Document:

EXHIBIT 4.1

                          REGISTRATION RIGHTS AGREEMENT

      This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of March
21 2005, is by and between MEDIABAY, INC., a Florida corporation (the
"Company"), and each of the entities whose names appear on the signature pages
hereof. Such entities are each referred to herein as an "Investor" and,
collectively, as the "Investors".

      A. The Company has agreed, on the terms and subject to the conditions set
forth in the Securities Purchase Agreement, dated as of March 21, 2005 (the
"Securities Purchase Agreement"), (i) to issue and sell to each Investor named
therein shares of Series D Convertible Preferred Stock (the "Preferred Stock"),
an Investor Warrant and a Preferred Warrant and (ii) to issue to Satellite
Strategic Finance Associates, LLC the Satellite Consulting Warrant. The Investor
Warrants and the Satellite Consulting Warrant are collectively referred to
herein as the "Warrants". Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Securities Purchase
Agreement.

      B. The shares of Preferred Stock are convertible into shares (the
"Conversion Shares") of the Company's common stock, no par value (the "Common
Stock"). The Warrants are exercisable to purchase shares of Common Stock (the
"Warrant Shares"). The Preferred Warrants are exercisable into shares of
Preferred Stock (the "Additional Preferred Stock") and Investor Warrants (the
"Additional Warrants").

      C. In order to induce each Investor to enter into the Securities Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended (the "Securities Act"), and under
applicable state securities laws.

      In consideration of each Investor entering into the Securities Purchase
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1.    DEFINITIONS.

      For purposes of this Agreement, the following terms shall have the
meanings specified:

            "Business Day" means any day other than a Saturday, a Sunday or a
      day on which the Commission or commercial banks located in New York City
      are authorized or permitted by law to close.

            "Commission" means the Securities and Exchange Commission.

            "Effective Date" means the date on which the Registration Statement
      is declared effective by the Commission.

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            "Exchange Act" means the Securities Exchange Act of 1934, as
      amended.

            "Filing Deadline" means May 1, 2005.

            "Goldman Sachs Registration Rights Agreement" means that certain
      Registration Rights Agreement, dated as of the date hereof, by and between
      the Company and Goldman, Sachs & Co.

            "Holder" means any person owning or having the right to acquire,
      through conversion of the Preferred Stock or exercise of the Warrants or
      otherwise, Registrable Securities, including initially each Investor and
      thereafter any permitted assignee thereof; provided, however, that the
      term "Holder" shall not include Goldman, Sachs & Co. (or any other Holder
      that may be deemed a broker-dealer under the Exchange Act) for purposes of
      Section 2 hereof and the definitions of "Common Stock Dividend Condition"
      and "Mandatory Commission Conditions" set forth in the Articles of
      Amendment (as defined in the Securities Purchase Agreement), unless the
      Company (i) meets the eligibility requirements for a primary offering on
      Form S-3 as provided in General Instruction I.B.1 of Form S-3 at the time
      of filing a Registration Statement on Form S-3 or (ii) shall prepare and
      file with the Commission a Registration Statement on Form S-1 or Form S-2
      as required by the last sentence of Section 2(a).

            "Per Share Default Payment Amount" means $0.0055. The Per Shares
      Default Payment Amount shall be proportionately adjusted in the event of a
      stock split, reverse stock split or similar event.

            "Registrable Securities" means the Conversion Shares, the Warrant
      Shares and any other shares of Common Stock issuable pursuant to the terms
      of the Preferred Stock, the Additional Preferred Stock, the Warrants or
      the Additional Warrants, and any shares of capital stock issued or
      issuable from time to time (with any adjustments) in replacement of, in
      exchange for, as a distribution on, or otherwise in respect of such
      Conversion Shares or the Warrant Shares; provided, however, that any such
      shares shall cease to be Registrable Securities at such time as they may
      be sold by the Holder without registration under Rule 144(k) without
      limitation as to volume; provided further, however, that, for purposes of
      Section 2 of this Agreement, the term "Registrable Securities" shall not
      include any such shares held by Goldman, Sachs & Co. (or any other Holder
      that may be deemed a broker-dealer under the Exchange Act) unless the
      Company (i) meets the eligibility requirements for a primary offering on
      Form S-3 as provided in General Instruction I.B.1 of Form S-3 at the time
      of filing a Registration Statement on Form S-3 or (ii) shall prepare and
      file with the Commission a Registration Statement on Form S-1 or Form S-2
      as required by the last sentence of Section 2(a).

            "Registration Deadline" means the ninetieth (90th) calendar day
      following the Closing Date; provided, however, that if the staff of the
      Commission undertakes a full review (or a full accounting review) of the
      Registration Statement, or if the Commission takes the position that
      offering by the Holders does not meet the eligibility requirements for
      filing a Registration Statement on Form S-3, then in either such case the
      Registration Deadline shall be the one hundred and twentieth (120th)
      calendar day following the Closing Date.

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            "Registration Period" has the meaning set forth in paragraph 2(b)
      below.

            "Registration Statement" means a registration statement or
      statements prepared in compliance with the Securities Act and pursuant to
      Rule 415 under the Securities Act ("Rule 415") or any successor rule
      providing for the offering of securities on a continuous or delayed basis.

2.    REGISTRATION.

      (a) Registration Statement. On or before the Filing Deadline, the Company
shall prepare and file with the Commission a Registration Statement on Form S-3
pursuant to Rule 415 under the Securities Act covering the resale of a number of
shares of Registrable Securities equal to one hundred twenty-five percent (125%)
of the aggregate number of shares of Common Stock issuable on the Closing Date
pursuant to (i) the conversion of the Preferred Stock and the Additional
Preferred Stock and (ii) the exercise of the Warrants and the Additional
Warrants (such number to be determined using the Conversion Price or Exercise
Price, as applicable, in effect on such date and without regard to any
restriction on the ability of any Holder to convert such Holder's Preferred
Stock or Additional Preferred Stock or exercise such Holder's Warrant or
Additional Warrant as of such date). Such Registration Statement shall state, to
the extent permitted by Rule 416 under the Securities Act, that it also covers
such indeterminate number of additional shares of Common Stock as may become
issuable upon the conversion of the Preferred Stock or Additional Preferred
Stock and exercise of the Warrants or Additional Warrants in order to (x)
satisfy the Company's obligation to pay dividends on the Preferred Stock, (y)
prevent dilution resulting from stock splits, stock dividends or similar events
and (z) effect required anti-dilution adjustments pursuant to the terms of the
Articles of Amendment, Warrants and Additional Warrants. Notwithstanding the
foregoing, if the Company or the offering by the Holders does not meet the
eligibility requirements for filing a Registration Statement on Form S-3, the
Company shall instead prepare and file with the Commission a Registration
Statement on Form S-1 or Form S-2 and, in such event, the Company shall, as
promptly as practicable (but in no event later than thirty (30) days) after the
Company or the offering by the Holders, as the case may be, meets the
eligibility requirements to use Form S-3 for the resale of Registrable
Securities by each Holder (other than Goldman, Sachs & Co. or any other Holder
that may be deemed to be a broker-dealer under the Exchange Act), re-file such
Registration Statement, or file a new Registration Statement on Form S-3
covering at least the number of shares then registered on the existing
Registration Statement (and not previously sold pursuant to the existing
Registration Statement or pursuant to Rule 144 under the Securities Act ("Rule
144")).

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      (b) Effectiveness. The Company shall use its best efforts to cause the
Registration Statement to become effective as soon as practicable following the
filing thereof, but in no event later than the Registration Deadline. The
Company shall respond promptly to any and all comments made by the staff of the
Commission on the Registration Statement, and shall submit to the Commission,
within three (3) Business Days after the Company learns that no review of the
Registration Statement will be made by the staff of the Commission or that the
staff of the Commission has no further comments on the Registration Statement
(or, if the Company would be required to include financial statements more
current than those included in its filing with the Commission, three (3)
Business Days after the date on which the Company is required to file an annual
report on Form 10-K (or Form 10-KSB) or quarterly report on form 10-Q (or Form
10-QSB), as the case may be, including such updated financial statements, after
permitted extension if a Form 12b-25 is timely filed), as the case may be, a
request for acceleration of the effectiveness of the Registration Statement to a
time and date not later than two (2) Business Days after the submission of such
request. The Company will maintain the effectiveness of the Registration
Statement until the earlier to occur of (i) the date on which all of the
Registrable Securities eligible for resale thereunder have been publicly sold
pursuant to either the Registration Statement or Rule 144 and (ii) the date on
which all of the Registrable Securities remaining to be sold under the
Registration Statement (in the reasonable opinion of counsel to the Company) may
be immediately sold to the public under Rule 144(k) under the Securities Act or
any successor provision ("Rule 144(k)") (the period beginning on the Closing
Date and ending on the earlier to occur of (i) or (ii) above being referred to
herein as the "Registration Period").

      (c) Registration Default. If (i) the Registration Statement is not filed
on or before the Filing Deadline or declared effective by the Commission on or
before the Registration Deadline, (ii) after the Registration Statement has been
declared effective by the Commission, sales of Registrable Securities cannot be
made by a Holder under the Registration Statement for any reason not within the
exclusive control of such Holder (other than such Registrable Securities as are
then freely saleable pursuant to Rule 144(k)); provided, that the failure of the
Registration Statement to remain effective after the two (2) year anniversary of
its initial effective date thereof if at such time all of the Conversion Shares
issued or issuable upon conversion of the Preferred Shares are freely saleable
pursuant to Rule 144(k), shall not be a deemed to be a Registration Default
hereunder, (iii) the Common Stock ceases to be listed on the Nasdaq National
Market, the Nasdaq SmallCap Market or the New York Stock Exchange, (iv) the
Company fails to submit a request for acceleration within the time frames
required hereby, or (v) an amendment or supplement to the Registration
Statement, or a new registration statement, required to be filed pursuant to the
terms of paragraph 4(k) below is not filed on or before the date required by
such paragraph (each of the foregoing clauses (i), (ii), (iii), (iv) and (v)
being referred to herein as a "Registration Default"), the Company shall make a
cash payment to each Holder, for each thirty (30) day period or part thereof in
which a Registration Default exists, equal to the product of (A) the Per Share
Default Payment Amount times (B) the sum of (I) the number of Conversion Shares
into which the Preferred Shares then held by such Holder are convertible at the
Conversion Price then in effect plus (II) the number of Warrant Shares for which
the Warrants then held by such Holder are exercisable at the Exercise Price then
in effect, in each case without regard to any limitation on such conversion or
exercise contained in the Articles of Amendment, the Warrants or any other
Transaction Documents. Each such payment shall be made within five (5) Business
Days following the last day of each calendar month in which a Registration
Default existed. Any such payment shall be in addition to any other remedies
available to each Holder at law or in equity, whether pursuant to the terms
hereof, the Securities Purchase Agreement, the Articles of Amendment, or
otherwise. Notwithstanding the foregoing, a Registration Default under clauses
(ii), (iii) or (v) shall not be deemed to be a Fundamental Change (under and as
defined in the Articles of Amendment) giving rise to a Mandatory Redemption
right under the Articles of Amendment provided the Company has used its best
efforts to prevent the occurrence of such Registration Default and continues
after the occurrence thereof to use its best efforts to cure such Registration
Default.

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<PAGE>

      (d) Allocation of Conversion Shares and Warrant Shares. The initial number
of Conversion Shares and Warrant Shares included in any Registration Statement
and each increase in the number thereof included therein shall be allocated pro
rata among the Holders based on the aggregate number of Registrable Securities
issuable to each Holder at the time the Registration Statement covering such
initial number of Registrable Securities or increase thereof is declared
effective by the Commission (such number to be determined using the Conversion
Price or Exercise Price, as applicable, in effect at such time and without
regard to any restriction on the ability of a Holder to convert such Holder's
Preferred Stock or exercise such Holder's Warrant as of such date). In the event
that a Holder sells or otherwise transfers any of such Holder's Registrable
Securities, each transferee shall be allocated the portion of the then remaining
number of Registrable Securities included in such Registration Statement
allocable to the transferor.

      (e) Registration of Other Securities. During the period beginning on the
date hereof and ending on the Effective Date, the Company shall, except as
described in Schedule 3.12 to the Securities Purchase Agreement, refrain from
filing any registration statement (other than (i) a Registration Statement filed
hereunder, (ii) a registration statement on Form S-8 with respect to stock
option plans and agreements and stock plans currently in effect and disclosed in
the Securities Purchase Agreement or the schedules thereto or (iii) a
Registration Statement filed pursuant to the Goldman Sachs Registration Rights
Agreement). Other than as specified on such Schedule 3.12, in no event shall the
Company include any securities other than the Registrable Securities on any
Registration Statement filed by the Company on behalf of the Holders pursuant to
the terms of this Section 2.

      (f) Other. If, at the time the Registration Statement is filed, the
Company does not meet the eligibility requirements for a primary offering on
Form S-3 as provided in General instruction I.B.1 of Form S-3, the Common Stock
Dividend Condition and Mandatory Conversion Conditions set forth in the Articles
of Incorporation shall be deemed to be satisfied as to Goldman, Sachs & Co. (and
any other Holder that may be deemed to be a broker-dealer under the Exchange
Act) if the Registration Statement is effective and available to each Holder,
even though the Registrable Securities held by Goldman, Sachs & Co. (or any
other Holder that may be deemed to be a broker-dealer under the Exchange Act)
are not included in the Registration Statement.

3.    PIGGYBACK REGISTRATION.

      If at any time prior to the expiration of the Registration Period, (i) the
Company proposes to register shares of Common Stock under the Securities Act in
connection with the public offering of such shares for cash (a "Proposed
Registration") other than (x) a registration statement on Form S-8 or Form S-4
or any successor or other forms promulgated for similar purposes or (y) a
Registration Statement on Form S-3 filed pursuant to Section 2 hereof, and (ii)
a Registration Statement covering the sale of all of the Registrable Securities
held by any Holder is not then effective and available for sales thereof by such
Holder (each, an "Unregistered Holder"), the Company shall, at such time,
promptly give each Unregistered Holder written notice of such Proposed
Registration. Each Unregistered Holder shall have ten (10) Business Days from
its receipt of such notice to deliver to the Company a written request
specifying the amount of Registrable Securities that such Holder intends to sell
and such Holder's intended method of distribution. Upon receipt of such request,
the Company shall use its best efforts to cause all Registrable Securities which
the Company has been requested to register to be registered under the Securities
Act to the extent necessary to permit their sale or other disposition in
accordance with the intended methods of distribution specified in the request of
each Unregistered Holder; provided, however, that the Company shall have the
right to postpone or withdraw any registration effected pursuant to this Section
3 without obligation to the Holders. If, in connection with any underwritten
public offering for the account of the Company or for stockholders of the
Company that have contractual rights to require the Company to register shares
of Common Stock, the managing underwriter(s) thereof shall impose a limitation
on the number of shares of Common Stock which may be included in a registration
statement because, in the judgment of such underwriter(s), marketing or other
factors dictate such limitation is necessary to facilitate such offering, then,
after inclusion of shares as to which the Company is as of the date hereof
contractually obligated to register the Company shall be obligated to include in
the registration statement, on a pro rata basis with other holders of
registration rights outstanding prior to the date hereof, only such limited
portion of the Registrable Securities with respect to which each Holder has
requested inclusion hereunder as such underwriter(s) shall permit. Any exclusion
of Registrable Securities shall be made pro rata among the Holders seeking to
include Registrable Securities in a registration statement, in proportion to the
number of Registrable Securities sought to be included by such Holders;
provided, however, that the Company shall not exclude any Registrable Securities
unless the Company has first excluded all outstanding securities, the holders of
which are not entitled to inclusion of such securities in the registration
statement or are not entitled to pro rata inclusion with the Registrable
Securities; and provided, further, that, after giving effect to the immediately
preceding proviso, any exclusion of Registrable Securities shall be made pro
rata with holders of other securities having the right to include such
securities in the registration statement.

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4.    OBLIGATIONS OF THE COMPANY.

      In addition to performing its obligations hereunder, including without
limitation those pursuant to Section 2 above, the Company shall, with respect to
the Registration Statement:

      (a) prepare and file with the Commission such amendments and supplements
to the Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act or to maintain the effectiveness of the Registration Statement
during the Registration Period, or as may be reasonably requested by a Holder in
order to incorporate information concerning such Holder or such Holder's
intended method of distribution;

      (b) promptly following the Closing, secure the listing of all Registrable
Securities on the Nasdaq National Market System or the Nasdaq SmallCap Market
(if that is the Principal Market) and provide each Holder with reasonable
evidence thereof;

      (c) furnish to each Holder such number of copies of the prospectus
included in the Registration Statement, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as such Holder may reasonably request in order to facilitate the disposition of
such Holder's Registrable Securities;

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<PAGE>

      (d) use commercially reasonable efforts to register or qualify the
Registrable Securities under the securities or "blue sky" laws of such
jurisdictions within the United States as shall be reasonably requested from
time to time by a Holder, and do any and all other acts or things which may be
necessary or advisable to enable such Holder to consummate the public sale and
re-sale or other disposition of the Registrable Securities in such
jurisdictions; provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such jurisdiction or to subject
itself to taxation in any such jurisdiction;

      (e) in the event of an underwritten public offering of the Registrable
Securities, enter into (together with all Holders proposing to distribute
Registrable Securities through such underwriting) and perform its obligations
under an underwriting agreement, in usual and customary form reasonably
acceptable to the Company, with the managing underwriter of such offering;

      (f) notify each Holder immediately after becoming aware of the occurrence
of any event (but shall not, without the prior written consent of such Holder,
disclose to such Holder any facts or circumstances constituting material
non-public information) as a result of which the prospectus included in the
Registration Statement, as then in effect, contains an untrue statement of
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and as promptly as practicable prepare and file
with the Commission and furnish to each Holder a reasonable number of copies of
a supplement or an amendment to such prospectus as may be necessary so that such
prospectus does not contain an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing;

      (g) use all commercially reasonable efforts to prevent the issuance of any
stop order or other order suspending the effectiveness of the Registration
Statement and, if such an order is issued, to obtain the withdrawal thereof at
the earliest possible time and to notify each Holder of the issuance of such
order and the resolution thereof;

      (h) furnish to each Holder, on the date that the Registration Statement,
or any successor registration statement, becomes effective, a letter, dated such
date, of outside counsel representing the Company (and reasonably acceptable to
such Holder) addressed to such Holder, confirming such effectiveness and, to the
knowledge of such counsel, the absence of any stop order;

      (i) provide to each Holder and its representatives the reasonable
opportunity to conduct a reasonable inquiry of the Company's financial and other
records during normal business hours and make available its officers, directors
and employees for questions regarding information which such Holder may
reasonably request in order to fulfill any due diligence obligation on its part,
subject, however, to the execution and delivery to the Company by such Holder of
a customary non-disclosure agreement and provided that the Company shall not
disclose any material non-public information to such Holder absent such Holder's
written request therefor;

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      (j) permit counsel for each Holder, at such Holder's expense, to review
the Registration Statement and all amendments and supplements thereto, and any
comments made by the staff of the Commission concerning such Holder and/or the
transactions contemplated by the Transaction Documents and the Company's
responses thereto, within a reasonable period of time prior to the filing
thereof with the Commission (or, in the case of comments made by the staff of
the Commission, within a reasonable period of time following the receipt thereof
by the Company);

      (k) in the event that, at any time, the number of shares available under
the Registration Statement is insufficient to cover one hundred five percent
(105%) of the Registrable Securities issuable under the Preferred Stock,
Additional Preferred Stock, Warrants and Additional Warrants (such number to be
determined using the Conversion Price or Exercise Price, as applicable, in
effect at such time and without regard to any restriction on the ability of any
Holder to convert such Holder's Preferred Stock or exercise such Holder's
Warrant) the Company shall promptly amend the Registration Statement or file a
new registration statement, in any event as soon as practicable, but not later
than the twentieth (20th) day following notice from a Holder of the occurrence
of such event, so that the Registration Statement or such new registration
statement, or both, covers no less than one hundred twenty-five percent (125%)
of the Registrable Securities issuable thereunder. The Company shall use its
best efforts to cause such amendment and/or new Registration Statement to become
effective as soon as practicable following the filing thereof. Any Registration
Statement filed pursuant to this paragraph 4(k) shall state that, to the extent
permitted by Rule 416 under the Securities Act, such Registration Statement also
covers such indeterminate number of additional shares of Common Stock as may
become issuable upon conversion of the Preferred Stock and Additional Preferred
Stock and exercise of the Warrants and Additional Warrants in order to prevent
dilution resulting from stock splits, stock dividends or similar events. Unless
and until such amendment or new Registration Statement becomes effective, each
Holder shall have the rights described in paragraph 2(c) above;

      (l) hold in confidence and not make any disclosure of information
concerning an Investor provided to the Company if at the time such information
is provided the Company is notified of the confidential nature of such
information unless (i) disclosure of such information is necessary to comply
with federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any Registration
Statement that includes such Investor's Registrable Securities, (iii) the
release of such information is ordered pursuant to a subpoena or other order
from a court or governmental body of competent jurisdiction, (iv) such
information has been made generally available to the public other than by
disclosure in violation of this or any other agreement, or (v) such Investor
consents to the form and content of any such disclosure. The Company shall, upon
learning that disclosure of any information concerning an Investor is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to such Investor prior to making such disclosure, and
cooperate with the Investor, at the Investor's expense, in taking appropriate
action to prevent disclosure of, or to obtain a protective order for, such
information;

      (m) provide a transfer agent and registrar, which may be a single entity,
for the Registrable Securities not later than the effective date of the
Registration Statement; and

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      (n) comply with all applicable laws related to a Registration Statement
and offering and sale of securities and all applicable rules and regulations of
governmental authorities in connection therewith (including, without limitation,
the Securities Act and the Exchange Act and the rules and regulations thereunder
promulgated by the Commission).

5.    OBLIGATIONS OF EACH HOLDER.

      In connection with the registration of Registrable Securities pursuant to
a Registration Statement, each Holder shall:

      (a) timely furnish to the Company in writing such information regarding
itself and the intended method of disposition of such Registrable Securities as
the Company shall reasonably request in order to effect the registration
thereof;

      (b) upon receipt of any notice from the Company of the happening of any
event of the kind described in paragraphs 4(f) or 4(g), immediately discontinue
any sale or other disposition of such Registrable Securities pursuant to such
Registration Statement until the filing of an amendment or supplement as
described in paragraph 4(f) or withdrawal of the stop order referred to in
paragraph 4(g), and use commercially reasonable efforts to maintain the
confidentiality of such notice and its contents;

      (c) in the event of an underwritten offering of such Registrable
Securities in which such Holder participates, enter into a customary and
reasonable underwriting agreement and execute such other documents as the
Company and/or the managing underwriter for such offering may reasonably
request;

      (d) to the extent required by applicable law, deliver a prospectus to the
purchaser of such Registrable Securities;

      (e) notify the Company when it has sold all of the Registrable Securities
held by it; and

      (f) notify the Company in the event that any information supplied by such
Holder in writing for inclusion in such Registration Statement or related
prospectus is untrue or omits to state a material fact required to be stated
therein or necessary to make such information not misleading in light of the
circumstances then existing; immediately discontinue any sale or other
disposition of such Registrable Securities pursuant to such Registration
Statement until the filing of an amendment or supplement to such prospectus as
may be necessary so that such prospectus does not contain an untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing; and use commercially reasonable efforts to assist
the Company as may be appropriate to make such amendment or supplement effective
for such purpose.

6.    INDEMNIFICATION.

      In the event that any Registrable Securities are included in a
Registration Statement under this Agreement:

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      (a) To the extent permitted by law, the Company shall indemnify and hold
harmless each Holder, the officers, directors, employees, agents and
representatives of such Holder, and each person, if any, who controls such
Holder within the meaning of the Securities Act or the Securities Exchange Act
of 1934, as amended (the "Exchange Act") (collectively, the "Holder Indemnified
Parties"), including in such Holder Indemnified Parties' capacity as a broker
dealer, against any losses, claims, damages, liabilities or reasonable
out-of-pocket expenses (whether joint or several) (collectively, including legal
or other expenses reasonably incurred in connection with investigating or
defending same, "Losses"), insofar as any such Losses arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained in such Registration Statement, including any preliminary prospectus
or final prospectus contained therein or any amendments or supplements thereto,
or (ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. Subject
to the provisions of paragraph 6(c) below, the Company will reimburse such
Holder, and each such officer, director, employee, agent, representative or
controlling person, for any legal or other out-of-pocket expenses as reasonably
incurred by any such entity or person in connection with investigating or
defending any Loss; provided, however, that the foregoing indemnity shall not
apply to amounts paid in settlement of any Loss if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld), nor shall the Company be obligated to indemnify any person for any
Loss to the extent that such Loss (i) is based upon and is in conformity with
written information furnished by such person expressly for use in such
Registration Statement, (ii) is based on a failure of such person to deliver or
cause to be delivered the final prospectus contained in the Registration
Statement and made available by the Company, if such delivery is required by
applicable law, or (iii) relates to the sale of shares by such Holder after the
Company has notified such Holder that an event described in Section 4(f) has
occurred and has not yet provided the Holder with a supplemental or new
prospectus for delivery. The Company shall not enter into any settlement of a
Loss that does not provide for the unconditional release of such Holder from all
liabilities and obligations relating to such Loss.

      (b) To the extent permitted by law, each Holder who is named in such
Registration Statement as a selling stockholder, acting severally and not
jointly, shall indemnify and hold harmless the Company, the officers, directors,
employees, agents and representatives of the Company, and each person, if any,
who controls the Company within the meaning of the Securities Act or the
Exchange Act, against any Losses to the extent (and only to the extent) that any
such Losses (i) are based upon and in conformity with written information
furnished by such Holder expressly for use in such Registration Statement, (ii)
are based on a failure of such Holder to deliver or cause to be delivered the
final prospectus contained in the Registration Statement and made available by
the Company, if such delivery is required by applicable law, or (iii) relate to
the sale of shares by such Holder after the Company has notified such Holder
that an event described in Section 4(f) has occurred and has not yet provided
the Holder with a supplemental or new prospectus for delivery. Subject to the
provisions of paragraph 6(c) below, such Holder will reimburse any legal or
other expenses as reasonably incurred by the Company and any such officer,
director, employee, agent, representative, or controlling person, in connection
with investigating or defending any such Loss; provided, however, that the
foregoing indemnity shall not apply to amounts paid in settlement of any such
Loss if such settlement is effected without the consent of such Holder (which
consent shall not be unreasonably withheld); and provided, further, that, in no
event shall any indemnity under this paragraph 6(b) exceed the net proceeds
resulting from the sale of the Registrable Securities sold by such Holder under
such Registration Statement.

                                       10
<PAGE>

      (c) Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in and to assume the defense thereof with counsel
mutually satisfactory to the parties; provided, however, that an indemnified
party shall have the right to retain its own counsel, with the reasonably
incurred fees and expenses of one such counsel for all indemnified parties to be
paid by the indemnifying party, if representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate under
applicable standards of professional conduct due to actual or potential
conflicting interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, to the extent prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party
under this Section 6 with respect to such action, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this Section 6 or
with respect to any other action unless the indemnifying party is materially
prejudiced as a result of not receiving such notice.

      (d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 6 is unavailable or insufficient to hold harmless an indemnified
party for any reason, the Company and each Holder agree, severally and not
jointly, to contribute to the aggregate Losses to which the Company or such
Holder may be subject in such proportion as is appropriate to reflect the
relative fault of the Company and such Holder in connection with the statements
or omissions which resulted in such Losses; provided, however, that in no case
shall such Holder be responsible for any amount in excess of the net proceeds
resulting from the sale of the Registrable Securities sold by it under the
Registration Statement. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information provided
by the Company or by such Holder. The Company and each Holder agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person who controls a
Holder within the meaning of either the Securities Act or the Exchange Act and
each officer, director, employee, agent or representative of such Holder shall
have the same rights to contribution as such Holder, and each person who
controls the Company within the meaning of either the Securities Act or the
Exchange Act and each officer, director, employee, agent or representative of
the Company shall have the same rights to contribution as the Company, subject
in each case to the applicable terms and conditions of this paragraph (d).

                                       11
<PAGE>

      (e) The obligations of the Company and each Holder under this Section 6
shall survive the conversion of the Preferred Stock and exercise of the Warrants
in full, the completion of any offering or sale of Registrable Securities
pursuant to a Registration Statement under this Agreement, or otherwise.

7.    REPORTS.

      With a view to making available to each Holder the benefits of Rule 144
and any other similar rule or regulation of the Commission that may at any time
permit such Holder to sell securities of the Company to the public without
registration, the Company agrees (until all of the Registrable Securities have
been sold under a Registration Statement or pursuant to Rule 144) to:

      (a) make and keep public information available, as those terms are
understood and defined in Rule 144;

      (b) file with the Commission in a timely manner all reports and other
documents required of the Company under Section 13 of the Exchange Act; and

      (c) furnish to such Holder, so long as such Holder owns any Registrable
Securities, promptly upon written request (i) a written statement by the
Company, if true, that it has complied with the reporting requirements of Rule
144, the Securities Act and the Exchange Act, (ii) to the extent not publicly
available through the Commission's EDGAR database, a copy of the most recent
annual or quarterly report of the Company and such other reports and documents
so filed by the Company, and (iii) such other information as may be reasonably
requested by such Holder in connection with such Holder's compliance with any
rule or regulation of the Commission which permits the selling of any such
securities without registration.

8.    MISCELLANEOUS.

      (a) Expenses of Registration. Except as otherwise provided in the
Securities Purchase Agreement, all reasonable expenses, other than underwriting
discounts and commissions and fees and expenses of counsel and other advisors to
each Holder, incurred in connection with the registrations, filings or
qualifications described herein, including (without limitation) all
registration, filing and qualification fees, printers' and accounting fees, the
fees and disbursements of counsel for the Company, and the fees and
disbursements incurred in connection with the opinion and letter described in
paragraph 4(h) hereof, shall be borne by the Company.

      (b) Amendment; Waiver. Except as expressly provided herein, neither this
Agreement nor any term hereof may be amended or waived except pursuant to a
written instrument executed by the Company and the Holders of at least
two-thirds (2/3) of the Registrable Securities into which all of the Preferred
Stock, Additional Preferred Stock, Warrants and Additional Warrants then
outstanding are convertible or exercisable (without regard to any limitation on
such conversion or exercise). Any amendment or waiver effected in accordance
with this paragraph shall be binding upon each Holder, each future Holder and
the Company. The failure of any party to exercise any right or remedy under this
Agreement or otherwise, or the delay by any party in exercising such right or
remedy, shall not operate as a waiver thereof.

                                       12
<PAGE>

      (c) Notices. Any notice, demand or request required or permitted to be
given by the Company or a Holder pursuant to the terms of this Agreement shall
be in writing and shall be deemed delivered (i) when delivered personally or by
verifiable facsimile transmission, unless such delivery is made on a day that is
not a Business Day, in which case such delivery will be deemed to be made on the
next succeeding Business Day, (ii) on the next Business Day after timely
delivery to a reputable overnight courier and (iii) on the Business Day actually
received if deposited in the U.S. mail (certified or registered mail, return
receipt requested, postage prepaid), addressed as follows:

      If to the Company:

      MediaBay, Inc.
      2 Ridgedale Avenue
      Cedar Knolls, New Jersey 07927
      Attn: Chief Executive Officer and
            Chief Financial Officer
      Tel: (973) 539-9528
      Fax: (973) 539-1273

      with a copy to:

      Blank Rome LLP
      The Chrysler Building
      405 Lexington Ave.
      New York, NY 10174
      Attn: Robert J. Mittman
      Tel: (212) 885-5000
      Fax: (212) 885-5001

and if to a Holder, to such address as shall be designated by such Holder in
writing to the Company.

      (d) Assignment. Upon the transfer of any Preferred Stock, Additional
Preferred Stock, Warrants, Additional Warrants or Registrable Securities by a
Holder, the rights of such Holder hereunder with respect to such securities so
transferred shall be assigned automatically to the transferee thereof, and such
transferee shall thereupon be deemed to be a "Holder" for purposes of this
Agreement, as long as: (i) the Company is, within a reasonable period of time
following such transfer, furnished with written notice of the name and address
of such transferee, (ii) the transferee agrees in writing with the Company to be
bound by all of the provisions hereof, and (iii) such transfer is made in
accordance with the applicable requirements of the Securities Purchase
Agreement; provided, however, that the registration rights granted under this
Agreement shall not be assigned to any person or entity that receives any
Preferred Stock, Additional Preferred Stock, Warrants, Additional Warrants or
Registrable Securities in a public transaction pursuant to an effective
registration statement under the Securities Act or pursuant to Rule 144.

      (e) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which together shall be deemed one
and the same instrument. This Agreement, once executed by a party, may be
delivered to any other party hereto by facsimile transmission.

                                       13
<PAGE>

      (f) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within the State of New York.

      (g) Holder of Record. A person is deemed to be a Holder whenever such
person owns or is deemed to own of record Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two or more persons
with respect to the same Registrable Securities, the Company shall act upon the
basis of instructions, notice or election received from the record owner of such
Registrable Securities.

      (h) Entire Agreement. This Agreement, the Goldman Sachs Registration
Rights Agreement, the Securities Purchase Agreement, the Articles of Amendment,
the Warrants, the Preferred Warrants and the other Transaction Documents
constitute the entire agreement among the parties hereto with respect to the
subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the Goldman Sachs Registration Rights Agreement, the
Securities Purchase Agreement, the Articles of Amendment, the Warrants, the
Preferred Warrants and the other Transaction Documents supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof, including, without limitation, any
nondisclosure or similar agreement heretofore entered into between the Company
and any Investor.

      (i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

      (j) Third Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.

                           [Signature Pages to Follow]

                                       14
<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.

                                      MEDIABAY, INC.

                                      By: /s/ Jeffrey A. Dittus
                                          --------------------------------------
                                          Name:  Jeffrey A. Dittus
                                          Title:    Chief Executive Officer

                                      SATELLITE STRATEGIC FINANCE PARTNERS, LTD.

                                      By: Satellite Asset Management, L.P.,
                                          its Manager

                                      By: /s/ Simon Raykher
                                          --------------------------------------
                                          Name:  Simon Raykher
                                          Title: General Counsel

                                      SATELLITE STRATEGIC FINANCE ASSOCIATES,
                                      LLC

                                      By: Satellite Asset Management, L.P.,
                                          its Manager

                                      By: /s/ Simon Raykher
                                          --------------------------------------
                                          Name:  Simon Raykher
                                          Title: General Counsel

<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.

                                      MEDIABAY, INC.

                                      By: /s/ Jeffrey A. Dittus
                                          --------------------------------------
                                          Name:  Jeffrey A. Dittus
                                          Title:    Chief Executive Officer

                                      CCM MASTER QUALIFIED FUND, LTD.

                                      By: Coghill Capital Management, LLC,
                                          its Manager

                                      By: /s/ Clint D. Coghill
                                          --------------------------------------
                                          Name: Clint D. Coghill
                                          Title: President & Chief Investment
                                                 Officer
<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.

                                        MEDIABAY, INC.

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

                                        GOLDMAN, SACHS & CO.

                                        By: /s/ Scott Lange
                                            ------------------------------------
                                            Name: Scott Lange
                                            Title: Managing Director

<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.

                                        MEDIABAY, INC.

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

                                        RADCLIFFE SPC, LTD. for and on behalf
                                          of the Class A Convertible Crossover
                                          Segregated Portfolio

                                        By: RG Capital Management, L.P., its
                                            Investment Manager

                                        By: RGC Management Company, LLC

                                        By: /s/ Gerald F. Stahlecker
                                            ------------------------------------
                                            Name: Gerald F. Stahlecker
                                            Title: Managing Director

<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.

                                        MEDIABAY, INC.

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

                                        FOREST HILL SELECT FUND, L.P.

                                        By: Forest Hill Capital, its Manager

                                        By: /s/ Mark Lee
                                            ------------------------------------
                                            Name: Mark Lee
                                            Title: President

<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.

                                        MEDIABAY, INC.

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

                                        FOREST HILL SELECT OFFSHORE, LTD.

                                        By: Forest Hill Capital, its Manager

                                        By: /s/ Mark Lee
                                            ------------------------------------
                                            Name: Mark Lee
                                            Title: President

<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.

                                        MEDIABAY, INC.

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

                                        LONE OAK PARTNERS, L.P.

                                        By: Forest Hill Capital, its Manager

                                        By: /s/ Mark Lee
                                            ------------------------------------
                                            Name: Mark Lee
                                            Title: President

<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.

                                        MEDIABAY, INC.

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

                                        PALISADES MASTER FUND, L.P.

                                        By: Discovery Management Ltd.,
                                            its Manager

                                        By: /s/ David K. Sims
                                            ------------------------------------
                                            Name: David K. Sims
                                            Title: Authorized SignatoryEXHIBIT 4.2
                          REGISTRATION RIGHTS AGREEMENT

      This REGISTRATION RIGHTS AGREEMENT (this  "AGREEMENT"),  dated as of March
21  2005,  is  by  and  between  MEDIABAY,  INC.,  a  Florida  corporation  (the
"COMPANY"), and Goldman, Sachs & Co. (the "INVESTOR").

      A. The Company has agreed,  on the terms and subject to the conditions set
forth in the  Securities  Purchase  Agreement,  dated as of March 21,  2005 (the
"SECURITIES  PURCHASE  AGREEMENT"),  (i) to issue and sell to the  Investor  and
other  investors  named  therein  (the  "OTHER  INVESTORS")  shares  of Series D
Convertible  Preferred Stock (the "PREFERRED  STOCK"), an Investor Warrant and a
Preferred Warrant. Capitalized terms used herein and not otherwise defined shall
have the respective meanings set forth in the Securities Purchase Agreement.

      B. The  shares  of  Preferred  Stock  are  convertible  into  shares  (the
"CONVERSION  SHARES") of the Company's  common stock,  no par value (the "COMMON
STOCK").  The Investor Warrant is exercisable to purchase shares of Common Stock
(the "WARRANT  SHARES").  The Preferred  Warrant is  exercisable  into shares of
Preferred Stock (the "ADDITIONAL  PREFERRED STOCK") and an Investor Warrant (the
"ADDITIONAL WARRANT").

      C. In order to induce the Investor to enter into the  Securities  Purchase
Agreement,  the Company has agreed to provide certain  registration rights under
the  Securities  Act of 1933,  as  amended  (the  "SECURITIES  ACT"),  and under
applicable state securities laws.

      D. The  Company,  the  Investor  and the Other  Investors  entered  into a
registration  rights  agreement,  dated March 21, 2005 (the "FIRST  REGISTRATION
RIGHTS  AGREEMENT"),  which provides Investor with certain  registration  rights
under the Securities Act and under  applicable state securities laws in addition
to the registration rights provided herein.

      In  consideration  of the Investor  entering into the Securities  Purchase
Agreement,   and  other  good  and  valuable  consideration,   the  receipt  and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1.    DEFINITIONS.

      For  purposes  of this  Agreement,  the  following  terms  shall  have the
meanings specified:

            "BUSINESS  DAY" means any day other than a  Saturday,  a Sunday or a
      day on which the  Commission or commercial  banks located in New York City
      are authorized or permitted by law to close.

            "COMMISSION" means the Securities and Exchange Commission.

<PAGE>

            "EFFECTIVE DATE" means the date on which the Registration  Statement
      is declared effective by the Commission.

            "FILING DEADLINE" means the date which is forty-five (45) days after
      (i) the date on which the Company meets the eligibility requirements for a
      primary offering on Form S-3 as provided in General  Instruction  I.B.1 of
      Form S-3 or (ii) the date the Investor  delivers a Demand Notice  pursuant
      to Section 2(b), as the case may be. Notwithstanding the foregoing, in the
      event the  Registration  Statement  on Form S-3 filed  pursuant to Section
      2(a) of the First  Registration  Rights Agreement  relating to Registrable
      Securities held by the Other Investors has not been declared  effective by
      the Commission  prior to the Filing Deadline set forth above,  such Filing
      Deadline  shall be extended  to the date which is fifteen  (15) days after
      such effective date.

            "HOLDER"  means any person  owning or having  the right to  acquire,
      through  conversion  of the  Preferred  Stock or exercise of the  Investor
      Warrant or  otherwise,  Registrable  Securities,  including  initially the
      Investor and thereafter any permitted assignee thereof.

            "PER SHARE  DEFAULT  PAYMENT  AMOUNT" means  $0.0055.  The Per Share
      Default Payment Amount shall be proportionately adjusted in the event of a
      stock split, reverse stock split or similar event.

            "REGISTRABLE  SECURITIES" means the Conversion  Shares,  the Warrant
      Shares and any other shares of Common Stock issuable pursuant to the terms
      of the Preferred  Stock,  the  Additional  Preferred  Stock,  the Investor
      Warrant or the Additional Warrant,  and any shares of capital stock issued
      or issuable from time to time (with any adjustments) in replacement of, in
      exchange  for,  as a  distribution  on, or  otherwise  in  respect of such
      Conversion Shares or the Warrant Shares; provided,  however, that any such
      shares shall cease to be  Registrable  Securities at such time as they may
      be sold by the  Holder  without  registration  under Rule  144(k)  without
      limitation as to volume.

            "REGISTRATION  DEADLINE"  means (i) with  respect to a  Registration
      Statement  on Form S-3 filed  pursuant to Section  2(a),  the  forty-fifth
      (45th) calendar day following the Filing Deadline; provided, however, that
      if the  staff  of the  Commission  undertakes  a  full  review  (or a full
      accounting  review) of the Registration  Statement,  then in such case the
      Registration Deadline shall be the ninetieth (90th) calendar day following
      the Filing  Deadline and (ii) with respect to a Registration  Statement on
      Form S-1 filed pursuant to Section 2(b), the ninetieth (90th) calendar day
      following the Filing Deadline; provided, however, that if the staff of the
      Commission  undertakes a full review (or a full accounting  review) of the
      Registration Statement,  then in such case the Registration Deadline shall
      be the one hundred  twentieth  (120th)  calendar day  following the Filing
      Deadline.

            "REGISTRATION  PERIOD" has the meaning set forth in  paragraph  2(c)
      below.

            "REGISTRATION   STATEMENT"   means  a   registration   statement  or
      statements  prepared in compliance with the Securities Act and pursuant to
      Rule 415 under the  Securities  Act  ("RULE  415") or any  successor  rule
      providing for the offering of securities on a continuous or delayed basis.

                                       2
<PAGE>

      2.    REGISTRATION.

      (a) Form S-3  Registration  Statement.  In the event the Company meets the
eligibility  requirements  for a primary  offering  on Form S-3 as  provided  in
General  Instruction  I.B.1 of Form S-3, the Company shall prepare and file with
the Commission,  on or before the Filing Deadline,  a Registration  Statement on
Form S-3 pursuant to Rule 415 under the  Securities Act covering the resale of a
number of shares of  Registrable  Securities  equal to one  hundred  twenty-five
percent (125%) of the aggregate number of shares of Common Stock issuable on the
Closing  Date  pursuant to (i) the  conversion  of the  Preferred  Stock and the
Additional Preferred Stock and (ii) the exercise of the Investor Warrant and the
Additional  Warrant (such number to be determined  using the Conversion Price or
Exercise Price, as applicable,  in effect on such date and without regard to any
restriction  on the  ability of the Holder to convert  such  Holder's  Preferred
Stock or Additional  Preferred Stock or exercise such Holder's  Investor Warrant
or Additional Warrant as of such date). Such Registration Statement shall state,
to the  extent  permitted  by Rule 416 under the  Securities  Act,  that it also
covers such  indeterminate  number of  additional  shares of Common Stock as may
become  issuable  upon the  conversion  of the  Preferred  Stock  or  Additional
Preferred  Stock and exercise of the Investor  Warrant or Additional  Warrant in
order to (x) satisfy the Company's  obligation to pay dividends on the Preferred
Stock,  (y) prevent  dilution  resulting from stock splits,  stock  dividends or
similar events and (z) effect required anti-dilution adjustments pursuant to the
terms of the Articles of Amendment, Investor Warrant and Additional Warrant.

      (b) Demand Registration.

            (i)  Commencing  one hundred and eighty (180) days after the Closing
Date,  the Holder may, by written notice (a "DEMAND  NOTICE"),  require that the
Company prepare and file with the Commission,  on or before the Filing Deadline,
a Registration Statement on Form S-1 to register under the Securities Act all or
any portion of the Holder's  Registrable  Securities in the manner  specified in
the Demand Notice.

            (ii) The Company  shall use its best  efforts to register  under the
Securities  Act, in accordance  with the method of disposition  specified in the
Demand Notice,  which shall not be an underwritten  offering unless agreed to in
writing  by the  Company  upon  receipt  of such  Demand  Notice,  the number of
Registrable  Securities  specified in the Demand  Notice.  The Company  shall be
obligated to register Registrable  Securities pursuant to Section 2(a)(i) on one
occasion only; provided that such obligation shall be deemed satisfied only when
a Registration  Statement covering all Registrable  Securities  specified in the
Demand Notice  received as aforesaid,  for sale in accordance with the method of
disposition  specified in the Demand  Notice,  shall have become  effective  and
remained effective for the period provided in Section 2(c).

      (c)  Effectiveness.  The Company  shall use its best  efforts to cause the
Registration  Statement to become effective as soon as practicable following the
filing  thereof,  but in no event  later  than the  Registration  Deadline.  The
Company shall respond  promptly to any and all comments made by the staff of the
Commission on the  Registration  Statement,  and shall submit to the Commission,
within  three (3) Business  Days after the Company  learns that no review of the
Registration  Statement  will be made by the staff of the Commission or that the
staff of the Commission has no further  comments on the  Registration  Statement
(or, if the  Company  would be required  to include  financial  statements  more
current  than  those  included  in its  filing  with the  Commission,  three (3)
Business  Days after the date on which the Company is required to file an annual
report on Form 10-K (or Form 10-KSB) or  quarterly  report on form 10-Q (or Form
10-QSB), as the case may be, including such updated financial statements,  after
permitted  extension  if a Form 12b-25 is timely  filed),  as the case may be, a
request for acceleration of the effectiveness of the Registration Statement to a
time and date not later than two (2) Business Days after the  submission of such
request.  The  Company  will  maintain  the  effectiveness  of the  Registration
Statement  until  the  earlier  to occur  of (i) the  date on  which  all of the
Registrable  Securities  eligible for resale  thereunder have been publicly sold
pursuant  to either the  Registration  Statement  or Rule 144,  (ii) the date on
which  all  of  the  Registrable  Securities  remaining  to be  sold  under  the
Registration Statement (in the reasonable opinion of counsel to the Company) may
be immediately  sold to the public under Rule 144(k) under the Securities Act or
any successor  provision ("RULE 144(K)") and (iii) in the case of a Registration
Statement  on Form S-1,  the date which is ninety (90) days after the  Effective
Date (the  period  beginning  on the  Closing  Date and ending on the earlier to
occur of (i), (ii) or (iii) above being referred to herein as the  "REGISTRATION
PERIOD").

                                       3
<PAGE>

            (d) Registration  Default. If (i) the Registration  Statement is not
filed on or before the Filing  Deadline or declared  effective by the Commission
on or before the Registration  Deadline,  (ii) after the Registration  Statement
has been declared effective by the Commission,  sales of Registrable  Securities
cannot be made by a Holder under the  Registration  Statement for any reason not
within  the  exclusive  control  of such  Holder  (other  than such  Registrable
Securities as are then freely saleable pursuant to Rule 144(k));  provided, that
the failure of the Registration  Statement on Form S-3 filed pursuant to Section
2(a) to remain  effective  after  the two (2) year  anniversary  of its  initial
effective  date thereof if at such time all of the  Conversion  Shares issued or
issuable upon conversion of the Preferred Shares are freely saleable pursuant to
Rule 144(k), shall not be a deemed to be a Registration Default hereunder, (iii)
the Common Stock ceases to be listed on the Nasdaq National  Market,  the Nasdaq
SmallCap Market or the New York Stock Exchange, (iv) the Company fails to submit
a request for  acceleration  within the time frames required  hereby,  or (v) an
amendment or supplement to the  Registration  Statement,  or a new  registration
statement, required to be filed pursuant to the terms of paragraph 3(k) below is
not  filed  on or  before  the  date  required  by such  paragraph  (each of the
foregoing  clauses (i), (ii),  (iii), (iv) and (v) being referred to herein as a
"REGISTRATION  DEFAULT"),  the Company shall make a cash payment to each Holder,
for each thirty (30) day period or part thereof in which a Registration  Default
exists,  equal to the product of (A) the Per Share Default  Payment Amount times
(B) the sum of (I) the number of  Conversion  Shares  into  which the  Preferred
Shares then held by such Holder are convertible at the Conversion  Price then in
effect  plus (II) the number of Warrant  Shares for which the  Investor  Warrant
then held by such Holder are  exercisable  at the Exercise Price then in effect,
in each case without  regard to any  limitation  on such  conversion or exercise
contained  in the  Articles  of  Amendment,  the  Investor  Warrant or any other
Transaction Documents.  Each such payment shall be made within five (5) Business
Days  following  the last  day of each  calendar  month in which a  Registration
Default  existed.  Any such payment  shall be in addition to any other  remedies
available  to each  Holder at law or in equity,  whether  pursuant  to the terms
hereof,  the  Securities  Purchase  Agreement,  the  Articles of  Amendment,  or
otherwise.  Notwithstanding the foregoing,  a Registration Default under clauses
(ii), (iii) or (v) shall not be deemed to be a Fundamental  Change (under and as
defined in the  Articles of  Amendment)  giving  rise to a Mandatory  Redemption
right under the  Articles of  Amendment  provided  the Company has used its best
efforts to prevent the  occurrence  of such  Registration  Default and continues
after the occurrence  thereof to use its best efforts to cure such  Registration
Default.

                                       4
<PAGE>

            (e) Allocation of Conversion Shares and Warrant Shares.  The initial
number of  Conversion  Shares and Warrant  Shares  included in any  Registration
Statement  and each  increase in the number  thereof  included  therein shall be
allocated  pro  rata  among  the  Holders  based  on  the  aggregate  number  of
Registrable  Securities  issuable  to each  Holder at the time the  Registration
Statement  covering such initial  number of  Registrable  Securities or increase
thereof is declared  effective by the  Commission  (such number to be determined
using the Conversion  Price or Exercise Price, as applicable,  in effect at such
time and without regard to any restriction on the ability of a Holder to convert
such Holder's  Preferred Stock or exercise such Holder's  Investor Warrant as of
such date). In the event that a Holder sells or otherwise  transfers any of such
Holder's Registrable Securities,  each transferee shall be allocated the portion
of the  then  remaining  number  of  Registrable  Securities  included  in  such
Registration Statement allocable to the transferor.

            (f) Registration of Other Securities. During the period beginning on
the date hereof and ending on the Effective  Date, the Company shall,  except as
described in Schedule 3.12 to the Securities  Purchase  Agreement,  refrain from
filing any registration statement (other than (i) a Registration Statement filed
hereunder,  (ii) a  registration  statement  on Form S-8 with  respect  to stock
option plans and agreements and stock plans currently in effect and disclosed in
the  Securities   Purchase  Agreement  or  the  schedules  thereto  or  (iii)  a
Registration   Statement  filed  pursuant  to  the  First  Registration   Rights
Agreement). Other than as specified on such Schedule 3.12, in no event shall the
Company  include any  securities  other than the  Registrable  Securities on any
Registration Statement filed by the Company on behalf of the Holders pursuant to
the terms of this Section 2.

      3.    OBLIGATIONS OF THE COMPANY.

      In addition to performing its  obligations  hereunder,  including  without
limitation those pursuant to Section 2 above, the Company shall, with respect to
the Registration Statement:

            (a)  prepare  and  file  with the  Commission  such  amendments  and
supplements to the Registration  Statement and the prospectus used in connection
with  the  Registration  Statement  as may  be  necessary  to  comply  with  the
provisions  of  the  Securities  Act or to  maintain  the  effectiveness  of the
Registration  Statement during the Registration  Period, or as may be reasonably
requested by a Holder in order to incorporate information concerning such Holder
or such Holder's intended method of distribution;

            (b)  promptly  following  the  Closing,  secure  the  listing of all
Registrable  Securities  on the  Nasdaq  National  Market  System or the  Nasdaq
SmallCap  Market (if that is the Principal  Market) and provide each Holder with
reasonable evidence thereof;

            (c) furnish to each  Holder such number of copies of the  prospectus
included in the Registration Statement,  including a preliminary prospectus,  in
conformity with the requirements of the Securities Act, and such other documents
as such Holder may reasonably  request in order to facilitate the disposition of
such Holder's Registrable Securities;

                                       5
<PAGE>

            (d) use commercially  reasonable  efforts to register or qualify the
Registrable  Securities  under  the  securities  or  "blue  sky"  laws  of  such
jurisdictions  within the United  States as shall be reasonably  requested  from
time to time by a Holder,  and do any and all other acts or things  which may be
necessary or advisable to enable such Holder to  consummate  the public sale and
re-sale  or  other   disposition   of  the   Registrable   Securities   in  such
jurisdictions;  provided  that the Company  shall not be required in  connection
therewith  or as a  condition  thereto to qualify  to do  business  or to file a
general  consent to service  of process in any such  jurisdiction  or to subject
itself to taxation in any such jurisdiction;

            (e)  in  the  event  of  an  underwritten  public  offering  of  the
Registrable  Securities,  enter into  (together  with all Holders  proposing  to
distribute  Registrable  Securities  through such  underwriting) and perform its
obligations  under an  underwriting  agreement,  in  usual  and  customary  form
reasonably  acceptable  to the Company,  with the managing  underwriter  of such
offering;

            (f) notify  each  Holder  immediately  after  becoming  aware of the
occurrence  of any event (but shall not,  without the prior  written  consent of
such  Holder,  disclose to such Holder any facts or  circumstances  constituting
material non-public information) as a result of which the prospectus included in
the Registration  Statement,  as then in effect, contains an untrue statement of
material fact or omits to state a material fact required to be stated therein or
necessary  to make  the  statements  therein  not  misleading  in  light  of the
circumstances  then existing,  and as promptly as  practicable  prepare and file
with the Commission and furnish to each Holder a reasonable  number of copies of
a supplement or an amendment to such prospectus as may be necessary so that such
prospectus  does not contain an untrue  statement  of  material  fact or omit to
state a material  fact  required to be stated  therein or  necessary to make the
statements therein not misleading in light of the circumstances then existing;

            (g) use all commercially  reasonable efforts to prevent the issuance
of  any  stop  order  or  other  order  suspending  the   effectiveness  of  the
Registration Statement and, if such an order is issued, to obtain the withdrawal
thereof at the earliest  possible time and to notify each Holder of the issuance
of such order and the resolution thereof;

            (h)  furnish  to each  Holder,  on the date  that  the  Registration
Statement, or any successor registration statement, becomes effective, a letter,
dated such date, of outside  counsel  representing  the Company (and  reasonably
acceptable  to  such  Holder)   addressed  to  such  Holder,   confirming   such
effectiveness  and, to the  knowledge of such  counsel,  the absence of any stop
order;

            (i) provide to each Holder and its  representatives  the  reasonable
opportunity to conduct a reasonable inquiry of the Company's financial and other
records during normal business hours and make available its officers,  directors
and  employees  for  questions  regarding  information  which  such  Holder  may
reasonably request in order to fulfill any due diligence obligation on its part,
subject, however, to the execution and delivery to the Company by such Holder of
a customary  non-disclosure  agreement  and provided  that the Company shall not
disclose any material non-public information to such Holder absent such Holder's
written request therefor;

                                       6
<PAGE>

            (j) permit  counsel for each Holder,  at such Holder's  expense,  to
review the  Registration  Statement and all amendments and supplements  thereto,
and any  comments  made by the staff of the  Commission  concerning  such Holder
and/or  the  transactions  contemplated  by the  Transaction  Documents  and the
Company's  responses  thereto,  within a reasonable  period of time prior to the
filing  thereof  with the  Commission  (or, in the case of comments  made by the
staff of the  Commission,  within a  reasonable  period  of time  following  the
receipt thereof by the Company);

            (k) in the event that, at any time,  the number of shares  available
under the  Registration  Statement  is  insufficient  to cover one hundred  five
percent (105%) of the Registrable Securities issuable under the Preferred Stock,
Additional Preferred Stock, Investor Warrant and Additional Warrant (such number
to be determined using the Conversion Price or Exercise Price, as applicable, in
effect at such time and without regard to any  restriction on the ability of any
Holder to convert  such  Holder's  Preferred  Stock or  exercise  such  Holder's
Investor Warrant) the Company shall promptly amend the Registration Statement or
file a new registration statement, in any event as soon as practicable,  but not
later  than the  twentieth  (20th)  day  following  notice  from a Holder of the
occurrence  of such  event,  so that  the  Registration  Statement  or such  new
registration  statement,  or both,  covers no less than one hundred  twenty-five
percent (125%) of the Registrable  Securities issuable  thereunder.  The Company
shall use its best  efforts to cause  such  amendment  and/or  new  Registration
Statement  to become  effective  as soon as  practicable  following  the  filing
thereof. Any Registration  Statement filed pursuant to this paragraph 3(k) shall
state that, to the extent  permitted by Rule 416 under the Securities  Act, such
Registration  Statement  also covers  such  indeterminate  number of  additional
shares of Common Stock as may become  issuable upon  conversion of the Preferred
Stock and Additional  Preferred  Stock and exercise of the Investor  Warrant and
Additional  Warrant in order to prevent  dilution  resulting  from stock splits,
stock  dividends  or similar  events.  Unless and until  such  amendment  or new
Registration  Statement  becomes  effective,  each Holder  shall have the rights
described in paragraph 2(d) above;

            (l) hold in confidence  and not make any  disclosure of  information
concerning an Investor  provided to the Company if at the time such  information
is  provided  the  Company  is  notified  of the  confidential  nature  of  such
information  unless (i)  disclosure of such  information  is necessary to comply
with federal or state  securities  laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any  Registration
Statement  that  includes  such  Investor's  Registrable  Securities,  (iii) the
release of such  information  is ordered  pursuant  to a subpoena or other order
from  a  court  or  governmental  body  of  competent  jurisdiction,  (iv)  such
information  has been made  generally  available  to the  public  other  than by
disclosure  in violation of this or any other  agreement,  or (v) such  Investor
consents to the form and content of any such disclosure. The Company shall, upon
learning that disclosure of any information  concerning an Investor is sought in
or by a court or  governmental  body of competent  jurisdiction or through other
means, give prompt notice to such Investor prior to making such disclosure,  and
cooperate with the Investor,  at the Investor's  expense,  in taking appropriate
action to prevent  disclosure  of, or to obtain a  protective  order  for,  such
information;

            (m) provide a transfer  agent and  registrar,  which may be a single
entity, for the Registrable  Securities not later than the effective date of the
Registration Statement; and

                                       7
<PAGE>

            (n)  comply  with all  applicable  laws  related  to a  Registration
Statement  and  offering and sale of  securities  and all  applicable  rules and
regulations  of  governmental  authorities in connection  therewith  (including,
without  limitation,  the  Securities Act and the Exchange Act and the rules and
regulations thereunder promulgated by the Commission).

      4.    OBLIGATIONS OF EACH HOLDER.

      In connection with the registration of Registrable  Securities pursuant to
a Registration Statement, each Holder shall:

            (a) timely  furnish  to the  Company  in  writing  such  information
regarding  itself and the intended  method of  disposition  of such  Registrable
Securities  as the  Company  shall  reasonably  request  in order to effect  the
registration thereof;

            (b) upon receipt of any notice from the Company of the  happening of
any  event  of the  kind  described  in  paragraphs  3(f) or  3(g),  immediately
discontinue  any  sale  or  other  disposition  of such  Registrable  Securities
pursuant to such  Registration  Statement  until the filing of an  amendment  or
supplement  as  described  in  paragraph  3(f) or  withdrawal  of the stop order
referred  to in  paragraph  3(g),  and use  commercially  reasonable  efforts to
maintain the confidentiality of such notice and its contents;

            (c) in the event of an  underwritten  offering  of such  Registrable
Securities  in which  such  Holder  participates,  enter  into a  customary  and
reasonable  underwriting  agreement  and  execute  such other  documents  as the
Company  and/or  the  managing  underwriter  for such  offering  may  reasonably
request;

            (d) to the extent required by applicable  law,  deliver a prospectus
to the purchaser of such Registrable Securities;

            (e)  in the  event  a  Holder  is  deemed  to be an  underwriter  in
connection with the offering of Registrable Securities,  such Holder consents to
the inclusion of customary disclosure in the Registration Statement with respect
thereto;

            (f)  notify  the  Company  when it has sold  all of the  Registrable
Securities held by it; and

            (g) notify the Company in the event that any information supplied by
such Holder in writing for inclusion in such  Registration  Statement or related
prospectus  is untrue or omits to state a material  fact  required  to be stated
therein or necessary to make such  information  not  misleading  in light of the
circumstances  then  existing;   immediately   discontinue  any  sale  or  other
disposition  of  such  Registrable  Securities  pursuant  to  such  Registration
Statement  until the filing of an amendment or supplement to such  prospectus as
may be necessary so that such prospectus does not contain an untrue statement of
material fact or omit to state a material fact required to be stated  therein or
necessary  to make  the  statements  therein  not  misleading  in  light  of the
circumstances then existing;  and use commercially  reasonable efforts to assist
the Company as may be appropriate to make such amendment or supplement effective
for such purpose.

                                       8
<PAGE>

      5.    INDEMNIFICATION.

      In  the  event  that  any   Registrable   Securities  are  included  in  a
Registration Statement under this Agreement:

            (a) To the extent  permitted by law, the Company shall indemnify and
hold  harmless  each Holder,  the  officers,  directors,  employees,  agents and
representatives  of such  Holder,  and each person,  if any,  who controls  such
Holder within the meaning of the Securities  Act or the Securities  Exchange Act
of 1934, as amended (the "EXCHANGE ACT") (collectively,  the "Holder Indemnified
Parties"),  including in such Holder  Indemnified  Parties' capacity as a broker
dealer,  against  any  losses,  claims,   damages,   liabilities  or  reasonable
out-of-pocket expenses (whether joint or several) (collectively, including legal
or other  expenses  reasonably  incurred in  connection  with  investigating  or
defending same, "LOSSES"),  insofar as any such Losses arise out of or are based
upon (i) any untrue  statement or alleged  untrue  statement of a material  fact
contained in such Registration  Statement,  including any preliminary prospectus
or final prospectus  contained therein or any amendments or supplements thereto,
or (ii) the  omission  or alleged  omission  to state  therein a  material  fact
required to be stated therein,  or necessary to make the statements  therein, in
light of the circumstances  under which they were made, not misleading.  Subject
to the  provisions  of paragraph  5(c) below,  the Company will  reimburse  such
Holder,  and each such officer,  director,  employee,  agent,  representative or
controlling person, for any legal or other out-of-pocket  expenses as reasonably
incurred  by any such  entity or  person in  connection  with  investigating  or
defending any Loss;  provided,  however,  that the foregoing indemnity shall not
apply to amounts paid in settlement  of any Loss if such  settlement is effected
without the  consent of the Company  (which  consent  shall not be  unreasonably
withheld),  nor shall the Company be obligated  to indemnify  any person for any
Loss to the extent  that such Loss (i) is based upon and is in  conformity  with
written  information  furnished  by  such  person  expressly  for  use  in  such
Registration Statement,  (ii) is based on a failure of such person to deliver or
cause  to be  delivered  the  final  prospectus  contained  in the  Registration
Statement  and made  available by the Company,  if such  delivery is required by
applicable  law, or (iii) relates to the sale of shares by such Holder after the
Company has  notified  such Holder that an event  described  in Section 3(f) has
occurred  and  has  not yet  provided  the  Holder  with a  supplemental  or new
prospectus  for delivery.  The Company shall not enter into any  settlement of a
Loss that does not provide for the unconditional release of such Holder from all
liabilities and obligations relating to such Loss.

            (b) To the extent permitted by law, each Holder who is named in such
Registration  Statement  as a  selling  stockholder,  acting  severally  and not
jointly, shall indemnify and hold harmless the Company, the officers, directors,
employees,  agents and representatives of the Company,  and each person, if any,
who  controls  the  Company  within  the  meaning of the  Securities  Act or the
Exchange Act, against any Losses to the extent (and only to the extent) that any
such  Losses  (i) are based  upon and in  conformity  with  written  information
furnished by such Holder expressly for use in such Registration Statement,  (ii)
are based on a failure of such  Holder to deliver or cause to be  delivered  the
final prospectus  contained in the Registration  Statement and made available by
the Company,  if such delivery is required by applicable law, or (iii) relate to
the sale of shares by such Holder  after the Company  has  notified  such Holder
that an event  described  in Section  3(f) has occurred and has not yet provided
the Holder with a supplemental  or new  prospectus for delivery.  Subject to the
provisions  of paragraph  5(c) below,  such Holder will  reimburse  any legal or
other  expenses as  reasonably  incurred  by the  Company and any such  officer,
director, employee, agent, representative,  or controlling person, in connection
with  investigating  or defending  any such Loss;  provided,  however,  that the
foregoing  indemnity  shall not apply to amounts paid in  settlement of any such
Loss if such  settlement  is effected  without the consent of such Holder (which
consent shall not be unreasonably withheld); and provided,  further, that, in no
event shall any  indemnity  under this  paragraph  5(b) exceed the net  proceeds
resulting from the sale of the Registrable  Securities sold by such Holder under
such Registration Statement.

                                       9
<PAGE>

            (c)  Promptly  after  receipt  by an  indemnified  party  under this
Section  5  of  notice  of  the  commencement  of  any  action   (including  any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made  against any  indemnifying  party under this Section 5, deliver to
the  indemnifying  party a written  notice of the  commencement  thereof and the
indemnifying  party  shall  have the right to  participate  in and to assume the
defense thereof with counsel  mutually  satisfactory  to the parties;  provided,
however,  that an  indemnified  party  shall  have the right to  retain  its own
counsel,  with the reasonably incurred fees and expenses of one such counsel for
all indemnified  parties to be paid by the indemnifying party, if representation
of such  indemnified  party by the counsel  retained by the  indemnifying  party
would be inappropriate under applicable standards of professional conduct due to
actual or potential conflicting interests between such indemnified party and any
other  party  represented  by such  counsel in such  proceeding.  The failure to
deliver written notice to the indemnifying party within a reasonable time of the
commencement  of any such action,  to the extent  prejudicial  to its ability to
defend such action,  shall relieve such  indemnifying  party of any liability to
the indemnified party under this Section 5 with respect to such action,  but the
omission so to deliver written notice to the indemnifying party will not relieve
it of any liability  that it may have to any  indemnified  party  otherwise than
under this Section 5 or with respect to any other action unless the indemnifying
party is materially prejudiced as a result of not receiving such notice.

            (d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 5 is unavailable or insufficient to hold harmless an indemnified
party for any  reason,  the Company and each  Holder  agree,  severally  and not
jointly,  to  contribute  to the  aggregate  Losses to which the Company or such
Holder  may be subject  in such  proportion  as is  appropriate  to reflect  the
relative fault of the Company and such Holder in connection  with the statements
or omissions which resulted in such Losses;  provided,  however, that in no case
shall such Holder be  responsible  for any amount in excess of the net  proceeds
resulting  from  the sale of the  Registrable  Securities  sold by it under  the
Registration  Statement.  Relative  fault shall be  determined  by  reference to
whether any alleged untrue statement or omission relates to information provided
by the Company or by such  Holder.  The  Company  and each Holder  agree that it
would not be just and  equitable if  contribution  were  determined  by pro rata
allocation or any other method of allocation  which does not take account of the
equitable  considerations  referred to above.  Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation (within the
meaning  of  Section  11(f)  of  the  Securities   Act)  shall  be  entitled  to
contribution   from  any   person   who  is  not   guilty  of  such   fraudulent
misrepresentation.  For  purposes of this  Section 5, each person who controls a
Holder within the meaning of either the  Securities  Act or the Exchange Act and
each officer,  director,  employee, agent or representative of such Holder shall
have the same  rights  to  contribution  as such  Holder,  and each  person  who
controls  the  Company  within the meaning of either the  Securities  Act or the
Exchange Act and each officer,  director,  employee,  agent or representative of
the Company shall have the same rights to contribution  as the Company,  subject
in each case to the applicable terms and conditions of this paragraph (d).

                                       10
<PAGE>

            (e) The  obligations  of the  Company  and each  Holder  under  this
Section 5 shall survive the  conversion  of the Preferred  Stock and exercise of
the  Investor  Warrant  in  full,  the  completion  of any  offering  or sale of
Registrable   Securities  pursuant  to  a  Registration   Statement  under  this
Agreement, or otherwise.

      6.    REPORTS; LEGENDS.

            (a) With a view to making  available  to each Holder the benefits of
Rule 144 and any other similar rule or regulation of the Commission  that may at
any time  permit  such  Holder to sell  securities  of the Company to the public
without  registration,   the  Company  agrees  (until  all  of  the  Registrable
Securities  have been sold under a  Registration  Statement  or pursuant to Rule
144) to:

                  (i) make and keep public information available, as those terms
are understood and defined in Rule 144;

                  (ii) file with the  Commission  in a timely manner all reports
and other  documents  required of the Company  under  Section 13 of the Exchange
Act; and

                  (iii) furnish to such Holder,  so long as such Holder owns any
Registrable Securities, promptly upon written request (A) a written statement by
the Company,  if true,  that it has complied with the reporting  requirements of
Rule 144,  the  Securities  Act and the  Exchange  Act,  (B) to the  extent  not
publicly available through the Commission's  EDGAR database,  a copy of the most
recent  annual or  quarterly  report of the Company  and such other  reports and
documents  so filed by the  Company,  and (C) such other  information  as may be
reasonably  requested by such Holder in connection with such Holder's compliance
with any rule or regulation of the  Commission  which permits the selling of any
such securities without registration.

            (b) Each Holder  understands that the certificates  representing the
Registrable   Securities  shall  bear  at  issuance  a  restrictive   legend  in
substantially the following form:

            "THE  SECURITIES  REPRESENTED  BY THIS  CERTIFICATE  HAVE  NOT  BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES  ACT"),
OR THE  SECURITIES  LAWS OF ANY STATE,  AND MAY NOT BE OFFERED OR SOLD  UNLESS A
REGISTRATION  STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS SHALL HAVE BECOME  EFFECTIVE  WITH REGARD  THERETO,  OR AN  EXEMPTION  FROM
REGISTRATION  UNDER THE SECURITIES ACT AND APPLICABLE  STATE  SECURITIES LAWS IS
AVAILABLE  IN  CONNECTION  WITH  SUCH  OFFER OR SALE.  FURTHER,  THE  SECURITIES
REPRESENTED  BY THIS  CERTIFICATE  ARE SUBJECT TO THE TERMS AND  CONDITIONS OF A
CERTAIN REGISTRATION RIGHTS AGREEMENT BY AND BETWEEN THE HOLDER AND THE COMPANY.
COPIES OF SUCH  AGREEMENT MAY BE OBTAINED UPON WRITTEN  REQUEST TO THE SECRETARY
OF THE COMPANY. NOTWITHSTANDING THE FOREGOING BUT SUBJECT TO COMPLIANCE WITH THE
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE  STATE  SECURITIES LAWS, THESE
SECURITIES  AND THE SECURITIES  ISSUABLE UPON EXERCISE  HEREOF MAY BE PLEDGED OR
HYPOTHECATED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED
BY SUCH SECURITIES."

                                       11
<PAGE>

            Notwithstanding  the  foregoing,  it is agreed that, at the time (A)
the resale or transfer  (including  without  limitation  a pledge) of any of the
Registrable  Securities  is  registered  pursuant to an  effective  Registration
Statement,  (B) such Registrable Securities have been sold pursuant to Rule 144,
or (C) such Registrable  Securities are eligible for resale under Rule 144(k) or
any successor  provision and the Holder  represents in writing that it is not an
affiliate of the Company and is eligible to use such rule for public  resales of
such Registrable  Securities,  the Company shall issue new certificates  without
such legend to the Holder upon request.

      7.    MISCELLANEOUS.

            (a) Expenses of  Registration.  Except as otherwise  provided in the
Securities Purchase Agreement,  all reasonable expenses, other than underwriting
discounts and commissions and fees and expenses of counsel and other advisors to
each  Holder,  incurred  in  connection  with  the  registrations,   filings  or
qualifications    described   herein,   including   (without   limitation)   all
registration,  filing and qualification fees, printers' and accounting fees, the
fees  and   disbursements  of  counsel  for  the  Company,   and  the  fees  and
disbursements  incurred in connection  with the opinion and letter  described in
paragraph 3(h) hereof, shall be borne by the Company.

            (b) Amendment;  Waiver. Except as expressly provided herein, neither
this Agreement nor any term hereof may be amended or waived except pursuant to a
written  instrument  executed  by  the  Company  and  the  Holders  of at  least
two-thirds  (2/3) of the Registrable  Securities into which all of the Preferred
Stock,  Additional Preferred Stock, Investor Warrant and Additional Warrant then
outstanding are convertible or exercisable  (without regard to any limitation on
such  conversion  or exercise).  Any amendment or waiver  effected in accordance
with this  paragraph  shall be binding upon each Holder,  each future Holder and
the Company. The failure of any party to exercise any right or remedy under this
Agreement or otherwise,  or the delay by any party in  exercising  such right or
remedy, shall not operate as a waiver thereof.

            (c) Notices. Any notice,  demand or request required or permitted to
be given by the  Company  or a Holder  pursuant  to the terms of this  Agreement
shall be in writing and shall be deemed delivered (i) when delivered  personally
or by verifiable facsimile  transmission,  unless such delivery is made on a day
that is not a Business  Day,  in which case such  delivery  will be deemed to be
made on the next  succeeding  Business  Day, (ii) on the next Business Day after
timely delivery to a reputable  overnight  courier and (iii) on the Business Day
actually  received if deposited in the U.S. mail (certified or registered  mail,
return receipt requested, postage prepaid), addressed as follows:

                                       12
<PAGE>

            If to the Company:

            MediaBay, Inc.
            2 Ridgedale Avenue
            Cedar Knolls, New Jersey 07927
            Attn:    Chief Executive Officer and
                     Chief Financial Officer
            Tel:     (973) 539-9528
            Fax:     (973) 539-1273

            with a copy to:

            Blank Rome LLP
            The Chrysler Building
            405 Lexington Ave.
            New York, NY 10174
            Attn:    Robert J. Mittman
            Tel:     (212) 885-5000
            Fax:     (212) 885-5001

and if to a Holder,  to such  address as shall be  designated  by such Holder in
writing to the Company.

            (d) Assignment. Upon the transfer of any Preferred Stock, Additional
Preferred Stock, Investor Warrant,  Additional Warrant or Registrable Securities
by a Holder, the rights of such Holder hereunder with respect to such securities
so transferred shall be assigned  automatically to the transferee  thereof,  and
such transferee  shall thereupon be deemed to be a "Holder" for purposes of this
Agreement,  as long as: (i) the Company is,  within a reasonable  period of time
following such  transfer,  furnished with written notice of the name and address
of such transferee, (ii) the transferee agrees in writing with the Company to be
bound by all of the  provisions  hereof,  and  (iii)  such  transfer  is made in
accordance  with  the  applicable   requirements  of  the  Securities   Purchase
Agreement;  provided,  however,  that the registration rights granted under this
Agreement  shall not be  assigned  to any  person or entity  that  receives  any
Preferred  Stock,  Additional  Preferred  Stock,  Investor  Warrant,  Additional
Warrant  or  Registrable  Securities  in a  public  transaction  pursuant  to an
effective  registration  statement  under the Securities Act or pursuant to Rule
144.

            (e)  Counterparts.  This Agreement may be executed in  counterparts,
each of which shall be deemed an original,  and all of which  together  shall be
deemed one and the same  instrument.  This Agreement,  once executed by a party,
may be delivered to any other party hereto by facsimile transmission.

            (f) Governing Law. This Agreement shall be governed by and construed
in  accordance  with the laws of the State of New York  applicable  to contracts
made and to be performed entirely within the State of New York.

            (g)  Holder of  Record.  A person is deemed to be a Holder  whenever
such person owns or is deemed to own of record  Registrable  Securities.  If the
Company receives conflicting instructions, notices or elections from two or more
persons with respect to the same Registrable  Securities,  the Company shall act
upon the basis of  instructions,  notice or  election  received  from the record
owner of such Registrable Securities.

                                       13
<PAGE>

            (h) Entire Agreement.  This Agreement, the First Registration Rights
Agreement,  the Securities  Purchase Agreement,  the Articles of Amendment,  the
Investor  Warrant,  the Preferred  Warrant and the other  Transaction  Documents
constitute  the entire  agreement  among the parties  hereto with respect to the
subject  matter  hereof  and  thereof.  There  are  no  restrictions,  promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the First Registration Rights Agreement, the Securities
Purchase  Agreement,  the  Articles of  Amendment,  the  Investor  Warrant,  the
Preferred  Warrant  and the  other  Transaction  Documents  supersede  all prior
agreements  and  understandings  among the parties  hereto  with  respect to the
subject  matter  hereof  and  thereof,   including,   without  limitation,   any
nondisclosure or similar agreement  heretofore  entered into between the Company
and any Investor.

            (i) Headings.  The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

            (j) Third Party  Beneficiaries.  This  Agreement is intended for the
benefit of the parties  hereto and their  respective  permitted  successors  and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

                           [Signature Pages to Follow]

                                       14
<PAGE>

      IN WITNESS WHEREOF, the undersigned have executed this Registration Rights
Agreement as of the date first-above written.

MEDIABAY, INC.

By:      /s/ Jeffrey A. Dittus
         ----------------------------------
         Name:  Jeffrey A. Dittus
         Title:   Chief Executive Officer

GOLDMAN, SACHS & CO.

By:      /s/ Scott Lange
         ----------------------------------
         Name:  Scott Lange
         Title:   Managing Director

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