Document:

SPACEDEV, INC.
                          SECURITIES PURCHASE AGREEMENT
                                 AUGUST 25, 2004

<PAGE>

iii

                                TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----
1.     Agreement  to  Sell  and  Purchase. . . . . . . . . . . . . . . . .     1
       ----------------------------------
2.     Fees  and  Warrant. . . . . . . . . . . . . . . . . . . . . . . . .     1
       ------------------
3.     Closing,  Delivery  and  Payment. . . . . . . . . . . . . . . . . .     2
       --------------------------------
          3.1    Closing . . . . . . . . . . . . . . . . . . . . . . . . .     2
                 -------
          3.2   Delivery . . . . . . . . . . . . . . . . . . . . . . . . .     2
                --------
4.     Representations  and  Warranties  of  the  Company. . . . . . . . .     2
       --------------------------------------------------
          4.1   Organization,  Good  Standing  and Qualification . . . . .     2
                ------------------------------------------------
          4.2   Subsidiaries . . . . . . . . . . . . . . . . . . . . . . .     3
                ------------
          4.3   Capitalization; Voting  Rights . . . . . . . . . . . . . .     3
                ------------------------------
          4.4   Authorization;  Binding  Obligations . . . . . . . . . . .     4
                ------------------------------------
          4.5   Liabilities. . . . . . . . . . . . . . . . . . . . . . . .     4
                -----------
          4.6   Agreements; Action . . . . . . . . . . . . . . . . . . . .     5
                ------------------
          4.7   Obligations  to  Related Parties . . . . . . . . . . . . .     5
                --------------------------------
          4.8   Changes. . . . . . . . . . . . . . . . . . . . . . . . . .     6
                -------
          4.9   Title  to  Properties  and  Assets;  Liens,  Etc . . . . .     7
                ------------------------------------------------
          4.10  Intellectual  Property . . . . . . . . . . . . . . . . . .     7
                ----------------------
          4.11  Compliance  with  Other  Instruments . . . . . . . . . . .     8
                ------------------------------------
          4.12  Litigation . . . . . . . . . . . . . . . . . . . . . . . .     8
                ----------
          4.13  Tax  Returns  and Payments . . . . . . . . . . . . . . . .     9
                ---------------------------
          4.14  Employees. . . . . . . . . . . . . . . . . . . . . . . . .     9
                ---------
          4.15  Registration  Rights  and  Voting Rights . . . . . . . . .     9
                ----------------------------------------
          4.16  Compliance  with  Laws;  Permits . . . . . . . . . . . . .    10
                --------------------------------
          4.17  Environmental  and  Safety  Laws . . . . . . . . . . . . .    10
                --------------------------------
          4.18  Valid Offering . . . . . . . . . . . . . . . . . . . . . .    10
               ---------------
          4.19  Full  Disclosure . . . . . . . . . . . . . . . . . . . . .    10
               ----------------
          4.20  Insurance. . . . . . . . . . . . . . . . . . . . . . . . .    11
                ---------
          4.21  SEC  Reports . . . . . . . . . . . . . . . . . . . . . . .    11
                ------------
          4.22  Listing. . . . . . . . . . . . . . . . . . . . . . . . . .    11
                -------
          4.23  No  Integrated  Offering . . . . . . . . . . . . . . . . .    11
                ------------------------
          4.24  Stop  Transfer . . . . . . . . . . . . . . . . . . . . . .    11
               --------------
          4.25  Dilution . . . . . . . . . . . . . . . . . . . . . . . . .    12
                --------
          4.26  Patriot  Act . . . . . . . . . . . . . . . . . . . . . . .    12
                ------------
5.     Representations  and  Warranties  of  the  Purchaser. . . . . . . .    12
       ----------------------------------------------------
          5.1   No  Shorting . . . . . . . . . . . . . . . . . . . . . . .    12
                ------------
          5.2   Requisite  Power  and  Authority . . . . . . . . . . . . .    13
                --------------------------------
          5.3   Investment Representations . . . . . . . . . . . . . . . .    13
                ---------------------------
          5.4   Purchaser  Bears  Economic  Risk . . . . . . . . . . . . .    13
                --------------------------------
          5.5   Acquisition  for  Own  Account . . . . . . . . . . . . . .    13
                ------------------------------
          5.6   Purchaser  Can  Protect  Its  Interest . . . . . . . . . .    13
                --------------------------------------
          5.7   Accredited  Investor . . . . . . . . . . . . . . . . . . .    14
                --------------------
          5.8   Legends. . . . . . . . . . . . . . . . . . . . . . . . . .    14
                -------
6.     Covenants  of  the Company. . . . . . . . . . . . . . . . . . . . .    16
       ---------------------------
          6.1   Stop-Orders. . . . . . . . . . . . . . . . . . . . . . . .    16
                -----------
          6.2   Listing. . . . . . . . . . . . . . . . . . . . . . . . . .    16
                -------
          6.3   Market Regulations . . . . . . . . . . . . . . . . . . . .    16
                -------------------
          6.4   Reporting Requirements . . . . . . . . . . . . . . . . . .    16
                -----------------------
          6.5   Use  of  Funds . . . . . . . . . . . . . . . . . . . . . .    16
                --------------
          6.6   Access  to  Facilities . . . . . . . . . . . . . . . . . .    16
                ----------------------
          6.7   Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . .    17
                -----
          6.8   Insurance. . . . . . . . . . . . . . . . . . . . . . . . .    17
                ---------
          6.9   Intellectual  Property . . . . . . . . . . . . . . . . . .    17
               ----------------------
          6.10  Properties . . . . . . . . . . . . . . . . . . . . . . . .    17
                ----------
          6.11  Confidentiality. . . . . . . . . . . . . . . . . . . . . .    18
                ---------------
          6.12  Required Approvals . . . . . . . . . . . . . . . . . . . .    18
                --------------------
          6.13  Reissuance  of  Securities . . . . . . . . . . . . . . . .    18
                --------------------------
          6.14  Opinion. . . . . . . . . . . . . . . . . . . . . . . . . .    18
                -------
7.     Covenants  of  the Purchaser. . . . . . . . . . . . . . . . . . . .    19
       -----------------------------
          7.1   Confidentiality. . . . . . . . . . . . . . . . . . . . . .    19
                ---------------
          7.2   Non-Public Information . . . . . . . . . . . . . . . . . .    19
                -----------------------
8.     Covenants of the Company and Purchaser Regarding Indemnification. .    20
       -----------------------------------------------------------------
          8.1   Company  Indemnification . . . . . . . . . . . . . . . . .    20
                ------------------------
          8.2   Purchaser's  Indemnification . . . . . . . . . . . . . . .    20
                ----------------------------
9.     Conversion  of  Convertible  Preferred Stock. . . . . . . . . . . .    20
       ---------------------------------------------
          9.1   Mechanics  of Conversion . . . . . . . . . . . . . . . . .    20
                ------------------------
10.     Registration Rights. . . . . . . . . . . . . . . . . . . . . . . .    22
        --------------------
          10.1  Registration  Rights Granted . . . . . . . . . . . . . . .    22
                ----------------------------
          10.2  Offering  Restrictions . . . . . . . . . . . . . . . . . .    22
                ----------------------
11.     Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . .    22
        -------------
          11.1  Governing  Law . . . . . . . . . . . . . . . . . . . . . .    22
                --------------
          11.2  Survival . . . . . . . . . . . . . . . . . . . . . . . . .    22
                --------
          11.3  Successors . . . . . . . . . . . . . . . . . . . . . . . .    23
                ----------
          11.4  Entire  Agreement. . . . . . . . . . . . . . . . . . . . .    23
                -----------------
          11.5  Severability . . . . . . . . . . . . . . . . . . . . . . .    23
                ------------
          11.6  Amendment and  Waiver. . . . . . . . . . . . . . . . . . .    23
                ----------------------
          11.7  Delays  or  Omissions. . . . . . . . . . . . . . . . . . .    23
                ---------------------
          11.8  Notices. . . . . . . . . . . . . . . . . . . . . . . . . .    23
                -------
          11.9  Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . .    24
                ----------------
          11.10 Titles  and Subtitles. . . . . . . . . . . . . . . . . . .    25
                ----------------------
          11.11 Facsimile  Signatures; Counterparts. . . . . . . . . . . .    25
                ------------------------------------
          11.12 Broker's Fees. . . . . . . . . . . . . . . . . . . . . . .    25
                --------------
          11.13 Construction . . . . . . . . . . . . . . . . . . . . . . .    25
                ------------

                                      PAGE

                                LIST OF EXHIBITS
--------------------------------------------------------------------------------
Form of Convertible Term Preferred Stock                              Exhibit  A
Form  of  Warrant                                                     Exhibit  B
Form  of  Opinion                                                     Exhibit  C
Form  of  Escrow  Agreement                                           Exhibit  D

                                      PAGE

                         SECURITIES PURCHASE AGREEMENT

     THIS  SECURITIES  PURCHASE AGREEMENT (this "Agreement") is made and entered
into  as  of  August  25,  2004,  by  and  between  SPACEDEV,  INC.,  a Colorado
corporation  (the  "Company"),  and  Laurus  Master Fund, Ltd., a Cayman Islands
company  (the  "Purchaser").

                                    RECITALS

     WHEREAS,  the Company has authorized the sale to the Purchaser of shares of
its  Series  C Convertible Preferred Stock with an aggregate stated value of Two
Million  Five  Hundred  Thousand  Dollars  ($2,500,000) (the "Preferred Stock"),
which  Preferred Stock is convertible into shares of the Company's common stock,
$0.0001  par value per share (the "Common Stock") at an initial fixed conversion
price  of  $1.54  per  share  of  Common  Stock  ("Fixed  Conversion  Price");

     WHEREAS, the Company wishes to issue a warrant to the Purchaser to purchase
up to 487,000 shares of the Company's Common Stock (subject to adjustment as set
forth  therein)  in connection with Purchaser's purchase of the Preferred Stock;

     WHEREAS,  Purchaser desires to purchase the Preferred Stock and the Warrant
(as  defined  in  Section  2)  on the terms and conditions set forth herein; and

     WHEREAS,  the  Company  desires  to  issue and sell the Preferred Stock and
Warrant  to  Purchaser  on  the  terms  and  conditions  set  forth  herein.

                                    AGREEMENT

     NOW,  THEREFORE,  in consideration of the foregoing recitals and the mutual
promises,  representations,  warranties  and covenants hereinafter set forth and
for  other good and valuable consideration, the receipt and sufficiency of which
are  hereby  acknowledged,  the  parties  hereto  agree  as  follows:

     1.  Agreement  to  Sell and Purchase . Pursuant to the terms and conditions
set  forth in this Agreement, on the Closing Date (as defined in Section 3), the
Company  agrees  to  sell  to  the Purchaser, and the Purchaser hereby agrees to
purchase  from  the  Company  Preferred  Stock with an aggregate stated value of
$2,500,000  convertible  in accordance with the terms thereof into shares of the
Company's  Common  Stock in accordance with the terms of the Preferred Stock and
this Agreement. The Preferred Stock purchased on the Closing Date shall be known
as the "Offering." A form of the Preferred Stock is annexed hereto as Exhibit A.
Collectively,  the  Preferred  Stock  and  Warrant  and Common Stock issuable in
payment  of the Preferred Stock, upon conversion of the Preferred Stock and upon
exercise  of  the  Warrant  are  referred  to  as  the  "Securities."

     2.  Fees  and  Warrant.  On  the  Closing  Date:

          (a)  The  Company will issue and deliver to the Purchaser a Warrant to
     purchase  up  to  487,000  shares  of  Common  Stock in connection with the
     Offering  (the "Warrant") pursuant to Section 1 hereof. The Warrant must be

                                      PAGE

     delivered  on  the  Closing  Date.  A  form of Warrant is annexed hereto as
     Exhibit  B.  All  the representations, covenants, warranties, undertakings,
     and indemnification, and other rights made or granted to or for the benefit
     of the Purchaser by the Company are hereby also made and granted in respect
     of  the  Warrant  and  shares  of  the Company's Common Stock issuable upon
     exercise  of  the  Warrant  (the  "Warrant  Shares").

          (b)  Subject to the terms of Section 2(d) below, the Company shall pay
     to  Laurus  Capital Management, LLC, manager of Purchaser a closing payment
     in  an  amount equal to three and one-half percent (3.50%) of the aggregate
     stated  value  of  the  Preferred  Stock.  The foregoing fee is referred to
     herein  as  the  "Closing  Payment."

          (c)  The  Company  shall  reimburse  the  Purchaser for its reasonable
     expenses (including documentation fees and expenses) incurred in connection
     with  the  preparation  and  negotiation  of this Agreement and the Related
     Agreements  (as  hereinafter  defined), and expenses incurred in connection
     with  the  Purchaser's  due  diligence  review  of  the  Company  and  its
     Subsidiaries  and  all  related  matters. Amounts required to be paid under
     this Section 2(c) will be paid on the Closing Date and shall be $20,000 for
     such  expenses  referred  to  in  this  Section  2(c).

          (d)  The Closing Payment and the expenses referred to in the preceding
     clause  (c)  shall  be  paid  at  closing out of funds held pursuant to the
     Escrow  Agreement  (as  defined  below)  and  a  disbursement  letter  (the
     "Disbursement  Letter").

     3.  Closing,  Delivery  and  Payment.

     3.1 Closing. Subject to the terms and conditions herein, the closing of the
transactions  contemplated  hereby (the "Closing"), shall take place on the date
hereof,  at  such  time or place as the Company and Purchaser may mutually agree
(such  date  is  hereinafter  referred  to  as  the  "Closing  Date").

     3.2  Delivery.  Pursuant  to  the  Escrow  Agreement, at the Closing on the
Closing  Date,  the  Company  will deliver to the Purchaser, among other things,
Preferred  Stock  in  the  form  attached as Exhibit A representing an aggregate
stated  value  of  $2,500,000 and a Warrant in the form attached as Exhibit B in
the  Purchaser's name representing 487,000 Warrant Shares and the Purchaser will
deliver  to  the  Company,  among  other  things,  the  amounts set forth in the
Disbursement  Letter  by  certified  funds  or  wire  transfer.

     4.  Representations  and  Warranties  of  the  Company.  The Company hereby
represents  and  warrants to the Purchaser as follows (which representations and
warranties  are supplemented by, and subject to, the Company's filings under the
Securities  Exchange  Act  of  1934  (collectively, the "Exchange Act Filings"),
copies  of  which  have  been  provided  to  the  Purchaser:

     4.1  Organization,  Good  Standing  and  Qualification.  The  Company  is a
corporation duly organized, validly existing and in good standing under the laws
of  its  jurisdiction  of  organization. The Company has the corporate power and
authority  to  own and operate its properties and assets, to execute and deliver
this  (i)  this  Agreement, (ii) the Preferred Stock Certificate of Designations
(defined  below)  (iii) a certificate issued to Purchaser for 250,0000 shares of

                                        2
                                      PAGE

Preferred  Stock,  (iv)  the  Warrant  to  be  issued  in  connection  with this
Agreement,  (vi)  the  Registration  Rights Agreement relating to the Securities
dated  as  of the date hereof between the Company and the Purchaser (as amended,
modified  or  supplemented  from  time  to  time,   the   "Registration   Rights
Agreement"),  (vii)  the  Escrow Agreement dated as of the date hereof among the
Company,  the  Purchaser and the escrow agent referred to therein, substantially
in  the form of Exhibit D hereto (as amended, modified or supplemented from time
to time, the "Escrow Agreement") and (viii) all other agreements related to this
Agreement  and the Preferred Stock and referred to herein (the preceding clauses
(ii)  through (viii), collectively, the "Related Agreements"), to issue and sell
the  Preferred  Stock and the shares of Common Stock issuable upon conversion of
the  Preferred  Stock  (the  "Preferred  Stock  Shares"),  to issue and sell the
Warrant  and  the  Warrant  Shares,  and  to  carry  out  the provisions of this
Agreement  and  the Related Agreements and to carry on its business as presently
conducted. The Company is duly qualified and is authorized to do business and is
in good standing as a foreign corporation in all jurisdictions, except for those
jurisdictions in which the failure to do so has not had, or could not reasonably
be expected to have, individually or in the aggregate, a material adverse effect
on  the  business,  assets,  liabilities,  condition  (financial  or otherwise),
properties,  operations  or  prospects  of  the  Company  (a  "Material  Adverse
Effect").

     4.2  Subsidiaries.  Each direct and indirect Subsidiary of the Company, the
direct  owner  of  such  Subsidiary and its percentage ownership thereof, is set
forth  on Schedule 4.2. For the purpose of this Agreement, a "Subsidiary" of any
person  or  entity means (i) a corporation or other entity whose shares of stock
or  other  ownership interests having ordinary voting power (other than stock or
other ownership interests having such power only by reason of the happening of a
contingency)  to elect a majority of the directors of such corporation, or other
persons  or entities performing similar functions for such person or entity, are
owned, directly or indirectly, by such person or entity or (ii) a corporation or
other  entity  in which such person or entity owns, directly or indirectly, more
than  50%  of  the  equity  interests  at  such  time.

     4.3  Capitalization;  Voting  Rights

          (a)  The  authorized  capital  stock  of  the  Company, as of the date
     hereof,  consists  of  60,000,000 shares, of which 50,000,000 are shares of
     Common  Stock,  par  value $0.001 per share, 19,065,623 shares of which are
     issued  and  outstanding, and 10,000,000 are shares of preferred stock, par
     value  $0.001  per  share,  of  which no shares are issued and outstanding.

          (b)  Except  as  disclosed on Schedule 4.3, other than: (i) the shares
     reserved  for  issuance  under  the  Company's stock option plans; and (ii)
     shares  which  may  be  issued  pursuant  to this Agreement and the Related
     Agreements  including  the Company's revolving credit facility with Laurus,
     there are no outstanding options, warrants, rights (including conversion or
     preemptive  rights  and  rights  of  first  refusal),  proxy or stockholder
     agreements,  or  arrangements or agreements of any kind for the purchase or
     acquisition  from the Company of any of its securities. Except as disclosed
     on  Schedule  4.3,  neither  the  offer,  issuance  or  sale  of any of the
     Preferred  Stock  or Warrant, or the issuance of any of the Preferred Stock
     Shares  or  Warrant  Shares,  nor  the  consummation  of  any   transaction
     contemplated  hereby  will result in a change in the price or number of any

                                        3
                                      PAGE

     securities of the Company outstanding, under anti-dilution or other similar
     provisions  contained  in  or  affecting  any  such  securities.

          (c)  All  issued and outstanding shares of the Company's Common Stock:
     (i)  have  been  duly  authorized and validly issued and are fully paid and
     nonassessable; and (ii) were issued in compliance with all applicable state
     and  federal  laws  concerning  the  issuance  of  securities.

          (d) The rights, preferences, privileges and restrictions of the shares
     of  the  Common  Stock  are  as  stated  in  the  Company's  Certificate of
     Incorporation  (the  "Charter").  The  rights,  preferences, privileges and
     restrictions  of  the  shares  of  the Preferred Stock are as stated in the
     Company's  Certificate  of Designation as filed with the Secretary of State
     of  Colorado  on  August  25,  2004 (the "Certificate of Designation"). The
     Preferred  Stock  Shares  and  Warrant  Shares  have  been duly and validly
     reserved  for  issuance.  When  issued in compliance with the provisions of
     this  Agreement  and  the Company's Charter, the Securities will be validly
     issued,  fully  paid  and  nonassessable,  and will be free of any liens or
     encumbrances;  provided,  however,  that  the  Securities may be subject to
     restrictions  on transfer under state and/or federal securities laws as set
     forth  herein  or as otherwise required by such laws at the time a transfer
     is  proposed.

     4.4 Authorization; Binding Obligations. All corporate action on the part of
the  Company, its officers and directors necessary for the authorization of this
Agreement  and the Related Agreements, the performance of all obligations of the
Company  hereunder  and  under  the  Related  Agreements at the Closing and, the
authorization,  sale,  issuance  and delivery of the Preferred Stock and Warrant
has  been  taken  or  will be taken prior to the Closing. This Agreement and the
Related  Agreements, when executed and delivered and to the extent it is a party
thereto,  will  be  valid  and binding obligations of the Company enforceable in
accordance  with  their  terms,  except:

          (a)  as  limited by applicable bankruptcy, insolvency, reorganization,
     moratorium  or  other  laws of general application affecting enforcement of
     creditors'  rights;  and

          (b)  general  principles  of  equity that restrict the availability of
     equitable  or  legal  remedies.  The  sale  of  the Preferred Stock and the
     subsequent  conversion  of  the Preferred Stock into Preferred Stock Shares
     are not and will not be subject to any preemptive rights or rights of first
     refusal  (other  than  those  already  held  by  Laurus) that have not been
     properly  waived  or  complied  with.  The  issuance of the Warrant and the
     subsequent  exercise of the Warrant for Warrant Shares are not and will not
     be  subject  to  any preemptive rights or rights of first refusal that have
     not  been  properly  waived  or  complied  with.

     4.5  Liabilities.  The  Company  does  not have any contingent liabilities,
except  current  liabilities  incurred  in  the  ordinary course of business and
liabilities  disclosed  in  any  Exchange  Act  Filings.

                                        4
                                      PAGE

     4.6 Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed
in  any  Exchange  Act  Filings:

          (a) Other than those in existence on the date hereof between Purchaser
     and  the  Company,  there  are  no agreements, understandings, instruments,
     contracts,  proposed  transactions,  judgments, orders, writs or decrees to
     which the Company is a party or to its knowledge by which it is bound which
     may  involve: (i) obligations (contingent or otherwise) of, or payments to,
     the  Company  in  excess of $50,000 (other than obligations of, or payments
     to,  the  Company  arising from purchase or sale agreements entered into in
     the  ordinary  course  of business); or (ii) the transfer or license of any
     patent,  copyright,  trade secret or other proprietary right to or from the
     Company  (other  than licenses arising from the purchase of "off the shelf"
     or  other  standard  products);   or  (iii)  provisions   restricting   the
     development,  manufacture  or  distribution  of  the  Company's products or
     services;  or  (iv)  indemnification  by  the  Company  with   respect   to
     infringements  of  proprietary  rights.

          (b)  Other  than in connection with transactions between Purchaser and
     the  Company,  since  March  31, 2004, the Company has not: (i) declared or
     paid  any  dividends,  or  authorized or made any distribution upon or with
     respect  to  any  class  or  series of its capital stock; (ii) incurred any
     indebtedness  for  money  borrowed  or  any  other  liabilities (other than
     ordinary  course  obligations) individually in excess of $50,000 or, in the
     case  of indebtedness and/or liabilities individually less than $50,000, in
     excess  of  $100,000  in the aggregate; (iii) made any loans or advances to
     any  person  not  in excess, individually or in the aggregate, of $100,000,
     other  than  ordinary advances for travel expenses; or (iv) sold, exchanged
     or  otherwise  disposed of any of its assets or rights, other than the sale
     of  its  inventory  in  the  ordinary  course  of  business.

          (c)  For  the  purposes  of  subsections   (a)  and  (b)  above,   all
     indebtedness,  liabilities,   agreements,    understandings,   instruments,
     contracts  and  proposed  transactions  involving the same person or entity
     (including  persons  or  entities  the  Company  has  reason to believe are
     affiliated  therewith)  shall  be aggregated for the purpose of meeting the
     individual  minimum  dollar  amounts  of  such  subsections.

     4.7 Obligations to Related Parties. Except as set forth on Schedule 4.7, or
as  disclosed  related  to  obligations owing to Mr. James Benson, the Company's
Chief  Executive  Officer of which the outstanding balance on the date hereof is
less  than  $200,000,  there  are  no  obligations  of  the Company to officers,
directors,  stockholders  or  employees  of  the  Company  other  than:

          (a) for payment of salary for services rendered and for bonus payments
     including  deferred  and  accrued  salaries  on  the  Company's  financial
     statements;

          (b)  reimbursement  for  reasonable expenses incurred on behalf of the
     Company;

                                        5
                                      PAGE

          (c)  for  other standard employee benefits made generally available to
     all  employees  (including  stock  option  agreements outstanding under any
     stock  option  plan approved by the Board of Directors of the Company); and

          (d)  obligations  listed  in  the  Company's  financial  statements or
     disclosed  in  any  of  its  Exchange  Act  Filings.

Except  as  described  above or set forth on Schedule 4.7, none of the officers,
directors  or,  to  the  best  of  the  Company's  knowledge,  key  employees or
stockholders  of  the  Company  or  any members of their immediate families, are
indebted  to the Company, individually or in the aggregate, in excess of $50,000
or  have  any  direct  or indirect ownership interest in any firm or corporation
with  which  the  Company is affiliated or with which the Company has a business
relationship,  or any firm or corporation which competes with the Company, other
than  passive  investments  in publicly traded companies (representing less than
one  percent (1%) of such company) which may compete with the Company. Except as
described  above,  no  officer,  director or stockholder, or any member of their
immediate  families,  is,  directly  or  indirectly,  interested in any material
contract  with  the  Company  and  no  agreements,  understandings  or  proposed
transactions  are  contemplated  between  the Company and any such person, other
than Mr. Benson's personal guarantee of the Company's building lease obligation.
Except  as  set  forth  on  Schedule  4.7,  the  Company  is  not a guarantor or
indemnitor  of  any  indebtedness  of  any  other  person,  firm or corporation.

     4.8  Changes. Since March 31, 2004, except as disclosed in any Exchange Act
Filing or in any Schedule to this Agreement or to any of the Related Agreements,
there  has  not  been:

          (a)  any  change  in  the  business,  assets,  liabilities,  condition
     (financial  or  otherwise),  properties,  operations  or  prospects  of the
     Company,  which,  individually  or  in  the  aggregate,  has  had  or could
     reasonably  be  expected  to  have,  a  Material  Adverse  Effect;

          (b)  any  resignation  or  termination of any officer, key employee or
     group  of  employees  of  the  Company;

          (c) any material change, except in the ordinary course of business, in
     the  contingent obligations of the Company by way of guaranty, endorsement,
     indemnity,  warranty  or  otherwise;

          (d)  any  damage,  destruction  or  loss,  whether  or  not covered by
     insurance,  which  has  had,  or  could  reasonably  be  expected  to have,
     individually  or  in  the  aggregate,  a  Material  Adverse  Effect;

          (e)  any  waiver  by  the Company of a valuable right or of a material
     debt  owed  to  it;

          (f)  any  direct or indirect material loans made by the Company to any
     stockholder,  employee,  officer  or  director  of  the Company, other than
     advances  made  in  the  ordinary  course  of  business;

                                        6
                                      PAGE

          (g)  any  material change in any compensation arrangement or agreement
     with  any  employee,  officer,  director  or  stockholder;

          (h)  any  declaration or payment of any dividend or other distribution
     of  the  assets  of  the  Company;

          (i)  any  labor  organization  activity  related  to  the  Company;

          (j)  any debt, obligation or liability incurred, assumed or guaranteed
     by  the  Company,  except  those  for  immaterial  amounts  and for current
     liabilities  incurred  in  the  ordinary  course  of business other than in
     connection  with  transactions  between  Purchaser  and  the  Company;

          (k)  any  sale,  assignment  or  transfer  of any patents, trademarks,
     copyrights,  trade  secrets  or  other  intangible  assets;

          (l)  any  change  in  any material agreement to which the Company is a
     party  or  by  which  it  is  bound  which,  either  individually or in the
     aggregate,  has  had,  or  could reasonably be expected to have, a Material
     Adverse  Effect;

          (m)  any  other  event  or  condition  of  any  character that, either
     individually  or in the aggregate, has had, or could reasonably be expected
     to  have,  a  Material  Adverse  Effect;  or

          (n) any arrangement or commitment by the Company to do any of the acts
     described  in  subsection  (a)  through  (m)  above.

     4.9  Title  to  Properties  and  Assets; Liens, Etc. Except as set forth on
Schedule  4.9,  the  Company has good and marketable title to its properties and
assets,  and  good  title  to  its leasehold estates, in each case subject to no
mortgage,  pledge,  lien,  lease,  encumbrance  or  charge,  other  than:

          (a)  those  resulting from taxes which have not yet become delinquent;

          (b)  minor liens and encumbrances which do not materially detract from
     the  value  of  the  property  subject  thereto  or  materially  impair the
     operations  of  the  Company;  and

          (c)  those  that  have  otherwise  arisen  in  the  ordinary course of
     business.

All  facilities,  machinery,  equipment, fixtures, vehicles and other properties
owned,  leased or used by the Company are in good operating condition and repair
and  are  reasonably  fit  and  usable for the purposes for which they are being
used.  Except  as  set  forth on Schedule 4.9, the Company is in compliance with
all  material  terms of each lease to which it is a party or is otherwise bound.

     4.10  Intellectual  Property.

                                        7
                                      PAGE

          (a)  The  Company  owns  or  possesses  sufficient legal rights to all
     patents, trademarks, service marks, trade names, copyrights, trade secrets,
     licenses,  information and other proprietary rights and processes necessary
     for  its  business  as  now  conducted  and  to  the Company's knowledge as
     presently  proposed  to be conducted (the "Intellectual Property"), without
     any  known  infringement  of the rights of others. There are no outstanding
     options,  licenses  or  agreements  of  any  kind relating to the foregoing
     proprietary  rights, nor is the Company bound by or a party to any options,
     licenses or agreements of any kind with respect to the patents, trademarks,
     service  marks,  trade  names,   copyrights,   trade   secrets,   licenses,
     information  and other proprietary rights and processes of any other person
     or  entity other than such licenses or agreements arising from the purchase
     of  "off  the  shelf"  or  standard  products.

          (b)  The Company has not received any communications alleging that the
     Company  has  violated any of the patents, trademarks, service marks, trade
     names, copyrights or trade secrets or other proprietary rights of any other
     person  or  entity,  nor  is  the  Company  aware  of  any  basis therefor.

          (c) The Company does not believe it is or will be necessary to utilize
     any  inventions,  trade  secrets  or  proprietary information of any of its
     employees  made  prior  to  their  employment  by  the  Company, except for
     inventions,  trade  secrets  or  proprietary  information  that  have  been
     rightfully  assigned  to  the  Company.

     4.11  Compliance with Other Instruments. The Company is not in violation or
default of (x) any term of its Charter, Bylaws or Certificate of Designation, or
(y)  of  any  provision  of  any  indebtedness,  mortgage,  indenture, contract,
agreement or instrument to which it is a party or by which it is bound or of any
judgment, decree, order or writ, which violation or default, in the case of this
clause  (y),  has  had,  or  could  reasonably  be  expected  to   have,  either
individually  or  in  the  aggregate,  a Material Adverse Effect. The execution,
delivery  and  performance of and compliance with this Agreement and the Related
Agreements  to  which  it is a party, and the issuance and sale of the Preferred
Stock  by  the  Company  and  the  other Securities by the Company each pursuant
hereto  and  thereto, will not, with or without the passage of time or giving of
notice,  result  in  any  such  material  violation,  or  be in conflict with or
constitute a default under any such term or provision, or result in the creation
of  any mortgage, pledge, lien, encumbrance or charge upon any of the properties
or  assets  of the Company or the suspension, revocation, impairment, forfeiture
or  nonrenewal  of  any permit, license, authorization or approval applicable to
the  Company,  its  business  or  operations or any of its assets or properties.

     4.12  Litigation.  Except as set forth on Schedule 4.12 hereto, there is no
action,  suit,  proceeding  or  investigation  pending  or,  to  the   Company's
knowledge,  currently  threatened  against the Company that prevents the Company
from  entering  into  this  Agreement  or  the  Related   Agreements,   or  from
consummating  the transactions contemplated hereby or thereby, or which has had,
or  could  reasonably  be  expected  to  have,  either  individually  or  in the
aggregate,  a  Material  Adverse  Effect  or  could  result in any change in the
current  equity ownership of the Company, nor is the Company aware that there is
any  basis to assert any of the foregoing. The Company is not a party or subject
to  the  provisions  of  any  order, writ, injunction, judgment or decree of any
court  or  government  agency  or  instrumentality.  There  is  no action, suit,
proceeding  or  investigation  by  the  Company  currently  pending or which the
Company  intends  to  initiate.

                                        8
                                      PAGE

     4.13  Tax Returns and Payments. The Company has timely filed (including all
filed  extensions)  all  tax  returns  (federal, state and local) required to be
filed  by  it.  All  taxes  shown  to  be  due  and payable on such returns, any
assessments  imposed,  and  all other taxes due and payable by the Company on or
before the Closing, have been paid or will be paid prior to the time they become
delinquent.  Except  as  set  forth  on  Schedule 4.13, the Company has not been
advised:

          (a) that any of its returns, federal, state or other, have been or are
     being  audited  as  of  the  date  hereof;  or

          (b)  of  any  deficiency  in  assessment  or  proposed judgment to its
     federal,  state  or  other  taxes.

The  Company has no knowledge of any liability of any tax to be imposed upon its
properties  or  assets  as  of the date of this Agreement that is not adequately
provided  for.

     4.14  Employees.  Except  as set forth on Schedule 4.14, the Company has no
collective  bargaining  agreements  with any of its employees. There is no labor
union  organizing  activity  pending  or, to the Company's knowledge, threatened
with  respect to the Company. Except as disclosed in the Exchange Act Filings or
on  Schedule  4.14,  the  Company  is  not  a party to or bound by any currently
effective  employment  contract,  deferred compensation arrangement, bonus plan,
incentive  plan,  profit  sharing  plan,  retirement agreement or other employee
compensation  plan  or agreement, except the 2004 Equity Incentive Plan approved
by  the Company's stockholders on August 5, 2004. To the Company's knowledge, no
employee  of  the  Company,  nor  any  consultant  with  whom  the  Company  has
contracted,  is in violation of any term of any employment contract, proprietary
information  agreement  or any other agreement relating to the right of any such
individual  to  be  employed by, or to contract with, the Company because of the
nature  of  the  business  to  be conducted by the Company; and to the Company's
knowledge  the continued employment by the Company of its present employees, and
the  performance  of  the  Company's contracts with its independent contractors,
will  not result in any such violation. The Company is not aware that any of its
employees  is  obligated  under  any  contract (including licenses, covenants or
commitments  of  any  nature)  or  other  agreement, or subject to any judgment,
decree or order of any court or administrative agency, that would interfere with
their  duties  to  the Company. The Company has not received any notice alleging
that  any  such  violation has occurred. Except for employees who have a current
effective  employment agreement with the Company, no employee of the Company has
been granted the right to continued employment by the Company or to any material
compensation following termination of employment with the Company. Except as set
forth  on Schedule 4.14, the Company is not aware that any officer, key employee
or group of employees intends to terminate his, her or their employment with the
Company,  nor  does  the  Company  have  a  present  intention  to terminate the
employment  of  any  officer,  key  employee  or  group  of  employees.

     4.15  Registration  Rights and Voting Rights. Other than in connection with
transactions  between  Purchaser  and  the  Company,  and except as set forth on

                                        9
                                      PAGE

Schedule  4.15  and  except as disclosed in Exchange Act Filings, the Company is
presently  not under any obligation, and has not granted any rights, to register
any  of  the Company's presently outstanding securities or any of its securities
that may hereafter be issued. Except as set forth on Schedule 4.15 and except as
disclosed in Exchange Act Filings, to the Company's knowledge, no stockholder of
the  Company has entered into any agreement with respect to the voting of equity
securities  of  the  Company.

     4.16  Compliance with Laws; Permits. The Company is not in violation of any
applicable  statute,  rule,  regulation, order or restriction of any domestic or
foreign  government  or  any instrumentality or agency thereof in respect of the
conduct  of  its  business  or the ownership of its properties which has had, or
could reasonably be expected to have, either individually or in the aggregate, a
Material  Adverse  Effect.  No  governmental   orders,  permissions,   consents,
approvals  or authorizations are required to be obtained and no registrations or
declarations  are  required  to  be  filed  in connection with the execution and
delivery  of  this Agreement or any Related Agreement and the issuance of any of
the  Securities,  except such as has been duly and validly obtained or filed, or
with  respect  to  any  filings  that must be made after the Closing, as will be
filed  in  a  timely  manner.  The Company has all material franchises, permits,
licenses  and any similar authority necessary for the conduct of its business as
now  being  conducted  by it, the lack of which could, either individually or in
the  aggregate,  reasonably  be  expected  to  have  a  Material Adverse Effect.

     4.17  Environmental and Safety Laws. The Company is not in violation of any
applicable  statute,  law   or  regulation  relating  to   the   environment  or
occupational  health  and safety, and to its knowledge, no material expenditures
are  or  will be required in order to comply with any such existing statute, law
or  regulation. Except as set forth on Schedule 4.17, no Hazardous Materials (as
defined below) are used or have been used, stored, or disposed of by the Company
or,  to  the  Company's knowledge, by any other person or entity on any property
owned,  leased  or  used  by  the  Company.  For  the  purposes of the preceding
sentence,  "Hazardous  Materials"  shall  mean:

          (a)  materials which are listed or otherwise defined as "hazardous" or
     "toxic"  under any applicable local, state, federal and/or foreign laws and
     regulations  that  govern  the  existence and/or remedy of contamination on
     property, the protection of the environment from contamination, the control
     of  hazardous  wastes,  or other activities involving hazardous substances,
     including  building  materials;  or

          (b)  any  petroleum  products  or  nuclear  materials.

     4.18  Valid  Offering.  Assuming  the  accuracy  of the representations and
warranties  of  the  Purchaser  contained in this Agreement, the offer, sale and
issuance  of the Securities will be exempt from the registration requirements of
the  Securities  Act  of  1933, as amended (the "Securities Act"), and will have
been registered or qualified (or are exempt from registration and qualification)
under  the  registration, permit or qualification requirements of all applicable
state  securities  laws.

     4.19  Full  Disclosure.  The  Company  has  provided the Purchaser with all
information  requested  by  the  Purchaser  in  connection  with its decision to

                                       10
                                      PAGE

purchase  the Preferred Stock and Warrant, including all information the Company
believes  is reasonably necessary to make such investment decision. Neither this
Agreement,  the  Related  Agreements  nor  the exhibits and schedules hereto and
thereto  nor  any  other  document  delivered by the Company to Purchaser or its
attorneys or agents in connection herewith or therewith or with the transactions
contemplated  hereby or thereby, contain any untrue statement of a material fact
nor  omit  to  state  a  material fact necessary in order to make the statements
contained  herein  or  therein,  in light of the circumstances in which they are
made,  not misleading. Any financial projections and other estimates provided to
the  Purchaser  by  the  Company  were  based on the Company's experience in the
industry  and  on  assumptions of fact and opinion as to future events which the
Company,  at the date of the issuance of such projections or estimates, believed
to  be  reasonable.

     4.20 Insurance. The Company has general commercial, product liability, fire
and  casualty  insurance  policies with coverages which the Company believes are
customary for companies similarly situated to the Company in the same or similar
business.

     4.21  SEC  Reports  . Except as set forth on Schedule 4.21, the Company has
filed  all proxy statements, reports and other documents required to be filed by
it  under the Securities Exchange Act 1934, as amended (the "Exchange Act"). The
Company  has  furnished  the  Purchaser with copies of: (i) its Annual Report on
Form 10-KSB for the fiscal year ended December 31, 2003 ; and (ii) its Quarterly
Reports  on  Form  10-QSB for the fiscal quarters ended March 31, 2004, and June
30,  2004,  and  the  Form  8-K filings which it has made during the fiscal year
ending  December  31,  2003 to date (collectively, the "SEC Reports"). Except as
set  forth  on Schedule 4.21, each SEC Report was, at the time of its filing, in
substantial  compliance with the requirements of its respective form and none of
the SEC Reports, nor the financial statements (and the Preferred Stocks thereto)
included  in the SEC Reports, as of their respective filing dates, contained any
untrue statement of a material fact or omitted to state a material fact required
to  be  stated  therein or necessary to make the statements therein, in light of
the  circumstances  under  which  they  were  made,  not  misleading.

     4.22  Listing.  The  Company's  Common Stock is traded on the NASD Over the
Counter  Bulletin  Board  ("OTCBB")  and  satisfies  all  requirements  for  the
continuation  of  such listing. The Company has not received any notice that its
Common  Stock  will  be  ineligible to be traded on the OTCBB or that its Common
Stock  does  not  meet  all  requirements  for  such  continued  trading.

     4.23  No  Integrated  Offering.  Neither  the  Company,  nor  any   of  its
affiliates,  nor  any  person  acting  on  its  or their behalf, has directly or
indirectly  made  any offers or sales of any security or solicited any offers to
buy  any  security  under  circumstances  that  would  cause the offering of the
Securities  pursuant to this Agreement or any Related Agreement to be integrated
with  prior  offerings  by  the Company for purposes of the Securities Act which
would prevent the Company from selling the Securities pursuant to Rule 506 under
the  Securities  Act,  or  any  applicable exchange-related stockholder approval
provisions,  nor  will the Company or any of its affiliates or subsidiaries take
any  action  or  steps  that  would  cause  the offering of the Securities to be
integrated  with  other  offerings.

     4.24 Stop Transfer. The Securities are restricted securities as of the date
of  this  Agreement. The Company will not issue any stop transfer order or other
order  impeding  the  sale  and  delivery  of any of the Securities at such time

                                       11
                                      PAGE

as  the  Securities  are  registered  for  public  sale  or  an  exemption  from
registration  is  available,  except as required by state and federal securities
laws.

     4.25 Dilution. The Company specifically acknowledges that its obligation to
issue  the  shares  of  Common  Stock upon conversion of the Preferred Stock and
exercise  of  the Warrant is binding upon the Company and enforceable regardless
of  the  dilution  such  issuance  may  have on the ownership interests of other
shareholders  of  the  Company.

     4.26  Patriot  Act.  The  Company  certifies that, to the best of Company's
knowledge,  the Company has not been designated, and is not owned or controlled,
by  a  "suspected  terrorist"  as  defined in Executive Order 13224. The Company
hereby  acknowledges that the Purchaser seeks to comply with all applicable laws
concerning  money  laundering  and  related  activities. In furtherance of those
efforts,  the  Company  hereby represents, warrants and agrees that: (i) none of
the  cash  or  property  that  the  Company  will  pay or will contribute to the
Purchaser has been or shall be derived from, or related to, any activity that is
deemed  criminal under United States law; and (ii) no contribution or payment by
the  Company  to the Purchaser, to the extent that they are within the Company's
control  shall  cause the Purchaser to be in violation of the United States Bank
Secrecy  Act,  the  United  States International Money Laundering Control Act of
1986  or  the  United  States  International  Money  Laundering  Abatement   and
Anti-Terrorist  Financing  Act  of  2001.  The Company shall promptly notify the
Purchaser  if  any  of  these  representations  ceases  to  be true and accurate
regarding  the  Company.  The  Company  agrees  to  provide  the  Purchaser  any
additional  information regarding the Company that the Purchaser deems necessary
or  convenient  to  ensure  compliance with all applicable laws concerning money
laundering and similar activities. The Company understands and agrees that if at
any  time  it  is  discovered  that  any  of  the  foregoing representations are
incorrect,  or  if otherwise required by applicable law or regulation related to
money  laundering  similar  activities,  the Purchaser may undertake appropriate
actions  to  ensure  compliance with applicable law or regulation, including but
not  limited  to  segregation and/or redemption of the Purchaser's investment in
the  Company.  The  Company  further  understands that the Purchaser may release
confidential  information  about  the Company and, if applicable, any underlying
beneficial  owners,  to  proper  authorities  if  the  Purchaser,  in  its  sole
discretion,  determines  that  it  is  in the best interests of the Purchaser in
light  of  relevant rules and regulations under the laws set forth in subsection
(ii)  above.

     5.  Representations  and  Warranties of the Purchaser. The Purchaser hereby
represents  and  warrants  to  the  Company as follows (such representations and
warranties  do  not  lessen or obviate the representations and warranties of the
Company  set  forth  in  this  Agreement)

     5.1  No  Shorting.  The  Purchaser  or any of its affiliates and investment
partners  has not, will not and will not cause any person or entity, directly or
indirectly, to engage in "short sales," matched orders, pools, wash sales, runs,
corners,  market  stabilization,  parking  and warehousing, computerized program
trading,  or  marketing  the  close of the Company's Common Stock as long as the
Preferred  Stock  shall  be  outstanding.

                                       12
                                      PAGE

     5.2  Requisite  Power  and Authority. The Purchaser has all necessary power
and authority under all applicable provisions of law to execute and deliver this
Agreement  and  the  Related  Agreements  and to carry out their provisions. All
corporate  action  on  Purchaser's  part  required  for the lawful execution and
delivery  of  this  Agreement  and  the  Related Agreements have been or will be
effectively  taken prior to the Closing. Upon their execution and delivery, this
Agreement  and  the  Related Agreements will be valid and binding obligations of
Purchaser,  enforceable  in  accordance  with  their  terms,  except:

          (a)  as  limited by applicable bankruptcy, insolvency, reorganization,
     moratorium  or  other  laws of general application affecting enforcement of
     creditors'  rights;  and

          (b)  as  limited  by  general  principles  of equity that restrict the
     availability  of  equitable  and  legal  remedies.

     5.3  Investment Representations . Purchaser understands that the Securities
are  being offered and sold pursuant to an exemption from registration contained
in  the  Securities Act based in part upon Purchaser's representations contained
in  the  Agreement,  including,  without  limitation,  that  the Purchaser is an
"accredited  investor"  within  the meaning of Regulation D under the Securities
Act  of  1933, as amended (the "Securities Act"). The Purchaser confirms that it
has  received  or  has  had  full  access  to  all  the information it considers
necessary or appropriate to make an informed investment decision with respect to
the  Preferred  Stock and the Warrant to be purchased by it under this Agreement
and  the  Preferred  Stock Shares and the Warrant Shares acquired by it upon the
conversion of the Preferred Stock and the exercise of the Warrant, respectively.
The  Purchaser  further confirms that it has had an opportunity to ask questions
and  receive  answers  from  the  Company  regarding  the  Company's   business,
management  and  financial affairs and the terms and conditions of the Offering,
the  Preferred  Stock,  the  Warrant and the Securities and to obtain additional
information  (to  the  extent  the  Company  possessed such information or could
acquire  it  without  unreasonable  effort  or  expense) necessary to verify any
information  furnished  to  the  Purchaser or to which the Purchaser had access.

     5.4 Purchaser Bears Economic Risk. The Purchaser has substantial experience
in  evaluating  and investing in private placement transactions of securities in
companies  similar to the Company so that it is capable of evaluating the merits
and  risks  of its investment in the Company and has the capacity to protect its
own  interests.  The  Purchaser  must  bear the economic risk of this investment
until  the  Securities  are  sold  pursuant  to:  (i)  an effective registration
statement  under  the  Securities Act; or (ii) an exemption from registration is
available  with  respect  to  such  sale.

     5.5  Acquisition  for Own Account. The Purchaser is acquiring the Preferred
Stock  and Warrant and the Preferred Stock Shares and the Warrant Shares for the
Purchaser's  own  account for investment only, and not as a nominee or agent and
not  with  a  view  towards or for resale in connection with their distribution.

     5.6  Purchaser  Can  Protect Its Interest. The Purchaser represents that by
reason  of  its,  or of its management's, business and financial experience, the
Purchaser has the capacity to evaluate the merits and risks of its investment in

                                       13
                                      PAGE

the  Preferred  Stock,  the  Warrant  and  the Securities and to protect its own
interests  in  connection  with the transactions contemplated in this Agreement,
and the Related Agreements. Further, the Purchaser is aware of no publication of
any  advertisement  in  connection  with  the  transactions  contemplated in the
Agreement  or  the  Related  Agreements.

     5.7  Accredited  Investor.  Purchaser  represents  that it is an accredited
investor  within  the  meaning  of  Regulation  D  under  the  Securities  Act.

     5.8  Legends.

          (a) The Preferred Stock shall bear substantially the following legend:

          "THIS PREFERRED STOCK AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF
          THIS PREFERRED STOCK HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
          OF  1933,  AS  AMENDED, OR ANY APPLICABLE, STATE SECURITIES LAWS. THIS
          PREFERRED  STOCK AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS
          PREFERRED  STOCK  MAY  NOT  BE  SOLD,  OFFERED  FOR  SALE,  PLEDGED OR
          HYPOTHECATED  IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
          TO  THIS  PREFERRED STOCK OR SUCH SHARES UNDER SAID ACT AND APPLICABLE
          STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
          TO  SPACEDEV,  INC.  THAT  SUCH  REGISTRATION  IS  NOT  REQUIRED."

          (b)  The  Preferred Stock Shares and the Warrant Shares, if not issued
     by DWAC system (as hereinafter defined), shall bear a legend which shall be
     in  substantially  the  following  form until such shares are covered by an
     effective  registration  statement  filed  with  the  SEC:

          "THE  SHARES  REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATE
          SECURITIES  LAWS.  THESE  SHARES  MAY  NOT  BE SOLD, OFFERED FOR SALE,
          PLEDGED  OR  HYPOTHECATED  IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
          STATEMENT  UNDER  SUCH  SECURITIES ACT AND APPLICABLE STATE LAWS OR AN
          OPINION OF COUNSEL REASONABLY SATISFACTORY TO SPACEDEV, INC. THAT SUCH
          REGISTRATION  IS  NOT  REQUIRED."

                                       14
                                      PAGE

          (c)  The  Warrant  shall  bear  substantially  the  following  legend:

          "THIS  WARRANT  AND  THE  COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
          WARRANT  HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
          AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE
          COMMON  SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
          OFFERED  FOR  SALE,  PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE OF AN
          EFFECTIVE  REGISTRATION STATEMENT AS TO THIS WARRANT OR THE UNDERLYING
          SHARES  OF COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES
          LAWS  OR  AN  OPINION  OF COUNSEL REASONABLY SATISFACTORY TO SPACEDEV,
          INC.  THAT  SUCH  REGISTRATION  IS  NOT  REQUIRED."

     5.9  Patriot  Act.  The  Purchaser  certifies  that,  to  the  best  of the
Purchaser's knowledge, neither the Purchaser nor any of its directors, officers,
managers,  affiliates, agents or employees has been designated, and is not owned
or  controlled  by  a "suspected terrorist" as defined in Executive Order 13224.
The  Purchaser  hereby  acknowledges  that  the Company seeks to comply with all
applicable  laws  concerning  money  laundering   and  related   activities.  In
furtherance  of  those  efforts,  the  Purchaser hereby represents, warrants and
agrees that: (i) none of the cash that the Purchaser or any of its affiliates or
agents will pay to the Company has been or shall be derived from, or related to,
any  activity  that  is  deemed  criminal  under  United States law; and (ii) no
payment  by  the Purchaser or any of its affiliates or agents to the Company, to
the  extent  that  they  are  within  the  Purchaser's  and/or  its  directors',
officers',  managers',  affiliates',  agents', or employees' control shall cause
the Company to be in violation of the United States Bank Secrecy Act, the United
States International Money Laundering Abatement and Anti-Terrorist Financing Act
of  2001.  The  Purchaser  shall  promptly  notify  the  Company if any of these
representations  ceases  to be true and accurate regarding the Purchaser and any
of  its  directors,  officers,  managers,  affiliates, agents, or employees. The
Purchaser agrees to provide the Company any additional information regarding the
Purchaser  or  any  of its directors, officers, managers, affiliates, agents, or
employees  that  the  Company deems necessary or convenient to ensure compliance
with all applicable laws concerning money laundering and all similar activities.
The  Purchaser  understands and agrees that otherwise required by applicable law
or  regulation  related  to money laundering similar activities, the Company may
undertake  appropriate  actions  to  ensure  compliance  with  applicable law or
regulation.  The  Purchaser  further  understands  that  the Company may release
confidential  information  about  the  Purchaser  and  its  directors, officers,
managers,  affiliates,  agents,  or employees and, if applicable, any underlying
beneficial owners, to proper authorities if the Company, in its sole discretion,
determines  that it is in the best interests of the Company in light of relevant
rules  and  regulations  under  the  laws  set  forth  in  subsection (ii) above

                                       15
                                      PAGE

     6.  Covenants  of  the  Company.  The Company covenants and agrees with the
Purchaser  as  follows:

     6.1  Stop-Orders. The Company will  advise the Purchaser, promptly after it
receives  notice  of  issuance  by  the  Securities and Exchange Commission (the
"SEC"), any state securities commission or any other regulatory authority of any
stop  order  or  of  any  order  preventing  or  suspending  any offering of any
securities  of  the  Company,  or  of the suspension of the qualification of the
Common  Stock  of  the  Company for offering or sale in any jurisdiction, or the
initiation  of  any  proceeding  for  any  such  purpose.

     6.2  Listing. The Company  shall promptly secure the trading  of the shares
of  Common  Stock  issuable  upon conversion of the Preferred Stock and upon the
exercise  of the Warrant on the OTCBB (the "Principal Market") upon which shares
of  Common  Stock  are listed (subject to official notice of issuance) and shall
maintain  such  listing  so long as any other shares of Common Stock shall be so
listed.  The  Company  will  maintain  the  listing  of  its Common Stock on the
Principal  Market,  and  will comply in all material respects with the Company's
reporting,  filing  and  other  obligations  under  the  bylaws  or rules of the
National  Association  of  Securities  Dealers  ("NASD")  and such exchanges, as
applicable.

     6.3  Market  Regulations.  The  Company  shall  notify  the  SEC,  NASD and
applicable  state  authorities,  in  accordance  with their requirements, of the
transactions  contemplated by this Agreement, and shall take all other necessary
action  and proceedings as may be required and permitted by applicable law, rule
and  regulation,  for  the  legal  and  valid  issuance of the Securities to the
Purchaser  and  promptly  provide  copies  thereof  to  the  Purchaser.

     6.4  Reporting  Requirements. The Company will timely file with the SEC all
reports  required  to  be  filed  pursuant  to the Exchange Act and refrain from
terminating its status as an issuer required by the Exchange Act to file reports
thereunder even if the Exchange Act or the rules or regulations thereunder would
permit  such  termination.

     6.5  Use  of Funds. The Company agrees that it will use the proceeds of the
sale  of  the  Preferred  Stock and Warrant for general working capital purposes
only.

     6.6  Access  to  Facilities.  The  Company  will permit any representatives
designated by the Purchaser (or any successor of the Purchaser), upon reasonable
notice  and  during  normal  business  hours,  at  such  person's  expense  and
accompanied  by  a  representative  of  the  Company,  to:

          (a)  visit  and  inspect  any  of  the  properties  of  the  Company;

          (b) examine the corporate and financial records of the Company (unless
     such  examination  is  not  permitted  by federal, state or local law or by
     contract)  and  make  copies  thereof  or  extracts  therefrom;  and

          (c) discuss the affairs, finances and accounts of the Company with the
     directors,  officers  and   independent   accountants   of   the   Company.

                                       16
                                      PAGE

     Notwithstanding  the  foregoing, the Company will not provide any material,
     non-public  information  to  the  Purchaser  unless  the  Purchaser signs a
     confidentiality  agreement and otherwise complies with Regulation FD, under
     the  federal  securities  laws.

     6.7  Taxes.  The  Company  will  promptly pay and discharge, or cause to be
paid  and  discharged,  when  due and payable, all lawful taxes, assessments and
governmental  charges  or  levies  imposed upon the income, profits, property or
business  of  the  Company;  provided,  however,  that any such tax, assessment,
charge  or  levy  need  not  be  paid if the validity thereof shall currently be
contested in good faith by appropriate proceedings and if the Company shall have
set  aside  on  its  books adequate reserves with respect thereto, and provided,
further,  that  the  Company  will  pay  all such taxes, assessments, charges or
levies  forthwith  upon  the  commencement  of proceedings to foreclose any lien
which  may  have  attached  as  security  therefore.

     6.8  Insurance.  The Company will keep its assets which are of an insurable
character  insured  by  financially sound and reputable insurers against loss or
damage  by  fire,  explosion  and  other  risks  customarily  insured against by
companies in similar business similarly situated as the Company; and the Company
will  maintain, with financially sound and reputable insurers, insurance against
other  hazards and risks and liability to persons and property to the extent and
in  the  manner which the Company reasonably believes is customary for companies
in  similar  business  similarly  situated  as  the  Company  and  to the extent
available  on  commercially reasonable terms. The Company shall (i) keep all its
insurable  properties and properties in which it has an interest insured against
the hazards of fire, flood, sprinkler leakage, those hazards covered by extended
coverage insurance and such other hazards, and for such amounts, as is customary
in  the  case  of  companies  engaged  in  businesses  similar  to the Company's
including  business interruption insurance; (ii) maintain a bond in such amounts
as  is  customary  in the case of companies engaged in businesses similar to the
Company's   insuring   against   larceny,   embezzlement   or   other   criminal
misappropriation  of  insured's  officers and employees who may either singly or
jointly  with  others  at  any  time  have  access to the assets or funds of the
Company  either  directly  or  through  governmental authority to draw upon such
funds  or  to  direct  generally  the disposition of such assets; (iii) maintain
public and product liability insurance against claims for personal injury, death
or  property  damage  suffered  by  others;  and (iv) maintain all such worker's
compensation or similar insurance as may be required under the laws of any state
or  jurisdiction  in  which  the  Company  is  engaged  in  business.

     6.9  Intellectual  Property.  The  Company shall maintain in full force and
effect its corporate existence, rights and franchises and all licenses and other
rights  to  use  Intellectual  Property  owned or possessed by it and reasonably
deemed  to  be  necessary  to  the  conduct  of  its  business.

     6.10  Properties.  The  Company  will  keep  its properties in good repair,
working order and condition, reasonable wear and tear excepted, and from time to
time  make all needful and proper repairs, renewals, replacements, additions and
improvements  thereto;  and  the  Company  will  at  all  times comply with each
provision  of  all  leases  to  which  it  is a party or under which it occupies
property  if the breach of such provision could reasonably be expected to have a
Material  Adverse  Effect.

                                       17
                                      PAGE

     6.11  Confidentiality.  The  Company  agrees that it will not disclose, and
will  not  include in any public announcement, the name of the Purchaser, unless
expressly  agreed  to  by  the  Purchaser or unless and until such disclosure is
required  by  law  or applicable regulation, and then only to the extent of such
requirement. The Company may disclose Purchaser's identity and the terms of this
Agreement  to  its  current  and  prospective debt and equity financing sources.

     6.12  Required Approvals. For so long as at least twenty-five percent (25%)
of  the  aggregate  stated  value  of  the  Preferred  Stock issued to Purchaser
hereunder  is outstanding, the Company, without the prior written consent of the
Purchaser,  shall  not:

          (a)  (i)  directly  or  indirectly declare or pay any dividends, other
     than  dividends  paid  to  the  Purchaser  with  respect  to  the  Series C
     Preferred, (ii) issue any preferred stock that is mandatorily redeemable or
     (iii)  redeem  any  of  its  other  equity  interests;

          (b)  liquidate, dissolve or effect a material reorganization (it being
     understood  that in no event shall the Company dissolve, liquidate or merge
     with  any  other  person  or  entity  (unless  the Company is the surviving
     entity);

          (c)  become  subject  to  (including,  without  limitation,  by way of
     amendment  to  or modification of) any agreement or instrument which by its
     terms  would  (under  any  circumstances)  restrict  the Company's right to
     perform  the  provisions  of  this  Agreement  or  any  of  the  agreements
     contemplated  thereby;

          (d)  materially  alter  or  change  the  scope  of the business of the
     Company;  and

          (e)  make  investments  in, make any loans or advances to, or transfer
     assets  to, any of its Subsidiaries, other than any immaterial investments,
     loans,  advances  and/or  asset  transfers  made  in the ordinary course of
     business.

     6.13  Reissuance  of Securities. The Company agrees to reissue certificates
representing  the  Securities without the legends set forth in Section 5.8 above
at  such  time  as:

          (a)  the  holder  thereof  is  permitted to dispose of such Securities
     pursuant  to  Rule  144(k)  under  the  Securities  Act;  or

          (b)  upon  resale subject to an effective registration statement after
     such Securities are registered under the Securities Act. The Company agrees
     to  cooperate with the Purchaser in connection with all resales pursuant to
     Rule  144(d)  and Rule 144(k) and provide legal opinions necessary to allow
     such  resales  provided  the  Company  and  its  counsel receive reasonably
     requested  representations  from  the selling Purchaser and broker, if any.

     6.14  Opinion.  On  the  Closing  Date,  the  Company  will  deliver to the
Purchaser  an  opinion  acceptable  to  the  Purchaser  from the Company's legal
counsel.  The  Company  will provide, at the Company's expense, such other legal
opinions  in  the  future  as are reasonably necessary for the conversion of the
Preferred  Stock  and  exercise  of  the  Warrant.

                                       18
                                      PAGE

     6.15  Margin  Stock. The Company will not permit any of the proceeds of the
Preferred  Stock  or the Warrant to be used directly or indirectly to "purchase"
or  "carry"  "margin  stock"  or to repay indebtedness incurred to "purchase" or
"carry"  "margin  stock"  within  the  respective meanings of each of the quoted
terms under Regulation U of the Board of Governors of the Federal Reserve System
as  now  and  from  time  to  time  hereafter  in  effect.

     6.16  Financing  Right  of  First  Refusal.

          (a)  So  long  as  any  shares of Preferred Stock are outstanding, the
     Company  hereby grants to the Purchaser a right of first refusal to provide
     any  Additional  Financing  (as  defined below) to be issued by the Company
     and/or  any  of  its  Subsidiaries,  subject  to  the  following  terms and
     conditions.  From and after the date hereof, prior to the incurrence of any
     additional indebtedness and/or the sale or issuance of any equity interests
     of  the  Company  or  any  of its Subsidiaries other than to holders of the
     Preferred Stock upon conversion, dividends paid to holders of the Preferred
     Stock  in  shares  of  Common Stock, pursuant to options that may be issued
     under  any  employee  incentive  stock plan or any qualified stock plan (an
     "Additional  Financing"), the Company and/or any Subsidiary of the Company,
     as  the  case  may be, shall notify the Purchaser of its intention to enter
     into such Additional Financing. In connection therewith, the Company and/or
     the  applicable Subsidiary thereof shall submit a fully executed term sheet
     (a  "Proposed  Term  Sheet")  to  the  Purchaser  setting  forth the terms,
     conditions  and pricing of any such Additional Financing (such financing to
     be  negotiated  on  "arm's  length"  terms  and  the  terms  thereof  to be
     negotiated in good faith) proposed to be entered into by the Company and/or
     such  Subsidiary.  The  Purchaser  shall  have  the  right,  but  not   the
     obligation,  to  deliver  its  own proposed term sheet (the "Purchaser Term
     Sheet")  setting  forth the terms and conditions upon which Purchaser would
     be  willing to provide such Additional Financing to the Company and/or such
     Subsidiary.  The Purchaser Term Sheet shall contain terms no less favorable
     to  the Company and /or the Subsidiary than those outlined in Proposed Term
     Sheet.  The  Purchaser  shall  deliver such Purchaser Term Sheet within ten
     business  days  of  receipt  of  each  such  Proposed  Term  Sheet.  If the
     provisions  of  the  Purchaser  Term Sheet are at least as favorable to the
     Company  and/or  such  Subsidiary, as the case may be, as the provisions of
     the  Proposed  Term  Sheet,  the Company and/or such Subsidiary shall enter
     into  and  consummate  the Additional Financing transaction outlined in the
     Purchaser  Term  Sheet.

          (b)  The  Company  will  not, and will not permit its Subsidiaries to,
     agree, directly or indirectly, to any restriction with any person or entity
     which  limits  the  ability  of  the  Purchaser to consummate an Additional
     Financing  with  the  Company  or  any  of  its  Subsidiaries.

     7.  Covenants of the Purchaser. The Purchaser covenants and agrees with the
Company  as  follows:

     7.1  Confidentiality  . The Purchaser agrees that it will not disclose, and
will  not  include  in  any public announcement, the name of the Company, unless
expressly  agreed  to  by  the  Company  or  unless and until such disclosure is
required  by  law  or applicable regulation, and then only to the extent of such
requirement.

     7.2  Non-Public  Information.  The Purchaser agrees not to effect any sales
in  the  shares  of  the Company's Common Stock while in possession of material,
non-public  information  regarding  the  Company  if  such  sales  would violate
applicable  securities  law.

                                       19
                                      PAGE

     7.3  No  Shorting.  The  Purchaser  or any of its affiliates and investment
partners  has not, will not and will not cause any person or entity, directly or
indirectly, to engage in "short sales," matched orders, pools, wash sales, runs,
corners,  market  stabilization,  parking  and warehousing, computerized program
trading,  or  marketing  the  close of the Company's Common Stock as long as the
Preferred  Stock  shall  be  outstanding.

     8.  Covenants  of  the  Company  and  Purchaser  Regarding Indemnification.

     8.1  Company  Indemnification.  The  Company  agrees  to  indemnify,  hold
harmless,  reimburse  and  defend  Purchaser,  each  of  Purchaser's   officers,
directors,  agents,  affiliates,  control  persons,  and principal shareholders,
against  any  claim,  cost,  expense,  liability,  obligation,  loss  or  damage
(including reasonable legal fees) of any nature, incurred by or imposed upon the
Purchaser  which  results,  arises   out  of  or   is  based   upon:   (i)   any
misrepresentation  by  Company  or  breach  of  any  warranty by Company in this
Agreement, any Related Agreement or in any exhibits or schedules attached hereto
or  thereto;  or  (ii)  any  breach  or default in performance by Company of any
covenant  or  undertaking  to  be  performed  by Company hereunder, or any other
agreement  entered  into  by  the  Company  and  Purchaser  relating  hereto.

     8.2  Purchaser's  Indemnification.  Purchaser  agrees  to  indemnify,  hold
harmless,  reimburse  and defend the Company and each of the Company's officers,
directors,  agents,  affiliates,  control persons and principal shareholders, at
all  times  against  any  claim,  cost,  expense, liability, obligation, loss or
damage  (including  reasonable legal fees) of any nature, incurred by or imposed
upon  the  Company  which  results,  arises  out  of  or  is based upon: (i) any
misrepresentation  by  Purchaser  or breach of any warranty by Purchaser in this
Agreement  or  in  any  exhibits  or  schedules  attached  hereto or any Related
Agreement;  or  (ii)  any  breach  or default in performance by Purchaser of any
covenant  or  undertaking  to  be performed by Purchaser hereunder, or any other
agreement  entered  into  by  the  Company  and  Purchaser  relating  hereto.

     9.  Conversion  of  Convertible  Preferred  Stock.

9.1     Mechanics  of  Conversion.

          (a) Provided the Purchaser has notified the Company of the Purchaser's
     intention to sell the Preferred Stock Shares and the Preferred Stock Shares
     are included in an effective registration statement or are otherwise exempt
     from registration when sold: (i) Upon the conversion of the Preferred Stock
     or  part  thereof, the Company shall, at its own cost and expense, take all
     necessary  action  (including  the  issuance  of  an  opinion  of   counsel
     reasonably  acceptable  to  the  Purchaser  following  a  request   by  the
     Purchaser)  to  assure that the Company's transfer agent shall issue shares
     of the Company's Common Stock in the name of the Purchaser (or its nominee)
     or  such  other  persons  as designated by the Purchaser in accordance with
     Section  9.1(b)  hereof  and  in  such   denominations   to  be   specified
     representing  the  number  of  Preferred  Stock  Shares  issuable upon such
     conversion;  and  (ii) The Company warrants that no instructions other than
     these  instructions have been or will be given to the transfer agent of the

                                       20
                                      PAGE

     Company's Common Stock and that after the Effectiveness Date (as defined in
     the  Registration  Rights Agreement) the Preferred Stock Shares issued will
     be  freely  transferable subject to the prospectus delivery requirements of
     the  Securities  Act  and  the  provisions  of this Agreement, and will not
     contain a legend restricting the resale or transferability of the Preferred
     Stock  Shares.

          (b)  Purchaser  will give notice of its decision to exercise its right
     to  convert the Preferred Stock or part thereof by telecopying or otherwise
     delivering  an  executed and completed notice of the number of shares to be
     converted  to  the Company (the "Notice of Conversion"). The Purchaser will
     not  be  required  to  surrender  the  Preferred  Stock until the Purchaser
     receives  a  credit  to the account of the Purchaser's prime broker through
     the DWAC system (as defined below), representing the Preferred Stock Shares
     or  until  the  Preferred  Stock  has  been  fully satisfied; however, once
     satisfied,  Purchaser  shall  promptly  surrender the Preferred Stock. Each
     date  on  which  a  Notice  of Conversion is telecopied or delivered to the
     Company  in  accordance  with  the  provisions  hereof  shall  be  deemed a
     "Conversion  Date."  Pursuant to the terms of the Notice of Conversion, the
     Company  will  issue  instructions  to the transfer agent accompanied by an
     opinion  of  counsel  within  three  (3)  business  days of the date of the
     delivery  to  the  Company  of the Notice of Conversion and shall cause the
     transfer  agent  to  transmit  the certificates representing the Conversion
     Shares  to  the  Holder  by  crediting the account of the Purchaser's prime
     broker  with  the  Depository  Trust  Company  ("DTC")  through its Deposit
     Withdrawal  Agent Commission ("DWAC") system within three (3) business days
     after  receipt  by  the  Company of the Notice of Conversion (the "Delivery
     Date").

          (c)  The  Company  understands  that  a  delay  in the delivery of the
     Preferred  Stock  Shares  in the form required pursuant to Section 9 hereof
     beyond the Delivery Date could result in economic loss to the Purchaser. In
     the  event  that  the Company fails to direct its transfer agent to deliver
     the  Preferred Stock Shares to the Purchaser via the DWAC system within the
     time frame set forth in Section 9.1(b) above and the Preferred Stock Shares
     are not delivered to the Purchaser by the Delivery Date, as compensation to
     the Purchaser for such loss, the Company agrees to pay late payments to the
     Purchaser  for  late  issuance  of  the  Preferred Stock Shares in the form
     required  pursuant  to  Section  9  hereof upon conversion of the Preferred
     Stock in the amount equal to $500 per business day after the Delivery Date.
     Notwithstanding the foregoing, the Corporation shall not owe the Holder any
     late  fees  set forth in this Section 9(c) if (i) the delay in the delivery
     of  the Series C Preferred Shares beyond the Delivery date is solely out of
     the  control  of the Corporation (as determined in good faith by the Holder
     and  the Corporation) (ii) the Corporation is utilizing its best efforts to
     actively  attempt  to cure the cause of the delay or (iii) the delay is the
     result  of the exhaustion of all registered shares of Common Stock issuable
     upon  conversion  of  the  Preferred  Stock  or payment of dividends on the
     Preferred  Stock  if  the  Corporation  is  in  the  process of registering
     additional  shares  of Common Stock for such purpose. The Company shall pay
     any  payments  incurred  under  this Section in immediately available funds
     upon  demand.

     Nothing contained herein or in any document referred to herein or delivered
in  connection herewith shall be deemed to establish or require the payment of a
rate  of  interest  or  other  charges  in  excess  of  the maximum permitted by

                                       21
                                      PAGE

applicable  law. In the event that the rate of interest or dividends required to
be  paid  or other charges hereunder exceed the maximum amount permitted by such
law,  any  payments  in excess of such maximum shall be credited against amounts
owed  by  the  Company  to  a  Purchaser  and  thus  refunded  to  the  Company.

10.     Registration  Rights.

     10.1  Registration  Rights  Granted. The Company hereby grants registration
rights  to the Purchaser pursuant to a Registration Rights Agreement dated as of
even  date  herewith  between  the  Company  and  the  Purchaser.

     10.2  Offering  Restrictions.  Except  as  previously  disclosed in the SEC
Reports  or  in  the  Exchange Act Filings, or stock or stock options granted to
employees  or directors of the Company (these exceptions hereinafter referred to
as  the  "Excepted Issuances"), the Company will not issue any securities with a
continuously  variable/floating  conversion  feature  which  are or could be (by
conversion  or  registration) free-trading securities (i.e. common stock subject
to  a  registration  statement) prior to the full repayment or conversion of the
Preferred  Stock (together with all accrued and unpaid interest and fees related
thereto.

     11.  Miscellaneous.

     11.1  Governing  Law.  THIS  AGREEMENT  AND EACH RELATED AGREEMENT SHALL BE
GOVERNED  BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT  REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. ANY ACTION BROUGHT BY EITHER
PARTY  AGAINST  THE  OTHER  CONCERNING  THE  TRANSACTIONS  CONTEMPLATED  BY THIS
AGREEMENT  AND  EACH RELATED AGREEMENT SHALL BE BROUGHT ONLY IN THE STATE COURTS
OF  NEW  YORK  OR  IN  THE FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK. BOTH
PARTIES  AND THE INDIVIDUALS EXECUTING THIS AGREEMENT AND THE RELATED AGREEMENTS
ON  BEHALF OF THE COMPANY AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS AND
WAIVE  TRIAL  BY  JURY. IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT OR ANY
RELATED  AGREEMENT  DELIVERED IN CONNECTION HEREWITH IS INVALID OR UNENFORCEABLE
UNDER ANY APPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMED
INOPERATIVE  TO  THE  EXTENT  THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMED
MODIFIED  TO  CONFORM WITH SUCH STATUTE OR RULE OF LAW. ANY SUCH PROVISION WHICH
MAY  PROVE  INVALID OR UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY
OR  ENFORCEABILITY  OF  ANY  OTHER  PROVISION  OF  THIS AGREEMENT OR ANY RELATED
AGREEMENT.

     11.2  Survival.  The  representations, warranties, covenants and agreements
made  herein  shall  survive  any  investigation  made  by the Purchaser and the
closing  of the transactions contemplated hereby to the extent provided therein.
All  statements  as  to  factual  matters  contained in any certificate or other
instrument  delivered  by  or  on  behalf  of  the  Company  pursuant  hereto in
connection  with  the  transactions  contemplated  hereby  shall be deemed to be
representations and warranties by the Company hereunder solely as of the date of
such  certificate  or  instrument.

                                       22
                                      PAGE

     11.3  Successors.  Except  as  otherwise  expressly  provided  herein,  the
provisions  hereof  shall  inure  to  the  benefit  of, and be binding upon, the
successors,  heirs, executors and administrators of the parties hereto and shall
inure  to the benefit of and be enforceable by each person who shall be a holder
of  the  Securities  from  time  to time, other than the holders of Common Stock
which  has  been  sold  by  the  Purchaser  pursuant to Rule 144 or an effective
registration  statement.  Purchaser  may  not  assign  its rights hereunder to a
competitor  of  the  Company.

     11.4  Entire  Agreement.  This  Agreement,  the  Related  Agreements,   the
exhibits  and  schedules  hereto  and  thereto and the other documents delivered
pursuant  hereto  constitute  the  full  and  entire understanding and agreement
between  the  parties  with  regard to the subjects hereof and no party shall be
liable  or  bound to any other in any manner by any representations, warranties,
covenants  and  agreements  except as specifically set forth herein and therein.

     11.5  Severability.  In  case  any  provision  of  the  Agreement  shall be
invalid,  illegal or unenforceable, the validity, legality and enforceability of
the  remaining  provisions shall not in any way be affected or impaired thereby.

     11.6  Amendment  and  Waiver.

          (a)  This  Agreement  may be amended or modified only upon the written
     consent  of  the  Company  and  the  Purchaser.

          (b)  The  obligations  of  the Company and the rights of the Purchaser
     under  this  Agreement  may  be waived only with the written consent of the
     Purchaser.

          (c)  The  obligations  of  the Purchaser and the rights of the Company
     under  this  Agreement  may  be waived only with the written consent of the
     Company.

     11.7  Delays  or  Omissions.  It  is  agreed  that  no delay or omission to
exercise  any  right,  power  or  remedy accruing to any party, upon any breach,
default  or  noncompliance  by another party under this Agreement or the Related
Agreements,  shall  impair  any  such  right,  power  or remedy, nor shall it be
construed  to  be  a waiver of any such breach, default or noncompliance, or any
acquiescence  therein,  or of or in any similar breach, default or noncompliance
thereafter  occurring. All remedies, either under this Agreement, or the Related
Agreements,  by  law or otherwise afforded to any party, shall be cumulative and
not  alternative.

     11.8  Notices.  All  notices  required  or  permitted hereunder shall be in
writing  and  shall  be  deemed  effectively  given:

          (a)  upon  personal  delivery  to  the  party  to  be  notified;

          (b)  when  sent  by confirmed facsimile if sent during normal business
     hours  of  the  recipient,  if  not,  then  on  the  next  business  day;

          (c)  three  (3)  business days after having been sent by registered or
     certified  mail,  return  receipt  requested,  postage  prepaid;  or

                                       23
                                      PAGE

          (d)  one  (1) day after deposit with a nationally recognized overnight
     courier,  specifying  next  day  delivery,  with  written  verification  of
     receipt.

All  communications  shall  be  sent  as  follows:

If  to  the  Company,  to:                                       SpaceDev,  Inc.
                                                             13855  Stowe  Drive
                                                               Poway,  CA  92064
                     Attention:  Richard  B  Slansky,  Chief  Financial  Officer
                                                     Facsimile:  (858)  375-1000

                                                              with  a  copy  to:

                                                               Weintraub  Dillon
                                                      12520  High  Bluff  Drive,
                                                                      Suite  260
                                                          San  Diego,  CA  92130

                                              Attention:  Gretchen  Cowen,  Esq.
                                                 Facsimile:      (858)  259-2868

If  to  the  Purchaser,  to:                         Laurus  Master  Fund,  Ltd.
                                       c/o  Ironshore  Corporate  Services  ltd.
                                                           P.O.  Box  1234  G.T.
                                       Queensgate  House,  South  Church  Street
                                                 Grand  Cayman,  Cayman  Islands
                                                        Facsimile:  345-949-9877

                                                              with  a  copy  to:

                                                       John  E.  Tucker  ,  Esq.
                                                 825  Third  Avenue  14th  Floor
                                                           New  York,  NY  10022
                                                        Facsimile:  212-541-4434

or  at  such  other  address  as  the  Company or the Purchaser may designate by
written  notice  to  the  other  parties  hereto  given  in accordance herewith.

     11.9  Attorneys'  Fees.  In the event that any suit or action is instituted
to enforce any provision in this Agreement, the prevailing party in such dispute
shall  be entitled to recover from the losing party all fees, costs and expenses
of  enforcing  any  right of such prevailing party under or with respect to this
Agreement,  including,  without limitation, such reasonable fees and expenses of
attorneys  and  accountants,  which shall include, without limitation, all fees,
costs  and  expenses  of  appeals.

                                       24
                                      PAGE

     11.10  Titles  and Subtitles. The titles of the sections and subsections of
the Agreement are for convenience of reference only and are not to be considered
in  construing  this  Agreement.

     11.11  Facsimile  Signatures;  Counterparts. This Agreement may be executed
by  facsimile  signatures and in any number of counterparts, each of which shall
be  an  original,  but  all  of  which together shall constitute one instrument.

     11.12  Broker's  Fees.  Except  as set forth on Schedule 11.12 hereof, each
party  hereto  represents and warrants that no agent, broker, investment banker,
person  or  firm acting on behalf of or under the authority of such party hereto
is  or  will be entitled to any broker's or finder's fee or any other commission
directly  or indirectly in connection with the transactions contemplated herein.
Each  party  hereto further agrees to indemnify each other party for any claims,
losses  or  expenses  incurred  by  such  other  party  as  a  result  of  the
representation  in  this  Section  11.12  being  untrue.

     11.13  Construction.  Each  party  acknowledges  that  its  legal   counsel
participated  in  the  preparation  of this Agreement and the Related Agreements
and, therefore, stipulates that the rule of construction that ambiguities are to
be  resolved  against  the  drafting  party   shall  not  be   applied  in   the
interpretation  of  this  Agreement  to  favor  any  party  against  the  other.

             THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK

                                       25
                                      PAGE

IN  WITNESS  WHEREOF,  the  parties hereto have executed the SECURITIES PURCHASE
AGREEMENT  as  of  the  date  set  forth  in  the  first  paragraph  hereof.

COMPANY:                                                              PURCHASER:

SpaceDev,  Inc.                                      Laurus  Master  Fund,  Ltd.

By:  /s/ James W. Benson                             By:  /s/ Eugene Grin
--------------------------------                     ---------------------------
Name:  James  W.  Benson                             Name:  Eugene Grin
--------------------------------                     ---------------------------
Title:  Chief  Executive  Officer                    Title:  Director
--------------------------------                     ---------------------------

                                       26
                                      PAGE

                                    EXHIBIT A
                  FORM OF SERIES C CONVERTIBLE PREFERRED STOCK

                                       A-1
                                      PAGE

                                    EXHIBIT B
                                 FORM OF WARRANT

                                       B-1
                                      PAGE

                                    EXHIBIT C

                                 FORM OF OPINION

     1.  The Company is a corporation duly incorporated, validly existing and in
good  standing  under  the  laws  of the State of Colorado and has all requisite
corporate  power  and  authority to own, operate and lease its properties and to
carry  on  its  business  as  it  is  now  being  conducted.

     2.  The Company has the requisite corporate power and authority to execute,
deliver  and  perform  its  obligations  under  the  Agreement  and  the Related
Agreements.  All  corporate  action on the part of the Company and its officers,
directors  and  stockholders necessary has been taken for: (i) the authorization
of  the  Agreement  and  the  Related  Agreements  and  the  performance  of all
obligations  of  the  Company   thereunder   at  the  Closing;   and  (ii)   the
authorization,  sale,  issuance  and  delivery of the Securities pursuant to the
Agreement and the Related Agreements. The Preferred Stock Shares and the Warrant
Shares,  when  issued  pursuant  to  and  in  accordance  with  the terms of the
Agreement  and  the Related Agreements and upon delivery shall be validly issued
and  outstanding,  fully  paid  and  non  assessable.

     3.  The execution, delivery and performance of the Agreement, the Preferred
Stock  or  the  Related  Agreements  by  the Company and the consummation of the
transactions  on  its  part  contemplated  by  any  thereof, to the best of such
counsel's  knowledge,  will  not,  with  or  without the giving of notice or the
passage  of  time  or  both:

          (a)  Violate  the  provisions of the Charter or bylaws of the Company;

          (b)  Violate any judgment, decree, order or award of any court binding
     upon  the  Company;  or

          (c)  Violate  any [Insert jurisdictions in which counsel is qualified]
     or  federal  law.

     4.  The  Agreement  and  the  Related Agreements will constitute, valid and
legally  binding  obligations  of  the  Company, and are enforceable against the
Company  in  accordance  with  their  respective  terms,  except:

          (a)  as  limited by applicable bankruptcy, insolvency, reorganization,
     moratorium  or  other  laws of general application affecting enforcement of
     creditors'  rights;  and

          (b)  general  principles  of  equity that restrict the availability of
     equitable  or  legal  remedies.

     5.  To  such  counsel's  knowledge, the sale of the Preferred Stock and the
subsequent conversion of the Preferred Stock into Preferred Stock Shares are not
subject  to  any preemptive rights or rights of first refusal that have not been
properly  waived  or complied with. To such counsel's knowledge, the sale of the
Warrant  and  the  subsequent exercise of the Warrant for Warrant Shares are not
subject  to  any  preemptive  rights  or, to such counsel's knowledge, rights of
first  refusal  that  have  not  been  properly  waived  or  complied  with.

                                       C-1
                                      PAGE

     6.  Assuming  the  accuracy  of  the  representations and warranties of the
Purchaser  contained  in  the  Agreement,  the  offer,  sale and issuance of the
Securities on the Closing Date will be exempt from the registration requirements
of the Securities Act. To such counsel's knowledge, neither the Company, nor any
of its affiliates, nor any person acting on its or their behalf, has directly or
indirectly  made  any offers or sales of any security or solicited any offers to
buy  and  security  under  circumstances  that  would  cause the offering of the
Securities  pursuant  to this Agreement to be integrated with prior offerings by
the  Company  for purposes of the Securities Act which would prevent the Company
from  selling  the  Securities pursuant to Rule 506 under the Securities Act, or
any  applicable  exchange-related  stockholder  approval  provisions.

     7.  There  is  no  action, suit, proceeding or investigation pending or, to
such counsel's knowledge, currently threatened against the Company that prevents
the  right  of  the  Company  to enter into this Agreement or any of the Related
Agreements,  or to consummate the transactions contemplated thereby. The Company
is  not  a  party  or  subject to the provisions of any order, writ, injunction,
judgment or decree of any court or government agency or instrumentality; nor, to
such counsel's knowledge, is there any action, suit, proceeding or investigation
by  the  Company  currently  pending  or  which the Company intends to initiate.

                                       C-2
                                      PAGE

                                    EXHIBIT D
                            FORM OF ESCROW AGREEMENT

                                       D-1
                                      PAGEREGISTRATION RIGHTS AGREEMENT

     This  Registration  Rights Agreement (this "Agreement") is made and entered
into  as  of   August  25,  2004,  by  and  between  SpaceDev, Inc.,  a Colorado
corporation  (the  "Company"),  and  Laurus Master Fund, Ltd. (the "Purchaser").

     This Agreement is made pursuant to the Securities Purchase Agreement, dated
as of the date hereof, by and between the Purchaser and the Company (as amended,
modified  or  supplemented  from  time  to  time,   the   "Securities   Purchase
Agreement"),  and  pursuant  to the Preferred Stock and the Warrants referred to
therein.

     The  Company  and  the  Purchaser  hereby  agree  as  follows:

     1.  Definitions.  Capitalized  terms  used and not otherwise defined herein
that  are  defined  in the Securities Purchase Agreement shall have the meanings
given  such  terms  in  the  Securities  Purchase  Agreement.  As  used  in this
Agreement,  the  following  terms  shall  have  the  following  meanings:

          "Commission"  means  the  Securities  and  Exchange  Commission.

          "Common  Stock"  means shares of the Company's common stock, par value
     $0.001  per  share.

          "Effectiveness  Date"  means  with respect to the initial Registration
     Statement  required to be filed hereunder, a date no later than one hundred
     thirty  (130)  following  the  date  hereof.

          "Effectiveness  Period"  shall  have  the meaning set forth in Section
     2(a).

          "Exchange  Act" means the Securities Exchange Act of 1934, as amended,
     and  any  successor  statute.

          "Filing  Date"  means,  with  respect  to (i) the initial Registration
     Statement  required to be filed hereunder, a date no later than thirty (30)
     days  following  the  date hereof and (ii) with respect to shares of Common
     Stock  issuable  to  the  Holder  as  a  result of adjustments to the Fixed
     Conversion  Price  made  pursuant  to  Section  3  of  the  Certificate  of
     Designation  of  the  Preferred  Stock  or  Section  4  of  the  Warrant or
     otherwise,  thirty (30) days after the occurrence such event or the date of
     the  adjustment  of  the  Fixed  Conversion  Price.

          "Holder"  or "Holders" means the Purchaser or any of its affiliates or
     transferees  to  the  extent  any  of  them  hold  Registrable  Securities.

          "Indemnified  Party" shall have the meaning set forth in Section 5(c).

          "Indemnifying Party" shall have the meaning set forth in Section 5(c).

          "Preferred Stock " shall mean the Series B Convertible Preferred Stock
     of  the  Company  referred  to  in  the  Securities  Purchase  Agreement.

          "Proceeding" means an action, claim, suit, investigation or proceeding
     (including,  without  limitation,  an  investigation or partial proceeding,
     such  as  a  deposition),  whether  commenced  or  threatened.

          "Prospectus"  means  the  prospectus   included  in  the  Registration
     Statement  (including,  without  limitation, a prospectus that includes any
     information  previously  omitted  from  a  prospectus  filed  as part of an
     effective  registration  statement  in  reliance upon Rule 430A promulgated
     under  the  Securities  Act),  as amended or supplemented by any prospectus
     supplement, with respect to the terms of the offering of any portion of the
     Registrable Securities covered by the Registration Statement, and all other
     amendments  and  supplements  to  the  Prospectus, including post-effective
     amendments,  and  all  material  incorporated  by reference or deemed to be
     incorporated  by  reference  in  such  Prospectus.

          "Registrable  Securities" means the shares of Common Stock issued upon
     the  conversion  of  the  Preferred Stock and issuable upon exercise of the
     Warrants.

          "Registration Statement" means each registration statement required to
     be filed hereunder, including the Prospectus, amendments and supplements to
     such   registration   statement   or   Prospectus,   including   pre-   and
     post-effective  amendments,   all  exhibits  thereto,  and   all   material
     incorporated by reference or deemed to be incorporated by reference in such
     registration  statement.

          "Rule  144"  means  Rule 144 promulgated by the Commission pursuant to
     the  Securities  Act, as such Rule may be amended from time to time, or any
     similar  rule  or  regulation  hereafter  adopted  by the Commission having
     substantially  the  same  effect  as  such  Rule.

          "Rule  415"  means  Rule 415 promulgated by the Commission pursuant to
     the  Securities  Act, as such Rule may be amended from time to time, or any
     similar  rule  or  regulation  hereafter  adopted  by the Commission having
     substantially  the  same  effect  as  such  Rule.

          "Rule  424"  means  Rule 424 promulgated by the Commission pursuant to
     the  Securities  Act, as such Rule may be amended from time to time, or any
     similar  rule  or  regulation  hereafter  adopted  by the Commission having
     substantially  the  same  effect  as  such  Rule.

          "SEC"  means  the  U.S.  Securities  and  Exchange  Commission.

          "Securities Act" means the Securities Act of 1933, as amended, and any
     successor  statute.

          "Securities  Purchase  Agreement"  means  the  agreement  between  the
     parties  hereto  calling  for  the  issuance by the Company of an aggregate
     stated  value  of  $2,500,000  of  its  Preferred  Stock  plus  Warrants.

          "Trading  Market"  means  any  of  the NASD OTC Bulletin Board, NASDAQ
     SmallCap Market, the Nasdaq National Market, the American Stock Exchange or
     the  New  York  Stock  Exchange.

          "Warrants" means the Common Stock purchase warrants issued pursuant to
     the  Securities  Purchase  Agreement.

     2.  Registration.

          (a)  On or prior to the Filing Date the Company shall prepare and file
     with  the  Commission  a  Registration  Statement  covering the Registrable
     Securities  for  an  offering  to be made on a continuous basis pursuant to
     Rule  415.  The  Registration  Statement shall be on Form SB-2. The Company
     shall  cause  the  Registration  Statement  to  become effective and remain
     effective  as  provided  herein.  The  Company  shall  use  its  reasonable
     commercial  efforts  to  cause  the  Registration  Statement to be declared
     effective under the Securities Act as promptly as possible after the filing
     thereof, but in any event no later than the Effectiveness Date. The Company
     shall  use  its  reasonable  commercial  efforts  to  keep the Registration
     Statement  continuously  effective  under the Securities Act until the date
     which  is the earlier date of when (i) all Registrable Securities have been
     sold  or  (ii)  all  Registrable Securities may be sold immediately without
     registration  under  the  Securities  Act  and  without volume restrictions
     pursuant  to  Rule  144(k),  as  determined  by  the counsel to the Company
     pursuant  to  a  written  opinion  letter  to  such  effect,  addressed and
     acceptable  to  the  Company's transfer agent and the affected Holders (the
     "Effectiveness  Period").

          (b) If: (i) the Registration Statement is not filed on or prior to the
     Filing  Date;  (ii) the Registration Statement is not declared effective by
     the  Commission  by  the  Effectiveness  Date; (iii) after the Registration
     Statement  is  filed  with  and  declared  effective by the Commission, the
     Registration  Statement ceases to be effective (by suspension or otherwise)
     as  to  all Registrable Securities to which it is required to relate at any
     time  prior  to  the  expiration of the Effectiveness Period (without being
     succeeded  immediately  by  an  additional registration statement filed and
     declared  effective) for a period of time which shall exceed 30 days in the
     aggregate  per year or more than 20 consecutive calendar days (defined as a
     period  of  365  days  commencing on the date the Registration Statement is
     declared  effective)  unless  such suspension or delay is the result of any
     suspension of trading in the market place generally and is not specifically
     related  to  the Company; or (iv) the Common Stock is not listed or quoted,
     or  is  suspended  from trading on any Trading Market for a period of three
     (3) consecutive Trading Days (provided the Company shall not have been able
     to  cure  such  trading  suspension within 30 days of the notice thereof or
     list  the  Common  Stock  on  another Trading Market); (any such failure or
     breach  being  referred to as an "Event," and for purposes of clause (i) or
     (ii)  the  date on which such Event occurs, or for purposes of clause (iii)
     the  date  which  such 30 day or 20 consecutive day period (as the case may
     be)  is  exceeded,  or  for  purposes of clause (iv) the date on which such
     three  (3)  Trading  Day  period  is  exceeded, being referred to as "Event
     Date"),  then until the applicable Event is cured, the Company shall pay to
     each  Holder an amount in cash, as liquidated damages and not as a penalty,
     equal  to  1.50%  for  each  thirty  (30)  day period (prorated for partial
     periods)  on  a  daily basis of the aggregate stated value of the Preferred
     Stock.  While  such  Event continues, such liquidated damages shall be paid
     not less often than each thirty (30) days. Any unpaid liquidated damages as
     of  the  date  when  an  Event  has been cured by the Company shall be paid
     within  five (5) days following the date on which such Event has been cured
     by  the  Company.

          (c)  Within  five  (5)  business  days  of the Effectiveness Date, the
     Company  shall  cause  its  counsel  to issue a blanket opinion in the form
     attached hereto as Exhibit A, to the transfer agent stating that the shares
     are subject to an effective registration statement and can be reissued free
     of  restrictive  legend  upon  notice  of  a  sale  by  the  Purchaser  and
     confirmation  by  the  Purchaser  that  it has complied with the prospectus
     delivery  requirements,  provided  that  the  Company  has  not advised the
     transfer  agent  orally  or in writing that the opinion has been withdrawn.
     Copies  of  the  blanket  opinion  required  by  this Section 2(c) shall be
     delivered  to  the  Purchaser  within  the  time  frame  set  forth  above.

     3.  Registration Procedures. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities under
the  Securities  Act,  the  Company  will,  as  expeditiously  as  possible:

          (a)  prepare  and  file with the Commission the Registration Statement
     with  respect  to  such  Registrable  Securities,  respond  as  promptly as
     possible  to  any  comments  received from the Commission, and use its best
     efforts  to cause the Registration Statement to become and remain effective
     for  the Effectiveness Period with respect thereto, and promptly provide to
     the  Purchaser  copies  of  all  filings  and Commission letters of comment
     relating  thereto;

          (b)  prepare  and  file  with  the  Commission  such  amendments   and
     supplements  to  the  Registration  Statement  and  the  Prospectus used in
     connection  therewith  as may be necessary to comply with the provisions of
     the  Securities  Act  with  respect  to  the disposition of all Registrable
     Securities  covered  by  the  Registration  Statement  and  to  keep   such
     Registration  Statement effective until the expiration of the Effectiveness
     Period;

          (c) furnish to the Purchaser such number of copies of the Registration
     Statement  and  the Prospectus included therein (including each preliminary
     Prospectus)  as  the  Purchaser  reasonably  may  request to facilitate the
     public  sale  or  disposition  of the Registrable Securities covered by the
     Registration  Statement;

          (d) use its commercially reasonable efforts to register or qualify the
     Purchaser's  Registrable  Securities  covered by the Registration Statement
     under  the  securities  or "blue sky" laws of such jurisdictions within the
     United  States  as the Purchaser may reasonably request, provided, however,
     that  the  Company  shall  not  for any such purpose be required to qualify
     generally to transact business as a foreign corporation in any jurisdiction
     where it is not so qualified or to consent to general service of process in
     any  such  jurisdiction;

          (e)  list  the  Registrable  Securities  covered  by  the Registration
     Statement  with  any  securities  exchange on which the Common Stock of the
     Company  is  then  listed;

          (f)  immediately  notify  the  Purchaser at any time when a Prospectus
     relating  thereto  is required to be delivered under the Securities Act, of
     the  happening  of any event of which the Company has knowledge as a result
     of  which  the Prospectus contained in such Registration Statement, as then
     in  effect,  includes  an  untrue  statement of a material fact or omits to
     state  a  material  fact required to be stated therein or necessary to make
     the  statements  therein  not misleading in light of the circumstances then
     existing;  and

          (g)  make  available for inspection by the Purchaser and any attorney,
     accountant  or   other  agent  retained  by  the  Purchaser,  all  publicly
     available,  non-confidential  financial   and  other   records,   pertinent
     corporate  documents and properties of the Company, and cause the Company's
     officers,  directors  and  employees  to  supply  all  publicly  available,
     non-confidential   information  reasonably   requested  by  the   attorney,
     accountant  or  agent  of  the  Purchaser.

     4. Registration Expenses. All expenses relating to the Company's compliance
with  Sections  2  and 3 hereof, including, without limitation, all registration
and  filing  fees,  printing  expenses,  fees  and  disbursements of counsel and
independent  public  accountants  for  the Company, fees and expenses (including
reasonable  counsel  fees)  incurred  in  connection  with  complying with state
securities  or  "blue  sky"  laws,  fees  of  the  NASD, transfer taxes, fees of
transfer  agents  and  registrars,  fees  of, and disbursements incurred by, one
counsel for the Holders (to the extent such counsel is required due to Company's
failure  to  meet  any  of  its obligations hereunder), are called "Registration
Expenses".  All  selling  commissions  applicable  to  the  sale  of Registrable
Securities,  including  any fees and disbursements of any special counsel to the
Holders  beyond  those  included  in  Registration Expenses, are called "Selling
Expenses."  The Company shall only be responsible for all Registration Expenses.

     5.  Indemnification.

          (a) In the event of a registration of any Registrable Securities under
     the  Securities  Act pursuant to this Agreement, the Company will indemnify
     and hold harmless the Purchaser, and its officers, directors and each other
     person,  if  any,  who  controls  the  Purchaser  within the meaning of the
     Securities  Act,  against any losses, claims, damages or liabilities, joint
     or  several,  to  which  the  Purchaser, or such persons may become subject
     under  the  Securities  Act  or  otherwise, insofar as such losses, claims,
     damages  or liabilities (or actions in respect thereof) arise out of or are
     based upon any untrue statement or alleged untrue statement of any material
     fact  contained  in any Registration Statement under which such Registrable
     Securities  were  registered  under  the  Securities  Act  pursuant to this
     Agreement,  any  preliminary  Prospectus  or  final  Prospectus  contained
     therein,  or  any  amendment  or supplement thereof, or arise out of or are
     based  upon  the  omission  or alleged omission to state therein a material
     fact  required  to  be  stated  therein or necessary to make the statements
     therein  not  misleading,  and  will reimburse the Purchaser, and each such
     person  for  any  reasonable  legal  or  other expenses incurred by them in
     connection  with  investigating  or defending any such loss, claim, damage,
     liability or action; provided, however, that the Company will not be liable
     in  any such case if and to the extent that any such loss, claim, damage or
     liability  arises  out  of  or is based upon an untrue statement or alleged
     untrue statement or omission or alleged omission so made in conformity with
     information  furnished  by or on behalf of the Purchaser or any such person
     in  writing  specifically  for  use  in  any  such  document.

          (b) In the event of a registration of the Registrable Securities under
     the Securities Act pursuant to this Agreement, the Purchaser will indemnify
     and  hold  harmless the Company, and its officers, directors and each other
     person,  if  any,  who  controls  the  Company  within  the  meaning of the
     Securities  Act,  against all losses, claims, damages or liabilities, joint
     or  several,  to which the Company or such persons may become subject under
     the Securities Act or otherwise, insofar as such losses, claims, damages or
     liabilities  (or actions in respect thereof) arise out of or are based upon
     any untrue statement or alleged untrue statement of any material fact which
     was  furnished in writing by the Purchaser to the Company expressly for use
     in  (and such information is contained in) the Registration Statement under
     which  such Registrable Securities were registered under the Securities Act
     pursuant  to this Agreement, any preliminary Prospectus or final Prospectus
     contained  therein, or any amendment or supplement thereof, or arise out of
     or  are  based  upon  the  omission  or alleged omission to state therein a
     material  fact  required  to  be  stated  therein  or necessary to make the
     statements  therein not misleading, and will reimburse the Company and each
     such  person for any reasonable legal or other expenses incurred by them in
     connection  with  investigating  or defending any such loss, claim, damage,
     liability  or  action, provided, however, that the Purchaser will be liable
     in  any  such  case  if  and  only to the extent that any such loss, claim,
     damage  or  liability arises out of or is based upon an untrue statement or
     alleged  untrue  statement  or  omission  or  alleged  omission  so made in
     conformity  with  information  furnished in writing to the Company by or on
     behalf  of  the  Purchaser  specifically  for  use  in  any  such document.
     Notwithstanding  the  provisions of this paragraph, the Purchaser shall not
     be  required  to  indemnify any person or entity in excess of the amount of
     the  aggregate  net  proceeds  received  by  the  Purchaser  in  respect of
     Registrable  Securities  in connection with any such registration under the
     Securities  Act.

          (c)  Promptly  after   receipt  by   a   party   entitled   to   claim
     indemnification  hereunder  (an  "Indemnified  Party")  of  notice  of  the
     commencement  of  any  action, such Indemnified Party shall, if a claim for
     indemnification  in  respect  thereof  is to be made against a party hereto
     obligated  to  indemnify  such Indemnified Party (an "Indemnifying Party"),
     notify  the  Indemnifying  Party in writing thereof, but the omission so to
     notify the Indemnifying Party shall not relieve it from any liability which
     it  may  have  to such Indemnified Party other than under this Section 5(c)
     and  shall  only  relieve  it  from any liability which it may have to such
     Indemnified  Party  under  this  Section  5(c)  if  and  to  the extent the
     Indemnifying  Party is prejudiced by such omission. In case any such action
     shall  be  brought  against  any  Indemnified Party and it shall notify the
     Indemnifying  Party  of  the  commencement  thereof, the Indemnifying Party
     shall  be  entitled  to participate in and, to the extent it shall wish, to
     assume  and undertake the defense thereof with counsel satisfactory to such
     Indemnified  Party,  and,  after notice from the Indemnifying Party to such
     Indemnified  Party  of  its election so to assume and undertake the defense
     thereof,  the  Indemnifying  Party  shall not be liable to such Indemnified
     Party  under this Section 5(c) for any legal expenses subsequently incurred
     by  such  Indemnified  Party in connection with the defense thereof; if the
     Indemnified Party retains its own counsel, then the Indemnified Party shall
     pay  all fees, costs and expenses of such counsel, provided, however, that,
     if the defendants in any such action include both the indemnified party and
     the  Indemnifying  Party  and  the  Indemnified Party shall have reasonably
     concluded  that  there may be reasonable defenses available to it which are
     different  from  or additional to those available to the Indemnifying Party
     or  if  the  interests of the Indemnified Party reasonably may be deemed to
     conflict  with  the  interests  of  the Indemnifying Party, the Indemnified
     Party  shall  have  the  right to select one separate counsel and to assume
     such  legal  defenses  and  otherwise to participate in the defense of such
     action,  with the reasonable expenses and fees of such separate counsel and
     other  expenses  related  to  such  participation  to  be reimbursed by the
     Indemnifying  Party  as  incurred.

          (d)  In  order  to  provide for just and equitable contribution in the
     event  of  joint  liability  under  the Securities Act in any case in which
     either (i) the Purchaser, or any officer, director or controlling person of
     the Purchaser, makes a claim for indemnification pursuant to this Section 5
     but it is judicially determined (by the entry of a final judgment or decree
     by  a  court of competent jurisdiction and the expiration of time to appeal
     or  the  denial  of the last right of appeal) that such indemnification may
     not  be  enforced in such case notwithstanding the fact that this Section 5
     provides  for  indemnification in such case, or (ii) contribution under the
     Securities  Act  may  be  required  on  the  part  of the Purchaser or such
     officer,  director  or controlling person of the Purchaser in circumstances
     for  which  indemnification  is provided under this Section 5; then, and in
     each  such  case,  the  Company  and  the  Purchaser will contribute to the
     aggregate  losses,  claims,  damages  or  liabilities  to which they may be
     subject  (after  contribution  from  others) in such proportion so that the
     Purchaser is responsible only for the portion represented by the percentage
     that  the  public  offering  price  of  its  securities  offered  by  the
     Registration Statement bears to the public offering price of all securities
     offered  by  such  Registration  Statement, provided, however, that, in any
     such  case, (A) the Purchaser will not be required to contribute any amount
     in excess of the public offering price of all such securities offered by it
     pursuant to such Registration Statement; and (B) no person or entity guilty
     of fraudulent misrepresentation (within the meaning of Section 10(f) of the
     Act) will be entitled to contribution from any person or entity who was not
     guilty  of  such  fraudulent  misrepresentation.

     6.  Representations  and  Warranties.

          (a)  The Common Stock of the Company is registered pursuant to Section
     12(b)  or  12(g)  of  the  Exchange Act and, except with respect to certain
     matters  which  the Company has disclosed to the Purchaser on Schedule 4.21
     to  the  Securities  Purchase  Agreement,  the Company has timely filed all
     proxy statements, reports, schedules, forms, statements and other documents
     required  to  be  filed by it under the Exchange Act. The Company has filed
     (i) its Annual Report on Form 10-KSB for its fiscal year ended December 31,
     2003  and  (ii) its Quarterly Report on Form 10-QSB for the fiscal quarters
     ended  March  31, 2004 and June 30, 2004 (collectively, the "SEC Reports").
     Each  SEC  Report was, at the time of its filing, in substantial compliance
     with  the  requirements of its respective form and none of the SEC Reports,
     nor  the  financial  statements (and the notes thereto) included in the SEC
     Reports,  as  of  their  respective  filing  dates,  contained  any  untrue
     statement  of  a material fact or omitted to state a material fact required
     to  be stated therein or necessary to make the statements therein, in light
     of  the  circumstances  under  which  they  were  made, not misleading. The
     financial  statements  of the Company included in the SEC Reports comply as
     to  form  in  all material respects with applicable accounting requirements
     and  the  published  rules  and  regulations  of  the  Commission  or other
     applicable  rules  and  regulations  with  respect  thereto. Such financial
     statements  have  been  prepared  in  accordance  with  generally  accepted
     accounting  principles  ("GAAP")  applied  on a consistent basis during the
     periods  involved  (except  (i)  as  may  be  otherwise  indicated  in such
     financial  statements or the notes thereto or (ii) in the case of unaudited
     interim  statements, to the extent they may not include footnotes or may be
     condensed)  and  fairly  present  in  all  material  respects the financial
     condition,  the results of operations and the cash flows of the Company and
     its  subsidiaries,  on  a  consolidated  basis, as of, and for, the periods
     presented  in  each  such  SEC  Report.

          (b)  The  Common  Stock  is  listed  for  trading on the NASD Over the
     Counter  Bulletin  Board  ("OTCBB")  and satisfies all requirements for the
     continuation  of such listing. The Company has not received any notice that
     its  Common Stock will be delisted from the OTCBB (except for prior notices
     which  have been fully remedied) or that the Common Stock does not meet all
     requirements  for  the  continuation  of  such  listing.

          (c)  Neither  the  Company,  nor any of its affiliates, nor any person
     acting  on  its or their behalf, has directly or indirectly made any offers
     or  sales of any security or solicited any offers to buy any security under
     circumstances  that  would cause the offering of the Securities pursuant to
     the  Securities Purchase Agreement to be integrated with prior offerings by
     the  Company  for  purposes  of  the Securities Act which would prevent the
     Company  from  selling  the  Common  Stock  pursuant  to Rule 506 under the
     Securities  Act,  or  any  applicable exchange-related stockholder approval
     provisions,  nor  will the Company or any of its affiliates or subsidiaries
     take any action or steps that would cause the offering of the Securities to
     be  integrated  with  other  offerings.

          (d)  The  Warrants, the Preferred Stock and the shares of Common Stock
     which  the Purchaser may acquire pursuant to the Warrants and the Preferred
     Stock are all restricted securities under the Securities Act as of the date
     of  this  Agreement.  The Company will not issue any stop transfer order or
     other  order  impeding  the  sale  and  delivery  of any of the Registrable
     Securities  at  such time as such Registrable Securities are registered for
     public  sale  or  an  exemption  from  registration is available, except as
     required  by  federal  or  state  securities  laws.

          (e)  The  Company understands the nature of the Registrable Securities
     issuable upon the conversion of the Preferred Stock and the exercise of the
     Warrant and recognizes that the issuance of such Registrable Securities may
     have  a  potential  dilutive  effect. The Company specifically acknowledges
     that its obligation to issue the Registrable Securities is binding upon the
     Company  and  enforceable regardless of the dilution such issuance may have
     on  the  ownership  interests  of  other  shareholders  of  the  Company.

          (f)  Except  for  agreements  made in the ordinary course of business,
     there  is  no  agreement  that has not been filed with the Commission as an
     exhibit  to  a  registration statement or to a form required to be filed by
     the Company under the Exchange Act, the breach of which could reasonably be
     expected  to  have  a  material  and  adverse effect on the Company and its
     subsidiaries,  or would prohibit or otherwise interfere with the ability of
     the  Company  to  enter  into and perform any of its obligations under this
     Agreement  in  any  material  respect.

          (g)  The  Company  will  at  all  times have authorized and reserved a
     sufficient  number of shares of Common Stock for the full conversion of the
     Preferred  Stock  and  exercise  of  the  Warrants.

     7.  Miscellaneous.

          (a)  Remedies. In the event of a breach by the Company or by a Holder,
     of any of their respective obligations under this Agreement, each Holder or
     the  Company, as the case may be, in addition to being entitled to exercise
     all  rights  granted by law and under this Agreement, including recovery of
     damages,  will be entitled to specific performance of its rights under this
     Agreement.

          (b)  No  Piggyback  on  Registrations.  Except  as  and  to the extent
     specified  in  Schedule  7(b)  hereto,  neither  the Company nor any of its
     security  holders (other than the Holders in such capacity pursuant hereto)
     may  include  securities of the Company in any Registration Statement other
     than  the  Registrable Securities, and the Company shall not after the date
     hereof  enter  into any agreement providing any such right for inclusion of
     shares in the Registration Statement to any of its security holders. Except
     as and to the extent specified in Schedule 7(b) hereto, the Company has not
     previously entered into any agreement granting any registration rights with
     respect  to  any  of  its securities to any Person that have not been fully
     satisfied.
          (c)  Compliance.  Each Holder covenants and agrees that it will comply
     with  the  prospectus  delivery  requirements  of  the  Securities  Act  as
     applicable  to  it  in  connection  with  sales  of  Registrable Securities
     pursuant  to  the  Registration  Statement.

          (d) Discontinued Disposition. Each Holder agrees by its acquisition of
     such Registrable Securities that, upon receipt of a notice from the Company
     of  the  occurrence  of  a  Discontinuation  Event (as defined below), such
     Holder  will  forthwith  discontinue   disposition   of  such   Registrable
     Securities  under the applicable Registration Statement until such Holder's
     receipt  of  the  copies  of  the  supplemented  Prospectus  and/or amended
     Registration  Statement or until it is advised in writing (the "Advice") by
     the  Company that the use of the applicable Prospectus may be resumed, and,
     in  either  case,  has  received  copies  of any additional or supplemental
     filings  that are incorporated or deemed to be incorporated by reference in
     such  Prospectus  or  Registration  Statement.  The  Company  may   provide
     appropriate  stop  orders  to enforce the provisions of this paragraph. For
     purposes  of  this  Section  7(d), a "Discontinuation Event" shall mean (i)
     when  the  Commission notifies the Company whether there will be a "review"
     of  such  Registration  Statement  and  whenever the Commission comments in
     writing  on such Registration Statement (the Company shall provide true and
     complete  copies  thereof  and all written responses thereto to each of the
     Holders);  (ii) any request by the Commission or any other Federal or state
     governmental  authority  for amendments or supplements to such Registration
     Statement  or  Prospectus or for additional information; (iii) the issuance
     by  the  Commission  of any stop order suspending the effectiveness of such
     Registration Statement covering any or all of the Registrable Securities or
     the initiation of any Proceedings for that purpose; (iv) the receipt by the
     Company  of  any  notification  with  respect  to  the  suspension  of  the
     qualification  or  exemption  from  qualification of any of the Registrable
     Securities  for  sale in any jurisdiction, or the initiation or threatening
     of  any Proceeding for such purpose; and/or (v) the occurrence of any event
     or  passage  of  time  that makes the financial statements included in such
     Registration  Statement  ineligible  for inclusion therein or any statement
     made  in  such  Registration  Statement  or  Prospectus  or   any  document
     incorporated  or  deemed  to be incorporated therein by reference untrue in
     any  material  respect  or that requires any revisions to such Registration
     Statement,  Prospectus  or  other  documents  so  that, in the case of such
     Registration  Statement  or  Prospectus,  as  the  case may be, it will not
     contain  any  untrue  statement  of  a  material  fact or omit to state any
     material  fact  required  to  be  stated  therein  or necessary to make the
     statements  therein,  in  light  of the circumstances under which they were
     made,  not  misleading.

          (e)  Piggy-Back Registrations. If at any time during the Effectiveness
     Period there is not an effective Registration Statement covering all of the
     Registrable  Securities and the Company shall determine to prepare and file
     with  the  Commission  a registration statement relating to an offering for
     its own account or the account of others under the Securities Act of any of
     its  equity  securities,  other  than  on  Form  S-4  or  Form S-8 (each as
     promulgated under the Securities Act) or their then equivalents relating to
     equity securities to be issued solely in connection with any acquisition of
     any  entity  or  business  or equity securities issuable in connection with
     stock  option  or other employee benefit plans, then the Company shall send
     to  each Holder written notice of such determination and, if within fifteen
     days  after  receipt  of  such  notice, any such Holder shall so request in
     writing,  the  Company  shall include in such registration statement all or
     any  part  of  such  Registrable  Securities  such  holder  requests  to be
     registered  to  the  extent  the  Company  may  do  so  without  violating
     registration rights of others which exist as of the date of this Agreement,
     subject  to  customary  underwriter  cutbacks  applicable to all holders of
     registration  rights  and  subject to obtaining any required the consent of
     any  selling  stockholder(s)  to  such  inclusion  under  such registration
     statement.

          (f)  Amendments  and  Waivers.  The  provisions  of  this  Agreement,
     including  the provisions of this sentence, may not be amended, modified or
     supplemented,  and  waivers  or  consents to departures from the provisions
     hereof  may not be given, unless the same shall be in writing and signed by
     the Company and the Holders of the then outstanding Registrable Securities.
     Notwithstanding  the  foregoing,  a  waiver  or  consent to depart from the
     provisions  hereof with respect to a matter that relates exclusively to the
     rights  of  certain Holders and that does not directly or indirectly affect
     the  rights of other Holders may be given by Holders of at least a majority
     of  the  Registrable  Securities  to  which such waiver or consent relates;
     provided, however, that the provisions of this sentence may not be amended,
     modified,  or  supplemented except in accordance with the provisions of the
     immediately  preceding  sentence.

          (g)  Notices.  Any  notice  or  request  hereunder may be given to the
     Company  or the Purchaser at the respective addresses set forth below or as
     may  hereafter  be  specified in a notice designated as a change of address
     under  this Section 7(g). Any notice or request hereunder shall be given by
     registered  or  certified  mail,  return  receipt requested, hand delivery,
     overnight  mail,  Federal  Express  or  other  national  overnight next day
     carrier  (collectively, "Courier") or telecopy (confirmed by mail). Notices
     and  requests  shall  be,  in the case of those by hand delivery, deemed to
     have been given when delivered to any party to whom it is addressed, in the
     case  of  those  by mail or overnight mail, deemed to have been given three
     (3)  business  days  after  the date when deposited in the mail or with the
     overnight  mail  carrier,  in  the case of a Courier, the next business day
     following timely delivery of the package with the Courier, and, in the case
     of  a  telecopy,  when  confirmed.  The  address  for   such   notices  and
     communications  shall  be  as  follows:

     If  to  the  Company:                                       SpaceDev,  Inc.
                                                             13855  Stowe  Drive
                                                               Poway,  CA  92064

                                                 Attention:Richard  B.  Slansky,
                                                       Chief  Financial  Officer
                                                     Facsimile:  (858)  375-1000

                                                              with  a  copy  to:
                                                               Weintraub  Dillon
                                          12520  High  Bluff  Drive,  Suite  260
                                                          San  Diego,  CA  92130

                                              Attention:  Gretchen  Cowen,  Esq.
                                                       Facsimile: (858) 259-2868

If to a Purchaser:                        To the address set forth under such
                                          Purchaser name on the signature  pages
                                          hereto.

If  to any other Person who is
then the registered Holder:      To the address of such  Holder  as  it  appears
                               in  the  stock  transfer  books  of  the  Company

or  such  other  address as may be designated in writing hereafter in accordance
with  this  Section  7(g)  by  such  Person.

          (h)  Successors and Assigns. This Agreement shall inure to the benefit
     of  and be binding upon the successors and permitted assigns of each of the
     parties  and shall inure to the benefit of each Holder. The Company may not
     assign  its  rights  or  obligations  hereunder  without  the prior written
     consent  of  each  Holder.  Each  Holder may assign their respective rights
     hereunder in the manner and to the Persons as permitted under the Preferred
     Stock  and the Securities Purchase Agreement with the prior written consent
     of  the  Company,  which  consent  shall  not  be  unreasonably  withheld.

          (i)  Execution and Counterparts. This Agreement may be executed in any
     number  of  counterparts, each of which when so executed shall be deemed to
     be  an  original  and, all of which taken together shall constitute one and
     the  same  Agreement.  In  the  event  that  any  signature is delivered by
     facsimile  transmission,  such  signature  shall  create  a  valid  binding
     obligation  of  the  party  executing (or on whose behalf such signature is
     executed)  the  same  with  the  same force and effect as if such facsimile
     signature  were  the  original  thereof.

          (j)  Governing  Law.  All  questions  concerning  the  construction,
     validity,  enforcement  and  interpretation  of  this  Agreement  shall  be
     governed by and construed and enforced in accordance with the internal laws
     of  the State of New York, without regard to the principles of conflicts of
     law  thereof.  Each  party  agrees  that  all  Proceedings  concerning  the
     interpretations,  enforcement  and defense of the transactions contemplated
     by  this  Agreement shall be commenced exclusively in the state and federal
     courts  sitting  in  the City of New York, Borough of Manhattan. Each party
     hereto  hereby  irrevocably  submits  to  the exclusive jurisdiction of the
     state  and  federal  courts  sitting  in  the  City of New York, Borough of
     Manhattan  for  the  adjudication of any dispute hereunder or in connection
     herewith  or  with any transaction contemplated hereby or discussed herein,
     and  hereby irrevocably waives, and agrees not to assert in any Proceeding,
     any claim that it is not personally subject to the jurisdiction of any such
     court,  that  such  Proceeding  is  improper.  Each  party  hereto  hereby
     irrevocably  waives  personal  service  of  process and consents to process
     being  served  in  any  such  Proceeding  by  mailing  a  copy  thereof via
     registered  or  certified  mail  or  overnight  delivery  (with evidence of
     delivery)  to  such  party at the address in effect for notices to it under
     this  Agreement  and  agrees  that  such  service shall constitute good and
     sufficient  service of process and notice thereof. Nothing contained herein
     shall  be  deemed  to  limit  in  any way any right to serve process in any
     manner  permitted  by  law. Each party hereto hereby irrevocably waives, to
     the  fullest extent permitted by applicable law, any and all right to trial
     by  jury  in  any  legal  proceeding  arising  out  of  or relating to this
     Agreement  or  the  transactions contemplated hereby. If either party shall
     commence a Proceeding to enforce any provisions of this Agreement, then the
     prevailing  party in such Proceeding shall be reimbursed by the other party
     for  its  reasonable  attorneys  fees and other costs and expenses incurred
     with  the  investigation,  preparation  and prosecution of such Proceeding.

          (k)  Cumulative  Remedies. The remedies provided herein are cumulative
     and  not  exclusive  of  any  remedies  provided  by  law.

          (l)  Severability.  If any term, provision, covenant or restriction of
     this  Agreement is held by a court of competent jurisdiction to be invalid,
     illegal,  void  or  unenforceable,  the remainder of the terms, provisions,
     covenants  and restrictions set forth herein shall remain in full force and
     effect  and  shall  in no way be affected, impaired or invalidated, and the
     parties  hereto  shall  use  their reasonable efforts to find and employ an
     alternative  means  to achieve the same or substantially the same result as
     that  contemplated  by such term, provision, covenant or restriction. It is
     hereby stipulated and declared to be the intention of the parties that they
     would  have  executed  the  remaining  terms,  provisions,  covenants  and
     restrictions  without  including any of such that may be hereafter declared
     invalid,  illegal,  void  or  unenforceable.

          (m)  Headings.  The  headings in this Agreement are for convenience of
     reference  only and shall not limit or otherwise affect the meaning hereof.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                             SIGNATURE PAGE FOLLOWS]

                                      PAGE

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as  of  the  date  first  written  above.
SpaceDev,  Inc.                                      Laurus  Master  Fund,  Ltd.

By:/s/ James W. Benson                               By:  /s/ Eugene Grin
--------------------------------------------------------------------------------
Name:  James  W.  Benson                             Name:  Eugene Grin
--------------------------------------------------------------------------------
Title:  Chief  Executive  Officer                    Title:  Director
--------------------------------------------------------------------------------

Address  for  Notices:                               Address  for  Notices:

SpaceDev,  Inc.
13855  Stowe  Drive                                  825 Third Avenue 14th Floor
Poway,  CA  92064                                    New  York,  NY  10022
Attention:  Richard  B.  Slansky,                    Attention:  Eugene  Grin
Chief  Financial  Officer                            Facsimile:  (212)  541-4434
Facsimile:  (858)  375-1000

                                      PAGE

                                    EXHIBIT A
                                [Month  __, 2003]

[Continental  Stock  Transfer
   &  Trust  Company
17  Battery  Place,  8th  Floor
New  York,  NY  10004
Attn:  Felix  Orihuela]

Re:     SpaceDev,  Inc.  Registration  Statement  on  Form  SB-2
        --------------------------------------------------------

Ladies  and  Gentlemen:

     As  counsel  to  SpaceDev, Inc., a Colorado corporation (the "Company"), we
have  been  requested to render our opinion to you in connection with the resale
by  the  individuals  or  entitles  listed  on  Schedule  A attached hereto (the
"Selling Stockholders"), of an aggregate of [amount]shares (the "Shares") of the
Company's  Common  Stock.

     A  Registration Statement on Form SB-2 under the Securities Act of 1933, as
amended  (the  "Act"),  with  respect  to  the resale of the Shares was declared
effective  by  the Securities and Exchange Commission on [date]. Enclosed is the
Prospectus  dated  [date].  We  understand that the Shares are to be offered and
sold  in  the  manner  described  in  the  Prospectus.

     Based  upon  the foregoing, upon request by the Selling Stockholders at any
time  while the registration statement remains effective, it is our opinion that
the  Shares  have  been registered for resale under the Act and new certificates
evidencing  the  Shares  upon  their  transfer or re-registration by the Selling
Stockholders may be issued without restrictive legend. We will advise you if the
registration statement is not available or effective at any point in the future.

                                                             Very  truly  yours,

                                                              [Company  counsel]

                                      PAGE

                                   SCHEDULE A
                                                                          Shares
Selling  Stockholder                                              Being  Offered
--------------------                                              --------------

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}]]