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As you're creating your pdf files yourself you can use pdf. Simply take care to create them for a page 9x12 cm.
Another possibility would be to create html files and convert them via Sigil or Calibre into epub. These are all open formats/programs.
I don't know of any ereader where you can edit the documents on the device. That's only possible on your laptop. What you can do is taking notes or making scribbles.
And I'm afraid you will have to spend a little bit more than 50 Euros. One advice would be the Sony PRS-T2 that sells in Germany for 99 Euros.
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