FOURTH AMENDED AND RESTATED CO-SALE AGREEMENT

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Exhibit 10.8

TECHWELL, INC.

FOURTH AMENDED AND RESTATED CO-SALE AGREEMENT

        THIS FOURTH AMENDED AND RESTATED CO-SALE AGREEMENT (the "Agreement") is made and entered into as of March 11, 2005 by and among Techwell, Inc., a California corporation (the "Company"), the shareholders of the Company identified in Schedule A (each a "Shareholder" and collectively referred to herein as the "Shareholders"), and those investors identified in Schedule B that (i) hold not less than 250,000 shares (as adjusted for stock splits, stock dividends, combinations, recapitalizations and the like) of the Company's Series B Preferred Stock (the "Major B Investors"), (ii) hold not less than 150,000 shares (as adjusted for stock splits, stock dividends, combinations, recapitalizations and the like) of the Company's Series C Preferred Stock (the "Major C Investors"), (iii) hold not less than 150,000 shares (as adjusted for stock splits, stock dividends, combinations, recapitalizations and the like) of the Company's Series D Preferred Stock (the "Major D Investors"), (iv) hold not less than 150,000 shares (as adjusted for stock splits, stock dividends, combinations, recapitalizations and the like) of the Company's Series E Preferred Stock and/or Series E-1 Preferred Stock (the "Major E Investors", and collectively with the Major B Investors, the Major C Investors and the Major D Investors, the "Prior Investors"), or (v) hold not less than 150,000 shares (as adjusted for stock splits, stock dividends, combinations, recapitalizations and the like) of the Company's Series F Preferred Stock (the "Major F Investors", and collectively with the Prior Investors, the "Investors"); provided that for purposes of these calculations, any shares of Preferred Stock held by an affiliate, member, partner of, or venture capital fund under common management with, such Investor shall be aggregated. The Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock, the Series E Preferred Stock, the Series E-1 Preferred Stock and the Series F Preferred Stock held by the Investors is referred to herein as the "Investor Shares".

RECITALS

        WHEREAS, the Shareholders hold that number of shares of capital stock (or options to acquire stock) set forth opposite each such Shareholder's name in Schedule A (the "Shares"); and

        WHEREAS, the Company, the Shareholders and the Prior Investors are parties to that certain Third Amended and Restated Co-Sale Agreement dated October 2, 2003 (the "Prior Agreement"); and

        WHEREAS, the Prior Investors have certain first refusal and co-sale rights (the "Rights") with respect to proposed sales of the Shares by the Shareholders pursuant to the Prior Agreement; and

        WHEREAS, the Company and the Shareholders, to induce the Major F Investors to purchase shares of the Company's Series F Preferred Stock pursuant to the Series F Preferred Stock Purchase Agreement of even date herewith (the "Series F Agreement"), desire to grant the Rights to the Major F Investors, and the Prior Investors desire to facilitate such grant; and

        WHEREAS, the Prior Agreement may be amended as set forth in Section 4.5 thereof.

        NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1.      RIGHT OF FIRST REFUSAL AND CO-SALE

1.1

Notice of Sales; Assignment of Company Right of First Refusal .

(a)

Should a Shareholder propose to sell, assign, hypothecate, pledge, convey in trust, gift, transfer by bequest or devise, or otherwise transfer (including, but not limited to, a transfer pursuant to divorce or legal separation, a transfer to receivers, creditors, trustees or receivers in bankruptcy proceedings or a general assignment for the benefit of creditors), whether voluntary, involuntarily or by operation of law, directly or indirectly (collectively, "Transfer") to any persons (a) five percent (5%) or more of his Shares measured as of the date hereof or (b) any of his Shares if he has cumulatively sold ten percent (10%) or more of his Shares

measured as of the date hereof in previous sales, the Shareholder shall promptly deliver a notice (the "Notice") to the Company and each Investor stating the terms and conditions of such Transfer including, without limitation, the number of shares of the Company's capital stock to be sold or transferred, the nature of such Transfer (including the material terms and conditions upon which the proposed Transfer is to be made), the consideration to be paid and the name and address of each prospective purchaser or transferee. The Notice shall also include a copy of any written proposal, term sheet or letter of intent or other agreement relating to the proposed Transfer. In the event that the Transfer is being made pursuant to the provisions of Section 1.5 hereof, the Notice shall state under which specific subsection the Transfer will be made.

(b)

The Company agrees that in the event that the Company declines to exercise in full any right of first refusal set forth in any Restricted Stock Purchase Agreement, Stock Purchase Rights Agreement or Stock Option Agreement (collectively, the "Stock Purchase Agreement") relating to such Shares between the Shareholder and the Company (the "Right of First Refusal"), the Company will provide each Investor with notice of such determination at least fifteen (15) days prior to the end of the period in which the Right of First Refusal expires under such Stock Purchase Agreement. Each Investor shall then have the right, exercisable by written notice to the transferring Shareholder prior to the end of such period, to exercise such Right of First Refusal as the Company's assignee on a pro rata basis (based upon the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of the Investor Shares) held by such Investor relative to the aggregate number of shares of Common Stock (including shares of Common Stock issuable upon conversion of the Investor Shares) held by all Investors); provided that if fewer than all Investors elect to fully participate, the Shares that would otherwise be allocated to non-fully-participating Investors shall be allocated to each fully participating Investor in a manner such that each fully participating Investor is entitled to purchase at least such Investor's pro rata portion of such unallocated Shares (based upon the number of shares of Common Stock (including shares of Common Stock issuable upon conversion of the Investor Shares) held by all fully participating Investors) or such different number of shares as the fully participating Investors shall mutually agree. Upon expiration or exercise of the Right of First Refusal, the Company will promptly provide a notice (the "Subsequent Notice") to each Investor as to whether or not the Right of First Refusal has been exercised by the Company or the Investors and such Subsequent Notice shall include all of the information and certifications required in the Notice and shall additionally identify the Shares that the Company has declined to purchase (the "Remaining Shares") and briefly describe the Investors right to participate in the proposed Transfer.

1.2

Participation Right . To the extent that the Right of First Refusal, if applicable, is not exercised by the Company or the Investors, each Investor shall have the right, exercisable upon written notice to the transferring Shareholder within ten (10) business days after receipt of the Subsequent Notice, to participate in the Transfer pursuant to the specified terms and conditions set forth in the Subsequent Notice. To the extent an Investor exercises such right of participation in accordance with the terms and conditions set forth below, the number of Remaining Shares which the Shareholder may sell in the Transfer shall be correspondingly reduced. The right of participation of each Investor shall be subject to the following terms and conditions:

(a)

Calculation of Shares . Each Investor may sell all or any part of that number of shares of capital stock of the Company equal to the product obtained by multiplying (i) the aggregate number of shares of capital stock covered by the Subsequent Notice by (ii) a fraction, the numerator of which is the number of shares of the Company's Common Stock (including shares of Common Stock issuable upon conversion of the Investor Shares) at the time owned by such Investor and the denominator of which is the combined number of shares of the Company's Common Stock (including shares of Common Stock issuable upon conversion of the Investor Shares) at the time owned by the Shareholder, including shares transferred to Permitted Transferees (as herein-after defined) in accordance herewith, and the Investors.

(b)

Delivery of Certificate . Each Investor may effect its participation in the sale by delivering to the transferring Shareholder for transfer to the third-party transferee one or more certificates, properly endorsed for transfer, which represent:

(i)

the type and number of shares of capital stock of the Company that such Investor elects to sell; or

(ii)

that number of shares of capital stock of the Company that are at such time convertible into the number of shares of Common Stock that such Investor elects to sell; provided, however, that if the prospective third-party transferee objects to the delivery of such shares of capital stock of the Company in lieu of Common Stock, such Investor shall convert such shares of capital stock of the Company into Common Stock and deliver Common Stock as provided in this Section 1.2. The Company agrees to make any such conversion concurrent with the actual transfer of such shares to the third-party transferee and contingent on such transfer.

1.3

Transfer . The stock certificate or certificates which such Investor delivers to the Shareholder pursuant to Section 1.2 shall be delivered by the Shareholder to the third-party transferee in consummation of the sale pursuant to the terms and conditions specified in the Notice, and the Shareholder shall promptly thereafter remit to such Investor that portion of the sale proceeds to which such Investor is entitled by reason of its participation in such sale. To the extent that any prospective third-party transferee or transferees prohibits such assignment or otherwise refuses to purchase shares or other securities from an Investor exercising its rights of participation hereunder, the Shareholder shall not sell to such prospective transferee or transferees any Shares unless and until, simultaneously with such sale, the Shareholder shall purchase such shares or other securities from such Investor for the same consideration and on the same terms and conditions as the proposed transfer described in the Notice.

1.4

No Adverse Effect . To the extent that the Company and the Investors have not exercised their rights to purchase the Shares covered by a Notice within the time periods specified in Section 1.1 and the Investors have not exercised their rights to participate in the sale of such Remaining Shares within the time periods specified in Section 1.2, the transferring Shareholder shall have a period of forty-five (45) days from the date the Notice was delivered to the Company and the Investors in which to sell the Shares not purchased by the Company or the Investors pursuant to Section 1.1 of this Agreement upon terms and conditions (including the purchase price) no more favorable than those specified in the Notice, to the third-party transferee(s) identified in the Notice. The third-party transferee(s) shall acquire the Shares sold thereby free and clear of subsequent rights of first refusal and co-sale rights under this Agreement. In the event the transferring Shareholder does not consummate the sale or disposition of such Shares within the foregoing forty-five (45) day period, the Company's first refusal rights and the Investors' first refusal rights and co-sale rights shall continue to be applicable to any subsequent disposition of such Shares by the Shareholder until such rights lapse in accordance with the terms of this Agreement. Furthermore, the exercise or non-exercise of the rights of the Company and the Investors under this Agreement to purchase Shares from a Shareholder or participate in sales of Shares by a Shareholder shall not adversely affect their rights to make subsequent purchases of Shares from such Shareholder or subsequently participate in sales of Shares by such Shareholder.

1.5

Permitted Transactions . The participation rights of each Investor shall not pertain or apply to any Transfer to the Shareholder's ancestors, descendants or spouse or to a trustee for their benefit; provided , that (i) the Shareholder shall inform the Investors of such Transfer prior to effecting it and (ii) each such transferee or donee (collectively, the "Permitted Transferees"), prior to the completion of the Transfer, shall furnish the Investors with a written agreement to be bound by and comply with all provisions of this Agreement applicable to the Shareholder. Such transferred Shares shall remain "Shares" hereunder, and such transferee or donee shall be treated as the "Shareholder" for purposes of this Agreement.

2.      PROHIBITED TRANSFERS

2.1

In the event a Shareholder should Transfer any Shares in contravention of the rights of the Investors under this Agreement (a "Prohibited Transfer"), each Investor, in addition to such other remedies as may be available at law, in equity or hereunder, shall have the put option provided below, and the Shareholder shall be bound by the applicable provisions of such option.

2.2

In the event of a Prohibited Transfer, each Investor shall have the right to sell to the transferring Shareholder the type and number of shares of Common Stock equal to the number of shares each Investor would have been entitled to transfer to the purchaser had the Prohibited Transfer been effected pursuant to and in compliance with the terms hereof. Such sale shall be made on the following terms and conditions:

(a)

The price per share at which the shares are to be sold to the Shareholder shall be equal to the price per share paid by the purchaser to the Shareholder in the Prohibited Transfer. The Shareholder shall also reimbur