Document:

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                                                                     Exhibit 4.1

                             NOTE PURCHASE AGREEMENT

         NOTE PURCHASE AGREEMENT, made and entered as of this _______ day of
________ 2002 (the "Agreement"), by and among SpaceDev, Inc., a Colorado
corporation (the "Company"), and the purchaser(s) set forth on THE SIGNATURE
PAGE hereto (each a "Purchaser" and, collectively, the "Purchasers").

                                   WITNESSETH:

         WHEREAS, the Company desires to issue and sell, and the Purchasers
desire to purchase, all upon the terms and subject to the conditions set forth
in this Agreement, Series A Convertible Notes of the Company (individually, a
"Note" and, collectively, the "Notes") in the aggregate principal amount of up
to $400,000 each bearing interest at the rate of 2.03% per annum, which are
convertible into securities of the Company, as set forth herein.

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements of the parties herein contained, the parties hereby
agree as follows:

         1. PURCHASE AND SALE OF NOTES.

                  1.1 SALE AND ISSUANCE OF NOTES. Subject to the terms and
conditions of this Agreement, each Purchaser severally and not jointly agrees to
purchase, and the Company agrees to sell and issue to each Purchaser, a Note of
this Company which shall be subordinate to all other debt of the Company, and
which shall convert into such number of securities as determined pursuant to
Section 1.3 herein. The Company further agrees that, upon issuance of the Note,
the Company shall also deliver to each Purchaser a warrant to purchase _____
shares of the Company's $0.0001 par value common stock (the "Warrant" or
"Warrants"). The Warrant shall be exercisable at any time after issuance at the
conversion price of the Note. Forms of the Note and Warrant are attached hereto
as EXHIBITS A AND B.

                  1.2 CLOSING. (i) The closing of the purchase and sale of the
Notes (the "Closing") shall take place at such time and place as shall be
mutually agreed upon by the Purchasers and the Company. At the Closing and upon
receipt of a certified check or a wire transfer of the principal amount of each
Note to an account that will have been designated by the Company not less than
one (1) business day prior to the date of the Closing, the Company shall deliver
to each Purchaser a Note.

                  1.3 NOTE CONVERSION. The Company may, at its option, convert
each Note into shares of the Company's common stock equal in number to the
outstanding principal amount and accrued interest on such Note divided by the
Conversion Price (as defined in Section 2.2 of the Note) on the Maturity Date of
the Note.

                  Upon conversion, the Notes shall cease to represent the
indebtedness of the Company stated therein and the sole right of the holder
thereof shall be to receive certificates or instruments evidencing the common
shares to which such holder is entitled. Upon conversion, such Purchaser agrees
to promptly surrender to the Company the Note held by it in exchange for the
common shares as provided in the Note. Fractional shares of common stock shall
not be issued and fractions shall be settled in cash at the conversion price.

         2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents, warrants and covenants to the Purchasers as follows:

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                  2.1 CORPORATE STATUS. 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 and in the places where
such properties are now owned, operated and leased or such business is now being
conducted. The Company is subject to the reporting requirements of the
Securities Exchange Act of 1934, and is in compliance with those requirements.

                  2.2 AUTHORIZATION; VALIDITY. When executed and delivered by
the Company, this Agreement, the Notes and the Warrants will constitute the
valid and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization and moratorium laws and other laws of general
application affecting the enforcement of creditors' rights generally and general
principles of equity. Upon issuance, the shares of common stock issued by the
Company upon conversion of the Notes and/or exercise of the Warrants (the
"Conversion Shares") shall be duly authorized, validly issued, fully paid and
non-assessable, and free of any liens or encumbrances or preemptive rights,
except for restrictions on transfer under the securities laws and any agreement
to which the holder of the Conversion Shares becomes a party.

                  2.3 NO CONFLICT. The execution, delivery and performance of
this Agreement, the Notes and the Warrants and the issuance of the Conversion
Shares do not and will not violate any material agreements to which the Company
is, or at the time of issuance will be, a party. The Company is not in violation
of or default on any provision of any contract, indenture or other agreement to
which it is a party or by which it is bound, which violation or default would
materially and adversely affect the business of the Company taken as a whole.

                  2.4 APPROVALS AND CONSENTS. No action, approval, consent or
authorization, including, but not limited to, any action, approval, consent or
authorization by any governmental or quasi-governmental board, agency,
commission, bureau, or instrumentality is necessary or required as to the
Company in order to constitute this Agreement as a valid, binding and
enforceable obligation of the Company in accordance with its terms.

                  2.5 AUTHORIZATION AND RESERVATION OF CONVERSION SHARES. The
Company shall authorize and reserve sufficient shares of Conversion Shares to
enable the conversion of the Notes and exercise of the Warrants.

         3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each of the
Purchasers, severally but not jointly, represents and warrants to the Company as
to itself as follows:

                  3.1 AUTHORIZATION. The execution, delivery and performance of
this Agreement, by such Purchaser and the consummation by such Purchaser of the
transactions contemplated hereby and thereby are within the powers of such
Purchaser and have been duly authorized by all necessary individual, corporate,
partnership or limited liability company action, as appropriate, on the part of
such Purchaser. This Agreement has been duly executed and delivered by such
Purchaser and constitutes a legal, valid and binding obligation of the Purchaser
enforceable against such Purchaser in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization and moratorium laws and other
laws of general application affecting the enforcement of creditors' rights
generally and general principles of equity.

                  3.3 APPROVALS AND CONSENTS. No action, approval, consent or
authorization, including, but not limited to, any action, approval, consent or
authorization by any governmental or quasi-governmental board, agency,
commission, bureau, or instrumentality is necessary or required as to such

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Purchaser in order to constitute this Agreement as a valid, binding and
enforceable obligation of such Purchaser in accordance with its terms.

                  3.4 INVESTMENT. Such Purchaser is acquiring the Note and the
Warrant for his own account as principal, not as a nominee or agent, for
investment purposes only, and not with a view to, or for, resale or distribution
thereof and no other Person or entity has a direct or indirect beneficial
interest in such Note.

                  3.5 EXEMPTION FROM REGISTRATION. Such Purchaser acknowledges
that the offering and sale of the Notes (the "Offering") is intended to be
exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act"), by virtue of Section 4(2) of the Securities Act and the
provisions promulgated thereunder. In furtherance thereof, such Purchaser
represents and warrants to the Company as follows: (i) such Purchaser does not
have a present intent to distribute or transfer the Note or the Warrant issued
to it or the securities received upon conversion of such Note or Warrant; (ii)
such Purchaser has the financial ability to bear the economic risk of his
investment, has adequate means for providing for his current needs and
contingencies and has no need for liquidity with respect to his investment in
the Company; and (iii) such Purchaser has such knowledge and experience in
financial, and business matters as to be capable of evaluating the merits and
risks of an investment in the Notes.

                  3.6 ACCREDITED PURCHASER. Such Purchaser is, by virtue of his
position as an officer and/or director of the Company, or otherwise, an
"accredited investor," as that term is defined in SEC Rule 501.

                  3.7 TRANSFER RESTRICTIONS. Such Purchaser will not sell or
otherwise transfer the Note or Warrant issued to him, or the Conversion Shares,
without registration under the Securities Act or unless such Purchaser provides
the Company with an opinion of counsel for the Company, to the effect that a
sale, transfer or assignment of such Note, Warrant or such Conversion Shares may
be made without registration. Such Purchaser fully understands and agrees that
such Purchaser must bear the economic risk of such Purchaser's purchase because,
among other reasons, such Note, Warrant and Conversion Shares have not been
registered under the Securities Act or under the securities laws of any state
and, therefore, cannot be resold, pledged, assigned or otherwise disposed of
unless they are subsequently registered under the Securities Act and under the
applicable securities laws of such states, or unless exemptions from such
registration requirements are available. In particular, such Purchaser is aware
that such Note, Warrant and Conversion Shares are "restricted securities," as
such term is defined in Rule 144 promulgated under the Securities Act of 1933.
Such Purchaser further understands that sales or transfers of such Note, Warrant
and Conversion Shares are further restricted by state securities laws and the
provisions of this Agreement.

                  3.8 LEGEND. Such Purchaser understands and acknowledges that
the Note, the Warrant and the Conversion Shares shall bear a legend
substantially as follows:

         "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
         1933, AS AMENDED (THE "SECURITIES ACT"), AND THEY MAY NOT BE OFFERED,
         SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i)
         PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS
         BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE SECURITIES, OR
         (ii) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER THE
         SECURITIES ACT."

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                  3.9 RECEIPT OF INFORMATION. Each Purchaser has received and
reviewed this Agreement, his attorney and his accountant have had access to, and
an opportunity to review all documents and other materials requested of the
Company; he and they have been given an opportunity to ask any and all questions
of, and receive answers from, the Company concerning the terms and conditions of
the offering and to obtain all information he or they believe necessary or
appropriate to evaluate the suitability of an investment in the Notes; and, in
evaluating the suitability of an investment in the Notes, he and they have not
relied upon any representations or other information (whether oral or written)
other than as set forth in the documents and answers referred to above. Each
Purchaser further acknowledges that, by virtue of his position as an officer
and/or director of the Company, he has sufficient knowledge of the business
operations and financial condition of the Company to evaluate an investment in
the Company.

         4. CONDITIONS TO CLOSING.

                  4.1 CONDITIONS TO CLOSING BY THE PURCHASERS. The obligations
of each Purchaser to purchase Notes at the Closing is subject to the fulfillment
to such Company's satisfaction of each of the following conditions:

                  (a) REPRESENTATIONS AND WARRANTIES CORRECT; PERFORMANCE. The
representations and warranties made by the Company shall be true and correct in
all material respects when made, and shall be true and correct in all material
respects as of the Closing as if made at the Closing. All covenants, agreements
and conditions contained in this Agreement to be performed or complied with by
the Company at or prior to the Closing shall have been performed or complied
with in all material respects.

                  (b) QUALIFICATIONS. As of the Closing, all authorizations,
approvals or permits of, or filings with, any governmental authority, including
state securities or "Blue Sky" filings, that are required by laws in connection
with the lawful sale and issuance of the Notes shall have been duly obtained by
the Company, and shall be effective as of the Closing.

                  4.2 CONDITIONS TO CLOSING BY THE COMPANY. The obligation of
the Company to sell the Notes at the Closing is subject to the fulfillment to
the Purchaser's satisfaction of each of the following conditions.

                  (a) REPRESENTATIONS AND WARRANTIES CORRECT; PERFORMANCE. The
representations and warranties made by each Purchaser shall be true and correct
in all material respects when made, and shall be true and correct in all
material respects as of the Closing as if made at the Closing. All covenants,
agreements and conditions contained in the Agreement to be performed or complied
with by each Purchaser at or prior to the Closing shall have been performed or
complied with in all material respects.

                  (b) QUALIFICATIONS. As of the Closing, all authorizations,
approvals or permits of, or filings with, any governmental authority that are
required by law in connection with the lawful purchase of the Notes shall have
been duly obtained by each Purchaser, and, except as they may be appropriately
filed after the Closing, shall be effective as of the Closing.

                  (c) SUITABILITY OF PURCHASER. Each Purchaser shall be an
officer and/or director of the Company at Closing.

         5. EVENTS OF DEFAULT AND REMEDIES.

                  5.1 EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY; WAIVER
OF DEFAULT. If one or more of the following events ("Events of Default") shall
have occurred and be continuing:

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                  (a) default in the payment of all or any part of the principal
or interest of any of the Notes on their respective maturity dates; or

                  (b) failure on the part of the Company duly to observe or
perform any other of the material covenants or agreements on the part of the
Company contained herein, or in the Note or Warrant (other than that set forth
in clause (a) above) for a period of thirty (30) days after the date on which
written notice specifying such failure, stating that such notice is a "Notice of
Default" hereunder and demanding that the Company remedy the same, shall have
been given by registered or certified mail, return receipt requested, by or on
behalf of the Purchasers to the Company; or

                  (c) the Company shall fail to make any payment in respect of
any debt when due or within any applicable grace period, where such failure
continues and/or is not fully remedied within thirty (30) days or any event or
condition shall occur which results in the acceleration of the maturity of any
debt or enables (or, with the giving of notice or lapse of time or both, would
enable) the holder of such debt or any person acting on such holder's behalf to
accelerate the maturity thereof; or

                  (d) the Company pursuant to or within the meaning of any
bankruptcy law (i) commences a voluntary case or proceeding; (ii) consents to
the entry of an order for relief against it in an involuntary case or
proceeding; (iii) consents to the appointment of a custodian of it or for all or
substantially all of its property; (iv) makes a general assignment for the
benefit of its creditors; or (v) admits in writing its inability to pay its
debts as the same become due; or

                  (e) a court of competent jurisdiction enters an order or
decree under any bankruptcy law that (i) is for relief against the Company in an
involuntary case; (ii) appoints a custodian of the Company or for all or
substantially all of the property of the Company; or (iii) orders the
liquidation of the Company, and such order or decree remains unstayed and in
effect for sixty (60) days;

THEN the Purchasers (by vote of a majority-in-interest of the outstanding
Notes), by notice in writing to the Company (the "Acceleration Notice"), may
declare the Notes to be due and payable immediately, and upon any such
declaration the same shall become immediately due and payable; provided, that if
an Event of Default specified in Section 5.1(d) or 5.1(e) occurs, the Notes
shall become and be immediately due and payable without any declaration or other
act on the part of the Holder.

                  5.2 POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER OF DEFAULT. No right or remedy herein conferred upon or reserved to the
Purchasers is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy. No delay or
omission of the Purchasers to exercise any right or power accruing upon any
Event of Default occurring and continuing as aforesaid shall impair any such
right or power or shall be construed to be a waiver of any such Event of Default
or an acquiescence therein; and every power and remedy given by the Notes or by
law may be exercised from time to time, and as often as shall be deemed
expedient, by the Purchasers.

         6. GENERAL PROVISIONS.

                  (a) ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement,
the Notes and the Warrants constitute the entire agreement between the parties
hereto with respect to the subject matter contained herein and supersede all
prior oral or written agreements, if any, between the parties hereto with
respect to such subject matter. Any amendments hereto or modifications hereof
must be made in writing and executed by the Company and the Purchasers holding
more than fifty-one percent (51%) of the aggregate principal amount of the

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outstanding Notes. Any failure by the Company or the Purchasers to enforce any
rights hereunder shall not be deemed a waiver of such rights. The
representations and warrants set forth in this Agreement shall survive the
Closing.

                  (b) NOTICES. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given (i) upon personal delivery to the party to be notified, (ii)
four (4) days after deposit with the United States Post Office, by registered or
certified mail, postage prepaid, or (iii) one day after deposit with a reputable
overnight courier service and addressed to the party to be notified at the
address indicated for such party on the signature pages hereof, or at such other
address as such party may designate by ten (10) days' advance written notice to
the other parties.

                  (c) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California without giving
effect to conflict of laws principles.

                  (d) BINDING EFFECT; ASSIGNMENT. This Agreement and the various
rights and obligations arising hereunder shall inure to the benefit of and be
binding upon the Company and the Purchasers and each of their respective
successors and assigns. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be transferred or assigned (by operation of law
or otherwise) by any of the parties hereto without the prior written consent of
the other parties hereto. Any transfer or assignment of any of the rights,
interests or obligations hereunder in violation of the terms hereof shall be
void and of no force or effect.

                  (e) HEADINGS. The headings or captions contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

                  (f) SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by virtue of any
rule of law, or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the maximum extent possible.

                  (g) COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.

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

                                            COMPANY:

                                            SPACEDEV, INC.

                                            By:
                                                --------------------------------
                                                Name: James W. Benson
                                                Title:  Chief Executive Officer

                                            Address:  13855 Stowe Drive
                                                      Poway, California 92064
                                                      Attention: James W. Benson

                                            PURCHASER:

                                            ------------------------------------
                                            Signature

                                            ------------------------------------
                                            Print Name

                                            Address:
                                                     ---------------------------

                                                     ---------------------------
                                                     Attention:

                   [SIGNATURE PAGE TO NOTE PURCHASE AGREEMENT]

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                                    EXHIBIT A
                                    ---------

                            SERIES A CONVERTIBLE NOTE
                            -------------------------

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                                    EXHIBIT B
                                    ---------

                                 FORM OF WARRANT
                                 ---------------<PAGE>

                                                                     Exhibit 4.2

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE,
TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

                     SERIES A SUBORDINATED CONVERTIBLE NOTE
                     --------------------------------------

$______________                                             _____________, 200__

         SpaceDev, Inc., a Colorado corporation (the "COMPANY"), for value
received, hereby promises to pay to _________________ ("HOLDER"), the principal
sum of ________________ Dollars ($______________) with interest as provided
below.

         1. PAYMENT.

                  1.1 PAYMENT. Subject to the provisions of Section 2 hereof
relating to the conversion of this Note, principal and accrued interest hereof
shall be payable on the six-month anniversary hereof (the "MATURITY DATE"), or
upon the Company's receipt of new capital in an amount of Three Hundred Fifty
Thousand Dollars ($350,000) or more, whichever occurs first.

                  Payments hereunder shall be made by the Company to the Holder,
at the address as provided to the Company by the Holder in writing, in lawful
money of the United States of America. Interest shall accrue with respect to the
unpaid principal amount of the loan from the date of this Note until such
principal is paid or converted as provided in Section 2 hereof at a rate of
2.03% per annum (computed on the basis of a 365-day year).

                  1.2 PREPAYMENT. The Company shall have the right at any time
and without penalty to prepay, in whole or in part, the principal outstanding
and/or the interest accrued hereunder.

                  1.3 ACCELERATION. Subject to the provisions of Section 3
hereof, the principal outstanding hereunder and all accrued and unpaid interest
shall be immediately due and payable in full without notice, demand,
presentment, protest or other formalities of any kind in the event that (a) a
decree or order by a court having jurisdiction adjudging the Company bankrupt or
insolvent, or approving a petition seeking reorganization of the Company is
entered, and such decree or order is unstayed and in effect for a period of
sixty days, or (b) a voluntary case under relevant bankruptcy law is commenced,
or the Company consents to the commencement of a bankruptcy or insolvency
proceeding against it or to the appointment of a receiver, liquidator, assignee,
trustee or similar official (an "Insolvency Event").

         2. CONVERSION.

                  2.1 CONVERSION. The Company may, at its option, convert this
Note into shares of Common Stock ("Stock") on the Maturity Date. The Company
shall designate and authorize issuance of the Stock (as described in the Note
Purchase Agreement) to the Holder of this Note, and all other holders of notes
issued on the same terms and conditions as this Note. The Company shall give
written notice of its election to convert this Note to Holder at least fifteen
(15) days prior to the Maturity Date.

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                  2.2 CONVERSION PRICE. The number of shares of Stock to be
issued upon such conversion shall equal the aggregate amount of principal under
the Note then outstanding divided by a per share price equal in amount to
twenty-day average asking price of the Company's common stock immediately
preceding the date hereof less 10%, or $_____ per share.

                  2.3 DELIVERY OF NOTE AND SHARE CERTIFICATES. Upon conversion
of this Note pursuant hereto, the Holder, by acceptance of this Note, agrees to
deliver the executed original of this Note to the Company within twenty (20)
business days of such conversion, and to execute a standard form of Purchase
Agreement and other agreements as are necessary to document the issuance of the
shares of Stock. On, or as soon as reasonably practicable after, such conversion
and execution, the Company shall issue and deliver to the Holder a certificate
or certificates for the number of full shares of Stock to which the Holder is
entitled and a check or cash with respect to any fractional interest in a share
of Stock. The Company covenants that all shares of Stock issued upon conversion
will, upon issuance, be fully paid and non-assessable and free from all taxes,
liens and charges caused or created by the Company with respect to the issue
thereof.

         3. SUBORDINATION. The indebtedness evidenced by this Note is hereby
expressly subordinated, to the extent and in the manner hereinafter set forth,
in right of payment to the prior payment in full of all the Company's Senior
Indebtedness, as hereinafter defined.

                  3.1 SENIOR INDEBTEDNESS. As used in this Note, the term
"Senior Indebtedness" shall mean the principal or unpaid interest on, (i) all
indebtedness of the Company or with respect to which the Company is a guarantor,
outstanding on the date hereof or entered into hereafter to banks, insurance
companies, equipment lessors or other lending institutions regularly engaged in
the business of lending money, which is for the money borrowed by the Company or
a subsidiary of the Company, whether or not secured, and (ii) any deferrals,
renewals, or extensions of any such indebtedness or any debentures, notes or
other evidence of indebtedness issued in exchange for such Senior Indebtedness.

                  3.2 DEFAULT ON SENIOR INDEBTEDNESS. If there should occur any
Insolvency Event, sale of all or substantially all of the assets, dissolution,
liquidation, or any other marshalling of the assets and liabilities of the
Company or if this Note shall be declared due and payable upon the occurrence of
an event of default with respect to any Senior Indebtedness, then (i) no amount
will be paid by the Company in respect of the principal of or interest on this
Note at the time outstanding, unless and until the principal of and interest on
the Senior Indebtedness then outstanding will first be paid in full, and (ii) no
claim or proof of claim will be filed with the Company by or on behalf of the
Holder which shall assert any right to receive any payments in respect of the
principal of and interest on this Note, except subject to the payment in full of
the principal of and interest on all of the Senior Indebtedness then
outstanding. If there occurs an event of default which has been declared in
writing with respect to any Senior Indebtedness, or in the instrument under
which any Senior Indebtedness is outstanding, permitting the Holder of such
Senior Indebtedness to accelerate the maturity thereof, then, unless and until
such event of default shall have been cured or waived or shall have ceased to
exist, or all Senior indebtedness shall have been paid in full, no payment will
be made in respect of the principal of or interest on this Note, unless within
three (3) months after the happening of such event of default, the maturity of
such Senior Indebtedness shall not have been accelerated.

                  3.3 EFFECT OF SUBORDINATION. Subject to the rights, if any, of
the holders of Senior Indebtedness under this Section 3 to receive cash,
securities and other properties otherwise payable or deliverable to the Holder,
nothing contained in this Section 3 shall impair, as between the Company and the
Holder, the obligation of the Company, which is absolute and unconditional, to
pay to the Holder hereof the principal hereof and interest hereon as and when
the same become due and payable, or shall prevent the Holder, upon default
hereunder, from exercising all rights, powers and remedies otherwise provided
herein or therein or by applicable law.

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         4. AMENDMENT PROVISIONS. This Note may not be amended or modified, nor
may any of its terms be waived, except by written instruments signed by the
Company and at least 51% of the holders of the Notes, and then only to the
extent set forth therein.

         5. SEVERABILITY. If any provision of this Note is determined to be
invalid, illegal or unenforceable, in whole or in part, the validity, legality
and enforceability of any of the remaining provisions or portions of this Note
shall not in any way be affected or impaired thereby and this Note shall
nevertheless be binding between the Company and the Holder.

         6. BINDING EFFECT. This Note shall be binding upon, and shall inure to
the benefit of, the Company and the Holder thereof and their respective
successors and assigns.

         7. NOTICES. Any notice required by any provision of this Note to be
given to the holders of Notes shall be in writing and may be delivered by
personal service, e-mail or facsimile or sent by registered or certified mail,
return receipt requested, with postage thereon fully prepaid. All such
communications shall be addressed to the Holder of record at its address
appearing on the books of the Company.

         8. NO RIGHTS AS SHAREHOLDER. This Note, as such, shall not entitle the
Holder to any rights as a shareholder of the Company, except as otherwise
specified herein.

         9. HEADINGS AND GOVERNING LAW. The descriptive headings in this Note
are inserted for convenience only and do not constitute a part of this Note. The
validity, meaning and effect of this Note shall be determined in accordance with
the laws of the State of California, without regard to principles of conflicts
of law.

         10. CONSIDERATION. In consideration for this Note, payment shall have
been made by Holder to the account of SpaceDev, Inc., by check or wire
remittance to a bank and account number to be designated the Company, prior to
the date first set forth above.

         IN WITNESS WHEREOF, SpaceDev, Inc. has duly caused this Note to be
signed in its name and on its behalf by its duly authorized officer as of the
date hereinabove written.

                                               SPACEDEV, INC.

                                               By:_______________________
                                                  James W. Benson, CEO

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