Monday, August 07, 2006

Veritek Confirms Offer for Herley (HRLY); Said Offer Rejected

In a 13D filing on Herley Industries, Inc. (Nasdaq: HRLY), Veritek Manufacturing Services, LLC discloses a 6% stake (877K shares) in the company and confirms that they sent a letter to the company on August 2nd regarding its interest in pursuing a business combination with the Herley in excess of $15.00 per share.

Veritek said Herley's board reviewed the Letter and their response was that the Company was not for sale and that the management of the Company was not willing to speak about the subject.

NOTE: The offer was first disclosed to the public on 08/02.

Shares of Herley Industries Inc. (HRLY) are up 2.88% to $12.85 in afternoon action Monday.

Copy of Letter:

August 2, 2006

Mr. Myron Levy

Vice Chairman & CEO

101 North Pointe Blvd

Lancaster, PA 17601

Dear Mr. Levy:

Veritek Manufacturing Services LLC and its affiliated entities are thebeneficial owner of over 4% of the outstanding Common Stock of HerleyIndustries, Inc. ("Herley" or the "Company"). For two months now, our ManagingDirector, Brian Kahn, has repeatedly attempted to communicate with you about ourinterest in pursuing a business combination with Herley. While we enjoyed briefconversations with President John Kelly in June, for the last 30 days allcommunication lines have been cut off completely. Therefore, we are left with noalternative but to send this formal letter to the entire board.

Veritek Manufacturing Services, LLC, is a manufacturer of complex electroniccomponents and assemblies with operations in the United States and Mexico.We would like the opportunity to discuss the potential business combination ofHerley and Veritek. Subject to satisfactory completion of due diligence, webelieve a combination of Herley and Veritek could generate consideration forHerley shareholders in excess of $15.00 per share, a significant premium to thecurrent stock price of $10.50. We believe Herley's assets possess significantvalue but that time is of the essence. We believe new ownership and managementof Herley assets would be viewed favorably by its customers, vendors, employees,and shareholders alike. A prompt conclusion to the recent turmoil at Herleywould also alleviate risks of employee defection while increasing the chances ofmaintaining the highest level of service for Herley's customers.

Once given the opportunity, Veritek is in position to complete due diligenceexpeditiously, and without further disruption to Herley's business.

To reiterate, Veritek has a strong interest in pursuing a strategic businesscombination with Herley and we believe such a combination would be beneficialfor all stakeholders in both companies. We request the opportunity to properlyinvestigate such a transaction. Please call me at (XXX) XXX-XXXX to discuss.

Sincerely,/s/ Brian Kahn

Managing Director, Veritek Manufacturing Services LLC


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