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                                                                    EXHIBIT 10.3


                                                    Letter Contract No. SHB 1014
                                                    Modification No.          06
                                                    Date:       December 19,1997


To:                                                 From:
The Boeing Company                                  SPACEHAB, Inc.
689 Discovery Drive                                 1595 Spring Hill Road
Huntsville, Alabama 35806                           Suite 360
                                                    Vienna, VA 22182
                                                    
Attn:            Doyle McBride
                 Senior Contracts Administrator


Dear Mr. McBride:

Letter Contract No. 1014 is hereby amended as follows:

Paragraph 1 is deleted in its entirety and replaced with the following:

"1.      SPACEHAB, Inc. ("SPACEHAB"), hereby commercially contracts with
         McDonnell Douglas Aerospace - Huntsville (hereinafter referred to as
         "MDA-Huntsville" or "Seller"), a division of the McDonnell Douglas
         Corporation, a wholly-owned subsidiary of the Boeing Company, for the
         following:

         a.      The performance of all integration and operations tasks
                 required to successfully complete 4 SPACEHAB science missions
                 (1 single module mission and 3 double module missions) and 2
                 SPACEHAB cargo double module missions (Multiple Mission
                 Integration and Operations (MM I/O Tasks)).  The definitized
                 contract will include options for 3 additional cargo double
                 module missions that may be executed in accordance with the
                 definitized schedule.

         b.      Initiation of effort to enhance cargo carrying capability of
                 the SPACEHAB module consistent with capabilities presented to
                 SHI on 28 August 1997 as follows: i) Ceiling stowage system is
                 desired for use on STS-95 (2 bags are required). Use best
                 efforts for partial system capability (2 bags) for use on
                 STS-91.  Provide a firm quotation for 1 set of ceiling
                 enhancement hardware within 150 days from the date of
                 Modification 01 to this Letter Agreement and ii) Rack front
                 stowage system (along with ceiling system) is required for use
                 on STS-96.  Provide a firm quotation for 3 sets of rack
                 enhancement hardware within 180 days from the date of
                 Modification 01 to this Letter Agreement.

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                                                     Letter Contract No. SHB1014
                                                             Modification No. 06
                                                                19 December 1997

         c.      Initiation of effort to design, develop, build, and certify a
                 roof-top stowage adapter plate system, as described to SHI on
                 6 November 1997.  This system is to consist of raised mounting
                 plates with generic hold patterns for payload mounting.  Each
                 available roof top quadrant shall be capable of supporting 500
                 lb. gross weight (design goal, which includes a design goal of
                 75 lb. for the mounting plate).  Boeing is to work with SHI
                 and/or a selected EVA hardware contractor to develop the
                 generic hole pattern and to define environments, volumetric
                 envelops, weight and c.g. requirements, etc. for equipment to
                 be mounted to the plate(s).  This capability is required for
                 STS-96.  Provide a firm quotation for 6 total units within 90
                 days of the date of Modification 03 to this Letter Agreement.

         d.      Initiation of effort to design, develop, build, and certify
                 the necessary hardware to accommodate the Experiment Water
                 Pump Package in a SPACEHAB double rack.  This capability is
                 required for STS-95.  Provide a firm quotation with prices for
                 1, 2, or 3 sets of this within 90 days of the date of
                 Modification 03 to this Letter Agreement.

         e.      Initiation of effort to design, develop, build, and certify
                 new MGSE for the 27.14 inch tunnel as described  to SHI on 7
                 November 1997.  This equipment is required to process STS-95.
                 Provide a firm quotation for this effort within 90 days of the
                 date of Modification 03 to this Letter Agreement.

         f.      Initiation of the effort to perform the following tasks under
                 WBS 9.1.9.5.2 Flight Systems:

                 (i)      9.1.9.5.2.1  Logistics Double Module Enhancements.
                          This element contains the labor effort necessary to
                          identify, evaluate, and recommend ways to enhance the
                          cargo carrying capability of the Logistics Double
                          Module.

                 (ii)     9.1.9.5.2.2  Research Double Module Enhancements.
                          This element contains the labor effort necessary to
                          identify, evaluate, and recommend ways to enhance the
                          capability of the Research Double module to
                          accommodate new payloads and improve accommodations
                          for existing payloads.

                 (iii)    9.1.9.5.2.3  Integrated Cargo Services.  This element
                          contains the labor effort necessary to evaluate
                          future storage/cargo requirements associated with the
                          International Space Station and determine proposed
                          solutions considering all SPACEHAB assets.  This
                          element includes studies, evaluations, and support of
                          the new SPACEHAB provided Integrated Cargo Carrier
                          assets.

         g.      Initiation of effort to provide payload optional services for
                 STS-95 including the design and development of a triple
                 mounting plate for BioBox and the design and development of a
                 double mounting plate for MGBX.  Provide a firm quotation for
                 this effort within 90 days of this modification.
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                                                     Letter Contract No. SHB1014
                                                             Modification No. 06
                                                                19 December 1997



         h.      Initiation of effort to upgrade the existing engineering
                 prototype SCU unit for use as flight spare on STS-95 and
                 provide a firm quotation for this effort within 90 days of
                 this modification.

         i.      Initiation of effort to perform a GTS Win NT upgrade as
                 proposed in Supplement No. 1."

Paragraph 3 is deleted in its entirety and replaced with the following.

"3.      The maximum amount (including, but not limited to, a reasonable amount
for termination costs and for 12 percent fee) for which SPACEHAB shall be
liable under this letter contract is $1,434,076.00 for the effort described in
Paragraph 1.a;  $65,000.00 for the effort described in Paragraph 1.b;
$90,000.00 for the effort described in Paragraph 1.c.; $45,000.00 for the
effort described in Paragraph 1.d.; $20,000.00 for the effort described in
Paragraph 1.e.; $25,000.00 for the effort described in Paragraph 1.f.(i);
$25,000.00 for the effort described in Paragraph 1.f.(ii); $25,000.00 for the
effort described in Paragraph 1.f.(iii); $45,000 for the effort described in
Paragraph 1.g.; $15,000.00 for the effort described in Paragraph 1.h.; and
$20,700 for the effort described in Paragraph 1.i."

Paragraph 8 is deleted in its entirety and replaced with the following:

         "8.     Period of performance:  8/13/97 - January 30, 1998"

Except as hereby modified, all conditions of said contract as heretofore
modified, remain unchanged and in full force and effect.

Contractor is directed to account for costs in such a manner as to allow
visibility into the costs of effort authorized in this change order.

Please acknowledge receipt of this Change Notice by returning the
acknowledgment copy (within l0 days of receipt) signed with date of receipt
indicated.


/s/ NELDA WILBANKS                         /s/ DOYLE MCBRIDE
---------------------                      ---------------------------------
Nelda Wilbanks                             Doyle McBride
SPACEHAB, Inc.                             McDonnell Douglas Corporation,
                                           A Wholly-Owned Subsidiary of
                                           The Boeing Company




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