- U. S. Government Suspension Has Been Lifted

- Herley Chairman Expects Business Operations Will Return to Normal

LANCASTER, Pa., Oct. 13 /PRNewswire-FirstCall/ -- Herley Industries, Inc. (Nasdaq: HRLY) announced today it has reached an Administrative Agreement with The OGC Acquisition Integrity Office, Department of Navy. With this agreement, the suspension preventing new contract awards at manufacturing locations in Lancaster, Pennsylvania, Woburn, Massachusetts, and Farmingdale, New York since June 8, has been lifted, and Herley is now able to resume its normal business dealings with both its DOD and prime contractor customers.

Myron Levy, Chairman and CEO, remarked, "We are pleased that our negotiations with representatives of the OGC for Acquisition Integrity of the Department of the Navy, have been successfully concluded. It has been a difficult period for new bookings, but we believe that most of the contracts that we would have received during the past three months have only been delayed, and they will now be placed quickly. We look forward to once again providing the services of all of our locations to our prime contractor customers and to the U. S. Government. I am especially appreciative of the support and encouragement we have received from our customers as they have worked with us through this period. I would like to think that the strength of our unique technical capabilities in critical military applications may have been an influencing factor in the successful conclusion of these negotiations."

Mr. Levy continued, "We will move as quickly as possible to book the business that has been delayed and to schedule deliveries to meet our customer's needs. Our employees and our customers have been very supportive, and we can now turn, fully focused, to the business at hand."

Herley Industries, Inc. is a leader in the design, development and manufacture of microwave technology solutions for the defense, aerospace and medical industries worldwide. Based in Lancaster, PA, Herley has eight manufacturing locations and over 1000 employees. Additional information about the company can be found on the Internet at http://www.herley.com.

Except for the historical information contained herein, this release may contain forward-looking statements. Such statements are inherently subject to risks and uncertainties. When used in this report, words such as "anticipated," "believes," "could," "estimates," "expects," "may," "plans," "potential" and "intends" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward- looking statements are based on the belief of the Company's management, as well as assumptions made by and information currently available to the Company's management. 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, the effects of the recently announced indictment of the Company and general economic conditions. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.

For information at Herley contact:

     Peg Guzzetti                           Tel:  (717) 735-8117
     Investor Relations                     www.herley.com