MODIFICATION OF LEASE


     THIS  MODIFICATION  OF LEASE dated as of the 10th day of January,  2001, by
and between WSG Eatontown LP (hereinafter referred to as "Landlord"), and Harvey
Electronics, Inc. (hereinafter referred to as "Tenant").

                                   WITNESSETH

     WHEREAS, Landlord and Tenant are parties to a certain Lease dated September
20, 2000 for retail  space (said  retail  space  hereinafter  referred to as the
"Demised  Premises"),  in a shopping center located on Route 36, Eatontown,  New
Jersey (the "Building"); and

     WHEREAS,  Landlord and Tenant have agreed that the actual Demised  Premises
delivered  to Tenant  contains  only 7,693  square  feet,  rather than the 8,000
provided for in the Lease; and

     WHEREAS, Landlord and Tenant have agreed to modify the Lease to reflect the
agreed upon  reduced  square  footage of the Demised  Premises,  pursuant to the
terms and conditions hereof; and

     WHEREAS, Landlord and Tenant hereby confirm their respective rights, duties
and  obligations  under the Lease and hereby  modify the Lease,  pursuant to the
terms and conditions of this Modification of Lease.


     NOW,  THEREFORE,  in consideration of the mutual covenants herein contained
and other good and valuable consideration,  the receipt and sufficiency of which
is hereby acknowledged, the Landlord and Tenant hereby agree as follows:

(1)      SECTION 1 - Basic Lease Provisions
         The  following  provisions  of Section 1.01 are hereby  modified as set
forth below:

e) Demised Premises:  All references to "eight thousand (8,000) square feet" are
hereby changed to "seven  thousand six hundred and  ninety-three  (7,693) square
feet".

(g) Monthly Rent: The minimum  monthly rent under the Lease is hereby changed to
the following:

Rent Commencement Date through 24th month - $15,225.73
25th month through  60th month -  $15,386.00
61st month  through  120th month - $17,309.25
121st month through  180th month - $19,472.91
181st month through 240th month - $21,907.02

(h) Security Deposit:  The security deposit is hereby changed to Thirty Thousand
Four  Hundred  Fifty One Dollars and Forty Five Cents  ($30,451.45).  The sum of
$1,215.21 already in Landlord's  possession and representing  difference between
the new amount of  security  deposit  and the  original  amount of the  security
deposit will be credited  against the first month's minimum monthly rent payable
by Tenant hereunder.

(2)      SECTION 2 - Defined Terms
         The  Definition  of "Rent  Commencement  Date" in Section 2 of the
Lease is hereby changed to "January 1, 2001".

(3)      FULL FORCE AND EFFECT
         Except as expressly  modified herein, the Lease shall remain unmodified
and in full force and effect.

WITNESS:                                    WSG EATONTOWN LP


____________________________                BY:___________________________
                                               NAME
                                               TITLE




WITNESS:                                    HARVEY ELECTRONICS, INC.


/s/ Joseph J. Calabrese                     BY:/s/ Franklin C. Karp
-----------------------                        --------------------
                                               NAME:Franklin C. Karp