-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CWeI/Kew2WLSaOxXWtvpXagjQYKzg+nvwF0ZvIceXH8sScEzJD031NLk8OGMnzlJ 1CzVsYWguoo75WsLULUkRQ== 0001201800-08-000059.txt : 20080508 0001201800-08-000059.hdr.sgml : 20080508 20080508161120 ACCESSION NUMBER: 0001201800-08-000059 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080505 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080508 DATE AS OF CHANGE: 20080508 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HERLEY INDUSTRIES INC /NEW CENTRAL INDEX KEY: 0000047035 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 232413500 STATE OF INCORPORATION: DE FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-05411 FILM NUMBER: 08814130 BUSINESS ADDRESS: STREET 1: 101 NORTH POINTE BOULEVARD CITY: LANCASTER STATE: PA ZIP: 17601-4133 BUSINESS PHONE: 7177358117 MAIL ADDRESS: STREET 1: 101 NORTH POINTE BOULEVARD CITY: LANCASTER STATE: PA ZIP: 17601-4133 FORMER COMPANY: FORMER CONFORMED NAME: HERLEY MICROWAVE SYSTEMS INC DATE OF NAME CHANGE: 19900510 FORMER COMPANY: FORMER CONFORMED NAME: HERLEY INDUSTRIES INC DATE OF NAME CHANGE: 19831103 8-K 1 hrly8kmay5-2008.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: May 5, 2008 (Date of earliest event reported) HERLEY INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 0-5411 23-2413500 - -------------------------------------------------------------------------------- (State or other (Commission (IRS Employer jurisdiction of File Number) Identification incorporation) Number) 101 North Pointe Boulevard, Lancaster, Pennsylvania 17601-4133 - -------------------------------------------------------------------------------- Address of principal executive offices) (Zip Code) Registrant's telephone number including area code (717) 735-8117 --------------- ---------------------------------------------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b) [ ] Pre-commencement communications pursuant to Rule 13e-4c under the Exchange Act (17 CFR 240.13e-4(c) Item 1.01 Entry into a Material Definitive Agreement On May 5, 2008, Herley Industries, Inc. ("Herley" or "the Company") reached a court approved settlement with the U.S. Government on all existing criminal and civil claims. These claims include (a) the criminal indictment against the Company which had been scheduled for trial on May 5, 2008 with respect to a contract for the sale of voltage control oscillators in January 2001 and two contracts involving the sale of power heads to the U.S. Government in April 2002 and October 2002, respectively; (b) the civil action by the U.S. Government against the Company based on alleged excessive profits on these three contracts; and ( c ) any future U.S. Government action against the Company arising from activities resulting in its two prior suspensions from receiving new contract awards from the U.S. Government, including its June 2007 suspension related to the Conventional Air Launched Cruise Missile project (CALCM). A settlement has also been reached with the U.S. Government and its former Chairman, Lee N. Blatt. The settlement agreement with the Company is as follows: (a) with respect to the indictment, the Company has pleaded guilty to two counts of obstructing an audit relating solely to the power heads, a fine of $3.5 million, and the remaining 31 counts of the indictment have been dismissed; (b) the Department of Justice has released the Company of any civil liability for the matters set forth in the indictment in exchange for the payment of $6 million; and (c ) with respect to the facts and circumstances resulting in the Company's two prior suspensions, the U. S. Government considers the matters closed. With respect to Mr. Blatt, the Court, at the Government's request, dismissed all of the charges against him in the indictment and the Government filed a Superseding Information charging Mr. Blatt with a misdemeanor violation of the tax code in a single count, and Mr. Blatt has entered a guilty plea for failing to keep Company records of the allocation of an $18,000 corporate research expense. Mr. Blatt has been fined $25,000, has received a term of probation of one year and is required to perform some community service. The Company is presently a party to an administrative agreement dated October 12, 2006, as amended on August 14, 2007, ("the Agreement") with the Department of the Navy, Acquisition Integrity Office. Subject to the terms and conditions set forth in the Agreement, the Navy, on behalf of the Department of Defense, agreed to terminate Herley's suspension and not to debar Herley based upon the facts and causes leading to the suspension. The Company has advised the Navy about the terms and conditions of the Court approved settlement for the criminal and civil matters mentioned above, and the Navy, through the Acquisition Integrity Office, has advised Herley that no action will be taken to suspend or debar Herley based on this settlement. Item 9.01 Financial Statements and Exhibits (c) Exhibits 10.1 Civil Settlement Agreement by and among the United States of America and Herley Industries, Inc. dated as of May 5, 2008. 10.2 Guilty Plea Agreement in the matter of the United States of America v. Herley Industries dated May 5, 2008. Signatures ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HERLEY INDUSTRIES, INC. By: /s/ Myron Levy -------------------------------------- Myron Levy Chairman and Chief Executive Officer Dated: May 8, 2008 EX-10.1 2 hrly8kmay08ex10-1.txt AGREEMENT EXHIBIT 10.1 HERLEY INDUSTRIES, INC. CIVIL SETTLEMENT AGREEMENT I. PARTIES This Civil Settlement Agreement ("Agreement") is entered into by and among: (A) the United States of America ("United States"), acting by and through its authorized counsel, on behalf of the United States Air Force and the Department of the Navy; and (B) Herley Industries, Inc. ("Herley"), by and through its authorized counsel. The United States and Herley are hereinafter collectively referred to as the "Parties." II. PREAMBLE A. WHEREAS, this Agreement addresses the United States' civil claims against Herley for the conduct described in the Superseding Indictment in United States v. Herley Industries, Inc., Criminal Action No. 06-268-2 in the Eastern District of Pennsylvania ("Superseding Indictment"), and for alleged fraud in connection with the formation and pricing of, and billing for, the following contracts between Herley and the United States: (i) U.S.A.F. Contract No. F42620-00-C-0069, awarded on June 26, 2000; (ii) Department of the Navy Contract No. N00383-01-C-B022, awarded on July 16, 2001; and (iii) Department of the Navy Contract No. N00383-02-C-N063, awarded February 26, 2002 (hereinafter referred to as the "Covered Conduct"); B. WHEREAS, Herley will enter into a plea agreement with the United States pursuant to which, if that agreement is approved by the Court, Herley will enter a plea of guilty pursuant to Federal Rule of Criminal Procedure 11(c)(1)(C) to Counts 28 and 29 of the Superseding Indictment alleging obstruction of a federal audit in violation of 18 U.S.C. Sec. 1516, and 2, arising from the Covered Conduct, and will pay a criminal fine in the amount of Three Million Five Hundred Thousand dollars ($3,500,000), pursuant to the plea of guilty; C. WHEREAS, this Agreement also addresses any civil claims that Herley has or may have against the United States concerning the Covered Conduct, and/or the United States' investigation of the Covered Conduct; D. WHEREAS, this Agreement addresses the Parties' claims for attorneys' fees and costs; E. WHEREAS, the Parties wish to avoid the delay, expense, inconvenience and uncertainty of protracted litigation of these claims and to reach a full and final compromise pursuant to the Terms and Conditions set forth below. 1 III. TERMS AND CONDITIONS NOW, THEREFORE, in reliance on the representations contained herein and in consideration of the mutual promises, covenants and obligations in this Agreement, and for good and valuable consideration, as stated herein, the Parties agree as follows: 1. Settlement Amount: Within three (3) business days of the effective date of this Agreement, Herley agrees to pay the United States the total sum of six million dollars ($6,000,000.00) plus interest at the rate of 5% per annum beginning on May 5, 2008, through the date paid in full (hereinafter the "Settlement Amount"), by electronic funds transfer, pursuant to written instructions provided by the United States. By executing this Agreement, Herley acknowledges receipt of the electronic funds transfer instructions. Herley agrees that if the Settlement Amount is not paid in full within the time required, then Herley shall be in material breach of this Agreement. If Herley's agreed upon guilty plea pursuant to Federal Rule of Criminal Procedure 11(c)(1)(C) described in Preamble Paragraph B above is not accepted by the Court, or the Court does not impose the agreed upon sentence or fines for any reason, this Agreement shall be null and void. 2. Herley Release: By this Agreement, Herley, including Herley's current and former officers, directors, shareholders, parents, affiliates, successors, and assigns, fully and finally releases the United States, its agencies, employees, servants, and agents from any claims (including attorneys' fees, costs, and expenses of every kind and however denominated) which Herley has asserted, could have asserted, or may assert in the future, against the United States, its agencies, employees, servants, and agents, related to the conduct described in the Covered Conduct and any investigation and prosecution thereof. 3. United States Release: Subject to Herley's full compliance with the terms of this Agreement, and upon receipt of payment in full of the Settlement Amount, the United States shall hereby release Herley, including Herley's current and former officers, directors, employees, shareholders, parents, affiliates, successors, and assigns, from any civil or administrative monetary claim the United States has or may have under the False Claims Act, 31 U.S.C. Sec. 3729-3733; the Program Fraud Civil Remedies Act, 31 U.S.C. Sec. 3801-3812; the Contract Disputes Act, 41 U.S.C. Sec. 601 et seq.; or the common law theories of payment by mistake, unjust enrichment, breach of contract, and fraud, for the Covered Conduct. 4. Not Released: The United States does not release, and specifically reserves the right to assert the following claims, as to which Herley (including Herley's current and former officers, directors, employees, affiliates, successors, and assigns) reserves the right to assert all defenses: (a) Any civil, criminal, or administrative liability arising under Title 26, U.S. Code (Internal Revenue Code); (b) Any criminal liability; (c) Except as explicitly stated in this 2 Settlement Agreement, any administrative liability, including debarment and suspension; (d) Any liability to the United States (or its agencies) for any conduct other than the Covered Conduct; (e) Any claims based upon such obligations as are created by this Settlement Agreement; (f) Any express or implied warranty claims or other claims for defective or deficient products or services, including quality of goods and services; and (g) Any liability for failure to deliver goods or services due. 5. Debarment Issues: It is expressly understood that this Settlement Agreement has no bearing on the rights or obligations of the Parties with respect to potential administrative suspension and debarment issues. 6. Waiver: Herley waives and will not assert any defenses Herley may have to any criminal prosecution or administrative action (which has not been released as explicitly stated herein) relating to the Covered Conduct, which defenses may be based in whole or in part on a contention that, under the Double Jeopardy Clause in the Fifth Amendment of the Constitution, or under the Excessive Fines Clause in the Eighth Amendment of the Constitution, this Agreement bars a remedy sought in such criminal prosecution or administrative action. Herley agrees that this settlement is not punitive in purpose or effect. Nothing in this Agreement constitutes an agreement by the United States concerning the characterization of the amounts paid hereunder for purposes of any proceeding under Title 26 of the Internal Revenue Code. 7. Third Parties: This Agreement is intended to be for the benefit of the United States, and Herley only, and does not benefit or release any third parties. The terms of this Agreement are in no way intended to, nor are they to be construed to, work a release of liability or in any way create a benefit in favor of any person not a party to this Agreement, except as expressly provided herein. 8. Unallowable Costs: The Parties agree that all costs (as defined by Federal Acquisition Regulation Sec. 31.205-47(a)) incurred by or on behalf of Herley and its officers, directors, agents, and employees, in connection with: (1) the matters covered by this Agreement, (2) the United States' audits and investigations of the matters covered by this Agreement, (3) Herley's investigation, defense of the matter, and corrective actions undertaken in response to the United States' investigation of the Covered Conduct, including but not limited to related audit work and attorneys' fees and costs; (4) the negotiation of this Agreement; and (5) the payment Herley makes to the United States pursuant to this Agreement, including any costs and attorneys' fees; shall be unallowable costs for government contract accounting purposes. These costs shall be separately accounted for by Herley. Nothing in this Agreement shall be construed as allowing such costs under the provisions of a contract or subcontract. 9. Financial Condition: Herley expressly warrants that it has reviewed its financial condition and that it currently is solvent within the meaning of 11 U.S.C. Sec. 547(b)(3) and 548(a)(1)(B)(ii)(I) and will remain solvent following its payment to the United States of the Settlement Amount. Further, the Parties expressly warrant that, in evaluating whether to execute this Agreement, the Parties: (a) have intended that the mutual promises, covenants, 3 and obligations set forth herein constitute a contemporaneous exchange for new value given to Herley, within the meaning of 11 U.S.C. Sec. 547(c)(1), and (b) have concluded that these mutual promises, covenants, and obligations do, in fact, constitute such a contemporaneous exchange. Further, the Parties warrant that the mutual promises, covenants, and obligations set forth herein are intended and do, in fact, represent a reasonably equivalent exchange of value which is not intended to hinder, delay, or defraud any entity to which Herley might become indebted, on or after the date of this transfer, all within the meaning of 11 U.S.C. Sec. 548(a)(1). 10. Bankruptcy: If, within 91 days of the effective date of this Agreement, Herley commences, or a third party commences, any case, proceeding, or other action under any law relating to bankruptcy, insolvency, reorganization, or relief of debtors, (A) seeking to have any order for relief of Herley's debts, or seeking to adjudicate Herley as bankrupt or insolvent; or (B) seeking appointment of a receiver, trustee, custodian, or other similar official for Herley or for all or any substantial part of Herley's assets, Herley agrees as follows: (a) Herley's obligations under this Agreement may not be avoided pursuant to 11 U.S.C. Sec. 547 or 548, and Herley will not argue or otherwise take the position in any such case, proceeding, or action that: (i) Herley's obligations under this Agreement may be avoided under 11 U.S.C. Sec. 547 or 548; (ii) Herley was insolvent at the time this Agreement was entered into, or became insolvent as a result of the payment made to the United States hereunder; or (iii) the mutual promises, covenants, and obligations set forth in this Agreement do not constitute a contemporaneous exchange for new value given to Herley. (b) If Herley's obligations under this Agreement are avoided for any reason, including, but not limited to, through the exercise of a trustee's avoidance powers under the Bankruptcy Code, the United States, in its sole discretion, may rescind the releases in this Agreement, and bring any civil and/or administrative claim, action, or proceeding against Herley for the claims that would otherwise be covered by the releases provided in this Agreement. Herley agrees that (i) any such claims, actions, or proceedings brought by the United States are not subject to an "automatic stay" pursuant to 11 U.S.C. Section 362(a) as a result of the action, case, or proceeding described in the first clause of this Paragraph, and Herley will not argue or otherwise contend that the United States' claims, actions, or proceedings are subject to an automatic stay; (ii) Herley will not plead, argue, or otherwise raise any defenses under the theories of statute of limitations, laches, estoppel, or similar theories, to any such civil or administrative claims, actions, or proceeding which are brought by the United States within 120 calendar days of written notification to Herley that the releases herein have been rescinded pursuant to this Paragraph, except to the extent such defenses were available on the date that this Agreement was signed by all Parties; and (iii) Herley waives any defenses or objections that Herley has or may have to the United States' claims against 4 Herley, and the United States may pursue its claims in the case, action, or proceeding referenced in the first clause of this Paragraph, as well as in any other case, action, or proceeding. (c) Herley acknowledges that its agreement in this Paragraph is provided in exchange for valuable consideration provided in this Agreement. 11. No Admissions: Nothing in this Agreement or in the payment described herein shall be construed as an admission of fact, liability or wrongdoing, or a waiver of any rights or legal defenses (except as expressly provided in this Agreement), by Herley or any of its affiliated entities, its current or former officers, directors, and employees, or their successors and assigns; nor shall this Agreement be construed as a concession by the United States that its claims are not well founded. 12. Successors: The provisions of this Agreement shall be binding upon the Parties to it, their affiliated entities, and their collective successors and assigns. 13. Complete Agreement: This Agreement constitutes the complete agreement between the Parties. This Agreement may not be amended except by written consent of the Parties. 14. Authorized: Each person who signs this Agreement in a representative capacity warrants that he or she is duly authorized to do so. The United States signatories represent that they are signing this Agreement in their official capacities and that they are authorized to execute this Agreement. 15. Originals: This Settlement Agreement may be executed in counterparts, each of which constitutes an original and all of which constitute one and the same agreement. Signatures sent by facsimile shall have the same force and effect as original signatures. 16. Effective Date: This Agreement is effective on the date of the signature of the last signatory to the Agreement. 17. Legal Costs: Each party to this Agreement will bear its own legal and all other costs, fees or expenses incurred in connection with the investigation, litigation, or settlement of this matter, including the preparation and performance of this Agreement. 18. No Duress: Herley represents that this Agreement has been freely and voluntarily entered into without any degree of duress or compulsion whatsoever. 19. Governing Law: This Agreement is governed by the laws of the United States. The Parties agree that the exclusive jurisdiction and venue for any dispute arising between and among the Parties under this Agreement will be the United States District Court for the Eastern District of Pennsylvania. 5 20. Public Document: All Parties consent to the disclosure of this Agreement, and information about this Agreement, to the public. The Parties hereto affix their signatures: For Herley Industries, Inc. /s/ Myron Levy - ------------------------ Name: Title: Dated: 5/2/08 Reviewed and approved by: /s/ James T. Smith - ----------------------- Counsel for Herley Industries, Inc. Dated: 5/2/08 For the United States of America /s/ Patrick L. Meehan - --------------------------- Patrick L. Meehan United States Attorney Eastern District of Pennsylvania /s/ Virginia A. Gibson - --------------------------- Virginia A. Gibson Assistant United States Attorney Chief, Civil Division /s/ Viveca D. Parker - -------------------------- Viveca D. Parker Assistant United States Attorney Dated: May 5, 2008 6 EX-10.2 3 hrly8kmay08ex10-2.txt AGREEMENT EXHIBIT 10.2 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA UNITED STATES OF AMERICA : v. : CRIMINAL NO. 06-268-2 HERLEY INDUSTRIES : GUILTY PLEA AGREEMENT --------------------- Under Rule 11 of the Federal Rules of Criminal Procedure, the government, the defendant, and the defendant's counsel enter into the following guilty plea agreement. Any reference to the United States or the government in this agreement shall mean the Office of the United States Attorney for the Eastern District of Pennsylvania. 1. Defendant Herley Industries, Inc. ("Herley") agrees to plead guilty to Counts 28 and 29 of the Superseding Indictment charging the defendant with obstruction of federal audits, in violation of 18 U.S.C. Sec. 1516, when, with intent to deceive or defraud the United States, the defendant obstructed federal auditors by withholding certain cost and pricing data relating to the defendant's bids on the two Power Head contracts described in Counts 28 and 29 of the Superseding Indictment. The defendant further acknowledges its waiver of rights, as set forth in the attachment to this agreement. 2. The defendant agrees to pay the special victims/witness assessment in the amount of $800 before the time of sentencing and shall provide a receipt from the Clerk to the government before sentencing as proof of this payment. 3. The parties agree that this plea agreement is made pursuant to Fed.R.Crim.P. 11(c)(l)(C) and that the following specific sentence is their joint recommendation to the Court for the disposition of this case: A. The defendant shall pay a fine of $3,500,000. Payment shall be made within three days of the date of sentencing. B. The parties agree that for purposes of the Sentencing Guidelines, pursuant to Guidelines Section 1B1.3, the loss amount to the government of all relevant conduct in this matter is $2,500,000. The parties acknowledge that the defendant has entered into an agreement with the Civil Division of the Office of the United States Attorney for the Eastern District of Pennsylvania (hereinafter "the Civil Settlement Agreement"), which settlement includes full restitution to the Department of Defense and damages. The parties agree that there shall be no restitution awarded in this criminal case. C. It is further agreed that in the event that the Court rejects the plea agreement, it will do so on the record and in open court, and will personally advise the defendant: (a) that the Court is not required to follow the plea agreement and give the defendant an opportunity to withdraw the plea; and (b) that if the plea is not withdrawn, the Court may dispose of the case in a manner less favorable toward the defendant than the plea contemplated. 4. Pursuant to U.S.S.G. Sec. 6B1.4, the parties enter into the following stipulations under the Sentencing Guidelines Manual effective November 1,2001. It is understood and agreed that: (1) except as provided in this paragraph, neither party shall argue the applicability of any provision of the Sentencing Guidelines, including offense conduct, offense characteristics, criminal history, adjustments and departures; (2) these stipulations are not binding upon either the Probation Office or the Court; and (3) the Court may make factual and legal determinations that differ from these stipulations and that may result in an increase or decrease in the Sentencing Guidelines range and the sentence that may be imposed: A. The Sentencing Guideline applicable to the determination of the applicable fine for the offense of conviction is U.S.S.G. Sec. 8C2. 2 B. The base fine is $2,500,000, under Sec.8C2.4(a)(3). C. Under Sec. 8C2.5 (a) and (b)(3)(A), the culpability score is 8, less one point for acceptance of responsibility, under Sec.8C2.5(g)(3), for a total culpability score of 7. D. Under Sec. 8C2.6, the minimum multiplier is l.40 and the maximum multiplier is 2.80. 5. The defendant waives any and all defenses and objections in this matter as to any payment made to the government in the Civil Settlement Agreement of any civil claim, including under the False Claims Act and under the Double Jeopardy and the Excessive Fines clauses of the Eighth Amendment. 6. The defendant agrees that any fine, restitution, assessment, tax, interest or other payments, including payments made under the Civil Settlement Agreement relating to the transactions which are the subject of the Superseding Indictment, do not constitute extraordinary acceptance of responsibility or provide any basis to seek a downward departure. 7. The defendant waives any claim under the Hyde Amendment, 18 U.S.C. Sec. 3006A (Statutory Note), for attorney's fees and other litigation expenses arising out of the investigation or prosecution of this matter. 8. At the time of sentencing, the government will: A. Move to dismiss Counts 1 through 27 and 30 through 33 of the Superseding Indictment filed on January 30, 2007 as to this defendant. The defendant waives the statute of limitations as to all counts to be dismissed under this agreement and agrees that if the defendant withdraws from, or successfully challenges, the guilty plea entered under this agreement, or if these counts are 3 otherwise reinstated under the terms of this agreement, neither the statute of limitations nor the Double Jeopardy Clause will bar prosecution on any of these dismissed counts. B. Comment on the evidence and circumstances of the case; bring to the Court's attention all facts relevant to sentencing including evidence relating to dismissed counts, if any, and to any criminal conduct of the defendant; address the Court regarding the nature and seriousness of the offense; respond factually to questions raised by the Court; correct factual inaccuracies in the presentence report, if any, or sentencing record; and rebut, as it deems appropriate, any statement of facts made by or on behalf of the defendant at sentencing. Nothing in this agreement shall limit the government in its comments in, and responses to, any post-sentencing matters. 9. The defendant understands, agrees and has had explained to it by counsel that the Court may impose the following statutory maximum sentence on the counts of conviction: A. Count 28 (obstruction of a federal audit of the response to the 2001 solicitation for 42 Power Heads): a fine of the greater of $500,000 or twice the sum gained as a result of the obstruction, organizational probation, a special assessment of $400, and restitution. B. Count 29 (obstruction of a federal audit of the response to the 2001 solicitation for 139 power heads): a fine of the greater of $500,000 or twice the sum gained as a result of the obstruction, organizational probation, a special assessment of $400, and restitution. 4 Thus, the Total Statutory Maximum penalty that the Court may impose is a fine equal to the greater of $1,000,000 or twice the sum gained as a result of the obstruction, organizational probation, a special assessment of $800 and restitution. 10. The defendant understands and agrees that: (a) the status of any license or certification held by the defendant is not protected by this agreement and is a matter solely within the discretion of the appropriate licensing, regulatory and administrative authorities; and (b) the government will inform the appropriate licensing, regulatory and administrative authorities of the disposition of the criminal charges filed against the defendant in this case. 11. In exchange for the undertakings made by the government in entering this plea agreement, the defendant voluntarily and expressly waives all rights to appeal or collaterally attack the defendant's conviction, sentence, or any other matter relating to the prosecution of all defendants, whether such a right to appeal or collateral attack arises under 18 U.S.C. Sec. 3742,28 U.S.C. Sec. 1291,28 U.S.C. Sec. 2255, or any other provision of law. This waiver is not intended to bar the assertion of constitutional claims that the relevant case law holds cannot be waived. A. Notwithstanding the waiver provision above, if the government appeals from the sentence, then the defendant may file a direct appeal of its sentence. B. If the government does not appeal, then notwithstanding the waiver provision set forth in this paragraph, the defendant may file a direct appeal but may raise only claims that: 1. the defendant's sentence on any count of conviction exceeds the statutory maximum for that count as set forth in paragraph 9 above; 5 2. the sentencing judge erroneously departed upward pursuant to the Sentencing Guidelines; or 3. the sentencing judge, exercising the Court's discretion pursuant to United States v. Booker, 543 U.S. 220 (2005), imposed an unreasonable sentence above the final Sentencing Guideline range determined by the Court. If the defendant does appeal pursuant to this paragraph, no issue may be presented by the defendant on appeal other than those described in this paragraph. 12. The defendant represents that its representative has been duly authorized to enter into this agreement by its Board of Directors as evidenced by the attached certified copy of the relevant portions of the minutes of its Board meeting of April 1, 2008 and a meeting of a Special Committee held on April 3, 2008. 13. The defendant is satisfied with the legal representation provided by the defendant's lawyers; the defendant and these lawyers have fully discussed this plea agreement; and the defendant is agreeing to plead guilty because the defendant admits that the defendant is guilty. 14. It is agreed that the parties' guilty plea agreement contains no additional promises, agreements or understandings other than those set forth in 6 this written guilty plea agreement, and that no additional promises, agreements or understandings will be entered into unless in writing and signed by all parties. HERLEY INDUSTRIES, Inc. PATRICK L. MEEEHAN Defendant United States Attorney /s/ Myron Levy /s/ LINDA DALE HOFFA _____________________________________ ___________________________________ By LINDA DALE HOFFA Its CEO & Chairman Chief, Criminal Division Assistant United States Attorney /s/ James T. Smith /s/ Pamela Foa _____________________________________ __________________________________ JAMES T. SMITH, Esq. PAMELA FOA Counsel for Defendant ANTHONY G. KYRIAKAKIS Assistant United States Attorneys Date: May 5, 2008 -----END PRIVACY-ENHANCED MESSAGE-----