Exhibit 4.2


 


EXHIBIT
A


 


NEITHER THESE
SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.  NOTWITHSTANDING THE
FOREGOING, THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.


 


WORLDGATE COMMUNICATIONS, INC.


 


ADDITIONAL INVESTMENT RIGHT


 




	
  Additional Investment Right
  No. [  ]

  	
   

  	
  Dated:  November 30, 2003

  






 


WorldGate
Communications, Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received, [Name of
Holder] or its registered assigns (the “Holder”),
is entitled to purchase from the Company (a) up to a total of [          ](1) shares of common stock, $0.01
par value per share (the “Common Stock”),
of the Company (each such share, an “Additional
Investment Right Share” and all such shares, the “Additional Investment Right Shares”) at an
exercise price equal to $0.80 per share (as adjusted from time to time as
provided in Section 9, the “Exercise
Price”), and (b) only as part of and in connection with the purchase
of the Additional Investment Right Shares, warrants in the form attached hereto
as Exhibit A to purchase up to [     
](2) shares of Common Stock (including any warrants issued in
replacement or partial exercise thereof, the “Additional Investment Right Warrants”),
at any time and from time to time from and after the date hereof and through
and including the 30th Trading Day following the Effective Date (the “Expiration Date”), and subject to the
following terms and conditions.  This
Additional Investment Right (this “Additional
Investment Right”) is one of a series of similar additional
investment rights issued pursuant to that certain Securities Purchase Agreement,
dated as of the date hereof, by and among the Company and the Purchasers
identified therein (the “Purchase Agreement”).  All such additional investment rights are
referred to herein, collectively, as the “Additional
Investment Rights.”  Common
Stock issuable upon exercise of the Additional Investment Right Warrants shall
be known herein as the “Additional Investment Right Warrant Shares.”  Concurrently with the issuance of Additional
Investment Right Shares to the Holders upon the exercise of this Additional


 












(1)  20% of Common Stock purchased.


(2)  30% warrant coverage on Additional
Investment Right Shares purchased.


 

















 


Investment
Right, the Holder shall be issued Additional Investment Right Warrants
exercisable for a number of Additional Investment Right Warrant Shares equal to
30% of the number of Additional Investment Right Shares so issued to the Holder
upon such exercise.


 


1.                                       Definitions.  In addition to the terms defined
elsewhere in this Additional Investment Right, capitalized terms that are not
otherwise defined herein have the meanings given to such terms in the Purchase
Agreement.


 


2.                                       Registration of Additional Investment Right.  The
Company shall register this Additional Investment Right, upon records to be
maintained by the Company for that purpose (the “Additional Investment Right Register”), in the name of the record Holder hereof from time to time.  The Company may deem and treat the
registered Holder of this Additional Investment Right as the absolute owner
hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.


 


3.                                       Registration of Transfers.  The
Company shall register the assignment and transfer of any portion of this
Additional Investment Right in the Additional Investment Right Register, upon
surrender of this Additional Investment Right, with the Form of Assignment
attached hereto duly completed and signed, to the Transfer Agent or to the
Company at its address specified herein. 
Upon any such registration or transfer, a new additional investment
right to purchase Common Stock, in substantially the form of this Additional
Investment Right (any such new additional investment right, a “New Additional Investment Right”), evidencing the portion of this Additional
Investment Right so transferred shall be issued to the transferee and a New
Additional Investment Right evidencing the remaining portion of this Additional
Investment Right not so transferred, if any, shall be issued to the transferring
Holder.  The acceptance of the New
Additional Investment Right by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of an Additional Investment Right.


 


4.                                       Exercise and Duration of Additional Investment
Right.


 


(a)                                  This
Additional Investment Right shall be exercisable by the registered Holder at
any time and from time to time on or after the date hereof to and including the
Expiration Date.  At 5:30 P.M., New York
City time on the Expiration Date, the portion of this Additional Investment
Right not exercised prior thereto shall be and become void and of no value.


 


(b)                                 The
Holder may exercise this Additional Investment Right by delivering to the
Company (i) an exercise notice, in the form attached hereto (the “Exercise Notice”), appropriately completed and duly signed,
and (ii) payment of the Exercise Price for the number of Additional
Investment Right Shares and Additional Investment Right Warrants as to which
this Additional Investment Right is being exercised (which may take the form of
a “cashless exercise” if so indicated in the Exercise Notice and if a “cashless
exercise” may occur at such time pursuant to Section 10 below), and the date
such items are delivered to the Company (as determined in accordance with the
notice provisions hereof) is an “Exercise Date.”  The Holder shall not be required to deliver
the original Additional Investment Right in order to effect an exercise
hereunder.  Execution and delivery of
the Exercise Notice shall have the same effect as


 


2

















 


cancellation of the original
Additional Investment Right and issuance of a New Additional Investment Right
evidencing the right to purchase the remaining number of Additional Investment
Right Shares and Additional Investment Right Warrants.


 


5.                                       Delivery of Additional Investment Right Shares.


 


(a)                                  Upon
exercise of this Additional Investment Right, the Company shall promptly (but
in no event later than three Trading Days after the Exercise Date) issue or
cause to be issued and cause to be delivered to or upon the written order of
the Holder and in such name or names as the Holder may designate, a certificate
for the Additional Investment Right Shares and Additional Investment Right
Warrants issuable upon such exercise, free of restrictive legends unless a
registration statement covering the resale of the Additional Investment Right
Shares or Additional Investment Right Warrant Shares, respectively, and naming
the Holder as a selling stockholder thereunder is not then effective and the
Additional Investment Right Shares or the Additional Investment Right Warrant
Shares, respectively, are not freely transferable without volume restrictions
pursuant to Rule 144 under the Securities Act. 
The Holder, or any Person so designated by the Holder to receive
Additional Investment Right Shares and Additional Investment Right Warrants,
shall be deemed to have become holder of record of such Additional Investment
Right Shares and Additional Investment Right Warrants as of the Exercise
Date.  The Company shall, upon request
of the Holder, use its best efforts to deliver Additional Investment Right
Shares hereunder electronically through the Depository Trust Corporation or
another established clearing corporation performing similar functions.


 


(b)                                 This
Additional Investment Right is exercisable, either in its entirety or, from
time to time, for a portion of the number of Additional Investment Right Shares
and Additional Investment Right Warrants. 
Upon surrender of this Additional Investment Right following one or more
partial exercises, the Company shall issue or cause to be issued, at its
expense, a New Additional Investment Right evidencing the right to purchase the
remaining number of Additional Investment Right Shares and Additional
Investment Right Warrants.


 


(c)                                  In
addition to any other rights available to a Holder, if the Company fails to
deliver to the Holder a certificate representing Additional Investment Right
Shares by the third Trading Day after the date on which delivery of such
certificate is required by this Additional Investment Right and if after such
third Trading Day the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
Holder of the Additional Investment Right Shares that the Holder anticipated
receiving from the Company (a “Buy-In”), then
the Company shall, within three Trading Days after the Holder’s request and in
the Holder’s discretion, either (i) pay cash to the Holder in an amount equal
to the Holder’s total purchase price (including brokerage commissions, if any)
for the shares of Common Stock so purchased (the “Buy-In
Price”), at which point the Company’s obligation to deliver such
certificate (and to issue such Common Stock) shall terminate, or (ii) promptly
honor its obligation to deliver to the Holder a certificate or certificates
representing such Common Stock and pay cash to the Holder in an amount equal to
the excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Common Stock, times (B) the Closing Price on the date of the event
giving rise to the Company’s obligation to deliver such certificate.


 


3

















 


(d)                                 The
Company’s obligations to issue and deliver Additional Investment Right Shares
and Additional Investment Right Warrants in accordance with the terms hereof
are absolute and unconditional, irrespective of any action or inaction by the
Holder to enforce the same, any waiver or consent with respect to any provision
hereof, the recovery of any judgment against any Person or any action to
enforce the same, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by the Holder or any other Person
of any obligation to the Company or any violation or alleged violation of law
by the Holder or any other Person, and irrespective of any other circumstance
which might otherwise limit such obligation of the Company to the Holder in connection
with the issuance of Additional Investment Right Shares and Additional
Investment Right Warrants.  Nothing
herein shall limit a Holder’s right to pursue any other remedies available to
it hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock upon
exercise of the Additional Investment Right as required pursuant to the terms
hereof.


 


6.                                       Charges, Taxes and Expenses.  
Issuance and delivery of certificates for shares of Common Stock and
Additional Investment Right Warrants upon exercise of this Additional
Investment Right shall be made without charge to the Holder for any issue or transfer
tax, withholding tax, transfer agent fee or other incidental tax or expense in
respect of the issuance of such certificates, all of which taxes and expenses
shall be paid by the Company; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any transfer
involved in the registration of any certificates for Additional Investment
Right Shares, Additional Investment Right Warrants or Additional Investment
Rights in a name other than that of the Holder or an Affiliate thereof.  The Holder shall be responsible for all
other tax liability that may arise as a result of holding or transferring this
Additional Investment Right or receiving Additional Investment Right Shares and
Additional Investment Right Warrants upon exercise hereof.


 


7.                                       Replacement of Additional Investment Right.  If this
Additional Investment Right is mutilated, lost, stolen or destroyed, the
Company shall issue or cause to be issued in exchange and substitution for and
upon cancellation hereof, or in lieu of and substitution for this Additional
Investment Right, a New Additional Investment Right, but only upon receipt of
evidence reasonably satisfactory to the Company of such loss, theft or
destruction and customary and reasonable indemnity, if requested.  Applicants for a New Additional Investment
Right under such circumstances shall also comply with such other reasonable
regulations and procedures and pay such other reasonable third-party costs as
the Company may prescribe.


 


8.                                       Reservation of Additional Investment Right Shares.  The
Company covenants that it will at all times reserve and keep available out of
the aggregate of its authorized but unissued and otherwise unreserved Common
Stock, solely for the purpose of enabling it to issue Additional Investment
Right Shares upon exercise of this Additional Investment Right and Additional
Investment Right Warrant Shares upon exercise of the Additional Investment
Right Warrants as herein provided and as provided in the Additional Investment Right
Warrants, the number of Additional Investment Right Shares which are then
issuable and deliverable upon the exercise of this entire Additional Investment
Right and the number of Additional Investment Right Warrant Shares which are
then issuable and deliverable upon the exercise of any Additional Investment
Right Warrants, free from preemptive rights or any other contingent


 


4

















 


purchase
rights of persons other than the Holder (taking into account the adjustments
and restrictions of Section 9). The Company covenants that all
Additional Investment Right Shares and Additional Invesment Right Warrant
Shares so issuable and deliverable shall, upon issuance and the payment of the
applicable Exercise Price in accordance with the terms hereof, or the
Additional Investment Right Warrants, as the case may be, be duly and validly
authorized, issued and fully paid and nonassessable.  The Company will take all such action as may be necessary
to assure that such shares of Common Stock may be issued as provided herein and
further to the Additional Investment Right Warrants without violation of any
applicable law or regulation, or of any requirements of any securities exchange
or automated quotation system upon which the Common Stock may be listed.


 


9.                                       Certain Adjustments.  The
Exercise Price and number of Additional Investment Right Shares issuable upon
exercise of this Additional Investment Right are subject to adjustment from
time to time as set forth in this Section 9.  The exercise price and number of Additional Investment Right
Warrant Shares issuable upon exercise of the Additional Investment Right
Warrants shall be subject to adjustment pursuant to Section 9 of the Additional
Investment Right Warants.


 


(a)                                  Stock
Dividends and Splits.  If the
Company, at any time while this Additional Investment Right is outstanding, (i)
pays a stock dividend on its Common Stock or otherwise makes a distribution on
any class of capital stock that is payable in shares of Common Stock, (ii)
subdivides outstanding shares of Common Stock into a larger number of shares,
or (iii) combines outstanding shares of Common Stock into a smaller number of
shares, then in each such case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such
event.  Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution, and any adjustment pursuant to clauses (ii) or (iii)
of this paragraph shall become effective immediately after the effective date
of such subdivision or combination.


 


(b)                                 Pro
Rata Distributions.  If the Company,
at any time while this Additional Investment Right is outstanding, distributes
to holders of Common Stock (i) evidences of its indebtedness, (ii) any security
(other than a distribution of Common Stock covered by the preceding paragraph),
(iii) rights or warrants to subscribe for or purchase any security, or
(iv) any other asset (in each case, “Distributed Property”),
then in each such case the Exercise Price in effect immediately prior to the
record date fixed for determination of stockholders entitled to receive such
distribution shall be adjusted (effective on such record date) to equal the
product of such Exercise Price times a fraction of which the denominator shall
be the average of the Closing Prices for the five Trading Days immediately
prior to (but not including) such record date and of which the numerator shall
be such average less the then fair market value of the Distributed Property
distributed in respect of one outstanding share of Common Stock, as determined
by the Company’s independent certified public accountants that regularly
examine the financial statements of the Company (an “Appraiser”).  In such event, the Holder, after receipt of
the determination by the Appraiser, shall have the right to select an
additional appraiser (which shall be a nationally recognized accounting firm),
in which case such fair market value shall be deemed to equal the average of
the values determined by each of the Appraiser and such


 


5

















 


appraiser.  As an alternative to the foregoing
adjustment to the Exercise Price, at the request of the Holder delivered before
the 90th day after such record date, the Company will deliver to such Holder,
within five Trading Days after such request (or, if later, on the effective
date of such distribution), the Distributed Property that such Holder would
have been entitled to receive in respect of the Additional Investment Right
Shares for which this Additional Investment Right could have been exercised
immediately prior to such record date. 
If such Distributed Property is not delivered to a Holder pursuant to
the preceding sentence, then upon expiration of or any exercise of the
Additional Investment Right that occurs after such record date, such Holder
shall remain entitled to receive, in addition to the Additional Investment
Right Shares otherwise issuable upon such exercise (if applicable), such
Distributed Property.


 


(c)                                  Fundamental
Transactions.  If, at any time while
this Additional Investment Right is outstanding, (i) the Company effects any
merger or consolidation of the Company with or into another Person, (ii) the
Company effects any sale of all or substantially all of its assets in one or a
series of related transactions, (iii) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (iv) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (other than as a result of a subdivision or
combination of shares of Common Stock covered by Section 9(a) above) (in any
such case, a “Fundamental Transaction”), then
the Holder shall have the right thereafter to receive, upon exercise of this
Additional Investment Right, the same amount and kind of securities, cash or
property as it would have been entitled to receive upon the occurrence of such
Fundamental Transaction if it had been, immediately prior to such Fundamental
Transaction, the holder of the number of Additional Investment Right Shares
then issuable upon exercise in full of this Additional Investment Right (the “Alternate Consideration”). 
The aggregate Exercise Price for this Additional Investment Right will
not be affected by any such Fundamental Transaction, but the Company shall
apportion such aggregate Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different components of
the Alternate Consideration.  If holders
of Common Stock are given any choice as to the securities, cash or property to
be received in a Fundamental Transaction, then the Holder shall be given the
same choice as to the Alternate Consideration it receives upon any exercise of
this Additional Investment Right following such Fundamental Transaction.  At the Holder’s request, any successor to
the Company or surviving entity in such Fundamental Transaction shall issue to
the Holder a new additional investment right consistent with the foregoing
provisions and evidencing the Holder’s right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof.  The terms of any agreement pursuant to which
a Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this paragraph
(c) and insuring that the Additional Investment Right (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous
to a Fundamental Transaction. If any Fundamental Transaction constitutes or
results in a Change of Control, then at the request of the Holder delivered
before the 90th day after such Fundamental Transaction, the Company (or any
such successor or surviving entity) will purchase the Additional Investment
Right from the Holder for a purchase price, payable in cash within five Trading
Days after such request (or, if later, on the effective date of the


 


6

















 


Fundamental Transaction), equal
to the Black Scholes value of the remaining unexercised portion of this
Additional Investment Right on the date of such request.


 


(d)                                 Number
of Additional Investment Right Shares. 
Simultaneously with any adjustment to the Exercise Price pursuant to
paragraphs (a) or (b) of this Section, the number of Additional Investment
Right Shares that may be purchased upon exercise of this Additional Investment
Right shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the increased or
decreased number of Additional Investment Right Shares shall be the same as the
aggregate Exercise Price in effect immediately prior to such adjustment.


 


(e)                                  Calculations.  All calculations under this Section 9
shall be made to the nearest cent or the nearest 1/100th of a share, as
applicable.  The number of shares of
Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such shares
shall be considered an issue or sale of Common Stock.


 


(f)                                    Notice
of Adjustments.  Upon the occurrence
of each adjustment pursuant to this Section 9, the Company at its
expense will promptly compute such adjustment in accordance with the terms of
this Additional Investment Right and prepare a certificate setting forth such
adjustment, including a statement of the adjusted Exercise Price and adjusted
number or type of Additional Investment Right Shares or other securities
issuable upon exercise of this Additional Investment Right (as applicable),
describing the transactions giving rise to such adjustments and showing in
detail the facts upon which such adjustment is based.  Upon written request, the Company will promptly deliver a copy of
each such certificate to the Holder and to the Company’s Transfer Agent.


 


(g)                                 Notice
of Corporate Events.  If the Company
(i) declares a dividend or any other distribution of cash, securities or other
property in respect of its Common Stock, including, without limitation, any
granting of rights or warrants to subscribe for or purchase any capital stock
of the Company or any Subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating or solicits stockholder approval for any Fundamental
Transaction or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, then the Company shall deliver to the
Holder a notice describing the material terms and conditions of such
transaction, at least 20 calendar days prior to the applicable record or
effective date on which a Person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the Company will
take all steps reasonably necessary in order to insure that the Holder is given
the practical opportunity to exercise this Additional Investment Right prior to
such time so as to participate in or vote with respect to such transaction;
provided, however, that the failure to deliver such notice or any defect
therein shall not affect the validity of the corporate action required to be
described in such notice.


 


10.                                 Payment of Exercise Price.  The
Holder shall pay the Exercise Price in immediately available funds; provided,
however, if the Registration Statement did not become effective on or before
Required Effectiveness Date and is not continuously effective through the
Expiration Date, the Holder may satisfy its obligation to pay the Exercise
Price through a


 


7

















 


“cashless exercise,” in which
event the Company shall issue to the Holder the number of Additional Investment
Right Shares determined as follows:


 


	
   

  	
   

  	
  X = Y [(A-B)/A]

  
	
  where:

  	
   

  	
   

  
	
   

  	
   

  	
  X = the number of Additional
  Investment Right Shares to be issued to the Holder.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Y = the number of Additional
  Investment Right Shares with respect to which this Additional Investment
  Right is being exercised.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A = the average of the
  Closing Prices for the five Trading Days immediately prior to (but not
  including) the Exercise Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B = the Exercise Price.

  



 


For purposes
of Rule 144 promulgated under the Securities Act, it is intended, understood
and acknowledged that the Additional Investment Right Shares issued in a
cashless exercise transaction shall be deemed to have been acquired by the
Holder, and the holding period for the Additional Investment Right Shares shall
be deemed to have commenced, on the date this Additional Investment Right was
originally issued pursuant to the Purchase Agreement.


 


11.                                 Limitation on
Exercise.


 


(a)                                  Notwithstanding
anything to the contrary contained herein, the number of shares of Common Stock
that may be acquired by the Holder upon any exercise of this Additional
Investment Right (or otherwise in respect hereof) shall be limited to the
extent necessary to insure that, following such exercise (or other issuance),
the total number of shares of Common Stock then beneficially owned by such
Holder and its Affiliates and any other Persons whose beneficial ownership of
Common Stock would be aggregated with the Holder’s for purposes of Section
13(d) of the Exchange Act, does not exceed 4.999% (the “Maximum
Percentage”) of the total number of issued and outstanding shares of
Common Stock (including for such purpose the shares of Common Stock issuable
upon such exercise).  For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of
the Exchange Act and the rules and regulations promulgated thereunder.  Each delivery of an Exercise Notice
hereunder will constitute a representation by the Holder that it has evaluated
the limitation set forth in this paragraph and determined that issuance of the
full number of Additional Investment Right Shares requested in such Exercise
Notice is permitted under this paragraph. 
The Company’s obligation to issue shares of Common Stock in excess of
the limitation referred to in this Section shall be suspended (and shall not
terminate or expire notwithstanding any contrary provisions hereof) until such
time, if any, as such shares of Common Stock may be issued in compliance with
such limitation.  By written notice to
the Company, the Holder may waive the provisions of this Section or increase or
decrease the Maximum Percentage to any other percentage specified in such
notice, but (i) any such waiver or increase will not be effective until the
61st day after such notice is delivered to the Company, and (ii) any such
waiver or increase


 


8

















 


or decrease will apply only to
the Holder and not to any other holder of Additional Investment Rights.


 


(b)                                 Notwithstanding
anything to the contrary contained herein, the maximum number of shares of
Common Stock that the Company may issue pursuant to the Transaction Documents
at an effective purchase price less than the Closing Price on the Trading Day
immediately preceding the Closing Date shall equal 19.99% of the shares of
Common Stock outstanding on the Closing Date (the “Issuable Maximum”), unless the Company obtains the necessary
stockholder approvals required by the rules and regulations of the Trading
Market.  If, at the time any Holder
requests an exercise of any of the Additional Investment Rights, the Actual
Minimum (excluding any shares issued or issuable at an effective purchase price
in excess of the Closing Price on the Trading Day immediately preceding the
Closing Date) exceeds the Issuable Maximum (and if the Company has not
previously obtained the required stockholder approval), then the Company shall
issue to the Holder requesting such exercise a number of shares of Common Stock
not exceeding such Holder’s pro-rata portion of the Issuable Maximum (based on
such Holder’s share (vis-à-vis other Holders) of the aggregate purchase price
paid under the Purchase Agreement and taking into account any Additional Investment
Right Shares previously issued to such Holder).  For the purposes hereof, “Actual Minimum”
shall mean, as of any date, the maximum aggregate number of shares of Common
Stock then issued or potentially issuable in the future pursuant to the
Transaction Documents, including any Underlying Shares issuable upon exercise
in full of all Additional Investment Rights, ignoring any limits on the number
of shares of Common Stock that may be owned by a Holder at any one time.


 


12.                                 Fractional Shares.  The
Company shall not be required to issue or cause to be issued fractional
Additional Investment Right Shares or Additional Investment Right Warrants to
purchase fractional Additional Investment Right Warrant Shares on the exercise
of this Additional Investment Right.  If
any fraction of a Additional Investment Right Share or if any Additional
Investment Right Warrant to purchase a fraction of an Additional Investment
Right Warrant Share would, except for the provisions of this Section, be
issuable upon exercise of this Additional Investment Right, the number of
Additional Investment Right Shares and/or Additional Investment Right Warrant
Shares issuable upon exercise of the Additional Investment Right Warrants, as
the case may be, to be issued will be rounded up to the nearest whole share.


 


13.                                 Notices.  Any and all notices or other
communications or deliveries hereunder (including without limitation any
Exercise Notice) shall be in writing and shall be deemed given and effective on
the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in this Section
prior to 5:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading
Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on a
day that is not a Trading Day or later than 5:30 p.m. (New York City time) on
any Trading Day, (iii) the Trading Day following the date of deposit with a
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given.  The address and facsimile numbers for such
notices or communications shall be as set forth in the Purchase Agreement.


 


9

















 


14.                                 Additional Investment Right Agent.  The
Company shall serve as additional investment right agent under this Additional
Investment Right.  Upon 30 days’ notice
to the Holder, the Company may appoint a new additional investment right
agent.  Any corporation into which the
Company or any new additional investment right agent may be merged or any
corporation resulting from any consolidation to which the Company or any new
additional investment right agent shall be a party or any corporation to which
the Company or any new additional investment right agent transfers
substantially all of its corporate trust or stockholders services business
shall be a successor additional investment right agent under this Additional Investment
Right without any further act.  Any such
successor additional investment right agent shall promptly cause notice of its
succession as additional investment right agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s last address as shown on
the Additional Investment Right Register.


 


15.                                 Miscellaneous.


 


(a)                                  Subject
to the restrictions on transfer set forth on the first page hereof, this
Additional Investment Right may be assigned by the Holder.  This Additional Investment Right may not be
assigned by the Company except to a successor in the event of a Fundamental
Transaction.  This Additional Investment
Right shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns. 
Subject to the preceding sentence, nothing in this Additional Investment
Right shall be construed to give to any Person other than the Company and the
Holder any legal or equitable right, remedy or cause of action under this
Additional Investment Right.  This
Additional Investment Right may be amended only in writing signed by the
Company and the Holder and their successors and assigns.


 


(b)                                 The
Company will not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Additional Investment
Right, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder against
impairment.  Without limiting the
generality of the foregoing, the Company (i) will not increase the par value of
any Additional Investment Right Shares or Additional Investment Right Warrant
Shares above the amount payable therefor on such exercise, (ii) will take all
such action as may be reasonably necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Additional
Investment Right Shares or Additional Investment Right Warrant Shares on the
exercise of this Additional Investment Right and Additional Investment Right
Warrants, respectively, and (iii) will not close its stockholder books or
records in any manner which interferes with the timely exercise of this
Additional Investment Right.


 


(c)                                  GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL. 
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND
INTERPRETATION OF THIS ADDITIONAL INVESTMENT RIGHT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.  EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING
IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION
CONTEMPLATED HEREBY


 


10

















 


OR DISCUSSED HEREIN (INCLUDING
WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND
HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR
PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF
ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.  EACH PARTY HEREBY IRREVOCABLY WAIVES
PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH
SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT
SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.  THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.


 


(d)                                 The
headings herein are for convenience only, do not constitute a part of this
Additional Investment Right and shall not be deemed to limit or affect any of
the provisions hereof.


 


(e)                                  In
case any one or more of the provisions of this Additional Investment Right
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Additional
Investment Right shall not in any way be affected or impaired thereby and the
parties will attempt in good faith to agree upon a valid and enforceable
provision which shall be a commercially reasonable substitute therefor, and
upon so agreeing, shall incorporate such substitute provision in this
Additional Investment Right.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]


 


11

















 


IN WITNESS
WHEREOF, the Company has caused this Additional Investment Right to be duly
executed by its authorized officer as of the date first indicated above.


 


	
   

  	
  WORLDGATE COMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


12

















 


FORM OF EXERCISE NOTICE


 


(To be executed by the Holder
to exercise the right to purchase shares of Common Stock under the foregoing
Additional Investment Right)


 


To:  Worldgate Communications, Inc.


 


The undersigned is the Holder
of Additional Investment Right No.
          (the “Additional Investment Right”) issued by
Worldgate Communications, Inc., a Delaware corporation (the “Company”). 
Capitalized terms used herein and not otherwise defined have the
respective meanings set forth in the Additional Investment Right.


 


1.                                       The
Additional Investment Right is currently exercisable to purchase a total
of                          
Additional Investment Right Shares and Additional Investment Right Warrants
exercisable
for               
shares of Additional Investment Right Shares.


 


2.                                       The
undersigned Holder hereby exercises its right to
purchase                                   
Additional Investment Right Shares and Additional Investment Right Warrants
exercisable
for                
shares of Additional Investment Right Shares (which number of shares underlying
such Additional Investment Right Warrants shall be equal to 30% of the
Additional Investment Right Shares so issued upon exercise of the Additional
Investment Right) in accordance with the terms of the Additional Investment
Right.


 


3.                                       The
Holder intends that payment of the Exercise Price shall be made as (check one):


 


o                                    “Cash
Exercise”


 


o                                    “Cashless
Exercise” (under Section 10)


 


4.                                       If
the holder has elected a Cash Exercise, the holder shall pay the sum of
$                      
to the Company in accordance with the terms of the Additional Investment Right.


 


5.                                       Pursuant
to this exercise, the Company shall deliver to the
holder                         
Additional Investment Right Shares and Additional Investment Right Warrants
exercisable
for              
shares of Additional Investment Right Shares (which number of shares underlying
such Additional Investment Right Warrants shall be equal to 30% of the
Additional Investment Right Shares so issued upon exercise of the Additional
Investment Right) in accordance with the terms of the Additional Investment
Right.


 


6.                                       Following
this exercise, the Additional Investment Right shall be exercisable to purchase
a total
of                         
Additional Investment Right Shares and Additional Investment Right Warrants
exercisable
for                 
shares of Additional Investment Right Shares (which number of shares underlying
such Additional Investment Right Warrants shall be equal to 30% of the
Additional Investment Right Shares so issued upon exercise of the Additional
Investment Right).


 

















 


	
  Dated:

  	
   

  	
  ,

  	
   

  	
   

  	
   

  	
  Name of Holder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Print)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature must conform in
  all respects to name of holder as specified on the face of the Additional
  Investment Right)

  
											



 

















 


FORM OF ASSIGNMENT


 


[To be
completed and signed only upon transfer of Additional Investment Right]


 


FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                                              
the right represented by the within Additional Investment Right to purchase
                         
shares of Common Stock and warrants to purchase shares of Common Stock (which
number of shares underlying such warrants shall be equal to 30% of the shares
so issued upon exercise of the Additional Investment Right) in accordance with
the terms of the Additional Investment Right.of Worldgate Communications, Inc.
to which the within Additional Investment Right relates and appoints
                              
attorney to transfer said right on the books of Worldgate Communications, Inc.
with full power of substitution in the premises.


 


	
  Dated:

  	
   

  	
  ,

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature must conform in
  all respects to name of holder as specified on the face of the Additional
  Investment Right)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address of Transferee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  In the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
									



 

















 


EXHIBIT
A


 


NEITHER THESE
SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.  THESE SECURITIES AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.


 


WORLDGATE COMMUNICATIONS, INC.


 


ADDITIONAL INVESTMENT RIGHT WARRANT


 




	
  Additional Investment Right
  Warrant No. [  ]

  	
   

  	
  Dated:  November 28, 2003

  






 


WorldGate
Communications, Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received, [Name of
Holder] or its registered assigns (the “Holder”),
is entitled to purchase from the Company up to a total of [          ](1) shares of common stock, $0.01
par value per share (the “Common Stock”),
of the Company (each such share, a “Additional
Investment Right Warrant Share” and all such shares, the “Additional Investment Right Warrant Shares”)
at an exercise price equal to $1.00 per share (as adjusted from time to time as
provided in Section 9, the “Exercise
Price”), at any time and from time to time from and after the date
hereof and through and including the date that is five years from the date of
issuance hereof (the “Expiration Date”),
and subject to the following terms and conditions.  This Additional Investment Right Warrant (this “Additional Investment Right Warrant”) is
one of a series of similar Additional Investment Right Warrants issued pursuant
to that certain Securities Purchase Agreement, dated as of the date hereof, by
and among the Company and the Purchasers identified therein (the “Purchase Agreement”).  All such Additional Investment Right
Warrants are referred to herein, collectively, as the “Additional Investment Right Warrants.”


 


1.                                       Definitions.  In addition to the terms defined
elsewhere in this Additional Investment Right Warrant, capitalized terms that
are not otherwise defined herein have the meanings given to such terms in the
Purchase Agreement.


 












(1)  30% warrant coverage based on Additional Investment Right Shares
issued pursuant to Additional Investment Right.


 

















 


2.                                       Registration of Additional Investment Right
Warrant.  The Company shall register this Additional
Investment Right Warrant, upon records to be maintained by the Company for that
purpose (the “Additional
Investment Right Warrant Register”),
in the name of the record Holder hereof from time to time.  The Company may deem and treat the
registered Holder of this Additional Investment Right Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the contrary.


 


3.                                       Registration of Transfers.  The
Company shall register the transfer of any portion of this Additional
Investment Right Warrant in the Additional Investment Right Warrant Register,
upon surrender of this Additional Investment Right Warrant, with the Form of Assignment
attached hereto duly completed and signed, to the Transfer Agent or to the
Company at its address specified herein. 
Upon any such registration or transfer, a new warrant to purchase Common
Stock, in substantially the form of this Additional Investment Right Warrant
(any such new warrant, a “New
Additional Investment Right Warrant”), evidencing the portion of this Additional Investment Right Warrant so
transferred shall be issued to the transferee and a New Additional Investment
Right Warrant evidencing the remaining portion of this Additional Investment
Right Warrant not so transferred, if any, shall be issued to the transferring
Holder.  The acceptance of the New
Additional Investment Right Warrant by the transferee thereof shall be deemed
the acceptance by such transferee of all of the rights and obligations of a
holder of a Additional Investment Right Warrant.


 


4.                                       Exercise and Duration of Additional Investment
Right Warrants.


 


(a)                                  This
Additional Investment Right Warrant shall be exercisable by the registered
Holder at any time and from time to time on or after the date hereof to and
including the Expiration Date.  At 5:30
P.M., New York City time on the Expiration Date, the portion of this Additional
Investment Right Warrant not exercised prior thereto shall be and become void
and of no value; provided that, if the average of the Closing Prices for the
five Trading Days immediately prior to (but not including) the Expiration Date
exceeds the Exercise Price on the Expiration Date, then this Additional
Investment Right Warrant shall be deemed to have been exercised in full (to the
extent not previously exercised) on a “cashless exercise” basis at 5:30 P.M.
New York City time on the Expiration Date if a “cashless exercise” may occur at
such time pursuant to Section 10 below. 
Notwithstanding anything to the contrary herein, the Expiration Date
shall be extended for each day following the Effective Date that the
Registration Statement is not effective.


 


(b)                                 A
Holder may exercise this Additional Investment Right Warrant by delivering to
the Company (i) an exercise notice, in the form attached hereto (the “Exercise Notice”), appropriately completed and duly signed,
and (ii) payment of the Exercise Price for the number of Additional
Investment Right Warrant Shares as to which this Additional Investment Right
Warrant is being exercised (which may take the form of a “cashless exercise” if
so indicated in the Exercise Notice and if a “cashless exercise” may occur at
such time pursuant to Section 10 below), and the date such items are delivered
to the Company (as determined in accordance with the notice provisions hereof)
is an “Exercise Date.”  The Holder shall not be required to deliver
the original Additional Investment Right Warrant in order to effect an exercise
hereunder.  Execution and delivery of
the Exercise Notice shall have the same effect as


 


2

















 


cancellation of the original
Additional Investment Right Warrant and issuance of a New Additional Investment
Right Warrant evidencing the right to purchase the remaining number of
Additional Investment Right Warrant Shares.


 


5.                                       Delivery of Additional Investment Right Warrant
Shares.


 


(a)                                  Upon
exercise of this Additional Investment Right Warrant, the Company shall
promptly (but in no event later than three Trading Days after the Exercise
Date) issue or cause to be issued and cause to be delivered to or upon the
written order of the Holder and in such name or names as the Holder may
designate, a certificate for the Additional Investment Right Warrant Shares
issuable upon such exercise, free of restrictive legends unless a registration
statement covering the resale of the Additional Investment Right Warrant Shares
and naming the Holder as a selling stockholder thereunder is not then effective
and the Additional Investment Right Warrant Shares are not freely transferable
without volume restrictions pursuant to Rule 144 under the Securities Act.  The Holder, or any Person so designated by
the Holder to receive Additional Investment Right Warrant Shares, shall be
deemed to have become holder of record of such Additional Investment Right
Warrant Shares as of the Exercise Date. 
The Company shall, upon request of the Holder, use its best efforts to
deliver Additional Investment Right Warrant Shares hereunder electronically
through the Depository Trust Corporation or another established clearing
corporation performing similar functions.


 


(b)                                 This
Additional Investment Right Warrant is exercisable, either in its entirety or,
from time to time, for a portion of the number of Additional Investment Right
Warrant Shares.  Upon surrender of this
Additional Investment Right Warrant following one or more partial exercises,
the Company shall issue or cause to be issued, at its expense, a New Additional
Investment Right Warrant evidencing the right to purchase the remaining number
of Additional Investment Right Warrant Shares.


 


(c)                                  In
addition to any other rights available to a Holder, if the Company fails to
deliver to the Holder a certificate representing Additional Investment Right
Warrant Shares by the third Trading Day after the date on which delivery of
such certificate is required by this Additional Investment Right Warrant, and
if after such third Trading Day the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of
a sale by the Holder of the Additional Investment Right Warrant Shares that the
Holder anticipated receiving from the Company (a “Buy-In”),
then the Company shall, within three Trading Days after the Holder’s request
and in the Holder’s discretion, either (i) pay cash to the Holder in an amount
equal to the Holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased (the “Buy-In
Price”), at which point the Company’s obligation to deliver such
certificate (and to issue such Common Stock) shall terminate, or (ii) promptly
honor its obligation to deliver to the Holder a certificate or certificates
representing such Common Stock and pay cash to the Holder in an amount equal to
the excess (if any) of the Buy-In Price over the product of (A) such number of
shares of Common Stock, times (B) the Closing Price on the date of the event
giving rise to the Company’s obligation to deliver such certificate.


 


(d)                                 The
Company’s obligations to issue and deliver Additional Investment Right Warrant
Shares in accordance with the terms hereof are absolute and unconditional,


 


3

















 


irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of Additional Investment Right Warrant
Shares.  Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity including, without limitation, a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely
deliver certificates representing shares of Common Stock upon exercise of the
Additional Investment Right Warrant as required pursuant to the terms hereof.


 


6.                                       Charges, Taxes and Expenses.  
Issuance and delivery of certificates for shares of Common Stock upon
exercise of this Additional Investment Right Warrant shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the Company;
provided, however, that the Company shall not be required to pay any tax which
may be payable in respect of any transfer involved in the registration of any
certificates for Additional Investment Right Warrant Shares or Additional
Investment Right Warrants in a name other than that of the Holder or an Affiliate
thereof.  The Holder shall be
responsible for all other tax liability that may arise as a result of holding
or transferring this Additional Investment Right Warrant or receiving
Additional Investment Right Warrant Shares upon exercise hereof.


 


7.                                       Replacement of Additional Investment Right Warrant.  If this
Additional Investment Right Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation hereof, or in lieu of and substitution for this
Additional Investment Right Warrant, a New Additional Investment Right Warrant,
but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction and customary and reasonable bond or indemnity,
if requested.  Applicants for a New
Additional Investment Right Warrant under such circumstances shall also comply
with such other reasonable regulations and procedures and pay such other
reasonable third-party costs as the Company may prescribe.


 


8.                                       Reservation of Additional Investment Right Warrant
Shares.  The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue
Additional Investment Right Warrant Shares upon exercise of this Additional
Investment Right Warrant as herein provided, the number of Additional
Investment Right Warrant Shares which are then issuable and deliverable upon
the exercise of this entire Additional Investment Right Warrant, free from
preemptive rights or any other contingent purchase rights of persons other than
the Holder (after giving effect to the adjustments and restrictions of Section
9, if any). The Company covenants that all Additional Investment Right
Warrant Shares so issuable and deliverable shall, upon issuance and the payment
of the applicable Exercise Price in accordance with the terms hereof, be duly
and validly authorized, issued and fully paid and nonassessable.  The Company will take all such action as may be necessary
to assure that such shares of


 


4

















 


Common Stock may be
issued as provided herein without violation of any applicable law or
regulation, or of any requirements of any securities exchange or automated
quotation system upon which the Common Stock may be listed.


 


9.                                       Certain Adjustments.  The
Exercise Price and number of Additional Investment Right Warrant Shares
issuable upon exercise of this Additional Investment Right Warrant are subject
to adjustment from time to time as set forth in this Section 9.


 


(a)                                  Stock
Dividends and Splits.  If the
Company, at any time while this Additional Investment Right Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied
by a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately before such event and of which the denominator shall
be the number of shares of Common Stock outstanding immediately after such
event.  Any adjustment made pursuant to
clause (i) of this paragraph shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
dividend or distribution, and any adjustment pursuant to clause (ii) or (iii)
of this paragraph shall become effective immediately after the effective date
of such subdivision or combination.


 


(b)                                 Pro
Rata Distributions.  If the Company,
at any time while this Additional Investment Right Warrant is outstanding,
distributes to holders of Common Stock (i) evidences of its indebtedness, (ii)
any security (other than a distribution of Common Stock covered by the
preceding paragraph), (iii) rights or warrants to subscribe for or
purchase any security, or (iv) any other asset (in each case, “Distributed Property”), then in each such case the Exercise
Price in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution shall be adjusted (effective
on such record date) to equal the product of such Exercise Price times a
fraction of which the denominator shall be the average of the Closing Prices
for the five Trading Days immediately prior to (but not including) such record
date and of which the numerator shall be such average less the then fair market
value of the Distributed Property distributed in respect of one outstanding
share of Common Stock, as determined by the Company’s independent certified
public accountants that regularly examine the financial statements of the
Company, (an “Appraiser”).  In such event, the Holder, after receipt of
the determination by the Appraiser, shall have the right to select an
additional appraiser (which shall be a nationally recognized accounting firm),
in which case such fair market value shall be deemed to equal the average of
the values determined by each of the Appraiser and such appraiser.  As an alternative to the foregoing
adjustment to the Exercise Price, at the request of the Holder delivered before
the 90th day after such record date, the Company will deliver to such Holder,
within five Trading Days after such request (or, if later, on the effective
date of such distribution), the Distributed Property that such Holder would
have been entitled to receive in respect of the Additional Investment Right
Warrant Shares for which this Additional Investment Right Warrant could have
been exercised immediately prior to such record date.  If such Distributed Property is not delivered to a Holder
pursuant to the preceding sentence, then upon expiration of or any exercise of
the Additional Investment Right Warrant that occurs after such record date,
such Holder shall remain entitled to receive, in addition to the Additional
Investment


 


5

















 


Right Warrant Shares otherwise
issuable upon such exercise (if applicable), such Distributed Property.


 


(c)                                  Fundamental
Transactions.  If, at any time while
this Additional Investment Right Warrant is outstanding, (i) the Company
effects any merger or consolidation of the Company with or into another Person,
(ii) the Company effects any sale of all or substantially all of its assets in
one or a series of related transactions, (iii) any tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (iv) the Company effects any reclassification
of the Common Stock or any compulsory share exchange pursuant to which the
Common Stock is effectively converted into or exchanged for other securities,
cash or property (other than as a result of a subdivision or combination of
shares of Common Stock covered by Section 9(a) above) (in any such case, a “Fundamental Transaction”), then the Holder shall have the
right thereafter to receive, upon exercise of this Additional Investment Right
Warrant, the same amount and kind of securities, cash or property as it would
have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Additional Investment Right Warrant Shares then
issuable upon exercise in full of this Additional Investment Right Warrant (the
“Alternate Consideration”).  The aggregate Exercise Price for this
Additional Investment Right Warrant will not be affected by any such
Fundamental Transaction, but the Company shall apportion such aggregate
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.  If holders of Common
Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any exercise of this
Additional Investment Right Warrant following such Fundamental Transaction.  At the Holder’s request, any successor to
the Company or surviving entity in such Fundamental Transaction shall issue to
the Holder a new Additional Investment Right Warrant consistent with the
foregoing provisions and evidencing the Holder’s right to purchase the
Alternate Consideration for the aggregate Exercise Price upon exercise
thereof.  The terms of any agreement
pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions
of this paragraph (c) and insuring that the Additional Investment Right Warrant
(or any such replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental Transaction. If any
Fundamental Transaction constitutes or results in a Change of Control, then at
the request of the Holder delivered before the 90th day after such Fundamental
Transaction, the Company (or any such successor or surviving entity) will
purchase the Additional Investment Right Warrant from the Holder for a purchase
price, payable in cash within five Trading Days after such request (or, if
later, on the effective date of the Fundamental Transaction), equal to the
Black-Scholes value of the remaining unexercised portion of this Additional
Investment Right Warrant on the date of such request.


 


(d)                                 Subsequent
Equity Sales.


 


(i)                                     If,
at any time while this Additional Investment Right Warrant is outstanding, the
Company or any Subsidiary issues additional shares of Common Stock or rights, Additional
Investment Right Warrants, options or other securities or debt


 


6

















 


convertible, exercisable or exchangeable for
shares of Common Stock or otherwise entitling any Person to acquire shares of
Common Stock (collectively, “Common Stock
Equivalents”) at an effective net price to the Company per share of
Common Stock (the “Effective Price”)
less than the Exercise Price (as adjusted hereunder to such date), then the
Exercise Price shall be reduced to equal the lesser of (x) 125% of the
Effective Price and (x) the Exercise Price. 
If, at any time while this Additional Investment Right Warrant is
outstanding, the Company or any Subsidiary issues Common Stock or Common Stock
Equivalents at an Effective Price greater than the Exercise Price (as adjusted
hereunder to such date) but less than the average Closing Price over the five
Business Days prior to such issuance (the “Adjustment Price”),
then the Exercise Price shall be reduced to equal the product of (A) the
Exercise Price in effect immediately prior to such issuance of Common Stock or
Common Stock Equivalents times (B) a fraction, the numerator of which is the
sum of (1) the number of shares of Common Stock outstanding immediately prior
to such issuance, plus (2) the number of shares of Common Stock which the
aggregate Effective Price of the Common Stock issued (or deemed to be issued)
would purchase at the Adjustment Price, and the denominator of which is the
aggregate number of shares of Common Stock outstanding or deemed to be
outstanding immediately after such issuance. 
For purposes of this paragraph, in connection with any issuance of any
Common Stock Equivalents, (A) the maximum number of shares of Common Stock
potentially issuable at any time upon conversion, exercise or exchange of such
Common Stock Equivalents (the “Deemed Number”)
shall be deemed to be outstanding upon issuance of such Common Stock
Equivalents, (B) the Effective Price applicable to such Common Stock shall
equal the weighted average dollar value of consideration payable to the Company
to purchase such Common Stock Equivalents and to convert, exercise or exchange
them into Common Stock (net of any discounts, fees, commissions and other
expenses), divided by the Deemed Number, and (C) no further adjustment shall be
made to the Exercise Price upon the actual issuance of Common Stock upon
conversion, exercise or exchange of such Common Stock Equivalents.


 


(ii)                                  If,
at any time while this Additional Investment Right Warrant is outstanding, the
Company or any Subsidiary issues Common Stock Equivalents with an Effective
Price or a number of underlying shares that floats or resets or otherwise
varies or is subject to adjustment based (directly or indirectly) on market
prices of the Common Stock (a “Floating Price Security”),
then for purposes of applying the preceding paragraph in connection with any
subsequent exercise, the Effective Price will be determined separately on each
Exercise Date and will be deemed to equal the lowest Effective Price at which
any holder of such Floating Price Security is entitled to acquire Common Stock
on such Exercise Date (regardless of whether any such holder actually acquires
any shares on such date).


 


(iii)                               Notwithstanding
the foregoing, no adjustment will be made under this paragraph (d) in respect
to any issuance of Common Stock or Common Stock Equivalents (A) upon exercise
or conversion of any options or other securities described in Schedule 3.1(f)
of the Purchase Agreement (provided that such exercise or conversion occurs in
accordance with the terms thereof, without amendment or modification, and that
the applicable exercise or conversion price or ratio is described in such
schedule) or


 


7

















 


otherwise pursuant to any employee benefit
plan described in the SEC Reports, Schedule 3.1(f) of the Purchase Agreement or
hereafter adopted by the Company and approved by its stockholders, (B) in
connection with any grant of options to employees, officers, directors or consultants
of the Company pursuant to a stock option plan duly adopted by the Company’s
board of directors or in respect of the issuance of Common Stock upon exercise
of any such options, or (C) the issuance of securities, in connection with a
joint venture or development agreement or strategic partnership, or similar
agreement approved by the Company’s board of directors, a primary purpose of
which is not to raise equity capital and to an entity whose primary business is
other than investing in other entities.


 


(e)                                  Number
of Additional Investment Right Warrant Shares.  Simultaneously with any adjustment to the Exercise Price pursuant
to paragraphs (a) or (b) of this Section, the number of Additional Investment
Right Warrant Shares that may be purchased upon exercise of this Additional
Investment Right Warrant shall be increased or decreased proportionately, so
that after such adjustment the aggregate Exercise Price payable hereunder for
the increased or decreased number of Additional Investment Right Warrant Shares
shall be the same as the aggregate Exercise Price in effect immediately prior
to such adjustment.


 


(f)                                    Calculations.  All calculations under this Section 9
shall be made to the nearest cent or the nearest 1/100th of a share, as
applicable.  The number of shares of
Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such
shares shall be considered an issue or sale of Common Stock.


 


(g)                                 Notice
of Adjustments.  Upon the occurrence
of each adjustment pursuant to this Section 9, the Company at its
expense will promptly compute such adjustment in accordance with the terms of
this Additional Investment Right Warrant and prepare a certificate setting
forth such adjustment, including a statement of the adjusted Exercise Price and
adjusted number or type of Additional Investment Right Warrant Shares or other
securities issuable upon exercise of this Additional Investment Right Warrant
(as applicable), describing the transactions giving rise to such adjustments
and showing in detail the facts upon which such adjustment is based.  Upon written request, the Company will
promptly deliver a copy of each such certificate to the Holder and to the
Company’s Transfer Agent.


 


(h)                                 Notice
of Corporate Events.  If the Company
(i) declares a dividend or any other distribution of cash, securities or other
property in respect of its Common Stock, including without limitation any
granting of rights or warrants to subscribe for or purchase any capital stock
of the Company or any Subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating or solicits stockholder approval for any Fundamental
Transaction or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, then the Company shall deliver to the
Holder a notice describing the material terms and conditions of such
transaction, at least 20 calendar days prior to the applicable record or
effective date on which a Person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the Company will
take all steps reasonably necessary in order to insure that the Holder is given
the practical opportunity to exercise this Additional Investment Right Warrant
prior to such time so as to participate in or vote with respect to such
transaction;


 


8

















 


provided, however, that the
failure to deliver such notice or any defect therein shall not affect the validity
of the corporate action required to be described in such notice.


 


10.                                 Payment of Exercise Price.  The
Holder shall pay the Exercise Price in immediately available funds; provided,
however, that the Holder may satisfy its obligation to pay the Exercise Price
through a “cashless exercise,” in which event the Company shall issue to the
Holder the number of Additional Investment Right Warrant Shares determined as
follows:


 


	
   

  	
  X = Y [(A-B)/A]

  
	
  where:

  	
   

  
	
   

  	
  X = the number of Additional
  Investment Right Warrant Shares to be issued to the Holder.

  
	
   

  	
   

  
	
   

  	
  Y = the number of Additional
  Investment Right Warrant Shares with respect to which this Additional
  Investment Right Warrant is being exercised.

  
	
   

  	
   

  
	
   

  	
  A = the average of the
  Closing Prices for the five Trading Days immediately prior to (but not
  including) the Exercise Date.

  
	
   

  	
   

  
	
   

  	
  B = the Exercise Price.

  



 


For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Additional Investment Right Warrant Shares
issued in a cashless exercise transaction shall be deemed to have been acquired
by the Holder, and the holding period for the Additional Investment Right
Warrant Shares shall be deemed to have commenced, on the date this Additional
Investment Right Warrant was originally issued pursuant to the Purchase
Agreement.


 


11.                                 Limitation on Exercise.


 


(a)                                  Notwithstanding
anything to the contrary contained herein, the number of shares of Common Stock
that may be acquired by the Holder upon any exercise of this Additional Investment
Right Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to insure that, following such exercise (or other issuance), the
total number of shares of Common Stock then beneficially owned by such Holder
and its Affiliates and any other Persons whose beneficial ownership of Common
Stock would be aggregated with the Holder’s for purposes of Section 13(d) of
the Exchange Act, does not exceed 4.999% (the “Maximum Percentage”) of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). 
For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder.  The Company
shall, instead of issuing shares of Common Stock in excess of the limitation
referred to in this Section 11,  pay to
such Holder an amount in cash equal to the fair market value, less the Exercise
Price, of the number of shares of Common Stock in excess of such limitation; provided,
however, that the Holder may, at its option, elect to waive the
requirement to deliver such cash and the Company’s obligation to


 


9

















 


issue shares in excess of the
foregoing limitation shall be suspended until such time, if any, as such shares
of Common Stock may be issued in compliance with such limitation.  Additionally, by written notice to the
Company, the Holder may waive the provisions of this Section 11 or increase or
decrease the Maximum Percentage to any other percentage specified in such
notice, but (i) any such waiver or increase will not be effective until the
61st day after such notice is delivered to the Company, and (ii) any such
waiver or increase or decrease will apply only to the Holder and not to any
other holder of Additional Investment Right Warrants.


 


(b)                                 Notwithstanding
anything to the contrary contained herein, the maximum number of shares of
Common Stock that the Company may issue pursuant to the Transaction Documents
at an effective purchase price less than the Closing Price on the Trading Day
immediately preceding the Closing Date shall equal 19.99% of the shares of
Common Stock outstanding on the Closing Date (the “Issuable Maximum”), unless
the Company obtains the necessary stockholder approvals required by the rules
and regulations of the Trading Market. 
If, at the time any Holder requests an exercise of any of the Additional
Investment Right Warrants, the Actual Minimum (excluding any shares issued or
issuable at an effective purchase price in excess of the Closing Price on the
Trading Day immediately preceding the Closing Date) exceeds the Issuable
Maximum (and if the Company has not previously obtained the required stockholder
approval), then the Company shall issue to the Holder requesting such exercise
a number of shares of Common Stock not exceeding such Holder’s pro-rata portion
of the Issuable Maximum (based on such Holder’s share (vis-à-vis other Holders)
of the aggregate purchase price paid under the Purchase Agreement and taking
into account any Additional Investment Right Warrant Shares previously issued
to such Holder).  For the purposes
hereof, “Actual Minimum” shall
mean, as of any date, the maximum aggregate number of shares of Common Stock
then issued or potentially issuable in the future pursuant to the Transaction
Documents, including any Underlying Shares issuable upon exercise in full of
all Additional Investment Right Warrants, without giving effect to any limits
on the number of shares of Common Stock that may be owned by a Holder at any
one time.


 


12.                                 Fractional Shares.  The
Company shall not be required to issue or cause to be issued fractional
Additional Investment Right Warrant Shares on the exercise of this Additional
Investment Right Warrant.  If any
fraction of a Additional Investment Right Warrant Share would, except for the
provisions of this Section, be issuable upon exercise of this Additional
Investment Right Warrant, the number of Additional Investment Right Warrant
Shares to be issued will be rounded up to the nearest whole share.


 


13.                                 Notices.  Any and all notices or other
communications or deliveries hereunder (including without limitation any
Exercise Notice) shall be in writing and shall be deemed given and effective on
the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number specified in this Section
prior to 5:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading
Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on a
day that is not a Trading Day or later than 5:30 p.m. (New York City time) on
any Trading Day, (iii) the Trading Day following the date of mailing, if sent
by nationally recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given.  The address for such notices or
communications shall be as set forth in the Purchase Agreement.


 


10

















 


14.                                 Additional Investment Right Warrant Agent.  The
Company shall serve as additional investment right warrant agent under this
Additional Investment Right Warrant.  Upon
30 days’ notice to the Holder, the Company may appoint a new additional
investment right warrant agent.  Any
corporation into which the Company or any new Additional Investment Right
Warrant agent may be merged or any corporation resulting from any consolidation
to which the Company or any new additional investment right warrant agent shall
be a party or any corporation to which the Company or any new additional
investment right warrant agent transfers substantially all of its corporate
trust or stockholders services business shall be a successor additional
investment right warrant agent under this Additional Investment Right Warrant
without any further act.  Any such
successor additional investment right warrant agent shall promptly cause notice
of its succession as additional investment right warrant agent to be mailed (by
first class mail, postage prepaid) to the Holder at the Holder’s last address
as shown on the Additional Investment Right Warrant Register.


 


15.                                 Miscellaneous.


 


(a)                                  Subject
to the restrictions on transfer set forth on the first page hereof, this
Additional Investment Right Warrant may be assigned by the Holder.  This Additional Investment Right Warrant may
not be assigned by the Company except to a successor in the event of a Fundamental
Transaction.  This Additional Investment
Right Warrant shall be binding on and inure to the benefit of the parties
hereto and their respective successors and assigns.  Subject to the preceding sentence, nothing in this Additional
Investment Right Warrant shall be construed to give to any Person other than
the Company and the Holder any legal or equitable right, remedy or cause of
action under this Additional Investment Right Warrant.  This Additional Investment Right Warrant may
be amended only in writing signed by the Company and the Holder and their
successors and assigns.


 


(b)                                 The
Company will not, by amendment of its governing documents or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Additional Investment
Right Warrant, but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder against
impairment.  Without limiting the
generality of the foregoing, the Company (i) will not increase the par value of
any Additional Investment Right Warrant Shares above the amount payable
therefor on such exercise, (ii) will take all such action as may be reasonably
necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable Additional Investment Right Warrant Shares
on the exercise of this Additional Investment Right Warrant, and (iii) will not
close its stockholder books or records in any manner which interferes with the
timely exercise of this Additional Investment Right Warrant.


 


(c)                                  GOVERNING
LAW; VENUE; WAIVER OF JURY TRIAL. 
ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND
INTERPRETATION OF THIS ADDITIONAL INVESTMENT RIGHT WARRANT SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.  EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING
IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY


 


11

















 


DISPUTE HEREUNDER OR IN CONNECTION
HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN
(INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION
DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
IMPROPER.  EACH PARTY HEREBY IRREVOCABLY
WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY
SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR
CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY
AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT
SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE
THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT
TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.  THE COMPANY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.


 


(d)                                 The
headings herein are for convenience only, do not constitute a part of this
Additional Investment Right Warrant and shall not be deemed to limit or affect
any of the provisions hereof.


 


(e)                                  In
case any one or more of the provisions of this Additional Investment Right Warrant
shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Additional
Investment Right Warrant shall not in any way be affected or impaired thereby
and the parties will attempt in good faith to agree upon a valid and
enforceable provision which shall be a commercially reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in
this Additional Investment Right Warrant.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]


 


12

















 


IN WITNESS
WHEREOF, the Company has caused this Additional Investment Right Warrant to be
duly executed by its authorized officer as of the date first indicated above.


 


	
   

  	
  WORLDGATE COMMUNICATIONS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


13

















 


FORM OF EXERCISE NOTICE


 


(To be executed by the Holder
to exercise the right to purchase shares of Common Stock under the foregoing
Additional Investment Right Warrant)


 


To:  WORLDGATE COMMUNICATIONS, INC.


 


The undersigned is the Holder
of Additional Investment Right Warrant No.
              
(the “Additional Investment Right Warrant”)
issued by Worldgate Communications, Inc., a Delaware corporation (the “Company”). 
Capitalized terms used herein and not otherwise defined have the
respective meanings set forth in the Additional Investment Right Warrant.


 


1.                                       The
Additional Investment Right Warrant is currently exercisable to purchase a
total of
                           
Additional Investment Right Warrant Shares.


 


2.                                       The
undersigned Holder hereby exercises its right to purchase
                                    Additional
Investment Right Warrant Shares pursuant to the Additional Investment Right
Warrant.


 


3.                                       The
Holder intends that payment of the Exercise Price shall be made as (check one):


 


o                                    “Cash
Exercise” under Section 10


 


o                                    “Cashless
Exercise” under Section 10


 


4.                                       If
the holder has elected a Cash Exercise, the holder shall pay the sum of
$                     to
the Company in accordance with the terms of the Additional Investment Right
Warrant.


 


5.                                       Pursuant
to this exercise, the Company shall deliver to the holder
                          Additional
Investment Right Warrant Shares in accordance with the terms of the Additional
Investment Right Warrant.


 


6.                                       Following
this exercise, the Additional Investment Right Warrant shall be exercisable to
purchase a total of
                       Additional
Investment Right Warrant Shares.


 


	
  Dated:

  	
   

  	
  ,

  	
   

  	
   

  	
   

  	
  Name of Holder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Print)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature must conform in
  all respects to name of holder as specified on the face of the Additional
  Investment Right Warrant)

  
											



 

















 


FORM OF ASSIGNMENT


 


[To be
completed and signed only upon transfer of Additional Investment Right Warrant]


 


FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
                                                     the
right represented by the within Additional Investment Right Warrant to purchase
                 shares
of Common Stock of Worldgate Communications, Inc. to which the within
Additional Investment Right Warrant relates and appoints
                            
attorney to transfer said right on the books of Worldgate Communications, Inc.
with full power of substitution in the premises.


 


	
  Dated:

  	
   

  	
  ,

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature must conform in
  all respects to name of holder as specified on the face of the Additional
  Investment Right Warrant)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address of Transferee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  In the presence of: