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To	the Shareholders of Genesis Microchip Incorporated:

1.

to consider, pursuant to an interim order of the Supreme Court of Nova Scotia dated             , 2001, and to vote upon a proposed resolution to approve an arrangement under Section 130 of the Companies Act (Nova Scotia) that will reorganize Genesis Microchip from a Nova Scotia company to a newly formed Delaware corporation, which we refer to as Genesis Microchip Delaware. In this reorganization, Genesis Microchip, a Nova Scotia company, will become a wholly owned subsidiary of Genesis Microchip Delaware, and shareholders of Genesis Microchip will become stockholders of Genesis Microchip Delaware;

2.

to consider and vote upon a proposal to approve the issuance of shares of common stock, par value $0.001 per share, of Genesis Microchip Delaware, pursuant to the Agreement and Plan of Merger and Reorganization, dated as of September 27, 2001, by and between Genesis Microchip and Sage, pursuant to which Sage will become a wholly owned subsidiary of Genesis Microchip Delaware; and

3.

to transact such other business as may properly come before the special general meeting or any adjournment or postponement thereof.

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To	the Stockholders of Sage, Inc.:

1.

to consider and vote upon a proposal to approve and adopt the Agreement and Plan of Merger and Reorganization, dated as of September 27, 2001, by and between Genesis Microchip and Sage and to approve the merger described therein. Prior to the merger, Genesis Microchip will reorganize from a Nova Scotia company to a Delaware corporation, which we refer to as Genesis Microchip Delaware. Pursuant to the merger agreement, Sage will become a wholly owned subsidiary of Genesis Microchip Delaware. Each outstanding share of common stock, par value $0.01 per share, of Sage will be canceled and converted into the right to receive 0.571 of a share of common stock of Genesis Microchip Delaware; and

2.

to transact such other business as may properly come before the special meeting or any adjournment or postponement thereof.

Mi	lpitas, California

Jan	uary     , 2002

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Q:

What is happening?

A:

Two things are happening.

•

First, Genesis Microchip is exchanging its shares in order to reorganize from a Nova Scotia company to a Delaware corporation. Currently, Genesis Microchip is a Nova Scotia company but has most of its operations in Silicon Valley in the United States.

•

Second, Genesis Microchip and Sage are proposing to merge.

Q:

How is this happening?

A:

The reorganization and the merger will be completed in two distinct steps, to be completed in succession once all conditions are satisfied.

•

Step One – The Reorganization. Genesis Microchip, a Nova Scotia company, will exchange all common shares held by its shareholders for newly issued shares of Genesis Microchip Inc., a newly formed Delaware corporation and a subsidiary of Genesis Microchip Incorporated. The Nova Scotia company will become a subsidiary of the Delaware corporation and the shareholders of the Nova Scotia company will become stockholders of the Delaware corporation.

•

Step Two – The Merger. The newly formed Delaware corporation, Genesis Microchip Delaware, will acquire Sage in a merger transaction between Sage and a subsidiary of Genesis Microchip Delaware, such that Sage will survive the merger as a subsidiary of Genesis Microchip Delaware.

Q:

Why are Genesis Microchip and Sage proposing to merge?

A:

We are proposing the merger because we believe the combined strengths of our two companies will create a more efficient and competitive participant in the display processor industry. We believe that the merger will expand our financial, technological, operational, and marketing resources and capabilities that will be necessary to compete successfully in this industry against companies with far greater resources and capabilities and new entrants.

Q:

Why is Genesis Microchip proposing the reorganization?

A:

Genesis Microchip is generally unable to acquire U.S. companies in stock-for-stock transactions intended to be tax-free to the selling company’s stockholders under U.S. law. The reorganization of Genesis Microchip from a Nova Scotia company to a Delaware corporation will enable it to acquire U.S. companies in tax-free transactions.

Q:

What effect will the reorganization have on Genesis Microchip shareholders?

A:

If the reorganization is completed, Genesis Microchip shareholders will become stockholders of Genesis Microchip Delaware, and each outstanding share of Genesis Microchip will be exchanged for one share of Genesis Microchip Delaware.

Q:

What will Sage stockholders receive in the merger?

A:

If the merger is completed, each outstanding share of Sage common stock will be converted into the right to receive 0.571 of a common share of Genesis Microchip Delaware. Genesis Microchip Delaware will not issue fractional shares in connection with the merger. Sage stockholders will receive cash, without interest, rather than a fractional share of Genesis Microchip Delaware common stock that Sage stockholders would otherwise be entitled to receive in the merger.

Q:

What happens if the reorganization is not completed?

A:

Genesis Microchip shareholders:    You will continue to hold shares of Genesis Microchip.

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The proposed merger with Sage, even if approved by stockholders of both companies, will not be consummated.

Sage stockholders:    The proposed merger, even if approved by stockholders of both companies, will not be consummated.

Q:

What happens if the reorganization is approved but the merger or the issuance of shares in the merger is not approved by stockholders?

A:

The reorganization will be effected but the merger will not be completed.

Q:

What will happen to my stock options?

A:

Genesis Microchip option holders:    Your options to purchase common stock of Genesis Microchip will be assumed by Genesis Microchip Delaware in the reorganization and will become exercisable, on the same terms and conditions as your current options, for common stock of Genesis Microchip Delaware.

Sage option holders:    Your options to purchase common stock of Sage will be assumed by Genesis Microchip Delaware in the merger, and will become exercisable for shares of Genesis Microchip Delaware common stock after completion of the merger. After the merger, your options will constitute options to acquire a number of shares of Genesis Microchip Delaware common stock equal to the number of shares of Sage common stock subject to the unexercised portion of such option multiplied by 0.571, rounded down to the nearest whole number. The exercise price per share of each assumed option will be equal to the exercise price per share of each assumed option to purchase shares of Sage common stock divided by 0.571, rounded up to the nearest whole cent.

Q:

What am I being asked to vote upon?

A:

Genesis Microchip shareholders:    You are being asked to vote to approve two things:

•

First, the reorganization of Genesis Microchip from a Nova Scotia company to Genesis Microchip Delaware, a newly formed Delaware corporation.

•

Second, the issuance of shares of common stock of Genesis Microchip Delaware in connection with the merger.

Sage stockholders:    You are being asked to vote to approve the merger.

Q:

What approvals are required?

A:

Genesis Microchip shareholders:    The reorganization of Genesis Microchip from a Nova Scotia company to a Delaware corporation requires:

•

The affirmative vote of at least a majority of the number of shareholders of Genesis Microchip present, in person or by proxy, at the Genesis Microchip special general meeting; and

•

The affirmative vote of holders of at least seventy-five percent of the common shares of Genesis Microchip present, in person or by proxy, at the special general meeting.

The approval of the issuance of shares of Genesis Microchip Delaware in the merger requires the affirmative vote of at least a majority of the votes cast, in person or by proxy, at the special general meeting.

Sage stockholders:    The affirmative vote of stockholders holding at least a majority of the outstanding shares of Sage common stock is required to approve and adopt the merger agreement and approve the merger.

Q:

Will the merger result in any material disadvantages to Genesis Microchip shareholders?

A:

Genesis Microchip will incur significant costs as a result of the merger. In addition to incurring transaction costs, Genesis Microchip expects to incur additional charges to the combined company’s earnings as a result of the amortization of intangible assets arising from the merger. Genesis Microchip currently estimates the amount of the additional annual charges for amortization of intangible assets to

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be approximately $22.8 million. Additional information relating to these charges for amortization of intangible assets can be found in “Unaudited Pro Forma Combined  Consolidated Financial Statements” beginning on page 82.

Q:

How does my board of directors recommend that I vote on the proposals?

A:

Genesis Microchip shareholders:    The board of directors of Genesis Microchip unanimously recommends that you vote “FOR” each of the two proposals submitted by the board.

Sage stockholders:    The board of directors of Sage unanimously recommends that you vote “FOR” the merger.

Q:

Will I be able to trade the stock I receive?

A:

Genesis Microchip shareholders:    Yes, unless you are an affiliate of Genesis Microchip. Genesis Microchip is currently traded on the Nasdaq National Market under the symbol “GNSS” and is not traded on any Canadian or other exchange. Your shares of Genesis Microchip exchanged for shares of common stock of Genesis Microchip Delaware will be listed on the Nasdaq National Market under the same symbol, “GNSS.” Persons who are deemed to be affiliates of Genesis Microchip Delaware, however, must comply with Rule 145 under the Securities Act if they wish to sell or otherwise transfer any of the shares of Genesis Microchip Delaware they receive in the reorganization.

Sage stockholders:    Yes. The shares of Genesis Microchip Delaware common stock will be listed on the Nasdaq National Market under the symbol “GNSS.” Persons who are deemed to be affiliates of Sage prior to the completion of the merger, however, must comply with Rule 145 under the Securities Act if they wish to sell or otherwise transfer the shares of Genesis Microchip Delaware common stock they receive in the merger.

Q:

If the reorganization and merger are approved, when is everything expected to be completed?

A:

The reorganization must occur prior to consummation of the merger.

•

The reorganization.    The reorganization is subject to approval by the Supreme Court of Nova Scotia. A hearing for this approval has been scheduled for              , 2002. It is expected that the reorganization will become effective as soon as possible after Genesis Microchip obtains a final order from the Supreme Court of Nova Scotia.

•

The merger.    If all conditions to closing have been satisfied, the parties will close as soon as possible after the special meeting of stockholders of Sage and the special general meeting of shareholders of Genesis Microchip on February 11, 2002 and after Genesis Microchip obtains a final order from the Supreme Court of Nova Scotia to approve the reorganization.

Q:

When is the special general meeting of shareholders of Genesis Microchip relating to the reorganization and the merger?

A:

The special general meeting of shareholders of Genesis Microchip will be held on February 11, 2002, at 8:00 a.m. local time, at Stewart McKelvey Stirling Scales at Suite 900, Purdy’s Wharf Tower One, 1959 Upper Water Street, P.O. Box 997, Halifax, NS, Canada, B3J 2X2.

If there is no quorum for the special general meeting, Genesis Microchip intends to adjourn the special general meeting for seven days as provided in its articles of association. Genesis Microchip may then conduct a special general meeting and the shareholders present at that meeting shall constitute a quorum.

Q:

When is the special meeting of Sage stockholders relating to the merger?

A:

The special meeting of Sage stockholders will take place on February 11, 2002 at 9:00 a.m., local time, at the offices of Sage at 1601 McCarthy Boulevard, Milpitas, California 95035.

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Q:

How do I vote? (see pages 37 and 40)

A:

•

After carefully reading and considering the information contained in this joint proxy statement/prospectus, including the annexes, complete, sign and date the enclosed proxy card, and then mail it in the enclosed pre-paid return envelope as soon as possible so that your shares can be voted at the Genesis Microchip special general meeting or the Sage special meeting.

•

You may also attend the Genesis Microchip special general meeting or the Sage special meeting and vote in person instead of submitting a proxy. If your shares are held by your broker, consult your broker on how to arrange for voting at the meeting.

•

Whether or not you plan to attend the Genesis Microchip special general meeting or the Sage special meeting, please complete, sign, date and return the accompanying proxy card so that your shares will be represented.

•

Returning your proxy will not deprive you of your right to attend the Genesis Microchip special general meeting or the Sage special meeting and vote your shares in person.

Q:

Can I vote by telephone or electronically? (see pages 37 and 40)

A:

Genesis Microchip shareholders:    Registered Genesis Microchip shareholders must vote by returning their proxy cards or voting in person at the special general meeting. Registered Genesis Microchip shareholders cannot vote by telephone or electronically. Non-registered shareholders may be able to submit voting instructions to their intermediary by telephone or via the internet, and should follow the instructions provided by such intermediary.

Sage stockholders:    Under Delaware law, Sage stockholders may submit proxies electronically, via the Internet or by telephone. Specific instructions on voting via the Internet or by telephone are included in the Sage proxy card.

Q:

If my shares are held in “street name” by my broker, will my broker vote my shares for me? (see pages 36 and 39)

A:

No. Your broker will not be able to vote your shares without instructions from you. If you do not provide your broker with voting instructions, your shares may be considered present at the special general meeting of Genesis Microchip shareholders or the special meeting of Sage stockholders for purposes of determining a quorum, but will not be considered to have been voted in favor of approval of any proposal. If you have instructed a broker to vote your shares and wish to change your vote, you must follow directions received from your broker to change those instructions.

Q:

What happens if I don’t return a proxy card? (see pages 36 and 39)

A:

Genesis Microchip shareholders:    Failure to return a proxy will have the effect of reducing the number of votes cast at the special general meeting of Genesis Microchip shareholders and of reducing the number of votes needed to approve the proposals. The failure to return a proxy may also contribute to a failure to obtain a quorum at the meeting.

Sage stockholders:    Failure to return a proxy will have the effect of reducing the number of votes cast at the special meeting of Sage stockholders. The failure to return a proxy may also contribute to a failure to obtain a quorum at the meeting.

Q:

What happens if I am a record holder and I return a properly executed proxy card but I don’t indicate how to vote my proxy? (see pages 37 and 40)

A:

Genesis Microchip shareholders:     Your shares will be voted “FOR” each of the reorganization and the issuance of shares of Genesis Microchip Delaware common stock in the merger.

Sage stockholders:    Your shares of Sage common stock will be voted “FOR” adoption and approval of the merger agreement and approval of the merger.

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Q:

Can I change my vote after I have mailed my proxy card? (see pages 37 and 40)

A:

Yes, you can change your vote at any time before your proxy is voted at your special meeting or special general meeting. If you are a shareholder of record, you can do this in one of three ways.

•

First, you can send a written notice to Genesis Microchip or Sage care of Innisfree M&A Incorporated or to the Secretary of Sage, stating that you would like to revoke your previously delivered proxy.

•

Second, you can complete and deliver a later dated proxy card to Genesis Microchip or Sage care of Innisfree M&A Incorporated.

•

Third, you can attend the Genesis Microchip special general meeting or the Sage special meeting and vote in person. Your attendance at the special general meeting or special meeting, by itself, however, will not revoke your previously delivered proxy.

If your shares are held by your broker, consult your broker for procedures to change your vote.

Q:

When should I send in my share certificates? (see pages 65 and 107)

A:

Genesis Microchip shareholders:    Please do not send in your share certificates with your proxy card. You must keep your share certificates until after the reorganization has been completed, at which time you will receive a letter of transmittal describing how you may exchange your Genesis Microchip share certificates for certificates representing shares of Genesis Microchip Delaware common stock. At that time, you will have to submit your Genesis Microchip share certificates to the exchange agent with your completed letter of transmittal.

Sage stockholders:    Please do not send in your stock certificates with your proxy card. You must keep your stock certificates until after the merger has been completed, at which time you will receive a letter of transmittal describing how you may exchange your Sage stock certificates for certificates representing shares of Genesis Microchip Delaware common stock. At that time, you will have to submit your Sage stock certificates to the exchange agent with your completed letter of transmittal.

Q:

Are there risks I should consider in deciding whether to vote for the reorganization and the merger? (see page 20)

A:

Yes.    The section entitled “Risk Factors” beginning on page 20 of this joint proxy statement/prospectus describes a number of risk factors that you should consider in connection with the reorganization and the merger.

Q:

Who can help answer my questions about the reorganization and the merger?

A:

If you have any questions about the reorganization or the merger or how to vote your proxy, or if you need additional copies of this joint proxy statement/prospectus or the enclosed proxy card or voting instructions, you should contact:

Innisfree M&A Incorporated

501 Madison Avenue

20th Floor

New York, New York 10022

Call Toll Free: (888) 750-5834

Banks and Brokers Call Collect:

(212) 750-5833

Genesis Microchip shareholders may also call:

Genesis Microchip Incorporated

165 Commerce Valley Drive, W.

Thornhill, Ontario Canada L3T 7V8

Attention:  Chief Financial Officer

(905) 889-5400

Sage, Inc.

1601 McCarthy Boulevard

Milpitas, California 95035

Attention: Chief Financial Officer and Secretary

(408) 383-5300

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165	Commerce Valley Drive W.

Th	ornhill, Ontario L3T 7V8

(90	5) 889-5400

215	0 Gold Street

Alv	iso, California 95002

(40	8) 262-6599

160	1 McCarthy Boulevard

Mi	lpitas, California 95035

(40	8) 383-5300

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(1)

Closing price on September 27, 2001.

(2)

Closing price on December 13, 2001.

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•

approval of the merger by the Sage stockholders;

•

approval of the issuance of Genesis Microchip Delaware common stock by the Genesis Microchip shareholders;

•

consummation of the reorganization of Genesis Microchip; and

•

Genesis Microchip Delaware’s receipt of an opinion of its U.S. tax counsel that the reorganization together with the merger qualifies as a tax-free exchange under the provisions of Section 351 of the United States Internal Revenue Code and Sage’s receipt of an opinion of its U.S. tax counsel that the merger constitutes a tax-free reorganization within the meaning of Section 368(a) of the United States Internal Revenue Code.

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the board of directors of Genesis Microchip Delaware will consist of seven directors, including five directors from the board of Genesis Microchip; and

•

Chandrashekar M. Reddy, president and chief executive officer of Sage and N. Damodar Reddy, a member of Sage’s board of directors, will be appointed to the Genesis Microchip board.

•

Research and Development; and

•

Sales and Administration.

•

United States

•

Canada

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(1)

Historical book value per share is computed by dividing stockholders’ equity by the number of shares of Genesis Microchip or Sage common stock outstanding at the end of each period. Pro forma book value per share is computed by dividing pro forma stockholders’ equity by the pro forma number of shares of Genesis Microchip Delaware common stock outstanding at the end of each period.

(2)

The Sage equivalent pro forma combined per share amounts are calculated by multiplying Genesis Microchip Delaware combined pro forma share amounts by the exchange ratio for the merger (e.g., 0.571).

(3)

Genesis Microchip Delaware’s pro forma consolidated net income per share for the year ended March 31, 2001 combines Genesis Microchip’s net income for the fiscal year ended March 31, 2001 and Sage’s net income for the fiscal year ended March 31, 2001. Genesis Microchip Delaware’s pro forma consolidated net income per share for the six months ended September 30, 2001 combines Genesis Microchip’s net income for the six month period ended September 30, 2001 and Sage’s net income for the six month period ended September 30, 2001.

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•

retaining existing customers of each business;

•

retaining and integrating management and other key employees of each of Genesis Microchip Delaware and Sage to pursue the business objectives of the combined company;

•

consolidating product plans and coordinating research and development activities to permit efficient time-to-market introductions and time-to-volume production for new products and technologies;

•

integrating purchasing and procurement operations in multiple locations;

•

integrating sales efforts so that customers can do business easily with the combined company;

•

transitioning all facilities to common accounting and information technology systems;

•

developing and maintaining uniform standards, controls, procedures and policies;

•

maximizing efficiency of operations by eliminating redundant functions, centralizing functions in one location to the extent possible and discontinuing unprofitable lines of business; and

•

controlling the costs associated with integration.

•

impairment and/or loss of relationships with employees, customers and/or suppliers;

•

disruption of the combined company’s business;

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distraction of management; and

•

adverse financial results related to unanticipated expenses associated with integration of the two businesses.

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executives of Sage have entered into employment agreements with Genesis Microchip that will become effective upon completion of the merger, which agreements entitle them to, among other benefits, options to purchase shares of the combined company’s common stock following the merger and receipt of severance payments and accelerated vesting of assumed options in the event of a termination under various circumstances;

•

all directors and some of the executive officers of Sage have entered into voting agreements with Genesis Microchip under which they give Genesis Microchip the right to vote their Sage shares in favor of adopting the merger agreement and the merger;

•

two directors of Sage, Chandrashekar M. Reddy and N. Damodar Reddy, will become directors of the combined company; and

•

directors and officers of Sage are entitled to specified indemnification rights.

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Sage may be required to pay Genesis Microchip a termination fee of $9.64 million, plus Genesis Microchip’s actual out-of-pocket fees expenses incurred in connection with the merger (but in any event not to exceed $1.75 million in the aggregate);

•

the price of Genesis Microchip common shares and Sage common stock may decline to the extent that the current market prices of Genesis Microchip common shares and Sage common stock reflect a market assumption that the merger will be completed;

•

Genesis Microchip’s and Sage’s costs related to the merger, such as legal, accounting, financial printing and a portion of the financial advisory fees, must be paid even if the merger is not completed; and

•

The reorganization will be completed and Genesis Microchip’s costs related to the reorganization, such as legal, accounting, and financial printing fees, must be paid.

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a significant reduction in the costs of products;

•

the availability of components such as LCDs required by such products; and

•

the emergence of competing technologies.

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reduced control over manufacturing and delivery schedules of products;

•

potential political or environmental risks in the countries where the manufacturing facilities are located;

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reduced control over quality assurance;

•

difficulty of management of manufacturing costs and quantities;

•

lack of control over contracts for the manufacture of products;

•

potential lack of adequate capacity during periods of excess demand; and

•

potential unauthorized use of intellectual property.

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fluctuations in currency exchange rates, tariffs, import restrictions and other trade barriers;

•

difficulties in maintaining sales representatives outside of the U.S. that are knowledgeable of the display applications industry, the video processing industry and our range of products;

•

unexpected changes in regulatory requirements;

•

longer payment periods;

•

potentially adverse tax consequences;

•

difficulties related to design piracy of display and video processing technologies that may exist outside the U.S.;

•

export license requirements;

•

differing technology standards;

•

political and economic instability;

•

delays in deliveries as a result of grounding of flights; and

•

unexpected changes in diplomatic and trade relationships.

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stop selling products or using technology that contain the allegedly infringing intellectual property;

•

attempt to obtain a license to the relevant intellectual property, which license may not be available on reasonable terms or at all; and

•

attempt to redesign those products that contain the allegedly infringing intellectual property.

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actual or anticipated fluctuations in the combined company’s operating results;

•

changes in expectations as to the combined company’s future financial performance;

•

changes in financial estimates of securities analysts;

•

changes in market valuations of other technology companies;

•

announcements by the combined company or its competitors of significant technical innovations, design wins, contracts, standards or acquisitions;

•

the operating and stock price performance of other comparable companies; and

•

the number of shares of the combined company that are available for trading by the public and the trading volume of its shares.

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1.

to consider, pursuant to an interim order of the Supreme Court of Nova Scotia dated December     , 2001, and to vote upon a proposed resolution to approve an arrangement under Section 130 of the Companies Act (Nova Scotia) that will reorganize Genesis Microchip from a Nova Scotia company to a newly formed Delaware corporation. In this reorganization, Genesis Microchip will become a wholly owned subsidiary of Genesis Microchip Delaware, and shareholders of Genesis Microchip will become stockholders of Genesis Microchip Delaware;

2.

to consider and vote upon a proposal to approve the issuance of shares of common stock, par value $0.001 per share, of Genesis Microchip Delaware, pursuant to the agreement and plan of merger and reorganization, dated as of September 27, 2001, by and between Genesis Microchip and Sage, pursuant to which Sage will become a wholly owned subsidiary of Genesis Microchip Delaware; and

3.

to transact such further or other business as may properly come before the special general meeting or any adjournment or postponement thereof.

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delivering an instrument in writing executed by the Genesis Microchip shareholder or an attorney authorized in writing or, where the Genesis Microchip shareholder is a corporation, by a duly authorized officer or attorney of the corporation;

•

executing and delivering a proxy bearing a later date; or

•

attending the meeting and voting in person.

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delivering an instrument in writing executed by the Sage stockholder or an attorney authorized in writing or, where the Sage stockholder is a corporation, by a duly authorized officer or attorney of the corporation;

•

executing and delivering a proxy bearing a later date; or

•

attending the meeting and voting in person.

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developing the business of the combined company by adding size, scale and scope to improve the company’s ability to respond to increasing competition from companies with far greater resources as well as the numerous other companies that focus solely on one or more specialty products;

•

creating significant opportunities for cost reduction through the integration of the operations of the two businesses and the elimination of redundant overhead expenses and duplicate sales, marketing and administrative functions;

•

combining the companies’ complementary technologies to expand their individual products and offer a full range of product solutions to each of the companies’ customers;

•

combining each company’s global geographic strengths to create an efficient and competitive global sales network;

•

combining the manufacturing know-how and talent of the companies in order to work effectively with their foundries to bring new and better products to market more quickly and at greater volume;

•

combining the companies’ engineering resources and complementary technologies to be able to focus on new innovative technologies including expanding the combined company’s product line into new vertical applications such as consumer electronics, as well as “best of breed” next generation products; and

•

responding to customer demands by creating a global customer support and response network by integrating the complementary positioned technical support staff of the two companies, allowing them to assist their customers in integrating the combined company’s technology into their product lines.

•

the expansion of Genesis Microchip’s technological expertise through the acquisition of the Indian operations of Sage;

•

the ability to broaden Genesis Microchip’s product offerings through the acquisition of consumer chip technology of Faroudja;

•

enhanced in-house intellectual property expertise and know-how gained through the consolidation of the research and development groups of both companies;

•

creating a global sales force and expanded customer relationships;

•

accelerating introduction of Genesis Microchip technology by combining Sage’s complementary technologies and engineering talent;

•

expanded research and development focus, through the addition of more expertise;

•

responding to customer demands by creating a global customer support and response network by integrating the complementary positioned technical support staff of the two companies, allowing them to assist their customers in integrating the combined company’s technology into their product lines; and

•

improved operating margins through lower production costs by, among other things, increased efficiencies and the elimination of redundant costs in the combined entity.

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the risk that the merger might not be consummated and the effect of the public announcement of the merger on Genesis Microchip’s sales, stock price and operating results and ability to attract and retain key management and technical, sales and marketing personnel:

•

the possibility that there may be higher than anticipated costs associated with such benefits; and

•

other applicable risks described in this joint proxy statement/prospectus described in “Risk Factors.”

•

a draft of the merger agreement, dated as of September 27, 2001, and assumed that the final form of the merger agreement did not differ in any material respect from the draft provided to DrKW;

•

certain publicly available business and financial information relating to Sage and Genesis Microchip for recent years and interim periods; and

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certain internal financial and operating information, including financial forecasts, analyses and projections prepared by or on behalf of Sage and Genesis Microchip and provided to DrKW for purposes of its analysis.

•

certain financial and stock market data relating to Sage and Genesis Microchip, and compared that data with similar data for certain other companies, the securities of which are publicly traded, that DrKW believes may be relevant or comparable in certain respects to Sage and Genesis Microchip or one or more of their respective businesses or assets; and

•

the financial terms of selected recent acquisitions and business combination transactions in the multimedia semiconductor industry specifically, and in the semiconductor industry generally, that DrKW believes to be reasonably comparable to the merger or otherwise relevant to DrKW’s inquiry.

•

the accuracy and completeness of all of the historical financial and other information provided to or discussed with DrKW or publicly available; and

•

the reasonableness and accuracy of the financial projections, forecasts and analyses provided to DrKW, including estimates of savings and other effects on operating results expected to result from consummation of the merger.

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Contribution Analysis

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Comparable Company Analysis

•

Genesis Microchip Incorporated;

•

Pixelworks, Inc.; and

•

Silicon Image, Inc.

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Genesis Microchip Incorporated;

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Pixelworks, Inc.;

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Silicon Image;

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NVIDIA Corporation;

•

ATI Technologies Inc.;

•

Cirrus Logic, Inc.;

•

ESS Technology, Inc.;

•

Zoran Corporation; and

•

Creative Technology Ltd.

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Comparable Transactions Analysis

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Stock Price Premiums Analysis

Exchange Ratio Analysis

Pro Forma Earnings Analysis

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the enhanced competitive position of the combined companies. The Sage board considered the increases in scale of operation, the strength of Sage’s presence in the consumer electronics market when combined with Genesis Microchip’s offerings in the flat panel display industry and the opportunity to further build upon the Faroudja brand;

•

the expectation that the combination of Sage and Genesis Microchip would have strong synergistic benefits, as a result of the breadth and complimentary nature of the technology and product lines, including more efficient research and development expenditures, modest headcount efficiencies, potential cost savings from leveraging Sage’s Indian research and development presence and possible consolidation of facilities;

•

the terms of the merger agreement, including the fact that the exchange ratio represented an approximately 40% premium to the Sage common stock closing price on September 27, 2001, which was the last trading day immediately prior to the public announcement of the merger, and the termination fee which the Sage board of directors realized might discourage third parties from seeking to acquire Sage;

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the terms of the transition agreements and the stock option benefits to be received by Sage’s management in connection with the completion of the merger;

•

the failure to agree upon final terms, including an appropriate exchange ratio, with the Other Company;

•

other alternatives open to Sage, including the ability to renew discussions with the Other Company given the parties’ failure to agree on terms and the prospects for growth after choosing to remain independent;

•

the likelihood of obtaining the required regulatory approvals, including the expiration of the applicable waiting period under the Hart-Scott-Rodino Act of 1976;

•

the probability that the merger might not be completed and the anticipated effect of that failure on Sage’s common stock trading price;

•

the opinion and presentation of U.S. Bancorp Piper Jaffray to the Sage board of directors on September 27, 2001 that the exchange ratio was fair from a financial point of view to the Sage stockholders as of such date, as described below under “Opinion of U.S. Bancorp Piper Jaffray,” including, without limitation, the contribution analysis performed by U.S. Bancorp Piper Jaffray that indicated that Sage would contribute to the combined entity revenue of 25.6% and 29.1% and gross profit of 27.7% and 29.0% for calendar years 2001 and 2002, respectively, and that Sage would contribute to the combined entity pretax income of 4.9% and net income of 6.0% in calendar year 2002; and

•

the expectation that the merger will generally be a tax-free transaction to Sage and its stockholders.

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•

a draft of the merger agreement dated September 27, 2001;

•

information, including financial forecasts, relating to the business, earnings, cash flows, assets, liabilities and prospects of Genesis Microchip and Sage furnished to or discussed with U.S. Bancorp Piper Jaffray by Genesis Microchip and Sage;

•

publicly available market and securities data of Genesis Microchip, Sage and of selected public companies deemed comparable to Sage and Genesis Microchip;

•

to the extent publicly available, financial information relating to selected transactions deemed comparable to the proposed merger.

Implied Consideration

Sage and Genesis Microchip Market Analysis

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Comparable Company Analysis

Comparable Acquisition Analysis

•

transactions that were completed between January 1, 1998 and September 27, 2001;

•

transactions involving target companies in the semiconductor industry deemed comparable to Sage;

•

transactions in which 100% of the target company was acquired;

•

transactions which were not repurchases or hostile transactions;

•

transactions involving public target companies and public acquiring companies; and

•

transactions with a transaction value of $100 million to $1 billion.

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Premiums Paid Analysis

•

transactions that were completed between January 1, 1998 and September 27, 2001;

•

transactions involving companies in the technology or communications industries;

•

transactions involving public target companies in which 100% of the target company was acquired;

•

transactions with a transaction value of $100 million to $1 billion; and

•

transactions that were not repurchases or hostile transactions.

Discounted Cash Flow Analysis

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Pro Forma Analyses

Historical Relative Trading Value Analysis

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Director Seats

Change of Control Agreements

Employment Agreements

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•

Genesis Microchip must continue to pay the employee his base salary during the six month period following the termination date, except Genesis Microchip may cease these payments if the employee violates the terms of his agreement;

•

the employee will be entitled, for a six month period following the termination date, to participate in the Genesis Microchip benefit plans in which the employee was participating at the time of the termination, subject to Genesis Microchip’s right to pay the employee a lump sum at the time of termination equal to the value of these benefits; and

•

in the event the termination occurs within six months of the closing, effective on the termination date, the unvested portion of options assumed by Genesis Microchip under the employment agreements will vest, and employees will have the right to exercise the option for a period of twenty-four months following the termination date.

Stock Restriction Agreements

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shares of Sage common stock of the employee; and

•

Genesis Microchip common shares or Genesis Microchip Delaware common stock that the employee receives in the merger in exchange for these shares of Sage common stock.

Indemnification

Conversion of Securities; Exchange Ratio

Completion and Effectiveness of the Merger

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Conversion of Sage Common Stock in the Merger

Fractional Shares

Exchange of Sage Stock Certificates for Genesis Microchip Delaware Stock Certificates

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Distributions with Respect to Unexchanged Shares

Transfers of Ownership and Lost Stock Certificates

Sage’s Representations and Warranties

•

corporate organization and qualifications to do business of Sage and its subsidiaries;

•

charter documents of Sage and its subsidiaries;

•

Sage’s capitalization;

•

corporate authorization to enter into and carry out the obligations of the merger agreement by Sage;

•

obligations of Sage under applicable law in connection with the merger;

•

the vote of Sage’s stockholders required to approve the merger;

•

governmental and regulatory approvals required to complete the merger;

•

the effect of the merger on Sage’s obligations and contracts;

•

Sage’s filings and reports with the Securities and Exchange Commission;

•

Sage’s financial statements;

•

the absence of undisclosed liabilities of Sage or its subsidiaries;

•

changes in Sage’s business since June 30, 2001;

•

Sage’s taxes;

•

Sage’s employee benefit plans;

•

intellectual property matters pertaining to Sage;

•

Sage’s compliance with applicable laws;

•

absence of restrictions on the conduct of Sage’s business;

•

possession of and compliance with all permits required for the operation of Sage’s business;

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title to the properties Sage owns and leases;

•

litigation involving Sage;

•

payments required to be made by Sage to brokers and agents on account of the merger;

•

Sage’s labor relations;

•

Sage’s environmental matters;

•

absence of breaches of Sage’s material contracts;

•

Sage’s insurance coverage;

•

accuracy of information supplied by Sage in this joint proxy statement/prospectus and the related registration statement filed by Genesis Microchip Delaware with the Securities and Exchange Commission;

•

approvals by the Sage board of directors;

•

the fairness opinion received by Sage from U.S. Bancorp Piper Jaffray;

•

the inapplicability of state takeover statutes to the merger; and

•

amendment of Sage’s rights agreement.

Genesis Microchip’s Representations and Warranties

•

corporate organization and qualification to do business of Genesis Microchip and its subsidiaries;

•

the Memorandum and Articles of Association of Genesis Microchip and the equivalent organizational documents of its subsidiaries;

•

Genesis Microchip’s capitalization;

•

validity of Genesis Microchip Delaware common stock to be issued pursuant to the merger;

•

complete authorization to enter into and carry out the obligations of the merger agreement by Genesis Microchip;

•

governmental and regulatory approvals required to complete the merger;

•

the effect of the merger on Genesis Microchip’s obligations and contracts;

•

Genesis Microchip’s filings and reports with the Securities and Exchange Commission;

•

Genesis Microchip’s financial statements;

•

the absence of undisclosed liabilities of Genesis Microchip or its subsidiaries;

•

changes in Genesis Microchip’s business since June 30, 2001;

•

Genesis Microchip’s labor relations;

•

litigation involving Genesis Microchip;

•

accuracy of information supplied by Genesis Microchip in this joint proxy statement/prospectus and the related registration statement filed by Genesis Microchip Delaware with the Securities and Exchange Commission;

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payments required to be made by Genesis Microchip to brokers and agents on account of the merger;

•

intellectual property matters pertaining to Genesis Microchip;

•

the fairness opinion received by Genesis Microchip from DrKW;

•

approvals by the Genesis Microchip board of directors;

•

the vote of Genesis Microchip shareholders required to approve the issuance of Genesis Microchip Delaware common stock and the reorganization; and

•

Genesis Microchip’s taxes.

Sage’s Conduct of Business Before Completion of the Merger

•

preserve intact its present business organization;

•

keep available the services of its present officers and employees; and

•

preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings.

•

changes with respect to Sage restricted stock and stock options;

•

the granting of severance and termination payments;

•

the transfer or license of intellectual property;

•

the declaration or payment of dividends or other distributions on Sage capital stock;

•

the repurchase, redemption or acquisition of Sage capital stock;

•

the split, combination or reclassification of Sage capital stock;

•

the issuance of capital stock;

•

the modification of the certificate of incorporation or bylaws of Sage or its subsidiaries;

•

the acquisition of the other business entities;

•

the entering into of joint ventures, strategic partnerships or alliances;

•

the sale, lease, license and disposition of assets;

•

the incurrence of indebtedness;

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the adoption or amendment of employee benefit plans;

•

the entering into of employment or collective bargaining agreements, payment of bonuses or increasing compensation rates;

•

payment or settlement of liabilities;

•

waivers or modifications to existing confidentiality agreements;

•

expenditures outside the ordinary course of business in excess of $100,000;

•

modification of material contracts or waivers of material rights under material contracts;

•

the entry into or modification of product licenses;

•

changes in accounting policies and procedures;

•

the incurrence of obligations and other agreements outside the ordinary course of business in excess of $500,000;

•

the making of any loan or investment in any person outside the ordinary course of business in excess of $10,000 individually or $50,000 in the aggregate;

•

modification of standstill agreements;

•

taking any action that could reasonably be expected to materially delay the merger;

•

the redemption of rights or amendment or termination of its rights plan; and

•

the making of certain tax elections.

Genesis Microchip’s Conduct of Business Before Completion of the Merger

•

preserve intact its present business organization;

•

keep available the services of its present officers and employees; and

•

preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings.

•

the declaration or payment of dividends or other distributions on Genesis Microchip capital shares;

•

the repurchase, redemption or acquisition of Genesis Microchip capital shares;

•

the modification of the memorandum and articles of association of Genesis Microchip;

•

changes in accounting policies and procedures; and

•

taking any action that would materially delay the merger.

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Sage Prohibited from Soliciting Other Offers

•

solicit, initiate, induce or knowingly encourage the making, submission or announcement of any acquisition proposal by a third party of the type described below;

•

enter or participate in any discussions or negotiations with any third party regarding any acquisition proposal of the type described below;

•

furnish to any person any information with respect to Sage or its subsidiaries, or take any other action to cooperate in any way with, or facilitate any inquiries or the making of any proposal that constitutes or may reasonably be expected to lead to, any acquisition proposal of the type described below;

•

approve, endorse or recommend any acquisition proposal of the type described below; or

•

enter into any letter of intent or similar document or any contract, agreement or commitment contemplating or otherwise relating to any acquisition proposal of the type described below or transaction contemplated by such an acquisition proposal.

•

the acquisition by any person or group of more than a 15% interest in the total outstanding voting securities of Sage or any of its subsidiaries;

•

any merger, consolidation, business combination or similar transaction involving Sage pursuant to which the stockholders of Sage immediately preceding such transaction hold less than 85% of the equity interests in the surviving entity;

•

any sale, lease outside the ordinary course of business, exchange, transfer, license outside the ordinary course of business, acquisition or disposition of more than 15% of the assets of Sage; or

•

any liquidation, dissolution, recapitalization or other significant corporate reorganization of Sage.

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the proposed acquisition must be an unsolicited bona fide written offer to the board of directors made by a third party on terms that Sage’s board of directors has reasonably determined (following receipt of advice of its financial advisor):

•

will provide greater value to its stockholders than the terms of the merger; and

•

the proposed acquisition is reasonably capable of being consummated;

Other Covenants

•

use its commercially reasonable efforts to obtain any consents, waivers and approvals under any of its or its subsidiaries’ respective agreements, contracts, licenses or leases required to be obtained in connection with the consummation of the transactions contemplated by the merger agreement;

•

promptly notify the other of any breach in any representation or warranty contained in, or failure to comply in any respect with any covenant, condition or agreement to be complied with or satisfied by it under the merger agreement;

•

use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective in the most expeditious manner practicable the merger and the other transactions contemplated by the merger agreement and to assist and cooperate with each other in doing such things, including:

•

taking all reasonable acts necessary to cause the conditions to the completion of the merger to be satisfied;

•

taking all actions or nonactions necessary to obtain any necessary waivers, consents, approvals, orders and authorizations by or from any governmental entity or third party required and taking all reasonable steps to avoid any suit, claim, action, investigation or proceeding by any governmental entity;

•

defending all lawsuits or other legal proceedings challenging the merger agreement or the consummation of the merger; and

•

executing or delivering any additional instruments reasonably necessary to consummate the transactions contemplated by the merger agreement.

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Treatment of Sage Stock Options

Treatment of Rights under Sage’s Employee Stock Purchase Plan

Treatment of Sage 401(k) Plan

Conditions to Completion of the Merger

•

the merger agreement has been adopted and approved and the merger has been be approved by the requisite vote of holders of Sage common stock;

•

the issuance of Genesis Microchip Delaware common stock to holders of Sage common stock in connection with the merger has been approved by the requisite vote of holders of Genesis Microchip common shares;

•

no law, regulation or order has been enacted or issued that has the effect of making the merger illegal or otherwise prohibiting completion of the merger;

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the Securities and Exchange Commission has declared Genesis Microchip Delaware’s registration statement effective, no stop order suspending its effectiveness has been issued and no proceeding for suspension of the registration statement’s effectiveness has been initiated or threatened in writing by the Securities and Exchange Commission;

•

all waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act with respect to the merger and the other transactions contemplated by the merger agreement have expired or terminated early;

•

all other material foreign antitrust approvals required to be obtained prior to the merger in connection with the transactions contemplated by the merger agreement have been obtained;

•

the reorganization of Genesis Microchip has been consummated;

•

Genesis Microchip has received from its U.S. tax counsel an opinion to the effect that the reorganization together with the merger qualifies as a tax-free exchange under the provisions of Section 351 of the United States Internal Revenue Code and Sage has received from its U.S. tax counsel an opinion to the effect that the merger constitutes a tax-free reorganization within the meaning of Section 368(a) of the United States Internal Revenue Code and such opinions have not been withdrawn; and

•

the shares of Genesis Microchip Delaware common stock to be issued in the merger have been authorized for listing on the Nasdaq National Market.

•

the representations and warranties of Genesis Microchip will have been true and correct on September 27, 2001 and must continue to be true and correct on and as of the date the merger is to be completed as if made at and as of such time, except:

•

to the extent the representations and warranties of Genesis Microchip address matters only as of a particular date, they must be true and correct as of that date; and

•

to the extent that any inaccuracies of such representations and breaches of these warranties do not have a material adverse effect on Genesis Microchip.

•

Genesis Microchip will have performed or complied in all material respects with all of its agreements and covenants required by the merger agreement to be performed or complied with by it before completion of the merger; and

•

no material adverse effect on Genesis Microchip may have occurred.

•

to the extent Sage’s representations and warranties address matters only as of a particular date, they must be true and correct only as of that date; and

•

to the extent that any inaccuracies of such representations and breaches of such warranties do not have a material adverse effect on Sage.

•

Sage must have performed or complied in all material respects with all of its agreements and covenants required by the merger agreement to be performed or complied with by it before completion of the merger;

•

the employment and noncompetition agreements entered into in connection with the merger are in full force and effect;

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no material adverse effect on Sage may have occurred; and

•

Sage has received all consents, waivers and approvals required in connection with the transactions contemplated in the merger agreement.

Definition of Material Adverse Effect

•

any loss of customers, orders or design wins to the other party directly due to the public announcement of the execution of the merger agreement or the pendency of the merger agreement, and any change in the revenues or operating results of a party directly attributable to such loss of customers, orders or design wins;

•

any change in the trading price of Genesis Microchip shares or Sage stock, as the case may be; or

•

any change in general economic conditions or the industries in which such party operates generally and not affecting a party to a materially disproportionate degree.

Termination of the Merger Agreement

•

by mutual written consent duly authorized by the boards of directors of Genesis Microchip and Sage;

•

by Genesis Microchip or Sage, if the merger is not consummated by May 31, 2002 for any reason, except that this right to terminate the merger agreement is not available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the merger to occur on or before that date, and such action or failure to act constitutes a material breach of the merger agreement;

•

by Genesis Microchip or Sage, if there is any order of a court or other action or inaction of any governmental authority having the effect of permanently restraining, enjoining or prohibiting the completion of the merger which is final and nonappealable;

•

by Genesis Microchip or Sage, if the required shareholder approval of the Genesis Microchip shareholders of the reorganization is not obtained, except that this right to terminate the merger agreement is not available to Genesis Microchip where the failure to obtain Genesis Microchip’s shareholder approval was caused by Genesis Microchip’s action or failure to act and such action or failure to act constitutes a breach by Genesis Microchip of the merger agreement;

•

by Genesis Microchip or Sage, if the issuance of shares of Genesis Microchip Delaware common stock to Sage stockholders in connection with the merger fails to receive the requisite vote by the shareholders of Genesis Microchip at a meeting of Genesis Microchip shareholders or at any adjournment of that meeting, except that the right to terminate the merger agreement is not available to Genesis Microchip where the failure to obtain Genesis Microchip shareholder approval was caused by Genesis Microchip’s action or failure to act and such action or failure to act constitutes a breach by Genesis Microchip of the merger agreement;

•

by Genesis Microchip or Sage, if the merger agreement and the merger fails to receive the requisite vote for adoption and approval at a meeting of Sage stockholders or at any adjournment of that meeting,

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except that this right to terminate the merger agreement is not available to Sage where the failure to obtain Sage stockholder approval was caused by Sage’s action or failure to act and such action or failure to act constitutes a breach by Sage of the merger agreement;

•

by Genesis Microchip, if any of the following triggering events occur with respect to Sage:

•

its board of directors withdraws, modifies or changes its recommendation in favor of the adoption and approval of the merger agreement and approval of the merger by Sage’s stockholders;

•

it fails to include its recommendation in this joint proxy statement/prospectus;

•

its board of directors approves, solicits or recommends any acquisition proposal of the type described above under “Sage Prohibited from Soliciting Other Offers” beginning on page 70 of this joint proxy statement/prospectus;

•

it enters into any letter of intent or similar agreement or arrangement contemplating an acquisition proposal or an acquisition transaction; or

•

an acquisition proposal has been announced and Sage fails to recommend that its stockholders reject the acquisition proposal or reconfirm the recommendation for the merger within five business days after such announcement.

•

by Sage, upon a breach of any representation, warranty, covenant or agreement on the part of Genesis Microchip in the merger agreement or if any representation or warranty of Genesis Microchip will have become untrue, in either case so that the condition to completion of the merger regarding Genesis Microchip’s representations and warranties or covenants would not be met. However, if the breach or inaccuracy is curable by Genesis Microchip through the exercise of its commercially reasonable efforts, then Sage may not terminate the merger agreement until the earlier of (1) thirty days after delivery of written notice from Sage to Genesis Microchip of the breach, or (2) Genesis Microchip ceasing to exercise commercially reasonable efforts to cure such breach or inaccuracy, provided that Genesis Microchip continues to exercise commercially reasonable efforts to cure such breach or inaccuracy. If the breach is cured during those thirty days, Sage may not exercise this termination right; or

•

by Genesis Microchip, upon a breach of any representation, warranty, covenant or agreement on the part of Sage in the merger agreement or if any representation or warranty of Sage will have become untrue, in either case so that the condition to completion of the merger regarding Sage’s representations and warranties or covenants would not be met. However, if the breach or inaccuracy is curable by Sage through the exercise of commercially reasonable efforts, then Genesis Microchip may not terminate the merger agreement until the earlier of (1) thirty days after delivery of written notice from Genesis Microchip to Sage of the breach or (2) Sage ceasing to exercise commercially reasonable efforts to cure such breach or inaccuracy, provided that Sage continues to exercise commercially reasonable efforts to cure such breach or inaccuracy. If the breach is cured during those thirty days, Genesis Microchip may not exercise this termination right.

Payment of Termination Fee by Sage

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(a)

after September 27, 2001 and prior to the termination of the merger agreement, a third party has announced an acquisition proposal with respect to Sage and within twelve months following the termination of the merger agreement, an acquisition of Sage is consummated; or

(b)

after September 27, 2001 and prior to the termination of the merger agreement, a third party has announced an acquisition proposal with respect to Sage and within twelve months following the termination of the merger agreement, Sage enters into a letter of intent or an agreement providing for an acquisition of Sage and an acquisition is later consummated.

•

a merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving Sage, pursuant to which its stockholders immediately preceding such transaction hold less than 60% of the aggregate equity interests in the surviving or resulting entity of such transaction;

•

a sale or other disposition by Sage of assets representing in excess of 30% of the aggregate fair market value of its business immediately prior to such sale; or

•

the acquisition by any person or group, including by way of a tender offer or an exchange offer or issuance by Sage, directly or indirectly, of beneficial ownership or a right to acquire beneficial ownership of shares representing in excess of 30% of the voting power of the then outstanding shares of capital stock of Sage.

Extension, Waiver and Amendment of the Merger Agreement

Expenses

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is a dealer in securities;

•

is subject to the alternative minimum tax provisions of the United States Internal Revenue Code;

•

is a non-United States person or entity;

•

is a financial institution, tax-exempt organization or insurance company;

•

acquired Sage shares in connection with stock option or stock purchase plans or in other compensatory transactions;

•

holds Sage common stock as part of an integrated investment, including a “straddle,” consisting of shares of Sage common stock and one or more other positions; or

•

holds Sage common stock subject to the constructive sale provisions of Section 1259 of the United States Internal Revenue Code.

Accordingly, Sage stockholders are urged to consult their own tax advisors concerning the specific tax consequences of the merger, including the applicable federal, state, local and foreign tax consequences to them in the merger.

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Sage stockholders will not recognize any gain or loss upon their receipt of Genesis Microchip Delaware common stock in the merger, except on cash received for a fractional share of Genesis Microchip Delaware common stock;

•

the aggregate tax basis of the Genesis Microchip Delaware common stock received by a Sage stockholder in the merger, including any fractional shares of Genesis Microchip Delaware common stock a Sage stockholder is deemed to receive, will be the same as the aggregate tax basis of the Sage common stock surrendered in exchange therefor;

•

the holding period of the Genesis Microchip Delaware common stock received by a Sage stockholder in the merger will include the period for which the Sage common stock surrendered by such stockholder in exchange therefor was considered to be held; and

•

any cash payment received by a Sage stockholder for a fractional share of Genesis Microchip Delaware common stock will be treated as if such fractional share had been issued in the merger and then redeemed by Genesis Microchip Delaware. Assuming that, immediately after the merger, such stockholder holds a minimal interest in Genesis Microchip Delaware, exercises no control over Genesis Microchip Delaware and, as a result of the deemed redemption and after giving effect to certain constructive ownership rules, experiences an actual reduction in interest in Genesis Microchip Delaware, such stockholder will recognize capital gain or loss on the deemed redemption in an amount equal to the difference between the amount of cash received and the holder’s adjusted tax basis allocable to such fractional share. Otherwise the cash payment may be taxable to the Sage stockholder as a dividend. Any capital gain or loss will be long-term capital gain or loss if a Sage stockholder has held their shares of Sage common stock for more than one year at the time the merger is completed.

•

Genesis Microchip Delaware and Sage will not recognize gain or loss solely as a result of the merger.

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The board of directors of Genesis Microchip Delaware will consist of seven directors;

•

one current director of Genesis Microchip will resign; and

•

the Genesis Microchip board will take all actions necessary such that Chandrashekar M. Reddy, president and chief executive officer of Sage, and N. Damodar Reddy, director of Sage, will be appointed to the Genesis Microchip Delaware board of directors.

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an effective registration statement under the Securities Act covering the resale of those shares;

•

an exemption under paragraph (d) of Rule 145 under the Securities Act; or

•

any other applicable exemption under the Securities Act.

Voting Agreements

•

vote their shares in favor of the approval and adoption of the merger, the merger agreement, each other transaction contemplated by the merger agreement and in favor of any action required in furtherance of the consummation of the merger;

•

vote against approval of any proposal made in opposition to, or in competition with, consummation of the merger and the transactions contemplated by the merger agreement;

•

vote against any extraordinary transaction other than those contemplated by the merger agreement or any other action intended to or that could reasonably be expected to impede the merger; and

•

grant, and did grant, Genesis Microchip irrevocable proxies to vote their shares as required by the voting agreement.

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the closing of the transactions contemplated by the merger agreement; and

•

the date the merger agreement is terminated in accordance with its terms.

Affiliate Agreements

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*

Amounts are consistent with amortization and lives used by Sage.

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The pro forma consolidated statement of operations for the year ended March 31, 2001 is based on:

•

our audited financial statements for the year ended March 31, 2001;

•

the audited financial statements of Sage for the year ended March 31, 2001;

•

the unaudited financial statements of Faroudja for the period April 1, 2000 to June 7, 2000; and

•

the additional information provided in notes 2, 3, and 4.

The pro forma consolidated statement of operations for the six months ended September 30, 2001 is based on:

•

our unaudited financial statements for the six months ended September 30, 2001;

•

the unaudited financial statements of Sage for the six months ended September 30, 2001; and

•

the additional information provided in notes 2, 3, and 4.

The pro forma consolidated balance sheet as at September 30, 2001 is based on:

•

our unaudited financial statements as at September 30, 2001;

•

the unaudited financial statements of Sage as at September 30, 2001; and

•

the additional information provided in notes 2, 3, and 4.

Sage’s, Genesis Microchip’s and Faroudja’s financial statements are prepared in accordance with accounting principles generally accepted in the United States.

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(a)

To give effect to the amortization of the Sage trademarks and trade names arising on the acquisition over a period of three years, which amortization is in the amount of $100 and $200 for the periods ended September 30, 2001 and March 31, 2001, respectively, and the reversal of amortization recorded by Sage relating to its intangible assets.

(b)

To give effect to the amortization of the Sage acquired technology arising on the acquisition over a period of two and four years for developed product technology and core technology, respectively, which amortization is in the amount of $5,313 and $10,625 for the periods ended September 30, 2001 and March 31, 2001, respectively.

(c)

To give effect to the compensation expense of approximately $5,973 and $11,945 for the periods ended September 30, 2001 and March 31, 2001, respectively. The deferred stock-based compensation arising from the acquisition is being amortized on a straight-line basis over the future service period in which the related stock options vest of two years and has been classified in accordance with the nature of the services provided by the option holder.

(d)

To give effect to the elimination of purchased in-process research and development recorded in connection with the acquisition of Faroudja, Inc.

(e)

The pro forma consolidated balance sheet as of September 30, 2001 gives effect to the acquisition of Sage described in note 2, as if it had occurred on September 30, 2001, including the effect of recording of the consideration paid and the fair value of the identified intangible assets acquired. In preparation for the business combination with Sage, Genesis Microchip will reorganize from a Nova Scotia company to a newly formed Delaware corporation. Share capital has been adjusted in order to reflect this reorganization through share capital and additional paid in capital. The pro forma consolidated balance sheet as of September 30, 2001 gives effect to certain merger-related expenses, consisting primarily of investment banking fees, attorneys, accountants, financial printing and other related charges, as well as employee termination costs and lease cancellation costs, of approximately $5.7 million. The estimated merger-related expenses and purchase price allocation are preliminary and are therefore subject to change. The ultimate purchase price allocation will be based on the fair value of acquired assets and liabilities at the completion date. Significant intangible asset allocations will be subject to independent appraisal.

(f)

The pro forma statement of operations adjustments do not include a nonrecurring adjustment of $25,500 to recognize in-process research and development identified as part of the purchase price allocation (note 1). This charge will be reflected in our actual income statement in the twelve month reporting period following the closing of the business combination due to the immediate write-off of in-process research and development under generally accepted accounting principles.

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(i)

To give effect to the amortization of the Faroudja acquired intangible assets arising on the acquisition over a period of three and five years. The amortization is in the amount of $4,622 for the period April 1, 2000 through June 7, 2000.

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for a classified board of directors;

•

the board of directors to issue preferred stock in one or more series without stockholder action;

•

the board of directors to determine the number of directors serving on the board of directors;

•

the board of directors to fill vacancies on the board of directors; and

•

the board of directors to amend the bylaws.

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Common Stock

Preferred Stock

Size of the Board of Directors

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Election of Directors

Removal of Directors

Filling Vacancies on the Board of Directors

Ability to Call Special Meetings of the Board of Directors

Ability to Call a Special Meeting of Stockholders

Limitations on Business Transacted at a Special Meeting of Stockholders

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Advance Notice Provisions for Stockholder Nominations and Proposals

•

specified in the notice of meeting, or any supplemental material, given by or at the direction of the board of directors;

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otherwise properly brought before the meeting by or at the direction of the board of directors; or

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otherwise properly brought before the meeting by a stockholder who is a stockholder of record on the date of the giving of the notice for the meeting and on the record date for determination of stockholders entitled to vote at the meeting.

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it is specified in the notice of meeting;

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it is brought by or at the direction of the board of directors; or

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it is brought by a stockholder of the corporation who was a stockholder of record on the record date and who has timely provided the necessary written notice of the matter to Sage’s secretary.

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it is called by the board of directors, the chairman of the board, the president, or by stockholders holding in the aggregate not less than 10% of the voting power at the time of the special meeting; and

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it is specified in the notice of meeting that is provided in compliance with Sage’s bylaws.

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a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting;

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the name and record address of the stockholder proposing such business;

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the class and number of shares of the corporation that are beneficially owned by the stockholder; and

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any material interest of the stockholder in such business.

Stockholder Action by Written Consent

Certificate of Incorporation

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the division of the board of directors into three classes;

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the ability of the board of directors (1) to amend the bylaws, (2) to fill vacancies on the board of directors, and (3) to determine the number of directors that serve on the board of directors;

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the provision regarding advance notice of stockholder proposals;

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the manner in which notice of stockholder meetings is provided;

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the manner in which directors are nominated for election;

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the ability of officers and directors to call a special stockholder meeting;

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the ability of stockholders to act by written consent; and

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the ability of stockholders to amend the certificate of incorporation to alter any provision noted above.

Bylaws

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to allow stockholders to act by written consent;

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to allow stockholders to call special stockholder meetings;

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affecting the advance notice of stockholder proposals requirement;

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affecting the manner in which notice of stockholder meetings is provided;

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affecting the manner in which directors are nominated for election;

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affecting the ability of the board of directors (1) to amend the bylaws, (2) to fill vacancies on the board of directors, and (3) to determine the number of directors that serve on the board of directors; or

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affecting the ability of stockholders to amend the bylaws to alter any of the above.

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Limitation of Liability of Directors

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breaches of the director’s duty of loyalty to the corporation or its stockholders;

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acts or omissions not in good faith or involving intentional misconduct or knowing violations or law;

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the payment of unlawful dividends or unlawful stock repurchases or redemptions; or

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transactions in which the director received an improper personal benefit.

Indemnification

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the business combination or the transaction that resulted in the stockholder becoming an interested stockholder is approved by the corporation’s board of directors prior to the time the interested stockholder acquired such 15% interest;

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upon the consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the outstanding voting stock of the corporation excluding, for the purpose of determining the number of shares outstanding, shares held by persons who are directors and also officers and by employee stock plans in which participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered;

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the business combination is approved by a majority of the board of directors and the affirmative vote of two-thirds of the outstanding votes entitled to be cast by disinterested stockholders at an annual or special meeting;

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the corporation does not have a class of voting stock that is listed on a national securities exchange, authorized for quotation on Nasdaq, or held of record by more than 2,000 stockholders unless any of the foregoing results from action taken, directly or indirectly, by an interested stockholder or from a transaction in which a person becomes an interested stockholder;

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the corporation effectively elects not to be governed by this provision; or

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in certain other limited circumstances. Neither Genesis Microchip Delaware nor Sage has taken action to elect not to be governed by this provision.

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Incorporation of Genesis Microchip Delaware

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Incorporation of Genesis NSULC

Interim Order by Nova Scotia Court Regarding Special General Meeting

Final Order by Nova Scotia Court Regarding the Plan of Arrangement

Pre-Arrangement Transactions

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Effectiveness of Plan of Arrangement; Share Issuances

Exchange of Genesis Microchip Share Certificates for Genesis Microchip Delaware Stock Certificates

Distributions with Respect to Unexchanged Shares

Transfers of Ownership and Lost Share Certificates

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an effective registration statement under the Securities Act covering the resale of those shares;

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an exemption under paragraph (d) of Rule 145 under the Securities Act; or

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any other applicable exemption under the Securities Act.

(i)

instruct the intermediary to exercise the right to dissent on the non-registered holder’s behalf; or

(ii)

instruct the intermediary to re-register the Genesis Microchip common shares in the name of the non-registered holder, in which case the non-registered holder would have to exercise the right to dissent directly.

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the dissenting shareholder withdraws the demand for payment before Genesis Microchip makes an offer to pay; or

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Genesis Microchip fails to make a timely offer to pay to the dissenting shareholder and the dissenting shareholder withdraws his, her or its demand for payment;

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an individual citizen or resident of the United States;

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a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or of any political subdivision thereof;

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a partnership or other entity classified as a partnership for U.S. federal income tax purposes;

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an estate the income of which is subject to United States federal income tax regardless of its source; or

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a trust, in general, if (x) it is subject to the primary supervision of a United States court and the control of one or more United States persons or (y) it has made an election to be treated as a United States person.

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U.S. Holders of shares of Genesis Microchip will recognize no gain or loss upon the receipt of shares of Genesis Microchip Delaware solely in exchange for their shares of Genesis Microchip in the reorganization;

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the aggregate tax basis of the shares of Genesis Microchip Delaware received by U.S. Holders of shares of Genesis Microchip in the reorganization will be the same as the aggregate tax basis of the shares of Genesis Microchip surrendered in exchange therefor;

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the holding period of the shares of Genesis Microchip Delaware received by each U.S. Holder of shares of Genesis Microchip in the reorganization will include the holding period of the shares of Genesis Microchip surrendered in exchange therefor; and

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a U.S. Holder of shares of Genesis Microchip exercising dissenters’ rights in the reorganization generally will recognize gain or loss with respect to a cash payment measured by the difference, if any, between the amount of cash received in exchange for the holder’s shares of Genesis Microchip and the holder’s tax basis in such shares.

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Tax Consequences of the Reorganization to Non-U.S. Holders

The Reorganization

Dividends

Gain on Disposition of Common Stock

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the gain is effectively connected with a United States trade or business of the Non-U.S. Holder (which gain, in the case of a corporate Non-U.S. Holder, must also be taken into account for branch profits tax purposes);

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the Non-U.S. Holder is an individual who holds his or her common stock as a capital asset (generally, an asset held for investment purposes) and who is present in the United States for a period or periods aggregating one hundred eighty-three days or more during the calendar year in which the sale or disposition occurs and certain other conditions are met; or

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we are or have been a “United States real property holding corporation” for United States federal income tax purposes at any time within the shorter of the five-year period preceding the disposition or the holder’s holding period for our common stock. We have determined that we are not and do not believe that we will become a “United States real property holding corporation” for United States federal income tax purposes.

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a United States person;

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a “controlled foreign corporation” for United States federal income tax purposes;

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a foreign person 50% or more of whose gross income for certain periods is from the conduct of a United States trade or business; or

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a foreign partnership if at any time during its tax year (1) one or more of its partners are United States persons, as defined for United States federal income tax purposes, who in the aggregate hold more than 50% of the income or capital interests in the partnership, or (2) the foreign partnership is engaged in a United States trade or business;

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Material Canadian Federal Income Tax Consequences for Genesis Microchip Shareholders

The Reorganization

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Genesis Microchip Delaware Common Shares

Taxation of Capital Gains and Capital Losses

Foreign Property Information Reporting

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Proposed Amendments Relating to Foreign Investment Entities

Dissenting Shareholders

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Reorganization

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Dissenting Shareholders

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an alteration of the memorandum or articles of the company;

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an increase in the company’s authorized capital in certain ways or a subdivision, consolidation or change of the company’s shares;

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the purchase of a company’s own shares other than redeemable shares;

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a voluntarily wind-up;

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a change of the company name; or

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with court approval, a reduction in the company’s paid up capital.

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no authorizing stockholder vote is required of a corporation surviving a merger if

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such corporation’s certificate of incorporation is not amended in any respect by the merger,

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each share of stock of such corporation outstanding immediately prior to the effective date of the merger will be an identical outstanding or treasury share of the surviving corporation after the effective date of the merger, and

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either no shares of common stock of the surviving corporation and no shares, securities or obligations convertible into such stock are to be issued or delivered under the plan of merger, or the authorized unissued shares or the treasury shares of common stock of the surviving corporation to be issued and delivered in the merger plus those initially issuable upon conversion of any other shares, securities or obligations to be issued in the merger do not exceed 20% of such corporation’s outstanding common stock immediately prior to the effective date of the merger; and

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in certain limited circumstances, no authorizing stockholder vote is required of a corporation to authorize a merger with or into a single direct or indirect wholly owned subsidiary of such corporation.

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the division of the board of directors into three classes;

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the ability of the board of directors (1) to amend the bylaws, (2) to fill vacancies on the board of directors, and (3) to determine the number of directors that serve on the board of directors;

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the provision regarding advance notice of stockholder proposals;

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the manner in which notice of stockholder meetings is provided;

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the manner in which directors are nominated for election;

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the ability of officers and directors to call a special stockholder meeting;

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the ability of stockholders to act by written consent; and

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the ability of stockholders to amend the certificate of incorporation to alter any provision noted above.

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to allow stockholders to act by written consent;

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to allow stockholders to call special stockholder meetings;

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affecting the advance notice of stockholder proposals requirement;

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affecting the manner in which notice of stockholder meetings is provided;

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affecting the manner in which directors are nominated for election;

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affecting the ability of the board of directors (1) to amend the bylaws, (2) to fill vacancies on the board of directors, and (3) to determine the number of directors that serve on the board of directors; or

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affecting the ability of stockholders to amend the bylaws to alter any of the above.

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stock of the surviving corporation;

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shares of stock of another corporation which shares of stock are either listed on a national securities exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or held of record by more than 2,000 stockholders;

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cash in lieu of fractional shares (in the case of the above); or

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some combination of the above.

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any act or omission of the company or any of its affiliates effects a result;

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the business or affairs of the company or any of its affiliates are or have been carried on or conducted in a manner; or

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the powers of the directors of the corporation or any of its affiliates are or have been exercised in a manner,

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a present or former registered holder or beneficial owner of securities of a company or any of its affiliates;

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a present or former officer or director of the company or any of its affiliates;

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the Registrar of Joint Stock Companies; and

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any other person who in the discretion of the court is a proper person to make such application.

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specified in the notice of meeting, or any supplemental material, given by or at the direction of the board of directors;

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otherwise properly brought before the meeting by or at the direction of the board of directors; or

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otherwise properly brought before the meeting by a stockholder who is a stockholder of record on the date of the giving of the notice for the meeting and on the record date for determination of stockholders entitled to vote at the meeting.

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a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting;

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the name and record address of the stockholder proposing such business;

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the class and number of shares of the corporation that are beneficially owned by the stockholder; and

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any material interest of the stockholder in such business.

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breaches of the director’s duty of loyalty to the corporation or its stockholders;

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acts or omissions not in good faith or involving intentional misconduct or knowing violations or law;

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the payment of unlawful dividends or unlawful stock repurchases or redemptions; or

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transactions in which the director received an improper personal benefit.

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the business combination or the transaction that resulted in the stockholder becoming an interested stockholder is approved by the corporation’s board of directors prior to the time the interested stockholder acquired such 15% interest;

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upon the consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the outstanding voting stock of the corporation excluding, for the purpose of determining the number of shares outstanding, shares held by persons who are directors and also officers and by employee stock plans in which participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered;

•

the business combination is approved by a majority of the board of directors and the affirmative vote of two-thirds of the outstanding votes entitled to be cast by disinterested stockholders at an annual or special meeting;

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the corporation does not have a class of voting stock that is listed on a national securities exchange, authorized for quotation on Nasdaq, or held of record by more than 2,000 stockholders unless any of the foregoing results from action taken, directly or indirectly, by an interested stockholder or from a transaction in which a person becomes an interested stockholder;

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the corporation effectively elects not to be governed by this provision; or

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in certain other limited circumstances. Genesis Microchip Delaware has not taken action to elect not to be governed by this provision.

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*

Less than one percent

(1)

Such information is based on a Schedule 13G filed with the Securities and Exchange Commission on November 10, 2001.

(2)

Such information is based on a Schedule 13G filed with the Securities and Exchange Commission on August 10, 2001.

(3)

Such information is based on a Schedule 13F filed with the Securities and Exchange Commission on September 30, 2001.

(4)

Includes 14,554 common shares held by a trust established for the benefit of Mr. Diamond and his family.

(5)

Includes 348,948 common shares held by a trust established for the benefit of Mr. Finch and his family.

(6)

Includes 1,700 common shares held by Mr. Chan indirectly.

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(1)

Such information is based on a Schedule 13G/A filed by Kern Capital Management LLC with the Securities and Exchange Commission and reflects stock held as of July 15, 2001 including 783,500 shares as to which Kern Capital Management LLC has sole voting and dispositive power.

(2)

Mr. Johary is custodian for an aggregate of 20,999 shares of common stock held by his two daughters and his niece. Mr. Johary disclaims beneficial ownership of those 20,999 shares.

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(3)

Mr. Desai resigned on April 25, 2001. Mr. Desai's common shares beneficially owned is as of June 30, 2001 and is not represented in the number of common shares or percentage of common shares beneficially owned by all directors and executive officers as a group.

(4)

The number of common shares of Sage stock beneficially owned and the percentage of outstanding common shares of Sage stock does not include Vijay Desai’s shares of Sage common stock.

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(1)

Genesis Microchip’s Annual Report on Form 10-K for its fiscal year ended March 31, 2001, filed on June 29, 2001, the Form 10-K 405/A filed on July 30, 2001 and the Form 10-K/A filed on December 3, 2001;

(2)

Genesis Microchip’s Quarterly Report on Form 10-Q for its quarter ended June 30, 2001, filed on August 14, 2001;

(3)

Genesis Microchip’s current report on Form 8-K, filed on September 28, 2001; and

(4)

Genesis Microchip’s Quarterly Report on Form 10-Q for its quarter ended September 30, 2001, filed on October 22, 2001 and the Form 10-Q/A filed on December 3, 2001.

(1)

the description of Sage’s common stock contained in its registration statement on Form 8-A, filed with the Securities and Exchange Commission on November 4, 1999 and any amendment or report filed with the Securities and Exchange Commission for the purpose of updating such description;

(2)

Sage’s Annual Report on Form 10-K for its fiscal year ended March 31, 2001, filed on June 29, 2001 and Form 10-K/A filed on November 30, 2001;

(3)

Sage’s Quarterly Report on Form 10-Q for its quarter ended June 30, 2001, filed on August 14, 2001;

(4)

Sage’s Current Report on Form 8-K, filed on September 28, 2001; and

(5)

Sage’s Quarterly Report on Form 10-Q for its quarter ended September 30, 2001, filed on October 22, 2001.

(1)

Faroudja’s Annual Report on Form 10-K for its fiscal year ended December 31, 1999, filed on March 30, 2000;

(2)

Faroudja’s Quarterly Report on Form 10-Q for its quarter ended March 31, 2000 filed on May 15, 2000.

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Inn

isfree M&A Incorporated

501

Madison Avenue

20t

h Floor

Ne

w York, New York 10022

(88

8) 750-5834

(21

2) 750-5833 (call collect)

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(i)  “Intellectual Property” shall mean any or all of the following and all rights in, arising out of, or associated therewith: (i) all United States and foreign patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof (“Patents”); (ii) all inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists, and all documentation relating to any of the foregoing; (iii) all copyrights, copyright registrations and applications therefor and all other rights corresponding thereto throughout the world (“Copyrights”); (iv) all semiconductor and semiconductor circuit designs; (v) all rights to all mask works and reticles, mask work registrations and applications therefor, and any equivalent or similar rights in semiconductor masks, layouts, architectures or topographies (“Mask Works”); (vi) all industrial designs and any registrations and applications therefor throughout the world; (vii) all trade names, logos, common law trademarks and service marks; trademark and service mark registrations and applications therefor and all goodwill associated therewith throughout the world; (viii) all databases and data collections and all rights therein throughout the world; (ix) all computer software, including all source code, object code, firmware, development tools, files, records and data, all media on which any of the foregoing is recorded, all Web addresses, sites and domain names; (x) all processes, devices, prototypes, schematics, breadboards, netlists, mask works, test methodologies, and hardware development tools; (xi) any similar, corresponding or equivalent rights to any of the foregoing; and (xii) all documentation related to any of the foregoing.

(ii)  “Company Intellectual Property” shall mean any Intellectual Property that is owned by or exclusively licensed to the Company or any of its subsidiaries, including the Company Registered Intellectual Property (as defined below). Without in any way limiting the generality of the foregoing, Company Intellectual Property includes all Intellectual Property owned or exclusively licensed to Company

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related to the Company’s products, including without limitation all rights in any design code, documentation, and tooling for packaging of semiconductors in connection with all current products and products in design and development.

(iii)  “Registered Intellectual Property” shall mean all United States, international and foreign:

(i) Patents, Patent applications (including provisional applications); (ii) registered trademarks, applications to register trademarks, intent-to-use applications, or other registrations or applications related to trademarks; (iii) registered copyrights and applications for copyright registration; (iv) any mask work registrations and applications to register mask works; and (v) any other Company Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued by, filed with, or recorded by, any state, government or other public legal authority.

(iv)  “Company Registered Intellectual Property” means all of the Registered Intellectual Property owned by, or filed in the name of, the Company or any of its subsidiaries.

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(i)  any employment or consulting agreement, contract or commitment with any officer or director or higher level employee or member of Company’s board of directors, other than those that are terminable by Company or any of its subsidiaries on no more than thirty (30) days’ notice without liability or financial obligation to the Company;

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(ii)  any agreement or plan, including, without limitation, any stock option plan, stock appreciation right plan or stock purchase plan, any of the benefits of which will be increased, or the vesting of benefits of which will be accelerated, by the occurrence of any of the transactions (either alone or upon the occurrence of any additional or subsequent events) contemplated by this Agreement or the value of any of the benefits of which will be calculated on the basis of any of the transactions (either alone or upon the occurrence of any additional or subsequent events) contemplated by this Agreement;

(iii)  any agreement of indemnification or any guaranty other than any agreement of indemnification entered into in connection with the sale or license or purchase of products or services in the ordinary course of business;

(iv)  any agreement, contract or commitment containing any covenant limiting in any respect the right of Company or any of its subsidiaries to engage in any line of business or to compete with any person or granting any exclusive distribution rights;

(v)  any agreement, contract or commitment currently in force relating to the disposition or acquisition by Company or any of its subsidiaries after the date of this Agreement of a material amount of assets not in the ordinary course of business or pursuant to which Company or any of its subsidiaries has any material ownership interest in any corporation, partnership, joint venture or other business enterprise other than Company’s subsidiaries;

(vi)  any dealer, distributor, joint marketing or development agreement currently in force under which Company or any of its subsidiaries have continuing material obligations to jointly market any product, technology or service and which may not be canceled without penalty upon notice of ninety (90) days or less, or any material agreement pursuant to which Company or any of its subsidiaries have continuing material obligations to jointly develop any intellectual property that will not be owned, in whole or in part, by Company or any of its subsidiaries and which may not be canceled without penalty upon notice of ninety (90) days or less;

(v)  any agreement, contract or commitment currently in force to provide source code to any third party for any product or technology that is material to Company and its subsidiaries taken as a whole;

(vi)  any agreement, contract or commitment currently in force to license any third party to manufacture or reproduce any Company product, service or technology or any agreement, contract or commitment currently in force to sell or distribute any Company products, service or technology except agreements with distributors or sales representative in the normal course of business cancelable without penalty upon notice of ninety (90) days or less and substantially in the form previously provided to Acquiror;

(vii)  any mortgages, leases, indentures, guarantees, loans or credit agreements, security agreements or other agreements or instruments relating to the borrowing of money or extension of credit;

(viii)  any material settlement agreement entered into within five (5) years prior to the date of this Agreement; or

(ix)  any other agreement, contract or commitment that has a value of $250,000 or more individually.

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(i)  Waive any stock repurchase rights, accelerate, amend or change the period of exercisability of options or restricted stock or preferred stock purchase rights, or reprice options granted under any employee, consultant, director or other stock plans or authorize cash payments in exchange for any options granted under any of such plans;

(ii)  Grant (or agree to grant, whether orally or in writing) any severance or termination pay (cash, equity or otherwise) to any officer or employee, except (x) pursuant to written agreements outstanding, or policies existing, on the date hereof and (y) as previously disclosed in writing to Acquiror in the Company Disclosure Letter, or adopt any new severance plan;

(iii)  Transfer or license to any person or entity or otherwise extend, amend or modify any rights to the Company Intellectual Property, or enter into grants to transfer or license to any person future patent rights other than in the ordinary course of business consistent with past practices. Without limiting the foregoing, in no event shall Company license, sell, assign or transfer any Company Intellectual Property, other than non-exclusive licenses in the ordinary course of business;

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(iv)  Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock of Company or split, combine or reclassify any capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for any capital stock;

(v)  Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Company or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;

(vi)  Issue, deliver, sell, authorize, pledge or otherwise encumber or propose any of the foregoing with respect to any shares of capital stock or any securities convertible into shares of capital stock, or subscriptions, rights, warrants or options to acquire any shares of capital stock or any securities convertible into shares of capital stock, or enter into other agreements or commitments of any character obligating it to issue any such shares or convertible securities, other than (x) the issuance, delivery and/or sale of (i) shares of Company Common Stock pursuant to the exercise of stock options outstanding as of the date of this Agreement, and (ii) shares of Company Common Stock issuable to participants in the Company ESPP consistent with the terms thereof for periods commencing in July 2001, and (y) the granting of stock options to purchase up to fifteen thousand (15,000) shares to any individual or to purchase up to two hundred thousand (200,000) shares in the aggregate (and the issuance of Common Stock upon exercise thereof) under the terms of the Company 1997 Stock Option Plan;

(vii)  Cause, permit or propose any amendments to the Company Charter Documents (or similar governing instruments of any of its subsidiaries);

(viii)  Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material, individually or in the aggregate, to the business of Company or enter into any material joint ventures, strategic partnerships or alliances;

(ix)  Sell, lease, license, encumber or otherwise dispose of any properties or assets which are material, except (A) sales, leases or licenses of product or of inventory in the ordinary course of business consistent with past practice, or (B) sales, leases or dispositions of property or assets which are not material, individually or in the aggregate, to the business of Company and its subsidiaries;

(x) Incur any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company, enter into any “keep well” or other agreement to maintain any financial statement condition or enter into any arrangement having the economic effect of any of the foregoing other than in connection with the financing of ordinary course trade payables consistent with past practice or pursuant to existing credit facilities in the ordinary course of business consistent with past practice;

(xi)  Adopt or amend (except as necessary to conform to all applicable laws, including, without limitation, ERISA or the Code) any employee benefit plan, policy, employee stock purchase or employee stock option plan, or enter into any employment contract or collective bargaining agreement (other than offer letters and letter agreements entered into in the ordinary course of business consistent with past practice with employees who are terminable “at will”), pay any special bonus or special remuneration (cash, equity or otherwise) to any director or employee, or increase the salaries or wage rates or fringe benefits (including rights to severance or indemnification) of its directors, officers, employees or consultants other than as required by applicable law or this Agreement;

(xii)  (A) pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise, and whether or not arising prior to, on or after the date of this Agreement), other than the payment, discharge, settlement or satisfaction, in the ordinary course of business or in accordance with their respective terms, or liabilities recognized or disclosed in the most

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recent consolidated financial statements (or the notes thereto) of Company included in the Company SEC Reports or incurred since the date of such financial statements, or (B) amend, terminate, waive in writing or release any confidentiality or similar agreement to which Company or any of its subsidiaries is a party or of which Company or any of its subsidiaries is a beneficiary; provided, however, that Company will use its good faith efforts to enforce any such agreements specifically requested to be enforced by Acquiror;

(xiii)  Make any individual or series of related payments outside of the ordinary course of business (including payments to financial, legal, accounting or other professional service advisors incurred in connection with the transactions contemplated by this Agreement or otherwise) in excess of $100,000;

(xix)  Enter into or materially modify, amend or terminate any material contract or agreement to which Company or any subsidiary thereof is a party or waive, delay the exercise of, release or assign any material rights or claims thereunder;

(xx)  Except in the ordinary course of business consistent with past practice, enter into any material contracts, agreements, or obligations relating to the distribution, sale, license or marketing by third parties of Company’s products or products licensed by Company;

(xxi)  Revalue any of its assets or, except as required by GAAP, make any change in accounting methods, principles or practices;

(xxii)  Incur or enter into any agreement, contract or commitment outside of the ordinary course of business in excess of $500,000 individually;

(xxiii)  Make or change any Tax election that, individually or in the aggregate, is reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of Company or any of its subsidiaries, settle or compromise any material income Tax liability or consent to any extension or waiver of the limitation period applicable to any claim or assessment in respect of Taxes;

(xxiv)  Make any loan, advance or capital contribution to or investment in any person (other than a subsidiary of Company) other than in the ordinary course of business consistent with past practice, but in no event in the amount (to persons other than subsidiaries) of more than $10,000 for any one transaction and $50,000 in the aggregate, and other than investments in cash equivalents made in the ordinary course of business consistent with past practice;

(xxv)  Modify or amend in any manner that is adverse to Company standstill or similar agreements to which Company or any of its subsidiaries is a party;

(xxvi)  Engage in any action or enter into any transaction or permit any action to be taken that could reasonably be expected to (i) directly or indirectly materially delay the consummation of any of the transactions contemplated by this Agreement or (ii) increase the possibility that any Governmental or Regulatory Authority will seek to object to or challenge or take any action to interfere in any respect with or delay the consummation of any of the transactions contemplated by this Agreement; or

(xxvii)  Redeem rights under its rights plan or amend, modify or terminate its rights plan;

(xxviii)  Agree in writing or otherwise to take any of the actions described in Section 5.1(b)(i) through Section 5.1(b)(xxvii) above, inclusive.

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(i)  Declare, set aside or pay any dividends on or make any other distributions (whether in cash, stock, equity securities or property) in respect of any capital stock of Acquiror; provided, however, that neither Acquiror nor Genesis Delaware shall be prohibited under this clause (i) from effecting any stock split, reverse stock split, stock dividend, reorganization, recapitalization, reclassification or other like change with respect to Acquiror Common Shares or shares of Genesis Delaware Common Stock on or after the date hereof;

(ii)  Purchase, redeem or otherwise acquire, directly or indirectly, any shares of capital stock of Acquiror or its subsidiaries, except repurchases of unvested shares at cost in connection with the termination of the employment relationship with any employee pursuant to stock option or purchase agreements in effect on the date hereof;

(iii)  Cause, permit or propose any amendments to the Acquiror Charter Documents or other charter documents;

(iv)  Except as required by GAAP, make any change in accounting methods, principles or practices or any change in tax accounting methods or any tax elections;

(v)  Take any action that would materially delay the consummation of the transactions contemplated hereby; or

(vi)  Agree in writing or otherwise to take any of the actions described in Section 5.2(b)(i) through Section 5.2(b)(v) above, inclusive.

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(i)  In the event that Acquiror shall terminate this Agreement pursuant to Section 8.1(g), Company shall pay to Acquiror Nine Million, Six Hundred and Forty Thousand Dollars ($9,640,000), plus an amount equal to the Acquiror’s actual and documented out-of-pocket fees and expenses incurred by Acquiror in connection with this Agreement and the consummation of the transactions contemplated hereby; provided, however, that such fees and expenses shall not exceed $1,750,000 in the aggregate (the “Termination Fee”), which Termination Fee shall be payable by wire transfer of immediately available funds to such account designated by Acquiror in writing to Company.

(ii)  Company shall pay to Acquiror an amount in cash equal to the Termination Fee, by wire transfer of immediately available funds to an account designated in writing by Acquiror to Company, within one (1) business day after demand by Acquiror, in the event that this Agreement is terminated by Acquiror or Company pursuant to Section 8.1(b) or Section 8.1(d)(i), and (A) following the execution and delivery of this Agreement and prior to the termination of this Agreement, an Acquisition Proposal shall have been publicly announced or shall have become publicly known and not withdrawn, and (B) within twelve (12) months following the termination of this Agreement, either a Company Acquisition (as defined below) is consummated, or the Company enters into a letter of intent or a definitive agreement providing for a Company Acquisition and any Company Acquisition is later consummated. For the purposes of this Agreement, the term “Company Acquisition” means any of the following transactions (other than the transactions contemplated by this Agreement): (A) a merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Company pursuant to which the stockholders of the Company immediately preceding such transaction hold less than sixty percent (60%) of the aggregate equity interests in the surviving or resulting entity of such transaction, (B) a sale or other disposition by the Company of assets representing in excess of thirty percent (30%) of the aggregate fair market value of the Company’s business immediately prior to such sale, or (C) the acquisition by any person or group (including by way of a tender offer or an exchange offer or issuance by the Company), directly or indirectly, of beneficial ownership or a right to acquire beneficial ownership of shares representing in excess of thirty percent (30%) of the voting power of the then outstanding shares of capital stock of the Company.

(iii)  The Company acknowledges that the agreements contained in this Section 8.3(b) are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, Acquiror

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would not enter into this Agreement; accordingly, if the Company fails to pay in a timely manner the amounts due pursuant to this Section 8.3(b) and, in order to obtain such payment, Acquiror makes a claim that results in a judgment against the Company for the amounts set forth in this Section 8.3(b), the Company shall pay to Acquiror its costs and expenses (including attorneys’ fees and expenses) in connection with such suit, together with interest on the amounts set forth in this Section 8.3(b) at the prime rate of Citibank N.A. in effect on the date such payment was required to be made. Payment of the fees described in this Section 8.3(b) shall not be in lieu of damages incurred in the event of breach of this Agreement.

(a)

if to Acquiror, to:

Genesis Microchip Incorporated

2150 Gold Street

Alviso, California 95002

Attention: Amnon Fisher

Telephone: (408) 262-6599

Telecopy: (408) 262-6365

with a copy to:

Wilson Sonsini Goodrich & Rosati

Professional Corporation

One Market

Spear Tower, Suite 3300

San Francisco, California 94105

Attention: Selim Day, Esq.

Telephone: (415) 947-2000

Telecopy: (415) 947-2099

(b)

if to Company, to:

Sage, Inc.

1601 McCarthy Boulevard

Milpitas, California 95035

Attention: Chandra Reddy

Telephone: (408) 383-5300

Telecopy: (408) 383-5310

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with a copy to:

Morrison & Foerster LLP

425 Market Street

San Francisco, California 94105

Attention: John W. Campbell III, Esq.

Telephone: (415) 268-7000

Telecopy: (415) 268-7522

(i)  the term “knowledge” means with respect to a party hereto, with respect to any matter in question, knowledge of the executive officers of such party after reasonable inquiry;

(ii)  the term “Material Adverse Effect,” when used in connection with a party to this Agreement, means any change, event, violation, inaccuracy, circumstance or effect that is materially adverse to the business, assets, liabilities, financial condition, capitalization or results of operations of such party and its subsidiaries taken as a whole; provided, however, that in no event shall any effect that results from (A) the loss of customers, orders or design wins to the other party directly due to the public announcement of the execution of this Agreement or the pendency of this Agreement, and any change in the revenues or operating results of a party directly attributable to such loss of customers, orders or design wins, (B) changes in general economic conditions or the industry in which a party operates generally and not affecting a party to a materially disproportionate degree, or (C) changes in the trading prices of such party’s common stock, constitute a “Material Adverse Effect.”

(iii)  the term “person” shall mean any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity.

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GE

NESIS MICROCHIP INCORPORATED

By

: /S/    AMNON FISHER

Name: Amnon Fisher

Title: President & CEO

SA

GE, INC.

By

: /S/    C M REDDY

Name: Chandrashekar M. Reddy

Title: President & CEO

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If to the Acquiror:

Genesis Microchip Incorporated

2150 Gold Street

Alviso, CA 95002

Attention: Chief Executive Officer and General Counsel

Telephone: (408) 262-6599

Telecopy: (408) 262-6365

with a copy to:

Wilson Sonsini Goodrich & Rosati

Professional Corporation

One Market

Spear Tower, Suite 3300

San Francisco, California 94105

Attention: Selim Day, Esq.

Telecopy: (415) 947-2099

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If to the Stockholder: To the address for notice set forth on the signature page hereof.

with a copy to:

Sage, Inc.

1601 McCarthy Blvd.

Milipitas, CA 95035

Attention: Chief Executive Officer

Telephone: (408) 383-5300

Telecopy: (408) 383-5310

and to:

Morrison & Foerster LLP

425 Market Street

San Francisco, California 94105

Attention: John W. Campbell III, Esq.

Telecopy: (415) 268-7000

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Da	ted: September 27, 2001

Sig

nature of Stockholder:

Pri

nt Name of Stockholder:

Sh

ares beneficially owned:

shares of Company Common Stock

shares of Company Common Stock issuable upon the exercise of outstanding options, warrants or other rights

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Bo	ard of Directors

Ge	nesis Microchip Incorporated

165	Commerce Valley Drive West

Th	ornhill, Ontario L3T 7V8, Canada

Me	mbers of the Board:

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Ve

ry truly yours,

/s/

DRESDNER KLEINWORT WASSERSTEIN, INC.

DR

ESDNER KLEINWORT WASSERSTEIN, INC.

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Sep	tember 27, 2001

Bo	ard of Directors

Sag

e, Inc.

160	1 McCarthy Blvd

Mi	lpitas, CA 95035

Me	mbers of the Board:

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Sin

cerely,

/s/    U.S. BANCORP PIPER JAFFRAY INC.

U.S. BANCORP PIPER JAFFRAY INC.

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(a)

“Exchange Transaction” means the transactions contemplated by this Agreement pursuant to which Genesis Canada will become an indirect wholly owned subsidiary of Genesis Delaware, including the Arrangement;

(b)

“Genesis Canada Option Plans” means all share option or purchase plans of Genesis Canada, including the Stock Option Plan, 1997 Employee Stock Option Plan, 1997 Non-Employee Stock Option Plan, 2000 Non-Statutory Stock Option Plan, 2001 Non-Statutory Stock Option Plan, and 1997 Employee Stock Purchase Plan of Genesis Canada;

(c)

“Interim Order” means the order of the Court pursuant to the application to the Court pursuant to section 130 of the Act;

(d)

“Options” means options to acquire Common Shares pursuant to the Genesis Canada Option Plans;

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(e)

“Plan of Arrangement” means the plan of arrangement set out as Exhibit 1 hereto together with any amendments or variations thereto made in accordance with section 3.1 hereof or the provisions thereof; and

(f)

each of the terms “Act”, “Arrangement”, “Arrangement Resolution”, “Common Shares”, “Court”, “Dissent Rights”, “Dissenting Shareholder”, “Effective Date”, “Effective Time”, “Final Order”, “Genesis Canada”, “Genesis Canada Shareholders”, “Genesis Delaware”, “Genesis Delaware Stock”, “Genesis NSULC”, “Registrar” and “Special General Meeting” shall have the meaning given to those terms in section 1.1 of the Plan of Arrangement.

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(a)

proceed with an application to the Court pursuant to section 130 of the Act for the Interim Order;

(b)

convene the Special General Meeting, solicit proxies to be voted at the Special General Meeting in favour of the Arrangement Resolution, and conduct the Special General Meeting in accordance with the articles of association of Genesis Canada and as otherwise required by law;

(c)

if the Arrangement Resolution is properly passed at the Special General Meeting, proceed with an application to the Court pursuant to section 130 of the Act for the Final Order in such fashion as the Court may direct;

(d)

as soon as practicable after receipt of the Final Order, subject to compliance with the conditions set out herein, deliver a certified copy of the Final Order to the Registrar; and

(e)

use its best efforts to obtain such other consents, orders or approvals as counsel may advise are necessary or desirable for the implementation of the Exchange Transaction, including the Arrangement.

(a)

transfer the Genesis Delaware Stock to each holder of Common Shares, other than Dissenting Shareholders, in exchange for the Common Shares and to otherwise perform the obligations required to be performed by it under the Plan of Arrangement; and

(b)

do all such other acts and things as may be necessary or desirable in order to give effect to the Exchange Transaction, including the Arrangement, and without limiting the generality of the foregoing, Genesis NSULC shall use its best efforts to apply for and shall cooperate in any application for:

(i)

the Interim Order and Final Order; and

(ii)

such other consents, orders or approvals as counsel may advise are necessary or desirable for the implementation of the Exchange Transaction, including the Arrangement.

(a)

at or prior to the Effective Time, issue to Genesis NSULC that number of shares of Genesis Delaware Stock equal to the number of Common Shares issued and outstanding at the Effective Time (excluding such of those Common Shares to which Dissent Rights apply at the Effective Time), and record such issue in the register of holders of Genesis Delaware Stock;

(b)

at the Effective Time assume all outstanding Options, whether vested or unvested and whether exercisable or unexercisable, subject to the same terms and conditions set forth in the relevant Genesis Canada Option Plans, such that the Options shall be exercisable on the same terms for the same number of shares of Genesis Delaware Stock;

(c)

as at the Effective Time, record in the register of holders of Genesis Delaware Stock the transfers of Genesis Delaware Stock from Genesis NSULC to Genesis Canada Shareholders pursuant to the Arrangement;

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(d)

at or prior to the Effective Time secure the listing of the Genesis Delaware Stock on the Nasdaq National Market;

(e)

immediately following the Effective Time, acquire for cancellation and cancel the one common share of Genesis Delaware Stock held by Genesis Canada in exchange for one U.S. dollar;

(f)

after the Effective Time and from time to time, issue to Genesis NSULC that number of shares of Genesis Delaware Stock equal to those Common Shares to which Dissent Rights applied at the Effective Time, but for which the Dissent Rights subsequently terminated so that such Common Shares are deemed to have been exchanged in accordance with sections 3.1(a), (b) and (c) of the Plan of Arrangement; and

(g)

otherwise perform the obligations required to be performed by it under the Exchange Transaction, including the Arrangement, and do all such other acts and things as may be necessary or desirable in order to give effect to the Exchange Transaction, including the Arrangement, and without limiting the generality of the foregoing, Genesis Delaware shall use its best efforts to apply for and shall cooperate in any application for:

(i)

the Interim Order and Final Order; and

(ii)

such other consents, orders or approvals as counsel may advise are necessary or desirable for the implementation of the Exchange Transaction, including the Arrangement.

(a)

Genesis Delaware is a corporation duly incorporated and validly subsisting in all respects under the laws of Delaware;

(b)

Genesis Delaware has good right, full corporate power and absolute authority to enter into this Agreement and to perform all the obligations to be performed by Genesis Delaware under this Agreement;

(c)

Genesis Delaware has taken all necessary or desirable actions, steps and corporate and other proceedings to approve or authorize, validly and effectively, the entering into, and the execution, delivery and performance of, this Agreement;

(d)

this Agreement is a legal, valid and binding obligation of Genesis Delaware, enforceable against it in accordance with its terms subject to bankruptcy, insolvency, moratorium, reorganization and other laws relating to or affecting the enforcement of creditors’ rights generally, and the fact that equitable remedies, including the remedies of specific performance and injunction, may only be granted in the discretion of a court;

(e)

the execution, delivery and performance of this Agreement and each of the other agreements contemplated or referred to herein by Genesis Delaware, and the completion of the transactions contemplated hereby, will not constitute or result in a violation or breach of or default under (i) any term or provision of any of the articles, by-laws or other constating documents of Genesis Delaware; (ii) the terms of any indenture, agreement (written or oral), instrument or understanding or other obligation or restriction to which Genesis Delaware is a party or by which it is bound; or (iii) any term or provision of any licenses, registrations or qualification of Genesis Delaware or any order of any court, governmental authority or regulatory body or any applicable law or regulation of any jurisdiction; and

(f)

upon issue in accordance with the terms of this Agreement, the Genesis Delaware Stock will be validly issued as fully paid and non-assessable and be listed on the NASDAQ National Market, all in compliance with applicable securities law requirements.

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(a)

The Arrangement Resolution, with or without amendment, shall have been passed at the Special General Meeting in accordance with the Interim Order and the Act, and the Arrangement Resolution shall have otherwise been approved by the requisite majorities of persons entitled or required to vote thereon;

(b)

The Interim Order and the Final Order shall have been obtained in form and substance satisfactory to each party hereto;

(c)

All other consents, orders, regulations and approvals, including regulatory and judicial approvals and orders, required or necessary or desirable for the completion of the transactions provided for in this Agreement and the Plan of Arrangement shall have been obtained or received from the persons, authorities or bodies having jurisdiction in the circumstances, including, without limitation, pursuant to the Securities Act (Nova Scotia) and the comparable securities laws of the other provinces of Canada and comparable securities laws of the United States;

(d)

There shall not be in force any order or decree restraining or enjoining the consummation of the transactions contemplated by this Agreement and the Arrangement;

(e)

None of the consents, orders, regulations or approvals contemplated herein shall contain terms or conditions or require undertakings or security deemed unsatisfactory or unacceptable by any of the parties hereto; and

(f)

This Agreement shall not have been terminated under Article 4.

(a)

change the time for performance of the obligations or acts of the parties hereto;

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(b)

waive any inaccuracies or modify any representation contained herein or in any document to be delivered pursuant hereto; or

(c)

waive compliance with or modify any of the covenants herein contained or waive or modify performance of any of the obligations of the parties hereto,

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(a)

“Act” means the Companies Act, R.S.N.S. 1989, c.81, as amended;

(b)

“Arrangement” means an arrangement under the provisions of section 130 of the Act on the terms and conditions set forth in this Plan of Arrangement and any amendment or variation hereto made in accordance with section 4.1 of the Arrangement Agreement and section 5.1 hereof;

(c)

“Arrangement Resolution” means the shareholders’ resolution to be presented to the shareholders of Genesis Canada at the Special General Meeting and, if deemed advisable, passed with or without variation by the holders of the outstanding Common Shares at the Special General Meeting;

(d)

“Associated Rights” means the rights outstanding under the Shareholder Rights Plan;

(e)

“Common Shares” means the common shares in the capital stock of Genesis Canada, including all rights attached to such shares, which include the Associated Rights;

(f)

“Court” means the Supreme Court of Nova Scotia;

(g)

“Depositary” means Mellon Investor Services LLC;

(h)

“Dissent Rights” has the meaning attributed to that term in section 6.1;

(i)

“Dissenting Shareholder” means a holder of Common Shares who dissents in respect of the Arrangement in strict compliance with the Dissent Rights;

(j)

“Effective Date” means the date a certified copy of the Final Order is delivered to the Registrar for registration giving effect to the Arrangement;

(k)

“Effective Time” means          (Halifax Time) on the Effective Date;

(l)

“Final Order” means the final order of the Court approving the Arrangement;

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(m)

“Genesis Canada” means Genesis Microchip Incorporated, a company organized under the laws of the Province of Nova Scotia;

(n)

“Genesis Canada Shareholders” means all of the holders and beneficial owners of Common Shares;

(o)

“Genesis Delaware” means Genesis Microchip Inc., a body corporate under the laws of Delaware;

(p)

“Genesis Delaware Stock” means shares of common stock of the par value of $0.001(U.S.) per share in the capital of Genesis Delaware;

(q)

“Genesis NSULC” means Genesis Microchip Nova Scotia Corp., an unlimited company formed under the laws of the Province of Nova Scotia, and a wholly-owned subsidiary of Genesis Delaware;

(r)

“Letter of Transmittal” means the letter of transmittal to be delivered to the Genesis Canada Shareholders following the Effective Date;

(s)

“Registrar” means the Registrar of Joint Stock Companies for the Province of Nova Scotia;

(t)

“Shareholder Rights Plan” means the shareholder rights plan of Genesis Microchip, dated December 19, 1997; and

(u)

“Special General Meeting” means the special general meeting of the holders of the outstanding Common Shares to be held on such date as may be determined by the Court to consider and, if deemed advisable, to approve the Arrangement, and any adjourned meeting.

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(a)

each outstanding Common Share, other than those Common Shares held by a Dissenting Shareholder, shall be transferred by each holder thereof to Genesis NSULC in exchange for one fully paid and non-assessable share of Genesis Delaware Stock;

(b)

each holder of Common Shares, other than any Dissenting Shareholders, shall cease to be a holder of Common Shares, and the name of each such holder shall be removed from the register of holders of Common Shares, and Genesis NSULC will be recorded as the registered holder of such Common Shares and will be deemed to be the legal and beneficial owner thereof;

(c)

subject to section 4.1, each holder of Common Shares, other than any Dissenting Shareholders, shall have the right to receive from Genesis NSULC one or more certificates for the number of fully paid and non-assessable shares of Genesis Delaware Stock to which the holder is entitled pursuant to the foregoing, to become a holder of the number of fully paid and non-assessable shares of Genesis Delaware Stock to which the holder is entitled pursuant to the foregoing, and to have the name of such holder added to the register of holders of Genesis Delaware Stock; and

(d)

each outstanding Common Share held by Dissenting Shareholders shall be deemed to have been transferred to Genesis Canada and be cancelled and cease to be outstanding such Dissenting Shareholders shall cease to have any rights as Genesis Canada Shareholders other than Dissent Rights.

(a)

At or prior to the Effective Time, Genesis NSULC shall deliver to the Depositary for the benefit of the Genesis Canada Shareholders who have not elected to exercise their Dissent Rights, all certificates for Genesis Delaware Stock held by Genesis NSULC.

(b)

The Depositary shall, as soon as practicable after the Effective Date mail one share of Genesis Delaware Stock for each Common Share of that holder exchanged in accordance with this Plan of Arrangement to each Genesis Canada Shareholder who:

(i)

did not elect to exercise their Dissent Rights; and

(ii)

deposits with the Depositary properly endorsed certificates representing all Common Shares held by that holder together with a duly completed Letter of Transmittal and any other documents or instruments as would have been required to effect the transfer of the Common Shares in accordance with the Act and the constating documents of Genesis Canada and such other documents or instruments as the Depositary may reasonably require.

(c)

No dividends or other distributions declared or made after the Effective Time with respect to Genesis Delaware Stock with a record date after the Effective Time shall be paid to the holder of any unsurrendered certificate which immediately prior to the Effective Time represented outstanding Common Shares, unless and until the holder of record of such certificate shall surrender such certificate in accordance with Section 4.1(b). Subject to applicable law, at the time of such surrender of any such certificate, there shall be paid to the holder of record of a certificate formerly representing Common Shares, without interest, the amount of dividends or other distributions, if any, on Genesis Delaware Stock with a record date after the Effective Time and a payment date prior to surrender.

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(a)

A Dissenting Shareholder shall send to Genesis Canada, no later than the termination of the Special General Meeting (or any adjournment thereof), a written objection to the Arrangement Resolution (a “Dissent Notice”). A Dissenting Shareholder may only dissent with respect to all Common Shares held by such holder on behalf of any one beneficial owner and which are registered in the name of the Dissenting Shareholder.

(b)

A Dissenting Shareholder who submits a Dissent Notice but who also votes in favour of the Arrangement Resolution will not be considered a Dissenting Shareholder and the Common Shares of such Dissenting Shareholder shall be deemed to have been exchanged in accordance with 3.1(a), (b) and (c) hereof and accordingly, all Common Shares held by such Dissenting Shareholder shall be deemed to be transferred to Genesis NSULC on the Effective Date pursuant to the Arrangement hereinbefore described.

(c)

Any proxy granted by a Dissenting Shareholder who intends to dissent, other than a proxy that instructs the proxyholder to vote against the Arrangement Resolution, must be validly revoked by the Genesis Canada Shareholder in order to prevent the proxyholder from voting such Dissenting Shareholder’s Common Shares in favour of the Arrangement Resolution and thereby disentitling the Dissenting Shareholder from the right to dissent.

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(a)

the Dissenting Shareholder withdraws the Payment Demand before Genesis Canada makes an offer to such Dissenting Shareholder; or

(b)

Genesis Canada fails to make an offer as hereinafter described and the Dissenting Shareholder withdraws the Payment Demand;

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(a)

If Genesis Canada fails to make an Offer to Pay for a Dissenting Shareholder’s Common Shares, or if a Dissenting Shareholder fails to accept an Offer to Pay, Genesis Canada may, within 50 days after the Effective Date or within such further period as the Court may allow, apply to the Court to fix a fair value for the Common Shares of any Dissenting Shareholders.

(b)

If Genesis Canada fails to apply to the Court, a Dissenting Shareholder may apply to the Court for the same purpose within a further period of 20 days or within such further period as the Court may allow.

(c)

If no application is made to the Court by either Genesis Canada or a Dissenting Shareholder within the respective time periods, the Common Shares of the respective Dissenting Shareholder shall be deemed to have been exchanged in accordance with 3.1(a), (b) and (c) hereof and accordingly, all Common Shares of such Dissenting Shareholder shall be deemed to be transferred to Genesis NSULC on the Effective Date pursuant to the Arrangement hereinbefore described.

(d)

Upon an application to the Court, all Dissenting Shareholders whose Common Shares have not been purchased by Genesis Canada shall be joined as parties and bound by the decision of the Court, and Genesis Canada shall notify each affected Dissenting Shareholder of the date, place and consequences of the application and of the right to appear and be heard in person or by counsel.

(e)

Upon any such application to the Court, the Court shall fix a fair value for the Common Shares of all of the Dissenting Shareholders who have not accepted an Offer to Pay.

(f)

The final order of the Court shall be rendered against Genesis Canada in favour of each such Dissenting Shareholder and for the amount of the fair value of the Common Shares held by such Dissenting Shareholder as fixed by the Court.

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2001

IN

THE SUPREME COURT OF NOVA SCOTIA

IN THE MATTER OF THE APPLICATION OF GENESIS MICROCHIP INCORPORATED, GENESIS MICROCHIP INC. and GENESIS MICROCHIP NOVA SCOTIA CORP.

- and -

IN THE MATTER OF THE COMPANIES ACT, R.S.N.S. 1989, C. 81, AS AMENDED, AND IN PARTICULAR, SECTION 130 THEREOF.

1.

Genesis Microchip Incorporated (“Genesis Microchip”) is authorized and directed to call, hold and conduct a special general meeting (the “Special General Meeting”) of the holders of its common shares (the “Shareholders”) to, among other things, consider and, if deemed advisable, pass, with or without variation, a resolution (the “Resolution”) under the Nova Scotia Companies Act, R.S.N.S. 1989, c. 81 (the “Act”) to approve the arrangement (the “Arrangement”) substantially in the form set forth in the Plan of Arrangement contained in the Share Exchange and Arrangement Agreement attached as Annex      of Exhibit “     ” to the Affidavit of          (the “Plan of Arrangement”).

2.

A Special General Meeting to consider the Resolution shall be called, held and conducted on          at 8:00 a.m., local time, in accordance with the Act and the Memorandum and Articles of Association of Genesis Microchip, subject to the terms of this Order and subject to any further Order of this Honourable Court.

3.

Genesis Microchip is authorized to make, in the manner contemplated by the Plan of Arrangement, such amendments, revisions or supplements to the Arrangement as it may determine without any additional notice to the Shareholders and the Arrangement as so amended, revised or supplemented, shall be the Arrangement to be submitted to the Special General Meeting.

4.

Genesis Microchip, if it deems advisable, is specifically authorized to adjourn or postpone the Special General Meeting on one or more occasions, without the necessity of first convening a Special General Meeting or first obtaining any vote of the Shareholders respecting the adjournment or postponement. Notice of any such adjournment shall be given by press release.

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5.

Notice of the Special General Meeting (the “Notice of Meeting”) and the Joint Prospectus and Proxy Statement/Prospectus of Genesis Microchip and Sage, Inc. dated                 , 2002 and the Interlocutory Notice (Application Ex Parte) setting a date for an application for an Order approving an arrangement between Genesis Microchip and Genesis Microchip Shareholders (collectively the “Genesis Proxy Material”) in substantially the same form as contained in Exhibit      to the Affidavit of          shall be distributed to the Shareholders of record as of         , the “record date’’ by mailing the same by prepaid ordinary mail to such persons at least twenty-one (21) clear days prior to the date of the Special General Meeting in accordance with the Articles of Association of Genesis Microchip, and such mailing shall constitute good and sufficient service of notice of the Special General Meeting.

6.

The accidental omission to give notice of the Special General Meeting, or the non-receipt of such notice, shall not invalidate any resolution passed or proceedings taken at the Special General Meeting, but if any such failure or omission is brought to the attention of Genesis Microchip prior to the Special General Meeting, then it shall use reasonable best efforts to rectify it by the method and in a time most reasonably practicable in the circumstances.

7.

Genesis Microchip is authorized to use the form of proxy, in substantially the same form as [Annex] to Exhibit      to the Affidavit of         , subject to Genesis Microchip’s ability to insert dates and other relevant information in the final form of proxy. Genesis Microchip is authorized, at its expense, to solicit proxies, directly and through its officers, directors and employees, and through such agents or representatives as it may retain for the purpose, and by mail or such other forms of personal or electronic communication as it may determine.

8.

Votes shall be taken at the Special General Meeting on the basis of one (1) vote per Common Share and, subject to further Order of this Honourable Court, the vote required to pass the Resolution shall be the affirmative vote of not less than a majority of the Shareholders represented in person or by proxy at the Special General Meeting and three fourths in value of those Shareholders represented in person or by proxy at the Special General Meeting (excluding spoiled, illegible or defective votes).

9.

The only persons entitled to attend the Special General Meeting shall be the Shareholders as at the record date for the Special General Meeting; holders of valid proxies from such Shareholders; Genesis Microchip directors, auditors, advisors and legal counsel. The only persons entitled to be represented and to vote at the Special General Meeting shall be the Shareholders as at the record date for the Special General Meeting.

10.

The Shareholders shall be entitled to exercise rights of dissent in accordance with and in compliance with the Plan of Arrangement, provided that they provide Genesis Microchip with written objection to the Resolution at or before the Special General Meeting and otherwise comply with the Plan of Arrangement.

11.

Upon approval by the Shareholders of the Arrangement in the manner set forth in this Order, Genesis Microchip may apply to this Honourable Court on the      day of                 , 2001 at the hour of 9:30 in the forenoon or on such later date to which this application may be adjourned, for approval of the Arrangement.

12.

The only persons entitled to appear at the application to sanction and approve the Arrangement at the hearing described in paragraph 11 of this Order, shall, subject to any further Order of this Honourable Court, be:

(a)

The Registrar appointed pursuant to section 3 of the Act; and

(b)

Persons who have filed an appearance herein in accordance with the Nova Scotia Rules of Civil Procedure giving this Honourable Court and Genesis Microchip notice of an intention to appear no less than two (2) clear days before the hearing of this application.

13.

Mailing of the Interlocutory Notice (Application Ex Parte) in the form attached as Annex      of Exhibit “    ” to the Affidavit of          in the Genesis Microchip Proxy Material in accordance with paragraph 5 of this Order shall constitute good and sufficient service of such Interlocutory Notice to all

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interested parties. No other form of service need be made on such persons in respect of these proceedings. No other material filed on behalf of Genesis Microchip in support of this Application need be served on any person except to those persons who have filed an appearance in accordance with the provisions of paragraph 12(b) of this Order in which case Genesis Microchip will make reasonable efforts to deliver to such persons copies of materials filed with this Honourable Court which were not included in the Genesis Proxy Material.

14.

No further notice of any adjournment of the Application to sanction and approve the Arrangement is required except to those persons who have filed an appearance in accordance with the provisions of paragraph 12(b) of this Order in which case Genesis Microchip will make reasonable efforts to deliver notice to such persons.

PR

OTHONOTARY

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IN THE MATTER OF THE APPLICATION OF GENESIS MICROCHIP INCORPORATED, GENESIS MICROCHIP INC. and GENESIS MICROCHIP NOVA SCOTIA CORP.

- and -

IN THE MATTER OF THE COMPANIES ACT, R.S.N.S. 1989, C. 81, AS AMENDED, AND IN PARTICULAR, SECTION 130 THEREOF

Ro

derick (Rory) H. Rogers

Ste

wart McKelvey Stirling Scales

900

Purdy’s Wharf Tower 1

195

9 Upper Water Street

Ha

lifax, NS B3J 2X2

So

licitor for the Applicant

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1.

The arrangement (the “Arrangement”) under Section 130 of the Companies Act (Nova Scotia) involving Genesis Microchip Incorporated (“Genesis Microchip”), as more particularly described and set forth in the joint proxy statement/prospectus of Genesis Microchip Incorporated and Sage, Inc. dated [ ], 2001 (the “Proxy Statement”)] accompanying the notice of this meeting (as the Arrangement may be modified or amended) is hereby authorized, approved and adopted.

2.

The Share Exchange and Arrangement Agreement among Genesis Microchip, Genesis Microchip Inc., a Delaware corporation, and Genesis Microchip Nova Scotia Corp., attached as Annex E to the Proxy Statement (the “Arrangement Agreement”), including the Plan of Arrangement (the “Plan of Arrangement”) set forth in Exhibit 1 to the Arrangement Agreement (as the Arrangement Agreement and Plan of Arrangement may be modified or amended) is hereby authorized, approved and adopted.

3.

Notwithstanding that this resolution has been passed (and the Arrangement adopted) by the shareholders of Genesis Microchip or that the Arrangement has been approved by the Supreme Court of Nova Scotia (the “Court”), the directors of Genesis Microchip are hereby authorized without any further approval by the shareholders of Genesis Microchip to vary or terminate the Arrangement in such manner as is provided for in the Plan of Arrangement and Arrangement Agreement and as may be approved by the Supreme Court of Nova Scotia in granting the final order approving the Arrangement.

4.

Any one director or officer of Genesis Microchip be and is hereby authorized for and on behalf of Genesis Microchip to make application to the Supreme Court of Nova Scotia for an order approving the Arrangement and to deliver a certified copy of an order of the Supreme Court of Nova Scotia approving the Arrangement to the Registrar of Joint Stock Companies for registration pursuant to Section 130(3) of the Companies Act (Nova Scotia).

5.

Any one director or officer of Genesis Microchip be and is hereby authorized for and on behalf of Genesis Microchip to execute or cause to be executed, under the seal of Genesis Microchip or otherwise, and to deliver or to cause to be delivered, all such documents, agreements and instruments, and to do or to cause to be done all such other acts and things, as such director or officer determines to be necessary or desirable in order to carry out the intent of the foregoing paragraphs of this resolution and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such document, agreement or instrument or the doing of any such act or thing.

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(a)    Exhibits

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*

Previously filed.

(1)

Incorporated by reference to Faroudja Laboratories, Inc.’s Form S-1 (File No. 333-32375) filed with the Securities and Exchange Commission on July 30, 1997, as amended.

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(b)    Financial Statement Schedules

(c)    Reports, Opinions, or Appraisals

(1)  that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference into this registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

(2)  that prior to any public reoffering of the securities registered hereunder through use of a prospectus that 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;

(3)  that every prospectus (i) that is filed pursuant to paragraph (2) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities 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 Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

(4)  to deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report, to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.

(5)  to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of any such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed after the effective date of the registration statement through the date of responding to such request; and

(6)  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.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission

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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 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.

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GE

NESIS MICROCHIP INC.

/s/    ERIC ERDMAN

By

:

Na

me: Eric Erdman

Tit

le: Secretary and Chief Financial Officer

/s/    ERIC ERDMAN

By

:

I. Eric Erdman

Attorney-in-fact

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*

Previously filed.

(1)

Incorporated by reference to Faroudja Laboratories, Inc.’s Form S-1 (File No. 333-32375) filed with the Securities and Exchange Commission on July 30, 1997, as amended.