EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT

This Employment Agreement is entered into as of the 6th day of June, 2007

by and between HARVEY ELECTRONICS, INC., a New York corporation (the "Company"),

and MICHAEL RECCA ("Executive").

In consideration of the mutual covenants contained in this Agreement, the

Company and Executive agree as follows:

1. Employment. During the term of this Agreement (as defined in Section 2),

the Company shall employ Executive, and Executive hereby accepts such employment

by the Company, in accordance with the terms and conditions set forth in this

Agreement.

a) Position and Duties. Executive shall serve as Interim Chief Executive

Officer and President of the Company or in such other position with the Company,

as the Board of Directors of the Company shall, from time to time, specify.

Executive shall perform all duties, services and responsibilities and have such

authority and powers for, and on behalf of, the Company as are customary and

appropriate for such position designated by, as are established from time to

time by, or in accordance with procedures established by, the Company's Board of

Directors.

(b) Performance. Executive shall perform the duties called for under this

Agreement to the best of his ability and shall devote an appropriate amount of

his business time (no less than 40 hours per week), energies, efforts and skill

to such duties during the term of his employment and shall not accept employment

with any other employer or business or engage in any other business of any

nature whatsoever, in any capacity whatsoever, unless approved in writing in

advance by the Board of Directors of the Company.

2. Term. The term of Executive's employment under this Agreement shall

begin on the date hereof and shall continue until November 30, 2007 (the

"Termination Date"). Subject to Section 4 hereof, at any time on or before the

Termination Date or any Extended Termination Date (as defined herein), the

Company may, at its sole option, extend this Agreement for a period of one (1)

month (the expiration of any extension being referred to herein as the "Extended

Termination Date"); provided, however, that the Company may extend this

Agreement no more than six (6) times for an aggregate of six (6) months.

3. Compensation, Expenses and Benefits. As full compensation for

Executive's performance of his duties pursuant to this Agreement, the Company

shall pay Executive during the term of this Agreement, and Executive shall

accept as full payment for such performance, the following aggregate amounts and

benefits:

(a) Salary. As salary for Executive's services to be rendered under this

Agreement, the Company shall pay Executive a monthly salary of $25,000; Eighty

(80%) percent, ($ 20,000) of such salary to be paid in cash in accordance with

the regular payroll practices of the Company, with the balance accrued. The

total balance accrued and not paid shall be paid in twelve-equal monthly

installments following termination of the agreement

(b) Business Expenses. In addition, the Company shall reimburse Executive,

or cause him to be reimbursed, for all reasonable out-of-pocket expenses

incurred by him in the performance of his duties hereunder or in furtherance of

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the business and/or interests of the Company. Out of pocket expenses will be

reimbursed provided, that (i) such expenses are incurred in accordance with

Company policy, and (ii) Executive furnishes to the Company an itemized account

(including receipts), reasonably satisfactory to the Company, in substantiation

of such expenditures.

(c) Vacation. Executive shall be entitled to 2 paid vacation days per month

period. Vacation days not taken by Executive will not be paid upon termination.

(d) Options. Upon the execution of this Agreement, the Company shall grant

Executive a "non-qualified stock option" (the "Option") pursuant to the Free

Standing Non-Qualified Stock Option Agreement attached hereto as Annex A.

The parties agree that Executive shall be granted certain "piggy-back"

registration rights to the extent the shares of common stock underlying the

Option are not covered by an effective registration statement. The parties

further acknowledge and agree that the number of shares and exercise prices set

forth in Annex A reflect a one-for-four reverse split consummated by the Company

on November 10, 2006. Executive further agrees and acknowledges that he shall

not sell any shares of the Company's common stock underlying the Option until a

period commencing one year from the later of the Termination Date and the final

Extended Termination Date and Executive further agrees and acknowledges that he

shall not sell more than 25,000 Option Shares in any three-month period.

Should Executive purchase shares of the common stock of the Company outside of

the scope of this Agreement and the option granted hereunder, Executive agrees

that such purchases shall be made pursuant to a plan meeting the requirements of

Rule 10b5-1(c) under the Securities and Exchange Act of 1934, as amended. The

prohibition on the sale of shares set forth in this Agreement shall not apply to

such shares, provided, however, that Executive acknowledges that to the extent

Executive purchases such shares at any time the Executive is deemed an

"affiliate" (as such term is defined under Rule 144(a)(1) of the Securities Act

of 1933, as amended (the "Act")) of the Company, such shares shall be

"restricted securities" (as such term is defined under Rule 144(a)(3) of the

Act) and may only be resold pursuant to an effective registration statement

under the Act or pursuant to an applicable exemption under the Act. .

(e) Executive shall have the right to participate, on the same basis and to

the same extent as other executive employees of the Company, in the Company's

employee benefit programs, if any, including, without limitation, group life and

medical insurance programs covering Executive and his dependents.

(f) Indemnification; Directors and Officers Insurance. The Company shall,

to the fullest extent authorized or permitted by the New York Business

Corporation Law, the Company's Charter and the Company's By-Laws, defend,

indemnify and hold Executive, his heirs, executors, administrators and other

legal representatives, harmless from and against any and all claims, suits,

debts, causes of action, proceedings or other actions, at law or in equity

("Claims"), which any person or entity may have had, now has or may in the

future have with respect to Executive's service to the Company as an officer,

director, executive or agent thereof, including any costs and reasonable

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attorney fees incurred in connection with defending such Claims. This provision

shall survive the termination of this agreement.

(g) The Company shall deduct from Executive's compensation hereunder and

any other payment, any federal, state, or city withholding taxes, social

security contributions, and any other amounts which may be required to be

deducted or withheld by the Company pursuant to any federal, state, or city

laws, rules, or regulations.

4. Termination.

The Company or Executive can terminate this Agreement on thirty (30) days'

notice to the other party; provided however this Agreement shall terminate

immediately upon Executive's death.

5. Effects of Expiration or Termination.

(a) Expiration under Section 2 or Termination under Section 4. If this

Agreement expires or Executive's employment with the Company under this

Agreement is terminated pursuant to Section 4, the Company's obligations under

this Agreement, including obligations under Section 3, shall end except for the

Company's obligation to: (i) reimburse Executive (or his estate) for all

out-of-pocket expenses incurred and unpaid pursuant to Section 3(b); (ii) pay to

Executive (or his estate) any salary pursuant to Sections 3(a) and (c), actually

earned, accrued and unpaid through the date of termination and (iii) indemnify

Executive as provided under section 3(e). All unvested options as of the

termination of this Agreement shall be forfeited.

(b) Rights and Obligations. Termination of Executive's employment under

this Agreement shall not affect any party's rights and obligations under

Sections 3 (subject to the limitations set forth in Sections 5(a), 6, 7, 8, 9,

10, 11 and 12, such rights and obligations shall continue and survive the

termination of Executive's employment and this Agreement.

6. Solicitation of Employees and Consultants. Upon expiration of this

Agreement or termination of Executive's employment with the Company under this

Agreement pursuant to Section 4, Executive shall not for a period of three years

following the date of such termination, without the written consent of the

Company, directly or indirectly:

(i) solicit, recruit, or attempt to hire any person who is then employed

by, or is a consultant to, the Company or who, to Executive's knowledge, was

employed by, or was a consultant to, the Company at any time during the period

of Executive's employment with the Company under this Agreement; or

(ii) encourage, solicit or entice any such person to terminate his or her

employment or consultation with the Company, or employ or engage any such person

as an employee, or independent contractor of any person or entity other than the

Company or a Company subsidiary.

This provision will not apply to Executive's appointment of the Company's

employees, board members or consultants to serve on the board of directors of

another company, provided such appointment is to the board of directors of a

company whose interests are not adverse to the Company.

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7. Covenant Not to Compete/ Non Disparagement.

(a) During the term of Executive's employment under this Agreement and for

a period of three years following expiration of this Agreement or the

termination of Executive's employment with the Company under this Agreement

pursuant to Section 4, Executive shall not, directly or indirectly, himself, or

through or for an individual, person or entity wherever located:

(i) engage in any activities or perform any services for a company that

specializes in the sale and custom installation of audio visual and

home theater products for consumers or, businesses. or

(ii) be employed by, consult with, own any capital stock of, or have any

financial interest of any kind in, any individual, person or entity,

wherever located, for a company that specializes in the sale and

custom installation of audio visual and home theater products for

consumers or businesses; provided that Executive may own, for

investment purposes up to 1% of the securities of any such publicly

traded company whose securities (i) trade or are listed on a national

securities exchange registered under Section 6 of the Securities and

Exchange Act of 1934, as amended (the "Exchange Act") or (ii) are

quoted on the National Association of Securities Dealers' electronic

bulletin board or any other "over-the-counter market"(so long as

Executive is not otherwise affiliated with such business).

(b) Each of the parties agrees that it will not, and will instruct, as the

case may be, each of its respective representatives, officers and members of its

board of directors not to, make any statements, written or oral, which would be

reasonably likely to disparage or damage the other party. Executive further

acknowledges and agrees that, following the expiration of the Agreement or

termination of Executive's employment with the Company pursuant to Section 4, he

will not make any statement about the Company or his service thereto, or any

related matter, without the prior written consent of the Company. Following the

expiration of this Agreement or termination of Executive's employment with the

Company pursuant to Section 4, Executive further agrees to provide assistance to

and shall cooperate with the Company upon its reasonable request with respect to

matters within the scope of Executive's duties and responsibilities during

employment. The Company agrees and acknowledges that it shall, to the maximum

extent possible under then prevailing circumstances, coordinate any such request

with Executive's other commitments and responsibilities to minimize the degree

to which such request interferes with such commitments and responsibilities. The

Company agrees that it will reimburse Executive for reasonable travel expenses

(i.e., travel, meals, and lodging) that Executive may incur in providing

assistance to the Company hereunder.

8. Solicitation of Company Customers. Upon expiration of this Agreement or

termination of Executive's employment with the Company under this Agreement

pursuant to Section 4, Executive shall not, directly or indirectly, at any time

within three years after the date of such termination, solicit any entity that,

to Executive's knowledge, was a customer of the Company within the year before

the date of such termination, to perform services or supply products for such

customer of a similar nature to those services performed or products provided by

the Company to such customer.

9. Intellectual Property/Confidential Information; Return of Documents.

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(a) Executive covenants and undertakes that he will not at any time during

or after the expiration of this Agreement or termination of Executive's

employment with the Company under this Agreement pursuant to Section 4, in

perpetuity, reveal, divulge, or make known to any person, firm, corporation, or

other business organization (other than the Company or its affiliates, if any),

or use for his own account or for the account of another, directly or

indirectly, any customer lists, pricing policies, marketing plans or strategies,

financial information, trade secrets, "know-how", or any other secret or

confidential information of any kind used by the Company (the "Confidential

Information") during his employment by the Company, and made known (whether or

not with the knowledge and permission of the Company, whether or not developed,

devised, or otherwise created in whole or in part by the efforts of Executive,

and whether or not a matter of public knowledge unless as a result of authorized

disclosure) to Executive by reason of his employment by the Company. Executive

further covenants and agrees that he shall retain and use the Confidential

Information in trust for the sole benefit of the Company, its successors and

assigns.

(b) Executive shall promptly communicate and disclose to the Company all

inventions, ideas, discoveries, improvements, modifications, writings, artistic

or creative material, or other intellectual property in any form whatsoever

(hereinafter "Inventions"), conceived, developed, or made by him during his

employment by the Company, whether solely or jointly with others, and whether or

not patentable or copyrightable, (a) which relate to any matters or business of

the type carried on or being developed by the Company, or (b) which result from

or are suggested by any work done by him in the course of his employment by the

Company. Executive shall also promptly communicate and disclose to the Company

all other data obtained by him concerning the business or affairs of the Company

in the course of his employment by the Company.

(c) All written materials, records, and documents (in any form) made by

Executive or coming into his possession during the term of this Agreement

concerning the business or affairs of the Company shall be the sole property of

the Company, and, upon the expiration of this Agreement or termination of

Executive's employment with the Company under this Agreement pursuant to Section

4, or upon the request of the Company during the term hereof, Executive shall

promptly deliver the original and all copies (whether physical or electronic) of

same to the Company. Executive agrees to render to the Company such reports of

the activities undertaken by Executive or conducted under Executive's direction

pursuant hereto during the term hereof as the Company may request from time to

time.

10. Company' Remedies. Executive acknowledges and agrees that the covenants

and undertakings contained in Sections 1(b), 6, 7, 8, and 9 of this Agreement

relate to matters which are of a special, unique and extraordinary character and

that a violation of any of the terms of such Sections will cause irreparable

injury to the Company, the amount of which will be difficult, if not impossible,

to estimate or determine and which cannot be adequately compensated. Executive

further acknowledges and agrees that the compensation paid, or to be paid to him

hereunder, is adequate and sufficient for the covenants and agreements he is

making hereunder. Therefore, Executive agrees that the Company, in addition to

any other available remedies under applicable law, shall be entitled, as a

matter of course, to an