EXHIBIT 10.1

                        THIRD AMENDMENT TO LOAN AGREEMENT

     THIS THIRD AMENDMENT TO LOAN AGREEMENT (the "Third Amendment"), is made and
entered into this 4th day of May,  2009,  by and among HERLEY  INDUSTRIES,  INC.
(the "Borrower"), MANUFACTURERS AND TRADERS TRUST COMPANY and PNC BANK, NATIONAL
ASSOCIATION, successor to Bank of Lancaster County, a division of BLC Bank N.A.,
successor to Bank of Lancaster  County,  N.A. (each a "Lender" and collectively,
the "Lenders") and  MANUFACTURERS  AND TRADERS TRUST COMPANY,  as agent (in such
capacity, the "Agent").

                               B A C K G R O U N D

     A.  Borrower  has  borrowed  from Lenders and desires to continue to borrow
from Lenders in connection with the operation of its business(es).  On April 30,
2007,  the parties  entered into a Loan  Agreement,  upon which monies have been
advanced,  which was amended by an Amendment to Loan Agreement dated May 2, 2008
and a Second  Amendment to Loan Agreement  dated September 11, 2008 (as amended,
the "Loan  Agreement").  The Loan Agreement is incorporated  herein by reference
and made a part hereof.  All  capitalized  terms used herein without  definition
which are  defined  in the Loan  Agreement  shall  have the  meanings  set forth
therein.

     B. Borrower has requested  Lenders to amend certain  provisions of the Loan
Agreement.

     C. The parties desire to enter into this Third Amendment to effectuate such
amendments.

         D. Borrower has no defense, charge, defalcation, claim, plea, demand or
set-off against the Loan Agreement or any of the Loan Documents.

     NOW,  THEREFORE,  for  valuable  consideration,  receipt of which is hereby
acknowledged,  and  intending to be legally  bound  hereby,  the parties  hereto
covenant and agree as follows:

     1. That the above Background is incorporated herein by reference.

     2. That the definitions of "Lender" and "Lenders"  contained in Section 1.1
of the Loan  Agreement  be and  hereby  are  amended  to  substitute  "PNC Bank,
National  Association,  successor to Bank of Lancaster County, a division of BLC
Bank, N.A.,  successor to Bank of Lancaster County, N.A." for "Bank of Lancaster
County,  a division of BLC Bank,  N.A.,  successor to Bank of Lancaster  County,
N.A." appearing therein.

     3. That the  definition  of "LIBOR"  contained  in Section  1.1 of the Loan
Agreement be and hereby is amended to read in its entirety as follows:

     "LIBOR" shall mean the rate per annum (rounded upward, if necessary, to the
     nearest  1/16th of 1%)  obtained by  dividing  (i) the  one-month  interest
     period  London  Interbank  Offered  Rate as  fixed by the  British  Bankers
     Association  for United  States  dollar  deposits  in the London  interbank
     market  at  approximately  11:00  a.m.  London,  England  time  (or as soon
     thereafter  as  practicable)  each  day  (or if  such  day is not a  London
     Business  Day,  as fixed in the same  manner on the  immediately  preceding
     London Business Day, which day's rate shall, unless otherwise provided for,
     apply  to  the  immediately   succeeding   non-London  Business  Days),  as
     determined  by the Agent  from any  broker,  quoting  service  or  commonly

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     available  source utilized by the Agent, 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 Agent's sole discretion.

     4. That Section 1.1 of the Loan Agreement be and hereby is amended to add a
definition for "London Business Day" as follows:

     "London Business Day" shall mean any day on which dealings in United States
     dollar  deposits  are  carried  on by  banking  institutions  in the London
     Interbank Market.

     5. That the definition of "Revolving  Credit  Maturity  Date"  contained in
Section 1.1 of the Loan Agreement be and hereby is amended to substitute  "March
31, 2011" for "March 31, 2010" appearing therein.

     6. That  Section  2.3 (a) of the Loan  Agreement  be and  hereby is amended
effective  __________,  2009, to provide that the  applicable  interest rate for
LIBOR Advances will be the greater of (a) 2.50 percentage points above one-month
LIBOR,  adjusting  daily,  or (b) 3.50%,  notwithstanding  the  pricing  formula
otherwise therein set forth.

     7. That  Section  2.5(b) of the Loan  Agreement be and hereby is amended to
substitute  "one and  one-quarter  percent  (1.25%)" for "one  percent  (1.00%)"
appearing  therein as and for the amount of the annual letter of credit fee that
is now due and payable on the aggregate amounts of letters of credit pursuant to
Section 2.4(b).

     8.  That the  Borrower  reaffirms  and  restates  the  representations  and
warranties  set forth in  Section 7 of the Loan  Agreement,  as  amended by this
Third Amendment,  and all such  representations and warranties shall be true and
correct  on the date  hereof  with the same  force and effect as if made on such
date, except as they may specifically refer to an earlier date(s).  The Borrower
represents and warrants (which  representations and warranties shall survive the
execution and delivery  hereof) to the Agent and the Lenders that (i) this Third
Amendment has been duly  authorized,  executed and  delivered  and  constitute a
legal,  valid and binding  obligation of the  Borrower,  and is  enforceable  in
accordance  with its terms;  (ii) the Borrower is not in default  under the Loan
Agreement  or any of the  other  Loan  Documents,  and the  Borrower  is in full
compliance with all of the terms and conditions thereof;  (iii) no event exists,
or is likely to exist in the future,  which with the passage of time, notice, or
both,  will  constitute a default  under the Loan  Agreement or any of the other
Loan  Documents;  and (iv) there have been no  material  adverse  changes in the
Borrower's  financial  condition or operations which would cause the Borrower to
be in  default  under  any of the  financial  covenants  contained  in the  Loan
Documents.  Borrower  shall  update all  Schedules  as of the date of this Third
Amendment.

     9.  That the terms  and  conditions,  paragraph  sections,  collateral  and
guaranty requirements,  representations and warranties of the Loan Agreement and
Loan Documents,  together with all  understandings by and between the parties to
this Third Amendment evidenced by writings of the same or subsequent date not in
conflict with the above modifications under this Third Amendment shall remain in
full force and effect as the agreement of the parties relative to the Loans, and
are hereby ratified, reaffirmed and confirmed. Any past, present or future delay
or failure of the Agent and the Lenders to demand or enforce strict  performance

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of each term and  condition of the Loan  Agreement and Loan  Documents,  and any
past, present or future delay or failure of the Agent or the Lenders to exercise
any right,  power or privilege shall not be deemed or construed as a waiver with
respect to the same or any other matter, or preclude the future exercise of such
right,  power or  privilege,  or be  construed  or  deemed  to be a waiver of or
acquiescence in any such default.

     10. That all references to the Loan  Agreement,  the Loan Documents and the
other  documents  and  instruments   delivered  pursuant  to  or  in  connection
therewith, as well as in writings of the same or subsequent date, shall mean the
Loan  Agreement  as amended  hereby  and as each may in the  future be  amended,
restated, supplemented or modified from time to time. Further, all references to
Bank of Lancaster County, N.A. in the Loan Agreement, the Loan Documents and the
other documents and instruments delivered pursuant to or in connection therewith
shall  now be  deemed  to have  been  made and to refer  to PNC  Bank,  National
Association,  successor  to Bank of  Lancaster  County,  a division of BLC Bank,
N.A., successor to Bank of Lancaster County, N.A.

     11.  That the  parties  hereto  shall,  at any time,  and from time to time
following  the execution of this Third  Amendment,  execute and deliver all such
further  instruments  and take  all such  further  action  as may be  reasonably
necessary  or  appropriate  in order to carry out the  provisions  of this Third
Amendment.

     IN WITNESS WHEREOF, and intending to be legally bound hereby, the Borrower,
the Lenders and the Agent have  caused  this Third  Amendment  to be executed by
their proper corporate officers thereunto duly authorized as of the day and year
first above written.

ATTEST/WITNESS:                  HERLEY INDUSTRIES, INC.

/s/___________________________     By: /s/
                                 -----------------------------------------------
                                       Myron Levy, CEO

Title: CFO____________________


                              MANUFACTURERS AND TRADERS
                              TRUST COMPANY, in its capacities as
                              Agent and Lender


                              By: /s/
                                 -----------------------------------------------
                                  Jane E. McMinn, Vice President


                              PNC BANK, NATIONAL ASSOCIATION


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


                              Title: SVP
                                    --------------------------------------------



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