-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 G0tM5DIlznVyKlSMJyXDU5/BNCHI+OixFvuagwW0A3A3/TxUi109b8UtHp/uOKJ8
 KOPsSnTjDhmI1ef/77vR1g==

<SEC-DOCUMENT>0001157523-08-002191.txt : 20080312
<SEC-HEADER>0001157523-08-002191.hdr.sgml : 20080312
<ACCEPTANCE-DATETIME>20080312163155
ACCESSION NUMBER:		0001157523-08-002191
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		9
CONFORMED PERIOD OF REPORT:	20080131
FILED AS OF DATE:		20080312
DATE AS OF CHANGE:		20080312

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			COPYTELE INC
		CENTRAL INDEX KEY:			0000715446
		STANDARD INDUSTRIAL CLASSIFICATION:	COMPUTER PERIPHERAL EQUIPMENT, NEC [3577]
		IRS NUMBER:				112622630
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-11254
		FILM NUMBER:		08683882

	BUSINESS ADDRESS:	
		STREET 1:		900 WALT WHITMAN RD
		CITY:			MELVILLE
		STATE:			NY
		ZIP:			11747
		BUSINESS PHONE:		5165495900

	MAIL ADDRESS:	
		STREET 1:		900 WALT WHITMAN ROAD
		CITY:			MELVILLE
		STATE:			NY
		ZIP:			11747
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>a5631402.txt
<DESCRIPTION>COPYTELE, INC. 10-Q
<TEXT>
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                 For the quarterly period ended January 31, 2008

                         Commission file number 0-11254


                                 COPYTELE, INC.
- --------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


               Delaware                                   11-2622630
               --------                                   ----------
   (State or other jurisdiction of                     (I.R.S. Employer
   incorporation or organization)                      Identification no.)


               900 Walt Whitman Road
                   Melville, NY                                       11747
- --------------------------------------------------------------------------------
    (Address of principal executive offices)                        (Zip Code)


                                 (631) 549-5900
- --------------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                  Yes X   No
                                     ---    ---

Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.

         Large accelerated filer [   ]           Accelerated filer         [ X ]
         Non-accelerated filer   [   ]           Smaller Reporting Company [ X ]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).

                                    Yes   No X
                                      ---   ---

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

On March 5, 2008, the registrant had outstanding 128,721,136 shares of Common
Stock, par value $.01 per share, which is the registrant's only class of common
stock.


<PAGE>

                                TABLE OF CONTENTS
                                -----------------


<TABLE>
<CAPTION>
<S>                      <C> <C>                                                                          <C>
PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.

          Condensed Consolidated Balance Sheets as of January 31, 2008 (Unaudited)
             and October 31, 2007                                                                         3

         Condensed Consolidated Statements of Operations (Unaudited) for the three
            months ended January 31, 2008 and 2007                                                        4

         Condensed Consolidated Statements of Cash Flows (Unaudited) for the three
            months ended January 31, 2008 and 2007                                                        5

         Notes to Condensed Consolidated Financial Statements (Unaudited)                                 6 - 18

Item 2.  Management's Discussion and Analysis of Financial Condition and
             Results of Operations.                                                                      19 - 28

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.                                     28

Item 4.  Controls and Procedures.                                                                        29


PART II.  OTHER INFORMATION

Item 1A. Risk Factors.                                                                                   29

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.                                    29

Item 6.  Exhibits.                                                                                       29 - 30

         SIGNATURES                                                                                      31
</TABLE>

                                       2
<PAGE>


                          PART I. FINANCIAL INFORMATION
                          -----------------------------
Item 1.  Financial Statements.
         ---------------------

                         COPYTELE, INC. AND SUBSIDIARIES
                         -------------------------------
                      CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
<S>                                                                                          <C>           <C>

                                                                                              (Unaudited)
                                                                                             -------------
                                                                                              January 31,   October 31,
                                           ASSETS                                                 2008         2007*
                                           ------                                            ------------- -------------
CURRENT ASSETS:
   Cash and cash equivalents                                                                 $    793,644  $    669,141
   Short-term investments                                                                         441,000       400,000
   Accounts receivable, net of allowance for doubtful accounts of $60,000 and $-0-,
    respectively                                                                                   60,000       120,000
   Inventories                                                                                    225,112       191,923
   Prepaid expenses and other current assets                                                       33,397        34,555
                                                                                             ------------- -------------
                    Total current assets                                                        1,553,153     1,415,619

INVESTMENT in Videocon Industries Limited global depository receipts, at
 fair value                                                                                    17,271,026             -

INVESTMENT in Digital Info Security Co. Inc. common stock, at cost                                417,000       417,000

LOAN RECEIVABLE                                                                                 5,000,000             -

PROPERTY AND EQUIPMENT, net                                                                        30,539        26,653

OTHER ASSETS                                                                                       10,887        10,887
                                                                                             ------------- -------------
                                                                                             $ 24,282,605  $  1,870,159
                                                                                             ============= =============

                            LIABILITIES AND SHAREHOLDERS' EQUITY
                            ------------------------------------

CURRENT LIABILITIES:
   Accounts payable                                                                          $    403,285  $    347,141
   Accrued liabilities                                                                            183,551       331,668
                                                                                             ------------- -------------
                    Total current liabilities                                                     586,836       678,809

LOAN PAYABLE                                                                                    5,000,000             -

SHAREHOLDERS' EQUITY:
   Preferred stock, par value $100 per share; 500,000 shares authorized; no
      shares issued or outstanding                                                                      -             -
   Common stock, par value $.01 per share; 240,000,000 shares authorized;
       128,580,416 and 106,911,315 shares issued and outstanding, respectively                  1,285,804     1,069,113
   Additional paid-in capital                                                                 104,991,001    86,088,974
   Accumulated deficit                                                                        (88,652,062)  (85,966,737)
   Accumulated other comprehensive income                                                       1,071,026             -
                                                                                             ------------- -------------
                                                                                               18,695,769     1,191,350
                                                                                             ------------- -------------
                                                                                             $ 24,282,605  $  1,870,159
                                                                                             ============= =============
</TABLE>

* Derived from audited balance sheet included in our Annual Report on Form 10-K
for the fiscal year ended October 31, 2007.
The accompanying notes are an integral part of these condensed balance sheets.

                                       3
<PAGE>



                         COPYTELE, INC. AND SUBSIDIARIES
                         -------------------------------
           CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
           -----------------------------------------------------------


<TABLE>
<CAPTION>
<S>                                                                                          <C>           <C>
                                                                                             For the Three Months Ended
                                                                                                     January 31,
                                                                                             ---------------------------
                                                                                                 2008          2007
                                                                                             ------------- -------------

NET SALES
         Sales of encryption products, net                                                   $     52,225  $     70,750
         Sales of encryption services, net                                                              -        60,000
                                                                                             ------------- -------------
                                                                                                   52,225       130,750
                                                                                             ------------- -------------

COST OF SALES
         Cost of encryption products sold                                                          12,898        20,291
         Cost of encryption services sold                                                               -        20,905
                                                                                             ------------- -------------
                                                                                                   12,898        41,196
                                                                                             ------------- -------------

         Gross profit                                                                              39,327        89,554

OPERATING EXPENSES
         Research and development expenses                                                      1,312,702     1,002,931
         Selling, general and administrative expenses                                           1,419,157       869,711
                                                                                             ------------- -------------
                  Total operating expenses                                                      2,731,859     1,872,642
                                                                                             ------------- -------------

LOSS FROM OPERATIONS                                                                           (2,692,532)   (1,783,088)

INTEREST INCOME                                                                                     7,207         9,654
                                                                                             ------------- -------------

NET LOSS                                                                                     $ (2,685,325) $ (1,773,434)
                                                                                             ============= =============


PER SHARE INFORMATION:
Net loss per share:
         Basic and Diluted                                                                   $      (0.02) $      (0.02)
                                                                                             ============= =============

Shares used in computing net loss per share:
         Basic and Diluted                                                                    126,739,111   100,913,968
                                                                                             ============= =============


                The accompanying notes are an integral part of these condensed statements.
</TABLE>

                                       4
<PAGE>


                         COPYTELE, INC. AND SUBSIDIARIES
                         -------------------------------
           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
           -----------------------------------------------------------
<TABLE>
<CAPTION>
<S>                                                                                         <C>             <C>
                                                                                             For the Three Months Ended
                                                                                                    January 31,
                                                                                            ----------------------------
                                                                                                 2008           2007
                                                                                            --------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Payments to suppliers, employees and consultants                                         $     (894,346) $  (883,663)
   Cash received from customers                                                                     52,225       72,165
   Interest received                                                                                 7,207        9,654
                                                                                            --------------- ------------
           Net cash used in operating activities                                                  (834,914)    (801,884)
                                                                                            --------------- ------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Disbursements to acquire Videocon Industries Limited global depository receipts             (16,200,000)           -
   Disbursement to acquire loan receivable                                                      (5,000,000)           -
   Proceeds from maturities of short-term investments (certificates of deposit)                    400,000       38,000
   Disbursements to acquire short-term investments (certificates of deposit)                      (441,000)    (425,000)
   Payments for purchases of property and equipment                                                 (6,188)      (2,364)
                                                                                            --------------- ------------
           Net cash used in investing activities                                               (21,247,188)    (389,364)
                                                                                            --------------- ------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from sale of common stock to Videocon Industries Limited                            16,200,000            -
   Proceeds from issuance of loan payable                                                        5,000,000            -
   Proceeds from exercise of stock options                                                       1,006,605      737,599
                                                                                            --------------- ------------
           Net cash provided by financing activities                                            22,206,605      737,599
                                                                                            --------------- ------------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                               124,503     (453,649)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                                   669,141    1,281,660
                                                                                            --------------- ------------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                  $      793,644  $   828,011
                                                                                            =============== ============

RECONCILIATION OF NET LOSS TO NET CASH USED IN OPERATING ACTIVITIES:
   Net loss                                                                                 $   (2,685,325) $(1,773,434)
   Stock option compensation to employees                                                        1,088,373      708,204
   Stock option compensation to consultants                                                        206,976            -
   Stock awards granted to employees pursuant to stock incentive plans                             556,611      421,284
   Stock awards granted to consultants pursuant to stock incentive plans                            60,153       94,943
   Provision for doubtful accounts                                                                  60,000            -
   Recovery of slow-moving inventory reserve                                                        (1,634)           -
   Depreciation and amortization                                                                     2,302        3,094
   Change in operating assets and liabilities:
      Accounts receivable                                                                                -      (58,585)
      Inventories                                                                                  (31,555)      17,631
      Prepaid expenses and other current assets                                                      1,158         (349)
      Other assets                                                                                       -            -
      Accounts payable and accrued liabilities                                                     (91,973)    (214,672)
                                                                                            --------------- ------------
           Net cash used in operating activities                                            $     (834,914) $  (801,884)
                                                                                            =============== ============


                              The accompanying notes are an integral part of these condensed statements.
</TABLE>

                                       5
<PAGE>


                         COPYTELE, INC. AND SUBSIDIARIES
                         -------------------------------

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------

                                   (UNAUDITED)
                                   -----------


1.       BUSINESS AND FUNDING
         --------------------

Description of Business and Basis of Presentation
- -------------------------------------------------

         Our principal operations are the development, production and marketing
of thin, flat low-voltage phosphor display technology and the development,
production and marketing of multi-functional encryption products that provide
information security for domestic and international users over virtually every
communications media.

         The condensed consolidated financial statements are unaudited, and have
been prepared in accordance with accounting principles generally accepted in the
United States of America ("US GAAP") for interim financial reporting, and with
the rules and regulations of the Securities and Exchange Commission regarding
interim financial reporting. Accordingly, they do not include all of the
information and footnotes required by US GAAP for complete financial statements.
The information contained herein is for the three-month periods ended January
31, 2008 and 2007. In management's opinion, all adjustments (consisting only of
normal recurring adjustments considered necessary for a fair presentation of the
results of operations for such periods) have been included herein. Certain prior
year amounts have been reclassified to conform with current year presentation.

         The condensed consolidated financial statements include the accounts of
CopyTele, Inc. and its wholly owned subsidiaries, CopyTele International Ltd.
("CopyTele International") and CopyTele Marketing Inc. ("CopyTele Marketing").
CopyTele International and CopyTele Marketing were incorporated in the British
Virgin Islands on July 12, 2007 and September 5, 2007, respectively. CopyTele
International was formed for the purpose of holding an investment in global
depository receipts of Videocon Industries Limited, an Indian company
("Videocon"). As of January 31, 2008, CopyTele Marketing was inactive. All
significant intercompany transactions have been eliminated in consolidation.

         The results of operations for interim periods presented are not
necessarily indicative of the results that may be expected for a full year or
any interim period. Reference is made to the audited financial statements and
notes thereto included in our Annual Report on Form 10-K for the fiscal year
ended October 31, 2007, for more extensive disclosures than contained in these
condensed financial statements.

Technology License Agreement with Videocon Industries Limited
- -------------------------------------------------------------

         On November 2, 2007, we entered into a Technology License Agreement
(the "License Agreement") with Videocon. Under the License Agreement, we provide
Videocon with a non-transferable, worldwide license of our technology for thin,
flat, low voltage phosphor displays (the "Licensed Technology"), for Videocon
(or a Videocon Group company) to produce and market products, including TVs,
incorporating displays utilizing the Licensed Technology. Under the License
Agreement, we will receive a license fee of $11 million from Videocon, payable
in installments over a 27 month period, with the first installment of $2 million
payable 15 days after the License Agreement is effective. The License Agreement
will be effective after Videocon has obtained the necessary regulatory approvals
in India for the payment of the license fees and royalties and may be terminated
if the required approvals are not obtained in a reasonable period of time. We
will also receive an agreed upon royalty from Videocon based on display sales by
Videocon.

                                       6
<PAGE>

         We will continue to have the right to produce and market, and to
utilize Volga Svet Ltd., a Russian display company that we have been working
with for more than ten years, and an Asian company that we have been working
with for more than four years, to produce and market, products utilizing the
Licensed Technology. Additional licenses of the Licensed Technology to third
parties require our joint agreement with Videocon.

         On November 2, 2007, we also entered into a Share Subscription
Agreement (the "Subscription Agreement") with Mars Overseas Limited, an
affiliate of Videocon ("Mars Overseas"). Under the Subscription Agreement, Mars
Overseas agreed to purchase from us 20,000,000 shares of our common stock (the
"CopyTele Shares") for an aggregate purchase price of $16,200,000. The purchase
of the CopyTele Shares pursuant to the Subscription Agreement closed on November
6, 2007.

         Also on November 2, 2007, our wholly-owned British Virgin Islands
subsidiary, CopyTele International, entered into a GDR Purchase Agreement (the
"Purchase Agreement") with Global EPC Ventures Limited ("Global"), for CopyTele
International to purchase from Global 1,495,845 global depository receipts of
Videocon (the "Videocon GDRs") for an aggregate purchase price of $16,200,000.
Videocon's global depository receipts are listed on the Luxembourg Stock
Exchange. The purchase of the Videocon GDRs pursuant to the Purchase Agreement
closed on December 19, 2007.

         For the purpose of effecting a lock up of the Videocon GDRs and
CopyTele Shares (collectively, the "Securities") for a period of seven years,
and therefore restricting both parties from selling or transferring the
Securities during such period, CopyTele International and Mars Overseas have
entered into two Loan and Pledge Agreements dated November 2, 2007. The Videocon
GDRs are to be held as security for a loan in principal amount of $5,000,000
from Mars Overseas to CopyTele International, and the CopyTele Shares are
similarly held as security for a loan in principal amount of $5,000,000 from
CopyTele International to Mars Overseas. The loans are for a term of seven years
and do not bear interest. Prepayment of each loan requires payment of a premium
by the borrower and, in any event, the lien on the Securities securing the
prepaid loan will not be released until the seventh anniversary of the closing
of the loans and the prepaid amount would be held in escrow until such date. The
loan agreements required the parties to enter into an escrow agreement under
which the parties deposited the Securities with an escrow agent for the term of
the loans. The loan agreements also provide for customary events of default
which may result in forfeiture of the Securities by the defaulting party. The
loan and escrow agreements also provide for the transfer to the respective
parties, free and clear of any encumbrances under the agreements, any dividends,
distributions, rights or other proceeds or benefits received by the escrow agent
in respect of the Securities. The closing of the loans took place on December
19, 2007.

                                       7
<PAGE>

Investment in Videocon
- ----------------------

         Although the Videocon GDRs are held as security for the loan payable to
Mars Overseas and prepayment of the loan will not release the Videocon GDRs
securing the loan until the seventh anniversary of the closing of the loan, our
investment in Videcon is classified as an "available-for-sale security" and
reported at fair value, with unrealized gains and losses excluded from
operations and reported as a component of accumulated other comprehensive
income, net of the related tax effects, in shareholders' equity. Cost is
determined using the specific identification method. The fair value of the
Videocon GDRs is based on the underlying price of Videocon's equity shares which
are traded on stock exchanges in India with prices quoted in rupees. The cost,
unrealized gain and fair value of our investment in Videocon as of January 31,
2008 are as follows:

                                        January 31,
                                           2008
                                      -------------
               Cost                     $16,200,000
               Unrealized gain            1,071,026
                                      -------------
               Fair value                17,271,026
                                      -------------

Funding and Management's Plans
- ------------------------------

         From our inception, we have met our liquidity and capital expenditure
needs primarily through the proceeds from sales of common stock in our initial
public offering, in private placements, upon exercise of warrants issued in
connection with the private placements and public offering, and upon the
exercise of stock options. In 2001 and 2002, we also received payments under a
technology development agreement. In addition, commencing in the fourth quarter
of fiscal 1999, we have generated cash flows from sales of our encryption
products and in fiscal 2008 we expect to commence receiving license fees from
Videocon after Videocon has obtained the necessary regulatory approvals in India
for such payments.

          During the three months ended January 31, 2008, our cash used in
operating activities was approximately $835,000. This resulted from payments to
suppliers, employees and consultants of approximately $894,000, which was offset
by cash of approximately $52,000 received from collections of accounts
receivable related to sales of encryption products, and approximately $7,000 of
interest income received. Our cash used in investing activities during the three
months ended January 31, 2008 was approximately $21,247,000, which resulted from
a disbursement of $16,200,000 for the purchase of Videocon GDRs, a disbursement
$5,000,000 to issue a loan to Mars Overseas, purchases of short-term investments
consisting of certificates of deposit of $441,000 and purchases of approximately
$6,000 of equipment, offset by $400,000 received upon maturities of short-term
investments consisting of certificates of deposit. Our cash provided by
financing activities during the three months ended January 31, 2008 was
approximately $22,207,000, which resulted from the sale of our common stock to
Videocon for $16,200,000, the proceeds received of $5,000,000 upon obtaining a
loan from Mars Overseas and cash received upon the exercise of stock options of
approximately $1,007,000. Accordingly, during the three months ended January 31,
2008, our cash and cash equivalents increased by approximately $125,000 and our
short-term investments increased by $41,000. As a result, our cash, cash
equivalents, and short-term investments, at January 31, 2008 increased to
approximately $1,235,000 from approximately $1,069,000 at the end of fiscal
2007.

         We believe that our existing cash, cash equivalents, short-term
investments and accounts receivable, together with cash flows from expected
sales of our encryption products and revenue relating to our thin, flat,
low-voltage phosphor display technology, including license fees we expect to
receive from Videocon once Videocon has obtained the necessary regulatory
approvals in India for such payments, and other potential sources of cash flows,
will be sufficient to enable us to continue in operation until at least the end
of the first quarter of fiscal 2009. We anticipate that, thereafter, we will
require additional funds to continue our marketing, production, and research and
development activities, and we will require outside funding if cash generated
from operations is insufficient to satisfy our liquidity requirements. However,
our projections of future cash needs and cash flows may differ from actual
results. It is management's intention to continue to compensate their employees
by issuing stock or stock options. If current cash and cash that may be
generated from operations are insufficient to satisfy our liquidity
requirements, we may seek to sell debt or equity securities or to obtain a line
of credit prior to the first quarter of fiscal 2009. The sale of additional
equity securities or convertible debt could result in dilution to our
stockholders. We currently have no arrangements with respect to additional
financing. There can be no assurance that we will generate sufficient revenues
in the future (through sales or otherwise) to improve our liquidity or sustain
future operations, that the necessary regulatory approvals in India for payments
of license fees by Videocon to us will be obtained, that our production
capabilities will be adequate, that other products will not be produced by other
companies that will render our products obsolete, or that other sources of
funding would be available, if needed, on favorable terms or at all. If we
cannot obtain such funds if needed, we would need to curtail or cease some or
all of our operations.

                                       8
<PAGE>

2.       STOCK-BASED COMPENSATION
         ------------------------

         We maintain stock equity incentive plans under which we may grant
non-qualified stock options, incentive stock options, stock appreciation rights,
stock awards, performance and performance-based awards, or stock units to
employees, non-employee directors and consultants.

Stock Option Compensation Expense
- ---------------------------------

         We account for stock options granted to employees and directors using
Financial Accounting Standards Board ("FASB") Statement of Financial Accounting
Standards ("SFAS") No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R").
We recognize compensation expense for stock option awards on a straight-line
basis over the requisite service period of the grant. We recorded approximately
$1,088,000 and $708,000 of stock-based compensation expense, related to stock
options granted to employees and non-employee directors, during the three-month
periods ended January 31, 2008 and 2007, respectively, in accordance with SFAS
123R. Such compensation expense is included in the accompanying condensed
consolidated statements of operations in either research and development
expenses or selling, general and administrative expenses, as applicable based on
the functions performed by such employees and directors. Such stock-based
compensation expense increased both basic and diluted net loss per share for the
three-month periods ended January 31, 2008 and 2007 by $0.01 and $0.01,
respectively.

         Included in the stock-based compensation cost related to stock options
granted to employees and directors recorded during the three-month periods ended
January 31, 2008 and 2007 was approximately $-0- and $6,000, respectively, of
expense related to the amortization of compensation cost for stock options
granted prior to, but not yet vested as of, the end of the prior fiscal year. As
of January 31, 2008, there was approximately $873,000 of unrecognized
compensation cost related to non-vested share-based compensation arrangements.
Approximately $700,000 of this unrecognized cost is expected to be amortized
over the remaining portion of the current fiscal year and approximately
$121,000, $51,000, and $1,000 of this unrecognized cost is expected to be
amortized during fiscal 2009, 2010 and 2011, respectively.

                                       9
<PAGE>

         We also account for stock options granted to consultants using SFAS
123R. We recognized consulting expense for options granted to non-employee
consultants, during the three-month periods ended January 31, 2008 and 2007, of
approximately $207,000 and $-0-, respectively. As of January 31, 2008, there was
approximately $23,000 of unrecognized consulting expense related to non-vested
share-based compensation arrangements. Approximately $10,000 of this
unrecognized consulting expense is expected to be amortized over the remaining
portion of the current fiscal year and approximately $13,000 is expected to be
amortized during fiscal 2009. Such consulting expense is included in the
accompanying condensed consolidated statements of operations in either research
and development expenses or selling, general and administrative expenses, as
applicable based on the functions performed by such consultants.

Fair Value Determination
- ------------------------

         In accordance with SFAS No. 123R, we estimate the fair value of stock
options granted to employees, non-employee directors and consultants on the date
of grant using the Black-Scholes pricing model. We separate the individuals we
grant stock options to into three relatively homogenous groups, based on
exercise and post-vesting employment termination behaviors. To determine the
weighted average fair value of stock options on the date of grant, we take a
weighted average of the assumptions used for each of these groups. Stock options
we granted during the three-month period ended January 31, 2008 consisted of
awards of options with 10-year terms which vested either immediately or over
future periods of from three months to three years. All of the stock options we
granted during the three-month period ended January 31, 2007 consisted of awards
of options with 10-year terms which vested immediately.

         We estimated the fair value of stock option awards using the following
assumptions:
<TABLE>
<CAPTION>
<S>                                                                                                      <C>        <C>
                                                                                                   For the Three Months
                                                                                                    Ended January 31,
                                                                                                  ----------------------
                                                                                                     2008       2007
                                                                                                  ----------- ----------
                    Expected term (in years)                                                             4.4        3.8
                    Volatility                                                                            93%        98%
                    Risk-free interest rate                                                             3.91%      4.62%
                    Dividend yield                                                                         0          0
                    Weighted average fair value at grant date                                     $     0.70 $     0.40
</TABLE>

         The expected term of stock options represents the weighted average
period the stock options are expected to remain outstanding. Because we consider
our options to be "plain vanilla", we estimated the expected term using a
modified version of the simplified method of calculation, as prescribed by Staff
Accounting Bulletin No. 107, "Share-Based Payment" ("SAB 107"). This modified
calculation uses the actual life for options that have been settled, and a
uniform distribution assumption for the options still outstanding. Under SAB
107, options are considered to be "plain vanilla" if they have the following
basic characteristics: granted "at-the-money"; exercisability is conditioned
upon service through the vesting date; termination of service prior to vesting
results in forfeiture; limited exercise period following termination of service;
and options are non-transferable and non-hedgeable. In December 2007, the
Securities and Exchange Commission ("SEC") staff issued Staff Accounting
Bulletin No. 110, "Share-Based Payment" ("SAB 110"). SAB 110 permits the use of
the simplified method in SAB 107 for employee option grants after December 31,
2007 for companies whose historical data about their employees' exercise
behavior does not provide a reasonable basis for estimating the expected term of
the options. We have adopted SAB 110 and continued to use the simplified method
to estimate the expected term for options granted after December 2007, as
adequate historical experience is not available to provide a reasonable
estimate. We intend to continue applying the simplified method until enough
historical experience is readily available to provide a reasonable estimate of
the expected term for employee option grants.

                                       10
<PAGE>

         We estimated the expected volatility of our shares of common stock
based upon the historical volatility of our share price over a period of time
equal to the expected life of the options.

         We estimated the risk-free interest rate based on the implied yield
available on the applicable grant date of a U.S. Treasury note with a term equal
to the expected term of the underlying grants.

         We made the dividend yield assumption based on our history of not
paying dividends and our expectation not to pay dividends in the future.

         Under SFAS No. 123R, the amount of stock-based compensation expense
recognized is based on the portion of the awards that are ultimately expected to
vest. Accordingly, we reduce the fair value of the stock option awards for
expected forfeitures, which are forfeitures of the unvested portion of
surrendered options. We estimate expected forfeitures based on our historical
experience.

         We will reconsider use of the Black-Scholes pricing model if additional
information becomes available in the future that indicates another model would
be more appropriate, or if grants issued in future periods have characteristics
that cannot be reasonably estimated using this model.

Stock Option Activity
- ---------------------

         During the three-month periods ended January 31, 2008 and 2007, we
granted options to purchase 3,125,000 shares and 1,775,000 shares, respectively,
to employees, non-employee directors and consultants of common stock at weighted
average exercise prices of $1.03 and $.61 per share, respectively, pursuant to
the CopyTele, Inc. 2003 Share Incentive Plan (the "2003 Share Plan"). During the
three-month periods ended January 31, 2008 and 2007, stock options to purchase
1,174,200 shares and 1,612,230 shares, respectively, of common stock were
exercised with aggregate proceeds of approximately $1,007,000 and $738,000,
respectively.

                                       11
<PAGE>


Stock Option Plans
- ------------------

         As of January 31, 2008, we have three stock option plans: the CopyTele,
Inc. 1993 Stock Option Plan (the "1993 Plan"), the CopyTele, Inc. 2000 Share
Incentive Plan (the "2000 Share Plan") and the 2003 Share Plan, which were
adopted by our Board of Directors on April 28, 1993, May 8, 2000 and April 21,
2003, respectively.

           On July 14, 1993, our shareholders approved the 1993 Plan. The 1993
Plan was amended as of May 3, 1995 and May 10, 1996 to, among other things,
increase the number of shares available for issuance thereunder from 6,000,000
shares to 20,000,000 shares, after giving consideration to stock splits. The
1993 Plan provided for the granting of incentive stock options and stock
appreciation rights to key employees, and non-qualified stock options and stock
appreciation rights to key employees and consultants of the Company.

         The 1993 Plan was administered by the Stock Option Committee, which
determined the option price, term and provisions of each option. However, the
purchase price of shares issuable upon the exercise of incentive stock options
could not be less than the fair market value of such shares at the date of grant
and incentive stock options are not exercisable for more than 10 years. Upon
approval of the 2000 Share Plan by our shareholders in July 2000, the 1993 Plan
was terminated with respect to the grant of future options. Since June 2004, the
1993 Plan has been administered by the Board of Directors.

         Information regarding the 1993 Plan for the three months ended January
31, 2008 is as follows:
<TABLE>
<CAPTION>
<S>                                            <C> <C>                   <C>        <C>               <C>
                                                                                    Current Weighted      Aggregate
                                                                                    Average Exercise      Intrinsic
                                                                        Shares       Price Per Share        Value
                                                                    --------------- ----------------- ------------------

Shares Under Option at October 31, 2007                                  2,614,000  $            2.33
  Expired                                                                 (975,000) $            3.38
  Exercised                                                                 (5,000) $            1.31
                                                                    ---------------
Shares Under Option and Exercisable at January 31, 2008                  1,634,000  $            1.72 $          117,765
                                                                    ---------------
</TABLE>


         The following table summarizes information about stock options
outstanding under the 1993 Plan as of January 31, 2008:
<TABLE>
<CAPTION>
<S>         <C>           <C>            <C>        <C>        <C>            <C>         <C>
                             Options Outstanding                   Options Exercisable
                    ------------------------------------- -------------------------------------
                                   Weighted                             Weighted
                                   Average     Weighted                 Average     Weighted
                                  Remaining    Average                 Remaining     Average
      Range of         Number    Contractual  Exercise       Number   Contractual   Exercise
   Exercise Prices   Outstanding     Life        Price    Exercisable     Life        Price
- -----------------------------------------------------------------------------------------------

   $0.84 to $1.56         779,000        1.78       $1.10      779,000        1.78        $1.10
       $2.28              855,000        0.45       $2.28      855,000        0.45        $2.28
</TABLE>

                                       12
<PAGE>


         The exercise price with respect to all of the options granted under the
1993 Plan, since its inception, was equal to the fair market value of the
underlying common stock at the grant date.

         On July 25, 2000, our shareholders approved the 2000 Share Plan. The
maximum number of shares of common stock that may be granted was 5,000,000
shares. On July 6, 2001 and July 16, 2002, the 2000 Share Plan was amended by
our Board of Directors to increase the maximum number of shares of common stock
that may be granted to 10,000,000 shares and 15,000,000 shares, respectively.
These amendments were approved by our shareholders on August 16, 2001 and
September 12, 2002, respectively. The 2000 Share Plan provides for the grant of
incentive stock options, nonqualified stock options, stock appreciation rights,
stock awards, performance awards and stock units to key employees and
consultants of the Company.

         The 2000 Share Plan was administered by the Stock Option Committee
through June 2004 and since that date has been administered by the Board of
Directors, which determines the option price, term and provisions of each
option; however, the purchase price of shares issuable upon the exercise of
incentive stock options will not be less than the fair market value of such
shares at the date of grant and incentive stock options will not be exercisable
for more than 10 years.

         Information regarding the 2000 Share Plan for the three months ended
January 31, 2008 is as follows:
<TABLE>
<CAPTION>
<S>     <C> <C>                                                              <C>        <C>                <C>
                                                                                         Current Weighted    Aggregate
                                                                                         Average Exercise    Intrinsic
                                                                          Shares          Price Per Share      Value
                                                                   -------------------- ------------------ -------------

Shares Under Option at October 31, 2007                                      2,182,466  $             0.82
  Exercised                                                                   (410,000) $             0.95
                                                                   --------------------
Shares Under Option and Exercisable at
January 31, 2008                                                             1,772,466  $             0.79 $     712,256
                                                                   --------------------
</TABLE>


         The following table summarizes information about stock options
         outstanding under the 2000 Share Plan as of January 31, 2008:
<TABLE>
<CAPTION>
<S>        <C>           <C>            <C>        <C>        <C>            <C>        <C>
                            Options Outstanding                  Options Exercisable
                   ------------------------------------- ------------------------------------
                                  Weighted                             Weighted
                                  Average     Weighted                 Average     Weighted
                                 Remaining    Average                 Remaining    Average
      Range of        Number    Contractual  Exercise       Number   Contractual  Exercise
  Exercise Prices   Outstanding     Life        Price    Exercisable     Life        Price
- ---------------------------------------------------------------------------------------------

       $0.40             445,000        3.64       $0.40      445,000        3.64       $0.40
       $0.69             505,466        2.92       $0.69      505,466        2.92       $0.69
   $0.94 - $1.09         822,000        1.99       $1.06      822,000        1.99       $1.06
</TABLE>

                                       13
<PAGE>


         The exercise price with respect to all of the options granted under the
2000 Share Plan since its inception was equal to the fair market value of the
underlying common stock at the grant date. As of January 31, 2008, 21,508 shares
were available for future grants under the 2000 Share Plan.

         The 2003 Share Plan provides for the grant of nonqualified stock
options, stock appreciation rights, stock awards, performance awards and stock
units to key employees and consultants of the Company. The maximum number of
shares of common stock available for issuance under the 2003 Share Plan
initially was 15,000,000 shares. On October 8, 2004, February 9, 2006 and August
22, 2007, the 2003 Plan was amended by our Board of Directors to increase the
maximum number of shares of common stock that may be granted to 30,000,000
shares, 45,000,000 shares and 55,000,000 shares, respectively. Current and
future non-employee directors are automatically granted nonqualified stock
options to purchase 60,000 shares of common stock upon their initial election to
the Board of Directors and at the time of each subsequent annual meeting of our
shareholders at which they are elected to the Board of Directors. The 2003 Share
Plan was administered by the Stock Option Committee through June 2004 and since
that date has been administered by the Board of Directors, which determines the
option price, term and provisions of each option.

        Information regarding the 2003 Share Plan for the three months ended
January 31, 2008 is as follows:
<TABLE>
<CAPTION>
<S>                            <C> <C>                                         <C>         <C>               <C>
                                                                                           Current Weighted   Aggregate
                                                                                           Average Exercise   Intrinsic
                                                                             Shares         Price Per Share     Value
                                                                     --------------------- ----------------- -----------

Shares Under Option at October 31, 2007                                        14,476,245  $            0.74
  Granted                                                                       3,125,000  $            1.03
  Exercised                                                                      (759,200) $            0.81
                                                                     ---------------------
Shares Under Option at January 31, 2008                                        16,842,045  $            0.79 $ 6,704,382
                                                                     ---------------------
Options Exercisable at January 31, 2008                                        13,907,045  $            0.75 $ 6,151,882
                                                                     ---------------------
</TABLE>


         The following table summarizes information about stock options
outstanding under the 2003 Share Plan as of January 31, 2008:
<TABLE>
<CAPTION>
<S>   <C>     <C>     <C>               <C>        <C>      <C>              <C>         <C>
                            Options Outstanding                   Options Exercisable
                   -------------------------------------- ------------------------------------
                                  Weighted                             Weighted
                                  Average     Weighted                 Average     Weighted
                      Number     Remaining    Average      Number     Remaining     Average
      Range of      Outstanding Contractual  Exercise    Exercisable Contractual   Exercise
  Exercise Prices   at 1/31/08      Life        Price    at 1/31/08      Life        Price
- ----------------------------------------------------------------------------------------------

      $0.25 - $0.43    1,245,000        5.75       $0.33    1,245,000        5.75        $0.33
      $0.52 - $0.77    5,450,970        7.41       $0.63    5,450,970        7.41        $0.63
      $0.81 - $1.46   10,146,075        8.18       $0.94    7,211,075        7.54        $0.91
</TABLE>


         The exercise price with respect to all of the options granted under the
2003 Share Plan since its inception was equal to the fair market value of the
underlying common stock at the grant date. As of January 31, 2008, 6,725,186
shares were available for future grants under the 2003 Share Plan.

                                       14
<PAGE>

Stock Grants
- ------------

         We account for stock awards granted to employees and consultants based
on their grant date fair value. During the three-month periods ended January 31,
2008 and 2007, we issued 448,575 shares and 548,800 shares, respectively, of
common stock to certain employees for services rendered, principally in lieu of
cash compensation, pursuant to the 2003 Share Plan. We recorded compensation
expense for the three-month periods ended January 31, 2008 and 2007 of
approximately $557,000 and $421,000, respectively, for the shares of common
stock issued to employees. In addition, during the three-month periods ended
January 31, 2008 and 2007, we issued 46,326 shares and 134,020 shares,
respectively, of common stock to consultants for services rendered pursuant to
the 2003 Share Plan. We recorded consulting expense for the three-month periods
ended January 31, 2008 and 2007 of approximately $60,000 and $95,000,
respectively, for the shares of common stock issued to consultants.

3.       CONCENTRATION OF CREDIT RISK
         ----------------------------

         Financial instruments that potentially subject us to concentrations of
credit risk consist principally of accounts receivable from sales in the
ordinary course of business. Management reviews our accounts receivable and
other receivables for potential doubtful accounts and maintains an allowance for
estimated uncollectible amounts. Generally, no collateral is received from
customers for our accounts receivable. During the three months ended January 31,
2008, three customers in the Encryption Products and Services Segment
represented 25%, 25% and 20%, respectively, of total net sales. During the three
months ended January 31, 2007, two customers in the Encryption Products and
Services Segment represented 46% and 38%, respectively, of total net sales. At
January 31, 2008 and October 31, 2007, one customer in the Encryption Products
and Services Segment represented 100% of accounts receivable.

4.       SHORT-TERM INVESTMENTS
         ----------------------

         Short-term investments represent certificates of deposits, carried at
amortized cost, with maturities of less than twelve months. The fair values of
the certificates of deposits, including accrued interest, approximate their
carrying value due to their short maturities.

5.      INVESTMENT IN AND RELATED PARTY TRANSACTIONS WITH DIGITAL INFO SECURITY
        -----------------------------------------------------------------------
CO. INC.
- --------

         On February 13, 2006, we entered into a Software License and
Distribution Agreement (the "DISC License Agreement") to license to Digital Info
Security Co. Inc. ("DISC"), an encryption system that integrates our encryption
technology into DISC's e-mail services. The system allows companies to encrypt
all e-mail transactions in a manner transparent to the individual user.
Concurrently with entering into the DISC License Agreement with DISC, we
acquired a minority interest in DISC by exchanging 100,000 unregistered shares
of our common stock for 5,000,000 shares of DISC's common stock. On May 17, 2006
and July 14, 2006, we purchased an additional 1,000,000 shares and 1,200,000
shares, respectively, of DISC's common stock for $50,000 and $60,000 in cash,
respectively. On November 27, 2006, we acquired an additional 5,000,000 shares
of DISC's common stock in exchange for 300,000 unregistered shares of our common
stock. Accordingly, as of January 31, 2008, we held 12,200,000 shares of DISC's
common stock, all of which were restricted securities. DISC's common stock is
not registered under the Securities Exchange Act of 1934, but is quoted on the
Pink Sheets. According to DISC's most recent public financial report, as of
September 30, 2007 we held approximately 12% of the outstanding common stock of
DISC. Our investment in DISC as of January 31, 2008, is recorded in the
accompanying consolidated balance sheet at cost of $417,000, based on the
closing price of our common stock on the dates we acquired DISC common stock in
exchange for our common stock, and the price paid for the shares purchased for
cash.

                                       15
<PAGE>

         Net sales for the three months ended January 31, 2007 included billings
to DISC for engineering services of $60,000. We had no net sales relating to
DISC for the three months ended January 31, 2008. Net accounts receivable at
January 31, 2008 and October 31, 2007 include $60,000 and $120,000,
respectively, from DISC.

6.       INVENTORIES
         ------------

         Inventories consist of the following as of:

                                                  January 31,     October 31,
                                                      2008            2007
                                                --------------- ---------------
     Component parts                            $       101,020 $       113,458
     Work-in-process                                     57,360          26,597
     Finished products                                   66,732          51,868
                                                --------------- ---------------
                                                $       225,112 $       191,923
                                                =============== ===============

7.       NET LOSS PER SHARE OF COMMON STOCK
         ----------------------------------

         In accordance with SFAS No. 128, "Earnings Per Share" ("SFAS No. 128"),
basic net loss per common share ("Basic EPS") is computed by dividing net loss
by the weighted average number of common shares outstanding. Diluted net loss
per common share ("Diluted EPS") is computed by dividing net loss by the
weighted average number of common shares and dilutive common share equivalents
and convertible securities then outstanding. Diluted EPS for all periods
presented is the same as Basic EPS, as the inclusion of the effect of common
stock equivalents then outstanding would be anti-dilutive. For this reason,
excluded from the calculation of Diluted EPS for the three-month periods ended
January 31, 2008 and 2007, were options to purchase 20,248,511 shares and
21,637,711 shares, respectively.

8.       EFFECT OF RECENTLY ISSUED PRONOUNCEMENTS
         ----------------------------------------

         In June 2006, the FASB issued FASB Interpretation No. 48, "Accounting
for Uncertainty in Income Taxes," an interpretation of FASB Statement No. 109
("FIN 48"). FIN 48 clarifies the accounting for uncertainties in income taxes
recognized in an enterprise's financial statements. The interpretation requires
that the Company determine whether it is more likely than not that a tax
position will be sustained upon examination by the appropriate taxing authority.
If a tax position meets the more likely than not recognition criteria, FIN 48
requires the tax position be measured at the largest amount of benefit greater
than 50 percent likely of being realized upon ultimate settlement. This
accounting standard is effective for fiscal years beginning after December 15,
2006. We adopted FIN 48 on November 1, 2007. There were no unrecognized tax
benefits as of the date of adoption of FIN 48 and its adoption did not have a
material effect on our financial statements.

                                       16
<PAGE>

         In September 2006, the FASB issued SFAS No. 157, "Fair Value
Measurements" ("SFAS 157"). SFAS 157 defines fair value, establishes a framework
for measuring fair value in generally accepted accounting principles, and
expands disclosures about fair value measurements. SFAS 157 applies to other
accounting pronouncements that require or permit fair value measurements. The
provisions of SFAS 157 are effective for fiscal years beginning after November
15, 2007. We are currently evaluating the effect, if any, that the adoption of
SFAS 157 will have on our financial statements.

         In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities" ("SFAS 159"). SFAS 159 expands
opportunities to use fair value measurement in financial reporting and permits
entities to choose to measure many financial instruments and certain other items
at fair value. SFAS 159 is effective for fiscal years beginning after November
15, 2007. We are currently evaluating the effect, if any, that the adoption of
SFAS 159 will have on our financial statements.

         In December 2007, the FASB issued SFAS No. 141 (revised 2007),
"Business Combinations" ("SFAS 141R"), which changes how an entity accounts for
the acquisition of a business. When effective, SFAS 141R will replace existing
SFAS No. 141, "Business Combinations" ("SFAS 141"), in its entirety. SFAS 141R
carries forward the existing requirements to account for all business
combinations using the acquisition method (formerly called the purchase method).
In general, SFAS 141R will require acquisition-date fair value measurement of
identifiable assets acquired, liabilities assumed, and noncontrolling interest
in the acquired entity. SFAS 141R will eliminate the current cost-based purchase
method under SFAS 141. SFAS 141R is effective for fiscal years and interim
periods within those fiscal years beginning on or after December 15, 2008. The
adoption of SFAS 141R is not expected to have a material effect on our financial
statements.

9.       INCOME TAXES
         ------------

         We file Federal and New York State income tax returns. Due to net
operating losses, the statue of limitations remains open since the fiscal year
ended October 31, 1992. We account for interest and penalties related to income
tax matters in selling, general and administrative expenses.

10.      SEGMENT INFORMATION
         -------------------

         We follow the provisions of SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information" ("SFAS No. 131"). Reportable operating
segments are determined based on management's approach. The management approach,
as defined by SFAS No. 131, is based on the way that the chief operating
decision-maker organizes the segments within an enterprise for making operating
decisions and assessing performance. While our results of operations are
primarily reviewed on a consolidated basis, the chief operating decision-maker
also manages the enterprise in two segments: (i) Flat-panel display and (ii)
Encryption products and services. The following represents selected financial
information for our segments for the three-month periods ended January 31, 2008
and 2007:

                                       17
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                       <C>                 <C>            <C>
                                                                                      Encryption Products
                      Segment Data                            Flat-Panel Display          and Services        Total
- --------------------------------------------------------- --------------------------- ------------------- --------------

Three Months Ended January 31, 2008:
   Net sales                                              $                        -  $           52,225  $      52,225
   Net loss                                                               (1,496,273)         (1,189,052)    (2,685,325)

Three Months Ended January 31, 2007:
   Net sales                                              $                        -  $          130,750  $     130,750
   Net loss                                                                 (934,341)           (839,093)    (1,773,434)
</TABLE>

                                       18
<PAGE>


Item 2.  Management's Discussion and Analysis of Financial Condition and Results
                  --------------------------------------------------------------
of Operations.
- --------------

GENERAL
- -------

         Our principal operations are the development, production and marketing
of thin, flat, low-voltage phosphor display technology and the development,
production and marketing of multi-functional encryption products that provide
information security for domestic and international users over virtually every
communications media.

         We have pioneered the basic development of an innovative new type of
flat panel display technology, which is brighter, has higher contrast and
consumes a less power than our prior display technology. This new proprietary
display is a color phosphor based display having a unique lower voltage electron
emission system to excite the color phosphors. As with our prior display
technology, the new technology emits light to display color images, such as
movies from DVD players. In addition, we are also developing another version of
our new type low voltage and low power display having a different matrix
configuration and phosphor excitation system. These new type of displays are
expected to be lower in cost than our prior displays.

         On November 2, 2007, we entered into a Technology License Agreement
(the "License Agreement") with Videocon Industries Limited, an Indian company
("Videocon"). Under the License Agreement, we licensed to Videocon our
technology for thin, flat, low voltage phosphor displays, for Videocon (or a
Videocon Group company) to produce and market products, including TVs,
incorporating displays utilizing out technology. CopyTele and Videocon are
jointly cooperating to implement our technology into production displays.
Improvements to the technology will be jointly owned by CopyTele and Videocon,
and the parties will jointly decide whether to pursue patents for any
improvements. The license of our technology is non-transferable and worldwide.
Under the License Agreement, Videocon will pay us a license fee of $11 million,
payable in installments over a 27 month period. The first installment of $2
million will be paid after the License Agreement is effective. The License
Agreement will be effective after Videocon has obtained the necessary regulatory
approvals in India for the payment of the license fees and royalties. Videocon
has filed for approval with the Indian government. Videocon will also pay us an
agreed upon royalty based on display sales by Videocon.

         We will continue to have the right to produce and market, and to
utilize Volga Svet Ltd., a Russian display company that we have been working
with for more than ten years ("Volga"), and an Asian company that CopyTele has
been working with for more than four years, to produce and market, products
utilizing our technology. Additional licenses of our technology to third parties
require the joint agreement of CopyTele and Videocon.

         In connection with the License Agreement, for the term of the license
granted under the License Agreement, Videocon and CopyTele have each appointed
one senior advisor to the other's board of directors to advise with respect to
strategic planning and technology in the display field.

                                       19
<PAGE>

         At the same time as we entered into the License Agreement, we entered
into a Share Subscription Agreement with an affiliate of Videocon ("Mars
Overseas") for Mars Overseas to purchase 20,000,000 shares of our common stock,
and a subsidiary of ours, CopyTele International Ltd. ("CopyTele
International"), entered into a GDR Purchase Agreement to purchase 1,495,845
global depository receipts ("GDRs") of Videocon. Both transactions were
completed in our first fiscal quarter of fiscal 2008. See Note 1 to the
Condensed Consolidated Financial Statements.

         Our new display technology has been incorporated into display modules
which are brighter, have higher contrast and consume less power than our prior
carbon nanotube and proprietary low voltage color phosphor display technology.
We have developed various engineering models using such prior technology, which
demonstrated the display's ability to show movies from DVD players by
controlling the brightness of selected individual pixels. The carbon nanotubes,
which are supplied to us by a U.S. company, require a low voltage for electron
emission and are extremely small - approximately 10,000 times thinner than the
width of a human hair. The 5.5 inch (diagonal) display we developed has 960 x
234 pixels and utilizes a new memory-based active matrix thin film technology
with each pixel phosphor activated by electrons emitted by a proprietary carbon
nanotube network located approximately 10 microns (1/10th of a human hair) from
the pixels. As a result, each pixel phosphor brightness is controlled using a
maximum of only 40 volts. The carbon nanotubes and proprietary color phosphors
are precisely placed and separated utilizing our proprietary nanotube and
phosphor deposition technology. We have developed a process of maintaining
uniform carbon nanotube deposition independent of phosphor deposition. We have
also developed a method of enhancing nanotube electron emission to increase the
brightness of this type of display.

         Some other characteristics of our display technology are as follows:

          o    We  have  developed  a  proprietary  system  which  allows  us to
               evacuate  our  display;  to  rapidly  vacuum  seal  it  at a  low
               temperature to accommodate the matrix; and to create lithographic
               type spacers to assemble our display  utilizing only 0.7mm glass.
               We thus obtain a display thickness of approximately  1/16th of an
               inch,   thinner  than  LCD  (liquid  crystal)  and  PDP  (plasma)
               displays.
          o    The display matrix,  phosphor  excitation system, and drivers are
               all on one substrate.
          o    Our display is able to select and change the  brightness  of each
               individual pixel,  requiring only 40 volts on each pixel phosphor
               to change the  brightness  from black to white.  This compares to
               thousands  of volts  required  for  other  video  phosphor  based
               displays, which leads to inherent breakdowns and short life.
          o    Our display has no backlight. Because power is only consumed when
               a pixel is turned on, low power is needed to  activate  the whole
               display. The display requires less than 20% the power required by
               an LCD. This low power consumption could potentially allow use of
               rechargeable  batteries  to  operate  TV  products  for  wireless
               applications  and extend the battery  operation time for portable
               devices.
          o    The same basic display  technology could  potentially be utilized
               in various size applications, from hand-held to TV size displays.
          o    Our  proprietary  matrix  structures  can be produced by existing
               mass production TFT (thin film  technology)  LCD  facilities,  or
               portions of these facilities.

                                       20
<PAGE>

          o    Our display eliminates display flicker.
          o    Our  display  has  an  approximately  1,000  times  faster  video
               response  time than an LCD,  and matches the  response  time of a
               cathode ray tube (CRT).
          o    Our display can be viewed with high contrast over approximately a
               180 degree  viewing  angle,  in both the  horizontal and vertical
               directions, which exceeds the viewing angle of LCDs.
          o    Also like  CRTs,  our  display is  capable  of  operating  over a
               temperature range (-40(degree)C to 85(degree)C) which exceeds the
               range  over  which  LCDs  can  operate,   especially  under  cold
               temperature conditions.

         We believe our displays could potentially have a cost similar to a CRT
and thus less than current LCD or PDP displays (our display does not contain a
backlight, or color filter or polarizer, which represent a substantial portion
of the cost of an LCD).

         During the past year we have also continued to pursue our encryption
business. We have sought encryption opportunities in both the commercial and
government security markets.

         Our government market has been primarily handled by The Boeing Company
("Boeing") and its large distributors of the Thuraya satellite phones. The
Thuraya Satellite Network has grown as a communications provider due to its
geographic coverage, quality of service and cost effective usage. The third
Thuraya Geo-mobile satellite was successfully launched in January 2008, allowing
Thuraya to embark on major expansion plans to provide their mobile satellite
services in the Asia-Pacific region, thus potentially opening new markets for
CopyTele security solutions that are designed for the Thuraya network.

         During fiscal 2007, we entered into a new three year agreement with
Boeing. Boeing now distributes 13 of our products, including our DCS-1400D
(docker voice encryption device), USS-900T (satellite fax encryption device),
USS-900TL (landline to satellite fax encryption device), USS-900WF (satellite
and cellular fax encryption device), USS-900WFL (landline to satellite and
cellular fax encryption device) and USS-900TC (satellite fax encryption to
computer) products, which were specifically designed for the Thuraya network.
Boeing sells these products under the brand name of Thuraya.

         We are continuing to promote our Thuraya encryption solutions through
other Thuraya developers and resellers beside Boeing, including Asia Pacific
Satellite Industries ("APSI"). We offer a full line of voice, fax and data
encryption products that secure these communications, and our products are being
used by government agencies, military, and domestic and international
non-governmental organizations (NGOs) in the Middle East, Europe, Far East and
Africa.

         APSI has manufactured new Thuraya handsets and docking units that allow
satellite and GSM cellular communications both outdoors and indoors. CopyTele
and APSI have developed connecting cables and compatibility arrangements that
customers can easily set up and utilize to secure their communications over the
Thuraya network and which are compatible with landline telephone systems. APSI's
new FDU-3500 docking unit for its SO-2510 phone is now available in the market.
This unit allows for outdoor and indoor operation of the satellite phone on the
Thuraya network. Our new PA-3500 and PA-3500T products allow compatibility
between our DCS-1200, DCS-1400 and USS-900T encryption devices and the APSI
FDU-3500 docking unit and SO-2510 phone. We have continued to work on further
designs for encrypting the SO-2510 phone that we believe will increase customer
attraction to security by reducing the size of the encryption unit and greatly
improving the customer's graphical interface.

                                       21
<PAGE>

         Our products provide secure communications with many different
satellite phones, including the Thuraya 7100/7101/SO-2510 handheld terminal
("HHT"), Globalstar GSP-1600 HHT, Telit SAT-550/600 HHT, Globalstar
GSP-2800/2900 fixed phone, Iridium 9500/9505/9505A HHT, Inmarsat M4 and Mini "M"
HHT units from Thrane & Thrane and Nera. Through the use of our products,
encrypted satellite communications are available for many Thuraya docking units,
including Teknobil's Next Thuraya Docker, Thuraya's Fixed Docking Adapter,
APSI's FDU-2500 and FDU-3500 Fixed Docking Units, and Sattrans's SAT-OFFICE
Fixed Docking Unit and SAT-VDA Hands-Free Car Kit.

         We have also added Voice over Internet Protocol (VoIP) functions to the
DCS-1200 for corporate utilization over these popular new telephone systems.

         In the commercial field, we licensed our encryption system for e-mail
to Digital Info Security Co. Inc. ("DISC"), located in Westminster, Colorado.
The system, our DCS-2200, integrates into DISC's e-mail services and allows
companies to encrypt all e-mail transactions in a manner transparent to the
individual user.

         In furtherance of our relationship with DISC, during fiscal 2006 and
2007, we acquired an aggregate of 12,200,000 shares of DISC's common stock, all
of which were restricted securities. DISC's common stock is not registered under
the Securities Exchange Act of 1934, but is quoted on the Pink Sheets. According
to DISC's most recent public financial report, as of September 30, 2007 we held
approximately 12% of the outstanding common stock of DISC. More information on
DISC can be obtained on their website www.disecurityco.com.

         Our operations and the achievement of our objectives in marketing,
production, and research and development are dependent upon an adequate cash
flow. Accordingly, in monitoring our financial position and results of
operations, particular attention is given to cash and accounts receivable
balances and cash flows from operations. Since our initial public offering, our
cash flows have been primarily generated through the sales of common stock in
private placements and upon exercise of stock options. Since 1999 we have also
generated cash flows from sales of our encryption products and services and in
fiscal 2008 we expect to commence receiving license fees from Videocon after
Videocon has obtained the necessary regulatory approvals in India for such
payments. During the past year we have continued to direct our encryption
marketing efforts to participate in the security opportunities created by the
U.S. Department of Homeland Security, the Defense Department, and the enactment
of laws such as HIPAA, the Sarbanes-Oxley Act, and Gramm-Leach-Bliley Act, which
mandate that government and private sector firms provide higher levels of
information privacy and security. We have pursued and are continuing to pursue
marketing and licensing opportunities for our display technology. To date we
have not received any revenue from sales or licensing of our display technology;
however, commencing in fiscal 2008 we expect to receive license fees from
Videocon after Videocon has obtained the necessary regulatory approvals in India
for such payments. We anticipate that current cash on hand, cash generated from
operations, and cash generated from the exercise of employee options will be
adequate to fund our operations at least through the end of the first quarter of
fiscal 2009.

                                       22
<PAGE>

CRITICAL ACCOUNTING POLICES
- ---------------------------

         Our financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America. As such, we are
required to make certain estimates, judgments and assumptions that management
believes are reasonable based upon the information available. These estimates
and assumptions affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the dates of the financial
statements and the reported amounts of revenue and expenses during the reporting
periods.

         We believe the following critical accounting polices affect the more
significant judgments and estimates used in the preparation of our financial
statements. For additional discussion on the application of these and other
accounting polices, refer to the financial statements and notes thereto included
in our Annual Report on Form 10-K for the year ended October 31, 2007.

Revenue Recognition
- -------------------

         Revenues from sales are recorded when all four of the following
criteria are met: (i) persuasive evidence of an arrangement exists; (ii)
delivery has occurred and title has transferred or services have been rendered;
(iii) our price to the buyer is fixed or determinable; and (iv) collectibility
is reasonably assured.

Inventories
- -----------

         Inventories are stated at the lower of cost, including material, labor
and overhead, determined on a first-in, first-out basis, or market, which
represents our best estimate of market value. We regularly review inventory
quantities on hand, particularly finished goods, and record a provision for
excess and obsolete inventory based primarily on forecasts of future product
demand. Our net loss is directly affected by management's estimate of the
realizability of inventories. To date, sales of our products have been limited.
Accordingly, there can be no assurance that we will not be required to reduce
the selling price of our inventory below our current carrying value in the
future.

Stock Based Compensation
- ------------------------

         We account for stock options granted to employees, directors and
consultants using Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 123 (revised 2004), "Share-Based Payment" ("SFAS
123R"). We recognize compensation expense for stock option awards on a
straight-line basis over the requisite service period of the grant. Determining
the appropriate fair value model and calculating the fair value of stock-based
awards requires judgment, including estimating stock price volatility,
forfeiture rates and expected life. If factors change and we employ different
assumptions in the application of SFAS No. 123R in future periods, the
compensation expense that we record under SFAS No. 123R may differ significantly
from what we have recorded in the current period.

                                       23
<PAGE>

RESULTS OF OPERATIONS
- ---------------------

Three months ended January 31, 2008 compared with three months ended January 31,
- --------------------------------------------------------------------------------
2007
- ----

         Net Sales and Gross Profit

         Net Sales. Net sales decreased by approximately $79,000 in the
three-month period ended January 31, 2008, to approximately $52,000, as compared
to approximately $131,000 in the comparable prior-year period. Revenue during
the current period was from encryption products, while revenue during the prior
year period was from encryption products and services. The decrease in net sales
resulted from a reduction in unit sales of approximately $19,000, to
approximately $52,000, as compared to approximately $71,000 in the comparable
prior-year period and a decrease in revenue from encryption services from
$60,000 in the comparable prior-year period to none in the current period. The
revenue from encryption services in the prior year period resulted from
engineering services billed to DISC. Our encryption sales have been limited and
are sensitive to individual large transactions. We believe that changes in sales
between periods generally represent the nature of the early stage of our product
and sales channel development.

         Gross Profit. Gross profit from sales of encryption products and
services decreased by approximately $51,000 in the three-month period ended
January 31, 2008, to approximately $39,000, as compared to a gross profit of
approximately $90,000 in the comparable prior-year period. The decrease in gross
profit is primarily due to the decrease in sales. Gross profit as a percent of
net sales in the three-month period ended January 31, 2008 was approximately
75%, as compared to approximately 69% in the comparable prior-year period.
Because of the limited number of transactions during each of the periods, gross
profit percentages are sensitive to individual transactions.

         Research and Development Expenses

         Research and development expenses increased by approximately $310,000
in the three-month period ended January 31, 2008, to approximately $1,313,000,
from approximately $1,003,000 in the comparable prior-year period. The increase
in research and development expenses was principally due to an increase in
employee stock option compensation expense of approximately $205,000, an
increase in consultant stock option compensation expense of approximately
$45,000 and an increase in employee compensation and related costs, other than
stock option expense, of approximately $46,000.

         Selling, General and Administrative Expenses

         Selling, general and administrative expenses increased by approximately
$549,000 to approximately $1,419,000 in the three-month period ended January 31,
2008, from approximately $870,000 in the comparable prior-year period. The
increase in selling, general and administrative expenses was principally due to
an increase in employee stock option compensation expense of approximately
$175,000, an increase in consultant stock option compensation expense of
approximately $162,000, an increase in employee compensation and related costs,
other than stock option expense, of approximately $82,000, an increase
professional fees of approximately $75,000 and an increase in the provision for
doubtful accounts of $60,000, offset by the partial recovery of inventory from
an account receivable previously written off of approximately $29,000.

                                       24
<PAGE>

         Interest Income

         Interest income was approximately $7,000 in the three-month period
ended January 31, 2008, compared to approximately $10,000 in the comparable
prior-year period.

LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------

         From our inception, we have met our liquidity and capital expenditure
needs primarily through the proceeds from sales of common stock in our initial
public offering, in private placements, upon exercise of warrants issued in
connection with the private placements and public offering, and upon the
exercise of stock options. In 2001 and 2002, we also received payments under a
technology development agreement. In addition, commencing in the fourth quarter
of fiscal 1999, we have generated cash flows from sales of our encryption
products and in fiscal 2008 we expect to commence receiving license fees from
Videocon after Videocon has obtained the necessary regulatory approvals in India
for such payments.

          During the three months ended January 31, 2008, our cash used in
operating activities was approximately $835,000. This resulted from payments to
suppliers, employees and consultants of approximately $894,000, which was offset
by cash of approximately $52,000 received from collections of accounts
receivable related to sales of encryption products, and approximately $7,000 of
interest income received. Our cash used in investing activities during the three
months ended January 31, 2008 was approximately $21,247,000, which resulted from
a disbursement of $16,200,000 for the purchase of Videocon GDRs, a disbursement
$5,000,000 to issue a loan to Mars Overseas, purchases of short-term investments
consisting of certificates of deposit of $441,000 and purchases of approximately
$6,000 of equipment, offset by $400,000 received upon maturities of short-term
investments consisting of certificates of deposit. Our cash provided by
financing activities during the three months ended January 31, 2008 was
approximately $22,207,000, which resulted from the sale of our common stock to
Videocon for $16,200,000, the proceeds received of $5,000,000 upon obtaining a
loan from Mars Overseas and cash received upon the exercise of stock options of
approximately $1,007,000. Accordingly, during the three months ended January 31,
2008, our cash and cash equivalents increased by approximately $125,000 and our
short-term investments increased by $41,000. As a result, our cash, cash
equivalents, and short-term investments, at January 31, 2008 increased to
approximately $1,235,000 from approximately $1,069,000 at the end of fiscal
2007.

         Accounts receivable decreased by $60,000 from $120,000 at the end of
fiscal 2007 to $60,000 at January 31, 2008. The decrease in accounts receivable
is a result of a provision for doubtful accounts of $60,000 related to accounts
receivable from DISC. Inventories increased by approximately $33,000 from
approximately $192,000 at October 31, 2007 to approximately $225,000 at January
31, 2008, primarily as a result of the timing of shipments and production
schedules. Investment in Videocon increased to $16,200,000 at January 31, 2008,
as a result of our purchase of Videocon global depository receipts for that
amount. Investment in DISC at cost of $417,000 has not changed at January 31,
2008 from the end of fiscal 2007. Loan receivable increased to $5,000,000 at
January 31, 2008, as a result of issuing a loan in that amount to Mars Overseas.
Accounts payable and accrued liabilities decreased by approximately $92,000 from
approximately $679,000 at the end of fiscal 2007 to approximately $587,000 at
January 31, 2008, as a result the timing of payments. Loan payable increased to
$5,000,000 at January 31, 2008, as a result obtaining a loan from Mars Overseas.

                                       25
<PAGE>

         As a result of these changes, working capital at January 31, 2008
increased to approximately $966,000 from approximately $737,000 at the end of
fiscal 2007.

         Our working capital includes inventory of approximately $225,000 at
January 31, 2008. Management has recorded our inventory at the lower of cost or
our current best estimate of net realizable value. To date, sales of our
products have been limited. Accordingly, there can be no assurance that we will
not be required to reduce the selling price of our inventory below our current
carrying value.

         During the three-month periods ended January 31, 2008 and 2007, we
issued 448,575 shares and 548,800 shares, respectively, of common stock to
certain employees for services rendered, principally in lieu of cash
compensation, pursuant to the CopyTele, Inc. 2003 Share Incentive Plan (the
"2003 Share Plan"). We recorded compensation expense for the three-month periods
ended January 31, 2008 and 2007 of approximately $557,000 and $421,000,
respectively, for the shares of common stock issued to employees. In addition,
during the three-month periods ended January 31, 2008 and 2007, we issued 46,326
shares and 134,020 shares, respectively, of common stock to consultants for
services rendered pursuant to the 2003 Share Plan. We recorded consulting
expense for the three-month periods ended January 31, 2008 and 2007 of
approximately $60,000 and $95,000, respectively, for the shares of common stock
issued to consultants.

         During the three-month periods ended January 31, 2008 and 2007, we
granted options to purchase 3,125,000 shares and 1,775,000 shares, respectively,
to employees, non-employee directors and consultants of common stock at weighted
average exercise prices of $1.03 and $.61 per share, respectively, pursuant to
the 2003 Share Plan. During the three-month periods ended January 31, 2008 and
2007, stock options to purchase 1,174,200 shares and 1,612,230 shares,
respectively, of common stock were exercised with aggregate proceeds of
approximately $1,007,000 and $738,000, respectively.

                                       26
<PAGE>

         During the three-month period ended January 31, 2008, we issued
20,000,000 shares of our common stock to an affiliate of Videocon for an
aggregate purchase price of $16,200,000 and we purchased 1,495,845 Videocon GDRs
for an aggregate purchase price of $16,200,000. On February 25, 2008 the Board
of Directors of Videocon recommended for approval at the annual general meeting
of Videocon to be held on March 31, 2008 a dividend of 3.5 rupees per equity
share (each Videocon GDR represents the equivalent of one Videocon equity
share). While the Videocon GDRs are held as security for the loan payable to
Mars Overseas, the agreement governing such loan provides that any dividends,
distributions, rights or other proceeds or benefits in respect of the Videocon
GDRs shall be promptly transferred to us free and clear of any encumbrances
under the agreements.

        We believe that our existing cash, cash equivalents, short-term
investments and accounts receivable, together with cash flows from expected
sales of our encryption products and revenue relating to our thin, flat,
low-voltage phosphor display technology, including license fees we expect to
receive from Videocon once Videocon has obtained the necessary regulatory
approvals in India for such payments, and other potential sources of cash flows,
will be sufficient to enable us to continue in operation until at least the end
of the first quarter of fiscal 2009. We anticipate that, thereafter, we will
require additional funds to continue our marketing, production, and research and
development activities, and we will require outside funding if cash generated
from operations is insufficient to satisfy our liquidity requirements. However,
our projections of future cash needs and cash flows may differ from actual
results. If current cash and cash that may be generated from operations are
insufficient to satisfy our liquidity requirements, we may seek to sell debt or
equity securities or to obtain a line of credit prior to the first quarter of
fiscal 2009. The sale of additional equity securities or convertible debt could
result in dilution to our stockholders. We currently have no arrangements with
respect to additional financing. There can be no assurance that we will generate
sufficient revenues in the future (through sales or otherwise) to improve our
liquidity or sustain future operations, that the necessary regulatory approvals
in India for payments of license fees by Videocon to us will be obtained, that
our production capabilities will be adequate, that other products will not be
produced by other companies that will render our products obsolete, or that
other sources of funding would be available, if needed, on favorable terms or at
all. If we cannot obtain such funds if needed, we would need to curtail or cease
some or all of our operations.

        We are seeking to improve our liquidity through increased sales or
license of products and technology. In an effort to generate sales, we have
marketed our encryption products directly to U.S. and international
distributors, dealers and original equipment manufacturers that market our
encryption products and to end-users. We have been working with several large
organizations to provide them with both our hardware and software encryption
solutions for them to evaluate whether the solutions meet their security
requirements and have begun supplying several major U.S. companies with our
encryption products. We have pursued and are continuing to pursue marketing and
licensing opportunities for our display technology. To date we have not received
any revenue from sales or licensing of our display technology; however,
commencing in fiscal 2008 we expect to receive license fees from Videocon after
Videocon has obtained the necessary regulatory approvals in India for such
payments. During the three-month period ended January 31, 2008, we have
recognized revenue from sales of encryption products of approximately $52,000.

         The following table presents our expected cash requirements for
contractual obligations outstanding as of January 31, 2008:

                                       27
<PAGE>
<TABLE>
<CAPTION>
<S>                 <C>                                  <C>            <C>

                                            Payments Due by Period
                    -----------------------------------------------------------------------
                       Less
Contractual            than         1-3         4-5          After
 Obligations          1 year       years       years        5 years            Total

Consulting
Agreement           $    43,000           -           -              -  $            43,000

Noncancelable
Operating Leases    $   232,000           -           -              -  $           232,000

Loan Payable                  -           -           -  $   5,000,000  $         5,000,000
                    -----------  ----------  ----------  -------------  -------------------

Total Contractual
Cash Obligations    $   275,000           -           -  $   5,000,000  $         5,275,000
                    -----------  ----------  ----------  -------------  -------------------
</TABLE>


FORWARD-LOOKING STATEMENTS
- --------------------------

         Information included in this Quarterly Report on Form 10-Q may contain
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements are not statements of
historical facts, but rather reflect our current expectations concerning future
events and results. We generally use the words "believes," "expects," "intends,"
"plans," "anticipates," "likely," "will" and similar expressions to identify
forward-looking statements. Such forward-looking statements, including those
concerning our expectations, involve risks, uncertainties and other factors,
some of which are beyond our control, which may cause our actual results,
performance or achievements, or industry results, to be materially different
from any future results, performance, or achievements expressed or implied by
such forward-looking statements. These risks, uncertainties and factors include,
but are not limited to, those factors set forth in Part II, Item 1A - "Risk
Factors" below and Note 1 to Condensed Financial Statements. You should read
this discussion and analysis along with our Annual Report on Form 10-K for the
year ended October 31, 2007 and the condensed financial statements included in
this Report. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. You are cautioned not to unduly rely on such
forward-looking statements when evaluating the information presented in this
Report.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.
         -----------------------------------------------------------

         We have invested a portion of our cash on hand in short-term, fixed
rate and highly liquid instruments that have historically been reinvested when
they mature throughout the year. Although our existing instruments are not
considered at risk with respect to changes in interest rates or markets for
these instruments, our rate of return on these securities could be affected at
the time of reinvestment, if any.

         At January 31, 2008, our investment in Videocon GDRs is recorded at
fair value of approximately $17,271,000, including an unrealized gain of
approximately $1,071,000, and has exposure to price risk. The fair value of the
Videocon GDRs is based on the underlying price of Videocon's equity shares which
are traded on stock exchanges in India with prices quoted in rupees.
Accordingly, the fair value of the Videocon GDRs is subject to price risk and
foreign exchange risk. The potential loss in fair value resulting from a
hypothetical 10% adverse change in prices of Videocon equity shares quoted by
Indian stock exchanges and in foreign currency exchange rates, as of January 31,
2008 amounts to approximately $1,727,000.

                                       28
<PAGE>



Item 4.  Controls and Procedures.
         ------------------------

         We carried out an evaluation, under the supervision and with the
participation of our management including our Chairman of the Board and Chief
Executive Officer and our Vice President - Finance and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures pursuant to Rule 13-15(b) of the Securities Exchange Act of 1934, as
amended. Based upon that evaluation, our Chairman of the Board and Chief
Executive Officer and our Vice President - Finance and Chief Financial Officer
concluded that our disclosure controls and procedures are effective as of the
end of the period covered by this report.

         There was no change in our internal control over financial reporting
during the quarter ended January 31, 2008 that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.


                           PART II. OTHER INFORMATION
                           --------------------------

Item 1A.  Risk Factors.
          ------------

         There have been no material changes in our risk factors from those
disclosed in our Annual Report on Form 10-K for the year ended October 31, 2007.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds.
         -----------------------------------------------------------

         On November 2, 2007, we also entered into a Share Subscription
Agreement (the "Subscription Agreement") with Mars Overseas Limited, an
affiliate of Videocon Industries Limited ("Mars Overseas"). Under the
Subscription Agreement, Mars Overseas agreed to purchase from us 20,000,000
shares of our common stock (the "CopyTele Shares") for an aggregate purchase
price of $16,200,000. The purchase of the CopyTele Shares pursuant to the
Subscription Agreement closed on November 6, 2007.

          The CopyTele Shares were issued without registration in reliance on
the exemption provided by Section 4(2) of the Securities Act of 1933, as
amended, for transactions not involving a public offering. In claiming such
exemption, we relied on representations that, among other things, Mars Overseas
was acquiring the shares for its own account (and not for the account of others)
for investment and not with a view to the distribution thereof.

Item 6.  Exhibits.
         ---------

          10.1 Technology  License  Agreement,  dated November 2, 2007,  between
               CopyTele, Inc. and Videocon Industries Limited.

          10.2 GDR Purchase Agreement,  dated November 2, 2007, between CopyTele
               International Ltd. and Global EPC Ventures Limited. (Incorporated
               by  reference  to Exhibit 2.1 to our  Current  Report on Form 8-K
               filed December 21, 2007.)

                                       29
<PAGE>

          10.3 Addendum to GDR  Purchase  Agreement,  dated  November  30, 2007,
               between  CopyTele  International  Ltd.  and Global  EPC  Ventures
               Limited. (Incorporated by reference to Exhibit 2.2 to our Current
               Report on Form 8-K filed December 21, 2007.)

          10.4 Share  Subscription  Agreement,  dated November 2, 2007,  between
               CopyTele, Inc. and Mars Overseas Limited.

          10.5 Loan and Pledge Agreement,  dated November 2, 2007,  Between Mars
               Overseas Limited and CopyTele International Ltd.

          10.6 Loan and  Pledge  Agreement,  dated  November  2,  2007,  Between
               CopyTele International Ltd. and Mars Overseas Limited.

          31.1 Certification of Chief Executive Officer, pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002, dated March 11, 2008.

          31.2 Certification of Chief Financial Officer, pursuant to Section 302
               of the Sarbanes-Oxley Act of 2002, dated March 11, 2008.

          32.1 Statement of Chief Executive Officer, pursuant to Section 1350 of
               Title 18 of the United States Code, dated March 11, 2008.

          32.2 Statement of Chief Financial Officer, pursuant to Section 1350 of
               Title 18 of the United States Code, dated March 11, 2008.

                                       30
<PAGE>




                                   SIGNATURES
                                   ----------


         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                   COPYTELE, INC.


                                   By: /s/ Denis A. Krusos
                                       ---------------------------------
                                       Denis A. Krusos
                                       Chairman of the Board and
                                       Chief Executive Officer
March 11, 2008                         (Principal Executive Officer)



                                  By: /s/ Henry P. Herms
                                      ----------------------------------
                                      Henry P. Herms
                                      Vice President - Finance and
                                      Chief Financial Officer (Principal
March 11, 2008                        Financial and Accounting Officer)


                                       31
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>a5631402ex10_1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
                                  Exhibit 10.1
                                  ------------


                          TECHNOLOGY LICENSE AGREEMENT
                          ----------------------------

         THIS TECHNOLOGY LICENSE AGREEMENT (the "Agreement"), made as of the 2nd
day of November, 2007, by and between CopyTele, Inc., a Delaware corporation
having an address at 900 Walt Whitman Road, Melville, New York 11747
("CopyTele"), and Videocon Industries Limited, a company existing under the laws
of India, having its principal place of business at 2nd Floor Fort House, D.N.
Road, Fort, Mumbai - 400 001 (INDIA) ("Videocon").

                              W I T N E S S E T H:

         WHEREAS CopyTele has developed and is the owner of technology (the
"CopyTele Technology"), variously protected by patents, patent applications,
know-how and trade secrets, relating to thin flat Low Voltage Phosphor displays
("Displays"); and

         WHEREAS, Videocon is in the business of developing, manufacturing, and
selling CRT, LCD and Plasma displays; and

         WHEREAS, Videocon and CopyTele propose jointly to further develop the
CopyTele Technology to make it suitable to be utilized in commercial
applications such as television displays; and

         WHEREAS, the Parties desire to set forth their agreement for
manufacturing and selling Modules containing Displays; and

         WHEREAS, Videocon desires to receive a transfer of the CopyTele
Technology and a license under the CopyTele Technology for the manufacture and
distribution of such Modules; and

         WHEREAS, CopyTele is willing to transfer such CopyTele Technology and
grant Videocon such a license, subject to the terms and conditions of this
Agreement;

         NOW, THEREFORE, in consideration of their mutual covenants herein
contained, and for other good and valuable consideration, and intending to be
legally bound hereby, the parties hereto agree as follows:

Article I.        DEFINITIONS

Section 1.01 "Copyright Rights" shall mean all rights in works of authorship,
including diagrams, schematics, flow charts, manuals, and documentation,
relating to the CopyTele Technology (all of the foregoing works being referred
to herein as the "Works"), including registrations of copyright in the Works.

Section 1.02 "CopyTele Technology" shall have the meaning set forth in the
preamble, and shall include nanotube devices for use in displays, as well as
thin film electron emitters and shall also include the technical information,
know-how, manufacturing techniques, engineering data, specification of materials
and other information in the possession of CopyTele relating to or in respect of
manufacture and use of the Products and all or part of which may be necessary to
enable Videocon to manufacture the Products to a standard and quality similar to
the standard and quality of Modules.

<PAGE>

Section 1.03      "Dhoot Family" shall mean Mr. V.N. Dhoot, Mr. P.N. Dhoot, Mr.
R.N. Dhoot and any of their spouses and children.

Section 1.04 "Effective Date" shall mean a date mutually agreed by CopyTele and
Videocon as soon as practicable after Videocon has received the written
approvals of the concerned statutory authorities of government of India to the
terms of this Agreement, as may be applicable, and has delivered to CopyTele a
copy of the same.

Section 1.05 "Ex-Factory Price" shall have the meaning set forth in Exhibit E.

Section 1.06 "Modules" shall have the meaning set forth in Exhibit A.

Section 1.07 "Products" shall mean Modules that are (a) within the scope of any
claim of the Patent Rights or (b) made with the use of or embody any of the
Trade Secrets or the Works.

Section 1.08 "Patent Rights" shall mean those United States and foreign patents
and patent applications and design applications and registrations identified in
Exhibit B, and patents and patent applications in the same and other countries
having the same substantive disclosure and claiming the benefit of such
applications, including continuations, divisionals, re-examinations, re-issues
and extensions thereof.

Section 1.09 "Trade Secrets" shall mean all confidential and proprietary
technical information of CopyTele relating to the CopyTele Technology and
disclosed by CopyTele to Videocon in connection with this Agreement.

Section 1.10 "Videocon Group Company" shall mean a company in which Videocon,
the Dhoot Family, or both hold either directly or indirectly at least 50% of the
share capital or have management control.

Article II.       LICENSE

Section 2.01 CopyTele hereby grants to Videocon, subject to the provisions of
Section 2.04 below, a non-transferable, worldwide, royalty-bearing right and
license under the Patent Rights, the Trade Secrets, the Copyright Rights and
other CopyTele Technology to manufacture, use, sell, and offer for sale Products
or other Products that CopyTele and Videocon may mutually agree upon in writing.
CopyTele shall continue to have the right to produce and market, and to utilize
the entities listed in Exhibit C to produce and market, Products utilizing the
CopyTele Technology.

<PAGE>

Section 2.02 Joint agreement of CopyTele and Videocon in writing shall be
necessary in case of grant of licenses to third parties under the CopyTele
Technology, upon reasonable terms and conditions as agreed by CopyTele and
Videocon.

Section 2.03      The license granted herein does not include the right to have
Products made by another.

Section 2.04 Videocon shall be entitled to grant sublicense of the Patent
Rights, Trade Secrets, Copyright Rights and other CopyTele Technology only to
other Videocon Group Company/ies (any such Videocon Group Company to which
Videocon has granted such a sublicense, a "Sublicensee"), and any such
sublicense shall be subject to the terms and conditions of this Section 2.04. In
the event that Videocon sublicenses the Patent Rights, the Trade Secrets, the
Copyright Rights or other CopyTele Technology to any Sublicensee, such
Sublicensee shall be bound by the terms of this Agreement, including, without
limitation, that it shall be liable to pay to CopyTele royalty for the Products
sold by it on the same terms and at the same rate as provided in Article VI. In
the event of any such sublicense, Videocon shall procure in writing from such
Sublicensee a sublicense agreement confirming the payment of royalty and
adherence of the terms and conditions of this Agreement as applicable to it, and
shall provide to CopyTele a copy of such sublicense agreement. Videocon shall
give to CopyTele prompt written notice of such sublicense, setting forth the
name and address of such Sublicensee, jurisdiction of incorporation or
formation, and precise amount and nature of Videocon's and the Dhoot Family's
ownership interest therein. In the event any Sublicensee to whom such
sub-license is granted ceases to qualify as Videocon Group Company, the
sublicense granted to such Sublicensee shall forthwith stand terminated.
Videocon shall be responsible for the performance by any permitted Sublicensee,
and any breach by any permitted Sublicensee shall be deemed a breach by
Videocon.

Section 2.05 The license granted herein includes the right only to sell and
offer for sale completed Products, and not components or sub-assemblies thereof,
to any third party or Videocon Group Company. However, Videocon or any
Sublicensee shall be entitled to sell the components or sub-assemblies to any
other Videocon Group Company.

Section 2.06 The rights licensed under the Copyright Rights include the rights
to copy and modify the Works for the internal use of Videocon in connection with
the manufacture, use, sale and offer for sale of Products, but not the right to
publish, distribute, transmit or publicly display the Works, or any combination
thereof, in whole or in part.

Article III.      DISCLOSURE AND TARGET JOINT DEVELOPMENT PROGRAM

Section 3.01 CopyTele shall use its commercially reasonable efforts to disclose
to Videocon the CopyTele Technology to the extent required for suitably
qualified and experienced (in the reasonable judgment of CopyTele) personnel of
Videocon to understand the CopyTele Technology. Such efforts shall consist of
furnishing to Videocon such copies of existing documentation of the CopyTele
Technology as CopyTele deems reasonable, and providing reasonable training of
suitably qualified and experienced (in the reasonable judgment of CopyTele)
Videocon personnel at CopyTele's facility in Melville, New York, or at
Videocon's facilities at mutually agreeable times.

<PAGE>

Section 3.02 CopyTele and Videocon shall jointly cooperate, prior to production,
to jointly implement the CopyTele Technology to produce prototypes of the
Modules in accordance with the target task & schedule as indicated in Exhibit D.
Any patent required to be registered in respect of such implementation of the
CopyTele Technology shall be jointly applied for by CopyTele and Videocon.

Article IV.        PRODUCTION

Section 4.01 To prepare for the production and manufacture of the Products,
Videocon, at Videocon's sole expense, with the assistance of CopyTele, shall
undertake the following:

(a)      Videocon shall provide all design and process engineering required to
         produce the Products based on the CopyTele Technology.

(b)      CopyTele and Videocon shall hold joint design reviews as required from
         time to time.

(c)      CopyTele and Videocon shall jointly agree, in writing, concerning
         Product acceptance and testing criteria for engineering samples.

(d)      Videocon and CopyTele shall each record all progress and achievements
         in preparation for production and deliver progress reports to the other
         within one week after the end of each calendar month until the
         commencement of commercial production of the Products.

(e)      Videocon shall purchase, at its sole expense, all tooling and fixtures
         for the production of Products.

Section 4.02 Throughout the term of this Agreement, Videocon shall deliver
(and/or cause to be delivered by a Sublicensee) to CopyTele such information as
CopyTele shall reasonably request regarding Videocon's (or such Sublicensee's)
testing of the Products.

Section 4.03 After commencement of commercial production of the Products,
Videocon and any permitted Sublicensee shall provide CopyTele with production
samples from time to time as may be reasonably requested by CopyTele. Videocon
and CopyTele shall hold joint reviews of such production as may be reasonably
necessary to ensure quality of the Product from time to time.

Section 4.04 Videocon may purchase raw materials for use in production of
Products from any source, including CopyTele, as elected by Videocon.

Article V.        IMPROVEMENTS

Section 5.01 All developments and improvements subsequent to the Effective Date
in the Products, design changes, modifications, revisions, additions and the
like to CopyTele Technology ("Improvements") developed, conceived or reduced to
practice jointly or severally by employees of Videocon (or contractors or agents
of Videocon), or employees of CopyTele (or contractors or agents of CopyTele),
shall be jointly owned, in equal undivided shares, by Videocon and CopyTele. The
parties shall decide jointly on seeking patent protection in any Improvements
and in strategy in filing and prosecuting patent applications, and shall share
equally in the expense of patent application preparation and prosecution, and
patent maintenance.

<PAGE>

Section 5.02 Each party shall execute, and shall cause its employees,
contractors and agents to execute, such assignments of patent applications,
confirmatory licenses, and other documents that the other or its counsel may
reasonably request to assure that the rights licensed and granted under this
Article V fully vest in the other party.

Section 5.03 Videocon represents, warrants and covenants that there now are and
will be throughout the term of this Agreement valid and enforceable written
agreements, between Videocon and its employees, contractors and agents, pursuant
to which Videocon will have sole ownership of any Improvement and sole ownership
of any contribution of such employee, contractor or agent to any Improvement,
and further obligating such employees, contractors and agents to provide
cooperation, execute documents, and otherwise perform those acts as may be
required for Videocon to fulfill its obligations under Sections 5.01 and 5.02
hereof. Videocon further warrants that the grant of Improvements to CopyTele
shall be free of any claims for compensation by any Videocon employee,
contractor or agent.

Article VI.       PAYMENTS; INSEPCTION; REFERRAL

Section 6.01 FEE AMOUNTS. In consideration of the disclosure of CopyTele
Technology under this Agreement, Videocon agrees to pay CopyTele the technology
transfer fees ("Technology Transfer Fees") in the amounts and on the dates set
forth in Exhibit E. In consideration of the license granted herein, Videocon
agrees to pay CopyTele a royalty (the "Percentage Royalty") equal to the
Percentage Royalty Rate, as set forth in Exhibit E, of the Ex-Factory Price of
all Products sold by Videocon or any permitted Sublicensee to any party. In the
event of any sublicense, Videocon shall ensure that such Sublicensee pays to
CopyTele the Percentage Royalty as set forth in Exhibit E.

Section 6.02 TIME OF PAYMENT. Videocon shall pay to CopyTele the Technology
Transfer Fees at the times set forth in Exhibit E. Videocon shall pay, and cause
each Sublicensee, as applicable, to pay, to CopyTele the Percentage Royalties
with respect to sales in each calendar quarter on or before the 90th day
following the end of such calendar quarter.

Section 6.03 MANNER OF PAYMENT. Payments shall be made, in U.S. dollars, by
electronic transfer to an account, designated by CopyTele in writing, no later
than the due date.

Section 6.04 LATE PAYMENTS; INTEREST. If Videocon or any Sublicensee fails to
make any payment of Percentage Royalties, Technology Transfer Fees or other
amount due under this Agreement to CopyTele within ten business days of its due
date, Videocon or such Sublicensee shall, in addition to and without limitation
of CopyTele's other remedies hereunder, pay to CopyTele interest thereon from
the date ten business days after its due date until paid at the annual rate
equal to LIBOR then in effect plus 5% per annum; provided that in no event shall
the rate of interest required hereunder exceed the maximum rate permitted under
applicable law.

Section 6.05 AUDIT. Videocon shall deliver to CopyTele a statement of the
royalty calculations as certified by its statutory auditors (and those of any
Sublicensee that is liable to pay a royalty in accordance with this Article VI),
stating the amount of the license fees payable to CopyTele under this Agreement.
Such statement of royalty calculations shall be delivered by Videocon to
CopyTele on or before 20th July for each period of January to June and on or
before 20th January for each period of July to December. In the event CopyTele
requires any further details in respect of any amounts stated in the
calculations statements, Videocon shall within 7 (seven) working days of such
request furnish such required details and/or invoice, as the case may be
including extracts from its books of records duly certified by the statutory
auditors. In the event Videocon and CopyTele are unable to resolve any
differences as regards payment of royalty, the matter will be referred to CEO of
CopyTele and Videocon. In the event the matter remains unresolved after such
reference to CEOs of CopyTele and Videocon, the differences shall be referred to
arbitration under the provisions of Section 15.08. Such submission of accounts
statement and furnishing of additional details, invoices and extracts, as the
case may be shall be at CopyTele's expense, provided, however, that if
underpayment by Videocon is determined to be more than 10% of the total payments
owed for the relevant period, Videocon shall repay and/or reimburse to CopyTele
the cost incurred for preparation of the accounts statement and furnishing of
the required details, invoices and extracts.

<PAGE>

Section 6.06 COMPUTATION OF ROYALTIES. Royalties shall be payable based on the
invoicing of all Products, whether to third parties or to any Videocon Group
Company, whether by Videocon or by any other Videocon Group Company, and whether
or not for captive consumption by Videocon, at the Percentage Royalty rate as
set forth in Exhibit E.

Section 6.07 REFERRALS. If CopyTele receives any orders for Products, it may, in
its sole discretion, refer any such orders to Videocon. Videocon shall use its
best efforts to sell, or cause a Videocon Group Company to sell, in accordance
with this Agreement, such Products as may be necessary to fulfill any orders
referred to Videocon by CopyTele and any orders that CopyTele places provided,
however, the price to be paid to Videocon (or the Sublicensee as the case may
be), shall not be less than the price at which Videocon (or the Sublicensee, as
the case may be) is selling the same product otherwise to other customers.

Article VII.      EFFORTS TO MARKET

Videocon shall use its best efforts to exploit the rights granted to it hereby
and to sell the Products therein consistent with the limitations of this
Agreement. Videocon shall be entitled to advertise the manufacture and/or sale
of the Products by them through any media as Videocon may deem appropriate.

Article VIII.     TAXES

Any sales, use, rental, receipt, personal property, value-added, consumption,
goods and services, customs, excise or other tax or duty which may be levied or
assessed in connection with the licenses granted under this Agreement, the
disclosure and/or transfer of CopyTele Technology, and/or the payment of fees
under this Agreement, shall be the sole responsibility of Videocon or its
Sublicensee as the case may be. Videocon shall indemnify CopyTele from and
against any charge or assessment for any such tax or duty. Notwithstanding the
foregoing, if the Government of India or of the country of any Sublicensees
imposes a tax on royalties payable hereunder to CopyTele, then Videocon or such
Sublicensee shall pay such tax on behalf of CopyTele, shall deduct and adjust
such tax paid from the royalty payable to CopyTele and shall submit a Tax
Deduction Certificate to CopyTele. In the event CopyTele requires any assistance
in seeking credit or deduction of such payments made in connection with
CopyTele's taxes in the United States, Videocon or the Sublicensee as the case
may be, shall render all its co-operation and assistance therefore.

<PAGE>

Article IX.       CONFIDENTIAL INFORMATION.

Section 9.01 DEFINITION. The Trade Secrets and all information communicated by
either of CopyTele or Videocon (a "disclosing party") to the other (a "receiving
party"), in oral, written or electronic form, which is confidential to the
disclosing party and provides value to the disclosing party at least in part by
virtue of its confidential status, shall be deemed Confidential Information
pursuant to this Agreement. In addition, and without limitation, the terms and
conditions of this Agreement shall be deemed Confidential Information.

Section 9.02 CONFIDENTIAL NATURE. Each party, as a receiving party, acknowledges
that the Confidential Information of the disclosing party is valuable and
confidential proprietary information of the disclosing party, and that the value
of the Confidential Information derives at least in part from its confidential
status.

Section 9.03 MAINTENANCE OF CONFIDENTIALITY. Each party, as a receiving party,
agrees to engage in efforts to maintain Confidential Information of the
disclosing party in strict confidence at least as stringent as the efforts that
the receiving party engages in to protect its own confidential information, and
in any event no less than commercially reasonable efforts. Without limiting the
foregoing, the receiving party shall restrict access to the Confidential
Information of the disclosing party, by electronic security measures in the case
of electronic files, and by physical security measures in the case of hard
copies, to those employees who have a need to know such Confidential Information
and shall advise those employees of the restrictions of this Agreement prior to
any such disclosure. The receiving party shall immediately advise the disclosing
party of any threatened, actual or apprehended disclosure of any Confidential
Information.

Section 9.04 EXCEPTIONS. As used in this Agreement, Confidential Information
shall not include:

     (a)  Information  which is now available to the public or hereafter becomes
          available to the public without any violation of this Agreement;

     (b)  Information  disclosed in good faith to the receiving party by a third
          party legally entitled to disclose the same; and

    (c)  Information is required to be disclosed to any government agency or any
         regulatory authority or a court of competent jurisdiction provided that
         the parties agree to use their best efforts to minimize the disclosure
         of such information and shall consult with and assist the other party.

provided, however, that specific information shall not be deemed to be within
any of the foregoing exceptions merely because it is in the scope of more
general information within any such exceptions and a combination of features
shall not be deemed to be within any such exceptions merely because individual
features are within such exception.

<PAGE>

Section 9.05 DISCLOSURES. Under no circumstances shall the receiving party,
without the prior written approval of the disclosing party, acknowledge to any
third party what is or is not a part of Confidential Information of the
disclosing party. In the event disclosure is required of the receiving party
under provisions of any law or court order, the receiving party will notify the
disclosing party of the obligation to make such disclosure upon receipt of such
notification or order to disclose under any law or court order. The disclosing
party may make necessary application to the concerned government department
and/or court objecting to such disclosure of Confidential Information. However,
in the event the receiving party is required to make disclosures irrespective of
the outcome of any such application, it shall do so and notify the disclosing
party accordingly. In the event of required disclosure, the receiving party will
assert confidentiality to all Confidential Information of the disclosing party
not directly required to be disclosed.

Section 9.06 PUBLIC DISCLOSURES. Notwithstanding the foregoing, each receiving
party shall be allowed to disclose Confidential Information of the disclosing
party to make any necessary announcement or reporting required by the U.S.
Securities and Exchange Commission, any stock exchange, the NASDAQ Stock Market,
the Securities and Exchange Board of India. However, the party making the
disclosure shall use reasonable efforts to notify the other party in advance of
the contents of the announcement or the reporting.

Article X.        MARKING.

Videocon and its permitted Sublicensees shall include proprietary markings on
all Products, in a form reasonably specified by CopyTele in writing from time to
time, and including a patent notice in the form "Pat. X,XXX,XXX" and/or "Pat.
Pending."

Article XI.       TERM; TERMINATION

Section 11.01 TERM. The license and other rights herein granted shall commence
upon the Effective Date and shall continue unless terminated by either party as
provided in clause 11.02 hereafter; provided, however, that the parties'
obligations under Article IX shall commence immediately.

Section 11.02 TERMINATION. This Agreement and the licenses and other rights
granted hereunder may be terminated by either party by written notice upon: (a)
a material breach by the other party of its obligations hereunder, which
material breach remains unremedied 90 (ninety) days after written notice thereof
to the breaching party by the aggrieved party; (b) a filing by or against either
party for protection, receivership, reorganization or dissolution under the
Federal Bankruptcy Code or similar laws of any state or foreign country relating
to insolvency,

<PAGE>

bankruptcy or the protection of debtors; (c) a cessation by either party of the
conduct of its business in the ordinary course; (d) at any time prior to the
Effective Date if the necessary statutory and/or regulatory approvals of the
concerned authorities to the terms of this Agreement are not obtained within a
reasonable period of time (and in such case, this Agreement shall be of no
further force or effect, other than Articles IX and XII hereof, which shall
continue); or (e) or as otherwise mutually decided by the parties.

Article XII.      RIGHTS AND DUTIES ON TERMINATION.

         Upon the termination for any reason of the license and other rights
herein granted, Videocon agrees immediately to, and to cause all permitted
Sublicensees to: (a) cease and desist from any and all activities requiring use
of the rights granted hereunder, including without limitation the manufacture,
use, sale or offer for sale of Products, provided, however, that Videocon may
sell in the ordinary course of business Products completely manufactured as of
the effective date of termination, subject to all applicable terms and
conditions of this Agreement; (b) destroy or return to CopyTele all papers,
documents, notebooks, charts, computer programs, computer files, records and all
other stored information in any form incorporating any portion of the
Confidential Information; (c) direct any and all employees of Videocon and/or
employees of Sublicensee who have or have had access to any portion of the
Confidential Information not to make any further use or disclosure of any
portion of the Confidential Information for any purpose; and (d) submit a
certificate confirming having complied with (a), (b) and (c) above.

Article XIII.     PATENT PROSECUTION AND MAINTENANCE; INFRINGEMENTS.

Section 13.01 GENERAL. The prosecution and maintenance of patents and
applications within the Patent Rights shall be conducted by CopyTele at
CopyTele's sole expense, in the sole and absolution discretion of CopyTele, by
counsel selected by CopyTele.

Section 13.02 ACTIONS. In the event that either party, or any permitted
Sublicensee, becomes aware of an actual, apprehended or suspected infringement
of any of the rights licensed hereunder, the parties shall promptly consult with
respect thereto. In event of an infringement, both parties must consent to any
grant of a license to the infringer. If either party refuses, in its sole and
absolute discretion, to grant a license to the infringer, then both parties must
join in an infringement suit; the parties shall jointly select counsel, shall
jointly approve any settlement, and shall share equally in expenses and any
recovery. If either party refuses, in its sole and absolute discretion, to join
in an infringement suit, then the other party may file suit for infringement and
if necessary make the other party a party defendant at the cost of the party
filing suit. The party pursuing the suit shall select counsel, approve any
settlement, and shall bear all of the costs of enforcement and retain any
recovery in its entirety. The party not joining the suit shall, at the
reasonable request and expense of the party pursuing the suit, provide such
information, documents and assistance as may be deemed necessary or appropriate
by the party pursuing the suit or its counsel in connection with enforcement
against such infringement.

<PAGE>

Section 13.03 NOTICES. Videocon shall notify CopyTele immediately in writing of
any infringement or possible infringements made known to Videocon or any
permitted Sublicensee of any right of CopyTele. Videocon shall provide at the
reasonable request and expense of CopyTele and at CopyTele's expense, such
information, document and assistance as may be deemed necessary or appropriate
by CopyTele or its counsel in connection with enforcement against such
infringement.

Article XIV.      REPRESENTATIONS AND WARRANTIES.

Section 14.01 NO CONFLICTS. CopyTele represents and warrants that it has the
right to enter into this Agreement, to grant the rights granted herein, and to
perform its obligations hereunder, and that to do so will not violate or
conflict with any agreement to which CopyTele is a party or by which CopyTele is
bound, and that the Copyright Rights and Patent Rights do not violate the rights
of any third party.

Section 14.02 AUTHORITY. Videocon represents and warrants that it has the right,
power and authority to enter into this Agreement and to perform its obligations
hereunder, and to do so will not violate or conflict with any agreement to which
Videocon is a party or by which Videocon is bound.

Section 14.03 NO OTHER WARRANTIES. COPYTELE HEREBY DISCLAIMS ANY AND ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, RELATING TO THE COPYTELE TECHNOLOGY AND THE
RIGHTS GRANTED UNDER THIS AGREEMENT, INCLUDING WITHOUT LIMITATION WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WARRANTIES OF VALIDITY,
ENFORCEABILITY AND/OR NON-INFRINGEMENT.

Section 14.04 NO INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL
COPYTELE BE LIABLE TO VIDEOCON OR ANY THIRD PARTY FOR ANY INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION WORK DELAYS OR LOST PROFITS,
RESULTING FROM THE USE OF THE COPYTELE TECHNOLOGY AND/OR PRODUCTS.

Section 14.05 INDEMNITY BY VIDEOCON. Videocon shall indemnify and hold harmless
CopyTele and its directors, officers, agents and employees from and against all
claims, suits, and damages whatsoever, including but not limited to incidental
costs, attorney's fees and punitive damages, arising from or in connection with
the breach or alleged breach by Videocon of any covenant, representation or
warranty under this Agreement or the use of the CopyTele Technology by Videocon
or any permitted Sublicensee, including the manufacture, distribution,
marketing, sale and use of Products, and including without limitation all claims
for false or misleading advertising, personal injury or property damage relating
to Products; provided, however, that CopyTele shall (a) promptly notify Videocon
in writing of such claims, and (b) provide to Videocon all reasonably available
information, assistance and authority to defend, however, reserving unto
CopyTele the right to: participate in any defense to the extent that, in its
judgment, CopyTele may be prejudiced thereby, and approve any settlement offer
made by or to Videocon which may affect CopyTele's rights or interests.

Section 14.06 INDEMNITY BY COPYTELE. CopyTele shall indemnify and hold harmless
Videocon and its directors, officers, agents and employees from and against all
claims, suits, and damages whatsoever, including but not limited to incidental
costs, attorney's fees and punitive damages, arising from or in connection with
the breach or alleged breach by CopyTele of any covenant, representation or
warranty under this Agreement or the use of CopyTele Technology by Videocon;
provided, however, that Videocon shall (a) promptly notify CopyTele in writing
of such claims, and (b) provide to CopyTele all reasonably available
information, assistance and authority to defend, however, reserving unto
Videocon the right to: participate in any defense to the extent that, in its
judgment, Videocon may be prejudiced thereby, and approve any settlement offer
made by or to CopyTele which may affect Videocon's rights or interests.

<PAGE>

Section 14.07 NOTICE OF ACTIONS. Videocon agrees to notify CopyTele immediately
of any actions, claims or demands brought or made against Videocon whose outcome
may affect the rights of CopyTele in any of the rights licensed or otherwise
granted under this Agreement.

Article XV.       MISCELLANEOUS.

Section 15.01 ENTIRE AGREEMENT; AMENDMENTS. This Agreement is the entire
agreement of the parties with respect to the subject matter hereof, and
supersedes all prior or contemporaneous agreements, arrangements, and
understandings, whether oral or written, regarding the subject matter hereof.
This Agreement may be amended only by a written instrument signed on behalf of
the parties by their duly authorized representatives.

Section 15.02 BINDING AGREEMENT; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors,
legal representatives and assigns. This Agreement and the license herein granted
shall be assignable and transferable by CopyTele, upon written notice to
Videocon. Videocon shall have no right to assign this Agreement or the license
granted herein except with the written consent of CopyTele. For purposes of this
Section 15.02, a change in control of Videocon or a merger in which Videocon
does not survive shall be deemed an assignment.

Section 15.03 RELATIONSHIP OF PARTIES. In making and performing this Agreement,
CopyTele and Videocon act and shall act at all times as independent contractors
and nothing contained in this Agreement shall be construed or implied to create
an agency or partnership relationship between the parties. At no time shall
either party make commitments or incur any charges or expenses for or in the
name of the other.

Section 15.04 SURVIVAL. It is expressly understood and agreed that Article V
(but only as to Improvements conceived, developed and reduced to practice prior
to termination or cancellation), Article VI, Article VIII, Article IX, Article
XII, Article XIV, and Article XV hereof shall survive the termination of this
Agreement and of the license herein granted and shall remain in full force and
effect.

Section 15.05 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
conflict of laws.

Section 15.06 NOTICES. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be given by Federal Express,
Express Mail, or similar overnight delivery or courier service or delivered (in
person or by telecopy or similar telecommunications equipment) against receipt
to the party to whom it is to be given at the address of such party set forth
for such party below (or to such other address as the party shall have furnished
in writing in accordance with the provisions of this Section 15.06), with a copy
to each of the other parties hereto. Any notice shall be deemed given at the
time of receipt thereof.

<PAGE>

                  If to CopyTele:

                  CopyTele, Inc.
                  900 Walt Whitman Road
                  Melville, New York 11747
                  United States of America
                  Attention:  Denis A. Krusos, Chairman & CEO
                  Fax:  631-549-3813

                  If to Videocon:

                  Videocon Industries Limited
                  2nd Floor, Fort House, D.N.Road
                  Fort, Mumbai 400 001, INDIA
                  Attention: Venugopal N. Dhoot, Director / Naveen Mandhana,
                  Sr. Vice President
                  Fax:  91-22-66551985

Section 15.07 SEVERABILITY. If any provision of this Agreement is invalid,
illegal, or unenforceable, the balance of this Agreement shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.

Section 15.08 DISPUTES. Any dispute, difference or controversy arising out of or
relating to this Agreement, any document or instrument delivered pursuant to, in
connection with, or simultaneously with this Agreement, or any breach of this
Agreement or any such document or instrument, with the exception of an actual or
apprehended unlawful disclosure or misappropriation of Confidential Information,
shall be subject to settlement proceedings under the then-applicable
International Chamber of Commerce ("ICC") ADR Rules (or successor rules). If the
dispute has not been settled pursuant to the said Rules within 45 days following
the filing of a Request for ADR or within such other period as the parties may
agree in writing, such dispute shall be finally settled by arbitration under the
then-applicable Rules of Arbitration of the ICC (or successor rules), by a
proceeding conducted in London, England, United Kingdom, in the English
language, by a single arbitrator appointed in accordance with the said Rules of
Arbitration. The arbitrator may grant injunctions or other relief in such
dispute or controversy. The decision of the arbitrator shall be final,
conclusive, and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction, and the
parties irrevocably consent to the jurisdiction of the courts of the State of
New York and of any federal court located in such State for this purpose. In any
such arbitration, the parties waive personal service of any process or other
papers and agree that service thereof may be made in accordance with Section
15.06. Each party shall pay one-half of the costs and expenses of such
arbitration, and each shall separately pay its own attorneys' fees and expenses.
Notwithstanding the foregoing, either party may apply to any court of the State
of New York or any federal court located in such State for injunctive relief to
maintain the status quo until the arbitration award is rendered or the
controversy is otherwise resolved, and each party hereby consents to the
exclusive jurisdiction and venue of such courts for such purpose.

<PAGE>

Section 15.09 INJUNCTIONS. Each party agrees that any actual, apprehended or
threatened disclosure of any portion of the Confidential Information of the
other to any third party will actually, materially and irreparably damage the
disclosing party, in an amount and a manner that is not capable of remedy by the
payment of damages alone, and each party shall have the right to obtain
injunctions, both permanent and preliminary or temporary restraining orders,
either on notice or ex parte, without the need to post bond, against continuing
any such violation or commencing any threatened violation.

Section 15.10 WAIVER. Any waiver by any party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.

Section 15.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

Section 15.12 HEADINGS. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.

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


COPYTELE, INC.                           VIDEOCON INDUSTRIES LTD.



By: /s/ Denis A. Krusos                  By: /s/ Venugopal N. Dhoot
    -------------------                      ----------------------
      Denis A. Krusos                        Venugopal N. Dhoot
      Chairman & CEO                         Chairman & Managing Director
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>3
<FILENAME>a5631402ex10_4.txt
<DESCRIPTION>EXHIBIT 10.4
<TEXT>
                                  Exhibit 10.4
                                  ------------


                          SHARE SUBSCRIPTION AGREEMENT


                                     BETWEEN


                                  COPYTELE INC.


                                       AND


                              MARS OVERSEAS LIMITED

                                      Dated

                                2nd NOVEMBER 2007



<PAGE>



                                TABLE OF CONTENTS


1.    DEFINITIONS AND INTERPRETATION...........................................1

2.    SUBSCRIPTION OF SHARES...................................................3

3.    CLOSING OBLIGATIONS......................................................4

4.    REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS.............................4

5.    CONFIDENTIALITY..........................................................5

6.    INDEMNIFICATION..........................................................6

7.    NOTICES..................................................................6

8.    GOVERNING LAW AND DISPUTE RESOLUTION.....................................7

9.    MISCELLANEOUS............................................................8

SCHEDULE 1...............................................

SCHEDULE 2...............................................


<PAGE>

This Share Subscription Agreement (this "Agreement") has been entered into on
this 2nd day of November, 2007 between:

1.      COPYTELE INC., a Delaware corporation having its principal office at
        900 Walt Whitman Road, Melville, NY 11747 (hereinafter referred to as
        the "Company");

        AND

2.      MARS OVERSEAS LIMITED, a company incorporated under the laws of the
        Cayman Islands and having its registered office at PO Box 309 GT,
        Ugland House, South Church Street, George Town, Grand Cayman, Cayman
        Islands,) (hereinafter referred to as "Investor" which expression
        includes its successors and permitted assigns).

The Company and the Investor are hereinafter collectively referred to as
"Parties" and individually as a "Party".

WHEREAS:

A.      The Company is currently engaged in the development, production and
        marketing of thin, flat low-voltage phosphor display technology and the
        development, production and marketing of multi-functional encryption
        products;

B.      The Investor is a trading Company;

C.      The Investor has agreed to subscribe to and the Company has agreed to
        issue and sell to the Investor the Subscription Shares (as defined
        below), on the terms and conditions set out in this Agreement; and

D.      The Parties now desire to enter into this Agreement to record the terms
        and conditions for subscribing to the Subscription Shares.

NOW THEREFORE, in consideration of the premises and the mutual covenants set
forth herein, the Parties hereto, intending to be legally bound, hereby agree as
follows:

1.      DEFINITIONS AND INTERPRETATION

1.1.    Definitions

        In this Agreement the following words and expressions set out below
        shall have the following meanings:

        1.1.1. "Affiliate" of a Party means (i) in the case of any Party other
               than a natural person, any other Person that, either directly or
               indirectly through one or more intermediate Persons, controls, is
               controlled by or is under common control with such Party; (ii) in
               the case of any Party that is a natural person, any other Person
               who is a relative of such Party. For purposes of this definition,
               "control" means possession, directly or indirectly, of the power
               to direct or cause the direction of the management or policies of
               any entity, whether through the ownership of voting securities,
               by contract or otherwise;

        1.1.2. "Applicable Law" shall mean all applicable statutes,
               enactments, acts of legislature or Parliament, laws, ordinances,
               rules, by-laws, regulations, notifications, guidelines, policies,
               directions, directives and orders of any Government Authority,
               tribunal, board, court or recognised stock exchange;

                                       1

<PAGE>

        1.1.3. "Approvals" shall mean any permission, approval, consent,
               license, order, decree, authorization, authentication of, or
               registration, qualification, designation, declaration or filing
               with or notification, exemption or ruling to or from any
               Governmental Authority required under any statute or regulation
               for the completion of the transactions contemplated under this
               Agreement;

        1.1.4. "Board" shall mean the Board of Directors of the Company;

        1.1.5. "Business Day" shall mean a day other than Saturday and Sunday
               on which banks are open for normal banking business in London;

        1.1.6. "Closing" shall have the meaning as ascribed to it in Clause
               3.1;

        1.1.7. "Closing Documents" shall have the meaning as ascribed to them
               in Clause 3.3;

        1.1.8. "Designated Account" shall mean the account of the Company
               designated in accordance with Section 3.1.2;

        1.1.9. "Effective Date" shall mean the date of execution of this
               Agreement by the Parties;

       1.1.10. "Encumbrance" shall mean (i) any mortgage, charge (whether
               fixed or floating), pledge, lien, hypothecation, assignment, deed
               of trust, title retention, security interest or other encumbrance
               of any kind securing, or conferring any priority of payment in
               respect of, any obligation of any Person, including any right
               granted by a transaction which, in legal terms, is not the
               granting of security but which has an economic or financial
               effect similar to the granting of security under Applicable Law,
               (ii) any proxy, power of attorney, voting trust agreement,
               interest, option, right of first offer, refusal or transfer
               restriction in favour of any Person, and (iii) any adverse claim
               as to title, possession or use;

       1.1.11. "Governmental Authority" shall mean any governmental or
               statutory authority, government department, agency, commission,
               board, tribunal or court or other entity authorized to make laws,
               rules or regulations or pass directions having or purporting to
               have jurisdiction pursuant to the laws of any country as maybe
               applicable;

       1.1.12. "Loan Agreement" means those certain Loan and Pledge Agreement
               dated the date hereof between Investor and CopyTele International
               Ltd.

       1.1.13. "Person" shall mean any natural person, firm, company,
               Governmental Authority, joint venture, association, partnership
               or other entity (whether or not having separate legal
               personality);

       1.1.14. "Subscription Amount" shall have the meaning ascribed to it in
               Clause 2.2;

       1.1.15. "Subscription Shares" shall mean 20,000,000 shares of
               Company's Common Stock to be issued to the Investor by the
               Company comprising 15.76% of the issued and outstanding shares of
               common stock of the Company after issuance of the Subscription
               Shares, in accordance with the terms of this Agreement;

       1.1.16. "Transaction" shall mean the issue and sale of the
               Subscription Shares to the Investor;

                                       2
<PAGE>

       1.1.17. "Transfer" shall mean and include any direct or indirect sale,
               assignment, lease, transfer, pledge, gift, Encumbrance or other
               disposition of or the subjecting to an Encumbrance of, any
               property, asset, right or privilege or any interest therein or
               thereto;

1.2.     Interpretation

        1.2.1. Any reference herein to any Clause or Schedule is to such
               Clause or Schedule to this Agreement unless the context otherwise
               requires. The Schedules to this Agreement shall be deemed to form
               part of this Agreement.

        1.2.2. References to a Party shall, where the context permits, include
               such Party's respective successors, legal representatives and
               permitted assigns and in the case of individuals will include
               their legal representatives, heirs and permitted assigns.

        1.2.3. The headings or interpretation are inserted for convenience
               only and shall not affect the construction of this Agreement.

        1.2.4. Unless the context otherwise requires, words importing the
               singular include the plural and vice versa, and pronouns
               importing a gender include each of the masculine, feminine and
               neuter genders.

        1.2.5. The terms "hereof", "herein", "hereby", "hereto" and derivative
               or similar words refer to this entire Agreement or specified
               Clauses of this Agreement, as the case may be.

        1.2.6. Reference to statutory provisions shall be construed as meaning
               and including references also to any amendment or re-enactment
               (whether before or after the date of this Agreement) for the time
               being in force and to all statutory instruments or orders made
               pursuant to such statutory provisions.

        1.2.7. Reference to the word "include" shall be construed without
               limitation.

        1.2.8. Time is of the essence in the performance of the Parties'
               respective obligations. If any time period specified herein is
               extended by mutual agreement between the Parties, such extended
               time shall also be of the essence.

        1.2.9. The words "directly or indirectly" mean directly or indirectly
               through one or more intermediary Persons or through contractual
               or other legal arrangements, and "direct or indirect" shall have
               the correlative meanings.

       1.2.10. References to the knowledge, information, belief or awareness
               of any Person shall be deemed to include the knowledge,
               information, belief or awareness of such Person after examining
               all information and making all due diligence inquiries and
               investigations which would be expected or required from a person
               of ordinary prudence.

2.      SUBSCRIPTION OF SHARES

2.1.    On the basis of the representations, warranties, covenants, and
        agreements contained in this Agreement and subject to the terms and
        conditions of this Agreement, the Investor hereby agrees to subscribe
        to and pay for, and the Company hereby agrees to issue and sell to the
        Investor, on the Closing Date, the Subscription Shares at a
        subscription price of US$ 0.81 per Subscription Share.

                                       3
<PAGE>

2.2.    The aggregate subscription amount payable by the Investor to the
        Company on the Closing Date on the issue of the Subscription Shares
        shall be US$ 16,200,000 (Sixteen Million Two Hundred Thousand US
        Dollars) ("Subscription Amount").

2.3.    As of September 20, 2007, 106,911,315 shares of the common stock of the
        Company were issued and outstanding.

3.      CLOSING OBLIGATIONS

3.1.    The closing of the subscription of the Subscription Shares ("Closing")
        shall take place, on November 6, 2007 (the "Closing Date") subject to
        the fulfillment of the following conditions and subject to the
        Warranties set forth on the Schedules being true, correct and complete
        as of the Closing Date:

        3.1.1. The Company shall deliver to the Investor a copy of the
               instructions provided by the Company to the Company's transfer
               agent instructing such transfer agent to issue the Subscription
               Shares.

        3.1.2. The Investor shall deliver to the Company a copy of wire
               instructions for the Transfer of Subscription Amount to the
               Designated Account, the details whereof have been reproduced in
               Schedule 3 attached herewith.

        3.1.3. The Company shall deliver to the Investor all documents or
               instruments as may be reasonably requested by, and in form and
               substance reasonably satisfactory to, the Investor to record and
               confirm the issuance of the Subscription Shares such that the
               Transaction is deemed to have been effectuated on the Closing
               Date.

        3.1.4. The Parties shall have obtained all the necessary corporate,
               shareholders, and Governmental Approvals required for the
               consummation of the Transaction.

        3.1.5. The Company shall deliver to the Investor a copy of the
               resolutions of the Board dated September 14, 2007 authorizing the
               Company to issue the Subscription Shares and an officer of the
               Company to enter into this Agreement.

3.2.    Within 10 (ten) Business Days after the Closing Date, the Company shall
        deliver to the Investor a copy of records of the Company maintained by
        the Company and Company's transfer agent stating the issuance of the
        Subscription Shares together with the share certificate(s) representing
        the Subscription Shares. Such delivery of copies of records of the
        Company together with the share certificate(s) representing the
        Subscription Shares shall be considered to be a formality for
        completing the Transaction.


3.3.    The documents referred to in Clauses 3.1.1, 3.1.3, and 3.1.4 shall be
        collectively referred to as "Closing Documents".

4.      REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

4.1.    The Company warrants to the Investor the representations and warranties
        as set out in Schedule 1 ("Company Warranties").

                                       4
<PAGE>

4.2.    The Investor warrants to the Company the representations and warranties
        as set out in Schedule 2 ("Investors' Warranties").

4.3.    The Company Warranties and Investor Warranties are collectively
        referred to as "Warranties".

4.4.    Each of the Warranties shall be separate and independent and save as
        expressly provided shall not be limited by reference to any other
        paragraph or anything in this Agreement or the Schedules.

4.5.   The Investor agrees as follows:

        4.5.1. The Investor understands that the Subscription Shares are not
               registered under the U.S. Securities Act of 1933, as amended (the
               "Act"), or any foreign or state securities laws. The Investor
               agrees that the Subscription Shares will not be sold, offered for
               sale, transferred, pledged, hypothecated, or otherwise disposed
               of (collectively, "Disposed Of") except in compliance with the
               Act and applicable foreign and state securities laws. Purchasers
               of Subscription Shares can only Dispose Of the Subscription
               Shares pursuant to registration under the Act or pursuant to an
               exemption therefrom.

        4.5.2. The Investor agrees that the Subscription Shares will not be
               Disposed Of (other than in an open market broker's or
               underwritten transaction, whether pursuant to an offering
               registered under the Act or pursuant to Rule 144) unless the
               transferee agrees to abide by the provisions of this Section 4.5.

        4.5.3. To enable the Company to enforce the transfer restrictions
               contained in Sections 4.5.1 and 4.5.2, the Investor hereby
               consents to the placing of legends upon, and stop-transfer orders
               with respect to the and with the transfer agent of, the
               Subscription Shares.

5.      CONFIDENTIALITY

5.1.    Each Party and its Affiliates shall keep all information relating to
        the other Party and its Affiliates relating to the Transaction
        (collectively referred to as the "Information") confidential. Neither
        Party shall issue any public release or public announcement or
        otherwise make any disclosure concerning this Agreement and/or the
        Transaction, without the prior approval of the other Party, provided
        however, that nothing in this Agreement shall restrict either Party
        from disclosing any information as may be required under Applicable Law
        subject to providing a prior written notice to the other Party.

5.2.    Nothing in this Clause 5 shall restrict either Party or its Affiliates
        from disclosing Information:

        5.2.1. to the extent that such Information is in the public domain
               other than by breach of this Agreement;

        5.2.2. to the extent that such Information is required to be disclosed
               by any Applicable Law or required to be disclosed to any
               Governmental Authority to whose jurisdiction such Party and/or
               its Affiliate(s) is subject or with whose instructions it is
               customary to comply;

                                       5
<PAGE>

        5.2.3. to its or its Affiliates' employees, officer, directors or
               professional advisers, provided that such Party shall require
               that such persons treat such Information as confidential;

        5.2.4. to the extent that any of such Information is/are later
               acquired by such Party from a source not obligated to the other
               Party hereto, or to the other Party's Affiliates, to keep such
               Information confidential;

        5.2.5. to the extent that any of such Information was previously known
               or already in the lawful possession of such Party and/or its
               Affiliates, prior to disclosure by the other Party hereto; and

        5.2.6. to the extent that any information, materially similar to the
               Information, shall have been independently developed by such
               Party and/or its Affiliates without reference to any Information
               furnished by the other Party hereto.

6.      INDEMNIFICATION

6.1.    Each Party (the "Indemnifying Party") hereby agrees to indemnify,
        defend and hold harmless the other Party, its Affiliates, and their
        respective directors, officers, representatives, employees and agents
        (collectively, the "Indemnified Persons") from and against any and all
        claims asserted against or incurred by the Indemnified Persons, as a
        result of, arising from, or in connection with or relating to any
        matter inconsistent with, or any breach or inaccuracy of any of the
        Indemnifying Party's Warranties, or any covenant or agreement made by
        the Indemnifying Party or failure by the Indemnifying Party to perform
        (whether in whole or part) any obligation required to be performed by
        it, pursuant to this Agreement.

6.2.    The knowledge of the Indemnified Persons or the conduct of any
        investigation by the Indemnified Persons shall not in any manner affect
        or limit the right to indemnification, payment of claims or other
        remedies with respect to the accuracy, or inaccuracy of or compliance
        or non-compliance with, any representation, warranty, covenant,
        obligation or arrangement set forth hereinabove and the Indemnifying
        Party shall not invoke the Indemnified Persons' knowledge (actual,
        constructive or imputed) of a fact or circumstance that might make a
        statement untrue, inaccurate, incomplete or misleading as a defense to
        a claim for breach of the representations and warranties or covenant or
        obligation of the Indemnifying Party.

6.3.    The indemnification rights of the Indemnified Persons under this
        Agreement are independent of, and in addition to, such other rights and
        remedies as the Parties may have at law or in equity or otherwise,
        including the right to seek specific performance, rescission or other
        injunctive relief, none of which rights or remedies shall be affected
        or diminished thereby.

7.      NOTICES

7.1.    Each notice, demand or other communication given or made under this
        Agreement shall be in writing and delivered or sent to the relevant
        Party at its address or fax number set out below (or such other
        address or fax number as the addressee has by seven (7) Business Days'
        prior written notice specified to the other Parties). Any notice,
        demand or other communication given or made by letter between
        countries shall be delivered by registered airmail or international
        courier service. Any notice, demand or other communication so
        addressed to the relevant Party shall be deemed to have been delivered
        (a) if delivered in person or by messenger, when proof of delivery is
        obtained by the delivering Party, (b) if sent by post within the same
        country, on the fifth day following posting, and if sent by post to
        another country, on the tenth day following posting, and (c) if given
        or made by fax, upon dispatch and the receipt of a transmission report
        confirming dispatch.

                                       6
<PAGE>

7.2.    The initial address and facsimile for the Parties for the purposes of
        the Agreement are:

        If to the Company:

        Name              :        CopyTele, Inc.

        Address           :        900 Walt Whitman Road
                                   Melville, New York 11747

        Attention         :        Mr. Denis A. Krusos

        Fax               :        631-549-5974

        Telephone         :        631-549-5900


        If to the Investor:

        Name              :        MARS OVERSEAS LIMITED

        Address           :        PO Box 309 GT, Ugland House, South Church
                                   Street, George Town, Grand Cayman,
                                   Cayman Islands

        Attention         :        Mr. Venugopal N. Dhoot

        Fax               :        +91 22 6655 0580

        Telephone         :        + 91 22 6611 3500


8.      GOVERNING LAW AND DISPUTE RESOLUTION

8.1.    Governing Law

        This Agreement shall be governed by and construed in accordance with
        the laws of England, except that matters relating to the issuance of
        the Subscription Shares shall be governed by and construed in
        accordance with the laws of the State of Delaware.

8.2.    Dispute Resolution

        8.2.1. In the event any Party is in breach of any of the terms of this
               Agreement, another Party may serve written notice to require the
               Party in breach to cure such breach within thirty (30) days of
               the receipt of such written notice thereof.

        8.2.2. In the case of any dispute or claim arising out of or in
               connection with or relating to this Agreement, or the breach
               (where such breach has not been cured by the Party in breach
               within thirty (30) days of a written notice thereof), termination
               or invalidity hereof, the Parties shall attempt to first resolve
               such dispute or claim through discussions between senior
               executives of the Investor.

                                       7
<PAGE>

        8.2.3. If the dispute is not resolved through such discussions within
               thirty (30) days after one Party has served a written notice on
               the other Party requesting the commencement of discussions,
               dispute or claim shall be finally settled by arbitration under
               the United Nations Commission on International Trade Law
               Arbitration Rules (the "UNCITRAL Rules") as are in force at the
               time of any such arbitration. For the purpose of such
               arbitration, there shall be one arbitrator jointly appointed by
               the Parties, failing which there shall be three (3) arbitrators
               in accordance with the UNCITRAL Rules (the "Arbitration Board").
               The Company shall appoint one arbitrator, and the Investor shall
               appoint one arbitrator. The two arbitrators shall then jointly
               appoint a third arbitrator, who shall serve as Chairman of the
               Arbitration Board.

        8.2.4. All arbitration proceedings shall be conducted in the English
               language and the place of arbitration shall be in London,
               England, United Kingdom.

        8.2.5. Each Party shall co-operate in good faith to expedite (to the
               maximum extent practicable) the conduct of any arbitral
               proceedings commenced under this Agreement.

        8.2.6. The costs and expenses of the arbitration, including, the fees
               of the third arbitrator on the Arbitration Board, shall be borne
               equally by each Party to the dispute or claim and each Party
               shall pay its own fees, disbursements and other charges of its
               counsel and the arbitrators nominated by it, except as may be
               otherwise determined by the Arbitration Board. The Arbitration
               Board would have the power to award interest on any sum awarded
               pursuant to the arbitration proceedings and such sum would carry
               interest, if awarded, until the actual payment of such amounts.

        8.2.7. Any award made by the Arbitration Board shall be final and
               binding on each of the Parties that were parties to the dispute.

9.      MISCELLANEOUS

9.1.    No Partnership

        The Parties expressly do not intend hereby to form a partnership,
        either general or limited, under any jurisdiction's partnership law.
        The Parties do not intend to be partners to one another or partners as
        to any third party, or create any fiduciary relationship among
        themselves, solely by virtue of their status as shareholders of the
        Company. To the extent that any Party, by word or action, represents to
        another Person that any other Party is a partner or that the Company is
        a partnership, the Party making such representation shall be liable to
        any other Parties that incur any losses, claims, damages, liabilities,
        judgments, fines, obligations, expenses and liabilities of any kind or
        nature whatsoever (including to any investigative, legal or other
        expenses incurred in connection with, and any amount paid in settlement
        of, any pending or threatened legal action or proceeding) arising out
        of or relating to such representation.

9.2.    No Agency

        No Party, acting solely in its capacity as a shareholder of the
        Company, shall act as an agent of the other Parties or have any
        authority to act for or to bind the other Parties.

9.3.    Amendment

        This Agreement may not be amended, modified or supplemented except by a
        written instrument executed by each of the Parties.

                                       8
<PAGE>

9.4.    Waiver

        No waiver of any provision of this Agreement shall be effective unless
        set forth in a written instrument signed by the Party waiving such
        provision. No failure or delay by a Party in exercising any right,
        power or remedy under this Agreement shall operate as a waiver thereof,
        nor shall any single or partial exercise of the same preclude any
        further exercise thereof or the exercise of any other right, power or
        remedy. Without limiting the foregoing, no waiver by a Party of any
        breach by any other Party of any provision hereof shall be deemed to be
        a waiver of any prior, concurrent or subsequent breach of that or any
        other provision hereof.

9.5.    Entire Agreement

        This Agreement constitutes the whole agreement between the Parties
        relating to the subject matter hereof and supersedes any prior
        agreements or understandings relating to such subject matter.

9.6.    Severability

        Each and every obligation under this Agreement shall be treated as a
        separate obligation and shall be severally enforceable as such and in
        the event of any obligation or obligations being or becoming
        unenforceable in whole or in part. To the extent that any provision or
        provisions of this Agreement are unenforceable they shall be deemed to
        be deleted from this Agreement, and any such deletion shall not affect
        the enforceability of the remainder of this Agreement not so deleted
        provided the fundamental terms of the Agreement are not altered.

9.7.    Counterparts

        This Agreement may be executed in one or more counterparts including
        counterparts transmitted by facsimile, each of which shall be deemed to
        be an original, but all of which signed and taken together, shall
        constitute one document.

9.8.    Specific Performance

        Each Party shall be entitled to an injunction, restraining order, right
        for recovery, suit for specific performance or such other equitable
        relief as a court of competent jurisdiction may deem necessary or
        appropriate to restrain the other Party from committing any violation
        or to enforce the performance of the covenants, representations and
        obligations contained in this Agreement. These injunctive remedies are
        cumulative and are in addition to any other rights and remedies the
        Parties may have at law or in equity.

9.9.    Independent Rights

        Each of the rights of the Parties are independent, cumulative and
        without prejudice to all other rights available to them, and the
        exercise or non-exercise of any such rights shall not prejudice or
        constitute a waiver of any other right of the Party, whether under this
        Agreement or otherwise.

                                       9
<PAGE>

9.10.   No Assignment

        Subject to the provisions of this Agreement, this Agreement is personal
        to the Company and shall not be capable of assignment. Notwithstanding
        the aforesaid, the Investor may together with the Transfer of any of
        the Subscription Shares assign any of its rights under this Agreement
        to any Person who is an Affiliate of the Investor, provided such
        Transfer of such Subscription Shares complies with the Loan Agreements
        and the Escrow Agreement (as defined in the Loan Agreements).

9.11.   Costs and Expenses

        Each Party agrees that it shall bear by itself all costs and expenses
        incurred by it in connection with any discussions, negotiations and
        investigations undertaken in connection with the subject matter hereof,
        including costs and expenses associated with retention of financial,
        legal, tax and other professional advisers.

9.12.   No Third Party Beneficiaries

        This Agreement does not create, and shall not be construed as creating,
        any rights enforceable by any person not a party to this Agreement
        (except as provided in Clause 6) under the Contracts (Rights of Third
        Parties) Act 1999 or otherwise.

9.13.   Counterparts

        This Agreement may be executed in one or more counterparts, including
        counterparts transmitted by facsimile, each of which shall be deemed an
        original, but all of which signed and taken together shall constitute 1
        (one) document.

IN WITNESS WHEREOF the Parties hereto have executed this Agreement on the day
and year first above written.

Signed and delivered for and on behalf of COPYTELE, INC.


By       :        /s/ Denis A. Krusos

Name     :        Denis A. Krusos

Title    :        Chairman and Chief Executive Officer


Signed and delivered for and on behalf of

MARS OVERSEAS LIMITED



By       :        /s/Venugopal N. Dhoot

Name     :        Venugopal N. Dhoot

Title    :        Director


                                       10
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>4
<FILENAME>a5631402ex10_5.txt
<DESCRIPTION>EXHIBIT 10.5
<TEXT>
                                  Exhibit 10.5
                                  ------------

                            LOAN AND PLEDGE AGREEMENT



                                     BETWEEN



                              MARS OVERSEAS LIMITED



                                       AND


                           COPYTELE INTERNATIONAL LTD.



                             DATED 2nd NOVEMBER 2007



                                       1
<PAGE>



                                TABLE OF CONTENTS


1.       DEFINITION AND INTERPRETATION........................................3
2.       LOAN & PAYMENT.......................................................5
3.       CREATION OF SECURITY.................................................6
4.       TAXES................................................................7
5.       REPRESENTATIONS AND WARRANTIES.......................................7
6.       BORROWERS' CONVENANTS................................................8
7.       EVENTS OF DEFAULT...................................................10
8.       REMEDIES ON EVENT OF DEFAULT........................................11
9.       CONTINUING OBLIGATIONS..............................................11
10.      COSTS, CHARGES AND EXPENSES.........................................12
11.      INDEMNITY...........................................................12
12.      RELEASE AND TERMINATION.............................................12
13.      MISCELLANEOUS.......................................................12


                                       2
<PAGE>




                            LOAN AND PLEDGE AGREEMENT

This LOAN AND PLEDGE AGREEMENT (this "Agreement") is made on this 2nd day of
November, 2007 by and among:

(1)      COPYTELE INTERNATIONAL LTD., a company incorporated under the laws of
         the British Virgin Islands and having its registered office at Icaza
         Gonzalez-Ruiz & Aleman, (BVI) Trust Limited, Vanterpool Plaza, Second
         Floor, Wickham Cay 1, Road Town, Tortola, British Virgin Islands
         (hereinafter referred to as the "Borrower" which expression shall
         include its successors and permitted assigns); and

(2)      MARS OVERSEAS LIMITED, a company incorporated under the laws of the
         Cayman Islands and having its registered office at PO Box 309 GT,
         Ugland House, South Church Street, George Town, Grand Cayman, Cayman
         Islands (the "Lender" which expression includes its successors and
         permitted assigns).

The Borrower and the Lender are individually referred to as a "Party" and
together as the "Parties".

     WHEREAS

          A.   The Borrower has requested  the Lender for a senior  secured loan
               for a sum of US$5,000,000.

          B.   The Borrower has agreed to acquire  1,495,845  Global  Depository
               Receipts of Videocon  Industries Ltd.  ("Pledged  GDRs") having a
               face value of US$ 10 each.

          C.   The Loan will be secured by pledge of the  Pledged  GDRs and will
               be subject to other terms and conditions  hereinafter  appearing;
               and

          D.   The Lender  requires  the  Borrower  to create the pledge and the
               Borrower  has  agreed  to  create  the  pledge  on the  terms and
               conditions set out under this Agreement.

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto, hereby agrees as follows:

1.                DEFINITION AND INTERPRETATION

1.1.              The following terms used in this Agreement shall have the
                  meanings assigned to them herein:

                    (a)  "Agent  Bank"  means a bank  acceptable  to Lender  and
                         Borrower in which  Lender shall have an account for the
                         purpose of repayment of the Loan;

                    (b)  "Applicable  Law"  includes  all  applicable  statutes,
                         enactments,    laws,   ordinances,    rules,   by-laws,
                         regulations,   notifications,   guidelines,   policies,
                         directions,  directives and orders of any  Governmental
                         Authority,  statutory authority, tribunal, board, court
                         or a recognized stock exchange, as may be applicable;

                    (c)  "Approvals"    means   all   approvals,    permissions,
                         authorizations, consents and notifications whether from
                         any Governmental Authority,  regulatory or departmental
                         authority or otherwise  including,  without limitation,
                         approvals   of  any   authority,   or   any   corporate
                         authorizations as may be applicable;

                    (d)  "Business  Day" means a day  (other  than  Saturday  or
                         Sunday) on which banks are open for general business in
                         London, England;

                                       3
<PAGE>

                    (e)  "Charter Documents" means the Memorandum of Association
                         and Articles of Association of Borrower;

                    (f)  "Closing  Date"  means the date of the  drawdown of the
                         Loan pursuant to this Agreement,  which shall be a date
                         mutually  agreed  between the Parties  hereto and which
                         shall not in any event be later  than the 30th day from
                         the date of  execution  of this  Agreement,  and in the
                         event  the  30th  day  is  not a  Business  Day or is a
                         Saturday or a Sunday,  then the next Business Day, such
                         that on or prior to such date the  Borrower  shall have
                         purchased  the Pledged  GDRs and the Lender  shall have
                         purchased  20,000,000  shares  of the  common  stock of
                         CopyTele  Inc.  pursuant  to  a  certain   Subscription
                         Agreement, dated the date hereof, between CopyTele Inc.
                         and the Lender;

                    (g)  "Designated  Account"  (i)  of  the  Lender  means  the
                         account of the Lender in the Agent Bank for the purpose
                         of  repayment  of the  Loan,  and (ii) of the  Borrower
                         means the account of the Borrower in the Agent Bank for
                         purposes of receiving the Loan.

                    (h)  "Encumbrance" means any mortgage, charge (whether fixed
                         or floating), pledge, lien, hypothecation,  assignment,
                         security  interest  or other  encumbrances  of any kind
                         securing  or  conferring  any  priority  of  payment in
                         respect of any obligation of any Person;

                    (i)  "Escrow  Agent"  means the Escrow Agent to be appointed
                         pursuant to the Escrow Agreement;

                    (j)  "Escrow  Agreement"  means the escrow  agreement  to be
                         executed on the or prior to the Closing  Date among the
                         Borrower, the Lender and the Escrow Agent, in such form
                         as  the  Borrower  and  Lender  may  agree  and  as  is
                         acceptable  to the  Escrow  Agent,  in  each  case,  as
                         amended from time to time;

                    (k)  "Event of Default"  means the  occurrence of any of the
                         events or  circumstances  specified in Clause 7 of this
                         Agreement;

                    (l)  "Final Settlement Date" means the date on which all the
                         Obligations have been  irrevocably and  unconditionally
                         paid and discharged in full to the  satisfaction of the
                         Lender;

                    (m)  "Finance Documents" means the following,  executed in a
                         form and manner satisfactory to the Lender:

                          i)   this Agreement;

                         ii)   the Escrow Agreement;

                        iii)   all other documents and agreements relating to
                               the above, as  such documents may be amended or
                               supplemented  from time to time.

                    (n)  "GDR  Certificate/Receipt"  means a document evidencing
                         holding of GDRs by the Borrower;

                    (o)  "Governmental   Authority"   means  any  government  or
                         political  subdivision thereof; any department,  agency
                         or  instrumentality  of  any  government  or  political
                         subdivision thereof; any court or arbitral tribunal and
                         includes the governing body of any securities exchange;

                    (p)  "Loan" shall have the meaning  ascribed to it in Clause
                         2.1 of this Agreement;

                                       4
<PAGE>

                    (q)  "Maturity  Date" shall mean the seventh  anniversary of
                         the Closing Date;

                    (o)  "Maturity Value" shall mean, when the loan is repaid on
                         the Maturity Date, a sum of US$ 5 million;

                    (r)  "Obligations" means all amounts payable pursuant to the
                         terms  of  the  Finance  Documents,  including  without
                         limitation:

                         i)    the principal amount of the Loan;

                        ii)    any and all sums incurred by the Escrow Agent in
                               order to preserve the security provided under the
                               Finance Documents or its security interest
                               therein; and

                       iii)    in the event of any proceeding for the collection
                               or enforcement of the above, after a Default
                               shall have occurred, the expenses incurred for
                               the purpose of retaking, holding, preparing for
                               sale, selling or otherwise disposing of the
                               Security, or of any exercise by the Lender and/or
                               the Escrow Agent of their respective rights under
                               the various Finance Documents, together with
                               legal fees and court costs;

                    (s)  "Security"     means     collectively,      the     GDR
                         Certificates/Receipts   or  any   other   document   or
                         instrument  evidencing  ownership of GDRs, the transfer
                         documents duly signed relating to the Pledged GDRs, and
                         the Pledeged GDRs.

                    (t)  "Taxes"  shall  mean  any and all  present  and  future
                         taxes, levy, impost, premium, duty or other charge of a
                         similar nature,  including  without  limitation,  gross
                         receipts,   sales,   turn-over,    value   added,   use
                         consumption,   property,  income,  franchise,  capital,
                         occupational,  license,  excise and documentary  stamps
                         taxes,  and customs and other duties,  assessments,  or
                         fees, however imposed, withheld, levied, or assessed by
                         any country or  government  subdivision  thereof or any
                         other taxing  authority  together with interest thereon
                         and penalties in respect thereof.


1.2.              In this Agreement:

                    (a)  a provision of law is a reference to that  provision as
                         amended or re-enacted;

                    (b)  a Clause is a reference to a section of this Agreement;

                    (c)  words  importing  the plural shall include the singular
                         and vice-versa;

                    (d)  a Person shall be construed as including  references to
                         an  individual,  firm,  company or other body,  whether
                         incorporated or not; and

                    (e)  the index and the  headings in this  Agreement  are for
                         convenience  and are to be ignored in  construing  this
                         Agreement.

2.                LOAN & PAYMENT

2.1.              At the request of the Borrower, and subject to the terms and
                  conditions set out in this Agreement, on the Closing Date, the
                  Lender shall lend to the Borrower, and the Borrower shall
                  borrow from the Lender, the principal amount of US$5,000,000
                  (the "Loan"). The Loan shall not bear interest.

2.2.              Lender shall make the Loan by making remittance of the said
                  amount to the Designated Account of the Borrower.

                                       5
<PAGE>

2.3.              The Maturity Value shall be due and payable in lump sum on the
                  Maturity Date. In no case and under no circumstances,
                  arrangements or events whatsoever, shall the Loan be repayable
                  before the seventh anniversary of the Closing Date; and the
                  Borrower shall also have no option to pre-pay before the
                  Maturity Date. The Borrower shall make repayment of the Loan
                  on the Maturity Date by depositing in the Designated Account
                  of the Lender cash in the amount of the Maturity Value.

2.4.              In the event  there is any  pre-payment  before the  seventh
                  anniversary of the Closing Date in  contravention  of Clause
                  2.3 above, due to any reason whatsoever,  the Borrower shall
                  be liable to pay and shall pay a pre-payment premium at 200%
                  of the Loan to the Lender. In case of pre-payment,  the Loan
                  shall  be paid in a  single  tranche  and  deposited  to the
                  Designated Account of the Lender.  Without prejudice to what
                  is stated hereinabove,  in the event of the Borrower desires
                  to prepay the Loan  before the  Maturity  Date,  it shall be
                  mandatory that (a) pursuant to an escrow agreement among the
                  Lender,  the  Borrower  and the  Agent  Bank  dated the date
                  hereof  the  prepaid  amount  of the  Loan  shall be kept in
                  escrow in the  Designated  Account of the  Lender  until the
                  Maturity Date and shall be paid to the Lender on the date of
                  payment,  (b) any interest accruing on the prepaid amount of
                  the Loan  kept in escrow in the  Designated  Account  of the
                  Lender  shall be also  retained in escrow in the  Designated
                  Account until the Maturity Date and shall paid to the Lender
                  on the date of payment,  and (c) the lien over the  Security
                  will not be vacated until the Maturity Date.

2.5.              The Borrower shall drawdown the Loan in a single tranche.

2.6.              The Closing of the Loan pursuant to this Agreement and the
                  drawdown thereof shall take place on the Closing Date and is
                  subject to the fulfillment of the following conditions
                  precedent to the satisfaction of the Lender:

                         i)    The Lender shall have received, the following,
                               each dated such day (unless otherwise specified),
                               in form and substance satisfactory to the Lender:

                               A)   copies of the Charter  Documents of the
                               Borrower  and each  amendment thereto,  certified
                               as true,  correct  and  complete  by the  company
                               secretary / director of the Borrower;

                               B) copies of the resolution of the shareholders
                               and the resolutions of the board of directors of
                               the Borrower, approving the transactions
                               contemplated by the Finance Documents to which
                               the Borrower, is or will be a party, in each case
                               certified as true, correct and complete by the
                               company secretary / director of the Borrower.

                        ii)    The Borrower shall have acquired the Pledged
                               GDRs; and

                       iii)    The Parties and the Escrow Agent shall have
                               entered into the Escrow Agreement.


3.                CREATION OF SECURITY

3.1.              In order to secure the due performance, payment and discharge
                  in full of the Obligations, and in consideration of the Loan
                  being advanced by the Lender the Borrower hereby pledges in
                  favour of the Escrow Agent, for the benefit of the Lender, as
                  security for the due discharge of the Obligations, the Pledged
                  GDRs, and shall deposit and deliver to the Escrow Agent such
                  relevant instruments or documents, including security
                  receipts/forms/depository slips, GDR Certificate/Receipts or
                  any other document required for effectuating the pledge of the
                  Pledged GDRs.

                                       6
<PAGE>

3.2.              The Borrower shall provide any information and assistance as
                  may be reasonably necessary to perfect the pledge created over
                  the Pledged GDRs in favour of the Escrow Agent for the benefit
                  of the Lender.

3.3.              The Borrower hereby agrees and undertakes that, until the
                  Final Settlement Date, the Borrower shall not, and shall not
                  attempt to, transfer any of the Pledged GDRs directly or
                  indirectly or in any form or method whatsoever.

3.4.              The Borrower agrees and undertakes that it shall not
                  sell/transfer or enter into any agreement for sale/transfer of
                  the Pledged GDRs to any third party in any manner whatsoever
                  until the seventh anniversary of the Closing Date. The
                  Borrower shall give irrevocable instructions to the Escrow
                  Agent not to accept any instructions for
                  withdrawal/cancellation of the Pledged GDRs or for
                  sale/transfer of the Pledged GDRs other than in accordance
                  with the terms of the Escrow Agreement.

3.5.              The Pledged GDRs shall continue to remain pledged with the
                  Escrow Agent for security of repayment of the Loan for a
                  period of seven years or repayment of the Loan, whichever is
                  later. Further, even in case of prepayment of the Loan prior
                  to the expiry of seven years as stated above in Clause 2.4,
                  the Pledged GDRs shall continue to remain pledged with the
                  Escrow Agent until the seventh anniversary of Closing Date.

4.                TAXES

4.1.              The Borrower shall bear all Taxes as may be applicable or as
                  may be levied in  relation  to each  Facility  and all other
                  amounts payable under the Finance Documents. Notwithstanding
                  anything to the  contrary  stated  herein,  it is  expressly
                  agreed that all  payments to be made to the Lender under the
                  Finance  Documents  shall  be made  free  and  clear  of and
                  without  any  deduction  for or on  account of any Taxes and
                  without any  set-off or  counter-claim.  If the  Borrower is
                  required to make deduction on account of any Taxes, then, in
                  such  case,  the  sums  (other  than the  interest  amounts)
                  payable  to the  Lender  shall be  increased  to the  extent
                  necessary to ensure that,  after making such deduction,  the
                  Lender  receive and retain  (without any  liability for such
                  deductions)  a sum  equal to the sum  which  it  would  have
                  received and retained,  had no such  deduction  been made or
                  required to be made.

4.2.              Without prejudice to the provisions of Clause 4.1 above, if
                  the Lender is required to make any payment on account of any
                  Taxes in relation to any sum received or receivable by it
                  hereunder (excluding income tax payable by the Lender) or any
                  liability in respect of such payment is imposed, levied or
                  assessed against such Lender, the Borrower shall, upon demand
                  of such Lender, promptly reimburse to such Lender such payment
                  or liability together with interest, penalties and expenses,
                  if any, paid or incurred in connection therewith.

5.                REPRESENTATIONS AND WARRANTIES

5.1.              The Borrower hereby represents and warrants to the Lender as
                  of the date of this Agreement (which representations and
                  warranties shall survive the execution and delivery of this
                  Agreement and continue until the Final Settlement Date) as
                  follows:

                    (a)  the  Borrower is duly  organised  and validly  existing
                         under the laws of British  Virgin  Islands  and has the
                         power  and  authority  to carry on  business  as is now
                         being carried on and to own its property and assets;

                    (b)  the Borrower has the power and  authority to enter into
                         and perform its obligations under the Finance Documents
                         in accordance  with the terms thereof and has taken all
                         necessary  corporate and other actions to authorise the
                         execution,  delivery and performance of the obligations
                         under the Finance Documents;

                                       7
<PAGE>

                    (c)  the execution,  delivery and performance of the Finance
                         Documents   and   creation   of  a  valid  and  legally
                         enforceable  pledge in favour of the  Escrow  Agent for
                         the  benefit  of the  Lender by the  Borrower  will not
                         contravene  (i) any  Applicable  Law or  regulation  to
                         which the Borrower is subject or (ii) any  provision of
                         the  Charter  Documents  of the  Borrower  or (iii) any
                         agreement  or  obligation  or  document  binding  on or
                         applicable to the Borrower;

                    (d)  the Finance  Documents  and the pledge  created  herein
                         constitute legally binding and enforceable  obligations
                         of the Borrower;

                    (e)  no clearance,  authorizations,  Approvals,  waivers, no
                         objections  or other  action  by,  and no  notice to or
                         filing,  registration with, any Governmental  Authority
                         or any other Person is required for the due  execution,
                         delivery,  recordation,  filing or  performance  by the
                         Borrower of any Finance  Document or for the  creation,
                         perfection and the maintenance of the various  security
                         interest  created  pursuant  to the  Finance  Documents
                         (including for the maintenance of the first priority as
                         contemplated therein);

                    (f)  no Event of Default has occurred;

                    (g)  the  Borrower  has not  granted  or  agreed to grant in
                         favour  of any  other  person  any  interest  in or any
                         option or other rights in respect of any of the Pledged
                         GDRs;

                    (h)  no actions, proceedings or steps have been taken and/or
                         are proposed or threatened for the liquidation, winding
                         up or dissolution,  administration,  reorganization  or
                         insolvency of the Borrower, or for the appointment of a
                         receiver,  trustee or similar officer in respect of the
                         Borrower or its assets  before any court,  Governmental
                         Authority  or  administrative  body  and/or  under  any
                         applicable bankruptcy,  insolvency, winding-up or other
                         similar law;

                    (i)  no   actions,   suits,   proceedings,   investigations,
                         litigation,  arbitration or administrative  proceedings
                         of any kind in any court or before  any  arbitrator  or
                         any  Governmental  Authority are at present  current or
                         pending   against   the   Borrower  or  its  assets  or
                         threatened  which has or is  likely to have a  material
                         adverse effect;

                    (j)  there  are  no  third  party  consents  required  to be
                         obtained  for the  Borrower to lawfully  enter into and
                         perform their respective  obligations under the Finance
                         Documents;

                    (k)  there are no actions,  proceedings,  disputes or claims
                         pending   before  any  court,   government   agency  or
                         administrative body, or threatened against or affecting
                         the  Borrower or its assets and which  would  adversely
                         affect the  ability of the  Borrower  to perform  their
                         respective obligations under the Finance Documents;

                    (l)  on the Closing  Date,  the Borrower  shall be the legal
                         and  beneficial  owner  of,  and  shall  have  good and
                         marketable title to, or valid and enforceable rights in
                         respect of, all of its  property  and assets over which
                         the  security  interest  is  proposed  to be created in
                         favour  of the  Escrow  Agent  for the  benefit  of the
                         Lender  pursuant  to the  Finance  Documents  and  such
                         assets  will not be subject to any  Encumbrances  other
                         than those created pursuant to the Finance Documents.

6.                BORROWERS' CONVENANTS

6.1.              Positive Covenants

                  The Borrower irrevocably and unconditionally covenants and
                  undertakes that so long as any Obligations remain outstanding,
                  and until the Final Settlement Date, it shall:

                                       8
<PAGE>

                    (a)  maintain  its   corporate   existence  (to  the  extent
                         applicable)  and all rights and privileges  enjoyed and
                         obtain,  comply  with  the  terms of and do all that is
                         necessary  to  maintain  in full  force and  effect all
                         Approvals  required to enable it to  lawfully  carry on
                         its business;

                    (b)  obtain,  comply  with  the  terms of and do all that is
                         necessary  to  maintain  in full  force and  effect all
                         Approvals as may be required to enable it to enter into
                         and perform its obligations under the Finance Documents
                         and the transactions contemplated thereby and to ensure
                         the legality, validity, enforceability or admissibility
                         in  evidence  of  the   Finance   Documents   and  this
                         Agreement;

                    (c)  comply  with  all  Applicable  Laws and the  terms  and
                         conditions of the Approvals;

                    (d)  pay regularly all Taxes, assessments,  dues, duties and
                         impositions as may, from time to time be payable to any
                         Governmental Authority;

                    (e)  comply in all  respects  with the terms of the  Finance
                         Documents;

                    (f)  use reasonable  commercial efforts to do or cause to be
                         done everything  which is necessary,  in the reasonable
                         opinion  of the  Lender,  to  create  and  perfect  the
                         security  with respect to the Pledged GDRs  pursuant to
                         the Finance Documents  (including,  without limitation,
                         any  further  registration  or filing in respect of the
                         security);

                    (g)  pay or reimburse  to the Lender all  charges,  Taxes or
                         penalties  imposed on or in pursuance of this Agreement
                         or on any  instruments,  issued  hereunder,  payable in
                         relation to the interest  amounts on the pre-paid  Loan
                         amount paid to the Lender;

                    (h)  perform and execute, on the request of the Lender, such
                         acts and deeds, as may be reasonably  necessary  and/or
                         required  to  carry  out  the  intent  of  the  Finance
                         Documents; and

                    (i)  do all  such  acts  and  things  as  may be  reasonably
                         required by the Lender to protect  the  interest of the
                         Lender under the Finance Documents.

6.2.              Negative Covenants

                  The Borrower covenants and agrees that so long as any
                  Obligations remain outstanding and until the Final Settlement
                  Date, without the prior written consent of the Lender :

                    (a)  the Borrower shall not undertake any further  borrowing
                         in any manner whatsoever;

                    (b)  the  Borrower  shall not dispose of or create any other
                         Encumbrance  or grant any third  party  rights over the
                         Pledged  GDRs  which has been  pledged in favour of the
                         Escrow Agent for the benefit of the Lender;

                    (c)  the  Borrower  shall not effect  and/or  enter into any
                         transaction  of merger,  amalgamation,  reconstruction,
                         consolidation,      reconstruction,      restructuring,
                         reorganization or other similar transactions  including
                         those  relating to change in its  shareholding  pattern
                         (whether   legal  or   beneficial)   other  than  those
                         permitted  in  terms  of the  Finance  Documents,  as a
                         result  whereof  the  Borrower  is  not  the  surviving
                         entity,  or as a result  of  which an Event of  Default
                         arises;

                    (d)  the  Borrower  shall not  amend,  alter or  modify  its
                         Charter  Documents  in a manner  which may  affect  the
                         terms of the Finance  Documents or the rights of any of
                         the Lender thereunder in any manner whatsoever;

                                       9
<PAGE>

                    (e)  the Borrower  shall not wind up,  liquidate or dissolve
                         or initiate  any  voluntary  winding up process  and/or
                         cause any  circumstance  to arise which could result in
                         any person  initiating  winding up actions  against the
                         Borrower  and/or any other actions which in the opinion
                         of the Lender  would  affect or is likely to affect the
                         rights  and  benefits  of the  Lender  including  their
                         rights in relation to the security;

                    (f)  the  Borrower  shall  ensure that  except as  otherwise
                         provided in the Finance Documents, the security created
                         thereunder  shall be free of  encumbrances,  except for
                         the security  interest created thereon in favour of the
                         Escrow Agent for the benefit of the Lender;

                    (g)  the  Borrower  shall  not  grant in favour of any other
                         Person any interest in or any option or other rights in
                         respect of the Pledged GDRs or any part thereof.

                    (h)  the  Borrower   shall  not  enter  into  any  corporate
                         arrangement   including  but  not  limited  to  merger,
                         amalgamation,  joint  venture or  partnership  with any
                         other entity.

                    (g)  the Borrower  shall not at any point of time,  have any
                         creditors,  unsecured  lenders  or  any  other  outside
                         liability  in  any  form  whatsoever,   other  than  an
                         unsecured   loan  of  an  amount  not   exceeding   US$
                         16,300,000/-   (US$  Sixteen   Million   Three  Hundred
                         Thousand)  from CopyTele  Inc.,  Parent  Company of the
                         Borrower.  The loan so obtained from CopyTele Inc.shall
                         be interest free and shall be  subordinate  to the Loan
                         obtained from the Lender..

7.                EVENTS OF DEFAULT

7.1.              The occurrence of any of the following events shall constitute
                  an Event of Default (the "Event of Default"):

                    (a)  the  Borrower  fails to pay any  amount  due  under the
                         Finance  Documents on the due date or on demand, as the
                         case may be;

                    (b)  failure to maintain the first priority exclusive pledge
                         over the Pledged GDRs in favour of the Escrow Agent for
                         the  benefit  of the  Lender  pursuant  to the  Finance
                         Documents;

                    (c)  any  representation  or statement  made by the Borrower
                         under  any  of the  Finance  Documents,  including  any
                         representation   or  statement   with  respect  to  the
                         security,  or any certificate or statement delivered by
                         the Borrower pursuant thereto is or proves to have been
                         incorrect  or  misleading  when  made and  affects  the
                         performance  of the  obligations  by the Borrower under
                         the Finance Documents or cause the breach of any of the
                         provisions of the Finance Documents;

                    (d)  any amendment to or alteration or  modification  of the
                         Charter  Documents  in a manner  which may  affect  the
                         terms of the  Finance  Documents  or the  rights of the
                         Lender thereunder in any manner whatsoever, without the
                         consent of the Lender;

                    (e)  the  Borrower  fails to maintain a valid legal title to
                         the Pledged GDRs;

                    (f)  the  Borrower  commences  or takes  steps to initiate a
                         voluntary winding up or restructuring process under any
                         applicable bankruptcy,  insolvency, winding up or other
                         similar laws now or hereafter in effect,  or consent to
                         the  entry of an order  for  relief  in an  involuntary
                         proceeding  under  any such  law,  or  consents  to the
                         appointment   or  taking   possession  by  a  receiver,
                         liquidator, assignee (or similar official) for any part
                         of their properties;

                                       10
<PAGE>

                    (g)  the  Borrower  is  deemed  unable  to pay its  debts or
                         becomes  unable  to pay its  debts as they  fall due or
                         suspends  or  threatens  to  suspend  making   payments
                         (whether  principal or interest) with respect to any of
                         its debts;

                    (h)  Breach of any of the  covenants  as mentioned in Clause
                         6.1 and Clause 6.2 above

8.                REMEDIES ON EVENT OF DEFAULT


8.1.              Upon an Event of Default, the Pledged GDRs shall be forfeited
                  by the Escrow Agent for the benefit of the Lender who shall
                  hold the same as trustee for the Lender and then deal with
                  Pledged GDRs as per the instructions of the Lender.

8.2.              In addition to the above, the Lender shall also have a right
                  to:

                    (a)  enforce the security  interest  created pursuant to the
                         Finance Documents;

                    (b)  exercise  all the rights and  remedies  available to it
                         under  the  Finance  Documents  in such  manner  as the
                         Lender may deem fit without  intervention  of the Court
                         and  without  any  consent of the  Borrower  and/or any
                         Person.

8.3.              The Borrower agrees that at any time after an Event of Default
                  occurs, the Lender shall have the right, without prejudice to
                  its other rights under this Agreement and the other Finance
                  Documents and/or under any Applicable Law, in its discretion
                  to exercise all the rights, powers and remedies vested in it
                  (whether vested in it by or pursuant to this Agreement, the
                  other Finance Documents or by any Applicable Law) for the
                  protection, perfection and enforcement of its rights in
                  respect of the Security, and the Lender shall be entitled,
                  without limitation, to exercise the rights set out below:

                    (a)  to give suitable  instructions to the Escrow Agent such
                         that the Pledged  GDRs are  released and handed over to
                         the Lender;

                    (b)  to transfer or register in the name of its nominees, as
                         it shall deem fit, all or any of the Pledged  GDRs,  at
                         the cost of the Borrower;

                    (c)  to  receive  all  amounts  payable  in  respect  of the
                         Security;

                    (d)  to receive  cash  proceeds  and/or to sell the non-cash
                         Security   (or   any   part   thereof),   without   the
                         intervention  of the court or other judicial  authority
                         and/or  Governmental  Authority,  at public or  private
                         sale  or  on  any  securities  exchange  for  cash,  or
                         transfer  or  procure  registration  in the name of the
                         Escrow Agent, or any of its nominees at the cost of the
                         Borrower,  as the  Escrow  Agent may deem  commercially
                         reasonable  and  apply  the  proceeds  thereof  towards
                         payment of the  Obligations,  provided  that the Escrow
                         Agent  shall  not be  obliged  to make  any sale of any
                         Security  relating to Pledged GDRs if it desires not to
                         do so,  regardless  of the fact that notice of sale may
                         have been given;

                    (e)  to take all such actions including vote all or any part
                         of the Pledged GDRs (whether or not  transferred in the
                         name of the  Escrow  Agent)  with  respect  thereto  as
                         though it were the outright owner thereof;

                    (f)  exercise  such other  rights as the Lender may deem fit
                         under Applicable Law.

9.       CONTINUING OBLIGATIONS

         The liabilities and obligations of the Borrower under or pursuant to
         this Agreement and the other Finance Documents shall remain in full
         force and effect notwithstanding any act, omission, event or
         circumstance whatsoever until the Final Settlement Date.

                                       11
<PAGE>

10.      COSTS, CHARGES AND EXPENSES

         Each Party shall bear all its own costs, charges and expenses
         (including legal and other fees on a full indemnity basis), and Taxes
         on it pertaining to the Loan in connection with the negotiation,
         preparation, execution, registration, administration, modification and
         amendment of this Agreement, the other Finance Documents and any other
         document delivered hereunder and in exercising, protecting, perfecting,
         preserving or enforcing any of its rights or powers hereunder or there
         under (including the security interest created under or pursuant to the
         Finance Documents) or in suing for or seeking to recover any sums due
         hereunder or thereunder or in defending any claims brought against it
         in respect of this Agreement and any other document delivered hereunder
         or pursuant to this Agreement or in releasing this Agreement, the other
         Finance Documents or the security interest created hereunder or
         pursuant to this Agreement and the other Finance Documents on the Final
         Settlement Date.

11.      INDEMNITY

         The Borrower shall indemnify and hold harmless the Lender, the Escrow
         Agent and their nominees, agents, officers, and directors ("Indemnified
         Parties") against all actions, proceedings, claims, demands, judgments,
         losses, liabilities, obligations, damages, costs and expenses
         ("Losses") imposed, asserted against or incurred by them which may be
         incurred, sustained or raised in respect of any Event of Default or the
         non-performance of or non-observance of any of the undertakings,
         representations and warranties and agreements on the part of the
         Borrower herein contained or contained in any other Finance Documents
         or in respect of any inaccuracy in the representation and warranties
         relating in any way whatsoever to the security interest created
         hereunder.

12.      RELEASE AND TERMINATION

         Upon the occurrence of the Final Settlement Date, this Agreement shall
         terminate and the Escrow Agent shall, as provided in the Escrow
         Agreement, release the Security from the pledge granted hereby, and
         shall deliver to Borrower such Security as may be in the possession of
         the Escrow Agent. However, in no case or in no event whatsoever, the
         securities shall be released to the Borrower before the seventh
         anniversary of the Closing Date.

13.      MISCELLANEOUS

13.1.    Governing Law

         This Agreement shall be governed by and construed in accordance with
         the laws of England.

13.2.             Dispute Resolution

                    (a)  In the event any Party is in breach of any of the terms
                         of this  Agreement,  another  Party may  serve  written
                         notice  to  require  the  Party in  breach to cure such
                         breach  within  thirty (30) days of the receipt of such
                         written notice thereof.

                    (b)  In the case of any  dispute or claim  arising out of or
                         in connection  with or relating to this  Agreement,  or
                         the breach (where such breach has not been cured by the
                         Party in breach  within  thirty  (30) days of a written
                         notice thereof),  termination or invalidity hereof, the
                         Parties  shall attempt to first resolve such dispute or
                         claim through  discussions between senior executives of
                         the Investor.

                    (c)  If the dispute is not resolved through such discussions
                         within  thirty  (30) days  after one Party has served a
                         written  notice  on  the  other  Party  requesting  the
                         commencement of discussions,  dispute or claim shall be
                         finally settled by arbitration under the United Nations
                         Commission on International Trade Law Arbitration Rules
                         (the  "UNCITRAL  Rules") as are in force at the time of
                         any  such   arbitration.   For  the   purpose  of  such
                         arbitration,  there  shall  be one  arbitrator  jointly
                         appointed by the Parties,  failing which there shall be
                         three (3)  arbitrators in accordance  with the UNCITRAL
                         Rules (the  "Arbitration  Board").  The  Company  shall
                         appoint one arbitrator,  and the Investor shall appoint
                         one arbitrator.  The two arbitrators shall then jointly
                         appoint a third arbitrator, who shall serve as Chairman
                         of the Arbitration Board.

                                       12
<PAGE>

                    (d)  All arbitration  proceedings  shall be conducted in the
                         English language and the place of arbitration  shall be
                         in London, England, United Kingdom.

                    (e)  Each Party shall  co-operate  in good faith to expedite
                         (to the maximum extent  practicable) the conduct of any
                         arbitral proceedings commenced under this Agreement.

                    (f)  The costs and expenses of the  arbitration,  including,
                         the fees of the  third  arbitrator  on the  Arbitration
                         Board,  shall be  borne  equally  by each  Party to the
                         dispute or claim and each Party shall pay its own fees,
                         disbursements  and other charges of its counsel and the
                         arbitrators nominated by it, except as may be otherwise
                         determined by the  Arbitration  Board.  The Arbitration
                         Board would have the power to award interest on any sum
                         awarded  pursuant to the  arbitration  proceedings  and
                         such sum would carry  interest,  if awarded,  until the
                         actual payment of such amounts.

                    (g)  Any award made by the Arbitration  Board shall be final
                         and binding on each of the Parties that were parties to
                         the dispute.

13.3.             Notice/Communication

                    (a)  Each  notice,  demand or other  communication  given or
                         made  under  this  Agreement  shall be in  writing  and
                         delivered or sent to the relevant  Party at its address
                         or fax number  set out below (or such other  address or
                         fax number as the  addressee  has by seven (7) Business
                         Days'  prior  written  notice  specified  to the  other
                         Parties).  Any  notice,  demand or other  communication
                         given  or made by  letter  between  countries  shall be
                         delivered  by  registered   airmail  or   international
                         courier   service.   Any   notice,   demand   or  other
                         communication  so addressed to the relevant Party shall
                         be deemed to have been  delivered  (i) if  delivered in
                         person  or by  messenger,  when  proof of  delivery  is
                         obtained by the delivering  Party, (ii) if sent by post
                         within  the same  country,  on the fifth day  following
                         posting, and if sent by post to another country, on the
                         tenth day following posting, and (iii) if given or made
                         by fax, upon dispatch and the receipt of a transmission
                         report confirming dispatch.

                    (b)  The initial  address and  facsimile for the Parties for
                         the purposes of the Agreement are:

                    If to the Borrower:

                     Name     :     COPYTELE INTERNATIONAL LTD.

                     Address  :     c/o CopyTele, Inc.
                                    900 Walt Whitman Road
                                    Melville, New York 11747

                    Attention :     Mr. Denis A. Krusos

                    Fax       :     631-549-5974

                                       13
<PAGE>

                    Telephone :     631-549-5900


                    If to the Lender:

                    Name      :     MARS OVERSEAS LIMITED

                    Address   :     C/o Videocon Industries Limited
                                    Fort House, Second Floor,
                                    Dr. D. N. Road, Fort ,
                                    Mumbai, India: 400001

                    Attention :     Mr. Venugopal N. Dhoot

                    Fax       :     +91 22 6655 0580

                    Telephone :     + 91 22 6611 3600

13.4.    Waiver/Forbearance

         Any waiver of any provision of this Agreement and any waiver of any
         default under this Agreement shall only be effective if made in writing
         and signed by the Lender. Any waiver or forbearance or delay on the
         part of the Lender to insist upon the performance of any terms and
         conditions of this Agreement, or to exercise any right or privilege
         conferred under this Agreement, or to demand any penalties resulting
         from any breach of any of the terms or conditions of this Agreement
         shall not be construed as a waiver on the part of the Lender of any of
         the terms or conditions of this agreement or of its rights or
         privileges or of any other default on the part of the Borrower, and all
         original rights and powers of the Lender under this Agreement will
         remain in full force, notwithstanding any such forbearance or delay.
         For the avoidance of doubt it is clarified that the waiver by the
         Lender of any of its rights under this Agreement on a particular
         occasion shall not constitute a waiver on any subsequent occasion of
         such right.

13.5.    Severability

         If at any time any provision of this Agreement is or becomes illegal,
         invalid or unenforceable in any respect under the law of any
         jurisdiction, the legality, validity and enforceability of such
         provision under the law of any other jurisdiction, and of the remaining
         provisions of this Agreement shall not be affected or impaired thereby.
         In the event that any of the terms or provisions of this Agreement or
         portions or applications thereof, are held to be prohibited,
         unenforceable or invalid under any law, a reasonable adjustment in such
         term or provision shall be made with a view towards effecting the
         purpose of such terms and provisions of this Agreement, and the
         enforceability and validity of the remaining terms and provisions, or
         portions or applications thereof, shall not be affected thereby.

13.6.    Survival

         Any expiry or termination of this Agreement or the release of any
         securities on the occurrence of the Final Settlement Date shall not
         affect Clauses 1.1, 1.2, 11, 12 and 13 which shall survive expiry or
         termination of this Agreement and/or the release of any of the
         securities.

13.7.             No Assignment

                    (a)  The terms and  provisions  of this  Agreement  shall be
                         binding  upon,  and the benefits  hereof shall inure to
                         the Parties hereto and their respective  successors and
                         assigns.

                                       14
<PAGE>

                    (b)  Neither Party shall assign this Agreement or any of the
                         rights,  duties or  obligations  hereunder  without the
                         prior written consent of the other Party.

13.8.             Variation of the Terms

         No amendment, modification or variation of this Agreement shall be
         binding on either the Borrower or the Lender unless such amendment,
         modification or variation is in writing and is signed by each of the
         Borrower and the Lender.

13.9.    No Third Party Beneficiaries

         This Agreement does not create, and shall not be construed as creating,
         any rights enforceable by any person not a party to this Agreement
         (except as provided in Clause 11) under the Contracts (Rights of Third
         Parties) Act 1999 or otherwise.

13.10.   Counterparts

         This Agreement may be executed in one or more counterparts, including
         counterparts transmitted by facsimile, each of which shall be deemed an
         original, but all of which signed and taken together shall constitute 1
         (one) document.

IN WITNESS WHEREOF the Parties hereto have executed these presents the day and
year first hereinabove written.

COPYTELE INTERNATIONAL LTD.



By: /s/ Denis A. Krusos
    -------------------
Name:   Denis A. Krusos
Title:  Chairman and Chief Executive Officer



MARS OVERSEAS LIMITED



By: /s/ Venugopal N. Dhoot
    ----------------------
Name:   Venugopal N. Dhoot
Title:  DIRECTOR




                                       15
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.6
<SEQUENCE>5
<FILENAME>a5631402ex10_6.txt
<DESCRIPTION>EXHIBIT 10.6
<TEXT>
                                  Exhibit 10.6
                                  ------------










                            LOAN AND PLEDGE AGREEMENT



                                     BETWEEN

                           COPYTELE INTERNATIONAL LTD.




                                       AND



                              MARS OVERSEAS LIMITED



                             DATED 2nd NOVEMBER 2007


                                       1
<PAGE>


                                TABLE OF CONTENTS


1.       DEFINITION AND INTERPRETATION........................................3
2.       LOAN & PAYMENT.......................................................5
3.       CREATION OF SECURITY.................................................6
4.       TAXES................................................................7
5.       REPRESENTATIONS AND WARRANTIES.......................................7
6.       BORROWERS' CONVENANTS................................................9
7.       EVENTS OF DEFAULT...................................................10
8.       REMEDIES ON EVENT OF DEFAULT........................................11
9.       CONTINUING OBLIGATIONS..............................................12
10.      COSTS, CHARGES AND EXPENSES.........................................12
11.      INDEMNITY...........................................................12
12.      RELEASE AND TERMINATION.............................................12
13.      MISCELLANEOUS.......................................................12


                                       2
<PAGE>



                            LOAN AND PLEDGE AGREEMENT

This LOAN AND PLEDGE AGREEMENT (this "Agreement") is made on the 2nd day of
November, 2007 by and among:

(1)      COPYTELE INTERNATIONAL LTD., a company incorporated under the laws of
         the British Virgin Islands and having its registered office at Icaza
         Gonzalez-Ruiz & Aleman, (BVI) Trust Limited, Vanterpool Plaza, Second
         Floor, Wickham Cay 1, Road Town, Tortola, British Virgin Islands
         (hereinafter referred to as the "Lender" which expression shall include
         its successors and permitted assigns); and

(2)      MARS OVERSEAS LIMITED, a company incorporated under the laws of the
         Cayman Islands and having its registered office at PO Box 309 GT,
         Ugland House, South Church Street, George Town, Grand Cayman, Cayman
         Islands (the "Borrower" which expression includes its successors and
         permitted assigns).

The Borrower and the Lender are individually referred to as a "Party" and
together as the "Parties".

     WHEREAS

          A.   The Borrower has requested  the Lender for a senior  secured loan
               for a sum of US$5,000,000.

          B.   The  Borrower  has  agreed to  acquire  20,000,000  shares of the
               common stock of CopyTele Inc. ("Pledged Shares").

          C.   The loan will be secured by pledge of the Pledged Shares and will
               be subject to other terms and conditions  hereinafter  appearing;
               and

          D.   The Lender  requires  the  Borrower  to create the pledge and the
               Borrower  has  agreed  to  create  the  pledge  on the  terms and
               conditions set out under this Agreement.

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto, hereby agrees as follows:

1.                DEFINITION AND INTERPRETATION

1.1.              The following terms used in this Agreement shall have the
                  meanings assigned to them herein:

          (a)  "Agent  Bank" means a bank  acceptable  to Lender and Borrower in
               which  Lender  shall have an account for the purpose of repayment
               of the Loan;

          (b)  "Applicable  Law" includes all applicable  statutes,  enactments,
               laws,  ordinances,  rules, by-laws,  regulations,  notifications,
               guidelines,  policies,  directions,  directives and orders of any
               Governmental  Authority,  statutory authority,  tribunal,  board,
               court or a recognized stock exchange, as may be applicable;

          (c)  "Approvals"  means all  approvals,  permissions,  authorizations,
               consents  and   notifications   whether  from  any   Governmental
               Authority,  regulatory  or  departmental  authority  or otherwise
               including, without limitation, approvals of any authority, or any
               corporate authorizations as may be applicable;

          (d)  "Business  Day" means a day (other  than  Saturday  or Sunday) on
               which banks are open for general business in London, England;

                                       3
<PAGE>

          (e)  "Charter  Documents"  means the  Memorandum  of  Association  and
               Articles of Association of Borrower;

          (f)  "Closing  Date"  means  the  date  of the  drawdown  of the  Loan
               pursuant to this Agreement, which shall be a date mutually agreed
               between  the  Parties  hereto and which shall not in any event be
               later  than the 30th  day  from  the  date of  execution  of this
               Agreement, and in the event the 30th day is not a Business Day or
               is a Saturday or a Sunday,  then the next Business Day, such that
               on or  prior  to such  date,  the  Lender  shall  have  purchased
               1,495,845 global depository  receipts of Videocon Industries Ltd.
               and the Borrower shall have purchased the Pleged Shares  pursuant
               to a  certain  Subscription  Agreement,  dated  the date  hereof,
               between CopyTele Inc. and the Lender;

          (g)  "Designated  Account"  (i) of the Lender means the account of the
               Lender in the Agent  Bank for the  purpose  of  repayment  of the
               Loan,  and (ii) of the Borrower means the account of the Borrower
               in the Agent Bank for purposes of receiving the Loan.

          (h)  "Encumbrance"  means  any  mortgage,  charge  (whether  fixed  or
               floating),  pledge,  lien,  hypothecation,  assignment,  security
               interest or other encumbrances of any kind securing or conferring
               any  priority  of payment in  respect  of any  obligation  of any
               Person;

          (i)  "Escrow Agent" means the Escrow Agent to be appointed pursuant to
               the Escrow Agreement;

          (j)  "Escrow  Agreement"  means the escrow agreement to be executed on
               or prior to the Closing Date among the  Borrower,  the Lender and
               the Escrow  Agent,  in such form as the  Borrower  and Lender may
               agree and as is acceptable to the Escrow Agent,  in each case, as
               amended from time to time;

          (k)  "Event of Default"  means the  occurrence of any of the events or
               circumstances specified in Clause 7 of this Agreement;

          (l)  "Final   Settlement  Date"  means  the  date  on  which  all  the
               Obligations  have been irrevocably and  unconditionally  paid and
               discharged in full to the satisfaction of the Lender;

          (m)  "Finance  Documents" means the following,  executed in a form and
               manner satisfactory to the Lender:

                    i)   this Agreement;

                    ii)  the Escrow Agreement;

                    iii) all other  documents  and  agreements  relating  to the
                         above, as such documents may be amended or supplemented
                         from time to time.

          (n)  "Governmental   Authority"  means  any  government  or  political
               subdivision thereof; any department, agency or instrumentality of
               any  government or political  subdivision  thereof;  any court or
               arbitral   tribunal  and  includes  the  governing  body  of  any
               securities exchange;

          (o)  "Loan"  shall have the  meaning  ascribed  to it in Clause 2.1 of
               this Agreement;

          (p)  "Maturity Date" shall mean the seventh anniversary of the Closing
               Date;

                                       4
<PAGE>

          (o)  "Maturity  Value"  shall  mean,  when the loan is  repaid  on the
               Maturity Date, a sum of US$ 5 million;

          (q)  "Obligations"  means all amounts payable pursuant to the terms of
               the Finance Documents, including without limitation:

               i)   the principal amount of the Loan;

               ii)  any and all sums  incurred  by the Escrow  Agent in order to
                    preserve the security  provided under the Finance  Documents
                    or its security interest therein; and

               iii) in the  event  of  any  proceeding  for  the  collection  or
                    enforcement  of  the  above,  after  a  Default  shall  have
                    occurred, the expenses incurred for the purpose of retaking,
                    holding,  preparing for sale, selling or otherwise disposing
                    of the Security, or of any exercise by the Lender and/or the
                    Escrow  Agent of their  respective  rights under the various
                    Finance Documents, together with legal fees and court costs;

          (r)  "Security"  means  collectively,  the Share  Certificates  or any
               other document or instrument  evidencing ownership of the Pledged
               Shares,  the  transfer  documents  duly  signed  relating  to the
               Pledged Shares, and the Pledged Shares.

          (s)  "Share Certificate" means a certificate evidencing holding of the
               Pledged Shares by the Borrower;

          (t)  "Taxes"  shall mean any and all present and future  taxes,  levy,
               impost,  premium,  duty or  other  charge  of a  similar  nature,
               including without limitation,  gross receipts,  sales, turn-over,
               value  added,  use  consumption,   property,  income,  franchise,
               capital,  occupational,  license,  excise and documentary  stamps
               taxes,  and  customs  and  other  duties,  assessments,  or fees,
               however imposed,  withheld, levied, or assessed by any country or
               government  subdivision  thereof  or any other  taxing  authority
               together with interest thereon and penalties in respect thereof.


1.2.              In this Agreement:

          (a)  a provision of law is a reference to that provision as amended or
               re-enacted;

          (b)  a Clause is a reference to a section of this Agreement;

          (c)  words  importing  the  plural  shall  include  the  singular  and
               vice-versa;

          (d)  a  Person  shall  be  construed  as  including  references  to an
               individual,  firm, company or other body, whether incorporated or
               not; and

          (e)  the index and the headings in this Agreement are for  convenience
               and are to be ignored in construing this Agreement.

2.                LOAN & PAYMENT

2.1.              At the request of the Borrower, and subject to the terms and
                  conditions set out in this Agreement, on the Closing Date, the
                  Lender shall lend to the Borrower, and the Borrower shall
                  borrow from the Lender, the principal amount of US$5,000,000
                  (the "Loan"). The Loan shall not bear interest.

2.2.              Lender shall make the Loan by making remittance of the said
                  amount to the Designated Account of the Borrower.

                                       5
<PAGE>

2.3.              The Maturity Value shall be due and payable in lump sum on the
                  Maturity Date. In no case and under no circumstances,
                  arrangements or events whatsoever, shall the Loan be repayable
                  before the seventh anniversary of the Closing Date; and the
                  Borrower shall also have no option to pre-pay before the
                  Maturity Date. The Borrower shall make repayment of the Loan
                  on the Maturity Date by depositing in the Designated Account
                  of the Lender cash in the amount of the Maturity Value.

2.4.              In the event  there is any  pre-payment  before the  seventh
                  anniversary of the Closing Date in  contravention  of Clause
                  2.3 above, due to any reason whatsoever,  the Borrower shall
                  be liable to pay and shall pay a pre-payment premium at 200%
                  of the Loan to the Lender. In case of pre-payment,  the Loan
                  shall  be paid in a  single  tranche  and  deposited  to the
                  Designated Account of the Lender.  Without prejudice to what
                  is stated hereinabove,  in the event of the Borrower desires
                  to prepay the Loan  before the  Maturity  Date,  it shall be
                  mandatory that (a) pursuant to an escrow agreement among the
                  Lender,  the  Borrower  and the  Agent  Bank  dated the date
                  hereof  the  prepaid  amount  of the  Loan  shall be kept in
                  escrow in the  Designated  Account of the  Lender  until the
                  Maturity Date and shall be paid to the Lender on the date of
                  payment,  (b) any interest accruing on the prepaid amount of
                  the Loan  kept in escrow in the  Designated  Account  of the
                  Lender  shall be also  retained in escrow in the  Designated
                  Account until the Maturity Date and shall paid to the Lender
                  on the date of payment,  and (c) the lien over the  Security
                  will not be vacated until the Maturity Date.

2.5.              The Borrower shall drawdown the Loan in a single tranche.

2.6.              The Closing of the Loan pursuant to this Agreement and the
                  drawdown thereof shall take place on the Closing Date and is
                  subject to the fulfillment of the following conditions
                  precedent to the satisfaction of the Lender:

                    i)   The Lender shall have  received,  the  following,  each
                         dated such day (unless  otherwise  specified),  in form
                         and substance satisfactory to the Lender:

                      A) copies of the Charter  Documents  of the  Borrower  and
                         each amendment thereto,  certified as true, correct and
                         complete  by the  company  secretary  / director of the
                         Borrower;

                      B) copies of the  resolution of the  shareholders  and the
                         resolutions  of the board of directors of the Borrower,
                         approving the transactions  contemplated by the Finance
                         Documents to which the Borrower, is or will be a party,
                         in each case certified as true, correct and complete by
                         the company secretary / director of the Borrower.

                    ii)  The  Lender  shall  have  acquired   1,495,845   global
                         depository receipts of Videocon Industries Ltd;

                    iii) The   borrower   shall  have   acquired   the   Pledged
                         Shares.;and

                    iv)  The  Parties and the Escrow  Agent  shall have  entered
                         into the Escrow Agreement.



3.                CREATION OF SECURITY

                                       6
<PAGE>

3.1.              In order to secure the due performance, payment and discharge
                  in full of the Obligations, and in consideration of the Loan
                  being advanced by the Lender the Borrower hereby pledges in
                  favour of the Escrow Agent, for the benefit of the Lender, as
                  security for the due discharge of the Obligations, the Pledged
                  Shares, and shall deposit and deliver to the Escrow Agent such
                  relevant instruments or documents, including Share
                  Certificates, or any other document required for effectuating
                  the pledge of the Pledged Shares.

3.2.              The Borrower shall provide any information and assistance as
                  may be reasonably necessary to perfect the pledge created over
                  the Pledged Shares in favour of the Escrow Agent for the
                  benefit of the Lender.

3.3.              The Borrower hereby agrees and undertakes that, until the
                  Final Settlement Date, the Borrower shall not, and shall not
                  attempt to, transfer any of the Pledged Shares directly or
                  indirectly or in any form or method whatsoever.

3.4.              The Borrower agrees and undertakes that it shall not
                  sell/transfer or enter into any agreement for sale/transfer of
                  the Pledged Shares to any third party in any manner whatsoever
                  until the seventh anniversary of the Closing Date. The
                  Borrower shall give irrevocable instructions to the Escrow
                  Agent not to accept any instructions for
                  withdrawal/cancellation of the Pledged Shares or for
                  sale/transfer of the Pledged Shares other than in accordance
                  with the terms of the Escrow Agreement.

3.5.              The Pledged Shares shall continue to remain pledged with the
                  Escrow Agent for security of repayment of the Loan for a
                  period of seven years or repayment of the Loan, whichever is
                  later. Further, even in case of prepayment of the Loan prior
                  to the expiry of seven years as stated above in Clause 2.4,
                  the Pledged Shares shall continue to remain pledged with the
                  Escrow Agent until the seventh anniversary of Closing Date.

4.                TAXES

4.1.              The Borrower shall bear all Taxes as may be applicable or as
                  may be levied in  relation  to each  Facility  and all other
                  amounts payable under the Finance Documents. Notwithstanding
                  anything to the  contrary  stated  herein,  it is  expressly
                  agreed that all  payments to be made to the Lender under the
                  Finance  Documents  shall  be made  free  and  clear  of and
                  without  any  deduction  for or on  account of any Taxes and
                  without any  set-off or  counter-claim.  If the  Borrower is
                  required to make deduction on account of any Taxes, then, in
                  such  case,  the  sums  (other  than the  interest  amounts)
                  payable  to the  Lender  shall be  increased  to the  extent
                  necessary to ensure that,  after making such deduction,  the
                  Lender  receive and retain  (without any  liability for such
                  deductions)  a sum  equal to the sum  which  it  would  have
                  received and retained,  had no such  deduction  been made or
                  required to be made.

4.2.              Without prejudice to the provisions of Clause 4.1 above, if
                  the Lender is required to make any payment on account of any
                  Taxes in relation to any sum received or receivable by it
                  hereunder (excluding income tax payable by the Lender) or any
                  liability in respect of such payment is imposed, levied or
                  assessed against such Lender, the Borrower shall, upon demand
                  of such Lender, promptly reimburse to such Lender such payment
                  or liability together with interest, penalties and expenses,
                  if any, paid or incurred in connection therewith.

5.                REPRESENTATIONS AND WARRANTIES

5.1.              The Borrower hereby represents and warrants to the Lender as
                  of the date of this Agreement (which representations and
                  warranties shall survive the execution and delivery of this
                  Agreement and continue until the Final Settlement Date) as
                  follows:

               (a)  the Borrower is duly  organised and validly  existing  under
                    the  laws  of the  Cayman  Islands  and has  the  power  and
                    authority  to carry on business  as is now being  carried on
                    and to own its property and assets;

                                       7
<PAGE>

               (b)  the Borrower  has the power and  authority to enter into and
                    perform  its  obligations  under the  Finance  Documents  in
                    accordance   with  the  terms  thereof  and  has  taken  all
                    necessary  corporate  and other  actions  to  authorise  the
                    execution, delivery and performance of the obligations under
                    the Finance Documents;

               (c)  the  execution,  delivery  and  performance  of the  Finance
                    Documents  and  creation of a valid and legally  enforceable
                    pledge in favour of the Escrow  Agent for the benefit of the
                    Lender  by  the  Borrower  will  not   contravene   (i)  any
                    Applicable  Law or  regulation  to  which  the  Borrower  is
                    subject or (ii) any  provision  of the Charter  Documents of
                    the  Borrower  or  (iii)  any  agreement  or  obligation  or
                    document binding on or applicable to the Borrower;

               (d)  the  Finance   Documents  and  the  pledge   created  herein
                    constitute  legally binding and  enforceable  obligations of
                    the Borrower;

               (e)  no  clearance,   authorizations,   Approvals,   waivers,  no
                    objections  or other  action by, and no notice to or filing,
                    registration  with, any Governmental  Authority or any other
                    Person  is  required  for  the  due   execution,   delivery,
                    recordation,  filing or  performance  by the Borrower of any
                    Finance  Document or for the  creation,  perfection  and the
                    maintenance  of  the  various   security   interest  created
                    pursuant  to  the  Finance  Documents   (including  for  the
                    maintenance of the first priority as contemplated therein);

               (f)  no Event of Default has occurred;

               (g)  the Borrower has not granted or agreed to grant in favour of
                    any other  person  any  interest  in or any  option or other
                    rights in respect of any of the Pledged Shares;

               (h)  no actions,  proceedings or steps have been taken and/or are
                    proposed or threatened  for the  liquidation,  winding up or
                    dissolution, administration, reorganization or insolvency of
                    the Borrower, or for the appointment of a receiver,  trustee
                    or similar  officer in respect of the Borrower or its assets
                    before any court,  Governmental  Authority or administrative
                    body and/or  under any  applicable  bankruptcy,  insolvency,
                    winding-up or other similar law;

               (i)  no actions, suits, proceedings, investigations,  litigation,
                    arbitration or administrative proceedings of any kind in any
                    court or before any arbitrator or any Governmental Authority
                    are at present  current or pending  against the  Borrower or
                    its  assets or  threatened  which has or is likely to have a
                    material adverse effect;

               (j)  there are no third  party  consents  required to be obtained
                    for the  Borrower to lawfully  enter into and perform  their
                    respective obligations under the Finance Documents;

               (k)  there  are  no  actions,  proceedings,  disputes  or  claims
                    pending   before   any   court,    government    agency   or
                    administrative  body, or threatened against or affecting the
                    Borrower or its assets and which would adversely  affect the
                    ability  of  the  Borrower  to  perform   their   respective
                    obligations under the Finance Documents;

               (l)  the Borrower is the legal and  beneficial  owner of, and has
                    good and  marketable  title to,  or a valid and  enforceable
                    rights in respect  of, all of its  property  and assets over
                    which the  security  interest  is  proposed to be created in
                    favour of the  Escrow  Agent for the  benefit  of the Lender
                    pursuant  to the Finance  Documents  and such assets are not
                    subject  to  any  Encumbrances   other  than  those  created
                    pursuant to the Finance Documents.

                                       8
<PAGE>

6.       BORROWERS' CONVENANTS

6.1.     Positive Covenants

         The Borrower irrevocably and unconditionally covenants and undertakes
         that so long as any Obligations remain outstanding, and until the Final
         Settlement Date, it shall:

               (a)  maintain its corporate  existence (to the extent applicable)
                    and all rights and  privileges  enjoyed and  obtain,  comply
                    with the terms of and do all that is  necessary  to maintain
                    in full force and effect all Approvals required to enable it
                    to lawfully carry on its business;

               (b)  obtain,  comply  with  the  terms  of  and do  all  that  is
                    necessary to maintain in full force and effect all Approvals
                    as may be  required  to enable it to enter into and  perform
                    its  obligations   under  the  Finance   Documents  and  the
                    transactions   contemplated   thereby   and  to  ensure  the
                    legality,  validity,   enforceability  or  admissibility  in
                    evidence of the Finance Documents and this Agreement;

               (c)  comply with all Applicable Laws and the terms and conditions
                    of the Approvals;

               (d)  pay  regularly  all  Taxes,  assessments,  dues,  duties and
                    impositions  as may,  from  time to time be  payable  to any
                    Governmental Authority;

               (e)  comply  in all  respects  with  the  terms  of  the  Finance
                    Documents;

               (f)  use reasonable  commercial efforts to do or cause to be done
                    everything which is necessary,  in the reasonable opinion of
                    the Lender,  to create and perfect the security with respect
                    to the Pledged  Shares  pursuant  to the  Finance  Documents
                    (including,  without limitation, any further registration or
                    filing in respect of the security);

               (g)  pay or  reimburse  to  the  Lender  all  charges,  Taxes  or
                    penalties imposed on or in pursuance of this Agreement or on
                    any instruments,  issued  hereunder,  payable in relation to
                    the interest amounts on the pre-paid Loan amount paid to the
                    Lender;

               (h)  perform and execute, on the request of the Lender, such acts
                    and deeds, as may be reasonably necessary and/or required to
                    carry out the intent of the Finance Documents; and

               (i)  do all such acts and things as may be reasonably required by
                    the Lender to protect the  interest of the Lender  under the
                    Finance Documents.

6.2.     Negative Covenants

         The Borrower covenants and agrees that so long as any Obligations
         remain outstanding and until the Final Settlement Date, without the
         prior written consent of the Lender :

               (a)  the Borrower  shall not undertake  any further  borrowing in
                    any manner whatsoever;

               (b)  the  Borrower  shall  not  dispose  of or  create  any other
                    Encumbrance or grant any third party rights over the Pledged
                    Shares  which has been pledged in favour of the Escrow Agent
                    for the benefit of the Lender;

                                       9
<PAGE>

               (c)  the  Borrower   shall  not  effect  and/or  enter  into  any
                    transaction   of   merger,   amalgamation,   reconstruction,
                    consolidation, reconstruction, restructuring, reorganization
                    or other similar  transactions  including  those relating to
                    change  in  its  shareholding   pattern  (whether  legal  or
                    beneficial)  other  than  those  permitted  in  terms of the
                    Finance  Documents,  as a result whereof the Borrower is not
                    the  surviving  entity,  or as a result of which an Event of
                    Default arises;

               (d)  the  Borrower  shall not amend,  alter or modify its Charter
                    Documents  in a manner  which  may  affect  the terms of the
                    Finance  Documents  or the  rights  of  any  of  the  Lender
                    thereunder in any manner whatsoever;

               (e)  the  Borrower  shall not wind up,  liquidate  or dissolve or
                    initiate any voluntary  winding up process  and/or cause any
                    circumstance  to arise  which  could  result  in any  person
                    initiating  winding up actions  against the Borrower  and/or
                    any other  actions  which in the opinion of the Lender would
                    affect or is likely to affect the rights and benefits of the
                    Lender including their rights in relation to the security;

               (f)  the Borrower shall ensure that except as otherwise  provided
                    in the Finance  Documents,  the security created  thereunder
                    shall  be  free of  encumbrances,  except  for the  security
                    interest  created  thereon in favour of the Escrow Agent for
                    the benefit of the Lender;

               (g)  the  Borrower  shall not grant in favour of any other Person
                    any  interest in or any option or other rights in respect of
                    the Pledged Shares or any part thereof.

               (h)  the Borrower shall not enter into any corporate  arrangement
                    including  but not  limited to merger,  amalgamation,  joint
                    venture or partnership with any other entity.

               (g)  the  Borrower  shall  not at any  point  of  time,  have any
                    creditors,  unsecured lenders or any other outside liability
                    in any form  whatsoever  other than the  unsecured  loan not
                    exceeding  US$  21,300,000/-  (US$ Twenty One Million  Three
                    Hundred Thousand) from group companies. The loan so obtained
                    from the group companies shall be interest free and shall be
                    subordinate to the Loan obtained from the Lender.

7.                EVENTS OF DEFAULT

7.1.              The occurrence of any of the following events shall constitute
                  an Event of Default (the "Event of Default"):

               (a)  the  Borrower  fails to pay any amount due under the Finance
                    Documents on the due date or on demand, as the case may be;

               (b)  failure to maintain the first priority exclusive pledge over
                    the  Pledged  Shares in favour of the  Escrow  Agent for the
                    benefit of the Lender pursuant to the Finance Documents;

               (c)  any  representation  or statement made by the Borrower under
                    any of the Finance  Documents,  including any representation
                    or  statement   with  respect  to  the   security,   or  any
                    certificate or statement  delivered by the Borrower pursuant
                    thereto is or proves to have been  incorrect  or  misleading
                    when made and affects the  performance of the obligations by
                    the Borrower under the Finance Documents or cause the breach
                    of any of the provisions of the Finance Documents;

               (d)  any  amendment  to or  alteration  or  modification  of  the
                    Charter  Documents in a manner which may affect the terms of
                    the Finance Documents or the rights of the Lender thereunder
                    in any manner whatsoever, without the consent of the Lender;

                                       10
<PAGE>

               (e)  the  Borrower  fails to  maintain a valid legal title to the
                    Pledged Shares;

               (f)  the  Borrower   commences  or  takes  steps  to  initiate  a
                    voluntary  winding  up or  restructuring  process  under any
                    applicable  bankruptcy,  insolvency,  winding  up  or  other
                    similar laws now or  hereafter in effect,  or consent to the
                    entry of an order for  relief in an  involuntary  proceeding
                    under any such law, or consents to the appointment or taking
                    possession by a receiver,  liquidator,  assignee (or similar
                    official) for any part of their properties;

               (g)  the  Borrower  is deemed  unable to pay its debts or becomes
                    unable  to pay its  debts as they  fall due or  suspends  or
                    threatens to suspend making payments  (whether  principal or
                    interest) with respect to any of its debts;

               (h)  Breach of any of the  covenants  as  mentioned in Clause 6.1
                    and Clause 6.2 above

8.                REMEDIES ON EVENT OF DEFAULT


8.1.              Upon an Event of Default, the Pledged Shares shall be
                  forfeited by the Escrow Agent for the benefit of the Lender
                  who shall hold the same as trustee for the Lender and then
                  deal with Pledged Shares as per the instructions of the
                  Lender.

8.2.              In addition to the above, the Lender shall also have a right
                  to:

               (a)  enforce  the  security  interest  created  pursuant  to  the
                    Finance Documents;

               (b)  exercise all the rights and  remedies  available to it under
                    the Finance  Documents in such manner as the Lender may deem
                    fit  without  intervention  of the  Court  and  without  any
                    consent of the Borrower and/or any Person.

8.3.              The Borrower agrees that at any time after an Event of Default
                  occurs, the Lender shall have the right, without prejudice to
                  its other rights under this Agreement and the other Finance
                  Documents and/or under any Applicable Law, in its discretion
                  to exercise all the rights, powers and remedies vested in it
                  (whether vested in it by or pursuant to this Agreement, the
                  other Finance Documents or by any Applicable Law) for the
                  protection, perfection and enforcement of its rights in
                  respect of the Security, and the Lender shall be entitled,
                  without limitation, to exercise the rights set out below:

               (a)  to give suitable  instructions to the Escrow Agent such that
                    the  Pledged  Shares are  released  and  handed  over to the
                    Lender;

               (b)  to transfer or register in the name of its  nominees,  as it
                    shall deem fit,  all or any of the  Pledged  Shares,  at the
                    cost of the Borrower;

               (c)  to receive all amounts payable in respect of the Security;

               (d)  to  receive  cash  proceeds  and/or  to  sell  the  non-cash
                    Security (or any part thereof),  without the intervention of
                    the court or other judicial  authority  and/or  Governmental
                    Authority,  at public or private  sale or on any  securities
                    exchange for cash,  or transfer or procure  registration  in
                    the name of the Escrow Agent,  or any of its nominees at the
                    cost  of  the  Borrower,   as  the  Escrow  Agent  may  deem
                    commercially  reasonable  and  apply  the  proceeds  thereof
                    towards payment of the Obligations, provided that the Escrow
                    Agent shall not be obliged to make any sale of any  Security
                    relating  to  Pledged  Shares  if it  desires  not to do so,
                    regardless  of the fact  that  notice  of sale may have been
                    given;

                                       11
<PAGE>

               (e)  to take all such actions  including  vote all or any part of
                    the Pledged Shares  (whether or not  transferred in the name
                    of the Escrow Agent) with respect  thereto as though it were
                    the outright owner thereof;

               (f)  exercise  such other rights as the Lender may deem fit under
                    Applicable Law.

9.       CONTINUING OBLIGATIONS

         The liabilities and obligations of the Borrower under or pursuant to
         this Agreement and the other Finance Documents shall remain in full
         force and effect notwithstanding any act, omission, event or
         circumstance whatsoever until the Final Settlement Date.

10.      COSTS, CHARGES AND EXPENSES

         Each Party shall bear all its own costs, charges and expenses
         (including legal and other fees on a full indemnity basis), and Taxes
         on it pertaining to the Loan in connection with the negotiation,
         preparation, execution, registration, administration, modification and
         amendment of this Agreement, the other Finance Documents and any other
         document delivered hereunder and in exercising, protecting, perfecting,
         preserving or enforcing any of its rights or powers hereunder or there
         under (including the security interest created under or pursuant to the
         Finance Documents) or in suing for or seeking to recover any sums due
         hereunder or thereunder or in defending any claims brought against it
         in respect of this Agreement and any other document delivered hereunder
         or pursuant to this Agreement or in releasing this Agreement, the other
         Finance Documents or the security interest created hereunder or
         pursuant to this Agreement and the other Finance Documents on the Final
         Settlement Date.

11.      INDEMNITY

         The Borrower shall indemnify and hold harmless the Lender, the Escrow
         Agent and their nominees, agents, officers, and directors ("Indemnified
         Parties") against all actions, proceedings, claims, demands, judgments,
         losses, liabilities, obligations, damages, costs and expenses
         ("Losses") imposed, asserted against or incurred by them which may be
         incurred, sustained or raised in respect of any Event of Default or the
         non-performance of or non-observance of any of the undertakings,
         representations and warranties and agreements on the part of the
         Borrower herein contained or contained in any other Finance Documents
         or in respect of any inaccuracy in the representation and warranties
         relating in any way whatsoever to the security interest created
         hereunder.

12.      RELEASE AND TERMINATION

         Upon the occurrence of the Final Settlement Date, this Agreement shall
         terminate and the Escrow Agent shall, as provided in the Escrow
         Agreement, release the Security from the pledge granted hereby, and
         shall deliver to Borrower such Security as may be in the possession of
         the Escrow Agent. However, in no case or in no event whatsoever, the
         securities shall be released to the Borrower before the seventh
         anniversary of the Closing Date.

13.      MISCELLANEOUS

13.1.    Governing Law

         This Agreement shall be governed by and construed in accordance with
         the laws of England.

13.2.             Dispute Resolution

               (a)  In the  event  any Party is in breach of any of the terms of
                    this  Agreement,  another Party may serve written  notice to
                    require  the  Party in breach  to cure  such  breach  within
                    thirty  (30)  days of the  receipt  of such  written  notice
                    thereof.

                                       12
<PAGE>

               (b)  In the case of any  dispute  or claim  arising  out of or in
                    connection with or relating to this Agreement, or the breach
                    (where such breach has not been cured by the Party in breach
                    within  thirty  (30)  days  of a  written  notice  thereof),
                    termination or invalidity  hereof, the Parties shall attempt
                    to first resolve such dispute or claim  through  discussions
                    between senior executives of the Investor.

               (c)  If the  dispute is not  resolved  through  such  discussions
                    within thirty (30) days after one Party has served a written
                    notice on the other Party  requesting  the  commencement  of
                    discussions,  dispute or claim  shall be finally  settled by
                    arbitration   under  the  United   Nations   Commission   on
                    International  Trade Law  Arbitration  Rules (the  "UNCITRAL
                    Rules") as are in force at the time of any such arbitration.
                    For the  purpose  of such  arbitration,  there  shall be one
                    arbitrator  jointly appointed by the Parties,  failing which
                    there shall be three (3)  arbitrators in accordance with the
                    UNCITRAL Rules (the "Arbitration  Board"). The Company shall
                    appoint one  arbitrator,  and the Investor shall appoint one
                    arbitrator. The two arbitrators shall then jointly appoint a
                    third  arbitrator,  who  shall  serve  as  Chairman  of  the
                    Arbitration Board.

               (d)  All  arbitration  proceedings  shall  be  conducted  in  the
                    English  language and the place of  arbitration  shall be in
                    London, England, United Kingdom.

               (e)  Each Party shall  co-operate  in good faith to expedite  (to
                    the maximum extent  practicable) the conduct of any arbitral
                    proceedings commenced under this Agreement.

               (f)  The costs and expenses of the  arbitration,  including,  the
                    fees of the third arbitrator on the Arbitration Board, shall
                    be borne  equally by each Party to the  dispute or claim and
                    each Party shall pay its own fees,  disbursements  and other
                    charges of its counsel and the arbitrators  nominated by it,
                    except as may be  otherwise  determined  by the  Arbitration
                    Board.  The Arbitration  Board would have the power to award
                    interest  on any sum  awarded  pursuant  to the  arbitration
                    proceedings and such sum would carry  interest,  if awarded,
                    until the actual payment of such amounts.

               (g)  Any award made by the  Arbitration  Board shall be final and
                    binding  on each of the  Parties  that were  parties  to the
                    dispute.

13.3.             Notice/Communication

               (a)  Each  notice,  demand or other  communication  given or made
                    under this  Agreement  shall be in writing and  delivered or
                    sent to the relevant  Party at its address or fax number set
                    out  below  (or such  other  address  or fax  number  as the
                    addressee  has by seven (7)  Business  Days'  prior  written
                    notice specified to the other Parties).  Any notice,  demand
                    or  other  communication  given  or made by  letter  between
                    countries  shall  be  delivered  by  registered  airmail  or
                    international  courier service. Any notice,  demand or other
                    communication  so addressed  to the relevant  Party shall be
                    deemed to have been  delivered (i) if delivered in person or
                    by  messenger,  when proof of  delivery  is  obtained by the
                    delivering  Party,  (ii) if sent by  post  within  the  same
                    country, on the fifth day following posting,  and if sent by
                    post to another country, on the tenth day following posting,
                    and  (iii) if given or made by fax,  upon  dispatch  and the
                    receipt of a transmission report confirming dispatch.

               (b)  The initial  address and  facsimile  for the Parties for the
                    purposes of the Agreement are:

         If to the Lender:

                                       13
<PAGE>

         Name              :        COPYTELE INTERNATIONAL LTD.

         Address           :        c/o CopyTele, Inc.
                                    900 Walt Whitman Road
                                    Melville, New York 11747

         Attention         :        Mr. Denis A. Krusos

         Fax               :        631-549-5974

         Telephone         :        631-549-5900


         If to the Borrower:

         Name              :        MARS OVERSEAS LIMITED

         Address           :        C/o Videocon Industries Limited
                                    Fort House, Second Floor,
                                    Dr. D. N. Road, Fort ,
                                    Mumbai, India: 400001

         Attention         :        Mr. Venugopal N. Dhoot

         Fax               :        +91 22 6655 0580

         Telephone         :        + 91 22 6611 3600

13.4.    Waiver/Forbearance

         Any waiver of any provision of this Agreement and any waiver of any
         default under this Agreement shall only be effective if made in writing
         and signed by the Lender. Any waiver or forbearance or delay on the
         part of the Lender to insist upon the performance of any terms and
         conditions of this Agreement, or to exercise any right or privilege
         conferred under this Agreement, or to demand any penalties resulting
         from any breach of any of the terms or conditions of this Agreement
         shall not be construed as a waiver on the part of the Lender of any of
         the terms or conditions of this agreement or of its rights or
         privileges or of any other default on the part of the Borrower, and all
         original rights and powers of the Lender under this Agreement will
         remain in full force, notwithstanding any such forbearance or delay.
         For the avoidance of doubt it is clarified that the waiver by the
         Lender of any of its rights under this Agreement on a particular
         occasion shall not constitute a waiver on any subsequent occasion of
         such right.

13.5.    Severability

         If at any time any provision of this Agreement is or becomes illegal,
         invalid or unenforceable in any respect under the law of any
         jurisdiction, the legality, validity and enforceability of such
         provision under the law of any other jurisdiction, and of the remaining
         provisions of this Agreement shall not be affected or impaired thereby.
         In the event that any of the terms or provisions of this Agreement or
         portions or applications thereof, are held to be prohibited,
         unenforceable or invalid under any law, a reasonable adjustment in such
         term or provision shall be made with a view towards effecting the
         purpose of such terms and provisions of this Agreement, and the
         enforceability and validity of the remaining terms and provisions, or
         portions or applications thereof, shall not be affected thereby.

13.6.    Survival

                                       14
<PAGE>

         Any expiry or termination of this Agreement or the release of any
         securities on the occurrence of the Final Settlement Date shall not
         affect Clauses 1.1, 1.2, 11, 12 and 13 which shall survive expiry or
         termination of this Agreement and/or the release of any of the
         securities.

13.7.    No Assignment

               (a)  The terms and provisions of this Agreement  shall be binding
                    upon,  and the  benefits  hereof  shall inure to the Parties
                    hereto and their respective successors and assigns.

               (b)  Neither  Party  shall  assign this  Agreement  or any of the
                    rights,  duties or obligations  hereunder  without the prior
                    written consent of the other Party.

13.8.    Variation of the Terms

         No amendment, modification or variation of this Agreement shall be
         binding on either the Borrower or the Lender unless such amendment,
         modification or variation is in writing and is signed by each of the
         Borrower and the Lender.

13.9.    No Third Party Beneficiaries

         This Agreement does not create, and shall not be construed as creating,
         any rights enforceable by any person not a party to this Agreement
         (except as provided in Clause 11) under the Contracts (Rights of Third
         Parties) Act 1999 or otherwise.

13.10.   Counterparts

         This Agreement may be executed in one or more counterparts, including
         counterparts transmitted by facsimile, each of which shall be deemed an
         original, but all of which signed and taken together shall constitute 1
         (one) document.


IN WITNESS WHEREOF the Parties hereto have executed these presents the day and
year first hereinabove written.

COPYTELE INTERNATIONAL LTD.


By: /s/ Denis A. Krusos
    -------------------
Name:   Denis A. Krusos
Title:  Chairman and Chief Executive Officer



MARS OVERSEAS LIMITED


By: /s/ Venugopal N. Dhoot
    ----------------------
Name:    Venugopal N. Dhoot
Title:   DIRECTOR




                                       15
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>6
<FILENAME>a5631402ex31_1.txt
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
                                  Exhibit 31.1
                                  ------------

                                  CERTIFICATION
                                  -------------

I, Denis A. Krusos, Chairman of the Board and Chief Executive Officer of
CopyTele, Inc., certify that:

1.       I have reviewed this quarterly report on Form 10-Q of CopyTele, Inc.;

2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying officer(s) and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
         control over financial reporting (as defined in Exchange Act Rules
         13a-15(f) and 15d-15(f)) for the registrant and have:

         (a)      Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

         (b)      Designed such internal control over financial reporting, or
                  caused such internal control over financial reporting to be
                  designed under our supervision, to provide reasonable
                  assurance regarding the reliability of financial reporting and
                  the preparation of financial statements for external purposes
                  in accordance with generally accepted accounting principles;

         (c)      Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period covered by this
                  report based on such evaluation; and

         (d)      Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting; and

5.       The registrant's other certifying officer(s) and I have disclosed,
         based on our most recent evaluation of internal control over financial
         reporting, to the registrant's auditors and the audit committee of the
         registrant's board of directors (or persons performing the equivalent
         functions):

         (a)      All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect
                  the registrant's ability to record, process, summarize and
                  report financial information; and

         (b)      Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.


                                     /s/ Denis A. Krusos
                                     -----------------------------------
                                     Denis A. Krusos
                                     Chairman of the Board and
March 11, 2008                       Chief Executive Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>7
<FILENAME>a5631402ex31_2.txt
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
                                  Exhibit 31.2
                                  ------------


                                  CERTIFICATION
                                  -------------

I, Henry P. Herms, Vice President - Finance and Chief Financial Officer of
CopyTele, Inc., certify that:

1.       I have reviewed this quarterly report on Form 10-Q of CopyTele, Inc.;

2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying officer(s) and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
         control over financial reporting (as defined in Exchange Act Rules
         13a-15(f) and 15d-15(f)) for the registrant and have:

         (a)      Designed such disclosure controls and procedures, or caused
                  such disclosure controls and procedures to be designed under
                  our supervision, to ensure that material information relating
                  to the registrant, including its consolidated subsidiaries, is
                  made known to us by others within those entities, particularly
                  during the period in which this report is being prepared;

         (b)      Designed such internal control over financial reporting, or
                  caused such internal control over financial reporting to be
                  designed under our supervision, to provide reasonable
                  assurance regarding the reliability of financial reporting and
                  the preparation of financial statements for external purposes
                  in accordance with generally accepted accounting principles;

         (c)      Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures and presented in this report our
                  conclusions about the effectiveness of the disclosure controls
                  and procedures, as of the end of the period covered by this
                  report based on such evaluation; and

         (d)      Disclosed in this report any change in the registrant's
                  internal control over financial reporting that occurred during
                  the registrant's most recent fiscal quarter (the registrant's
                  fourth fiscal quarter in the case of an annual report) that
                  has materially affected, or is reasonably likely to materially
                  affect, the registrant's internal control over financial
                  reporting; and

5.       The registrant's other certifying officer(s) and I have disclosed,
         based on our most recent evaluation of internal control over financial
         reporting, to the registrant's auditors and the audit committee of the
         registrant's board of directors (or persons performing the equivalent
         functions):

         (a)      All significant deficiencies and material weaknesses in
                  the design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

         (b)      Any fraud, whether or not material, that involves
                  management or other employees who have a significant role in
                  the registrant's internal control over financial reporting.


                                     /s/ Henry P. Herms
                                     ----------------------------------
                                     Henry P. Herms
                                     Vice President - Finance and
March 11, 2008                       Chief Financial Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>8
<FILENAME>a5631402ex32_1.txt
<DESCRIPTION>EXHIBIT 32.1
<TEXT>
                                  Exhibit 32.1
                                  ------------

                      Statement of Chief Executive Officer
         Pursuant to Section 1350 of Title 18 of the United States Code


Pursuant to Section 1350 of Title 18 of the United States Code, the undersigned,
Denis A. Krusos, the Chairman of the Board and Chief Executive Officer of
CopyTele, Inc., hereby certifies that:

     1.  The Company's Form 10-Q Quarterly Report for the period ended January
         31, 2008 (the "Report") fully complies with the requirements of Section
         13(a) or 15(d) of the Securities Exchange Act of 1934; and

     2.  The information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations of
         the Company.


                                     /s/ Denis A. Krusos
                                     ---------------------------------
                                     Denis A. Krusos
                                     Chairman of the Board and
March 11, 2008                       Chief Executive Officer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>9
<FILENAME>a5631402ex32_2.txt
<DESCRIPTION>EXHIBIT 32.2
<TEXT>
                                  Exhibit 32.2
                                  ------------


                      Statement of Chief Financial Officer
         Pursuant to Section 1350 of Title 18 of the United States Code


Pursuant to Section 1350 of Title 18 of the United States Code, the undersigned,
Henry P. Herms, the Vice President - Finance and Chief Financial Officer of
CopyTele, Inc., hereby certifies that:

     1.  The Company's Form 10-Q Quarterly Report for the period ended January
         31, 2008 (the "Report") fully complies with the requirements of Section
         13(a) or 15(d) of the Securities Exchange Act of 1934; and

     2.  The information contained in the Report fairly presents, in all
         material respects, the financial condition and results of operations of
         the Company.


                                     /s/ Henry P. Herms
                                     ---------------------------------
                                     Henry P. Herms
                                     Vice President - Finance and
March 11, 2008                       Chief Financial Officer
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
