1
EXHIBIT 10.30
PARENT AFFILIATE AGREEMENT
This AFFILIATE AGREEMENT (this "AGREEMENT") dated as of January 22,
1999, by and between Genesis Microchip Incorporated, a Nova Scotia corporation
("PARENT"), and the undersigned affiliate ("AFFILIATE") of Parent. Capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to
them in the Reorganization Agreement (as defined below).
RECITALS
A. Parent and Paradise Electronics, Inc., a Delaware corporation
("COMPANY"), propose to enter into an Agreement and Plan of Reorganization
("REORGANIZATION AGREEMENT") pursuant to which a subsidiary of Parent will merge
with and into Company (the "MERGER"), and Company will become a subsidiary of
Parent;
B. Pursuant to the Merger, at the Effective Time outstanding shares of
Company Capital Stock will be converted into the right to receive shares of
Parent Common Stock;
C. It will be a condition to effectiveness of the Merger that the
independent accounting firms that audit the annual financial statements of
Company and Parent will have delivered their written concurrences to the effect
that the Merger will be accounted for as a pooling of interests;
D. Affiliate may be deemed to be an "affiliate" of Parent, as the term
"affiliate" is used (i) for purposes of paragraphs (c) and (d) of Rule 145 of
the Rules and Regulations (the "RULES AND REGULATIONS") of the Securities and
Exchange Commission (the "SEC") and (ii) in the SEC's Accounting Series Releases
130 and 135, as amended, although nothing contained herein shall be construed as
an admission by Affiliate that Affiliate is in fact an affiliate of Parent.
NOW, THEREFORE, intending to be legally bound, the parties hereby agree as
follows:
1. Acknowledgments by Affiliate. Affiliate acknowledges and understands
that the representations, warranties and covenants by Affiliate set
forth herein will be relied upon by Parent, Company, and their
respective Affiliates, counsel and accounting firms, and that
substantial losses and damages may be incurred by these persons if
Affiliate's representations, warranties or covenants are breached.
Affiliate has carefully read this Agreement and the Reorganization
Agreement and has discussed the requirements of this Agreement with his
professional advisors, who are qualified to advise him with regard to
such matters.
2. Covenants Related to Pooling of Interests. During the period beginning
30 days prior to the Closing Date and ending on the second day after the
day that Parent publicly announces financial results covering at least
30 days of combined operations of Parent and Company, Affiliate will not
sell, exchange, transfer, pledge, distribute, make any gift or otherwise
dispose of or grant any option, establish any "short" or put-equivalent
position with respect to or enter into any similar transaction (through
derivatives or otherwise) intended to have or having the effect,
directly or indirectly, of reducing his risk relative to any securities
or shares of Parent Common Stock. Parent may, at its discretion, place a
stock transfer notice consistent with the foregoing with its
2
transfer agent with respect to Affiliate's shares. Notwithstanding the
foregoing, Affiliate will not be prohibited by the foregoing from
selling or disposing of shares so long as such sale or disposition is in
accordance with the "de minimis" test set forth in SEC Staff Accounting
Bulletin No. 76. Affiliate may also make charitable gifts, so long as
(i) the charity agrees to be bound by this Section 2, and (ii) Parent
reasonably determines that the gift would not result in the Merger being
accounted for as other than a pooling of interests.
3. [INTENTIONALLY LEFT BLANK.]
4. Miscellaneous.
a. Counterparts. This Agreement shall be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
b. Binding Agreement. This Agreement will inure to the benefit
of and be binding upon and enforceable against the parties and their successors
and assigns.
c. Waiver. No waiver by any party hereto of any condition or of
any breach of any provision of this Agreement shall be effective unless in
writing and signed by each party hereto.
d. Governing Law. This Agreement shall be governed by and
construed, interpreted and enforced in accordance with the laws of the State of
California, without giving effect to any choice or conflict of law provision or
rule (whether of the State of California or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
California.
e. Attorneys' Fees. In the event of any legal actions or
proceeding to enforce or interpret the provisions hereof, the prevailing party
shall be entitled to reasonable attorneys' fees, whether or not the proceeding
results in a final judgment.
f. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction or interpretation of this
Agreement.
g. Third Party Reliance. Counsel to and independent auditors for
the Parent and the Company shall be entitled to rely upon this Agreement.
-2-
3
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
on the day and year first above written.
GENESIS MICROCHIP INCORPORATED AFFILIATE
By: By:
--------------------------------- -------------------------------------
Name: Name:
------------------------------- -----------------------------------
Title: Title:
------------------------------ ----------------------------------
Affiliate's Address for Notice:
----------------------------------------
----------------------------------------
----------------------------------------
[SIGNATURE PAGE TO PARENT AFFILIATE AGREEMENT]
