Exhibit 10.2
                            ASSET PURCHASE AGREEMENT


         ASSET PURCHASE AGREEMENT made as of the 1st day of February 2000, by
and between ROBINSON LABORATORIES, INC., a New Hampshire corporation
(hereinafter the "Seller") and HERLEY INDUSTRIES, INC., a Delaware corporation
(hereinafter the  "Buyer").

                              W I T N E S S E T H:

         WHEREAS, Seller is engaged in the business of manufacturing and selling
microwave  components and desires to sell to Buyer its business (the "Business")
and  substantially  all of its assets,  as herein provided (the  "Assets"),  and
Buyer desires to purchase the Business and Assets, at the price and on the terms
and conditions hereinafter set forth.

         NOW, THEREFORE, for and in consideration of the mutual representations,
covenants and  warranties  herein  contained,  and intending to be legally bound
hereby, the parties hereto agree as follows:

                                    ARTICLE I

                           Purchase and Sale of Assets

         Subject  to  the  terms  and  conditions  hereof  and  based  upon  the
representations,  warranties,  covenants and agreements of the parties hereafter
set forth,  Buyer hereby  agrees to purchase and accept from Seller,  and Seller
agrees to sell,  assign,  transfer  and convey to Buyer on the Closing  Date (as
hereinafter defined) all of the Assets, including without limitation, all of the
tangible and intangible assets,  rights,  interests and properties of every kind
and nature,  wherever located and by whomever  possessed,  owned by Seller as of
the date hereof (together with any proceeds thereof or any payment thereon which
may be received by Seller subsequent to the date hereof),  free and clear of all
security interests, liens and encumbrances, except as otherwise set forth in the
Disclosure  Schedule  attached  hereto,  including,   without  limitation,   the
following:

         1.1. All machinery and other equipment,  telephone  systems,  vehicles,
furniture,  fixtures,  leasehold  interests and improvements and fixed assets of
Seller  of any  kind  whatsoever,  including  without  limitation  those  assets
reflected  on the Balance  Sheet of Seller at  September  30, 1999 and the fixed
assets described on Schedule 1.1 attached hereto.

         1.2. All catalogues, shipping and office supplies, books of account and
other  financial  records  necessary to or useful in the continued  operation of
Seller's Business, customer lists and vendor lists, customer backlogs, telephone
numbers  and  telephone  directory  listings,  the  name  ROBINSON  LABS and any
variation  thereof,  all rights under any contracts subject to consents required
for assignment of government  contracts,  licenses and permits,  the Business of
Seller  as a going  concern,  and all  intangible  assets  of Seller of any kind
whatsoever,  including without limitation,  all trade secrets,  and all patents,
trademarks,  tradenames,  and applications  therefor and the goodwill associated
therewith,  all licenses,  sublicenses granted or obtained with respect thereto,
and all rights thereunder, all



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remedies  against  infringement  thereof,  all rights to protection of interests
therein  under  the  law of  all  applicable  jurisdictions,  and  the  patents,
copyrights, licenses and rights listed in Schedule 1.2 attached hereto; and

         1.3.  All  other  assets,  property  and  rights  of Seller of any kind
whatsoever, including but not limited to, cash, tax refunds, accounts receivable
and prepaid expenses.

         1.4.  Notwithstanding  the foregoing,  the Assets shall not include the
following assets of the Seller:  (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 the Seller
as a  corporation,  or (ii) the rights of the Seller  under this Asset  Purchase
Agreement (hereinafter the "Excluded Assets").

                                   ARTICLE II

             Payment of Purchase Price ans Assumption of Liabilities

         Subject to the terms and conditions set forth in this Agreement,  Buyer
shall, in full consideration of the Assets to be sold and assigned to Buyer:

     2.1 (a) Pay to Seller the sum of Six Million  ($6,000,000)  Dollars by wire
transfer on the Closing date.

     Pay to Seller,  33,841 shares of Herley Industries,  Inc. common stock (the
"Common Stock") on the Closing Date.

     Pay to Seller, on January 31, 2001, as an earnout,  32,000 shares of Herley
Industries, Inc. Common Stock under the following conditions:

     If the business conducted by the Buyer as the successor and continuation of
the Business conveyed hereunder (the "Successor  Business") books new orders, at
prices reasonably  satisfactory to the Buyer,  totaling $9,000,000 in the twelve
month period beginning February 1, 2000 and ending January 31, 2001;

     (d) Pay to Seller, on January 31, 2001, 65,841 shares of Herley Industries,
Inc. Common Stock under the following conditions:

     If the business conducted by the Buyer as the successor and continuation of
the Business conveyed hereunder (the "Successor  Business") books new orders, at
prices reasonably  satisfactory to the Buyer, totaling $10,000,000 in the twelve
month period beginning February 1, 2000 and ending January 31, 2001;

     (e) If the Successor Business fails to meet the $9,000,000 threshold of new
orders by January 31, 2001, the shares described in (C) and (d) above,  will not
be issued to the Seller and the $6,000,000  cash payment  described in Paragraph
2.1 (1) and

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the 33,841 shares described in 2.1 (b) above shall constitute the full and final
payment for all of the Assets of the Seller. If the Successor Business meets the
threshold by January 31, 2001,  the Seller will receive the shares  described in
(c) above.

     (f) If the Successor Business meets the $9,000,000  threshold of new orders
by January 31, 2001, but fails to meet the  $10,000,000  threshold of new orders
by January 31, 2001,  the shares  described in (d) above,  will not be issued to
the Seller and the  $6,000,000  cash payment  described in Paragraph 2.1 (a) and
the 33,8941  shares  described in 2.1 (b) and the 32.000 shres  described in 2.1
(c) above shall  constitute  the full and final payment for all of the Assets of
the Seller.  If the Successor  Business meets the threshold by January 31, 2001,
the Seller will receive the shares described in (d) above.

     2.2. On the Closing Date,  assume the following  liabilities of Seller (the
"Assumed Liabilities") and no others:

     (a). Accounts payable as listed in the attached  Schedule 2.2(a),  provided
accounts receivable exceeds the sum of the accounts payable, and bank borrowing,
by $800,000 on the closing date.

     (b).  Accrued  payroll,  and related  payroll  taxes and income  taxes,  as
identified in the attached Schedule 2.2(b).

     (c).  The  obligations  of Seller  under the capital  leases  listed in the
attached Schedule 2.2(c).

     (d),  Other  accrued  expenses  to the  extent  set  forth in the  attached
Schedule  2.2(d).  Such  accruals to include,  but are not limited to  employees
benefits (vacation,  holidays,  insurance,  sick pay, etc.) sales representative
commissions, and other normal and ordinary business obligations.

     (e). Bank  indebtedness  and other long-term  indebtedness as listed in the
attached Schedule 2.2(e).

           Except as expressly set forth in this Agreement, no other liabilities
or obligations of Seller shall be assumed by Buyer.

         2.3. Any provision of this  Agreement to the contrary  notwithstanding,
Buyer will not and does not assume the following  liabilities and obligations of
the  Seller  (the  "Retained  Liabilities")  even if, to any  extent,  they were
reflected  in the  Financial  Statements  and  arose in  connection  with,  were
incurred by or were related to the operation of the Business:

                  (a).  liabilities  or  obligations  of Seller to any  officer,
director or stockholder of the Seller, whether or not owed to such person in his
capacity as such, any person  affiliated with any of the foregoing or any person
related  to or  sharing  a  household  with  any of  the  foregoing  EXCEPT  for
liabilities for accrued wages and salaries reflected

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in the Financial Statements and approximately $593,000 owed to Benjamin Robinson
and Frank Holt which sum shall be paid at the Closing by wire transfer;

     (b). expenses incurred by the Seller in connection with the transactions

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contemplated  herein,  including,  without  limitation,  fees  and  expenses  of
Seller's counsel, advisors, and accountants;

     (c). any obligation or liability of the Seller to the Buyer;

     (d). any foreign,  federal,  state or local tax based on income or revenues
or interest or penalties relating thereto, whether arising by reason of the sale
of the Assets as herein  provided or by reason of the existence or operations of
the Seller prior to or after the date hereof and any sales or use taxes incurred
by Seller on or prior to the Closing;

     (e). to the extent not paid for under existing  insurance policies assigned
to Buyer  hereunder,  workman's  compensation  claims  against  Seller  based on
occurrences prior to the Closing Date;

     (f). to the extent not paid for under existing  insurance policies assigned
to the  Buyer  hereunder,  liabilities  to third  parties  for tort and  product
liability  claims  made  against  Seller  prior to the  Closing  Date based upon
occurrences prior to the Closing Date;

     (g). all  obligations  of Seller  incurred after the date hereof other than
those incurred in the ordinary course of business;

     (h). all other  liabilities  or  obligations of Seller to the extent any of
such liabilities or obligations  constitute a breach of the  representations  or
warranties of Seller set forth in Article III hereof;

     (i).  obligations  or  liabilities  of Seller with  respect to any employee
option or benefit  plan  including,  without  limitation,  any  underfunding  or
termination liability;

     (j). liabilities or obligations of Seller in connection with its failure to
obtain,  its failure to  maintain in full force and effect or its default  under
any  approval,  authorization,  consent,  certificate  of  occupancy  (or  local
equivalent),  license,  franchise,  order or other permit of any governmental or
regulatory  agency,  whether federal,  state,  local or foreign necessary to the
operation  of  Seller's  business  as  presently  conducted  including,  without
limitation,  the construction,  alteration,  operation,  use or occupancy of the
premises occupied by Seller, or any improvements thereon;

     (k). except to the extent  expressly  provided herein in Paragraphs  2.2(b)
and  (d) of  Article  II or in any  other  document  executed  contemporaneously
herewith,  any liabilities to employees or former  employees of the Seller,  and
their beneficiaries, whether pursuant to agreement or otherwise, including those
for  salaries,  bonus  and  employment  benefits,  fringe  benefits,  insurance,
welfare, post retirement medical, medical reimbursement,  deferred compensation,
sick pay,  termination,  severance,  stock  option,  stock  purchase,  accident,
disability,  vacation,  health,  medical and workers  compensation  insurance or
benefits;

     (l). any and all environmental liabilities arising out of or resulting from
any or all of the  following  conditions,  which  hereinafter  are  collectively
referred to as the

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"pre-closing  liability conditions:" (i) the existence prior to the Closing Date
of hazardous  materials  upon,  within or beneath any of the real  property,  or
migrating  from  such  real  property;  (ii)  any  violations  of  environmental
requirements premised upon, or arising out of any of the conditions described in
(i) above; (iii) any violations of environmental  requirements pertaining to the
use or  operation  of the real  property or any other of the Assets prior to the
Closing Date, or the conduct of operation of the business of the Seller prior to
the Closing Date; and (iv) the existence of any underground  storage tank (USTs)
at the real property; and

     (m). any other liabilities or obligations of Seller which are not expressly
assumed hereunder.

                                   ARTICLE III

                    Representations and Warranties of Seller.

         The Seller  represents  and warrants that the  statements  contained in
this Article III 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 Article III),  except as set forth in the disclosure  schedules
accompanying  this  Agreement  (the  "Disclosure  Schedules").   The  Disclosure
Schedules  will be arranged in  paragraphs  corresponding  to the  lettered  and
numbered paragraphs contained in this Agreement.

         3.1. (a). Seller is a corporation duly organized,  validly existing and
in good standing  under the laws of the state of New  Hampshire.  The Seller has
been qualified as a foreign  corporation  for the transaction of business and is
in good standing under the laws of each  jurisdiction in which it is required to
be so qualified as set forth in Schedule 3.1(a) hereto.

                  (b).     Seller does not have any subsidiaries.

                  (c).  Schedule 3.1(c) accurately sets forth the authorized and
outstanding  capital  stock of the Seller and the name,  address,  and number of
shares of capital stock held by each  stockholder.  There are no  outstanding or
authorized options,  warrants,  purchase rights,  subscription rights,  exchange
rights,  calls,  or other  contracts or  commitments  that require the Seller to
issue,  sell, or otherwise cause to become outstanding any of its capital stock.
There are no outstanding  securities or other  instruments  convertible  into or
exchangeable  for shares of common stock or capital stock or other securities of
the Seller and no person or entity  has any right of first  refusal,  preemptive
right,  subscription  right or similar right with respect to any common stock or
other securities of the Seller.

         3.2.  Seller  has  corporate  power to enter  into and  carry  out this
Agreement and related  documents,  has no contractual or other  restriction upon
its so doing and has  properly  secured the  approval of this  Agreement  of its
stockholders  and  Board of  Directors;  and  Seller's  executing  officers  are
authorized thereby to execute this Agreement, and such other documents as may be
necessary  to  consummate  the  transaction   contemplated  herein,  subject  to
stockholder  approval.  The Agreement and related  documents will be a valid and
binding agreement of Seller, enforceable against Seller in accordance with their
terms.

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         3.3.  Attached  hereto  as  Schedule  3.3  are  copies  of the  audited
financial  statements  of Seller for the fiscal  years ended  December 31, 1996,
1997 and 1998 and  unaudited  financial  statements  for the nine  months  ended
September  30, 1999,  including  the Balance Sheet of the Seller as of September
30, 1999, and Statement of Operations and Retained Earnings, and Changes of Cash
Flows of the Seller, with appended notes to all such financial statements, which
are an integral part of such statements (collectively the "Financials.")

                  (a). The  Financials  have been  prepared in  conformity  with
generally  accepted  accounting  principles  applied on a  consistent  basis and
present fairly the financial position and results of operations of Seller at the
dates and for the periods specified.

                  (b).  There  has  been no  material  change  in the  financial
condition,  assets or liabilities of Seller from September 30, 1999, to the date
hereof,  except  for  changes  which have  occurred  in the  ordinary  course of
business, none of which have been materially adverse.

         3.4.  The only real  property  owned by Seller are real  estate  leases
under which Seller is a lessee are  described  in Schedule 3.4 attached  hereto.
Aside from said leases, the Seller neither owns nor has interest in or rights to
any real estate.

         3.5. Schedule 3.5, attached hereto, includes a true and correct list of
all fixed  assets  owned by Seller and a schedule of all leases of fixed  assets
and  personal  property  under which  Seller is lessee,  all of which leases are
valid and binding and not in default, by either lessor or lessee thereunder.

                  (a).  Schedule  3.5(a)  contains  a list of all real  property
leases,  licenses  and  personal  property  leases under which the Seller is the
lessee or  licensee,  together  with (i) the  location and nature of each of the
leased or licensed properties  (including a legal description of all Leased Real
Property),  (ii) the termination  date of each such lease or license,  (iii) the
name of the lessor or licensor  and (iv) all rental and other  payments  made or
required  to be made for the year  ending  December  31,  1999.  All  leases and
licenses  pursuant to which the Seller  leases or  licenses  from others real or
personal  property are valid,  subsisting in full force and effect in accordance
with their  respective  terms,  and there is not, under any real property lease,
personal property lease or license, any existing default or event of default (or
event that, with notice or passage of time, or both, would constitute a default,
or would  constitute a basis of force majeure or other claim of excusable  delay
or  nonperformance).  True and  complete  copies  of all real  property  leases,
licenses  and  personal  property  leases  listed on  Schedule  3.5(a) have been
delivered to Buyer heretofore,  as well as copies of any title reports,  surveys
or environmental reports or audits relating to any Leased Real Property.  Except
as set forth in  Schedule  3.5(a),  no such lease or license  will  require  the
consent of the lessor or licensor to or as a result of the  consummation  of the
transactions  contemplated by this  Agreement.  For the purposes of this Section
3.5(a), a "lease" shall include a sublease.

                  (b). Seller has not received any notice from any  governmental
authority  that its real estate or personal  property  violate the provisions of
any building or similar  code,  nor does Seller have  knowledge of any basis for
such a claim.


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                  (c).   Except  with  respect  to   government   contracts  and
governmental  licenses and permits, no consents (except those which have already
been  obtained)  are  necessary  to  transfer  to the Buyer  any of the  Assets,
property or rights of the Business,  including any leases or licenses of real or
personal property or other rights.

         3.6. (a). The Seller has good and marketable title to all of the Assets
to be  acquired  by Buyer  hereunder  and all such Assets are and will be on the
Closing  Date  owned by Seller  free and  clear of any  liens,  encumbrances  or
restrictions, except as specifically reflected in Schedule 3.6 attached hereto.

                  (b). The personal  property  described in Schedule 3.5 and the
Real Property and personal  property held by the Company  pursuant to the leases
and licenses  described in Schedule 3.5(a) comprise all of the real property and
personal property used in the conduct of business of the Company.

         3.7.  From and after the date of this  Agreement  and until the Closing
Date,  the  Business  has been  and  will be  operated  in the  ordinary  course
consistent with past practices and there has not or will not have been:

     (a). any damage,  destruction or loss, whether or not covered by insurance,
which has had, or will have, a material adverse effect on the Business;

     (b). any strike,  picketing or similar labor trouble which has had, or will
have, a material adverse effect on the Business;

     (c). any license,  sale,  transfer,  mortgage or other  disposition  of any
Assets  except  in the  ordinary  course  of  business,  or any  license,  sale,
assignment,  transfer or other disposition of any patent, copyright,  trademark,
license, franchise,  know-how,  proprietary process, formula or other intangible
asset used in the Business;

     (d).  any  change in the  benefits  or  compensation  payable  or to become
payable to  officers  or  employees  in any form,  including  bonuses,  pension,
severance, etc.

     (e). any loans,  advances or capital  contribution  to or investment in any
person or entity;

     (f). any issuances or sale of any stock, bond or other corporate security;

     (g).  any  material  adverse  change in Seller's  condition  (financial  or
otherwise).

         3.8.  Seller has not  received any request for  information,  notice of
claim,  demand or notification  that it is (or which indicates that it may be) a
"potentially responsible party" with respect to the threatened or actual release
of any hazardous materials; nor has it received any notice from any governmental
agency with respect to any "alleged material violation" (i.e., a violation which
if Seller were found  liable  would have a material  adverse  effect on Seller's
Business)  by it of any  applicable  federal,  state or local  environmental  or
health and safety statutes and regulations in connection with the Business,  nor
does Seller know of any basis for any investigation or proceeding  against it by
any federal, state or local

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environmental or health and safety enforcement agency regarding such a violation
in  connection  with the  operation of the  Business.  To the best  knowledge of
Seller,  neither Seller nor any  predecessor of Seller has been alleged to be in
material  violation  of, or has been subject to any  administrative  or judicial
proceeding  pursuant to such  environmental laws and regulations with respect to
the Business, either now or at any time during the past ten years, and so far as
Seller is aware,  there  are no such  threatened  or  proposed  violations  with
respect to the Business.

         3.9 The equipment and other personal  property taken as a whole,  is in
good operating  condition in all material  respects,  subject to normal wear and
tear,  has  been  operated,   serviced  and  maintained   properly   within  the
recommendations  and requirements of the  manufacturers  thereof (if any) and is
suitable and appropriate for the use thereof made and proposed to be made by the
Seller in its business and operations.

         3.10.    (a).     Schedule 3.10 lists all of the following contracts:

                         (i). 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 goods or services,  the performance
                    of which  will  extend  over a period of more than one year,
                    that  would  result  in a  material  loss to the  Seller  if
                    terminated,  or that  involves  consideration  in  excess of
                    $50,000.00;

                         (ii).  any agreement  concerning a partnership or joint
                    venture;

                         (iii).  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 $50,000.00 or under which it
                    has  imposed  a  security  interest  on any  of its  assets,
                    tangible or intangible;

                         (iv). any agreement concerning  confidentiality or non-
                    competition;

                         (v). any agreement  involving  any of the  Stockholders
                    and their affiliates ;

                         (vi). 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;

                         (vii). any collective bargaining agreement;

                         (viii).   any  agreement  for  the  employment  of  any
                    individual on a full-time,  part-time,  consulting, or other
                    basis providing annual  compensation in excess of $30,000.00
                    or providing

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                    severance benefits;

                         (ix).  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;

                         (x). any agreement  under which the  consequences  of a
                    default or  termination  could have an adverse effect on the
                    business,  financial  condition,   operations,   results  of
                    operations, or future prospects of the Seller; or

                         (xi).   any  other   agreement  (or  group  of  related
                    agreements) the performance of which involves  consideration
                    in excess of $30,000.00.

               (b). The Seller has delivered to the Buyer a correct and complete
          copy of each written  agreement listed in Schedule ss.3.10 (as amended
          to date) and a written  summary setting forth the terms and conditions
          of each oral agreement  listed.  With respect to each such  agreement:
          (A) the agreement is legal, valid, binding,  enforceable,  and in full
          force and effect; (B) the agreement will continue to be legal,  valid,
          binding,  enforceable, and in full force and effect on identical terms
          following the  consummation of the  transactions  contemplated  hereby
          (including the assignments  and  assumptions  referred to in Article 2
          above),  (C) no party  is in  breach  or  default,  and no  event  has
          occurred which with notice or lapse of time would  constitute a breach
          or default,  or permit  termination,  modification,  or  acceleration,
          under the agreement;  and (D) no party has repudiated any provision of
          the agreement.

               (c).  Except as set forth in  Schedule  3.10,  there are no other
          material  agreements  or  contracts  to which  Seller is a party or by
          which it is bound.

         3.11. With respect to government  contracts or OEM subcontracts,  there
are (i) no  outstanding  written cure  notices or show causes,  (ii) any written
notices of contract  termination  or stop work orders,  (iii) any written  final
decision assessing a penalty or damages,  (iv) any written assertion of a formal
claim based on violation of government cost  accounting  standards or government
pricing,  or (v) any formal  notice of proposed  disallowance  of indirect  cost
claims, any subpoena or written notice signifying government investigation.

         3.12.  All  inventory  reflected on the Balance  Sheet at September 30,
1999 is, and on the Closing Date will be, of usable quality.

         3.13.    (a).  To the  knowledge of Seller, no  executive, key employee
or group of employees has any plans to terminate employment with the Seller.

                  (b).  Payment in full has been made to all of its employees of
all wages, salaries, commissions,  bonuses, benefits, and other compensation due
to such employees or otherwise  arising under any policy,  practice,  agreement,
plan, program, statute, or other law has been made;


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                  (c). No facility of the Seller has been closed, there have not
been any  layoffs  of any of their  employees  or  implementations  of any early
retirement,  separation,  or window  program  within the past  three  years with
respect to any of the Seller and its  Subsidiaries,  nor, are there any plans or
announcements of any such action or program for the future;

                  (d). The Seller is in compliance with its obligations pursuant
to the Workers  Adjustment and Retraining  Notification  Act of 1988, as amended
(WARN), and all other notification and bargaining  obligations arising under any
collective bargaining agreement or statute; and

                  (e). Seller has never had any labor trouble, by which is meant
employee  strikes,  work  stoppages,  slow  downs or lock outs,  or any  threats
thereof.  None of  Seller's  employees  has ever been  covered  by a  collective
bargaining agreement between Seller and any labor union.

         3.14.  Schedule 3.14,  attached hereto,  contains a complete listing of
all patents, licenses,  trademarks, trade names, brand names, copyrights, logos,
inventions, trade secrets, and other proprietary information used or required by
Seller in connection  with the carrying on and conduct of its Business,  none of
which, to the best knowledge of Seller,  infringes the rights of others.  Seller
is the sole  owner  of or has the  exclusive  right to use,  for the life of the
proprietary  rights,  all  patents,  trademarks,  service  marks,  trade  names,
copyrights, inventions, logos, trade secrets, etc. used in the Business.

         3.15.  (a).     The  Seller has, to the date  hereof, properly accrued,
and will pay when due, all federal, state and other tax liabilities of Seller.

                                       11

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                  (b). The Seller has filed all tax returns that it was required
to file.  All such tax returns were correct and  complete in all  respects.  All
taxes  owed by the Seller  (whether  or not shown on any tax  return)  have been
paid. The Seller is not the beneficiary of any extension of time within which to
file  any  tax  return.  No  claim  has  ever  been  made by an  authority  in a
jurisdiction  where the Seller  does not file tax  returns  that it is or may be
subject to taxation by that jurisdiction.

                  (c). The Seller has  withheld  and paid all taxes  required to
have been  withheld  and paid in  connection  with  amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third party.

                  (d).  The Seller does not expect any  authority  to assess any
additional taxes for any period for which tax returns have been filed.  There is
no dispute  or claim  concerning  any tax  liability  of the  Seller  either (A)
claimed or raised by any  authority in writing or (B) as to which the Seller has
knowledge. Schedule 3.15 lists all federal, state, local, and foreign income tax
returns  filed with respect to the Seller for taxable  periods ended on or after
December  31, 1989,  indicates  those tax returns  that have been  audited,  and
indicates those tax returns that currently are the subject of audit.  The Seller
has delivered to the Buyer correct and complete copies of all federal income tax
returns, examination reports, and statements of deficiencies assessed against or
agreed to by the Seller since December 31, 1989.

                  (e).  The Seller has not waived any  statute of limitations in
respect  of   taxes  or agreed  to any extension  of time  with respect to a Tax
assessment or deficiency.

                  (f). The Seller has not made any payments, is not obligated to
make  any  payments,  and is not a party to any  agreement  that  under  certain
circumstances could obligate it to make any payments that will not be deductible
under Code Sec. 280G. The Seller is not a party to any tax allocation or sharing
agreement.  The Seller  has not been a member of an  Affiliated  Group  filing a
consolidated federal income tax return or (B) has any liability for the taxes of
any third person  under Treas.  Reg.  ss.1.1502-6  (or any similar  provision of
state,  local,  or foreign law), as a transferee or successor,  by contract,  or
otherwise.

                  (g). The Seller's  election to be treated as an S  corporation
pursuant to ss.1362(a)  of the Code is currently  valid and, with respect to tax
returns for taxable  periods ended on or after  December 31, 1989, the Seller is
not aware of any facts  which  could  form a basis for the  termination  of such
election.

         3.16. Seller has complied in all material respects with all laws, rules
regulations,  ordinances,  judgments,  decrees and orders of federal,  state and
local  authorities  and agencies  applicable to its  Business,  the violation of
which  could  result in  liability  to Seller  of  $2,000  or more.  Seller  has
substantially   complied  with  all   requirements   under  necessary   permits,
authorizations,  or  licenses  and has,  as of the  date  hereof,  secured  such
permits, authorizations and licenses.

         3.17. Except as set forth on Schedule 3.17, there are no actions at law
or in equity pending or, to the best knowledge of Seller,  threatened against or
adversely  affecting  Seller or any of its assets,  and there are no proceedings
pending or, to the best knowledge of Seller,

                                       12

<PAGE>



threatened  against  Seller by or before  any  governmental  board,  department,
commission or agency. Schedule 3.17 sets forth each instance in which the Seller
(i) is subject to any outstanding injunction,  judgment,  order, decree, ruling,
or charge or (ii) is a party or 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.  None of the actions, suits, proceedings,
hearings,  and  investigations  set forth in Schedule  3.17 could  result in any
material  adverse  change  in the  business,  financial  condition,  operations,
results of operations,  or future  prospects of the Seller.  The Seller does not
have any reason to believe that any such action, suit,  proceeding,  hearing, or
investigation may be brought or threatened against it.

     3.18.  (a).  To the  best of the  knowledge  of  Seller,  none of the  real
property  owned or  leased by Seller  and none of the real  property  previously
owned or leased by Seller or any of its predecessors has been used at any time:

                         (i).  as a site for the  storage or  disposal  of waste
                    (including,  without limitation, as that term is used in the
                    Resource  Conservation Recovery Act ( "RCRA") (42 U.S.C. 901
                    et seq);

                         (ii).  so as to cause a violation of or to give rise to
                    a removal or  restoration  obligation  or liability  for the
                    costs of removal or restoration by others,  or liability for
                    damages  to others,  under any  statute,  ordinance,  order,
                    decree,  or under  the  common  law of any  state,  federal,
                    municipal  or  other  governmental  entity,  body or  agency
                    having  jurisdiction  over any of the real  property  or any
                    such previously owned or leased property, including, without
                    limitation,   the  Comprehensive   Environmental   Response,
                    Compensation  and Liability  Act, as amended  ("CERCLA") (42
                    U.S.C.   9601  et  seq.),   or  any  similar   Environmental
                    Requirement;

 nor has any such violation, obligation or liability been created by the removal
by or at the request of the Seller or, to the best knowledge of the Seller,  any
of its  predecessors  of any  waste  from the real  property  or such  leased or
previously owned or leased properties,  the disposition of such removed waste or
by reason of the  discontinuance of operations of any business  conducted at the
real property or the previously owned or leased properties.

         (b). To the best  knowledge  of the Seller,  none of the real  property
owned or leased  by Seller  and none of the real  property  previously  owned or
leased by Seller  or any of its  predecessors  has been used at any time for the
storage of hazardous materials in USTs.

         (c). Seller has delivered to Buyer true, complete and correct copies or
results of any reports,  studies or tests in the  possession  of or initiated by
Sellers   pertaining  to  the   existence  of  hazardous   materials  and  other
environmental  concerns  at any  part of the  real  property  or any  properties
previously  owned or leased by Seller or any of its  predecessors  or concerning
compliance  with or  liability  under  laws  relating  to toxic  waste and other
environmental  matters in the  operation of the business and  properties  of the
Seller or any of its predecessors.

                                       13

<PAGE>



         3.19.  (a).  All notes and  accounts  receivable  of the Seller are set
forth on Schedule 3.19 and are reflected properly on its books and records,  are
valid  receivables  subject  to no  setoff 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
Most  Recent  Balance  Sheet as  adjusted  for the  passage of time  through the
Closing Date in accordance with the past custom and practice of the Seller.

     (b).  Seller has no reason to believe  that the accounts  receivable  being
conveyed to Buyer hereunder are  uncollectible,  except as set forth in attached
Schedule 3.19.

         3.20. Seller is not in default, or alleged to be in default,  under any
agreement, instrument or obligation, which singly or in the aggregate might have
an adverse effect on the Seller's Business or condition.  There is no default by
any party with whom the Seller has an agreement, which is of material importance
to the Seller's Business or condition.

         3.21.  Except  with  respect  to  government   contracts  and  customer
contracts,  licenses  and permits  for which  consent is  required,  there is no
material  asset,  property or right used or required by the Buyer in the conduct
of the Business which is not being conveyed,  transferred,  or assigned to Buyer
under this Agreement.

     3.22. (a). Except as set forth on Schedule 3.22 (a),  neither the execution
and  delivery  of this  Agreement,  nor  the  consummation  of the  transactions
contemplated hereby,  violates any provision of the certificate of incorporation
or by-laws of Seller

                  (b)  Except  as set forth on  Schedule  3.22(b).  neither  the
execution  and  delivery  of  this  Agreement,   nor  the  consummation  of  the
transactions contemplated hereby, violates or is in conflict with or constitutes
a default  (or an event  which,  with  notice or lapse of time,  or both,  would
constitute a default)  under,  or results in the  termination of, or accelerates
the performance  required by, or excuses performance by any person of any of its
or their  obligations  under, or causes the  acceleration of the maturity of any
debt or obligation pursuant to, or results in, the creation or imposition of any
lien or encumbrance upon any property or assets of Seller under any agreement or
commitment  to which Seller is a party or by which any of its property or assets
is bound, or to which any of the property or assets of the Seller is subject; or
violates any statute,  law, regulation,  rule, judgment or order of any court or
other governmental body.

     3.23. The insurance coverage of Seller is adequate for the Assets, Business
and operations of Seller and is as set forth in Schedule 3.23.

     3.24.  Seller has not employed  any broker,  finder,  investment  banker or
financial advisor as to whom the Seller may have an obligation to pay monies, or
incurred any liability for any brokerage fees or commissions or for any finders'
investment  banking  or  financial  advisory  fees for which the  Seller  may be
responsible in connection with the transactions contemplated hereby.

     3.25. (a). Seller's products do not contain any computer programs. Seller's
key financial and  operational  computer  programs have been reviewed and, where
required,  detailed  plans  have  been  developed  and have  been and are  being
implemented on a schedule

                                       14

<PAGE>



intended to permit the Seller's computer programs to be Year 2000 Compliant.

                  (b). To the best of its knowledge, Seller has not received any
communications   from  any  of  its  suppliers  or  customers  relating  to  the
possibility  that any of their computer  programs  (including those contained in
any of their products) are not or will not be Year 2000 Compliant.

                  (c).  Seller has not given any warranties or  undertakings  to
any of its  customers to the effect that Seller or any of its computer  programs
are Year 2000 Compliant except test software and operating systems.

                  (d). For  purposes of this  Agreement,  "Year 2000  Compliant"
shall mean that:  (i) the  occurrence  in or use by  computer  programs of dates
before, on or after January 1, 2000 will not adversely affect the performance of
such programs with respect to date- dependent  data,  computations,  output,  or
other  functions  (including,  without  limitation,  calculating,  comparing and
sequencing);  (ii) such programs will not abnormally  end or provide  invalid or
incorrect  results as a result of  date-dependent  data; and (iii) such programs
can accurately  recognize,  manage,  accommodate  and manipulate  date-dependent
data, including, without limitation,  single and multi-century formulas and leap
years.

         3.26 Each  product  manufactured,  sold,  leased,  or  delivered by the
Seller has been in conformity  with all applicable  contractual  commitments and
all express and implied  warranties,  and the Seller has no liability (and there
is no basis  for any  present  or  future  action,  suit,  proceeding,  hearing,
investigation,  charge,  complaint,  claim, or demand against any of them giving
rise to any  liability)  for  replacement  or repair thereof or other damages in
connection  therewith,  subject only to the reserve for product  warranty claims
set forth on the most recent  balance  sheet as adjusted for the passage of time
through the Closing Date in accordance  with the past custom and practice of the
Seller.  No product  manufactured,  sold,  leased, or delivered by the Seller is
subject to any guaranty,  warranty,  or other  indemnity  beyond the  applicable
standard terms and conditions of sale or lease.

     3.27 Schedule 3.27 includes  copies of the standard terms and conditions of
sale or lease for the Seller  (containing  applicable  guaranty,  warranty,  and
indemnity provisions).

     3.28 The Seller does not have any liability  (and there is no basis for any
present or future action,  suit,  proceeding,  hearing,  investigation,  charge,
complaint,  claim,  or demand  against any of them giving rise to any liability)
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 the Seller.

     3.29 (a).  Schedule 3.29 lists each  Employee  Benefit Plan that the Seller
maintains or to which the Seller contributes.

                  (b). Each such Employee  Benefit Plan (and each related trust,
insurance  contract,  or fund) complies in form and in operation in all respects
with the applicable requirements of ERISA, the Code, and other applicable laws.

                  (c).     All required reports and descriptions (including Form
5500  Annual  Reports,  Summary  Annual  Reports,  PBGC-1s,  and  Summary   Plan
Descriptions) have been

                                       15

<PAGE>



filed or distributed  appropriately  with respect to each such Employee  Benefit
Plan. The  requirements  of Part 6 of Subtitle B of Title I of ERISA and of Code
Sec.  4980B have been met with respect to each such Employee  Benefit Plan which
is an Employee Welfare Benefit Plan.

                  (d).  Except as set forth on  Schedule  3.29,  the Seller does
notmaintain or contribute to, nor has it ever has maintained or contributed  to,
or has it ever been required to contribute to any Employee  Welfare Benefit Plan
providing medical,  health, or life insurance or other welfare-type benefits for
current or future  retired or  terminated  employees,  their  spouses,  or their
dependents (other than in accordance with Code Sec. 4980B).

                  (e).  The  Seller  has  delivered  to the  Buyer  correct  and
complete  copies of the plan documents and Summary Plan  Descriptions,  the most
recent determination letter received from the Internal Revenue Service, the most
recent Form 5500 Annual  Report,  and all related  trust  agreements,  insurance
contracts,  and other  funding  agreements  which  implement  each such Employee
Benefit Plan.

                  (f). No action,  suit,  proceeding,  hearing, or investigation
with  respect  to the  administration  or the  investment  of the  assets of any
Employee  Benefit  Plan (other than routine  claims for  benefits) is pending or
threatened.  The Seller  does not have any  knowledge  of any basis for any such
action, suit, proceeding, hearing, or investigation.

                  (g). All premiums or other  payments for all periods ending on
or before the  Closing  Date have been paid with  respect to each such  Employee
Benefit Plan which is an Employee Welfare Benefit Plan.

         3.30.  No  representation  or warranty  made in this  Agreement  by the
Seller, and no statement,  schedule or certificate  furnished or to be furnished
to  the  Buyer  pursuant   hereto,   or  in  connection  with  the  transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact,  or omits or will  omit to state a  material  fact  necessary  to make the
statements contained herein or therein not misleading.

                                   ARTICLE IV

                     Representations and Warranties of Buyer

         Buyer represents and warrants to Seller that:

     4.1. Buyer is a corporation  duly organized,  validly  existing and in good
standing under the laws of the State of Delaware with  corporate  power to carry
on its business as now conducted and will continue to be so on the Closing Date.
Buyer has  corporate  power to enter into and carry out this  Agreement,  has no
contractual or other restriction upon its so doing, and has properly secured the
approval of its Board of Directors to do so, no other approval  being  required.
Buyer's executing officers are authorized thereby to execute this Agreement, and
such  other  documents  as may  be  necessary  to  consummate  the  transactions
contemplated herein.

     4.2.  Neither  the  execution  and  delivery  of  this  Agreement,  nor the
consummation of the transactions  contemplated hereby, violates any provision of
the certificate of

                                       16

<PAGE>



incorporation  or  by-laws  of  Buyer;  violates  or  is  in  conflict  with  or
constitutes a default (or an event which, with notice or lapse of time, or both,
would  constitute  a  default)  under,  or  results  in the  termination  of, or
accelerates the performance required by, or excuses performance by any person of
any of its or  their  obligations  under,  or  causes  the  acceleration  of the
maturity of any debt or  obligation  pursuant  to, or results in the creation or
imposition of any lien or encumbrance upon any property or assets of Buyer under
any  agreement  or  commitment  to which Buyer is a party or by which any of its
property  or assets is bound,  or to which any of the  property or assets of the
Buyer is subject; or violates any statute,  law,  regulation,  rule, judgment or
order of any court or other governmental body.

         4.3.  Buyer  will use all  reasonable  efforts  to  release  Seller and
Benjamin  Robinson as guarantor of corporate debt from those  liabilities  which
Buyer has expressly agreed to assume under this Agreement.

         4.4. No representation or warranty made in this Agreement by the Buyer,
and no statement,  schedule or  certificate  furnished or to be furnished to the
Seller  pursuant  hereto,  or in connection with the  transactions  contemplated
hereby,  contains or will contain any untrue  statement of a material  fact,  or
omits or will omit to a state a material fact  necessary to make the  statements
contained herein or therein not misleading.

                                    ARTICLE V

                 Operations of Business Since September 30, 1999

         Since  September  30,  1999,  the Seller has  adhered to the  following
restrictions:

         5.1. Seller has conducted the Business in the ordinary and usual course
and has used its best efforts to maintain the Business and the goodwill  thereof
in accordance with its prior practice.

         5.2.  Seller has maintained the Assets owned or leased by Seller in the
same condition as the same were on September 30, 1999,  reasonable wear and tear
excepted and dispositions in the ordinary course of business, which dispositions
have not been material in the aggregate.

     5.3.  Seller  has  not  mortgaged,  pledged  or  subjected  to any  lien or
encumbrance  any of the Assets or  suffered or  permitted,  any of the Assets to
become encumbered or subject to any lien.

         5.4.  Seller has not made or  declared  any  distribution,  transfer or
dividend  to its  shareholders,  or sold or  disposed  of,  or made  any  offer,
agreement or contract  relating to the sale or disposition of, any of the Assets
or any assets of a similar  nature  acquired by Seller since  September 30, 1999
(with the further exception of those which have been disposed of in the ordinary
course of business consistent with historical practice.)

         5.5.  Seller has not incurred or become  liable for any  obligation  or
liability except current liabilities incurred in the ordinary course of business
consistent with historical business practices.


                                       17

<PAGE>



     5.6.  Seller has not made  increases  in  employees'  salaries  or benefits
subsequent to September 30, 1999,  except as set forth in the attached  Schedule
5.6.

         5.7. Seller has paid or accrued all operating costs since September 30,
1999, including but not limited to all wages and salaries as the same shall have
become due and payable,  any premiums due on employee health insurance and other
insurance policies,  utility bills, rents, all payments required for merchandise
and services  received  during such period,  and all other  expenses of the type
ordinarily and reasonably incurred by Seller's business since December 31, 1999.

                                   ARTICLE VI

                   Conditions to Obligation of Buyer to Close

         The  obligation  of Buyer to  purchase  the  Assets  and  otherwise  to
consummate the transactions that are to be consummated at the Closing is subject
to the satisfaction,  on or before the Closing Date, of the following conditions
(any of which may be waived by Buyer in whole or in part):

     6.1. Buyer has completed its due diligence review and has determined in its
reasonable and good faith judgment to complete the transaction.

         6.2.  There  shall have  occurred  no  material  adverse  change to the
Business since the date of this Agreement  (whether or not covered by insurance)
, in each  case  taken as a  whole,  except  for  changes  contemplated  by this
Agreement  or by  any  of the  contracts  and  changes  otherwise  occurring  in
connection with the transactions contemplated hereby.

         6.3.  All  required  consents,  including  the  consent  of each of its
stockholders in the form of Exhibit "A" hereto,  but excepting customer novation
or consent agreements,  shall have been duly obtained or obviated,  except where
(i) the failure to obtain any such  required  consents  would not  reasonably be
expected to subject  Buyer to any material  penalty or loss,  including  loss of
partial revenue,  or (ii) such required consent relates to an assigned  contract
or a related assumed liability, as to which the parties will proceed pursuant to
Article VIII.

         6.4. The  representations and warranties of Seller set forth in Article
III shall be true and correct in all  material  respects on the Closing  Date as
though such representations and warranties were made as of such date.

         6.5.  Seller shall have  complied with and  performed,  in all material
respects,  all  obligations  required by this  Agreement to be complied  with or
performed by Seller on or before the Closing Date.

         6.6.  Seller shall have delivered to Buyer a  certificate,  dated as of
the Closing Date, to the effect that the  conditions set forth in Paragraphs 6.3
and 6.4 have been satisfied.

         6.7.  Buyer  shall  have  entered  into an  Employment  Agreement  with
Benjamin  Robinson,  in conformity with the form of agreement  annexed hereto as
Exhibit "B".

     6.8.  Seller's  accounts  receivable  shall exceed its accounts payable and
bank debt

                                       18

<PAGE>



by at least $800,000.

     6.9. Benjamin Robinson shall have entered into an Indemnification Agreement
in the form annexed hereto as Exhibit "C".

         6.10 Seller shall have complied with the conditions of Paragraphs  9.3,
9.4, 9.5, and 9.6 of Article IX.

         6.11.  The  Closing  shall have taken  place no later than  February 1,
2000, with the effective date of the  transaction to be January 3, 2000,  unless
otherwise agreed to by the parties.

                                   ARTICLE VII

                   Conditions to Obligation of Seller to Close

         The  obligation  of Seller to sell the Assets to Buyer and otherwise to
consummate the transactions that are to be consummated at the Closing is subject
to the satisfaction,  on or before the Closing Date, of the following conditions
(any of which may be waived by Seller in whole or in part);

         7.1.     Reserved.

         7.2. The  representations  and warranties of Buyer set forth in Article
IV and the  representations  and  warranties  of Buyer  set  forth in the  other
instruments  shall be true and correct in all  material  respects on the Closing
Date as though such representations and warranties were made as of such date.

         7.3.  Buyer shall have  complied  with and  performed,  in all material
respects,  all  obligations  required by this  Agreement to be complied  with or
performed by Buyer on or before the Closing Date.

         7.4. Buyer shall have delivered to Seller a certificate dated as of the
Closing Date, to the effect that the  conditions set forth in Paragraphs 7.2 and
7.3 of this Article VII above have been satisfied.

         7.5.  Buyer  shall  have  entered  into an  Employment  Agreement  with
Benjamin  Robinson,  in conformity with the form of agreement  annexed hereto as
Exhibit "B".

         7.6.  Buyer shall  have complied with the  conditions of Paragraphs 9.7
and 9.8 of Article IX.

         7.7.     The Closing shall take place no later than February 1, 2000.

                                  ARTICLE VIII

                         Best Efforts to Obtain Consents

         8.1.  Where required, Seller and  Buyer shall notify Seller's customers
and suppliers

                                       19

<PAGE>



that Seller's obligations under its contracts,  including government  contracts,
will, after the closing,  be performed by Buyer. After the Closing,  Seller will
use its best  efforts to obtain the  consents of any  parties to the  contracts.
Seller and Buyer will cooperate and use their best reasonable  efforts to obtain
(i)  novation  agreements  to the  extent  required  by law to  each  government
contract  ("Novation  Contracts")  as  soon as  reasonably  possible,  (ii)  any
security  clearances,  licenses  or similar  permits  required  to  operate  any
facility or conduct any portion of the  Business  and (iii) all other  consents,
approvals, novations, and waivers necessary to convey to Buyer any of the Assets
which are not required by law or by contact to be obtained  prior to the Closing
Date, (All Novation Contracts and other consents, security clearances,  permits,
approvals  and waivers  described in (i),  (ii) and (iii) above are  hereinafter
referred to as "Post-closing Consents".)

         8.2. To the extent that the  assignment by Seller and the assumption by
Buyer of any contracts  included  within the Assets shall require the consent or
approval of any third party,  this Agreement  shall not constitute an assignment
and/or  assumption  thereof if such attempted  assignments  or assumption  would
constitute a breach thereof.

         8.3. Until (i) any Novation  Contract  legally required with respect to
any  government  contract has been  executed and  delivered  and (ii) Seller and
Buyer have obtained any Post-closing  Consents  necessary to convey to Buyer any
contract not requiring a Novation Contract pursuant to Section 1 of this Article
VIII above,  Buyer on behalf of Seller,  from and after the  Closing  Date shall
assume  and  perform  (as a  subcontractor  to Seller in the case of  government
contracts)  and Buyer shall  assume and  perform,  for the benefit of the issuer
thereof or other party or parties thereto, the liabilities, responsibilities and
obligations of Seller thereunder  (other than the liabilities,  responsibilities
and obligations of Seller under Section 4 of this Article VIII.)

         8.4.  Until Seller and Buyer have  obtained  any Novation  Contracts or
Post-closing  Consents  necessary  to convey to Buyer any  contracts,  including
government  contracts  pursuant  to Section 1, Seller from and after the closing
will (i) promptly transmit to Seller's government  contract customers,  Seller's
invoices  based  upon the  invoices  submitted  by Buyer to Seller  pursuant  to
Section 5 of this Article VIII, (ii) receive payments tendered to Seller by such
government  contract  customers and promptly remit such payments to Buyer, (iii)
enforce  for the  benefit  of Buyer all  rights of Seller  under any  government
contract, and (iv) take any other reasonable actions necessary to allow Buyer to
perform its  obligations  and derive its benefits as a  subcontractor  under the
government contracts.

         8.5.  From  and  after  the  Closing  Date  and  until  the  applicable
Post-closing  Consents  are  obtained,  Buyer shall take all  reasonable  action
necessary  to allow  Seller to  perform  its  obligations  under the  government
contracts,  including but not limited to promptly  submitting invoices to Seller
for such payments or  reimbursements  as are  appropriate in accordance with the
respective terms of such government contracts.

                                   ARTICLE IX

                                   The Closing

     9.1. The Closing hereunder shall take place at the offices of Herley-MDI on
February 1, 2000 at 10:00 a.m., (the "Closing Date".)

                                       20

<PAGE>



         9.2. On the Closing Date, (a) Seller shall transfer the Assets to Buyer
by good and  sufficient  assignment  and bill of sale in the form of Exhibit "D"
hereto and such other  documents and instruments of conveyance as are reasonably
satisfactory  to counsel for Buyer;  and (b) Buyer  shall  deliver to Seller the
cash payment  payable on the Closing Date (by cashier's  check or wire transfer)
and duly executed  instrument  evidencing the assumption by Buyer of the Assumed
Liabilities in the form of Exhibit "E" hereto.

         9.3.  Seller shall furnish to Buyer, on the Closing Date, a certificate
of Seller dated the Closing Date and executed by its President  stating that all
of Seller's representations,  warranties and covenants contained herein are true
and correct as of the Closing Date.

         9.4.  Except as otherwise  provided in Article  VII,  Seller shall have
received on or prior on or prior to the Closing Date,  all required  consents of
third  parties to the  consummation  of the  transactions  provided  for herein,
including  consents to the  assignment of the Leases,  or a new building  lease,
material contracts,  leases and agreements, and delivered its certificate of its
President  to such effect to buyer,  except for U.S.  Government  contracts  and
sub-contracts from prime contractors.

         9.5. Seller shall furnish to Buyer on the Closing Date resolutions duly
adopted and carried by its directors and stockholders authorizing the execution,
deliver and performance of this Agreement, certified by its secretary.

         9.6.  Seller shall furnish to Buyer, on the Closing Date, an opinion of
counsel for Seller in form and substance reasonably  satisfactory to counsel for
Buyer to the effect that:

                  (a). Seller is a corporation  duly organized,  existing and in
good standing under the laws of the State of New Hampshire, with corporate power
to enter into and perform this Agreement and transfer the Assets as provided for
herein;

                  (b).  This  Agreement has been duly  authorized,  executed and
delivered by Seller and constitutes a legal, valid and enforceable obligation of
Seller in accordance with its terms,  except as enforceability may be limited by
applicable bankruptcy,  insolvency,  reorganization,  moratorium or similar laws
affecting the enforcement of creditors' rights generally;

                  (c). To the best of counsel's  knowledge,  this  Agreement and
the  carrying out of the  transactions  provided for herein will not violate any
charter,  bylaw,  or other  corporate  restriction,  agreement or arrangement to
which Seller is a party or to which it is subject; and

                  (d). The bills of sale and other  documents of conveyance  and
transfer  delivered  to Buyer by  Seller  on the  Closing  Date  have  been duly
authorized,  executed and delivered by Seller and are adequate under the laws of
New  Hampshire  and any other  applicable  law to  effect  such  conveyance  and
transfer.

         9.7. Buyer shall furnish to Seller,  on the Closing Date, a certificate
of Buyer dated the Closing Date and executed by its President or one of its Vice
Presidents stating that all of Buyer's representations, warranties and covenants
contained herein are true and correct as of the Closing Date.

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<PAGE>



         9.8 Buyer shall  furnish to Seller,  on the Closing Date, an opinion of
counsel for Buyer in form and substance  reasonably  satisfactory to counsel for
Seller to the effect that:

                    (a). Buyer is a corporation duly organized,  existing and in
               good  standing  under  the  laws of the  State of  Delaware  with
               corporate power to enter into and perform this Agreement.

                    (b). This Agreement has been duly  authorized,  executed and
               delivered by Buyer and constitutes a legal, valid and enforceable
               obligation  of Buyer in  accordance  with its  terms,  except  as
               enforceability   may  be   limited  by   applicable   bankruptcy,
               insolvency, reorganization,  moratorium or similar laws affecting
               the enforcement of creditors' rights generally.

                    (c). To the best of counsel's knowledge,  this Agreement and
               the carrying out of the transactions herein provided for will not
               violate any charter or other corporate restriction,  agreement or
               arrangement to which Buyer is subject; and

                  Concurrent with the  closing  of this  transaction,  the Buyer
                           undertakes to notify the American  Stock Transfer and
                           Trust to issue Herley Stock certificates as follows:

                           Benjamin Robinson                     31,841 shares

                           Frank Holt                             2,050 shares

                                            Total shares         33,841 shares

         These  certificates  will be  endorsed  or stamped  with the  following
legend:

                            "THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE
                            ISSUED WITHOUT REGISTRATION UNDER THE SECURITIES ACT
                            OF 1933, AS AMENDED, IN RELIANCE UPON THE EXEMPTIONS
                            CONTAINED IN THE SECURITIES ACT OF 1933, AS AMENDED.
                            NO TRANSFER  OF THESE  SECURITIES,  OR ANY  INTEREST
                            THEREIN, MAY BE MADE EXCEPT PURSUANT TO AN EFFECTIVE
                            REGISTRATION  STATEMENT  UNDER SUCH ACT,  UNLESS THE
                            COMPANY   HAS   RECEIVED   AN   OPINION  OF  COUNSEL
                            SATISFACTORY  TO IT  THAT  SUCH  TRANSFER  DOES  NOT
                            REQUIRE REGISTRATION UNDER SUCH ACT."

                                   ARTICLE X.

         Survival of Representations and Warranties and Indemnification

     10.1.   Survival  of   Representations   and   Warranties   of  Seller  and
Indemnification.

                    (a). The representations, covenants and warranties of Seller
               contained in the Agreement or any Exhibit  attached hereto or any
               certificate delivered pursuant hereto (the

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<PAGE>



               "Representations and Warranties") shall survive the Closing Date.

                    (b).  Notwithstanding  any  investigation  or  Seller on the
               Assets or  Business  which is made by or on behalf of Buyer prior
               to the Closing Date,  Seller shall  indemnify,  defend,  and hold
               harmless Buyer against any loss,  expense  (including  reasonable
               cost of investigation  and legal fees), or other damage resulting
               from  (i)  any  material   breach  by  Seller  of  any  of  their
               warranties,  representations or agreements contained herein, (ii)
               any action or claim which is brought or asserted by third parties
               against  Buyer or any  successor  arising  out of the  conduct of
               Seller (except by assumed Liabilities  expressly assumed by Buyer
               pursuant   to   Article   II   hereof)   or  on  account  of  the
               non-compliance  by Seller  or Buyer  with the  provisions  of any
               so-called Bulk Sales Law applicable to the conveyance to Buyer of
               the  Assets,  or (iii)  any  failure  by Seller  to  perform  any
               covenant, undertaking or obligation hereunder.

                    (c).  If any action or claim  shall be  brought or  asserted
               against Buyer or any successor in respect of which  indemnity may
               be sought  from  Seller  pursuant  to  paragraph  10.1(b) of this
               Article X, Buyer  shall  timely  notify  Seller and Seller  shall
               assume the defense  thereof,  including the employment of counsel
               reasonably   satisfactory  to  Buyer,  and  the  payment  of  all
               expenses.  Buyer shall have the right to employ separate  counsel
               in any such action and  participate in the defense  thereof,  but
               the fee and expenses of such  counsel  shall be at the expense of
               Buyer  unless  (i)  the   employment   thereof  shall  have  been
               specifically  directed  by  Seller,  or (ii)  Seller  shall  have
               elected  not to assume the defense  and employ  counsel.  For the
               purpose of this  section,  notice given  within  thirty (30) days
               after the occurrence giving rise to the right of  indemnification
               shall be  "timely"  but notice  given later than such thirty (30)
               days  shall  not  terminate  a party's  right to  indemnification
               unless the party receiving such notice can  demonstrate  that its
               rights have been adversely affected in a material fashion by such
               allegedly untimely notice.

                    (d). Except  obligations and liabilities  arising because of
               fraud or arising under Paragraphs 3.1 (1), 3.1(C), 3.2 or 3.22(a)
               of this Agreement,  the indemnity  liability of the Seller herein
               shall not exceed the amount of $500,000, and such liability shall
               lapse after two years.

     10.2.   Survival   of   Representations   and   Warranties   of  Buyer  and
Indemnification.

                  (a). The  representations and warranties of Buyer contained in
this  Agreement  or any Exhibit  attached  hereto or any  certificate  delivered
pursuant hereto (the "Representations and Warranties") shall survive the Closing
Date.

                  (b).  Notwithstanding any investigation of Buyer which is made
by or on behalf of Seller  prior to the Closing  Date,  Buyer  shall  indemnify,
defend, and hold harmless Seller against any loss, expense (including reasonable
cost of  investigation  and legal fees), or other damage  resulting from (i) any
breach  by  Buyer  of any  of  its  warranties,  representations  or  agreements
contained herein (ii) any failure by Buyer to perform any covenant,  undertaking
or obligation  hereunder,  or (iii) any action or claim brought or asserted,  by
third  parties  against  Seller which  relates to the conduct of the Business by
Buyer after the Closing Date.

                  (c).  If  any action  or claim  shall  be  brought or asserted
against Seller or any

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<PAGE>



successor  in respect of which  indemnity  may be sought from Buyer  pursuant to
Paragraph  10.2(b) of this Article X. Seller shall timely notify Buyer and Buyer
shall assume the defense thereof, including the employment if counsel reasonably
satisfactory to Seller,  and the payment of all expenses.  Seller shall have the
right to employ  separated  counsel in any such  action and  participate  in the
defense  thereof,  but the fee and  expenses  of such  counsel  shall  be at the
expense of Seller unless (i) the employment thereof shall have been specifically
directed by Buyer,  or (ii) buyer  shall have  elected not to assume the defense
and employ counsel. For the purpose of this section,  notice given within thirty
(30) days after the occurrence giving rise to the right of indemnification shall
be  "timely"  but  notice  given  later  than such  thirty  (30) days  shall not
terminate a party's right to  indemnification  unless the party  receiving  such
notice  can  demonstrate  that its  rights  have been  adversely  affected  in a
material fashion by such allegedly untimely notice.

         (d).   The indemnity liability of the Buyer herein shall not exceed the
amount of $ 300,000.00, and such liability shall lapse after one (1) year.

                                   ARTICLE XI

     Covenants and Agreements Pertaining to the Period Subsequent to Closing

         11.1.  (a).  Promptly after the Closing the Seller shall satisfy all of
its obligations  and  Liabilities  not included  within the Assumed  Liabilities
before  paying any  dividend  or making  any  distribution  with  respect to its
capital  stock,  or  redeeming,  purchasing,  or otherwise  acquiring any of its
capital stock.  Seller shall  indemnify  Buyer from,  and promptly  discharge or
cause  to  be  discharged  as  they  become  due,  all  debts,  obligations  and
liabilities of Seller other that the Assumed Liabilities.

                  (b). Buyer shall indemnify Seller and Benjamin  Robinson from,
and promptly discharge or cause to be discharged as they become due, the Assumed
Liabilities and those liabilities  arising out of the conduct of the Business by
Buyer after the Closing Date.

         11.2. Upon the request of either Buyer or Seller,  the other party will
execute and deliver to the requesting  party all such  instruments and documents
of further assurance or otherwise,  and will do any and all such acts and things
as may  reasonably  be  required  to carry  out the  obligations  of such  party
hereunder and to consummate the transactions contemplated hereby.

         11.3. Seller and its representatives  shall, upon reasonable notice and
at reasonable times, have access to Seller's records which have been left in the
possession  of Buyer for the  purpose of winding up its  affairs  and filing and
paying its tax obligations.

         11.4.  From and after the date hereof,  the Seller and its officers and
directors  will,  and Seller will cause its  officers and director to, hold in a
fiduciary  capacity  for the  benefit  of Buyer  all  confidential  information,
knowledge,  and data  relating to or  concerned  with the Business and shall not
divulge,  and shall cause such officers and  directors not to divulge,  any such
confidential information, knowledge, or data to any person, firm, or corporation
other than the Buyer,


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<PAGE>



         11.5.  Buyer will not assign,  transfer  or convey the  Business to any
third party  without  requiring  such third party to assume the  obligations  of
Buyer  hereunder.  Such  assignment,  transfer or conveyance will not release or
modify any of the obligations of Buyer under this Agreement.

         11.6.  Buyer shall offer to hire on the Closing Date the current active
employees  of the  Seller as  employees-at-will  . Buyer  shall  provide  to the
Transferred  Employees (as hereinafter defined) on the day following the Closing
the wage and salary levels in effect  immediately prior to the Closing Date (the
Compensation Program);  provided, however, that the foregoing shall not preclude
or  interfere in any way, in the right of the Buyer to modify all or any portion
of the  Compensation  Program  to comply  with  applicable  law or for any other
reason which the Buyer, in its sole discretion, determines at any time after the
Closing.  Those  employees who accept the Buyer's  offer of employment  shall be
referred to as Transferred Employees,  effective as of the Closing Date (or with
respect to those  employees on an authorized  leave or  disability,  the date of
such acceptance).

         11.7 With respect to any unused  vacation  time to which a  Transferred
Employee is entitled  immediately  prior to the Closing Date, the Buyer shall be
liable after the Closing Date for,  and shall  permit  Transferred  Employees to
take, such vacation time to the extent such vacation time is accrued on the Most
Recent  Balance Sheet as adjusted for the passage of time to the Closing Date in
the Seller's ordinary course of business.

         11.8 The Seller  shall not, at any time within the 60-day  period prior
to the Closing Date  effectuate a plant  closing or mass layoff,  as those terms
are  defined  in  WARN,  affecting  in  whole  or in part  any of its  sites  of
employment facility, operating units, or employees.

         11.9 In the event the Buyer  decides  to engage in  conduct  that might
trigger an  obligation  to  provide  notice  under  WARN,  the Seller  agrees to
cooperate  with the Buyer and take any action  required to permit  timely notice
under WARN to any person,  entity,  or party entitled to notice pursuant to WARN
and to take such other reasonable  action as may be helpful to the Buyer in that
regard.

         11.10  Transferred  Employees  will be eligible to  participate  in the
Buyer's  employee  benefit  plans and programs  extended to  similarly  situated
employees  of the Buyer in  accordance  with the terms of such  plans,  and will
receive  service credit under the Buyer's plans for  eligibility and vesting for
service with the Seller.

                                   ARTICLE XII

                                  Miscellaneous

         12.1.  Any  notices,  approvals  or other  communications  provided for
herein to be given hereunder by any party to another shall be deemed validly and
properly  given  or made  if in  writing  and  delivered  personally  or sent by
overnight or certified  mail,  return receipt  requested,  postage  prepaid,  as
follows:

         If to Seller:              Robinson Laboratories, Inc.
                                    1 Tanguay Avenue
                                    Nashua, NH 03063-1741

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<PAGE>



         With a copy to:            Hamblett & Kerrigan, P.A.
                                    146 Main Street
                                    Nashua, NH 03060
                                    Attention: Chester H. Lopez, Inc., Esq.

         If to Buyer:               Herley Industries, Inc.
                                    10 Industry Drive
                                    Lancaster, Pennsylvania 17603
                                    Attention: Mr. Lee N. Blatt, Chairman of the
                                               Board

         With a copy to:            Blau, Kramer, Walter  & Lieberman, P.C.
                                    100 Jericho Quadrangle
                                    Jericho, New York  11753
                                    Attention: David H. Lieberman, Esq.

         Either of the  parties  hereto may give notice to the other at any time
by the  methods  specified  above of a change in the  address  at which,  or the
persons to whom,  notices addressed to it are to be delivered in the future, and
such notice shall be deemed to amend this paragraph until  superseded by a later
notice  of the  same  type.  Any  notice  given  by mail as  aforesaid  shall be
conclusively  deemed to have been received by a party hereto and be effective on
the third  business  day after the day on which  mailed to the address set forth
above.

         12.2.  This  Agreement  shall be  binding  upon and shall  inure to the
benefit of the parties hereto and their respective successors and assigns.

         12.3.  This Agreement may be executed in one or more counterparts, each
of which shall constitute an original hereof.

         12.4. This Agreement may be modified,  amended, or supplemented only by
mutual  written   agreement  of  the  Seller  and  the  Buyer.  Each  amendment,
modification or supplement shall be in writing signed by the party or parties to
be charged.

         12.5.  This  Agreement,  the  Exhibits  hereto and the other  documents
delivered  hereto  constitute the entire  agreement of the parties in respect of
the subject  matter  hereof and  supersedes  all prior  statements or agreements
among the parties in respect of such subject matter.

         12.6.  Article headings used in this Agreement are for convenience only
and shall not affect the construction of this Agreement.

         12.7.  Whenever in this  Agreement  it is provided  that a party hereto
shall  deliver  an  agreement  or other  instrument  to the other of them,  such
agreement or instrument shall be in form reasonably  satisfactory to counsel for
the party to which the same is to be delivered.

         12.8.  In the  event of  litigation  to  enforce  this  Agreement,  the
prevailing party shall receive and award of reasonable attorney's fees.

         12.9.  This Agreement  shall be  construed and interpreted according to
the laws of

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<PAGE>


the State of Delaware  without regard to its conflicts of laws  provisions.  Any
suit, action or proceeding  arising out of this Agreement shall be instituted in
the state or federal courts in the State of New York.

         12.10  Neither  party shall issue any press  release or make any public
announcement  relating to the subject matter of this Agreement without the prior
approval of the other Party; provided,  however, that the Buyer may disclose the
subject  matter  of this  Agreement  to its  lenders  and may  make  any  public
disclosure  it believes in good faith is required by applicable  law  concerning
its securities  registered under the Securities Exchange Act of 1934, as amended
(in which case the Buyer will use its best efforts to advise the Seller prior to
making such disclosure).

         12.11 Simultaneously with the execution and delivery of this Agreement,
each of the  Stockholders of the Seller has executed the CONSENT OF STOCKHOLDERS
attached hereto as Exhibit " A".

         IN WITNESS  WHEREOF,  Seller and Buyer have caused this Agreement to be
executed  by their duly  authorized  officers  and their  corporate  seals to be
affixed and attested by their  respective  Secretaries  as of the day, month and
year first above written.

                                                    ROBINSON  LABORATORIES, INC.

(Corporate Seal)

                                                     By: ______________________
Attest:                                                       Name:
         _________________________                            Title:
         Secretary


                                                     HERLEY INDUSTRIES, INC.



(Corporate Seal)
                                                     By: ______________________
Attest:                                                       Name:
         _________________________                            Title:
         Secretary



                                       27