Document:

Exhibit 4(bm)

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

                               -----------------

                                 NCT GROUP, INC.

             (Incorporated under the laws of the State of Delaware)

          Void after 5:00 p.m., New York City time, on December 6, 2007

                                                             Warrant to Purchase
                                                            15,000,000 Shares of
                                                                    Common Stock

               Warrant for the Purchase of Shares of Common Stock

No. ACA-2

     FOR  VALUE  RECEIVED,   NCT  GROUP,   INC.  (the  "Company"),   a  Delaware
corporation,  on this 6th day of December, 2002 (the "Grant Date") hereby issues
this warrant (the "Warrant") and certifies that Alpha Capital Aktiengesellschaft
(the  "Holder") is granted the right,  subject to the provisions of the Warrant,
to  purchase  from the  Company,  at any time,  or from time to time  during the
period  commencing  at 9:00 a.m.  New York City local time on the Grant Date and
expiring,  unless earlier terminated as hereinafter  provided,  at 5:00 p.m. New
York City local time on December 6, 2007 (the  "Expiration  Date") up to fifteen
million  (15,000,000) fully paid and nonassessable  shares of Common Stock, $.01
par value,  of the Company at a per share  price  equal to $0.01 (the  "Exercise
Price"), and subject to further adjustment as set forth herein.

     The term "Common  Stock" means the shares of Common Stock,  $.01 par value,
of the Company as constituted  on the Grant Date of this Warrant,  together with
any  other  equity  securities  that may be issued by the  Company  in  addition
thereto or in substitution  therefor. The number of shares of Common Stock to be
received  upon the exercise of this Warrant may be adjusted from time to time as
hereinafter  set  forth.  The  shares  of  Common  Stock  deliverable  upon such
exercise,  and as adjusted from time to time, are hereinafter sometimes referred
to as "Warrant Stock".

     Upon receipt by the Company of evidence  reasonably  satisfactory  to it of
the loss, theft,  destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender  and  cancellation  of this Warrant,  if mutilated,  the Company shall
execute and  deliver a new Warrant of like tenor and date.  Any such new Warrant
executed and delivered shall constitute an additional  contractual obligation on
the part of the Company,  whether or not this Warrant so lost, stolen, destroyed
or mutilated shall be at any time enforceable by anyone.

     The Holder agrees with the Company that this Warrant is issued, and all the
rights  hereunder shall be held,  subject to all of the conditions,  limitations
and provisions set forth herein.

     1. Exercise of Warrant.

     1.1. Period of Exercise.  This Warrant may be exercised in whole or in part
at any time,  or from time to time,  during the period  commencing at 9:00 a.m.,
New York City local  time,  on the  Vesting  Date (as  defined  in  Section  1.7
hereof),  and expiring at 5:00 p.m., New York City local time, on the Expiration
Date, or, if such day is a day on which banking  institutions in the City of New
York are authorized by law to close,  then on the next succeeding day that shall
not be such a day.

     1.2 Exercise For Payment.  Subject to the  restrictions and limitations set
forth above,  this Warrant may be exercised by presentation and surrender hereof
to the Company at its principal  office with the Warrant  Exercise Form attached
hereto duly executed and  accompanied by payment (either in cash or by certified
or official  bank check,  payable to the order of the  Company) of the  Exercise
Price for the  number  of  shares  specified  in such  Form and  instruments  of
transfer, if appropriate, duly executed by the Holder.

     1.3 Cashless Exercise.  This Section 1.3 shall apply only if both (a) there
is no  registration  statement  then in effect  covering the Warrant Stock as to
which an exercise under this Section 1.3 is being effected and (b) the method of
exercise  described  in this  Section  1.3  would be  necessary  for the  Holder
lawfully  to sell the  Warrant  Stock  acquired  pursuant  to this  Section  1.3
immediately  after  such  acquisition  in  accordance  with  Rule 144  under the
Securities Act of 1933, as amended (the "1933 Act").  As the  alternative to the
payment  method of  exercise  described  in Section  1.2  above,  the Holder may
exercise this Warrant by surrendering this Warrant in exchange for the number of
shares of  Warrant  Stock  equal to the  product  of (a) the number of shares of
Warrant  Stock as to which the Warrant is being  exercised,  multiplied by (b) a
fraction,  the numerator of which is the Market Price (as defined  below) of the
Common Stock less the Exercise Price of the Warrant Stock and the denominator of
which is the  Market  Price of Common  Stock.  Solely  for the  purposes  of the
foregoing calculation,  the "Market Price" of the Common Stock shall be based on
the date on which the Warrant  Exercise Form  attached  hereto is deemed to have
been sent to the Company  pursuant  to Section 12 hereof,  and shall be equal to
the last sale price of the Common  Stock on the Nasdaq  National  Market  System
(the "Nasdaq-NM") as reported by Bloomberg Financial Markets ("Bloomberg"),  or,
if the Nasdaq-NM is not the principal trading market for such security,  then on
the  principal  securities  exchange or trading  market  where such  security is
listed or traded as reported by  Bloomberg,  or if the  foregoing  do not apply,
then in the  over-the-counter  market on the pink sheets or  bulletin  board for
such security as reported by Bloomberg (as applicable,  the "Principal Market").
For purposes of this Warrant,  the method of exercise  described in this Section
1.3 shall be known as "Cashless Exercise."

     1.4 Partial Exercise. If this Warrant should be exercised in part only, the
Company  shall,  upon  surrender of this Warrant for  cancellation,  execute and
deliver a new Warrant  evidencing  the rights of the Holder  thereof to purchase
the balance of the shares purchasable hereunder.

     1.5 Transfer  Books and  Certificates.  Upon receipt by the Company of this
Warrant,  together with the Warrant Exercise Form and the Exercise Price, at its
office, in proper form for exercise, the Holder shall be deemed to be the holder
of  record  of  the  shares  of  Common  Stock   issuable  upon  such  exercise,
notwithstanding  that the stock  transfer  books of the  Company  shall  then be
closed or that  certificates  representing such shares of Common Stock shall not
then be actually delivered to the Holder.

     1.6 Certain Taxes.  The Company shall pay any and all documentary  stamp or
similar  issue or transfer  taxes payable in respect of the issue or delivery of
shares of Common Stock on exercise of this Warrant.

     1.7  Vesting.  This  Warrant  shall  vest and  become  exerciseable  in its
entirety as of the date, if any, that both of the following events have occurred
(the "Vesting Date"):

          (a) The Company has failed to pay when due and payable any amount owed
     by it under  the  Promissory  Note,  dated as of the  date  hereof,  in the
     principal  amount of  $385,000.00,  made by the  Company to the Holder (the
     "Note"); and

          (b) The Company has failed,  as of the date that the Note  becomes due
     and payable,  to pay any amount owed by the Company under any  Registration
     Penalty  Provision  (as  defined  in  Exhibit  A hereto)  and such  payment
     obligation has not been otherwise discharged.

If the event  described  in clause (b) above  occurs but the event  described in
clause  (a) above  does not  occur,  then this  Warrant  shall  vest and  become
exerciseable as to two million (2,000,000) shares of Warrant Stock only.

     1.8  Certain  Beneficial  Ownership.  The Holder  shall not be  entitled to
exercise  this  Warrant  to the  extent  that (a) the number of shares of Common
Stock  issuable  upon such exercise and (b) the number of shares of Common Stock
beneficially owned by the Holder and its affiliates on the date of such exercise
would result in  beneficial  ownership by the Holder and its  affiliates of more
than  9.99%  of the  outstanding  shares  of  Common  Stock  on the date of such
exercise.  For the purposes of 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 Rule 13d-3  thereunder.  Subject to the
foregoing, the Holder shall not be limited to aggregate exercises of only 9.99%.
The Holder may void the exercise limitation  described in this paragraph upon 75
days' prior written notice to the Company.  The Holder may allocate which of the
equity of the Company 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%.

     2. [OMITTED]

     3.  Reservation  of  Shares.  The  Company  will at all times  reserve  for
issuance and delivery  upon  exercise of this Warrant all shares of Common Stock
of the Company from time to time receivable  upon exercise of this Warrant.  All
such shares shall be duly authorized and, when issued upon such exercise,  shall
be validly  issued,  fully  paid and  nonassessable  and free of all  preemptive
rights.

     4. Warrant Stock Registration and Transfer.

     4.1  Registration.  The Company shall include the Warrant Stock on the next
available  registration  statement  the Company  files with the  Securities  and
Exchange  Commission  (the  "SEC")  that  relates  to shares  of  Common  Stock;
provided,  however, that the availability of a registration  statement hereunder
may not be negated or delayed by a commitment the Company  undertakes to a third
party after the date  hereof.  The Company  shall use best efforts to cause such
registration  statement  to be  declared  effective  by the  SEC  and to  remain
effective  until the earlier of (a) the date on which Holder has sold all of the
Warrant Stock or (b) the date on which this Warrant expires.

     4.2 Transfer.  The Warrant  Stock may not be sold or otherwise  disposed of
unless  registered  pursuant to the provisions of the 1933 Act, or an opinion of
counsel in form and content satisfactory to the Company is obtained stating that
such sale or other disposition is made in compliance with an available exemption
from such registration.  Any sale or other disposition of the Warrant Stock must
also comply with all applicable state securities laws and regulations.

     5. Fractional Shares. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant,  but the Company shall
issue one  additional  share of its Common  Stock in lieu of each  fraction of a
share otherwise called for upon any exercise of this Warrant.

     6. Exchange,  Transfer,  Assignment of Loss of Warrant. This Warrant is not
registered  under the 1933 Act nor under any applicable  state securities law or
regulation.  This Warrant cannot be sold,  exchanged,  transferred,  assigned or
otherwise  disposed of unless registered  pursuant to the provisions of the 1933
Act or an opinion of counsel in form and content  satisfactory to the Company is
obtained  stating  that such  disposition  is in  compliance  with an  available
exemption  from  registration.  Any  such  disposition  must  also  comply  with
applicable state securities laws and regulations.

     7.  Rights of the  Holder.  The Holder  shall  not,  by virtue  hereof,  be
entitled  to any rights of a  stockholder  of the  Company,  either at law or in
equity,  and the  rights of the Holder are  limited to those  expressed  in this
Warrant.

     8. Redemption. This Warrant is not redeemable by the Company.

     9. Anti-Dilution Provisions.

     9.1  Adjustment  for  Dividends  in  Other  Securities,   Property,   Etc.:
Reclassification,  Etc. In case at any time or from time to time after the Grant
Date the holders of Common Stock (or any other securities at the time receivable
upon the  exercise  of this  Warrant)  shall have  received,  or on or after the
record date fixed for the  determination  of eligible  stockholders,  shall have
become  entitled to receive without  payment  therefor:  (a) other or additional
securities or property  (other than cash) by way of dividend,  (b) any cash paid
or  payable  except out of earned  surplus  of the  Company at the Grant Date as
increased  (decreased)  by  subsequent  credits  (charges)  thereto  (other than
credits  in respect of any  capital or paid-in  surplus or surplus  created as a
result  of a  revaluation  of  property)  or (c) other or  additional  (or less)
securities  or  property  (including  cash)  by  way of  stock-split,  spin-off,
split-up,   reclassification,   combination  of  shares  or  similar   corporate
rearrangement, then, and in each such case, the Holder of this Warrant, upon the
exercise thereof as provided in Section 1, shall be entitled to receive, subject
to the limitations and  restrictions  set forth above,  the amount of securities
and  property  (including  cash in the cases  referred to in clauses (b) and (c)
above) which such Holder would hold on the date of such exercise if on the Grant
Date it had been the  holder of record of the  number of shares of Common  Stock
(as constituted on the Grant Date) subscribed for upon such exercise as provided
in Section 1 and had  thereafter,  during the period  from the Grant Date to and
including  the date of such  exercise,  retained  such  shares  and/or all other
additional  (or  less)  securities  and  property  (including  cash in the cases
referred to in clauses (b) and (c) above)  receivable by it as aforesaid  during
such period,  giving effect to all adjustments  called for during such period by
Section 8.2.

     9.2 Adjustment for Reorganization,  Consolidation,  Merger, Etc. In case of
any reorganization of the Company (or any other  corporation,  the securities of
which are at the time  receivable  on the  exercise of this  Warrant)  after the
Grant  Date  or in  case  after  such  date  the  Company  (or  any  such  other
corporation) shall consolidate with or merge into another  corporation or convey
all or substantially all of its assets to another corporation, then, and in each
such case,  the Holder of this Warrant upon the exercise  thereof as provided in
Section  1  at  any  time  after  the   consummation  of  such   reorganization,
consolidation,  merger or conveyance,  shall be entitled to receive,  in lieu of
the securities and property  receivable  upon the exercise of this Warrant prior
to such consummation, the securities or property to which such Holder would have
been entitled upon such  consummation  if such Holder had exercised this Warrant
immediately  prior  thereto,  all subject to further  adjustment  as provided in
Section 8.1; in each such case, the terms of this Warrant shall be applicable to
the  securities or property  receivable  upon the exercise of this Warrant after
such consummation.

     9.3  Certificate  as to  Adjustments.  In each case of an adjustment in the
number of shares of Common Stock (or other securities or property) receivable on
the exercise of the Warrant,  the Company at its expense will  promptly  compute
such  adjustment  in  accordance  with the terms of the  Warrant  and  prepare a
certificate  setting forth such  adjustment and showing in detail the facts upon
which such adjustment is based,  including a statement of (a) the  consideration
received or to be received  by the Company for any  additional  shares of Common
Stock  issued or sold or deemed to have been  issued or sold,  (b) the number of
shares of Common Stock outstanding or deemed to be outstanding,  and (c) the pro
forma adjusted  Exercise  Price.  The Company will forthwith mail a copy of each
such certificate to the holder of this Warrant.

     9.4 Notices of Record Date, Etc.

     In case:

          (a) the Company shall take a record of the holders of its Common Stock
     (or  other  securities  at the time  receivable  upon the  exercise  of the
     Warrant) for the purpose of entitling  them to receive any dividend  (other
     than a cash dividend) or other distribution, or any right to subscribe for,
     purchase or otherwise acquire any shares of stock of any class or any other
     securities, or to receive any other right; or

          (b) of any capital  reorganization  of the Company (other than a stock
     split or reverse stock split), any reclassification of the capital stock of
     the  Company,  any  consolidation  or  merger of the  Company  with or into
     another  corporation  (other  than a  merger  for  purposes  of  change  of
     domicile) or any  conveyance of all or  substantially  all of the assets of
     the Company to another corporation; or

          (c)  of any  voluntary  or  involuntary  dissolution,  liquidation  or
     winding-up of the Company,

then,  and in each such case,  the  Company  shall mail or cause to be mailed to
each holder of the Warrant at the time outstanding a notice  specifying,  as the
case may be,  (i) the date on which a record is to be taken for the  purpose  of
such dividend,  distribution  or right,  and stating the amount and character of
such  dividend,   distribution  or  right,  or  (ii)  the  date  on  which  such
reorganization,    reclassification,    consolidation,    merger,    conveyance,
dissolution,  liquidation or winding-up is to take place,  and the time, if any,
is to be fixed, as to which the holders of record of Common Stock (or such other
securities  at the time  receivable  upon the exercise of the Warrant)  shall be
entitled to exchange their shares of Common Stock (or such other securities) for
securities   or   other   property   deliverable   upon   such   reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation or
winding-up.  Such notice  shall be mailed at least twenty (20) days prior to the
date  therein  specified  and the  Warrant may be  exercised  prior to said date
during the term of the Warrant no later than five (5) days prior to said date.

     10.  Legend.  In the event of the exercise of this Warrant and the issuance
of any of the Warrant Stock  hereunder,  all certificates  representing  Warrant
Stock not then  registered  for sale to the public under the 1933 Act shall bear
on the face thereof substantially the following legend, insofar as is consistent
with Delaware law:

          "THE SHARES  REPRESENTED BY THIS  CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE  SECURITIES  ACT OF 1933, AS AMENDED,  OR  APPLICABLE  STATE
          SECURITIES LAWS. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES
          ONLY AND MAY NOT BE OFFERED FOR SALE, SOLD,  TRANSFERRED,  ASSIGNED OR
          OTHERWISE  DISPOSED  OF IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
          STATEMENT  FOR THE  SECURITIES  UNDER THE  SECURITIES  ACT OF 1933, AS
          AMENDED,  AND  APPLICABLE  STATE  SECURITIES  LAWS,  OR AN  OPINION OF
          COUNSEL, REASONABLY SATISFACTORY TO NCT GROUP, INC., THAT REGISTRATION
          IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE  STATE SECURITIES LAWS OR
          UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT."

     11. Applicable Law. This Warrant is issued under and shall for all purposes
be  governed  by and  construed  in  accordance  with the  laws of the  State of
Delaware and of the United States of America.

     12. Notice.  Notices and other  communications to be given to the Holder of
the  Warrant  evidenced  by this  certificate  shall  be  deemed  to  have  been
sufficiently  given,  if delivered  or mailed,  addressed in the name and at the
address of such owner  appearing on the records of the  Company,  and if mailed,
sent  registered  or  certified  mail,   postage   prepaid.   Notices  or  other
communications to the Company shall be deemed to have been sufficiently given if
delivered by hand or mailed,  by registered or certified mail,  postage prepaid,
to the Company at 20 Ketchum Street,  Westport,  CT 06880, Attn: Chief Financial
Officer,  or at such other  address as the  Company  shall  have  designated  by
written notice to such registered owner as herein provided, Notice by mail shall
be deemed given when deposited in the United States mail as herein provided.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed on its
behalf, in its corporate name, by its duly authorized officer, all as of the day
and year set forth below.

Dated:                 December 6, 2002

                       NCT GROUP, INC.

                       By:    /s/ Michael J. Parrella
                           -------------------------------------------
                                   Michael J. Parrella
                                   Chairman & Chief Executive Officer

<PAGE>

                                                                       EXHIBIT A

                         REGISTRATION PENALTY PROVISIONS

                       [COPY LIST FROM 3(a)(10) COMPLAINT]

<PAGE>

                              WARRANT EXERCISE FORM
         (to be executed by the Holder in order to exercise the Warrant)

                       TO:   NCT Group, Inc.
                             20 Ketchum Street
                             Westport, CT  06880
                             Attention:  Cy E. Hammond
                             Senior Vice President, Chief Financial Officer

     The undersigned hereby irrevocably elects to exercise the within Warrant to
the extent of  purchasing  ______________  shares of Common  Stock of NCT Group,
Inc.

     The  undersigned  hereby makes payment for the  foregoing  shares of Common
Stock at the rate of $.01 per share,  or an  aggregate of  $___________.  In the
alternative,  if  "Cashless  Exercise" as described in Section 1.3 of the within
Warrant is available and is desired,  then check the  following:  __________ (If
checked, the number of shares of Common Stock will be calculated per Section 1.3
of the within Warrant.)

     The  undersigned  represents,  warrants and  certifies  that all offers and
sales  of the  Warrant  Stock  shall  be  made:  (i)  pursuant  to an  effective
registration  statement  under the Securities Act of 1933, as amended (the "1933
Act"), or pursuant to an exemption from, or in a transaction not subject to, the
registration  requirements  of  the  1993  Act;  and  (ii)  in  compliance  with
applicable state securities laws and those of any other applicable jurisdiction.

Dated:
       -----------------------------

                                          ----------------------------------
                                          Name of Warrant Holder

                                          -----------------------------------
                                          Signature

<PAGE>

                       INSTRUCTIONS FOR ISSUANCE OF STOCK
         (if other than to the registered Holder of the within Warrant)

Name:     ________________________________________________________
                   (Please type or print in block letters)

Address:  ________________________________________________________

Social Security or Taxpayer Identification Number:  ______________Exhibit 4(bn)

                                 NCT GROUP, INC.
                             STOCK OPTION AGREEMENT

     STOCK OPTION AGREEMENT,  dated as of December 26, 2002,  between NCT Group,
Inc., a Delaware corporation (the "Company"),  and MotorWorld,  Incorporated,  a
New Jersey corporation ("Optionee").

     The Company  hereby grants to Optionee  options to acquire  Common Stock of
the Company upon the following terms and conditions:

     1. Grant of Options. The Company grants to Optionee options (the "Options")
to purchase up to Twenty-Three Million (23,000,000) fully paid and nonassessable
shares of the  Common  Stock,  par value  $.01 per share,  of the  Company  (the
"Shares"),  to be issued upon the exercise of the  Options,  as set forth below.
Such Options are granted pursuant to the Consulting Agreement dated December 26,
2002 between the Company and Optionee (the "Agreement").

     2.  Exercise  Price.  The exercise  price of the Options shall be $.042 per
Share.  The  Company  shall  pay all  original  issue or  transfer  taxes on the
exercise of the Options.

     3. Vesting of Options. The Options shall vest as of the date hereof.

     4.  Expiration of Options.  The Options shall expire and not be exercisable
after December 26,sss 2007.

     5. Non-Assignability of Options.  Except as set forth in Section 12 hereof,
the Options shall not be given, granted, sold, exchanged,  transferred, pledged,
assigned  or  otherwise  encumbered  or  disposed  of by  Optionee  and shall be
exercisable only by Optionee or its agent or attorney-in-fact.

     6.  Method of Exercise of  Options.  Optionee  shall  notify the Company by
written notice sent by certified mail,  return receipt  requested,  addressed to
the Company's  principal  office,  or by hand delivery to such office, as to the
number of Shares which  Optionee  desires to purchase  under the options,  which
written notice shall be accompanied by Optionee's  check payable to the order of
the Company for the full option  price of such  Shares.  As soon as  practicable
after the receipt of such written  notice,  the Company shall,  at its principal
office,  tender to Optionee a certificate or  certificates  issued in Optionee's
name evidencing the Shares purchased by Optionee hereunder.

     7. Shares of Common Stock as Investment. By accepting the Options, Optionee
agrees that any and all Shares  purchased  upon the  exercise  thereof  shall be
acquired for investment and not for  distribution,  and upon the issuance of any
or all of the  Shares  subject to the  Options,  Optionee  shall  deliver to the
Company a representation  in writing that such Shares are being acquired in good
faith for  investment  and not with a view toward  resale or  distribution.  The
Company  may  place an  appropriate  restrictive  legend on the  certificate  or
certificates evidencing such Shares.

     8. Adjustments upon Changes in  Capitalization.  In the event of changes in
the outstanding Common Stock of the Company by reason of stock dividends,  stock
splits, recapitalizations,  mergers, consolidations,  combinations, exchanges of
shares,  separations,  reorganization  or  liquidations,  the  number  of Shares
issuable  upon the exercise of the Options,  the exercise  price thereof and any
limitation  on exercise set forth in Section 3 hereof  shall be  correspondingly
adjusted by the Company. Any such adjustment in the number of Shares shall apply
proportionately  to  only  the  then  unexercised  portion  of the  Options.  If
fractional shares would result from any such adjustment, the adjustment shall be
revised to the next lower whole number of shares.

     9.  No  Rights  as  Stockholders.  Optionee  shall  have  no  rights  as  a
stockholder in respect to the shares as to which the Options shall not have been
exercised and payment made as herein provided.

     10. Board  Approval.  The Option grants  described in Section 1 hereof have
been approved by the Board of Directors of the Company.

     11. Notices.  Notices,  demands and other  communications  given under this
Stock  Option  Agreement  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 Optionee:                              with a copy to:
--------------                               --------------

MotorWorld, Incorporated                     Peter Rosen, Esq.
431 Route 10                                 Rosen & Avigliano
Randolph, NJ  07869                          431 Route 10
Attention:  Steven Salkind                   Randolph, NJ  07689
Facsimile:  973-328-1335                     Facsimile:  973-361-1644

If to the Company:                           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

     12.  Miscellaneous.  This Stock Option  Agreement  may be amended,  and any
provision  of this Stock  Option  Agreement  may be  waived,  only via a written
instrument  executed by both  parties  hereto.  No course of dealing  between or
among any persons  having any  interest in this Stock Option  Agreement  will be
deemed  effective to modify or amend any part of this Stock Option  Agreement or
any rights or  obligations of any person under or by reason of this Stock Option
Agreement. This Stock Option Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors  and  permitted  assigns,  except that (a) the Company may not assign
this  Stock  Option  Agreement  or any of the  Company's  rights,  interests  or
obligations hereunder except with the prior written consent of Optionee; and (b)
Optionee may not assign this Stock Option Agreement or any of Optionee's rights,
interests or obligations  hereunder except (i) with the prior written consent of
the Company, or (ii) to an individual that controls Optionee (or a family member
thereof)  or (iii) to an entity  that  controls,  is  controlled  by or is under
common control with Optionee.  Whenever  possible,  each provision of this Stock
Option Agreement will be interpreted in such manner as to be effective and valid
under  applicable  law, but if any  provision of this Stock Option  Agreement is
held to be prohibited by or invalid under applicable law, such provision will be
ineffective  only to the  extent  of such  prohibition  or  invalidity,  without
invalidating the remainder of such provision or the remaining provisions of this
Stock  Option  Agreement.  This  Stock  Option  Agreement  contains  the  entire
agreement  between the parties  with  respect to the subject  matter  hereof and
supersedes any prior understandings, agreements or representations by or between
the parties, written or oral, with respect to such subject matter. To the extent
of any inconsistency between the Agreement and this Stock Option Agreement, this
Stock  Option  Agreement  shall  prevail.  This Stock  Option  Agreement  may be
executed  in one or more  counterparts,  any one of which need not  contain  the
signatures  of more than one party,  and all such  counterparts  taken  together
shall constitute one and the same instrument.  This Stock Option Agreement 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 Stock Option Agreement.

     IN WITNESS  WHEREOF,  the parties have executed this Stock Option Agreement
as of the day and year first above written. NCT GROUP, INC.

                By:            /s/ Michael J. Parrella
                            ----------------------------------------------
                            Michael J. Parrella
                            Chairman & Chief Executive Officer

                MOTORWORLD, INCORPORATED

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

<PAGE>

                              OPTION EXERCISE FORM

        (To be executed by the Optionee in order to exercise the Option)

                  TO:               NCT Group, Inc.
                                    20 Ketchum Street
                                    Westport, CT 06880
                                    Attention:  Chief Financial Officer

     The undersigned  hereby irrevocably elects to exercise the within Option to
the extent of purchasing  __________  shares of Common Stock, par value $.01 per
share, of NCT Group, Inc. (the "Shares") and hereby makes payment at the rate of
$___.____ per share, or an aggregate of $_________, in payment therefor.

     The undersigned represents, warrants and certifies as follows:

     (a)  Optionee  is  acquiring  the  Shares  in good  faith for  purposes  of
          investment and not with a view to the resale or distribution thereof.

     (b)  All  offers  and  sales of the  Shares  shall be made  pursuant  to an
          effective  registration statement under the Securities Act of 1933, as
          amended (the "1933 Act"),  or pursuant to an exemption  from,  or in a
          transaction not subject to, the registration  requirements of the 1933
          Act.

Dated:  ___________________, 20____

                           ----------------------------------------------------
                           (print name of Optionee)

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

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