Herley Receives $1.3 Million Contract Award From 'EADS'; Follow-On Orders Expected to Exceed $4 Million; First Contract From 'MRCM' Partnership.

Business Editors/Hi-Tech Writers

LANCASTER, Pa.--(BUSINESS WIRE)--July 9, 2001

Herley Industries, Inc. (NASDAQ:HRLY), announced today that Herley Power Amplifier Systems (HPAS) has received a $1.3 million contract to design and build high power amplifiers for a tactical jammer with a follow-on potential of more than $4 million.

The award was received through Herley's MRCM(R) partner, EADS ewation. EADS ewation is the signal intelligence/electronic warfare division of European Aeronautic Defence and Space Company, the third largest defense/aerospace company in the world.

Myron Levy, CEO of Herley, stated, "It is very gratifying to begin our partnership with EADS ewation, with this major contract for the electronic warfare system of the future." Mr. Levy continued, "As we begin our recently announced partnership with MRCM(R) companies, we expect Herley to be a valuable contributor."

Joseph Frumkin, General Manager of HPAS, stated, "This award is a major win for Herley and is consistent with the intent of the Sales and Marketing Agreement among the MRCM(R) partners. Herley has worked very hard at developing and expanding our business relationships in the international arena, another major international win is expected to be announced shortly."

MRCM(R) is a worldwide strategic alliance, which stands for an exceptional portfolio of products and key technologies as well as systems and software engineering capabilities in the field of Monitoring, Reconnaissance and Counter Measures.

MRCM(R) is the basis for future system design to achieve customer-tailored solutions with increased flexibility, improved cost-effectiveness and reduced implementation risk.

Herley Industries, Inc. is a leader in the design, development and manufacture of microwave technology solutions for the commercial wireless and defense/aerospace industries. Based in Lancaster, PA, Herley has eight manufacturing facilities and approximately 650 employees worldwide. Additional information about the company can be found on the Internet at www.herley.com.

Safe Harbor Statement - Except for the historical information contained herein, this release may contain forward-looking statements. Such statements are inherently subject to risks and uncertainties.

The Company's results could differ materially based on various factors, including, but not limited to cancellation or deferral of customer orders, difficulties in the timely development of new products, difficulties in manufacturing, increased competitive pressures, and general economic conditions.