AUDIT COMMITTEE CHARTER

I. PURPOSE: The primary functions of the Audit Committee (the "Committee") of WorldGate Communication, Inc. (the "Company") are to:

(1) assist the Board of Directors in fulfilling its oversight responsibilities by serving as an independent and objective party to monitor the Company's financial reporting process and internal control system;

(2) review: the financial reports and other financial information provided by the Company to any governmental body or the public; the Company's systems of internal controls regarding finance, accounting, legal compliance and ethics that management and the board have established; and the Company's auditing, accounting and financial reporting processes generally;

(3) review and appraise the audit effort of the Company's independent accountants.

(4) provide an open avenue of communication among the independent accountants, financial and senior management, and the Board of Directors.

Consistent with these functions, the Committee should encourage continuous improvement of, and should foster adherence to, the Company's policies, procedures and practices at all levels.

II. MEMBERSHIP: The Committee's membership is determined by the Board and consists of at least three directors. All members of the Committee shall have a working familiarity with basic finance and accounting practices, and at least one member of the Committee shall have accounting related financial management expertise. All members of the Committee shall meet the independence requirements of the listing standards of NASDAQ and qualify as "None-employee Director" for purposes of Rule 16b-3 under the Securities Exchange Act of 1934. The members of the Committee shall be elected by the Board at the annual organizational meeting of the Board or until their successors shall be duly elected and qualified. Unless a Chair is elected by the Board, the members of the Committee may designate a Chair by majority vote of the Committee membership. The Committee shall have the authority to retain such consultants and other advisors as the Committee may deem appropriate. The Committee shall have authority to approve related fees and retention terms for such consultants and advisors. Except to the extent prohibited by law or regulation, the Committee shall have the authority to delegate any of its responsibilities to subcommittees or individual(s) as the Committee may deem appropriate.

III. MEETINGS: The Committee shall meet at least four times annually, or more frequently as circumstances dictate, reporting significant matters arising from such meetings to the Board. A majority of the members shall constitute a quorum. A majority of the members present may decide any matter brought before the Committee. As part of its job to foster open communication, the Committee should meet at least annually with management and the independent accountants in separate, private executive sessions.

IV. RESPONSIBILITIES AND DUTIES: To fulfill its responsibilities and duties the Committee shall:

(1) Recommend annually to the Board of Directors the firm of certified public accountants to be employed by the Company as its independent auditors for the ensuing year.

(2) Annually review the engagement of the independent auditors, including the scope, extent and procedures of the audit and other services provided, and the compensation to be paid therefor.

(3) Review and approve all professional services provided to the Company by its independent auditors and consider the possible effect of such services on the independence of such auditors.

(4) Request the independent auditors to provide, from time to time as specific issues arise, an overview of key industry accounting and financial reporting issues/practices that are material to the Company and discuss with such auditors the Company's practices in those areas.

(5) Discuss quarterly with management and the independent auditors any changes to the accounting and reporting principles and practices applied by the Company in preparing its financial statements. Discuss any material regulatory, litigation or tax matters that may impact financial statements

(6) Review with the senior management of the Company and the independent auditors information as reported in the Company's financial statements, supplemental disclosures to the SEC or other disclosures. Such information should include: (a) the Company's balance sheet, income statement and statements of cash flows and stockholders' equity for each interim period, and (b) upon completion of the annual audit, financial results for the year.

(7) Discuss company performance and practices with independent auditors at least quarterly.

(8) Review with independent auditors the cooperation they received during their audit examination, including their access to all requested records, data and information. Elicit the comments of management regarding the responsiveness of the independent auditors to the Company's needs.

(9) Consult with the independent auditors and discuss with senior management of the Company the scope and quality of internal accounting and financial reporting controls in effect.

(10) Investigate, review and report to the Board of Directors the propriety and ethical implications of any transactions, as reported or disclosed to the Committee by the independent auditors, employees, officers, members of the Board of Directors or otherwise, between (a) the Company and (b) any employee, officer or member of the Board of Directors of the Company, or any affiliates of the foregoing.

(11) Annually review with management and the Company's legal and/or tax advisors, as appropriate, the Company's system and process for monitoring compliance with laws and regulations.

(12) Prepare an audit committee report as required by the rules of the Securities and Exchange Commission for inclusion in the Company's annual proxy statement.

(13) Review and reassess the adequacy of this Charter at least annually and submit any changes to the Board for approval.

(14) Conduct an annual performance evaluation of the Committee.