SPACEHAB TO BUILD FIRST COMMERCIAL HABITAT IN ORBIT
Enterprise^TM Module and Space Station Internet Media Company Will Take Space Commerce to New Heights

Washington, DC, December 10, 1999 – SPACEHAB, Inc. (Nasdaq: SPAB) today announced an historic agreement with RSC Energia of Korolev, Russia, to establish the first permanent commercial presence in space. SPACEHAB and Energia will build a pressurized module, named Enterprise, which will be attached to the International Space Station (ISS). Enterprise will be manned and dedicated to servicing a myriad of commercial mass markets on Earth.

"Among our new businesses will be the first independent commercial television and Internet Web-site broadcasts from space," said Dr. Shelley Harrison, SPACEHAB's Chairman. "We will also expand our highly successful S*T*A*R*S space and science education program from the Space Shuttle to Enterprise, targeting millions of youngsters around the world."

"SPACEHAB will provide a unique blend of space-originated news, information, education, entertainment programming and business advertising and promotion, broadcasting from Enterprise to Earth TV and Internet links as it orbits the Earth every 90 minutes," said Dr. Harrison.

SPACEHAB is the first company to own and operate commercial space habitation modules, flown on NASA Space Shuttles to increase pressurized volume in which astronauts can live and work. U.S. Senator John Glenn performed research in a SPACEHAB Research Module upon his return to space in October 1998 aboard the Shuttle Discovery. (Glenn's flight was SPACEHAB's fifth Shuttle research mission.) SPACEHAB Logistics Modules supported seven critical resupply missions to the Russian space station Mir and the first resupply mission to the International Space Station (ISS). RSC (Rocket Space Corporation) Energia is the leading Russian corporation in manned space operations, spacecraft, space stations, launch vehicles, communications satellites, R&D, manufacturing and launch operations, with experience from Sputnik to Mir and now the ISS.

The new pressurized space module Enterprise, which will be attached to the Russian portion of the ISS, will house a broadcast station and a research laboratory in which company-sponsored microgravity experiments targeting new biotech and advanced materials products and processes will be conducted. SPACEHAB officials estimate that it will cost approximately $100 million to develop Enterprise and establish the space media company. SPACEHAB will raise private financing for its portion of this endeavor. Energia will construct Enterprise and coordinate with the Russian Space Agency (RSA). RSA will provide launch services and other resources to the enterprise.

"Our long-term strategic partners Daimler Chrysler Aerospace (DASA) and Mitsubishi Corporation are highly supportive of this initiative," said Dr. Harrison. "SPACEHAB's initiative begins to fulfill the International Partners' objective of commercializing the ISS," commented DASA President Mr. Josef Kind.

"Enterprise is an historic project -- the first commercial real estate in orbit," said SPACEHAB President David Rossi. "This partnership is the first big step off Planet Earth for private enterprise in space, independent of government funding, " he said. "The ISS partners have endorsed greater commercial participation in the space station. As a private company with 15 years of experience working in manned space and partners and customers around the world, we are committed to making space commerce a reality."

SPACEHAB, with its Johnson Engineering and Astrotech subsidiaries, is the world's leading provider of commercial payload processing services for manned and unmanned payloads. The Company also supports NASA astronaut training at the Johnson Space Center.