Exhibit 10.20
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                            ASSET PURCHASE AGREEMENT

     This  Asset  Purchase  Agreement  (this  "Agreement")  entered  into  as of
September 1 , 2004, by and between  HERLEY - RSS,  INC., a Delaware  corporation
("HERLEY") and RELIABLE SYSTEM SERVICES  CORP., a Florida  Corporation  ("RSS").
HERLEY and RSS are referred to collectively herein as the "Parties."

     This  Agreement  contemplates  a transaction  in which HERLEY will purchase
certain of the assets of RSS in return for cash.

     Now,  therefore,  in  consideration of the premises and the mutual promises
herein  made,  and in  consideration  of the  representations,  warranties,  and
covenants herein contained, the Parties agree as follows.

     Section 1. Definitions

     "Acquired Assets" means all right, title, and interest in and to certain of
the assets of RSS,  including all of its (a) Leased Real Property,  (b) tangible
personal  property (such as machinery,  equipment,  inventories of raw materials
and supplies,  manufactured and purchased  parts,  goods in process and finished
goods, furniture,  automobiles,  trucks,  tractors,  trailers,  tools, jigs, and
dies), (c) Intellectual  Property,  goodwill associated therewith,  licenses and
sublicenses  granted and obtained with respect thereto,  and rights  thereunder,
remedies against  infringements  thereof,  and rights to protection of interests
therein under the laws of all jurisdictions,  (d) leases,  subleases, and rights
thereunder,  (e)  agreements,  contracts,  indentures,  mortgages,  instruments,
Liens,  guaranties,  other  similar  arrangements,  and rights  thereunder,  (f)
accounts,  notes, and other receivables,  (g) securities , (h) claims, deposits,
prepayments,  refunds,  causes of action,  choses in action, rights of recovery,
rights  of set off,  and  rights  of  recoupment  , (i)  franchises,  approvals,
permits, licenses, orders, registrations,  certificates,  variances, and similar
rights obtained from governments and governmental  agencies, (j) books, records,
ledgers, files, documents,  correspondence,  lists, plats,  architectural plans,
drawings,  and specifications,  creative materials,  advertising and promotional
materials,  studies, reports, and other printed or written materials ; provided,
however,  that the Acquired Assets shall not include (i) the corporate  charter,
qualifications to conduct business as a foreign  corporation,  arrangements with
registered  agents  relating  to  foreign  qualifications,  taxpayer  and  other
identification  numbers,  seals, minute books, stock transfer books, blank stock
certificates, and other documents relating to the organization, maintenance, and
existence of RSS as a  corporation  or limited  liability  company (ii) Cash, or
(iii) any of the rights of RSS under this Agreement (or under any side agreement
between  RSS on the one hand and  HERLEY on the other  hand  entered  into on or
after the date of this Agreement).

     "Adverse  Consequences"  with respect to RSS, Powers and Perez-Falcon shall
mean:

     (i) any breach or  default in the  performance  by RSS of any  covenant  or
agreement  of RSS  contained  herein or in any  certificate  delivered  pursuant
hereto at the Closing;

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     (ii) any breach of  warranty or  representation  made by RSS  contained  in
Section 3 of this Agreement or in any certificate  delivered  pursuant hereto at
the Closing; or

     (iii) any Losses arising out of any Excluded  Liabilities.

     With  respect  to  Herley,  Adverse  Consequences  shall mean any breach of
warranty or  representation  contained in Section 4 of this  Agreement or in any
certificate delivered pursuant hereto at the Closing.

     "Affiliate"  has the  meaning  set forth in Rule  12b-2 of the  regulations
promulgated under the Securities Exchange Act.

     "Affiliated  Group" means any  affiliated  group within the meaning of Code
Section 1504(a) or any similar group defined under a similar provision of state,
local, or foreign law.

     "Assumed  Liabilities"  means (a) all  liabilities  of RSS set forth on the
face of the Most Recent  Balance Sheet , (b) all  liabilities  of RSS which have
arisen after the Most Recent Fiscal Month End in the Ordinary Course of Business
(other than any liability  resulting  from,  arising out of, relating to, in the
nature  of, or  caused by any  breach of  contract,  breach of  warranty,  tort,
infringement,  violation  of law, or  environmental  matter,  including  without
limitation those arising under Environmental,  Health, and Safety Requirements),
(c) all obligations of RSS under the agreements,  contracts,  leases,  licenses,
and other  arrangements  referred to in the definition of Acquired Assets either
(i) to furnish goods,  services,  and other  non-Cash  benefits to another party
after  the  Closing  or (ii) to pay for  goods,  services,  and  other  non-Cash
benefits  that another  party will  furnish to it after the  Closing;  provided,
however,  that,  notwithstanding  the above, the Assumed  Liabilities  shall not
include (aa) any liability of RSS for Taxes,  (bb) except as provided in Section
8(l) below,  any  liability  of RSS for  transfer,  sales,  use, and other Taxes
arising in connection  with the  consummation of the  transactions  contemplated
hereby,  or (cc)  any  liability  of RSS for  costs  and  expenses  incurred  in
connection with this Agreement and the transactions  contemplated hereby, or(dd)
any  liability  or  obligation  of RSS under this  Agreement  (or under any side
agreement  between RSS on the one hand and HERLEY on the other hand entered into
on or after the date of this Agreement).

     "Basis" means any past or present fact,  situation,  circumstance,  status,
condition,  activity,  practice,  plan,  occurrence,  event,  incident,  action,
failure  to act,  or  transaction  that  forms or could  form the  basis for any
specified consequence.

     "Cash" means cash and cash equivalents (including marketable securities and
short term  investments)  calculated in accordance  with GAAP applied on a basis
consistent with the preparation of the Financial Statements.

     "CERCLA" has the meaning set forth in Section 3(z).

     "Closing" has the meaning set forth in Section 2(e) below.

     "Closing Date" has the meaning set forth in Section 2(e) below.

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     "Closing  Date  Balance  Sheet" has the meaning  set forth in Section  2(d)
below.

     "COBRA" means the  requirements of Part 6 of Subtitle B of Title I of ERISA
and Code Section 4980B and of any similar state law.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Confidential  Information" means any information concerning the businesses
and affairs of RSS that is not already generally available to the public.

     "RSS" has the meaning set forth in the preface above.

     "Disclosure Schedule" has the meaning set forth in Section 3 below.

     "Employee  Benefit Plan" means any "employee benefit plan" (as such term is
defined in ERISA Section 3(3)) and any other employee  benefit plan,  program or
arrangement of any kind.

     "Employee  Pension Benefit Plan" has the meaning set forth in ERISA Section
3(2).

     "Employee  Welfare Benefit Plan" has the meaning set forth in ERISA Section
3(1).

     "Environmental,  Health, and Safety  Requirements"  shall mean all federal,
state,  local,  and  foreign  statutes,  regulations,  ordinances,  and  similar
provisions  having the force or effect of law, all  judicial and  administrative
orders  and  determinations,  and all common law  concerning  public  health and
safety,   worker  health  and  safety,   and  pollution  or  protection  of  the
environment,  including  without  limitation all those relating to the presence,
use,  production,  generation,  handling,  transportation,  treatment,  storage,
disposal,  distribution,  labeling,  testing,  processing,  discharge,  release,
threatened release, control, or cleanup of any hazardous materials,  substances,
or  wastes,   chemical   substances,   or  mixtures,   pesticides,   pollutants,
contaminants,  toxic  chemicals,  petroleum  products or  byproducts,  asbestos,
polychlorinated biphenyls, noise, or radiation.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended.

     "ERISA  Affiliate"  means each entity that is treated as a single  employer
with RSS for purposes of Code Section 414.

     "Estoppel Certificates" has the meaning set forth in Section 6(a) below.

     "Excess Loss Account" has the meaning set forth in Reg. Section 1.1502-19.

     "Excluded Liabilities" shall mean the liabilities set forth in (aa) through
(dd) within the definition of Assumed  Liabilities  and any liability  resulting
from,  arising out of, relating to, in the nature of, or caused by the operation
of the  business  of RSS prior to the Closing  and not  specifically  assumed by
HERLEY in this Agreement.

     "Fiduciary" has the meaning set forth in ERISA Section 3(21).

     "Financial Statements" has the meaning set forth in Section 3(g) below.

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     "GAAP" means United States generally accepted  accounting  principles as in
effect from time to time, consistently applied.

     "HERLEY" has the meaning set forth in the preface above.

     "Improvements" has the meaning set forth in Section 3(l) below.

     "Income  Tax" means any  federal,  state,  local,  or foreign  income  tax,
including any interest, penalty, or addition thereto, whether disputed or not.

     "Income  Tax  Return"  means any  return,  declaration,  report,  claim for
refund, or information return or statement  relating to Income Taxes,  including
any schedule or attachment thereto, and including any amendment thereof.

     "Intellectual  Property"  means all of the  following  in any  jurisdiction
throughout the world: (a) all inventions (whether patentable or unpatentable and
whether or not reduced to practice),  all improvements thereto, and all patents,
patent  applications,  and patent  disclosures,  together with all  reissuances,
continuations, continuations-in-part,  revisions, extensions, and reexaminations
thereof, (b) all trademarks,  service marks, trade dress, logos, slogans,  trade
names,  corporate names, Internet domain names, and rights in telephone numbers,
together  with all  translations,  adaptations,  derivations,  and  combinations
thereof and including all goodwill associated  therewith,  and all applications,
registrations,  and  renewals in  connection  therewith,  (c) all  copyrightable
works,  all copyrights,  and all  applications,  registrations,  and renewals in
connection  therewith,  (d) all mask works and all applications,  registrations,
and renewals in connection  therewith,  (e) all trade  secrets and  confidential
business  information  (including  ideas,  research and  development,  know-how,
formulas,  compositions,  manufacturing and production processes and techniques,
technical data, designs, drawings, specifications,  customer and supplier lists,
pricing and cost  information,  and business and marketing plans and proposals),
(f) all  computer  software  (including  source  code,  executable  code,  data,
databases,  and  related  documentation),   (g)  all  material  advertising  and
promotional materials,  (h) all other proprietary rights, and (i) all copies and
tangible embodiments thereof (in whatever form or medium).

     "Intercompany  Transaction"  has the  meaning  set  forth  in Reg.  Section
1.1502-13.

     "Knowledge" means actual knowledge after reasonable investigation.

     "Lease Consents" has the meaning set forth in Section 6(a) below.

     "Leased Real  Property"  means all  leasehold or  subleasehold  estates and
other  rights to use or occupy any land,  buildings,  structures,  improvements,
fixtures or other interest in real property held by RSS.

     "Leases"  means all  leases,  subleases,  licenses,  concessions  and other
agreements (written or oral),  including all amendments,  extensions,  renewals,
guaranties  and other  agreements  with respect  thereto,  pursuant to which RSS
holds any Leased Real Property.

     "Lien" means any mortgage,  pledge,  lien,  encumbrance,  charge,  or other
security interest.

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     "Material  Adverse Effect" or "Material Adverse Change" means any effect or
change  that would be  materially  adverse to the  business,  assets,  condition
(financial or otherwise),  operating results,  operations, or business prospects
of RSS,  taken as a whole,  or on the ability of any Party to consummate  timely
the transactions contemplated hereby.

     "Most Recent  Balance Sheet" means the balance sheet  contained  within the
Most Recent Financial Statements.

     "Most  Recent  Financial  Statements"  has the meaning set forth in Section
3(g) below.

     "Most  Recent  Fiscal  Month End" has the meaning set forth in Section 3(g)
below.

     "Most  Recent  Fiscal Year End" has the  meaning set forth in Section  3(g)
below.

     "Multiemployer Plan" has the meaning set forth in ERISA Section 3(37).

     "Ordinary  Course of  Business"  means  the  ordinary  course  of  business
consistent with past custom and practice (including with respect to quantity and
frequency).

     "Party" has the meaning set forth in the preface above.

     "PBGC" means the Pension Benefit Guaranty Corporation.

     "Person" means an  individual,  a  partnership,  a  corporation,  a limited
liability  company,  an  association,  a joint stock  company,  a trust, a joint
venture,  an  unincorporated  organization,  any  other  business  entity  or  a
governmental  entity  (or  any  department,  agency,  or  political  subdivision
thereof).

     "Prohibited Transaction" has the meaning set forth in ERISA Section 406 and
Code Section 4975.

     "Purchase Price" has the meaning set forth in Section 2(c) below.

     "Reportable Event" has the meaning set forth in ERISA Section 4043.

     "Securities Act" means the Securities Act of 1933, as amended.

     "Securities  Exchange  Act" means the  Securities  Exchange Act of 1934, as
amended.

     "Subsidiary"  means, with respect to any Person,  any corporation,  limited
liability company,  partnership,  association, or other business entity of which
(i) if a  corporation,  a majority of the total  voting power of shares of stock
entitled  (without  regard to the occurrence of any  contingency) to vote in the
election of  directors,  managers,  or trustees  thereof is at the time owned or
controlled,  directly or indirectly,  by that Person or one or more of the other
Subsidiaries  of that  Person  or a  combination  thereof  or (ii) if a  limited
liability  company,  partnership,  association,  or other business entity (other
than a  corporation),  a majority  of  partnership  or other  similar  ownership
interest thereof is at the time owned or controlled,  directly or indirectly, by
that Person or one or more Subsidiaries of that Person or a combination  thereof
and for this purpose,  a Person or Persons owns a majority ownership interest in
such a business  entity  (other  than a  corporation)  if such Person or Persons
shall be allocated a majority of such business entity's gains or losses or shall

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be or control any managing  director or general  partner of such business entity
(other than a corporation). The term "Subsidiary" shall include all Subsidiaries
of such Subsidiary.

     "Systems" has the meaning set forth in Section 3(aa) below.

     "Tax" or "Taxes" means any federal,  state, local, or foreign income, gross
receipts,  license, payroll,  employment,  excise, severance, stamp, occupation,
premium,  windfall  profits,  environmental  (including taxes under Code Section
59A), customs duties, capital stock,  franchise,  profits,  withholding,  social
security  (or  similar),  unemployment,   disability,  real  property,  personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum,  estimated, or other tax of any kind whatsoever,  whether computed on a
separate  or  consolidated,  unitary or combined  basis or in any other  manner,
including any interest, penalty, or addition thereto, whether disputed or not.

     "Tax Return" means any return,  declaration,  report,  claim for refund, or
information  return or statement  relating to Taxes,  including  any schedule or
attachment  thereto,  and  including  any  amendment  thereof.

     Section 2. Basic Transaction.

     (a) Purchase and Sale of Assets. On and subject to the terms and conditions
of this  Agreement,  HERLEY agrees to purchase from RSS, and RSS agrees to sell,
transfer,  convey,  and  deliver to HERLEY,  all of the  Acquired  Assets at the
Closing for the consideration specified below in this Section 2.

     (b) Assumption of  Liabilities.  On and subject to the terms and conditions
of this Agreement, HERLEY agrees to assume and become responsible for all of the
Assumed  Liabilities  at the  Closing.  HERLEY  will  not  assume  or  have  any
responsibility,  however,  with respect to any other  obligation or liability of
RSS not included within the definition of Assumed Liabilities.

     (c) Purchase  Price.  HERLEY agrees to pay to RSS at the Closing the sum of
$3,725,000 (the "Purchase Price") payable by wire transfer.

     (d) The  Closing.  The  closing of the  transactions  contemplated  by this
Agreement (the "Closing") shall take place at the offices of Herley  Industries,
Inc. in Lancaster, Pennsylvania, commencing at 9:00 a.m. local time on September
20, 2004.

     (e)  Deliveries  at the Closing.  At the  Closing,  (i) RSS will deliver to
HERLEY the  various  certificates,  instruments,  and  documents  referred to in
Section 6(a) below;  (ii) HERLEY will  deliver to RSS the various  certificates,
instruments,  and  documents  referred to in Section 6(b) below;  (iii) RSS will
execute,  acknowledge  (if  appropriate),  and deliver to HERLEY or caused to be
delivered  to  HERLEY  such  instruments  of  sale,  transfer,  conveyance,  and
assignment as HERLEY and its counsel  reasonably  may request;  (iv) HERLEY will
execute,  acknowledge (if  appropriate),  and deliver to RSS such instruments of
assumption as RSS and its counsel  reasonably  may request;  and (v) HERLEY will
deliver to RSS the consideration specified in Section 2(c) above.

     (f)  Allocation.  The Parties agree to allocate the Purchase Price (and all
other capitalizable costs) among the Acquired Assets for all purposes (including
financial  accounting  and Tax  purposes)  in  accordance  with  the  allocation
schedule attached hereto as Exhibit E.

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     Section 3. RSS and Principal Stockholders'  Representations and Warranties.
RSS  and  Emilio  Power  and  Tony   Perez-Falcon   (hereafter   the  "Principal
Stockholders"),  jointly and severally, represent and warrant to HERLEY that the
statements  contained  in this Section 3 are correct and complete as of the date
of this  Agreement  and will be correct and  complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Section 3), except as set forth in the disclosure
schedule accompanying this Agreement (the "Disclosure Schedule"). The Disclosure
Schedule  will be arranged  in  paragraphs  corresponding  to the  lettered  and
numbered paragraphs contained in this Section 3.

     (a)  Organization  of RSS. RSS is a  corporation  duly  organized,  validly
existing, and in good standing under the laws of Florida.

     (b)  Authorization  of  Transaction.  RSS  has  full  power  and  authority
(including  full  corporate or other entity power and  authority) to execute and
deliver  this  Agreement  and to  perform  its  obligations  hereunder.  Without
limiting  the  generality  of  the   foregoing,   the  board  of  directors  and
shareholders  of  RSS  have  duly  authorized  the  execution,   delivery,   and
performance of this Agreement by RSS. This Agreement  constitutes  the valid and
legally binding obligation of RSS,  enforceable in accordance with its terms and
conditions.

     (c)  Non-contravention.  Neither  the  execution  and the  delivery of this
Agreement,  nor  the  consummation  of  the  transactions   contemplated  hereby
(including the assignments and assumptions referred to in Section 2 above), will
(i) violate any constitution,  statute, regulation, rule, injunction,  judgment,
order,  decree,   ruling,  charge,  or  other  restriction  of  any  government,
governmental  agency,  or court to which RSS is subject or any  provision of the
charter  or  bylaws  of RSS or  (ii)  conflict  with,  result  in a  breach  of,
constitute a default under,  result in the  acceleration of, create in any party
the right to accelerate,  terminate,  modify,  or cancel,  or require any notice
under any agreement,  contract, lease, license, instrument, or other arrangement
to which RSS is a party or by which it is bound or to which any of its assets is
subject (or result in the imposition of any Lien upon any of its assets), except
where the  violation,  conflict,  breach,  default,  acceleration,  termination,
modification,  cancellation,  failure to give  notice,  or Lien would not have a
Material  Adverse  Effect.  RSS does not need to give any  notice  to,  make any
filing with, or obtain any authorization, consent, or approval of any government
or  governmental  agency or any other  third  party in order for the  Parties to
consummate  the  transactions  contemplated  by this  Agreement  (including  the
assignments and assumptions referred to in Section 2 above).

     (d) Brokers'  Fees.  RSS has no liability or  obligation to pay any fees or
commissions  to any broker,  finder,  or agent with respect to the  transactions
contemplated  by  this  Agreement  for  which  HERLEY  could  become  liable  or
obligated.

     (e)  Title to  Assets.  RSS has good and  marketable  title  to, or a valid
leasehold  interest in, the properties and assets used by them, located on their
premises, or shown on their Most Recent Balance Sheet or acquired after the date
thereof,  free and clear of all Liens, except for properties and assets disposed
of in the Ordinary  Course of Business since the date of the Most Recent Balance
Sheet.  Without  limiting  the  generality  of the  foregoing,  RSS has good and
marketable  title to all of the Acquired  Assets,  free and clear of any Lien or
restriction on transfer.

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     (f) Subsidiaries. RSS has no subsidiaries.

     (g) Financial  Statements.  Attached  hereto as Exhibit F are the following
financial  statements  (collectively  the "Financial  Statements"):  (i) balance
sheet and statement of income,  as of and for the fiscal year ended December 31,
2003 (the "Most Recent  Fiscal Year End") for RSS;  and (ii) balance  sheets and
statements of income (the "Most Recent Financial  Statements") as of and for the
six (6) months ended June 30, 2004 (the "Most Recent Fiscal Month End") for RSS.
The Financial  Statements  present  fairly the financial  condition of RSS as of
such dates and the  results of  operations  of RSS for such  periods;  provided,
however,  that the Most  Recent  Financial  Statements  are  subject  to  normal
year-end  adjustments  (which  will  not  be  material  individually  or in  the
aggregate) and lack footnotes and other presentation items.

     (h) Events Subsequent to Most Recent Fiscal Year End. Since the Most Recent
Fiscal  Year  End,  there  has not been any  Material  Adverse  Change.  Without
limiting the generality of the foregoing, since that date:

          (i) RSS has not sold,  leased,  transferred,  or assigned any material
     assets, tangible or intangible, outside the Ordinary Course of Business;

          (ii) RSS has not entered into any material agreement, contract, lease,
     or license outside the Ordinary Course of Business;

          (iii) RSS has not accelerated, terminated, made material modifications
     to, or cancelled any material  agreement,  contract,  lease,  or license to
     which RSS is a party or by which they are bound;

          (iv) RSS has not imposed any Lien upon any of its assets,  tangible or
     intangible;

          (v) RSS has not made any  material  capital  expenditures  outside the
     Ordinary Course of Business;

          (vi) RSS has not made  any  material  capital  investment  in,  or any
     material loan to, any other Person outside the Ordinary Course of Business;

          (vii) RSS has not  transferred,  assigned,  or granted  any license or
     sublicense of any material rights under or with respect to any Intellectual
     Property; (viii) there has been no change made or authorized in the charter
     or bylaws of RSS;

          (ix) RSS has not issued,  sold,  or  otherwise  disposed of any of its
     capital  stock,  or  granted  any  options,  warrants,  or other  rights to
     purchase or obtain (including upon conversion,  exchange,  or exercise) any
     of its capital stock;

          (x) RSS has not experienced any material damage,  destruction, or loss
     (whether or not covered by insurance) to its property;

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          (xi)  RSS has not  made  any  loan  to,  or  entered  into  any  other
     transaction with, any of its directors, officers, and employees outside the
     Ordinary Course of Business;

          (xii) RSS has not entered into any  employment  contract or collective
     bargaining  agreement,  written  or  oral,  or  modified  the  terms of any
     existing such contract or agreement;

          (xiii) RSS has not granted any  increase in the base  compensation  of
     any of its directors,  officers,  and employees outside the Ordinary Course
     of Business;

          (xiv) RSS has not adopted, amended, modified, or terminated any bonus,
     profit  sharing,   incentive,   severance,  or  other  plan,  contract,  or
     commitment for the benefit of any of its directors, officers, and employees
     (or taken any such action with respect to any other Employee Benefit Plan);

          (xv) RSS has not made any other  material  change in employment  terms
     for any of its  directors,  officers,  and  employees  outside the Ordinary
     Course of Business;

          (xvi) RSS has not changed its normal  business  practices or taken any
     other action  outside the Ordinary  Course of Business in order to generate
     Cash;

          (xvii) RSS has not made any loans or advances of money; and

          (xviii) RSS has not committed to any of the foregoing.

     (i) Undisclosed  Liabilities.  RSS has no material liability (whether known
or unknown,  whether  asserted or  unasserted,  whether  absolute or contingent,
whether accrued or unaccrued,  whether  liquidated or unliquidated,  and whether
due or to become due),  except for (i)  liabilities set forth on the face of the
Most Recent Balance Sheet and (ii) liabilities  which have arisen after the Most
Recent Fiscal Month End in the Ordinary Course of Business.

     (j) Legal  Compliance.  RSS has complied in all material  respects with all
applicable  laws  (including  rules,  regulations,  codes,  plans,  injunctions,
judgments,  orders,  decrees,  rulings, and charges thereunder and including the
Foreign Corrupt Practices Act, 15 U.S.C.  78dd-1,  et. seq.) of federal,  state,
local, and foreign governments (and all agencies thereof),  and no action, suit,
proceeding, hearing, investigation,  charge, complaint, claim, demand, or notice
has been filed or  commenced  against  any of them  alleging  any  failure so to
comply.

     (k) Real Property.

          (i) RSS owns no real property.

          (ii)  Section  3(k)(ii)  of the  Disclosure  Schedule  sets  forth the
     address of each parcel of Leased  Real  Property,  and a true and  complete
     list of all Leases for each such Leased Real Property  (including  the date
     and name of the  parties  to such Lease  document).  RSS has  delivered  to
     HERLEY a true and complete copy of each such Lease document.

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          (iii) The Leased Real Property  identified in Section  3(k)(ii) of the
     Disclosure  Schedule  (the  "Real  Property")  comprises  all of  the  real
     property used or intended to be used in the business of RSS; and RSS is not
     a party to any  agreement  or  option  to  purchase  any real  property  or
     interest therein.

          (iv)  All  buildings,   structures,  fixtures,  building  systems  and
     equipment,  and all components thereof,  included in the Real Property (the
     "Improvements")  are in good  condition and repair and  sufficient  for the
     operation of the  business of RSS as  historically  operated.  There are no
     facts  or  conditions  affecting  any  of  the  Improvements  which  would,
     individually  or in the aggregate,  interfere in any material  respect with
     the use or  occupancy  of the  Improvements  or any portion  thereof in the
     operation of the business of RSS as currently conducted thereon.

          (v) The  Leased  Real  Property  is in  material  compliance  with all
     applicable building, zoning, subdivision,  health and safety and other land
     use  laws,  including  the  Americans  with  Disabilities  Act of 1990,  as
     amended.

          (vi) A portion of the Real  Property is subleased to the United States
     Air Force.

    (l) Intellectual Property.

          (i) RSS has not interfered with, infringed upon,  misappropriated,  or
     violated any material  Intellectual Property rights of third parties in any
     material  respect,  and none of the  directors and officers of RSS has ever
     received any charge, complaint,  claim, demand, or notice alleging any such
     interference,  infringement,  misappropriation, or violation (including any
     claim that RSS must license or refrain from using any Intellectual Property
     rights of any third party).  To the Knowledge of the directors and officers
     of  RSS,   no  third   party   has   interfered   with,   infringed   upon,
     misappropriated,  or violated any material  Intellectual Property rights of
     RSS in any material respect.

          (ii)  Section  3(l)(ii) of the  Disclosure  Schedule  identifies  each
     patent or registration  which has been issued to RSS with respect to any of
     its Intellectual  Property,  identifies each pending patent  application or
     application for registration  which RSS has made with respect to any of its
     Intellectual  Property,  and identifies each license,  agreement,  or other
     permission  which RSS has granted to any third party with respect to any of
     its Intellectual Property (together with any exceptions). RSS has delivered
     to HERLEY correct and complete  copies of all such patents,  registrations,
     applications,  licenses,  agreements, and permissions (as amended to date).
     Section 3(l)(ii) of the Disclosure Schedule also identifies each trade name
     or unregistered  trademark,  service mark,  corporate name, Internet domain
     name, copyright,  and computer software item used by RSS in connection with
     any of its businesses.  With respect to each item of Intellectual  Property
     required to be identified in Section 3(l)(ii) of the Disclosure Schedule:

          (A) RSS possesses all right,  title,  and interest in and to the item,
     free and clear of any Lien, license, or other restriction;

          (B) the item is not subject to any outstanding  injunction,  judgment,
     order, decree, ruling, or charge;

                                       10
<PAGE>

          (C) no  action,  suit,  proceeding,  hearing,  investigation,  charge,
     complaint,  claim,  or  demand  is  pending  or,  to the  Knowledge  of the
     directors and officers of RSS, is threatened which challenges the legality,
     validity, enforceability, use, or ownership of the item; and

          (D) RSS has not agreed to  indemnify  any  Person  for or against  any
     interference,  infringement,   misappropriation,  or  other  conflict  with
     respect to the item, except in the Ordinary Course of Business.

          (iii) Section  3(l)(iii) of the Disclosure  Schedule  identifies  each
     item of  Intellectual  Property that any third party owns and that RSS uses
     pursuant  to  license,  sublicense,   agreement,  or  permission.  RSS  has
     delivered  to HERLEY  correct  and  complete  copies of all such  licenses,
     sublicenses, agreements, and permissions (as amended to date). With respect
     to each such item of used  Intellectual  Property required to be identified
     in Section 3(l)(iii) of the Disclosure Schedule:

          (A) the license,  sublicense,  agreement,  or permission  covering the
     item is legal, valid, binding, enforceable, and in full force and effect in
     all material respects;

          (B) no party to the license,  sublicense,  agreement, or permission is
     in material breach or default,  and no event has occurred which with notice
     or lapse of time would  constitute  a material  breach or default or permit
     termination, modification, or acceleration thereunder;

          (C) no party to the license, sublicense,  agreement, or permission has
     repudiated any material provision thereof;

          (D) RSS has not granted any  sublicense  or similar right with respect
     to the license, sublicense, agreement, or permission; and

          (E) no loss or  expiration  of the  item is  threatened,  pending,  or
     reasonably  foreseeable,  except for  patents  expiring at the end of their
     statutory  terms  (and  not as a  result  of any  act or  omission  by RSS,
     including  without  limitation,  a  failure  by  RSS to  pay  any  required
     maintenance fees).

     (m)  Tangible  Assets.  The  buildings,  machinery,  equipment,  and  other
tangible assets that RSS owns and leases are free from material  defects (patent
and latent),  have been maintained in accordance with normal industry  practice,
and are in good  operating  condition  and repair  (subject  to normal  wear and
tear).

     (n) Inventory. The inventory of RSS consists of raw materials and supplies,
manufactured  and processed parts,  work in process,  and finished goods, all of
which is  merchantable  and fit for the  purpose  for which it was  procured  or
manufactured  and RSS has provided a reserve for obsolete,  damaged or defective
inventory as set forth on the face of the Most Recent Balance Sheet.

     (o) Contracts.  Section 3(o) of the Disclosure Schedule lists the following
contracts and other agreements to which RSS is a party:

                                       11
<PAGE>

          (i) any  agreement (or group of related  agreements)  for the lease of
     personal  property to or from any Person  providing  for lease  payments in
     excess of $10,000 per annum;

          (ii) any agreement (or group of related  agreements)  for the purchase
     or  sale  of raw  materials,  commodities,  supplies,  products,  or  other
     personal  property,  or for the  furnishing  or  receipt of  services,  the
     performance  of which  will  extend  over a period of more than one year or
     involve consideration in excess of $10,000;

          (iii) any agreement concerning a partnership or joint venture;

          (iv) any agreement (or group of related agreements) under which it has
     created,  incurred,  assumed,  or guaranteed any  indebtedness for borrowed
     money, or any capitalized lease  obligation,  in excess of $10,000 or under
     which it has imposed a Lien on any of its assets, tangible or intangible;

          (v) any agreement concerning confidentiality or non-competition;

          (vi) any agreement involving any RSS Affiliates (other than RSS);

          (vii)  any  profit  sharing,  stock  option,  stock  purchase,   stock
     appreciation,   deferred   compensation,   severance,   or  other  plan  or
     arrangement for the benefit of its current or former  directors,  officers,
     and employees;

          (viii) any collective bargaining agreement;

          (ix)  any  agreement  for  the  employment  of  any  individual  on  a
     full-time,   part-time,   consulting,   or  other  basis  providing  annual
     compensation in excess of $25,000 or providing material severance benefits;

          (x) any agreement  under which it has advanced or loaned any amount to
     any of its directors,  officers,  and employees outside the Ordinary Course
     of Business;

          (xi) any  agreement  under  which the  consequences  of a  default  or
     termination could have a Material Adverse Effect.

          (xii)  any  agreement  under  which  it has  granted  any  Person  any
     registration rights (including,  without  limitation,  demand and piggyback
     registration rights);

          (xiii) any agreement  under which RSS has advanced or loaned any other
     Person amounts in the aggregate exceeding $10,000; or

          (xiv)  any  other  agreement  (or  group of  related  agreements)  the
     performance of which involves consideration in excess of $25,000.

RSS has  delivered  to  HERLEY  a  correct  and  complete  copy of each  written
agreement listed in Section 3(o) of the Disclosure Schedule (as amended to date)
and a written  summary  setting forth the material  terms and conditions of each
oral  agreement  referred to in Section 3(o) of the  Disclosure  Schedule.  With

                                       12
<PAGE>

respect to each such  agreement:  (A) the  agreement is legal,  valid,  binding,
enforceable, and in full force and effect in all material respects; (B) no party
is in material breach or default, and no event has occurred which with notice or
lapse  of time  would  constitute  a  material  breach  or  default,  or  permit
termination,  modification,  or  acceleration,  under the agreement;  and (C) no
party has repudiated any material provision of the agreement.

     (p) Accounts  Receivable.  All  accounts  receivable  of RSS are  reflected
properly on their books and records, are valid receivables subject to no setoffs
or  counterclaims,  are  current  and  collectible,  and  will be  collected  in
accordance  with their  terms at their  recorded  amounts,  subject  only to the
reserve for bad debts set forth on the face of the Most Recent Balance Sheet.

     (q)  Powers of  Attorney.  There  are no  outstanding  powers  of  attorney
executed on behalf of RSS.

     (r)  Insurance.  Section  3(r) of the  Disclosure  Schedule  sets forth the
following  information with respect to each insurance policy (including policies
providing property, casualty,  liability, and workers' compensation coverage and
bond and surety arrangements) which will be assumed by HERLEY:

          (i) the name, address, and telephone number of the agent;

          (ii) the name of the insurer,  the name of the  policyholder,  and the
     name of each covered insured;

          (iii) the policy number and the period of coverage;

          (iv) the scope  (including an indication of whether the coverage is on
     a claims  made,  occurrence,  or  other  basis)  and  amount  (including  a
     description of how  deductibles and ceilings are calculated and operate) of
     coverage; and

          (v) a description  of any  retroactive  premium  adjustments  or other
     material loss- sharing arrangements.

With  respect to each such  insurance  policy:  (A) the policy is legal,  valid,
binding, enforceable, and in full force and effect in all material respects; (B)
RSS,  nor any  other  party to the  policy  is in  material  breach  or  default
(including  with  respect to the payment of premiums or the giving of  notices),
and no event  has  occurred  which,  with  notice  or the  lapse of time,  would
constitute   such  a  material  breach  or  default,   or  permit   termination,
modification, or acceleration,  under the policy; and (C) no party to the policy
has repudiated any material  provision  thereof.  Section 3(r) of the Disclosure
Schedule describes any material self-insurance arrangements affecting RSS.

     (s)  Litigation.  Section 3(s) of the  Disclosure  Schedule sets forth each
instance in which RSS (i) is subject to any  outstanding  injunction,  judgment,
order, decree,  ruling, or charge or (ii) is a party or, to the Knowledge of the
directors  and officers of RSS, is  threatened to be made a party to any action,
suit,  proceeding,  hearing,  or  investigation  of,  in, or before any court or
quasi-judicial or administrative agency of any federal, state, local, or foreign
jurisdiction or before any arbitrator.

                                       13
<PAGE>

     (t) Product Warranty. All of the products  manufactured,  sold, leased, and
delivered by RSS have conformed in all respects with all applicable  contractual
commitments  and all express and implied  warranties,  and RSS has no  liability
(whether known or unknown,  whether asserted or unasserted,  whether absolute or
contingent,  whether accrued or unaccrued,  whether  liquidated or unliquidated,
and  whether due or to become due) for  replacement  or repair  thereof or other
damages in connection therewith, that will exceed $50,000 in the aggregate. Each
agreement for products  manufactured,  sold,  leased and delivered by RSS is the
subject of contractual  negotiation related to warranty and as such, no standard
terms and conditions, including that related to warranty, are used.

     (u) Product  Liability.  RSS has no material  liability  (whether  known or
unknown, whether asserted or unasserted, whether absolute or contingent, whether
accrued or unaccrued, whether liquidated or unliquidated,  and whether due or to
become due) arising out of any injury to  individuals or property as a result of
the ownership,  possession, or use of any product manufactured, sold, leased, or
delivered by RSS.

     (v)  Guaranties.  RSS is not a guarantor or otherwise  responsible  for any
liability or obligation (including indebtedness) of any other Person.

     (w) Environmental, Health, and Safety Matters.

          (i) RSS, and its predecessors have complied and are in compliance,  in
     each case in all material  respects,  with all  Environmental,  Health, and
     Safety Requirements.

          (ii)  Without  limiting  the  generality  of the  foregoing,  RSS  has
     obtained,  has  complied,  and is in  compliance  with, in each case in all
     material respects, all material permits,  licenses and other authorizations
     that  are  required   pursuant  to   Environmental,   Health,   and  Safety
     Requirements  for the occupation of its facilities and the operation of its
     business;  a  list  of  all  such  material  permits,  licenses  and  other
     authorizations is set forth on Section 3(w)(ii) of the Disclosure Schedule.

          (iii) RSS has not received any written or oral notice, report or other
     information   regarding  any  actual  or  alleged  material   violation  of
     Environmental, Health, and Safety Requirements, or any material liabilities
     or potential material liabilities (whether accrued,  absolute,  contingent,
     unliquidated or otherwise), including any material investigatory,  remedial
     or  corrective  obligations,  relating  to  its  facilities  arising  under
     Environmental, Health, and Safety Requirements.

          (iv)  Except  as set  forth  on  Section  3(w)(iv)  of the  Disclosure
     Schedule, none of the following exists at any property or facility owned or
     operated by RSS: (1)  underground  storage tanks,  (2)  asbestos-containing
     material in any friable and damaged  form or  condition,  (3)  materials or
     equipment containing polychlorinated  biphenyls, or (4) landfills,  surface
     impoundments, or disposal areas.

          (v) Neither RSS,  nor any of its  predecessors  has  treated,  stored,
     disposed  of,  arranged for or  permitted  the  disposal  of,  transported,
     handled,  or released  any  substance,  including  without  limitation  any
     hazardous substance,  or owned or operated any property or facility (and no
     such  property or  facility is  contaminated  by any such  substance)  in a

                                       14
<PAGE>

     manner that has given or would give rise to material liabilities, including
     any  material  liability  for  response  costs,  corrective  action  costs,
     personal injury,  property damage,  natural  resources  damages or attorney
     fees, pursuant to the Comprehensive  Environmental  Response,  Compensation
     and  Liability  Act of 1980,  as  amended  ("CERCLA")  or the  Solid  Waste
     Disposal  Act, as amended or any other  Environmental,  Health,  and Safety
     Requirements.

          (vi) Neither this Agreement nor the  consummation  of the  transaction
     that  is the  subject  of  this  Agreement  will  result  in  any  material
     obligations  for site  investigation  or  cleanup,  or  notification  to or
     consent of  government  agencies or third  parties,  pursuant to any of the
     so-called   "transaction-triggered"   or  "responsible  property  transfer"
     Environmental, Health, and Safety Requirements.

     Section 4. HERLEY's  Representations and Warranties.  HERLEY represents and
warrants to RSS that the statements  contained in this Section 4 are correct and
complete as of the date of this Agreement and will be correct and complete as of
the  Closing  Date (as  though  made then and as though  the  Closing  Date were
substituted for the date of this Agreement throughout this Section 4), except as
set forth in the Disclosure  Schedule.  The Disclosure Schedule will be arranged
in paragraphs corresponding to the lettered and numbered paragraphs contained in
this Section 4.

     (a) Organization of HERLEY. HERLEY is a corporation duly organized, validly
existing, and in good standing under the laws of Delaware.

     (b)  Authorization  of  Transaction.  HERLEY has full  power and  authority
(including  full  corporate  power or other entity and authority) to execute and
deliver this Agreement and to perform its obligations hereunder.  This Agreement
constitutes the valid and legally binding  obligation of HERLEY,  enforceable in
accordance  with its terms and  conditions.  HERLEY need not give any notice to,
make any filing with, or obtain any authorization,  consent,  or approval of any
government  or  governmental  agency  in order to  consummate  the  transactions
contemplated by this Agreement. The execution,  delivery and performance of this
Agreement and all other agreements contemplated hereby have been duly authorized
by HERLEY.

     (c)  Noncontravention.  Neither  the  execution  and the  delivery  of this
Agreement,  nor  the  consummation  of  the  transactions   contemplated  hereby
(including the assignments and assumptions referred to in Section 2 above), will
(i) violate any constitution,  statute, regulation, rule, injunction,  judgment,
order,  decree,   ruling,  charge,  or  other  restriction  of  any  government,
governmental agency, or court to which HERLEY is subject or any provision of its
charter,  or other governing documents or (ii) conflict with, result in a breach
of,  constitute a default under,  result in the  acceleration  of, create in any
party the right to  accelerate,  terminate,  modify,  or cancel,  or require any
notice under any  agreement,  contract,  lease,  license,  instrument,  or other
arrangement  to which  HERLEY is a party or by which it is bound or to which any
of its assets is  subject.  HERLEY does not need to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any government
or governmental  agency in order for the Parties to consummate the  transactions
contemplated  by this  Agreement  (including  the  assignments  and  assumptions
referred to in Section 2 above).

                                       15
<PAGE>

     (d) Brokers' Fees. HERLEY has no liability or obligation to pay any fees or
commissions  to any broker,  finder,  or agent with respect to the  transactions
contemplated  by this  Agreement for which RSS could become liable or obligated.

     Section 5. Pre-Closing Covenants. The Parties agree as follows with respect
to the period between the execution of this Agreement and the Closing.

     (a) General.  Each of the Parties will use its  reasonable  best efforts to
take all action and to do all things necessary,  proper or advisable in order to
consummate and make effective the  transactions  contemplated  by this Agreement
(including satisfaction,  but not waiver, of the Closing conditions set forth in
Section 6 below).

     (b) Notices and Consents.  RSS will give any notices to third parties,  and
RSS will use its  reasonable  best  efforts to obtain any third  party  consents
referred to in Section 3(c) above, and any other items set forth in Section 5(b)
of the Disclosure  Schedule.  Each of the Parties will give any notices to, make
any  filings  with,  and  use  its   reasonable   best  efforts  to  obtain  any
authorizations, consents, and approvals of governments and governmental agencies
in  connection  with the matters  referred to in Section  3(c) and Section  4(c)
above.

     (c) Operation of Business.  RSS will not engage in any  practice,  take any
action, or enter into any transaction outside the Ordinary Course of Business.

     (d)  Preservation  of Business.  RSS will keep its business and  properties
substantially  intact,  including its present operations,  physical  facilities,
working  conditions,   insurance  policies,   and  relationships  with  lessors,
licensors, suppliers, customers, and employees.

     (e) Full Access. RSS will permit representatives of HERLEY (including legal
counsel and  accountants) to have full access at all reasonable  times, and in a
manner so as not to interfere with the normal business operations of RSS, to all
premises,  properties,   personnel,  books,  records  (including  Tax  records),
contracts,  and documents of or pertaining to RSS. HERLEY will treat and hold as
such any  Confidential  Information  it receives  from RSS, in the course of the
reviews  contemplated by this Section 5(e), will not use any of the Confidential
Information except in connection with this Agreement,  and, if this Agreement is
terminated  for  any  reason  whatsoever,  will  return  to RSS ,  all  tangible
embodiments  (and all copies) of the Confidential  Information  which are in its
possession.

     (f) Notice of  Developments.  Each Party will give prompt written notice to
the other Party of any material adverse  development  causing a breach of any of
its own  representations  and  warranties  in Section 3 and Section 4 above.  No
disclosure by any Party pursuant to this Section 5(f), however,  shall be deemed
to amend  or  supplement  the  Disclosure  Schedule  or to  prevent  or cure any
misrepresentation, breach of warranty, or breach of covenant.

     (g)  Exclusivity.  RSS will not (i) solicit,  initiate,  or  encourage  the
submission of any proposal or offer from any Person  relating to the acquisition
of any capital stock or other voting securities,  or any substantial  portion of
the  assets,  of  RSS  (including  any  acquisition   structured  as  a  merger,
consolidation,  or share  exchange) or (ii)  participate  in any  discussions or

                                       16
<PAGE>

negotiations  regarding,  furnish any  information  with  respect to,  assist or
participate  in, or  facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing.

     Section 6. Conditions to Obligation to Close.

     (a)  Conditions  to  HERLEY  's  Obligation.  The  obligation  of HERLEY to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:

          (i) The  representations  and  warranties set forth in Section 3 above
     shall be true and correct in all respects at and as of the Closing Date;

          (ii) RSS shall have  performed  and complied with all of its covenants
     hereunder in all material respects through the Closing;

          (iii) RSS shall have  procured  (or made  reasonable  arrangements  to
     procure) all of the third party consents specified in Section 5(b) above;

          (iv) No action,  suit, or proceeding shall be pending before any court
     or quasi- judicial or administrative  agency of any federal,  state, local,
     or foreign  jurisdiction  or before any  arbitrator  wherein an unfavorable
     injunction,  judgment,  order, decree,  ruling, or charge would (A) prevent
     consummation of any of the transactions contemplated by this Agreement, (B)
     cause  any  of  the  transactions  contemplated  by  this  Agreement  to be
     rescinded  following  consummation,  or (C) affect  adversely  the right of
     HERLEY to own the Acquired  Assets and to operate the former  businesses of
     RSS;

          (v) RSS shall have  delivered  to HERLEY a  certificate  to the effect
     that each of the  conditions  specified  above in Section  6(a)(i)-(iv)  is
     satisfied in all respects;

          (vi) HERLEY shall have received from counsel to RSS an opinion in form
     and  substance  as set forth in Exhibit G  attached  hereto,  addressed  to
     HERLEY , and dated as of the Closing Date;

          (vii) All actions to be taken by RSS in connection  with  consummation
     of the transactions  contemplated  hereby and all  certificates,  opinions,
     instruments,  and  other  documents  required  to effect  the  transactions
     contemplated  hereby will be reasonably  satisfactory in form and substance
     to HERLEY ;

          (viii)  HERLEY  shall  have  entered  into a lease  agreement  for the
     premises  located  at 91 East  Drive,  Melbourne,  Florida on the terms set
     forth as Exhibit 6(a).

          (ix) HERLEY shall have entered into a  non-competition  agreement with
     Antonio J. Perez-Falcon in the form annexed hereto as Exhibit 6(b).

          (x) HERLEY shall have entered into a  non-competition  agreement  with
     Emilio J. Power in the form annexed hereto as Exhibit 6(c).

                                       17
<PAGE>

          (xi) RSS shall have delivered to HERLEY copies of the  certificates of
     good  standing of RSS,  issued on or soon  before the  Closing  Date by the
     Secretary  of State (or  comparable  officer) of the  jurisdiction  of RSS'
     organization  and of each  jurisdiction  in which  RSS is  qualified  to do
     business; and

HERLEY may waive any  condition  specified in this Section 6(a) if it executes a
writing so stating at or prior to the Closing.

     (b) Conditions to RSS's Obligation. The obligation of RSS to consummate the
transactions  to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:

          (i) the  representations  and  warranties set forth in Section 4 above
     shall be true and correct in all material respects at and as of the Closing
     Date;

          (ii)  HERLEY  shall  have  performed  and  complied  with  all  of its
     covenants hereunder in all material respects through the Closing;

          (iii) no action, suit, or proceeding shall be pending before any court
     or quasi- judicial or administrative  agency of any federal,  state, local,
     or foreign  jurisdiction  or before any  arbitrator  wherein an unfavorable
     injunction,  judgment,  order, decree,  ruling, or charge would (A) prevent
     consummation of any of the  transactions  contemplated by this Agreement or
     (B) cause any of the  transactions  contemplated  by this  Agreement  to be
     rescinded following consummation (and no such injunction,  judgment, order,
     decree, ruling, or charge shall be in effect);

          (iv) HERLEY shall have  delivered to RSS a  certificate  to the effect
     that each of the conditions  specified  above in Section  6(b)(i)-(iii)  is
     satisfied in all respects;

          (v) RSS, and HERLEY shall have  received all material  authorizations,
     consents,  and approvals of governments and governmental  agencies referred
     to in Section 3(c) and Section 4(c) above;

          (vi) RSS shall have received from counsel to HERLEY an opinion in form
     and substance as set forth in Exhibit H attached hereto,  addressed to RSS,
     and dated as of the Closing Date; and

          (vii) RSS shall have entered into a lease  agreement  for the premises
     located at 91 East Drive, Melbourne,  Florida in the form annexed hereto as
     Exhibit 6(a).

          (viii)  all  actions  to  be  taken  by  HERLEY  in  connection   with
     consummation of the transactions  contemplated hereby and all certificates,
     opinions,   instruments,   and  other  documents  required  to  effect  the
     transactions  contemplated  hereby will be reasonably  satisfactory in form
     and substance to RSS.

RSS may waive any  condition  specified  in this  Section  6(b) if it executes a
writing so stating at or prior to the Closing.

                                       18
<PAGE>

          Section 7. Termination.

     (a)  Termination of Agreement.  The Parties may terminate this Agreement as
provided below:

          (i) The parties may terminate this Agreement by mutual written consent
     at any time prior to the Closing;

          (ii) HERLEY may terminate  this  Agreement by giving written notice to
     RSS at any time prior to the Closing (A) in the event RSS has  breached any
     representation,  warranty,  or covenant  contained in this Agreement in any
     material respect, HERLEY has notified RSS of the breach, and the breach has
     continued  without  cure for a period of 30 days after the notice of breach
     or (B) if the Closing shall not have occurred on or before October 1, 2004,
     by reason of the failure of any  condition  precedent  under  Section  6(a)
     hereof (unless the failure results  primarily from HERLEY itself  breaching
     any representation, warranty, or covenant contained in this Agreement); and

          (iii) RSS may terminate  this  Agreement by giving  written  notice to
     HERLEY  at any time  prior  to the  Closing  (A) in the  event  HERLEY  has
     breached  any  representation,  warranty,  or  covenant  contained  in this
     Agreement in any material  respect,  RSS has notified HERLEY of the breach,
     and the breach has continued without cure for a period of 30 days after the
     notice of breach or (B) if the Closing shall not have occurred on or before
     October 1, 2004, by reason of the failure of any condition  precedent under
     Section 6(b) hereof (unless the failure  results  primarily from RSS itself
     breaching  any  representation,  warranty,  or covenant  contained  in this
     Agreement).

     (b) Effect of Termination.  If any Party terminates this Agreement pursuant
to Section 7(a) above, all rights and obligations of the Parties hereunder shall
terminate  without  any  liability  of any Party to any other  Party;  provided,
however,  that the  confidentiality  provisions  contained in Section 5(e) above
shall  survive  termination  and RSS shall have  liability for breach of Section
5(g).

     Section 8. Remedies for Breaches of This Agreement.

     (a) Survival of Representations and Warranties.

          (i) The  representations  and warranties made pursuant to Section 3 of
     this  Agreement  shall not  terminate,  but shall  survive  the Closing and
     continue in effect until following the Closing Date as follows:

               (A)  the   representations  and  warranties  under  Section  3(l)
          (Intellectual  Property) and Section 3(w) (Environmental) shall remain
          in effect until three (3) years following the Closing Date; and

               (B) the  representations and warranties under Sections 3(a) and 4
          shall remain in effect until two (2) years following the Closing Date.

provided,  however, that any such representation or warranty as to which a claim
shall have been asserted  during such survival  period shall  continue in effect
until such time as such claim shall have been resolved or settled.

                                       19
<PAGE>

     (b) Survival of Covenants and Agreements.  Except as expressly  provided in
this  Agreement,  all covenants and agreements made hereunder or pursuant hereto
or in connection with the transactions  contemplated  hereby shall not terminate
but shall survive the Closing.

     (c) Indemnification Provisions for HERLEY's Benefit.

          (i)  In  the  event  of  a  breach  of  any  of  the  representations,
     warranties,  and covenants  contained in this Agreement,  and provided that
     HERLEY  makes a  written  claim  for  indemnification  against  RSS and the
     Principal  Shareholders  pursuant to Section 8(f) below within the survival
     period,  then  RSS and  each of the  Principal  Shareholders,  jointly  and
     severally,  shall be  obligated  to  indemnify  HERLEY from and against the
     entirety  of any  Adverse  Consequences  HERLEY may suffer  (including  any
     Adverse  Consequences  HERLEY  may suffer  after the end of any  applicable
     survival period) directly  resulting from,  arising out of, relating to, or
     caused  by the  breach;  provided,  however,  that  RSS and  the  Principal
     Shareholders,  shall not have any  obligation to indemnify  HERLEY from and
     against any Adverse  Consequences  resulting from, arising out of, relating
     to, or caused by the breach of any representation or warranty of RSS or the
     Principal Shareholders if such breach involves Adverse Consequences of less
     than $10,000 and until HERLEY has suffered  Adverse  Consequences in excess
     of a $25,000 aggregate  deductible (after which point RSS and the Principal
     Shareholders  will be obligated  only to indemnify  HERLEY from and against
     further such Adverse  Consequences)  by reason of all breaches in excess of
     $10,000.

     (d) Indemnification Provisions for RSS's Benefit.

          (i)  In  the  event  HERLEY  breaches  any  of  its   representations,
     warranties,  and covenants contained in this Agreement,  and, provided that
     any RSS  Stockholder  makes a  written  claim for  indemnification  against
     HERLEY  pursuant to Section 8 within the survival  period,  (if there is an
     applicable  survival  period  pursuant to Section 8(a) above),  then HERLEY
     shall   indemnify  RSS  from  and  against  the  entirety  of  any  Adverse
     Consequences  suffered (including any Adverse  Consequences  suffered after
     the end of any applicable  survival period) resulting from, arising out of,
     relating to, in the nature of, or caused by the breach.

          (ii) HERLEY  agrees to indemnify  RSS from and against the entirety of
     any Adverse  Consequences  RSS may suffer  resulting from,  arising out of,
     relating to, in the nature of, or caused by any Assumed Liability.

     (e) Intentionally left blank.

     (f) Matters Involving Third Parties.

          (i) If any  third  party  shall  notify  any Party  (the  "Indemnified
     Party") with respect to any matter (a "Third Party  Claim")  which may give
     rise  to  a  claim  for  indemnification   against  any  other  Party  (the
     "Indemnifying  Party")  under this  Section 8, then the  Indemnified  Party
     shall promptly notify each Indemnifying Party thereof in writing.

          (ii) Any Indemnifying  Party will have the right to assume the defense
     of the Third  Party  Claim with  counsel  of his or its  choice  reasonably
     satisfactory to the Indemnified  Party at any time within 15 days after the
     Indemnified  Party has given  notice of the Third  Party  Claim;  provided,
     however,  that the Indemnifying Party must conduct the defense of the Third

                                       20
<PAGE>

     Party Claim  actively and  diligently  thereafter  in order to preserve its
     rights in this regard;  and provided further that the Indemnified Party may
     retain separate  co-counsel at its sole cost and expense and participate in
     the defense of the Third Party Claim.

          (iii) So long as the Indemnifying  Party has assumed and is conducting
     the defense of the Third Party Claim in  accordance  with Section 8(d) (ii)
     above,  (A) the  Indemnifying  Party  will not  consent to the entry of any
     judgment or enter into any settlement with respect to the Third Party Claim
     without  the prior  written  consent  of the  Indemnified  Party (not to be
     withheld  unreasonably) unless the judgment or proposed settlement involves
     only  the  payment  of  money  damages  by one or more of the  Indemnifying
     Parties and does not impose an  injunction or other  equitable  relief upon
     the Indemnified Party and (B) the Indemnified Party will not consent to the
     entry of any  judgment  or enter into any  settlement  with  respect to the
     Third Party Claim  without the prior  written  consent of the  Indemnifying
     Party.

          (iv)  In the  event  none  of the  Indemnifying  Parties  assumes  and
     conducts  the defense of the Third Party Claim in  accordance  with Section
     8(e)(ii) above,  however, (A) the Indemnified Party may defend against, and
     consent  to the entry of any  judgment  or enter into any  settlement  with
     respect  to, the Third Party  Claim in any manner he or it  reasonably  may
     deem  appropriate  (and the  Indemnified  Party need not consult  with,  or
     obtain any consent from, any  Indemnifying  Party in connection  therewith)
     and (B) the  Indemnifying  Parties will remain  responsible for any Adverse
     Consequences the Indemnified  Party may suffer resulting from,  arising out
     of,  relating  to, in the nature of, or caused by the Third  Party Claim to
     the fullest extent provided in this Section 8.

     (g)  Determination  of  Adverse   Consequences.   The  Parties  shall  make
appropriate   adjustments   for  insurance   coverage  in  determining   Adverse
Consequences for purposes of this Section 8. Indemnification payments under this
Section 8 shall be paid by the Indemnifying  Party without reduction for any Tax
Benefits  available to the Indemnified  Party.  However,  to the extent that the
Indemnified   Party   recognizes  Tax  Benefits  as  a  result  of  any  Adverse
Consequences,  the  Indemnified  Party shall pay the amount of such Tax Benefits
(but not in excess of the indemnification  payment or payments actually received
from the  Indemnifying  Party with respect to such Adverse  Consequences) to the
Indemnifying  Party  as  such  Tax  Benefits  are  actually  recognized  by  the
Indemnified  Party. For this purpose,  the Indemnified  Party shall be deemed to
recognize a tax benefit ("Tax  Benefit")  with respect to a taxable year if, and
to the extent that,  the  Indemnified  Party's  cumulative  liability  for Taxes
through the end of such taxable  year,  calculated  by  excluding  any Tax items
attributable  to the Adverse  Consequences  and the  receipt of  indemnification
payments  under this Section 8 from all taxable years,  exceeds the  Indemnified
Party's  actual  cumulative  liability for Taxes through the end of such taxable
year,  calculated  by taking  into  account  any Tax items  attributable  to the
Adverse  Consequences  and the  receipt of  indemnification  payment  under this
Section 8 for all taxable years (to the extent permitted by relevant Tax law and
treating  such Tax items as the last items  taken into  account  for any taxable
year).  All  indemnification  payments  under  this  Section  8 shall be  deemed
adjustments to the Purchase Price.

     (h)  Exclusive  Remedy.   HERLEY,   RSS  and  the  Principal   Shareholders
acknowledge  and agree that the  foregoing  indemnification  provisions  in this
Section  8  shall  be  the  exclusive  remedy  of  HERLEY  with  respect  to the
representations, warranties and covenants contained in this Agreement, including

                                       21
<PAGE>

but not  limited to claims of  breaches of the  representations  and  warranties
contained in Section 3, and the transactions contemplated by this Agreement.

     (i) Limitation of Liability.  Notwithstanding  anything contained herein to
the  contrary,  the  liability of RSS and the  Principal  Shareholders  shall be
limited in the aggregate for any and all claims  related to this  Agreement to a
sum not to exceed the amount of the Purchase Price.

     Section 9. Miscellaneous.

     (a)  Exclusivity.  No  RSS  Stockholder  will  (i)  solicit,  initiate,  or
encourage the  submission  of any proposal or offer from any Person  relating to
the  acquisition  of any  capital  stock  or  other  voting  securities,  or any
substantial portion of the assets, of RSS (including any acquisition  structured
as a  merger,  consolidation,  or share  exchange)  or (ii)  participate  in any
discussions or negotiations regarding,  furnish any information with respect to,
assist or  participate  in, or  facilitate  in any other  manner  any  effort or
attempt by any Person to do or seek any of the  foregoing.  No RSS  Stockholders
will vote  their RSS  Shares in favor of any such  acquisition  structured  as a
merger, consolidation, or share exchange.

     (b) Press Releases and Public Announcements. No Party shall issue any press
release or make any public  announcement  relating to the subject matter of this
Agreement without the prior written approval of the other Party,  which approval
shall not be  unreasonably  withheld  or delayed,  except that no such  approval
shall be necessary to the extent  disclosure  is required by  Applicable  Law or
applicable stock exchange rules or any listing agreement of any party hereto.

     (c) No  Third-Party  Beneficiaries.  This  Agreement  shall not  confer any
rights or remedies  upon any Person other than the Parties and their  respective
successors and permitted assigns.

     (d) Entire Agreement.  This Agreement  (including the documents referred to
herein)  constitutes  the entire  agreement among the Parties and supersedes any
prior  understandings,  agreements,  or representations by or among the Parties,
written or oral,  to the extent  they  relate in any way to the  subject  matter
hereof.

     (e) Succession  and  Assignment.  This Agreement  shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted  assigns.  No Party may assign either this Agreement or any of its
rights,  interests,  or obligations hereunder without the prior written approval
of the other Party; provided,  however, that HERLEY may (i) assign any or all of
its rights and interests hereunder to one or more of its Affiliates, however any
such  assignment  shall not be construed to expand the  responsibilities  of any
party  to an  Employment  Agreement  or  Consulting  Agreement  entered  into in
connection with the closing of this Agreement, and (ii) designate one or more of
its  Affiliates  to perform its  obligations  hereunder  (in any or all of which
cases HERLEY nonetheless shall remain liable and responsible for the performance
of all of its obligations hereunder).

     (f)   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts (including by means of facsimile), each of which shall be deemed an
original but all of which together will constitute one and the same instrument.

                                       22
<PAGE>

     (g) Headings. The section headings contained in this Agreement are inserted
for  convenience   only  and  shall  not  affect  in  any  way  the  meaning  or
interpretation of this Agreement.

     (h)  Notices.   All  notices,   requests,   demands,   claims,   and  other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other  communication  hereunder shall be deemed duly given (i) when delivered
personally  to the  recipient,  (ii) one  business  day after  being sent to the
recipient by reputable  overnight courier service (charges  prepaid),  (iii) one
business  day after being sent to the  recipient by  facsimile  transmission  or
electronic  mail, or (iv) four business days after being mailed to the recipient
by certified or registered mail,  return receipt  requested and postage prepaid,
and addressed to the intended recipient as set forth below:

        If to HERLEY:
        ------------

        Herley - RSS, Inc.
        101 North Point Boulevard
        Lancaster, Pennsylvania  17601-4133
        Fax:  717-397-9503

        Copy to:

        David H. Lieberman, Esq.
        Beckman, Lieberman & Barandes, LLP
        100 Jericho Quadrangle, Suite 329
        Jericho, New York 11753
        Fax:  516-433-5858


        If to RSS:
        ---------

        Reliable System Services Corp.
        91 East Drive
        Melbourne, Florida 32904
        Fax:  (321) (321) 255-6500


        Copy to:

        James M. O'Brien, Esq.
        O'Brien Riemenschneider, P.A.
        1686 West Hibiscus Boulevard
        Melbourne, Florida 32901

                                       23
<PAGE>



        Antonio J. Perez-Falcon
        4805 Sweet Gum Place
        Melbourne, Florida  32904

        Emilio J. Power
        4812 Union Cypress Place
        Melbourne, Florida  32904


Any Party may change the address to which notices,  requests,  demands,  claims,
and other  communications  hereunder  are to be  delivered  by giving  the other
Parties notice in the manner herein set forth.

     (i)  Governing  Law. This  Agreement  shall be governed by and construed in
accordance  with the  domestic  laws of Delaware  without  giving  effect to any
choice or conflict of law  provision  or rule  (whether of Delaware or any other
jurisdiction)  that would cause the application of the laws of any  jurisdiction
other than Delaware.

     (j) Amendments and Waivers. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by HERLEY and RSS.
No  waiver  by any  Party of any  provision  of the  Agreement  or any  default,
misrepresentation,   or  breach  of  warranty  or  covenant  hereunder,  whether
intentional  or not,  shall be valid  unless the same  shall be in  writing  and
signed by the Party making such waiver nor shall such waiver be deemed to extend
to any prior or subsequent default, misrepresentation,  or breach of warranty or
covenant  hereunder  or affect in any way any  rights  arising  by virtue of any
prior or subsequent such occurrence.

     (k)  Severability.  Any term or provision of this Agreement that is invalid
or  unenforceable  in any  situation  in any  jurisdiction  shall not affect the
validity or  enforceability  of the remaining terms and provisions hereof or the
validity or  enforceability  of the  offending  term or  provision  in any other
situation or in any other jurisdiction.

     (l) Expenses.  Each of the Parties will bear his, her, or its own costs and
expenses  (including  legal fees and expenses)  incurred in connection with this
Agreement and the transactions contemplated hereby (except as otherwise provided
herein).

     (m) Construction.  The Parties have participated jointly in the negotiation
and drafting of this Agreement.  In the event an ambiguity or question of intent
or  interpretation  arises,  this  Agreement  shall be  construed  as if drafted
jointly  by the  Parties  and no  presumption  or  burden of proof  shall  arise
favoring  or  disfavoring  any Party by virtue of the  authorship  of any of the
provisions of this  Agreement.  Any reference to any federal,  state,  local, or
foreign  statute  or law  shall  be  deemed  also  to  refer  to all  rules  and
regulations promulgated thereunder,  unless the context requires otherwise.  The
word "including" shall mean including without limitation.

                                       24
<PAGE>

     (n) Governing Language.  This Agreement has been negotiated and executed by
the  Parties in  English.  In the event any  translation  of this  Agreement  is
prepared for  convenience  or any other  purpose,  the provisions of the English
version shall prevail.

     IN WITNESS WHEREOF,  the Parties hereto have executed this Agreement on the
date first above written.

                                        HERLEY - RSS, INC.

                                        By: /s/
                                        ---------------------------------

                                        Title:______________

                                        RELIABLE SYSTEM SERVICES CORP.

                                        By: /s/
                                        ---------------------------------

                                        Title:______________

ACCEPTED AND AGREED TO BY;

/s/____________________________
   Emilio J. Power

/s/____________________________
   Antonio Perez-Falcon