On\ue000 February\ue000 19,\ue000 2009,\ue000 Internet\ue000 America,\ue000 Inc.\ue000 (\u201cInternet\ue000 America\u201d\ue000 or\ue000 the\ue000 "Company")\ue000 terminated\ue000 the\ue000 merger\ue000 contemplated\ue000 by\ue000 the
Agreement\ue000 and\ue000 Plan\ue000 of\ue000 Merger\ue000 (the\ue000 \u201cMerger\ue000 Agreement\u201d)\ue000 dated\ue000 November\ue000 14,\ue000 2008\ue000 among\ue000 the\ue000 Company,\ue000 KeyOn\ue000 Communications\ue000 Holdings,
Inc.,\ue000 a\ue000 Delaware\ue000 corporation\ue000 (\u201cKeyOn\u201d),\ue000 and\ue000 IA\ue000 Acquisition,\ue000 Inc.,\ue000 a\ue000 Delaware\ue000 corporation\ue000 wholly\ue000 owned\ue000 by\ue000 Internet\ue000 America.\ue000 \ue000 The\ue000 Company
terminated\ue000 the\ue000 Merger\ue000 Agreement\ue000 due\ue000 to\ue000 KeyOn\u2019s\ue000 inability\ue000 to\ue000 comply\ue000 in\ue000 a\ue000 material\ue000 respect\ue000 with\ue000 certain\ue000 of\ue000 the\ue000 covenants\ue000 and\ue000 conditions\ue000 to
closing\ue000 required\ue000 to\ue000 be\ue000 performed\ue000 or\ue000 satisfied\ue000 by\ue000 it\ue000 under\ue000 the\ue000 Merger\ue000 Agreement.\ue000 Internet\ue000 America\ue000 is\ue000 pursuing\ue000 its\ue000 right\ue000 to\ue000 the\ue000 termination\ue000 fee
and\ue000 expenses\ue000 due\ue000 it\ue000 under\ue000 the\ue000 Merger\ue000 Agreement.

As\ue000 reported\ue000 in\ue000 the\ue000 Company\u2019s\ue000 Current\ue000 Report\ue000 on\ue000 Form\ue000 8-K\ue000 filed\ue000 November\ue000 18,\ue000 2008,\ue000 pursuant\ue000 to\ue000 the\ue000 Merger\ue000 Agreement,\ue000 KeyOn
would\ue000 have\ue000 become\ue000 a\ue000 wholly-owned\ue000 subsidiary\ue000 of\ue000 Internet\ue000 America\ue000 by\ue000 merger\ue000 with\ue000 and\ue000 into\ue000 IA\ue000 Acquisition,\ue000 Inc.\ue000 \ue000 The\ue000 Merger\ue000 Agreement
provided\ue000 for\ue000 the\ue000 Company\ue000 to\ue000 issue\ue000 an\ue000 aggregate\ue000 of\ue000 16,155,906\ue000 shares\ue000 of\ue000 Company\ue000 common\ue000 stock\ue000 to\ue000 KeyOn\ue000 shareholders\ue000 in\ue000 a\ue000 stock-for-stock
exchange\ue000 for\ue000 all\ue000 outstanding\ue000 shares\ue000 of\ue000 KeyOn\ue000 common\ue000 stock.\ue000 Upon\ue000 completion\ue000 of\ue000 the\ue000 proposed\ue000 merger,\ue000 KeyOn\ue000 shareholders\ue000 would\ue000 have
owned\ue000 45%,\ue000 and\ue000 Internet\ue000 America\ue000 shareholders\ue000 would\ue000 have\ue000 owned\ue000 55%,\ue000 of\ue000 the\ue000 aggregate\ue000 number\ue000 of\ue000 shares\ue000 of\ue000 common\ue000 and\ue000 preferred\ue000 stock\ue000 of
the\ue000 Company\ue000 outstanding\ue000 after\ue000 the\ue000 merger.\ue000 Among\ue000 other\ue000 obligations\ue000 under\ue000 the\ue000 Merger\ue000 Agreement,\ue000 KeyOn\ue000 was\ue000 required\ue000 to\ue000 reach\ue000 a\ue000 liquidity
threshold\ue000 by\ue000 reducing\ue000 or\ue000 eliminating\ue000 certain\ue000 current\ue000 liabilities\ue000 combined\ue000 with\ue000 raising\ue000 additional\ue000 equity,\ue000 to\ue000 meet\ue000 certain\ue000 financial\ue000 covenants\ue000 and
to\ue000 restructure\ue000 its\ue000 $4,500,000\ue000 short-term\ue000 obligation\ue000 into\ue000 a\ue000 long-term\ue000 debt\ue000 obligation\ue000 with\ue000 a\ue000 5\ue000 year\ue000 maturity\ue000 and\ue000 a\ue000 ten-year\ue000 amortization.\ue000 \ue000

Each\ue000 party\ue000 to\ue000 the\ue000 Merger\ue000 Agreement\ue000 had\ue000 rights\ue000 to\ue000 terminate\ue000 that\ue000 agreement\ue000 if\ue000 certain\ue000 covenants\ue000 of\ue000 the\ue000 other\ue000 party\ue000 were\ue000 not\ue000 performed
or\ue000 conditions\ue000 to\ue000 the\ue000 closing\ue000 were\ue000 not\ue000 met.\ue000 On\ue000 February\ue000 18,\ue000 2009,\ue000 the\ue000 Company\ue000 received\ue000 a\ue000 notice\ue000 from\ue000 KeyOn\ue000 purportedly\ue000 terminating\ue000 the
Merger\ue000 Agreement.\ue000 On\ue000 February\ue000 19,\ue000 2009,\ue000 Internet\ue000 America\ue000 responded\ue000 that\ue000 it\ue000 did\ue000 not\ue000 consider\ue000 KeyOn\u2019s\ue000 termination\ue000 valid\ue000 under\ue000 the\ue000 terms\ue000 of
the\ue000 Merger\ue000 Agreement,\ue000 and\ue000 gave\ue000 notice\ue000 of\ue000 termination\ue000 to\ue000 KeyOn\ue000 for\ue000 the\ue000 failure\ue000 to\ue000 comply\ue000 in\ue000 a\ue000 material\ue000 respect\ue000 with\ue000 certain\ue000 of\ue000 the\ue000 covenants
and\ue000 conditions\ue000 to\ue000 closing\ue000 required\ue000 to\ue000 be\ue000 performed\ue000 or\ue000 satisfied\ue000 by\ue000 KeyOn\ue000 under\ue000 the\ue000 Merger\ue000 Agreement.