EXHIBIT
      10.1







May
      31,
      2007







As
      a
      preferred shareholder, investor, and partner in SpaceDev, we appreciate your
      continued support of our Company.  We have a lot going on here at SpaceDev,
      and as you have seen in the press, we have recently announced several major
      new
      programs and initiatives. We continue to work on interesting and exciting
      projects and proposals, and see real progress in the integration of our
      acquisition. Our ultimate goal is to create a real increase in shareholder
      value
      for our loyal and dedicated stockholders.





We
      are
      considering raising some additional working capital to fuel our growth and
      expansion.  We have several developmental programs that are now moving
      into production and need to support this growth as was projected by our business
      plan.  We have several ways to potentially accomplish this, but before
      turning to the outside and new participants, we thought that we would present
      you with a creative and potentially rewarding way to thank you for being an
      early stage supporter of our business. One of the things we are always concerned
      with is dilution.  In a growth company, such as ours, capital is
      needed, but in seeking it, we strive to minimize the number of shares and
      maximize the return for our current investors.





To
      that
      end, we would like to present to you, as someone who currently holds warrants,
      an added incentive for you to exercise some or all of your vested warrants.
       This would bring some additional working capital into the Company and, at
      the same time, reduce the Company’s share overhang, which is one factor that we
      believe is limiting the Company’s market stock price.  The basis of
      this incentive is that we would likely have to provide a discount to the market
      price for any new external financiers, and our view is that we would prefer
      to
      offer a discount in the form of a value proposition to you first.





Our
      offer
      is that we are willing to discount the exercise price of your warrants by 20%
      from the current fair market value. Fair market value is defined as the weighted
      average of the closing prices for the twenty (20) trading days prior to the
      exercise of the warrant. This means that if you hold a warrant on 1,000 shares
      of SpaceDev common stock and the fair market value is $1.00 per share, we will
      reduce the exercise price of your warrants to $0.80 per share, replacing the
      original exercise price as defined in the warrant. This offer expires at 5:00PM
      (PDT) on June 15, 2007.





Although
      we hope you seriously consider this proposal, there is no requirement to
      exercise any or all of your vested warrants at this time, and there will be
      no
      penalty if you choose not to do so.  We are offering this primarily in
      appreciation for your continued support, and as a thank you and a
      reward.  However, the discount or subsidy may not be offered again and
      should be considered a one-time offer.  Also, be assured that if you do not
      participate in this program, your warrant terms and conditions will remain
      the
      same as they are now and SpaceDev will continue to honor all of its contractual
      commitments.





Please
      feel free to contact me directly if you have any questions on this potential
      transaction.








Best
      Regards,





SPACEDEV,
      INC.


Richard
      B. Slansky


President
      & Chief Financial Officer