**Exhibit 4.3**

**Dated:  August 11, 2006**

**NEITHER THIS DEBENTURE NOR THESECURITIES INTO WHICH THIS DEBENTURE IS CONVERTIBLE HAVE BEEN REGISTERED WITHTHE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANYSTATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACTOF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BEOFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDERTHE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN ATRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACTAND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.**

No. WGAT-1-1                                                                                                                                                                   $6,000,000

**WORLDGATE COMMUNICATIONS, INC.**

**Secured Convertible Debenture**

**Due: August 11, 2009**

This Secured ConvertibleDebenture (the “Debenture”) is issued by **WORLDGATECOMMUNICATIONS, INC.**,****aDelaware corporation (the “Company”), to **CORNELLCAPITAL PARTNERS, LP** (the “Holder”), pursuant to that certainSecurities Purchase Agreement (the “Securities Purchase Agreement”)dated August 11, 2006.

**FORVALUE RECEIVED**, the Company hereby promises to pay to theHolder or its successors and assigns the principal sum of Six Million Dollars($6,000,000) together with accrued but unpaid interest on or before August 11,2009 (the “Maturity Date”) in accordance with the following terms:

*Section 1*.              General Terms

(a)           *Interest*.  Interest shall accrue on the outstandingprincipal balance hereof at an annual rate equal to six percent (6%).  Interest shall be calculated on the basis ofa 365-day year and the actual number of days elapsed, to the extent permittedby applicable law.  Interest hereundershall be paid on the Maturity Date (or sooner as provided herein) to the Holderor its assignee in whose name this Debenture is registered on the records ofthe Company regarding registration and transfers of Debentures in cash or inCommon Stock (valued at the Volume Weighted Average Price on the Trading Dayimmediately prior to the date paid) at the option of the Company.

(b)*          **Security*.  This Debenture is secured by a SecurityAgreement (the “Security Agreement”) dated August 11, 2006 between theCompany, each wholly owned subsidiary of the Company, and the Holder.

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*Section 2*.              Events of Default.

(a)           An “Event of Default”, whereverused herein, means any one of the following events (whatever the reason andwhether it shall be voluntary or involuntary or effected by operation of law orpursuant to any judgment, decree or order of any court, or any order, rule orregulation of any administrative or governmental body):

(i)            Anydefault in the payment of the principal of, interest on or other charges inrespect of this Debenture, free of any claim of subordination, as and when thesame shall become due and payable whether upon an Optional Redemption (asdefined in *Section 3(a)*), or the Maturity Date orby acceleration or otherwise;

(ii)           TheCompany or any subsidiary of the Company shall commence, or there shall becommenced against the Company or any subsidiary of the Company under any applicablebankruptcy or insolvency laws as now or hereafter in effect or any successorthereto, or the Company or any subsidiary of the Company commences any otherproceeding under any reorganization, arrangement, adjustment of debt, relief ofdebtors, dissolution, insolvency or liquidation or similar law of anyjurisdiction whether now or hereafter in effect relating to the Company or anysubsidiary of the Company or there is commenced against the Company or anysubsidiary of the Company any such bankruptcy, insolvency or other proceedingwhich remains undismissed for a period of 61 days; or the Company or anysubsidiary of the Company is adjudicated insolvent or bankrupt; or any order ofrelief or other order approving any such case or proceeding is entered; or theCompany or any subsidiary of the Company suffers any appointment of anycustodian, private or court appointed receiver or the like for it or anysubstantial part of its property which continues undischarged or unstayed for aperiod of sixty one (61) days; or the Company or any subsidiary of the Companymakes a general assignment for the benefit of creditors; or the Company or anysubsidiary of the Company shall fail to pay, or shall state that it is unableto pay, or shall be unable to pay, its debts generally as they become due; orthe Company or any subsidiary of the Company shall call a meeting of itscreditors with a view to arranging a composition, adjustment or restructuringof its debts; or the Company or any subsidiary of the Company shall by any actor failure to act expressly indicate its consent to, approval of oracquiescence in any of the foregoing; or any corporate or other action is takenby the Company or any subsidiary of the Company for the purpose of effectingany of the foregoing;

(iii)          TheCompany or any subsidiary of the Company shall default in any of itsobligations under any other debenture or any mortgage, credit agreement orother facility, indenture agreement, factoring agreement or other instrumentunder which there may be issued, or by which there may be secured or evidencedany indebtedness for borrowed money or money due under any long term leasing orfactoring arrangement of the Company or any subsidiary of the Company in anamount exceeding $500,000, whether such indebtedness now exists or shallhereafter be created and such default shall result in such indebtednessbecoming or being declared due and payable prior to the date on which it wouldotherwise become due and payable;

(iv)          TheCommon Stock shall cease to be quoted for trading or listing for trading on anyof (a) the American Stock Exchange, (b) New York Stock Exchange, (c) the NasdaqNational Market, (d) the Nasdaq Capital Market, or (e) the Nasdaq OTC BulletinBoard

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 (“OTCBB”)  (each, a “Primary Market”) and shallnot again be quoted or listed for trading on any Primary Market within five (5)Trading Days of such delisting;

(v)           TheCompany shall (a) fail to file the Underlying Shares Registration Statement (asdefined in *Section 6*) with theCommission (as defined in *Section 6*),or (b) the Underlying Shares Registration Statement shall not have beendeclared effective by the Commission, in each case within thirty (30) days ofthe periods set forth in the Investor Registration Rights Agreement (“RegistrationRights Agreement”) dated August 11, 2006 between the Company and theHolder, or, (c) while the Underlying Shares Registration Statement is requiredto be maintained effective pursuant to the terms of the Registration RightsAgreement, the effectiveness of the Underlying Shares Registration Statementlapses for any reason or (d) the Holder shall not be permitted to resell theshares of Common Stock underlying this Debenture under the Underlying SharesRegistration Statement, in either case, for more than ten (10) consecutiveTrading Days (other than days during an Allowable Grace Period (as defined inthe Registration Rights Agreement) or for more than an aggregate of twenty (20)days in any 365-day period (which need not be consecutive) (other than daysduring an Allowable Grace Period (as defined in the Registration RightsAgreement)); provided that the events identified in clauses (c), and (d) aboveshall not cause an Event of Default to occur or be continuing during thependency of a review of the Underlying Shares Registration Statement (includingany review of a post-effective amendment thereto) by the Commission, providedthat the Company diligently responds to all comments of the Commissionregarding the Underlying Shares Registration Statement and otherwise usescommercially reasonably efforts to cause the Commission to declare theUnderlying Shares Registration Statement (or a post-effective amendmentthereto, as the case may be) effective; and provided further that upon theoccurrence of an event identified in clause (b) above, an Event of Defaultshall not be deemed to occur provided that (i) the failure to have theUnderlying Shares Registration Statement declared effective in a timely fashionis due solely to comments by the Commission relating to the structure of thetransaction contemplated by the Securities Purchase Agreement, (ii) the Companyhas diligently responded to all comments of the Commission regarding theUnderlying Shares Registration Statement and otherwise used commerciallyreasonably efforts to cause the Commission to declare the Underlying SharesRegistration Statement effective, and (iii) the Company acknowledges that anyand all fees previously paid to the Holder and any Warrants issued to theHolder have been fully earned and are non-refundable and repays (subject to thenext sentence) all outstanding principal and interest under the Debenturewithout incurring any Redemption Premium. The Holder at its sole option may waive the repayment requirement ofclause (iii) above in which case the Company shall not be permitted to repaythe Debenture (unless otherwise permitted hereunder) and the Debenture shallremain outstanding, and provided that the other conditions are satisfied, noEvent of Default shall be deemed to have occurred.

(vi)          AChange of Control Transaction (as defined in *Section6*) with respect to the Company shall have been consummated;

(vii)         TheCompany shall fail for any reason to deliver Common Stock certificates to aHolder on or prior to the fifth (5th) Trading Day after a Conversion Date,and such failure shall not be cured within ten (10) days after a ConversionDate (provided that such Holder shall provide the Company with notice prior tothe tenth (10th) day after the Conversion

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Date that it has not received such certificates), orthe Company shall provide notice to the Holder, including by way of publicannouncement, at any time, of its intention not to comply with requests forconversions in accordance with the terms hereof;

(viii)        TheCompany shall fail for any reason to deliver the payment in cash pursuant to aBuy-In (as defined herein) within three (3) days after notice is deliveredhereunder, and such failure shall continue for a period of ten (10) days;

(ix)           TheCompany shall fail to observe or perform any other covenant, agreement orwarranty contained in, or otherwise commit any breach or default of anyprovision of this Debenture (except as may be covered by *Section 2(a)(i) through 2(a)(ix)* hereof)or any Transaction Document (as defined in *Section6*) which is not cured within 10 days after notice is given by theHolder to the Company, or an Event of Default under any other debenture issuedto the Holder in connection with the Securities Purchase Agreement shall occurand be continuing;

 (b)          Duringthe time that any portion of this Debenture is outstanding, if any Event ofDefault has occurred and be continuing, the full principal amount of thisDebenture, together with interest and other amounts owing in respect thereof,to the date of acceleration shall become at the Holder’s election, immediatelydue and payable in cash, *provided however*,the Holder may request (but shall have no obligation to request) payment ofsuch amounts in Common Stock of the Company. Furthermore, in addition to any other remedies, the Holder shall havethe right (but not the obligation) to convert this Debenture at any time duringthe continuation of an Event of Default at the Conversion Price thenin-effect.  The Holder need not provideand the Company hereby waives any presentment, demand, protest or other noticeof any kind, and the Holder may immediately and without expiration of any graceperiod enforce any and all of its rights and remedies hereunder and all otherremedies available to it under applicable law. Such declaration may berescinded and annulled by Holder at any time prior to payment hereunder. Nosuch rescission or annulment shall affect any subsequent Event of Default orimpair any right consequent thereon. Except as set forth in Section 4(b)(i), (iii), and (iv), upon theoccurrence and during the continuation of an Event of Default, the Holder shallhave no obligation to comply with or adhere to any limitations, if any, on theconversion of this Debenture or the sale of the Underlying Shares.  

*Section 3*.              Redemptions.

(a)*           Company’s OptionalCash Redemption*. The Company at its option shall have the right to redeem (“OptionalRedemption”) a portion or all amounts outstanding under this Debentureprior to the Maturity Date *provided that*as of the date of the Holder’s receipt of a Redemption Notice (as definedherein) (i) the Volume Weighted Average Price of the of the Common Stock, asreported by Bloomberg, LP, is less than the Conversion Price and (ii) no Eventof Default shall have occurred and be continuing.  The Company shall pay an amount equal to theprincipal amount being redeemed plus a redemption premium (“RedemptionPremium”) equal to ten percent (10%) of the principal amount beingredeemed, and accrued interest, (collectively referred to as the “Redemption Amount”).  In order to make a redemption, the Companyshall first provide written notice to the Holder of its intention to make aredemption (the “Redemption Notice”) setting forth the amount ofprincipal it desires to redeem.  Afterreceipt of the Redemption Notice the Holder shall have three (3) business daysto elect to convert

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all or any portion of this Debenture, subject to thelimitations set forth in *Section 4(b)*.  On the fourth (4th) business day after the RedemptionNotice, the Company shall deliver to the Holder the Redemption Amount withrespect to the principal amount redeemed after giving effect to conversionseffected during the three (3) business day period.

*Section 4*.              Conversion.

(a)           Conversion at Option of Holder.

(i)            ThisDebenture shall be convertible into shares of Common Stock at the option of theHolder, in whole or in part at any time and from time to time, after theOriginal Issue Date (as defined in *Section 6*)(subject to the limitations on conversion set forth in *Section 4(b)* hereof). The number of sharesof Common Stock issuable upon a conversion hereunder equals the quotientobtained by dividing (x) the outstanding amount of this Debenture to beconverted by (y) the Conversion Price (as defined in *Section 4(c)(i)*).  TheCompany shall deliver Common Stock certificates to the Holder on or prior tothe Fifth (5th)Trading Day after a Conversion Date.

(ii)           Notwithstanding anything to the contrarycontained herein, if on any Conversion Date: (1) the number of shares of CommonStock at the time authorized and unissued, or held as treasury stock, isinsufficient to satisfy the Holder’s request for conversion on such ConversionDate or if issued would violate the Share Limitation; or (2) the Common Stockis not listed or quoted for trading on the OTCBB or on a Primary Market; then,at the option of the Holder, the Company, in lieu of delivering shares ofCommon Stock pursuant to *Section 4(a)(i)*,shall deliver, within five (5) Trading Days of each applicable Conversion Date,an amount in cash equal to the product of the outstanding principalamount to be converted divided by the applicable Conversion Price, andmultiplied by the average Volume Weighted Average Price for the five (5)Trading Days immediately preceding the date such cash payment is made.

Further, if the Company shall not have delivered anycash due in respect of conversion of this Debenture by the fifth (5th) Trading Day after theConversion Date, the Holder may, by notice to the Company, require the Companyto issue shares of Common Stock pursuant to *Section4(c)*, except that for such purpose the Conversion Price applicablethereto shall be the lesser of the Conversion Price on the Conversion Date andthe Conversion Price on the date of such Holder demand. Any such shares will besubject to the provisions of this Section.

(iii)          TheHolder shall effect conversions by delivering to the Company a completed noticein the form attached hereto as Exhibit A (a “Conversion Notice”).  The date on which a Conversion Notice isdelivered is the “Conversion Date.” Unless the Holder is converting theentire principal amount outstanding under this Debenture, the Holder is notrequired to physically surrender this Debenture to the Company in order toeffect conversions.  Conversionshereunder shall have the effect of lowering the outstanding principal amount ofthis Debenture plus all accrued and unpaid interest thereon in an amount equalto the applicable conversion. The Holder and the Company shall maintain recordsshowing the principal amount converted and the date of such conversions. In theevent of any dispute or discrepancy, the records of the Holder shall becontrolling and determinative in the absence of manifest error.

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(b)           Certain Conversion Restrictions.

(i)            TheCompany shall not effect any conversions of this Debenture and the Holder shallnot have the right to convert any portion of this Debenture or receive sharesof Common Stock as payment of interest hereunder to the extent that aftergiving effect to such such conversion or receipt of such interest payment, theHolder, together with any affiliate thereof, would beneficially own (asdetermined in accordance with Section 13(d) of the Exchange Act and the rulespromulgated thereunder) in excess of 9.99% of the number of shares of CommonStock outstanding immediately after giving effect to such conversion or receiptof shares as payment of interest.   Since the Holder will not be obligated to report to the Company thenumber of shares of Common Stock it may hold at the time of a conversion hereunder,unless the conversion at issue would result in the issuance of shares of CommonStock in excess of 9.99% of the then outstanding shares of Common Stock withoutregard to any other shares which may be beneficially owned by the Holder or anaffiliate thereof, the Holder shall have the authority and obligation todetermine whether the restriction contained in this Section will limit anyparticular conversion hereunder and to the extent that the Holder determinesthat the limitation contained in this Section applies, the determination ofwhich portion of the principal amount of this Debenture is convertible shall bethe responsibility and obligation of the Holder.  If the Holder has delivered a ConversionNotice for a principal amount of this Debenture that, without regard to anyother shares that the Holder or its affiliates may beneficially own, wouldresult in the issuance in excess of the permitted amount hereunder, the Companyshall notify the Holder of this fact and shall honor the conversion for themaximum principal amount permitted to be converted on such Conversion Date inaccordance with the periods described in *Section4(a)(i)* and, any principal amount tendered for conversion in excessof the permitted amount hereunder shall remain outstanding under thisDebenture. The provisions of this Section may be waived by a Holder (but onlyas to itself and not to any other Holder) upon not less than 65 days priornotice to the Company. Other Holders shall be unaffected by any such waiver.

(ii)           TheHolder shall be subject to the following conversion restrictions:  (a) the Holder shall not make any conversionof this Debenture using the Market Conversion Price until the earlier of theeffective date of the Underlying Share Registration Statement or January 1,2007 (the “Restricted Period”); (b) after the expiration of theRestricted Period, all of the Holder’s conversions of this Debenture (combinedwith conversions on all other debentures issued pursuant to the SecuritiesPurchase Agreement) using the Market Conversion Price in any thirty (30) dayperiod (y) shall not exceed $500,000 of principal amount of this Debenture (the“Cash Conversion Limit”) and (z) shall not result in the issuance of inexcess of 840,000 shares of Common Stock of the Company (the “ShareConversion Limit”) provided that the Company promptly pays the Holder thebalance of the principal amount up to the Cash Conversion Limit which remainsunconverted as a result of the Share Conversion Limit.  Notwithstanding the foregoing, the Cash ConversionLimit and the Share Conversion Limit shall not apply upon the occurrence andduring the continuation of an Event of Default, and neither of suchrestrictions shall apply if waived in writing by the Company.  Nothing contained in this Section 4(b)(ii)hereof shall limit the Holder’s right to make conversions at the FixedConversion Price.

(iii)          The Company shall not issue any sharesof Common Stock pursuant to this Debenture, and the Holder of this Debentureshall not have the right to receive any shares of Common Stock pursuant to thisDebenture, if the issuance of any such shares of Common Stock 

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would cause the totalshares of Common Stock issued under the transactions contemplated by theSecurities Purchase Agreement, including, (a) this Debenture or any otherdebenture issued pursuant to the Securities Purchase Agreement, (b) the WarrantShares (as defined in the Securities Purchase Agreement), (c) the CommitmentShares (as defined in the Securities Purchase Agreement), and (d) any shares ofCommon Stock issued as Liquidated Damages (as defined in the RegistrationRights Agreement) to be greater than 19.99% of the outstanding shares of CommonStock as of the date of the Securities Purchase Agreement (the number of sharesthat may be issued without violating such rules and regulations, the “ShareLimitation”), until the Company’s shareholders approve (without the vote ofany shares acquired in the transactions set forth in the Securities purchaseAgreement) the issuance of all the shares issuable under the transactionscontemplated by the Securities Purchase Agreement.

(iv)          The Company shall not issue any sharesof Common Stock pursuant to this Debenture, and the Holder of this Debentureshall not have the right to receive any shares of Common Stock pursuant to thisDebenture, if the issuance of any such shares of Common Stock would cause thetotal shares of Common Stock issued under the transactions contemplated by theSecurities Purchase Agreement, including, (a) this Debenture or any other debentureissued pursuant to the Securities Purchase Agreement, (b) the Warrant Shares(as defined in the Securities Purchase Agreement), (c) the Commitment Shares(as defined in the Securities Purchase Agreement), and (d) any shares of CommonStock issued as Liquidated Damages (as defined in the Registration RightsAgreement), to be greater than 61,111,111 shares of Common Stock.

 (c)          ConversionPrice and Adjustments to Conversion Price.

(i)            Theconversion price in effect on any Conversion Date shall be equal to the lesserof (a) $1.75 (the “FixedConversion Price”) or (b) ninety percent (90%) of the averageof the five (5) lowest daily Volume Weighted Average Prices during the fifteen(15) Trading Days immediately preceding the Conversion Date (the “Market Conversion Price”).  The Fixed Conversion Price and the MarketConversion Price are collectively referred to as the “Conversion Price.” The Conversion Price may be adjusted pursuant to the other terms of thisDebenture.

(ii)           Ifthe Company, at any time while this Debenture is outstanding, shall(a) pay a stock dividend or otherwise make a distribution or distributionson shares of its Common Stock or any other equity or equity equivalentsecurities payable in shares of Common Stock, (b) subdivide outstanding sharesof Common Stock into a larger number of shares, (c) combine (including by wayof reverse stock split) outstanding shares of Common Stock into a smallernumber of shares, or (d) issue by reclassification of shares of the CommonStock any shares of capital stock of the Company, then the Conversion Priceshall be multiplied by a fraction of which the numerator shall be the number ofshares of Common Stock (excluding treasury shares, if any) outstanding beforesuch event and of which the denominator shall be the number of shares of CommonStock outstanding after such event. Any adjustment made pursuant to thisSection shall become effective immediately after the record date for thedetermination of stockholders entitled to receive such dividend or distributionand shall become effective immediately after the effective date in the case ofa subdivision, combination or re-classification.

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(iii)          Ifthe Company, at any time while this Debenture is outstanding, shall issuerights, options or warrants to all holders of Common Stock (and not to theHolder) entitling them to subscribe for or purchase shares of Common Stock at aprice per share less than the Conversion Price, then the Conversion Price shallbe multiplied by a fraction, of which the denominator shall be the number ofshares of the Common Stock (excluding treasury shares, if any) outstanding onthe date of issuance of such rights or warrants (plus the number of additionalshares of Common Stock offered for subscription or purchase), and of which thenumerator shall be the number of shares of the Common Stock (excluding treasuryshares, if any) outstanding on the date of issuance of such rights or warrants,plus the number of shares which the aggregate offering price of the totalnumber of shares so offered would purchase at the Conversion Price. Suchadjustment shall be made whenever such rights or warrants are issued, and shallbecome effective immediately after the record date for the determination ofstockholders entitled to receive such rights, options or warrants. However,upon the expiration of any such right, option or warrant to purchase shares ofthe Common Stock the issuance of which resulted in an adjustment in theConversion Price pursuant to this Section, if any such right, option or warrantshall expire and shall not have been exercised, the Conversion Price shallimmediately upon such expiration be recomputed and effective immediately uponsuch expiration be increased to the price which it would have been (butreflecting any other adjustments in the Conversion Price made pursuant to theprovisions of this Section after the issuance of such rights or warrants) hadthe adjustment of the Conversion Price made upon the issuance of such rights,options or warrants been made on the basis of offering for subscription orpurchase only that number of shares of the Common Stock actually purchased uponthe exercise of such rights, options or warrants actually exercised.

(iv)          Ifthe Company or any subsidiary thereof, as applicable, at any time while this Debentureis outstanding, shall issue shares of Common Stock or rights, warrants, optionsor other securities or debt that are convertible into or exchangeable forshares of Common Stock (“Common Stock Equivalents”) entitling any Personto acquire shares of Common Stock, at a price per share less than theConversion Price (if the holder of the Common Stock or Common Stock Equivalentso issued shall at any time, whether by operation of purchase priceadjustments, reset provisions, floating conversion, exercise or exchange pricesor otherwise, or due to warrants, options or rights per share which is issuedin connection with such issuance, be entitled to receive shares of Common Stockat a price per share which is less than the Conversion Price, such issuance shallbe deemed to have occurred for less than the Conversion Price) (a “DilutiveIssuance”), then, effective immediately upon the Dilutive Issuance, theFixed Conversion Price shall be adjusted so as to equal an amount determined bymultiplying such Fixed Conversion Price by the following fraction:
|        | N0 + N1 |
|--------|--------------|
|   | N0 + N2 |

where:

N0 =                      thenumber of shares of Common Stock outstanding immediately prior to the issuance,or deemed issuance, of such Common Stock or Common Stock Equivalents in suchDilutive Issuance (without taking into account any shares of Common Stockissuable upon

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                                                conversion,exchange or exercise of any securities or other instruments which areconvertible into or exercisable or exchangeable for Common Stock (“ConvertibleSecurities”) or options, warrants or other rights to purchase or subscribefor Common Stock or Convertible Securities, other than shares of Common Stockissuable upon conversion of this Debenture and any other debentures issuedpursuant to the Securities Purchase Agreement or upon exercise of the Warrants(as defined in the Securities Purchase Agreement), which shall be taken intoaccount in determining such number;

N1 =                        the number of shares of CommonStock which the aggregate consideration, if any, received or receivable by theCompany for the total number of such shares of Common Stock or Common StockEquivalents so issued, or deemed issued, in such Dilutive Issuance wouldpurchase at the Fixed Conversion Price in effect immediately prior to suchDilutive Issuance; and

N2 =                        the number of such additionalshares of Common Stock so issued or issuable, or deemed issued or issuable, inconnection with such Dilutive Issuance.

Such adjustment shall bemade whenever such Common Stock or Common Stock Equivalents are issued. TheCompany shall notify the Holder in writing, no later than one (1) business dayfollowing the issuance of any Common Stock or Common Stock Equivalent subjectto this Section, indicating therein the applicable issuance price, or ofapplicable reset price, exchange price, conversion price and other pricingterms.  No adjustment under this Sectionshall be made as a result of issuances of Excluded Securities.

(v)           Ifthe Company, at any time while this Debenture is outstanding, shall distributeto all holders of Common Stock (and not to the Holder) evidences of itsindebtedness or assets or rights or warrants to subscribe for or purchase anysecurity, then in each such case the Conversion Price at which this Debentureshall thereafter be convertible shall be determined by multiplying theConversion Price in effect immediately prior to the record date fixed fordetermination of stockholders entitled to receive such distribution by afraction of which the denominator shall be the Volume Weighted Average Pricedetermined as of the record date mentioned above, and of which the numeratorshall be such Volume Weighted Average Price on such record date less the thenfair market value at such record date of the portion of such assets or evidenceof indebtedness so distributed applicable to one outstanding share of theCommon Stock as determined by the Board of Directors in good faith. In eithercase the adjustments shall be described in a statement provided to the Holderof the portion of assets or evidences of indebtedness so distributed or suchsubscription rights applicable to one share of Common Stock. Such adjustmentshall be made whenever any such distribution is made and shall become effectiveimmediately after the record date mentioned above.

(vi)          Incase of any reclassification of the Common Stock or any compulsory shareexchange pursuant to which the Common Stock is converted into other securities,cash or 

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property, the Holder shall have the right thereafterto, at its option,  (A) convert the then outstandingprincipal amount, together with all accrued but unpaid interest and any otheramounts then owing hereunder in respect of this Debenture into the shares ofstock and other securities, cash and property receivable upon or deemed to beheld by holders of the Common Stock following such reclassification or shareexchange, and the Holder of this Debenture shall be entitled upon such event toreceive such amount of securities, cash or property as the shares of the CommonStock of the Company into which the then outstanding principal amount, togetherwith all accrued but unpaid interest and any other amounts then owing hereunderin respect of this Debenture could have been converted immediately prior tosuch reclassification or share exchange would have been entitled, or (B)require the Company to prepay the outstanding principal amount of thisDebenture, plus all interest and other amounts due and payable thereon. Theentire prepayment price shall be paid in cash. This provision shall similarly apply to successive reclassifications orshare exchanges.

(vii)         Wheneverthe Conversion Price is adjusted pursuant to *Section4* hereof, the Company shall promptly mail to the Holder a noticesetting forth the Conversion Price after such adjustment and setting forth abrief statement of the facts requiring such adjustment.

(viii)        If(A) the Company shall declare a dividend (or any other distribution) on theCommon Stock; (B) the Company shall declare a special nonrecurring cashdividend on or a redemption of the Common Stock; (C) the Company shallauthorize the granting to all holders of the Common Stock rights or warrants tosubscribe for or purchase any shares of capital stock of any class or of anyrights; (D) the approval of any stockholders of the Company shall be requiredin connection with any reclassification of the Common Stock, any consolidationor merger to which the Company is a party, any sale or transfer of all orsubstantially all of the assets of the Company, of any compulsory shareexchange whereby the Common Stock is converted into other securities, cash orproperty; or (E) the Company shall authorize the voluntary or involuntarydissolution, liquidation or winding up of the affairs of the Company; then, ineach case, the Company shall cause to be filed at each office or agencymaintained for the purpose of conversion of this Debenture, and shall cause tobe mailed to the Holder at its last address as it shall appear upon the stockbooks of the Company, at least twenty (20) calendar days prior to the applicablerecord or effective date hereinafter specified, a notice stating (x) the dateon which a record is to be taken for the purpose of such dividend,distribution, redemption, rights or warrants, or if a record is not to betaken, the date as of which the holders of the Common Stock of record to beentitled to such dividend, distributions, redemption, rights or warrants are tobe determined or (y) the date on which such reclassification, consolidation,merger, sale, transfer or share exchange is expected to become effective orclose, and the date as of which it is expected that holders of the Common Stockof record shall be entitled to exchange their shares of the Common Stock forsecurities, cash or other property deliverable upon such reclassification,consolidation, merger, sale, transfer or share exchange, provided, that thefailure to mail such notice or any defect therein or in the mailing thereofshall not affect the validity of the corporate action required to be specifiedin such notice.  The Holder is entitledto convert this Debenture during the 20-day calendar period commencing the dateof such notice to the effective date of the event triggering such notice.

(ix)           Incase of any (1) merger or consolidation of the Company or any subsidiary of theCompany with or into another Person, or (2) sale by the Company or any

 

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subsidiary of the Company of more than one-half of theassets of the Company in one or a series of related transactions, a Holdershall have the right to (A) exercise any rights under *Section 2(b)*, (B) convert the aggregateamount of this Debenture then outstanding into the shares of stock and othersecurities, cash and property receivable upon or deemed to be held by holdersof Common Stock following such merger, consolidation or sale, and such Holdershall be entitled upon such event or series of related events to receive suchamount of securities, cash and property as the shares of Common Stock intowhich such aggregate principal amount of this Debenture could have beenconverted immediately prior to such merger, consolidation or sales would havebeen entitled, or (C) in the case of a merger or consolidation, require thesurviving entity to issue to the Holder a convertible Debenture with aprincipal amount equal to the aggregate principal amount of this Debenture thenheld by such Holder, plus all accrued and unpaid interest and other amountsowing thereon, which such newly issued convertible Debenture shall have termsidentical (including with respect to conversion) to the terms of thisDebenture, and shall be entitled to all of the rights and privileges of theHolder of this Debenture set forth herein and the agreements pursuant to whichthis Debentures were issued. In the case of clause (C), the conversion priceapplicable for the newly issued shares of convertible preferred stock orconvertible Debentures shall be based upon the amount of securities, cash andproperty that each share of Common Stock would receive in such transaction andthe Conversion Price in effect immediately prior to the effectiveness orclosing date for such transaction. The terms of any such merger, sale orconsolidation shall include such terms so as to continue to give the Holder theright to receive the securities, cash and property set forth in this Sectionupon any conversion or redemption following such event. This provision shallsimilarly apply to successive such events.

(d)           Other Provisions.

(i)            TheCompany shall have the right to force the Holder to convert this Debenture intoshares of Common Stock in accordance with this *Section 4*hereof, in amounts not to exceed $500,000 in any thirty (30) day period (lessany amounts converted by the Holder during such period), after the OriginalIssue Date, subject to the limitations on conversions set forth in *Section 4(b)* hereof and provided that the followingconditions are satisfied:  (a) the VolumeWeighted Average Price of the Common Stock is greater than 110% of the FixedConversion Price on each of the five Trading Days immediately preceding theConversion Date, (b) the average daily trading volume for the Common Stock on aPrimary Market over the five Trading Days prior to the Conversion Date shallhave been greater than 200,000 shares, (c) the Underlying Shares RegistrationStatement shall be effective and the Holder shall be permitted to resell theshares of Common Stock underlying this Debenture under the UnderlyingRegistration Statement, and (d) no Event of Default shall have occurred and becontinuing.

(ii)           The Company will have the right to force the Holderto convert this Debenture into shares of Common Stock in accordance with this *Section 4* hereof if(a) the Volume Weighted Average Price of the Common Stock is greater than orequal to a price per share equal to 200% of the Fixed Conversion Price for atleast thirty (30) consecutive Trading Days preceding the Conversion Date, (b)the average daily trading volume for the Common Stock on a Primary Market overthe five Trading Days prior to the Conversion Date shall have been greater than250,000 shares, (c) the Underlying Shares Registration Statement shall beeffective and the Holder shall be permitted to resell the shares of CommonStock underlying this 

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Debenture under the Underlying Registration Statement,and (d) no Event of Default shall have occurred and be continuing.

(iii)          TheCompany shall at all times reserve and keep available out of its authorizedCommon Stock the full number of shares of Common Stock issuable upon conversionof all outstanding amounts under this Debenture; and within three (3) BusinessDays following the receipt by the Company of a Holder’s notice that suchminimum number of Underlying Shares is not so reserved, the Company shallpromptly reserve a sufficient number of shares of Common Stock to comply withsuch requirement.

(iv)          Allcalculations under this *Section 4*shall be rounded to the nearest $0.0001 or whole share.

(v)           TheCompany covenants that it will at all times reserve and keep available out ofits authorized and unissued shares of Common Stock solely for the purpose ofissuance upon conversion of this Debenture and payment of interest on thisDebenture, each as herein provided, free from preemptive rights or any otheractual contingent purchase rights of persons other than the Holder, not lessthan such number of shares of the Common Stock as shall (subject to anyadditional requirements of the Company as to reservation of such shares setforth in this Debenture or in the Transaction Documents) be issuable (takinginto account the adjustments and restrictions set forth herein) upon theconversion of the outstanding principal amount of this Debenture and payment ofinterest hereunder. The Company covenants that all shares of Common Stock thatshall be so issuable shall, upon issue, be duly and validly authorized, issuedand fully paid, nonassessable and, if the Underlying Shares RegistrationStatement has been declared effective under the Securities Act, registered forpublic sale in accordance with such Underlying Shares Registration Statement.

(vi)          Upona conversion hereunder the Company shall not be required to issue stockcertificates representing fractions of shares of the Common Stock, but may ifotherwise permitted, make a cash payment in respect of any final fraction of ashare based on the Volume Weighted Average Price at such time. If the Companyelects not, or is unable, to make such a cash payment, the Holder shall beentitled to receive, in lieu of the final fraction of a share, one whole shareof Common Stock.

(vii)         Theissuance of certificates for shares of the Common Stock on conversion of thisDebenture shall be made without charge to the Holder thereof for anydocumentary stamp or similar taxes that may be payable in respect of the issueor delivery of such certificate, provided that the Company shall not berequired to pay any tax that may be payable in respect of any transfer involvedin the issuance and delivery of any such certificate upon conversion in a nameother than that of the Holder of such Debenture so converted and the Companyshall not be required to issue or deliver such certificates unless or until theperson or persons requesting the issuance thereof shall have paid to theCompany the amount of such tax or shall have established to the satisfaction ofthe Company that such tax has been paid.

(viii)        Nothingherein shall limit a Holder’s right to pursue actual damages or declare anEvent of Default pursuant to *Section 2*herein for the Company ‘s failure to deliver certificates representing sharesof Common Stock upon conversion within the period specified 

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herein and such Holder shall have the right to pursueall remedies available to it at law or in equity including, without limitation,a decree of specific performance and/or injunctive relief, in each case withoutthe need to post a bond or provide other security. The exercise of any suchrights shall not prohibit the Holder from seeking to enforce damages pursuantto any other Section hereof or under applicable law.

(ix)           Inaddition to any other rights available to the Holder, if the Company fails todeliver to the Holder such certificate or certificates pursuant to *Section 4(a)(i)*by the fifth (5th) Trading Day after theConversion Date, and if after such fifth (5th) Trading Day the Holder purchases (in an open markettransaction or otherwise) Common Stock to deliver in satisfaction of a sale bysuch Holder of the Underlying Shares which the Holder anticipated receivingupon such conversion (a “Buy-In”), then the Company shall (A) pay incash to the Holder (in addition to any remedies available to or elected by theHolder) the amount by which (x) the Holder’s total purchase price (includingbrokerage commissions, if any) for the Common Stock so purchased exceeds (y)the product of (1) the aggregate number of shares of Common Stock that suchHolder anticipated receiving from the conversion at issue multiplied by (2) themarket price of the Common Stock at the time of the sale giving rise to suchpurchase obligation and (B) at the option of the Holder, either reissue aDebenture in the principal amount equal to the principal amount of theattempted conversion or deliver to the Holder the number of shares of CommonStock that would have been issued had the Company timely complied with itsdelivery requirements under *Section 4(a)(i)*.For example, if the Holder purchases Common Stock having a total purchase priceof $11,000 to cover a Buy-In with respect to an attempted conversion ofDebentures with respect to which the market price of the Underlying Shares onthe date of conversion was a total of $10,000 under clause (A) of theimmediately preceding sentence, the Company shall be required to pay the Holder$1,000.  The Holder shall provide theCompany written notice indicating the amounts payable to the Holder in respectof the Buy-In.

*Section5*.              Notices.                Any notices, consents, waivers or other communications required or permittedto be given under the terms hereof must be in writing and will be deemed tohave been delivered:  (i) upon receipt,when delivered personally; (ii) upon receipt, when sent by facsimile (providedconfirmation of transmission is mechanically or electronically generated andkept on file by the sending party); or (iii) one (1) Trading Day after depositwith a nationally recognized overnight delivery service, in each case properlyaddressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

 
| If to the Company, to: | WorldGate Communications, Inc. |
|------------------------|--------------------------------|
|                   | 3190 Tremont Avenue            |
| ** **             | Trevose, PA 19053              |
| ** **             | Attention:                | Joel Boyarski |
|                   | Telephone:                     | (215) 354-5312 |
|                   | Facsimile:                     | (215) 354-1049 |
|                   |                           |
| With a copy to:        | Drinker Biddle & Reath LLP |

 

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|                    | 1000 Westlakes Drive, Suite 300     |
|--------------------|-------------------------------------|
|               | Berwyn, PA 19312-2409               |
|               | Attention:                          | Walter Mostek |
|               | Telephone:                          | (610) 993-2233 |
|               | Facsimile:                          | (610) 993-8585 |
|               |                                |
| If to the  Holder: | Cornell Capital Partners, LP        |
|               | 101 Hudson Street, Suite 3700       |
|               | Jersey City, NJ 07303               |
|               | Attention:                          | Mark Angelo |
|               | Telephone:                          | (201) 985-8300 |
|               |                                |
| With a copy to:    | David Gonzalez, Esq                 |
|               | 101 Hudson Street — Suite 3700 |
|               | Jersey City, NJ 07302               |
|               | Telephone:                          | (201) 985-8300 |
|               | Facsimile:                          | (201) 985-8266 |
|               |                                |

 

or at such other address and/or facsimile numberand/or to the attention of such other person as the recipient party hasspecified by written notice given to each other party three (3) business daysprior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient of suchnotice, consent, waiver or other communication, (ii) mechanically orelectronically generated by the sender’s facsimile machine containing the time,date, recipient facsimile number and an image of the first page of suchtransmission or (iii) provided by a nationally recognized overnight deliveryservice, shall be rebuttable evidence of personal service, receipt by facsimileor receipt from a nationally recognized overnight delivery service inaccordance with clause (i), (ii) or (iii) above, respectively.

*Section 6*.              Definitions.  For the purposes hereof, the following termsshall have the following meanings:

“ApprovedStock Plan” means any stock or option or other incentive plan that has beenduly adopted by a majority of the non-employee members of the Board ofDirectors of the Company, or a majority of the members of a committee ofnon-employee directors established for such purpose, pursuant to which theCompany’s securities may be issued or deemed to be issued to consultants,employees, officers or directors of the Company.

 “Business Day” means any day exceptSaturday, Sunday and any day which shall be a federal legal holiday in theUnited States or a day on which banking institutions are authorized or requiredby law or other government action to close.

“Changeof Control Transaction” means the occurrence of (a) an acquisition afterthe date hereof by an individual or legal entity or “group” (as described inRule 13d-5(b)(1) promulgated under the Exchange Act) of effective control(whether through legal or beneficial ownership of capital stock of the Company,by contract or otherwise) of in excess of fifty percent (50%) of the votingsecurities of the Company (except that the acquisition of voting securities bythe Holder 

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shall not constitute a Change of Control Transactionfor purposes hereof), (b) a replacement at one time or over time of more thanone-half of the members of the board of directors of the Company which is notapproved by a majority of those individuals who are members of the board ofdirectors on the date hereof and remain on the board of directors as of thedate of such approval (or by those individuals who are serving as members ofthe board of directors on any date whose nomination to the board of directorswas approved by a majority of the members of the board of directors who aremembers on the date hereof and remain on the board of directors as of the dateof such approval), or (c) the merger, consolidation or sale of fifty percent(50%) or more of the assets of the Company or any subsidiary of the Company inone or a series of related transactions with or into another entity.

“Commission”means the Securities and Exchange Commission.

“CommonStock” means the common stock, par value $.01, of the Company and stock ofany other class into which such shares may hereafter be changed orreclassified.

“Conversion Date” shall mean thedate upon which the Holder gives the Company notice of their intention toeffectuate a conversion of this Debenture into shares of the Company’s CommonStock as outlined herein.

“ExchangeAct” means the Securities Exchange Act of 1934, as amended.

“ExcludedSecurities” means (a) shares of Common Stock issued or deemed to have beenissued pursuant to an Approved Stock Plan; (b) shares of Common Stock issued ordeemed to be issued by the Company upon the conversion, exchange or exercise ofany right, option, obligation or security outstanding on the date of theSecurities Purchase Agreement; provided that (1) the terms of such right,option, obligation or security are not amended or otherwise modified on orafter the date of the Securities Purchase Agreement, and (2) the conversionprice, exchange price, exercise price or other purchase price is not reduced,adjusted or otherwise modified (except by operation of, or in accordance with,the relevant governing documents) and the number of shares of Common Stockissued or issuable is not increased (except by operation of, or in accordancewith, the relevant governing documents) on or after the date of the SecuritiesPurchase Agreement, and provided further that, notwithstanding anything to thecontrary set forth herein, the term “Excluded Securities” shall include,subject to the consent of the Holder which shall not be unreasonably withheld,shares of Common Stock issued or deemed to be issued by the Company upon theexercise of additional investment rights issued or issuable by the Company insatisfaction of claims against the Company by the investors party to theprivate placement of the Company’s securities on August 3, 2005; and(c) the shares of Common Stock issued or deemed to be issued by theCompany upon conversion of this Debenture and any other debentures issuedpursuant to the Securities Purchase Agreement or upon exercise of the Warrants;and (d) shares of Common Stock issued or deemed to have been issued pursuant toany strategic transaction with a third party Person in connection with thebusiness of the Company, which transaction is not primarily for the purpose ofraising capital for the Company.

“OriginalIssue Date” shall mean the date of the first issuance of this Debentureregardless of the number of transfers and regardless of the number ofinstruments, which may be issued to evidence such Debenture.

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“Person”means a corporation, an association, a partnership, organization, a business,an individual, a government or political subdivision thereof or a governmentalagency.

 “Securities Act” means the SecuritiesAct of 1933, as amended, and the rules and regulations promulgated thereunder.

“TradingDay” means a day on which the shares of Common Stock are quoted on theOTCBB or quoted or traded on such Primary Market on which the shares of CommonStock are then quoted or listed; provided, that in the event that the shares ofCommon Stock are not listed or quoted, then Trading Day shall mean a BusinessDay.

“TransactionDocuments” means the Securities Purchase Agreement or any other agreementdelivered in connection with the Securities Purchase Agreement, including,without limitation, the Security Agreement, the Irrevocable Transfer AgentInstructions, and the Registration Rights Agreement.

“UnderlyingShares” means the shares of Common Stock issuable upon conversion of thisDebenture or as payment of interest in accordance with the terms hereof.

“UnderlyingShares Registration Statement” means a registration statement meeting therequirements set forth in the Registration Rights Agreement, covering amongother things the resale of the Underlying Shares and naming the Holder as a “sellingstockholder” thereunder.

“VolumeWeighted Average Price” means, with respect to a Trading Day, the volumeweighted average price of the Common Stock for such Trading Day as quoted byBloomberg, LP.

*Section 7*.              Except as expressly providedherein, no provision of this Debenture shall alter or impair the obligations ofthe Company, which are absolute and unconditional, to pay the principal of,interest and other charges (if any) on, this Debenture at the time, place, andrate, and in the coin or currency, herein prescribed.  This Debenture is a direct obligation of theCompany. This Debenture ranks pari passu with all other Debentures now orhereafter issued under the terms set forth herein. As long as this Debenture isoutstanding, the Company shall not and shall cause their subsidiaries not to,without the consent of the Holder, (i) amend its certificate of incorporation,bylaws or other charter documents so as to adversely affect any rights of theHolder; (ii) repay, repurchase or offer to repay, repurchase or otherwiseacquire shares of its Common Stock or other equity securities other than as tothe Underlying Shares to the extent permitted or required under the TransactionDocuments; or (iii) enter into any agreement with respect to any of theforegoing.

*Section 8*.              This Debenture shall not entitlethe Holder to any of the rights of a stockholder of the Company, includingwithout limitation, the right to vote, to receive dividends and otherdistributions, or to receive any notice of, or to attend, meetings ofstockholders or any other proceedings of the Company, unless and to the extentconverted into shares of Common Stock in accordance with the terms hereof.

*Section 9*.              If this Debenture is mutilated,lost, stolen or destroyed, the Company shall execute and deliver, in exchangeand substitution for and upon cancellation of the mutilated 

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Debenture, or in lieu of or in substitution for alost, stolen or destroyed Debenture, a new Debenture for the principal amountof this Debenture so mutilated, lost, stolen or destroyed but only upon receiptof evidence of such loss, theft or destruction of such Debenture, and of theownership hereof, and indemnity, if requested, all reasonably satisfactory tothe Company.

*Section 10*.            No indebtedness of the Company issenior to this Debenture in right of payment, whether with respect to interest,damages or upon liquidation or dissolution or otherwise.  Without the Holder’s consent, the Companywill not and will not permit any of their subsidiaries to, directly orindirectly, enter into, create, incur, assume or suffer to exist anyindebtedness of any kind, on or with respect to any of its property or assetsnow owned or hereafter acquired or any interest therein or any income or profitsthere from that is senior in any respect to the obligations of the Companyunder this Debenture.

*Section 11*.            This Debenture shall be governed byand construed in accordance with the laws of the State of New Jersey, withoutgiving effect to conflicts of laws thereof. Each of the parties consents to the jurisdiction of the Superior Courtsof the State of New Jersey sitting in Hudson County, New Jersey and theU.S. District Court for the District of New Jersey  sitting in Newark, New Jersey in connectionwith any dispute arising under this Debenture and hereby waives, to the maximumextent permitted by law, any objection, including any objection based on forumnonconveniens to the bringing of any such proceeding in suchjurisdictions.

*Section 12*.            If the Company fails to strictlycomply with the terms of this Debenture, then the Company shall reimburse theHolder promptly for all fees, costs and expenses, including, withoutlimitation, attorneys’ fees and expenses incurred by the Holder in any actionin connection with this Debenture, including, without limitation, thoseincurred: (i) during any workout, attempted workout, and/or in connection withthe rendering of legal advice as to the Holder’s rights, remedies andobligations, (ii) collecting any sums which become due to the Holder, (iii)defending or prosecuting any proceeding or any counterclaim to any proceedingor appeal; or (iv) the protection, preservation or enforcement of any rights orremedies of the Holder.

*Section 13*.            Any waiver by the Holder of a breachof any provision of this Debenture shall not operate as or be construed to be awaiver of any other breach of such provision or of any breach of any otherprovision of this Debenture. The failure of the Holder to insist upon strictadherence to any term of this Debenture on one or more occasions shall not beconsidered a waiver or deprive that party of the right thereafter to insistupon strict adherence to that term or any other term of this Debenture. Anywaiver must be in writing.

*Section 14*.            If any provision of this Debentureis invalid, illegal or unenforceable, the balance of this Debenture shallremain in effect, and if any provision is inapplicable to any person orcircumstance, it shall nevertheless remain applicable to all other persons andcircumstances. If it shall be found that any interest or other amount deemedinterest due hereunder shall violate applicable laws governing usury, theapplicable rate of interest due hereunder shall automatically be lowered toequal the maximum permitted rate of interest. The Company covenants (to theextent that it may lawfully do so) that it shall not at any time insist upon,plead, or in any manner whatsoever claim or take the benefit or advantage of,any stay, extension or usury law or other law which would prohibit or forgivethe Company from paying 

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all or any portion of the principal of or interest onthis Debenture as contemplated herein, wherever enacted, now or at any timehereafter in force, or which may affect the covenants or the performance ofthis indenture, and the Company (to the extent it may lawfully do so) herebyexpressly waives all benefits or advantage of any such law, and covenants thatit will not, by resort to any such law, hinder, delay or impeded the executionof any power herein granted to the Holder, but will suffer and permit theexecution of every such as though no such law has been enacted.

*Section 15*.            Whenever any payment or otherobligation hereunder shall be due on a day other than a Business Day, suchpayment shall be made on the next succeeding Business Day.

*Section 16*.            This Debenture is exchangeable foran equal aggregate principal amount of Debentures of different authorizeddenominations, as requested by the Holder surrendering the same. No servicecharge will be made for such registration of transfer or exchange.

*Section 17*.            THE PARTIES HEREBY KNOWINGLY,VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM MAY HAVE TO A TRIALBY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER ORIN CONNECTION WITH THIS AGREEMENT OR ANY TRANSACTION DOCUMENT OR ANY COURSE OFCONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONSOF ANY PARTY.  THIS PROVISION IS AMATERIAL INDUCEMENT FOR THE PARTIES’ ACCEPTANCE OF THIS AGREEMENT.

**[REMAINDER OF PAGE INTENTIONLLYLEFT BLANK]**

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**INWITNESS WHEREOF**, the Company has caused this SecuredConvertible Debenture to be duly executed by a duly authorized officer as ofthe date set forth above.

 
|        | **COMPANY:**                       |
|--------|------------------------------------|
|   | **WORLDGATE COMMUNICATIONS, INC.** |
|   |                               |
|   | By:                                | /s/ Joel Boyarski |
|   | Name:                              | Joel Boyarski |
|   | Title:                             | Chief Financial Officer |
|   |                               |

 

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**EXHIBIT A**

**CONVERSION NOTICE**

**(To be executed by theHolder in order to Convert the Debenture)**

 
| **TO:** |
|---------|

 

The undersigned hereby irrevocably elects to convert $                                                                              of the principal amount of Debenture No. WGAT-1-1 into Shares of Common Stockof **WORLDGATE COMMUNICATIONS, INC.**,according to the conditions stated therein, as of the Conversion Date writtenbelow.
| **Conversion Date:**                                                                             | ** **                                                                                                                     |
|--------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|
| **Amount to be converted:**                                                                      | $                                                                                                                              |
| **Conversion Price:**                                                                            | $                                                                                                                              |
| **Number of shares of Common Stock to be issued:**                                               | ** **                                                                                                                     |
| **Amount of Debenture Unconverted:**                                                             | $                                                                                                                              |
| ** **                                                                                       | ** **                                                                                                                     |
| ** **                                                                                       | ** **                                                                                                                     |
| **Please issue the shares of Common Stock in the  following name and to the following address:** |
| **Issue to:**                                                                                    | Cornell Capital Partners, LP 101 Hudson Street,  Suite 3700   Jersey City, NJ 07083  Tel: (201) 985-8300   Fax: (201) 985-8266 |   |
| ** **                                                                                       | ** **                                                                                                                     |
| **Authorized Signature:**                                                                        | ** **                                                                                                                     |
| **Name:**                                                                                        | ** **                                                                                                                     |
| **Title:**                                                                                       | ** **                                                                                                                     |
| **Broker DTC Participant Code:**                                                                 | ** **                                                                                                                     |
| **Account Number:**                                                                              | ** **                                                                                                                     |

 

 

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