**Exhibit 4.2**

**INVESTOR REGISTRATION RIGHTS AGREEMENT**

**THIS REGISTRATION RIGHTS AGREEMENT**(this “Agreement”), dated as of August 11, 2006, by and among **WORLDGATE COMMUNICATIONS, INC.,** a Delawarecorporation (the “Company”), and the undersigned investors listedon Schedule I attached hereto (each, an “Investor” andcollectively, the “Investors”).

**WHEREAS:**

A.            Inconnection with the Securities Purchase Agreement by and among the partieshereto of even date herewith (the **“**SecuritiesPurchase Agreement”), the Company has agreed, upon the terms and subject tothe conditions of the Securities Purchase Agreement, to issue and sell to theInvestors secured convertible debentures (the “Convertible Debentures”)which shall be convertible into that number of shares of the Company’s commonstock, par value $0.01 per share (the “Common Stock”), pursuant to theterms of the Securities Purchase Agreement for an aggregate purchase price of up to Eleven MillionDollars ($11,000,000).  Capitalized termsnot defined herein shall have the meaning ascribed to them in the SecuritiesPurchase Agreement.

B.            Toinduce the Investors to execute and deliver the Securities Purchase Agreement,the Company has agreed to provide certain registration rights under theSecurities Act of 1933, as amended, and the rules and regulations thereunder,or any similar successor statute (collectively, the “Securities Act”),and applicable state securities laws.

**NOW, THEREFORE,** inconsideration of the premises and the mutual covenants contained herein and othergood and valuable consideration, the receipt and sufficiency of which arehereby acknowledged, the Company and the Investors hereby agree as follows:

### 1.             DEFINITIONS.

As used in this Agreement, the following terms shallhave the following meanings:

#### (a)           “Person”means a corporation, a limited liability company, an association, apartnership, an organization, a business, an individual, a governmental orpolitical subdivision thereof or a governmental agency.

#### (b)           “Register,” “registered,”and “registration” refer to a registration effected by preparing andfiling one or more Registration Statements (as defined below) in compliancewith the Securities Act and pursuant to Rule 415 under the Securities Act orany successor rule providing for offering securities on a continuous or delayedbasis (“Rule 415”), and the declaration or ordering of effectiveness ofsuch Registration Statement(s) by the United States Securities and ExchangeCommission (the “SEC”).

#### (c)           “RegistrableSecurities” means the shares of Common Stock issuable to the Investors uponconversion of the Convertible Debentures pursuant to the terms thereof, theWarrant Shares (as defined in the Securities Purchase Agreement), and theCommitment Shares (as defined in the Securities Purchase Agreement).

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#### (d)           “RegistrationStatement” means a registration statement under the Securities Act whichcovers the Registrable Securities.

### 2.             REGISTRATION.

#### (a)           Subject to the termsand conditions of this Agreement, the Company shall prepare and file, no laterthan forty-five (45) days from the date hereof (the “Scheduled FilingDeadline”), with the SEC a registration statement on Form S-1 or SB-2 (or,if the Company is then eligible, on Form S-3) under the Securities Act (the “InitialRegistration Statement”) for the resale by the Investors of the RegistrableSecurities, which includes at least all shares listed on Schedule II attachedhereto.  Prior to the filing of theRegistration Statement with the SEC, the Company shall furnish a copy of theInitial Registration Statement to the Investors for their review andcomment.  The Investors shall furnishcomments on the Initial Registration Statement to the Company withintwenty-four (24) hours of the receipt thereof from the Company.

#### (b)           Effectiveness ofthe Initial Registration Statement. The Company shall use its best efforts (i) to have the InitialRegistration Statement declared effective by the SEC no later than one hundredtwenty (120) days from the date hereof (the “Scheduled Effective Deadline”)and (ii) to insure that the Initial Registration Statement and any subsequentRegistration Statement remains in effect until all of the RegistrableSecurities have been sold or until they become eligible for sale pursuant toRule 144(k), subject to the terms and conditions of this Agreement.

#### (c)           Failure to Fileor Obtain Effectiveness of the Registration Statement.  In the event the Registration Statement isnot filed by the Scheduled Filing Deadline or is not declared effective by theSEC on or before the Scheduled Effective Date, or if after the RegistrationStatement has been declared effective by the SEC, sales cannot be made pursuantto the Registration Statement (whether because of a failure to keep theRegistration Statement effective, failure to disclose such information as isnecessary for sales to be made pursuant to the Registration Statement, failureto register sufficient shares of Common Stock or otherwise) then as partialrelief for the damages to any holder of Registrable Securities by reason of anysuch delay in or reduction of its ability to sell the underlying shares ofCommon Stock (which remedy shall not be exclusive of any other remedies at lawor in equity), the Company will pay as liquidated damages (the “LiquidatedDamages”) to the holder, at the holder’s option, either a cash amount orshares of the Company’s Common Stock within three (3) business days, afterdemand therefore, equal to one percent (1%) of the liquidated value of theConvertible Debentures outstanding as Liquidated Damages for each thirty (30)day period after the Scheduled Filing Deadline or the Scheduled Effective Dateas the case may be.  Notwithstandinganything herein to the contrary, in no event shall Liquidated Damages exceedtwelve percent (12%) of the aggregate Purchase Price for all Investors.

#### (d)           LiquidatedDamages.  The Company and theInvestor hereto acknowledge and agree that the sums payable under subsection2(c) above shall constitute liquidated damages and not penalties and are inaddition to all other rights of the Investor, including the right to call adefault.  The parties further acknowledgethat (i) the amount of loss or damages likely to be incurred is incapable or isdifficult to precisely estimate, (ii) the amounts specified in such subsectionsbear a reasonable relationship to, and are not plainly or grosslydisproportionate to,

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#### the probableloss likely to be incurred in connection with any failure by the Company toobtain or maintain the effectiveness of a Registration Statement, (iii) one ofthe reasons for the Company and the Investor reaching an agreement as to suchamounts was the uncertainty and cost of litigation regarding the question ofactual damages, and (iv) the Company and the Investor are sophisticatedbusiness parties and have been represented by sophisticated and able legalcounsel and negotiated this Agreement at arm’s length.

### 3.             RELATEDOBLIGATIONS.

#### (a)           The Company shallkeep the Registration Statement effective pursuant to Rule 415 at alltimes until the date on which the Investor shall have sold all the RegistrableSecurities covered by such Registration Statement or until they become eligiblefor sale pursuant to Rule 144(k) (the “Registration Period”), whichRegistration Statement (including any amendments or supplements thereto andprospectuses contained therein) shall not contain any untrue statement of amaterial fact or omit to state a material fact required to be stated therein,or necessary to make the statements therein, in light of the circumstances inwhich they were made, not misleading.

#### (b)           The Company shallprepare and file with the SEC such amendments (including post-effectiveamendments) and supplements to a Registration Statement and the prospectus usedin connection with such Registration Statement, which prospectus is to be filedpursuant to Rule 424 promulgated under the Securities Act, as may be necessaryto keep such Registration Statement effective at all times during theRegistration Period, and, during such period, comply with the provisions of theSecurities Act with respect to the disposition of all Registrable Securities ofthe Company covered by such Registration Statement until such time as all ofsuch Registrable Securities shall have been disposed of in accordance with theintended methods of disposition by the seller or sellers thereof as set forthin such Registration Statement.  In thecase of amendments and supplements to a Registration Statement which arerequired to be filed pursuant to this Agreement (including pursuant to thisSection 3(b)) by reason of the Company’s filing a report on Form 10-K, Form10-Q or Form 8-K or any analogous report under the Securities Exchange Act of1934, as amended (the “Exchange Act”), the Company shall incorporatesuch report by reference into the Registration Statement, if applicable, orshall file such amendments or supplements with the SEC on the same day on whichthe Exchange Act report is filed which created the requirement for the Companyto amend or supplement the Registration Statement.

#### (c)           The Company shallfurnish to each Investor whose Registrable Securities are included in anyRegistration Statement, upon request and without charge, (i) at least one (1)copy of such Registration Statement as declared effective by the SEC and anyamendment(s) thereto, including financial statements and schedules, alldocuments incorporated therein by reference, all exhibits and each preliminaryprospectus, (ii) ten (10) copies of the final prospectus included in suchRegistration Statement and all amendments and supplements thereto (or such othernumber of copies as such Investor may reasonably request) and (iii) such otherdocuments as such Investor may reasonably request from time to time in order tofacilitate the disposition of the Registrable Securities owned by suchInvestor.

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#### (d)           The Company shall use its bestefforts to (i) register and qualify the Registrable Securities covered by aRegistration Statement under such other securities or “blue sky” laws of suchjurisdictions in the United States as any Investor reasonably requests, (ii) prepareand file in those jurisdictions, such amendments (including post-effectiveamendments) and supplements to such registrations and qualifications as may benecessary to maintain the effectiveness thereof during the Registration Period,(iii) take such other actions as may be necessary to maintain suchregistrations and qualifications in effect at all times during the RegistrationPeriod, and (iv) take all other actions reasonably necessary or advisable toqualify the Registrable Securities for sale in such jurisdictions; provided,however, that the Company shall not be required in connection therewith or as acondition thereto to (w) make any change to its certificate of incorporation orby-laws, (x) qualify to do business in any jurisdiction where it would nototherwise be required to qualify but for this Section 3(d), (y) subject itselfto general taxation in any such jurisdiction, or (z) file a general consent toservice of process in any such jurisdiction. The Company shall promptly notify each Investor who holds RegistrableSecurities of the receipt by the Company of any notification with respect tothe suspension of the registration or qualification of any of the RegistrableSecurities for sale under the securities or “blue sky” laws of any jurisdictionin the United States or its receipt of actual notice of the initiation orthreat of any proceeding for such purpose.

#### (e)           As promptly as practicable afterbecoming aware of such event or development, the Company shall notify eachInvestor in writing of the happening of any event as a result of which theprospectus included in a Registration Statement, as then in effect, includes anuntrue statement of a material fact or omission to state a material factrequired to be stated therein or necessary to make the statements therein, inlight of the circumstances under which they were made, not misleading (providedthat in no event shall such notice contain any material, nonpublicinformation), and promptly prepare a supplement or amendment to such RegistrationStatement to correct such untrue statement or omission, and, upon the requestof an Investor, deliver ten (10) copies of such supplement or amendment to suchInvestor.  The Company shall alsopromptly notify each Investor in writing (i) when a prospectus or anyprospectus supplement or post-effective amendment has been filed, and when aRegistration Statement or any post-effective amendment has become effective(notification of such effectiveness shall be delivered to each Investor byfacsimile on the same day of such effectiveness), (ii) of any request by theSEC for amendments or supplements to a Registration Statement or relatedprospectus or related information, and (iii) of the Company’s reasonabledetermination that a post-effective amendment to a Registration Statement wouldbe appropriate.

#### (f)            The Company shall use its bestefforts to prevent the issuance of any stop order or other suspension ofeffectiveness of a Registration Statement, or the suspension of thequalification of any of the Registrable Securities for sale in any jurisdictionwithin the United States of America and, if such an order or suspension isissued, to obtain the withdrawal of such order or suspension at the earliestpossible moment and to notify each Investor who holds Registrable Securitiesbeing sold of the issuance of such order and the resolution thereof or itsreceipt of actual notice of the initiation or threat of any proceeding for suchpurpose.

#### (g)           The Company shall make available forinspection by (i) any Investor and (ii) one (1) firm of accountants orother agents retained by the Investors (collectively, the “Inspectors”)all pertinent financial and other records, and pertinent corporate documentsand

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#### properties of the Company (collectively, the “Records”),as shall be reasonably deemed necessary by each Inspector, and cause theCompany’s officers, directors and employees to supply all information which anyInspector may reasonably request; provided, however, that each Inspector shallagree, and each Investor hereby agrees, to hold in strict confidence and shallnot make any disclosure (except to an Investor) or use  any Record or other information which theCompany determines in good faith to be confidential, and of which determinationthe Inspectors are so notified, unless (a) the disclosure of such Records isnecessary to avoid or correct a misstatement or omission in any RegistrationStatement or is otherwise required under the Securities Act, (b) the release ofsuch Records is ordered pursuant to a final, non-appealable subpoena or orderfrom a court or government body of competent jurisdiction, or (c) theinformation in such Records has been made generally available to the publicother than by disclosure in violation of this or any other agreement of whichthe Inspector and the Investor has knowledge. Each Investor agrees that it shall, upon learning that disclosure ofsuch Records is sought in or by a court or governmental body of competentjurisdiction or through other means, give prompt notice to the Company andallow the Company, at its expense, to undertake appropriate action to preventdisclosure of, or to obtain a protective order for, the Records deemedconfidential.

#### (h)           The Company shall hold in confidenceand not make any disclosure of information concerning an Investor provided tothe Company unless (i) disclosure of such information is necessary to complywith federal or state securities laws, (ii) the disclosure of such informationis necessary to avoid or correct a misstatement or omission in any RegistrationStatement, (iii) the release of such information is ordered pursuant to asubpoena or other final, non-appealable order from a court or governmental bodyof competent jurisdiction, or (iv) such information has been made generallyavailable to the public other than by disclosure in violation of this Agreementor any other agreement.  The Companyagrees that it shall, upon learning that disclosure of such informationconcerning an Investor is sought in or by a court or governmental body ofcompetent jurisdiction or through other means, give prompt written notice tosuch Investor and allow such Investor, at the Investor’s expense, to undertakeappropriate action to prevent disclosure of, or to obtain a protective orderfor, such information.

#### (i)            The Company shall use its bestefforts either to cause all the Registrable Securities covered by aRegistration Statement to be (i) listed on each securities exchange on whichsecurities of the same class or series issued by the Company are then listed,if any, if the listing of such Registrable Securities is then permitted underthe rules of such exchange, or (ii) included for quotation on the NasdaqNational Market, Nasdaq Capital Market, or Nasdaq OTC Bulletin Board.  The Company shall pay all fees and expensesin connection with satisfying its obligation under this Section 3(i).

#### (j)            The Company shall cooperate with theInvestors who hold Registrable Securities being offered and, to the extentapplicable, to facilitate the timely preparation and delivery of certificates(not bearing any restrictive legend, provided that the Investors have providedan undertaking that (i) they will only sell such Registrable Securitiespursuant to an effective registration statement for such securities under theSecurities Act and (ii) they will comply with all applicable prospectusdelivery requirements) representing the Registrable Securities to be offeredpursuant to a Registration Statement and enable such certificates to be in 

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#### such denominations or amounts, as the casemay be, as the Investors may reasonably request and registered in such names asthe Investors may request.

#### (k)           The Company shalluse its best efforts to cause the Registrable Securities covered by theapplicable Registration Statement to be registered with or approved by suchother governmental agencies or authorities as may be necessary to consummatethe disposition of such Registrable Securities.

#### (l)            The Company shallmake generally available to its security holders, as soon as practical, anearnings statement (in form complying with the provisions of Rule 158 under theSecurities Act) covering a twelve (12) month period beginning not later thanthe first day of the Company’s fiscal year next following the effective date ofthe Registration Statement.

#### (m)          The Company shallotherwise use its best efforts to comply with all applicable rules andregulations of the SEC in connection with any registration hereunder.

#### (n)           Within two (2)business days after a Registration Statement which covers RegistrableSecurities is declared effective by the SEC, the Company shall deliver, andshall cause legal counsel for the Company to deliver, to the transfer agent forsuch Registrable Securities (with copies to the Investors whose RegistrableSecurities are included in such Registration Statement) confirmation that suchRegistration Statement has been declared effective by the SEC in the formattached hereto as Exhibit A.

#### (o)           The Company shalltake all other reasonable actions necessary to expedite and facilitatedisposition by the Investors of Registrable Securities pursuant to aRegistration Statement.

#### (p)           Notwithstandinganything to the contrary herein, at any time after the Effective Date, theCompany may delay the disclosure of material, non-public information concerningthe Company the disclosure of which at the time is not, in the good faithopinion of the Board of Directors of the Company (following consultation withits counsel), in the best interest of the Company (a “Grace Period”); provided, thatthe Company shall promptly (i) notify the Investors in writing that suchdetermination has been made (provided that in each notice the Company will notdisclose the content of such material, non-public information to the Investors)and the date on which the Grace Period will begin, and (ii) notify theInvestors in writing of the date on which the Grace Period ends; and, providedfurther, that during any three hundred sixty five (365) day period such GracePeriods shall not exceed an aggregate of twenty (20) days and the first day ofany Grace Period must be at ten (10) trading days after the last day of anyprior Grace Period (each, an “AllowableGrace Period”).  For purposesof determining the length of a Grace Period above, the Grace Period shall beginon and include the date the Investors receive the notice referred to in clause(i) and shall end on and include the later of the date the Investors receivethe notice referred to in clause (ii) and the date referred to in suchnotice.  Upon expiration of the GracePeriod, the Company shall again be bound by the first sentence of Section 3(e)with respect to the information giving rise thereto unless such material,non-public information is no longer applicable. Notwithstanding anything to the contrary, the Company shall cause its transferagent to deliver unlegended shares of Common Stock to a transferee of anInvestor in accordance with the terms of the Securities Purchase Agreement inconnection with

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#### any sale ofRegistrable Securities with respect to which an Investor has entered into acontract for sale and delivered a copy of the prospectus included as part ofthe applicable Registration Statement (unless an exemption from such prospectusdelivery requirement exists) prior to the Investor’s receipt of the notice of aGrace Period and for which the Investor has not yet settled.

### 4.             OBLIGATIONS OFTHE INVESTORS.

Each Investor agrees that, upon receipt of any noticefrom the Company of the happening of any event of the kind described in Section3(f) or the first sentence of 3(e), such Investor will immediately discontinuedisposition of Registrable Securities pursuant to any Registration Statement(s)covering such Registrable Securities until such Investor’s receipt of thecopies of the supplemented or amended prospectus contemplated by Section 3(e)or receipt of notice that no supplement or amendment is required.  Notwithstanding anything to the contrary, theCompany shall cause its transfer agent to deliver unlegended certificates forshares of Common Stock to a transferee of an Investor in accordance with theterms of the Securities Purchase Agreement in connection with any sale ofRegistrable Securities with respect to which an Investor has entered into acontract for sale prior to the Investor’s receipt of a notice from the Companyof the happening of any event of the kind described in Section 3(f) or thefirst sentence of 3(e) and for which the Investor has not yet settled; providedthat such Investor has provided an undertaking that (i) it has sold suchRegistrable Securities only pursuant to an effective registration statement forsuch securities under the Securities Act and (ii) it has complied, and willcomply, with all applicable prospectus delivery requirements.

### 5.             EXPENSES OFREGISTRATION.

All expenses incurred by the Company in connectionwith registrations, filings or qualifications pursuant to Sections 2 and 3,including, without limitation, all registration, listing and qualificationsfees, printers, legal and accounting fees shall be paid by the Company.

### 6.             INDEMNIFICATION.

With respect to Registrable Securities which areincluded in a Registration Statement under this Agreement:

#### (a)           To the fullestextent permitted by law, the Company will, and hereby does, indemnify, holdharmless and defend each Investor, the directors, officers, partners,employees, agents, representatives of, and each Person, if any, who controlsany Investor within the meaning of the Securities Act or the Exchange Act(each, an “Indemnified Person”), against any losses, claims, damages,liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’fees, amounts paid in settlement or expenses, joint or several (collectively, “Claims”)incurred in investigating, preparing or defending any action, claim, suit,inquiry, proceeding, investigation or appeal taken from the foregoing by orbefore any court or governmental, administrative or other regulatory agency,body or the SEC, whether pending or threatened, whether or not an indemnifiedparty is or may be a party thereto (“Indemnified Damages”), to which anyof them may become subject insofar as such Claims (or actions or proceedings,whether commenced or threatened, in respect thereof) arise out of or are basedupon: (i) any untrue statement or alleged untrue statement of a material fact ina Registration Statement or any post-effective amendment

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#### thereto or inany filing made in connection with the qualification of the offering under thesecurities or other “blue sky” laws of any jurisdiction in which RegistrableSecurities are offered (“Blue Sky Filing”), or the omission oralleged omission to state a material fact required to be stated therein ornecessary to make the statements therein not misleading; (ii) any untruestatement or alleged untrue statement of a material fact contained in any finalprospectus (as amended or supplemented, if the Company files any amendmentthereof or supplement thereto with the SEC) or the omission or alleged omissionto state therein any material fact necessary to make the statements madetherein, in light of the circumstances under which the statements therein weremade, not misleading; or (iii) any violation or alleged violation by theCompany of the Securities Act, the Exchange Act, any other law, including,without limitation, any state securities law, or any rule or regulationthereunder relating to the offer or sale of the Registrable Securities pursuantto a Registration Statement (the matters in the foregoing clauses (i) through(iii) being, collectively, “Violations”).  The Company shall reimburse the Investors andeach such controlling person promptly as such expenses are incurred and are dueand payable, for any legal fees or disbursements or other reasonable expensesincurred by them in connection with investigating or defending any such Claim.  Notwithstanding anything to the contrarycontained herein, the indemnification agreement contained in this Section 6(a):(x) shall not apply to a Claim by an Indemnified Person arising out of or basedupon a Violation which occurs in reliance upon and in conformity withinformation furnished in writing to the Company by such Indemnified Person foruse in connection with the preparation of the Registration Statement or anysuch amendment thereof or supplement thereto; (y) shall not be available to theextent such Claim is based on a failure of the Investor to deliver or to causeto be delivered the prospectus made available by the Company, if suchprospectus was timely made available by the Company pursuant to Section 3(c);and (z) shall not apply to amounts paid in settlement of any Claim if suchsettlement is effected without the prior written consent of the Company, whichconsent shall not be unreasonably withheld. Such indemnity shall remain in fullforce and effect regardless of any investigation made by or on behalf of theIndemnified Person and shall survive the transfer of the Registrable Securitiesby the Investors pursuant to Section 9 hereof.

#### (b)           In connection with aRegistration Statement, each Investor agrees to severally and not jointlyindemnify, hold harmless and defend, to the same extent and in the same manneras is set forth in Section 6(a), the Company, each of its directors, each ofits officers, employees, representatives, or agents and each Person, if any,who controls the Company within the meaning of the Securities Act or theExchange Act (each an “Indemnified Party”), against any Claim orIndemnified Damages to which any of them may become subject, under theSecurities Act, the Exchange Act or otherwise, insofar as such Claim orIndemnified Damages arise out of or is based upon any Violation, in each caseto the extent, and only to the extent, that such Violation occurs in relianceupon and in conformity with written information furnished to the Company bysuch Investor for use in connection with such Registration Statement; and,subject to Section 6(d), such Investor will reimburse any legal or otherexpenses reasonably incurred by them in connection with investigating ordefending any such Claim; provided, however, that the indemnity agreementcontained in this Section 6(b) and the agreement with respect to contributioncontained in Section 7 shall not apply to amounts paid in settlement of anyClaim if such settlement is effected without the prior written consent of suchInvestor, which consent shall not be unreasonably withheld; provided, further,however, that the Investor shall be liable under this Section 6(b) for onlythat amount of a Claim or Indemnified Damages as does not exceed the netproceeds to such Investor as a result of the sale of 

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#### RegistrableSecurities pursuant to such Registration Statement.  Such indemnity shall remain in full force andeffect regardless of any investigation made by or on behalf of such IndemnifiedParty and shall survive the transfer of the Registrable Securities by theInvestors pursuant to Section 9. Notwithstanding anything to the contrary contained herein, theindemnification agreement contained in this Section 6(b) with respect to anyprospectus shall not inure to the benefit of any Indemnified Party if theuntrue statement or omission of material fact contained in the prospectus wascorrected and such new prospectus was made available to each Investor prior tosuch Investor’s use of the prospectus to which the Claim relates.

#### (c)           Promptly after receiptby an Indemnified Person or Indemnified Party under this Section 6 of notice ofthe commencement of any action or proceeding (including any governmental actionor proceeding) involving a Claim, such Indemnified Person or Indemnified Partyshall, if a Claim in respect thereof is to be made against any indemnifyingparty under this Section 6, deliver to the indemnifying party a written noticeof the commencement thereof, and the indemnifying party shall have the right toparticipate in, and, to the extent the indemnifying party so desires, jointlywith any other indemnifying party similarly noticed, to assume control of thedefense thereof with counsel mutually satisfactory to the indemnifying partyand the Indemnified Person or the Indemnified Party, as the case may be;provided, however, that an Indemnified Person or Indemnified Party shall havethe right to retain its own counsel with the fees and expenses of not more thanone (1) counsel for such Indemnified Person or Indemnified Party to be paid bythe indemnifying party, if, in the reasonable opinion of counsel retained bythe indemnifying party, the representation by such counsel of the IndemnifiedPerson or Indemnified Party and the indemnifying party would be inappropriatedue to actual or potential differing interests between such Indemnified Person or Indemnified Party and anyother party represented by such counsel in such proceeding.  The Indemnified Party or Indemnified Personshall cooperate fully with the indemnifying party in connection with anynegotiation or defense of any such action or claim by the indemnifying partyand shall furnish to the indemnifying party all information reasonablyavailable to the Indemnified Party or Indemnified Person which relates to suchaction or claim.  The indemnifying partyshall keep the Indemnified Party or Indemnified Person fully apprised at alltimes as to the status of the defense or any settlement negotiations withrespect thereto.  No indemnifying partyshall be liable for any settlement of any action, claim or proceeding effectedwithout its prior written consent; provided, however, that the indemnifyingparty shall not unreasonably withhold, delay or condition its consent.  No indemnifying party shall, without theprior written consent of the Indemnified Party or Indemnified Person, consentto entry of any judgment or enter into any settlement or other compromise whichdoes not include as an unconditional term thereof the giving by the claimant orplaintiff to such Indemnified Party or Indemnified Person of a release from allliability in respect to such claim or litigation.  Following indemnification as provided forhereunder, the indemnifying party shall be subrogated to all rights of theIndemnified Party or Indemnified Person with respect to all third parties,firms or corporations relating to the matter for which indemnification has beenmade.  The failure to deliver writtennotice to the indemnifying party within a reasonable time of the commencementof any such action shall not relieve such indemnifying party of any liabilityto the Indemnified Person or Indemnified Party under this Section 6, except tothe extent that the indemnifying party is prejudiced in its ability to defendsuch action.

 

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#### (d)           The indemnificationrequired by this Section 6 shall be made by periodic payments of the amountthereof during the course of the investigation or defense, as and when billsare received or Indemnified Damages are incurred.

#### (e)           The indemnityagreements contained herein shall be in addition to (i) any cause ofaction or similar right of the Indemnified Party or Indemnified Person againstthe indemnifying party or others, and (ii) any liabilities the indemnifyingparty may be subject to pursuant to the law.

### 7.             CONTRIBUTION.

To the extent any indemnification by an indemnifyingparty is prohibited or limited by law, the indemnifying party agrees to makethe maximum contribution with respect to any amounts for which it wouldotherwise be liable under Section 6 to the fullest extent permitted by law;provided, however, that:  (i) no sellerof Registrable Securities guilty of fraudulent misrepresentation (within themeaning of Section 11(f) of the Securities Act) shall be entitled tocontribution from any seller of Registrable Securities who was not guilty offraudulent misrepresentation; and (ii) contribution by any seller ofRegistrable Securities shall be limited in amount to the net amount of proceedsreceived by such seller from the sale of such Registrable Securities.

### 8.             REPORTS UNDERTHE EXCHANGE ACT.

With a view to making available to the Investors thebenefits of Rule 144 promulgated under the Securities Act or any similar ruleor regulation of the SEC that may at any time permit the Investors to sell securitiesof the Company to the public without registration (“Rule 144”) theCompany agrees to:

#### (a)           make and keep publicinformation available, as those terms are understood and defined in Rule 144;

#### (b)           file with the SEC ina timely manner all reports and other documents required of the Company underthe Securities Act and the Exchange Act so long as the Company remains subjectto such requirements (it being understood that nothing herein shall limit theCompany’s obligations under Section 4(c) of the Securities Purchase Agreement)and the filing of such reports and other documents as are  required by the applicable provisions of Rule144; and

#### (c)           furnish to eachInvestor so long as such Investor owns Registrable Securities, promptly uponrequest, (i) a written statement by the Company that it has complied with thereporting requirements of Rule 144, the Securities Act and the Exchange Act,(ii) a copy of the most recent annual or quarterly report of the Company andsuch other reports and documents so filed by the Company, and (iii) such otherinformation as may be reasonably requested to permit the Investors to sell suchsecurities pursuant to Rule 144 without registration.

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### 9.             AMENDMENTOF REGISTRATION RIGHTS.

Provisions of this Agreement may be amended and theobservance thereof may be waived (either generally or in a particular instanceand either retroactively or prospectively), only with the written consent ofthe Company and Investors who then hold at least two-thirds (2/3) of theRegistrable Securities.  Any amendment orwaiver effected in accordance with this Section 9 shall be binding uponeach Investor and the Company.  No suchamendment shall be effective to the extent that it applies to fewer than all ofthe holders of the Registrable Securities. No consideration shall be offered or paid to any Person to amend orconsent to a waiver or modification of any provision of any of this Agreementunless the same consideration also is offered to all of the parties to thisAgreement.

### 10.           MISCELLANEOUS.

#### (a)           A Person is deemedto be a holder of Registrable Securities whenever such Person owns or is deemedto own of record such Registrable Securities or owns the right to receive theRegistrable Securities.  If the Company receivesconflicting instructions, notices or elections from two (2) or more Personswith respect to the same Registrable Securities, the Company shall act upon thebasis of instructions, notice or election received from the registered owner ofsuch Registrable Securities.

#### (b)           Any notices, consents,waivers or other communications required or permitted to be given under theterms of this Agreement must be in writing and will be deemed to have beendelivered:  (i) upon receipt, whendelivered 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) business 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 Copy to:          |   | Drinker Biddle & Reath LLP  |
|                   |   | 1000 Westlakes Drive, Suite 300 |
|                   |   | Berwyn, PA 19312-2409           |
|                   |   | Attention:                      | Walter Mostek |
|                   |   | Telephone:                      | (610) 993-2233 |
|                   |   | Facsimile:                      | (610) 993-8585 |
|                        |        |                                 |  |  |

 

If to an Investor, to its address and facsimile numberon the Schedule of Investors attached hereto, with copies to such Investor’srepresentatives as set forth on the Schedule of Investors or to such otheraddress and/or facsimile number and/or to the attention of such other person asthe recipient party has specified by written notice given to each other partyfive (5) days prior to the 

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effectiveness of such change.  Written confirmation of receipt (A) given bythe recipient of such notice, consent, waiver or other communication, (B)mechanically or electronically generated by the sender’s facsimile machinecontaining the time, date, recipient facsimile number and an image of the firstpage of such transmission or (C) provided by a courier or overnight courierservice 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.

#### (c)           Failure of any partyto exercise any right or remedy under this Agreement or otherwise, or delay bya party in exercising such right or remedy, shall not operate as a waiverthereof.

#### (d)           The laws of theState of New Jersey shall govern all issues concerning the relative rights ofthe Company and the Investors as its stockholders.  All other questions concerning theconstruction, validity, enforcement and interpretation of this Agreement shallbe governed by the internal laws of the State of New Jersey, without givingeffect to any choice of law or conflict of law provision or rule (whether ofthe State of New Jersey or any other jurisdiction) that would cause theapplication of the laws of any jurisdiction other than the State of NewJersey.  Each party hereby irrevocablysubmits to the non-exclusive jurisdiction of the Superior Courts of the Stateof New Jersey, sitting in Hudson County, New Jersey and federal courts for theDistrict of New Jersey sitting Newark, New Jersey, for the adjudication of anydispute hereunder or in connection herewith or with any transactioncontemplated hereby or discussed herein, and hereby irrevocably waives, andagrees not to assert in any suit, action or proceeding, any claim that it isnot personally subject to the jurisdiction of any such court, that such suit,action or proceeding is brought in an inconvenient forum or that the venue ofsuch suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process andconsents to process being served in any such suit, action or proceeding bymailing a copy thereof to such party at the address for such notices to itunder this Agreement and agrees that such service shall constitute good andsufficient service of process and notice thereof.  Nothing contained herein shall be deemed tolimit in any way any right to serve process in any manner permitted bylaw.  If any provision of this Agreementshall be invalid or unenforceable in any jurisdiction, such invalidity orunenforceability shall not affect the validity or enforceability of theremainder of this Agreement in that jurisdiction or the validity orenforceability of any provision of this Agreement in any otherjurisdiction.  EACH PARTY HEREBYIRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURYTRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITHOR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

#### (e)           This Agreement, theIrrevocable Transfer Agent Instructions, the Securities Purchase Agreement andrelated documents including the Convertible Debenture and the SecurityAgreement dated the date hereof (the “Security Agreement”) constitutethe entire agreement among the parties hereto with respect to the subjectmatter hereof and thereof.  There are norestrictions, promises, warranties or undertakings, other than those set forthor referred to herein and therein.  ThisAgreement, the Irrevocable Transfer Agent Instructions, the Securities PurchaseAgreement and related documents including the Convertible Debenture, and the 

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####  

#### SecurityAgreement supersede all prior agreements and understandings among the partieshereto with respect to the subject matter hereof and thereof.

#### (f)            This Agreementshall inure to the benefit of and be binding upon the permitted successors andassigns of each of the parties hereto.

#### (g)           The headings in thisAgreement are for convenience of reference only and shall not limit orotherwise affect the meaning hereof.

#### (h)           This Agreement maybe executed in identical counterparts, each of which shall be deemed anoriginal but all of which shall constitute one and the same agreement.  This Agreement, once executed by a party, maybe delivered to the other party hereto by facsimile transmission of a copy ofthis Agreement bearing the signature of the party so delivering this Agreement.

#### (i)            Each party shall doand perform, or cause to be done and performed, all such further acts andthings, and shall execute and deliver all such other agreements, certificates,instruments and documents, as the other party may reasonably request in orderto carry out the intent and accomplish the purposes of this Agreement and theconsummation of the transactions contemplated hereby.

#### The languageused in this Agreement will be deemed to be the language chosen by the partiesto express their mutual intent and no rules of strict construction will beapplied against any party.

#### (j)            This Agreement isintended for the benefit of the parties hereto and their respective permittedsuccessors and assigns, and is not for the benefit of, nor may any provisionhereof be enforced by, any other Person.

**[REMAINDEROF PAGE INTENTIONALLY LEFT BLANK]**

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**IN WITNESS WHEREOF,**each Investor and the Company have caused their signature page to this InvestorRegistration Rights Agreement to be duly executed as of the date first abovewritten.
|        | **COMPANY:**                       |
|--------|------------------------------------|
|   | **WORLDGATE COMMUNICATIONS, INC.** |
|   |                               |   |
|   | By:                                | /s/ Joel Boyarksi |
|   | Name:                              | Joel Boyarski |
|   | Title:                             | Chief Financial Officer |
|   |                               |   |

 

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**IN WITNESS WHEREOF,**each Investor and the Company have caused their signature page to this InvestorRegistration Rights Agreement to be duly executed as of the date first abovewritten.
|        | **INVESTOR:**                    |
|--------|----------------------------------|
|   | **CORNELL CAPITAL PARTNERS, LP** |
|   |                             |   |
|   | By:                              | Yorkville Advisors, LLC |
|   | Its:                             | General Partner |
|   |                             |   |
|   |                             |   |
|   | By:                              | /s/ Mark Angelo |
|   | Name:                            | Mark Angelo |
|   | Title:                           | Portfolio Manager |

 

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**SCHEDULE I**

**SCHEDULE OF INVESTORS**
| Investor                      | ** ** | **Address/Facsimile   Number of Investor** | ** ** | **Address/Facsimile   Number of Investor’s Representative** |
|-------------------------------|------------|--------------------------------------------|------------|------------------------------------------------------------------|
|                          |       |                                       |       |                                                             |
|                          |       |                                       |       |                                                             |
| Cornell Capital  Partners, LP |       | 101 Hudson Street — Suite 3700        |       | 101 Hudson Street — Suite 3700                              |
|                          |       | Jersey City, NJ 07303                      |       | Jersey City, NJ 07303                                            |
|                          |       | Facsimile:  (201) 985-8266       |       | Facsimile:  (201) 985-8266                             |
|                          |       |                                       |       | Attention: David Gonzalez, Esq.                                  |
|                          |       |                                       |       |                                                             |
|                          |       |                                       |       |                                                             |
|                          |       |                                       |       |                                                             |

 

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**SCHEDULE II**

**REGISTRABLESECURITIES**
| Selling Stockholder           | ** ** | **Shares of Common  Stock to be   Registered**                                                        | ** ** | **Description**                                            |
|-------------------------------|------------|-------------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------|
| Cornell Capital  Partners, LP |       | 27,227,581 shares of  which 7,798,333 shares shall be included on the Initial Registration  Statement |       | Shares of Common Stock underlying Convertible  Debentures. |
| Cornell Capital  Partners, LP |       | 177,419 shares which  shall be included on the Initial Registration Statement                         |       | Commitment Shares.                                         |
| Cornell Capital  Partners, LP |       | 2,595,000 shares which shall  be included on the subsequent Registration Statement                    |       | Shares of Common Stock underlying the Warrants.            |

 

 

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** **

**EXHIBITA**

**FORM OF NOTICE OFEFFECTIVENESSOF REGISTRATION STATEMENT**

              ,200 

              

Attention:

**RE:         WORLDGATE COMMUNICATIONS, INC.**

Ladies andGentlemen:

Weare counsel to WorldGate Communications, Inc., (the “Company”), and haverepresented the Company in connection with that certain Securities PurchaseAgreement, dated as of                     , 200  (the “Securities PurchaseAgreement”), entered into by and among the Company and the Buyers set forthon Schedule I attached thereto (collectively the “Buyers”) pursuant towhich the Company has agreed to sell to the Buyers up to $11,000,000 of securedconvertible debentures, which shall be convertible into shares (the “ConversionShares”) of the Company’s common stock, par value $.01 per share (the “CommonStock”), in accordance with the terms of the Securities PurchaseAgreement.  Pursuant to the SecuritiesPurchase Agreement, the Company also has entered into a Registration RightsAgreement, dated as of                      , 200 , with the Buyers (the “InvestorRegistration Rights Agreement”) pursuant to which the Company agreed, amongother things, to register the Conversion Shares under the Securities Act of1933, as amended (the “1933 Act”). In connection with the Company’s obligations under the SecuritiesPurchase Agreement and the Registration Rights Agreement, on           ,200 , the Company filed a Registration Statement (File No.       -          )(the “Registration Statement”) with the Securities and ExchangeCommission (the “SEC”) relating to the sale of the Conversion Shares.

In connection with the foregoing, we advise theTransfer Agent that a member of the SEC’s staff has advised us by telephonethat the SEC has entered an order declaring the Registration Statement effectiveunder the 1933 Act at       P.M. on              ,200  and we have no knowledge that any stop order suspending itseffectiveness has been issued or that any proceedings for that purpose arepending before, or threatened by, the SEC and the Conversion Shares areavailable for sale under the 1933 Act pursuant to the Registration Statement.

The statement made herein that “we have no knowledge”is based solely on information actually known to those attorneys currentlypracticing with this firm and engaged in the representation of the Company inconnection with the transactions contem­plated by the Securities PurchaseAgreement.

Very truly yours,

DRINKER BIDDLE& REATH LLP

cc:           **[LISTNAMES OF INVESTORS]**

 

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