Exhibit 10.40

FIRST AMENDMENT TO

NOTE AND RESTRICTED STOCK PURCHASE AGREEMENT

This First Amendment to Note and Restricted Stock Purchase Agreement (this
“Amendment”) is entered into as of June 20, 2007 by and between Catcher
Holdings, Inc., a Delaware corporation (the “Company”), and the Purchasers (as
defined below). This Amendment amends that Note and Restricted Stock Purchase
Agreement (the “Agreement”), dated as of April 4, 2007 by and among the Company
and the persons and entities listed on Exhibit A thereto (each a “Purchaser” and
collectively, the “Purchasers”). Capitalized terms not otherwise defined herein
shall have the meanings given in the Agreement.

RECITALS

WHEREAS, pursuant to the Agreement, the Company has previously issued to the
Purchasers Secured Convertible Promissory Notes with an aggregate principal
amount of $850,000 and 297,500 shares of the Company’s Common Stock;

WHEREAS, Section 5.4 of the Agreement provides that it may be amended with the
written consent of the Company and the holders of a majority of the Shares and
Conversion Shares on an as-converted basis (assuming for such purpose the
exercise or conversion of all outstanding Notes and underlying Conversion
Warrants and Conversion Shares into shares of Common Stock); and

WHEREAS, the Company and the holders of a majority of the Shares and Conversion
Shares on an as-converted basis (assuming for such purpose the exercise or
conversion of all outstanding Notes and underlying Conversion Warrants and
Conversion Shares into shares of Common Stock) desire to amend the Agreement as
set forth herein.

NOW, THEREFORE, in consideration of the foregoing and of the mutual promises and
covenants set forth herein, the parties agree as follows:

1. AMENDMENT OF DEFINITION OF NOTES. The definition of “Notes” in Section 1.1 of
the Agreement is hereby deleted and replaced in its entirety by the following:

“Notes” shall mean the Secured Convertible Promissory Notes in the form attached
as Exhibit A to the First Amendment to Note and Restricted Stock Purchase
Agreement, dated as of June 20, 2007, by and among the Company and the
Purchasers.

2. AMENDMENT OF SECTION 4.5. Section 4.5 of the Agreement is hereby deleted and
replaced in its entirety by the following:

Prohibited Transactions. During the last thirty (30) days prior to the date of
any conversion of a Note, neither the Purchaser holding such Note nor any
Affiliate of such Purchaser which (x) had knowledge of the transactions
contemplated hereby and thereby, (y) has or shares discretion relating to such
Purchaser’s investments or trading or information concerning such Purchaser’s
investments, including in

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respect of the Securities, or (z) is subject to such Purchaser’s review or input
concerning such Affiliate’s investments or trading (collectively, “Trading
Affiliates”) has, directly or indirectly, effected or agreed to effect any short
sale, whether or not against the box, established any “put equivalent position”
(as defined in Rule 16a-1(h) under the Exchange Act) with respect to the shares
of Common Stock issued upon conversion of the Notes pursuant to Section 6
thereof (the “Conversion Common Stock”), granted any other right (including,
without limitation, any put or call option) with respect to the Conversion
Common Stock or with respect to any security that includes, relates to or
derived any significant part of its value from the Conversion Common Stock or
otherwise sought to hedge its position in the Securities (each, a “Prohibited
Transaction”). Prior to the conversion of such Note, the Purchaser shall not,
and shall cause its Trading Affiliates not to, engage, directly or indirectly,
in a Prohibited Transaction. Such Purchaser acknowledges that the
representations, warranties and covenants contained in this Section 4.5 are
being made for the benefit of the Purchasers as well as the Company and that
each of the other Purchasers shall have an independent right to assert any
claims against such Purchaser arising out of any breach or violation of the
provisions of this Section 4.5.

3. AMENDMENT OF SECTION 5.4. Section 5.4 of the Agreement is hereby deleted and
replaced in its entirety by the following:

Amendments; Waivers. No provision of this Agreement may be waived or amended
except in a written instrument signed by the Company and the Purchasers holding,
together, a majority of the outstanding aggregate Loan Amount of the Notes
issued hereunder. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a waiver of any
other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.

4. NOTE AMENDMENT. Upon execution of this Amendment, each of the Convertible
Secured Promissory Notes issued pursuant to the Agreement (an “Original Note”),
shall be amended and restated in its entirety to have the terms set forth in the
form of Convertible Secured Promissory Note attached hereto as Exhibit A (a “New
Note”) and with a principal amount equal to the Loan Amount of the Original Note
multiplied by 1.3 plus any accrued but unpaid interest. The obligation of the
Company to issue a New Note hereunder shall be conditioned upon the surrender by
the Purchaser of such Original Note being exchanged.

5. REGISTRATION RIGHTS. In connection with this Amendment, the Purchasers and
the Company shall execute a Registration Rights Agreement in the form attached
hereto as Exhibit B covering the Shares and the capital stock issuable upon
conversion of the New Notes in accordance with the terms thereof.

6. REPRESENTATIONS OF PURCHASER. The Purchaser represents and warrants that the
representations and warranties in Section 3.2 of the Agreement, each of which
pertain to the Holder’s suitability as an investor acquiring securities not
registered under the Securities Act of 1933, are true and correct as of the date
of this Amendment.

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7. CONSENT AND WAIVER. This Amendment shall serve as the Purchasers’ consent to
the new indebtedness of the Company evidenced by the Convertible Secured
Promissory Notes issued pursuant to the Note and Restricted Stock Purchase
Agreement, dated as of June 20, 2007, by and among the Company and the
Purchasers listed on Exhibit A thereto, and a waiver of the Company’s
obligations pursuant to original Section 4.5 of the Agreement.

8. NO OTHER AMENDMENT. Except as specifically amended by this Amendment, the
Agreement shall continue in full force and effect. In the event of any conflict
between the terms of this Amendment and the Agreement, the terms of this
Amendment shall govern and control.

9. GOVERNING LAW. This Amendment shall be governed by and construed under the
laws of the State of Virginia as applied to agreements among Virginia residents
entered into and to be performed entirely within Virginia.

10. COUNTERPARTS. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

11. SEVERABILITY. If one or more provisions of this Amendment are held to be
unenforceable under applicable law, such provision shall be excluded from this
Amendment and the balance of the Amendment shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.

12. ENTIRE AGREEMENT. This Amendment, together with the Agreement and the other
agreements executed pursuant hereto and thereto, constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.

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IN WITNESS WHEREOF, the parties have executed this First Amendment to Note and
Restricted Stock Purchase Agreement as of the date first written above.

 

CATCHER HOLDINGS, INC. By:  

/s/ Robert H. Turner

Name:   Robert H. Turner Title:   Chief Executive Officer

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SIGNATURE PAGES OF PURCHASERS TO FOLLOW]

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IN WITNESS WHEREOF, the parties have executed this First Amendment to Note and
Restricted Stock Purchase Agreement as of the date first written above.

 

AGREED AND ACCEPTED:

By:

 

 

Name:

 

Title:

 

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EXHIBIT A

NEW NOTE

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EXHIBIT B

REGISTRATION RIGHTS AGREEMENT