Exhibit 10(az)(3)


THE SECURITIES  REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON
CONVERSION  HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.  THE SECURITIES  HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD,
TRANSFERRED  OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT
FOR THE SECURITIES  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR AN OPINION
OF COUNSEL IN FORM,  SUBSTANCE AND SCOPE  REASONABLY  ACCEPTABLE TO THE BORROWER
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT. ANY SUCH SALE,  ASSIGNMENT OR TRANSFER MUST ALSO COMPLY WITH
APPLICABLE STATE SECURITIES LAWS.


                            SECURED CONVERTIBLE NOTE

February 27, 2002                                                    $827,412.26


FOR VALUE RECEIVED, NCT GROUP, INC., a Delaware corporation  (hereinafter called
the  "Borrower")  hereby  promises  to pay to the  order of  Carole  Salkind  or
registered assigns (the "Holder") the sum of Eight Hundred Twenty-Seven Thousand
Four Hundred Twelve Dollars and Twenty-Six  Cents  ($827,412.26) on February 27,
2003,  and to pay  interest  on the  unpaid  principal  balance  hereof at eight
percent (8%) per annum (the "Ordinary  Interest Rate") from the date hereof (the
"Issue  Date") until the same  becomes due and  payable,  whether at maturity or
upon  acceleration or otherwise.  Any amount of principal of or interest on this
Note which is not paid when due shall bear  interest at the rate of five percent
(5%) above the Ordinary Interest Rate (the "Default Interest Rate") from the due
date thereof until the same is paid.  Interest  shall  commence  accruing on the
Issue Date and, to the extent not converted in accordance with the provisions of
Article II below,  shall be payable in arrears on the date the principal  amount
in  respect  of which  it has  accrued  is paid,  whether  at  maturity  or upon
acceleration  or by  prepayment  or  otherwise.  All payments of  principal  and
interest (to the extent not converted in accordance with the terms hereof) shall
be made in lawful money of the United States of America.  All payments  shall be
made at such  address as the Holder  shall  hereafter  give to the  Borrower  by
written notice made in accordance with the provisions of this Note.

The following terms shall apply to this Note:

                                    ARTICLE I

                                  NO PREPAYMENT

     1.1  PREPAYMENT.  This  Note is not  subject  to  prepayment.  This Note is
subject to optional conversion in accordance with Section 2.7 below.

                                   ARTICLE II

     CONVERSION AND PURCHASE RIGHTS; PAYMENT OF OPTION EXERCISE PRICE

     2.1  CONVERSION  RIGHT.  The Holder  shall have the right (the  "Conversion
Right") at any time on or prior to the day this Note is paid in full, to convert
at any time all or from  time to time any  part of the  outstanding  and  unpaid
principal  amount of this Note of at least  $50,000,  or such  lesser  amount as
shall remain unpaid at the time of the conversion,  into, at Holder's  election,
(i) fully paid and  non-assessable  shares of common  stock,  par value $.01 per
share, of the Borrower ("Common Stock"),  at a conversion price of $0.079;  (ii)
fully  paid and  non-assessable  shares of common  stock,  par value  $0.001 per
share, owned by the Borrower, of Pro Tech Communications,  Inc. ("Pro Tech"), at
a  conversion  price of  $0.06;  (iii) if  Artera  Group  International  Limited
("Artera")  has made an initial public  offering of its common stock,  par value
(pound)1.00 per share, fully paid and non-assessable  shares of such stock owned
by the  Borrower,  at a conversion  price equal to the initial  public  offering
price of such stock; (iv) if Distributed Media Corporation International Limited
("DMCI") has made a public offering of its common stock,  par value  (pound)1.00
per share,  fully  paid and  non-assessable  shares of such  stock  owned by the
Borrower,  at a conversion  price equal to the initial public  offering price of
such stock;  and (v) if any other  subsidiary  of the Borrower has made a public
offering of its common stock, fully paid and non-assessable shares of such stock
owned  by the  Borrower,  at a  conversion  price  equal to the  initial  public
offering price of such stock. Upon the surrender of this Note,  accompanied by a
Notice of Conversion of Secured  Convertible Note in the form attached hereto as
Exhibit 1, properly  completed  and duly  executed by the Holder (a  "Conversion
Notice"), the Borrower shall issue and, within five (5) business days after such
surrender of this Note with the Conversion Notice,  deliver to or upon the order
of the Holder (x) that  number of shares of common  stock for the portion of the
Note converted as shall be determined in accordance  herewith and (y) a new Note
in the form hereof for the balance of the principal amount hereof, if any.

     The number of shares of common stock to be issued upon each  conversion  of
this Note shall be determined by dividing (i) the sum of (A) that portion of the
principal  amount  of the Note to be  converted  plus (B) the  "Conversion  Date
Interest" (as defined below), by (ii) the Conversion Price (as defined below) in
effect on the date the  Conversion  Notice is  delivered  to the Borrower by the
Holder.  Conversion Date Interest means the product of (i) the principal  amount
of the Note to be converted,  multiplied by (ii) a fraction (A) the numerator of
which is the number of days elapsed  since the date of issuance of this Note and
(B) the  denominator of which is 365,  multiplied by the Ordinary  Interest Rate
(iii) or, a  fraction  (A) the  numerator  of which is the number of days in the
period  of  time  after  the  occurrence  of an  Event  of  Default  and (B) the
denominator of which is 365, multiplied by the Default Interest Rate.

     2.2 CONVERSION PRICE.

     (a) The "Conversion Price" for conversion into the Borrower's or Pro Tech's
common  shares  shall be the lesser of (i) the average of the closing bid prices
for such  common  shares  on the  NASDAQ  National  Market  or on the  principal
securities  exchange or other securities  market on which such common shares are
then being traded, for the five (5) consecutive Trading Days (as defined herein)
ending one (1)  Trading Day prior to the date the  Conversion  Notice is sent by
the Holder to the Borrower via facsimile (the  "Conversion  Date"),  or (ii) the
conversion price as indicated in Section 2.1 hereof.  The Conversion Price shall
be  subject  to  equitable   adjustments  for  stock  splits,  stock  dividends,
combinations, recapitalization, reclassifications and similar events. The Artera
and DMCI "Conversion  Price" shall be equal to the initial public offering price
of such stock and shall be subject to adjustment  as provided in Section  2.2(b)
hereof. "Trading Day" shall mean any day on which the applicable common stock is
traded  for any  period  on the  NASDAQ  National  Market,  or on the  principal
securities  exchange or other securities  market on which the applicable  common
stock is then being  traded.  In no event shall the NCT and Pro Tech  Conversion
Price for the  Borrower's  or Pro Tech's  common  shares be less than $0.079 and
$0.06 per share, respectively.

     (b) The Conversion  Price for NCT, Pro Tech,  Artera and DMCI shall also be
subject  to  equitable   adjustments   for  stock   splits,   stock   dividends,
combinations, reclassifications and similar events.

     (c) Borrower shall promptly notify each Holder of any adjustment (and event
that requires  adjustment) to the Conversion Price of NCT, Pro Tech,  Artera and
DMCI pursuant to this Section 2.2.

     2.3 AUTHORIZED  SHARES.  The Borrower  covenants that during the period the
Conversion Right exists,  the Borrower will use its best efforts to reserve from
its  authorized  and  unissued  Common  Stock a  sufficient  number of shares to
provide for the issuance of Common Stock upon the full  conversion of this Note.
The Borrower represents that upon issuance; such shares will be duly and validly
issued,  fully paid and  non-assessable.  The Borrower (i) acknowledges  that it
will  irrevocably  instruct its transfer  agent as soon as  practicable to issue
certificates for the Common Stock issuable upon conversion of this Note and (ii)
agrees that its  issuance of this Note shall  constitute  full  authority to its
officers  and  agents,  who  are  charged  with  the  duty  of  executing  stock
certificates,  to execute  and issue the  necessary  certificates  for shares of
Common Stock upon the  conversion  of this Note.  In the event that a sufficient
number of shares cannot be reserved,  Borrower agrees to use its best efforts to
call an annual  meeting of the Borrowers  shareholders  and seek approval for an
increase in the authorized  shares of the Borrowers  Common Stock to a number of
shares sufficient to provide for the full conversion of this Note.

     2.4 METHOD OF  CONVERSION.  Except as  otherwise  provided  in this Note or
agreed to by the Holder,  this Note may be  converted  by the Holder in whole at
any time or in part (provided such partial  conversion is at least $50,000) from
time to time by (i) submitting to the Borrower a Conversion Notice (by facsimile
dispatched on the  Conversion  Date and confirmed by U.S. mail or overnight mail
service sent within two Trading Days thereafter) and (ii) surrendering this Note
with the mailed confirmation of the Conversion Notice at the principal office of
the Borrower.  Upon partial exercise of the conversion rights provided hereby, a
new Note containing the same date and provisions as this Note shall be issued by
the  Borrower to the Holder for the  principal  balance of this Note which shall
not have been converted.  This Note has been issued by the Borrower  pursuant to
the exemption from  registration  provided either by Section 4.2 or Regulation D
under the Securities Act of 1933, as amended (the "Act").

     2.5  RESTRICTIONS  ON SHARES.  The  shares of common  stock  issuable  upon
conversion  of this Note may not be sold or  transferred  unless  (i) they first
shall have been registered  under the Act and applicable  state securities laws,
(ii) the Borrower shall have been furnished with an opinion of legal counsel (in
form, substance and scope reasonably  acceptable to Borrower) to the effect that
such sale or transfer is exempt from the registration requirements of the Act or
(iii) they are sold  pursuant to Rule 144 under the Act.  Each  certificate  for
shares of common stock issuable upon  conversion of this Note that have not been
so registered  and that have not been sold pursuant to an exemption that permits
removal of the legend,  shall bear a legend substantially in the following form,
as appropriate:

          THE  SECURITIES   REPRESENTED  BY  THIS   CERTIFICATE  HAVE  NOT  BEEN
          REGISTERED  UNDER  THE  SECURITIES  ACT  OF  1933,  AS  AMENDED.   THE
          SECURITIES  HAVE BEEN  ACQUIRED  FOR  INVESTMENT  AND MAY NOT BE SOLD,
          TRANSFERRED  OR ASSIGNED IN THE ABSENCE OF AN  EFFECTIVE  REGISTRATION
          STATEMENT  FOR THE  SECURITIES  UNDER THE  SECURITIES  ACT OF 1933, AS
          AMENDED,  OR AN  OPINION  OF  COUNSEL  IN FORM,  SUBSTANCE  AND  SCOPE
          REASONABLY  ACCEPTABLE  TO  THE  BORROWER  THAT  REGISTRATION  IS  NOT
          REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
          ACT.  ANY SUCH SALE,  ASSIGNMENT  OR  TRANSFER  MUST ALSO  COMPLY WITH
          APPLICABLE STATE SECURITIES LAWS.

     Upon the request of a holder of a  certificate  representing  any shares of
common stock  issuable upon  conversion of this Note,  the Borrower shall remove
the  foregoing  legend  from  the  certificate  or  issue  to such  holder a new
certificate  therefor free of any transfer legend, if (i) with such request, the
Borrower  shall  have  received   either  an  opinion  of  counsel,   reasonably
satisfactory  to the Borrower in form,  substance and scope,  to the effect that
any such legend may be removed  from such  certificate,  or (ii) a  registration
statement under the Act covering such  securities is in effect.  Nothing in this
Note shall affect in any way the Holder's  obligations to comply with applicable
securities laws upon the resale of the securities referred to herein.

     Borrower agrees to use its best efforts to register with the Securities and
Exchange  Commission,  no later  than the end of the term of this  Note  (unless
legally  prohibited  from doing so), a number of shares of Common Stock equal to
the  principal  amount  of this  Note  outstanding  at the time of  registration
divided by the  Conversion  Price with  respect to  Borrower.  Such Common Stock
shall not be used, without permission from the Holder, for any other purposes.

     2.6 EFFECT OF MERGER,  CONSOLIDATION,  ETC. If at anytime when this Note is
issued and outstanding,  there shall be any merger,  consolidation,  exchange of
shares, recapitalization, reorganization, or other similar event, as a result of
which shares of Common Stock of the Borrower shall be changed into the same or a
different number of shares of another class or classes of stock or securities of
the Borrower or another  entity,  or in case of any sale or conveyance of all or
substantially  all of the assets of the Borrower other than in connection with a
plan of complete liquidation of the Borrower, then the Holder of this Note shall
thereafter  have the right to receive  upon  conversion  of this Note,  upon the
bases and upon the  terms and  conditions  specified  herein  and in lieu of the
shares of Common Stock then issuable upon  conversion of this Note (assuming the
occurrence of the Amendments whether or not that has then occurred), such stock,
securities  or assets  which the Holder  would have been  entitled to receive in
such  transaction  had  this  Note  been  converted  immediately  prior  to such
transaction,  and in any such  case  appropriate  provisions  shall be made with
respect to the rights and  interests  of the Holder of this Note to the end that
the provisions hereof (including, without limitation,  provisions for adjustment
of the  Conversion  Price or Fixed Pro Tech Exercise  Price and of the number of
shares issuable upon conversion of this Note) shall thereafter be applicable, as
nearly as may be practicable in relation to any securities or assets  thereafter
deliverable  upon the  exercise  hereof.  The  Borrower  shall  not  effect  any
transaction  described  in this  Section 2.6 unless the  resulting  successor or
acquiring  entity  (if not the  Borrower)  assumes  by  written  instrument  the
obligations  of this  Section 2.6. The Holder will have the right if a merger or
consolidation occurs to force the payment in full of this note.

     2.7  OPTIONAL  CONVERSION.  So long as no Event of Default  (as  defined in
Article III below)  shall have  occurred  and be  continuing  the Holder has the
right to require the conversion of the note into stock.

                                   ARTICLE III

                                EVENTS OF DEFAULT

     If of any of the following  events of default (each, an "Event of Default")
shall occur:

     3.1 FAILURE TO PAY PRINCIPAL OR INTEREST. The Borrower fails (i) to pay the
principal hereof when due, whether at maturity upon acceleration or otherwise or
(ii) to pay any installment of interest hereon when due and, in the case of this
clause (ii) only, such failure continues for a period of five (5) days after the
due date thereof;

     3.2  CONVERSION.  The Borrower fails to issue shares of common stock to the
Holder  upon  exercise by the Holder of the  conversion  rights of the Holder in
accordance  with the terms of this Note,  and any such  failure  shall  continue
uncured for five (5) business  days after the Borrower  shall have been notified
thereof in writing by the Holder;

     3.3 BREACH OF  COVENANT.  The Borrower  breaches  any material  covenant or
other  material  term or  condition  of this Note  (other  than as  specifically
provided in Sections 3.1 and 3.2 hereof), and such breach continues for a period
of ten (10) business days after written  notice thereof to the Borrower from the
Holder.

     3.4  BREACH  OF  REPRESENTATIONS  AND  WARRANTIES.  Any  representation  or
warranty  of  the  Borrower  made  herein  or in  any  agreement,  statement  or
certificate given in writing pursuant hereto or in connection  herewith shall be
false or  misleading  in any material  respect when made and the breach of which
would have a material  adverse  effect on the  Borrower or the  prospects of the
Borrower or a material  adverse effect on the Holder or the rights of the Holder
with respect to this Note or the shares of common stock issuable upon conversion
of this Note;

     3.5  RECEIVER OR TRUSTEE.  The Borrower or any  subsidiary  of the Borrower
shall make an assignment  for the benefit of creditors,  or apply for or consent
to the appointment of a receiver or trustee for it or for a substantial  part of
its  property or  business;  or such a receiver or trustee  shall  otherwise  be
appointed;

     3.6 JUDGMENTS. Any money judgment, writ or similar process shall be entered
or filed  against the Borrower or any  subsidiary  of the Borrower or any of its
property or other assets for more than  $250,000,  and shall  remain  unvacated,
unbonded or unstayed for a period of twenty (20) days unless otherwise consented
to by the Holder; or

     3.7  BANKRUPTCY.  Bankruptcy,  insolvency,  reorganization  or  liquidation
proceedings or other  proceedings for relief under any bankruptcy law or any law
for the relief of debtors  shall be instituted by or against the Borrower or any
subsidiary of the Borrower.

     3.8 MATERIAL LOSS OR THEFT.  Material loss of theft,  substantial damage or
destruction or unauthorized  sale or encumbrance of any material  portion of the
Collateral  (as defined in Article IV hereof) in excess of  reasonably  expected
recoveries under insurance policies, or the making of any levy on, or seizure or
attachment  of or  entry  of a  judgment  against  a  material  portion  of  the
Collateral.

     3.9 REPORTS.  A material  omission or  misstatement  in any of the Debtor's
previously  or  hereafter  filed  reports  pursuant to the  requirements  of the
Securities  and Exchange Act of 1934, as amended,  or the rules and  regulations
promulgated thereunder.

     Then,  upon the  occurrence  and  during the  continuation  of any Event of
Default specified in Sections 3.1, 3.2, 3.3, 3.4, 3.6, 3.8 or 3.9 hereof, at the
option of the Holder  hereof,  and upon the  occurrence  of any event of default
specified in Sections 3.5 or 3.7 hereof,  the Borrower  shall pay to the Holder,
in  satisfaction of its obligation to pay the  outstanding  principal  amount of
this Note and accrued and unpaid interest thereon, an amount equal to the sum of
(i) the  product  of (x) the then  outstanding  principal  amount  of this  Note
multiplied  by (y) 110% plus (ii)  accrued  and  unpaid  interest  on the unpaid
principal amount of this Note to the date of payment (the "Default  Amount") and
such Default Amount, together with all other ancillary amounts payable hereunder
shall  immediately  become due and payable,  all without demand,  presentment or
notice,  all of which  hereby are  expressly  waived,  together  with all costs,
including,  without limitation,  legal fees and expenses of collection,  and the
Holder shall be entitled to exercise all other rights and remedies  available at
law or in equity.

     If the Borrower  fails to pay the Default  Amount  within five (5) business
days of written  notice  that such  amount is due and  payable,  then the Holder
shall have the right at any time, so long as the Borrower remains in default, to
require the Borrower,  upon written notice,  to immediately issue (in accordance
with the terms of Article II hereof),  in lieu of the Default Amount, the number
of shares of Common Stock of the Borrower equal to the Default Amount divided by
the Conversion Price then in effect.

                                   ARTICLE IV

                                   COLLATERAL

     Borrower  hereby  grants to Holder a security  interest  in all  inventory,
machinery,  equipment,  stocks, bonds, notes, accounts receivable, any rights or
claims that they may have against any other  person,  firm, or  corporation  for
monies, choses in action, any bank accounts, checking accounts,  certificates of
deposit or any financial instrument, patents and intellectual property rights or
any  other  assets  owned  by  Borrower  as of the  date of this  agreement,  or
hereafter acquired.

     Borrower hereby represents that none of the foregoing collateral encumbered
hereunder  has been sold or  assigned  since  the  original  promissory  note of
Borrower  to Holder of January  26, 1999 and that the lien of the holder of this
note is  uninterrupted  from January 26, 1999 and shall continue until this note
is paid or otherwise disposed of in accordance with its terms and conditions.

     All collateral rights in intellectual  property of Borrower is subordinated
to the  Borrower's  current  licenses and future  licenses  provided,  that with
respect to future licenses, the consent of the Holder must be obtained, but such
consent will not be unreasonably withheld. The patents and intellectual property
which are licensed under the cross license  agreement  dated September 27, 1997,
among NXT plc, New Transducers  Limited,  being related companies,  the Borrower
and NCT Audio  Products,  Inc. (or any successor  agreements)  are  specifically
excluded from the collateral.  There are approximately 20 pieces of intellectual
property in which,  under the cross  license  agreement,  Borrower  may not, and
hence does not herein,  grant a security interest.  In addition,  all agreements
between NCT Audio Products, Inc. and the Borrower that relate to such agreement,
and the stock of NCT Audio Products, Inc. owned by the Borrower, shall similarly
be excluded from the security interest granted in this Note.

     As additional  security for  Borrower's  obligations  under this Note,  NCT
Video Displays, Inc., a Delaware corporation and corporate affiliate of Borrower
("NCTV"),  hereby  grants  to Holder a  security  interest  in (i) that  certain
Product  Development  and License  Agreement,  dated as of  September  28, 2000,
between Advanced Display  Technologies  L.L.C.  ("Licensor") and NCTV, (ii) that
certain Letter  Addendum,  dated as of September 28, 2000,  between Licensor and
NCTV, (iii) that certain Product Development and Licensing  Agreement,  dated as
of May 4,  2001,  between  Licensor  (whose  name had by then  been  changed  to
"ViewBeam Technology,  L.L.C.") and NCTV, (iv) that certain Term Sheet, dated as
of January 30, 2002 (the "Term  Sheet"),  between  Licensor  (under its new name
"ViewBeam  Technology,  L.L.C.") and NCTV  (erroneously  referred to in the Term
Sheet as "NCT  Video,  Inc."),  (v) any  definitive  agreement  entered  into by
Licensor and NCTV based on the Term Sheet,  as  contemplated  therein,  (vi) any
other agreements now existing,  or at any time hereafter  entered into,  between
Licensor and NCTV and (vii) all proceeds of the foregoing.

     If Borrower does not pay the debt or other obligations under this Note when
due, all of the collateral described above may be sold in order to pay such debt
and obligations, or same may be transferred to the name of the Holder, as Holder
in her discretion  decides.  Holder may inspect the collateral at all reasonable
times.  Borrower  and NCTV further  agree that they will do anything  reasonably
requested  by  Holder  in  order  to make  Holder's  security  interests  in the
collateral legally effective  including the execution of one or more UCC-1s with
respect to Borrower and NCTV.


                                    ARTICLE V

                                  MISCELLANEOUS

     5.1 FAILURE OR  INDULGENCY  NOT WAIVER.  No failure or delay on the part of
the Holder in the  exercise of any power,  right or  privilege  hereunder  shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
such power,  right or privilege preclude other or further exercise thereof or of
any other right, power or privilege.  All rights and remedies existing hereunder
are  cumulative  to, and not  exclusive  of, any  rights or  remedies  otherwise
available.

     5.2 NOTICES.  Notices,  demands and other  communications  given under this
Note shall be in writing  and shall be deemed to have been given when  delivered
(if personally  delivered),  on the scheduled date of delivery (if delivered via
commercial  courier),  three  days  after  mailed  (if  mailed by  certified  or
registered mail, return receipt requested) or when sent by facsimile (if sent by
facsimile  with  evidence of  successful  transmission  retained by the sender);
provided, however, that failure to give proper and timely notice as set forth in
the "with a copy to" provisions below shall not invalidate a notice properly and
timely given to the associated party. Unless another address or facsimile number
is specified by notice hereunder, all notices shall be sent as follows:

If to the Holder:                     with a copy to:

Ms. Carole Salkind                       Peter Rosen, Esq.
c/o Sills, Cummis, Radin, Tishman,       Rosen & Avigliano
      Epstein & Gross                    431 Route 10 East
One Riverfront Plaza                     Randolph, NJ  07689
Newark NJ  07102
Facsimile:  973-643-6500                 Facsimile:  973-361-1644

If to the Borrower:                    with a copy to:

NCT Group, Inc.                          NCT Group, Inc.
20 Ketchum Street                        20 Ketchum Street
Westport, CT  06880                      Westport, CT  06880
Attention:  Chief Financial Officer      Attention:  General Counsel
Facsimile:  203-226-4338                 Facsimile:  203-226-4338

     5.3 AMENDMENT  PROVISION.  This Note and any  provision  hereof may only be
amended by an instrument in writing  signed by the Borrower and the Holder.  The
term "Note" and all references  thereto,  as used  throughout  this  instrument,
shall  mean this  instrument  as  originally  executed,  or if later  amended or
supplemented, then as so amended or supplemented.

     5.4  ASSIGNABILITY.  This Note shall be binding  upon the  Borrower and its
successors  and  assigns and shall inure to be the benefit of the Holder and its
successors and assigns;  PROVIDED,  HOWEVER, that so long as no Event of Default
has occurred,  this Note shall only be transferable in whole or in increments of
$100,000 to "Accredited Investors" (as defined in Rule 501(a) under the Act).

     5.5 COST OF COLLECTION. If default is made in the payment of this Note, the
Borrower shall pay the Holder hereof costs of collection,  including  reasonable
attorneys' fees.

     5.6  GOVERNING  LAW AND  JURISDICTION.  This Note shall be  governed by the
internal  laws of the State of  Delaware,  without  regard to  conflicts of laws
principles.  The parties hereto hereby submit to the exclusive  jurisdiction  of
the United States Federal Courts located in the state of New Jersey with respect
to any dispute arising under this Note.

     5.7 DAMAGES SHARES.  The shares of Common Stock that may be issuable to the
Holder  pursuant to Article III hereof  ("Damages  Shares")  shall be treated as
Common Stock issuable upon  conversion of this Note for all purposes  hereof and
shall be subject to all of the limitations and afforded all of the rights of the
other shares of Common Stock  issuable  hereunder.  For purposes of  calculating
interest payable on the outstanding principal amount hereof, amounts convertible
into Damages  Shares  ("Damages  Amounts")  shall not bear  interest but must be
converted  prior to the conversion of any outstanding  principal  amount hereof,
until the outstanding  Damages Amount is zero. Damaged Shares can only be issued
after Borrower has received the written notice that the Holder wishes to receive
such shares.

     5.8  DENOMINATIONS.  At the request of the Holder,  upon  surrender of this
Note, the Borrower  shall promptly issue new Notes in the aggregate  outstanding
principal amount hereof, in the form hereof,  in such  denominations of at least
$50,000 as the Holder shall request.

     IN WITNESS WHEREOF,  Borrower has caused this Note to be signed in its name
by its duly authorized officer this 27th day of February, 2002.

                     NCT GROUP, INC.


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


The  undersigned  hereby  agrees to the  provisions  of  Article IV of the above
Secured Convertible Note:

NCT VIDEO DISPLAYS, INC.


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


<PAGE>


                                                                       EXHIBIT 1

                NOTICE OF CONVERSION OF SECURED CONVERTIBLE NOTE

TO:  NCT Group, Inc.

     (1) Pursuant to the terms of the  attached  Secured  Convertible  Note (the
"Note"),  the undersigned hereby elects to convert $________ principal amount of
the Note into shares of common stock of:

         _____  NCT Group, Inc., a Delaware corporation

         _____  Pro Tech Communications, Inc., a Florida corporation

         _____  Distributed Media Corporation International Limited, a UK
                corporation

         _____  Artera Group International Limited, a UK corporation

         _____ Other public subsidiary (identify: _____________________________)

Capitalized  terms  used  herein  and not  otherwise  defined  herein  have  the
respective meanings provided in the Note.

     (2) Please issue a certificate or certificates  for the number of shares of
common stock into which such principal  amount of the Note is convertible in the
name(s) specified immediately below or, if additional space is necessary,  on an
attachment hereto:

<TABLE>
<CAPTION>
<S>                   <C>                                   <C>                   <C>

Name:                 Carole Salkind                        Name:
                      --------------------------                                  -------------------------
Address:                                                    Address:
                      --------------------------                                  -------------------------
SS or Tax ID Number:                                        SS or Tax ID Number:
                      --------------------------                                  -------------------------
</TABLE>

     (3) In the event of partial  exercise,  please reissue an appropriate  Note
for the principal balance which shall not have been converted.

     (4) If the shares of common stock issuable upon conversion of the Note have
not been  registered  under the  Securities Act of 1933, as amended (the "Act"),
the undersigned represents and warrants that (i) such shares of common stock are
being acquired for the account of the undersigned for investment, and not with a
present view to, or for resale in connection with, the distribution thereof, and
that the undersigned has no present  intention of distributing or reselling such
securities,  in each case, other than pursuant to a registration statement under
the Act and (ii) the  undersigned  is an  "Accredited  Investor"  as  defined in
Regulation  D under  the  Act.  The  undersigned  further  agrees  that (A) such
securities  shall not be sold or transferred  unless either (i) they first shall
have been registered  under the Act and applicable state securities laws or (ii)
the Borrower first shall have been furnished with either (x) an opinion of legal
counsel (in form,  substance and scope  reasonably  satisfactory to Borrower) to
the  effect  that  such  sale  or  transfer  is  exempt  from  the  registration
requirements of the Act or (y) satisfactory representations from the undersigned
that the undersigned may immediately  sell all of such securities (to the extent
such  securities  are deemed to have been acquired on the same date) pursuant to
Rule 144 under the Act (or a successor thereto) and (B) the Borrower may place a
legend on the certificate(s) for such securities to that effect and place a stop
transfer restriction in its records relating to such securities.

Date   ______________    ___________________________________________
                         Signature of Registered Holder
                         (must  be  signed  exactly  as  name  appears  in the
                         Note.  The  signature  must be guaranteed by a member
                         firm of the New York Stock  Exchange or the  National
                         Association   of   Securities   Dealers   or   by   a
                         commercial  bank or trust  having  an  office  in the
                         United States)