FIRST AMENDMENT
TO REVOLVING LOAN AND SECURITY AGREEMENT

THIS FIRST AMENDMENT TO REVOLVING LOAN AND SECURITY AGREEMENT (this “Amendment”)
is entered into this 9th day of March, 2010, by and between (i) WorldGate
Communications, Inc., a Delaware corporation, WorldGate Service, Inc., a
Delaware corporation, WorldGate Finance, Inc., a Delaware corporation, Ojo
Services LLC, a Pennsylvania limited liability company, and Ojo Video Phones
LLC, a Pennsylvania limited liability company (jointly and severally, the
“Borrower”), and (ii) WGI Investor LLC, a Delaware limited liability company
(“Lender”).
 
Recitals
 
A.           Lender and Borrower have entered into that certain Revolving Loan
and Security Agreement dated as of October 28, 2009 (as may be further amended,
modified, supplemented or restated, the “Loan Agreement”).  Lender has extended
credit to Borrower for the purposes permitted in the Loan Agreement.
 
B.           Borrower has requested that Lender amend the Loan Agreement to
increase the maximum principal amount available under the Loan Agreement.
 
C.           In partial consideration for the amendments set forth herein,
Borrower will grant to Lender a warrant to purchase up to 6,000,000 shares of
Borrower’s common stock.
 
D.           Lender is willing to so amend certain provisions of the Loan
Agreement, but only to the extent, in accordance with the terms, subject to the
conditions and in reliance upon the representations and warranties set forth
below.
 
Agreement
 
Now, Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:
 
1.           Definitions.  Capitalized terms used but not defined in this
Amendment shall have the meanings given to them in the Loan Agreement.
 
2.           Amendments to Loan Agreement.  The Loan Agreement is hereby amended
as follows:
 
2.1           The definition of “Maximum Principal Amount” under the Loan
Agreement is hereby amended to be “five million dollars ($5,000,000)”.
 

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3.           Replacement Promissory Note.  Borrower shall execute and deliver to
Lender a Revolving Promissory Note in the form attached as Exhibit A to this
Amendment to replace the Note executed by Borrower pursuant to the original Loan
Agreement.  Such replacement note shall constitute the Note described in the
Loan Agreement, as amended hereby.
 
4.           Limitation of Amendments.
 
4.1           The amendments set forth above are effective for the purposes set
forth herein and shall be limited precisely as written and shall not be deemed
to (a) be a consent to any amendment, waiver or modification of any other term
or condition of any Loan Document, or (b) otherwise prejudice any right or
remedy which Lender may now have or may have in the future under or in
connection with any Loan Document.
 
4.2           This Amendment shall be construed in connection with and as part
of the Loan Documents and all terms, conditions, representations, warranties,
covenants and agreements set forth in the Loan Documents, except as herein
amended, are hereby ratified and confirmed and shall remain in full force and
effect.
 
5.           Representations and Warranties.  To induce Lender to enter into
this Amendment, Borrower hereby represents and warrants to Lender as follows:
 
5.1           Immediately after giving effect to this Amendment (a) the
representations and warranties contained in the Loan Documents are true,
accurate and complete in all material respects as of the date hereof (except to
the extent such representations and warranties relate to an earlier date, in
which case they are true and correct as of such date), and (b) no Event of
Default has occurred and is continuing;
 
5.2           Borrower has the power and authority to execute and deliver this
Amendment and to perform its obligations under the Loan Agreement, as amended by
this Amendment;
 
5.3           The organizational documents of Borrower delivered to Lender on or
before the date of this Amendment remain true, accurate and complete and have
not been amended, supplemented or restated and are and continue to be in full
force and effect;
 
5.4           The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment, have been duly authorized;
 
5.5           The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment, do not and will not contravene (a) any law or regulation
binding on or affecting Borrower, (b) any contractual restriction with a Person
binding on Borrower, (c) any order, judgment or decree of any court or other
governmental or public body or authority, or subdivision thereof, binding on
Borrower, or (d) the organizational documents of Borrower;
 
5.6           The execution and delivery by Borrower of this Amendment and the
performance by Borrower of its obligations under the Loan Agreement, as amended
by this Amendment, do not require any order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by any governmental or public body or authority, or subdivision
thereof, binding on either Borrower, except as already has been obtained or
made; and
 
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5.7           This Amendment has been duly executed and delivered by Borrower
and is the binding obligation of Borrower, enforceable against Borrower in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar
laws of general application and equitable principles relating to or affecting
creditors’ rights.
 
6.           Counterparts.  This Amendment may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
 
7.           Effectiveness.  This Amendment shall be deemed effective upon (a)
the due execution and delivery to Lender of this Amendment by each party hereto
and (b)  Borrower’s execution and delivery to Lender of the Note in the form
attached hereto as Exhibit A, duly executed and delivered by the Borrower.
 

[Signature page follows.]
 
 
 
 
 
 
 
 
 
 
 
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first above written.

BORROWER:
 
WORLDGATE COMMUNICATIONS, INC.
 
By:  /s/ Christopher V.
Vitale                                                         
Name:  Christopher V. Vitale
Title:  Senior Vice President, Legal and Regulatory,
  General Counsel and Secretary 
 
WORLDGATE SERVICE, INC.
 
By:  /s/ Christopher V.
Vitale                                                         
Name:  Christopher V. Vitale
Title:  Senior Vice President, Legal and Regulatory,
  General Counsel and Secretary 
 
WORLDGATE FINANCE, INC.
 
By:  /s/ Christopher V.
Vitale                                                         
Name:  Christopher V. Vitale
Title:  Senior Vice President, Legal and Regulatory,
  General Counsel and Secretary 
 
OJO SERVICE LLC
 
By:   WorldGate Communications, Inc., its sole member
 
By:  /s/ Christopher V.
Vitale                                                         
Name:  Christopher V. Vitale
Title:  Senior Vice President, Legal and Regulatory,
  General Counsel and Secretary 
 
OJO VIDEO PHONES LLC
 
By:   WorldGate Communications, Inc., its sole member
 
By:  /s/ Christopher V.
Vitale                                                         
Name:  Christopher V. Vitale
Title:  Senior Vice President, Legal and Regulatory,
  General Counsel and Secretary 
LENDER:
 
WGI INVESTOR LLC
 
 
By:  /s/ Robert Stevanovski     
Name: Robert Stevanovski
Title: Manager