EXHIBIT 10.7

                              EMPLOYMENT AGREEMENT

      THIS AGREEMENT made as of the 31st day of January 2003, by and between
MediaBay, Inc., a Florida corporation, with offices at 2 Ridgedale Avenue, Cedar
Knolls, New Jersey (the "Company"), and Steve McLaughlin residing at 14
Whispering Woods Drive, Falnders, NJ 07836 (the "Executive").

                              W I T N E S S E T H:

      WHEREAS, the Company is engaged in the spoken audio business; and

      WHEREAS, the Company desires to employ the Executive; and

      WHEREAS, the Executive is willing to commit himself to serve and to
establish a minimum period during which he will serve the Company on the terms
and conditions herein provided.

      NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained and intending to be
legally bound hereby, the parties agree as follows:

      1. Recitals. The Whereas clauses recited above are hereby incorporated by
reference as though they were fully set forth herein.

      2. Employment. The Company shall employ the Executive and the Executive
shall serve the Company, on the terms and conditions set forth herein.

      3. Term. The employment of the Executive by the Company as provided in
paragraph 2 shall commence on February 16, 2003, and end on February 15, 2005,
subject, however, to the other termination provisions contained herein.

      4. Position and Duties. The Executive shall be employed by the Company as
Executive Vice President and Chief Technology Officer of MediaBay, Inc. His
power and authority shall be and remain subject to the direction and control of
the Board of Directors and all officers senior to him including but not limited
to the Chairman and Chief Executive Officer. The Executive shall have
responsibility for the technology oversight of the business and affairs of the
Company. The scope of his duties and the extent of his responsibilities shall be
substantially the same as the duties and responsibilities of other CTO's of
public companies. The Executive shall be required to spend


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his full time and attention, without other outside business interests other than
passive investment activities, in the performance of his duties and the
Company's business and affairs. Notwithstanding the foregoing, the Company
agrees that the Executive shall be permitted to continue his current level of
involvement and work on two projects (FlashyChat, LLC and FX Media, Inc.),
provided that any work done in connection with such projects occur on
Executive's own personal time and provided further that it in no way conflicts
with the business of the Company including Executive's performance,
responsibilities and hours spent working with the Company. Additionally, the
Company agrees that the Executive shall be permitted to continue his position as
a Board Director of Visagent Corporation.

      5.Compensation and Related Matters.

            a) Salary. During the term of this Agreement up until and including
February 15, 2004, the Company shall pay to the Executive, as compensation for
his services, an annual salary of $200,000 in equal bi-monthly installments in
arrears; the Company shall pay to the Executive during the final twelve months
of the term of this Agreement (i.e. from February 16, 2004 through February 15,
2005) an annual salary of $210,000. In addition, the Executive may receive a
performance-based bonus to be determined by the Chairman and Chief Executive
Officer in their sole and absolute discretion, provided the Executive shall
receive a minimum bonus on February 15, 2004, provided the Executive is still
employed by the Company at such time, in the amount of Ten Thousand and 00/100
U.S. Dollars ($10,000.00) and a minimum bonus on February 15, 2005, provided the
Executive is still employed by the Company at such time, in the amount of
Fifteen Thousand and 00/100 U.S. Dollars ($15,000.00); such bonuses shall be
paid within forty-five (45) days of their due dates.

            (b) Expenses. The Executive shall receive prompt reimbursement for
all reasonable travel and business expenses in connection with services
performed hereunder in accordance with normal Company policy, as the same may be
determined from time to time.

            (c) Insurance and Employee Benefits. The Executive shall receive
insurance and employee benefits applicable to all officers of the Company.
Specifically, the Executive shall receive health insurance coverage for himself
and his family.

            (d) Vacation. The Executive shall receive, prorata during each full
year of his employment, three (3) weeks paid vacation approved one (1) month in
advance.


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            (e) Stock Options. The Executive shall receive stock options to
acquire an additional forty thousand (40,000) shares of Common Stock in the
Company pursuant to and in accordance with the Company's Stock Option Plan.
Options with respect to twenty thousand (20,000) shares shall vest on February
15, 2004, provided that the Executive is an employee of the Company at that
time. Options with respect to the remaining twenty thousand (20,000) shares
shall vest on February 15, 2005, provided that the Executive is an employee of
the Company at that time. Such options shall be exercisable at a price per share
of $1.50 and will be on the terms and conditions as more specifically provided
for in the Company's Stock Option Plan.

      6. Termination by the Company. The Executive's employment hereunder may be
terminated by the Company without any breach of this Agreement only under the
circumstances described below.

            (a) Death. The Executive's employment hereunder shall terminate upon
his death.

            (b) Disability. If, as a result of the Executive's incapacity due to
physical or mental illness, as determined by a physician mutually chosen by the
Executive and the Company, the Executive shall have been absent from his duties
hereunder for a consecutive period of forty-five (45) days and after notice of
termination is given (which may be given before or after the end of such 45 day
period but which will in no event be effective until, at the earliest, the day
following the forty-fifth day of the period) shall not have returned to the
performance of his duties hereunder, as that concept is contemplated in this
Agreement, within ten (10) days after the notice of termination is given, the
Company may terminate the Executive's employment hereunder.

            (c) Cause. The Company may terminate the Executive's employment
under this Agreement at any time for cause. For purposes of this Agreement, the
term "cause" shall include one or more of the following: (i) willful misconduct,
(ii) failure by the Executive to materially perform his duties, as contemplated
in this Agreement, as Chief Technology Officer (other than through disability as
defined in paragraph 6(b), above), (iii) indictment of a crime or alcohol or
drug abuse, or (iv) the Executive's material breach of this Agreement. The
termination shall be evidenced by written notice thereof to the Executive.

            (d) Without Cause. In addition to any other rights the Company has
to terminate the Executive's employment under this Agreement, the Company may,
at any time, by a vote of not


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less than fifty percent (50%) of the directors then in office (excluding the
vote of the Executive if he is also a director), terminate the Executive without
cause upon thirty (30) days' prior written notice to the Executive setting forth
the reasons, if any, for the termination. For purposes of this Agreement, the
term "without cause" shall mean termination by the Company on any grounds other
than those set forth in paragraphs 6(a), (b) or (c) hereof.

            (e) Severance Pay. In the event that the Company has terminated the
Executive's employment under this Agreement (i) "without cause" or (ii) in the
event there is a "Change of Control" (as defined below), then the Executive will
be entitled to receive severance pay equal to fifty percent (50%) of his base
salary for the unexpired period of his two (2) year employment term; such
payment, if any, shall be made to the Executive within thirty (30) days of such
termination of the Executive's employment.

            (f) Change of Control. For purposes of this Agreement, a "Change of
Control" shall be deemed to occur, unless previously consented to in writing by
the Executive, and only if the Executive is not offered continued employment
under terms substantially similar to this Agreement, upon (i) the actual
acquisition of fifty percent (50%) or more of the voting securities of the
Company by any company or entity or affiliated group of companies or entities
(other than pursuant to a bona fide underwriting agreement relating to a public
distribution of securities of the Company), (ii) the completion of a tender or
exchange offer for more than fifty percent (50%) of the voting securities of the
Company by any company or entity or affiliated group of companies or entities
not affiliated with the Executive, (iii) the completion of a proxy contest
against the management for the election of a majority of the Board of Directors
of the Company if the group conducting the proxy contest owns, has or gains the
power to vote at least fifty percent (50%) of the voting securities of the
Company, or (iv) a merger or consolidation in which the Company is not the
surviving entity or a sale of or substantially all of the assets of the Company.

            (g) Change of Control Compensation. In the event of a completion of
a tender or exchange offer for more than fifty percent (50%) of the voting
securities of the Company by any company or entity or affiliated group of
companies or entities not affiliated with the Executive, the stock options,
described in paragraph 5(e) and all other stock options previously or
subsequently received, shall immediately be exercisable and any unvested shall
immediately vest.

            (h) The Executive shall not be required to mitigate the amount of
any payment provided for in this paragraph 6 by seeking other employment or
otherwise nor shall the amount of any payment provided for in this paragraph 6
be reduced by any compensation earned by the


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Executive as the result of employment by another employer or business or by
profits earned by the Executive from any other source at any time before and
after the date of termination. The amounts payable to the Executive under this
Agreement shall not be treated as damages, but as severance pay to which the
Executive is entitled by reason of his employment and the circumstances
contemplated by this Agreement.

            (i) The severance pay which the Executive will be entitled to
receive as a result of the termination of his employment under this Agreement,
shall be the Executive's exclusive remedy in the event of such termination.

      7. Non-Competition and Confidentiality Covenant. The Executive hereby
covenants and agrees that he will not serve as an officer of or perform any
functions for any other company during the term of his employment under this
Agreement, except as provided in Section 4. In addition, during the term of this
Agreement and for a period of two (2) years immediately following the
termination of his employment, whether said termination is occasioned by the
Company, the Executive or a mutual agreement of the parties, the Executive shall
not, for himself or on behalf of any other person, persons, firm, partnership,
corporation or company, engage or participate in any activities which are in
direct or indirect conflict with the interests of the Company or solicit or
attempt to solicit the business or patronage of any person, firm, corporation,
company or partnership, which had previously been a customer of the Company, for
the purpose of selling products and services similar to those provided by the
Company.

            Furthermore, the Executive acknowledges and agrees that: all mailing
lists; customer, member and prospect names; license or arrangement; front-end
and back-end marketing performance; financial statements; operating system,
database and other computer software, specific to the Company; and all
information which is known by the Executive to be subject to a confidentiality
agreement or obligation of confidentiality, even without a confidentiality
agreement between the Company and another person or party, shall be maintained
by the Executive in a confidential manner and the Executive agrees that the
Executive will not use such information to the detriment of the Company or
disclose such information to any third party, except as may be necessary in the
course of performing the Executive's job responsibilities. The Executive further
agrees that these obligations of confidentiality with respect to such
information shall continue after the Executive ceases to be employed by the
Company. Disclosure of the aforementioned information shall not be prohibited if
such disclosure is directly pursuant to a valid and existing order of a court or
other governmental body or agency within the United States; provided, however,
that (i) the Executive shall first have given prompt notice to the Company of
any such possible or prospective


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order (or proceeding pursuant to which any such order may result), (ii) the
Company shall have been afforded a reasonable opportunity to review such
disclosure and to prevent or limit any such disclosure, and (iii) the Executive
shall, if requested by the Company and at the Company's cost and expense, use
his best efforts to prevent or limit any such disclosure by means of a
protective order or a request for confidential treatment.

      8. Indemnification. To the maximum extent permitted under the corporate
laws of the State of Florida or, if more favorable, the Articles of
Incorporation and/or By-Laws of the Company as in effect on the date of this
Agreement, (a) the Executive shall be indemnified and held harmless by the
Company, as provided under such corporate laws or such Articles of Incorporation
and/or By-Laws, as applicable, for any and all actions taken or matters
undertaken, directly or indirectly, in the performance of his duties and
responsibilities under this Agreement or otherwise on behalf of the Company,
provided the Executive did not act wantonly or recklessly or was not grossly
negligent or engaged in willful misconduct, and (b) without limiting clause (a),
the Company shall indemnify and hold harmless the Executive from and against (i)
any claim, loss, liability, obligation, damage, cost, expense, action, suit,
proceeding or cause of action (collectively, "Claims") arising from or out of or
relating to the Executive's acting as an officer, director, employee or agent of
the Company or any of its affiliates or in any other capacity, including,
without limitation, any fiduciary capacity, in which the Executive serves at the
request of the Company, and (ii) any cost or expense (including, without
limitation, fees and disbursements of counsel) (collectively, "Expenses")
incurred by the Executive in connection with the defense or investigation
thereof. If any Claim is asserted or other matter arises with respect to which
the Executive believes in good faith the Executive is entitled to
indemnification as contemplated hereby, the Company shall, at its election, to
be determined in its sole and absolute discretion, either assume the defense or
investigation of such Claim or matter or pay the Expenses incurred by the
Executive in connection with the defense or investigation of such Claim or
matter, provided that the Executive shall reimburse the Company for such
amounts, plus simple interest thereon at the then current Prime Rate as in
effect from time to time, compounded annually, if the Executive shall be found,
as finally judicially determined by a court of competent jurisdiction, not to
have been entitled to indemnification hereunder.

      9. Binding Agreement. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, divisees and legatees. In addition, this Agreement and the
obligations and rights of the Company hereunder shall be binding on any person,
firm or corporation which is a successor-in-interest to the Company.


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      10. Notice. For the purpose of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when delivered personally, or by private
overnight courier or mail service, postage prepaid or (unless otherwise
specified) mailed by United States registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:

If to the Executive:                To the address at the head of this Agreement

If to the Company:                  MediaBay, Inc.
                                    2 Ridgedale Avenue
                                    Suite 300
                                    Cedar Knolls, New Jersey 07927
                                    (973) 539-9528

or to such other address as the parties may furnish to each other in writing.
Copies of all notices, demands and communications shall be sent to the home
addresses of all members of the Board of Directors of the Company.

      11. Miscellaneous.

            (a) No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
signed by the parties hereto, provided, however, that this Agreement may be
modified, waived or discharged by mutual agreement in writing.

            (b) No delay, waiver, omission or forbearance (whether by conduct or
otherwise) by any party hereto at any time to exercise any right, option, duty
or power arising out of breach or default by the other party of any of the
terms, conditions or provisions of this Agreement to be performed by such other
party shall constitute a waiver by such party or a waiver of such party's rights
to enforce any right, option or power as against the other party or as to
subsequent breach or default by such other party, and no explicit waiver shall
constitute a waiver of similar or dissimilar terms, provisions or conditions at
the same time or at any prior or subsequent time.


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      12. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

      13. Governing Law. Except as preempted by federal law, this Agreement
shall be executed, construed and performed in accordance with the laws of the
State of New Jersey without reference to conflict of laws principles. The
parties agree that the venue for any dispute hereunder will be the state or
federal courts in New Jersey and the parties hereby agree to the exclusive
jurisdiction thereof.

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

      15. Entire Agreement. This Agreement contains the entire understanding of
the Company and the Executive with respect to his employment by the Company.
This Agreement supersedes all prior agreements and understandings whether
written or oral between the Executive and the Company, and there are no
restrictions, agreements, promises, warranties or covenants other than those
stated in this Agreement.

      IN WITNESS WHEREOF, the parties have executed this Agreement on the date
shown below effective as of the date first written above.

                                            "COMPANY"

Date Signed: January 31, 2003               MEDIABAY, INC., a Florida
                                            corporation

                                            By:           /s/ Hakan Lindskog
                                                          ----------------------
                                            Printed Name: Hakan Lindskog
                                            Title:        CEO

                                            "EXECUTIVE"

Date Signed: Januray 31, 2003               Stephen McLaughlin
                                            ------------------------------------
                                            Printed Name: Stephen McLaughlin


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