SECOND AMENDED AND RESTATED SEVERANCE AGREEMENT


     This SECOND AMENDED AND RESTATED  SEVERANCE  AGREEMENT (the "Agreement") is
made as of the ____ day of November,  2000, by and between  Harvey  Electronics,
Inc., a New York  corporation  with its  principal  office at 205 Chubb  Avenue,
Lyndhurst, NJ 07071, ("Harvey," which term shall include any successor to Harvey
Electronics,  Inc. as a result of a "Change in Control" event, as defined below)
and Franklin C. Karp,  residing at 10 Dogwood  Avenue,  Roslyn Harbor,  New York
11576 (the "Executive").

     WHEREAS,  Harvey  and  the  Executive  entered  into  a  certain  Severance
Agreement  dated April 3, 1997 (the  "Severance  Agreement")  and an Amended and
Restated  Severance  Agreement  dated  May  24,  2000  (the  "Amended  Severance
Agreement") which superceded the Severance Agreement;

     WHEREAS,  Harvey and the Executive  desire to amend and restate the Amended
Severance Agreement on the terms and conditions set forth herein;

     NOW  THEREFORE,  Harvey and the  Executive  hereby agree that the Severance
Agreement is amended and restated in its entirety as follows:

1. Definitions.  For purposes of this Agreement,  the following terms shall have
the meanings indicated below:

     (i)  "Base  Salary"  shall  mean the  compensation  paid by  Harvey  to the
Executive  as  was  or  would  have  been  reported  on a  Form  W-2,  excluding
reimbursement  of  expenses,  for the twelve (12) months  prior to the Change in
Control, Potential Change in Control,  Disability or termination absent a Change
in Control, Potential Change in Control or Disability (as hereinafter defined).

     (ii) "Cause"  shall be deemed to be the  commission of any of the following
acts by the Executive:

          (a) The Executive shall have committed any act of gross  negligence in
     the  performance of his duties to Harvey,  or, without proper cause,  shall
     have willfully refused or habitually neglected to perform such duties;

          (b) The  Executive  shall have  committed  any material act of willful
     misconduct,  dishonesty  or breach of trust which  directly  or  indirectly
     causes Harvey or any of its  subsidiaries to suffer any loss,  fine,  civil
     penalty, judgment, claim, damage or expense; or

          (c) The  Executive  shall have been  convicted  of, or shall have pled
     guilty  or nolo  contendere  to, a felony  or  indictable  offense  (unless
     committed in the reasonable, good faith belief that the Executive's actions
     were in the best  interests  of Harvey and its  stockholders  and would not
     violate criminal law).

     (iii)  "Disability"  shall be deemed to have  occurred if the Executive has
been unable to perform his duties for six (6) consecutive months or an aggregate
of nine  (9)  months  in any  period  of  twelve  (12)  consecutive  months,  as
determined in good faith by the Board of Directors of Harvey.

     (iv)  "Change in Control" of Harvey shall be deemed to have  occurred  upon
the happening of any one of the following events:

          (a) the acquisition of Beneficial Ownership (as hereinafter  defined),
     directly or indirectly,  by any entity, person or group (other than Harvey,
     any of its subsidiaries, or any executive benefit plan of Harvey, including
     any trustee of such plan) of  securities of Harvey  representing  more than
     fifty (50%)  percent of the combined  voting power of Harvey's  outstanding
     securities.

          (b)  individuals  who constitute the Board of Directors as of the date
     hereof (the "Incumbent  Board") cease for any reason to constitute at least
     a  majority  thereof,  provided  that any  individual  becoming  a director
     subsequent  to the date hereof whose  election was approved by a vote of at
     least three-quarters (3/4) of the directors comprising the Incumbent Board,
     or whose nomination for election by the stockholders of Harvey was approved
     by the  Incumbent  Board,  shall be, for  purposes of this  paragraph  (b),
     considered as though he were a member of the Incumbent Board; or

          (c) the consummation of a reorganization,  merger, or consolidation of
     Harvey occurs in which  stockholders  of Harvey  immediately  prior to such
     reorganization,  merger or  consolidation  do not own at least  fifty (50%)
     percent of the  voting  securities  of the entity  which is formed or which
     exists following such reorganization, merger or consolidation; or

          (d) the sale or disposition by Harvey of substantially all its assets;
     or

          (e) Michael  Recca  ceases to serve as Chairman of the Board of Harvey
     for any reason other than his voluntary resignation; or

          (f) the assignment to the Executive of any duties  inconsistent in any
     adverse  respect  with  the  Executive's  current  position,  authority  or
     responsibilities; or

          (g) the corporate office of Harvey is moved from Lyndhurst, New Jersey
     to a new  location  and that  location  is more than thirty (30) miles from
     Mineola, New York, and the Executive declines to relocate.

     (v) "Beneficial  Ownership"  shall have the meaning set forth in Rule 13d-3
under the Securities Exchange Act of 1934;

     (vi)  "Potential  Change  in  Control"  of  Harvey  shall be deemed to have
occurred upon the happening of any one of the following events:

          (a) any person  commences a tender offer,  which if consummated  would
     result in such  person  becoming  the  Beneficial  Owner of more than fifty
     percent (50%) of Harvey's voting securities;

          (b) proxies are  solicited  by anyone  other than Harvey or any of its
     subsidiaries:  (x) for the election of directors of Harvey,  or (y) seeking
     shareholder approval of a plan of reorganization,  merger, or consolidation
     of  Harvey  with  one  or  more  corporations  as a  result  of  which  the
     outstanding  shares subject to the plan or transaction  are to be exchanged
     for or converted into cash, property or securities not issued by Harvey; or

          (c) the execution by Harvey of an agreement, the consummation of which
     would result in a Change of Control of Harvey.

2. Severance Payment. In the event of:

          (a) a Change in Control; or

          (b) a Potential Change of Control; or

          (c) a Disability of the Executive,

          and within one  hundred  eighty  (180) days of the  occurrence  of the
          event in Section 2(a), 2(b), or 2(c),

          (1) Harvey  terminates  the  Executive's  employment for reasons other
          than for Cause; or (2) the Executive terminates his employment for any
          reason,

then  Harvey  shall pay the  Executive,  subject to Section 4, the  amounts  and
provide the Executive with the benefits described below:

          (i) a cash  amount  equal to the higher of: (x) the  Executive's  Base
     Salary prior to the event  giving rise to the Change in Control,  Potential
     Change in Control or Disability,  or (y) the Executive's  Base Salary prior
     to the  event  giving  rise  to the  Executive's  right  to  terminate  his
     employment for any reason (the "Severance Payment");

          (ii) a cash payment equal to the higher of

               (a) twelve (12)  months of the  Executive's  highest  monthly car
          allowance or monthly average travel reimbursement in effect within the
          six (6) month  period  immediately  prior to the  Change  in  Control,
          Potential  Change in  Control  or  Disability,  not to  exceed  Twelve
          Thousand and 00/100 ($12,000) Dollars; or

               (b) twelve (12)  months of the  Executive's  highest  monthly car
          allowance or monthly average travel reimbursement in effect within the
          six (6)  month  period  immediately  prior to the  date the  Executive
          terminates  his  employment  for  any  reason,  not to  exceed  Twelve
          Thousand and 00/100 ($12,000) Dollars.

          (iii) the  maximum/highest  benefits which the Executive was receiving
     at any time  during a two-year  period  prior to  termination,  relating to
     health insurance,  accident  insurance,  long-term care, life insurance and
     disability,  shall continue for one (1) year beyond the date of termination
     of the Executive's employment;

          (iv)  any  stock  options  granted  to the  Executive  on or  prior to
     termination date shall immediately vest as of the date of termination; and

          (v) any other benefits, not named herein but provided by Harvey to its
     executives, shall immediately vest upon termination; and

          (vi) cash payment for accrued but unpaid vacation and sick days.

If any payments are due to Executive pursuant to this Section 2, Executive shall
not be entitled to any payments or benefits pursuant to Section 3.

3. Severance Payment Absent Change in Control.  Notwithstanding  anything to the
contrary  contained  herein,  in the event (i) Executive is  terminated  for any
reason other than for Cause and (ii) a Change in Control,  a Potential Change in
Control or a  Disability  shall not have  occurred,  then  Harvey  shall pay the
Executive,  subject to Section 4, the amounts and provide the Executive with the
benefits described below:

          a) the cash payments provided in Sections 2(i) and 2(ii);

          b) the benefits provided in Sections 2(iii), 2(v) and (vi); and

          c)  any  stock  options  granted  to  the  Executive  on or  prior  to
     termination date shall immediately vest as of the date of termination.

If any payments are due to Executive pursuant to this Section 3, Executive shall
not be entitled to any payments or benefits pursuant to Section 2.

4. Condition Precedent to Severance Payment. Notwithstanding the foregoing, as a
condition precedent to Executive's right to receive the payments and/or benefits
described in Section 2 or Section 3, the Executive  shall  execute,  on or about
the date of the  Executive's  termination,  a general release (the "Release") in
favor of Harvey in substantially the form annexed hereto as Exhibit A. Executive
shall have twenty one (21) days in which to execute and return the Release.  Any
cash  payment due to the  Executive  pursuant to Section 2 or Section 3 shall be
paid in a single  lump sum ten (10) days after the date the  Release is executed
and delivered to Harvey, unless Harvey is directed otherwise by the Executive in
writing,  in which  case,  the  payment  shall be  payable  in  accordance  with
Executive's  instructions.  In the event of a Disability  or death of Executive,
following  (i) an event  giving rise to a payment due to  Executive  from Harvey
pursuant to Section 2 or Section 3, and (ii) the  execution  and delivery of the
Release  and any  payments  are still due and  payable  pursuant to Section 2 or
Section 3, then any such payment  shall be paid to  Executive's  spouse or legal
representative.

5. No Rights as an Employee.  This Agreement confers no rights to Executive with
respect to his employment  with Harvey,  or his Base Salary prior to a Change in
Control or Potential Change in Control event.

6.  Amendments.  This  Agreement  may be amended only in writing  signed by both
parties hereto.

7. Governing Law. This Agreement shall be governed by, construed and interpreted
in  accordance  with  the laws of the  State  of New  York,  without  regard  to
principles of conflict of laws.

8. Entire Agreement.  This Agreement represents the entire agreement between the
parties with respect to the subject  matter  hereof,  and  supercedes  all prior
agreements,  arrangements and understanding between the parties, whether oral or
written,  with respect  thereto  including the  Severance  Agreement and Amended
Severance Agreement.

9. Successors and Assigns.  This Agreement shall be binding upon and shall inure
to the  benefit of the  parties  hereto and their  permitted  heirs,  executors,
administrators, successors and assigns.

10. Counterparts.  This Agreement may be executed in counterparts, each of which
shall be deemed an original,  but all of which together shall constitute one and
the same instrument.

     IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as the
date first written above.

HARVEY ELECTRONICS, INC.



By:_____________________________            ______________________________
   MICHAEL E. RECCA, CHAIRMAN               FRANKLIN C. KARP, President


<PAGE>
                                    EXHIBIT A

                                 FORM OF RELEASE

(PLEASE READ  CAREFULLY.  THIS AGREEMENT AND GENERAL RELEASE HAS IMPORTANT LEGAL
CONSEQUENCES.)

     This  Agreement and General  Release (the  "Agreement")  is between  Harvey
Electronics,  Inc.  ("Harvey")  and  Franklin  C. Karp  ("Executive").  The term
"Harvey"  shall  include  any  subsidiaries  or  related  companies,  directors,
officers, shareholders, employees, agents, attorneys, and successors of Harvey.

IT IS AGREED THAT:

1..Executive's last date of employment with Harvey is _________________.

2. Ten (10) days after the date Executive  executes this Agreement,  Harvey will
pay Executive the payments  and/or  benefits  described in a certain Amended and
Restated  Severance  Agreement executed by and between the Executive and Harvey,
dated  _________,less  applicable  federal,  state,  and local legally  required
deductions (the "Payment").  Executive agrees that Harvey owes Executive nothing
else, including but not limited to wages or benefits.

3. In exchange for the payment,  Executive  understands that Executive  releases
and  forever  gives up the  right to sue or make any  claim  whatsoever  against
Harvey, for any reason whatsoever,  including but not limited to any claim under
contract  and/or  equity  and/or  any law,  relating  in any way to  Executive's
employment  with Harvey or the  termination of that  employment.  This waiver of
claims  includes any claims of  discrimination  on any  grounds,  whether or not
Executive  has  previously  filed  such  a  claim.  Executive  understands  that
Executive is giving up any rights or claims which  Executive  may have under the
numerous laws and  regulations  regulating  employment,  whether on the federal,
state, or local level, including,  but not limited to, the Age Discrimination in
Employment  Act of 1967, as amended,  Title VII of the Civil Rights Act of 1964,
as amended,  the Fair Labor  Standards  Act, the Equal Pay Act, and the New York
State Human Rights Law.

4.  Executive  agrees  that  Executive  has  returned  to  Harvey  any  and  all
identification cards, files, books, records,  materials,  equipment or documents
in  Executive's  possession  which were  provided to or obtained by Executive in
connection with Executive's employment.

5. It is understood and agreed that  Executive  will not talk about,  discuss or
communicate  with anyone,  orally or in writing,  concerning the matter which is
the  subject of this  Agreement  or any aspect of  Executive's  employment  with
Harvey except Executive may (i) discuss this Agreement with  Executive's  spouse
and children,  (ii) permit  Executive's  accountant to review this  Agreement in
connection  with  the  filing  of  tax  returns,  (iii)  permit  attorney(s)  of
Executive's  choice to review this Agreement,  and (iv) testify truthfully under
oath pursuant to a subpoena (in which event  Executive  will provide Harvey with
prompt notice of the subpoena).

6. Executive  represents  that Executive is not aware of any breach of contract,
wrongdoing  or liability by Harvey,  and  Executive  expressly  agrees that this
Agreement is not and shall not in any way be deemed to  constitute  an admission
or evidence of any breach of  contract,  wrongdoing  or liability on the part of
Harvey,  nor of any  violation  of any  federal,  state  or  municipal  statute,
regulation or principle of common law or equity.

7. Executive  acknowledges  that Executive has received a copy of this Agreement
and that Harvey has informed  Executive  that  Executive  should consult with an
attorney in connection with it. Executive acknowledges that Executive's decision
to consult  with an attorney or not to consult with an attorney was made without
influence by Harvey.  Executive  further  acknowledges that Executive has had at
least  21 days in  which  to  consider,  execute,  and  return  this  Agreement.
Notwithstanding  Executive's  right to consider  this  Agreement for 21 days, if
Executive  signs this  Agreement  before the  expiration  of the 21-day  period,
Executive will have done so knowingly and  voluntarily,  and will have expressly
waived  Executive's  right to  consider  this  Agreement  for the balance of the
21-day period.

8. This Agreement shall not become effective until seven (7) days after the date
Executive executes the Agreement, and Executive may cancel this Agreement within
seven (7) days of the date Executive  executes it, except that any  cancellation
must be in writing, signed by Executive, and delivered to Harvey.

9. This  Agreement  is made in the State of New York.  This  Agreement  is to be
interpreted under the law of the State of New York.

10.  EXECUTIVE  ACKNOWLEDGES  THAT EXECUTIVE HAS CAREFULLY READ THIS  AGREEMENT;
THAT  EXECUTIVE  HAS HAD AT LEAST 21 DAYS IN WHICH TO  CONSIDER  AND RETURN THIS
AGREEMENT;  THAT EXECUTIVE HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY OF
EXECUTIVE'S  CHOICE IN CONNECTION  WITH THIS  AGREEMENT;  THAT  EXECUTIVE  FULLY
UNDERSTANDS THE TERMS,  CONDITIONS,  AND  SIGNIFICANCE  AND CONSEQUENCES OF THIS
AGREEMENT;  AND  THAT  EXECUTIVE  HAS  EXECUTED  THIS  AGREEMENT  KNOWINGLY  AND
VOLUNTARILY, AND OF EXECUTIVE'S OWN FREE WILL.


HARVEY ELECTRONICS, INC.


By:                                         Dated:
   ------------------------------------           -----------------------------



                                            Dated:
---------------------------------------           -----------------------------
FRANKLIN C. KARP
President