EMPLOYMENT
AGREEMENT

     

    This
EMPLOYMENT AGREEMENT (as amended, supplemented or extended from time to time,
this “Agreement”)
is entered into as of April 6, 2009 (the
“Effective
Date”), by and between WorldGate Service, Inc. (the “Company”) and
Randall J. Gort (“Employee”).

     

    The
Employee has been employed by the Company as its General Counsel and Chief Legal
Officer since September 1, 2006.  The Company has just concluded the
private placement of a controlling interest in the Company, and wishes to retain
the Employee on the terms and conditions contained herein.  The
Employee desires to be so retained.

     

    NOW
THEREFORE, in consideration of the mutual covenants contained herein, and
in that certain Non-Disclosure, Non-Circumvention and Non-Competition Agreement
that the employee will sign simultaneously with this Agreement, and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties do hereby
agree as follows:

     

    1.                             Employment
and Employment Period.

     

    1.1.                      Position
and Duties.

     

    (a)                      Subject
to the terms and conditions of this Agreement, the Company agrees to employ the
Employee as General Counsel and Chief Legal Officer (the
“Position”), and the Employee agrees to remain in the employ of the Company,
during the Employment Period (as defined in Section
1.2).

     

    (b)                      The
Employee’s job duties include managing all legal affairs for the Company and
all other duties as reasonably requested by the Company consistent with that or
any future position of the Employee, which the Employee may
accept.  The Employee reports to the Company’s Board of Directors and
directly to the Chief Executive Officer and Chairman of the Board of
Directors.

     

    (c)                      At
all times during the Employment Period, the Employee agrees to: (i) perform all
services related to the Employee’s employment hereunder faithfully and
diligently and to discharge the responsibilities thereof to the best of the
Employee’s ability; (ii) devote full business time and attention and energies to
the duties of the Employee’s employment under this Agreement; and (iii) use the
Employee’s reasonable best efforts to promote the business of
Company.

     

    1.2.                      Employment
Period.
The term “Employment
Period” shall mean the period beginning on the Effective Date and shall
continue for one (1) year from that date (the “Expiration Date”).  The
Employee's employment with the Company shall be at-will and may be terminated
for any legal reason and at any time by the Company or the
Employee.

     

    2.          
              
   Compensation.


     

    2.1.                      Salary.  During
the Employment Period, in consideration for the services to be rendered
hereunder, and subject to the terms and conditions of this Agreement, the
Company hereby agrees to pay the Employee, in accordance with its normal
practices, a yearly salary of $200,289 during
the Employment Period (calculated from the date hereof) (the “Annual
Base Salary”).  All compensation shall be subject to all
applicable tax withholding and similar requirements under applicable
law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.2.                      Incentive
Compensation.

     

    (a)                      Cash
Bonus Incentive Compensation.  During the Employment Period,
the Employee shall be eligible to earn performance bonuses as set forth below
(“Cash Bonus”).  The Employee’s entitlement to these Cash Bonuses
shall be based upon individual performance objectives tailored specifically to
the Employee’s position, which shall be set by the Company’s Compensation
Committee and approved by the Company’s Board of Directors.  A Cash
Bonus shall be a percentage of the Employee’s Annual Base Salary, calculated by
dividing the Employee’s Annual Base Salary by four, and multiplying that number
by 35% (the “Target Quarterly Bonus Amount”).  The Cash Bonus shall be
payable quarterly, promptly after the Company’s results for that quarter are
announced, but in any event during the quarter immediately following the quarter
in which the Cash Bonus is earned, and, with respect to a Cash Bonus earned in
the fourth quarter of a calendar year, on or before March 15 of the following
calendar year.  In the event that the Employee’s employment hereunder
terminates involuntarily for any reason other than cause, as defined in section
4.1, below, a Cash Bonus shall, if earned and accrued, be apportioned on a per
diem basis and paid to the Employee upon his termination. The Cash Bonus shall
be paid on the following
schedule:

     

    1Q
2009             0%
of the Employee’s Target Quarterly Bonus Amount, regardless if or as
earned

     

    2Q
2009             100%
of the Employee’s Target Quarterly Bonus Amount, guaranteed, regardless if or as
earned

     

    3Q
2009             50%
of the Employee’s Target Quarterly Bonus Amount, guaranteed, regardless if or as
earned; the remainder only if and as earned, no guaranty

     

    4Q
2009             100%
of the Employee’s Target Quarterly Bonus Amount, only if and as earned, no
guaranty

     

    (b)                      Stock
Option Plan.  The Board of Directors intends, as soon as is
practically possible after the Effective Date of this Agreement, to approve and
adopt a new 2009 WorldGate Employee Stock Option Plan.  The Board
anticipates that this new employee stock option plan will include options that
vest over four years, except in the case where the Employee is terminated before
any of his options have yet vested, in which case he will be given vesting
credit for 25% of his options upon his termination, and which will have a per
share strike price to be set by the Board based on their fair market value on
the date of their grant.  As and when such plan is approved, adopted
and implemented, the Employee will be awarded 1,080,000 options to purchase the
Company’s shares under this plan.

     

    3.                             Benefits.

     

    3.1.                      Generally.  During
the Employment Period and according to the terms of the relevant plan documents,
the Employee shall be eligible to participate in any medical, prescription,
dental, life insurance, disability or other welfare benefit plans or policies
and any pension or retirement plans which the Company currently has in place or
may hereafter make available generally to employees having comparable
responsibilities and duties to the Employee, but the Company will not be
required to establish any such program or plan.  The Employee shall be
entitled to annual vacation and to reimbursement of expenses, each in accordance
with the Company’s policies in effect from time to time with respect to
employees having comparable responsibilities and duties.  With respect
to any expense reimbursements provided hereunder which are not otherwise
excludible from the Employee’s  gross taxable income, to the extent
required to comply with of Section 409A of the Internal Revenue Code of 1986, as
amended, and the regulations of the Treasury and applicable guidance of the
Internal Revenue Service thereunder (together, “Section 409A”), no reimbursement
of expenses incurred by the Employee during any taxable year of the Employee
shall be made after the last day of the following taxable year, the right to
reimbursement of any such expenses shall not be subject to liquidation or
exchange for another benefit, and the amount of expenses eligible for
reimbursement during any taxable year of the Employee may not affect the
expenses eligible for reimbursement available in any other taxable
year.

     

    
      
        
        

      

      
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    4.                     
       Termination
of Employment.

     

    4.1.                      Termination
for Cause.  This
Agreement and the Employee’s employment with the Company may be terminated at
any time by The Company for Cause by written notice to Employee specifying in
reasonable detail the reasons therefor. For purposes of this Agreement, “Cause”
shall mean: (a)  the Employee has been convicted of or pled guilty or
no contest to (i) any criminal offence which is classified as a felony (or its
equivalent under the laws or regulations of any country or political subdivision
thereof), or (ii) any other criminal offense which involves a violation of
federal or state securities laws or regulations (or equivalent laws or
regulations of any country or political subdivision thereof), embezzlement,
fraud, material wrongful taking or material misappropriation of property or
theft; (b) persistent and willful failure to perform in a manner consistent with
the Employee’s past performance a substantial portion of the Employee’s duties
and responsibilities, which failure continues more than ten (10) days after
written notice is given to the Employee by the Company; (c) gross negligence or
willful misconduct of the Employee in the performance of his or her duties to
the material detriment of the Company or any affiliate or shareholder of the
Company; (d) breach of any of the covenants, terms and provisions of this
Agreement; and (e) breach of trust or breach of fiduciary duty owed to the
Company, its shareholders, directors, customers, affiliates, subsidiaries or
members.  Nothing in this section or elsewhere in this Agreement shall
be construed to mean that the Company cannot alter, change, whether such might
be perceived as improvement or diminishment, the Employee’s duties and
responsibilities hereunder, nor as any obligation on the art of the Employee to
accept any such change.

     

    4.2.                      Death
or Permanent Disability of Employee.
This Agreement and the Employee’s employment with the Company shall
terminate upon the Employee’s death.  In addition, the Company shall
have the right to terminate this Agreement and the Employee’s employment
hereunder if the Company determines in good faith that the Disability of
Employee, as defined below, has occurred during the Employment
Period.  In the event of the Disability of the Employee, the
Employee’s employment hereunder shall terminate effective on the 30th day after
the Employee’s receipt of written notice from the Company notifying the Employee
of the Company’s intention to terminate this Agreement and the Employee’s
employment hereunder on account of such Disability; provided
that, within the 30-day period after such receipt, the Employee shall not have
returned to full-time performance of the Employee’s duties and
responsibilities.  For purposes of this Agreement, “Disability”
shall mean the inability of the Employee to perform one or more of the primary
duties of the General Counsel and Chief Legal Officer or
other comparable position as a result of incapacity of the Employee, despite any
reasonable accommodation required by law, due to bodily injury or disease or any
other mental or physical illness, which inability continues for a period of
thirty (30) days within any six month period.

     

    4.3.                      Termination
Without Cause or Voluntary Resignation.
The Company, by written notice to Employee, shall have the right to
terminate this Agreement and the Employee’s employment with the Company at any
time without Cause, for any reason or for no reason, subject to Section
4.4 hereof.  The Employee, by fifteen (15) days’ written notice
to the Company, shall have the right to terminate the Employee’s employment for
any reason or for no reason.

     

    
      
        
        

      

      
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    4.4.                      Compensation
Upon Termination.     If
the Company terminates the Employee's employment without Cause at any time after
the Effective Date, the Company will, contingent upon the Employee executing and
delivering to the Company a written general release of claims against the
Company in a form acceptable to the Company which will become irrevocable
by its terms on or before the 60th day
following the Employee’s ‘Separation from Service’, within the meaning of
Internal Revenue Code Section 409A, from the Company and will pay the Employee
severance in the amount of the greater of (a) the Employee’s monthly base salary
amount, plus any Cash Bonus amounts, including, for clarity, all guaranteed
amounts, earned or accrued through the date of the Employee’s termination
multiplied by the number of months left until the Expiration Date, or (b) the
Employee’s monthly base salary amount, plus any  Cash Bonus amounts,
including, for clarity, all guaranteed amounts, earned or accrued through the
date of the Employee’s termination, multiplied by six. All severance payments
shall be made as and when the Employee’s salary payments for the same periods
would have been made, and shall be subject to identical withholdings as would
have been base salary and cash bonuses.  The first severance payment to the
Employee shall be made following the date on which the release becomes
effective, and no later than the 75th day
following that date, and shall include a ‘catch-up’ payment for all amounts
which would have otherwise been paid during such period.  In addition
to the severance payments, the Company shall, during the time severance payments
are made, retain the Employee as part of its insured group covered by the
Company’s welfare benefits providers, and continue to pay the Company portion of
the insurance premiums for such benefits, and continue to deduct the employee’s
portion from all severance paid.  COBRA notice and coverage for the
employee would thus begin upon cessation of the severance
payments.  Notwithstanding any other provision of this Agreement, if
any amount payable to the Employee under this Agreement on account of the
Employee’s Separation from Service constitutes deferred compensation within the
meaning of and subject to Section 409A, and the Employee is a “Specified
Employee” of the Company on the date of his Separation from Service, then
payment of such amount shall be delayed until the first business day that is at
least six (6) months after the date on which the Employee’s Separation from
Service occurs.  For these purposes, “Specified Employee” has the
meaning given to that term in Internal Revenue Code Section 409A(a)(2)(B)(i) and
Treas. Reg. 1.409A-1(i).  Notwithstanding the foregoing, such six
month delay of payments shall not apply to any payments or benefits that are not
subject to Section 409A, including the following: (a) any severance or other
payments that qualify as “short term deferral” payments under Treas. Reg.
Section 1.409A-1(b)(4); and (b) any remaining severance or other payments paid
after the Employee’s Separation from Service to the extent (i) that the dollar
amount of such payments does not exceed two (2) times the lesser of (x) the
Employee’s annualized compensation (based on the Employee’s annual rate of pay
for the calendar year preceding the calendar year in which the Separation from
Service occurs, adjusted to reflect any increase during such calendar year which
was expected to continue indefinitely had the Employee’s Separation from Service
not occurred) and (y) the maximum amount of compensation that may be taken into
account under a qualified plan pursuant to Section 401(a)(17) of the Internal
Revenue Code for the calendar year in which the Separation from Service occurs,
and (ii) such severance or other payments are to be made to the Employee no
later than the last day of the second calendar year following the calendar year
in which the Separation from Service occurs.  For purposes of Section
409A, each payment of severance made on a payroll date and each monthly
provision of severance benefits under this Agreement shall be treated as a right
to a series of separate payments, as defined in Treas. Reg. Section
1.409A-2(b)(2).

     

    5.          
                  Miscellaneous.

     

    5.1.                      Representation.
The Employee and the Company hereby represent and warrant, each to the
other, that the execution of this Agreement and the performance of the
obligations hereunder will not breach or be in conflict with any written or
other agreement to which they are a party or are bound, and that neither of them
is subject to any written or other covenants which would affect the performance
of their respective obligations hereunder.

     

    
      
        
        

      

      
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    5.2.                      Waivers.
Any waiver of any terms or conditions or of the breach of any covenant or
warranty of this Agreement in any one instance shall not operate as or be deemed
to be or construed as a further or continuing waiver of any other breach of such
term, condition, covenant, or warranty or any other term, condition, covenant,
or warranty, nor shall any failure or delay at any time or times to enforce or
require performance of any provision hereof operate as a waiver of, or affect in
any manner, such party’s right at a later time to enforce or require performance
of such provision or of any other provision hereof; provided,
however,
that no such waiver, unless it, by its own terms, explicitly provides to the
contrary, shall be construed to effect a continuing waiver of the provision
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance.

     

    5.3.                      Modification.  Except
as otherwise provided in this Agreement, neither this Agreement nor any term
hereof may be changed, amended, modified, waived, discharged or terminated
except to the extent that the same is effected and evidenced by the signed
written consent of the party against whom enforcement of such change,
modification, waiver, discharge or termination is sought.  This
Agreement may not be modified by electronic mail.

     

    5.4.                      Governing
Law.  This
Agreement shall be governed by, and interpreted in accordance with, the laws of
the Commonwealth of Pennsylvania without regard without regard to its conflict
of laws or principles.

     

    5.5.                      Notices.

     

    (a)                      All
notices, requests, demands and other communications required or permitted under
this Agreement shall be in writing and sent as
follows:

     

    If to the
Company, to:

     

    WorldGate Service,
Inc.

    3190 Tremont
Avenue

    Trevose,
PA  19355

    Attn: General
Counsel

     

    With a copy to:

    WGI Investor,
LLC

    349-L Copperfield
Boulevard

    #392

    Concord,
NC  28025

    Attn: Richard L.
Boughrum

           
  Colleen R. Jones

     

    If to
Employee, to the address of Employee set forth on the signature page
hereto.

     

    (b)                      All
notices and other communications required or permitted under this Agreement
shall be sent via reputable overnight courier with tracking capability, and
shall be effective upon receipt.  The parties hereto may from time to
time change their respective addresses for the purpose of notices to that party
by a similar notice specifying a new address, but no such change shall be deemed
to have been given unless it is delivered or received in accordance with this
Section
7.5(b).

     

    5.6.                      Entire
Understanding; No Third Party Beneficiaries.
This Agreement, and the Non-Disclosure, Non-Circumvention and
Non-Competition Agreement that the Employee is signing as a part of its new
employment relationship with the Company, together represent the entire
understanding of the Company and the Employee with respect to the Employee’s
employment with the Company and Employee’s compensation.  Nothing in
this Agreement, express or implied, is intended to confer on any person, other
than the parties hereto and their respective heirs, personal representatives,
successors and assigns any rights, remedies, obligations or liabilities under or
by reason of this Agreement.  On and after the Effective Date, this
Agreement will supersede any and all other agreements, written or oral relating
to Employee’s employment with the Company or any predecessor of the
Company.  Specifically, the Employee acknowledges that no commitment
has been made by the Company to Employee with respect to any employment beyond
the term of this Agreement (whether ending by lapse of time or earlier
termination pursuant to its terms) or with respect to any benefit not expressly
set forth in this Agreement or incorporated herein by
reference.

     

    
      
        
        

      

      
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    5.7.                      Confidentiality
Agreement.  The effectiveness of this Agreement is expressly
conditioned on the Employee’s executing simultaneously a Non-Disclosure,
Non-Circumvention and Non-Competition Agreement prepared by the Company
expressly for such purpose, which shall  replace the existing
Non-Competition and Non-Disclosure Agreement with the Company to which the
Employee is subject.

     

    5.8.                      Arbitration.  The
parties shall submit any dispute (i) concerning the interpretation or
enforcement of the rights and duties under this Agreement, or (ii) relating
to this Agreement to final and binding arbitration pursuant to the National
Rules for the Resolution of Employment Disputes of the American Arbitration
Association then existing.  At the request of any party, the
arbitrator, attorneys, parties to the arbitration, witnesses, experts, court
reports, or other persons present at the arbitration shall agree in writing to
maintain the strict confidentiality of the arbitration
proceedings.  The arbitration shall be conducted in Pennsylvania by a
single, neutral arbitrator.  The award of the arbitrator may be
enforced in any court having jurisdiction over the award, the relevant party or
such party’s assets.

     

    5.9.                      Counterparts.  This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

     

    5.10.                    Headings;
Interpretation.
The various headings contained herein are for reference purposes only and
do not limit or otherwise affect any of the provisions of this
Agreement.  It is the intent of the parties that this Agreement not be
construed more strictly with regard to one party than with regard to any other
party.

     

    5.11.                    Assignment.  Neither
this Agreement, nor any rights or obligations hereunder, may be assigned by one
party without the consent of the other, except that this Agreement shall be
binding upon and inure to the benefit of any successor or successors of the
Company, whether by merger, consolidation, sale of assets or otherwise, and
references herein to the Company shall be deemed to include any such successor
or successors.

     

    5.12                     Consultation
with Attorney.
The Company understands that the Employee may wish to consult with an
attorney prior to the execution of this Agreement.  The Employee
agrees and acknowledges that the Company has advised the Employee to consult
with an attorney and that if the Employee chooses not to consult with an
attorney, the Employee has done so of the Employee’s own free
will.

     

    5.13.        Section
409A.      All payments to the Employee
pursuant to this Agreement are intended to comply with, or to be exempt from,
the requirements of Section 409A.  The Employee acknowledges that the
Employee bears the entire risk of any adverse federal and/or state tax
consequences and penalty taxes in the event that any payment amount pursuant to
this Agreement is deemed to be subject to Section 409A and that no
representations have been made to the Employee relating to the tax treatment of
any payment pursuant to this Agreement under Section 409A and the corresponding
provisions of any applicable state income taxation
laws.

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the date first above written.

     

    
      
        
          
            
              
                
                  	
                          The
      Company

                        
	 
	
                          WorldGate
      Service, Inc.

                        
	 
	
                          By:

                        	
                          /s/ Harold M.
      Krisbergh

                        
	
                          Name:
      Harold M. Krisbergh

                        
	
                          Title:
      Chief Executive Officer

                        
	 
      
	
                               
      /s/ Randall J. Gort

                        
	
                          Randall
      J. Gort

                        
	
                          [address]

                        


                

              

            

          

        

      

    

     

    
      
        
        

      

      
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