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                          MEMORANDUM OF UNDERSTANDING

This Memorandum of Understanding ("MOU") made at Bangalore on this 30th day of
June , 2000 by and between:

1.   Wipro Limited, a company incorporated under the laws of India, having its
     registered office at Doddakannelli, Sarjapur Road, Bangalore - 560 035
     (hereinafter referred to as "Wipro" which expression shall wherever the
     context otherwise requires includes its nominees, legal representatives and
     successors);

2.   The Parties listed in Schedule 1 to this Agreement (hereinafter
     individually referred to by the Abbreviation in the said Schedule and
     collectively referred to as "New Promoters" which expression shall, unless
     the context otherwise requires include their respective nominees, legal
     representatives and successors.


Whereas:


1.  Peripherals System Division ("PSD") is the computer peripheral business of
    Wipro. It is currently engaged in design, development, manufacture,
    marketing, sales, distribution and support of computer peripherals. Its
    business office is located at 2nd floor, Basappa Complex, Lavelle Road and
    manufacturing facility located at 312, Hebbal Industrial Area, Mysore. It
    has regional / branch / sales / support offices /warehouses, at various
    locations in the country and operates from independent locations or from
    locations shared with other offices of Wipro. Some business associates also
    refer to PSD as Wipro Peripherals.

2.  The New Promoters are in the process of setting up a company with the name
    of  Wipro e Peripherals Limited ("NewCo").

3.  After the incorporation of NewCo and with effect from the effective date,
    Wipro has decided to transfer PSD to NewCo.

4.  The Parties hereto are keen to set out their business and commercial
    understanding / relationship that would form the basis for the finalisation
    of definitive agreement(s), which would set out the contractual rights and
    obligations of the Parties.

5.  The Parties agree that they shall proceed forthwith with the implementation
    of the provisions of this MOU.

                                                                               1
<PAGE>

NOW THEREFORE THIS MOU WITNESSETH AS FOLLOWS:


1.   Incorporation of NewCo and its Financing

1.1  NewCo is being incorporated with a total authorised capital of Rupees 100
     Million with the main objects to design, develop, manufacture, market,
     trade, maintain and export computer peripherals.The authorised capital will
     subsequently be increased to Rupees 150 Million in accordance with the
     provisions of the Companies Act, 1956.

1.2  This MOU sets out various rights and obligations on the part of NewCo. The
     New Promoters are entering into this MOU on behalf of NewCo, which is to be
     incorporated. Consequently, the New Promoters undertake to ensure that
     NewCo accepts the provisions of this MOU in accordance with the provisions
     of the Specific Relief Act, with respect to pre-incorporation contracts. If
     NewCo fails to accept the provisions of this MOU, the provisions of this
     MOU shall not take effect and Wipro shall not be obligated to enter into
     any definitive agreements in relation to the transfer the PSD to NewCo.

1.3  NewCo shall issue equity share capital (par value of Rs. 10) up to Rs. 140
     Million.

1.4  The total issued and paid up equity capital of NewCo will be as follows:

     (a)  39% would be allotted to Wipro in terms of Clause 2.2(a) herein.
     (b)  26% would be allotted to the New Promoters and PSD employees. Such
          allotments would exclude the allotment of shares of NewCo consequent
          to Clause 5.2/ 5.3 of this MOU.
     (c)  Balance 35% would be allotted to employees, business associates and
          other strategic investors of Wipro.

     The equity contribution of the New Promoters and employees referred to in
     (c) above will be fully paid up latest within 30 days from the effective
     date.



2.   Transfer of the PSD by Wipro to NewCo

2.1  Wipro will transfer its PSD as a going concern to NewCo for a consideration
     as set out in Clause 2.2 hereto with effect from  September 1, 2000
     (effective date). Subject to the terms of this MOU, the transfer would
     inter alia include the transfer of the following:

     a.  All the assets and liabilities as reflected in the books of the PSD.
     b.  All the plant, machinery, equipment, furniture and fixtures situated at
         the PSD factory at Mysore
     c.  The land leased to Wipro from KIADB at Mysore on which the factory is
         situated subject to NewCo paying all the charges for the said transfer
         as also the consideration payable to KIADB for the transfer of the land
         upon execution of the sale deed by and between KIADB and either Wipro
         or NewCo. Provided however, that if the said land needs to be
         transferred to Wipro first and then to NewCo, NewCo will pay the
         charges only for the transfer between Wipro and NewCo.

                                                                               2
<PAGE>

     d.  All the employees of the PSD mutually identified by Wipro and the New
         Promoters.
     e.  The dealer and franchisee channel contracts associated with, and
         selling, PSD products.
     f.  All agreements, if any, with PSD's principals and collaborators
         including Epson, HP, Printonix and IBM (in accordance with the terms
         and conditions in such agreements)
     g.  All assets lying at all locations from which PSD currently operate.
     h.  Intellectual property subject to Clause 7 of this MOU.


2.2  The consideration for the transfer of the PSD would be as follows:

     (a)  By allotment to Wipro equity shares of NewCo which post issue (not
          including issue of shares under clause 5.2 and 5.3)would constitute
          39% of the total paid up equity capital of Rupees 140 Million.
     (b)  Issue and allotment to Wipro 12.5% 5 year redeemable secured
          debentures worth Rupees 100 million which will be redeemed in 10
          quarterly installments with a moratorium of 10 quarters from the
          effective date. Interest will be payable quarterly rear-ended basis.
     (c)  Balance Rupees 85.4 Million by way of cheque.

     The consideration set out in b and c above, will stand adjusted to the
     actual size of  net capital employed as of August 31, 2000 as compared to
     May 31, 2000, based on the balance sheet as of the effective date.

2.3  The allotment of equity shares and debentures and the payment of the monies
     as per Clause 2.2 above shall be made as of the effective date.

2.4  Each party will bear its own costs for giving effect to this MOU and
     consequent definitive agreements. It is clarified that NewCo will bear the
     cost of stamp duty with respect to the transfer of PSD, wherever
     applicable.



3.  Shareholder Issues

3.1  Wipro shall not be entitled to sell 15% of the total equity of 39 % of
     NewCo for a period of three years from the effective date except to the New
     Promoters as set out in Clause 3.2 below. After the period of three years,
     Wipro shall be free, subject to Clause 3.3 hereto, to sell this 15% stake
     to any third person and in accordance with such terms and conditions as it
     deems fit.

                                                                               3
<PAGE>

3.2  During the period of three years that Wipro is prohibited from selling 15%
     of the total equity of NewCo (referred to in Clause 3.1 above), the New
     Promoters will have a right to buy from Wipro and Wipro is obligated to
     sell the said 15 % of total equity of NewCo at a price determined as
     follows:

     (a)  Price if right exercised prior to IPO:

          (i)  If the New Promoters have not made a sale in accordance with
               Clause 3.11, the price shall be Rs. 54 per share. If the shares
               are bought earlier than the third year from the effective date,
               the price shall be discounted by 12% per annum.

          (ii) If the New Promoters have made a sale in accordance with Clause
               3.11, the price shall be the higher of the price determined in
               accordance with (i) above or 75% of the price per share the New
               Promoters received for the sale under Clause 3.11.

     (b)  Price if right exercised after IPO:

          The price shall be at the higher of the price determined in accordance
          with Clause 3.2(a)(i) above or 75% of the market value whichever is
          higher. Market value is to be calculated on the basis of the average
          closing price on the BSE / NSE (if listed in India) or any overseas
          exchange (if listed abroad), whichever is higher,  for the trading
          sessions of the preceding 6 weeks.

3.3. Wipro will be free (a) at all times to sell 24% of the total equity in
     NewCo to any third person; and (b) after a period of three years from the
     effective date (in accordance with Clause 3.1 hereto) to sell 15% of the
     total equity in NewCo to any third person.

     Provided the New Promoters are made an offer for such shares (the offer
     including the terms and conditions thereof). In the event the New Promoters
     decide to reject such offer, Wipro shall be entitled to offer such shares
     to any third party at a price that is not lower than the price referred to
     in Wipro's offer to the New Promoters and on such terms and conditions that
     are no more favourable than those set forth in the said offer.

3.4. New Co can initially issue the capital to any of the persons mentioned in
     Clause 1.4(c) above on mutually agreed basis and shall not be at face
     value. Issue of capital to New Promoters in accordance with Clause 1.4(b)
     will be at face value. Shares issued at the face value but linked to
     Preference shares will be considered as shares issued at a premium.

                                                                               4
<PAGE>

3.5.  Any issue of capital subsequently (i.e. after the initial issue set out in
      Clause 1.4 and 3.4 hereto) to any investor / strategic partner will be as
      per the mutual agreement of the Parties and in accordance with the terms
      and conditions contained herein. For 24 months from the effective date,
      Wipro will not place any unreasonable terms for such issue particularly if
      the valuation of such issue (including Initial Public Issue (IPO)) is
      higher by on 30% per annum than the initial issue referred to above. After
      the period of 24 months, Wipro shall be entitled to withhold consent at
      its own discretion.

3.6.  NewCo will have five directors. If Wipro holds more than 20% of NewCo's
      equity, it will have a right to nominate two directors, one of whom shall
      be a permanent director of the Company. If Wipro holds more than 5% and
      less than 20% of NewCo's equity, it will have the right to nominate one
      director who shall be a permanent director. If Wipro holds less than 5% of
      the NewCo's equity, it shall not have the right to nominate any director.
      The new promoters will have a right to nominate the remaining directors,
      one of whom will be a permanent director of the company. The directors
      shall be appointed by NewCo in general meeting.

3.7.  NewCo, at its option, can increase the number of directors to seven. Any
      increase in the number of directors beyond seven will need the prior
      written consent of Wipro.

3.8.  Wipro will co-operate with the New Promoters in relation to issues of
      management and shall work together with the New Promoters to ensure that
      they vote together on all matters that are referred to the Board.

3.9.  The following super-majority items shall require a positive affirmative
      vote of the permanent director nominated by Wipro (at the Board level) and
      the positive affirmative vote of Wipro at any shareholder meeting where
      such item is considered:

     (a)  Sale by the New Promoters of any or all of their shares in NewCo to
          any third party except shares they acquired post "initial issue at
          face value" by way of ESOPs or otherwise.

          Provided that item (a) herein shall require a positive affirmative
          vote of Wipro as referred to above for a period of [three]  years from
          the effective date.

     (b)  NewCo undertaking or proposing to undertake any "new business
          activity" without the express written consent of Wipro. Provided that
          Wipro will not unreasonably withhold consent unless in good faith it
          is of the view that the "new business activity" conflicts with, or is
          in competition with, its own business activities as of such date.

          Provided that item (b) herein shall require a positive affirmative
          vote of Wipro as referred to above for a period of three years only
          from the effective date.

                                                                               5
<PAGE>

          For purposes of Clauses (b), the following may be noted:

          .  It is clarified that "new business activity" will not refer to the
             business activity with respect to computer/ internet peripherals
             and software / firmware / services in relation to such peripheral
             products. Provided that in case of software services, it shall not
             exceed 5% of the total turnover of NewCo, beyond which it will be
             considered as new business activity.

          .  Peripherals above refers to all devices / equipments capable of
             connecting to / with computers and networks including telecom /
             datacom networks.

          .  Business activity, above, includes design, development,
             manufacture, marketing, sales, distribution, trading and support
             with or without the help of web/internet.)

3.10  Wipro will not enter into the business of manufacturing of dot matrix
      printers for a period of three years and for this undertaking NewCo will
      pay Wipro a non-compete fee of Rupees Twenty Five Million per year for a
      period of three years.

3.11  For the first three years or till the expiry of one year after the IPO
      whichever is later, the New Promoters will not be entitled to sell their
      shares obtained by way of the "initial issue" in the Company without
      Wipro's consent. Thereafter till the end of the fifth year, they will be
      entitled to sell their stake in NewCo in favour of a third party provided
      such third party offers to purchase, on a pro-rata basis, the shares held
      by Wipro in NewCo on the same terms and conditions. Wipro shall be
      entitled to accept the offer, partially accept the offer or reject such
      offer. In case Wipro decides to reject the offer ,Wipro will purchase the
      shares of New Promoters at the same terms and conditions (including price)
      which were offered by the third party. After the end of the fifth year,
      the New Promoters shall be free to sell their stake in NewCo without any
      restriction.



4.    Relationship between Wipro and NewCo

4.1   In consideration of 4.2 below ,NewCo will give Wipro a discount of [not
      less than] Rupees 10 million per year for three years on the purchases
      made by Wipro from NewCo. The details of the same will be worked out by
      and between NewCo and Wipro. This payment is to be made quarterly within
      30 days of end of the quarter subject to deduction of taxes (including
      TDS) if applicable.Wipro will ensure a minimum business as agreed between
      Wipro and new company.

4.2   Wipro will treat NewCo as a most preferred vendor. Similarly NewCo will
      treat Wipro as a most preferred customer.

                                                                               6
<PAGE>

5     HR / Employee related issues

5.1.  The employees of PSD are classified (in Schedule 2 to this MOU) into:

      (a)  The employees whom NewCo does not want and Wipro wants will be
           transferred to Wipro within 3 to 6 months from the effective date.
           Till the date of transfer they shall be on deputation with NewCo and
           the total cost for such employees during such period (including
           deferred benefits) will be to NewCo's account.

      (b)  The employees whom NewCo and Wipro want will be given an option to be
           transferred to Wipro within 24 months of the effective date. Wherever
           the employee exercises the option to be transferred to Wipro, the
           exercise price in case of outstanding Wipro stock options would get
           adjusted to the extent of the upward or downward movement of stock
           during the period such employee was with NewCo.

      (c)  The employees whom NewCo does not want them and in relation to whom
           Wipro has to take a decision.

      (d)  The balance employees who will remain with PSD and will have no
           option to be transferred to Wipro.

      (e)  Wipro and new co will work out a joint action for such difficult
           employees wanting to go against above understanding.Cost of such
           action will be jointly shared

5.2   All employees, who have Wipro ESOPs will be given a NewCo ESOPs to
      compensate them for the expected value appreciation, for which a mechanism
      will be worked out by NewCo and the concerned employees.

5.3   All employees who have WERT shares will be given a proportionate equal
      value of NewCo shares (not options) to compensate them for the expected
      value appreciation. A mechanism will be worked out by NewCo and the
      concerned employees.

5.4   NewCo and Wipro will have an agreement of not hiring employees from each
      other for a period of 3 years without each other's prior written consent.

5.5   Subject to the terms of this MOU, all the employees transferred to NewCo
      from Wipro will be assured continuity of service. Consistent with this
      requirement, all employee deferred benefits which are funded and/or
      provided for shall be transferred to NewCo.

                                                                               7
<PAGE>

5.6   It is agreed that NewCo will not offer additional ESOPs in excess of 10%
      per annum of the total paid up equity capital of the Company without the
      prior written consent of Wipro.



6.0   IPO / Merger/Acquisitions etc

6.1   NewCo will have the right to go for any IPO on any stock exchange. NewCo
      will ensure that Wipro's name is not used for any IPO activity and that
      Wipro will not be treated as a "promoter" for SEBI purposes. In addition,
      appropriate and adequate disclosure will be made with respect to Wipro's
      decision to focus on its software business. All documents pertaining to
      the IPO will be vetted and approved by Wipro to ensure the above.

6.2   New Co can acquire and/or invest in any company provided it is not engaged
      in any `new business activity' (as defined in Clause 3.9). This
      restriction is applicable only for three years from the effective date.

6.3   Notwithstanding clause 6.2,NewCo shall be entitled to make any
      acquisitions / investments in any company / undertaking subject to the
      limit of 19% of the investee company or Rs. 40 Million (whichever is
      higher) without obtaining Wipro's prior written consent. Any acquisition /
      investment beyond these limits will need the prior written consent of
      Wipro. Provided however that NewCo will not be entitled to make any
      acquisition / investment in a new company / undertaking if it has
      defaulted in any payments to Wipro due under this MOU.

6.4   NewCo can restructure itself in any lega forml including demerger and
      slump sale if all dues to Wipro have been paid.In any such demerger and
      slump sale Wipro's equity holding(in terms of percentage) in the new legal
      entity will not be lower than Wipro holding in NewCo.

6.5   NewCo shall be entitled to involve itself in any merger / acquisition
      subject to following conditions:

      a.  At Wipro's option, all equity / debenture ownership is transferred /
          bought back before such an event.
      b.  There is adequate protection for management of Wipro branded products
          marketed by NewCo as stipulated by Wipro
      c.  The basic parameters of this MOU are not affected in any way, without
          the consent of Wipro.

                                                                               8
<PAGE>

7.   Intellectual Property

7.1  Within one year of the effective date or 6 months prior to its IPO,
     whichever is later, NewCo shall change it's name to ensure that Wipro's
     name is no longer used.

7.2  NewCo will have a right to use Wipro brand for its existing products for a
     period of three years for which it will pay a royalty of Rupees Three
     Million per year for three years. Use of the Wipro brand in relation to any
     new product that NewCo will launch will require Wipro's prior written
     consent. Wipro shall not withhold consent unreasonably for two years from
     the effective date. Thereafter Wipro shall be free to withhold consent at
     its own discretion.After three years the right to use Wipro brand can be
     extended subject to mutual agreement.

7.3  NewCo will be required to take all necessary and reasonable steps to ensure
     that the Wipro brandname is protected and used in a manner that enhances
     the value of the brand and consistent with such requirements that Wipro may
     stipulate from time to time.

7.4  NewCo will pay Wipro an amount of Rupees Twenty Million per year for three
     years towards its contribution for the promotion of the Wipro brandname.
     Wipro shall use its best efforts to provide reasonable publicity to the
     products of NewCo in its advertisement campaigns.

7.5  While Wipro will own all the rights of Wipro brand, Wipro will transfer to
     NewCo its rights of all sub brands of the PSD including Longlife, Peace of
     Mind, Proline, Lx, Ex, LQ, Fx etc. to the extent Wipro has rights in them.
     Continuance of the the rights for Geniuswriters in the peripherals business
     will be re-discussed at the end of three years and will be mutually agreed.



8    Transition

8.1  Wipro will continue to manage PF, Gratuity and pension funds for the
     employees of the transferred to NewCo until alternate arrangements are made
     by NewCo. NewCo shall put these alternate arrangements in place within a
     reasonable time. When alternate arrangements are available Wipro will
     transfer all employee credits to similar fund in NewCo.

8.2  New Promoters will take over the management on the effective date and will
     run it on trusteeship basis until all formalities are completed and
     approvals are obtained.

                                                                               9
<PAGE>

8.3  MOU will be subject to legal due diligence by the new Promoters 's legal
     counsel and Wipro and NewCo obtaining all requisite internal corporate
     approvals (which shall include a shareholder approval by Wipro). Parties
     will make good faith efforts to ensure that these approvals are obtained.

8.4  Till the effective date, the NewCo will be managed by a board comprising of
     two nominees from Wipro (Mr. Arun K. Thiagarajan and Mr S. C. Senapaty) and
     a nominee from New Promoters (Mr R. N. Agarwal). The nominee of the New
     Promoters will act as the CEO of NewCo.

8.5  All existing interdivisional arrangements will continue for 4 months for
     telephones, data communication, rentals etc. except that these will
     structured and formalized and paid for by NewCo. However no corporate and /
     or group overheads will be payable from the effective date. A list of all
     receivables and payables to and from Wipro will be made as on effective
     date and settled within a month by actual payments / receipts between NewCo
     and Wipro.

8.6  Within 4 months NewCo will make their own arrangements for all shared
     locations for office / warehouse, telephones, communication etc. During
     this time all assets of NewCo will be identified and transferred. Any asset
     (except land and building) on the books of PSD and not transferred to the
     New Co will be compensated on the basis of the book value of such assets.

8.7  Any downside / upside not provided / accounted for in the books of PSD at
     the time of transfer relating to earlier years and identified within a
     period of 12 months from the effective date, having a financial impact of
     more than Rupees Five Hundred Thousand on an individual item basis and
     Rupees 5 Million on an aggregate basis which is not in the knowledge of
     either party will be to the account of Wipro. Any financial impact
     irrespective of the amount of such impact identified beyond the period of
     12 months will be to the account of NewCo.

8.8  The Parties shall draw up a detailed list of contingent liabilities that
     shall form part of the definitive agreements. Contingent liabilities in
     this list arising on account of / labour issues will be to the account of
     NewCo. All other contingent liabilities in this list will be to the account
     of Wipro.

8.9  Subject to, and in accordance with, the approval / consent of the banks,
     Wipro shall extend its banking facilities to NewCo till such time as NewCo
     is able to establish its own banking facilities.

8.10  Wipro and NewCo will do all acts and provide all help / support to each
      other to get all the necessary approvals from all authorities for smooth
      transfer/conduct of business.

                                                                              10
<PAGE>

9.   MOU Related.

9.1  The Parties confirm that they will make good faith efforts to conclude
     definitive agreements relating to implement the provisions of this MOU. On
     signing of this MOU, the Parties shall immediately proceed to negotiate the
     terms of the definitive agreements.

9.2  From the date of this MOU and for a period of 2 years thereafter, the
     Parties agree not to disclose to, any person not having the need to know,
     any proprietary information or other confidential information of the other
     party (including the conclusion of this MOU and the negotiations and
     actions contemplated under this MOU) to which such party may gain access to
     on account of the negotiations and actions contemplated under this MOU.
     This provision shall not apply to information in the public domain or that,
     which is to be disclosed by virtue of applicable law and / or for obtaining
     the necessary approvals to implement the provisions of this MOU.

9.3  The Parties confirm that they shall not, without the prior written consent
     of the other Party, issue any press release or make any public announcement
     with regard to the provision of this MOU or the transactions and actions
     contemplated herein, except when required to be disclosed by virtue of
     applicable law.

9.4  The Parties hereto agree that with the exception of the terms and
     conditions of this MOU there is no intention to create legally binding
     obligations on either of the parties

9.5  The provisions of this MOU shall terminate on the happening of the
     following:

     (a)  the successful completion of the definitive agreements; or
     (b)  by mutual consent of the Parties; or
     (c)  the non-completion of the definitive agreement within 30 days (or such
          extended period that the Parties may agree) of Wipro obtaining
          shareholder approval for the transfer of the PSD to NewCo.

9.6  The Parties agree that this MOU shall not be amended in any way other than
     by mutual written agreement with the stated aim to amend this MOU.

9.7  This MOU constitutes the agreement of the Parties in connection with the
     desired co-operation in respect of the services and shall supersede all
     previous understandings, communications, negotiations and arrangements
     either oral or written, between the Parties with respect to the subject
     matter of this MOU.

9.8  This MOU shall be governed by the laws of India

9.9  Any notice to be served pursuant to this MOU is to be sent by registered
     post and a confirmatory copy faxed to the other Party at the following
     contact details:

     In the case of Wipro:      Company Secretary and Corporate Counsel,
                                Wipro Limited,
                                Doddakannelli,
                                Sarjapur Road,
                                Bangalore - 560 035
                                Fax: (080 - 844 0051)

                                                                              11
<PAGE>

     In the case of New Promoters:  At the contact details set out in Schedule 1
                                    to this Agreement


IN WITNESS WHEREOF, the Parties hereto have set and subscribed their respective
hands at Bangalore on the day and year first hereinabove written.


SIGNED AND DELIVERED BY WIPRO           )
THROUGH IT'S AUTHORISED                 )
SIGNATORY AND DULY CONSTITUTED          )
ATTORNEY Mr S C Senapaty,
Corporate Executive VP-Finance
In the Presence of                      )
Mr Satish Menon, Corporate VP-Legal &
Company Secretary__                     )

SIGNED AND DELIVERED BY
Mr Ram N Agarwal                        )
In the Presence of Mr K R Girish        )

                                                                              12
<PAGE>

Schedule1



LIST OF PROMOTERS



Mr Ram N Agarwal

                                                                              13

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