EXHIBIT 10.3
                              EMPLOYMENT AGREEMENT

     THIS  AGREEMENT  made as of the  19th  day of  July  2001,  by and  between
MediaBay, Inc., a Florida corporation, with offices at 2 Ridgedale Avenue, Cedar
Knolls, New Jersey (the "Company"),  and Robert Toro residing at 3 Belaire Lane,
Manalapan, New Jersey 07726 (the "Executive").

                              W I T N E S S E T H:

     WHEREAS,  the Company is engaged in the audio book club, old time radio and
spoken audio digital download businesses; 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 the effective  date of this  Agreement and end on
the second  (2nd)  anniversary  of the  effective  date (the  "Term"),  subject,
however, to the other termination provisions contained herein.

     4. Position and Duties.  The Executive  shall be employed by the Company as
Senior Vice President of Finance of MediaBay,  Inc. and Chief Financial  Officer
of Audio Book Club,  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,
Norton  and   Michael   Herrick,   respectively.   The   Executive   shall  have
responsibility  for the  financial  oversight of the business and affairs of the
Company,  including without  limitation  responsibility for all filings with the
Securities and Exchange  Commission,  the Internal Revenue Service and all other
agencies  (federal,  state or local) and/or stock exchanges to which the Company
must  report,  subject  to  appropriate  review  and  approval  of the  Board of
Directors and senior officers and such further  revisions as the Executive deems
necessary.  The scope of his duties and the extent of his responsibilities shall
be  substantially  the same as the duties and  responsibilities  of other senior
vice  presidents  of finance and  financial  officers of public  companies.  The
Executive shall be required


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to spend 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.

     5. Compensation and Related Matters.

          (a) Salary.  During the term of this Agreement,  the Company shall pay
     to the Executive,  as  compensation  for his services,  an annual salary of
     $170,000 in equal bi-monthly  installments in arrears during the first year
     of the Term of this  Agreement;  and an annual  salary of $185,000 in equal
     bi-monthly  installments  in arrears  during the second year of the Term of
     this Agreement.  In addition, the Executive may receive a performance-based
     bonus to be  determined by the Chairman or Chief  Executive  Officer in his
     sole and absolute  discretion  with a minimum bonus at the end of each year
     during the Term, provided the Executive is still employed by the Company at
     such times,  of Sixteen  Thousand  Five  Hundred  and 00/100  U.S.  Dollars
     ($16,500.00) at the end of the first year of the Term of this Agreement and
     a  minimum  bonus  at the  end of the  second  year  of the  Term  of  this
     Agreement,  provided the Executive is still employed by the Company at that
     time,  of Eighteen  Thousand  and 00/100 U.S.  Dollars  ($18,000.00);  such
     bonuses shall be paid within  forty-five  (45) days after each  anniversary
     date.

          (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.
     In  addition,  the  Executive  shall be  reimbursed  for  reasonable  costs
     associated with (up to 24 hours of continuing  education courses) receiving
     CPE credits for maintaining CPA licenses  including  reasonable land travel
     cost to attend such courses.  In addition,  the Company will  reimburse the
     Executive for his dues to the AICPA and subscription to FASB Pronouncements
     and  other  professional  publications  deemed  necessary  to  perform  the
     Executive's duties.

          (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.  The  Executive  will make every  effort to schedule  the
     vacation time at a time most  convenient for the Company,  with the Company
     recognizing   that  the  Executive's   flexibility  is  limited  by  school
     calendars.  Notwithstanding  the  foregoing,  the  Executive  shall  not be
     entitled to vacation  during the three (3) week period prior to the date on
     which the Company's  Annual Report on Form 10-K or Quarterly Report on Form
     10-Q are required to be filed with the Securities  and Exchange  Commission
     unless  it is  agreed  that  filing  deadlines  will  not be  effected.  In
     addition, the Executive will receive normal Company holidays. The Executive
     shall  not take more  than  fourteen  (14)  consecutive  days of  vacation,
     including weekends.

          (e) Stock Options. The Executive will 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 at the end of
     the first year of the Term of this  Agreement,  provided that the


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     Executive  is an  employee  of the  Company at that time and  options  with
     respect to the remaining twenty thousand  (20,000) shares shall vest at the
     end of the second  year of the Term of this  Agreement,  provided  that the
     Executive is an employee of the Company at that time. Such options shall be
     exercisable  at a price  per  share of $1.00  and will be on the  terms and
     conditions as more specifically  provided for in the Company's Stock Option
     Plan and will be  exercisable  for a period  of five (5)  years  commencing
     immediately upon vesting.

     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 Senior Vice President of Finance of
     MediaBay,  Inc. or Chief Financial  Officer of Audio Book Club, Inc. (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. As for (ii) above, Executive shall
     have  forty-eight  (48) hours from receipt of written notice of termination
     to cure any and all failures to perform.  It will be in the sole discretion
     of the Board of  Directors  of the  Company  whether a default of item (ii)
     above has been cured by Executive to the  satisfaction  of the Board during
     the forty-eight (48) hour period after Executive receives notice thereof.

          (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  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

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     Control" (as defined below), then the Executive will be entitled to receive
     severance pay equal to one hundred percent (100%) 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 in equal monthly payments over the
     remaining unexpired period of Executive's employment Term.

          (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 all or  substantially  all
     of the assets of the Company.

          (g) Change of Control - Stock Options. 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 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.  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 conflict with the interests


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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  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 New  Jersey  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


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the Executive  shall be found,  as finally  judicially  determined by a court of
competent jurisdiction, not to have been entitled to indemnification hereunder.

     9.  Arbitration  Agreement.   The  parties  hereto  have  entered  into  an
Arbitration  Agreement  dated  February  27,  2001,  which may be amended by the
parties  from  time to  time  without  regard  to this  Agreement.  The  parties
expressly  agree that  disputes  arising out of or  relating to the  Executive's
employment,  including  any  disputes  under  or  relating  to  this  Employment
Agreement,  will be resolved by  arbitration  under the  Arbitration  Agreement;
provided  however,  that any dispute arising out of or relating to Section 7 and
Section 8 of this Agreement will not be subject to arbitration.

     10. 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.

     11.  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.

     12. 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.

     13. 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.


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          (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.

     14.  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.

     15.   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.

     16. 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.   Notwithstanding  the  foregoing,  and  as  stated
previously in this  Agreement,  the  Arbitration  Agreement  between the parties
dated February 27, 2001 does and shall remain in full force and effect.

     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:_________________, 2001     MEDIABAY, INC., a Florida corporation

                                        By:
                                           -------------------------------------
                                        Printed Name:
                                                     ---------------------------
                                        Title:
                                              ----------------------------------


                                        "EXECUTIVE"

Date Signed:_________________, 2001
                                        ----------------------------------------
                                        Printed Name:
                                                     ---------------------------