<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 4, 1999
REGISTRATION NO. 333-76937
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
GENESIS MICROCHIP INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
NOVA SCOTIA, CANADA 5065 NONE
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
200 TOWN CENTRE BOULEVARD, SUITE 400
MARKHAM, ONTARIO CANADA L3R 8G5
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
PAUL M. RUSSO
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
GENESIS MICROCHIP INCORPORATED
1871 LANDINGS DRIVE
MOUNTAIN VIEW, CA 94043
(650) 934-4261
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C> <C>
FRANCIS S. CURRIE, ESQ. I. ERIC ERDMAN ANDREI M. MANOLIU, ESQ.
ANTON T. COMMISSARIS, ESQ. VICE PRESIDENT, FINANCE AND ADMINISTRATION JAMES R. JONES, ESQ.
WILSON SONSINI GOODRICH & ROSATI CHIEF FINANCIAL OFFICER AND SECRETARY COOLEY GODWARD LLP
PROFESSIONAL CORPORATION GENESIS MICROCHIP INCORPORATED 5 PALO ALTO SQUARE
650 PAGE MILL ROAD 200 TOWN CENTRE BOULEVARD, SUITE 400 3000 EL CAMINO REAL
PALO ALTO, CA 94304 MARKHAM, ONTARIO, CANADA L3R 8G5 PALO ALTO, CA 94306
(650) 493-9300 (905) 470-2742 (650) 233-4500
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
Upon completion of the merger described in this registration statement.
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS PROPOSED PROPOSED MAXIMUM
OF SECURITIES TO AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING AMOUNT OF
BE REGISTERED REGISTERED(1) PRICE PER SHARE PRICE(2) REGISTRATION FEE(3)
- -----------------------------------------------------------------------------------------------------------------------------------
Common Shares...................... 4,500,000 $0.34178 $1,538,017 $427.57
- -----------------------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the number of common shares of the registrant which may be issued
to former stockholders of Paradise Electronics, Inc. pursuant to the merger
described in this registration statement.
(2) Pursuant to Rule 457(f)(2) under the Securities Act of 1933, the
registration fee has been calculated based on the book value of Paradise as
of December 31, 1998, assuming conversion of the outstanding preferred stock
of Paradise.
(3) The amount of the registration fee includes $307.61 previously paid with
Schedule 14A filed on February 26, 1999 in connection with the proposed
merger.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT FILES
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
WILL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT BECOMES EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
The sole purpose of this Amendment No. 2 is to delete the prior version of
the attachments (Officers' Tax Certificates for each of Genesis and Paradise) to
Exhibit 8.1 of this Registration Statement. The prior version of the Officers'
Tax Certificates were included in the Registration Statement on Form S-4 as
filed on April 23, 1999 and were mistakenly included in Amendment No. 1 of the
Registration Statement on Form S-4 as filed on April 30, 1999, along with the
correct version. Only the correct version of the Officers' Tax Certificates are
attached to Exhibit 8.1 as filed with this Amendment No. 2 of the Registration
Statement on Form S-4.
<PAGE> 3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Companies Act (Nova Scotia) does not restrict a company from
indemnifying directors. Section 153 of the Companies Act (Nova Scotia) provides
that if in any proceeding against a director for negligence or breach of trust
it appears to the court hearing the case that the director or person is or may
be liable for negligence or breach of trust, but has acted honestly and
reasonably and ought fairly to be excused for the negligence or breach of trust,
the court may relieve him, either wholly or partly, from his liability on such
terms as the court may think proper.
The Genesis articles of association provide that no director or officer,
former director or officer, or person who acts or acted at Genesis's request, as
a director or officer of Genesis, in the absence of any dishonesty on this
person's part, shall be liable
- for the acts, or defaults of any other director or other person, or
- for any loss to Genesis through the deficiency of title to any property
acquired for Genesis, or through the deficiency of any security in any of
the funds of Genesis are invested, or
- for any loss or damage arising from the bankruptcy, insolvency or
tortious acts of any person with whom any funds are deposited, or
- for any loss occasioned by error of judgment or oversight on the part of
such person, or
- for any other loss, damage or misfortune whatsoever which happens in the
execution of the duties of such person.
The directors of Genesis are authorized, without approval or confirmation
by Genesis shareholders, to cause Genesis to give indemnities to any director or
other person who has undertaken any liability on behalf of Genesis and to
mortgage or charge the property of Genesis as security for indemnities given to
a director or other person.
Genesis Microchip Incorporated maintains liability insurance for its
directors and principal executive officers, including insurance against
liabilities under the Securities Act.
ITEM 21. EXHIBITS
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
<C> <S>
2.1(3) Agreement and Plan of Reorganization, dated January 22, 1999
(attached as Annex A to the proxy statement/prospectus
included in this Registration Statement).
3.1(3) Memorandum and Articles of Association of the Registrant.
4.1(1) Special Warrant Indenture between Genesis Microchip Inc. and
Montreal Trust Company of Canada.
4.2(1) Bonus Warrant Indenture between Genesis Microchip Inc. and
Montreal Trust Company of Canada.
4.3(1) Yorkton Securities Inc. Options to Purchase Common Shares of
Genesis Microchip Inc.
4.4(1) Resolution of Board of Directors dated December 11, 1997
amending the Yorkton Securities Inc. Option to Purchase
Common Shares.
4.5(1) Shareholder Rights Plan Agreement.
5.1(3) Opinion of Stewart McKelvey Stirling Scales with respect to
the legality of the securities being issued.
</TABLE>
II-1
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
<C> <S>
8.1 Tax Opinion of Wilson Sonsini Goodrich & Rosati,
Professional Corporation dated April 23, 1999.
8.2(4) Tax Opinion of Cooley Godward LLP, dated April 30, 1999.
10.1(2) Custom Sales Agreement between Genesis Microchip Inc. and
International Business Machines Corporation dated March 9,
1998.
10.2(1) 1987 Stock Option Plan.
10.3(1) 1997 Employee Stock Option Plan.
10.4(1) 1997 Non-Employee Stock Option Plan.
10.5(1) 1997 Employee Stock Purchase Plan.
10.6(1) 401(k) Plan.
10.7(1) International Distributorship Agreement with Kanematsu
Semiconductor Corporation dated May 10, 1993, amended
effective as of January 1, 1996.
10.8(1) 1993 Supply Agreement with In Focus Systems, Inc. dated
September 20, 1996.
10.9(1) Half-Band Filter IC Royalty Agreement with Miranda
Technologies Inc. dated September 23, 1993.
10.10(1) IC Royalty Agreement with NorthShore Laboratories, Inc.
dated March 2, 1993.
10.11(1) Supplemental IC Royalty Agreement with NorthShore
Laboratories dated September 1, 1994.
10.12(1) Supplemental IC Royalty Agreement No. 2 with NorthShore
Laboratories, Inc. dated October 8, 1997.
10.13(1) Agreement for ASIC Design and Purchase of Products with IBM
Microelectronics Essex Junction, Vermont dated November 19,
1996.
10.14(1) Amendment 1 to the Agreement for ASIC Design and Purchase of
Products with IBM, effective date January 1, 1997.
10.15(3) United Semiconductor Corporation Wafer Foundry Procedures
with Genesis Microchip Inc. dated January 19, 1999.
10.16(1) Loan Agreement with Royal Bank of Canada dated January 7,
1997.
10.17(1) Loan Agreement with Royal Bank of Canada dated October 24,
1997.
10.18(1) Pledge Agreement and Promissory Note of Paul M. Russo dated
October 25, 1996.
10.19(1) Pledge Agreement and Promissory Note of Paul M. Russo dated
July 25, 1997.
10.20(1) Pledge Agreement and Promissory Note of Lance Greggain dated
July 25, 1997.
10.21(1) Lease Agreement between Markham Executive Centre Building
No. 2 Limited and related parties and Genesis Microchip Inc.
of 200 Town Centre Blvd., Suite 303, Markham, Ontario L3R
8G5, commencing date April 1, 1997.
10.22(1) Lease Agreement between Markham Executive Building No. 2
Limited and related parties and Genesis Microchip Inc. of
200 Town Centre Blvd., 4th Floor, Markham, Ontario L3R 8G5,
commencing date January 1, 1994.
10.23(1) Lease Agreement between The Landmark and Genesis Microchip
Corporation for 2111 Landings Drive, Mountain View, CA 94043
dated September 15, 1994.
10.24(1) Modification No. 1 to Genesis Microchip Corporation Landmark
Lease Agreement dated September 15, 1994.
10.25(1) Modification No. 2 to Genesis Microchip Corporation Landmark
Lease Agreement dated September 15, 1994, modifying the
premises leased under the agreement to 2071 Landings Drive,
Mountain View, CA.
10.26(3) Lease Agreement between Kolter Properties Limited and
Genesis Microchip Inc. dated January 28, 1999 for 165
Commerce Valley Drive West, Markham, Ontario.
10.27(3) Form of Stock Option Agreement Under the 1987 Stock Option
Plan.
10.28(3) Form of Stock Option Agreement Under the 1997 Employee Stock
Option Plan.
10.29(3) Form of Stock Option Agreement Under the 1997 Non-Employee
Stock Option Plan.
10.30(3) Form of Genesis Affiliate Agreement dated January 22, 1999,
by and among the Registrant and affiliates of the
Registrant.
</TABLE>
II-2
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
-------- -----------
<C> <S>
10.31(3) Form of Paradise Affiliate Agreement dated January 22, 1999,
by and among the Registrant, Paradise Electronics, Inc. and
affiliates of Paradise Electronics, Inc.
10.32(3) Form of Genesis Stockholder Voting Agreement dated January
22, 1999 by and among the Registrant, Paradise Electronics,
Inc. and affiliates of the Registrant.
10.33(3) Form of Paradise Stockholder Voting Agreement dated January
22, 1999 by and among the Registrant, Paradise Electronics,
Inc. and affiliates of Paradise Electronics, Inc.
10.34(3) Consulting Agreement dated January 21, 1999 between the
Registrant and Ronald A. Rohrer.
10.35(3) Consulting Agreement dated January 21, 1999 between the
Registrant and William Welling.
21.1(3) Subsidiaries of the Registrant.
23.1 Consent of KPMG LLP dated May 3, 1999.
23.2 Consent of Ernst & Young LLP dated May 3, 1999.
23.3(3) Consent of NationsBanc Montgomery Securities LLC dated April
23, 1999.
23.4 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation dated April 23, 1999. (included in Exhibit 8.1).
23.5(4) Consent of Cooley Godward LLP dated April 30, 1999 (included
in Exhibit 8.2).
23.6(3) Consent of Stewart McKelvey Stirling Scales dated April 22,
1999 (included in Exhibit 5.1)..............................
24.1 Power of Attorney (included on signature page at page II-5).
99.1(3) Registrant's Form of Proxy.
99.2(3) Paradise Electronics, Inc. Form of Proxy.
99.3(3) Consent to the use of name from Alexander S. Lushtak dated
April 21, 1999
99.4(4) Consent to the use of name from Lawrence G. Finch dated
April 23, 1999.
</TABLE>
- ---------------
(1) Incorporated by reference to the Registration Statement (Registration
Statement No. 333-8258) on Form F-1 declared effective on February 23, 1998.
(2) Incorporated by reference to the Registrant's Annual Report (SEC Document.
000-29592) on Form 20-F filed with the Securities and Exchange Commission on
September 28, 1998.
(3) Previously filed on April 23, 1999 with the Securities and Exchange
Commission on the Registration Statement Form S-4 (SEC Registration
Statement No. 333-76937).
(4) Previously filed on April 30, 1999 with the Securities and Exchange
Commission on Amendment No. 1 to the Registration Statement Form S-4 (SEC
Registration Statement No. 333-76937).
ITEM 22. UNDERTAKINGS
(a) (A) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended (the "Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate
II-3
<PAGE> 6
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment will be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time will be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination
of the offering.
(B) The undersigned Registrant hereby undertakes that prior to any public
reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c),
the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other Items of the applicable form.
(C) The undersigned Registrant undertakes that every prospectus: (i) that
is filed pursuant to paragraph (B) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Act and is
used in connection with an offering of securities subject to Rule 415, will
be filed as a part of an amendment to the registration statement and will
not be used until such amendment is effective, and that, for purposes of
determining any liability under the Act, each such post-effective amendment
will be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time will be deemed to be the initial bona fide offering thereof.
(4) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the Memorandum and Articles of Association, as amended of the
Registrant and the Companies Act (Nova Scotia), or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(b) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the proxy
statement/prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form S-4,
within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding
to the request.
(c) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the Registration Statement when it became effective.
II-4
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on this Amendment No. 2 to the Form S-4 and has
duly caused this Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized, in Mountain View, California on the 4th day of May,
1999.
GENESIS MICROCHIP INCORPORATED
a Nova Scotia company
By: /s/ PAUL M. RUSSO
------------------------------------
Paul M. Russo
Chairman of the Board,
Chief Executive Officer and
Authorized U.S. Representative
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <C> <S>
/s/ PAUL M. RUSSO Chairman of the Board, Chief May 4, 1999
- ----------------------------------------------------- Executive Officer and Authorized
Paul M. Russo U.S. Representative
/s/ STEPHEN J. SOLARI* President and Chief Operating May 4, 1999
- ----------------------------------------------------- Officer
Stephen J. Solari
/s/ PETER DAKIN* Vice President, Manufacturing May 4, 1999
- ----------------------------------------------------- Operations
Peter Dakin
/s/ I. ERIC ERDMAN* Vice President, Finance and May 4, 1999
- ----------------------------------------------------- Administration, Chief Financial
I. Eric Erdman Officer and Secretary
/s/ HAMID FARZANEH* Vice President, Worldwide Sales May 4, 1999
- -----------------------------------------------------
Hamid Farzaneh
Director May 4, 1999
- -----------------------------------------------------
Brian S. Campbell
/s/ JAMES E. DONEGAN* Director May 4, 1999
- -----------------------------------------------------
James E. Donegan
/s/ GEORGE A. DUGUAY* Director May 4, 1999
- -----------------------------------------------------
George A. Duguay
/s/ A. DAVID FERGUSON* Director May 4, 1999
- -----------------------------------------------------
A. David Ferguson
/s/ RONALD A. ROHRER* Director May 4, 1999
- -----------------------------------------------------
Ronald A. Rohrer
</TABLE>
II-5
<PAGE> 8
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <C> <S>
/s/ WILLIAM H. WELLING* Director May 4, 1999
- -----------------------------------------------------
William H. Welling
*By: /s/ PAUL M. RUSSO
---------------------------------------
Paul M. Russo
Attorney-in-fact
Date: May 4, 1999
</TABLE>
II-6
<PAGE> 9
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DOCUMENT DESCRIPTION PAGE
------- -------------------- ------------
<C> <S> <C>
2.1(3) Agreement and Plan of Reorganization, dated January 22, 1999
(attached as Annex A to the proxy statement/prospectus
included in this Registration Statement)....................
3.1(3) Memorandum and Articles of Association of the Registrant....
4.1(1) Special Warrant Indenture between Genesis Microchip Inc. and
Montreal Trust Company of Canada............................
4.2(1) Bonus Warrant Indenture between Genesis Microchip Inc. and
Montreal Trust Company of Canada............................
4.3(1) Yorkton Securities Inc. Options to Purchase Common Shares of
Genesis Microchip Inc. .....................................
4.4(1) Resolution of Board of Directors dated December 11, 1997
amending the Yorkton Securities Inc. Option to Purchase
Common Shares...............................................
4.5(1) Shareholder Rights Plan Agreement...........................
5.1(3) Opinion of Stewart McKelvey Stirling Scales with respect to
the legality of the securities being issued.................
8.1 Tax Opinion of Wilson Sonsini Goodrich & Rosati,
Professional Corporation dated April 23, 1999...............
8.2(4) Tax Opinion of Cooley Godward LLP, dated April 30, 1999.....
10.1(2) Custom Sales Agreement between Genesis Microchip Inc. and
International Business Machines Corporation dated March 9,
1998........................................................
10.2(1) 1987 Stock Option Plan......................................
10.3(1) 1997 Employee Stock Option Plan.............................
10.4(1) 1997 Non-Employee Stock Option Plan.........................
10.5(1) 1997 Employee Stock Purchase Plan...........................
10.6(1) 401(k) Plan.................................................
10.7(1) International Distributorship Agreement with Kanematsu
Semiconductor Corporation dated May 10, 1993, amended
effective as of January 1, 1996.............................
10.8(1) 1993 Supply Agreement with In Focus Systems, Inc. dated
September 20, 1996..........................................
10.9(1) Half-Band Filter IC Royalty Agreement with Miranda
Technologies Inc. dated September 23, 1993..................
10.10(1) IC Royalty Agreement with NorthShore Laboratories, Inc.
dated March 2, 1993.........................................
10.11(1) Supplemental IC Royalty Agreement with NorthShore
Laboratories dated September 1, 1994........................
10.12(1) Supplemental IC Royalty Agreement No. 2 with NorthShore
Laboratories, Inc. dated October 8, 1997....................
10.13(1) Agreement for ASIC Design and Purchase of Products with IBM
Microelectronics Essex Junction, Vermont dated November 19,
1996........................................................
10.14(1) Amendment 1 to the Agreement for ASIC Design and Purchase of
Products with IBM, effective date January 1, 1997...........
10.15(3) United Semiconductor Corporation Wafer Foundry Procedures
with Genesis Microchip Inc. dated January 19, 1999..........
10.16(1) Loan Agreement with Royal Bank of Canada dated January 7,
1997........................................................
10.17(1) Loan Agreement with Royal Bank of Canada dated October 24,
1997........................................................
10.18(1) Pledge Agreement and Promissory Note of Paul M. Russo dated
October 25, 1996............................................
10.19(1) Pledge Agreement and Promissory Note of Paul M. Russo dated
July 25, 1997...............................................
10.20(1) Pledge Agreement and Promissory Note of Lance Greggain dated
July 25, 1997...............................................
</TABLE>
<PAGE> 10
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DOCUMENT DESCRIPTION PAGE
------- -------------------- ------------
<C> <S> <C>
10.21(1) Lease Agreement between Markham Executive Centre Building
No. 2 Limited and related parties and Genesis Microchip Inc.
of 200 Town Centre Blvd., Suite 303, Markham, Ontario L3R
8G5, commencing date April 1, 1997..........................
10.22(1) Lease Agreement between Markham Executive Building No. 2
Limited and related parties and Genesis Microchip Inc. of
200 Town Centre Blvd., 4th Floor, Markham, Ontario L3R 8G5,
commencing date January 1, 1994.............................
10.23(1) Lease Agreement between The Landmark and Genesis Microchip
Corporation for 2111 Landings Drive, Mountain View, CA 94043
dated September 15, 1994....................................
10.24(1) Modification No. 1 to Genesis Microchip Corporation Landmark
Lease Agreement dated September 15, 1994....................
10.25(1) Modification No. 2 to Genesis Microchip Corporation Landmark
Lease Agreement dated September 15, 1994, modifying the
premises leased under the agreement to 2071 Landings Drive,
Mountain View, CA...........................................
10.26(3) Lease Agreement between Kolter Properties Limited and
Genesis Microchip Inc. dated January 28, 1999 for 165
Commerce Valley Drive West, Markham, Ontario................
10.27(3) Form of Stock Option Agreement Under the 1987 Stock Option
Plan........................................................
10.28(3) Form of Stock Option Agreement Under the 1997 Employee Stock
Option Plan.................................................
10.29(3) Form of Stock Option Agreement Under the 1997 Non-Employee
Stock Option Plan...........................................
10.30(3) Form of Genesis Affiliate Agreement dated January 22, 1999,
by and among the Registrant and affiliates of the
Registrant..................................................
10.31(3) Form of Paradise Affiliate Agreement dated January 22, 1999,
by and among the Registrant, Paradise Electronics, Inc. and
affiliates of Paradise Electronics, Inc. ...................
10.32(3) Form of Genesis Stockholder Voting Agreement dated January
22, 1999 by and among the Registrant, Paradise Electronics,
Inc. and affiliates of the Registrant.......................
10.33(3) Form of Paradise Stockholder Voting Agreement dated January
22, 1999 by and among the Registrant, Paradise Electronics,
Inc. and affiliates of Paradise Electronics, Inc. ..........
10.34(3) Consulting Agreement dated January 21, 1999 between the
Registrant and Ronald A. Rohrer.............................
10.35(3) Consulting Agreement dated January 21, 1999 between the
Registrant and William Welling..............................
21.1(3) Subsidiaries of the Registrant..............................
23.1 Consent of KPMG LLP dated May 3, 1999.
23.2 Consent of Ernst & Young LLP dated May 3, 1999.
23.3(3) Consent of NationsBanc Montgomery Securities LLC dated April
23, 1999.
23.4 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation dated April 23, 1999. (included in Exhibit 8.1).
23.5(4) Consent of Cooley Godward LLP dated April 30, 1999 (included
in Exhibit 8.2).
23.6(3) Consent of Stewart McKelvey Stirling Scales dated April 22,
1999 (included in Exhibit 5.1)..............................
24.1 Power of Attorney (included on signature page at page
II-5).......................................................
99.1(3) Registrant's Form of Proxy..................................
99.2(3) Paradise Electronics, Inc. Form of Proxy....................
99.3(3) Consent to the use of name from Alexander S. Lushtak dated
April 21, 1999..............................................
99.4(4) Consent to the use of name from Lawrence G. Finch dated
April 23, 1999..............................................
</TABLE>
- ---------------
<PAGE> 11
(1) Incorporated by reference to the Registration Statement (Registration
Statement No. 333-8258) on Form F-1 declared effective on February 23, 1998.
(2) Incorporated by reference to the Registrant's Annual Report (SEC Document
No. 000-29592) on Form 20-F filed with the Securities and Exchange
Commission on September 28, 1998.
(3) Previously filed on April 23, 1999 with the Securities and Exchange
Commission on Registration Statement Form S-4 (SEC Registration Statement
No. 333-76937).
(4) Previously filed on April 30, 1999 with the Securities and Exchange
Commission on Amendment No. 1 to the Registration Statement Form S-4 (SEC
Registration Statement No. 333-76937).
<PAGE> 1
EXHIBIT 8.1
[WILSON SONSINI GOODRICH & ROSATI LETTERHEAD]
April 23, 1999
Genesis Microchip, Incorporated
200 Town Center Blvd.
Markham, Ontario L3R 8G5
Canada
Ladies and Gentlemen:
This opinion is being delivered to you in connection with the Form S-4
Registration Statement filed with the Securities and Exchange Commission (which
contains a Joint Proxy Statement/Prospectus) (the "Registration Statement")
filed pursuant to the Agreement and Plan of Reorganization (the "Reorganization
Agreement"), dated January 22, 1999, among Genesis Microchip, Incorporated, a
Nova Scotia company ("Genesis"), Rainbow Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of Genesis ("Merger Sub"), and
Paradise Electronics, Inc., a Delaware corporation ("Paradise").
Except as otherwise provided, capitalized terms used but not defined
herein shall have the meanings set forth in the Reorganization Agreement.
We have acted as counsel to Genesis and Merger Sub in connection with
the Merger. As such, and for the purpose of rendering this opinion, we have
examined, and are relying upon (without any independent investigation or review
thereof) the truth and accuracy, at all relevant times, of the statements,
covenants, representations and warranties contained in the following documents
(including all exhibits and schedules attached thereto):
1. The Reorganization Agreement;
2. The Form S-4 Registration Statement filed with the Securities
and Exchange Commission on April 23, 1999 (which contains a
Joint Proxy Statement/Prospectus);
3. Those certain tax representation letters expected to be
delivered to us by Genesis, Merger Sub, and Paradise containing
certain representations of Genesis, Merger Sub, and Paradise
(the "Tax Representation Letters"), attached here as Attachments
A and B; and
4. Such other instruments and documents related to the formation,
organization and operation of Genesis, Merger Sub, and Paradise
and related to the consummation of the Merger and the other
transactions contemplated by the Reorganization Agreement as we
<PAGE> 2
Genesis Microchip, Inc.
April 23, 1999
Page 2
have deemed necessary or appropriate.
In connection with rendering this opinion, we have assumed (without any
independent investigation or review thereof) that:
a. Original documents submitted to us (including signatures
thereto) are authentic, documents submitted to us as copies
conform to the original documents, and that all such documents
have been (or will be by the Effective Time) duly and validly
executed and delivered where due execution and delivery are a
prerequisite to the effectiveness thereof;
b. All representations, warranties and statements made or agreed to
by Genesis, Merger Sub, and Paradise, their managements,
employees, officers, directors and shareholders in connection
with the Merger, including, but not limited to, those set forth
in the Reorganization Agreement (including the exhibits thereto)
and the Tax Representation Letters, are true and accurate at all
relevant times;
c. All covenants contained in the Reorganization Agreement
(including exhibits thereto) and the Tax Representation Letters
are performed without waiver or breach of any material provision
thereof;
d. The Merger will be reported by Genesis, Merger Sub, and Paradise
on their respective federal income tax returns in a manner
consistent with the opinion set forth below;
e. Any representation or statement made "to the best knowledge of"
or similarly qualified is correct without such qualification;
and
f. The opinion dated April 23, 1999, rendered by Cooley Godward LLP
to Paradise with respect to the qualification of the Merger as a
reorganization within the meaning of Section 368(a) of the Code
has been delivered and not been withdrawn.
Based on our examination of the foregoing items and subject to the
limitations, qualifications, assumptions and caveats set forth herein, we are of
the opinion that, if the Merger is consummated in accordance with the
Reorganization Agreement (and without any waiver, breach, or amendment of any of
the provisions thereof) and the statements set forth in the Tax Representation
Letters are true and correct as of the Effective Time, then, for U.S. federal
income tax purposes, the Merger will be a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended.
In addition, the disclosure entitled "The Merger and Related
Transactions - Material Tax
<PAGE> 3
Genesis Microchip, Inc.
April 23, 1999
Page 3
Considerations" in the Joint Proxy Statement/Prospectus constituting a part of
the Registration Statement, insofar as it relates to the statements of U.S. law
and U.S. federal legal conclusions, constitutes our opinion as to the material
United States federal income tax consequences of the Merger. We have not
reviewed, and have no opinion regarding the discussion of the Canadian tax
consequences of the merger or of holding Genesis common shares.
This opinion does not address the various state, local or foreign tax
consequences that may result from the Merger or the other transactions
contemplated by the Reorganization Agreement. In addition, no opinion is
expressed as to any tax consequence of the Merger or the other transactions
contemplated by the Reorganization Agreement except as specifically set forth
herein, and this opinion may not be relied upon except with respect to the
consequences specifically discussed herein. No opinion is expressed as to the
federal income tax treatment that may be relevant to a particular investor in
light of personal circumstances or to certain types of investors subject to
special treatment under the federal income tax laws (for example, life insurance
companies, dealers in securities, taxpayers subject to the alternative minimum
tax banks, tax-exempt organizations, non-United States persons, U.S.
stockholders who own at least five percent of either the total voting power or
the total value of the stock of Genesis immediately after the Merger, and
stockholders who acquired their shares of Paradise stock pursuant to the
exercise of options or otherwise as compensation).
No opinion is expressed as to any other transaction whatsoever,
including the Merger, if all of the transactions described in the Reorganization
Agreement are not consummated in accordance with the terms of the Reorganization
Agreement and without waiver of any material provision thereof. To the extent
that any of the representations, warranties, covenants, statements and
assumptions material to our opinion and upon which we have relied are not
accurate and complete in all material respects at all relevant times, our
opinion would be adversely affected and should not be relied upon.
This opinion only represents our best judgment as to the federal income
tax consequences of the Merger and is not binding on the Internal Revenue
Service or any court of law, tribunal, administrative agency or other
governmental body. The conclusions are based on the Internal Revenue Code of
1986, as amended, existing judicial decisions, administrative regulations and
published rulings. No assurance can be given that future legislative, judicial
or administrative changes or interpretations will not adversely affect the
accuracy of the conclusions stated herein. Nevertheless, by rendering this
opinion, we undertake no responsibility to advise you of any new developments in
the application or interpretation of the federal income tax laws.
<PAGE> 4
Genesis Microchip, Inc.
April 23, 1999
Page 4
This opinion is being delivered for the purposes of being included as an
exhibit to the Registration Statement. We hereby consent to the use of our name
under the headings "The Merger and Related Transactions - Material Tax
Considerations" and "Legal Matters" in the Joint Proxy Statement/Prospectus and
to the filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ Wilson Sonsini Goodrich & Rosati
WILSON SONSINI GOODRICH & ROSATI
Professional Corporation
<PAGE> 5
ATTACHMENT A
OFFICER'S TAX CERTIFICATE
Genesis Microchip Inc.
200 Town Center Blvd.
Markham, Ontario L3R 8G5
Canada
April 29, 1999
<TABLE>
<S> <C>
Wilson Sonsini Goodrich & Rosati Cooley Godward, LLP
650 Page Mill Road One Maritime Plaza, 20th Floor
Palo Alto, California 94304 San Francisco, CA 94111-3580
</TABLE>
RE: MERGER PURSUANT TO THE AGREEMENT AND PLAN OF REORGANIZATION (THE
"REORGANIZATION AGREEMENT"), DATED JANUARY 22, 1999, AMONG GENESIS
MICROCHIP INC., A NOVA SCOTIA COMPANY ("GENESIS"), RAINBOW ACQUISITION
CORPORATION, A DELAWARE CORPORATION AND A WHOLLY-OWNED SUBSIDIARY OF
GENESIS ("MERGER SUB"), AND PARADISE ELECTRONICS, INC., A DELAWARE
CORPORATION ("PARADISE"), AND THE RELATED AGREEMENT OF MERGER BETWEEN
PARADISE AND MERGER SUB (THE "MERGER AGREEMENT").
Ladies and Gentlemen:
This letter is supplied to you in connection with your rendering of
opinions regarding certain federal income tax consequences of the Merger. Unless
otherwise indicated, capitalized terms not defined herein have the meanings set
forth in the Reorganization Agreement. The Reorganization Agreement and the
Agreement of Merger, including exhibits and schedules attached thereto, are
collectively referred to as the "Agreements."
After consulting with their counsel and auditors regarding the meaning of
and factual support for the following representations, the undersigned hereby
certify and represent that the following facts are now true and will continue to
be true as of the Effective Time of the Merger and thereafter where relevant:
1. Pursuant to the Merger, Merger Sub will merge with and into Paradise,
and Paradise will acquire all of the assets and liabilities of Merger Sub.
Specifically, the assets transferred to Paradise pursuant to the Merger will
represent at least ninety percent (90%) of the fair market value of the net
assets and at least seventy percent (70%) of the fair market value of the gross
assets held by Merger Sub immediately prior to the Merger. In addition, at least
ninety percent (90%) of the fair market value of the net assets and at least
seventy percent (70%) of the fair market value of the gross assets held by
Paradise immediately prior to the Merger will continue to be held by Paradise
immediately after the Merger. For the purpose of determining the percentage of
Paradise's and Merger Sub's net and gross assets held by Paradise immediately
following the Merger, the following assets will be treated as property held by
Merger Sub or Paradise, as the case may be, immediately prior but not subsequent
to the Merger: (i) assets disposed of by Paradise or Merger Sub (other than
assets transferred from Merger Sub to Paradise in the Merger) prior to or
subsequent to the Merger and in contemplation thereof (including without
limitation any asset disposed of by Paradise, other than in the ordinary course
of business, pursuant to a plan or intent existing during the period ending at
the Effective Time of the Merger and beginning with the commencement of
negotiations (whether formal or informal) with Genesis regarding the Merger (the
"Pre-Merger Period")); (ii) assets used by Paradise or Merger Sub to pay
stockholders perfecting appraisal rights or other expenses or liabilities
incurred in connection with the Merger and (iii) assets used to make
distribution, redemption or other payments in respect of stock of Paradise or
rights to acquire such stock (including payments treated as such for tax
purposes) that are made in contemplation of the Merger or that are related
thereto;
2. Genesis' principal reasons for participating in the Merger are bona fide
business purposes not related to taxes;
3. Prior to the Merger, Genesis will directly own shares of stock
possessing at least eighty percent (80%) of the total combined voting power of
all classes of stock entitled to vote and at least eighty percent (80%) of
<PAGE> 6
the total number of shares of all other classes of stock of Merger Sub (such
percentage ownership to be referred to hereinafter as "Control"). For purposes
of determining Control, a person shall not be considered to own shares of voting
stock if rights to vote such shares (or to restrict or otherwise control the
voting of such shares) are held by a third party (including a voting trust)
other than an agent of such person;
4. In the Merger, shares of stock of Paradise representing Control of
Paradise will be exchanged solely for shares of Genesis Common Stock. For
purposes of this paragraph, shares of stock of Paradise exchanged in the Merger
for cash and other property (including, without limitation, cash paid to
stockholders of Paradise perfecting appraisal rights, if any, or in lieu of
fractional shares of Genesis Common Stock) will be treated as shares of stock of
Paradise outstanding on the date of the Merger but not exchanged for shares of
Genesis Common Stock;
5. Merger Sub was formed solely for the purposes of effecting the Merger
and has conducted no business or other activities except in connection with the
Merger;
6. Genesis has no plan or intention to cause Paradise to issue additional
shares of stock after the Merger, or take any other action, that would result in
Genesis losing Control of Paradise;
7. Other than the possible reacquisition of shares held in the Escrow Fund,
Genesis has no plan or intention to reacquire any of its stock issued pursuant
to the Merger;
8. Except for successive transfers of assets or stock acquired in the
Merger to corporations Controlled in each transfer by Genesis, and subsequent
transfers to corporations Controlled by Genesis-Controlled corporations, Genesis
has no plan or intention to: (a) liquidate Paradise; (b) merge Paradise with or
into another corporation including Genesis or its affiliates; (c) sell,
distribute or otherwise dispose of the stock of Paradise, or cause Paradise to
sell or otherwise dispose of the stock of Paradise; or (d) cause Paradise to
sell or otherwise dispose of any of its assets or of any assets acquired from
Merger Sub, except for dispositions made in the ordinary course of business or
in payment of expenses incurred by Paradise pursuant to the Merger;
9. In the Merger, Merger Sub will have no liabilities assumed by Paradise
and will not transfer to Paradise any assets subject to liabilities, except to
the extent incurred in connection with the transactions contemplated by the
Agreements;
10. Genesis will cause Paradise to either continue the historic business of
Paradise or use a significant portion of its historic business assets in a
business. For purposes of this representation, Genesis will be deemed to satisfy
this requirement if (a) the members of Genesis' qualified group (defined to be
one or more chains of corporations connected through stock ownership with
Genesis, provided Genesis directly holds stock in an amount constituting Control
of at least one other corporation in the chain, and the stock in each of the
other corporations is directly owned in an amount constituting Control by one of
the other corporations), in the aggregate, continue the historic business of
Paradise or use a significant portion of Paradise's historic business assets in
a business, or (b) the foregoing activities are undertaken by a partnership in
which (i) the members of Genesis' qualified group, in the aggregate, own at
least a thirty-three and one-third percent (33 1/3%) interest, or (ii) a member
of the qualified group has active and substantial management functions as a
partner with respect to the partnership business and the members of the
qualified group, in the aggregate, own at least a twenty percent (20%) interest;
11. During the past five (5) years, none of the outstanding shares of
capital stock of Paradise, including the right to acquire or vote any such
shares have, directly or indirectly, been owned by Genesis or, to Genesis'
knowledge, affiliates of Genesis;
12. Neither Genesis nor Sub is, nor will be on the Effective Time of the
Merger, an "investment company" -- i.e. a regulated investment company, a real
estate investment trust, or a corporation fifty percent (50%) or more of whose
total assets are stock and securities and eighty percent (80%) or more of the
value of whose total assets are assets held for investment.
13. Neither Genesis nor Sub is, nor will be on the Effective Time of the
Merger, under the jurisdiction of a court in a Title 11 case, or in a
receivership, foreclosure, or similar proceeding in a federal or state court;
-2-
<PAGE> 7
14. Following the Merger, Genesis will comply with all necessary
record-keeping and information filing requirements by filing as part of its
return for the taxable year within which the Merger occurs a complete statement
of all facts pertinent to the nonrecognition of gain or loss in connection with
the Merger;
15. No stockholder of Paradise is acting as agent for Genesis in connection
with the Merger or the approval thereof; Genesis will not reimburse any
stockholder of Paradise for any stock of Paradise such stockholder may have
purchased or for other obligations such stockholder may have incurred;
16. Neither Genesis nor any persons related to Genesis ("Genesis Related
Persons"), will, in connection with the Merger, redeem, purchase or otherwise
acquire ("Purchase") shares of Genesis Common Stock to be issued in the Merger,
that would, in the aggregate, reduce the value of all of the outstanding
Paradise Capital Stock as of the Effective Time, after giving effect to such
Purchases, to a value of less than fifty percent (50%) of the value of all of
the outstanding Paradise Capital Stock as of immediately prior to the Effective
Time determined without regard to such Purchases. For purposes of this
representation, shares of Paradise Capital Stock (i) with respect to which a
Paradise stockholder receives consideration in the Merger other than Genesis
Common Stock (including without limitation cash received in lieu of fractional
shares of Genesis Common Stock), (ii) with respect to which a Purchase by
Genesis or a Genesis Related Person occurs prior to or subsequent to, and in
connection with the Merger, for consideration other than Genesis Common Stock,
(iii) with respect to which a Purchase by Paradise or a person related to
Paradise occurs prior to and in connection with the Merger for consideration
other than Genesis Common Stock or Paradise Capital Stock, or (iv) with respect
to which Paradise made an extraordinary distribution prior to and in connection
with the Merger, shall be considered shares of Paradise Capital Stock
outstanding as of immediately prior to the Effective Time and with respect to
which there is a Purchase. Further, for purposes of this representation, (i)
repurchases in the ordinary course of business of unvested shares, if any,
acquired from Paradise terminating employees, and repurchases in the open market
pursuant to an ongoing stock repurchase program which was not created or
modified in connection with the Merger, for which there is a reasonable business
purpose, and (ii) the possible reacquisition of shares held in the Escrow Fund
will be disregarded;
17. The total fair market value of all consideration other than Genesis
Common Stock received by stockholders of Paradise in the Merger (including,
without limitation, cash paid to stockholders of Paradise perfecting appraisal
rights) will be less than ten percent (10%) of the aggregate fair market value
of stock of Paradise outstanding immediately prior to the Merger;
18. The fair market value of the Genesis Common Stock received by each
stockholder of Paradise will be approximately equal to the fair market value of
the stock of Paradise surrendered in exchange therefor, and the aggregate
consideration received by stockholders of Paradise in exchange for their stock
of Paradise will be approximately equal to the fair market value of all of the
outstanding shares of stock of Paradise immediately prior to the Merger;
19. Except as set forth in Section 8.3 of the Reorganization Agreement,
each of Merger Sub, Genesis, Paradise and each stockholder of Paradise will pay
separately his, her or its own expenses relating to the Merger;
20. There is no intercorporate indebtedness existing between Genesis and
Paradise or between Merger Sub and Paradise that was issued, acquired, or will
be settled at a discount as a result of the Merger, and Genesis will assume no
liabilities of Paradise or any stockholder of Paradise in connection with the
Merger;
21. The terms of the Reorganization Agreement and the agreements related
thereto are the product of arm's length negotiations;
22. None of the compensation received by any stockholder-employee of
Paradise will be separate consideration for, or allocable to, any of their
shares of stock of Paradise; none of the shares of Genesis Common Stock received
by any stockholder-employee of Paradise will be separate consideration for, or
allocable to, any employment agreement or any covenants not to compete; and the
compensation paid to any stockholder-employee of Paradise will be for services
actually rendered and will be commensurate with amounts paid to third parties
bargaining at arm's length for similar services;
23. The payment of cash in lieu of fractional shares of Genesis Common
Stock is solely for the purpose of avoiding the expense and inconvenience to
Genesis of issuing fractional shares and does not represent
-3-
<PAGE> 8
separately bargained-for consideration. The total cash consideration that will
be paid in the transaction to Paradise stockholders instead of issuing
fractional shares of Genesis Common Stock will not exceed one percent (1%) of
the total consideration that will be issued in the transaction to Paradise
stockholders in exchange for their shares of Paradise Capital Stock. The
fractional share interests of each Paradise stockholder will be aggregated, and
no Paradise stockholder will receive cash in an amount equal to or greater than
the value of one full share of Genesis Common Stock;
24. With respect to each instance, if any, in which shares of stock of
Paradise have been purchased by a stockholder of Genesis (a "Stockholder")
during the Pre-Merger Period (a "Stock Purchase"), to the best knowledge of
Genesis: (i) the Stock Purchase was made by such Stockholder not as a
representative of Genesis; (ii) the purchase price paid by such Stockholder
pursuant to the Stock Purchase was the product of arm's length negotiations, was
not advanced, and will not be reimbursed, either directly or indirectly, by
Genesis; (iii) at no time was such Stockholder or any other party required or
obligated to surrender to Genesis Paradise capital stock acquired in the Stock
Purchase, and neither such Stockholder nor any other party will be required to
surrender to Genesis the Genesis Common Stock for which such shares of stock of
Paradise will be exchanged in the Merger; and (iv) the Stock Purchase was not a
formal or informal condition to consummation of the Merger;
25. Fifty percent (50%) or less of both the total voting power and the
total value of the stock of Genesis will be received in the Merger, in the
aggregate, by Paradise stockholders who are U.S. persons;
26. Fifty percent (50%) or less of each of the total voting power and the
total value of the stock of Genesis will be owned, in the aggregate, immediately
after the Merger by U.S. persons that are either officers or directors of
Paradise or that are stockholders of Paradise who own at least five percent (5%)
of either the total voting power or total value of the stock of Paradise
immediately prior to the Merger. For purposes of this representation, any stock
of Genesis owned by U.S. persons immediately after the transfer will be taken
into account, whether or not it was received in the Merger for stock of
Paradise;
27. Genesis (i) has been engaged in an active trade or business for the
entire thirty-six (36) month period immediately before the Merger, (ii) will not
now, or in the future, substantially dispose of or discontinue such trade or
business. Also, the fair market value of Genesis is generally at least equal to
the fair market value of Paradise;
28. Genesis will cause Paradise to attach to its timely filed U.S. income
tax return for the taxable year in which the transfer occurs a statement titled
"Section 367(a) -- Reporting of Cross-Border Transfer Under Reg. Section
1.367(a)-3(c)(6)," signed under penalties of perjury by an officer of the
corporation to the best of the officer's knowledge and belief;
29. No stockholder of Paradise that is a "United States person" will own,
directly or indirectly, five percent (5%) or more of either the total voting
power or the total value of the outstanding capital stock of Genesis immediately
after the Merger. For purposes of the preceding sentence, the term "United
States person" includes any (A) citizen or resident of the U.S., (B) U.S.
corporation or partnership, or (C) estate or trust other than a foreign estate
or trust;
30. The Escrow Fund is being established for good and valid business
reasons;
31. The Genesis Common Stock held in the Escrow Fund is issued and
outstanding on the balance sheet of Genesis;
32. Genesis is a corporation; and
33. Genesis and Merger Sub are authorized to make all of the
representations set forth herein.
The undersigned recognize that (i) your opinions will be based on the
representations set forth herein and on the statements contained in the
Agreements and documents related thereto, and (ii) your opinions will be subject
to certain limitations and qualifications including that they may not be relied
upon if any such representations are not accurate in all material respects.
-4-
<PAGE> 9
The undersigned recognize that your opinions will not address any tax
consequences of the Merger or any action taken in connection therewith except as
expressly set forth in such opinions.
Very truly yours,
GENESIS MICROCHIP INC.,
a Nova Scotia company
By: /s/ PAUL M. RUSSO
Title: Chairman and Chief Executive
Officer
RAINBOW ACQUISITION CORPORATION,
a Delaware corporation
By: /s/ PAUL M. RUSSO
Title: Chairman and Chief Executive
Officer
-5-
<PAGE> 10
ATTACHMENT B
OFFICER'S TAX CERTIFICATE
PARADISE ELECTRONICS, INC.
1999 CONCOURSE DRIVE
SAN JOSE, CA 95131
APRIL 29, 1999
<TABLE>
<S> <C>
Wilson Sonsini Goodrich & Rosati Cooley Godward, LLP
650 Page Mill Road One Maritime Plaza, 20th Floor
Palo Alto, California 94304 San Francisco, CA 94111-3580
</TABLE>
RE: MERGER PURSUANT TO THE AGREEMENT AND PLAN OF REORGANIZATION (THE
"REORGANIZATION AGREEMENT"), DATED JANUARY 22, 1999, AMONG GENESIS
MICROCHIP INC., A NOVA SCOTIA COMPANY ("GENESIS"), RAINBOW ACQUISITION
CORPORATION, A DELAWARE CORPORATION AND A WHOLLY-OWNED SUBSIDIARY OF
GENESIS ("MERGER SUB"), AND PARADISE ELECTRONICS, INC., A DELAWARE
CORPORATION ("PARADISE"), AND THE RELATED AGREEMENT OF MERGER BETWEEN
PARADISE AND MERGER SUB (THE "MERGER AGREEMENT").
Ladies and Gentlemen:
This letter is supplied to you in connection with your rendering of
opinions regarding certain federal income tax consequences of the Merger. Unless
otherwise indicated, capitalized terms not defined herein have the meanings set
forth in the Reorganization Agreement or the Merger Agreement. The
Reorganization Agreement and the Merger Agreement, including exhibits and
schedules attached thereto, are collectively referred to as the "Agreements."
After consulting with its counsel and auditors regarding the meaning of and
factual support for the following representations, the undersigned hereby
certifies and represents that the following facts are now true and will continue
to be true as of the Effective Time of the Merger and thereafter where relevant:
1. Pursuant to the Merger, Merger Sub will merge with and into Paradise,
and Paradise will acquire all of the assets and liabilities of Merger Sub.
Specifically, at least ninety percent (90%) of the fair market value of the net
assets and at least seventy percent (70%) of the fair market value of the gross
assets held by Paradise immediately prior to the Merger will continue to be held
by Paradise immediately after the Merger. For the purpose of determining the
percentage of Paradise's net and gross assets held by Paradise immediately
following the Merger, the following assets will be treated as property held by
Paradise immediately prior but not subsequent to the Merger: (i) assets disposed
of by Paradise prior to or subsequent to the Merger and in contemplation thereof
(including without limitation any asset disposed of by Paradise, other than in
the ordinary course of business, pursuant to a plan or intent existing during
the period ending on the Effective Time of the Merger and beginning with the
commencement of negotiations (whether formal or informal) with Genesis regarding
the Merger (the "Pre-Merger Period")); (ii) assets used by Paradise to pay
stockholders perfecting appraisal rights or other expenses or liabilities
incurred in connection with the Merger and (iii) assets used to make
distribution, redemption or other payments in respect of stock of Paradise or
rights to acquire such stock (including payments treated as such for tax
purposes) that are made in contemplation of the Merger or that are related
thereto;
2. Other than in the ordinary course of business or pursuant to its
obligations under the Agreements, Paradise has made no transfer of any of its
assets (including any distribution of assets with respect to, or in redemption
of, stock) in contemplation of the Merger or during the Pre-Merger Period;
3. Paradise's principal reasons for participating in the Merger are bona
fide business purposes unrelated to taxes;
4. At the Effective Time of the Merger, Paradise will have no outstanding
equity interests other than those disclosed in Section 2.2 of the Reorganization
Agreement. At the Effective Time of the Merger, except as specified in the
Reorganization Agreement, Paradise will have no outstanding warrants, options,
or
<PAGE> 11
convertible securities or any other type of right outstanding pursuant to which
any person could acquire shares of Paradise capital stock or any other equity
interest in Paradise (other than those disclosed in Section 2.2 of the
Reorganization Agreement or the disclosure schedule with respect thereto) that,
if exercised, could affect Genesis' acquisition or retention of the direct
ownership of shares of stock possessing at least eighty percent (80%) of the
total combined voting power of shares of all classes of stock entitled to vote
and at least eighty percent (80%) of the total number of shares of all other
classes of stock of Paradise (such percentage ownership to be referred to
hereinafter as "Control"). For purposes of determining Control, a person shall
not be considered to own shares of voting stock if rights to vote such shares
(or to restrict or otherwise control the voting of such shares) are held by a
third party (including a voting trust) other than an agent of such person;
5. In the Merger, shares of stock of Paradise representing Control of
Paradise will be exchanged solely for shares of voting stock of Genesis. For
purposes of this paragraph, shares of the stock of Paradise exchanged in the
Merger for cash and other property (including, without limitation, cash paid to
stockholders of Paradise perfecting appraisal rights, if any, or in lieu of
fractional shares of Genesis Common Stock) will be treated as shares of stock of
Paradise outstanding on the date of the Merger but not exchanged for shares of
voting stock of Genesis;
6. The total fair market value of all consideration other than shares of
Genesis Common Stock received by stockholders of Paradise in the Merger
(including, without limitation, cash paid to Paradise stockholders perfecting
appraisal rights or in lieu of fractional shares of Genesis Common Stock) will
be less than ten percent (10%) of the aggregate fair market value of shares of
stock of Paradise outstanding immediately prior to the Merger;
7. Paradise has no plan or intention to issue additional shares of stock
after the Merger, or take any other action, that would result in Genesis losing
Control of Paradise;
8. Except for successive transfers of assets or stock acquired in the
Merger to corporations Controlled in each transfer by Genesis, to the best
knowledge of Paradise, Genesis has no plan or intention to: (a) liquidate
Paradise; (b) merge Paradise with or into another corporation, including Genesis
or its affiliates; (c) sell or otherwise dispose of the stock of Paradise, or
cause Paradise to sell or otherwise dispose of the stock of Paradise; or (d)
cause Paradise to sell or otherwise dispose of any of its assets or of any of
the assets acquired from Merger Sub, except for dispositions made in the
ordinary course of business or in payment of expenses incurred by Paradise
pursuant to the Merger;
9. Paradise intends to continue its historic business or use a significant
portion of its historic business assets in a business following the Merger;
10. The liabilities of Paradise have been incurred by Paradise in the
ordinary course of its business;
11. The fair market value of Paradise's assets will, on the Effective Time
of the Merger, exceed the aggregate liabilities of Paradise plus the amount of
liabilities, if any, to which such assets are subject;
12. To the best knowledge of Paradise, Genesis does not own, nor has it
owned during the past five (5) years, directly or indirectly, any shares of
stock of Paradise or rights to acquire such stock;
13. Paradise is not and will not be on the Effective Time of the Merger an
"investment company" -- i.e. a regulated investment company, a real estate
investment trust, or a corporation fifty percent (50%) or more of whose total
assets are stock and securities and eighty percent (80%) or more of the value of
whose total assets are assets held for investment;
14. Paradise is not and will not be on the Effective Time of the Merger
under the jurisdiction of a court in a Title 11 case, or in a receivership,
foreclosure, or similar proceeding in a federal or state court;
15. Paradise, and persons related to Paradise, have not redeemed, purchased
or otherwise acquired ("Purchased") other than in exchange for Genesis Common
Stock or Paradise Capital Stock, an amount of Paradise Capital Stock, and
Paradise has not made any extraordinary distributions with respect to its common
stock, prior to and in connection with the Merger, that would, in the aggregate,
reduce the value of all of the outstanding Paradise Capital Stock immediately
prior to the Merger, after giving effect to such Purchases and
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extraordinary distributions (the "Pre-Merger Value"), to a value of less than
fifty percent (50%) of the Pre-Merger Value (the "Continuing Proprietary
Interest"). For purposes of this representation, Paradise Capital Stock treated
as part of the Continuing Proprietary Interest will not include shares of
Paradise Capital Stock that will be (i) exchanged in the Merger for
consideration other than Genesis Common Stock, including Paradise Capital Stock
surrendered for cash or other property by dissenters, or (ii) deemed exchanged
for a fractional share of Genesis Common Stock which is redeemed by Genesis. In
addition, for purposes of this representation, extraordinary distributions will
not include periodic dividends that are consistent with Paradise's historic
dividend practices, and repurchases in the ordinary course of business of
unvested shares by Paradise, if any, acquired from Paradise terminating
employees will be disregarded;
16. The payment of cash in lieu of fractional shares of Genesis Common
Stock is solely for the purpose of avoiding the expense and inconvenience to
Genesis of issuing fractional shares of Genesis Common Stock and does not
represent separately bargained-for consideration. The total cash consideration
that will be paid in the transaction to stockholders of Paradise instead of
issuing fractional Genesis Common Stock will not exceed one percent (1%) of the
total consideration that will be issued in the transaction to the stockholders
of Paradise in exchange for their shares of Paradise. The fractional share
interests of each stockholder of Paradise will be aggregated, and no stockholder
of Paradise will receive cash in an amount equal to or greater than the value of
one share of Genesis Common Stock;
17. The fair market value of the shares of Genesis Common Stock received by
each stockholder of Paradise will be approximately equal to the fair market
value of the shares of stock of Paradise surrendered in exchange therefor and
the aggregate consideration received by stockholders of Paradise in exchange for
their shares of stock of Paradise will be approximately equal to the fair market
value of all of the outstanding shares of stock of Paradise immediately prior to
the Merger;
18. Except as set forth in Section 8.3 of the Reorganization Agreement,
each of Merger Sub, Genesis, Paradise and each stockholder of Paradise will each
pay separately his, her or its own expenses relating to the Merger;
19. There is no intercorporate indebtedness existing between Genesis and
Paradise or between Merger Sub and Paradise that was issued, acquired, or will
be settled at a discount as a result of the Merger; Genesis will assume no
liabilities of Paradise or any stockholder of Paradise in connection with the
Merger;
20. The terms of the Reorganization Agreement and the other agreements
relating thereto are the product of arm's length negotiations;
21. None of the compensation received by any stockholder-employees of
Paradise will be separate consideration for, or allocable to, any of their
shares of stock of Paradise; none of the shares of Genesis Common Stock received
by any stockholder-employees of Paradise will be separate consideration for, or
allocable to, any employment agreement or any covenants not to compete; and the
compensation paid to any stockholder-employees of Paradise will be for services
actually rendered and will be commensurate with amounts paid to third parties
bargaining at arm's length for similar services;
22. With respect to each instance, if any, in which shares of stock of
Paradise have been purchased by a stockholder of Genesis (a "Stockholder")
during the Pre-Merger Period (a "Stock Purchase"): (i) to the best knowledge of
Paradise, (A) the Stock Purchase was made by such Stockholder on its own behalf,
rather than as a representative, or for the benefit, of Genesis, (B) the Stock
Purchase was entered into solely to satisfy the separate interests of such
Stockholder and the seller, and (C) the purchase price paid by such Stockholder
pursuant to the Stock Purchase was the product of arm's length negotiations; and
(ii) the Stock Purchase was not a formal or informal condition to consummation
of the Merger;
23. Fifty percent (50%) or less of both the total voting power and the
total value of the stock of Genesis will be received in the Merger, in the
aggregate, by Paradise stockholders who are U.S. persons;
24. Fifty percent (50%) or less of each of the total voting power and the
total value of the stock of Genesis will be owned, in the aggregate, immediately
after the Merger by U.S. persons that are either officers or directors of
Paradise or that are shareholders of Paradise who own at least five percent (5%)
of either the
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total voting power or the total value of the stock of Paradise immediately prior
to the Merger. For purposes of this representation, any stock of Parent owned by
U.S. persons immediately after the transfer will be taken into account, whether
or not it was received in the Merger for stock of Paradise;
25. No Paradise stockholder will own, as a result of the Merger, an
ownership interest in Genesis, as of immediately after the Merger, equal to or
greater than five percent (5%) of either the total voting power or the total
value of the stock of Genesis;
26. Paradise has no intention to cause Genesis to substantially dispose of
or discontinue a trade or business such that Genesis would not (i) be engaged in
an active trade or business for the entire thirty-six (36) month period
immediately before the Merger, (ii) now, or in the future, substantially dispose
of or discontinue such trade or business, (iii) be valued at a fair market value
that is not at least generally equal to the fair market value of Paradise;
27. No stockholder of Paradise that is a "United States person" will own,
directly or indirectly, five percent (5%) or more of either the total voting
power or the total value of the outstanding capital stock of Genesis immediately
after the Merger. For purposes of the preceding sentence, the term "United
States person" includes any (A) citizen or resident of the U.S., (B) U.S.
corporation or partnership, or (C) estate or trust other than a foreign estate
or trust;
28. The Escrow Fund is being established for good and valid business
reasons; and
29. Paradise is authorized to make all of the representations set forth
herein.
The undersigned recognizes that (i) your opinions will be based on the
representations set forth herein and on the statements contained in the
Agreements and documents related thereto, and (ii) your opinions will be subject
to certain limitations and qualifications including that they may not be relied
upon if any such representations are not accurate in all material respects.
Notwithstanding anything herein to the contrary, the undersigned makes no
representations regarding any actions or conduct of Paradise pursuant to
Genesis' exercise of control over Paradise after the Merger.
The undersigned recognizes that your opinions will not address any tax
consequences of the Merger or any action taken in connection therewith except as
expressly set forth in such opinions.
Very truly yours,
PARADISE ELECTRONICS, INC.,
a Delaware corporation
By: /s/ JEFF DIAMOND
------------------------------------
Title: President & CEO
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EXHIBIT 23.1
CONSENT OF KPMG LLP
The Board of Directors
Genesis Microchip Incorporated
We consent to the inclusion of our report on the financial statements of
Genesis Microchip Incorporated as at May 31, 1998 and 1997 and for each of the
years in the three year period ended May 31, 1998 to be included in this
proxy/prospectus and to the reference to our firm under the heading "Experts" on
the proxy/ prospectus.
/s/ KPMG LLP
KPMG LLP
Chartered Accountants
Toronto, Canada
May 3, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under that caption "Experts" and to
the use of our report dated February 5, 1999, with respect to the consolidated
financial statements of Paradise Electronics, Inc. included in the Proxy
Statement/Prospectus included in the Registration Statement (Form S-4) of
Genesis Microchip Incorporated.
/s/ Ernst & Young LLP
San Jose, California
May 3, 1999
