Exhibit 10.1



                               LONG TERM AGREEMENT


                               AGREEMENT # 952619


                                     Between

                               THE BOEING COMPANY
                                       and

                              CopyTele Incorporated


                               BEST Supplier Code

                                  # BE10343641




                                       5
<PAGE>

                                Table of Contents

                                                                        Page No.

Section 1:      Definitions .................................................. 3

Section 2:      Statement of Work ............................................ 4

Section 3:      Period of Performance ........................................ 4

Section 4:      Estimated Expenditure Limitation ............................. 4

Section 5:      Pricing/Rates ................................................ 5

Section 6:      Ordering ..................................................... 6

Section 7:      Delivery ..................................................... 6

Section 8:      Identification, Invoicing and Payment ........................ 6

Section 9:      Technical Interface .......................................... 7

Section 10:     Qualification of Personnel ................................... 8

Section 11:     Export Control Notice ........................................ 8

Section 12:     Foreign Status ............................................... 9

Section 13:     Security Requirements ........................................10

Section 14:     Participation ................................................10

Section 15:     Priority Rating ..............................................11

Section 16:     Notices and Correspondence ...................................11

Section 17:     Cost Reduction Initiatives ...................................11

Section 18:     Performance Criteria .........................................12

Section 19:     Entire Agreement .............................................13


                                       6
<PAGE>

This  Agreement is entered into by and between The Boeing  Company  (hereinafter
referred to as "Buyer"),  and CopyTele.  (hereinafter  referred to as "Seller"),
with offices at 900 Walt Whitman Rd. Ste 203C Melville, NY 11747.


                                   WITNESSETH


In consideration  of the promises set forth herein,  the parties hereto mutually
agree as follows:

This Long Term Agreement  (hereinafter referred to as "LTA" or "Agreement") sets
forth terms and  conditions  for the  procurement  of supplies  and  services in
support of various  Boeing  programs on an as required  basis.  Seller agrees to
furnish  such  supplies  and/or  services  as  may be  ordered  by  Buyer,  from
time-to-time at the prices and terms and conditions set forth herein.

This Agreement consists of the Title page; the Schedule,  the Signature page and
the following Exhibits, are incorporated herein by reference:

         EXHIBITS:            TITLE:
         ---------            ------

         Exhibit A            Parts Price List
         Exhibit B            Pro-6088 Forms
         Exhibit C            Technical Documents


                                    SCHEDULE

1.       DEFINITIONS
         -----------


         1.1.  BOA: Basic  Ordering  Agreement,  also as  appropriate  Corporate
               Agreement (CA), Blanket Contract and Long Term Agreement (LTA).

         1.2.  Buyer: The Boeing Company

         1.3.  Documentation:   user  manuals,   training   materials,   product
               descriptions  and  specifications,   technical  manuals,  license
               agreements,  supporting  materials and other printed  information
               relating to Goods and/or Services,  whether distributed in print,
               electronic, CD-ROM or video format.

         1.4.  Estimated Expenditure Limitation:  is an estimated total value of
               orders to be released during a specified period.

         1.5.  Goods:  individually or  collectively  as appropriate,  hardware,
               software  and  related  documentation,   maintenance  agreements,
               support  agreements  and/or  licenses  delivered  by  physical or
               electronic means as specifically defined by this Agreement.


                                       7
<PAGE>

         1.6.  Lead-Time:  the time span from when  Buyer  releases  an Order to
               Seller to when the goods and/or services are received by Buyer.

         1.7.  Order: a Delivery Order, Purchase Order, Purchase Contract,  Work
               Order,   Blanket   Purchase   Order,   Release   or   any   other
               Buyer-authorized  procurement  document issued by Buyer to Seller
               referencing this Basic Ordering Agreement (BOA).

         1.8.  Seller: Copytele Incorporated

         1.9.  Services:   On-site  or  off-site   non-receivable  services  and
               associated  materials billed as time and material/labor  hours as
               specifically defined by this Agreement.


2.       STATEMENT OF WORK
         -----------------

         2.1   Seller shall provide wireless encryption devices and accessories,
               and  related  services  and  documentation  required to build and
               support   information    technology    infrastructure,    network
               infrastructure,  "proof-of-concept"  laboratories,  voice service
               solutions and any emerging needs.

         2.2   The goods and services are  identified  in Exhibit A "Parts Price
               List" and in  accordance  with the  delivery  schedules  and firm
               fixed-prices set forth therein.

         2.3   There is no guarantee of minimum usage under this LTA. Buyer will
               not be obligated to place any individual Orders.


3.       PERIOD OF PERFORMANCE
         ---------------------

         3.1   The  effective  term of this  Agreement  shall be for a period of
               three (3) years  beginning  on the date of Buyer's  execution  of
               this agreement and ending May 25, 2010.
                                         ------------

         3.2   Seller shall accept and process all orders issued by Buyer during
               the period of performance notwithstanding that the delivery dates
               of any orders may extend beyond the period of performance.


4.       ESTIMATED EXPENDITURE LIMITATION
         --------------------------------

         4.1   Any estimates regarding  forecasts,  planning,  and/or quantities
               provided  to Seller  by Buyer in any  document  relating  to this
               agreement are to be considered  informational  only and represent
               no  commitment  by Buyer to purchase any  particular  quantity of
               supplies or service.

         4.2   The  parties  agree  that  this  agreement  may be  incrementally
               funded. The current maximum amount for which Buyer will be liable
               under  this   agreement   is  $  200,000.   This  amount  may  be
               periodically increased as indicated in paragraph 4.3 below.

         4.3   Any  expenditure  or  obligation  in excess of the  amount(s) set
               forth above,  as it may from time to time be increased,  which is
               incurred  by Seller in  furtherance  of  performance  under  this
               agreement, will be at Seller's own risk. Seller will not be bound
               to  continue  performance  if such  performance  would  cause the
               amount to be expended  or  obligated  to exceed the then  current
               estimated  expenditure  limitation.  Seller will,  upon  reaching
               eighty-five   percent   (85%)  of  the  then  current   estimated
               expenditure  limitation,  notify Buyer's  authorized  agent. Upon
               receipt of Seller's notice,  Buyer will then determine whether or
               not  to  increase  the  then  current   expenditure   limitation.
               Alternatively,  Buyer may, at its option,  unilaterally  increase
               the  then  current  estimated  expenditure  limitation.  The then
               current estimated expenditure  limitation may be increased by the
               issuance of a unilateral  change to this Agreement,  signed by an
               authorized  agent of Buyer,  or by a bilateral  amendment to this
               Agreement.


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<PAGE>

         4.4   Notwithstanding any other provision of this Agreement, Buyer will
               not be obligated to pay Seller more than the price of each order,
               together  with  its  amendments,   for  performance   under  this
               agreement, including termination costs, if any.

         4.5   There is no guarantee of minimum usage under this Agreement.


5.       PRICING/RATES
         -------------

         5.1   The prices  covered by this  Agreement are set forth in Exhibit A
               "Parts Price List."

         5.2   The prices are firm-fixed for the term of this Agreement.

         5.3   RATES - SERVICES
               ----------------

               5.3.1  The labor  rates  above  include  Subcontractor's  profit,
                      overhead and supervision costs,  social security taxes and
                      contributions,  workers' compensation costs, and all other
                      applicable  taxes and insurances,  expenses for utilities,
                      equipment, all direct and indirect operating expenses, and
                      all  other  expenses,   of  whatever  nature,   except  as
                      specifically provided elsewhere in this Agreement.

               5.3.2  No overtime will be charged to this Agreement  unless such
                      overtime  is  approved  in  advance  in writing by Buyer's
                      authorized technical representative.

               5.3.3  The  labor  rates  above are not  portal-to-portal;  i.e.,
                      billable hours start upon arrival at the work site and end
                      upon departure from the work site.

               5.3.4  Reimbursement  for  Travel  and  Expenses  - Travel is not
                      authorized  on  this   agreement,   unless  prior  written
                      approval is obtained from the Technical Representative.



               5.3.5  Labor rates above do not include  Travel & Expenses  (T&E)
                      associated  with the  performance of services.  Authorized
                      T&E  expenses  will be billed  directly to Buyer  separate
                      from labor hours,  at the actual cost  incurred by Seller,
                      with no mark up. Actual  travel (air and/or  vehicles) and
                      lodging expenses will be billed at an actual cost incurred
                      basis   according   to  the   U.S.   government   Services
                      Administration Federal Travel Regulations (FTR). Meals and
                      incidental  expenses  (M&IE)  will be billed on a per-diem
                      basis on the FTR established rate.


                                       9
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6.       ORDERING
         --------

         Individual  Orders will  constitute the sole authority for procurement
         of all items under this agreement.  Buyer may issue,  and Seller shall
         accept, Orders for the products described herein.  However,  Buyer and
         Seller agree that this  agreement does not constitute an Order for any
         items, nor shall it be construed as authorizing work hereunder.


7.       DELIVERY
         --------

         7.1   Items  shall  be  delivered  in  accordance   with  the  delivery
               requirements as set forth in individual  Orders.  Buyer may issue
               orders requiring delivery to multiple destinations.

               7.1.1  Delivery locations shall include but not be limited to any
                      Boeing  IDS  or  Boeing  Commercial   Airplane  sites  and
                      facilities.

         7.2   F.O.B.   point  shall  be  ORIGIN.   (Ship  in  accordance   with
               instructions   found  in  Supplier   Management  and  Procurement
               Information  -  Routing  Instructions),   located  on  web  site:
                      http://www.boeing.com/companyoffices/doingbiz/routinginst/
               routing.htm

         7.3   Seller's  lead-time  shall be as set  forth in  Exhibit  A "Parts
               Price  List" of this  Agreement.  Each Order  shall  contain  the
               required delivery date.

         7.4   Packaging Requirements

               Seller shall strictly adhere to Packaging Requirements specified
               in each individual Order.


8.       IDENTIFICATION, INVOICING AND PAYMENT
         -------------------------------------

         8.1   Seller shall submit invoices to the Accounts  Payable  Department
               as specified in the applicable  Order.  (Not applicable to Orders
               utilizing pay from receipt process).

         8.2   Seller  invoices  shall  comply  with  the  instructions  of  the
               applicable  Order.  Each invoice shall contain but not be limited
               to the following: (1) Order Number (2) Agreement Number, (3) Item
               Description, (4) Unit Price, (5) Total Amount Billed.

         8.3   Payment Terms under this agreement are: Net 30 days.

         8.4   The individual purchase orders referencing this LTA will indicate
               whether the purchases are for resale or not for resale.

               The Buyer's Tax Permit  Numbers  applicable to this Agreement are
               located at the following website:
                    http://finance.whq.boeing.com/Tax/taxgroup/taxregbystate.htm
               or,   contact  the  Tax  Department  at   562-797-3151   for
               assistance.


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8.5      SERVICES
         --------

               8.5.1  Travel and  expenses  are to be listed  separate  from the
                      hourly  rates  and must  include  dates  and  location  of
                      travel. All invoices for travel must contain the following
                      certification  to FAR 31.205.45 for all applicable  travel
                      and  expenses  as  follows:  "All  amounts  claimed are in
                      accordance with the FAR and are allowable as defined there
                      under."

               8.5.2  Subcontractor's  representative  shall, on a weekly basis,
                      present a completed  Technical  Services Timecard (Exhibit
                      "TBD") or Subcontractor's equivalent, to Buyer's technical
                      representative,  who  shall  verify  the  accuracy  of the
                      Accounting,  hours expended,  and other services  provided
                      and sign.  There is to be only one  timecard  per week per
                      employee. If Subcontractor's representative is working for
                      more than one Boeing technical representative,  all Boeing
                      technical  representatives  must sign.  The  Subcontractor
                      shall  attach the signed  Technical  Services  Timecard to
                      their   invoice  and   forward  to  Accounts   Payable  in
                      accordance  with  Section  VIII.D  entitled   "Invoicing."
                                                                     ----------

               8.5.3  Invoices  shall  be  approved  by the  identified  Invoice
                      Approver or his/her Authorized  Designee reflected on each
                      specific individual Order.

               8.5.4  Upon  completion of the work required under this Contract,
                      Subcontractor   shall   promptly   submit   to   Buyer  an
                      appropriate  executed   "certification  as  to  the  hours
                      expended"  which  certifies  the  total  number  of direct
                      technical labor hours expended under this Subcontract,  as
                      follows:

                      "I hereby  certify  that the direct  labor hours and other
                      direct  costs as  itemized  hereon  represent  the  actual
                      direct  labor  hours and other  direct  costs  accumulated
                      pursuant to the Contract identified herein.

                      Signature               Title              Date          "
                               ---------------     --------------    -----------




9.       TECHNICAL INTERFACE
         -------------------
         This provision is applicable to Orders for services only.

         For  services,  all technical  interfaces  with  Subcontractor  will be
         coordinated through the identified Technical Representative  identified
         on each individual Order.


10.      QUALIFICATION OF PERSONNEL
         --------------------------
         This provision is applicable to Orders for services only.

         10.1  No person  objected  to by Buyer  shall be  assigned by Seller to
               perform services hereunder, and upon receipt of a written request
               from Buyer for the  replacement  of any such person,  such person
               shall  be  removed  and  a  satisfactory  replacement  furnished.
               However, the Seller shall not remove,  reassign,  or transfer any
               Seller   employee   acceptable   to  Buyer  without  the  written
               permission of the Buyer during the term of this Contract.


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<PAGE>

         10.2  If, within the first twenty-four (24) hours of assignment, any of
               the  Seller's  personnel  prove to be  unsatisfactory  within the
               discretion of the Buyer,  no charge will be made to Buyer for the
               time  worked or  services  rendered  during  this  period by such
               personnel. Seller shall save and hold Buyer harmless from any and
               all liability from the exercise of its discretion.

         10.3  If objections to the qualifications of the Seller's personnel are
               not raised by Buyer within the first five (5) working days,  said
               personnel  will  be  considered  qualified  for  the  assignment,
               provided,  however,  at any time  after  expiration  of the above
               first five (5) working day period Seller  further shall  withdraw
               and  replace   immediately   any   personnel   that  Buyer  deems
               unacceptable,  even  though  such  personnel  have been  approved
               previously  by Buyer and provided,  further,  that in this event,
               the Seller  shall be  entitled  to payment  for  services  of the
               personnel  up to the date  Buyer  requests  the  personnel  to be
               withdrawn.  If Seller's  personnel  who are  acceptable  to Buyer
               subsequent to the five (5) working day trial period resign or are
               acceptable to Buyer  subsequent to the five (5) working day trial
               period resign or discontinue  employment for other reasons,  such
               personnel  shall be  immediately  replaced by the Seller  without
               additional  cost to Buyer  except as  otherwise  provided in this
               Contract.  Seller  shall be entitled  to payment for  services of
               personnel who discontinue employment up to and including the date
               of such discontinuance.

         10.4  Buyer  reserves the right to terminate the services of one or all
               of the Seller's personnel on twenty-four (24) hours notice.

         10.5  In the event that Engineering  Services are required as stated in
               Exhibit A "Parts Price List"  seller shall  complete all required
               documentation as stated in Exhibit B "Pro-6088".


11.      EXPORT CONTROL NOTICE
         ---------------------

         Seller  shall  presume  that all  drawings,  specifications,  and other
         technical data or goods provided by Buyer to Seller contain information
         subject to export control laws. Whether or not specifically  identified
         or marked as such by Buyer.  Seller Shall not disclose  (oral,  visual,
         written or  otherwise)  or provide such  drawings,  specifications  and
         other technical data or goods to any foreign person  (including but not
         limited  to  Seller's  employees,  Seller's  subcontractor's,  etc.) or
         foreign firm or institution, without first obtaining authorization from
         the  Department  of  State,  and  notifying  Buyer  in  advance  of its
         intentions to do so.

         A "foreign firm or institution" means those organized or existing under
         the laws of a country other than the United States, its territories, or
         possessions.  The term  includes  any  agency or  instrumentality  of a
         foreign government,  and firms,  institutions or business organizations
         that are owned or are substantially  controlled by foreign governments,
         firms, institutions, or individuals.

         A  "foreign  person"  does  not  include  United  States  citizens  and
         corporations and permanent resident aliens of the United States.


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<PAGE>

         Seller shall include the above paragraphs in all its purchase contracts
         and solicitations.

         Information  furnished  to  Seller  under  this   solicitation/purchase
         contact  may  contain  technical  data as  defined  as  defined  in the
         International  Traffic in Arms  Regulations  ("ITAR") at 22 CFR 120.10.
         Seller is advised and hereby  acknowledges that such technical data may
         not be exported,  disclosed or  transferred to any foreign  person,  as
         defined in the ITAR at 22 CFR 120.16,  without first complying with all
         the  requirements of the ITAR (22 CFR 120-130)  including  requirements
         for obtaining any required export authority.  If such technical data is
         marked  as ITAR  controlled,  Seller  shall  indemnify  and hold  Buyer
         harmless from and against any and all claims,  liabilities and expenses
         resulting  from  Seller's  failure to comply  with the export  laws and
         regulations of the United States.

         By law, Buyer must control access to export  controlled  technical data
         within its facilities. Therefore, Seller shall only assign personnel to
         perform work in Buyer's  facilities who are either U.S. citizens or who
         have been granted Permanent  Resident Alien status in the U.S. Seller's
         personnel  will  be  required  to  furnish   documentary   evidence  of
         citizenship  or  immigration  status to Buyer's  Security  Badge and ID
         personnel at the time of badge pick-up. Acceptable documentary evidence
         of   citizenship  or  immigration   status   includes  U.S.   Passport,
         Certificate  of  U.S.   Citizenship,   Certificate  of  Naturalization,
         certified  copy of U.S.  Birth  Certificate,  U.S.  Alien  Registration
         Receipt Card with Photo,  and un-expired  foreign passport with INS-551
         stamp or  Certificate  of Birth  Abroad  issued by U.S.  Department  of
         State.


12.      FOREIGN STATUS
         --------------

         Unless Seller has notified Buyer of its foreign  status,  by acceptance
         of this Contract, Seller agrees and certifies that:

             1) it is not a foreign corporation
             2) it is not a Representative of a Foreign Interest (RFI), and
             3) it will not employ any foreign  persons on the effort related to
                this Boeing procurement.

         Seller agrees to notify Boeing of any change in status set forth above.


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13.      SECURITY REQUIREMENTS
         ---------------------
         This provision is applicable to Orders for services only.

         If required,  processed and approved on individual  Orders,  the Seller
         shall comply with the security  requirements  of the Contract  Security
         Classification  Specification,  DD Form 254. Once approved, the DD Form
         254 will be incorporated by reference into the individual Order.


14.      PARTICIPATION
         -------------

         14.1  Seller  agrees  that any  Boeing  division  or Boeing  subsidiary
               ("Boeing Entity") not specifically included in this Agreement may
               place orders under this  Agreement  during the term hereof or any
               written  extension  thereof,  under  the  terms,  conditions  and
               pricing  specified  by this  Agreement.  Seller  agrees  that the
               prices  set  forth  herein  may  be  disclosed  by  Boeing  on  a
               confidential  basis to Boeing  entities  wishing  to invoke  this
               Section.    Seller   shall   notify   the   Boeing    Procurement
               Representative  named in Section 13.0 of this Agreement of Boeing
               Entities not  specifically  referenced  herein who frequently use
               this Agreement.

         14.2  Buyer   Subcontractors/Suppliers   -  Seller   agrees   that  any
               subcontractor  or supplier  performing work for Buyer,  including
               but not limited to inventory management, (hereinafter referred to
               as "Buyer  Subcontractor")  may issue an order or  contract  with
               Seller independent of the Agreement.  Seller agrees to sell items
               to such Buyer  Subcontractor  for its use in its  contracts  with
               Buyer at the prices set forth herein or at a price that  reflects
               the pricing  methodology used under the Agreement.  Buyer assumes
               no obligation, including payment obligation, with respect to such
               independent  contract.  Seller may request  written  verification
               from the Buyer  Subcontractor  that the items ordered pursuant to
               the authority of the Agreement support Buyer requirements. Seller
               shall  periodically  inform Buyer of each such  request  invoking
               this participation right. Seller shall not release stock material
               to other than the forecasting site without prior consent from the
               affected site(s) unless stocked material quantity is in excess of
               the total forecasted amount.

         14.3  Notification of Contract In the event a purchaser known by Seller
               to be a Boeing Entity or Boeing Subcontractor places an order for
               supplies  or  services  covered  by this  Agreement  but fails to
               reference this Agreement or otherwise seek the prices established
               by this  Agreement,  Seller  shall  notify such  purchaser of the
               existence of this Agreement and the prices established  hereunder
               and shall offer such prices to such purchaser.

         14.4  Notification  of  Price  Reductions:  If  Seller  is  awarded  an
               additional  order or  contract  by  another  Boeing  Entity  that
               results  in any  price  less  than that  established  under  this
               Agreement,   Seller  agrees  to  notify  the  Boeing  Procurement
               Representative  immediately  of said price  reductions  and shall
               extend all such price reductions to this Agreement.


15.      PRIORITY RATING
         ---------------


                                       14
<PAGE>

         15.1  The following  certification will be applicable to all DPAS-Rated
               Orders  issued  under  this  contract  against  government  prime
               contracts:

                   "This is a rated order  certified  for national  defense use,
                   and you are  required  to follow  all the  provisions  of the
                   Defense  Priorities and Allocations  System (DPAS) regulation
                   (15  CFR  700).  Pursuant  to the  DPAS  regulation,  you are
                   required to acknowledge  this order in writing within fifteen
                   working  days after  receipt of a `DO' rated order and within
                   ten working days after receipt of a `DX' rated order."


16.      NOTICES AND CORRESPONDENCE
         --------------------------

         All  notices and formal  correspondence  between  the  parties,  in all
         matters  dealing  with this  agreement,  will be sent to the  following
         addresses:

                To BUYER:           THE BOEING COMPANY
                                    5301 Bolsa Avenue, M/C H012-B436
                                    Huntington Beach, CA USA 92647-2099
                                    Attention:  Jeffrey M. Bertram
                                    Telephone: (714) 372-0570
                                    Fax: (562) 668-9239
                                    Email: Jeffrey.m.bertram@boeing.com

                To SELLER:          CopyTele Incorporated
                                    900 Walt Whitman Rd STE 203
                                    Melville, NY USA 11747
                                    Attention:  Ron Tenio
                                    Telephone: 631-549-5900 x 112
                                    Fax: 631-549-5974
                                    Email: rtenio@copytele.com

                or any other address, provided prior written notice is given to
                the other party.


17.      COST REDUCTION INITIATIVES
         --------------------------

         17.1  Value Engineering - Seller may from time to time submit proposals
               to Buyer to decrease Seller's  performance costs or produce a net
               reduction in the cost to Buyer of the Goods. Provided,  that such
               change   shall   not   impair   any   essential    functions   or
               characteristics of the goods being purchased.

         17.2  Submission of Proposal - Proposals  shall be submitted to Buyer's
               Procurement  Representative.  Buyer  shall not be liable  for any
               delay in acting  upon a proposal.  Buyer's  decision to accept or
               reject any proposal  shall be final.  If there is a delay and the
               net result in savings no longer justifies the investment,  Seller
               will not be obligated to proceed with the change.  Seller has the
               right to withdraw, in whole or in part, any proposal not accepted
               by Buyer within the time period specified in the proposal. Seller
               shall submit,  as a minimum,  the following  information with the
               proposal:


                                       15
<PAGE>

               17.2.1 Description  of  the   difference   between  the  existing
                      requirement and the proposed  change,  and the comparative
                      advantages and disadvantages of each;

               17.2.2 The  specific  requirements  that must be  changed  if the
                      proposal is adopted;

               17.2.3 The cost savings and Seller's implementation costs;

               17.2.4 Each proposal shall include the need dates for engineering
                      release and the time by which a proposal  must be approved
                      so as to obtain the maximum cost reduction.

         17.3  Acceptance  and Cost  Sharing - Buyer may accept,  in whole or in
               part,  any proposal by issuing a change order.  Until such change
               order has been issued,  Seller shall remain  obligated to perform
               in  accordance  with the terms  and  conditions  of the  original
               Order.

               17.3.1 Seller shall  include with each proposal  verifiable  cost
                      records and other data as  required by Buyer for  proposal
                      review and analysis.

               17.3.2 Each party shall be responsible for its own implementation
                      costs.

         17.4  Lean   Savings/Reward   Saving  -  Buyer  and  Seller   agree  to
               aggressively pursue  cost-improvement  opportunities.  As part of
               this program Buyer and Seller agree to work together to eliminate
               waste and increase efficiencies involved in supply of Buyer goods
               being  purchased.  Tools such as AIW's  (Accelerated  Improvement
               Workshops)  and  Kaizen  teams  will be  utilized  to help  reach
               cost-improvement  targets.  Buyer and Seller agree to support the
               improvement activities with necessary resources.

         17.5  Cost-Reduction  Goals - Buyer and Seller  agree to develop  plans
               and work towards the cost-reduction goals. Buyer and Seller shall
               agree to the saving  share  ratio prior to  undertaking  the cost
               reduction efforts.


18.      PERFORMANCE CRITERIA
         --------------------

         18.1  During performance under this Agreement, the Seller must maintain
               a minimum  composite rating for quality and delivery of Bronze as
               defined by Buyer's enterprise performance measurement systems. If
               the  Seller  falls  below  Bronze  in either  category  for three
               consecutive  months,  a  corrective  action  plan  (CAP)  must be
               submitted to Buyer within two weeks of published performance data
               for Buyer's review and acceptance. The CAP shall include, but not
               be  limited  to,   identification   of  the  issue   causing  the
               infractions,   Seller's   corrective  actions  and  a  date  when
               performance  shall be at Bronze or better.  This recovered Bronze
               level  shall be  maintained  for a period  of three  (3)  months.
               Failure to comply with this article may result in  termination of
               this Agreement.

         18.2  If  the  Seller  is  unable  to  meet  the  delivery  or  quality
               requirements  for an individual  Order,  Buyer may issue an Order
               with an  alternate  source or direct  Seller to obtain  the goods
               from  a  Buyer-approved   alternate  source  to  satisfy  Buyer's
               requirement.  Examples  where Buyer may impose  this  requirement
               include,  but are not limited to: 1) Seller unable to meet normal
               lead  time  for an  Order,  2)  Seller  unable  to meet  delivery
               schedule for an open Order,  3) Seller unable to support  Buyer's
               expedited lead time.


                                       16
<PAGE>

19.      ENTIRE AGREEMENT
         ----------------

         This Agreement supersedes all prior oral or written agreements, if any,
         between the parties and  constitutes the entire  agreement  between the
         parties with  respect to the goods and  services to be delivered  under
         this Agreement.

<TABLE>
<CAPTION>

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

         IN WITNESS  WHEREOF,  the parties  hereto have executed this  Agreement which is effective as of the date executed
                                                      by the Boeing Company below.
         <C>                                                         <C>

         ---------------------------------------------------------------------------------------------------------------------
                             THE BOEING COMPANY                                       COPYTELE INCORPORATED


                           /s/ Jeffrey M. Bertram                                       /s/ Denis A. Krusos
         ----------------------------------------------------------- ---------------------------------------------------------
                             Authorized Agent                                         Seller's Representative


                Jeffrey M. Bertram                5/22/2007                   Denis A. Krusos                 5/23/2007
         ------------------------------ ---------------------------- -------------------------------- ------------------------
              Printed or Typed Name                 Date                   Printed or Typed Name                 Date


                               Procurement Agent                                                CEO
         ----------------------------------------------------------- ---------------------------------------------------------
                                Title (print)                                              Title (print)


            (714) 372-0570                (562) 668-9239
         --------------------- ------------------------------------- ---------------------------------------------------------
               Telephone                     Fax Phone                          Telephone                    Fax Phone
         --------------------- ------------------------------------- ---------------------------------------------------------

</TABLE>


                                       17
<PAGE>

Exhibit A

         Equipment  Matrix
         Model Number                 Item Number   Description
1        Headset                      HV-00014-00   Headset DCS-1200/1400
2        Thuraya DCS-1400                           Thuraya Voice Encryption
3        DCS-1400                                   Wireless Voice Encryption
4        DCS-1400D                    HV-00013-00   Docker Voice Encryption
5        DCS-1200                     HV-00029-00   Voice/Data Encryption
6        USS-900                      HV-00012-00   Voice/Fax/Data Encryption
7        Thuraya USS-900 Narrowband   HV-00032-00   Voice/Fax/Data Encryption
8        USS-900 Narrowband           HV-00030-00   Voice/Fax/Data Encryption
9        Thuraya USS-900T                           Thuraya Fax Encryption
10       USS-900T                                   Wireless Fax Encryption
11       Thuraya USS-900TL                          Landline Fax Encryption
12       USS-900TL                    HV-00028-00   Landline Fax Encryption
13       Thuraya USS-900TC                          Thuraya PC/Fax Encryption
14       USS-900TC                    HV-00038-00   Wireless PC/Fax Encryption
15       USS-900WF                                  Wireless Fax Encryption
16       USS-900WFL                                 Landline Fax Encryption
17       Thuraya Cable                              APsi Compatible Cable
         Services Matrix
16       Senior Engineer                            Hourly rate for Services
17       Staff Engineer                             Hourly rate for Services

A.  CopyTele is not  considered  a Small  Business by  definition,  employing 22
personnel in our Melville, NY facility.
B. All encryption  equipment is manufactured by CopyTele in the U.S. by citizens
of the United States.
C. Pricing is based on a per unit cost with no quantity limitation.
D. Prices quoted are valid for 60 days.
E. Orders are based FOB CopyTele warehouse Melville, NY.
F. CopyTele provides a one-year  replacement  warranty from the date of shipment
to Boeing.
G. CopyTele  generally has enough inventory in stock to supply orders to Boeing,
lead times for unusually large orders should not exceed 45-days from the date of
a firm order commitment.
H.  Engineering  Services for Boeing  requested  projects  will be billed at the
rates listed  above,  the scope and timing of each project will be negotiated in
advance by both parties before the commencement of work.

CopyTele  encryption  solutions are prohibited from export to Cuba, Iran, Libya,
North Korea,  Sudan and Syria without a valid Export License.  Refer to the Code
of Federal Regulations, Title 15 Commerce and Foreign Trade.


                                       18
<PAGE>

Exhibit B

Purchased Services Agreement Application Package


The Boeing Company will procure  purchased  services by written  agreement only.
Purchase  services may not be performed and payment will not be authorized until
a properly processed and approved agreement has been fully executed. THIS IS NOT
A PURCHASED  SERVICES AGREEMENT - THIS IS THE APPLICATION TO BE CONSIDERED FOR A
PURCHASED  SERVICES  AGREEMENT - NO WORK CAN BE PERFORMED AS A RESULT OF SIGNING
THIS APPLICATION.

Purchased Services Agreement Acknowledgement form Page 2
Purchased Services Application Page 3-5
Application Attachments Page 6
         a)  Conflict  of  Interest  Questionnaire,   copy  attached
         b)  Ethics Guidebook - Please review, form F70080, copy attached
         c)  Non-Employee Code of Conduct, form F70096
         d)  Non-Employee Ethics Acknowledgement, form F70082
         e)  PRO 6375 "Trade Secrets and  Restrictions on Acquisition and Use of
             Third Party (Non-Boeing) Proprietary Information".

To be considered by The Boeing  Company or a subsidiary of The Boeing Company as
a purchased  services  supplier,  please  complete this  application  and send a
signed  copy by fax or  regular  mail  and an  electronic  copy by  email of the
completed application to the fax number or address and email provided below.

Please contact the Supplier  Management/Global Partner focal (procurement agent)
if you have any questions.

Supplier Management/Global Partners focal
[Procurement agent name]            Jeff Bertram
[Mailing address]                   5301 Bolsa Avenue
                                    Huntington Beach, CA 92647
[Telephone No.]                     714-372-0570
[Fax No.]                           562-668-9239
[Email address]                     Jeffrey.m.bertram@boeing.com


PURCHASED SERVICES ACKNOWLEDGEMENT FORM

As you are aware,  you and your  company  are  currently  being  considered  for
purchased  services  by The Boeing  Company  (Boeing)  for  certain  products or
services.  The  Boeing  Supplier   Management/Global   Partner  organization  is
responsible for negotiating and administering agreements for retaining purchased
services.  This letter is to specify the terms of our relationship  while Boeing
is  considering  your  application.  Boeing has a  long-standing  and continuing
commitment  to the highest  standards  of business  conduct.  Boeing has adopted
processes and procedures to ensure compliance with such standards and applicable
U.S. and local laws. The engagement of purchased  services  supplier must adhere
to the  compliance  process  used by  Boeing  for  selection  and  retention  of
purchased services. As part of this process, those engaged as purchased services
must be  evaluated  and  approved  by several  functions  within  Boeing and the
retention is not effective  until an agreement has been executed by the supplier
providing  purchased  services  and  accepted  and  executed by the  appropriate
business unit Supplier Management/Global Partner organization.


                                       19
<PAGE>

UNLESS AND UNTIL A FORMAL AGREEMENT HAS BEEN EXECUTED BY YOU OR YOUR COMPANY AND
BY BOEING,  YOU ARE NOT  AUTHORIZED  TO PERFORM  ANY  SERVICES  FOR OR INCUR ANY
EXPENSES ON BEHALF OF, OR REPRESENT  YOURSELF AS BEING ASSOCIATED WITH BOEING IN
ANY MANNER.

In addition,  until an agreement  has been fully  executed,  you or your company
must  refrain  from  providing  any Boeing  employee  any  information  that you
consider  proprietary  since Boeing  currently  has neither  legal nor fiduciary
responsibility  to you with respect to any such  information.  Please be advised
that you must NOT rely on verbal  statements  or  representations  of any Boeing
employee  indicating that you may proceed with performance  until you and Boeing
have executed a formal agreement. Should you take any actions based upon such an
oral  statement or  representation,  Boeing shall not be obligated to compensate
you for such  services,  nor to assume  any  liability  for such  actions or the
results of such actions.

As part of the purchased services review process, you will receive a copy of the
publication  Ethical Business Conduct Guidelines and will be required to certify
that you and your  company  have read and  understand  and will  comply with its
contents as it applies to your  services  with Boeing.  It is the  commitment of
Boeing to conduct its  business  fairly,  impartially,  in an ethical and proper
manner,  and in full  compliance  with  all laws and  regulations.  The  highest
standards of ethical business conduct are required of those providing  purchased
services to Boeing.

You acknowledge  that in your work for Boeing,  you or your company must not use
or disclose information that is confidential to or owned by any former employer,
client,  or other third party (often referred to as "proprietary  information").
You  confirm  that you or your  company  will  not  bring  any such  proprietary
information  into The  Boeing  Company  and  will  not use any such  proprietary
information in performance of work for The Boeing Company.

Should you have any questions or comments regarding this letter,  please contact
the procurement agent listed above on page 1.

Prospective supplier:                                    Date:
                           Signature


                           Name/title


Company name


Boeing representative:                                   Date:
                           Signature


                           Name/title


                                       20
<PAGE>

PURCHASED SERVICES AGREEMENT APPLICATION

This  form  must be  completed  by the  supplier/individual.  An  incomplete  or
unsigned form will cause a delay in processing the agreement. A signed Purchased
Services Agreement is required to begin services.

                           Date:

1.       Applicant

0  Individual        0     Company      0     Corporation      0     Partnership

Legal business name:

Business address:

Principal point of contact:

Telephone No.:

Fax No.:

Email address:

ID No. for tax purposes (e.g., SSN or Federal Taxpayer Identification No.):

Date business established:


If a corporation or partnership,  identify place of incorporation or partnership
registration:

Check the items below that apply to you and/or your business.
Size Information
(Check one only)
0 Small Business (SB)
0 Large Business
0 Foreign Business
0 Non-profit Organization
    NISH  yes0 no 0


                                       21
<PAGE>

0 Historically Black     College/ University or Minority Institution
         Ownership Information
(Check as many as apply)
0 Small  Disadvantaged or Minority Owned
0 SBA-Certified HUB Zone SB*
0 SBA-Certified Small  Disadvantaged  Business*
0 SBA(8a)-Certified Small  Disadvantaged  Business*
0 Veteran  (American)  Owned  Self-Certified
0 Service-disabled Veteran (American) Owned Self-Certified
0 Women Owned

If you are minority owned,  complete Owner Ethnicity Information Owner Ethnicity
Information  (Check  one  only)
0 Asian  Pacific  American
0  African  American
0 Hispanic  American
0 Native  American  0Subcontinent  Asian American
0 National Minority Supplier  Development Council Certified**
*Include a copy of the Small  Business  Administration  certification  letter or
PRO-Net profile showing certification.
**Include  a  copy  of  the  National  Minority  Supplier   Development  Council
certification.



2.   Describe the specific services (statement of work) that you or your company
will perform for Boeing. (Attach additional sheet if necessary.)


3.   Identify all individuals,  including  yourself,  (officers,  employees,  or
subcontractors of applicant) who will perform services under this agreement: (If
additional space is required, please list on a separate page.)

Name

Citizenship       Hourly Rate
U.S.$

4.   YES 0 NO 0 Would any  individual  or entity  other than an  employee of the
applicant   assist   applicant   in   providing   services  to  Boeing?   (e.g.,
subcontractor)

     If yes,  identify each such person or entity,  provide  resume and describe
their relationship to the applicant and the assistance they would provide. Note:
Any  person  or entity  so  identified  will be  required  to submit a  separate
Purchased  Services  Application to Boeing.  Please contact your Boeing Supplier
Management /Global Partners focal.


                                       22
<PAGE>

5.   Describe  the nature of any  proposed  contact  with the U.S.  or any other
government,  including anticipated frequency of contact,  identity of offices or
individuals with whom you or any individual  identified above will deal, and any
other relevant information about the proposed dealings:



6.   YES 0 NO 0 Does any U.S. or other  government  employee  hold any ownership
interest or exercise any management role in your organization?

     If yes,  identify the  individuals  and describe the extent of ownership or
management control below.


I have reviewed this  questionnaire,  and I certify that the  information I have
provided  in this  questionnaire  is  complete  and  accurate  to the best of my
knowledge and I agree to promptly notify Boeing,  in writing,  of any changes to
the foregoing answers.

Signature:

Printed or typed name:

Title:

Date:


Attachments

Conflict of Interest (COI) Questionnaire:

Ethics Guidebook:

Non-Employee Code of Conduct, form F70096

Non Employee Ethics Acknowledgement F70082

Intellectual Property and Confidentiality Agreement, Form F70083

PRO 6375


1.   Please return completed application


                                       23
<PAGE>

2.   Return COI,  Non-Employee  Code of Conduct  Certification  and Non-Employee
Ethics Acknowledgement forms for each individual who will perform services under
this Agreement.


                                       24
<PAGE>

Exhibit C


TITLE:                                               DATE:
------                                               -----

Technical Specification DCS-1400                     4/01/2004


Technical Specification DCS-1200                     4/01/2004


Technical Specification USS-900                      4/01/2004


Technical Specification USS-900-Narowband            4/01/2004


                                       25