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Exhibit 10.4    
    


 
 

THIRD AMENDMENT TO CONTRIBUTION AGREEMENT    
    


        THIS THIRD AMENDMENT TO CONTRIBUTION AGREEMENT (the  "Amendment") is dated as of September 1, 2003, and is entered into by and among  JAZZ SEMICONDUCTOR, INC. (formerly known as Specialtysemi, Inc.), a Delaware
corporation
("Company"), CONEXANT SYSTEMS, INC., a Delaware
corporation ("Conexant"), and CARLYLE PARTNERS III,
L.P., a Delaware limited partnership ("CP III"), CP III COINVESTMENT, L.P., a
Delaware limited partnership ("CP III Coinvestment"), and CARLYLE HIGH YIELD PARTNERS, L.P., a Delaware
limited partnership ("Carlyle High Yield" and, together with CP III and CP III Coinvestment, "Carlyle"). 


RECITALS  


        WHEREAS, Company, Conexant and Carlyle Capital Investors, L.L.C. a Delaware limited liability company
("Carlyle Capital") are parties to that certain Contribution Agreement dated as of February 23, 2002, as amended by that certain First Amendment
to Contribution Agreement dated as of March 12, 2002 and that certain Second Amendment to the Contribution Agreement dated as of July 1, 2002 (as amended, the  "Contribution
Agreement"); 


        WHEREAS, pursuant to that certain Assignment and Assumption Agreement by and between Carlyle Capital and Carlyle, dated as of
March 12, 2002, Carlyle Capital has assigned all of its rights and obligations under the Contribution Agreement to Carlyle; and 



        WHEREAS, Company, Conexant and Carlyle wish to amend the Contribution Agreement. 


AGREEMENTS  


        NOW THEREFORE, in consideration of the promises and mutual agreements and covenants set forth herein, and
intending to be legally bound hereby, the parties hereto hereby agree as follows: 


        1.    Defined Terms.    Capitalized terms used herein and not otherwise defined shall
have the
meanings given to such terms in the Contribution Agreement. 


        2.    Amendment to Recital.    Subpart (ii)(6) of the third Recital to the
Contribution
Agreement is hereby amended and restated in its entirety to read as follows: 


        "(6)
an Employee Matters Agreement in the form of Exhibit E hereto (as such may be amended from time to time in accordance with the
terms and conditions thereof, the "Employee Matters Agreement")" 



        3.    Effect of Amendment.    Except as and to the extent expressly modified by this
Amendment, the Contribution Agreement, the Exhibits thereto, and the Disclosure Schedules shall remain in full force and effect in all respects. The terms of this Amendment shall be applied
retroactively for purposes of Sections 1, 2, 3, 6 and 8 of the Contribution Agreement, such that the Contribution Agreement, the Exhibits thereto, and the Disclosure Schedules shall be deemed to have
read, as of February 23, 2002, as amended herein. In the event of a conflict between this Amendment and the Contribution Agreement, the Exhibits thereto, or the Disclosure Schedules, this
Amendment shall govern. 


        4.    Counterparts.    This Amendment may be executed in several counterparts, each
of which
shall constitute an original and all of which, when taken together, shall constitute one agreement. 


        5.    Governing Law.    This Agreement shall be construed in accordance with, and
governed in
all respects by, the internal laws of the State of Delaware (without giving effect to principles of conflicts of laws). 


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        The
parties hereto have caused this Amendment to be executed and delivered as of the date set forth above. 



	 	 	JAZZ SEMICONDUCTOR, INC.,

a Delaware corporation
	

 	
 	

By:	

/s/  SHU LI      
 Name: Shu Li

Title: President and Chief Executive Officer
	

 	
 	
CONEXANT SYSTEMS, INC.,

a Delaware corporation
	

 	
 	

By:	

/s/  DWIGHT DECKER      
 Name: Dwight Decker

Title: Chief Executive Officer






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CARLYLE PARTNERS III, L.P.,

        a Delaware limited partnership
	

 	
 	

By:	

TC Group III, L.P.,

its General Partner
	

 	
 	

By:	

TC Group III, L.L.C.,

its General Partner
	

 	
 	

By:	

TC Group, L.L.C.,

its Managing Member
	

 	
 	

By:	

TCG Holdings, L.L.C.,

its Managing Member
	

 	
 	

By:	

/s/  ALLAN M. HOLT      

	 	 	Name:	Allan M. Holt
	 	 	Title:	Managing Director
	

 	
 	
CP III COINVESTMENT, L.P.,

        a Delaware limited partnership
	

 	
 	

By:	

TC Group III, L.P.,

its General Partner
	

 	
 	

By:	

TC Group III, L.L.C.,

its General Partner
	

 	
 	

By:	

TC Group, L.L.C.,

its Managing Member
	

 	
 	

By:	

TCG Holdings, L.L.C.,

its Managing Member
	

 	
 	

By:	

/s/  ALLAN M. HOLT      

	 	 	Name:	Allan M. Holt
	 	 	Title:	Managing Director





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CARLYLE HIGH YIELD PARTNERS, L.P.,

        a Delaware limited partnership
	

 	
 	

By:	

TCG High Yield, L.L.C.,

its General Partner
	

 	
 	

By:	

TCG High Yield Holdings, L.L.C.,

its Managing Member
	

 	
 	

By:	

TC Group, L.L.C.,

its sole Member
	

 	
 	

By:	

TCG Holdings, L.L.C.,

its Managing Member
	

 	
 	

By:	

/s/  ALLAN M. HOLT      

	 	 	Name:	Allan M. Holt
	 	 	Title:	Managing Director




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Exhibit 10.4


THIRD AMENDMENT TO CONTRIBUTION AGREEMENT