Space Media Inc. and RSC Energia Join Forces Forming New Multimedia Partnership

In a step toward furthering their aggressive strategy to broaden
their stake in the space media industry, Space Media Inc.(TM) (SMI)
has joined forces with RSC Energia forming a multimedia partnership,
Enermedia LLC, it was announced today by Dr. Shelley Harrison, Chief
Executive Officer, SMI.

Space Media Inc. will develop and provide multimedia content both
for television broadcast and Internet distribution from the Russian
Service Module of the International Space Station (ISS) and Russian
Space Program archives. RSC Energia is the prime contractor for the
ISS Russian segments. Space Media Inc. is a subsidiary of SPACEHAB
Inc. , which is building the Enterprise(TM) in
partnership with RSC Energia.

“This marks the beginning of a new era of doing business
cooperatively in space. Our partners at RSC Energia have an
outstanding history of quality and achievement in space. We
congratulate them on the successful mission of the Service Module to
the ISS and anticipate a long, productive, profitable and rewarding
relationship,” said Dr. Harrison.

“Our partnership with Space Media Inc. will allow us to share the
wonder, excitement, education and adventure of spaceflight that has
previously been available only to cosmonauts and astronauts. Earlier
this year, we celebrated the new millennium. Today, we celebrate the
new age of space travel in which international multimedia cooperation
will allow anyone to experience spaceflight,” stated RSC Energia
Chairman Yury P. Semenov.

“Working with RSC Energia, we will look forward to the opportunity
to use media to better share the adventure of spaceflight with anyone
who has access to a computer or television. This remarkable new era
will help open the universe and all its potential to millions of
people,” said John Getter, SMI, Senior Vice President of Creative
Services.

Although a young business, SMI earned recognition from the
educational community with its highly successful S*T*A*R*S*(TM) (Space
Technology and Research Students) program. Recently honored by the
Smithsonian’s National Air and Space Museum in Washington, D.C.,
S*T*A*R*S is a commercial education initiative designed to engage
students in science and technology while enabling them to share in the
excitement of space research and exploration by designing and flying
their own experiments in space. More than 500,000 children in 8
countries around the world are active participants in the S*T*A*R*S.

SMI recently announced the purchase of www.thespacestore.com. This
move is the latest in a series of actions by SMI to connect people and
space. The site offers visitors genuine quality products related to
space exploration and learning for purchase on the Web.
www.thespacestore.com now carries more than 400 different space items
including NASA flight suits for adults and kids, space food, official
astronaut mission patches, space toys and more. Web surfers can also
research the latest space shuttle mission, find educational links for
kids or download an actual astronaut application on the site.

RSC Energia is one of the most respected and experienced aerospace
manufacturers in the world. RSCE has designed and built spacecraft
ranging from the Sputnik to MIR. Working with SMI parent SPACEHAB, the
firm is designing and building the Enterprise(TM), the first
commercial facility in Earth orbit. It will be launched and attached
to the International Space Station in 2003.

SPACEHAB is the world’s leading provider of commercial services
for manned and unmanned missions in space. SPACEHAB is the first
company to commercially develop, own and operate habitable modules
that provide laboratory facilities and logistics aboard NASA’s Space
Shuttles. The company also supports NASA astronaut training at Johnson
Space Center in Houston.

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.