WARRANT TO PURCHASE SHARES OF COMMON STOCK OF WORLDGATE COMMUNICATIONS, INC

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT.  ANY SUCH DISPOSITION MAY ALSO BE SUBJECT TO APPLICABLE STATE SECURITIES LAWS.

VOID AFTER 5:00 P.M., NEW YORK, NEW YORK TIME, ON THE EXPIRATION DATE (AS DEFINED BELOW).

This certifies that, for value received, WGI Investor LLC, a Delaware limited liability company, and its permitted assigns or successors in interest (the “ Holder ”), is entitled to purchase from WorldGate Communications, Inc., a Delaware corporation (the “ Company ”), subject to the terms and conditions hereof, at any time on or after the date of this Warrant and before 5:00 P.M., New York, New York time on the date which is ten (10) years after the date hereof (the “ Expiration Date ”), that number of fully paid and non-assessable shares of the Company’s common stock, par value $0.01 (the “ Common Stock ”), as set forth in Section 2 hereof.

This Warrant represents the Anti-Dilution Warrant contemplated by the Securities Purchase Agreement, dated as of December 12, 2008, by and between the Company and the Holder (the “ Purchase Agreement ”), and enables to the Holder to maintain ownership of sixty-three percent (63%) of the issued and outstanding shares of capital stock of the Company in the event any capital stock of the Company is issued in accordance with the Existing Contingent Equity (as defined herein), New Contingent Equity (as defined herein) or the ACN Warrant (as defined herein).

1.             Definitions .  As used in this Warrant, the following terms shall have the meanings set forth below:

(a)           “ ACN Warrant ” means that certain Warrant to be issued by the Company to ACN Digital Phone Service, LLC as of the consummation of the transactions contemplated by the Purchase Agreement.

(b)           “ Exercise Period ” means the period beginning on the date of this Warrant and ending on the Expiration Date.

(c)           “ Exercise Price ” means $0.01 per share (as the same may be adjusted from time to time pursuant to the terms of this Warrant).

(d)           “ Existing Contingent Equity ” means any and all outstanding options, restricted stock, convertible notes and debentures, warrants, rights, pledges, calls, puts, contracts or other rights, agreements or commitments to subscribe for, purchase, or issue any equity interests of the Company or that grant any rights to acquire, any of the capital stock of the Company, existing as of the date hereof, but expressly excluding the YA Global Warrants.   Schedule 1 to this Warrant sets forth a list of all of the Existing Contingent Equity together with the dates on which such Existing Contingent Equity expires.

(e)           “ Fair Market Value ” means, on any particular date (a) if the Common Stock is then traded on a securities exchange, the average of the closing prices of such Common Stock on such exchange over the five trading day period ending on such date, (b) if the Common Stock is then regularly traded over-the-counter, the average of the closing sale prices or secondarily the closing bid of such Common Stock over the five trading day period ending on such date, or (c) if there is no active public trading market for the Common Stock, the fair market value of one share of the Warrant Shares as determined in good faith by the Board of Directors of the Company.

(f)           “ New Contingent Equity ” means any security granted by the Company in the form of options, restricted stock, convertible notes and debentures, warrants, rights, pledges, calls, puts, contracts or other rights, agreements or commitments to subscribe for, purchase, or issue any equity interests of the Company or that grant any rights to acquire, any of the capital stock of the Company, granted by the Company after the date hereof, up to a total of 19,662,043 shares of Common Stock.

(g)           “ Person ” (whether or not capitalized) means an individual, entity, partnership, limited liability company, corporation, association, trust, joint venture, unincorporated organization or any other form of entity not specifically listed herein, and any government, governmental department or agency or political subdivision thereof.

(h)           “ Securities Act ” means the Securities Act of 1933, as amended, and all of the rules and regulations promulgated thereunder.

(i)           “ Warrant ” means this Warrant and all stock purchase warrants issued in exchange therefor pursuant to the terms thereof.

(j)           “ Warrant Shares ” means the shares of Common Stock issuable upon exercise of this Warrant.

2.             Exercise of Warrant .

(a)            Number of Shares Underlying Warrant .  This Warrant shall be exercisable for up to 140,009,750 shares of Common Stock, as adjusted from time to time pursuant to the terms of this Warrant.

(b)            Vesting and Exercisability of Warrant .

(i)           The Holder may exercise the purchase rights represented by this Warrant, in whole or in part, during the Exercise Period as follows: the Holder may exercise this Warrant to purchase 1.7027027 shares of Common Stock for each share of Common Stock (A) issued by the Company upon exercise of any Existing Contingent Equity, New Contingent Equity or the ACN Warrant or (B) in respect of which all or any portion of any Existing Contingent Equity, New Contingent Equity or the ACN Warrant is exchanged, converted or otherwise deemed exercised with the effect that the holder of such Existing Contingent Equity, New Contingent Equity or the ACN Warrant is treated as having exercised such instrument or is provided the exercise value in connection with the cancellation or surrender of such instrument without the physical exercise thereof.

(ii)           Upon expiration of any Existing Contingent Equity, New Contingent Equity or the ACN Warrant (“ Expired Equity ”), the total number of Warrant Shares shall be reduced by the product of 1.7027027 multiplied by the number of shares underlying such Expired Equity.

(c)            Exercise Procedure .

(i)           The purchase rights represented by this Warrant may only be exercised by the Holder, in whole or in part, by delivery of a notice of exercise in the form set forth on the last page hereof (the “ Exercise Notice ”) at the principal office of the Company, and by the payment to the Company of the aggregate Exercise Price (in accordance with the next sentence) in an amount equal to the Exercise Price per share multiplied by the number of Warrant Shares then being purchased.  The aggregate purchase price for Warrant Shares being purchased hereunder pursuant to such exercise may be paid either (A) by cash or wire transfer of immediately available funds, (B) by cancellation of indebtedness, (C) by surrender of a number of Warrant Shares which have a fair market value equal to the aggregate purchase price of the Warrant Shares being purchased (“ Net Issuance ”) as determined herein, or (D) any combination of the foregoing.  If the Holder elects the Net Issuance method of payment, the Company shall issue to Holder upon exercise a number of shares of Warrant Shares determined in accordance with the following formula:

(ii)           No fractional shares arising out of the above formula for determining the number of shares to be issued to the Holder shall be issued, and the Company shall in lieu thereof make payment to the Holder of cash in the amount of such fraction multiplied by the Fair Market Value of one (1) share of the Warrant Shares on the date of exercise.

(iii)           In the event of any exercise of the rights represented by this Warrant, certificates for the Warrant Shares so purchased shall be delivered to the Holder as soon as practicable and, unless this Warrant has been fully exercised or has expired, a new Warrant representing the portion of the Warrant Shares, if any, with respect to which this Warrant shall not then have been exercised shall also be issued to the Holder as soon as practicable.  Such exercise shall be deemed to have been made immediately prior to the close of business on the date the Holder delivers the Exercise Notice with respect to such exercise.

3.             Reservation of Warrant Shares; Stock Fully Paid .  During the Exercise Period, the Company shall reserve and keep available for issuance upon the exercise of the Warrant such number of its authorized but unissued shares of Common Stock as will be sufficient to permit the exercis