SEPARATION AGREEMENT AND GENERAL RELEASE
                    ----------------------------------------
     THIS  SEPARATION AGREEMENT AND GENERAL RELEASE (hereinafter "AGREEMENT") is
made and entered into by and between Dario Emanuel DaPra ("DaPra") and SpaceDev,
Inc.  ("EMPLOYER"),  and  inures  to  the benefit of each of EMPLOYER's current,
former  and  future  parents,  subsidiaries,  related entities, employee benefit
plans  and  their  fiduciaries,  predecessors,  successors, officers, directors,
shareholders,  agents,  employees  and  assigns.

                                    RECITALS
                                    --------
     A.     DaPra  has  been,  for  just  under  three  months,  an  employee of
EMPLOYER,  most  recently  as  its  Vice  President  of  Engineering;

     B.     DaPra  has agreed to tender his  resignation  as  an  employee  with
EMPLOYER,  effective  on  April 30, 2004 (referred to herein as the "Resignation
Date"),  and  EMPLOYER has agreed to accept DaPra's resignation upon its tender,
subject  to  the  terms  and  conditions  set  forth  herein;

     C.     DaPra  has  also   agreed  that,  beginning on  March  8,  2004  and
continuing  through  the  Resignation  Date  (the  "Transition Period"), he will
perform transition support for EMPLOYER, according to the following schedule: no
more  than  four  (4)  hours  per  week  until  Resignation  Date, as reasonably
requested  by  EMPLOYER,  and  that  beginning  March 5, 2003, DaPra agrees to a
cessation  of  vesting  of  all granted stock options, and beginning on March 8,
2004  and continuing through the Resignation Date, DaPra will receive 50% of his
salary  plus full benefits as stated herein (the "Modified Salary Terms"), which
transition  support  and Modified Salary Terms are accepted by EMPLOYER, subject
to  the  terms  and  conditions  hereof;

     D.     DaPra  and   EMPLOYER  wish  permanently  to  resolve  any  and  all
potential  disputes  arising  out  of  DaPra's  employment  with EMPLOYER or the
cessation  of  that  employment.

     NOW, THEREFORE, for and in consideration of the execution of this AGREEMENT
and  the  mutual  covenants  contained in the following paragraphs, EMPLOYER and
DaPra  agree  as  follows:

     1.     INCORPORATION  OF  RECITALS.  The Recitals and identification of the
parties  to,  and beneficiaries of, this AGREEMENT are incorporated by reference
as  though  fully  set  forth  herein.
     2.  NO  ADMISSION  OF LIABILITY. The parties agree that this AGREEMENT, and
performance  of  the  acts  required  by it, does not constitute an admission of
liability, culpability, negligence or wrongdoing on the part of anyone, and will
not  be  construed  for  any  purpose as an admission of liability, culpability,
negligence  or  wrongdoing by any party and/or by any party's current, former or
future  parents,  subsidiaries,  related  entities,  predecessors,   successors,
officers,  directors,  shareholders,  agents,  employees  and  assigns.

<PAGE>

     3.  SEVERANCE  BENEFIT.  EMPLOYER agrees that, upon this AGREEMENT becoming
effective  (as defined in Section 30, herein), it will pay to DaPra severance in
the  form  of  continued salary payment, according to the Modified Salary Terms,
through  April  30,  2004 (the "Severance Benefit"), less applicable withholding
taxes,  which  Severance Benefit DaPra is not otherwise entitled to receive. The
Severance  Benefit  shall  be  paid  in  equal  installments, corresponding with
EMPLOYER's  regular  payroll  schedule.  Severance  payments  and  benefits will
terminate  on  April  30,  2004.

     4. DUTIES DURING TRANSITION PERIOD. DaPra agrees that during the Transition
Period  he  will  assist  EMPLOYER  in  its  efforts,  as  requested,  including
specifically  an  orderly  transition  of  all  engineering  contacts,   project
information  and  other material, by rendering all EMPLOYER documents accessible
and  usable  to designated employees of EMPLOYER, and assisting EMPLOYER in such
other  areas  and  manners  as  are  reasonably  requested.

     5.  AT-WILL  STATUS.  Nothing  in  this AGREEMENT is intended to modify the
at-will  nature  of  DaPra's  employment  with  EMPLOYER. Specifically, EMPLOYER
reserves  the  right to effect DaPra's separation prior to the Resignation Date.
Such  separation will not alter EMPLOYER's obligations - including for Severance
and benefit continuation - set forth herein, provided that the separation is not
the  result  of  DaPra's  material  breach  of  any provision of this AGREEMENT.

     6. WAGES AND VACATION TIME PAID. DaPra acknowledges that he will not accrue
vacation  during  the  Transition Period and EMPLOYER is not required to pay him
for any further accrued vacation and/or paid time off (PTO) beyond that provided
through  March  5,  2004.

     7.  RESIGNATION SCRIPT. During the Transition Period, the parties will work
cooperatively  on  the  preparation of resignation script to use by EMPLOYER and
DaPra  to  describe DaPra's separation from EMPLOYER, which script shall be used
following  the  Resignation  Date.

     8.  REFERENCE  REQUESTS.  EMPLOYER  agrees  that  if  it  is  contacted  by
prospective  employers of DaPra without prior notice from DaPra of such contact,
EMPLOYER  will  only  release  information  concerning  the  dates  of   DaPra's
employment  and  the  last position held, and will state that EMPLOYER's company
policy  is  to  release  only such information. In the event that DaPra provides
EMPLOYER  with  advance  notice  of  a  prospective  employer's  request  for  a
reference,  EMPLOYER  will  respond  to  the  reference request according to the
mutually-acceptable  resignation  script  described  in  Section  7,  above.

     9.  OPTION EXERCISE PERIOD. In addition to the Severance Benefit, described
above in Section 3 and as further consideration for the Releases granted herein,
DaPra  shall  be  permitted  to extend the expiration date on options for 40,000
shares  (the  "Extended  Options")  from  ninety  (90) days after termination of
employment to one hundred eighty (180) days from his resignation as an employee.
Any  portion  of  the  Extended Options not purchased at the Extended Expiration
Date  will be forfeit. All other options held by DaPra as of March 5, 2004 shall
cease  to  vest  and  be  forfeited  as  of  that  date.  DaPra  understands and
acknowledges  that  the  Extended  Options  will  no  longer  be  eligible   for
preferential  tax  treatment as Incentive Stock Options (ISOs) under Section 422
of  the  Internal Revenue Code of 1986, as amended, with respect to any exercise
occurring  after the Resignation Date, and he will be taxed upon exercise of the
Extended Options after such date as though they had been issued as Non-Qualified
Stock  Options  (NQLs).

<PAGE>

     10.  EQUIPMENT  &  MATERIALS.  DaPra  will return all property of Employer,
including  keys,  credit  cards,  books,  manuals,  records,  notes,  contracts,
customer  lists,  passwords,  access  to  electronic newsletters, website tools,
Proprietary  Matter, documents (in electronic, hard copy or other media), copies
of  any  of  the  foregoing,  and  any  equipment  furnished to DaPra during his
employment  to  EMPLOYER  on  the Resignation Date or such earlier date mutually
agreed  to  between  DaPra  and  EMPLOYER  in  writing.

     11.  DAPRA'S  GENERAL  RELEASE.  DaPra  for  himself, his heirs, executors,
administrators,  assigns  and  successors,  fully  and  forever   releases   and
discharges  EMPLOYER  and  each  of  its  current,  former  and  future parents,
subsidiaries,  related  entities,  employee benefit plans and their fiduciaries,
predecessors,  successors,  officers, directors, shareholders, agents, employees
and  assigns  (collectively,  "Releasees"),  with respect to any and all claims,
liabilities and causes of action, of every nature, kind and description, in law,
equity or otherwise, which have arisen, occurred or existed at any time prior to
the  signing  of  this  AGREEMENT,  including,  without  limitation, any and all
claims,  liabilities  and causes of action arising out of or relating to DaPra's
employment  with EMPLOYER or the cessation of that employment. In the event that
this  AGREEMENT is executed by DaPra prior to the Resignation Date, DaPra agrees
that on the Resignation Date he will sign the document entitled "Restated Waiver
and General Release," attached hereto as Exhibit "A," and incorporated herein as
a material part of this AGREEMENT. In the event that DaPra does not sign Exhibit
A,  EMPLOYER  will not be obligated to extend the exercise period for the vested
options  previously granted to DaPra and may institute action to recover any and
all  payments  made  to  DaPra  under  this  AGREEMENT.

     12.  KNOWING  WAIVER  OF  EMPLOYMENT-RELATED  CLAIMS. DaPra understands and
agrees  that,  with  the  exception  of  potential   employment-related   claims
identified  below, he is waiving any and all rights he may have had, now has, or
in  the  future  may  have,  to  pursue against any of the Releasees any and all
remedies  available  to  him  under  any  employment-related  causes  of action,
including  without limitation, claims of wrongful discharge, breach of contract,
breach  of  the  covenant  of  good  faith and fair dealing, fraud, violation of
public  policy,  defamation,  discrimination,  personal injury, physical injury,
emotional  distress,  claims under Title VII of the Civil Rights Act of 1964, as
amended,  the  Age  Discrimination  in  Employment  Act,  the   Americans   With
Disabilities  Act,  the Federal Rehabilitation Act, the Family and Medical Leave
Act,  the  California  Fair  Employment  and  Housing Act, the California Family
Rights  Act,  the  Equal Pay Act of 1963, the provisions of the California Labor
Code  and  any  other  federal,  state or local laws and regulations relating to
employment,  conditions  of  employment  (including  wage  and hour laws) and/or
employment  discrimination. Claims not covered by the release provisions of this
AGREEMENT  are  (i)  claims for unemployment insurance benefits, and (ii) claims
under  the  California  Workers'  Compensation  Act.

     13.  WAIVER  OF  CIVIL  CODE  SEC. 1542. DaPra expressly waives any and all
rights  and benefits conferred upon him by Section 1542 of the Civil Code of the
State  of  California,  which  states  as  follows:

<PAGE>

          "A  GENERAL  RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
          NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
          RELEASE,  WHICH  IF  KNOWN  BY  HIM  MUST HAVE MATERIALLY AFFECTED HIS
          SETTLEMENT  WITH  THE  DEBTOR."

DaPra expressly agrees and understands that the Release given by him pursuant to
this  AGREEMENT  applies  to  all unknown, unsuspected and unanticipated claims,
liabilities  and  causes  of  action,  which  he  may  have  against  EMPLOYER.

     14.  EMPLOYER'S  RELEASE.  As  of  the date of this AGREEMENT, EMPLOYER for
itself and each of its current, former and future parents, subsidiaries, related
entities,  employee  benefit  plans   and   their   fiduciaries,   predecessors,
successors,  officers,  directors,  shareholders, agents, employees and assigns,
fully  and  forever  releases  and  discharges  DaPra,  his  heirs,   executors,
administrators,  assigns  and  successors,  with  respect to any and all claims,
liabilities and causes of action, of every nature, kind and description, in law,
equity  or  otherwise,  by  EMPLOYER, including, without limitation, any and all
claims,  liabilities  and causes of action arising out of or relating to DaPra's
employment  with  EMPLOYER  or the cessation of that employment. Notwithstanding
the  foregoing,  EMPLOYER  does not release any claims it may have against DaPra
for  fraud,  intentional  misconduct  or  breach  of   EMPLOYER's   confidential
information  or  for  breach  of  DaPra's  fiduciary  duty  as an officer and/or
director of EMPLOYER prior to or following the date of this Agreement, which has
damaged  EMPLOYER.

     15.  SEVERABILITY  OF  RELEASE  PROVISIONS.  The  parties agree that if any
provision  of  the  releases  given  by them under this AGREEMENT is found to be
unenforceable, it will not affect the enforceability of the remaining provisions
and  the  courts may enforce all remaining provisions to the extent permitted by
law.

     16.  PROMISE  TO REFRAIN FROM SUIT OR ADMINISTRATIVE ACTION. DaPra promises
and  agrees  that  he  will never sue EMPLOYER or any of the other Releasees, or
otherwise  institute or participate in any legal proceedings against EMPLOYER or
any  of  the  other  Releasees, with respect to any claim covered by the release
provisions of this AGREEMENT, including but not limited to claims arising out of
DaPra's  employment  with EMPLOYER or the termination of that employment, unless
he  is  compelled  by legal process to do so. DaPra also represents and warrants
that  he  does not believe he has the basis to file, nor does he intend to file,
any  charge or claim with any administrative agency, including the United States
Equal  Employment  Opportunity  Commission and the California Department of Fair
Employment  and  Housing.

     17.  PROMISE  TO  REFRAIN  FROM ASSISTING IN SUIT OR ADMINISTRATIVE ACTION.
DaPra  promises  and agrees that he shall not advocate or incite the institution
of,  or  assist or participate in, any suit, complaint, charge or administrative
proceeding  by  any other person against EMPLOYER or any of the other Releasees,
unless  compelled  by  legal  process  to  do  so.

     18.  CONFIDENTIALITY  OF AGREEMENT. DaPra and Employer mutually promise and
agree  that, unless compelled by legal or SEC process, they will not disclose to
others  and  will  keep  confidential  both  the  fact  of and the terms of this
AGREEMENT,  including  the  amounts  referred  to  herein,  except that they may
disclose this information to their attorneys, accountants and other professional
advisors  to  whom  the  disclosure  is necessary to accomplish the purposes for
which  they  have  consulted  such  professional  advisors.  DaPra  and Employer
mutually  promise and agree that, unless compelled by legal or SEC process, they
will not disclose to any present or former employees of EMPLOYER the fact or the
terms  of  this  settlement.

<PAGE>

     19.  PROMISE  TO  MAINTAIN  CONFIDENTIALITY  OF   EMPLOYER'S   CONFIDENTIAL
INFORMATION. DaPra acknowledges that due to the position he has occupied and the
responsibilities  he  has  had  at  EMPLOYER,  he  has  received    confidential
information  concerning  EMPLOYER's  products,  procedures,  customers,   sales,
prices,  contracts,  and the like. DaPra hereby promises and agrees that, unless
compelled  by  legal  process,  he  will  not  disclose  to others and will keep
confidential  all  information  he  has  received  while  employed  by  EMPLOYER
concerning  its products and procedures, the identities of its customers, sales,
prices,  the  terms  of  any  of its contracts with third parties, and the like.
DaPra agrees that a violation by him of the foregoing obligation to maintain the
confidentiality  of  EMPLOYER's  confidential  information  will   constitute  a
material  breach  of  this  AGREEMENT.  DaPra specifically confirms that he will
continue  to comply with the terms of the EMPLOYER's proprietary information and
inventions  policy.  DaPra  agrees  that  it  would  be  difficult to compensate
EMPLOYER  fully  for  damages  for any violation of this provision. Accordingly,
DaPra  specifically  agrees  that  EMPLOYER  shall  be entitled to temporary and
permanent  injunctive  relief  to enforce the provisions of this Agreement. This
provision  with  respect  to  injunctive relief shall not, however, diminish the
right of EMPLOYER to claim and recover damages in addition to injunctive relief.

     20.  INTEGRATED  AGREEMENT.  The  parties  acknowledge  and  agree  that no
promises or representations were made to them which do not appear written herein
and  that  this  AGREEMENT  contains  the entire agreement of the parties on the
subject  matter  thereof.  The parties further acknowledge and agree that parole
evidence  shall  not  be  required  to  interpret  the  intent  of  the parties.

     21. VOLUNTARY EXECUTION. The parties hereby acknowledge that they have read
and  understand this AGREEMENT and that they sign this AGREEMENT voluntarily and
without  coercion.

     22. WAIVER, AMENDMENT AND MODIFICATION OF AGREEMENT. The parties agree that
no waiver, amendment or modification of any of the terms of this AGREEMENT shall
be effective unless in writing and signed by all parties affected by the waiver,
amendment  or  modification.  No waiver of any term, condition or default of any
term  of  this  AGREEMENT  shall  be  construed  as  a waiver of any other term,
condition  or  default.

     23. REPRESENTATION BY COUNSEL. The parties represent that they have had the
opportunity  to be represented in negotiations for, and the preparation of, this
AGREEMENT by counsel of their own choosing, and that they have entered into this
AGREEMENT  based  upon  their  own  judgment  and  not  in  reliance  upon   any
representations  or promises made by the other party, other than those contained
within  this  AGREEMENT.  The  parties further agree that if any of the facts or
matters  upon which they now rely in making this AGREEMENT hereafter prove to be
otherwise,  this  AGREEMENT  will  nonetheless  remain in full force and effect.

     24.  CALIFORNIA  LAW.  The  parties agree that this AGREEMENT and its terms
shall  be  construed  under  California  law.

<PAGE>

     25. AGREEMENT TO ARBITRATE CLAIMS ARISING FROM AGREEMENT. The parties agree
that  if  any dispute arises concerning interpretation and/or enforcement of the
terms  of  this AGREEMENT, said dispute shall be resolved by binding arbitration
conducted  in  San Diego, California in accordance with the American Arbitration
Association's  National Rules for the Resolution of Employment Disputes, then in
effect  ("AAA's  National  Rules").  In  the  event  that such a dispute arises,
counsel for both parties will attempt to jointly select an arbitrator. If unable
to  do  so,  the  procedures  outlined in the AAA's National Rules shall govern.

     26.  DRAFTING.  The  parties  agree  that this AGREEMENT shall be construed
without  regard to the drafter of the same and shall be construed as though each
party  to this AGREEMENT participated equally in the preparation and drafting of
this  AGREEMENT.

     27.  COUNTERPARTS.  This  AGREEMENT  may be signed in counterparts and said
counterparts  shall  be  treated  as  though  signed  as  one  document.

     28.  PERIOD  TO  CONSIDER  TERMS OF AGREEMENT. DaPra acknowledges that this
AGREEMENT was presented to him on March 11, 2004 and that he is entitled to have
21 days' time in which to consider the AGREEMENT. DaPra acknowledges that he has
obtained  or had the opportunity to obtain the advice and counsel from the legal
representative  of  his choice and executes this AGREEMENT having had sufficient
time  within  which  to consider its terms. DaPra represents that if he executes
this  AGREEMENT  before  21  days have elapsed, he does so voluntarily, upon the
advice  and  with  the  approval  of  his legal counsel, and that he voluntarily
waives  any  remaining  consideration  period.

     29.  REVOCATION  OF  AGREEMENT. DaPra understands that after executing this
AGREEMENT,  he  has  the  right  to  revoke  it  within seven (7) days after his
execution of it. DaPra understands that this AGREEMENT will not become effective
and enforceable unless the seven-day revocation period passes and DaPra does not
revoke  the  AGREEMENT in writing. DaPra understands that this AGREEMENT may not
be  revoked  after the seven-day revocation period has passed. DaPra understands
that  any  revocation of this AGREEMENT must be made in writing and delivered to
EMPLOYER  at  13855  Stowe  Drive, Poway, CA 92064, within the seven-day period.

     30.  EFFECTIVE DATE. This AGREEMENT shall become effective and binding upon
the parties eight (8) days after DaPra's execution hereof, so long as he has not
revoked  it  within the time period and in the manner specified in paragraph 29,
above.

<PAGE>

Dated:  March  18, 2004                          By:  /s/  Dario  Emanuel  DaPra
        --------------                               ---------------------------
                                                           Dario  Emanuel  DaPra

                                                                 SPACEDEV,  INC.
Dated:  March  11, 2004                              By:  /s/  James  W.  Benson
        ---------------                              ---------------------------
                                                               James  W.  Benson
                                                       Chief  Executive  Officer

<PAGE>
                                   EXHIBIT "A"

                       RESTATED WAIVER AND GENERAL RELEASE
                       -----------------------------------

     This  Restated  Waiver  and  General  Release  (the  "Restated Release") is
executed  by  Dario  Emanuel  DaPra  ("DaPra"),  for  the  benefit of his former
employer,  SpaceDev, Inc. ("Employer"), and is intended to be a material part of
the consideration proffered by DaPra and received by Employer under that certain
Separation  Agreement  and  General  Release  (the  "Release  Agreement").

     A.  DaPra  executed  the  Release  Agreement  on  March  11,  2004;

     B.  The  Resignation  Date  (as  defined in the Release Agreement) occurred
after  DaPra's  execution  of  the  Release  Agreement;

     C. Pursuant to Section 12 of the Release Agreement, DaPra agreed to execute
this  Restated  Release,  under  the  circumstances  described  in  Recital  B.

     NOW  THEREFORE,  in  exchange  for  his  continued receipt of the Severance
Benefit  (as described in the Release Agreement), DaPra reaffirms and represents
as  follows:

     1.  DaPra  for  himself,  his heirs, executors, administrators, assigns and
successors,  fully  and forever releases and discharges Employer and each of its
current,  former  and  future  parents, subsidiaries, related entities, employee
benefit  plans  and  their  fiduciaries,  predecessors,  successors,   officers,
directors,   shareholders,  agents,   employees   and   assigns   (collectively,
"Releasees"),  with  respect  to  any  and all claims, liabilities and causes of
action,  of  every  nature,  kind  and description, in law, equity or otherwise,
which  have arisen, occurred or existed at any time prior to the signing of this
Restated Release, including, without limitation, any and all claims, liabilities
and  causes  of  action  arising  out  of or relating to DaPra's employment with
Employment  or  the  cessation  of  that  employment.

     2.  With the exception of potential employment-related claims identified in
the  Release Agreement, DaPra is waiving any and all rights he may have had, now
has,  or  in the future may have, to pursue against any of the Releasees any and
all  remedies  available  to  him under any employment-related causes of action,
including  without limitation, claims of wrongful discharge, breach of contract,
breach  of  the  covenant  of  good  faith and fair dealing, fraud, violation of
public  policy,  defamation,  discrimination,  personal injury, physical injury,
emotional  distress,  claims under Title VII of the Civil Rights Act of 1964, as
amended,  the  Age  Discrimination  in  Employment   Act,  the  Americans   With
Disabilities  Act,  the Federal Rehabilitation Act, the Family and Medical Leave
Act,  the  California  Fair  Employment  and  Housing Act, the California Family
Rights  Act,  the  Equal Pay Act of 1963, the provisions of the California Labor
Code  and  any  other  federal,  state or local laws and regulations relating to
employment,  conditions  of  employment  (including  wage  and hour laws) and/or
employment  discrimination.

     3.     DaPra  expressly  waives  any  and all rights and benefits conferred
upon  him  by  Section  1542 of the Civil Code of the State of California, which
states  as  follows:

<PAGE>

          "A  GENERAL  RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
          NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
          RELEASE,  WHICH  IF  KNOWN  BY  HIM  MUST HAVE MATERIALLY AFFECTED HIS
          SETTLEMENT  WITH  THE  DEBTOR."

DaPra expressly agrees and understands that the Release given by him pursuant to
this  Restated  Release  applies  to  all unknown, unsuspected and unanticipated
claims,  liabilities and causes of action, which he may have against Employer or
any  of  the  other  Releasees.

     4.     DaPra  represents and warrants that, as of the date he executes this
Restated  Release,  he  does  not  believe he has the basis to file, nor does he
intend  to  file,  any charge or claim with any administrative agency, including
the  United  States  Equal  Employment Opportunity Commission and the California
Department  of  Fair  Employment  and  Housing,  regarding  his  employment with
Employer,  or  the  cessation  of  that  employment.

Dated:
        ----------------                    --------------------------
                                                 Dario  Emanuel  DaPra


<PAGE>