Exhibit 99.1

[LOGO] M&T Bank
      Manufacturers and Traders Trust Company

                             364 DAY LIBOR GRID NOTE

                                    New York

Buffalo, New York as of May 1, 2008                               $50,000,000.00

BORROWER: ANAREN, INC.

a(n) |_| individual(s) |_| partnership |X| corporation |_|  ____________________
organized under the laws of the State of New York

Address of residence/chief executive office: 6635 Kirkville Road, East Syracuse,
New York 13057

BANK: MANUFACTURERS  AND TRADERS TRUST COMPANY,  a New York banking  corporation
      with its principal  banking  office at One M&T Plaza,  Buffalo,  NY 14240.
      Attention: Office of General Counsel

1) DEFINITIONS.  Each capitalized  term shall have the meaning  specified herein
and the following terms shall have the indicated meanings:

      a)    "Authorized Person" shall mean, each individually,  the President or
            Senior  Vice  President  of Finance  and  Treasurer.  Mention of the
            Authorized Person's name is for reference purposes only and the Bank
            may rely on a  person's  title to  ascertain  whether  someone is an
            Authorized Person.

      b)    "Base Rate" shall mean _______  percentage  points above the rate of
            interest  announced  by the Bank from time to time as its prime rate
            of interest ("Prime"). If the prior blank is not completed, the Base
            Rate shall be one (1) percentage point above Prime.

      c.    "Base Rate Loan" shall mean a Loan which bears  interest at the Base
            Rate.

      d.    "Business  Day"  shall  mean any day of the year other than a day on
            which banking  institutions  in New York, New York are authorized or
            required by law or other governmental action to close.

      e.    "Draw Date" shall mean, in relation to any Loan, the Business Day on
            which such Loan is made, or to be made, to Borrower  pursuant to the
            Note.

      f.    "LIBOR  Rate Loan"  shall mean a Loan which  bears  interest  at the
            LIBOR Rate.

      g.    "LIBOR" shall mean the rate per annum (rounded upward, if necessary,
            to the nearest  1/16th of 1%)  obtained by dividing  (i) the one-day
            (or multiple day, as applicable, in contemplation of succeeding days
            in which the London  Interbank  Eurodollar  Market is expected to be
            closed) interest period London  Interbank  Offered Rate, as fixed by
            the British Bankers Association for United States dollar deposits in
            the London Interbank  Eurodollar Market at approximately  11:00 a.m.
            London, England time (or as soon thereafter as practicable) each day
            (or if such day is a  non-Business  Day, as fixed in the same manner
            on the  immediately  preceding  Business Day, which day's rate shall
            apply  to  the  immediately   succeeding   non-Business   Days),  as
            determined by the Bank from any broker,  quoting service or commonly
            available source utilized by the Bank, by (ii) a percentage equal to
            100% minus the stated  maximum rate of all  reserves  required to be
            maintained  against  "Eurocurrency   Liabilities"  as  specified  in
            Regulation D (or against any other  category of  liabilities,  which
            includes  deposits by reference to which the interest  rate on LIBOR
            Rate Loan(s) is determined,  or any category of extensions of credit
            or other assets which includes loans by a non-United  States' office
            of a bank to United  States'  residents)  on such date to any member
            bank of the Federal  Reserve System.  Notwithstanding  any provision
            above,   the  practice  of  rounding  to  determine   LIBOR  may  be
            discontinued at any time in the Bank's sole discretion.

      h.    "LIBOR Rate" shall mean seventy-five (75) basis points above LIBOR.

      i.    "Loan"  means a loan made to Borrower  by the Bank  pursuant to this
            Note.

      j.    "Maximum  Principal  Amount"  shall  mean Fifty  Million  and No/100
            Dollars ($50,000,000.00).

      k.    "Outstanding  Principal  Amount"  shall mean the actual  outstanding
            principal amount under this Note at any time.

      l.    "Subsidiary" means any corporation or other business entity of which
            at least fifty percent (50%) of the voting stock or other  ownership
            interest is owned by the Borrower directly or indirectly through one
            or more  Subsidiaries.  If the  Borrower  has no  Subsidiaries,  the
            provisions of this Agreement  relating to the Subsidiaries  shall be
            disregarded,  without affecting the applicability of such provisions
            to the Borrower alone.

2) PAYMENT OF PRINCIPAL, INTEREST AND EXPENSES

      a) Promise to Pay. For value received,  and intending to be legally bound,
Borrower  promises  to pay to the  order of the Bank,  on  demand,  the  Maximum
Principal Amount or the Outstanding  Principal Amount, if less; plus interest as
set forth below and all fees and costs (including without limitation  attorneys'
fees and disbursements, whether for internal or outside counsel) the Bank incurs
in order to collect any amount due under this Note,  to  negotiate or document a
workout or restructuring, or to preserve its rights or realize upon any guaranty
or other security for the payment of this Note ("Expenses").

      b) Interest.  Each Loan shall earn interest on the  Outstanding  Principal
Amount  thereof  calculated on the basis of a 360-day year for the actual number
of days of each year (365 or 366), as follows:

      i) LIBOR Rate Loans.  Interest shall accrue each day on a LIBOR Rate Loan,
      from and including the first date the LIBOR Rate Loan was made (i.e.,  the
      Draw Date) to, but not including, the date such LIBOR Rate Loan is paid in
      full or  converted  to a Base Rate Loan,  at a rate per annum equal to the
      LIBOR Rate in effect that day.

      ii) Base Rate Loans.  Interest  shall accrue each day on a Base Rate Loan,
      from and including  the first date the Base Rate Loan was made (i.e.,  the
      Draw Date) to, but not  including,  the day such Base Rate Loan is paid in
      full or converted to a LIBOR Rate Loan, at the rate


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      per annum  equal to the Base Rate in effect  that day.  Any  change in the
      Base Rate  resulting from a change in Prime shall be effective on the date
      of such change.

      c) Maximum  Legal Rate.  It is the intent of the Bank and of Borrower that
in no event shall  interest  be payable at a rate in excess of the maximum  rate
permitted by  applicable  law (the "Maximum  Legal Rate").  Solely to the extent
necessary to prevent  interest  under this Note from exceeding the Maximum Legal
Rate,  any amount  that would be treated  as  excessive  under a final  judicial
interpretation  of  applicable  law shall be  deemed to have been a mistake  and
automatically  canceled,  and,  if  received  by the Bank,  shall be refunded to
Borrower.

      d)  Payments;  Late  Charge;  Default  Rate.  Payments  shall  be  made in
immediately  available  United  States funds at any banking  office of the Bank.
Absent demand for payment in full, interest shall be due and payable monthly, or
as otherwise  invoiced by the Bank. If payment is not received  within five days
of its due date,  Borrower  shall pay a late charge equal to the greatest of (a)
5% of the  delinquent  amount,  (b) the  Bank's  then  current  late  charge  as
announced by the Bank from time to time, or (c) $50.00. In addition, if the Bank
has not actually  received any payment  under this Note within thirty days after
its due date,  from and  after  such  thirtieth  day the  interest  rate for all
amounts outstanding under this Note shall automatically increase to 5 percentage
points above the higher of the Base Rate or the LIBOR Rate (the "Default Rate"),
and any judgment  entered  hereon or otherwise  in  connection  with any suit to
collect amounts due hereunder shall bear interest at such Default rate. Payments
may be applied  in any order in the sole  discretion  of the Bank but,  prior to
demand, shall be applied first to past due interest, Expenses, late charges, and
principal  payments,  if any,  which are past due, then to current  interest and
Expenses and late charges, and last to remaining principal.

3) LOANS.

      a) General.  Any Loan hereunder shall either be in the form of a Base Rate
Loan or a LIBOR  Rate  Loan.  Unless  otherwise  required  hereunder,  each Loan
hereunder  shall be in the form of a LIBOR Rate Loan. The Bank may make any Loan
in reliance upon any oral, telephonic, written, teletransmitted or other request
(the  "Request(s)") that the Bank in good faith believes to be valid and to have
been made by Borrower or on behalf of Borrower by an Authorized Person. The Bank
may act on the  Request  of any  Authorized  Person  until the Bank  shall  have
received from  Borrower,  and had a reasonable  time to act on,  written  notice
revoking  the  authority  of such  Authorized  Person.  The Bank shall  incur no
liability to Borrower or to any other  person as a direct or indirect  result of
making any Loan pursuant to this paragraph.

      b) Request for Loans.  In making any Request  for a Loan,  Borrower  shall
specify the aggregate amount of such Loan and the Draw Date; provided,  however,
if a Request is received by the Bank after 2:00 p.m.  (Eastern Standard Time) on
any given day, the earliest  possible  Draw Date will be the next  Business Day;
and

      c. Delivery of Requests. Delivery of a Request for a Loan shall be made to
the Bank at the following address,  or such other address designated by the Bank
from time to time:

            Manufacturers and Traders Trust Company

            Attn: Michael J. Murphy, Vice President

            Fax No. (315) 424-6777

            Telephone No. (315) 442-1833

4) CONVERSION UPON DEFAULT.  Unless the Bank shall otherwise consent in writing,
if (i)  Borrower  has  failed  to  pay  when  due,  in  whole  or in  part,  the
indebtedness  under the Note  (whether  by demand or  otherwise),  or (ii) there
exists a  condition  or event  which,  with the  passage of time,  the giving of
notice or both,  shall  constitute  an event of default  under any of Borrower's
agreement with the Bank, if any, the Bank, in its sole  discretion,  may convert
any LIBOR  Rate Loan to a Base Rate  Loan.  Notwithstanding  the  foregoing,  if
Borrower  commences,  or has commenced against it, any proceeding or request for
relief  under any  bankruptcy,  insolvency  or similar  laws now or hereafter in
effect in the United States of America or any state or territory  thereof or any
foreign  jurisdiction  or any formal or  informal  proceeding  for  dissolution,
liquidation  or the  settlement  of claims  against  or winding up of affairs of
Borrower  (a  "Bankruptcy  Event"),  any  outstanding  LIBOR Rate Loans shall be
automatically  converted to Base Rate Loans without  further action by the Bank.
Nothing  herein  shall be  construed to be a waiver by the Bank to have any Loan
accrue  interest at the Default Rate of interest (which shall be calculated from
the higher of the LIBOR Rate or the Base Rate, as described above).

5) SETOFF.  The Bank shall have the right to set off against  the amounts  owing
under this Note any property held in a deposit or other account with the Bank or
any of its affiliates or otherwise owing by the Bank or any of its affiliates in
any capacity to Borrower or any guarantor or endorser of this Note. Such set-off
shall be deemed to have been exercised  immediately at the time the Bank or such
affiliate elects to do so.

6) DEMAND, DISCRETIONARY FACILITY.

      a.  Discretionary  Facility.  The Bank may  modify,  restrict,  suspend or
terminate  the credit  under  this Note at any time for any  reason and  without
affecting Borrower's then existing obligation under this Note. Any Request for a
Loan  hereunder  shall  be  limited  in  amount,  such  that  the sum of (i) the
principal  amount of such Request;  (ii) the Outstanding  Principal Amount under
this Note; and (iii) the aggregate  face amounts of (or, if greater,  Borrower's
aggregate  reimbursement  obligations to the Bank (or any of its  affiliates) in
connection  with)  any  letters  of  credit  issued  by the  Bank (or any of its
affiliates)  at the request (or for the benefit of)  Borrower,  pursuant to this
credit;   does  not  exceed  the  Maximum  Principal  Amount  under  this  Note.
Notwithstanding  the above, the Bank shall have the sole and absolute discretion
whether to make any Loan (or any  portion of any Loan)  requested  by  Borrower,
regardless of any general availability under the Maximum Principal Amount.

      b.  Demand  Facility.  This Note is  payable on  demand,  and all  amounts
hereunder  shall  become  immediately  due and payable  upon demand by the Bank;
provided,  however,  that the Outstanding  Principal Amount of this Note and all
accrued and unpaid interest shall automatically become


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<PAGE>

immediately  due and payable  upon the  occurrence  of a  Bankruptcy  Event with
regard to Borrower or any  guarantor or endorser of this Note.  Borrower  hereby
waives protest, presentment and notice of any kind in connection with this Note.

7) BANK RECORDS  CONCLUSIVE.  The Bank shall set forth on a schedule attached to
this Note or maintained on computer,  the date and original  principal amount of
each  Loan  and the  date  and  amount  of each  payment  to be  applied  to the
Outstanding  Principal Amount of this Note. The Outstanding Principal Amount set
forth on any such  schedule  shall be  presumptive  evidence of the  Outstanding
Principal  Amount of this Note and of all Loans. No failure by the Bank to make,
and no error by the Bank in making,  any  annotation on any such schedule  shall
affect the Borrower's  obligation to pay the principal and interest of each Loan
or any other obligation of Borrower to the Bank pursuant to this Note.

8) PURPOSE.  Borrower certifies (a) that no Loan will be used to purchase margin
stock  except  with the  Bank's  express  prior  written  consent  for each such
purchase  and (b) that all Loans shall be used for a business  purpose,  and not
for any personal, family or household purpose.

9) AUTHORIZATION.  Borrower,  if a corporation,  partnership,  limited liability
company, trust or other entity, represents that it is duly organized and in good
standing  or duly  constituted  in the  state  of its  organization  and is duly
authorized  to do business in all  jurisdictions  material to the conduct of its
business;  that the execution,  delivery and  performance of this Note have been
duly authorized by all necessary  regulatory and corporate or partnership action
or by its  governing  instrument;  that this Note has been duly  executed  by an
authorized  officer,  partner or trustee and  constitutes  a binding  obligation
enforceable  against  Borrower and not in  violation of any law,  court order or
agreement by which  Borrower is bound;  and that  Borrower's  performance is not
threatened by any pending or threatened litigation.

10) FINANCIAL AND OTHER INFORMATION.  Borrower shall provide to the Bank in form
and number of copies  satisfactory to the Bank, (i) within sixty (60) days after
the end of each of its first three fiscal quarters,  an unaudited  consolidating
and consolidated  financial  statement of the Borrower and each Subsidiary as of
the end of such quarter,  which financial  statement shall consist of income and
cash flows for the quarter, for the corresponding quarter in the previous fiscal
year  and for the  period  from  the end of the  previous  fiscal  year,  with a
consolidating  and consolidated  balance sheet as of the quarter end all in such
detail as the Bank may request; (ii) within 90 days after the end of each fiscal
year  of  the  Borrower,   consolidating  and  consolidated  statements  of  the
Borrower's and each Subsidiary's income and cash flows and its consolidating and
consolidated  balance  sheet as of the end of such fiscal  year,  setting  forth
comparative  figures for the preceding fiscal year and audited by an independent
certified public accountant acceptable to the Bank; all such statements shall be
certified  by the  Borrower's  chief  financial  officer  to be  correct  and in
accordance  with the  Borrower's  and each  Subsidiary's  records and to present
fairly the results of the Borrower's and each  Subsidiary's  operations and cash
flows and its financial position at year end.

11)  BANKING   RELATIONSHIP.   Borrower  shall  maintain  its  primary   banking
relationship,  including depository and cash management services,  with M&T Bank
during the term of this Note and, no later than July 31, 2008,  shall transition
its depository and cash management services to M&T Bank.

12) INABILITY TO DETERMINE LIBOR RATES, INCREASED COSTS, ILLEGALITY.

      a) Increased  Costs.  If the Bank shall  determine that, due to either (a)
the  introduction  of any  change  in  law  (other  than  any  change  by way of
imposition of or increase in reserve requirements included in the calculation of
the  LIBOR)  or in the  interpretation  of  any  requirement  of law or (b)  the
compliance  requirements  for any  guideline or request from any central bank or
other  governmental  authority  (whether or not having the force of law),  there
shall be any  increase  in the cost to the Bank of  agreeing  to make or making,
funding or maintaining any LIBOR Rate Loans,  then Borrower shall be liable for,
and shall from time to time,  upon  demand  therefor  by the Bank and pay to the
Bank such  additional  amounts as are sufficient to compensate the Bank for such
increased costs.

      b) Inability to Determine  Rates. If the Bank shall determine that for any
reason adequate and reasonable  means do not exist for  ascertaining  LIBOR with
respect  to a  proposed  LIBOR  Rate  Loan,  the Bank will  give  notice of such
determination to Borrower. Thereafter, the Bank may not make or maintain, as the
case may be,  LIBOR Rate  Loans  hereunder  and all Loans  shall then be made or
continued as Base Rate Loans  instead of LIBOR Rate Loans until the Bank revokes
such notice in writing.

      c) Illegality.  If the Bank shall  determine that the  introduction of any
law (statutory or common), treaty, rule, regulation,  guideline or determination
of an  arbitrator or of a  governmental  authority or in the  interpretation  or
administration  thereof, has made it unlawful, or that any central bank or other
governmental  authority  has  asserted  that it is unlawful for the Bank to make
LIBOR Rate Loans, then, on notice thereof by the Bank to Borrower,  the Bank may
suspend  the  making of LIBOR Rate  Loans  until the Bank  shall  have  notified
Borrower  that the  circumstances  giving  rise to such  determination  shall no
longer exist.  If the Bank shall  determine  that it is unlawful to maintain any
LIBOR Rate  Loans,  Borrower  shall  immediately  pay to the Bank the  aggregate
principal amount of all LIBOR Rate Loans then outstanding, together with accrued
interest and related Expenses. If Borrower is required to pay off any LIBOR Rate
Loan as set forth in this  subsection,  then  concurrently  with  such  payment,
Borrower may borrow from the Bank,  in the amount of such  payment,  a Base Rate
Loan.

13)  MISCELLANEOUS.  This Note,  together  with any  related  loan and  security
agreements and guaranties,  contains the entire  agreement  between the Bank and
Borrower with respect to the Note, and supersedes every course of dealing, other
conduct,  oral  agreement and  representation  previously  made by the Bank. All
rights and remedies of the Bank under  applicable law and this Note or amendment
of any  provision  of this Note are  cumulative  and not  exclusive.  No single,
partial or delayed  exercise by the Bank of any right or remedy  shall  preclude
the  subsequent  exercise  by the Bank at any time of any right or remedy of the
Bank without notice.  No waiver or amendment of any provision of this Note shall
be  effective  unless  made  specifically  in writing by the Bank.  No course of
dealing or other conduct,  no oral agreement or representation made by the Bank,
and no usage of trade,  shall  operate as a waiver of any right or remedy of the
Bank.  No waiver of any right or remedy of the Bank  shall be  effective  unless
made  specifically  in writing by the Bank.  Borrower  agrees  that in any legal
proceeding,  a copy of this Note kept in the Bank's  course of  business  may be
admitted  into  evidence  as an  original.  This  Note is a  binding  obligation
enforceable  against  Borrower and its successors and assigns and shall inure to
the benefit of the Bank and its  successors  and  assigns.  If a court deems any
provision  of this Note  invalid,  the  remainder  of the Note  shall  remain in
effect.  Section  headings are for  convenience  only.  Singular number includes
plural and neuter gender includes masculine and feminine as appropriate.


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<PAGE>

14)  NOTICES.  Any  demand  or notice  hereunder  or under  any  applicable  law
pertaining  hereto  shall be in writing and duly given if  delivered to Borrower
(at its  address on the Bank's  records)  or to the Bank (at the address on page
one and separately to the Bank officer  responsible for Borrower's  relationship
with the Bank). Such notice or demand shall be deemed sufficiently given for all
purposes when delivered (i) by personal  delivery and shall be deemed  effective
when delivered,  or (ii) by mail or courier and shall be deemed  effective three
(3) Business  Days after  deposit in an official  depository  maintained  by the
United  States Post Office for the  collection  of mail or one (1)  Business Day
after  delivery to a nationally  recognized  overnight  courier  service  (e.g.,
Federal  Express).  Notice by e-mail is not valid notice under this or any other
agreement between Borrower and the Bank.

15) JOINT AND SEVERAL. If there is more than one Borrower, each of them shall be
jointly and  severally  liable for all amounts  which become due under this Note
and the term "Borrower" shall include each as well as all of them.

16) GOVERNING LAW; JURISDICTION. This Note has been delivered to and accepted by
the Bank and will be  deemed  to be made in the  State of New  York.  Except  as
provided under federal law, this Note will be interpreted in accordance with the
laws of the State of New York  excluding  its  conflict of laws rules.  BORROWER
HEREBY  IRREVOCABLY  CONSENTS  TO THE  EXCLUSIVE  JURISDICTION  OF ANY  STATE OR
FEDERAL  COURT IN THE STATE OF NEW YORK IN A COUNTY OR JUDICIAL  DISTRICT  WHERE
THE BANK  MAINTAINS A BRANCH,  AND CONSENTS THAT THE BANK MAY EFFECT ANY SERVICE
OF PROCESS IN THE MANNER AND AT BORROWER'S ADDRESS SET FORTH ABOVE FOR PROVIDING
NOTICE OR DEMAND;  PROVIDED THAT NOTHING CONTAINED IN THIS NOTE WILL PREVENT THE
BANK FROM BRINGING ANY ACTION, ENFORCING ANY AWARD OR JUDGMENT OR EXERCISING ANY
RIGHTS  AGAINST  BORROWER  INDIVIDUALLY,  AGAINST  ANY  SECURITY  OR AGAINST ANY
PROPERTY OF BORROWER WITHIN ANY OTHER COUNTY, STATE OR OTHER FOREIGN OR DOMESTIC
JURISDICTION.  Borrower acknowledges and agrees that the venue provided above is
the most  convenient  forum for both the Bank and Borrower.  Borrower waives any
objection to venue and any  objection  based on a more  convenient  forum in any
action instituted under this Note.

17) WAIVER OF JURY TRIAL.  BORROWER AND THE BANK HEREBY KNOWINGLY,  VOLUNTARILY,
AND  INTENTIONALLY  WAIVE ANY RIGHT TO TRIAL BY JURY  BORROWER  AND THE BANK MAY
HAVE IN ANY ACTION OR PROCEEDING,  IN LAW OR IN EQUITY,  IN CONNECTION WITH THIS
NOTE OR THE TRANSACTIONS  RELATED HERETO.  BORROWER REPRESENTS AND WARRANTS THAT
NO REPRESENTATIVE OR AGENT OF THE BANK HAS REPRESENTED,  EXPRESSLY OR OTHERWISE,
THAT THE BANK WILL NOT, IN THE EVENT OF  LITIGATION,  SEEK TO ENFORCE  THIS JURY
TRIAL WAIVER. BORROWER ACKNOWLEDGES THAT THE BANK HAS BEEN INDUCED TO ENTER INTO
THIS NOTE BY, AMONG OTHER THINGS, THE PROVISIONS OF THIS SECTION.

Preauthorized  Transfers from Deposit  Account.  If a deposit  account number is
provided in the following  blank  Borrower  hereby  authorizes the Bank to debit
available funds in Borrower's deposit account # ________________________________
with the Bank  automatically for any amount which becomes due under this Note or
as directed by an Authorized Person, by telephone.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


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Acknowledgment.  Borrower  acknowledges that it has read and understands all the
provisions of this Note, including the Governing Law, Jurisdiction and Waiver of
Jury Trial, and has been advised by counsel as necessary or appropriate.

TAX ID/SS # 16-092-8561             BORROWER
                                         ANAREN, INC.


                                         By: /s/ Joseph E. Porcello
                                             ----------------------
                                         Name:  Joseph E. Porcello
                                         Title: Senior Vice President of Finance
                                                and Treasurer

____________________________________        ____________________________________
Signature of Witness

____________________________________        ____________________________________
Typed Name of Witness

                                 ACKNOWLEDGMENT

STATE OF  NEW YORK     )
                       :SS.
COUNTY OF ONONDAGA     )

      On the 2nd day of May,  in the year 2008,  before me, the  undersigned,  a
Notary Public in and for said State,  personally  appeared  JOSEPH E.  PORCELLO,
personally known to me or proved to me on the basis of satisfactory  evidence to
be the  individual  whose  name  is  subscribed  to the  within  instrument  and
acknowledged  to me that he executed the same in his  capacity,  and that by his
signature on the instrument,  the individual, or the person upon behalf of which
the individual acted, executed the instrument.

                                             /s/ David M. Ferrara
                                             --------------------
                                                 Notary Public

================================================================================
                                FOR BANK USE ONLY

Authorization Confirmed: _______________________________________________________
Product Code: 11900
Disbursement of Funds:

Credit A/C # ___________   Off Ck # ___________  Payoff Obligation # __________

           $ ___________          $ ___________                    $ __________


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