SPACEHAB, Inc. , a
leading provider of commercial space services, today announced that its
Astrotech Space Operations unit has sold the assets of its Oriole sounding
rocket program and related property to DTI Associates, Inc., of Arlington,
The sale, effective July 26, turns over all physical and
intellectual property assets of Astrotech’s sounding rocket program, including
the design of the Oriole rocket, except for those required for Astrotech to
fulfill the terms of an agreement with an existing customer.

“As we’ve been reporting throughout the year, we are focusing on our core
business and operating profitability,” said SPACEHAB President and Chief
Operating Officer Michael A. Kearney.
“This sale supports these objectives
and contributes to our goal of improving our cash position.”

Astrotech successfully completed a demonstration launch of the Oriole
suborbital launch vehicle on July 7, 2000, at the National Aeronautics and
Space Administration’s (NASA’s) Wallops Flight Facility in Virginia.
Astrotech developed the Oriole as a next-generation sounding rocket for
launching scientific and commercial payloads and as a target vehicle for
Theater Missile Defense system testing.
The Oriole is the first privately
developed sounding rocket in U.S. history and the first new suborbital launch
system developed in the last 25 years.
“We proved last summer that our Oriole
rocket system performs even better than we expected,” said Astrotech Senior
Vice President and General Manager John B. Satrom, “and we’re happy to provide
DTI an outstanding asset.”

Astrotech will fulfill the terms of a Memorandum of Agreement with the
University of Queensland in Australia to provide payload integration and
launch services for two Terrier-Orion sounding rocket launches scheduled for
October at Australia’s Woomera range.
These rockets will launch scramjet
(supersonic combustion ramjet) technology demonstration payloads for the
HYSHOT Project.
In conjunction with this launch activity, SPACEHAB subsidiary
Space Media, Inc., will help develop unique multimedia courseware with
University of Queensland faculty members on the benefits and prospects for
scramjet technology.
Space Media will employ this courseware in its STARS
Academy global education program, supported by the United Nations.

Astrotech is on schedule to complete a $30 million expansion of its
Titusville payload processing facility in mid-October, in support of the first
launches of the Boeing Delta IV and the Lockheed Martin Atlas V expendable
launch vehicles in early 2002.
Astrotech’s long-term contracts with Boeing
and Lockheed Martin to process satellites for launch from Florida now
represent $89.2 million in guaranteed minimum revenue for the company through

Since its establishment in 1981, Astrotech has been at the forefront of
the commercial space industry.
SPACEHAB acquired the company in 1997.
Astrotech provides commercial satellite processing services for expendable
launch vehicle programs.
Astrotech owns and operates payload processing
facilities in Titusville, Florida, and Vandenberg Air Force Base, California;
it also provides processing services for the Sea Launch program at the Home
Port in Long Beach, California.

Founded in 1984, with more than $100 million in annual revenue, SPACEHAB,
Inc., is a leading provider of commercial space services.
The company
develops, owns, and operates habitat and laboratory modules and cargo carriers
aboard NASA’s Space Shuttles.
It also supports astronaut training and
configuration management at NASA’s Johnson Space Center in Houston and builds
space-flight trainers and mockups.
SPACEHAB’s Astrotech subsidiary provides
commercial satellite processing services at facilities in California and
SPACEHAB’s newest strategic growth initiative, Space Media,
Inc.(TM), brings space into homes and classrooms worldwide with television and
Internet broadcasting from the International Space Station, interactive
education programs through STARS Academy ( ), and
space merchandise from The Space Store ( ).

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.