Document:

Exhibt 10(bw)

                      Agreement Relating To Pro Tech Stock

     Agreement,  dated as of  September  30,  2002,  between NCT Group,  Inc., a
Delaware corporation ("NCT"), and Carole Salkind, an individual ("Salkind").

     NCT has executed and delivered to Salkind,  and Salkind  currently holds, a
Warrant of NCT dated  February 13, 2001,  as amended on December 21, 2001 (as so
amended,  the "2001  Warrant").  Under the 2001 Warrant,  Salkind has the right,
among other rights,  to purchase up to an aggregate of $500,000  worth of common
stock,  par value $.001 per share, of Pro Tech  Communications,  Inc., a Florida
corporation, as more fully described in the 2001 Warrant (the "Pro Tech Purchase
Right").

     Salkind  hereby   irrevocably  waives  the  Pro  Tech  Purchase  Right,  in
consideration  of the execution  and delivery by NCT to Salkind,  simultaneously
with the execution and delivery of this  Agreement by the parties,  of a Warrant
in the  form of  Exhibit  A  annexed  hereto.  Agreed  to as of the  date  first
referenced above:

NCT GROUP, INC.

By: /S/ MICHAEL J. PARRELLA
    ----------------------------------------
         Name:    MICHAEL J. PARRELLA
               -----------------------------
         Title: CHAIRMAN & CEO
                ----------------------------

/S/ CAROLE SALKIND
--------------------------------------------
Carole Salkind

<PAGE>

                                                                       Exhibit A

This  Warrant  has not been  registered  under the  Securities  Act of 1933,  as
amended,  or applicable  state  securities  laws, nor the securities laws of any
other  jurisdiction.  This Warrant may not be sold or transferred in the absence
of an effective registration statement under those securities laws or an opinion
of counsel, in form and substance  satisfactory to the Company, that the sale or
transfer is pursuant to an exemption to the  registration  requirements of those
securities laws.

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

                                 NCT GROUP, INC.

             (Incorporated under the laws of the State of Delaware)

         Void after 5:00 p.m., New York City time, on September 30, 2007

                                                             Warrant to Purchase
                                                            10,000,000 Shares of
                                                                    Common Stock

               Warrant for the Purchase of Shares of Common Stock

No. CS-23

     FOR  VALUE  RECEIVED,   NCT  GROUP,   INC.  (the  "Company"),   a  Delaware
corporation,  on this 30th day of  September,  2002 (the  "Grant  Date")  hereby
issues this warrant  (the  "Warrant")  and  certifies  that Carole  Salkind (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 September  30,  2002,  and
expiring,  unless earlier terminated as hereinafter  provided,  at 5:00 p.m. New
York City local time on September 30, 2007 up to Ten Million  (10,000,000) fully
paid and nonassessable shares of Common Stock, $.01 par value, of the Company at
a price of $0.07 per share (hereinafter referred to as the "Exercise Price").

     The term "Common  Stock" means the shares of Common Stock,  $.01 par value,
of the Company 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.  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 September 30, 2002,  and expiring at 5:00 p.m., New
York City local time, on September  30, 2007,  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.

     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.  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.  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.  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.

     2.  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.

     3. Warrant Stock  Transfer to Comply with the  Securities  Act of 1933. The
Warrant  Stock  may not be sold  or  otherwise  disposed  of  unless  registered
pursuant to the  provisions of the Securities Act of 1933, as amended (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.

     4. 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.

     5. 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.

     6.  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.

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

     8. Anti-Dilution Provisions.

          8.1  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.

          8.2 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.

          8.3  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.  The Company will forthwith mail a copy of each such  certificate
     to the holder of this Warrant.

          8.4 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.

     9. 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
shall bear on the face thereof  substantially the following legends,  insofar as
is consistent with Delaware law:

"The  shares of  common  stock  represented  by this  certificate  have not been
registered under the Securities Act of 1933, as amended,  or the Securities laws
of any  state or other  jurisdiction,  and may not be sold,  offered  for  sale,
assigned,  transferred or otherwise  disposed of, unless registered  pursuant to
the provisions of that Act and of such  Securities laws or an opinion of counsel
acceptable to the  Corporation is obtained  stating that such  disposition is in
compliance with an available exemption from such registration."

     10. Governing Law and  Jurisdiction.  This Warrant 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 Warrant.

     11. Notices.  Notices,  demands and other  communications  given under this
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 the Holder:                               with a copy to:
     ----------------                                --------------

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

     If to the 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

          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:  September 30, 2002

                                        NCT GROUP, INC.

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

<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:  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. and hereby makes payment at the rate of $______ per share,  or
     an aggregate of $________, in payment therefor.

          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 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 10(bx)

                        SETTLEMENT AGREEMENT AND RELEASE

     THIS  AGREEMENT  is dated as of October 30, 2002 and is made by and between
CRAMMER ROAD LLC ("Crammer Road") and NCT GROUP, INC. ("NCT").

                                   BACKGROUND

     WHEREAS,  NCT  and  Crammer  Road  entered  into a  Private  Equity  Credit
Agreement  dated as of September  27, 2000 (the "2000  Agreement"),  under which
Crammer Road acquired $500,000 of common stock, par value $.01 per share, of NCT
("Common Stock"); and

     WHEREAS,  NCT  and  Crammer  Road  entered  into a  Private  Equity  Credit
Agreement  dated as of April 12, 2001 (the  "Equity  Credit  Agreement"),  which
Crammer Road asserts obligated NCT to put a minimum of $17,000,000 (the "Minimum
Commitment  Amount")  of Common  Stock to Crammer  Road by means of monthly  put
notices; and

     WHEREAS,  simultaneously with the execution of the Equity Credit Agreement,
Crammer Road and NCT entered into a Registration  Rights  Agreement (the "Equity
Registration Rights Agreement"),  also dated as of April 12, 2001, which Crammer
Road asserts  required NCT to file a registration  statement with the Securities
and Exchange Commission ("SEC") (the "Equity Credit Registration Statement") and
to cause such Equity  Credit  Registration  Statement to become  effective on or
before September 15, 2001; and

     WHEREAS,  after  execution  of the  Equity  Credit  Agreement,  NCT did not
deliver  any put  notices  to  Crammer  Road  and did  not put to  Crammer  Road
$17,000,000 of its Common Stock; and

     WHEREAS,  NCT did not, in connection  with the Equity  Registration  Rights
Agreement,  cause the Equity  Credit  Registration  Statement  to be filed or to
become effective by September 15, 2001; and

     WHEREAS,  pursuant to the terms of an Exchange  Agreement dated as of April
12, 2001 (the  "Exchange  Agreement"),  NCT agreed to acquire  from Crammer Road
2,000 shares of common stock,  without par value ("DMC NY Common Stock"), of DMC
New York,  Inc.  ("DMC NY") having an aggregate  value of $2,000,000 in exchange
for 13,333,333 shares of Common Stock; and

     WHEREAS,  simultaneously with the execution of the Exchange Agreement,  NCT
and Crammer Road entered into a Registration Rights Agreement, dated as of April
12, 2001 (the "Exchange  Registration Rights Agreement"),  which required NCT to
file  a  registration   statement  with  the  SEC  (the  "Exchange  Registration
Statement"); and

     WHEREAS,  Crammer Road asserts that, under the Exchange Agreement,  NCT was
obligated to issue to Crammer Road up to 3,333,334  additional  shares of Common
Stock if the closing bid price of the Common Stock was less than $0.15 per share
for the five business days prior to the day before NCT requested acceleration of
the effectiveness of the Exchange  Registration  Statement (the "Reset Shares");
and

     WHEREAS, pursuant to the terms of the Exchange Agreement, Crammer Road also
received two  convertible  notes:  (i) NCT issued to Crammer Road its $1,000,000
convertible note (the "Convertible  Note") due December 31, 2001 in exchange for
1,000  shares of DMC NY  Common  Stock,  and (ii)  NCT's  subsidiary,  NCT Video
Displays, Inc. ("NCT Video"), entered into a subscription agreement with Crammer
Road under which NCT Video issued its $500,000 convertible note due December 31,
2001 (the "$500,000 Note") to Crammer Road in exchange for a $500,000 loan; and

     WHEREAS,  after entering into the Exchange  Agreement,  NCT did not pay the
principal or interest  described in the  Convertible  Note and did not issue the
Reset Shares; and

     WHEREAS, NCT did not cause the Exchange Registration  Statement registering
the  shares  of  Common  Stock  associated  with  the  Exchange  Agreement,  the
Convertible  Note,  the  $500,000  Note or the 2000  Agreement to be filed or to
become effective by July 26, 2001; and

     WHEREAS,  on April 12,  2001,  NCT entered  into a related  agreement  with
Crammer  Road (the  "Additional  Agreement")  under which NCT agreed to purchase
1,000 shares of DMC NY Common Stock from Crammer Road for  $1,000,000 in cash if
certain  milestones  relating to  registration,  via the  Exchange  Registration
Statement, of the NCT Common Stock described in the Exchange Registration Rights
Agreement were not met; and

     WHEREAS, NCT made a cash payment of $100,000 under the Additional Agreement
but did not pay the remaining $900,000 described therein;

     WHEREAS,  on or about  September  9,  2002,  Crammer  Road  filed an action
against NCT  entitled  Crammer  Road LLC vs. NCT Group,  Inc.,  Civil Action No.
302CV1590 (the "Action"),  United States District Court, District of Connecticut
(the "Court"), whereby Crammer Road asserted claims against NCT under the Equity
Credit Agreement,  Equity  Registration  Rights Agreement,  Exchange  Agreement,
Exchange  Registration Rights Agreement and Additional Agreement  (collectively,
the "2001 Agreements"); and

     WHEREAS,  Crammer  Road and NCT desire to resolve,  settle and  compromise,
among other things, the claims that Crammer Road has asserted against NCT, which
arise out of or relate to (a) the Equity Credit Registration Statement,  (b) the
Exchange  Registration  Statement,  (c) the  delivery of put notices and puts of
Common Stock  described  above,  (d) the issuance of the Reset  Shares,  (e) the
payments  under the  Convertible  Note and (f) the payment of $900,000 under the
Additional  Agreement  (items (a) - (f) hereinafter  referred to collectively as
the "Claims").

     With this background  incorporated  herein, the parties hereby agree to the
following settlement:

                               TERMS OF SETTLEMENT

     1.  SETTLEMENT  SHARES.  Following  entry  of an  order  by  the  Court  in
accordance  with  Paragraph 2 herein and the  delivery by Crammer Road to NCT of
the Stipulation of Dismissal (as defined below),  NCT shall issue and deliver to
Crammer Road shares of Common Stock (the "Settlement Shares") as follows:

(a)  Forty  million  (40,000,000)  shares of Common  Stock  shall be issued  and
     delivered  by NCT to  Crammer  Road  within  ten days after the entry of an
     Order by the Court in accordance  with  Paragraph 2 herein and the delivery
     by Crammer Road to NCT of the Stipulation of Dismissal; and

(b)  Twenty-eight  million  (28,000,000) shares of Common Stock (the "Additional
     Settlement Shares") shall be issued and delivered by NCT to Crammer Road 65
     days after  delivery  of a written  demand by  Crammer  Road to NCT for the
     Additional  Settlement Shares (which written demand may be made only if, by
     then,  the Order and  Stipulation  of Dismissal  described  above have been
     entered and delivered, respectively).

Notwithstanding  anything to the contrary  contained herein, it is the intention
of the parties that the Additional  Settlement  Shares,  together with all other
shares  of  Common  Stock  then  owned by  Crammer  Road,  whether  of record or
beneficially,  should not result in Crammer  Road  owning  more than 9.9% of all
such Common Stock as would be  outstanding  on the date of the notice  demanding
the Additional Settlement Shares.

     2. FAIRNESS HEARING. Upon the execution hereof, Crammer Road and NCT agree,
pursuant  to  15  U.S.C.ss.77(a)(10),   to  immediately  submit  the  terms  and
conditions of this  Agreement to the Court for a hearing on the fairness of such
terms  and  conditions,  and  the  issuance  exempt  from  registration  of  the
Settlement  Shares.  This  Agreement  shall become binding upon the parties only
upon entry of an order by the Court  substantially in the form annexed hereto as
Exhibit A (the "Order").

     3. NECESSARY ACTION. At all times after the execution of this Agreement and
entry of the Order by the Court, each party hereto agrees to take or cause to be
taken all such necessary action including, without limitation, the execution and
delivery  of  such  further  instruments  and  documents,  as may be  reasonably
requested by any party for such  purposes or otherwise  necessary to complete or
perfect the transactions contemplated hereby.

     4.  RELEASES.  Upon  receipt  of all of the  Settlement  Shares  for and in
consideration of the terms and conditions of this Agreement,  and except for the
obligations  and  representations  arising or made hereunder or a breach hereof,
the parties  hereby  release,  acquit and forever  discharge the other and each,
every  and all of their  current  and past  officers,  directors,  shareholders,
affiliated  corporations,   subsidiaries,  agents,  employees,  representatives,
attorneys, predecessors, successors and assigns (the "Released Parties"), of and
from any and all claims, damages, causes of action, suits and costs, of whatever
nature,  character or  description,  whether  known or unknown,  anticipated  or
unanticipated,  which the parties may now have or may hereafter have or claim to
have  against  each  other  with  respect to (a) the  Claims,  (b)  registration
obligations  under the 2000  Agreement  (to the extent,  if any,  that a release
therefrom  has not  already  been  given) and (c) the 2001  Agreements.  Nothing
contained  herein shall be deemed to negate or affect  Crammer  Road's right and
title to any securities heretofore issued to it by NCT or any subsidiary of NCT.

     5.  CONTINUING  JURISDICTION.  Simultaneously  with the  execution  of this
Agreement,  the  attorneys  representing  the  parties  hereto  will  execute  a
stipulation of dismissal  substantially  in the form annexed hereto as Exhibit B
(the "Stipulation of Dismissal"). In order to enable the Court to grant specific
enforcement or other equitable relief in connection with this Agreement, (a) the
parties consent to the  jurisdiction of the Court for purposes of enforcing this
Agreement and (b) each party to this Agreement  expressly  waives any contention
that  there  is an  adequate  remedy  at law or any  like  doctrine  that  might
otherwise preclude injunctive relief to enforce this Agreement.

     6. CONDITIONS PRECEDENT.  If NCT shall default in delivering the Settlement
Shares to Crammer Road as required by Paragraphs 1 and 2 herein, or if the Order
shall not have been entered by the Court on or prior to December 31, 2002,  then
this Agreement shall be null and void,  unless extended by written  agreement of
the parties.  Both parties agree to use their best efforts to cooperate with the
Court to cause the Order to be timely  entered and agree that delays  caused due
to Court calendars shall not constitute a valid reason to void this Agreement.

     7.  INFORMATION.  NCT and  Crammer  Road each  represent  that prior to the
execution of this Agreement,  they have fully informed  themselves of its terms,
contents,  conditions and effects,  and that no promise or representation of any
kind has been made to them except as expressly stated in this Agreement.

     8. OWNERSHIP AND AUTHORITY. NCT and Crammer Road represent and warrant that
they have not sold, assigned, transferred, conveyed or otherwise disposed of any
or all of any claim,  demand,  right or cause of action,  relating to any matter
which  covered by this  Agreement,  that each is the sole  owner of such  claim,
demand,  right or cause of action,  and each has the power and authority and has
been duly  authorized  to enter into and perform  this  Agreement  and that this
Agreement is the binding obligation of each,  enforceable in accordance with its
terms.

     9. NO ADMISSION. This Agreement is contractual and it has been entered into
in order to compromise  disputed claims and to avoid the uncertainty and expense
of the  litigation.  This  Agreement and each of its provisions in any orders of
the Court  relating  to it shall not be offered or  received  in evidence in any
action,  proceeding  or otherwise  used as an admission or  concession as to the
merits of the  Action or the  liability  of any nature on the part of any of the
parties hereto except to enforce its terms.

     10.  BINDING  NATURE.  This  Agreement  shall  be  binding  on all  parties
executing this Agreement and their respective successors, assigns and heirs.

     11. AUTHORITY TO BIND. Each party to this Agreement represents and warrants
that  the  execution,  delivery  and  performance  of  this  Agreement  and  the
consummation  of the  transactions  provided  in this  Agreement  have been duly
authorized by all necessary action of the respective  entity and that the person
executing  this  Agreement  on its  behalf  has the full  capacity  to bind that
entity.  Each party further represents and warrants that is has been represented
by  independent  counsel of its choice in connection  with the  negotiation  and
execution of this Agreement and that counsel has reviewed this Agreement.

     12.  SIGNATURES.  This  Agreement  may be  signed in  counterparts  and the
Agreement,  together with its counterpart signature pages, shall be deemed valid
and binding on each party when duly executed by all parties.

     13. CHOICE OF LAW, ETC.  Notwithstanding the place where this Agreement may
be  executed  by  either of the  parties,  or any  other  factor,  all terms and
provisions hereof shall be governed by and construed in accordance with the laws
of the  State of  Connecticut,  applicable  to  agreements  made and to be fully
performed  in that State and without  regard to the  principles  of conflicts of
laws thereof.  Any action brought to enforce,  or otherwise  arising out of this
Agreement  shall be brought  only in the Federal  Court  sitting in the State of
Connecticut.

     14.  INCONSISTENCY.  In the event of any inconsistency between the terms of
this Agreement and any other document executed in connection herewith, the terms
of this  Agreement  shall  control  to the  extent  necessary  to  resolve  such
inconsistency.

         IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first indicated above.

                                CRAMMER ROAD  LLC

                                By: /s/ NAVIGATOR MANAGEMENT LTD.
                                    -----------------------------
                                    Its DIRECTOR
                                    -------------------------------

                                NCT GROUP, INC.

                                By: CY E. HAMMOND
                                    -------------------------------
                                    Its SENIOR VP & CFO
                                    -------------------------------

<PAGE>

                                                                       EXHIBIT A

                          UNITED STATES DISTRICT COURT
                             DISTRICT OF CONNECTICUT

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

                                                              CIVIL ACTION NO:
CRAMMER ROAD LLC,
                                                              302-CV-1590 (RNC)
                            Plaintiff,

                  - against -
                                                              ____________, 2002
NCT GROUP, INC.,

                           Defendant.

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

                 ORDER GRANTING APPROVAL OF SETTLEMENT AGREEMENT

     This matter  having come on for a hearing on the ____ day of  ____________,
2002,  to approve  the  Settlement  Agreement  and  Release  entered  into as of
______________, 2002 (the "Settlement Agreement") between Plaintiff Crammer Road
LLC ("Crammer Road") and Defendant NCT Group, Inc. ("NCT" and, collectively with
Crammer  Road,  the  "Parties"),  and the Court  having held a hearing as to the
fairness  of the terms and  conditions  of the  Settlement  Agreement  and being
otherwise fully advised in the premises, the Court hereby finds as follows:

     1. The Court has been advised that the Parties  intend that the sale of the
Settlement Shares (as defined by the Settlement Agreement and, hereinafter,  the
"Settlement  Shares") to and the resale of the Settlement Shares by Crammer Road
in the United States,  assuming  satisfaction of all other applicable securities
laws and regulations,  will be exempt from registration under the Securities Act
of 1933  (the  "Securities  Act")  in  reliance  upon  Section  3(a)(10)  of the
Securities  Act  based  upon  this  Court's  finding  herein  that the terms and
conditions of the issuance of the  Settlement  Shares by NCT to Crammer Road are
fair to Crammer Road;

     2. The hearing  having been  scheduled upon the consent of Crammer Road and
NCT, Crammer Road has had adequate notice of the hearing and Crammer Road is the
only party to whom  Settlement  Shares will be issued pursuant to the Settlement
Agreement;

     3. The terms and  conditions  of the issuance of the  Settlement  Shares in
exchange  for the  release  of  certain  claims as set  forth in the  Settlement
Agreement are fair to Crammer Road, the only party to whom the Settlement Shares
will be issued;

     4.  The  fairness  hearing  was  open to  Crammer  Road.  Crammer  Road was
represented by counsel at the hearing who  acknowledged  that adequate notice of
the hearing was given and consented to the entry of this order.

     It is  therefore  ORDERED AND  ADJUDGED  that the  Settlement  Agreement is
hereby  approved  as fair to the  party to whom the  Settlement  Shares  will be
issued,  within the meaning of Section  3(a)(10) of the  Securities Act and that
the sale of the Settlement Shares to, and the resale of the Settlement Shares in
the  United  States  by,  Crammer  Road,  assuming  satisfaction  of  all  other
applicable  securities laws and  regulations,  will be exempt from  registration
under the Securities Act.

         SO ORDERED, this ____ day

         of _________________, 2002.

         _____________________________
         The Honorable _______________

<PAGE>

                                                                       EXHIBIT B

                          UNITED STATES DISTRICT COURT
                             DISTRICT OF CONNECTICUT

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

                                                              CIVIL ACTION NO:
CRAMMER ROAD LLC,
                                                              302-CV-1590 (RNC)
                            Plaintiff,

                  - against -
                                                              ____________, 2002
NCT GROUP, INC.,

                           Defendant.

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

                            STIPULATION OF DISMISSAL

     IT IS HEREBY  STIPULATED AND AGREED,  by and between the  undersigned,  the
attorneys of record for all the parties to the above-entitled  action,  pursuant
to the Federal  Rules of Civil  Procedure,  that  whereas no party  hereto is an
infant  or  incompetent  person  for  whom a  committee  has been  appointed  or
conservatee  and no person not a party has an interest in the subject  matter of
the action, the above-entitled  action be, and the same hereby is,  discontinued
with prejudice, each party to bear its own costs.

     This  Stipulation may be filed without further notice with the Clerk of the
Court.

Dated:  _____________, 2002

KERNAN & HENRY, LLP                                 ______________________

By:_________________________________________        By:_________________________
      John K. McDonald                                    _____________________
      P.O. Box 2156                                       _____________________
      Waterbury, CT  06722                                _____________________
      (203) 756-8961

      Attorneys for Plaintiff                            Attorneys for Defendant

                                   SO ORDERED:

                                                     ___________________________
                                                     The Honorable _____________

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