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 April 30, 1999

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
       Huntington Station, NY                                11746
--------------------------------------------------------------------------------
(Address of principal executive offices)                   (Zip Code)


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

Number of shares of common stock, par value
$.01 per share, outstanding as of June 7, 1999:      59,115,376 shares



<PAGE>

                                TABLE OF CONTENTS


Part I.  FINANCIAL INFORMATION

Item 1.  Financial Statements.

         Condensed Balance Sheets (Unaudited) as of April 30, 1999 and October
         31, 1998

         Condensed Statements of Operations (Unaudited) for the six months ended
         April 30, 1999 and April 30, 1998,  and for the period from November 5,
         1982 (Inception) through April 30, 1999

         Condensed  Statements  of Operations  (Unaudited)  for the three months
         ended April 30, 1999 and April 30, 1998

         Condensed Statement of Shareholders'  Equity (Unaudited) for the period
         from November 5, 1982 (Inception) through April 30, 1999

         Condensed Statements of Cash Flows (Unaudited) for the six months ended
         April 30, 1999 and April 30, 1998,  and for the period from November 5,
         1982 (Inception) through April 30, 1999

         Condensed  Statements  of Cash Flows  (Unaudited)  for the three months
         ended April 30, 1999 and April 30, 1998

         Notes to Condensed Financial Statements (Unaudited)

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

Part II. OTHER INFORMATION

Item 2.  Changes in Securities and Use of Proceeds

Item 6.  Exhibits and Reports on Form 8-K

         Signatures


                                       2

<PAGE>
                         Part I - FINANCIAL INFORMATION
                         ------------------------------

Item 1. Financial Statements.
        ---------------------

<TABLE>
<CAPTION>


                                 COPYTELE, INC.
                                 --------------
                         (Development Stage Enterprise)
                         ------------------------------
                      CONDENSED BALANCE SHEETS (UNAUDITED)
                      ------------------------------------


                                                                                                  April 30,         October 31,
                                           ASSETS                                                   1999               1998
                                           ------                                                   ----               ----
<S>                                                                                        <C>                <C>
CURRENT ASSETS:
  Cash (including cash equivalents and interest bearing accounts of
    $3,669,984 and $5,363,522, respectively)                                                    $ 3,741,737        $ 5,406,017
  Marketable securities, at cost                                                                    489,444               -
  Accrued interest receivable                                                                        13,593              3,983
  Inventory                                                                                       2,823,627          2,719,215
  Prepaid expenses and other current assets (including amounts due from
  Joint Venture of approximately $619,000 and $825,000, respectively)                               666,537            904,656
                                                                                                ------------       ------------
               Total current assets                                                               7,734,938          9,033,871

PROPERTY AND EQUIPMENT (net of accumulated depreciation
    and amortization of $1,491,220  and $1,351,778, respectively)                                   664,639            766,106

INVESTMENT IN JOINT VENTURE (Note  2)                                                               232,852            345,947

AMOUNTS DUE FROM JOINT VENTURE                                                                    2,980,770          3,091,628

OTHER ASSETS                                                                                        102,914             97,420

DEFERRED TAX BENEFITS (net of valuation allowance of
    $31,906,000 and $30,910,000, respectively)                                                            -                 -
                                                                                                ------------       ------------
                                                                                                $11,716,113       $ 13,334,972
                                                                                                ============       ============

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

CURRENT LIABILITIES:
  Accounts payable (including amounts due to Joint Venture of
    approximately $619,000 and $662,000, respectively)                                          $ 1,246,581         $1,392,321
  Accrued liabilities                                                                                83,824             81,738
                                                                                                ------------       ------------
                       Total current liabilities                                                  1,330,405          1,474,059

SHAREHOLDERS' EQUITY:
  Preferred stock, par value $100 per share; authorized 500,000 shares;
    no shares outstanding                                                                               -                 -
  Common stock, par value $.01 per share; authorized 240,000,000
    shares; outstanding 58,865,576 and 57,871,176  shares, respectively                             588,656            578,712
  Additional paid-in capital                                                                     54,520,416         52,977,110
  Accumulated (deficit) during development stage                                                (44,723,364)       (41,694,909)
                                                                                                ------------       ------------
                                                                                                 10,385,708         11,860,913
                                                                                                ------------       ------------
                                                                                                $11,716,113        $13,334,972
                                                                                                ============       ============
</TABLE>

The accompanying notes to condensed  financial  statements are an integral part
of these balance sheets.

                                       3
<PAGE>
<TABLE>
<CAPTION>

                                 COPYTELE, INC.
                                 --------------
                         (Development Stage Enterprise)
                         ------------------------------
                 CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
                 ----------------------------------------------



                                                                      For the six months                         For the period from
                                                                        Ended April 30,                            November 5, 1982
                                                           -------------------------------------------           (inception) through
                                                                   1999                  1998                        April 30, 1999
                                                           --------------------- ---------------------         ---------------------

<S>                                                          <C>                   <C>                           <C>
SALES                                                           $    -               $    -                        $    -
                                                           --------------------- -----------------------       ---------------------


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES,(including
  research and development expenses of approximately
  $1,479,000, $2,106,000 and $29,790,000,
  respectively)                                                  3,012,135             3,833,273                     48,602,269
                                                           --------------------- -----------------------       ---------------------

LOSS FROM JOINT VENTURE                                            113,095               207,381                        992,148
                                                           --------------------- -----------------------       ---------------------

INTEREST INCOME                                                     96,775               288,767                      4,871,053
                                                           --------------------- -----------------------       ---------------------


NET (LOSS)                                                     ($3,028,455)          ($3,751,887)                  ($44,723,364)
                                                          ====================== =======================       =====================

NET (LOSS) PER SHARE OF COMMON
  STOCK: Basic and Diluted                                          ($0.05)               ($0.06)                        ($0.95)
                                                          ====================== =======================       =====================


WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING:
  Basic and Diluted                                              58,190,083            57,861,176                    46,995,119
                                                          ====================== =======================       =====================

</TABLE>

The accompanying notes to condensed financial statements are an integral part of
these statements.

                                       4
<PAGE>

                                 COPYTELE, INC.
                                 --------------
                         (Development Stage Enterprise)
                         ------------------------------
                 CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
                 ----------------------------------------------
<TABLE>
<CAPTION>

                                                                        For the three months
                                                                           ended April 30,
                                                        ------------------------------------------------

                                                                    1999                  1998
                                                          ---------------------- -----------------------

<S>                                                          <C>                   <C>
SALES                                                            $   -                 $   -
                                                          ---------------------- -----------------------


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES, (including
  research and development expenses of approximately
  $751,000 and $1,006,000, respectively)                         1,596,853            1,874,876
                                                          ---------------------- -----------------------

LOSS FROM JOINT VENTURE                                             44,467               70,802
                                                          ---------------------- -----------------------

INTEREST INCOME                                                     43,948              130,617
                                                          ---------------------- -----------------------

NET (LOSS)                                                     ($1,597,372)         ($1,815,061)
                                                          ====================== =======================

NET (LOSS) PER SHARE OF COMMON
  STOCK: Basic and Diluted                                          ($0.03)              ($0.03)
                                                          ====================== =======================


WEIGHTED AVERAGE NUMBER OF SHARES
  OUTSTANDING: Basic and Diluted                                58,468,576           57,861,176
                                                          ====================== =======================

</TABLE>

The accompanying notes to condensed financial statements are an integral part of
these statements.

                                       5

<PAGE>
<TABLE>
<CAPTION>


                                 COPYTELE, INC.
                                 --------------
                         (Development Stage Enterprise)
                         ------------------------------
                   CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
                   -------------------------------------------
 FOR THE PERIOD FROM NOVEMBER 5, 1982 (INCEPTION) THROUGH APRIL 30, 1999 (UNAUDITED)
 -----------------------------------------------------------------------------------



                                                                                                    Additional        Accumulated
                                                                         Common Stock                 Paid-in      (Deficit) During
                                                                       Shares   Par Value             Capital      Development Stage
                                                               --------------------------------    --------------  -----------------
<S>                                                             <C>              <C>             <C>               <C>
BALANCE, November 5, 1982 (inception)                                      -     $   -             $     -            $     -
Sale of common stock, at par, to incorporators on November
  8,  1982                                                             1,470,000   14,700                -                  -
Sale of common stock, at $.10 per share, primarily to
  officers and employees from November 9, 1982 to November
  30, 1982                                                               390,000    3,900              35,100               -
Sale of common stock, at $2 per share, in private offering
  from  January 24, 1983 to March 28, 1983                               250,000    2,500             497,500               -
Sale of common stock, at $10 per share, in public offering on
  October 6, 1983, net of underwriting discounts of $1 per
  share                                                                  690,000    6,900           6,203,100               -
Sale of 60,000 warrants to representative of underwriters, at
  $.001 each, in conjunction with public offering                           -         -                    60               -
Costs incurred in conjunction with private and public
  offerings                                                                 -         -              (362,030)              -
Common stock issued, at $12 per share, upon exercise of
  57,200 warrants from February 5, 1985 to October 16, 1985,
  net of registration costs                                               57,200      572             630,845               -
Proceeds from sales of common stock by individuals from
  January 29, 1985 to October 4, 1985 under agreements with
  the Company,  net of costs incurred by the Company                        -          -              298,745               -
Restatement as of October 31, 1985 for three-for-one stock
  split                                                                5,714,400   57,144             (57,144)              -
Common stock issued, at $4 per share, upon exercise of 2,800
  warrants in December 1985                                                8,400       84              33,516               -
Sale of common stock, at market, to officers on January 9,
  1987 and April 22, 1987 and to members of their immediate
  families on July 28, 1987                                               67,350      674             861,726               -
Restatement as of July 31, 1987 for five-for-four stock split          2,161,735   21,617             (21,617)              -
Fractional share payments in conjunction with five-for-four
  stock split                                                               -          -               (1,345)              -
Sale of common stock, at market, to members of officers'
  immediate  families from September 10,1987 to December 4, 1990
  and to officers on October 29, 1987 and February 26, 1989              628,040    6,280           6,124,031               -
Sale of common stock, at market, to senior level
  personnel on February 26, 1989                                          29,850      299             499,689               -


                                                                                                                    Continued
</TABLE>


                                       6
<PAGE>
<TABLE>
<CAPTION>


                                 COPYTELE, INC.
                                 --------------
                         (Development Stage Enterprise)
                         ------------------------------
                   CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
                   -------------------------------------------
 FOR THE PERIOD FROM NOVEMBER 5, 1982 (INCEPTION) THROUGH APRIL 30, 1999 (UNAUDITED)
 -----------------------------------------------------------------------------------


                                    Continued
                                    ---------

                                                                                                    Additional        Accumulated
                                                                         Common Stock                 Paid-in      (Deficit) During
                                                                       Shares   Par Value             Capital      Development Stage
                                                               --------------------------------    --------------  -----------------
<S>                                                               <C>           <C>                 <C>             <C>
Sale of common stock, at market, to unrelated party on
  February 26, 1989 amended on March 10, 1989                             35,820     358               599,627               -
Restatement as of January 31, 1991 for
  two-for-one stock split                                             11,502,795  115,028             (115,028)              -
Sale of common stock, at market, to members of officers'
  immediate families from April 26, 1991 to October 27, 1992             261,453    2,615            2,788,311               -
Common stock issued upon exercise of warrants by
  members of officers' immediate families on various
  dates from September 1993 through March 1996                           579,800    5,798            2,651,462               -
Common stock issued upon exercise of stock options
  from December 16, 1992 to June 12, 1996                              4,535,340   45,353           28,197,223               -
Restatement as of June 17, 1996 for two-for-one stock split           28,382,183  283,822             (283,822)              -
Common stock issued upon exercise of warrants by
  members of officers' immediate families on various
  dates in July and October, 1996, and March 1997                        206,610    2,066            1,062,167               -
Common stock issued upon purchase of equipment                            15,000      150               74,850               -
Common stock issued upon  exercise of stock options from
  July 1996 to April 1999 under stock option plans, net
  of  registration costs                                               1,479,600   14,796            3,956,200               -
Sale of common stock, at market, to a related party and
  an unrelated party on April 30, 1999                                   400,000    4,000              596,000               -
Stock options granted to consultants                                        -         -                251,250               -
Accumulated (deficit) during development stage                              -         -                   -            ( 44,723,364)
                                                                 --------------- ---------------   ----------------    -------------
BALANCE, April 30, 1999                                               58,865,576  $588,656          $54,520,416        ($44,723,364)
                                                                 =============== ===============   ================    =============

</TABLE>

The accompanying notes to condensed financial statements are an integral part of
this statement.
                                       7
<PAGE>


                                 COPYTELE, INC.
                                 --------------
                         (Development Stage Enterprise)
                         ------------------------------
                 CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
                 ----------------------------------------------
<TABLE>
<CAPTION>


                                                                          For the six
                                                                          months ended                        For the period from
                                                                            April 30,                           November 5, 1982
                                                               --------------------------------------         (inception) through
                                                                      1999             1998                       April 30, 1999
                                                               ----------------- --------------------      -------------------------
<S>                                                                <C>               <C>                      <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Payments to suppliers, employees and
  consultants                                                       ($2,729,146)   ($4,391,355)                    ($52,176,488)
Interest received                                                        87,165        319,647                        4,857,461
                                                               ----------------- --------------------      -------------------------
Net cash (used in) operating activities                              (2,641,981)    (4,071,708)                     (47,319,027)
                                                               ----------------- --------------------      -------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchases of property and
  equipment                                                             (24,455)      (298,473)                      (2,007,614)
Disbursements to acquire certificates of deposit and
  marketable securities                                                (489,444)      (972,469)                     (13,535,443)
Proceeds from maturities of investments                                    -           970,808                       13,045,999
Investment made in Joint Venture                                           -              -                          (1,225,000)
                                                               ----------------- --------------------      -------------------------
Net cash (used in) investing activities                                (513,899)      (300,134)                      (3,722,058)
                                                               ----------------- --------------------      -------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of common stock and warrants, net of
  underwriting discounts of $690,000 related to initial
  public offering in October 1983                                       600,000          -                           18,247,369
Proceeds from exercise of stock options and warrants,
  net of registration disbursements                                     891,600          -                           36,600,083
Proceeds from sales of common stock by
  individuals under agreements with the
  Company, net of disbursements made by
  the Company                                                              -             -                              298,745
Disbursements made in conjunction with sales of stock                      -             -                             (362,030)
Fractional share payments in conjunction with stock split                  -             -                               (1,345)
                                                                ----------------- --------------------      ------------------------
Net cash provided by financing activities                             1,491,600          -                           54,782,822
                                                               ----------------- --------------------      -------------------------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                 (1,664,280)    (4,371,842)                       3,741,737


CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                      5,406,017     12,329,171                            -
                                                               ----------------- --------------------      -------------------------

CASH AND CASH EQUIVALENTS AT END OF
  PERIOD                                                             $3,741,737     $7,957,329                       $3,741,737
                                                               ================= ====================      =========================

                                                                                                                      Continued
</TABLE>
                                       8

<PAGE>
<TABLE>
<CAPTION>

                                 COPYTELE, INC.
                                 --------------
                         (Development Stage Enterprise)
                         ------------------------------
                 CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
                 ----------------------------------------------

                                    Continued



                                                                           For the six
                                                                          months ended                     For the period from
                                                                            April 30,                        November 5, 1982
                                                             ---------------------------------------       (inception) through
                                                                        1999           1998                  April 30, 1999
                                                             ------------------- -------------------  -------------------------
RECONCILIATION OF NET (LOSS) TO NET CASH (USED IN)
  OPERATING ACTIVITIES:
<S>                                                               <C>             <C>                         <C>
Net (loss)                                                          ($3,028,455)    ($3,751,887)                ($44,723,364)
Stock option compensation to consultants                                 61,650         179,700                      251,250
Loss from Joint Venture                                                 113,095         207,381                      992,148
Depreciation and amortization                                           139,442         146,935                    1,506,878
Amortization of discount on marketable
  securities                                                               -             23,273                        -
(Increase) decrease  in accrued interest
  receivable                                                             (9,610)          7,607                      (13,593)
(Increase) in inventory                                                (104,412)       (607,623)                  (2,823,627)
Decrease (increase) in prepaid expenses and
  other current assets                                                  238,119        (422,112)                    (666,537)
Decrease (increase) in long term amount due from Joint
  Venture                                                               110,858             -                     (2,980,770)
(Increase) decrease  in other assets                                     (5,494)         14,289                     (102,914)
(Decrease) increase in accounts payable
  and accrued liabilities                                              (157,174)        130,729                    1,241,502
                                                             ------------------- -------------------      ---------------------
Net cash (used in) operating activities                             ($2,641,981)    ($4,071,708)                ($47,319,027)
                                                             =================== ===================      =====================


</TABLE>

The accompanying notes to condensed financial statements are an integral part of
these statements.
                                       9

<PAGE>
<TABLE>
<CAPTION>


                                 COPYTELE, INC.
                                 --------------
                         (Development Stage Enterprise)
                         ------------------------------
                 CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
                 ----------------------------------------------

                                                                      For the three months
                                                                         ended April 30,
                                                                --------------------------------

                                                                        1999         1998
                                                                ---------------- ---------------
<S>                                                             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Payments to suppliers, employees and
  consultants                                                       ($1,311,611)  ($2,342,105)
Interest received                                                        37,282       129,540
                                                                ---------------- ---------------
Net cash (used in) operating activities                              (1,274,329)   (2,212,565)
                                                                ---------------- ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
Payments for purchases of property and
  equipment                                                             (16,153)      (44,093)
Disbursements to acquire certificates of deposit and marketable
  securities                                                               -         (972,469)
                                                                ---------------- ---------------
Net cash (used in) investing activities                                 (16,153)   (1,016,562)
                                                                ---------------- ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from sales of common stock and warrants                        600,000         -
Proceeds from exercise of stock options and
  warrants, net of registration disbursements                            52,950         -
                                                                ---------------- ---------------
Net cash provided by financing activities                               652,950         -
                                                                ---------------- ---------------

NET (DECREASE) IN CASH AND CASH EQUIVALENTS                            (637,532)   (3,229,127)
                                                                ---------------- ---------------

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                      4,379,269    11,186,456


CASH AND CASH EQUIVALENTS AT END OF PERIOD                           $3,741,737    $7,957,329
                                                               ================= ===============

RECONCILIATION OF NET (LOSS) TO NET CASH (USED IN)
OPERATING ACTIVITIES:
Net (loss)                                                          ($1,597,372)  ($1,815,061)
Loss from Joint Venture                                                  44,467        70,802
Depreciation and amortization                                            67,388        76,117
(Increase) decrease in accrued interest receivable                       (6,666)        2,015
Decrease (increase) in inventory                                        167,883      (161,298)
Amortization of discount on marketable securities                           -          (3,092)
Decrease (increase) in prepaid expenses and other
  current assets                                                        110,139      (212,011)
(Increase) in long term amount due from Joint Venture                    (1,125)          -
Decrease in other assets                                                    -             320
(Decrease) in accounts payable and accrued liabilities                  (59,043)     (170,357)
                                                               ----------------- ---------------
Net cash (used in) operating activities                             ($1,274,329)  ($2,212,565)
                                                               ================= ===============

The accompanying notes to condensed financial statements are an integral part of
these statements.

</TABLE>

                                       10
<PAGE>

                                 COPYTELE, INC.
                                 --------------
                         (Development Stage Enterprise)
                         ------------------------------
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                     ---------------------------------------
                           APRIL 30, 1999 (UNAUDITED)
                           --------------------------

(1)         Nature of business and other disclosures:
            ------------------------------------------

CopyTele, Inc. (the "Company"), which was incorporated on November 5, 1982, is a
development stage enterprise whose principal activities include the development,
production and marketing of MAGICOM(R) 2000, a telephone based  multi-functional
telecommunications  product  incorporating the Company's  E-Paper(TM) Flat Panel
Display  technology;  the  development of USS-900,  a hardware based  peripheral
digital  encryption  device,  and e-way,  a  peripheral  product  which is being
designed to provide  simultaneous  voice and handwriting,  Internet e-mail,  and
Caller ID; and the operations of Shanghai  CopyTele  Electronics  Co., Ltd. (the
"Joint  Venture" or "SCE"),  the  Company's 55% owned joint venture in Shanghai,
China.  The Company is also continuing its research and  development  activities
for additional  ultra-high  resolution flat panel displays,  including video and
color  displays,  and  coated  particles  which  could  potentially  be  used by
manufacturers of toners and pigments.

The Company is producing its telephone based multi-functional telecommunications
product, called MAGICOM(R) 2000, incorporating the Company's flat panel display,
called E-Paper(TM),  and associated proprietary hardware and software technology
and  marketing  the  product   through  its  United  States  and   international
distributor/dealer  network. The Company has also developed, in conjunction with
a Japanese company,  a small portable printer called MAGIC PRINTER.  The printer
is presently being produced for the Company by the Japanese company and is being
marketed by the Company through its distributor and dealer network, including in
China,  for use with MAGICOM(R)  2000 or in conjunction  with personal or laptop
computers.

The Company is proceeding  with the  development of a hardware based  peripheral
digital  encryption  system called the USS-900,  with technical  assistance from
Harris Corporation  ("Harris").  This device utilizes the digital  cryptographic
chip - the  Citadel(TM)  (a trademark of Harris) - which is capable of providing
high-grade information encryption.  The USS-900 has received UL and FCC approval
and is currently being tested by the Company for functionality and compatibility
which  is  expected  to  be  concluded  in  June  1999.  A  limited   number  of
pre-production USS-900 devices have been produced by the Company at its facility
in New York. The pre-production  USS-900 units are being utilized by the Company
for  demonstration  purposes in the United States.  To develop the USS-900,  the
Company  utilized its experience  derived from the development of its MAGICOM(R)
2000 and e-way products.  e-way is being developed as a screen based  peripheral
device to a computer,  telephone  or fax machine  which can be used as a display
for  handwriting  and keyboard  typing.  The Company has completed the design of
e-way and intends to produce a limited initial quantity for test marketing.

The Company plans to sell its products,  including the USS-900 and e-way if they
are   successfully   produced  and  test  marketed,   to  end-users   through  a
distributor/dealer network. All of the critical elements of the earnings process
for a product will be complete  when a  distributor/dealer  sells the product to
end-users.  The Company has had no sales since its inception other than sales of
a limited  quantity of the MAGICOM(R) 2000 and MAGIC PRINTER products to certain
distributors. Revenue will not be recorded on sales until the Company determines
that the product(s)  have been accepted by the end-users.  There is no assurance
that the Company will  generate  significant  revenues in the future,  will have
sufficient  revenues  to  generate a profit or that other  products  will not be
produced by other companies that will render the products of the Company and SCE
obsolete.  See "Safe Harbor  Statement Under the Private  Securities  Litigation
Reform  Act of 1995"  contained  in  Management's  Discussion  and  Analysis  of
Financial  Condition  and  Results  of  Operations  for  discussions   regarding
uncertainties  that may significantly  affect the results of operations,  future
liquidity and capital resources.

                                       11
<PAGE>

           Basis of Presentation
           ---------------------

The  condensed  financial  statements  have been  prepared  in  accordance  with
generally  accepted  accounting  principles  for  interim  financial  reporting.
Accordingly,  they do not include all of the information and footnotes  required
by generally accepted accounting  principles for complete financial  statements.
The  information  contained  herein is for the six and three month periods ended
April 30,  1999 and 1998 and for the period from  November  5, 1982  (inception)
through  April  30,  1999.  In the  opinion  of  the  Company,  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.  The  results of  operations  for interim  periods  may not  necessarily
reflect the annual  operations of the Company.  Reference is made to the October
31,  1998  audited  financial  statements  and  notes  thereto  included  in the
Company's Annual Report on Form 10-K for the fiscal year ended October 31, 1998,
for more  extensive  disclosures  than  contained in these  condensed  financial
statements.

Effective  October 31, 1998,  the Company  adopted SFAS No. 128,  "Earnings  Per
Share".  In accordance  with SFAS 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.  SFAS No.  128  requires  the  presentation  of both  Basic EPS and
Diluted  EPS on the face of the  statements  of  operations.  The  impact of the
adoption of this statement was not material to previously  reported EPS amounts.
Diluted EPS for all years  presented is the same as Basic EPS, as the  inclusion
of  the  impact  of  common  stock   equivalents  then   outstanding   would  be
anti-dilutive.


              Realizability of Assets
              -----------------------

During  fiscal  1998 and the six  months  ended  April  30,  1999,  the  Company
increased  its  inventory  to  approximately   $2,825,000  to  prepare  for  the
distribution of its MAGICOM(R) 2000 and MAGIC PRINTER  products.  Management has
recorded the Company's  MAGICOM(R)  2000 inventory at its current net realizable
value, which is based upon the current anticipated selling price of the product,
and provides for no further reductions of the selling price. To date,  shipments
of the  Company's  product  have  been  limited.  Accordingly,  there  can be no
assurance  that the Company  will not be required to further  reduce the selling
price of the  MAGICOM(R)  2000 below its current  carrying  value to  accomplish
certain  business  strategies,  which would require a further  reduction of such
carrying value.

In addition,  amounts due from SCE totaled approximately  $3,600,000 as of April
30, 1999.  The advances to SCE have  primarily  funded the purchase of inventory
components  to  manufacture   the  Company's   MAGICOM(R)   2000.  The  ultimate
realizability of amounts due from SCE are dependent, in part, on future sales of
the Company's  products.  The Company's  proportionate share of future losses in
the Joint Venture will continue to reduce the carrying  value of the  investment
in the Joint Venture until such amount is exhausted. If, after the Company fully
writes off its investment, it makes any additional investments,  such additional
investments will be charged directly to the statement of operations.

The Company is  continuing to evaluate the  realizability  of these assets on an
ongoing basis and will make such adjustments, as necessary, to reflect estimated
net realizable values based on current facts and circumstances.

              Amounts Due from Joint Venture
              ------------------------------

The  amounts  due  from  the  Joint  Venture  of  approximately  $3,600,000  and
$3,917,000, respectively, on the accompanying Condensed Balance Sheets represent
parts inventory,  such as the flat panel assembly  components,  purchased by the
Company  on  behalf  of SCE  which are  incorporated  into the  MAGICOM(R)  2000
product.
                                       12
<PAGE>

(2)          Joint Venture:
            ---------------

           Investment in Joint Venture
           ---------------------------

The Company has  contributed to SCE $1,225,000 in cash, and technology  that has
been valued for purposes of the Joint Venture at $700,000.  SCE does not reflect
the $700,000 in  technology  as an asset or equity  investment  in the condensed
financial  statements  presented  below. The other parties have contributed cash
aggregating  $1,575,000.  The Company has reflected its  investment in SCE under
the equity method of accounting and will  recognize  losses in SCE to the extent
of its cash investment. If future losses result in the write-off of the original
cash investment, and the Company makes additional investments,  such investments
will be charged directly to the statement of operations.



         Condensed Financial Information
         -------------------------------

Condensed  Balance  Sheets for SCE at April 30,  1999 and  October  31, 1998 and
Condensed  Statements  of  Operations  for the six month periods ended April 30,
1999 and 1998 are as follows:

<TABLE>
<CAPTION>

                         Condensed Balance Sheets
                         -------------------------
                                (Unaudited)
                                -----------
                                                                                April 30,              October 31,
                                                                                  1999                    1998
                                                                            -----------------       ------------------
         <S>                                                                <C>                    <C>
          Cash                                                                 $   68,823             $   51,760
          Accounts receivable from CopyTele, Inc.                                 619,050                661,592
          Inventories                                                           3,313,119              3,568,202
          Other current assets                                                     15,444                 68,581
          Land occupancy rights, net of amortization; fixed assets,
            net of depreciation and other non-current  assets                   2,016,584              2,105,583
                                                                            -----------------       ------------------
                   Total Assets                                                $6,033,020             $6,455,718
                                                                            =================       ==================

          Short term loans                                                     $1,120,126             $   999,316
          Accounts payable and accrued liabilities                                316,979                 338,052
          Due to CopyTele, Inc.                                                 3,599,820               3,916,628
          Capital                                                                 996,095               1,201,722
                                                                            =================       ==================
                   Total Liabilities and Capital                               $6,033,020             $ 6,455,718
                                                                            =================       ==================

                      Condensed Statements of Operations
                      ----------------------------------
                                   (Unaudited)
                                   -----------                                       For the six months ended
                                                                            ------------------------------------------
                                                                                April 30,               April 30,
                                                                                  1999                    1998
                                                                            -----------------       ------------------

          Net Sales                                                            $     -                 $    -
          Operating (Loss)                                                      (166,684)               (361,296)
          Other Income (Expense)                                                 (38,943)                (15,760)
                                                                            =================       ==================
                   Net (Loss)                                                  $(205,627)              $(377,056)
                                                                            =================       ==================

</TABLE>
                                       13
<PAGE>
The short term loans bear interest at floating rates of  approximately  5.86% to
7.13% per annum at April 30,  1999.  These loans will mature in May and November
of 1999,  and February 2000 and are secured by a land-use  contract and building
owned by SCE.

The cumulative net (loss)  incurred by SCE since its inception on April 10, 1995
is $(1,803,905).

Any  valuation  reserves  related to the  Company's  inventory  will result in a
similar  charge to the  statement of operations  of SCE, as the  operations  and
certain assets of both entities are inter-dependent.  Such a charge would result
in a decrease to the Company's investment in SCE.


(3)         Shareholders' Equity:
            ---------------------

           Stock option plans:
           -------------------

The Company has two stock option plans,  the 1987 Stock Option Plan,  adopted by
the Board of Directors  on April 1, 1987 (the "1987  Plan"),  and the  CopyTele,
Inc. 1993 Stock Option Plan, adopted by the Board of Directors on April 28, 1993
(the "1993 Plan").

SFAS No. 123,  "Accounting for Stock Based Compensation",  encourages,  but does
not require,  companies to record  compensation  cost for  stock-based  employee
compensation  plans at fair value. The Company has chosen to continue to account
for  stock-based   employee   compensation  using  the  intrinsic  value  method
prescribed in Accounting  Principles  Board Opinion ("APB") No. 25,  "Accounting
for Stock Issued to Employees",  and related interpretations.  Compensation cost
for stock options is measured as the excess,  if any, of the quoted market price
of the Company's stock at the date of grant over the amount an employee must pay
to acquire the stock.  In  accordance  with APB Opinion No. 25, no  compensation
cost has been recognized by the Company,  as all option grants to employees have
been made at the fair market value of the Company's stock on the date of grant.

Options  granted  to  non-employee  consultants  are  accounted  for  using  the
fair-value method required by SFAS No. 123.  Compensation  expense recognized in
the six months ended April 30, 1999 and April 30, 1998 was $61,650 and $179,700,
respectively,  and is included in general and  administrative  expenses  for the
periods.

           Sales of common stock and issuance of warrants:
           -----------------------------------------------

On April 30 1999,  the Company  sold  400,000  shares of its common stock in two
private  placements for $1.50 per share,  or an aggregate of $600,000,  of which
300,000  shares were sold to a nominee for  election to the  Company's  Board of
Directors at the 1999 Annual Meeting of  Stockholders.  In conjunction  with the
sales of common stock, the Company issued warrants to purchase 400,000 shares of
common  stock at an exercise  price of $1.50 per share which expire on April 30,
2001.

                                       14
<PAGE>

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


        Safe Harbor Statement Under the Private Securities Litigation Reform Act
        ------------------------------------------------------------------------
        of 1995.
        --------


Certain   statements  in  this   Quarterly   Report  on  Form  10-Q   constitute
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and
unknown  risks,  uncertainties  and other  factors  which  may cause the  actual
results,  performance or achievements of the Company to be materially  different
from any future  results,  performance or  achievements  expressed or implied by
such  forward-looking  statements.  Such  factors  include,  among  others,  the
following:  production capability by SCE and the Japanese supplier of MAGICOM(R)
2000 and MAGIC  PRINTER,  respectively;  the  ability  of a second  supplier  to
produce and supply a lower cost printer;  long-term product  performance and the
capability of the Company,  SCE, its  distributors and its dealers to adequately
service  the  Company's  products;  the ability of  distributors  and dealers to
market their contracted quantities of the Company's products in their respective
territories;  the ability of the Company and SCE to obtain all required  foreign
government  approvals;  the  volatility  of  foreign  currency  exchange  rates;
political and economic stability in targeted marketing territories;  the ability
of the Company to reduce the cost of  MAGICOM(R)  2000 and the related  printer;
political  and  economic  stability  in China  and  Russia  in  which  research,
development or production  activities are taking place on behalf of the Company;
the ability of the Company to  commercially  develop and  establish a market for
its new products under development including the USS-900 and e-way; the possible
development  of  competitive  products that could render the Company's  products
obsolete or  unmarketable;  and the ability of the Company to obtain  additional
financing.  See  "Business"  and Note 1 to the  Company's  Financial  Statements
contained in the Company's  Annual Report on Form 10-K for the fiscal year ended
October 31, 1998 for discussions regarding  uncertainties that may significantly
affect the results of operations, future liquidity and capital resources.

         General
         -------

The Company,  which is a  development  stage  enterprise,  was  incorporated  on
November 5, 1982. The Company's  principal  activities  include the development,
production and marketing of MAGICOM(R) 2000, a telephone based  multi-functional
telecommunications  product  incorporating the Company's  E-Paper(TM) Flat Panel
Display  technology;  the  development of USS-900,  a hardware based  peripheral
digital  encryption  device,  and e-way,  a  peripheral  product  which is being
designed to provide  simultaneous  voice and handwriting,  Internet e-mail,  and
Caller ID; and the operations of Shanghai  CopyTele  Electronics  Co., Ltd. (the
"Joint  Venture" or "SCE"),  the  Company's 55% owned joint venture in Shanghai,
China which is accounted for under the equity method of accounting.  The Company
is also  continuing  its  research and  development  activities  for  additional
ultra-high  resolution flat panel displays,  including video and color displays,
and coated particles which could  potentially be used by manufacturers of toners
and pigments. There can be no assurance,  however, that the Company's efforts in
these areas will be successful. There is also no assurance that the Company will
generate  significant  revenues in the future,  will have sufficient revenues to
generate  profit or that other products will not be produced by other  companies
that will render the products of the Company or SCE obsolete or unmarketable.

The Company has proceeded with the  development  of a hardware based  peripheral
digital  encryption  system called the USS-900,  with technical  assistance from
Harris Corporation  ("Harris").  This device utilizes the digital  cryptographic
chip - the  Citadel(TM)  (a trademark of Harris) - which is capable of providing
high-grade information encryption.  The USS-900 has received UL and FCC approval
and is currently being tested by the Company for functionality and compatibility
which  is  expected  to  be  concluded  in  June  1999.  A  limited   number  of
pre-production USS-900 devices have been produced by the Company at its facility
in New York. The pre-production  USS-900 units are being utilized by the Company
for  demonstration  purposes in the United States.  To develop the USS-900,  the
Company  utilized its experience  derived from the development of its MAGICOM(R)
2000 and e-way products.  e-way is being developed as a screen based  peripheral
device to a computer,  telephone  or fax machine  which can be used as a display
for  handwriting  and keyboard  typing.  The Company has completed the design of
e-way and intends to produce a limited initial quantity for test marketing.

In reviewing  Management's  Discussion  and Analysis of Financial  Condition and
Results of Operations,  reference is made to the Company's  Condensed  Financial
Statements and the notes thereto.
                                       15
<PAGE>

         Results of Operations
         ---------------------

The Company plans to sell its products,  including the USS-900 and e-way if they
are   successfully   produced  and  test  marketed,   to  end-users   through  a
distributor/dealer network. All of the critical elements of the earnings process
for a product will be complete  when a  distributor/dealer  sells the product to
end users.  The Company has had no sales since its inception other than sales of
a limited  quantity of the  MAGICOM(R)  2000 and MAGIC  PRINTER  products to its
distributors.  Revenue  will not be  recorded  on these  sales,  which  were not
material, until the Company determines that the product(s) have been accepted by
the end-users.

Selling, general and administrative  expenses,  excluding the loss from SCE, for
the six month periods ended April 30, 1999 and 1998  decreased by  approximately
$821,000,   to   approximately   $3,012,000  in  the  fiscal  1999  period  from
approximately  $3,833,000  in the fiscal  1998  period.  These  amounts  include
research,   development  and  tooling  costs  of  approximately  $1,479,000  and
$2,106,000 for the fiscal 1999 and 1998 periods, respectively, as well as normal
operating expenses. Selling, general and administrative expenses,  excluding the
loss from  SCE,  for the  three  month  periods  ended  April 30,  1999 and 1998
decreased by approximately  $278,000, to approximately  $1,597,000 in the fiscal
1999 period  from  approximately  $1,875,000  in the fiscal  1998  period.  Also
included  in these  amounts  are  research,  development  and  tooling  costs of
approximately  $751,000  and  $1,006,000  for the fiscal 1999 and 1998  periods,
respectively,  as well as  normal  operating  expenses.  From  November  5, 1982
(inception) through April 30, 1999 selling, general and administrative expenses,
excluding  the  loss  from  SCE,  were   approximately   $48,602,000   including
approximately  $29,790,000 for research,  development and tooling costs, as well
as normal operating expenses.

The decreases in selling,  general and  administrative  expenses,  excluding the
loss from SCE, of  approximately  $821,000 and $278,000 during the six and three
month periods,  respectively, in the fiscal 1999 periods as compared to the same
periods in fiscal 1998 resulted  primarily  from decreases in  expenditures  for
engineering  supplies,  marketing  costs,  professional  fees,  and research and
development for video and color flat panel displays.

Engineering  supplies  decreased  in the fiscal 1999  periods as compared to the
fiscal 1998  periods  primarily as a result of reduced  purchases of  components
used to develop engineering changes to MAGICOM(R) 2000. This decrease was offset
somewhat by the cost to eliminate used  components as a result of these changes.
Engineering  service  costs  increased in the fiscal 1999 periods as compared to
the fiscal 1998 periods as a result of the USS-900 development effort. Marketing
costs for the  MAGICOM(R)  2000 decreased in the fiscal 1999 periods as compared
to the fiscal 1998 periods as a result of the elimination of non-recurring costs
associated  with marketing  start-up costs and reduced travel and  entertainment
costs.  Professional fees were also lower in the fiscal 1999 periods as compared
to the  fiscal  1998  periods  as a result of lower  fees  incurred  for  legal,
accounting and patent related services.  Research and development costs for flat
panel  displays  decreased  in the  aggregate  during  the six month  comparable
periods  principally as a result of lower costs incurred in connection  with the
development  of the Company's  solid state and optical video and color  display.
This decrease was offset  somewhat by higher costs in the field emission  (FED),
vacuum  fluorescent  (VFD) and liquid crystal (LCD) flat panel displays programs
under  development.  There was a slight  increase in the three month fiscal 1999
period as  compared  to the  fiscal  1998  period.  These  costs  vary over time
depending  on the  phase of  development  of each  product  or  technology.  The
Company's   non-cash  charge  to  earnings  for  stock  based   compensation  to
consultants  mandated  by SFAS No. 123 was lower in the fiscal  1999  periods as
compared to the fiscal 1998 periods.

                                       16
<PAGE>
Employee  compensation  and related  costs  increased in the fiscal 1999 periods
over the fiscal 1998 periods as a result of the hiring of three additional sales
and marketing  personnel,  one additional paid  engineering  employee and higher
payroll taxes  associated  with stock option  exercises.  Some employee  benefit
programs  incurred  rate  increases  for the  fiscal  1999  periods.  Rents also
increased slightly as a result of annual escalations in certain leases. A charge
to earnings  was  recorded in order to bring the  valuation of inventory in line
with current estimates.

The  Company's  portion of SCE's loss for the six month  periods ended April 30,
1999 and 1998 decreased by approximately  $94,000 to  approximately  $113,000 in
the fiscal 1999 period from  approximately  $207,000 in the fiscal 1998  period.
The Company's  portion of SCE's loss for the three month periods ended April 30,
1999 and 1998 also decreased by approximately  $27,000 to approximately  $44,000
in  the  fiscal  1999  period  as  compared  to  the  prior  year's   period  of
approximately  $71,000.  The decrease in the losses was  primarily the result of
cost reductions,  production  efficiencies and limited production  activity with
respect to the MAGICOM(R) 2000. From November 5, 1982 (inception)  through April
30, 1999 the Company's portion of SCE's losses were approximately  $992,000. The
Company's  proportionate  share of future  losses in SCE will continue to reduce
the  carrying  value of the  Company's  investment  in SCE until such  amount is
exhausted.  If, after the Company fully writes off its investment,  it makes any
additional investments,  such additional investments will be charged directly to
the statement of operations.

While there is no formal agreement,  the Company's Chairman of the Board and its
President have waived salary and related  pension  benefits for an  undetermined
period of time commencing  November 1985. Four other  individuals,  including an
officer and three senior level personnel,  then employed at the Company,  waived
salary and related  pension  benefits from January 1987 through  December  1990.
While there are no formal agreements,  commencing January 1991 these individuals
waived such rights for an  undetermined  period of time and they did not receive
salary or related pension benefits through December 1992. The Company's Chairman
of the Board,  its President and the three senior level  personnel  continued to
waive such rights commencing in January 1993 for an undetermined period of time.
From February 1993 to September  1998 one  additional  employee also waived such
salary and benefit rights.

Interest  income  during the six month  periods  ended  April 30,  1999 and 1998
decreased by  approximately  $192,000  from  approximately  $289,000  during the
fiscal 1998 period as compared to $97,000  during the fiscal 1999 period.  There
was also a  decrease  of  approximately  $87,000 in the three  month  comparable
periods ended April 30, 1999 and 1998. The decreases  resulted  primarily from a
decrease in average funds  available for investment  and lower  interest  rates.
Funds  available  for  investment  during the six and three month  periods ended
April 30, 1999 and 1998, on a monthly weighted average basis, were approximately
$4,400,000,   $10,425,000,   $4,152,000  and   $9,475,000,   respectively.   The
investments selected by the Company are principally treasury bills, money market
accounts and commercial paper.

                                       17
<PAGE>

         Year 2000 Issue
         ---------------

The Year 2000 issue  relates to computer  systems  programmed  to use two digits
rather  than four digits to define the  applicable  year.  Computer  systems and
other programmable devices utilizing  date/time-sensitive  software and hardware
may  recognize  a date using "00" as the year 1900  rather  than Year 2000 which
could  result in the  computer or device  shutting  down,  performing  incorrect
computations or performing inconsistently.

The Company is continuing  the process of  determining  its risks  regarding the
Year 2000 issue. Once the assessment is complete, the Company will formulate and
begin to  implement a plan to correct or  establish  contingencies  for any Year
2000  problems it  uncovers.  However,  the Company  cannot  guarantee  that its
remediation efforts will prevent the occurrence of all Year 2000 problems.

The  Company   utilizes   brand  name  personal   computers  and   predominately
off-the-shelf software to perform its daily functions.  An initial assessment of
the hardware  indicates  that the hardware is already Year 2000  compliant,  and
non-compliant  system operating software will be compliant with the installation
of readily available updates.  The Company's financial software has already been
upgraded to be Year 2000  compliant.  The Company's  MAGICOM(R)  2000 product is
Year  2000  compliant.  SCE has  performed  their  initial  assessment  and will
implement a plan to correct deficiencies which do not appear to be material.

The Company has  several  material  third  party  relationships  primarily  with
financial institutions, utilities, and telecommunications companies. The Company
is planning to take reasonable  steps to verify the Year 2000 readiness of these
companies.  The  Company is in the  process  of  contacting  its key  customers,
suppliers and vendors regarding their state of readiness.

The initial cost to begin the assessment process and the cost expended to update
some items has not been  material to date.  The Company  believes that its total
cost to test and  correct  any Year 2000  deficiencies  will be in line with its
annually budgeted expense for  computerization and is estimating the cost not to
exceed $20,000.

Failure by the Company to resolve a material Year 2000 issue could result in the
interruption or failure of certain business activities or operations,  and could
materially  adversely affect the financial  condition,  results of operation and
cash flow of the Company.  If an interruption or failure does occur,  the extent
of the  Company's  exposure  would  depend  primarily  upon the time it takes to
remedy the problem.  Based on the  Company's  current  knowledge of its systems,
operations and third party  relationships,  the Company does not anticipate that
the Year 2000 issue will have a material adverse impact on the Company.

The Company  contemplates  formulating a Year 2000 contingency plan in the event
of  possible  interruptions  in  business  operations.  This  plan is  currently
expected to be  completed by the middle of calendar  year 1999.  There can be no
assurance,  however,  that the  Company  will be able to develop or  implement a
successful  contingency  plan addressing the Year 2000 issue or that such a plan
will be economically feasible.
                                       18
<PAGE>

         Liquidity and Capital Resources
         -------------------------------

Since its inception,  the Company has met its liquidity and capital  expenditure
needs  primarily  from the  proceeds of sales of its common stock in its 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 pursuant to the 1987 Plan and the 1993 Plan.

During the six month period ended April 30, 1999, the Company received  proceeds
aggregating  approximately $891,600 from the exercise of stock options under the
1993 Plan to purchase  shares of its common stock and $600,000 from sales of its
common stock in private  placements.  During the period from May 1, 1999 through
June 7, 1999 the Company received additional proceeds aggregating  approximately
$390,000 from the exercise of stock options  pursuant to the 1993 Plan.  Working
capital decreased by approximately  $1,160,000 from approximately  $7,560,000 at
October 31, 1998 to  approximately  $6,400,000  at April 30, 1999 as a result of
the loss  incurred  for the six month  period ended April 30, 1999 offset by the
proceeds received in the same period.

The Company's  operations used  approximately  $2,640,000 in cash during the six
month  period  ended  April 30,  1999.  The  current  working  capital  includes
approximately  $4,230,000 of cash and marketable  securities,  and approximately
$711,000  (net of  approximately  $619,000  due to SCE) of accounts  payable and
accrued liabilities.  The Company believes that these net cash resources will be
sufficient to continue its operations,  as presently being  conducted,  into the
second quarter of fiscal 2000 after giving effect to  anticipated  reductions in
SCE's requirements for components purchases, which amounted to $1,275,000 during
fiscal  1998,  and  reductions  in  administrative  and  support  personnel,  if
necessary.

Management  has recorded the Company's  inventory at its current net  realizable
value,  which  is  based  upon  the  current  anticipated  selling  price of the
Company's  MAGICOM(R) 2000 units, and provides for no further  reductions of the
selling price of the product.  To date,  shipments of the Company's product have
been limited.  Accordingly,  there can be no assurance that the Company will not
be required to further reduce the selling price of the MAGICOM(R) 2000 below its
current  carrying value to accomplish  certain  business  strategies which would
require a further  reduction of such carrying  value.  In addition,  amounts due
from SCE totaled approximately  $3,600,000 as of April 30, 1999. The advances to
SCE have  primarily  funded the purchase of inventory  components to manufacture
the Company's  MAGICOM(R)  2000. The ultimate  realizability of amounts due from
SCE are also dependent,  in part, on future sales of the Company's products. The
Company  will  continue  to evaluate  the  realizability  of these  assets on an
ongoing basis and will make such adjustments, as necessary, to reflect estimated
net realizable values based on current facts and circumstances.

The Company is seeking to improve its  liquidity  through the sale of  products,
the collection of amounts due from SCE, and through possible sales of its common
stock, each as more fully described below.

In an effort to stimulate  sales,  the Company has reduced the selling  price of
MAGICOM(R)  2000 and  MAGIC  PRINTER  and is  attempting  to  lower  the cost of
producing  these  products so that further  price  reductions  may be made.  The
Company  is  hopeful,  although  there is no  assurance,  that  with  the  price
reductions  and the  addition of the  USS-900  encryption  device,  if it can be
successfully produced and marketed, sales of MAGICOM(R) 2000 will increase.

The amounts due from SCE are  primarily  costs related to the purchase by SCE of
components for use in MAGICOM(R) 2000 units. It is expected,  although there can
be no assurance, that SCE will pay the Company during the current and succeeding
year through the sales of units and financing from banks. SCE repaid the Company
approximately  $226,000 in the six months ended April 30, 1999.  As of April 30,
1999, the Company owed SCE approximately  $619,000 which when paid would be used
by SCE to repay the Company.  Sales of units by SCE to the Company may result in
an increase  in the  Company's  inventory  before the units are then sold by the
Company in the ordinary course of its business.

                                       19
<PAGE>
The Company may also attempt to raise  additional  funds, if necessary,  through
private sales of its common stock at offering  prices at or near the then market
price of the Company's  stock.  The market price of the  Company's  stock at the
time of the sales  would  affect the  amount of  dilution  that would  result to
stockholders  from such  sales.  There can be no  assurance,  however,  that the
Company will be able to consummate any future private sales of its common stock.

The NASD  requires  that the  Company  maintain  a minimum  of $4 million of net
tangible assets to maintain its NASDAQ-NMS  listing. If the Company's stock were
delisted, the delisting could potentially have an adverse affect on the price of
the  Company's  common  stock and could  adversely  affect the  liquidity of the
shares held by the Company's stockholders.  The Company anticipates that it will
seek additional sources of funding, when necessary, in order to satisfy the NASD
requirements.

The Company's estimated funding capacity indicated above assumes, although there
is no assurance,  that the waiver of salary and pension benefits by the Chairman
of the Board,  the  President  and senior level  personnel  will  continue.  The
Company  anticipates  that it may  require  additional  funds  to  continue  its
research and development  activities,  maintain the NASD funding requirement and
participate  in SCE beyond its  initial  capital  contribution.  There can be no
assurance  that  adequate  funds will be  available  to the Company or that,  if
available,  the Company will be able to obtain such funds on favorable terms and
conditions. The Company currently has no definitive arrangements with respect to
additional financing.

SCE required an initial  aggregate  capital  investment of  $3,500,000  from the
parties  to the joint  venture.  The Joint  Venture  Agreement  contemplates  an
additional  $3,500,000  of funding  which may be borrowed  from banks,  of which
$1,120,000  has  been  borrowed  to  date.   Short-term  loans  aggregating  the
$1,120,000 are from a Chinese bank, secured by a land-use contract with the Land
Administration  Bureau of Shanghai County and the building,  and from one of the
Chinese parties. The Company has contributed  $1,225,000 in cash, and technology
valued for the purposes of SCE at $700,000,  and the Chinese parties contributed
$1,575,000 in cash to SCE. SCE may require additional  capitalization  depending
upon the nature and extent of its business activities. There can be no assurance
that  adequate  funds will be available  to SCE,  including  any future  capital
contributions,  if any,  beyond its initial  capital  contributions  or that, if
available,  SCE  will be able to  obtain  such  funds  on  favorable  terms  and
conditions.

                                       20
<PAGE>



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

Item 2. Changes in Securities and Use of Proceeds
-------------------------------------------------

Recent Sales of Unregistered Securities
---------------------------------------

On April 30, 1999 the Company issued and sold 400,000 shares of Common Stock for
a purchase  price of $1.50 per share,  or an aggregate  of $600,000.  The shares
were sold to two individuals,  one of whom was Lewis H. Titterton, a nominee for
election  as  a  director  of  the  Company  at  the  1999  Annual   Meeting  of
Stockholders,  who purchased  300,000 shares.  In conjunction  with the sales of
Common Stock,  the Company issued Warrants to purchase  400,000 shares of Common
Stock at an exercise price of $1.50 per share which expire on April 30, 2001, of
which a Warrant for 300,000  shares was issued to Mr.  Titterton.  The shares of
Common  Stock  and  Warrants  were  offered  and sold in  reliance  upon the the
exemption from registration under Section 4(2) of the Securities Act of 1933, as
amended, relative to sales by an issuer not involving a public offering.

A copy of the Stock  Subscription  Agreement,  dated April 27, 1999, between the
Company  and  Mr.  Titterton,  including  the  form  of  Warrant  issued  to Mr.
Titterton, is filed as an Exhibit to this Report.


Item 6.  Exhibits and Reports on Form 8-K.
        ----------------------------------

        (a)      Exhibits
                 --------

                 10.11 -   Stock  Subscription  Agreement dated April 27, 1999
                           including form of Warrant, between CopyTele,  Inc.
                           and Lewis H. Titterton,   a nominee  for  election
                           as  Director  at  the  1999 Annual  Meeting  of
                           Stockholders.


                 27 -      Financial Data Schedule

        (b)      Reports on Form 8-K.
                 --------------------

                 No reports on Form 8-K were filed for the
                 Company during the quarter ended April 30, 1999.


                                       21

<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,
                                 Chief Executive Officer
                                 and Director (Principal
June 14, 1999                    Executive Officer)


                                 By:/s/ FRANK J. DISANTO
                                 -----------------------
                                 Frank J. DiSanto
June 14, 1999                    President and Director

                                 By:/s/ GERALD J. BENTIVEGNA
                                 ---------------------------
                                 Gerald J. Bentivegna
                                 Vice President - Finance,
                                 Chief Financial Officer and
                                 Director (Principal Financial
June 14, 1999                    and Accounting Officer)


                                       22

<PAGE>

                                  Exhibit Index
                                  -------------

Exhibit
Number            Description
-------           ------------

10.11             Stock Subscription Agreement dated April 27, 1999 including
                  form of Warrant, between CopyTele, Inc.  and Lewis H.
                  Titterton, a nominee for election as Director at the 1999
                  Annual Meeting of Stockholders


<PAGE>

EXHIBIT 10.11
-------------

THE SECURITIES  REFERRED TO HEREIN HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933,  AS AMENDED (THE "ACT"),  AND MAY NOT BE OFFERED OR SOLD UNLESS THE
SECURITIES ARE REGISTERED  UNDER THE ACT, OR AN EXEMPTION FROM THE  REGISTRATION
REQUIREMENTS OF THE ACT IS AVAILABLE.


                                 COPYTELE, INC.
                          STOCK SUBSCRIPTION AGREEMENT


         This Stock Subscription Agreement (this "Agreement"), dated as of April
27, 1999, is entered into by and between CopyTele,  Inc., a Delaware corporation
(the "Company"), and Lewis H. Titterton (the "Subscriber").

         The  Company has offered  for sale,  and the  Subscriber  has agreed to
purchase,  300,000  shares (the  "Shares") of common  stock,  par value $.01 per
share (the  "Common  Stock"),  of the Company and a Warrant (the  "Warrant")  to
purchase  300,000 shares of Common Stock (the "Warrant  Shares").  In connection
therewith, the Company and the Subscriber hereby agree as follows:

               1. Purchase   and  Sale  of   Shares.   Upon  the  basis  of  the
representations  and warranties,  and subject to the terms and  conditions,  set
forth herein, the Company agrees to issue and sell the Shares and the Warrant to
the Subscriber on the Closing Date (as hereinafter  defined) at a purchase price
of $1.50 per share of Common Stock,  or an aggregate  purchase price of $450,000
(the "Subscription Price"), and the Subscriber agrees to purchase the Shares and
the Warrant from the Company on the Closing Date at the Subscription Price.

               2. Closing.  The closing of the  purchase  and sale of the Shares
shall take place at 10:00 a.m.,  New York City time,  on April 30, 1999,  at the
offices of the Company at 900 Walt Whitman Road, Huntington,  New York 11746, or
on such  other  date or at such  other  time or  place  as the  Company  and the
Subscriber  may agree upon in writing  (such time and date of the closing  being
referred to herein as the  "Closing  Date").  Upon  payment of the  Subscription
Price in full in the form of cash or  certified  or bank  check  payable  to the
order of the Company,  the Company will deliver to the Subscriber as promptly as
practicable  (but in no event later than fifteen (15) days following the date of
payment in full of the  Subscription  Price) (i) a certificate  or  certificates
representing  the Shares,  registered in the name of the Subscriber,  and (ii) a
Warrant  granting the Subscriber the right to purchase the Warrant Shares at the
purchase price per share of $1.50,  expiring two (2) years following the Closing
Date,  in the form  attached  hereto as Exhibit A, the terms and  conditions  of
which are agreed to by the Subscriber.

               3. Representations  and  Warranties  of the Company.  The Company
represents and warrants that:

                    (a)    no consent,  approval,  authorization or order of any
         court,  governmental  agency or body or arbitrator having  jurisdiction
         over the Company or any of the Company's affiliates is required for the
         execution  of  this  Agreement  or the  performance  of  the  Company's
         obligations hereunder,  including,  without limitation, the sale of the
         Shares to the Subscriber;

<PAGE>

                    (b)    neither  the sale of the Shares and the  Warrant  nor
         the  performance of the Company's  other  obligations  pursuant to this
         Agreement  will  violate,  conflict  with,  result  in a breach  of, or
         constitute  a default (or an event  that,  with the giving of notice or
         the lapse of time or both,  would  constitute a default)  under (i) the
         certificate of incorporation or bylaws of the Company, (ii) any decree,
         judgment,  order or determination of any court,  governmental agency or
         body, or arbitrator having  jurisdiction over the Company or any of the
         Company's  properties  or  assets,  (iii)  any  law,  treaty,  rule  or
         regulation applicable to the Company (other than the federal securities
         laws,  representations and warranties with respect to which are made by
         the Company  solely in paragraphs (f) through (j) of this Section 3) or
         (iv) the  terms of any  bond,  debenture,  note or  other  evidence  of
         indebtedness,  or any  agreement,  stock option or other  similar plan,
         indenture,  lease, mortgage, deed or trust or other instrument to which
         the Company is a party or  otherwise  bound or to which any property of
         the Company is subject;

                    (c)    the Company has or, prior to the  Closing,  will have
         taken all  corporate  action  required to authorize  the  execution and
         delivery  of this  Agreement  and the  performance  of its  obligations
         hereunder;

                    (d)    the  Company has duly  authorized  the Shares and the
         Warrant  Shares and, when issued and  delivered in accordance  with the
         terms of the Company's  certificate of  incorporation  and delivered to
         and paid for by the Subscriber in accordance  with the terms hereof and
         the Warrant,  respectively,  the Shares and the Warrant  Shares will be
         duly  and  validly  issued,  fully  paid  and  non-assessable,  and the
         issuance  of the Shares and the  Warrant  Shares will not be subject to
         any preemptive or similar rights;

                    (e)      the Shares and the Warrant  Shares will be free and
         clear of any  security  interest,  lien,  claim or other encumbrance;

                    (f)    the  sale  of the  Shares  and  the  Warrants  by the
         Company  are not part of a plan or  scheme  to evade  the  registration
         requirements of the Securities Act of 1933, as amended (the "Act");

                    (g)    neither the  Company nor any person  acting on behalf
         of the  Company has offered or sold any of the Shares or the Warrant by
         any form of general solicitation or general advertising;

                    (h)    the  Company  has  offered the Shares and the Warrant
         for sale only to  "accredited  investors,"  as such term is  defined in
         Rule  501(a)  under  the  Act,  who by  reason  of their  business  and
         financial experience have such knowledge, sophistication and experience
         in business and financial  matters as to be capable of  evaluating  the
         merits and risks of the  investment in the Shares,  the Warrant and the
         Warrant Shares;

                    (i)    the  Company's  Annual Report on Form 10-K (the "Form
         10-K") for the fiscal year ended October 31, 1998 fairly and accurately
         presents  the  Company's  business  as of  the  date  thereof  and  its
         financial  condition and results of operation through October 31, 1998,
         and the Form 10-K does not contain any untrue  statement  of a material
         fact or omit to state a material fact required to be stated  therein or
         necessary to make the statements therein not misleading;

                    (j)    the financial  statements of the Company  included in
         the Form 10-K, including the schedules and notes thereto, comply in all
         material respects with the requirements of the Securities  Exchange Act
         of 1934, as amended,  and have been  prepared,  and fairly  present the
         financial  condition  and results of  operations  and cash flows of the
         Company  and  its  subsidiaries  at the  respective  dates  and for the
         respective  periods  indicated,  in accordance with generally  accepted
         accounting principles consistently applied throughout such periods; and

                                       2
<PAGE>

                    (k)    except as set forth in the Form 10-K,  since  October
         31, 1998 (i) the Company has not  incurred  any  material  liabilities,
         direct  or  contingent,  and (ii)  there has been no  material  adverse
         change in the properties,  business,  results of operations,  condition
         (financial  or other),  affairs or  prospects  of the  Company  and its
         subsidiaries, taken as a whole.

                  The Company has not made any  representations or warranties to
the Subscriber,  and the Subscriber has not relied upon any  representations  or
warranties of the Company, except as expressly set forth in this Section 3.

              4.  Representations   and  Warranties  of  the   Subscriber.   The
Subscriber represents and warrants that:

                    (a)       the  purchase of the Shares and the Warrant by the
         Subscriber  is not part of a plan or scheme to evade the registration
         requirements of the Act;

                    (b)    the Subscriber is an  "accredited  investor," as such
         term is  defined  in Rule  501(a)  under the Act,  who by reason of its
         business and financial  experience has such  knowledge,  sophistication
         and  experience in business and  financial  matters as to be capable of
         evaluating  the merits and risks of the  investment in the Shares,  the
         Warrant and the Warrant Shares and, having had access to or having been
         furnished  with all such  information  as it has  considered  necessary
         (including,  without limitation,  the Form 10-K), has concluded that it
         is able to bear those risks;

                    (c)    the Subscriber  understands that (i) the Shares,  the
         Warrant and the Warrant Shares have not been  registered  under the Act
         and may not be offered or sold  unless  registered  under the Act or an
         exemption from the  registration  requirements of the Act is available,
         (ii) if any transfer of the Shares,  the Warrant or the Warrant  Shares
         is to be made in reliance on an  exemption  under the Act,  the Company
         may require an opinion of counsel satisfactory to it that such transfer
         may be made  pursuant  to such  exemption  and  (iii) so long as deemed
         appropriate  by the  Company,  the Shares,  the Warrant and the Warrant
         Shares may bear a legend to the effect of clauses  (i) and (ii) of this
         paragraph;

                    (d)    in  making  any  subsequent  offering  or sale of the
         Shares,  the Subscriber  will be acting only for itself and not as part
         of a sale or planned distribution in violation of the Act;

                    (e)    the Shares and Warrant were not offered to the
         Subscriber  by any form of general  solicitation  or general
         advertising;

                    (f)    the Subscriber  understands  that no federal or state
         or other governmental agency has passed upon or made any recommendation
         or endorsement  with respect to the Shares,  the Warrant or the Warrant
         Shares;

                    (g)    the  Subscriber  is  purchasing  the  Shares  and the
         Warrant,  and will acquire the Warrant Shares,  for its own account and
         not with a view to, or for sale in connection with, any distribution;

                                       3
<PAGE>

                    (h)    during   the  period  of  five  (5)   business   days
         immediately prior to the execution of this Agreement by the Subscriber,
         Subscriber  did not, and from such date and through the  expiration  of
         the  90th  day  following  the  date  hereof  will  not,   directly  or
         indirectly,  execute or effect or cause to be executed or effected  any
         short sale,  option,  or equity swap  transaction in or with respect to
         the  Common  Stock or any other  derivative  security  transaction  the
         purpose or effect of which is to hedge or transfer to a third party all
         or any part of the risk of loss  associated  with the  ownership of the
         Shares, the Warrant or the Warrant Shares by the Subscriber; and

                    (i)    no consent,  approval,  authorization or order of any
         court,  governmental  agency or body or arbitrator having  jurisdiction
         over the Subscriber or any of the  Subscriber's  affiliates is required
         for  the  execution  of  this  Agreement  or  the  performance  of  the
         Subscriber's obligations hereunder,  including, without limitation, the
         purchase of the Shares and the Warrant by the Subscriber.

               5. Conditions to Closing. The obligations of each party hereunder
shall be subject to (a) the accuracy of the  representations  and  warranties of
the other party hereto as of the date hereof and as of the Closing  Date,  as if
such  representations  and  warranties had been made on and as of such date, (b)
the  performance  by the other party of its  obligations  hereunder  and (c) the
condition that Les Appel, counsel to the Subscriber,  shall have delivered on or
prior to the  Closing  Date an opinion to the effect that the sale of the Shares
and the Warrant  pursuant to, and in the manner  contemplated by, this Agreement
does not require  registration  under the Act, which opinion shall be acceptable
to the Company's  transfer agent for the Shares.  The Company and the Subscriber
hereby acknowledge that Les Appel,  counsel to the Subscriber,  will rely on the
accuracy and truth of the  representations and warranties of the Company and the
Subscriber in Section 3 and Section 4, respectively, and hereby, consent to such
reliance by such counsel.

               6. Indemnification.

                    (a)    The Company agrees to indemnify and hold harmless the
         Subscriber, each person, if any, who controls the Subscriber within the
         meaning of Section 15 of the Act and each officer,  director,  employee
         and agent of the Subscriber and of any such controlling  person against
         any  and  all  losses,   liabilities,   claims,   damages  or  expenses
         whatsoever, as incurred, arising out of or resulting from any breach or
         alleged  breach  or  other  violation  or  alleged   violation  of  any
         representation,  warranty,  covenant  or  undertaking  by  the  Company
         contained  in  this  Agreement,  and the  Company  will  reimburse  the
         Subscriber for its reasonable  legal and other expenses  (including the
         cost of any investigation and preparation, and including the reasonable
         fees and expenses of counsel) incurred in connection therewith.

                    (b)    The Subscriber  agrees to indemnify and hold harmless
         the Company,  each person,  if any, who controls the Company within the
         meaning of Section 15 of the Act and each officer,  director,  employee
         and agent of the Company and of any such controlling person against any
         and all losses, liabilities, claims, damages or expenses whatsoever, as
         incurred, arising out of or resulting from any breach or alleged breach
         or  other  violation  or  alleged  violation  of  any   representation,
         warranty,  covenant or undertaking by the Subscriber  contained in this
         Agreement,  and the  Subscriber  will  reimburse  the  Company  for its
         reasonable  legal  and  other  expenses  (including  the  cost  of  any
         investigation  and  preparation,  and including the reasonable fees and
         expenses of counsel) incurred in connection therewith.

               7. Survival of  Representations  and  Warranties.  The respective
agreements,  representations,  warranties, indemnities and other statements made
by or on behalf of each party hereto  pursuant to this Agreement shall remain in
full force and effect,  regardless of any investigation  made by or on behalf of
any party,  and shall  survive  delivery  of any  payment for the Shares and the
Warrant.

                                       4
<PAGE>

               8. Miscellaneous.

                    (a)    This  Agreement  may  be  executed  in  one  or  more
         counterparts,  and such  counterparts  shall constitute but one and the
         same agreement.

                    (b)    This  Agreement  shall inure to the benefit of and be
         binding upon the parties hereto, their respective  successors and, with
         respect to the indemnification  provisions hereof, each person entitled
         to indemnification  hereunder, and no other person shall have any right
         or obligation hereunder.  This Agreement shall not be assignable by any
         party  hereto  without  the prior  written  consent of the other  party
         hereto.  Any assignment  contrary to the terms hereof shall be null and
         void and of no force or effect.

                    (c)    This Agreement  represents  the entire  understanding
         and  agreement  between the parties  hereto with respect to the subject
         matter  hereof and can be amended,  supplemented  or  changed,  and any
         provision  hereof can be  waived,  only by  written  instrument  making
         specific  reference to this Agreement  signed by the party against whom
         enforcement of any such amendment,  supplement,  modification or waiver
         is sought.

               9. Time of the Essence.  Time shall be of the essence in this
                  Agreement.

               10.Governing Law.  This Agreement shall be governed by the
                  internal laws of the State of New York.


                  IN WITNESS WHEREOF,  the parties hereto have caused this Stock
Subscription Agreement to be executed and delivered as of the date first written
above.


                                          COPYTELE, INC.

                                          By: Denis A. Krusos
                                          --------------------------------------
                                          Name: Denis A. Krusos
                                          Title:   Chairman of the Board and
                                          Chief Executive Officer

                                          SUBSCRIBER:



                                          Lewis H. Titterton
                                          --------------------------------------
                                          Name: Lewis H. Titterton


                                       5
<PAGE>

Exhibit A
---------


                  THIS WARRANT AND ANY SECURITIES  ACQUIRED UPON THE EXERCISE OF
THIS WARRANT  HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS
AMENDED (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES LAWS AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,  TRANSFERRED,  PLEDGED
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE  REGISTRATION STATEMENT
UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND
SUCH LAWS THAT,  IN THE  OPINION OF COUNSEL FOR THE  HOLDER,  WHICH  COUNSEL AND
OPINION  ARE  REASONABLY  SATISFACTORY  TO  COUNSEL  FOR  THIS  CORPORATION,  IS
AVAILABLE.


Warrant to Purchase                                  Expiration:  April 30, 2001
                                                                  --------------
300,000 Shares
-------

                                 COPYTELE, INC.
                                 --------------
                          COMMON STOCK PURCHASE WARRANT
                          -----------------------------

                  This  certifies  that,  for good and  valuable  consideration,
CopyTele,  Inc., a Delaware  corporation  (including any successor  thereto with
respect to the obligations hereunder, by merger, consolidation or otherwise, the
"Company"),   grants  to  Lewis  H.   Titterton   or   permitted   assigns  (the
"Warrantholder"),  the right to subscribe for and purchase, in whole or in part,
from time to time from the Company  300,000  duly  authorized,  validly  issued,
fully paid and  nonassessable  shares (the  "Warrant  Shares") of the  Company's
Common  Stock,  par value $.01 per share (the "Common  Stock"),  at the purchase
price per share of $1.50 (the "Exercise  Price") at any time prior to 5:00 p.m.,
New York time on the Expiration  Date, all subject to the terms,  conditions and
adjustments  herein set forth. The terms that are capitalized  herein shall have
the meanings specified in Section 10 hereof,  unless the context shall otherwise
require.


  1. Duration and Exercise of Warrant; Limitation on Exercise; Payment of Taxes.
     ---------------------------------------------------------------------------

            1.1.  Duration  and  Exercise of  Warrant.  Subject to the terms and
                  ------------------------------------
conditions set forth herein, this Warrant may be exercised, in whole or in part,
by the Warrantholder by:

                    (a)    the surrender of this Warrant to the Company,  with a
duly executed  Exercise Form  specifying the number of Warrant Shares to be
purchased, during normal business hours on any Business Day prior to the
Expiration Date; and

                    (b)    the delivery of payment to the Company of the
Exercise Price for the number of Warrant  Shares  specified in the Exercise
Form in the form of cash or certified or bank check payable to the order of
the Company.

<PAGE>

                  The Company agrees that such Warrant Shares shall be deemed to
be issued to the Warrantholder as the record holder of such Warrant Shares as of
the  close of  business  on the date on  which  this  Warrant  shall  have  been
surrendered   and   payment   made  for  the   Warrant   Shares  as   aforesaid.
Notwithstanding  the  foregoing,   no  such  surrender  shall  be  effective  to
constitute  the person  entitled  to receive  such  shares as the record  holder
thereof while the transfer  books of the Company for the Common Stock are closed
for any purpose  (but not for any period in excess of five  days);  but any such
surrender of this Warrant for exercise during any period while such books are so
closed shall become  effective  for exercise  immediately  upon the reopening of
such  books,  as if the  exercise  had been  made on the date this  Warrant  was
surrendered  and for the  number of shares of Common  Stock and at the  Exercise
Price in effect at the date of such  surrender.  This Warrant and all rights and
options  hereunder shall expire on the Expiration Date, and shall be wholly null
and void to the extent this Warrant is not exercised before it expires.

            1.2.  Warrant   Shares   Certificate.   A   stock   certificate   or
                  -------------------------------
certificates  for the Warrant  Shares  specified in the  Exercise  Form shall be
delivered  to the  Warrantholder  within 10 Business  Days after  receipt of the
Exercise Form by the Company and payment of the purchase  price. If this Warrant
shall  have been  exercised  only in part,  the  Company  shall,  at the time of
delivery of the stock certificate or certificates,  deliver to the Warrantholder
a new Warrant  evidencing the rights to purchase the remaining  Warrant  Shares,
which new Warrant shall in all other respects be identical with this Warrant.

            1.3.  Payment of Taxes.  The  issuance of  certificates  for Warrant
                  -----------------
Shares shall be made without charge to the  Warrantholder for any stock transfer
or  other  issuance  tax  in  respect  thereto;  provided,   however,  that  the
                                                 ---------   --------
Warrantholder  shall be required to pay any and all taxes that may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than that of the then  Warrantholder as reflected upon the books
of the Company.

      2. Restrictions on Transfer; Restrictive Legends.
         ----------------------------------------------

            2.1.  Limitation on Transfer.  No Warrantholder  shall,  directly or
                  -----------------------
indirectly, sell, give, assign, hypothecate,  pledge, encumber, grant a security
interest in or otherwise  dispose of (whether by operation of law or  otherwise)
(each a  "transfer")  this  Warrant or any right,  title or  interest  herein or
hereto, except in accordance with the provisions of this Warrant. Any attempt to
transfer  this Warrant or any rights  hereunder  in  violation of the  preceding
sentence shall be null and void ab initio and the Company shall not register any
                                ---------
such transfer.

                                       2
<PAGE>

            2.2.  Transfer  Procedures.  If any Warrantholder wishes to transfer
                  ---------------------
this  Warrant  to a  transferee  (a  "Transferee")  under  this  Section 2, such
Warrantholder  shall give  notice to the  Company of its  intention  to make any
transfer  permitted  under  this  Section 2 not less than five (5) days prior to
effecting such  transfer,  which notice shall state the name and address of each
Transferee  to whom such  transfer is proposed.  This Warrant may, in accordance
with the terms hereof,  be  transferred  in whole or in part. If this Warrant is
assigned in whole,  the assignee shall receive a new Warrant  (registered in the
name of such  assignee or its nominee)  which new Warrant shall cover the number
of shares  assigned.  If this  Warrant is assigned  in part,  the  assignor  and
assignee shall each receive a new Warrant  (which,  in the case of the assignee,
shall be registered  in the name of the assignee or its nominee),  each of which
new Warrant  shall cover the number of shares not so assigned  and in respect of
which no such  exercise has been made in the case of the assignor and the number
of shares so assigned, in the case of the assignee.

            2.3.  Transfers in Compliance with Law;  Substitution of Transferee.
                  --------------------------------------------------------------
Notwithstanding  any other  provision of this  Warrant,  no transfer may be made
pursuant to this Section 2 unless (a) the Transferee has agreed in writing to be
bound by the terms and  conditions  hereto,  (b) the  transfer  complies  in all
respects with the  applicable  provisions of this Warrant,  and (c) the transfer
complies in all respects  with  applicable  federal and state  securities  laws,
including,  without  limitation,  the  Securities  Act of 1933,  as amended.  If
requested by the Company in its  reasonable  judgment,  an opinion of counsel to
such  transferring  Warrantholder  shall  be  supplied  to the  Company  at such
transferring  Warrantholder's expense, to the effect that such transfer complies
with the applicable federal and state securities laws; provided,  however,  that
no such opinion shall be required if the Transferee is a successor  trust to the
Warrantholder  which has the same  beneficiaries.  Any attempt to transfer  this
Warrant or rights  hereunder in violation of this Warrant shall be null and void
ab initio and the Company shall not register such transfer.
---------

      3. Legends.
         --------

         Each Warrant (and each Warrant issued in  substitution  for any Warrant
pursuant  hereto)  shall be  stamped  or  otherwise  imprinted  with a legend in
substantially the following form:

                  THIS WARRANT AND ANY SECURITIES  ACQUIRED UPON THE EXERCISE OF
         THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
         AS AMENDED (THE  "SECURITIES  ACT"),  OR ANY STATE  SECURITIES LAWS AND
         NEITHER THE SECURITIES NOR ANY INTEREST  THEREIN MAY BE OFFERED,  SOLD,
         TRANSFERRED,  PLEDGED OR  OTHERWISE  DISPOSED OF EXCEPT  PURSUANT TO AN
         EFFECTIVE  REGISTRATION  STATEMENT  UNDER  SUCH ACT OR SUCH  LAWS OR AN
         EXEMPTION FROM  REGISTRATION  UNDER SUCH ACT AND SUCH LAWS THAT, IN THE
         OPINION OF COUNSEL  FOR THE  HOLDER,  WHICH  COUNSEL  AND  OPINION  ARE
         REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS AVAILABLE.

                                       3
<PAGE>

         Each stock  certificate  for Warrant Shares issued upon the exercise of
any  Warrant  and each stock  certificate  issued  upon the  direct or  indirect
transfer of any such Warrant Shares shall be stamped or otherwise imprinted with
a legend in substantially the following form:

                  THE  SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN  REGISTERED
         UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR ANY STATE  SECURITIES
         LAWS  AND  NEITHER  THE  SECURITIES  NOR ANY  INTEREST  THEREIN  MAY BE
         OFFERED,  SOLD,  TRANSFERRED,  PLEDGED OR OTHERWISE  DISPOSED OF EXCEPT
         PURSUANT TO AN EFFECTIVE  REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH
         LAWS OR AN  EXEMPTION  FROM  REGISTRATION  UNDER SUCH ACT AND SUCH LAWS
         THAT,  IN THE  OPINION OF COUNSEL  FOR THE  HOLDER,  WHICH  COUNSEL AND
         OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS
         AVAILABLE.

         Notwithstanding  the  foregoing,  the  Warrantholder  may  require  the
Company to issue a Warrant or a stock  certificate for Warrant  Shares,  in each
case without a legend, if either (i) such Warrant or such Warrant Shares, as the
case may be, have been  registered  for resale under the  Securities Act or (ii)
the Warrantholder has delivered to the Company an opinion of counsel (reasonably
satisfactory to the Company) which opinion shall be addressed to the Company and
be reasonably  satisfactory in form and substance to the Company's  counsel,  to
the affect that such  registration  is not required with respect to such Warrant
or such Warrant Shares, as the case may be.

      4. Reservation of Shares, Etc.
         ---------------------------

                  The Company covenants and agrees as follows:

                    (a)    All Warrant  Shares that are issued upon the exercise
of this Warrant will, upon issuance, be duly and validly  issued,  fully paid
and  nonassessable,  not subject to any  preemptive rights, and free from all
taxes, liens,  security interests,  charges, and other encumbrances with respect
to the issuance  thereof,  other than taxes in respect of any transfer occurring
contemporaneously with such issue.

                    (b)    During the period  within  which this  Warrant may be
exercised, the Company will at all times have authorized and reserved,  and keep
available  free from  preemptive  rights,  a sufficient number of shares of
Common  Stock to  provide  for the  exercise  of the  rights represented by this
Warrant.

                                       4
<PAGE>

      5. Loss or Destruction of Warrant.
         -------------------------------

                  Subject to the terms and  conditions  hereof,  upon receipt by
the  Company  of  evidence  reasonably  satisfactory  to it of the loss,  theft,
destruction  or  mutilation  of this Warrant and, in the case of loss,  theft or
destruction,  of such bond or  indemnification  as the  Company  may  reasonably
require and, in the case of such mutilation,  upon surrender and cancellation of
this Warrant,  the Company will execute and deliver a new Warrant of like tenor.
If the original  holder of this Warrant or any subsequent  Institutional  Holder
with a minimum net worth of at least $25,000,000 is the owner of this Warrant at
the time it shall  be  lost,  stolen  or  destroyed,  then the  affidavit  of an
authorized officer of such owner,  setting forth the fact of such loss, theft or
destruction and of its ownership of this Warrant at the time of such loss, theft
or destruction shall be accepted as satisfactory evidence thereof and no further
bond shall be required as a condition  to the  execution  and  delivery of a new
Warrant other than the written agreement of such owner to indemnify the Company.

      6. Ownership of Warrant.
         ---------------------

                  The  Company  may deem and treat the person in whose name this
warrant  is  registered  as the  holder and owner  hereof  (notwithstanding  any
notations of ownership or writing  hereon made by anyone other than the Company)
for all purposes and shall not be affected by any notice to the contrary,  until
presentation of this Warrant for registration of transfer.  Notwithstanding  the
foregoing,  the Warrants  represented hereby, if properly assigned in compliance
with this Agreement, may be exercised by an assignee for the purchase of Warrant
Shares without having a new Warrant issued.

      7. Certain Adjustment.
         -------------------

             7.1. The number of Warrant Shares  purchasable upon the exercise of
this Warrant and the Exercise Price shall be subject to adjustment as follows:

                   (a) Stock  Dividends;  Stock  Splits.  If at any  time  after
                       ---------------------------------
the  date of the issuance of this Warrant (i)  theCompany  shall pay a stock
dividend or make any other distribution  payable inshares of Common Stock or
(ii) the number of shares of Common Stock shall have been increased by a
subdivision or split-up of shares of  Common  Stock,  then,  on the  date  of
the  payment  of  such  dividend  or immediately after the effective date of
subdivision or split up, as the case maybe, the number of shares to be delivered
upon  exercise of this Warrant will beincreased  so that the  Warrantholder
will be entitled to receive the number ofshares of Common  Stock that such
Warrantholder  would  have owned  immediatelyfollowing such action had this
Warrant been exercised immediately prior thereto,and the Exercise Price will be
adjusted as provided below in paragraph (f).

                   (b) Combination  of Stock.  If the number of shares of Common
                       ----------------------
stock  outstanding  at any time after the date of the issuance of this Warrant
shall have been  decreased by a combination  of the outstanding shares of Common
Stock, then, immediately after the effective date of such combination,the number
of shares of Common Stock to be delivered uponexercise of this Warrant will be
decreased so that the Warrantholder  thereafter will be entitledto  receive  the
number of shares of Common Stock that such Warrantholder wouldhave  owned
immediately  following  such action had this Warrant been exercised immediately
prior thereto, and the Exercise Price will be adjusted as provided below in
paragraph (f).

                                       5
<PAGE>

                    (c)     Reorganization,  etc. If any capital  reorganization
                           ---------------------
of the Company, or any reclassification of the Common Stock,or any consolidation
or share exchange of the Company with or merger of the Company with or into any
other person or any sale,  lease or other  transfer of all or  substantially all
of the assets of the Company to any other  person, shall be  effected  in such a
way that the holders of Common  Stock  shall be entitled to receive stock, other
securities or assets (whether such stock, other securities or assets are issued
or distributed by the Company or another person) with respect to or in exchange
for Common  Stock,  then, upon  exercise of this Warrant the Warrantholder shall
have the right to receive the kind and amount  of stock other  securities  or
assets  receivable  upon  such  reorganization, reclassification, consolidation,
merger or sale,  lease or other transfer by a holder of the  number of shares of
Common  Stock that such  Warrantholder would have been  entitled to receive upon
exercise of this  Warrant had this Warrant been  exercised   immediately  before
such  reorganization,   reclassification, consolidation,  merger or sale, lease
or other transfer,  subject to adjustments that shall be as nearly  equivalent
as may be  practicable  to the  adjustments provided for in this Section 7.1.

                    (d)     Fractional  Shares.  No fractional  shares of Common
                            -------------------
Stock or scrip shall be issued to any  Warrantholder in connection with the
exercise of this Warrant. Instead of any fractional  shares of Common Stock that
would  otherwise  be issuable to such  Warrantholder,  the Company  will pay to
such  Warrantholder  a cash  adjustment  in respect of such fractional  interest
in an amount equal to that fractional  interest of the then current Fair Market
Value per share of Common Stock.

                    (e)     Carryover  Notwithstanding  any other  provision  of
                            ---------
this Section  7.1, no adjustment shall be made to the number of shares of Common
Stock to be delivered to the Warrantholder (or to the Exercise  Price) if such
adjustment  represents less than 1% of the  number of shares to be so delivered,
but any lesser adjustment shall be carried forward and shall he made at the
time and together with the next subsequent adjustment that together with any
adjustments so carried forward shall amount to 1% or more of the number of
shares to be so delivered.  However,  upon the exercise of this Warrant,  the
Company shall make all necessary  adjustments not theretofore made to the number
of shares of Common Stock to be delivered to the Warrantholder (or to the
Exercise  Price) up to and  including the date upon which this Warrant is
exercised.

                    (f)    Exercise  Price  Adjustment.  Whenever  the number of
                           ----------------------------
Warrant  Shares  purchasable  upon the exercise of the Warrant is adjusted as
provided pursuant to this Section 7.1, the Exercise Price payable upon the
exercise of this Warrant shall be adjusted by multiplying  such Exercise Price
immediately prior to such adjustment by a fraction, of which the numerator shall
be the number of Warrant Shares purchasable upon the exercise of the Warrant
immediately prior to such adjustment,  and of which the denominator shall be the
number  of  Warrant  Shares  purchasable  immediately  thereafter; provided,
however,  that the Exercise  Price for each Warrant Share shall in no event be
less than the par value of such Warrant Share.

                                       6
<PAGE>

            7.2.  No  Adjustment  for  Dividends.  Except as provided in Section
                  -------------------------------
7.1, no adjustment in respect of any dividends  shall be made during the term of
this Warrant or upon the  exercise of this  Warrant.  Notwithstanding  any other
provision hereof, no adjustments shall be made on Warrant Shares issuable on the
exercise of this  Warrant for any cash  dividends  paid or payable to holders of
record of Common Stock prior to the date as of which the Warrantholder  shall be
deemed to be the record holder of such Warrant Shares.

            7.3.  Notice of Adjustment. Whenever the number of Warrant Shares or
                  ---------------------
the Exercise Price of such Warrant Shares is adjusted,  as herein  provided,  or
the rights of the Warrantholder shall change by reason of other events specified
herein, the Company shall promptly mail by first class,  postage prepaid, to the
Warrantholder, notice of such adjustment or adjustments and a certificate of the
Chief  Financial  Officer  of the  Company  setting  forth the number of Warrant
Shares and the  Exercise  Price of such Warrant  Shares  after such  adjustment,
setting  forth a brief  statement of the facts  requiring  such  adjustment  and
setting forth the computation by which such adjustment was made.

     8.  Amendments.  Any provision of this Warrant may be amended and the
         -----------
observance  thereof waived only with the written  consent of the Company and the
Warrantholder.

     9.    Notices of Corporate Action.  So long as this Warrant has not been
         ----------------------------
exercised in full, in the event of:

                    (a)     any  taking by the  Company  of a record  of the
holders  of any class of  securities  for the  purpose  of determining  the
holders thereof who are entitled to receive any  dividend or other distribution,
or any right to subscribe for, purchase or otherwise acquire any shares of stock
of any class or any other  securities  or  property,  or to receive any other
right,

                    (b)     any capital  reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger involving the Company and any other party or any
transfer of all or substantially  all theassets of the Company to any other
party, or

                    (c)    any voluntary or involuntary dissolution, liquidation
or winding-up of the Company,

the Company will mail to the  Warrantholder a notice  specifying (i) the date or
expected  date on which any such  record is to be taken for the  purpose of such
dividend,  distribution  or  right  and the  amount  and  character  of any such
dividend,  distribution or right and (ii) the date or expected date on which any
such reorganization, reclassification,  recapitalization, consolidation, merger,
transfer, dissolution,  liquidation or winding-up is to take place and the time,
if any such time is to be fixed,  as of which  the  holders  of record of Common
Stock (or other securities) shall be entitled to exchange their shares of Common
Stock (or other  securities)  for the securities or other  property  deliverable
upon such  reorganization,  reclassification,  recapitalization,  consolidation,
merger, transfer,  dissolution,  liquidation or winding-up. Such notice shall be
delivered at least 10 days prior to the date therein  specified,  in the case of
any date referred to in the foregoing subdivisions (i) and (ii).

                                       7
<PAGE>

     10. Definitions.
         ------------

                  As used herein,  unless the context  otherwise  requires,  the
following terms have the following respective meanings:

                  "Business Day" means any day other than a Saturday,  Sunday or
                  --------------
a day on which national banks are authorized by law to close in the State of New
York.

                  "Common Stock" has the meaning specified on the cover of this
                  --------------
Warrant.

                  "Company" has the meaning specified on the cover of this
                  ---------
Warrant.

                  "Exercise  Form"  means an Exercise  Form in the form  annexed
                  ----------------
hereto as Exhibit A.

                  "Exercise Price" has the meaning specified on the cover of
                  ----------------
this Warrant.

                  "Expiration  Date" means April 30,  2001;  provided,  however,
                  ------------------       -------------------------------------
that if such date shall not be a Business  Day,  then on the next  following day
that is a Business Day.

                  "Institutional Holder" means any bank, trust company,  savings
                  ----------------------
and loan  association  or other  financial  institution,  any pension plan,  any
pension trust,  any investment  company,  any insurance  company,  any broker or
dealer,  or any similar  financial  institution  or entity,  regardless of legal
form.

                  "Person"  means  any  natural  person,  corporation,   limited
                  --------
liability company,  trust,  joint venture,  association,  company,  partnership,
governmental authority or other entity.

                  "Securities  Act" has the  meaning  specified  on the cover of
                  -----------------
this Warrant,  or any similar Federal statute,  and the rules and regulations of
the Securities and Exchange Commission  thereunder,  all as the same shall be in
effect at the time.  Reference to a particular  section of the  Securities  Act,
shall include a reference to the comparable section, if any, of any such similar
Federal statute.

                                       8
<PAGE>

                  "Transfer" has the meaning specified in Section 2.1
                  ----------

                  "Transferee" has the meaning specified in Section 2.2.
                  ------------

                  "Warrantholder" has the meaning specified on the cover of this
                  ---------------
Warrant.

                  "Warrant Shares" has the meaning specified on the cover of
                  ----------------
this Warrant.


     11. Miscellaneous.
         --------------

            11.1. Entire Agreement. This Warrant constitutes the entire
                  -----------------
agreement  between the Company and the  Warrantholder  with respect to the
Warrants.

            11.2. Binding  Effect;  Benefits.  This  Warrant  shall inure to the
                  ---------------------------
benefit of and shall be binding upon the Company and the Warrantholder and their
respective  successors  and  assigns.  Nothing  in this  Warrant,  expressed  or
implied, is intended to or shall confer on any person other than the Company and
the  Warrantholder,  or their  respective  successors  or  assigns,  any rights,
remedies, obligations or liabilities under or by reason of this Warrant.

            11.3. Section and Other  Headings.  The  section and other  headings
                  ----------------------------
contained  in this  Warrant  are for  reference  purposes  only and shall not be
deemed to be a part of this  Warrant or to affect the meaning or  interpretation
of this Warrant.

            11.4. Notices.  All  notices  and other  communications  required or
                  --------
permitted  hereunder  shall be in  writing  and shall be  delivered  personally,
telecopied or sent by certified,  registered or express mail,  postage  prepaid.
Any such notice shall be deemed given when so delivered  personally,  telecopied
or sent by certified, registered or express mail, as follows:

                    (a)    if to the Company, addressed to:

                           CopyTele, Inc.
                           900 Walt Whitman Road
                           Huntington, New York 11746
                           Attn:    Chief Financial Officer

                    (b)    if to Warrantholder, addressed to:

                           Lewis H. Titterton
                           6 Autumn Lane
                           Saratoga Springs, NY  12866


Any party may by notice given in  accordance  with this  Section 11.4  designate
another address or person for receipt of notices hereunder.

                                       9
<PAGE>

            11.5. Severability.  Any term or provision of this Warrant  which is
                  -------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,  be
ineffective  to the  extent  of  such  invalidity  or  unenforceability  without
rendering  invalid or unenforceable  the terms and provisions of this Warrant or
affecting  the validity or  enforceability  of any of the terms or provisions of
this Warrant in any other jurisdiction.

            11.6. Governing  Law.  This Warrant shall be deemed to be a contract
                  ---------------
made  under  the laws of the  State of New  York and for all  purposes  shall be
governed by and construed in accordance  with the laws of such State  applicable
to such agreements made and to be performed entirely within such State.

            11.7. No Rights or Liabilities as Stockholder.  Nothing contained in
                  ----------------------------------------
this Warrant shall be determined as conferring upon the Warrantholder any rights
as a  stockholder  of  the  Company  or  as  imposing  any  liabilities  on  the
Warrantholder  to purchase any securities  whether such liabilities are asserted
by the Company or by creditors or stockholders of the Company or otherwise.

            11.8. Copy of Warrant.  A copy of this Warrant shall be filed among
                  ----------------
the records of the Company.

            11.9. Exercise of Remedies. In the event that the Company shall fail
                  ---------------------
to observe any provision contained in this Warrant, the holder hereof and/or any
holder of the Common Stock issued hereunder, as the case may be, may enforce its
rights  hereunder  by  suit  in  equity,  by  action  at  law,  or by any  other
appropriate  proceedings  in aid of the  exercise  of any power  granted in this
Warrant and,  without  limiting the foregoing,  said holder shall be entitled to
the entry of a decree for  specific  performance  and to such other and  further
relief as such court may decree.


                                   *       *        *
                                       10
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by
its duly authorized officer.

                                         COPYTELE, INC.


                                         By:     Denis A. Krusos
                                              ------------------
                                         Name: Denis A. Krusos
                                         Title: Chairman of the Board &
                                         Chief Executive Officer

Dated: April 30, 1999

                                       11
<PAGE>

EXHIBIT A

                                 EXERCISE FORM
                                  -------------

                              (To be executed upon exercise of this Warrant)

                  The  undersigned  hereby  irrevocably  elects to exercise  the
right,  represented by this Warrant, to purchase _________ of the Warrant Shares
and herewith  tenders  payment for such Warrant Shares to the order of CopyTele,
Inc. in the amount of $________ in  accordance  with the terms of this  Warrant.
The  undersigned  requests (a) that a  certificate  for such  Warrant  Shares be
registered in the name of the undersigned  (b), if such shares shall not include
all of the shares  issuable as provided in such  Warrant,  that a new Warrant of
like tenor and date for the balance of the shares issuable  thereunder be issued
to the  undersigned  and (c) that such  certificates  and  Warrant,  if any,  be
delivered to the undersigned's address below.

                  The  undersigned  represents that it is acquiring such Warrant
Shares for its own account for  investment and not with a view to or for sale in
connection with any distribution thereof.


Dated:
      ----------

                            Signature
                                     -------------------------------------------



                                                 -------------------------------
                                                         (Print Name)


                                                 -------------------------------
                                                       (Street Address)


                                                 -------------------------------
                                                     (City) (State) (Zip Code)

Signed in the presence of:
                          ------------------------------