Document:

SUBCONTRACT AGREEMENT

                                      TITLE

     "SMALL TUG:  MINIATURE FLIGHT EXPERIMENT DEMONSTRATING CISLUNAR CARGO TUG
                                  TECHNOLOGIES"

<TABLE>
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<S>                                   <C>

SELLER:  SPACEDEV, INC.. . . . . . .  SUBCONTRACT #:N0405-SC-NNM05AA92C-01
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                                       MODIFICATION #:
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ADDRESS:  13855 STOWE DRIVE. . . . .  SUBPROJECT #:
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          POWAY, CA 92064              DATE:
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                                       TYPE: FIRM FIXED PRICE
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                                       VALUE:
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Non  disclosure
                                  INTRODUCTION

This  Subcontract  Agreement  (the "Subcontract") is made between Andrews Space,
Inc.  (hereinafter  known  as "Buyer"), a Washington corporation, with principal
offices  in  Seattle,  Washington,  and  SpaceDev,  Inc.  (hereinafter  known as
"Seller"),  a  Colorado  corporation,  with principal offices in Poway, CA   The
effort  to be performed by Seller under this Subcontract will be part of Buyer's
Prime Contract (number) NNM05AA92C which has been issued by National Aeronautics
and  Space Administration, "NASA".  The work, defined in Attachment I "Statement
of  Work"  will be performed on a Firm Fixed Price basis, in accordance with the
following  terms  and  conditions

                                      PAGE

1.     INVOICES

Invoices  shall  be prepared in duplicate and contain the following information;
Subcontract  number,  Subproject  number,  labor categories, hourly rates, labor
hours, extended totals by category, material and other direct costs detail shall
be  separated  from  labor  costs.  Invoices  will  be  mailed  to:
(2  copies  unless  otherwise  specified):

          Andrews  Space,  Inc.
          505  5th  Avenue,  South,  Suite  300
          Seattle  WA  98104

Invoices shall clearly reference a unique invoice number on each invoice, period
of  incurred  costs,  and  the  date of the invoice.  Invoices shall include the
"Amount Previously Billed," the "Amount of this Invoice," the "Withhold Amount",
and  the  "Total  Amount  Billed to Date" for each labor category.  Seller shall
submit invoices for the full amount stating the amount of withhold/retention for
each  line  item  billed.

Example:     Line  Item  1          $10,000
             -  Less  withhold        1,000
             Total  Amount  Owed      9,000

2.     1852.216-78  FIRM  FIXED  PRICE  (DEC  1988)

(a)  The  total  firm  fixed  price  of  this  Subcontract  is   $1,249,493

(b)  The following milestone payment schedule is established for the Fixed Price
Base  Year:

 PHASE  I  FIXED  PRICE  MONTHLY  PAYMENT  SCHEDULE
---------------------------------------------------

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<S>         <C>               <C>

WORK MONTH  MONTHLY PAYMENT   CUMULATIVE PAYMENT
----------  ----------------  -------------------
Jun-05 . .  $        100,000  $           100,000
----------  ----------------  -------------------
Jul-05 . .  $        104,000  $           204,000
----------  ----------------  -------------------
Aug-05 . .  $         97,000  $           301,000
----------  ----------------  -------------------
Sep-05 . .  $        131,000  $           432,000
----------  ----------------  -------------------
Oct-05 . .  $        142,000  $           574,000
----------  ----------------  -------------------
Nov-05 . .  $        142,000  $           716,000
----------  ----------------  -------------------
Dec-05 . .  $        135,000  $           851,000
----------  ----------------  -------------------
Jan-06 . .  $        165,000  $         1,001,000
----------  ----------------  -------------------
Feb-06 . .  $         83,194  $         1,166,000
----------  ----------------  -------------------
Mar-06 . .  $      1,249,194
----------  ----------------
</TABLE>

The final payment will not made until the Final Report is accepted by the Buyer.

3.     DESCRIPTION/SPECIFICATIONS/STATEMENT  OF  WORK  (FEB  2001)

The  Description/Specifications/Statement  of  Work  is  Attachment  A-1.

4.     TECHNICAL  AND  CONTRACTUAL  REPRESENTATIVES

The  following  authorized  representatives  are  hereby  designated  for  this
Subcontract:

     Seller:                              Buyer:

     Technical    __Keith Beals_____________        Technical __Eric Wetzel_____

     Contractual  __Michelle  Crouch__________     Contractual  __Marian Joh____

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                                      PAGE

Either  Party  may  change  their authorized representative(s) by giving advance
written  notification  to  the  other  Party.

4.1.     CONTACTS

Contacts  with Buyer which affect the subcontract prices, schedule, statement of
work,  and  Subcontract  terms  and conditions shall be made with the authorized
Contractual Representative. No changes to this Subcontract shall be binding upon
Buyer  unless  incorporated  in  a  written modification to this Subcontract and
signed  by  Buyer's  contractual  representative.

4.2.     CHANGES

Buyer  may,  by  written notice to Seller at any time before completion of  this
Subcontract,  make  changes  within the general scope of this Subcontract in any
one  of  the following:  (a) drawings, designs, or specifications; (b) quantity;
(c)  delivery;  (d)  method  of shipment or routing; and (e) make changes in the
amount  of  Buyer  furnished  property.  If  any  such  change causes a material
increase  or decrease in any hourly rate or the not-to-exceed price, or the time
required for the performance of any part of the work under this Subcontract, the
Buyer  shall make an equitable adjustment in the price, hourly rates or delivery
schedule,  and shall modify the Subcontract not-to-exceed price.  As a condition
precedent  to  any equitable adjustment, the Seller must notify Buyer in writing
of  any  request  for  adjustment  within  twenty (20) days from the date Seller
receives  notice  from  Buyer  of a change, or from the date of any act of Buyer
which  Seller  considers  to  constitute  a  change.  Failure  to  agree  to any
adjustment  shall  be  a  dispute under the Disputes clause of this Subcontract.
However,  Seller shall proceed with the work as changed without interruption and
without  awaiting  settlement  of  any  such  claim.

5.     1852.235-71  KEY  PERSONNEL  AND  FACILITIES  (MAR  1989)

(a)  The  personnel  and/or  facilities  listed  below  (or  specified  in   the
subcontract Schedule) are considered essential to the work being performed under
this  Subcontract. Before removing, replacing, or diverting any of the listed or
specified  personnel  or  facilities,  the  Seller  shall  (1) notify the Buyers
Contractual  Representative  reasonably  in advance and (2) submit justification
(including  proposed substitutions) in sufficient detail to permit evaluation of
the  impact  on  this  Subcontract.

(b)  The  Seller  shall  make  no  diversion  without  the  Buyers   Contractual
Representative's  written  consent;  provided,  that  the  Buyers    Contractual
Representative  may ratify in writing the proposed change, and that ratification
shall  constitute  the  Buyers  Contractual Representative's consent required by
this  clause.

(c)  The list of personnel and/or facilities (shown below or as specified in the
contract  Schedule) may, with the consent of the contracting parties, be amended
from  time  to  time  during  the  course  of  the  Subcontract to add or delete
personnel  and/or  facilities.

          PERSONNEL:  KEITH  BEALS,  DAVE  REVOLINSKI,  MARTY  HOLMQUIST,  JOHN
          JACKLIN,  JOSH  STAMPS, JOE TAMBE, RUSSEL HOWARD, AND BRYCE CARPENTER

FACILITIES:

6.     PERIOD  OF  PERFORMANCE

The  period  of performance of this Subcontract shall be from the effective date
through  MARCH  31,  2006.

7.     OPTION  TO  EXTEND  THE TERM OF THE SUBCONTRACT (FAR 52.217-9) (MAR 2000)

(a)  The  Buyer may extend the term of this subcontract by written notice to the
Seller  within  a  reasonable  time;  provided that the Buyer gives the Seller a
preliminary  written  notice of its intent to extend at least 15 days before the
contract  expires.  The  preliminary  notice  does  not  commit  the Buyer to an
extension.
(b)  If  the  Buyer  exercises  this  option,  the extended Subcontract shall be
negotiated  prior  to  the  end  of  this  Subcontract.

                                       2
                                      PAGE

(c)  The  total  duration  of  this  Subcontract  shall  not   exceed   1  Year.
(d)  The  Buyer  may exercise the option in its entirety or in increments of one
month  or  more.

8.     PATENT  INDEMNITY

The  Seller  shall  indemnify  the  Buyer and its officers, employees and agents
against liability, including costs, for actual or alleged direct or contributory
infringement of, or inducement to infringe, any United States or foreign patent,
trademark  or copyright, arising out of the conduct of Seller in the performance
of  this  Subcontract, provided the Seller is reasonably notified of such claims
and  proceedings.

9.     RISK  OF  LOSS

Unless  the  Subcontract specifically provides otherwise, risk of loss or damage
to  the  supplies  provided  under this Subcontract shall remain with the Seller
until,  and  shall  pass  to  the  Buyer  upon:

(a)     Delivery  of  the  supplies  to  a  carrier, if transportation is f.o.b.
origin;  or

(b)     Delivery  of  the  supplies to the Buyer at the destination specified in
the  Subcontract,  if
transportation  is  f.o.b.  destination.

10.     TAXES

The  Subcontract  price  includes all applicable Federal, State, and local taxes
and  duties.

11.     TERMINATION  FOR  THE  BUYER'S  CONVENIENCE

The  Buyer reserves the right to terminate this Subcontract, or any part hereof,
for  its  sole  convenience.  In the event of such termination, the Seller shall
immediately  stop  all work hereunder and shall immediately cause any and all of
its  suppliers  and  subcontractors  to cease work. Subject to the terms of this
Subcontract, the Seller shall be paid for the portion of the work performed. The
Seller  shall  not  be  required to comply with the cost accounting standards or
subcontract  cost  principles for this purpose. This paragraph does not give the
Buyer  any right to audit the Seller's records. The Seller shall not be paid for
any  work  performed or costs incurred which reasonably could have been avoided.

12.     TERMINATION  FOR  CAUSE

The  Buyer  may terminate this Subcontract, or any part hereof, for cause in the
event  of  any  default by the Seller, or if the Seller fails to comply with any
Subcontract  terms  and conditions, or fails to provide the Buyer, upon request,
with  adequate assurances of future performance. In the event of termination for
cause,  the  Buyer shall not be liable to the Seller for any amount for supplies
or services not accepted, and Buyer may exercise any and all rights and remedies
provided  by law.  If it is determined that the Buyer improperly terminated this
Subcontract  for  default,  such  termination  shall be deemed a termination for
convenience.

13.     TITLE

Unless  specified  elsewhere in this Subcontract, title to items furnished under
this  Subcontract  shall  pass  to  the  Buyer  when  the  Buyer  takes physical
possession.

14.     WARRANTY

The  Seller warrants and implies that the hours and/or items delivered hereunder
are  merchantable  and  fit for use for the particular purpose described in this
Subcontract.

15.     OTHER  COMPLIANCES

The  Seller  shall  comply  with  all  applicable Federal, State and local laws,
executive orders, rules and regulations applicable to its performance under this
Subcontract.

16.     COMPLIANCE  WITH  LAWS  UNIQUE  TO  GOVERNMENT  SUBCONTRACTS

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                                      PAGE

The  Seller  agrees to comply with 31 U.S.C. 1352 relating to limitations on the
use  of  appropriated funds to influence certain Federal subcontracts; 18 U.S.C.
431  relating  to  officials not to benefit; 40 U.S.C. 327, et seq., Subcontract
Work Hours and Safety Standards Act; 41 U.S.C. 51-58, Anti-Kickback Act of 1986;
41  U.S.C.  265  and  10  U.S.C.  2409 relating to whistleblower protections; 49
U.S.C. 40118, Fly American; and 41 U.S.C. 423 relating to procurement integrity.

17.     DISPUTES

(a)  Notwithstanding  any  provisions  herein  to  the  contrary:

     (1)  If  a decision relating to the Prime Contract is made by NASA and such
decision  is  also  related  to this Subcontract, said decision, if binding upon
Buyer  under  the  Prime Contract shall in turn be binding upon Buyer and Seller
with  respect  to  such matter; provided, however, that if Seller disagrees with
any  such  decision  made  by NASA and Buyer elects not to appeal such decision,
Seller  shall have the right reserved to Buyer under the Prime Contract with the
NASA  to  prosecute  a  timely  appeal in the name of Buyer, as permitted by the
contract  or  by  law,  Seller  to bear its own legal and other costs.  If Buyer
elects  not  to  appeal  any  such  decision, Buyer agrees to notify Seller in a
timely  fashion  after  receipt  of  such  decision  and to assist Seller in its
prosecution  of  any such appeal in every reasonable manner.  If Buyer elects to
appeal any such decision of NASA, Buyer agrees to furnish Seller promptly with a
copy  of such appeal.  Any decision upon appeal, if binding upon Buyer, shall in
turn  be binding upon Seller.  Pending the making of any decision, either by the
NASA  or  on  appeal,  Seller  shall proceed diligently with performance of this
Subcontract.

     (2)  If,  as  a  result  of  any decision or judgment which is binding upon
Seller  and  Buyer,  as  provided  above,  Buyer  is unable to obtain payment or
reimbursement  from  the  NASA  under  the Prime Contract for, or is required to
refund  or credit to the NASA, any amount with respect to any item or matter for
which  Buyer  has  reimbursed  or  paid  Seller,  and  which relates to services
performed  by  Seller,  Seller  shall,  on demand, promptly repay such amount to
Buyer.  Additionally,  pending  the  final  conclusion  of any appeal hereunder,
Seller  shall,  on  demand,  promptly  repay  any such amount to Buyer.  Buyer's
maximum  liability  for any matter connected with or related to this Subcontract
which  was  properly  the  subject  of  a claim against the NASA under the Prime
Contract  shall  not  exceed  the  amount  of  Buyer's  recovery  from the NASA.

     (3)  Seller  agrees to provide certification that data supporting any claim
made  by  Seller hereunder is made in good faith and that the supporting data is
accurate  and  complete  to  the  best  of  Seller's knowledge or belief, all in
accordance  with  the  requirements  of  the  Contract  Disputes  Act  of   1978
(41USC601-613)  and  implementing  regulations.  If  any  claim  of  Seller   is
determined to be based upon fraud or misrepresentation, Seller agrees to defend,
indemnify  and  hold  Buyer  harmless  for  any and all liability, loss, cost or
expense  resulting  therefrom.

(b)  Any  dispute  not addressed in paragraph (a) above, will be resolved in the
following  manner:

     (1)  Buyer  and  Seller  agree  to  enter  into  Negotiation to resolve any
dispute.  Both  parties  agree  to  negotiate  in good faith to reach a mutually
agreeable  settlement  within  a  reasonable  amount  of  time.

     (2)  If negotiations are unsuccessful, Buyer and Seller agree to enter into
binding  Arbitration.  The  American  Arbitration  Association  (AAA) Commercial
Arbitration  Rules  (most  recent  edition)  are to govern this Arbitration. The
Arbitration  shall  take  place in Seattle, Washington.  The Arbitrator shall be
bound  to  follow  the  applicable  Subcontract provisions and Washington law in
adjudicating  the  dispute.  It  is agreed by both parties that the Arbitrator's
decision  is  final,  and  that  no  party  may  take  any  action,  judicial or
administrative,  to  overturn  such  decision.  The  judgment  rendered  by  the
Arbitrator  may  be  entered  in  any  court  having  jurisdiction  thereof.

     (3)     Pending  any  decision,  appeal  or  judgment  referred  to in this
provision  or  the  settlement  of  any  dispute arising under this Subcontract,
Seller  shall  proceed  diligently  with  the  performance  of this Subcontract.

18.     INTELLECTUAL  PROPERTY  RIGHTS

Buyer  shall  own  all  right,  title  and  interest  in and to all tangible and
intangible results and items arising in the course of performing or constituting
the  results  of  the  work  performed under this Subcontract, including without
limitation  all  inventions,  know-how,  documentation,  software  and data (the

                                       4
                                      PAGE

"Technology"),  and  all intellectual property rights therein, including without
limitation  all  current  and  future worldwide patents and other patent rights,
copyrights,  trade  secrets, and all applications and registrations with respect
to  and  of the foregoing.  The Seller hereby irrevocably transfers, conveys and
assigns  to  Buyer  in  perpetuity  all  right, title and interest in and to the
Technology,  including  without limitation all intellectual property rights with
respect  thereto.  Buyer shall have the exclusive right to apply for or register
patents,  copyrights,  and  such  other  proprietary  protections  as it wishes.

Except  as  expressly  authorized  in writing by the Buyer, the Seller shall not
retain  any  rights to use, sell, distribute, publish, reproduce, modify, create
derivative  works  of,  make  or  have  made,  any  of  the Technology.  Nothing
otherwise contained in this Subcontract shall be implied to grant the Seller any
license with respect to the Technology or to the work performed hereunder or the
results  thereof.

19.     LIMITED  RELEASE  OF  CONFIDENTIAL  BUSINESS  INFORMATION

(a)  Buyer and/or NASA may find it necessary to release information submitted by
the  Seller,  pursuant to the provisions of this Subcontract, to individuals not
employed  by  NASA  or  Buyer.  Business  information  that  would ordinarily be
entitled  to  confidential treatment may be included in the information released
to  such individuals.  Accordingly, by signature on this Subcontract, the Seller
hereby  consents  to  a limited release of its confidential business information
("CBI").

(b)  Possible  circumstances  where  Buyer  or NASA may release the Seller's CBI
include,  but  are  not  limited  to,  the  following:
     (1)  To  other  contractors  and subcontractors, and their employees tasked
with  assisting  NASA in handling and processing of information and documents in
the  evaluation, the award or the administration of contracts, such as providing
both pre-award and post-award audit support and specialized technical support to
NASA's  technical  evaluation  panels;
     (2)  To NASA contractors and subcontractors, and their employees engaged in
information systems analysis, development, operation, and maintenance, including
performing  data  processing  and  management  functions.

(c)  Buyer  and  NASA  recognizes  its  obligation  to  protect  the Seller from
competitive  harm  that  could  result from the release of such information to a
competitor.  Except  where  otherwise  provided  by law, Buyer/ and or NASA will
permit  the  limited release of CBI under subparagraphs (1) or (2) only pursuant
to  non-disclosure  agreements   signed   by   the   assisting   contractor   or
subcontractor,  and their individual employees who may require access to the CBI
to  perform  the  assisting  contract).

(d)  NASA's  responsibilities  under  the  Freedom  of  Information  Act are not
affected  by  this  clause.

(e)  The  Seller agrees to include this clause, including this paragraph (e), in
all subcontracts at all levels awarded pursuant to this Subcontract that require
the  furnishing  of  confidential  business  information  by  the subcontractor.

20.     INDEMNIFICATION

     (a)  Seller  shall  indemnify,  defend,  and  save  Buyer harmless from and
against  any  and  all  liability  for  injury to persons or property occasioned
wholly  or  in  part  by  an  act  or  omission  of   Seller,   its   lower-tier
subcontractors,  agents,  or  employees, including any and all expense, legal or
otherwise,  incurred by Buyer in the defense of any claim or suit arising out of
the  work performed under this Subcontract; provided, however, that Seller shall
not be liable for injury to persons or property caused by the sole negligence of
Buyer,  its  agents  and  employees. Such damages include but are not limited to
injury or death of persons (including employees of Seller), loss of or damage to
property  (including  loss  of  use  thereof), and economic loss, including lost
profit  or  opportunity,  pollution,  and  environmental impairment, and natural
resource  damages.

     (b)  Buyer shall promptly notify Seller of any claim against Buyer which is
covered by this indemnification provision and shall authorize representatives of
Seller  to settle or defend any such claim or suit and to represent Buyer in, or
to  take  charge  of,  any  litigation  in  connection  therewith.

     (c)  Seller  shall  indemnify,  defend,  and  save  Buyer harmless from and
against  any  and all liability for any tax, including but not limited to sales,
use,  or  value-added  tax,  arising  out of or relating to Seller's delivery of
goods  or services to Buyer, or Seller's performance of this Subcontract.  Buyer
shall  promptly notify Seller of any claim against Buyer for such taxes.  Seller
agrees  to  promptly  take  over  and defend, at its own expense, any actions to
collect  such  taxes,  and  shall pay any claims, demands, judgments and awards,
including  penalties  and  interest  related  thereto.  The  provisions  of this
paragraph  shall  continue  in  effect  upon  completion  or termination of this
Subcontract.

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                                      PAGE

21.     INSPECTION  AND  ACCEPTANCE

The  following  FAR  clauses are hereby incorporated by reference (see paragraph
26):
Clause
Number          Title                           Date
------          -----                           ----
52.246-7          Inspection  Of  Research  And  Development          AUG  1996
               -Fixed  Price
52.246-9     Inspection  of  Research  and  Development               APR  1984
(Short  Form)

22.     1852.227-72  DESIGNATION  OF  NEW  TECHNOLOGY  REPRESENTATIVE AND PATENT
REPRESENTATIVE  (JUL  1997)

(a)  For purposes of administration of the clause of this contract entitled "New
Technology"  or  "Patent Rights -- Retention by the Subcontractor (Short Form)",
whichever is included, the following named representatives are hereby designated
by  the  Buyers  Contractual  Representative  to  administer  such  clause:

New  Technology  Representative

Andrews  Space
505  5th  Avenue  South,  Suite  300
Seattle  WA  98104
Attn:  Kim  Huyber

Patent  Representative

Andrews  Space
505  5th  Avenue  South,  Suite  300
Seattle  WA  98104
Attn:  Kim  Huyber

(b)     Reports  of  reportable  items,  and  disclosure  of subject inventions,
interim  reports, final reports, utilization reports, and other reports required
by  the  clause,  as  well  as  any correspondence with respect to such matters,
should  be  directed  to the New Technology Representative unless transmitted in
response  to correspondence or request from the Patent Representative.  Inquires
or  requests  regarding  disposition  of  rights, election of rights, or related
matters  should  be directed to the Patent Representative.  This clause shall be
included  in  any  subcontract  hereunder requiring a "New Technology" clause or
"Patent  Rights--Retention  by  the  Subcontractor
     (Short  Form)"  clause,  unless  otherwise  authorized  or  directed by the
Contracting  Officer.  The
respective  responsibilities  and authorities of the above-named representatives
are  set  forth  in
1827.305-370  of  the  NASA  FAR  Supplement.

23.     1852.245-73  FINANCIAL  REPORTING  OF  NASA  PROPERTY  IN THE CUSTODY OF
CONTRACTORS  (OCT  2003)

(a) The Seller shall submit annually a NASA Form (NF) 1018, NASA Property in the
Custody of Subcontractors, in accordance with the provisions of 1845.505-14, the
instructions on the form, subpart 1845.71, and any supplemental instructions for
the  current  reporting  period  issued  by  NASA.

(b)     (1)  Seller  use of NF 1018 is not required by this clause; however, the
Seller shall include data on property in the possession of subcontractors in the
annual  NF  1018.

     (2)  The  Seller  shall  mail  the  original signed NF 1018 directly to the
cognizant NASA Center Deputy Chief Financial Officer, Finance, unless the Seller
uses  the NF 1018 Electronic Submission System (NESS) for report preparation and
submission.

(3)  One  copy  shall  be  submitted  Andrews  Space.

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                                      PAGE

(c)     (1)  The  annual  reporting  period shall be from October 1 of each year
through  September  30  of  the following year. The report shall be submitted in
time  to  be received by October 15.  The information contained in these reports
is  entered  into  the Buyer's accounting system to reflect current asset values
for  financial  statement  purposes.  Therefore,  it  is essential that required
reports  be  received  no later than October 15.  Some activity may be estimated
for the month of September, if necessary, to ensure the NF 1018 is received when
due.  However,  Seller's  procedures  must  document  the process for developing
these estimates based on planned activity such as planned purchases or NASA Form
533  (NF  533  Subcontractor  Financial  Management  Report) cost estimates.  It
should  be  supported  and  documented  by  historical   experience   or   other
corroborating  evidence,  and  be  retained  in accordance with FAR Subpart 4.7,
Subcontractor   Records   Retention.     Subcontractors   shall   validate   the
reasonableness  of the estimates and associated methodology by comparing them to
the  actual  activity  once that data is available, and adjust them accordingly.
In  addition,  differences  between  the  estimated cost and actual cost must be
adjusted  during  the  next  reporting period.  Subcontractors shall have formal
policies and procedures, which address the validation of NF 1018 data, including
data from subcontractors, and the identification and timely reporting of errors.
The  objective  of  this  validation  is  to ensure that information reported is
accurate  and  in  compliance  with  the  NASA  FAR  Supplement.  If  errors are
discovered  on  NF  1018  after  submission,  the  contractor  shall contact the
cognizant  NASA  Center  Industrial  Property Officer (IPO) within 30 days after
discovery  of  the  error  to  discuss  corrective  action.

     (2)  The Buyer may, in the Buyer's and/or NASA's interest, withhold payment
until  a  reserve  not  exceeding  $25,000  or  5  percent  of the amount of the
contract,  whichever  is less, has been set aside, if the Seller fails to submit
annual  NF  1018  reports  in  accordance  with 1845.505-14 and any supplemental
instructions  for  the  current  reporting  period issued by NASA.  Such reserve
shall  be  withheld  until  the Buyers Contractual Representative has determined
that  Buyer has received the required reports.  The withholding of any amount or
the  subsequent  payment  thereof  shall  not  be  construed  as a waiver of any
Government  and/or  Buyer  rights.

(d)  A  final  report shall be submitted within 30 days after disposition of all
property  subject  to reporting when the contract performance period is complete
in  accordance  with  (b)(1)  through  (3)  of  this  clause.

24.     SAFETY  AND  HEALTH  (APR  2002)

(a)  Safety  is  the freedom from those conditions that can cause death, injury,
occupational  illness,  damage to or loss of equipment or property, or damage to
the  environment.  NASA's  safety  priority  is  to protect: (1) the public, (2)
astronauts  and  pilots,  (3) the NASA workforce (including contractor employees
working  on  NASA  contracts),  and  (4)  high-value  equipment  and  property.

(b) The Seller shall take all reasonable safety and occupational health measures
in performing this Subcontract. The Seller shall comply with all Federal, State,
and  local laws applicable to safety and occupational health and with the safety
and  occupational  health standards, specifications, reporting requirements, and
any  other  relevant  requirements  of  this  contract.

(c)  The  Seller  shall  take,  or  cause  to  be  taken,  any other safety, and
occupational  health  measures  the  Buyers   Contractual   Representative   may
reasonably  direct.  To  the  extent  that  the  Seller  may  be  entitled to an
equitable  adjustment  for those measures under the terms and conditions of this
contract,  the  equitable  adjustment  shall  be  determined  pursuant  to   the
procedures  of the changes clause of this contract; provided, that no adjustment
shall  be  made  under this Safety and Health clause for any change for which an
equitable  adjustment  is  expressly  provided  under  any  other  clause of the
contract.

(d)  The  Seller  shall immediately notify and promptly report to the Buyer or a
designee  any  accident,  incident, or exposure resulting in fatality, lost-time
occupational  injury, occupational disease, contamination of property beyond any
stated acceptable limits set forth in the contract Schedule; or property loss of
$25,000  or  more,  or  Close Call (a situation or occurrence with no injury, no
damage  or  only  minor damage (less than $1,000) but possesses the potential to
cause  any  type mishap, or any injury, damage, or negative mission impact) that
may  be  of  immediate  interest  to  NASA and/or the Buyer, arising out of work
performed  under  this  contract.  The  Seller is not required to include in any
report  an  expression of opinion as to the fault or negligence of any employee.
In  addition,  service  contractors  (excluding  construction  contracts)  shall
provide  quarterly  reports  specifying  lost-time  frequency  rate,  number  of
lost-time  injuries,  exposure, and accident/incident dollar losses as specified
in  the  Subcontract  Schedule.

                                       7
                                      PAGE

(e)  The  Seller  shall  investigate  all work-related incidents, accidents, and
Close  Calls,  to the extent necessary to determine their causes and furnish the
Buyers  Contractual  Representative  a  report,  in  such  form  as  the  Buyers
Contractual  Representative  may  require,  of  the  investigative  findings and
proposed  or  completed  corrective  actions.

(f)     (1)  The  Buyers  Contractual  Representative  may  notify the Seller in
writing  of any noncompliance with this clause and specify corrective actions to
be  taken.  When  the  Buyers  Contractual  Representative  becomes   aware   of
noncompliance that may pose a serious or imminent danger to safety and health of
the  public,  astronauts  and  pilots,  the NASA workforce (including contractor
employees  working  on NASA contracts), or high value mission critical equipment
or  property,  the  Buyers  Contractual  Representative  shall notify the Seller
orally, with written confirmation. The Seller shall promptly take and report any
necessary  corrective  action.

     (2) If the Seller fails or refuses to institute prompt corrective action in
accordance  with  subparagraph  (f)(1)  of  this  clause, the Buyers Contractual
Representative may  invoke the stop-work order clause in this Subcontract or any
other  remedy  available  to  the  Buer in the event of such failure or refusal.

(g) The Seller (or subcontractor or supplier) shall insert the substance of this
clause,  including this paragraph (g) and any applicable Schedule provisions and
clauses,  with  appropriate  changes  of  designations  of  the  parties, in all
solicitations  and subcontracts of every tier, when one or more of the following
conditions  exist:

     (1)  The  work  will be conducted completely or partly on premises owned or
controlled  by  the  Government.

     (2)  The work includes construction, alteration, or repair of facilities in
excess  of  the  simplified  acquisition  threshold.

(3)  The  work,  regardless of place of performance, involves hazards that could
endanger the public, astronauts and pilots, the NASA workforce (including Seller
employees  working  on NASA contracts), or high value equipment or property, and
the  hazards  are  not  adequately  addressed  by Occupational Safety and Health
Administration  (OSHA)  or  Department  of  Transportation (DOT) regulations (if
applicable).

(4)  When the Seller (or subcontractor or supplier) determines that the assessed
risk  and consequences of a failure to properly manage and control the hazard(s)
warrants  use  of  the  clause.

(h)  The  Seller  (or  subcontractor  or supplier) may exclude the provisions of
paragraph  (g) from its solicitation(s) and subcontract(s) of every tier when it
determines  that the clause is not necessary because the application of the OSHA
and  DOT (if applicable) regulations constitute adequate safety and occupational
health  protection.  When  a  determination is made to exclude the provisions of
paragraph  (g)  from  a solicitation and subcontract, the Seller must notify and
provide  the  basis  for  the  determination  to  the  Contracting  Officer.  In
subcontracts  of  every  tier  above  the  micro-purchase  threshold  for  which
paragraph  (g)  does  not apply, the Seller (or subcontractor or supplier) shall
insert  the  substance  of  paragraphs  (a),  (b), (c), and (f) of this clause).

(i)  Authorized  Buyer  representatives  shall  have  access to and the right to
examine  the sites or areas where work under this contract is being performed in
order  to  determine the adequacy of the Seller's safety and occupational health
measures  under  this  clause.

(j)  The  Seller  shall  continually  update  the  safety  and  health plan when
necessary.  In  particular,  the  Seller  shall  furnish a list of all hazardous
operations to be performed, and a list of other major or key operations required
or  planned in the performance of the contract, even though not deemed hazardous
by  the  Seller.  The Buyer and the Seller shall jointly decide which operations
are  to  be  considered  hazardous,  with  Buyer as the final authority.  Before
hazardous  operations  commence, the Seller shall submit for Buyer concurrence -

     (1)  Written  hazardous  operating procedures for all hazardous operations;
and/or

     (2) Qualification standards for personnel involved in hazardous operations.

25.     1852.223-75  MAJOR  BREACH  OF  SAFETY  OR  SECURITY  (FEB  2002)

(a)  Safety  is  the freedom from those conditions that can cause death, injury,
occupational  illness,  damage to or loss of equipment or property, or damage to
the  environment.  Safety  is  essential  to NASA and is a material part of this
contract.  NASA's  safety priority is to protect: (1) the public; (2) astronauts
and  pilots;  (3)  the NASA workforce (including contractor employees working on
NASA  contracts);  and  (4) high-value equipment and property. A major breach of
safety  may  constitute a breach of contract that entitles the Government and/or

                                       8
                                      PAGE

the  Buyer  to  exercise  any  of its rights and remedies applicable to material
parts  of  this  contract, including termination for default.  A major breach of
safety  must  be related directly to the work on the contract. A major breach of
safety  is  an  act  or  omission  of  the  Seller that consists of an accident,
incident,  or  exposure resulting in a fatality or mission failure; or in damage
to  equipment  or  property  equal  to  or  greater  than  $1 million; or in any
"willful"  or  "repeat"  violation  cited  by the Occupational Safety and Health
Administration  (OSHA)  or  by  a  state agency operating under an OSHA approved
plan.

(b) Security is the condition of safeguarding against espionage, sabotage, crime
(including  computer  crime),  or  attack.  A  major  breach  of  security   may
constitute a breach of contract that entitles the Government and/or the Buyer to
exercise  any  of  its  rights and remedies applicable to material parts of this
contract,  including  termination  for  default.  A major breach of security may
occur  on  or  off Government installations, but must be related directly to the
work  on  the contract.  A major breach of security is an act or omission by the
Seller  that results in compromise of classified information, illegal technology
transfer,  workplace  violence  resulting  in  criminal  conviction,   sabotage,
compromise  or  denial of information technology services, equipment or property
damage  from  vandalism  greater  than $250,000, or theft greater than $250,000.

(c)  In  the  event  of  a  major breach of safety or security, the Seller shall
report  the breach to the Buyers Contractual Representative.  If directed by the
Buyers  Contractual  Representative,  the   Seller   shall   conduct   its   own
investigation  and  report the results to the Buyers Contractual Representative.
The  Seller  shall cooperate with the Government and/or Buyers investigation, if
conducted.

26.     1852.225-70  EXPORT  LICENSES  (FEB  2000)

(a)  The  Seller shall comply with all U.S. export control laws and regulations,
including the International Traffic in Arms Regulations (ITAR), 22 CFR Parts 120
through  130,  and the Export Administration Regulations (EAR), 15 CFR Parts 730
through  799,  in the performance of this contract.  In the absence of available
license exemptions/exceptions, the Seller shall be responsible for obtaining the
appropriate  licenses  or other approvals, if required, for exports of hardware,
technical  data,  and  software,  or  for the provision of technical assistance.

(b)  The Seller shall be responsible for obtaining export licenses, if required,
before  utilizing foreign persons in the performance of this contract, including
instances  where  the work is to be performed on-site at MSFC, where the foreign
person  will  have  access  to  export-controlled  technical  data  or software.

(c)  The  Seller  shall  be  responsible  for  all  regulatory  record  keeping
requirements  associated  with  the  use  of  licenses  and  license
exemptions/exceptions.

(d)  The  Seller  shall  be responsible for ensuring that the provisions of this
clause  apply  to  its  subcontractors.

27.     EDUCATION  AND  PUBLIC  OUTREACH

At  least  one  (1)  percent of the total contract value of this effort shall be
invested  in  education  and public outreach activities as further delineated in
the  statement  of  work.

28.     INCORPORATION  OF  FAR  AND  NASA  FAR  SUPPLEMENT  CLAUSES

(a) The following FAR and NASA FAR Supplement clauses are hereby incorporated by
reference.  In  all  such  clauses,  unless  the  context of the clause requires
otherwise, the term "Subcontractor" shall mean Seller, the term "Contract" shall
mean  this  Subcontract,  and  the terms "Government," "Contracting Officer" and
equivalent  phrases  shall  mean  Buyer  and  Buyers Contractual Representative,
respectively.  It  is intended that the referenced clauses shall apply to Seller
in  such  manner  as  is  necessary  to  reflect  the  position  of  Seller as a
subcontractor  to  Buyer,  to  insure  Seller's  obligations to Buyer and to the
United  States Government, and to enable Buyer to meet its obligations under its
Prime  Contract  or  Subcontract.

(b)  The  following  definitions  apply  unless  otherwise  specifically stated:

          "Buyer"  -  the  legal  entity  issuing  this  Subcontract.
          "Subcontract  Administrator"  -  Buyers  Contractual  Representative
          "Seller"  -  the  legal  entity  which  contracts  with  the  Buyer.
          "This  Subcontract"  - this contractual instrument, including changes.
          "Prime  Contract"  -  the  Government  contract  under  which  this
          Subcontract  is  issued.

                                       9
                                      PAGE

          "FAR"  -  the  Federal  Acquisition  Regulation.

(c)  Federal  Acquisition  Regulation  (48  CFR  Chapter 1) Clauses Incorporated
herein:

This  Subcontract  incorporates  one or more clauses by reference, with the same
force  and  effect  as if they were given in full text. Upon request, Buyer will
make  their full text available. Also, the full text of a clause may be accessed
electronically  at  this/these  address(es):

This contract incorporates one or more clauses by reference, with the same force
and  effect  as  if they were given in full text.  Upon request, the Contracting
Officer  will  make  their full text available.  Also, the full text of a clause
may  be  accessed  electronically  at  this/these  address(es):

FAR  Clauses:  http://www.arnet.gov/far/
NASA  FAR  Supplement  clauses:
http://www.hq.nasa.gov/office/procurement/regs/nfstoc.htm
MSFC  Clauses:  http://ec.msfc.nasa.gov/msfc/msfc_uni.html

PART  A:    FEDERAL  ACQUISITION  REGULATION  (48  CFR  CHAPTER  1)
<TABLE>
<CAPTION>

<S>                    <C>                                                     <C>
                       Clause
Number. . . . . . . .  Title                                                   Date
---------------------  ------------------------------------------------------  --------

52.202-1. . . . . . .  Definitions                                             JUL 2004
52.203-3. . . . . . .  Gratuities                                              APR 1984
52.203-5. . . . . . .  Covenant Against Contingent Fees                        APR 1984
52.203-6. . . . . . .  Restrictions on Subcontractor Sales to the              JUL 1995
                       Government
52.203-7. . . . . . .  Anti-Kickback Procedures                                JUL 1995
52.203-8. . . . . . .  Cancellation, Rescission, and Recovery of               JAN 1997
                       Funds for Illegal or Improper Activity
52.203-10 . . . . . .  Price or Fee Adjustment for Illegal or                  JAN 1997
                       Improper Activity
52.203-12 . . . . . .  Limitation on Payments to Influence Certain             JUN 2003
                       Federal Transactions
                       52.204-1                  Approval of Contract          DEC 1989
52.204-4. . . . . . .  Printed or Copied Double-Sided on Recycled              AUG 2000
                       Paper
52.204-7. . . . . . .  Central Contractor Registration                         OCT 2003
52.209-6. . . . . . .  Protecting the Government's Interest When               JAN 2005
                       Subcontracting with Contractors Debarred,
                       Suspended, or Proposed for Debarment
52.211-15 . . . . . .  Defense Priority and Allocation Requirements            SEP 1990
52.215-2. . . . . . .  Audit and Records-Negotiation                           JUN 1999
52.215-8. . . . . . .  Order of Precedence-Uniform Contract Format             OCT 1997
52.215-11 . . . . . .  Price Reduction for Defective Cost or Pricing Data-     OCT 1997
                       Modifications
52.215-13 . . . . . .  Subcontractor Cost or Pricing Data-Modifications        OCT 1997
52.215-14 . . . . . .  Integrity of Unit Prices                                OCT 1997
52.215-15 . . . . . .  Pension Adjustments and Asset Reversions                OCT 2004
52.215-17 . . . . . .  Waiver of Facilities Capital Cost of Money              OCT 1997
52.215-18 . . . . . .  Reversion or Adjustment of Plans for                    OCT 1997
                       Postretirement Benefits (PRB) Other Than
                       Pensions
52.215-21 . . . . . .  Requirements for Cost or Pricing Data or                OCT 1997
                       Information Other Than Cost or Pricing

                                       10
                                      PAGE

                       Data-Modifications
52.215-21 . . . . . .  Requirements for Cost or Pricing Data or                OCT 1997
                       Information Other Than Cost or Pricing
                       Data-Modifications (Alternate II)
52.222-3. . . . . . .  Convict Labor                                           JUN 2003
52.222-21              Prohibition of Segregated Facilities                    FEB 1999
52.222-26 . . . . . .  Equal Opportunity                                       APR 2002
52.222-35 . . . . . .  Equal Opportunity for Special Disabled Veterans,        DEC 2001
                       Veterans of the Vietnam Era, and Other Eligible
                       Veterans
52.222-36 . . . . . .  Affirmative Action for Workers with Disabilities        JUN 1998
52.222-37 . . . . . .  Employment Reports on Special Disabled                  DEC 2001
                       Veterans, Veterans of the Vietnam Era, and
                       Other Eligible Veterans
52.223-3. . . . . . .  Hazardous Material Identification and                   JUL 1995
                       Material Safety Data (Alternate I)
52.223-6. . . . . . .  Drug-Free Workplace                                     MAY 2001
52.223-14 . . . . . .  Toxic Chemical Release Reporting                        AUG 2003
52.225-1. . . . . . .  Buy American Act- Supplies                              JUN 2003
52.225-13 . . . . . .  Restrictions on Certain Foreign Purchases               DEC 2003
52.227-1. . . . . . .  Authorization and Consent (Alternate I)                 JUL 1995
52.227-14 . . . . . .  Rights In Data-General                                  JUN 1987
                       52.227-16                Additional Data Requirements
52.227-23 . . . . . .  Rights To Proposal Data (Technical)                     JUN 1987
52.228-5. . . . . . .  Insurance-Work on a Government Installation             JAN 1997
52.229-3. . . . . . .  Federal, State, and Local Taxes                         APR 2003
52.232-2. . . . . . .  Payments under Fixed-Price Research                     APR 1984
                       and Development Contracts
52.232-9. . . . . . .  Limitation on Withholding of Payments                   APR 1984
52.232-16 . . . . . .  Progress Payments (Alternate I)                         MAR 2000
52.232-17 . . . . . .  Interest                                                JUN 1996
52.232-23 . . . . . .  Assignment Of Claims                                    JAN 1986
52.232-25 . . . . . .  Prompt Payment                                          OCT 2003
52.232-34 . . . . . .  Payment By Electronic Funds Transfer-                   MAY 1999
                       Other Than Central Contractor Registration
52.233-1. . . . . . .  Disputes                                                JUL 2002
52.233-3. . . . . . .  Protest After Award                                     AUG 1996
52.233-4. . . . . . .  Applicable Law for Breach of Contract Claim             OCT 2004
52.242-13 . . . . . .  Bankruptcy                                              JUL 1995
52.243-1. . . . . . .  Changes Fixed-Price                                     AUG 1987
52.243-1. . . . . . .  Changes Fixed-Price (Alternate V)                       APR 1984
52.243-7. . . . . . .  Notification of Changes                                 APR 1984
52.244-2. . . . . . .  Subcontracts                                            AUG 1998
52.244-5. . . . . . .  Competition in Subcontracting                           DEC 1996
52.244-6. . . . . . .  Subcontracts for Commercial Items                       DEC 2004
52.245-2. . . . . . .  Government Property (Fixed-Price Contracts)             MAY 2004
52.246-23 . . . . . .  Limitation of Liability                                 FEB 1997
52.249-2. . . . . . .  Termination for Convenience of the                      MAY 2004
                       Government (Fixed-Price)
52.249-9. . . . . . .  Default (Fixed-Price Research and Development)          APR 1984
52.253-1. . . . . . .  Computer Generated Forms                                JAN 1991
</TABLE>

PART  B:    NASA  FAR  SUPPLEMENT  (48  CFR  CHAPTER  18)  CLAUSES
            ------------------------------------------------------

                                       11
                                      PAGE
<TABLE>
<CAPTION>

<S>                    <C>                                                     <C>
                       Clause
Number. . . . . . . .  Title                                                   Date
---------------------  ------------------------------------------------------  --------
1852.203-70            Display of Inspector General Hotline Posters            JUN 2001
1852.219-77            NASA Mentor-Prot g  Program                             MAY 1999
1852.223-74            Drug and Alcohol-Free Workforce                         MAR 1996
1852.225-70            Export Licenses                                         FEB 2000
1852.227-14            Rights in Data--General  **Modifies FAR Clause**        JUN 1987
1852.235-70            Center for Aerospace Information                        FEB 2003
1852.242-75            Earned Value Management Systems                         MAR 1999
1852.242-76            Modified Cost Performance Report                        MAR 1999
</TABLE>

29.     MSFC  52.252-90 REPRESENTATIONS, CERTIFICATIONS, AND OTHER STATEMENTS OF
OFFERORS  OR  QUOTERS  INCORPORATED  BY  REFERENCE  (FEB  2001)

The Representations, Certifications, and Other Statements of Offerors or Quoters
(Section  K  of the solicitation document) as completed by the Seller are hereby
incorporated  in  their entirety by reference, with the same force and effect as
if  they  were  given  in  full  text.

30.     1852.204-76  SECURITY  REQUIREMENTS  FOR  UNCLASSIFIED  INFORMATION
TECHNOLOGY  RESOURCES  (NOV  2004)

(a)  The Seller shall be responsible for Information Technology security for all
systems connected to a NASA or Buyer's network or operated by Seller for NASA or
Buyer,  regardless  of location. This clause is applicable to all or any part of
the  Subcontract  that  includes information technology resources or services in
which  the  Buyer  must  have  physical or electronic access to NASA's sensitive
information  contained in unclassified systems that directly support the mission
of  NASA.  This  includes  information  technology,  hardware, software, and the
management,  operation,  maintenance,  programming, and system administration of
computer  systems,  networks,  and telecommunications systems. Examples of tasks
that  require  security  provisions  include:

     (1)  Computer  control  of  spacecraft,  satellites,  or  aircraft or their
payloads;

     (2)  Acquisition,  transmission  or  analysis  of  data  owned by NASA with
significant  replacement  cost  should  the  contractor's copy be corrupted; and

     (3) Access to NASA networks or computers at a level beyond that granted the
general  public,  e.g.  bypassing  a  firewall.

(b)  The  Buyer shall provide, implement, and maintain an IT Security Plan. This
plan shall describe the processes and procedures that will be followed to ensure
appropriate  security  of  IT  resources  that are developed, processed, or used
under  this  Subcontract. The plan shall describe those parts of the Subcontract
to  which  this  clause applies. The Buyer's IT Security Plan shall be compliant
with  Federal  laws  that include, but are not limited to, the Computer Security
Act  of  1987  (40  U.S.C. 1441 et seq.) and the Government Information Security
Reform  Act  of 2000. The plan shall meet IT security requirements in accordance
with  Federal and NASA policies and procedures that include, but are not limited
to:

     (1)  OMB  Circular  A-130,  Management  of  Federal  Information Resources,
Appendix  III,  Security  of  Federal  Automated  Information  Resources;

     (2)  NASA  Procedures  and Guidelines (NPR) 2810.1, Security of Information
Technology;  and

     (3)  Chapter  3  of  NPR  1620.1,  NASA Security Procedures and Guidelines.

                                       12
                                      PAGE

(d)     (1)  Contractor  personnel  requiring  privileged  access   or   limited
privileged  access  to  systems  operated  by  the   Contractor   for  NASA   or
interconnected  to  a  NASA network shall be screened at an appropriate level in
accordance  with  NPR  2810.1, Section 4.5; NPR 1620.1, Chapter 3; and paragraph
(d)(2)  of this clause. Those Contractor personnel with non-privileged access do
not  require  personnel  screening.  NASA shall provide screening using standard
personnel screening National Agency Check (NAC) forms listed in paragraph (d)(3)
of  this clause, unless contractor screening in accordance with paragraph (d)(4)
is  approved.  The Contractor shall submit the required forms to the NASA Center
Chief  of  Security  (CCS)  within  fourteen  (14)  days after contract award or
assignment  of an individual to a position requiring screening. The forms may be
obtained  from  the  CCS. At the option of the government, interim access may be
granted  pending  completion  of  the  NAC.

     (2)  Guidance  for selecting the appropriate level of screening is based on
the  risk  of adverse impact to NASA missions. NASA defines three levels of risk
for  which  screening  is  required  (IT-1  has  the  highest  level  of  risk):

          (i) IT-1 -- Individuals having privileged access or limited privileged
          access  to  systems whose misuse can cause very serious adverse impact
          to  NASA  missions. These systems include, for example, those that can
          transmit  commands  directly  modifying  the  behavior  of spacecraft,
          satellites  or  aircraft.

          (ii)  IT-2  --  Individuals  having  privileged  access   or   limited
          privileged  access  to  systems whose misuse can cause serious adverse
          impact  to  NASA  missions.  These systems include, for example, those
          that can transmit commands directly modifying the behavior of payloads
          on  spacecraft,  satellites  or  aircraft;  and those that contain the
          primary  copy  of  "level  1"  data  whose cost to replace exceeds one
          million  dollars.

          (iii)  IT-3  --  Individuals  having  privileged  access  or   limited
          privileged  access  to  systems  whose  misuse  can  cause significant
          adverse  impact  to NASA missions. These systems include, for example,
          those  that  interconnect  with  a  NASA network in a way that exceeds
          access by the general public, such as bypassing firewalls; and systems
          operated  by  the  contractor  for  NASA  whose  function  or data has
          substantial  cost  to  replace,  even  if  these   systems   are   not
          interconnected  with  a  NASA  network.

     (3)  Screening for individuals shall employ forms appropriate for the level
of  risk  as  follows:

          (i)  IT-1:  Fingerprint  Card  (FC)  258  and  Standard Form (SF) 85P,
          Questionnaire  for  Public  Trust  Positions;

          (ii)  IT-2:  FC  258  and  SF  85,  Questionnaire  for  Non-Sensitive
          Positions;  and

          (iii)  IT-3:  NASA  Form  531,  Name  Check,  and  FC  258.

     (4)  The  Contracting  Officer  may allow the Contractor to conduct its own
screening  of  individuals  requiring  privileged  access  or limited privileged
access  provided  the Contractor can demonstrate that the procedures used by the
Contractor  are  equivalent  to  NASA's  personnel screening procedures. As used
here, equivalent includes a check for criminal history, as would be conducted by
NASA,  and  completion of a questionnaire covering the same information as would
be  required  by  NASA.

     (5)  Screening  of  contractor  personnel  may be waived by the Contracting
Officer  for  those  individuals  who  have  proof  of  -

          (i)  Current or recent national security clearances (within last three
          years);

          (ii)  Screening  conducted  by  NASA  within  last  three  years;  or

          (iii)  Screening conducted by the Contractor, within last three years,
          that  is  equivalent  to  the  NASA  personnel screening procedures as
          approved  by  the  Contracting  Officer under paragraph (d)(4) of this
          clause.

(e)  The  Contractor  shall  ensure  that  its  employees, in performance of the
contract,  receive  annual  IT  security  training in NASA IT Security policies,
procedures,  computer  ethics, and best practices in accordance with NPR 2810.1,
Section  4.3  requirements.  The contractor may use web-based training available
from  NASA  to  meet  this  requirement.

                                       13
                                      PAGE

(f) The Contractor shall afford NASA, including the Office of Inspector General,
access  to  the  Contractor's  and  subcontractors'  facilities,  installations,
operations,  documentation,  databases  and personnel used in performance of the
contract. Access shall be provided to the extent required to carry out a program
of  IT  inspection,  investigation  and  audit  to safeguard against threats and
hazards  to  the  integrity, availability and confidentiality of NASA data or to
the  function  of  computer  systems operated on behalf of NASA, and to preserve
evidence  of  computer  crime.

(g)  The  Contractor  shall  incorporate  the  substance  of  this clause in all
subcontracts  that  meet  the  conditions  in  paragraph  (a)  of  this  clause.

31.     1852.228-75  MINIMUM  INSURANCE  COVERAGE  (OCT  1988)

The  Seller  shall  obtain  and  maintain  insurance coverage as follows for the
performance  of  this  contract:

(a)  Worker's  compensation  and  employer's  liability insurance as required by
applicable  Federal  and  state  workers'  compensation and occupational disease
statutes.  If  occupational  diseases  are not compensable under those statutes,
they  shall  be  covered under the employer's liability section of the insurance
policy,  except  when  contract  operations  are so commingled with the Seller's
commercial  operations that it would not be practical.  The employer's liability
coverage  shall  be  at  least  $100,000,  except  in  States  with exclusive or
monopolistic  funds  that  do  not permit workers' compensation to be written by
private  carriers.

(b)  Comprehensive  general  (bodily  injury)  liability  insurance  of at least
$500,000  per  occurrence.

(c)  Motor  vehicle  liability  insurance  written  on the comprehensive form of
policy  which  provides for bodily injury and property damage liability covering
the  operation  of  all  motor  vehicles  used in connection with performing the
contract.  Policies  covering motor vehicles operated in the United States shall
provide coverage of at least $200,000 per person and $500,000 per occurrence for
bodily  injury  liability  and  $20,000 per occurrence for property damage.  The
amount  of  liability  coverage on other policies shall be commensurate with any
legal  requirements  of the locality and sufficient to meet normal and customary
claims.

(d)  Comprehensive  general and motor vehicle liability policies shall contain a
provision  worded  as  follows:

"The insurance company waives any right of subrogation against the United States
of  America  which  may  arise  by  reason  of  any  payment  under the policy."

(e)  When aircraft are used in connection with performing the contract, aircraft
public  and  passenger  liability  insurance of at least $200,000 per person and
$500,000  per  occurrence for bodily injury, other than passenger liability, and
$200,000  per  occurrence for property damage.  Coverage for passenger liability
bodily  injury  shall  be at least $200,000 multiplied by the number of seats or
passengers,  whichever  is  greater.

32.     GENERAL  RELATIONSHIP

Buyer  is  not  an employee of Seller for any purpose whatsoever.  Seller agrees
that  in  all  matters  relating  to  this  Subcontract it shall be acting as an
independent  contractor and shall assume and pay all liabilities and perform all
obligations imposed with respect to the performance of this Subcontract.  Seller
shall  have  no right, power or authority to create any obligation, expressed or
implied, on behalf of Buyer and/or the Government and shall have no authority to
represent  Buyer  as  an  agent.

33.     NON-WAIVER  OF  RIGHTS

The  failure  of Buyer to insist upon strict performance of any of the terms and
conditions  in the Subcontract, or to exercise any rights or remedies, shall not
be  construed  as a waiver of its rights to assert any of the same or to rely on
any  such terms or conditions at any time thereafter. The invalidity in whole or
in  part  of  any  term  or  condition  of this Subcontract shall not affect the
validity  of  other  parts  hereof.

34.     APPLICABLE  STATE  LAW  AND  COMPLIANCE

This  Subcontract shall be governed by and construed in accordance with the laws
of  the  State  of  Washington.  Seller  agrees  to  comply  with the applicable
provisions  of  any  federal,  state or local law or ordinance and all rules and
regulations  issued  thereunder.

                                       14
                                      PAGE

35.     ENTIRE  AGREEMENT

The parties hereby agree that this Subcontract, including all documents attached
hereto  and/or  incorporated  herein  by  reference, shall constitute the entire
agreement  and  understanding between the parties hereto and shall supersede and
replace  any  and  all  prior  or contemporaneous representations, agreements or
understandings  of  any  kind,  whether written or oral, relating to the subject
matter  hereof.

IN  WITNESS WHEREOF, the duly authorized representatives of Buyer and the Seller
have  executed  this  Subcontract  on  the  Dates  shown.

SELLER:                              BUYER:

SpaceDev,  Inc.                              Andrews  Space,  Inc.

By:  /s/Richard  B.  Slansky                    By:  /s/  Marian  Joh
----------------------------                    ---------------------
       Richard  B.  Slansky                               Marian  Joh

                                       15
                                      PAGE

                               LIST OF ATTACHMENTS

ATTACHMENT  NO.              DESCRIPTION                    PAGES
---------------              -----------                    -----

     A-1               Statement  of  Work

                                       16
                                      PAGEATTACHMENT A-1

           NASA HUMAN & ROBOTICS TECHNOLOGY SMALL TUG PROGRAM PHASE I
                  STATEMENT OF WORK FOR SPACEDEV SPACECRAFT BUS

                       Contract #: N0405-SC-NNM05AAS92C-01
                              DATED: JUNE 27, 2005

                                      PAGE

                           SPACEDEV STATEMENT OF WORK
                             SmallTug Spacecraft Bus

                            Reviewed and Accepted by:

                      /S/: KEITH BEALS          29 JUNE 05
                      ----------------          ----------
                                                      Date
                        /S/: ERIC WETZEL           6/27/05
                      ----------------          ----------
                                                      Date

                                      PAGE

                                TABLE OF CONTENTS

1         INTRODUCTION                                   1
2         SCOPE                                          2
3         PROGRAM  SCHEDULE  MILESTONES                  2
4         GENERAL  REQUIREMENTS                          2
4.1       PROGRAM  DIRECTION                             2
4.2       SCHEDULE                                       2
4.3       STATUS  REPORTING                              2
4.3.1     Weekly  teleconference                         2
4.3.2     Data  availability                             2
4.3.3     Data  format                                   3
4.3.4     Periodic  meetings                             3
4.3.5     Travel                                         3
5         STUDY  TASKS                                   3
6         STUDY  DELIVERABLES                            5

                                      PAGE

1     INTRODUCTION
The  Human  and  Robotic  Technology (HR&T) program administered by the National
Aeronautics  and  Space Administration (NASA) explores new space technologies in
support  of  our  nation's  Vision  of  Space Exploration. The SmallTug CisLunar
Flight  Experiment  (SmallTug)  is  one  of  the  first  experiments of the HR&T
program.

To  realize  the Nation's Vision of Space Exploration, sustainable and efficient
transportation  architecture  will be required.  As identified by NASA's Level 0
Requirements,  separation  of  cargo  and  crew  transport will be a fundamental
characteristic  of  the  transportation  architecture.  Recent  advances  in the
analysis  and  design of multi-body (n-body) trajectories indicate the potential
for delta v savings of between 15% and 70% over conventional transfer orbits. As
one  component  of  the  architecture, dedicated tugs can utilize these advanced
trajectories  for  highly  efficient  cargo  transfer  along periodic (repeating
trajectories.  Another factor in low cost cargo transport is safe, reliable, yet
affordable  production  of  large  power  using  photo-voltaic  arrays.

The SmallTug CisLunar Flight Experiment is a miniature scale demonstration of an
Exploration-class  cargo  tug on a cyclic (1 year) n-body trajectory between the
Earth  and  the  Moon  L1  point.  The  spacecraft  will  utilize solar electric
propulsion  and carry a small (~1.5 kg) highly sophisticated science instrument,
CEASE  II.  The SmallTug Technology Flight Experiment (TFE) will integrate three
mid-Technology  Readiness Level (TRL) technologies: 1) photovoltaic solar array,
2)electromagnetic  propulsion  and  3)  cyclic  n-body  trajectory  design.  The
ultimate goal is to reduce the delta v between LEO and L1 by between 15% and 70%
over  conventional  transfer  orbits.  While  this  demonstration  mission is in
cislunar space, the trajectory design methodologies demonstrated by SmallTug are
applicable  to  all  other  desired destinations in the Solar System (e.g. Mars,
Jupiter,  etc.).

SmallTug's payload, Compact Environmental Anomaly SEnsor (CEASE II), is a small,
low power instrument that provides operators with fully processed, real time, in
situ  measurements  and  autonomously  generated  warnings of the space radiaton
environment  threats.  CEASE  reports  to  SmallTug:1)  Inonizing radiation dose
rates,  (2)  Single event effects, (3) Surface and deep dielectric charging. The
CEASE  output  is  updated  once per minute in a 10-byte Engineering Data packet
quantifying  the  levels  associated  with  those  space  hazards.

The  SmallTug program is divided into two phases. The overall goal of Phase I is
to  confirm the feasibility and benefits of the SmallTug concept to support H&RT
objectives.  Phase  I  will stress the completion of design trades, analyses and
integration of the applicable technology. Phase II will fabricate, test, launch,
and  operate  the  demonstration vehicle from Phase I.  Completing both SmallTug
phases  will enable the development of full-scale solar electric space tugs that
can affordably transport cargo in support of a sustained exploration campaign on
a  timeline  that  is  consistent  with  returning  humans  to the Moon in 2020.

                                        1
                                      PAGE

2     SCOPE

This SOW describes the tasks to be performed and the products to be delivered by
SpaceDev  as  subcontractor  to  Andrews  Space for Phase I of the H&RT SmallTug
program.  The  duration  of  Phase  I  is  April 2005 through March 2006.    The
objective  of Phase I is to successfully complete a Preliminary Design Review as
the  basis  for  continuation  to  detailed  design  and  production.

3     PROGRAM  SCHEDULE  MILESTONES

Andrews Space's authority to proceed (ATP) on the H&RT SmallTug (Phase I period)
study  is  April  14,  2005.  Key  program  milestones  are:

-     Kickoff  meeting-May,  2005

-     Quarterly  Review  #1,  August  17,  2005

-     Quarterly  Review  #2,  November  16,  2005

-     Project  Continuation  Review,  February  28,  2006

-     Preliminary  Design  Review,  March  29,  2006

4     GENERAL  REQUIREMENTS

4.1     PROGRAM  DIRECTION

Andrews Space will be the sole source of program direction to SpaceDev.  Program
direction  includes,  but  is  not  limited  to,  issues  relating to contracts,
schedule  and  technical  requirements.

4.2     SCHEDULE

SpaceDev  shall  deliver  the  products  identified  in  this SOW (Section 6) in
accordance with the Program Schedule Milestones listed in Section 3. Contractual
deliverables  shall  be  submitted 2 weeks prior to associated Program Scheduled
Milestones  to  facilitate  integration,  iteration  and Andrews Space requested
updates.

4.3     STATUS  REPORTING

SpaceDev  shall provide a monthly status report to Andrews Space.  These reports
will  provide  technical  status,  schedule  status, and cost expenditures.  The
monthly  reports  are  due  on  the  5th  of  each month.     A baseline program
schedule and budget shall be provided in the first month's report.  In addition,
cost  expenditure  reports  shall  be  provided  two weeks following the monthly
report  to  facilitate  program  tracking.  These  interim  cost  reports may be
estimated.

4.3.1     WEEKLY  TELECONFERENCE

SpaceDev  shall  support  weekly  Andrews  Space  CE&R  telecoms.

4.3.2     DATA  AVAILABILITY

SpaceDev  shall  utilize  Andrews  Space's  web based Windchill ProjectLink data
management  system  for  the  transfer  of information.  Andrews Space will make
account  access  available  to  SpaceDev.

4.3.3     DATA  FORMAT

SpaceDev shall provide data in native file format as appropriate (e.g., MS Word,
MS  PowerPoint,  MS  Excel,  CAD  files  such  as  ProE  or  .igs format, etc.).
SpaceDev  shall  respond to communication from Andrews Space in a timely manner.

                                        2
                                      PAGE

4.3.4     PERIODIC  MEETINGS
SpaceDev  shall  support  the  meetings  listed  in  Section 3, Program Schedule
Milestones.  The  scope  of the meeting support is in accordance with Section 5,
Study  Support  Tasks.

4.3.5     TRAVEL

SpaceDev  shall provide 4 personnel to travel in support of the 4 reviews listed
in  Section  3.0.  for  a  one  day  duration  for  each  meeting

5     STUDY  TASKS

The  following  tasks  are  to  be performed during the Phase I period.  The WBS
levels  are defined for cost reporting purposes.  The tasks included in each WBS
are  listed

 WBS  1.1  MILESTONES  AND  REVIEWS
-----------------------------------

-Support  program  review  meetings  as  listed  in  Section  3.

-Provide  inputs  to  Andrews Space for the program reviews listed in Section 3.

WBS  1.2  PROGRAM  MANAGEMENT
-----------------------------

 PROGRAM  DELIVERABLES

-Prepare  monthly  technical  progress and financial reports per Section 4.3 and
conduct  quarterly  management  reviews  with  Andrews  Space.
 COST  ASSESSMENT  (BY  FEBRUARY  17,  2006)

-Provide  planning  input  and  cost  estimates  for  Phase  II  effort.

WBS  2.1  SYSTEMS  ENGINEERING  MANAGEMENT
------------------------------------------

CONFIGURATION  AND  DATA  MANAGEMENT  (AS  REQUIRED,  CONCEPT  BASELINE  TO  BE
UPDATED/ESTABLISHED  BY  AUGUST  8,  2005)

-Participate  in  Andrews Space configuration management process, provide SC bus
configuration  data  for  inclusion  in system, and participate in control board
discussions

MASS  PROPERTIES  (INITIAL  INPUT  BY  JUNE 30, 2005, UPDATE MONTHLY THEREAFTER)
-Provide  SC  bus  mass  properties  input to Andrews Space, participate in mass
properties  management  process  (e.g.,  define  weight  growth  allowances,
define/implement  weight  trades)

RISK  ANALYSIS  &  MANAGEMENT  (INPUT  BY JUNE 30, 2005, UPDATE 2 WEEKS PRIOR TO
MAJOR  REVIEWS)

-Provide  input  to Andrews Space program risk analysis process (e.g., risk list
inputs,  recommended  steps  to  address)

                                        3
                                      PAGE

WBS  2.2  SYSTEM  REQUIREMENTS  DEFINITION:
-------------------------------------------

SYSTEM  REQUIREMENTS  DOCUMENT  (SRD) (INITIAL INPUT BY JUNE 30, 2005, UPDATE BY
AUGUST  8,  2005,  FINAL  INPUT  BY  FEB.  28,  2006)

-  Review/comment  on  the  following  specifications  and  provide   input   as
appropriate  (Andrews  is  lead  in  drafting  and controlling these documents):

     >System  Performance  Specification
     >Spacecraft  Specification
     >Avionics/GN&C/CD&H  Subsystem  Specification
     >Propulsion  Subsystem  Specification
     >Mechanical  Subsystem  Specification  (structure,  thermal  management,
     mechanisms,  LV  interface,  etc.)
     >Communications  Subsystem  Specification
     >Software  Specification
     >Preliminary  Component  Specifications  (by  February  28,  2006)

 ENVIRONMENTS  SPECIFICATION  (REVIEW  AND  COMMENT  BY  JUNE  30,  2005)

-Review/comment  on  System  Environments  Specification

 INTERFACE  CONTROL  DOCUMENTS  (ICD)  (PROVIDE  BY  FEBRUARY  15,  2006)

-Draft  Spacecraft-to-LV  and  intra-spacecraft  ICD's

WBS  3.2  CONFIGURATION  DEVELOPMENT  AND  VEHICLE  DESIGN
----------------------------------------------------------

FAILURE  MODE  AND  EFFECTS  ANALYSIS  (FMEA)  (INPUT  BY  DECEMBER  16,  2005)

-Review and comment on the preliminary FMEA analysis developed by Andrews Space.
SPACECRAFT  BUS  CONCEPT  DESIGN  (BY  AUGUST  8,  2005)

-Conduct  concept  design  trades  and analyses on the spacecraft bus, avionics,
navigation sensors, power subsystem, communication subsystem, thermal management
approach,  mechanisms, attitude control systems (e.g., RW and ACS).  The concept
design  of  the solar array and associated drive, the power conditioning for the
propulsion  system, the Hall thruster, and the Hall thruster Xe feed system will
be  completed  by  other  team  members  and  provided  to  SpaceDev  for design
integration.

-Provide  recommended  concept  configuration  by first Quarterly Program Review

-Provide  top  level trade summaries showing analyses, assumptions, results, and
conclusions.

-Provide  initial  concept  budgets  and  allocation  of power, propellant, data
handling,  link  budget,  processing,  and  memory.

-Provide  CAD  models  depicting  the  SC  concept  design

                                        4
                                      PAGE

SPACECRAFT  PRELIMINARY  DESIGN  (BY  MARCH  1,  2006)

-Conduct preliminary design of the spacecraft bus, avionics, navigation sensors,
power  subsystem,  communication   subsystem,   thermal   management   approach,
mechanisms, attitude control systems (e.g., RW and ACS).  The preliminary design
of  the  solar  array  and  associated  drive,  the  power  conditioning for the
propulsion  system, the Hall thruster, and the Hall thruster Xe feed system will
be  completed  by  other  team  members  and  provided  to  SpaceDev  for design
integration. All technical input will be completed by PCR. SpaceDev will provide
updates  between  PCR  and  PDR.

-Perform  preliminary  structural  and  thermal  analyses  of preliminary design

-Provide  design  data/models  of  preliminary  design

-Provide  system  schematics

-Provide  preliminary  design  budgets and allocation of power, propellant, data
handling,  link  budget,  processing,  memory,  etc

-Provide requirements assessment results (verify preliminary design meets specs.
and  environments)

-Provide  CAD  models  depicting  the  SC  preliminary  design

-Provide  definition  of  software  architecture  and  design  approach
-.
WBS  3.3  SYSTEM  PLANNING
--------------------------

OPERATIONS  PLAN (REVIEW CONCEPT OPERATIONS PLAN BY AUGUST 8, REVIEW PRELIMINARY
OPERATIONS  PLAN  BY  MARCH  15)

-Review  and  comment  on  Andrews  Space's  Operation  Plan

DEVELOPMENT  AND  INTEGRATION PLAN (PRELIMINARY DEVELOPMENT AND INTEGRATION PLAN
BY  FEBRUARY  17,  2006)

-Provide  input  to  preliminary  Small Tug Development and Integration Plan, to
include  all  Phase  II  and  onwards  design and development activities for the
spacecraft  bus  (e.g.,  project  schedule,  long  lead,
assembly/integration/verification  plans)

6     STUDY  DELIVERABLES

The  following table summarizes the program deliverables described in Section 5.

                     TABLE 6-1. PHASE I PROGRAM DELIVERABLES

<TABLE>
<CAPTION>

<S>                                       <C>                                           <C>

Item . . . . . . . . . . . . . . . .      Description . . . . . . . . . . . . . . .     Due Date
-------------------------------------     -----------------------------------------     ------------------
Major Review                              Presentation material for two quarterly           2 weeks prior
Documentation                             reviews, program continuation review,                  to review
                                          and PDR
-------------------------------------     -----------------------------------------     ------------------
Monthly Cost and                          Provide technical status, schedule status,                5th of
Status Reports.                           and cost expenditures                                each month.

                                        5
                                      PAGE

Item . . . . . . . . . . . . . . . .      Description . . . . . . . . . . . . . . .     Due Date
-------------------------------------     -----------------------------------------     ------------------
Cost Assessment                           Phase II spacecraft bus program cost estimates February 16, 2006
-------------------------------------     -----------------------------------------     ------------------
Mass Properties Input                     Spacecraft bus mass properties input             Initial-June 30
                                                                                            Update monthly
-------------------------------------     -----------------------------------------     ------------------
Risk Management Plan Inputs               Provide risk list inputs on the spacecraft bus  Initial input by
                                                                                             June 30, 2005
                                                                                            update 2 weeks
                                                                                                  prior to
                                                                                            major reviews.
-------------------------------------     -----------------------------------------     ------------------
Requirements Input                        Provide input to SRD on the spacecraft bus      Initial-June 30,
                                                                                      2005-Update-August 8
                                                                                       2005 Final February
                                                                                                  28, 2006
-------------------------------------     -----------------------------------------     ------------------
Environmental Spec. Comments              Review/comment on Environmental Spec.              June 30, 2006
-------------------------------------     -----------------------------------------     ------------------
ICD's                                     Draft SC to LV and intra-SC ICD's              February 15, 2005
-------------------------------------     -----------------------------------------     ------------------
FMEA Comments                             Review/comment on Andrews FMEA                 December 16, 2006
-------------------------------------     -----------------------------------------     ------------------
Concept Design Data                       Recommended concept bus design, top level         August 8, 2006
                                          trade summaries, concept resource budgets
-------------------------------------     -----------------------------------------     ------------------
Preliminary Design Data                   Preliminary bus design, preliminary                March 1, 2006
                                          structural/thermal analysis results,
                                          bus system schematics, preliminary resource
                                          budgets, preliminary SW architecture/
                                          development plan.
-------------------------------------     -----------------------------------------     ------------------
Development  and Integration Plan         Spacecraft bus development and integration     February 17, 2006
                                           plan  for  Phase  II  effort.
-------------------------------------     -----------------------------------------     ------------------

</TABLE>

                                        6
                                      PAGE

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