Settlement Agreement among DMC HealthMedia Inc., Distributed Media Corporation, NCT Group, Inc., Kalkines, Arky, Zall & Bernstein LLP, Health Net Connections LLC, and HNC New York Representatives LLC

Summary

This agreement, dated December 11, 2002, is between DMC HealthMedia Inc., Distributed Media Corporation, NCT Group, Inc., Kalkines, Arky, Zall & Bernstein LLP, Health Net Connections LLC, and HNC New York Representatives LLC. It cancels and terminates all obligations under three prior agreements among the parties. In exchange, NCT Group, Inc. will issue a warrant to purchase 1,250,000 shares of its common stock at a set price, with the shares to be registered in the next available SEC filing. The warrant will be issued to KEQ Partners II on behalf of certain parties.

EX-10.BM 11 exh-10bm.txt SETTLEMENT AGREEMENT Exhibit 10(bm) DMC HealthMedia Inc. 20 Ketchum Street Westport, Connecticut 06880 December 11, 2002 Kalkines, Arky, Zall & Bernstein LLP DMCH New York Representatives LLC 1675 Broadway, 27th Floor c/o Kalkines, Arky, Zall & Bernstein LLP New York, New York 10019 1675 Broadway, 27th Floor Attn: Steven M. Polan, Esq. New York, New York 10019 Attn: George Kalkines, Esq. Health Net Connections LLC c/o Kalkines, Arky, Zall & Bernstein LLP 1675 Broadway, 27th Floor New York, New York 10019 Attn: George Kalkines, Esq. Ladies and Gentlemen: Reference is made to the following: (i) The engagement letter (the "KAZB Engagement Letter"), dated as of May 1, 2000, by and between DMC HealthMedia Inc. f/k/a HealthAdNet.com, Inc. ("DMCH") and Kalkines, Arky, Zall & Bernstein LLP ("KAZB"); (ii) The heads of agreement (the "Connections Agreement"), dated as of May 1, 2000, by and between DMCH and Distributed Media Corporation f/k/a Distributed Media.com, Inc. ("DMC"), on the one hand, and Health Net Connections LLC ("Connections"), on the other hand; (iii) The heads of agreement (the "NY Agreement"), dated as of May 1, 2000, by and between DMCH and DMC, on the one hand, and HNC New York Representatives LLC ("NYR"), on the other hand. This is to confirm that, effective as of the date hereof, subject to the approval of this agreement by the Board of Directors of NCT, all of the obligations of each of the parties under the KAZB Engagement Letter, the Connections Agreement and the NY Agreement are cancelled, each of such agreements are terminated and none of the parties to this letter agreement shall have any obligation or liability to any of the other parties hereto under any of such agreements; provided, however, that NCT Group, Inc. ("NCT"), an affiliate of DMCH and DMC, shall have those obligations set forth in this letter agreement. Subject to the approval of the Board of Directors of NCT (which approval NCT shall attempt to secure as soon as practicable), NCT shall within thirty days after the date hereof cause to be issued as provided in this letter agreement a warrant (the "Warrant") to purchase 1,250,000 shares of common stock of NCT, par value $.01 per share (the "Common Stock"), at an exercise price of $.063. NCT covenants to include the Common Stock underlying the Warrant within the next available registration statement filed with the SEC by NCT that pertains to Common Stock. The Warrant shall be immediately exercisable and the Common Stock issuable upon exercise of the Warrant shall, when issued upon such exercise and upon delivery be validly issued, fully paid and nonassessable. KAZB, Connections and NYR hereby direct that the Warrant shall be issued to the following entity on behalf of KAZB, Connections and NYR: KEQ Partners II c/o Kalkines, Arky, Zall & Bernstein LLP 1675 Broadway, 27th Floor New York, New York 10019 Attn: Steven M. Polan, Esq. Please confirm your agreement to the foregoing by signing in the space provided below. Thank you. Very Truly Yours, DMC HealthMedia Inc. By: \s\ Jonathan Charry --------------------------------- President & CEO Distributed Media Corporation By: \s\ Michael Parrella --------------------------------- Chairman NCT Group, Inc. By: \s\ Michael Parrella --------------------------------- Chairman Agreed and Accepted: Kalkines, Arky, Zall & Bernstein LLP By: \s\ Steven M. Polan --------------------------------------- Steven M. Polan, Partner Health Net Connections LLC By: \s\ George Kalkine --------------------------------------- George Kalkines, Member HNC New York Representatives LLC By: \s\ George Kalkines --------------------------------------- George Kalkines, Member