ADDENDUM TO REPURCHASE AGREEMENT

     THIS  ADDENDUM  TO  REPURCHASE  AGREEMENT  (this  "Addendum"),   dated  and
effective  as of June 1,  2000,  by and among  BANG & OLUFSEN  AMERICA,  INC.  a
Delaware corporation ("BOA"),  HARVEY ELECTRONICS,  INC., a New York corporation
("Harvey")  and  PARAGON  CAPITAL,  LLC, a Delaware  limited  liability  company
("Lender"),  supplements the Repurchase Agreement dated as of even date herewith
by and among BOA, Harvey and Lender (the  "Repurchase  Agreement").  Capitalized
terms used in this Addendum and not otherwise  defined  herein have the meanings
specified for such terms in the Repurchase Agreement.

     1. Notwithstanding  anything to the contrary contained in paragraph 16.C of
either  Dealer  Agreement,  BOA,  Harvey  and  Lender  hereby  agree that if BOA
exercises its right of repurchase  under said paragraph 16.C in accordance  with
the terms thereof (the "Dealer  Agreement Right of  Repurchase"),  (i) BOA shall
provide  Lender  with a copy of the demand  that BOA is  required  to deliver to
Harvey  pursuant to said  paragraph  16.C  concurrent  with the delivery of such
demand to Harvey and (ii) all sums  payable by BOA  pursuant  to said  paragraph
16.C shall be paid in accordance with Lender's  written  instructions  therefor;
provided,  however, that if BOA shall at any time receive a Sale Notice prior to
consummation  of the  transactions  contemplated  by the  exercise  of a  Dealer
Agreement Right of Repurchase,  the Dealer  Agreement Right of Repurchase  shall
automatically  be null and void  without any further  act or  instrument  of any
party hereto and the rights and  obligations of the parties hereto in respect of
the  Products  shall  be  governed  solely  and  exclusively  by the  terms  and
conditions of the Repurchase Agreement.

     2. BOA shall be entitled to conclusively  rely on any written  instructions
delivered by Lender pursuant to paragraph 1 of this Addendum,  and Harvey hereby
releases  BOA from,  and agrees to hold BOA  harmless in respect of, any and all
liability,  claims, losses, damages, costs and/or expenses (including attorneys'
fees and  disbursements)  resulting  from BOA's  reliance on, and/or  compliance
with, said written instructions of Lender.

     3. BOA hereby  acknowledges  and  consents to the  granting of the Security
Interest to Lender.

     4. The Repurchase  Agreement,  as  supplemented  by this Addendum,  and the
Dealer  Agreements  are  intended  to be,  and shall,  to the extent  reasonably
possible, be construed as, complementary documents;  provided,  however, that in
the event of any  conflict  between the terms of the  Repurchase  Agreement,  as
supplemented  by  this  Addendum,  and the  Dealer  Agreements,  the  Repurchase
Agreement, as supplemented by this Addendum,  shall govern and be controlling in
all respects.

     5. This  Addendum may be executed in multiple  counterparts,  each of which
shall be  deemed  to be an  original,  but all of  which  taken  together  shall
constitute but one and the same instrument.


                            [signature page follows]


<PAGE>



     IN WITNESS  WHEREOF,  the parties  hereto  have caused this  Addendum to be
executed as of the date first written above.


                                            BANG & OLUFSEN AMERICA, INC.


                                         By:______________________________
                                            Ole Bek, President


                                            PARAGON CAPITAL, LLC


                                         By:______________________________
                                        Its:______________________________


                                            HARVEY ELECTRONICS, INC.


                                         By:_____________________________
                                            Franklin Karp, President