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EXHIBIT 99.1
IRREVOCABLE VOTING AGREEMENT AND PROXY
THIS VOTING AGREEMENT (the "Agreement") as of August 22, 2007 is
made by
and among HARVEY ELECTRONICS, INC., incorporated and existing
under the laws of
the State of New York (the "Company"), Harborview Master Fund
L.P. (the
"Shareholder") and Yorkville Advisors, LLC, a Delaware limited
liability company
("Yorkville") (collectively the Company, the Shareholder and
Yorkville shall be
referred to as the "Parties").
RECITALS
WHEREAS, the Shareholder is a shareholder of the Company;
WHEREAS, the Shareholder desires to enter into this Agreement,
in
accordance with Section 609 of the New York Business Corporation
Law , for the
purpose of granting to Yorkville an irrevocable proxy to
exercise certain voting
rights of shares of stock of the Company at the special meeting
of the
shareholders to be held no later than November 21, 2007 (the
"Shareholders
Meeting").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants
and agreements hereinafter set forth, the parties hereto agree
as follows:
ARTICLE I
SHARES SUBJECT TO AGREEMENT
1.1 Shares Subject to Agreement. The shares subject to the
irrevocable
proxy provided in Section 2. are such shares of common stock of
the Company (the
"Shares") that are:
(a) As of the date hereof, held in the name of the Shareholder
in the
amounts set forth opposite the Shareholder's name on Schedule
1
attached hereto;
(b) As of the date hereof, shares of the Company's Common Stock
to which
the Shareholder is entitled pursuant to the exercise of
warrants
and/or options in the amounts as set forth opposite the
Shareholder's
name on Schedule 1 attached hereto ;
(c) Any future issuance of voting shares of capital stock of the
Company
to the Shareholder, provided however, that this Agreement is in
effect
at the time of such issuance.
1.2 Adjustment of Shares. In the event that the number of
outstanding
shares of common stock is increased by a stock dividend, stock
split, or similar
recapitalization of the Company, any additional shares issued to
the Shareholder
shall be deemed Shares within the meaning of this Agreement.
ARTICLE II
GRANT OF PROXY
1
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2.1 Grant of Proxy. Upon the execution of this Agreement, the
Shareholder
agrees to grant to Yorkville or its assigns or designees, an
irrevocable proxy
to vote the Shares for the sole and limited purpose of voting at
the
Shareholders Meeting for (i) the approval of the issuance of
shares of the
Company's Common Stock in the aggregate, in excess of 19.99% of
the outstanding
shares of the Company's Common Stock in connection with but not
limited to (a)
the shares issuable upon conversion of the convertible
debentures (the
"Convertible Debentures") issued pursuant to the Securities
Purchase Agreement
by and between the Company and YA Global Investments, L.P. ("YA
Global") dated
August 22, 2007 (the "Securities Purchase Agreement"), (b) the
shares of the
Company's common stock to be issued upon exercise of the warrant
issued to YA
Global pursuant to the Securities Purchase Agreement (the
"Warrant Shares"), and
(c) any shares of Common Stock issued as Liquidated Damages (as
defined in the
Registration Rights Agreement by and between the Company and YA
Global dated
August 22, 2007) (the "Total Transaction Shares"). The proxy
herein provided
shall be in the same form as Exhibit A to this Agreement.
2.2 Revocation of Prior Proxies. The Shareholders hereby revoke
and cancel
any and all proxies in respect of the Shares existing prior to
the date of this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
Each Shareholder represents and warrants to the other
Shareholder, the
following:
3.1 Requisite Power and Authority. The Shareholder has all the
necessary
power and authority under all applicable provisions of law to
execute and
deliver this Agreement and to carry out its provisions. All
action on
Shareholder's part required for the lawful execution and
delivery of this
Agreement has been taken. Upon execution and delivery, this
Agreement will be
valid and binding obligation of Shareholder, enforceable in
accordance with its
terms, except (a) as limited by applicable bankruptcy,
insolvency,
reorganization, moratorium or other laws of general application
affecting
enforcement of creditors' rights, and (b) general principles of
equity that
restrict the availability of equitable remedies.
3.2 Ownership of Shares. The Shareholder represents an
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