Document:

Exhibit 10(r)

                                 NCT GROUP, INC.
                                20 KETCHUM STREET
                               WESTPORT, CT 06880

April 17, 2003

Mr. Morton Salkind
TURBO NETWORKS, INC.

RE: CONSULTING AGREEMENT

This will  confirm  the  arrangements,  terms and  conditions  pursuant to which
Morton Salkind of TURBO  NETWORKS,  INC.  ("Consultants"),  has been retained to
serve as management consultants and advisors to Noise Cancellation Technologies.
Inc., ("the Company"), for one (13 year, automatically renewable for a period of
one (1) year,  commencing  on April 17,  2003,  providing  the  Agreement is not
canceled  by either  party  after the  initial  period  of the first  year.  The
undersigned hereby agrees to the following terms and conditions:

1.   Duties of Consultant:
     ---------------------
                    During the term of this agreement, consultants shall provide
                    the  company  with such  regular  and  customary  consulting
                    advice as is reasonably  requested by the company,  provided
                    that  consultants  shall not be required to undertake duties
                    not  reasonably  within  the  scope  of  the  financial  and
                    consulting advisory services contemplated by this agreement.
                    It is understood  and  acknowledged  by the parties that the
                    value   of  the   consultants'   advice   is   not   readily
                    quantifiable,  and that  consultants  shall be  obligated to
                    render  advice upon request of the  company,  in good faith,
                    but shall not be obligated  to spend any specific  amount of
                    time in so doing.  Consultants' duties may include, but will
                    not  necessarily  be limited to,  providing  recommendations
                    concerning the following financial and related matters:
                    a.   Disseminating  information  about  the  company  to the
                         investment community at large;
                    b.   Rendering  advice and assistance in connection with the
                         preparation  of annual and  interim  reports  and press
                         releases;
                    c.   Assisting in the company's financial public relations;
                    d.   Arranging,  on behalf of the  company,  at  appropriate
                         times,  meetings  with  securities

<PAGE>

                         analysts of major regional investment banking firms;

                    e.   Rendering  advice with  regard to internal  operations,
                         including:
                         (1) The formation of corporate goals and their
                             implementation;
                         (2) The company's financial structure and its divisions
                             or subsidiaries;
                         (3) Securing, when and if necessary and possible,
                             additional financing through banks and/or insurance
                             companies; and
                         (4) Corporate organization and personnel; and
                    f.   Rendering  advice with  regard to any of the  following
                         corporate finance matters:
                         (1) Changes in the capitalization of the company:
                         (2) Changes in the company s corporate structure;
                         (3) Redistribution of shareholdings of the company's
                             stock'
                         (4) Offerings of securities in public transactions;
                         (5) Sales of securities in private transactions;
                         (6) Alternative uses of corporate assets:
                         (7) Structure and use of debt; and
                         (8) Sales  of  stock by  insiders  pursuant  to Rule
                             144 or otherwise.

                    In addition to the  foregoing  consultants  agree to furnish
                    advice to the company in connection with (i) the acquisition
                    and/or merger of or with other companies, divestiture or any
                    other similar transaction, or the sale of the company itself
                    (or any  significant  percentage,  assets,  subsidiaries  or
                    affiliates thereof), and (ii) financings,  including private
                    financing  and   financing   from   financial   institutions
                    (including  but not limited to lines of credit,  performance
                    bonds. letters of credit. loans or other financings.

                    Consultants  shall render such other  financial  advisor and
                    consulting  services as may from time to time be agreed upon
                    by consultants and the company.

<PAGE>

2.   Term of the Agreement:
     ----------------------
                    The effective  date of this Agreement is April 17. 2003. The
                    term of this Agreement extends through April 17, 2004.

3.   Available Time:
     ---------------
                    Consultants shall make available such time as they. in their
                    sole discretion.  shall deem appropriate for the performance
                    of their obligations under this Agreement and may in certain
                    circumstances  be entitled  to  additional  compensation  in
                    connection therewith.

4.   Compensation:
     -------------
                    As compensation  for  Consultants  services  hereunder,  the
                    Company shall pay to Consultants  compensation  for business
                    consulting services as follows:

                    (a)  A monthly  retainer of $2,500  commencing  on April 17,
                         2003 and paid on April 17, 2004.

                    (b)  A cash  performance  bonus  for extra  services  may be
                         issued  to  Consultants  by  Company  at the  Company's
                         discretion.

                    (c)  All prior compensation  agreements remain in full force
                         and effect.

5.   Equity for Services:
     --------------------
                    The Company will grant the Consultants a Five Year (5) Stock
                    Option in the Company's common stock for 2,000,000 shares of
                    the  Company's  common stock at the price per share of $.037
                    which  was the  closing  price as of  April  17.  2003.  The
                    foregoing  Options will vest immediately and will be part of
                    the Stock Option Agreement to be created by the Company. The
                    shares  underlying  this  Option will be  registered  by the
                    Company with the next  registration  statement  filed by the
                    Company.  This  option  has been  approved  by the  Board of
                    Directors. All previous options as amended shall continue to
                    be in full force and effect.

6.   Expenses:
     ---------
                    The  Company  agrees  to  reimburse  the   Consultants   for
                    reasonable  out-of-pocket  expenses  related  to  performing
                    services on behalf of the Company.  Such expenses  typically
                    might include. but are not limited to, phone calls, postage,
                    shipping.  messengers.  travel.  meals and lodging expenses.
                    All travel will be pre-approved by the Company.

<PAGE>

7.   Health Care:
     ------------
                    The Company agrees to provide  health  coverage at its costs
                    to the Consultants.

8.   Communications:
     ---------------
                    Company  agrees to set up a private line for  communications
                    between Consultants and Michael J. Parrella.

9.   Relationship:
     -------------
                    Nothing herein shall constitute  Consultants as employees or
                    agents  of the  Company,  except  to such  extent  as  might
                    hereinafter  be expressly  agreed for a particular  purpose.
                    Consultants  shall not have the  authority  to  obligate  or
                    commit the Company in any manner whatsoever.

10.  Information:
     ------------
                    The  Company  acknowledges  that  Consultants  will  rely on
                    information   furnished  by  the  Company   concerning   the
                    Company's business affairs without independent certification
                    and  represents  that such  information  will be  materially
                    complete and correct.

11.  Confidentiality:
     ----------------
                    Except  in the  course  of  the  performance  of its  duties
                    hereunder,  Consultants  agree that they shall not  disclose
                    any   trade   secrets,   know-how.   or  other   proprietary
                    information  not in the public domain learned as a result of
                    this  Agreement  unless and until such  information  becomes
                    generally known.

12.  Indemnification:
     ----------------
                    The  Company  agrees  to  indemnify  and hold  harmless  the
                    Consultants,  their partners, officers, directors. employees
                    and  each  person  who  controls  Consultants  or any of its
                    affiliates  from and against any  losses,  claims,  damages,
                    liabilities and expenses  whatsoever  (including  reasonable
                    costs of  investigation  or  defending  any action) to which
                    they or any of them may become  subject under any applicable
                    law  arising  out of  Consultants'  performances  under this
                    Agreement and will  reimburse  Consultants  for all expenses
                    (including counsel fees) as they are incurred.

13.  Consultant an Independent
     Contractor:
     -------------------------
                    Consultants  shall  perform  their  services   hereunder  as
                    independent  contractors  and  not  as an  employees  of the
                    company or an affiliate thereof. It is expressly  understood
                    and agreed to by the parties hereto that  consultants  shall
                    have no authority to act for,  represent or bind the company
                    or any  affiliate

<PAGE>

                    thereof in any manner,  except as may be agreed to expressly
                    by the company in writing from time to time.

14.  Assignment:
     -----------
                    This Agreement shall not be assignable by either party.

15.  Prior Agreements
     ----------------
                    There are no prior agreements.

16.  Governing Law:
     --------------
                    This  Agreement  shall be deemed to be a contract made under
                    the laws of the State of  Connecticut  and for all  purposes
                    shall  be  construed  in  accordance  with  the laws of said
                    State.

17.  Notices:
     --------
                    All notices  will be sent via  certified  mail or  overnight
                    courier such as Federal Express, to Mr. Morton Salkind,  431
                    Route 10, Randolph, NJ 07869 and NCT Group, Inc., 20 Ketchum
                    Street, Westport. CT 06880, Attention: Michael J. Parrella.

18.  Board Approval:
     ---------------
                    This  Agreement has been approved by the Company's  Board of
                    Directors.

Very truly yours,

NCT GROUP, INC.                               AGREED & ACCEPTED

/s/  Michael J. Parrella
-----------------------------
     Michael J. Parrella                      Name: TURBO NETWORKS, INC.
     President, NCT Group, Inc.                     Consultant

                                              By: /s/  Morton Salkind
                                              ----------------------------------
                                                       Morton Salkind, President

Dated: April 17, 2003

<PAGE>

                                 FIRST AMENDMENT
                             OF CONSULTING AGREEMENT
                              DATED APRIL 17, 2003
                                     BETWEEN
                                 NCT GROUP, INC.
                                       AND
                              TURBO NETWORKS, INC.

     WHEREAS,  a Consulting  Agreement was entered into between NCT Group,  Inc.
(hereinafter  referred  to as  "NCT")  and  Turbo  Networks,  Inc.  (hereinafter
referred to as "Turbo") which commenced on April 17, 2003; and

     WHEREAS,  it is the  desire  of the  parties  hereto  to  amend  the  above
agreement because of substantial  additional  consulting services to be provided
internationally.

     NOW THEREFORE, in consideration of the mutual promises contained herein, it
is agreed as follows:

     1.   Paragraph 5, Equity for Services:  the contents of the paragraph shall
          be amended to add the following:

          "The company hereby grants the consultant an additional  five year (5)
          stock option in the company's  common stock for  18,550,000  shares of
          the company's common stock at the price per share of $.042,  which was
          the closing price as of May 22, 2003. The foregoing  options will vest
          immediately  and  will be part of the  Stock  Option  Agreement  to be
          created by the  company.  The shares  underlying  this  option will be
          registered by the company with the next  registration  statement filed
          by the  company.  This  option  has  been  approved  by the  Board  of
          Directors.  All previous  options as amended  shall  continue to be in
          full force and effect."

                                       1
<PAGE>

     2.   All other terms and conditions of the Consulting Agreement,  except as
          modified herein, are hereby ratified,  confirmed and are in full force
          and effect between the parties.

                               AGREED & ACCEPTED:

 NCT GROUP, INC.                                  TURBO NETWORKS, INC.
                                                  Consultant

 /s/  Michael J. Parrella                         /s/  Morton Salkind
 --------------------------------------           ------------------------------
 By:  Michael J. Parrella, Chairman/CEO           By:  Morton Salkind, President

Dated:  May 22, 2003

                                       2

                                SECOND AMENDMENT
                             OF CONSULTING AGREEMENT
                              DATED April 17, 2003
                                     BETWEEN
                                 NCT GROUP, INC.
                                       AND
                              TURBO NETWORKS, INC.

     WHEREAS,  a Consulting  Agreement was entered into between NCT Group,  Inc.
(hereinafter  referred  to as  "NCT")  and  Turbo  Networks,  Inc.  (hereinafter
referred to as "Turbo") which commenced on April 17, 2003; and

     WHEREAS,  it is the  desire  of the  parties  hereto  to  amend  the  above
agreement because of substantial  additional  consulting services to be provided
by Turbo.

     NOW THEREFORE, in consideration of the mutual promises contained herein, it
is agreed as follows:

     1.   Paragraph 1, Duties of  Consultant:  to the contents of the  paragraph
          shall be added a paragraph as follows:

          "In addition to the above consulting services, consultant will provide
          such consulting  services and advise  pertaining to negotiations  with
          resellers."

     2.   Paragraph 5, Equity for Services:  the contents of the paragraph shall
          be  amended  to add the  following:  "The  company  hereby  grants the
          consultant an  additional  five year (5) stock option in the company's
          common stock for 2,000,000 shares of the company's common stock at the
          price per share of $.04,  which was the  closing  price as of June 26,
          2003. The foregoing  options will vest immediately and will be part of
          the Stock Option  Agreement  to be created by the company.  The shares
          underlying this option will be registered by the company with the next
          registration  statement  filed by the  company.  This  option has been
          approved by the Board of  Directors.  All previous  options as amended
          shall continue to be in full force and effect."

     3.   All other terms and conditions of the Consulting Agreement,  except as
          modified herein, are hereby ratified,  confirmed and are in full force
          and effect between the parties.

                               AGREED A ACCEPTED:

NCT GROUP, INC.                               Name: TURBO NETWORKS, INC.
                                                    --------------------
                                                    Consultant

/s/   Michael J. Parrella                     /s/   Morton Salkind
---------------------------------------       ----------------------------------
By:   Michael J. Parrella, Chairman/CEO       By:   Morton Salkind

Dated: June 28, 2003Exhibit 10(t)

     THIS NOTE AND THE COMMON SHARES  ISSUABLE UPON CONVERSION OF THIS NOTE HAVE
     NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE
     AND THE COMMON  SHARES  ISSUABLE  UPON  CONVERSION  OF THIS NOTE MAY NOT BE
     SOLD,  OFFERED  FOR SALE,  PLEDGED  OR  HYPOTHECATED  IN THE  ABSENCE OF AN
     EFFECTIVE  REGISTRATION  STATEMENT  AS TO THIS  NOTE  UNDER  SAID ACT OR AN
     OPINION OF COUNSEL  REASONABLY  SATISFACTORY  TO NCT GROUP,  INC. THAT SUCH
     REGISTRATION IS NOT REQUIRED.

                                CONVERTIBLE NOTE

     FOR  VALUE  RECEIVED,   NCT  GROUP,  INC.,  a  Delaware   corporation  (the
"Borrower"),  hereby  promises  to  pay  to  ALPHA  CAPITAL  AKTIENGESELLSCHAFT,
Pradafant 7, 9490 Furstentums,  Vaduz,  Lichtenstein,  Fax: 011-42-32323196 (the
"Holder") or order,  without demand, the sum of Two Hundred Thirty-Five Thousand
Dollars  ($235,000.00),  with simple interest accruing at the annual rate of 8%,
on April 22, 2005 (the "Maturity Date").

         The following terms shall apply to this Note:

                                   ARTICLE 1
                           PAYMENT RELATED PROVISIONS

1.1. Payment Grace Period.  The Borrower  shall have a ten (10) day grace period
     to pay any monetary amounts due under this Note, after which grace period a
     default  interest  rate of eighteen  percent (18%) per annum shall apply to
     the amounts owed hereunder.

1.2. Conversion  Rights.  The  Conversion  Rights  set forth in  Article 2 shall
     remain in full force and effect  commencing  from the date hereof and until
     the Note is paid in full.

1.3. Interest Rate.  Subject to the Holder's right to convert,  interest payable
     on this Note shall  accrue at the annual rate of eight  percent (8%) and be
     payable January 1, 2004 and annually thereafter,  and on the Maturity Date,
     accelerated  or otherwise,  when the  principal  and remaining  accrued but
     unpaid interest shall be due and payable, or sooner as described below.

                                   ARTICLE 2
                                CONVERSION RIGHTS

     The  Holder  shall  have the right to  convert  the  principal  amount  and
interest due under this Note into Shares of the  Borrower's  Common Stock as set
forth below.

2.1. Conversion into the Borrower's Common Stock.

     (a)  The Holder  shall have the right from and after the  issuance  of this
          Note and then at any time  until this Note is fully  paid,  to convert
          any outstanding and unpaid principal  portion of this Note,  and/or at
          the Holder's  election,  the interest accrued on the Note (the date of
          giving of such notice of conversion  being a  "Conversion  Date") into
          fully paid and  nonassessable  shares of common  stock of  Borrower as
          such stock exists on the date of issuance of this Note,  or any shares
          of capital stock of Borrower into which such stock

                                       1
<PAGE>

          shall hereafter be changed or reclassified (the "Common Stock") at the
          conversion price, as defined in Section 2.1(b) hereof (the "Conversion
          Price"),  determined as provided herein. Upon delivery to the Borrower
          of a Notice of Conversion,  attached hereto as Exhibit A, as described
          in the  subscription  agreement  entered into between the Borrower and
          Holder relating to this Note (the "Subscription  Agreement"),  all the
          terms of which  are  incorporated  herein  by this  reference,  of the
          Holder's  written  request for  conversion,  Borrower  shall issue and
          deliver  to  the  Holder  within  five  (5)  business  days  from  the
          Conversion  Date that number of shares of Common Stock for the portion
          of the  Note  converted  in  accordance  with  the  foregoing.  At the
          election of the Holder,  the Borrower will deliver  accrued but unpaid
          interest  on the Note  through  the  Conversion  Date  directly to the
          Holder on or before the Delivery Date (as defined in the  Subscription
          Agreement).  The  number of shares of Common  Stock to be issued  upon
          each  conversion  of this Note shall be  determined  by dividing  that
          portion of the principal (and interest, at the election of the Holder)
          of the Note to be converted, by the Conversion Price.

     (b)  Subject to  adjustment  as  provided  in Section  2.1(c)  hereof,  the
          Conversion Price per share shall be Four Cents ($.04).

     (c)  The Conversion Price and number and kind of shares or other securities
          to be issued upon conversion  shall be subject to adjustment from time
          to time upon the  happening of certain  events  while this  conversion
          right remains outstanding, as follows:

          (i)  Merger,  Sale of Assets,  etc. If the  Borrower at any time shall
               consolidate  with  or  merge  into  or  sell  or  convey  all  or
               substantially all its assets to any other corporation, this Note,
               as to the unpaid  principal  portion thereof and accrued interest
               thereon,  shall  thereafter  be deemed to  evidence  the right to
               purchase such number and kind of shares or other  securities  and
               property as would have been issuable or  distributable on account
               of such consolidation,  merger, sale or conveyance,  upon or with
               respect to the  securities  subject to the conversion or purchase
               right immediately prior to such  consolidation,  merger,  sale or
               conveyance.  The foregoing  provision  shall  similarly  apply to
               successive transactions of a similar nature by any such successor
               or purchaser.  Without  limiting the generality of the foregoing,
               the anti-dilution  provisions of this Section shall apply to such
               securities  of  such  successor  or  purchaser   after  any  such
               consolidation, merger, sale or conveyance.

          (ii) Reclassification,  etc. If the  Borrower  at any time  shall,  by
               reclassification  or otherwise,  change the Common Stock into the
               same or a different number of securities of any class or classes,
               this Note, as to the unpaid principal portion thereof and accrued
               interest  thereon,  shall  thereafter  be deemed to evidence  the
               right to  purchase  such number and kind of  securities  as would
               have been  issuable as the result of such change with  respect to
               the Common Stock  immediately prior to such  reclassification  or
               other change.

          (iii)Stock  Splits,  Combinations  and  Dividends.  If the  shares  of
               Common Stock are subdivided or combined into a greater or smaller
               number of shares of Common Stock, or if a dividend is paid on the
               Common Stock in shares of Common Stock, the Conversion Base Price
               shall be proportionately reduced in case of subdivision of shares
               or stock  dividend or  proportionately  increased  in the case of
               combination  of shares,  in each such case by the ratio which the
               total  number of shares of Common Stock  outstanding  immediately
               after  such event  bears to the

                                       2
<PAGE>

               total  number of shares of Common Stock  outstanding  immediately
               prior to such event.

     (d)  Beginning  as of such time as Borrower  has  authorized  but  unissued
          shares of Common Stock available  therefor (but in no event later than
          the  earlier  of  (i)  three  months  after  Borrower's   current  S-1
          registration statement under review by the Commission with file number
          333-60574 (the "Current Registration  Statement") becomes effective or
          is abandoned or (ii) April 10,  2004),  and for the  remaining  period
          during which the  conversion  right under this Note  exists,  Borrower
          will  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.  Borrower represents that
          upon issuance, such shares will be duly and validly issued, fully paid
          and  non-assessable.  Borrower  agrees that its  issuance of this Note
          shall  constitute full authority to its officers,  agents and transfer
          agents who are charged  with the duty of executing  and issuing  stock
          certificates  to  execute  and issue the  necessary  certificates  for
          shares of Common Stock upon the conversion of this Note.

2.2. Method of Conversion.  This Note may be converted by the Holder in whole or
     in part  as  described  in  Section  2.1(a)  hereof  and  the  Subscription
     Agreement.  Upon  partial  conversion  of this Note,  if  requested  by the
     Holder,  a new Note  containing  the same date and  provisions of this Note
     shall be issued by the Borrower to the Holder for the  remaining  principal
     balance of this Note and  interest  which shall not have been  converted or
     paid.

2.3. Maximum  Conversion.  The  Holder  shall not be  entitled  to  convert on a
     Conversion  Date that amount of the Note in connection  with that number of
     shares  of  Common  Stock  which  would be in  excess of the sum of (i) the
     number of shares of Common Stock  beneficially  owned by the Holder and its
     affiliates  on a Conversion  Date,  and (ii) the number of shares of Common
     Stock  issuable  upon the  conversion of the Note with respect to which the
     determination  of this provision is being made on a Conversion  Date, which
     would result in  beneficial  ownership by the Holder and its  affiliates of
     more than 9.99% of the  outstanding  shares of Common Stock of the Borrower
     on  such  Conversion  Date.  For  the  purposes  of  the  provision  to the
     immediately preceding sentence, beneficial ownership shall be determined in
     accordance  with Section 13(d) of the  Securities  Exchange Act of 1934, as
     amended,  and Regulation 13d-3  thereunder.  Subject to the foregoing,  the
     Holder  shall not be limited  to  aggregate  conversions  of only 9.99% and
     aggregate  conversion by the Holder may exceed 9.99%. The Holder shall have
     the authority and obligation to determine whether the restriction contained
     in this Section 2.3 will limit any  conversion  hereunder and to the extent
     that the Holder  determines  that the limitation  contained in this Section
     applies,  the  determination  of which portion of the Notes are convertible
     shall be the  responsibility  and obligation of the Holder.  The Holder may
     void the conversion  limitation  described in this Section 2.3 upon 75 days
     prior written notice to the Borrower.  The Holder may allocate which of the
     equity of the  Borrower  deemed  beneficially  owned by the Holder shall be
     included in the 9.99% amount  described  above and which shall be allocated
     to the excess above 9.99%.

                                   ARTICLE 3
                                EVENT OF DEFAULT

     The  occurrence  of any of the  following  events  of  default  ("Event  of
Default") shall, at the option of the Holder hereof,  make all sums of principal
and  interest  then  remaining  unpaid  hereon  and all  other  amounts  payable
hereunder  immediately  due and  payable,  all without  demand,  presentment  or
notice, or grace period, all of which hereby are expressly waived, except as set
forth below:

                                       3
<PAGE>

3.1. Failure  to Pay  Principal  or  Interest.  The  Borrower  fails  to pay any
     installment  of  principal  or interest  hereon  when due and such  failure
     continues  for a period of ten (10) days  after the due date.  The ten (10)
     day period  described  in this  Section 3.1 is the same ten (10) day period
     described in Section 1.1 hereof.

3.2. Breach of Covenant.  The Borrower  breaches any material  covenant or other
     term or condition of this Note in any material respect and such breach,  if
     subject to cure,  continues  for a period of seven (7) days  after  written
     notice to the Borrower from the Holder.

3.3. Breach of Representations  and Warranties.  Any material  representation or
     warranty of the Borrower made herein, in the Subscription Agreement entered
     into by the Holder and  Borrower in  connection  with this Note,  or in any
     agreement,  statement or certificate given in writing pursuant hereto or in
     connection therewith shall be false or misleading in any material respect.

3.4. Receiver or Trustee.  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.

3.5. Judgments.  Any money  judgment,  writ or similar  final  process  shall be
     entered or filed  against  Borrower or any of its  property or other assets
     for more than  $50,000,  and shall remain  unpaid,  unvacated,  unbonded or
     unstayed for a period of sixty (60) days.

3.6. Bankruptcy.   Bankruptcy,   insolvency,   reorganization   or   liquidation
     proceedings or other  proceedings or relief under any bankruptcy law or any
     law for the  relief  of  debtors  shall be  instituted  by or  against  the
     Borrower  and if  instituted  against  Borrower  are not  dismissed  within
     seventy-five (75) days of initiation.

3.7. Default.  A default  by the  Borrower,  after  applicable  notice  and cure
     periods,  under any one or more obligations in an aggregate monetary amount
     in excess of $100,000.

3.8. Stop  Trade.  A  Securities  and  Exchange  Commission  stop trade order or
     Principal Market (as defined below) trading  suspension with respect to the
     Common Stock that lasts for five (5) or more consecutive  trading days. For
     purposes hereof,  "Principal  Market" with respect to the Borrower's Common
     Stock  shall mean the NASD OTC  Bulletin  Board,  NASDAQ  SmallCap  Market,
     NASDAQ  National  Market System,  American Stock Exchange or New York Stock
     Exchange  (whichever of the foregoing is at the time the principal  trading
     exchange or market for the Common Stock).

3.9. Failure to Deliver Common Stock or Replacement Note.  Borrower's failure to
     timely  deliver  Common  Stock to the  Holder  pursuant  to and in the form
     required by this Note and Section 9 of the  Subscription  Agreement,  or if
     required, a replacement Note.

3.10.Non-Registration  Event.  The  occurrence  of a  Non-Registration  Event as
     described in Section 10.4 of the Subscription Agreement.

3.11.Cross  Default.  A  default  by  Borrower  of a  material  term,  covenant,
     warranty  or  undertaking  of any other  agreement  to which  Borrower  and
     Subscriber  are parties,  or the  occurrence of a material event of default
     under any such other agreement.

3.12.Delisting.  Delisting of the Common  Stock from the OTC  Bulletin  Board or
     such  other  principal  exchange  on which the  Common  stock is listed for
     trading;  failure to comply with the

                                       4
<PAGE>

     requirements  for continued  listing on the OTC Bulletin Board for a period
     of  three  (3)  consecutive  trading  days;  or  notification  from the OTC
     Bulletin  Board  or  any  Principal  Market  that  the  Borrower  is not in
     compliance  with the  conditions  for  such  continued  listing  on the OTC
     Bulletin Board or other  Principal  Market and the Common Stock does not at
     the  time  of  such   notification   comply  with  the  continued   listing
     requirements of the OTC Bulletin Board.

                                   ARTICLE 4
                                  MISCELLANEOUS

4.1. Failure or Indulgence Not Waiver. No failure or delay on the part of Holder
     hereof 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.

4.2. Notices.  Any notice  herein  required or permitted to be given shall be in
     writing and may be personally served or sent by fax transmission (with copy
     sent by regular, certified or registered mail or by overnight courier). For
     the  purposes  hereof,  the  address and fax number of the Holder is as set
     forth on the  first  page  hereof.  A  Conversion  Notice  shall be  deemed
     delivered  on (i) the business day it is received by facsimile or otherwise
     by the  Borrower if such notice is  received  prior to 11:00 A.M.  New York
     time, or (ii) the immediately  succeeding business day if it is received by
     facsimile or otherwise  after 11:00 A.M. New York time on a business day or
     at any time on a day  which is not a  business  day.  The  address  and fax
     number  of the  Borrower  shall be NCT  Group,  Inc.,  20  Ketchum  Street,
     Westport, CT 06880, attn: Chief Financial Officer, telecopier number: (203)
     226-4338,  with a copy by telecopier only to: General Counsel.  Both Holder
     and  Borrower  may change the address and fax number for service by service
     of notice to the other as herein  provided.  Notice of Conversion  shall be
     deemed  given  when  made  to the  Borrower  pursuant  to the  Subscription
     Agreement.

4.3. Amendment  Provision.  The term "Note" and all reference  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.

4.4. Assignability.  This  Note  shall  be  binding  upon the  Borrower  and its
     successors  and  permitted  assigns,  and shall inure to the benefit of the
     Holder and its successors and assigns, and may be assigned by the Holder.

4.5. Cost  of  Collection.  If  default  is made in the  payment  of this  Note,
     Borrower  shall  pay the  Holder  hereof  reasonable  costs of  collection,
     including reasonable attorneys' fees.

4.6. Governing  Law.  This Note shall be governed by and construed in accordance
     with the laws of the State of New York.  Any action brought by either party
     against  the  other  concerning  the  transactions   contemplated  by  this
     Agreement  shall be brought  only in the state courts of New York or in the
     federal  courts  located in New York County in the State of New York.  Both
     parties and the individual signing this Agreement on behalf of the Borrower
     agree to submit to the  jurisdiction of such courts.  The prevailing  party
     shall be entitled to recover from the other party its reasonable attorneys'
     fees and costs.

4.7. Maximum Payments.  Nothing contained herein shall be deemed to establish or
     require the payment of a rate of interest or other charges in excess of the
     maximum permitted by applicable law. In the event that the rate of interest
     required to be paid or other charges hereunder exceed

                                       5
<PAGE>

     the maximum  permitted  by such law, any payments in excess of such maximum
     shall be credited  against  amounts  owed by the Borrower to the Holder and
     thus refunded to the Borrower.

4.8. Prepayment.  This Note may not be paid prior to the Maturity  Date or after
     the occurrence of an Event of Default without the consent of the Holder.

     IN WITNESS WHEREOF,  Borrower has caused this Note to be signed in its name
by its duly authorized officer as of the 22nd day of April, 2003.

                                               NCT GROUP, INC.

                                               By:  /s/  Cy E. Hammond
                                               ---------------------------------
                                               Name:     Cy E. Hammond
                                               Title:    Senior Vice President &
                                                         Chief Financial Officer

                                       6
<PAGE>

                                    EXHIBIT A
                              NOTICE OF CONVERSION

(To be executed by the Registered Holder in order to convert the Note)

     The  undersigned  hereby elects to convert  $_________ of the principal and
$_________  of the interest  due on the Note issued by NCT GROUP,  INC. on April
22,  2003 into  Shares of  Common  Stock of NCT  GROUP,  INC.  according  to the
conditions set forth in such Note, as of the date written below.

Date of Conversion:
                   -------------------------------------------------------------

Conversion Price:
                 ---------------------------------------------------------------

Shares To Be Delivered:
                       ---------------------------------------------------------

Signature:
          ----------------------------------------------------------------------

Print Name:
           ---------------------------------------------------------------------

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

                                       7

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