Vialta, Inc.

(Name of Issuer)

Common Stock, $0.001 par value per share

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(Title of Class of Securities)

92554D 30 6

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(CUSIP Number)

Fred Shiu Leung Chan
Victory Acquisition Corporation
19770 Stevens Creek Blvd.
Cupertino, CA 95014


Copies to:
Rob Dellenbach
Fenwick & West LLP
Embarcadero Center West
275 Battery Street
San Francisco, CA 94111
(415) 875-2300

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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

March 28, 2005

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(Date of Event Which Requires Filing of this Statement)

(1)	These shares represent 32,039,820 shares held by Victory Acquisition Corporation and 1,000,000 shares that Fred Shiu Leung Chan may acquire upon exercise of vested stock options. Victory Acquisition Corporation is a member of a group and has received shares from the other Reporting Persons under the Contribution Agreement (defined in Item 3).
*	Based on 83,052,852 shares of the Issuer’s Common Stock outstanding as of March 7, 2005, as reported in the Issuer’s Annual Report on Form 10-K filed with the Commission on March 31, 2005 and 1,000,000 shares of Issuer’s Common Stock that Fred Shiu Leung Chan may acquire upon exercise of vested stock options exercisable within 60 days.

 

(2)	These shares represent 32,039,820 shares held by Victory Acquisition Corporation and 1,000,000 shares that Fred Shiu Leung Chan may acquire upon exercise of vested stock options. Fred Shiu Leung Chan does not hold shares directly but is a member of a group who contributed shares to Victory Acquisition Corporation under the Contribution Agreement (defined in Item 3).
*	Based on 83,052,852 shares of the Issuer’s Common Stock outstanding as of March 7, 2005, as reported in the Issuer’s Annual Report on Form 10-K filed with the Commission on March 31, 2005 and 1,000,000 shares of Issuer’s Common Stock that Fred Shiu Leung Chan may acquire upon exercise of vested stock options exercisable within 60 days.

 

(3)	These shares represent 32,039,820 shares held by Victory Acquisition Corporation and 1,000,000 shares that Fred Shiu Leung Chan may acquire upon exercise of vested stock options. Annie M.H. Chan does not hold shares directly but is a member of a group who contributed shares to Victory Acquisition Corporation under the Contribution Agreement (defined in Item 3).
*	Based on 83,052,852 shares of the Issuer’s Common Stock outstanding as of March 7, 2005, as reported in the Issuer’s Annual Report on Form 10-K filed with the Commission on March 31, 2005 and 1,000,000 shares of Issuer’s Common Stock that Fred Shiu Leung Chan may acquire upon exercise of vested stock options exercisable within 60 days.

 

(4)	The Annie M.H. Chan TR UA 07-25-95, The Annie M.H.Chan Living Trust is a member of a group who contributed shares to Victory Acquisition Corporation under the Contribution Agreement (defined in Item 3) and as such may be deemed to share beneficial ownership of the shares held by the members of the group. These shares consist of 32,039,820 shares held by Victory Acquisition Corporation and 1,000,000 shares that Fred Shiu Leung Chan may acquire upon exercise of vested stock options.
*	Based on 83,052,852 shares of the Issuer’s Common Stock outstanding as of March 7, 2005, as reported in the Issuer’s Annual Report on Form 10-K filed with the Commission on March 31, 2005 and 1,000,000 shares of Issuer’s Common Stock that Fred Shiu Leung Chan may acquire upon exercise of vested stock options exercisable within 60 days.

 

(5)	The Mee Sim Lee & Sung Kook Kim & Myong Shin Kim TR UA DTD 12-21-87, The David Y.W. Chan Trust is a member of a group who contributed shares to Victory Acquisition Corporation under the Contribution Agreement (defined in Item 3) and as such may be deemed to share beneficial ownership of the shares held by the members of the group. These shares consist of 32,039,820 shares held by Victory Acquisition Corporation and 1,000,000 shares that Fred Shiu Leung Chan may acquire upon exercise of vested stock options.
*	Based on 83,052,852 shares of the Issuer’s Common Stock outstanding as of March 7, 2005, as reported in the Issuer’s Annual Report on Form 10-K filed with the Commission on March 31, 2005 and 1,000,000 shares of Issuer’s Common Stock that Fred Shiu Leung Chan may acquire upon exercise of vested stock options exercisable within 60 days.

 

(6)	The Mee Sim Lee & Sung Kook Kim & Myong Shin Kim TR UA DTD 12-21-87, The Edward Y.C. Chan Trust is a member of a group who contributed shares to Victory Acquisition Corporation under the Contribution Agreement (defined in Item 3) and as such may be deemed to share beneficial ownership of the shares held by the members of the group. These shares consist of 32,039,820 shares held by Victory Acquisition Corporation and 1,000,000 shares that Fred Shiu Leung Chan may acquire upon exercise of vested stock options.
*	Based on 83,052,852 shares of the Issuer’s Common Stock outstanding as of March 7, 2005, as reported in the Issuer’s Annual Report on Form 10-K filed with the Commission on March 31, 2005 and 1,000,000 shares of Issuer’s Common Stock that Fred Shiu Leung Chan may acquire upon exercise of vested stock options exercisable within 60 days.

 

(7)	The Mee Sim Lee & Sung Kook Kim & Myong Shin Kim TR UA DTD 3-16-92, The Michael Y.J. Chan Trust is a member of a group who contributed shares to Victory Acquisition Corporation under the Contribution Agreement (defined in Item 3) and as such may be deemed to share beneficial ownership of the shares held by the members of the group. These shares consist of 32,039,820 shares held by Victory Acquisition Corporation and 1,000,000 shares that Fred Shiu Leung Chan may acquire upon exercise of vested stock options.
*	Based on 83,052,852 shares of the Issuer’s Common Stock outstanding as of March 7, 2005, as reported in the Issuer’s Annual Report on Form 10-K filed with the Commission on March 31, 2005 and 1,000,000 shares of Issuer’s Common Stock that Fred Shiu Leung Chan may acquire upon exercise of vested stock options exercisable within 60 days.

 

(8)	The Shiu Leung Chan & Annie M.H. Chan Gift Trust Dated 11/20/92 is a member of a group who contributed shares to Victory Acquisition Corporation under the Contribution Agreement (defined in Item 3) and as such may be deemed to share beneficial ownership of the shares held by the members of the group. These shares consist of 32,039,820 shares held by Victory Acquisition Corporation and 1,000,000 shares that Fred Shiu Leung Chan may acquire upon exercise of vested stock options.
*	Based on 83,052,852 shares of the Issuer’s Common Stock outstanding as of March 7, 2005, as reported in the Issuer’s Annual Report on Form 10-K filed with the Commission on March 31, 2005 and 1,000,000 shares of Issuer’s Common Stock that Fred Shiu Leung Chan may acquire upon exercise of vested stock options exercisable within 60 days.

 

(9)	Evershine XVI, L.P. is a member of a group who contributed shares to Victory Acquisition Corporation under the Contribution Agreement (defined in Item 3) and as such may be deemed to share beneficial ownership of the shares held by the members of the group. These shares consist of 32,039,820 shares held by Victory Acquisition Corporation and 1,000,000 shares that Fred Shiu Leung Chan may acquire upon exercise of vested stock options.
*	Based on 83,052,852 shares of the Issuer’s Common Stock outstanding as of March 7, 2005, as reported in the Issuer’s Annual Report on Form 10-K filed with the Commission on March 31, 2005 and 1,000,000 shares of Issuer’s Common Stock that Fred Shiu Leung Chan may acquire upon exercise of vested stock options exercisable within 60 days.

 

(10)	Everbright II, LLC, which is the General Partner of Evershine XVI, L.P., is a member of a group who contributed shares to Victory Acquisition Corporation under the Contribution Agreement (defined in Item 3) and as such may be deemed to share beneficial ownership of the shares held by the members of the group. These shares consist of 32,039,820 shares held by Victory Acquisition Corporation and 1,000,000 shares that Fred Shiu Leung Chan may acquire upon exercise of vested stock options.
*	Based on 83,052,852 shares of the Issuer’s Common Stock outstanding as of March 7, 2005, as reported in the Issuer’s Annual Report on Form 10-K filed with the Commission on March 31, 2005 and 1,000,000 shares of Issuer’s Common Stock that Fred Shiu Leung Chan may acquire upon exercise of vested stock options exercisable within 60 days.

 

SCHEDULE 13D

Item 1. Security and Issuer.

     The class of equity securities to which this statement relates is Common Stock, $0.001 par value per share (“Common Stock”) of Vialta, Inc. (the “Issuer”). The principal executive offices of the Issuer are located at 48461 Fremont Boulevard, Fremont, California 94538.

Item 2. Identity and Background.

     This Schedule 13D is filed by Victory Acquisition Corporation, a Delaware corporation (“Victory”); Fred Shiu Leung Chan; Annie M.H. Chan; the Annie M.H. Chan TR UA 07-25-95, The Annie M.H.Chan Living Trust (the “Annie M.H. Chan Trust”); the Mee Sim Lee & Sung Kook Kim & Myong Shin Kim TR UA DTD 12-21-87, The David Y.W. Chan Trust (the “David Y.W. Chan Trust”); the Mee Sim Lee & Sung Kook Kim & Myong Shin Kim TR UA DTD 12-21-87, The Edward Y.C. Chan Trust (the “Edward Y.C. Chan Trust”); the Mee Sim Lee & Sung Kook Kim & Myong Shin Kim TR UA DTD 3-16-92, The Michael Y.J. Chan Trust (the “Michael Y.J. Chan Trust”); the Shiu Leung Chan & Annie M. H. Chan Gift Trust Dated 11/20/92 (the “Fred and Annie Chan Gift Trust”); Evershine XVI, L.P. (“Evershine”), a Limited Partnership organized under the laws of the State of California; and Everbright II, LLC (“Everbright”), a Limited Liability Company organized under the laws of the State of California (collectively, the “Reporting Persons”). Each of the preceding Trusts (defined below) is organized under the laws of the State of California. The business address of each of the Reporting Persons is 19770 Stevens Creek Boulevard, Cupertino, California 95014.

     Fred Shiu Leung Chan is a citizen of the United States of America and his principal occupation is presently Chairman of the Board of the Issuer. The Issuer’s principal business address is 48461 Fremont Boulevard, Fremont, California 94538.

     Annie M.H. Chan is a citizen of the United States of America and her principal occupation is presently President of the Everlasting Private Foundation, a charitable organization. Everlasting Private Foundation’s principal business address is 19770 Stevens Creek Boulevard, Cupertino California 95014.

     Each of the Fred and Annie M.H. Chan Gift Trust, the David Y.W. Chan Trust, the Edward Y.C. Chan Trust, and the Michael Y.J. Chan Trust are trusts established by Fred Shiu Leung Chan and Annie M.H. Chan, husband and wife, for the benefit of their children; Fred Shiu Leung Chan and Annie M.H. Chan are not the trustees of such trusts and do not have any authority over such trusts. The Annie M.H. Chan Trust was established solely by Annie M.H. Chan for the benefit of her children. The Annie M.H. Chan Trust, the David Y.W. Chan Trust, the Edward Y.C. Chan Trust, the Michael Y.J. Chan Trust and the Fred and Annie Chan Gift Trust are collectively referred to in this Schedule 13D as the “Trusts” and the David Y.W. Chan Trust, the Edward Y.C. Chan Trust, the Michael Y.J. Chan Trust and the Fred and Annie Chan Gift Trust are collectively referred to in this Schedule 13D as the “Children’s Trusts”).

     Evershine is an investment fund principally engaged in the business of making venture capital and other investments. Everbright is the sole General Partner of Evershine. Everbright is principally engaged in the business of making investments for, and acting as general partner or other authorized person of, investment funds engaged in venture capital and other investments. Everbright is beneficially owned and controlled by Fred Shiu Leung Chan and Annie M.H. Chan.

     Victory is a corporation organized for the purpose of effecting the Transaction (defined in Item 4). APPENDIX A hereto contains the name, the principal occupation or employment, and the name, principal business and address of any corporation or other organization in which such employment is conducted, of each of: (a) the trustees of the Trusts; (b) the sole director and sole executive officer of Victory; and (c) the members of Everbright.

     During the last five years, neither the Reporting Persons or any person listed on APPENDIX A hereto have been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which it was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Item 3. Source and Amount of Funds or Other Consideration.

     Purchase of Common Stock of the Issuer by Fred Shiu Leung Chan. In October of 1999, Fred Shiu Leung Chan purchased 4,000,000 shares of the Common Stock of the Issuer for an aggregate purchase price of $1,000,000, by delivering to the Issuer a promissory note that was paid in full in March 2000. These shares were purchased prior to the date on which the Issuer registered shares pursuant to Section 12 of the Act. In July of 2001, in connection with a recapitalization of the Issuer, the 4,000,000 shares of Common Stock of the Issuer were converted into 4,400,000 shares of Class B Common Stock. In July of 2002, these shares were subsequently converted into 4,400,000 shares of unclassified Common Stock.

     Purchase of Series B Preferred Stock of Issuer by Evershine XVI, L.P. On January 1, 2000, Evershine purchased 8,000,000 shares of Series B Preferred Stock of the Issuer for an aggregate purchase price of $20,800,000. These shares were purchased prior to the date on which the Issuer registered shares pursuant to Section 12 of the Act. In July of 2001, in connection with a recapitalization of the Issuer, the 8,000,000 shares of Series B Preferred Stock were converted into 8,800,000 shares of Series B Common Stock. In July of 2002, these shares were subsequently converted into 8,800,000 shares of unclassified Common Stock.

     Distribution of Vialta Shares to ESS Technology, Inc. shareholders on August 21, 2001. On August 21, 2001, ESS Technology, Inc. (“ESS”), in a spin-out of the Issuer, issued a dividend of 1.182 shares of the Issuer’s Class A Common Stock for each share of ESS common stock outstanding. In connection with this distribution: (a) Fred Shiu Leung Chan became the beneficial owner of 637,084 shares of Class A Common Stock; (b) Annie M.H. Chan became the beneficial owner of 13,628,050 shares of Class A Common Stock; (c) the David Y.W. Chan Trust became the beneficial owner of 962,830 shares of Class A Common Stock; (d) the Edward T.C. Chan Trust became the beneficial owner of 962,832 shares of Class A Common Stock; (e) the Michael Y.J. Chan Trust became the beneficial owner of 330,960 shares of Class A Common Stock; and (f) the Fred and Annie Chan Gift Trust became the beneficial owner of 2,094,268 shares of Class A Common Stock. In July of 2002, each of these shares were subsequently converted into shares of unclassified Common Stock, in the respective amounts of: (a) 637,084 shares of Common Stock, (b) 13,628,050 shares of Common Stock, (c) 962,830 shares of Common Stock, (d) 962,832 shares of Common Stock, (e) 330,960 shares of Common Stock, and (f) 2,094,268 shares of Common Stock.

     Distribution of Vialta Shares to ESS Technology, Inc. shareholders on November 15, 2002. On November 15, 2002, ESS issued 0.142 shares of the Issuer’s Class A Common Stock for each

CUSIP No. 92554D 30 6		Page 14 of 32 Pages

		Number of Shares of
		Issuer Common Stock
Victory Stockholder		Contributed				% Interest in Victory
Fred Shiu Leung Chan			5,044,744				15.7	%
Annie M.H. Chan			5,748,960				17.9	%
Annie M. H. Chan TR UA 07-25-95, The Annie M. H. Chan Living Trust			8,042,932				25.1	%
Mee Sim Lee & Sung Kook Kim & Myong Shin Kim TR UA DTD 12-21-87, The David Y. W. Chan Trust			974,410				3.0	%
Mee Sim Lee & Sung Kook Kim & Myong Shin Kim TR UA DTD 12-21-87, The Edward Y. C. Chan Trust			974,408				3.0	%
Mee Sim Lee & Sung Kook Kim & Myong Shin Kim TR UA DTD 3-16-92, The Michael Y. J. Chan Trust			334,939				1.0	%
Shiu Leung Chan & Annie M. H. Chan Gift Trust Dated 11/20/92			2,119,447				6.6	%
Evershine XVI, L.P.			8,800,000				27.5	%
TOTALS:			32,039,840				100.0	%

     The Contribution Agreement also provides that each Victory Stockholder shall contribute to Victory, as an additional contribution to capital, all shares of the Issuer, if any, that such stockholder may acquire after the date of the Contribution Agreement, until the earlier of (i) the “Effective Time” of the Merger, or (ii) the termination of the Merger Agreement pursuant to its terms.

Item 4. Purpose of Transaction.

     On March 28, 2005, the Issuer and Victory entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) pursuant to which Victory will merge with and into the Issuer (the “Transaction”). As part of the Transaction:

     (i) each share of Common Stock of the Issuer held by Victory shall be cancelled without consideration,

     (ii) each share of Common Stock of the Issuer held by all other stockholders of the Issuer (other than Victory) shall be converted into the right to receive $0.36 in cash upon tender therefore in compliance with the exchange mechanics in the Merger Agreement (including waiver of Delaware and California dissenters’ rights),

     (iii) each share of Victory common stock held by each of the Victory Stockholders shall be converted into the right to receive one share of Common Stock of the Issuer,

     (iv) each outstanding vested option exercisable for Issuer’s Common Stock (“Issuer Options”), other than Issuer Options held by Victory, its officers, its directors and the Victory Stockholders (“Victory Options”) shall be cancelled and converted into the right to receive cash (net of exercise price and withholding taxes), and

     (v) each outstanding Victory Option (if any) shall be cancelled without consideration.

     The Transaction is subject to the approval of Issuer’s stockholders, and the following key closing conditions: (i) no material adverse effect shall have occurred, (ii) counsel to Issuer shall have delivered an opinion of counsel, and (iii) Issuer shall have at least $14,500,000 in cash and cash equivalents as of midnight on the day prior to the closing of the Transaction.

     The Transaction may be terminated: (i) by mutual written consent of the Board of Directors of each of Victory and Issuer, (ii) by either Issuer or Victory, if the Transaction has not been consummated by August 13, 2005 (provided that failure to consummate was not caused by the failure or inaction of the party seeking to terminate), (iii) if a governmental entity shall have issued a final decree or order restraining or otherwise enjoining the Transaction, (iv) if approval by Issuer’s stockholders is not obtained, after Issuer has engaged in a proper proxy solicitation and duly-convened meeting of Issuer’s stockholders, (v) by Victory, if Issuer’s Special Committee withdraws support for the Transaction, (vi) by either Issuer or Victory, upon the breach of the other party, which breach is not cured following notice and a cure period, or (vii) by Issuer, if necessary to comply with Issuer’s fiduciary duties.

     In order to fund the payments to be made to Issuer’s stockholders and vested option holders (other than the “Victory Holders”, as defined below), Issuer is required to deposit sufficient cash into an “Exchange Fund”, held by the “Exchange Agent” for the Transaction, for the benefit of the Issuer’s stockholders and holders of vested options (other than Victory, its officers, its directors, and the Victory Stockholders, which are collectively referred to in this Schedule 13D as the “Victory Holders”). However, if Issuer does not have sufficient cash to deposit into the Exchange Fund for this purpose, Victory is required to deposit into the Exchange Fund additional cash equal to the shortfall (the “Shortfall”), but not to exceed a maximum of $4,000,000.

     Following the consummation of the Transaction, the Issuer, as the surviving entity, will no longer be listed on the Nasdaq OTC Bulletin Board, and it will terminate its reporting obligations under the Securities Exchange Act of 1934 (the “Act”). The surviving entity will be owned solely by the Victory Stockholders.

     In connection with the Merger Agreement, Victory entered into a Voting Agreement with the Issuer, pursuant to which Victory agreed to vote its shares of Issuer Common Stock in favor of the Transaction.

     In connection with the closing of the Transaction, Mr. Fred Shiu Leung Chan has entered into an Additional Contribution Agreement with Victory, pursuant to which Mr. Chan has agreed to loan an amount of cash to Victory equal to the Shortfall (if any), up to a maximum of $4,000,000, in the event that a Shortfall exists at the relevant time (the “Additional Contribution Agreement”).

     In connection with the Merger Agreement, Victory entered into a Pledge Agreement with the Issuer, pursuant to which Victory has pledged all shares of Issuer Common Stock owned or controlled by Victory to Issuer (the “Pledged Shares”), to secure Victory’s obligations under the Merger Agreement to make up the Shortfall (the “Pledge Agreement”). Pursuant to the Pledge Agreement, Victory has agreed (i) not to sell or transfer any of the Pledged Shares without consent of the Issuer, and (ii) not to permit a lien, security interest or other encumbrance upon the Pledged Shares (other then pursuant to the Pledge Agreement).

     Except as set forth above or in Item 5, Victory and the Reporting Persons do not have any plans or proposals concerning the Issuer with respect to the matters set forth in subparagraphs (a) through (j) of Item 4 of this Schedule 13D.

Item 5. Interest in Securities of the Issuer.

     (a)-(b) Unless otherwise noted, all percentage amounts referenced in this Item 5 are calculated using 83,052,852 shares of the Issuer’s Common Stock outstanding as of March 7, 2005 as reported in the Issuer’s Annual Report on Form 10-K filed with the Commission on March 31, 2005.

     Beneficial Ownership by Group. The Reporting Persons together constitute a “group” within the meaning of Section 13(d)(3) of the Act in that they are acting in concert with respect to their contribution of the Issuer’s shares held by them to Victory as described in the Contribution Agreement. Information with respect to each member of the group is described below.

     As members of a “group”, each of the Reporting Persons may be deemed to share beneficial ownership of 33,039,840 shares of the Common Stock held by the group as a whole, which represents 39.3% of the Issuer’s Common Stock. These shares consist of 32,039,840 shares held by Victory Acquisition Corp. 1,000,000 shares of Issuer’s Common Stock that Fred Shiu Leung Chan may acquire upon exercise of vested stock options.

     Pursuant to the Contribution Agreement, all Victory Stockholders (including Mr. Chan) have agreed to contribute to Victory, as an additional contribution to capital, all shares of the Issuer, if any (including such shares acquired upon exercise of stock options of the Issuer), that such stockholder may acquire after the date of the Contribution Agreement, until the earlier of (i) the “Effective Time” of the Merger, or (ii) the termination of the Merger Agreement pursuant to its terms.

     Fred Shiu Leung Chan, as the sole executive officer and director of Victory and as the beneficial owner of 43.2% of the outstanding Victory shares (including shares held in his name and in the name of Evershine, of which he is one of two managing members of the general partner, but excluding shares held by his wife, Annie M.H. Chan, and each of the Trusts), may be deemed to share both voting and dispositive power over the shares held in the name of Victory. Mr. Chan has sole voting and dispositive power of the stock options held in his name.

     Annie M.H. Chan, as the beneficial owner of 70.5% of the outstanding Victory shares (including shares held in her name, in the name of the Annie M.H. Chan Trust and in the name of Evershine, of which she is one of two managing members of the general partner, but excluding shares held by her husband, Fred Shiu Leung Chan, and by each of the Trusts, other than the Annie M.H. Chan Trust), may be deemed to share both voting and dispositive power over the shares held in the name of Victory.

     Beneficial Ownership Prior to Formation of Group. Immediately prior to the execution of the Contribution Agreement, the following Victory Stockholders were holders of shares of the Issuer as follows:

     Fred Shiu Leung Chan, the Chairman of the Board of Directors of the Issuer, had beneficial ownership with respect to 13,844,744 shares of Issuer’s Common Stock, and held the right to exercise options for up to 1,000,000 shares of the Issuer’s Common Stock, which in the aggregate represented approximately 17.9% of the Issuer’s Common Stock. This beneficial ownership consisted specifically of: (a) 5,044,744 shares of Common Stock held by Fred Shiu Leung Chan in his own name (with respect to which he exercised sole voting and dispositive power), (b) 8,800,000 shares of Common Stock held by Evershine XVI, L.P., of which

Everbright II, LLC is the general partner, and of which he is one of two managing members (and with respect to which he exercised shared voting and dispositive power), and (c) options to purchase 1,000,000 shares of Issuer’s Common Stock held by Fred Shiu Leung Chan in his own name (with respect to which he exercised sole voting and dispositive power). These amounts exclude 5,748,960 shares held in the name of Mr. Chan’s wife, Annie M.H. Chan, 8,042,932 shares held in the name of the Annie M.H. Chan Trust, of which Mrs. Chan is the sole trustee, and an aggregate of 4,403,204 shares held in the names of the Children’s Trusts.

     Annie M.H. Chan, the spouse of Fred Shiu Leung Chan, had beneficial ownership with respect to 22,591,892 shares of Common Stock, which in the aggregate represented 27.2% of the Issuer’s Common Stock. Her reported beneficial ownership consisted specifically of: (a) 5,748,960 shares of Common Stock held by Annie M.H. Chan in her own name (with respect to which she exercised sole voting and dispositive power), (b) 8,042,932 shares of Common Stock held by the Annie M.H. Chan Trust, of which she is the sole trustee (and with respect to which she exercised sole voting and dispositive power), and (c) 8,800,000 shares of Common Stock held by Evershine XVI, L.P., of which Everbright II, LLC is the general partner, and of which she is one of two managing members (and with respect to which she exercised shared voting and dispositive power). These amounts exclude 5,044,744 shares of Common Stock and vested options to purchase 1,000,000 shares of Common Stock held in the name of Mrs. Chan’s husband, Fred Shiu Leung Chan, and an aggregate of 4,403,204 shares held in the names of the Children’s Trusts.

     The David Y.W. Chan Trust was the sole beneficial owner of 974,408 shares of Common Stock, which represented 1.2% of the Issuer’s Common Stock. David Y.W. Chan, the beneficiary of the David Y.W. Chan Trust, is the son of Fred Shiu Leung Chan and Annie M.H.Chan; the trustees of the David Y.W. Chan Trust are independent of Fred Shiu Leung Chan and Annie M.H. Chan, neither of whom has any authority over such trust. These amounts exclude all shares and options held by any of the other Reporting Persons.

     The Edward Y.C. Chan Trust was the sole beneficial owner of 974,410 shares of Common Stock, which represented 0.4% of the Issuer’s Common Stock. Edward Y.C. Chan, the beneficiary of the Edward Y.C. Chan Trust, is the son of Fred Shiu Leung Chan and Annie M.H.Chan; the trustees of the Edward Y.C. Chan Trust are independent of Fred Shiu Leung Chan and Annie M.H. Chan, neither of whom has any authority over such trust. These amounts exclude all shares and options held by any of the other Reporting Persons.

     The Michael Y.J. Chan Trust was the sole beneficial owner of 334,939 shares of Common Stock, which represented 1.2% of the Issuer’s Common Stock. Michael Y.J. Chan, the beneficiary of the Michael Y.J. Chan Trust, is the son of Fred Shiu Leung Chan and Annie M.H.Chan; the trustees of the Michael Y.J. Chan Trust are independent of Fred Shiu Leung Chan and Annie M.H. Chan, neither of whom has any authority over such trust. These amounts exclude all shares and options held by any of the other Reporting Persons.

     The Annie and Fred Gift Trust and Mee Sim Lee and Sung Kook Kim, as co-trustees of the Annie and Fred Gift Trust shared beneficial ownership of 2,119,447 shares of Common Stock, which represented 2.6% of the Issuer’s Common Stock. Edward Y.C. Chan, Michael Y.J. Chan and David Y.W. Chan, the beneficiaries of the Annie and Fred Gift Trust, are the sons of Fred Shiu Leung Chan and Annie M.H. Chan; the trustees of the Annie and Fred Gift Trust are independent of Fred Shiu Leung Chan and Annie M.H. Chan, neither of whom has any authority over such trust. These amounts exclude all shares and options held by any of the other Reporting Persons.

     Evershine, and Everbright as the General Partner of Evershine, had beneficial ownership of 8,800,000 shares of the Issuer’s Common Stock, which represents 10.6% of the Issuer’s Common Stock. Everbright is beneficially owned and controlled by Fred Shiu Leung Chan and Annie M.H. Chan. These amounts exclude all shares and options held by any of the other Reporting Persons.

     (c) Pursuant to the Contribution Agreement, Victory has acquired from the Victory Stockholders beneficial ownership of their aggregate holdings of 32,039,840 shares of the Common Stock of the Issuer, which represents 38.6% of the Issuer’s Common Stock, in exchange for an equal number of shares of Victory Common Stock. See Item 3 above.

     (d) N/A

     (e) N/A

Item 6.	Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.

     Victory and Issuer have entered into a Merger Agreement to effect the Transaction. See Item 4 for a description of the Merger Agreement.

     In connection with the Merger Agreement, Victory entered into a Voting Agreement with the Issuer, pursuant to which Victory agreed to vote its shares of Issuer Common Stock in favor of the Transaction.

     In connection with the Merger Agreement, Victory entered into a Pledge Agreement with the Issuer, pursuant to which Victory has pledged all shares of Issuer Common Stock owned or controlled by Victory to Issuer, to secure Victory’s obligations under the Merger Agreement, including Victory’s obligations to pay an amount of cash into the Exchange Fund, as required, to fund any Shortfall in contributions by the Issuer to the Exchange Fund, up to a maximum of $4,000,000.

     In connection with the closing of the Transaction, Mr. Fred Shiu Leung Chan has entered into an Additional Contribution Agreement with Victory, pursuant to which Mr. Chan has agreed to loan an amount of cash equal to the Shortfall (if any) to Victory, up to a maximum of Four Million Dollars ($4,000,000), in the event that a Shortfall exists at the relevant time.

     In connection with the Transaction, Victory has entered into a Contribution Agreement with the Victory Stockholders, pursuant to which Victory has acquired from the Victory Stockholders beneficial ownership of their aggregate holdings of 32,039,840 shares of the Common Stock of the Issuer, in a 1-for-1 exchange for an equal number of shares of Victory Common Stock issued to the Victory Stockholders.

     The descriptions of such agreements included in this Schedule are qualified by reference to the text of such documents, which are filed as exhibits to this Schedule.

Item 7. Materials to be Filed as Exhibits.

     The following documents are filed as exhibits to this Schedule 13D:

     Exhibit 1. Agreement and Plan of Reorganization, dated as of March 28, 2005, by and between Victory Acquisition Corporation and Vialta, Inc. (filed as Exhibit 10.1 to the Issuer’s Form 8-K filed with the Commission on March 31, 2005, and incorporated herein by reference).

     Exhibit 2. Contribution Agreement, dated as of March 28, 2005, by and between Victory Acquisition Corporation and the Victory Shareholders.

     Exhibit 3. Voting Agreement, dated as of March 28, 2005, by and between Victory Acquisition Corporation and Vialta, Inc.

     Exhibit 4. Pledge Agreement, dated as of March 28, 2005, by and between Victory Acquisition Corporation and Vialta, Inc.

     Exhibit 5. Additional Contribution Agreement, dated as of March 28, 2005, by and between Victory Acquisition Corporation and Mr. Fred Shiu Leung Chan.

SIGNATURE

     After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

JOINT FILING AGREEMENT
PURSUANT TO RULE 13d-1(k)(1)

     The undersigned acknowledge and agree that the foregoing Statement on Schedule 13D with respect to the ownership by each of the undersigned of shares of Vialta, Inc. is filed jointly on behalf of each of the undersigned and that all subsequent amendments to the Statement on Schedule 13D shall be filed on behalf of each of the undersigned without the necessity of filing additional joint filing agreements. This joint filing agreement may be included as an exhibit to such joint filing. Each of the undersigned acknowledges that each shall be responsible for the timely filing of such amendments with respect to information concerning such undersigned reporting person, and for the completeness and accuracy of the information concerning such undersigned reporting person, contained therein, but shall not be responsible for the completeness and accuracy concerning the others, except to the extent that such reporting person knows or has reason to believe that such information is inaccurate. This agreement may be executed in any number of counterparts and all of such counterparts taken together shall constitute one and the same instrument.

APPENDIX A

TRUSTEE OF THE ANNIE M.H. CHAN TR UA 07-25-95, THE ANNIE M.H.CHAN LIVING TRUST

Annie M.H. Chan
President of Everlasting Private Foundation
19770 Stevens Creek Boulevard
Cupertino, California 95014

CO-TRUSTEES OF THE MEE SIM LEE & SUNG KOOK KIM & MYONG SHIN KIM TR UA DTD 12-21-87, THE DAVID Y.W. CHAN TRUST

Mee Sim Lee
Information Technology Manager for the State of South Carolina
Division Of Resource and Information Management
South Carolina Dept of Correction
4444 Broad River Road
Columbia, South Carolina 29210
Phone: 803 896-2114

Sung Kook Kim
Pastor of the Living Word Korean Baptist Church
1494 California Circle
Milpitas CA 95035

Myong Shin Kim
Secretary for the Everlasting Private Foundation
19770 Stevens Creek Boulevard
Cupertino, California 95014

CO-TRUSTEES OF THE MEE SIM LEE & SUNG KOOK KIM & MYONG SHIN KIM TR UA DTD 12-21-87, THE EDWARD Y.C. CHAN TRUST

Mee Sim Lee
Information Technology Manager for the State of South Carolina
Division Of Resource and Information Management
South Carolina Dept of Correction
4444 Broad River Road
Columbia, South Carolina 29210
Phone: 803 896-2114

Sung Kook Kim
Pastor of the Living Word Korean Baptist Church
1494 California Circle
Milpitas CA 95035

Myong Shin Kim
Secretary for the Everlasting Private Foundation
19770 Stevens Creek Boulevard
Cupertino, California 95014

CO-TRUSTEES OF THE MEE SIM LEE & SUNG KOOK KIM & MYONG SHIN KIM TR UA DTD 3-16-92, THE MICHAEL Y.J. CHAN TRUST

Mee Sim Lee
Information Technology Manager for the State of South Carolina
Division Of Resource and Information Management
South Carolina Dept of Correction
4444 Broad River Road
Columbia, South Carolina 29210
Phone: 803 896-2114

Sung Kook Kim
Pastor of the Living Word Korean Baptist Church
1494 California Circle
Milpitas CA 95035

Myong Shin Kim
Secretary for the Everlasting Private Foundation
19770 Stevens Creek Boulevard
Cupertino, California 95014

CO-TRUSTEES OF THE SHIU LEUNG CHAN & ANNIE M. H. CHAN GIFT TRUST DATED 11/20/92

Mee Sim Lee
Information Technology Manager for the State of South Carolina
Division Of Resource and Information Management
South Carolina Dept of Correction
4444 Broad River Road
Columbia, South Carolina 29210
Phone: 803 896-2114

Sung Kook Kim
Pastor of the Living Word Korean Baptist Church
1494 California Circle
Milpitas CA 95035

DIRECTOR OF VICTORY ACQUISITION CORPORATION

Fred Shiu Leung Chan
Chairman of Vialta, Inc.
C/o Vialta, Inc.
48461 Fremont Blvd.
Fremont, California 94538

EXECUTIVE OFFICERS OF VICTORY ACQUISITION CORPORATION

Fred Shiu Leung Chan
Chairman of Vialta, Inc.
C/o Vialta, Inc.
48461 Fremont Blvd.
Fremont, California 94538

MEMBERS OF EVERBRIGHT II, LLC

Fred Shiu Leung Chan
Chairman of Vialta, Inc.
C/o Vialta, Inc.
48461 Fremont Blvd.
Fremont, California 94538

Annie M.H. Chan
President of Everlasting Private Foundation
19770 Stevens Creek Boulevard
Cupertino, California 95014

EXHIBIT INDEX

Exhibit 2

STOCK CONTRIBUTION AGREEMENT

     This Stock Contribution Agreement (this “Agreement”) is made and entered into as of March 28, 2005 by and among Victory Acquisition Corp., a Delaware corporation (the “Company”), and the parties listed on the Schedule of Investors attached to this Agreement as Exhibit A (each hereinafter individually referred to as an “Investor” and collectively referred to as the "Investors”).

     A. The Company has been formed solely to facilitate and effect a statutory merger (the “Merger”) with Vialta, Inc., a Delaware corporation (“Vialta”), under which Vialta will be the surviving corporation, pursuant to the terms and conditions of that certain Agreement and Plan of Merger dated as of March 28, 2005 (“Merger Agreement”). The existence of the Company is transitory and will be discontinued upon the consummation of the Merger. The Company will conduct no business prior to the Merger.

     B. The Investors are holders of the outstanding shares of stock of Vialta set forth on Exhibit A (the “Vialta Shares”). Pursuant to this Agreement, the Investors intend to contribute their Vialta Shares to the Company in exchange for shares of the Company’s Common Stock as set forth on Exhibit A (the “Company Shares”), after which the Investors will hold all of the outstanding shares of the Company’s stock.

     C. The contribution of stock under this Agreement and the Merger are part of an integrated plan for Vialta to redeem the Vialta stock (other than the Vialta Shares). The contribution of stock under this Agreement and the Merger are intended to be treated for tax purposes as a redemption of the shares of Vialta stock outstanding immediately prior to the effective time of the Merger (other than the Vialta Shares), pursuant to Section 302 of the Internal Revenue Code of 1986, as amended (the “Code”).

     NOW THEREFORE, the parties hereby agree as follows:

     1. CONTRIBUTION. As part of an integrated plan with the Merger, each Investor hereby contributes such Investor’s Vialta Shares to the Company in exchange for, and in consideration of the issuance of, the Company Shares, as specified on Exhibit A. Each Investor hereby delivers to the Company: (a) the original stock certificate representing such Investor’s Vialta Shares together; and (b) a duly executed Stock Transfer Power and Assignment in the form of Exhibit B. The Company agrees to issue to each Investor a stock certificate representing the number of Company Shares set forth opposite such Investor’s name on Exhibit A. Until the earlier of (i) the Effective Time of the Merger or (ii) the Termination of the Merger Agreement, each Investor agrees that it will contribute to the Company as an additional contribution to capital all Vialta Shares which it acquires (if any) during such period.

     2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents and warrants to each Investor that the statements in the following paragraphs of this Section 2 are all true and complete:

          2.1 Organization, Good Standing, Corporate Power and Qualification. The Company has been duly incorporated and organized, and is validly existing in good standing,

 

under the laws of the State of Delaware. The Company has the requisite corporate power and authority to enter into and perform this Agreement.

          2.2 Due Authorization. All corporate action on the part of the Company necessary for (i) the authorization, execution, delivery of, and the performance of all obligations of the Company under, this Agreement and; (ii) the authorization, issuance, reservation for issuance and delivery of all of the Company Shares under this Agreement.

          2.3 Valid Issuance. The Company Shares issued under this Agreement will be validly issued, fully paid and nonassessable.

     3. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF INVESTORS. Each Investor hereby represents and warrants to, and agrees with, the Company, severally and not jointly, that:

          3.1 Authorization. This Agreement constitutes such Investor’s valid and legally binding obligation, enforceable in accordance with its terms except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and (ii) the effect of rules of law governing the availability of equitable remedies. Each Investor represents that such Investor has full power and authority to enter into this Agreement.

          3.2 Acquisition for Own Account. The Company Shares to be acquired by such Investor hereunder will be acquired for investment for such Investor’s own account, not as a nominee or agent, and not with a view to the public resale or distribution thereof within the meaning of the Securities Act of 1933, as amended (the “1933 Act”), and such Investor has no present intention of selling, granting any participation in, or otherwise distributing the same.

          3.3 No Solicitation. At no time was the Investor presented with or solicited by any publicly issued or circulated newspaper, mail, radio, television or other form of general advertising or solicitation in connection with the offer, sale and purchase of the Company Shares.

          3.4 Investment Experience. Such Investor understands that the acquisition of the Company Shares involves substantial risk. Such Investor is an “accredited investor” within the meaning of Regulation D promulgated under the 1933 Act and: (i) has experience as an investor in securities of companies in the development stage and acknowledges that such Investor is able to fend for itself, can bear the economic risk of such Investor’s investment in the Company Shares and has such knowledge and experience in financial or business matters that such Investor is capable of evaluating the merits and risks of this investment in the Company Shares and protecting its own interests in connection with this investment and/or (ii) has a preexisting personal or business relationship with the Company and certain of its officers, directors or controlling persons of a nature and duration that enables such Investor to be aware of the character, business acumen and financial circumstances of such persons.

          3.5 Restricted Securities. Such Investor understands that the Company Shares are characterized as “restricted securities” under the 1933 Act inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that under the 1933 Act and applicable regulations thereunder such securities may be resold without registration

 

under the 1933 Act only in certain limited circumstances. In this connection, such Investor represents that such Investor is familiar with Rule 144 of the U.S. Securities and Exchange Commission (the “SEC”), as presently in effect, and understands the resale limitations imposed thereby and by the 1933 Act. Such Investor understands that the Company is under no obligation to register any of the securities sold hereunder. Such Investor understands that no public market now exists for any of the Company Shares and that it is uncertain whether a public market will ever exist for the Company Shares.

          3.6 Further Limitations on Disposition. Without in any way limiting the representations set forth above, such Investor further agrees not to make any disposition of all or any portion of the Company Shares unless and until there is then in effect a registration statement under the 1933 Act covering such proposed disposition and such disposition is made in accordance with such registration statement. Notwithstanding the foregoing, no such registration statement shall be required: (i) for any transfer of any Company Shares in compliance with SEC Rule 144 or Rule 144A, or (ii) for any transfer of any Company Shares by an Investor that is a partnership or a corporation without payment of consideration to (A) a partner of such partnership or stockholder of such corporation, (B) a controlled affiliate of such partnership or corporation, (C) a retired partner of such partnership who retires after the date hereof, (D) the estate of any such partner or stockholder, or (iii) for the transfer by gift, will or intestate succession by any Investor to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in each of the foregoing cases the transferee agrees in writing to be subject to the terms of this Section 3 (other than Section 3.4) to the same extent as if the transferee were an original Investor hereunder.

          3.8 Legends. It is understood that the certificates evidencing the Company Shares and the Conversion Shares will bear the legends set forth below:

     (a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF ANY OTHER JURISDICTIONS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

                    (b) Any legend required by the laws of the State of California, including any legend required by the California Department of Corporations and Sections 417 and 418 of the California Corporations Code or any other state securities laws.

The legend set forth in (a) above shall be removed by the Company from any certificate evidencing Company Shares upon delivery to the Company of an opinion by counsel, reasonably satisfactory to the Company, that a registration statement under the 1933 Act is at that time in effect with respect to the legended security or that such security can be freely transferred in a

 

public sale without such a registration statement being in effect and that such transfer will not jeopardize the exemption or exemptions from registration pursuant to which the Company issued the Company Shares.

          3.9 Title to Vialta Shares. Investor has valid marketable title to the Vialta Shares to be contributed under this Agreement, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest. The Vialta Shares constitute all of the shares of Vialta stock owned or controlled by the Investor.

     4. GENERAL PROVISIONS.

          4.1 Successors and Assigns. Except as otherwise provided in this Agreement, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

          4.2 Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of California, without giving effect to that body of laws pertaining to conflict of laws.

          4.3 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement.

          4.4 Notices. Any and all notices required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing.

          4.5 Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the holders of a majority of the outstanding Company Shares issuable hereunder. Any amendment or waiver effected in accordance with this Section shall be binding upon each holder of any Company Shares at the time outstanding, each future holder of such securities, and the Company. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance. No waiver granted under this Agreement as to any one provision herein shall constitute a subsequent waiver of such provision or of any other provision herein, nor shall it constitute the waiver of any performance other than the actual performance specifically waived.

          4.6 Severability. If any provision of this Agreement is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto.

          4.11 Entire Agreement. This Agreement, together with all the Exhibits hereto, constitutes the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersede any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

IN WITNESS WHEREOF, the parties hereto have executed this Stock Contribution Agreement as of the date first written above.

VICTORY ACQUISITION CORPORATION:

By: /s/ Fred Shiu Leung Chan                    

Name: Fred Shiu Leung Chan                    

Title: President                                             

For TR UA 07-25-95, The Annie M.H. Chan Living Trust:

For The David Y.W. Chan Trust, UA DTD 12-21-87; The Edward Y.C. Chan Trust, UA DTD 12-21-87; The
Michael Y.J. Chan Trust, UA DTD 3-16-92:

For Shiu Leung Chan & Annie M.H. Chan Gift Trust 11/20/92:

For Evershine XVI, L.P.:
By: Everbright II, LLC

 

EXHIBIT A

Schedule of Investors

 

EXHIBIT B

Stock Power And Assignment

Separate From Stock Certificate

     FOR VALUE RECEIVED and pursuant to that certain Stock Contribution Agreement dated as of March 28, 2005, (the “Agreement”), the undersigned hereby sells, assigns and transfers unto Victory Acquisition Corporation (the “Transferee”), ___shares of the Common Stock of Vialta, Inc., a Delaware corporation (the “Company”), standing in the undersigned’s name on the books of the Company represented by Certificate No(s).___delivered herewith, and does hereby irrevocably constitute and appoint the Secretary of the Company as the undersigned’s attorney-in-fact, with full power of substitution, to transfer said stock on the books of the Company.

 

Exhibit 3

VOTING AGREEMENT

     This VOTING AGREEMENT (the “Agreement”) is entered into as of March 28, 2005, by and between Vialta, Inc, a Delaware corporation (the “Company”), and Victory Acquisition Corp., a Delaware corporation (the “Stockholder”).

RECITALS

     A. Concurrently with the execution of this Agreement, the Company and Stockholder are entering into an Agreement and Plan of Reorganization (as may be amended or supplemented from time to time, the “Merger Agreement”), pursuant to which the parties thereto have agreed, upon the terms and subject to the conditions set forth therein, to merge Stockholder with and into the Company (the “Merger”).

     B. Concurrently with the execution of this Agreement, the Company and Stockholder are entering in to a Pledge Agreement (as may be amended or supplemented from time to time, the “Pledge Agreement”).

     C. As of the date hereof, Stockholder beneficially owns (as such term is defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder (the “Exchange Act”)), and has the sole right to vote and dispose of, the number of shares (the “Shares”) of common stock, par value $.001 per share, of the Company (the “Company Common Stock”), set forth opposite Stockholder’s name on Schedule I attached hereto, (such Shares, together with any other shares of capital stock of the Company acquired by Stockholder after the date hereof and during the term of this Agreement (including through the exercise of any stock options, warrants, convertible securities or similar instruments), being collectively referred to herein as the “Subject Shares”).

     D. As a condition to its willingness to enter into the Merger Agreement, the Company has required that Stockholder agree, and Stockholder is willing to agree, to the matters set forth herein. Capitalized terms used and not defined herein have the meanings set forth in the Merger Agreement.

     E. In consideration of the foregoing and the mutual covenants and agreements set forth herein, the parties hereto agree as follows:

     1. Voting of Shares.

     1.1 Voting Agreement. For so long as this Agreement is in effect, Stockholder hereby agrees at any duly called annual, special or other meeting of the shareholders of the Company, and in any action by written consent of the shareholders of the Company, with respect to Subject Shares it beneficially owns as of the applicable record date, (a) to appear at the meeting, if a meeting is held, and any adjournment or postponement thereof, in person or by proxy, or to otherwise cause such Subject Shares over which Stockholder has sole voting power (and use reasonably commercial efforts to cause such Subject Shares over which Stockholder has

 

joint voting power) to be counted as present thereat for purposes of establishing a quorum; (b) to vote or consent such Subject Shares over which Stockholder has sole voting power (and cause to be voted or consented such Subject Shares over which Stockholder has joint voting power), in person or by proxy, in favor of the Merger and the adoption of the Merger Agreement and the approval of the other transactions contemplated thereby, and any actions required in furtherance thereof (including, without limitation, any proposal to adjourn any such meeting if necessary to permit further solicitation of proxies in the event there are not sufficient votes at the time of such meeting to approve the Merger Agreement); and (c) to vote or consent such Subject Shares over which Stockholder has sole voting power (and cause to be voted or consented such Subject Shares over which Stockholder has joint voting power), in person or by proxy, against any action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation of the Company under this Agreement or the Merger Agreement. Any vote by Stockholder that is not in accordance with this Section 1.1 shall be considered null and void. Stockholder shall not enter into any agreement or understanding with any person or entity prior to the termination of this Agreement to vote or give instructions in a manner inconsistent with this Section 1.1.

     1.2 Fiduciary Responsibilities. Each shareholder of Stockholder who is or becomes during the term hereof a director or officer of the Company does not make (and shall not be deemed to have made) any agreement or understanding herein, or by virtue of contributing his or her Shares to Stockholder, in his or her capacity as such director or officer. Without limiting the generality of the foregoing, each shareholder of Stockholder has contributed his or her Shares to Stockholder solely in his, her or its capacity as the record and/or beneficial owner, as applicable, of such person’s or enitty’s Shares and nothing herein shall limit or affect any actions taken by such shareholder (or a designee of such shareholder) in his or her capacity as an officer or director of the Company in exercising his or her or the Company’s or the Company Board of Director’s rights in connection with the Merger Agreement or otherwise.

     2. Representations and Warranties of Stockholder. Stockholder represents and warrants to the Company as follows:

     2.1 Corporate Existence; Authorization. Stockholder is duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to enter into, deliver and perform all of its obligations under this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Stockholder, the performance by Stockholder of its obligations hereunder and the consummation by Stockholder of the transactions contemplated hereby have been duly authorized by all requisite action on the part of Stockholder. This Agreement has been duly and validly executed and delivered by Stockholder and, assuming due execution and delivery by each of the other parties hereto, this Agreement constitutes a legal, valid and binding obligation of Stockholder enforceable against Stockholder in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law).

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     2.2 No Conflict. Neither the execution and delivery of this Agreement by Stockholder, the consummation of the transactions contemplated hereby, nor the performance by Stockholder of its obligations hereunder will, (a) conflict with or result in a breach of any provision of its Certificate of Incorporation or By-laws, (b) require any consent, approval, authorization or permit of, registration, declaration or filing (except for such filings as may be required under the federal securities laws) with, or notification to, any governmental entity, (c) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, or acceleration) under any contract, agreement, instrument, commitment, arrangement or understanding applicable to Stockholder or Stockholder’s Subject Shares, or result in the creation of a security interest, lien, charge, encumbrance, equity or claim with respect to any of Stockholder’s Subject Shares, (d) require any material consent, authorization or approval of any person other than a governmental entity, or (e) violate or conflict with any order, writ, injunction, decree, rule, regulation or law applicable to Stockholder or Stockholder’s Shares, except for such exceptions to the foregoing as will not have an adverse effect on the valid performance by Stockholder of its obligations hereunder.

     2.3 Ownership of Shares. Stockholder is the record and beneficial owner of the number of Shares set forth opposite Stockholder’s name on Schedule I attached hereto free and clear of any security interests, liens, charges, encumbrances, equities, claims, options or limitations of whatever nature and free of any other limitation or restriction (including any restriction on the right to vote, sell or otherwise dispose of such shares), other than interests granted pursuant to the Pledge Agreement. There are no outstanding options or other rights to acquire from Stockholder, or obligations of Stockholder to sell or to dispose of, any shares of Company Common Stock. Stockholder holds exclusive power to vote the Shares set forth opposite Stockholder’s name on Schedule I attached hereto, subject to the limitations set forth in Section 1 of this Agreement. As of the date of this Agreement, the Shares set forth opposite Stockholder’s name on Schedule I attached hereto represent all of the shares of capital stock of the Company beneficially owned by Stockholder and by each shareholder of Stockholder.

     2.4 Absence of Litigation. As of the date hereof, there is no suit, action, investigation or proceeding pending or, to the knowledge of Stockholder, threatened against Stockholder before or by any governmental entity that could impair the ability of Stockholder to perform its obligations hereunder or to consummate the transactions contemplated hereby on a timely basis.

     3. Representations and Warranties of the Company. The Company represents and warrants to Stockholder as follows:

     3.1 Corporate Authorization. The Company is duly organized and validly existing under the laws of the State of Delaware and has all requisite power and authority to enter into, deliver and perform all of its obligations under this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by the Company, the performance by the Company of its obligations hereunder and the consummation by the Company of the transactions contemplated hereby have been duly authorized by all requisite action on the part of the Company. This Agreement has been duly executed and delivered by the Company and, assuming the due and valid authorization,

3

execution and delivery hereof by the other parties hereto, this Agreement constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by bankruptcy and other similar Laws affecting the rights of creditors generally and general principles of equity.

     3.2 No Conflict. Neither the execution and delivery of this Agreement, the consummation by the Company of the transactions contemplated hereby, nor the compliance by the Company with any of the provisions hereof will (a) conflict with or result in a breach of any provision of its Certificate of Incorporation or By-laws, (b) require any consent, approval, authorization or permit of, registration, declaration or filing (except for such filings as may be required under the federal securities laws) with, or notification to, any governmental entity, (c) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, or acceleration) under any contract, agreement, instrument, commitment, arrangement or understanding applicable to the Company, (d) require any material consent, authorization or approval of any person other than a governmental entity, or (e) violate or conflict with any order, writ, injunction, decree or law applicable to the Company, except for such exceptions to the foregoing as are not reasonably likely to have an adverse effect on the valid performance by the Company of its obligations hereunder.

     4. Transfer and Other Restrictions. For so long as the Merger Agreement has not been terminated in accordance with its terms:

     4.1 Certain Prohibited Transfers. Stockholder agrees not to (a) directly or indirectly, sell, transfer, pledge, encumber, assign or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, pledge, encumbrance, assignment or other disposition of, Stockholder’s Subject Shares or any interest contained therein other than pursuant to the Pledge Agreement (any of the foregoing, a “Transfer”), other than to an affiliate of Stockholder, provided in the case of a Transfer to an affiliate, such affiliate shall have: (i) executed a counterpart of this Agreement; and (i) agreed to hold such Subject Shares (or interest in such Subject Shares) subject to all of the terms and provisions of this Agreement; (b) grant any proxies or powers of attorney or enter into a voting agreement or other arrangement with respect to Stockholder’s Subject Shares, other than this Agreement; (c) enter into, or deposit Stockholder’s Subject Shares into, a voting trust; nor (d) commit or agree to take any of the foregoing actions.

     4.2 Efforts. Stockholder agrees not to take any action which would make any representation or warranty of Stockholder herein untrue or incorrect in any material respect or take any action that would have the effect of preventing or disabling Stockholder from performing its obligations under this Agreement.

     4.3 Additional Shares. Without limiting the provisions of the Merger Agreement, in the event (i) of any stock dividend, stock split, recapitalization, reclassification, combination or exchange of shares of capital stock of the Company on, of or affecting Stockholder’s Subject Shares or (ii) Stockholder shall become the beneficial owner of any additional shares of Company Common Stock or other securities entitling the holder thereof to vote or give consent

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with respect to the matters set forth in Section 1 hereof, then the terms of this Agreement shall apply to the shares of capital stock or other securities of the Company held by Stockholder immediately following the effectiveness of the events described in clause (i) or Stockholder becoming the beneficial owner thereof, as described in clause (ii), as though they were Subject Shares of Stockholder hereunder. Stockholder hereby agrees, while this Agreement is in effect, to notify the Company of the number of any new shares of Company Common Stock acquired by Stockholder, if any, after the date hereof.

     4.4 Certain Events. Stockholder agrees that this Agreement and the obligations hereunder shall attach to the Subject Shares and shall be binding upon any person or entity to which legal or beneficial ownership of the Subject Shares shall pass, whether by operation of law or otherwise, including without limitation the Stockholder’s administrators, successors or receivers.

     5. Stop Transfer Order. In furtherance of this Agreement, Stockholder shall and does hereby authorize and request that the Company instruct its transfer agent to enter a stop transfer order, consistent with the terms of this Agreement and subject to such transfers as may be permitted by the express terms hereof, with respect to all of the Subject Shares beneficially owned by Stockholder.

     6. Specific Enforcement. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with the terms hereof or were otherwise breached and that each party shall be entitled to specific performance of the terms hereof in addition to any other remedy which may be available at law or in equity. It is accordingly agreed that the parties will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any state or federal located in the State of Delaware, the foregoing being in addition to any other remedy to which they are entitled at law or in equity. In addition, each of the parties hereto (i) consents to submit itself to the personal jurisdiction of any such state or federal court in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and (iii) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than a state or federal located in the State of Delaware.

     7. Termination. This Agreement shall automatically terminate, and neither the Company nor Stockholder shall have any rights or obligations hereunder and this Agreement shall become null and void and have no further effect, upon the earliest to occur of (a) the written agreement of the parties hereto to terminate this Agreement, (b) the Effective Time of the Merger and (c) the date of termination of the Merger Agreement in accordance with its terms.

     8. Survival. The representations and warranties of the parties contained in this Agreement shall terminate upon the termination of this Agreement.

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     9. Notices. Any notice or other communication required or permitted to be given under this Agreement shall be in writing and shall be deemed given upon (a) transmitter’s confirmation of a receipt of a facsimile transmission, (b) confirmed delivery by a standard overnight carrier or when delivered by hand or (c) the expiration of three business days after the day when mailed by certified or registered mail, postage prepaid, addressed at the following addresses (or at such other address for a party as shall be specified by like notice):

     If to the Company, to:

Vialta, Inc.
48461 Fremont Blvd.
Fremont, CA 94583
Attn: Special Committee of the Board of Directors
Tel: (510) 870-3088
Fax: (510) 870-3060

     with a copy to:

Kaye Scholer LLP
1999 Avenue of the Stars, Suite 1700
Los Angeles, CA 90064
Attn: Barry Dastin, Esq.
Tel: (310) 788-1000
Fax: (310) 788-1200

     and a copy to:

Potter Anderson & Corroon LLP
Hercules Plaza, 6th Floor
1313 N. Market Street
Wilmington DE 19801
Attn: John Grossbauer, Esq.
Tel: (302) 984-6000
Fax: (302) 658-1192

     If to Stockholder, to:

Victory Acquisition Corp.
19770 Stevens Creek Blvd.
Cupertino, CA 95014
Attn: Fred S.L. Chan
Tel: (408) 863-7332
Fax: (408) 343-1018

     with a copy to:

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Fenwick & West LLP
275 Battery Street, Suite 1500
San Francisco, CA 94111
Attn: Robert Dellenbach, Esq.
Tel: (415) 875-2323
Fax: (415) 875-2350

     10. Consideration. This Agreement is granted in consideration of the execution and delivery of the Merger Agreement by the Company.

     11. Governing Law. The internal laws of the State of Delaware (irrespective of its choice of law principles) will govern the validity of this Agreement, the construction of its terms, and the interpretation and enforcement of the rights and duties of the parties hereto.

     12. Assignment; Binding Upon Successors and Assigns. Neither party hereto may assign any of its rights or obligations hereunder without the prior written consent of the other party hereto. This Agreement will be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Stockholder agrees that this Agreement and the obligations hereunder shall attach to Stockholder’s Subject Shares and shall be binding upon any person or entity to which legal or beneficial ownership of such Subject Shares shall pass, whether by operation of law or otherwise, including Stockholder’s successors and permitted assigns.

     13. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

     14. Severability. If any provision of this Agreement, or the application thereof, will for any reason and to any extent be invalid or unenforceable, the remainder of this Agreement and application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of the void or unenforceable provision.

     15. Amendment. Any term or provision of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a writing signed by the party to be bound thereby; provided that, no amendment or waiver by the Company shall be effective unless first approved in writing by the Special Committee of the Board of Directors of the Company. The waiver by a party of any breach hereof or default in the performance hereof will not be deemed to constitute a waiver of any other default or any succeeding breach or default. The Agreement may be amended by the parties hereto at any time before or after approval of the Target Stockholders, but, after such approval, no amendment will be made which by applicable

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law requires the further approval of the Target Stockholders without obtaining such further approval.

     16. No Waiver. The failure of any party to enforce any of the provisions hereof will not be construed to be a waiver of the right of such party thereafter to enforce such provisions.

     17. Construction of Agreement. This Agreement has been negotiated by the respective parties hereto and their attorneys and the language hereof will not be construed for or against either party solely by reason that such party is the claimed drafter thereof. A reference to a Section or an exhibit will mean a Section in, or exhibit to, this Agreement unless otherwise explicitly set forth. The titles and headings herein are for reference purposes only and will not in any manner limit the construction of this Agreement that will be considered as a whole. The term “includes” or “including” are not limiting. Capitalized terms used in this Agreement without definition shall have the meanings assigned to them in the Merger Agreement.

     18. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto. The express terms hereof control and supersede any course of performance or usage of the trade inconsistent with any of the terms hereof.

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     IN WITNESS WHEREOF, this Voting Agreement has been duly executed and delivered by a duly authorized officer of the Stockholder and a duly authorized officer of the Company on the day and year first written above.

VIALTA, INC.

 

VICTORY ACQUISITION CORP.

 

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SCHEDULE I TO

VOTING AGREEMENT

1		Fred S. L. Chan holds options to acquire 1,000,000 shares of Company Common Stock. If Mr. Chan elects to exercise such options, he is obligated to contribute any shares acquired upon such exercise to the Stockholder pursuant to that certain Stock Contribution Agreement of even date herewith.

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Exhibit 4

PLEDGE AGREEMENT

     THIS PLEDGE AGREEMENT (this “Agreement”) dated as of March 28, 2005, is made by Victory Acquisition Corp. (the “Pledgor”) in favor of Vialta, Inc. (“Target”). Capitalized terms used herein which are not defined herein shall have the meanings given them in the Merger Agreement referred to below.

RECITALS

     WHEREAS, pursuant to that certain Agreement and Plan of Reorganization dated as of March 28, 2005 between the Pledgor and Target (the “Merger Agreement”) Pledgor shall merge with and into Target (the “Merger”);

     WHEREAS, the Pledgor owns the capital stock of Target described on Exhibit A (the “Securities”) certain of which are held in or will be transferred to certain securities accounts described on Exhibit A attached hereto (together with any successor or replacement account and all subaccounts therein, the “Accounts”);

     WHEREAS, Target has required as a condition, among other things, to entering into the Merger Agreement, and in order to secure the prompt and complete payment by Pledgor of its obligations to pay any Shortfall in the Merger Consideration to the Exchange Agent as, when and to the extent provided in Section 6.2(a) of the Merger Agreement (collectively, the “Payment Obligation”) that the Pledgor execute and deliver this Agreement to Target. As used in this Agreement, the term “Payment Default” shall mean the failure of Pledgor to pay when and as due such Payment Obligation as required under the Merger Agreement;

     WHEREAS, Target has also required that as a condition of the Merger, Pledgor enter into that certain Voting Agreement of even date herewith regarding the voting of Target’s securities held by Pledgor in connection with the Merger (the “Voting Agreement”).

     NOW, THEREFORE, for and in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

     1. Grant of Security Interest. The Pledgor hereby grants to Target, for the benefit of Target, as security for the prompt and complete satisfaction of the Payment Obligation, a security interest in all of the Pledgor’s now owned or hereafter acquired right, title and interest in the Securities and all replacements, renewals, substitutions and proceeds thereof, and the Accounts (together with all of the Securities collectively referred to as the “Pledged Interests”), all rights, privileges, authority and powers as owner or holder of the Securities, including all contract rights related thereto, all documents, instruments or certificates representing or evidencing the Securities, and all dividends, distributions, cash, instruments and other property from time to time received, receivable or otherwise distributed in respect of, or in exchange for, the Securities, and any and all proceeds of any of the foregoing (collectively, the “Pledged Collateral”).

     2. Perfection of Security Interest. The Pledgor agrees (i) to deliver, or cause to be delivered, to Target or Target’s nominee, all certificates evidencing any of the Pledged Collateral together with appropriate transfer powers executed in blank, (ii) Target is authorized to record such financing statements as Target may deem necessary or desirable to perfect the security

1

interests granted herein, (iii) to cause any securities intermediary with custody of any Pledged Collateral to deliver an agreement in form and substance satisfactory to Target, providing Target with “control” (as defined in Section 9-106 of the Uniform Commercial Code as in effect in the State of California) of such Pledged Collateral, and (iv) to take such other steps as Target may from time to time reasonably request to perfect and maintain Target’s security interest in the Pledged Collateral as a first priority security interest under applicable law.

     3. Voting Rights. So long as no Payment Default shall have occurred and be continuing, during the term of this Agreement, the Pledgor shall have the right to vote with respect to the Securities and to give consents, ratifications and waivers with respect thereto, subject to the Voting Agreement. Target shall, at the request of the Pledgor, provide the Pledgor with appropriate proxies and any other documents necessary or appropriate to permit the Pledgor to exercise the rights set forth in the preceding sentence.

     4. Dividends and Other Distributions. Unless a Payment Default has occurred and is continuing, any and all dividends or distributions paid in respect of the Securities shall be distributed or caused to be distributed to the Pledgor; provided, however, that (a) during the existence of a Payment Default all such amounts shall be paid over to Target and (b) any cash paid, payable or otherwise distributed in redemption of, in exchange for, or as a return of, the Pledgor’s capital investment in any Securities shall be paid directly to Target and any such amounts described in this provision, if received by the Pledgor, shall be held in trust for the benefit of Target, segregated from other property or funds of the Pledgor, and forthwith delivered to Target as Pledged Collateral in the same form as so received (with any necessary endorsement). Such amounts paid directly to Target as described in the immediately preceding sentence shall be held by Target as cash collateral for the Payment Obligation and any damages owing by the Pledgor for a breach thereof.

     5. Representations. The Pledgor warrants and represents as follows:

     (a) The Pledgor has the power and authority to execute, deliver and perform this Agreement and to grant to Target the security interests in the Pledged Collateral. No consent, approval, or authorization of, or declaration or filing with, any governmental authority, and no consent of any other person, is required in connection with the Pledgor’s execution, delivery, and performance of this Agreement except for those already duly obtained. This Agreement has been duly executed and delivered by the Pledgor, and constitutes the legal, valid and binding obligation of the Pledgor, enforceable against it in accordance with its terms. The Pledgor’s execution, delivery, and performance of this Agreement does not, and will not, conflict with, or constitute a violation or breach of, or constitute a default under, or result in the creation or imposition of any lien upon, the Pledged Collateral by reason of the terms of (i) any contract, mortgage, lien, lease, agreement, indenture, or instrument to which the Pledgor is a party or which is binding upon it or its property except as provided in this Agreement or (ii) any judgment, law, statute, rule or governmental regulation applicable to the Pledgor.

     (b) The Pledgor is the sole, direct, legal and beneficial owner of each of the Pledged Interests and the only securities entitlement holder with respect to each of the Pledged Interests which constitute securities entitlements, and each of the Pledged Interests as applicable, have been duly authorized and are fully paid and nonassessable.

2

     (c) There are no restrictions upon the voting rights associated with any of the Pledged Collateral other than those under the Voting Agreement.

     (d) The Pledgor has the right, subject to the provisions of this Agreement, (i) to vote the Securities, subject to the terms of the Voting Agreement, and (ii) to pledge and grant a security interest in all or any part of the Pledged Collateral, free of any lien or other charge, encumbrance or restriction.

     6. Subsequent Changes Affecting Pledged Collateral. The Pledgor represents to Target that the Pledgor has made its own arrangements for keeping informed of changes or potential changes affecting the Pledged Collateral (including, but not limited to, rights to convert, rights to subscribe, payment of interest, dividends, reorganization or other exchanges, tender offers and voting rights), and the Pledgor agrees that Target shall have no responsibility or liability for informing the Pledgor of any such changes or potential changes or for taking any action or omitting to take any action with respect thereto.

     7. Pledged Interests Adjustments. In the event that, during the term of this Agreement, any stock dividend, reclassification, readjustment or other change is declared or made in the capital structure of Target (including, without limitation, the issuance of additional shares of capital stock), then Target shall have a security interest in all equity and non-equity securities issued to or acquired by the Pledgor by reason of any such change or exercise with respect to any Pledged Interest, and such shares or other securities shall become part of the Pledged Collateral.

     8. Warrants, Options and Other Rights. In the event that, during the term of this Agreement, subscription warrants or any other rights or options shall be issued by Target on account of the Securities, then Target shall have a security interest in such warrants, rights and options, and such warrants, rights and options shall become part of the Pledged Collateral.

     9. Pledged Collateral Covenants. Except as otherwise provided in the Merger Agreement, the Pledgor agrees that it will not (a) sell or transfer any of the Securities without the prior written consent of Target, or (b) create or permit to exist any lien, security interest, or other charge or encumbrance or restriction upon or with respect to any of the Pledged Collateral, except for the security interest granted under this Agreement and the application of federal and state securities laws generally.

     10. Remedies of Target. Upon the occurrence and during the continuance of any Payment Default, Target shall have such powers of sale and other powers as may be conferred by applicable law with respect to the Pledged Collateral including, without limitation, all of the rights and remedies with respect to the Pledged Collateral of a secured party under the Uniform Commercial Code as in effect in the State of California. With respect to such Pledged Collateral or any part thereof, which shall then be in, or shall thereafter come into, the possession or custody of Target or which Target shall otherwise have the ability to transfer under applicable law, Target may, in its sole discretion, without notice except as specified below, upon the occurrence and during the continuance of any Payment Default, sell or cause the same to be sold at any broker’s board or at public or private sale, in one or more sales or lots, at such price as Target reasonably may deem best, for cash or on credit or for future delivery, without assumption of any credit risk on the part of Target and the purchaser of any or all of the Pledged Collateral so sold shall thereafter own the same, absolutely free from any claim, encumbrance or

3

right of any kind whatsoever and any sale of the Pledged Collateral conducted in conformity with reasonable commercial practices of banks, commercial finance companies, insurance companies or other financial institutions disposing of property similar to the Pledged Collateral shall be deemed to be commercially reasonable. Except with respect to any of the Pledged Collateral which threatens to decline speedily in value or is, or becomes, of a type sold on a recognized market, Target will give the Pledgor reasonable notice of the time and place of any public sale thereof, or of the time after which any private sale or other intended disposition is to be made. Notwithstanding any provision to the contrary contained herein, any requirements of reasonable notice shall be met if ten (10) Business Days’ notice of such sale or disposition is provided to the Pledgor. Any other requirement of notice, demand or advertisement for sale is, to the extent permitted by law, waived. Target may, in its own name or in the name of a designee or nominee, buy all or any part of the Pledged Collateral at any public sale and, if permitted by applicable law, buy all or any part of the Pledged Collateral at any private sale. In connection with any disposition of Pledged Collateral after a Payment Default, the Pledgor agrees to execute and deliver to Target such documents of transfer as Target may from time to time request to enable Target to transfer the Securities into its name or the name of its nominee, or to register any of the Securities to Target.

     11. Term. This Agreement shall remain in full force and effect until the earlier of the time at which (i) the Payment Obligation shall have been paid and satisfied in full or (ii) the Merger Agreement shall have been terminated pursuant to its terms other than solely for failure of Pledgor to perform the Payment Obligation. Upon the termination of this Agreement as provided in the immediately preceding sentence, Target shall promptly thereafter (i) deliver to or at Pledgor’s direction all certificates representing the Pledged Collateral, (ii) file a termination of any financing statement filed by Target to perfect the security interest in the Pledged Collateral under this Agreement and (iii) notify any securities intermediary (as such term is defined in the UCC) who holds any Pledged Collateral of the termination of this Agreement and take such further steps as the securities intermediary or the Pledgor shall require to release the security interest granted in the Pledged Collateral in such securities intermediary’s possession or control to Pledgor and to free such Pledged Collateral from any security interest therein granted in this Agreement.

     12. Expenses. The Pledgor agrees to pay to Target all reasonable expenses (including, without limitation, reasonable attorneys’ fees and costs) incident to, (a) the exercise or enforcement of any of the rights of Target hereunder, and (b) the failure by the Pledgor to perform or observe any provision hereof.

     13. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Pledgor, Target and their respective successors and assigns. The Pledgor’s successors and assigns shall include, without limitation, a receiver, trustee or debtor-in-possession of, or for, the Pledgor.

     14. Applicable Law and Severability. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited or invalid under applicable law, such provision shall be ineffective only to the extent of such

4

prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

     15. Further Assurances. The Pledgor agrees that it will cooperate with Target and will execute and deliver, or cause to be executed and delivered, all such stock powers, proxies, instruments and documents and will take all such other action as Target may reasonably request from time to time in order to carry out the provisions and purposes hereof.

     16. Waiver of Jury Trial. THE PLEDGOR AND TARGET IRREVOCABLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT.

     17. Target Appointed Attorney-in-Fact. The Pledgor hereby appoints Target as the Pledgor’s attorney-in-fact, with full authority in the place and stead of the Pledgor and in the name of the Pledgor or otherwise, from time to time in Target’s discretion, to take any action and to execute any instrument or agreement which Target may deem necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, to receive, endorse and collect all instruments made payable to the Pledgor representing any interest payment, dividend or other distribution in respect of the Pledged Collateral or any part thereof and to give full discharge for the same. This power of attorney created under this Paragraph, being coupled with an interest, shall be irrevocable for the term of this Agreement and thereafter as long as the Payment Obligation shall be outstanding.

     18. Target’s Duty. Target shall not be liable for any acts, omissions, errors of judgment or mistakes of fact or law including, without limitation, those acts, omissions, errors or mistakes with respect to the Pledged Collateral, except for those arising out of or in connection with (a) Target’s gross negligence or willful misconduct, or (b) the loss of any certificate evidencing any of the Pledged Collateral which is in the physical possession of Target. Without limiting the generality of the foregoing, Target shall be under no obligation to take any steps necessary to preserve rights in the Pledged Collateral against any other parties but may do so at its option, and all reasonable expenses incurred in connection therewith shall be for the sole account of the Pledgor.

     19. Notices. Any notice required or desired to be served, given or delivered under this Agreement shall be in writing, and shall be deemed to have been validly served, given or delivered (a) four (4) Business Days after deposit in the United States mails, with proper postage prepaid, (b) when properly transmitted if sent by facsimile with receipt confirmed, (c) one (1) Business Day after being deposited with a reputable overnight courier with all charges prepaid, or (d) when delivered, if hand-delivered, by messenger, all of which shall be properly addressed to the party to be notified and sent to the address or number set forth on the signature page of this Agreement. If the Pledgor refuses any such delivery, a notice so refused shall nonetheless be deemed delivered.

     20. Counterparts; Facsimile Execution. This Agreement may be executed in separate counterparts, each of which shall be an original and all of which, when taken together, shall constitute one and the same instrument. Delivery of any executed copy of this Agreement by facsimile shall be equally as effective as delivery of a manually-executed original of this Agreement. If the Pledgor delivers an executed copy of this Agreement by facsimile, the

5

Pledgor shall also deliver a manually-executed original, but the failure of the Pledgor to do so shall not affect the validity, enforceability or binding effect of this Agreement against the Pledgor.

     21. Section Headings. The section headings herein are for convenience of reference only, and shall not affect in any way the interpretation of any of the provisions hereof.

[The remainder of this page is intentionally left blank.]

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     IN WITNESS WHEREOF, the Pledgor and Target have executed this Agreement as of the day and year first above written.

	Victory Acquisition Corp.
	By:	/s/ Fred Shiu Leung Chan
		Title: President
	Notice Address: 19770 Stevens Creek Blvd. Cupertino, California 95014 AGREED & ACCEPTED: Vialta, Inc.
	By:	/s/ Didier Pietri
		Its: CEO
	Notice Address: 48461 Fremont Blvd. Fremont, CA 94538 Attn: Didier Pietri With a copy to: Kaye Scholer LLP 1999 Avenue of the Stars, Suite 1700 Los Angeles, CA 90067 Attn: Barry L. Dastin

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EXHIBIT A

32,039,840 shares of the common stock of Vialta, Inc.

Account No. #4495T432 at Smith Barney, a division of Citigroup Global Markets Inc.

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Exhibit 5

ADDITIONAL CONTRIBUTION AGREEMENT

     This Additional Contribution Agreement (this “Agreement”) is made and entered into as of March 28, 2005 by and among Victory Acquisition Corporation, a Delaware corporation (the “Company”), and Fred S. L. Chan (“Investor”).

     A. The Company has been formed solely to facilitate and effect a statutory merger (the “Merger”) with Vialta, Inc., a Delaware corporation (“Vialta”), under which Vialta will be the surviving corporation, pursuant to the terms and conditions of that certain Agreement and Plan of Merger dated as of March 28, 2005 (“Merger Agreement”). The existence of the Company is transitory and will be discontinued upon the consummation of the Merger. The Company will conduct no business prior to the Merger.

     B. The Investor and certain of his affiliates (collectively, “Investors”) are holders of the certain shares of stock of Vialta (the “Vialta Shares”). Pursuant to that certain Stock Contribution Agreement, dated as of even date herewith (“Contribution Agreement”), the Investors intend to contribute their Vialta Shares to the Company in exchange for shares of the Company’s Common Stock (the “Company Shares”), after which the Investors will hold all of the outstanding shares of the Company’s stock.

     C. The contribution of stock under the Contribution Agreement and the Merger are part of an integrated plan for Vialta to redeem the Vialta stock (other than the Vialta Shares), and are intended to be treated for tax purposes as a redemption of the shares of Vialta stock outstanding immediately prior to the effective time of the Merger (other than the Vialta Shares), pursuant to Section 302 of the Internal Revenue Code of 1986, as amended (the “Code”).

     D. Section 6.2 of the Merger Agreement provides that if after Vialta shall have deposited in the Exchange Fund (as defined in the Merger Agreement) all cash and cash equivalents available to Vialta immediately prior to the Closing and the Exchange Fund still does not have sufficient cash to pay the entire Merger Consideration (as defined in the Merger Agreement), then the Company shall, within two (2) business days, deposit into the Exchange Fund an amount of cash equal to the shortfall of such Merger Consideration (“Shortfall”), not to exceed Four Million Dollars ($4,000,000.00).

     E. The Company has no cash assets, and the Vialta Shares to be held by the Company following the consummation of the transactions set forth in the Contribution Agreement may not be liquidated; accordingly, the Company would require outside funding in order to meet its obligations under Section 6.2 of the Merger Agreement.

     F. Investor has agreed to advance to the Company the Shortfall, if needed, on the terms and conditions of this Agreement.

 

     NOW THEREFORE, the parties hereby agree as follows:

     1. LOAN. As part of an integrated plan with the Merger, Investor hereby agrees that in the event of a Shortfall, as determined by the Company, the Company shall make a written demand (“Demand”) on Investor requiring Investor to deliver to the Company (or to the Exchange Fund on behalf of the Company) the amount of the Shortfall, in cash in immediately available funds, up to a maximum of $4 million (“Loan Amount”). Investor hereby agrees to advance the Loan Amount to the Company or to the Exchange Fund on behalf of the Company, as requested by the Company pursuant to a Demand, as of the Effective Time. The advance of the Loan Amount will be considered a loan to the Company and the Company’s obligation to repay the Loan Amount will be evidenced by a promissory note in the form of Exhibit A attached hereto (“Note”).

2. GENERAL PROVISIONS.

          2.1 Successors and Assigns. Except as otherwise provided in this Agreement, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

          2.2 Governing Law. This Agreement and the Note will be governed by and construed in accordance with the laws of the State of California, without giving effect to that body of laws pertaining to conflict of laws.

          2.3 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered will be deemed an original, and all of which together shall constitute one and the same agreement. This Agreement may be executed and delivered by facsimile and upon such delivery the facsimile signature will be deemed to have the same effect as if the original signature had been delivered to the other party.

          2.4 Notices. Any and all notices required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing.

          2.5 Amendments and Waivers. Any term of this Agreement or the Note may be amended and the observance of any term of this Agreement or the Note may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the Investor. No delay or failure to require performance of any provision of this Agreement or the Note shall constitute a waiver of that provision as to that or any other instance. No waiver granted under this Agreement or the Note as to any one provision herein or therein shall constitute a subsequent waiver of such provision or of any other provision herein or therein, nor shall it constitute the waiver of any performance other than the actual performance specifically waived. Vialta shall be a third party beneficiary hereof with respect to the deposit into the Exchange Fund of the shortfall.

          2.6 Severability. If any provision of this Agreement or the Note is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or

 

unenforceable in any respect, such provision will be enforced to the maximum extent possible given the intent of the parties hereto.

          2.7 Entire Agreement. This Agreement, together with the Note, constitutes the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersedes any and all prior understandings and agreements, whether oral or written, between or among the parties hereto with respect to the specific subject matter hereof.

 

     IN WITNESS WHEREOF, the parties hereto have executed this Additional Contribution Agreement as of the date first written above.

VICTORY ACQUISITION CORPORATION:

By: /s/ Fred Shiu Leung Chan                    

Name: Fred Shiu Leung Chan                    

Title: President                                             

INVESTOR:

FRED S.L. CHAN

/s/ Fred S. L. Chan                                        

PROMISSORY NOTE
OF
VICTORY ACQUISITION CORPORATION

     For value received, Victory Acquisition Corporation, a Delaware corporation (the “Company”), hereby promises to pay to Fred S. L. Chan (“Holder”), or his registered assigns, the principal sum of $___(the “Principal Amount”), or such lesser amount as shall then equal the outstanding principal amount hereunder, together with simple interest on the unpaid principal balance at a rate equal to 6% per annum, computed on the basis of the actual number of days elapsed and a year of 365 days from the date of this Note, until the principal amount and all interest accrued thereon and other amounts owed hereunder are paid. Anything herein to the contrary notwithstanding, if during any period for which interest is computed hereunder, the amount of interest computed on the basis provided for in this Note, together with all fees, charges and other payments which are treated as interest under applicable law, as provided for herein or in any other document executed in connection herewith, would exceed the amount of such interest computed on the basis of the Highest Lawful Rate, the Company shall not be obligated to pay, and the Holder shall not be entitled to charge, collect, receive, reserve or take, interest in excess of the Highest Lawful Rate, and during any such period the interest payable hereunder shall be computed on the basis of the Highest Lawful Rate. As used herein, "Highest Lawful Rate” means the maximum non-usurious rate of interest, as in effect from time to time, which may be charged, contracted for, reserved, received or collected by the Holder in connection with this Note under applicable law. The unpaid Principal Amount, together with any then unpaid accrued interest and all other amounts owed hereunder, shall be due and payable on the date 24 months following the date hereof (the “Maturity Date”) or earlier when such amounts are made automatically due and payable upon or after the occurrence of an Event of Default (as defined below), at the principal offices of the Company or by mail to the address of the

 

registered holder of this Note in lawful money of the United States. Any payment made by the Company under this Note will be applied first to interest accrued and second to outstanding principal. This Note may be prepaid at any time without penalty.

This Note is issued pursuant to that certain Additional Contribution Agreement dated as of March [28], 2005, by and among the Company and the original holder of this Note, and is subject to the provisions thereof, and incorporates the provisions thereof by reference.

An “Event of Default” will occur if any of the following happens and such default is not cured within a five (5) day period after the Holder has given the Company written notice of such default:

the Company fails to make any payment when due hereunder;

the Company breaches any material obligation to the Holder under this Note or the Additional Contribution Agreement, or the Company fails to perform promptly at the time and strictly in the manner provided in this Note; or

a receiver is appointed for any material part of the Company’s property, the Company makes an assignment for the benefit of creditors, or the Company becomes a debtor or alleged debtor in a case under the U.S. Bankruptcy Code or becomes the subject of any other bankruptcy or similar proceeding for the general adjustment of its debts.

Upon the occurrence of any Event of Default, all accrued but unpaid expenses, accrued but unpaid interest, all principal and any other amounts outstanding under this Note shall become immediately due and payable in full without further notice or demand.

The Company and all endorsers of this Note hereby waive notice, presentment, protest and notice of dishonor.

In the event any party is required to engage the services of any attorneys for the purpose of enforcing this Note, or any provision thereof, the prevailing party shall be entitled to recover its reasonable expenses and costs in enforcing this Note, including attorneys’ fees.

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IN WITNESS WHEREOF, the Company has caused this Note to be signed in its name as of the date first above written.