Exhibit 10(ei)


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 DEMAND NOTE
                                 (No. CTS-04-09)

May 7, 2004                                                          $400,000.00


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 Four Hundred  Thousand Dollars and
No Cents ($400,000.00), upon demand, 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 upon demand or acceleration or otherwise. Any such payment demand by the
Holder shall be via written  notice to the Borrower.  Such demand may be for all
or any part of the principal amount then outstanding under this Note. Payment of
the amount so demanded shall be made by the Borrower  within one business day of
such  demand.  Any amount of  principal of or interest on this Note which is not
paid when due and payable  shall bear  interest at the rate of five percent (5%)
above the Ordinary  Interest Rate (the "Default Interest Rate") from the date it
is due and payable 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 upon demand
or  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 instructs in its demand for payment or, if no
address for payment is provided  therein,  then at the address of the Holder for
written notices under 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 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

<PAGE>


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 the
conversion  price  determined  by Section  2.2(a)  hereof;  (ii) 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;  (iii)  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 (iv) if any other subsidiary of
the  Borrower  (other  than Pro  Tech  Communications,  Inc.)  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  Demand 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 per share  "Conversion  Price" for conversion of this Note into the
Borrower's  Common  Stock shall be equal to the closing sale price of the Common
Stock on the Trading Day (as defined  below)  immediately  preceding the date of
this Note;  provided,  however,  that if, on the date of this Note and the three
Trading Days thereafter (the "Window"), neither the Holder nor any Related Party
(as defined below) sells or, whether in writing or otherwise, agrees to sell any
shares of Common Stock or any option,  warrant,  instrument  or right to convert
into,  exchange for or acquire Common Stock, then such price shall be reduced to
a price  equal  to the  lowest  closing  sale  price,  if lower  than the  price
specified  above in this sentence,  of the Common Stock during the Window on the
principal securities exchange or market on which the Common Stock is then traded
as reported on  Bloomberg  Financial  Markets.  If any closing sale price of the
Common  Stock  during  the  Window  is lower  than the  price  specified  at the
beginning of this  Section  2.2(a),  the Holder  shall give the Borrower  prompt
written  notice of any sale of or  agreement to sell any Common Stock or option,
warrant,  instrument  or right to convert into,  exchange for or acquire  Common
Stock made by the Holder or a Related  Party  during the Window.  "Trading  Day"
shall  mean any day on which the  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  Common  Stock is then  being  traded.  "Related
Party" shall mean a member of the Holder's  immediate  family,  including spouse
(even if separated or not residing with the Holder) and adult  children (even if
not residing  with the Holder),  or an entity (other than the Borrower) of which
the  Holder or any such  immediate  family  member is an  officer,  director  or
beneficial  shareholder  (determined  under  Rule  13d-3

                                       2
<PAGE>


under the  Securities  Exchange Act of 1934, as amended (the "1934  Act")).  The
Conversion  Price  shall  also 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.

     (b) The Conversion  Price for NCT, 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,  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

                                       3
<PAGE>


          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 six months from the date 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 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 CONVERSION  AFTER EVENT OF DEFAULT.  The Holder's right to convert this
Note into stock as  described  above shall apply even if an Event of Default (as
defined in Article III below) shall have occurred.

                                   ARTICLE III

                                EVENTS OF DEFAULT

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

                                       4
<PAGE>


     3.1 FAILURE TO PAY PRINCIPAL OR INTEREST. The Borrower fails (i) to pay the
principal  hereof when due and payable,  whether upon demand or  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 or 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 1934
Act 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

                                       5
<PAGE>


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 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 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.

     If Borrower does not pay the debt or other obligations under this Note when
due, the  collateral 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
further agrees that it will do anything reasonably  requested by Holder in order
to make Holder's security interest in the collateral legally effective including
the execution of a UCC-1.

                                    ARTICLE V

                                  MISCELLANEOUS

                                       6
<PAGE>


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 Epstein & Gross P.C.           Rosen & Avigliano
One Riverfront Plaza                            431 Route 10 East
Newark NJ 07102                                 Randolph, NJ  07689
--------------------------------------------------------------------------------
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.

                                       7
<PAGE>


     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 as of the date first written above.


                                            NCT GROUP, INC.


                                            By: /s/ Irene Lebovics
                                                -------------------------
                                                Irene Lebovics
                                                President

                                       8
<PAGE>


                                                                       EXHIBIT 1

             NOTICE OF CONVERSION OF SECURED CONVERTIBLE DEMAND NOTE

TO:  NCT Group, Inc.

     (1) Pursuant to the terms of the attached Secured  Convertible  Demand 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

    _____  Distributed Media Corporation International Limited, a UK corporation

    _____  Artera Group International Limited, a UK corporation

    _____  Other public subsidiary (identify: ________________________________)1

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:

Name:    Carole Salkind                      Name:
         ---------------------------                    ------------------------

Address:                                     Address:
         ---------------------------                    ------------------------

SS or Tax ID Number:                         SS or Tax ID Number:
                     ---------------                               -------------

     (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)




---------------------
1 May not be Pro Tech Communications, Inc.


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