Exhibit 10.6
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                            LOAN AND PLEDGE AGREEMENT



                                     BETWEEN

                           COPYTELE INTERNATIONAL LTD.




                                       AND



                              MARS OVERSEAS LIMITED



                             DATED 2nd NOVEMBER 2007


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                                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


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                            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;

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          (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;

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          (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.

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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

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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;

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               (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.

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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;

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               (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;

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               (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;

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<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




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