HEREUNDER SHALL NOT BE AFFECTED BY THE NEGLIGENCE OF ANY OTHER PARTY OR THEIR REPRESENTATIVES. 4.4 AFFIRMATION OF INDEMNITY AGREEMENT ETC. Purchaser hereby acknowledges that the Indemnity Agreement dated September 22, 1995 executed between Hunt and the Purchaser, as well as Purchaser's bylaws and resolutions (including without limitation the resolutions of the Board of Directors dated August 15, 2001) remain effective in accordance with their respective terms. ARTICLE V MISCELLANEOUS 5.1 COOPERATION; RELATIONSHIP OF THE PARTIES. Seller hereby agrees to cooperate with Purchaser in all manners reasonably requested by Purchaser to effect the consummation of the Transactions and the intent of the parties as expressed in this Agreement. 5.2 NATURE OF STATEMENTS; SURVIVAL. All statements of fact contained in any documents delivered by or on behalf of any party pursuant or in connection with the Transactions shall be deemed representations and warranties of such party. Notwithstanding any investigation heretofore or hereafter made by or on behalf of any of the parties to this Agreement, the representations and warranties contained in this Agreement and in any other document executed and delivered in connection with this Agreement shall survive the consummation of the Transactions for a period of 12 months. 5.3 NOTICES. All notices, requests, consents, directions, and other instruments and communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, if sent by third party courier or overnight delivery service, if mailed first-class, postage prepaid, registered or certified mail, or if sent by telecopy, telecommunication or other similar form of communication (with receipt confirmed), as follows: -5- If to Sellers, to: William O. Hunt 17604 Woods Edge Drive Dallas, Texas 75287 Facsimile: (972) 931-4032 with a copy (which shall not constitute notice) to: Andrews & Kurth, L.L.P. 1717 Main Street, Suite 3700 Dallas, Texas 75201 Attn: Ronald L. Brown Facsimile: (214) 659-4819 If to Purchaser, to: Internet America, Inc. One Dallas Centre 350 N. St. Paul, Suite 3000 Dallas, Texas 75201 Attn: CEO and Legal Department Facsimile: (214) 861-2663 with a copy (which shall not constitute notice) to: Fulbright & Jaworski,L.L.P. 1301 McKinney, Suite 5100 Houston, Texas 77010-3034 Attn: Robert F. Gray, Jr. Facsimile: (713) 651-5246 or to such other address and to the attention of such other person(s) or officer(s) as any party may designate by written notice. Any notice mailed shall be deemed to have been given and received on the third Business Day following the day of mailing. 5.4 ASSIGNMENT. No party to this Agreement may sell, transfer, assign, pledge, or hypothecate his or its rights, interests, or obligations under this Agreement without the prior written consent of the other parties hereto. 5.5 SUCCESSORS. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the parties hereto and their respective successors, heirs and permitted assigns. 5.6 ENTIRE AGREEMENT; MODIFICATION. This Agreement and the Exhibits and Schedules hereto and the other documents executed and delivered in connection with this Agreement constitute the entire agreement and understanding between the parties relating to the subject matter hereof and thereof and supersede all prior representations, endorsements, premises, agreements, memoranda, communications, negotiations, discussions, understandings, and arrangements, whether oral, written, or inferred, between the parties relating to the subject matter hereof. This Agreement may not be modified, amended, rescinded, canceled, altered or supplemented, in whole or in part, except upon the execution and delivery of a written instrument executed by the parties hereto. -6- 5.7 GOVERNING LAW. This Agreement shall be governed by and construed and enforced in all respects in accordance with the laws of the State of Texas without regard to the conflicts of laws principles thereof. The parties agree that any litigation directly or indirectly relating to this Agreement must be brought before and determined by a court of competent jurisdiction within Dallas County, Texas, and the parties hereby agree to waive any rights to object to, and hereby agree to submit to, the jurisdiction of such courts. 5.8 WAIVER. The waiver of any breach of any term or condition of this Agreement shall not be deemed to constitute the waiver of any other breach of the same or any other term or condition. 5.9 SEVERABILITY. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future Laws effective during the term hereof, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as part of this Agreement, a provision as similar in its terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable. 5.10 NO THIRD PARTY BENEFICIARIES. Except to the extent a third party is expressly given rights herein, any agreement contained, expressed or implied in this Agreement shall be only for the benefit of the parties hereto and their respective legal representatives, successors, heirs and permitted assigns and such agreements shall not inure to the benefit of the obligees of any indebtedness of any party hereto, it being the intention of the parties hereto that no person or entity shall be deemed a third party beneficiary of this Agreement, except to the extent a third party is expressly given rights herein. 5.11 REMEDIES. In addition to the rights and remedies of the parties specifically provided for herein, each party hereto shall have such other remedies as shall be available under applicable law or in equity for the other party's breach or failure to perform any of his or its representations, warranties, covenants, agreements, or obligations under or contained in this Agreement or in any other document executed and delivered in connection with this Agreement. 5.12 HEADINGS. The headings of the Articles, Sections, and subsections of this Agreement have been inserted for convenience of reference only and shall in no way restrict or otherwise modify any of the terms or provisions hereof or affect in any way the meaning or interpretation of this Agreement. 5.13 COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same instrument. Facsimile transmission of any signed original document and/or retransmission of any signed facsimile transmission will be deemed the same as delivery of an original. At the request of any party, the parties will confirm facsimile transmission by signing a duplicate original document. -7- 5.14 CONFIDENTIALITY. Each party agrees to maintain the confidentiality of the terms of this Agreement, except as disclosure thereof may be required by applicable laws or governmental, SRO or stock exchange rules or regulations. 5.15 TAX TREATMENT. Each party agrees to treat the Transactions hereby as a redemption of the Contractual Rights. [The next following page is a signature page.] -7- IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above. PURCHASER: INTERNET AMERICA, INC. By: /s/ JACK T. SMITH ----------------------------- Jack T. Smith, President SELLER: /s/ WILLIAM O. HUNT -------------------------------- William O. Hunt -8- EX-99.3 5 exhibit-i.txt PURCHASE AGREEMENT PURCHASE AGREEMENT This Purchase Agreement, dated as of September 9, 2003 (this "Agreement"), is by and among William O. Hunt ("Hunt"), Grace A. Hunt ("Grace") and B&G Partnership, Ltd., a Texas limited partnership ("B&G," and together with Hunt and Grace, the "Sellers"), and the party identified on the Signature Page hereof as the Purchaser (the "Purchaser"). WHEREAS, B&G is the record and beneficial owner of 732,063 restricted shares of Common Stock (the "Owned Shares"); and WHEREAS, Hunt and Grace are the sole general partners of B&G; and WHEREAS, B&G desires to sell the Owned Shares to Purchaser and Purchaser desires to purchase the Owned Shares on the terms and subject to the conditions set forth herein; NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: ARTICLE I THE TRANSACTIONS 1.1 Description of the Transactions. Concurrently with the execution and delivery of this Agreement and subject to the terms and conditions hereof: (a) B&G shall sell, transfer and deliver to Purchaser the Owned Shares, free and clear of all liens, and Purchaser shall acquire the Owned Shares from B&G. B&G shall, in connection therewith, deliver to Purchaser a stock certificate or certificates representing the Owned Shares, duly endorsed or along with a stock power in the form attached hereto, whereupon Purchaser shall own the Owned Shares, free and clear of all liens. (b) Purchaser shall pay to B&G the sum of $475,840.95 by wire transfer to an account identified by Seller. 1.2 Further Assurances. The parties shall, concurrently herewith and from time to time hereafter at the request of another party and without further consideration, execute and deliver or cause to be executed and delivered to the other party such further instruments of transfer, assignment, endorsement and conveyance, and shall take or cause to be taken such other action as reasonably requested, as may be necessary to effectively transfer to Purchaser the Owned Shares. ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLERS Sellers jointly and severally represent and warrant to Purchaser as follows: -1- 2.1 Power; Authorization. Sellers have all requisite power and authority to execute and deliver this Agreement, to perform fully their respective obligations hereunder, and to consummate the transactions contemplated hereby. The execution and delivery by each Seller of this Agreement, and the consummation of the transactions hereby, have been duly authorized by all requisite action of each Seller. Each Seller has duly executed and delivered this Agreement. This Agreement is a legal, valid and binding obligation of each Seller, enforceable against it in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting generally the enforcement of creditors' rights and by general principles of equity. 2.2 No Conflicts. The execution, delivery and performance by each Seller of this Agreement do not and will not conflict with or result in a violation of or under (with or without the giving of notice or the lapse of time or both) (a) the agreement of limited partnership or other governing document of such Seller, if applicable, (b) any law applicable to a Seller or any of its respective properties or assets, (c) any contract, agreement or other instrument applicable to Sellers or any of their respective properties or assets, or (d) any decree, judgment, order, statute, rule or regulation applicable to Sellers. 2.3 No Consents. No consent, approval, order, authorization or waiver from, notice to, or declaration, registration or filing with any governmental authority or other person is necessary in connection with the execution, delivery or performance by the Sellers of this Agreement or consummation of the transactions contemplated hereby, other than filings required by the Securities and Exchange Commission. 2.4 Litigation. There is no action, claim, suit or proceeding pending, or to any Seller's knowledge threatened, by or against or affecting any Seller in connection with or relating to the transactions hereby or any action taken or to be taken in connection herewith. 2.5 Brokers. All negotiations relating to this Agreement have been carried on without the participation of any Person acting on behalf of Sellers or their respective Affiliates in such manner as to give rise to any valid claim against Purchaser for any brokerage or finder's commission, fee or similar compensation upon consummation of the transactions hereby. 2.6 Ownership, Valid Issuance, Transferability and Enforceability; Capitalization. B&G owns the Owned Shares free and clear of all liens, security interests and encumbrances of any nature whatsoever, and such Owned Shares were duly and validly issued (including that such issuance was made in compliance with all applicable Laws) and are fully paid and nonassessable with no personal liability attached to the ownership thereof and are not be subject to any preemptive rights or restrictions on transfer other than under applicable federal securities laws. The Owned Shares have been continuously owned by Seller for more than three years. ARTICLE III MISCELLANEOUS 3.1 Notices. All notices, requests, consents, directions, and other instruments and communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, if sent by third party courier or overnight delivery service, if mailed first-class, postage prepaid, registered or certified mail, or if sent by telecopy, telecommunication or other similar form of communication (with receipt confirmed), as follows: -2- If to Sellers, to: William O. Hunt 17604 Woods Edge Drive Dallas, Texas 75287 Facsimile: (972) 931-4032 with a copy (which shall not constitute notice) to: Andrews & Kurth, L.L.P. 1717 Main Street, Suite 3700 Dallas, Texas 75201 Attn: Ronald L. Brown Facsimile: (214) 659-4819 If to Purchaser, to: Micro Capital Fund 410 Jessie Street, Suite 1002 San Francisco, CA 94103 Attn: Ian P. Ellis Facsimile (415) 625-0836 with a copy (which shall not constitute notice) to: Dyke D. Bennett, P.C. 4514 Cole Avenue, #600 Dallas, Texas 75205 Attn: Dyke D Bennett Facsimile (214)273-7237 or to such other address and to the attention of such other person(s) or officer(s) as any party may designate by written notice. Any notice mailed shall be deemed to have been given and received on the third business day following the day of mailing. 3.2 Assignment. No party to this Agreement may sell, transfer, assign, pledge, or hypothecate his or its rights, interests, or obligations under this Agreement without the consent of the other parties hereto. 3.3 Successors. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the parties hereto and their respective successors, heirs and permitted assigns. 3.4 Entire Agreement; Modification. This Agreement and the other documents executed and delivered in connection with this Agreement constitute the entire agreement and understanding between the parties relating to the subject matter hereof and thereof and supersede all prior representations, endorsements, premises, agreements, memoranda, communications, negotiations, discussions, understandings, and arrangements, whether oral, written, or inferred, between the parties relating to the subject matter hereof. This Agreement may not be modified, amended, rescinded, canceled, altered or supplemented, in whole or in part, except upon the execution and delivery of a written instrument executed by the parties hereto. -3- 3.5 Governing Law. This Agreement shall be governed by and construed and enforced in all respects in accordance with the laws of the State of Texas without regard to the conflicts of laws principles thereof. The parties agree that any litigation directly or indirectly relating to this Agreement must be brought before and determined by a court of competent jurisdiction within Dallas County, Texas, and the parties hereby agree to waive any rights to object to, and hereby agree to submit to, the jurisdiction of such courts. 3.6 Waiver. The waiver of any breach of any term or condition of this Agreement shall not be deemed to constitute the waiver of any other breach of the same or any other term or condition. 3.7 Severability. If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future Laws effective during the term hereof, such provision shall be fully severable and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision never comprised a part hereof; and the remaining provisions hereof shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as part of this Agreement, a provision as similar in its terms to such illegal, invalid, or unenforceable provision as may be possible and be legal, valid, and enforceable. 3.8 No Third Party Beneficiaries. Except to the extent a third party is expressly given rights herein, any agreement contained, contained, expressed or implied in this Agreement shall be only for the benefit of the parties hereto and their respective legal representatives, successors, heirs and permitted assigns and such agreements shall not inure to the benefit of the obligees of any indebtedness of any party hereto, it being the intention of the parties hereto that no person or entity shall be deemed a third party beneficiary of this Agreement, except to the extent a third party is expressly given rights herein. 3.9 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. [The next following page is a signature page.] -4- IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the date first written above. PURCHASER: MICRO CAPITAL FUND, L.P. By: /s/ CHRISTOPHER P. SWANSON ------------------------------- Christopher P. Swanson, VP, Micro Capital LLC SELLERS: B&G PARTNERSHIP, LTD. By: /s/ WILLIAM O. HUNT -------------------------------- William O. Hunt, General Partner By: /s/ GRACE A, HUNT -------------------------------- Grace A. Hunt, General Partner /s/ WILLIAM O. HUNT ----------------------------------- William O. Hunt /s/ GRACE A. HUNT ----------------------------------- Grace A. Hunt -5- -----END PRIVACY-ENHANCED MESSAGE-----