SPACEHAB Receives $5 Million Increase to Nasa Contract for Additional Services On Upcoming Shuttle Research Mission; Contract Value Now Totals $34.9 Million.

Business Editors/Hi-Tech Writers

WASHINGTON--(BUSINESS WIRE)--July 17, 2000

SPACEHAB, Inc. (NASDAQ/NMS:SPAB), a leading provider of commercial space services, today announced that it has received $5 million of new business from the National Aeronautics and Space Administration (NASA) for additional flight services on an upcoming Space Shuttle mission, STS-107, dedicated to microgravity and life sciences research.

NASA had previously contracted with SPACEHAB for the use of the company's Research Double Module (RDM) on STS-107, now scheduled to launch in June 2001. However, the agency recently identified a need for additional services in conjunction with the use of the RDM. NASA consequently decided to add a $5 million modification to its Research and Logistics Mission Support (REALMS) contract with the company for additional experiments, process improvements and hardware enhancements to better support STS-107 and future RDM missions. The $5 million addition raises the value of SPACEHAB's contract for STS-107 so far to a total of $34.9 million.

More than 8,500 pounds of equipment and experiments are already manifested on STS-107. This international mission will mark the debut of the RDM. In addition to NASA, the European Space Agency, National Space Development Agency of Japan, Canadian Space Agency, German Space Agency, and U.S. Department of Defense - all customers acquired by SPACEHAB - will also fly experiments in SPACEHAB's commercial allocation of space aboard the RDM. The Space Technology And Research Students (S*T*A*R*S(TM)) global space education program, managed by SPACEHAB's subsidiary Space Media(TM), Inc., will fly a full locker of experiments developed by students in Australia, China, Israel, Japan, and the United States on this mission.

To register a school to participate in the STS-107 S*T*A*R*S experiments, contact Space Media at 202/488-3500 (toll-free 888/647-9543) or visit http://www.starsprogram.com.

SPACEHAB and NASA established the REALMS contract in 1997 to enable the agency to manifest new Shuttle research flights or space station resupply missions as needed.

Founded in 1984 and with more than $100 million in annual revenue, SPACEHAB is a leading provider of commercial space services. SPACEHAB is the first company to commercially develop, own and operate habitable modules that provide laboratory facilities and logistics resupply aboard NASA's Space Shuttles. The company also supports astronaut training at NASA's Johnson Space Center in Texas and provides commercial satellite processing services for Boeing's Delta and Lockheed Martin's Atlas launch vehicles near Kennedy Space Center in Florida.

This release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Such risks and uncertainties include, but are not limited to, whether the company will fully realize the economic benefits under its NASA and other customer contracts, the timing and mix of Space Shuttle missions, the successful development and commercialization of new space assets, technological difficulties, product demand, timing of new contracts, launches and business, market acceptance risks, the effect of economic conditions, uncertainty in government funding, the impact of competition, and other risks detailed in the Company's Securities and Exchange Commission filings.