Exhibit 4.40.1
FIRST AMENDMENT
TO
15% PROMISSORY NOTE
THIS FIRST AMENDMENT TO 15% PROMISSORY NOTE (this "AMENDMENT") is made and entered into as of December 23, 2002, by E.DIGITAL CORPORATION, a Delaware corporation (the "COMPANY") in favor of DAVRIC CORPORATION, or its registered assigns ("NOTEHOLDER").
R E C I T A L S
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A. The Company has previously executed and delivered to Noteholder that certain 15% Promissory Note dated September 11, 2002 (the "NOTE"), in the original principal amount of Seven Hundred Fifty Thousand Dollars ($750,000).
B. Noteholder and the Company desire to modify the Note as set forth
herein.
NOW, THEREFORE, for a valuable consideration, the receipt and adequacy of
which is hereby acknowledged, the parties hereto agree as follows:
1. REVISED PAYMENT SCHEDULE. Section 2 of the Note is hereby deleted and
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replaced in its entirety as follows:
"All interest accruing during calendar year 2002 shall be due and
payable in one installment on December 31, 2002. Such interest, at the
election of the Company, may be paid in shares of Common Stock. All
interest accruing during calendar year 2003 shall be due and payable
in twelve (12) monthly installments, commencing January 31, 2003.
Commencing on January 31, 2004, and continuing on the same day of each
calendar month thereafter to and including April 30, 2005, the Company
shall pay principal and interest on this Note in sixteen (16) equal
monthly installments of Fifty Thousand Dollars ($50,000) each, with a
final payment of Thirty-Five Thousand Eight Hundred Dollars and
Ninety-Six Cents ($35,800.96) to be paid on May 31, 2005; provided,
however, that if any of the foregoing dates for any monthly
installment falls on a weekend or national holiday, the due date for
that installment shall be the following business day. Any payment
shall be deemed timely made if received by Noteholder within fifteen
(15) calendar days of the due date. All payments made on this Note
shall be applied first to accrued interest, and the balance of such
payment, if any, shall be applied to principal, and interest shall
thereupon cease upon the principal so credited."
2. DUE AUTHORIZATION. By execution of this Amendment, the Company hereby
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confirms that the undersigned is duly authorized to execute and deliver this
Amendment and that all necessary corporate action approving this Amendment has
been duly taken.
3. EFFECTIVE AMENDMENT. Except as expressly modified, altered or
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supplemented herein, all of the provisions of the Note remain in full force and
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effect; provided, however, that in the event of any conflict between the
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provisions of the Note and the provisions of this Amendment, the provisions of
this Amendment shall control.
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4. COUNTERPARTS. This Amendment may be executed in two or more counterparts each
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of which shall be deemed an original but all of which taken together shall
constitute but one and the same Amendment.
IN WITNESS WHEREOF, the parties hereto have duly executed this First
Amendment to 15% Promissory Note as of the date first above written.
"COMPANY"
E.DIGITAL CORPORATION, a Delaware corporation
By: ______________________________________
Title: ______________________________________
"NOTEHOLDER"
DAVRIC CORPORATION, a Nevada corporation
By: ______________________________________
Title: ______________________________________
