Document:

Exhibit 10.5
                                  ------------

                            LOAN AND PLEDGE AGREEMENT

                                     BETWEEN

                              MARS OVERSEAS LIMITED

                                       AND

                           COPYTELE INTERNATIONAL LTD.

                             DATED 2nd NOVEMBER 2007

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                                TABLE OF CONTENTS

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

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                            LOAN AND PLEDGE AGREEMENT

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

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

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

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

     WHEREAS

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

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

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

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

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

1.                DEFINITION AND INTERPRETATION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                          i)   this Agreement;

                         ii)   the Escrow Agreement;

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

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

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

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

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

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

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

                         i)    the principal amount of the Loan;

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

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

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

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

1.2.              In this Agreement:

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

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

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

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

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

2.                LOAN & PAYMENT

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

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

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

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

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

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

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

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

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

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

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

3.                CREATION OF SECURITY

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

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

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

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

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

4.                TAXES

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

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

5.                REPRESENTATIONS AND WARRANTIES

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

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

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

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

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

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

                    (f)  no Event of Default has occurred;

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

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

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

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

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

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

6.                BORROWERS' CONVENANTS

6.1.              Positive Covenants

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

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

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

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

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

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

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

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

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

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

6.2.              Negative Covenants

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

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

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

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

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

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

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

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

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

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

7.                EVENTS OF DEFAULT

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

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

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

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

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

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

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

                                       10
<PAGE>

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

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

8.                REMEDIES ON EVENT OF DEFAULT

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

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

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

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

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

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

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

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

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

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

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

9.       CONTINUING OBLIGATIONS

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

                                       11
<PAGE>

10.      COSTS, CHARGES AND EXPENSES

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

11.      INDEMNITY

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

12.      RELEASE AND TERMINATION

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

13.      MISCELLANEOUS

13.1.    Governing Law

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

13.2.             Dispute Resolution

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

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

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

                                       12
<PAGE>

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

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

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

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

13.3.             Notice/Communication

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

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

                    If to the Borrower:

                     Name     :     COPYTELE INTERNATIONAL LTD.

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

                    Attention :     Mr. Denis A. Krusos

                    Fax       :     631-549-5974

                                       13
<PAGE>

                    Telephone :     631-549-5900

                    If to the Lender:

                    Name      :     MARS OVERSEAS LIMITED

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

                    Attention :     Mr. Venugopal N. Dhoot

                    Fax       :     +91 22 6655 0580

                    Telephone :     + 91 22 6611 3600

13.4.    Waiver/Forbearance

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

13.5.    Severability

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

13.6.    Survival

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

13.7.             No Assignment

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

                                       14
<PAGE>

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

13.8.             Variation of the Terms

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

13.9.    No Third Party Beneficiaries

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

13.10.   Counterparts

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

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

COPYTELE INTERNATIONAL LTD.

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

MARS OVERSEAS LIMITED

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

                                       15Exhibit 10.6
                                  ------------

                            LOAN AND PLEDGE AGREEMENT

                                     BETWEEN

                           COPYTELE INTERNATIONAL LTD.

                                       AND

                              MARS OVERSEAS LIMITED

                             DATED 2nd NOVEMBER 2007

                                       1
<PAGE>

                                TABLE OF CONTENTS

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

                                       2
<PAGE>

                            LOAN AND PLEDGE AGREEMENT

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

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

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

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

     WHEREAS

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

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

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

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

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

1.                DEFINITION AND INTERPRETATION

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

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

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

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

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

                                       3
<PAGE>

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

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

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

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

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

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

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

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

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

                    i)   this Agreement;

                    ii)  the Escrow Agreement;

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

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

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

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

                                       4
<PAGE>

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

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

               i)   the principal amount of the Loan;

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

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

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

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

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

1.2.              In this Agreement:

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

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

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

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

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

2.                LOAN & PAYMENT

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

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

                                       5
<PAGE>

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

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

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

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

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

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

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

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

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

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

3.                CREATION OF SECURITY

                                       6
<PAGE>

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

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

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

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

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

4.                TAXES

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

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

5.                REPRESENTATIONS AND WARRANTIES

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

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

                                       7
<PAGE>

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

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

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

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

               (f)  no Event of Default has occurred;

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

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

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

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

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

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

                                       8
<PAGE>

6.       BORROWERS' CONVENANTS

6.1.     Positive Covenants

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

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

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

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

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

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

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

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

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

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

6.2.     Negative Covenants

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

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

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

                                       9
<PAGE>

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

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

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

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

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

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

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

7.                EVENTS OF DEFAULT

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

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

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

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

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

                                       10
<PAGE>

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

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

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

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

8.                REMEDIES ON EVENT OF DEFAULT

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

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

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

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

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

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

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

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

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

                                       11
<PAGE>

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

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

9.       CONTINUING OBLIGATIONS

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

10.      COSTS, CHARGES AND EXPENSES

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

11.      INDEMNITY

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

12.      RELEASE AND TERMINATION

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

13.      MISCELLANEOUS

13.1.    Governing Law

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

13.2.             Dispute Resolution

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

                                       12
<PAGE>

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

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

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

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

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

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

13.3.             Notice/Communication

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

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

         If to the Lender:

                                       13
<PAGE>

         Name              :        COPYTELE INTERNATIONAL LTD.

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

         Attention         :        Mr. Denis A. Krusos

         Fax               :        631-549-5974

         Telephone         :        631-549-5900

         If to the Borrower:

         Name              :        MARS OVERSEAS LIMITED

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

         Attention         :        Mr. Venugopal N. Dhoot

         Fax               :        +91 22 6655 0580

         Telephone         :        + 91 22 6611 3600

13.4.    Waiver/Forbearance

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

13.5.    Severability

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

13.6.    Survival

                                       14
<PAGE>

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

13.7.    No Assignment

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

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

13.8.    Variation of the Terms

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

13.9.    No Third Party Beneficiaries

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

13.10.   Counterparts

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

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

COPYTELE INTERNATIONAL LTD.

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

MARS OVERSEAS LIMITED

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

                                       15

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