Document:

Exhibit 4(ef)

THIS WARRANT AND THE COMMON  SHARES  ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS WARRANT
AND THE COMMON SHARES  ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN ACQUIRED
FOR INVESTMENT  PURPOSES ONLY AND MAY NOT BE SOLD,  OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED  IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT AS TO THIS
WARRANT UNDER SAID ACT OR ANY APPLICABLE  STATE  SECURITIES LAW OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO NCT GROUP, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED  UNDER SAID ACT OR  APPLICABLE  STATE  SECURITIES  LAWS OR UNLESS  SOLD
PURSUANT TO RULE 144 UNDER SAID ACT.

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

                                 NCT GROUP, INC.

             (Incorporated under the laws of the State of Delaware)

           Void after 5:00 p.m., New York City time, on July 23, 2009

                                                             Warrant to Purchase
                                                             5,555,556 Shares of
                                                                    Common Stock

               Warrant for the Purchase of Shares of Common Stock

No. ACA-3

     FOR  VALUE  RECEIVED,   NCT  GROUP,   INC.  (the  "Company"),   a  Delaware
corporation,  on this 23rd day of July,  2004 (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 July 23, 2009 (the "Expiration Date") up to Five Million
Five Hundred Fifty-Five  Thousand Five Hundred Fifty-Six  (5,555,556) fully paid
and  nonassessable  shares of Common Stock,  $.01 par value, of the Company at a
per share price equal to the lesser of (i) $0.0232 or (ii) 80% of the average of
the closing bid prices of the Common  Stock as reported by  Bloomberg  Financial
Markets  ("Bloomberg")  for the OTC  Bulletin  Board for the five  trading  days
preceding  the date of  exercise  hereof  (such  lesser  amount,  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

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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. Subject to Section 3 hereof, 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 Grant
     Date,  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
     (x) the number of shares of Warrant  Stock as to which the Warrant is being
     exercised,  multiplied  by (y) 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

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     the last sale  price of the  Common  Stock on the  Nasdaq  National  Market
     System (the "Nasdaq-NM") as reported by 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 Failure to Deliver Shares. In addition to any other remedies which
     may be available to the Holder, in the event that the Company fails for any
     reason to effect timely delivery of shares of Common Stock upon exercise of
     this  Warrant,  the Holder  will be  entitled  to revoke all or part of the
     relevant exercise by delivery of a notice to such effect to the Company.

          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 61 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.  Share  Issuance.  Until  one  year  after  the  Company's  current  S-1
registration  statement  under review by the Securities and Exchange  Commission
(the "SEC") with file number  333-60574 (the "Current  Registration  Statement")
becomes effective (the "Price Protection  Date"), if the Company shall issue any
Common Stock prior to the complete  exercise

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<PAGE>

of this Warrant for a  consideration  less than the Exercise Price that would be
in effect at the time of such issue, then, and thereafter successively upon each
such issue  prior to the Price  Protection  Date,  the  Purchase  Price shall be
reduced to such other lower issue price.  For purposes of this  adjustment,  the
issuance of any security or debt instrument of the Company carrying the right to
convert such  security or debt  instrument  into Common Stock or of any warrant,
right or option to purchase  Common Stock shall result in an  adjustment  to the
Exercise  Price  upon  the  issuance  of  the  above-described   security,  debt
instrument,  warrant,  right, or option.  The reduction of the Exercise Price as
described  in this  Section 2 is in addition  to the other  rights of the Holder
described in the Subscription  Agreement,  dated as of the date hereof,  between
the Company and the Holder (the "Subscription Agreement").

     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.  Notwithstanding the foregoing,  a default shall not exist and penalties
shall not accrue for a failure by the Company either to have a sufficient number
of shares of Common Stock  reserved for issuance and delivery of this Warrant or
to issue shares of Common Stock upon proffer of exercise demand by the holder of
this Warrant if, at the time,  the Company does not have a sufficient  number of
authorized but unissued  shares of Common Stock to perform the  applicable  act;
provided,  however, that this sentence shall apply only until the earlier of (a)
three months after the Current  Registration  Statement  becomes effective or is
abandoned or (b) August 30, 2004.

     4.Warrant Stock Registration and Transfer.

          4.1 Registration. The shares of Common Stock issuable upon exercise of
     this Warrant shall be registered  for sale to the public under the 1933 Act
     as described in Section 11 of the Subscription Agreement.

          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

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<PAGE>

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 9.2.

          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  9.1;  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.

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<PAGE>

          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

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<PAGE>

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.
           THESE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY
           AND  MAY  NOT  BE  SOLD,   OFFERED  FOR  SALE,   PLEDGED  OR
           HYPOTHECATED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
           STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE  STATE
           SECURITIES   LAWS  OR  AN  OPINION  OF  COUNSEL   REASONABLY
           SATISFACTORY  TO NCT GROUP,  INC. THAT SUCH  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:     July 23, 2004

                                      NCT GROUP, INC.

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

                                       7
<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  $.___  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

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                       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:  ______________________

                                       9Exhibit 4(eg)

THIS WARRANT AND THE COMMON  SHARES  ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS WARRANT
AND THE COMMON SHARES  ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN ACQUIRED
FOR INVESTMENT  PURPOSES ONLY AND MAY NOT BE SOLD,  OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED  IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT AS TO THIS
WARRANT UNDER SAID ACT OR ANY APPLICABLE  STATE  SECURITIES LAW OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO NCT GROUP, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED  UNDER SAID ACT OR  APPLICABLE  STATE  SECURITIES  LAWS OR UNLESS  SOLD
PURSUANT TO RULE 144 UNDER SAID ACT.

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

                                 NCT GROUP, INC.

             (Incorporated under the laws of the State of Delaware)

           Void after 5:00 p.m., New York City time, on July ___, 2009

                                                             Warrant to Purchase
                                                             6,944,445 Shares of
                                                                    Common Stock

               Warrant for the Purchase of Shares of Common Stock

No. LFL-1
---------

     FOR  VALUE  RECEIVED,   NCT  GROUP,   INC.  (the  "Company"),   a  Delaware
corporation,  on this 23rd day of July,  2004 (the "Grant  Date")  hereby issues
this warrant (the  "Warrant") and certifies that Longview Fund LP (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 July 23, 2009 (the  "Expiration  Date") up to Six Million  Nine  Hundred
Forty-Four   Thousand  Four  Hundred  Forty-Five   (6,944,445)  fully  paid  and
nonassessable  shares of Common Stock,  $.01 par value,  of the Company at a per
share price equal to the lesser of (i) $0.0232 or (ii) 80% of the average of the
closing  bid prices of the  Common  Stock as  reported  by  Bloomberg  Financial
Markets  ("Bloomberg")  for the OTC  Bulletin  Board for the five  trading  days
preceding  the date of  exercise  hereof  (such  lesser  amount,  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

                                       1
<PAGE>

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. Subject to Section 3 hereof, 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 Grant
     Date,  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
     (x) the number of shares of Warrant  Stock as to which the Warrant is being
     exercised,  multiplied  by (y) 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

                                       2
<PAGE>

     the last sale  price of the  Common  Stock on the  Nasdaq  National  Market
     System (the "Nasdaq-NM") as reported by 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 Failure to Deliver Shares. In addition to any other remedies which
     may be available to the Holder, in the event that the Company fails for any
     reason to effect timely delivery of shares of Common Stock upon exercise of
     this  Warrant,  the Holder  will be  entitled  to revoke all or part of the
     relevant exercise by delivery of a notice to such effect to the Company.

          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 61 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.  Share  Issuance.  Until  one  year  after  the  Company's  current  S-1
registration  statement  under review by the Securities and Exchange  Commission
(the "SEC") with file number  333-60574 (the "Current  Registration  Statement")
becomes effective (the "Price Protection  Date"), if the Company shall issue any
Common Stock prior to the complete  exercise

                                       3
<PAGE>

of this Warrant for a  consideration  less than the Exercise Price that would be
in effect at the time of such issue, then, and thereafter successively upon each
such issue  prior to the Price  Protection  Date,  the  Purchase  Price shall be
reduced to such other lower issue price.  For purposes of this  adjustment,  the
issuance of any security or debt instrument of the Company carrying the right to
convert such  security or debt  instrument  into Common Stock or of any warrant,
right or option to purchase  Common Stock shall result in an  adjustment  to the
Exercise  Price  upon  the  issuance  of  the  above-described   security,  debt
instrument,  warrant,  right, or option.  The reduction of the Exercise Price as
described  in this  Section 2 is in addition  to the other  rights of the Holder
described in the Subscription  Agreement,  dated as of the date hereof,  between
the Company and the Holder (the "Subscription Agreement").

     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.  Notwithstanding the foregoing,  a default shall not exist and penalties
shall not accrue for a failure by the Company either to have a sufficient number
of shares of Common Stock  reserved for issuance and delivery of this Warrant or
to issue shares of Common Stock upon proffer of exercise demand by the holder of
this Warrant if, at the time,  the Company does not have a sufficient  number of
authorized but unissued  shares of Common Stock to perform the  applicable  act;
provided,  however, that this sentence shall apply only until the earlier of (a)
three months after the Current  Registration  Statement  becomes effective or is
abandoned or (b) August 30, 2004.

     4.  Warrant Stock Registration and Transfer.

          4.1 Registration. The shares of Common Stock issuable upon exercise of
     this Warrant shall be registered  for sale to the public under the 1933 Act
     as described in Section 11 of the Subscription Agreement.

          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

                                       4
<PAGE>

     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 9.2.

      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 9.1; 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.

                                       5
<PAGE>

      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

                                       6
<PAGE>

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.
           THESE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY
           AND  MAY  NOT  BE  SOLD,   OFFERED  FOR  SALE,   PLEDGED  OR
           HYPOTHECATED  IN THE  ABSENCE OF AN  EFFECTIVE  REGISTRATION
           STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE  STATE
           SECURITIES   LAWS  OR  AN  OPINION  OF  COUNSEL   REASONABLY
           SATISFACTORY  TO NCT GROUP,  INC. THAT SUCH  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:     July 23, 2004

                                      NCT GROUP, INC.

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

                                       7
<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  $.___  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

                                       8
<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:  ______________________

                                       9

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