Document:

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                                                                    EXHIBIT 10.2

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this 27th
day of February, 2004, by and between Conexant Systems, Inc., a Delaware
corporation (the "Company"), and Lewis C. Brewster (the "Executive").

         WHEREAS, pursuant to that Agreement and Plan of Reorganization dated as
of November 3, 2003, as amended as of January 15, 2004 (the "Merger Agreement"),
by and among the Company, Concentric Sub, Inc., a Delaware corporation and a
wholly-owned subsidiary of the Company ("Concentric Sub"), and GlobespanVirata,
Inc., a Delaware corporation ("GlobespanVirata"), at the Effective Time (as
defined in the Merger Agreement), Concentric Sub will be merged with and into
GlobespanVirata (the "Merger"), with GlobespanVirata being the surviving
corporation in the Merger as a wholly-owned subsidiary of the Company;

         WHEREAS, the Executive is party to an Employment Agreement dated as of
December 15, 1998 with the Company (the "Continued Agreement"); and

         WHEREAS, the parities hereto wish to enter into the arrangements set
forth herein with respect to the terms and conditions of the Executive's
employment with the Company from and after the Effective Time;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

         1.       Employment Agreement. On the terms and conditions set forth in
this Agreement and subject to the consummation of the Merger, the Company agrees
to continue to employ the Executive, and the Executive agrees to be employed by
the Company, in the position and with the duties set forth in Section 3. Terms
used herein with initial capitalization and not otherwise defined herein are
defined in Section 20. This Agreement shall only become effective at the
Effective Time. At the Effective Time, this Agreement shall replace and
supersede any other employment agreements or arrangements between the Executive
and the Company or any of its Affiliates or predecessors, which shall
automatically be terminated as of the Effective Time and shall be of no further
force and effect from and after the Effective Time (other than the Continued
Agreement) (the "Replaced Agreements"). This Agreement shall be of no force or
effect unless, and until, the Merger is consummated.

         2.       Term. Unless earlier terminated pursuant to Section 7, the
term of the Executive's employment hereunder shall commence on the day on which
the Effective Time occurs (the "Effective Date") and shall conclude on the
second anniversary of the

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Effective Date (the "Renewal Date") (the "Employment Period"); provided,
however, that the Employment Period shall be automatically extended for an
additional one-year term on the Renewal Date and on each anniversary of the
Renewal Date, unless either party gives at least sixty days' advance written
notice to the other party (a "Notice of Non-Renewal") that it no longer wishes
such automatic extensions to continue.

         3.       Position and Duties. The Executive shall serve as Executive
Vice President, Sales, Operations and Quality of the Company during the
Employment Period. As Executive Vice President, Sales, Operations and Quality of
the Company, subject to the terms and conditions of this Agreement, the
Executive shall render executive, policy and other management services to the
Company as reasonably determined by the Senior Vice President and Chief
Operating Officer of the Company. The Executive shall devote the Executive's
reasonable best efforts and substantially full business time to the performance
of the Executive's duties hereunder and the advancement of the business and
affairs of the Company during the Employment Period (provided that the Executive
may devote time to managing the Executive's personal investments and to
charitable and community activities, and, with the consent of the Board, take up
other offices and positions during the Employment Period). The Executive shall
initially report directly to the Senior Vice President and Chief Operating
Officer of the Company.

         4.       Place of Performance. During the Employment Period, the
Executive's primary place of employment and work location shall be Newport
Beach, California, except for reasonable travel on Company business.

         5.       Compensation.

         (a)      Base Salary. During the Employment Period, the Company shall
pay to the Executive an annual base salary (the "Base Salary") of $360,000. The
Base Salary shall be reviewed by the Board or the Compensation and Management
Development Committee of the Board (the "Compensation Committee") no less
frequently than annually, and may be increased at the discretion of the Board or
the Compensation Committee. If the Executive's Base Salary is increased, the
increased amount shall be the Base Salary for the remainder of the Employment
Period (until the date of any subsequent increase). The Base Salary shall be
payable bi-weekly or in such other installments as shall be consistent with the
Company's payroll procedures in effect from time to time.

         (b)      Bonus. (i) During the Employment Period, the Executive shall
be eligible to earn an annual performance bonus in an amount determined at the
discretion of the Board or the Compensation Committee for each fiscal year. The
Board or the Compensation Committee shall establish a target bonus for the
Executive with respect to each fiscal year of the Employment Period based upon
overall performance of the

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Company and upon the Executive's individual performance, with the amount of the
target bonus to be based on competitive market levels and with bonus payments to
be based on actual performance. The Executive's annual target bonus for the
fiscal year ending October 1, 2004 will be seventy percent (70%) of the Base
Salary. In the event that a target bonus is not established with respect to any
subsequent year, the Executive's target bonus shall be deemed to be the target
bonus established under this Agreement for the immediately preceding year.

                  (ii)     In addition to any annual performance bonus payable
under this Section 5(b), the Company shall pay to the Executive a lump-sum cash
bonus in the amount of $ 150,000 within 14 days after the Effective Date.

         (c)      Equity Compensation. (i) On or about the Effective Date, the
Company shall grant to the Executive options to purchase 200,000 shares of
common stock, par value $.01 per share, of the Company (the "Company Common
Stock"), with an exercise price equal to the fair market value of the Company
Common Stock on the date of grant. Such options shall become exercisable in four
equal installments on the first, second, third and fourth anniversaries of the
date of grant.

                  (ii)     On or about the Effective Date, the Company shall
grant to the Executive options to purchase 175,000 shares of Company Common
Stock, with an exercise price equal to the fair market value of the Company
Common Stock on the date of grant. Such options shall become exercisable on the
second anniversary of the Effective Date.

         (d)      Benefits. During the Employment Period, the Executive will be
entitled to all employee benefits and perquisites (including health, welfare,
life insurance, pension and incentive plans and other arrangements) made
available to similarly situated executives of the Company. Nothing contained in
this Agreement shall prevent the Company from terminating plans, changing
carriers or effecting modifications in employee benefits coverage for the
Executive as long as such modifications are Company-wide modifications that
affect all similarly situated employees of the Company.

         (e)      Vacation; Holidays. During the Employment Period, the
Executive shall be entitled to all public holidays observed by the Company and
vacation days in accordance with the applicable vacation policies for senior
executives of the Company, which shall be taken at a reasonable time or times.

         (f)      Withholding Taxes and Other Deductions. To the extent required
by law, the Company shall withhold from any payments due to the Executive under
this Agreement any applicable federal, state or local taxes and such other
deductions as are

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prescribed by law.

         6.       Expenses. The Executive is expected and is authorized, subject
to the business expense policies as determined by the Company, to incur
reasonable expenses in the performance of the Executive's duties hereunder,
including the costs of entertainment, travel and similar business expenses. The
Company shall promptly reimburse the Executive for all such expenses upon
periodic presentation by the Executive of an accounting of such expenses on
terms applicable to senior executives of the Company.

         7.       Termination of Employment. Any termination of the Executive's
employment under this Agreement by the Company or the Executive shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 10. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon, if any, and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employment Period under the provision so indicated.
Termination of the Employment Period shall take effect on the Date of
Termination. The Executive's employment under this Agreement can be terminated
under the following circumstances:

         (a)      Death. The Employment Period shall terminate upon the
Executive's death;

         (b)      By the Company. The Company may terminate the Employment
Period (i) if the Executive shall have been unable to perform all of the
Executive's duties hereunder by reason of illness, physical or mental disability
or other similar incapacity, which inability shall continue or more than three
consecutive months, or any six months in a twelve-month period (a "Disability");
or (ii) with or without Cause;

         (c)      Voluntarily by the Executive. The Executive may voluntarily
terminate the Employment Period; or

         (d)      Non-Renewal. The Employment Period may terminate pursuant to
the terms of Section 2.

         8.       Compensation Upon Termination.

         (a)      Death. If the Employment Period terminates as a result of the
Executive's death, the Company shall promptly pay to the Executive's estate, or
as may be directed by the legal representatives of such estate, after the Date
of Termination any accrued but unpaid Base Salary through the Date of
Termination, all accrued vacation days and all other unpaid amounts, if any,
which the Executive has accrued and is entitled

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to as of the Date of Termination in connection with any fringe benefits or under
any bonus or incentive compensation plan or program of the Company pursuant to
Sections 5(b), (c) and (d), and the Company shall have no further obligations to
the Executive under this Agreement or otherwise (other than pursuant to any
employee benefit plan and any life insurance, death in service or other
equivalent policy for the benefit of the Executive).

                  (b)      Disability. If the Company terminates the Employment
Period because of the Executive's Disability, the Company shall promptly pay to
the Executive after the Date of Termination any accrued but unpaid Base Salary
through the Date of Termination, all accrued vacation days and all other unpaid
amounts, if any, which the Executive has accrued and is entitled to as of the
Date of Termination in connection with any fringe benefits or under any bonus or
incentive compensation plan or program of the Company pursuant to Sections 5(b),
(c) and (d), and the Company shall have no further obligations to the Executive
under this Agreement or otherwise (other than pursuant to any employee benefit
plan and any disability or other medical or life insurance policy for the
benefit of the Executive (and with respect to life insurance, to the extent the
Executive is covered by a Company provided life insurance policy at the time of
the Executive's death)).

                  (c)      By the Company for Cause; By the Executive. If the
Company terminates the Employment Period for Cause or if the Executive
voluntarily terminates the Employment Period (including pursuant to the
Executive's delivery of a Notice of Non-Renewal), the Company shall promptly pay
to the Executive after the Date of Termination any accrued but unpaid Base
Salary through the Date of Termination and all other unpaid amounts, if any,
Which the Executive has accrued and is entitled to as of the Date of Termination
in connection with any fringe benefits or under any bonus or incentive
compensation plan or program of the Company pursuant to Sections 5(b), (c) and
(d), and other than pursuant to any employee benefit plan, the Company shall
have no further obligations to the Executive under this Agreement.

                  (d)      By the Company Without Cause. If the Company
terminates the Employment Period (including pursuant to the Company's delivery
of a Notice of Non-Renewal) other than for Cause, Disability or death, (i) the
Company shall continue to pay to the Executive the Executive's Base Salary for
the Continuation Period in accordance with normal Company payroll practices;
(ii) the Company shall continue to provide welfare benefits pursuant to Section
5(d) to the Executive for the Continuation Period (or, to the extent such
benefits cannot be so provided, the Company shall make a cash payment to the
Executive in an amount sufficient (on an after-tax basis) to allow the Executive
to obtain comparable benefits for such period), unless and until the Executive
receives any such or similar benefits while employed in any capacity by any
other employer during the Continuation Period; (iii) the Company shall pay to
the Executive,

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promptly after the end of the fiscal year in which the Date of Termination
occurs, a cash lump sum in an amount equal to the sum of (A) the product of (x)
100% of the Executive's target bonus for the fiscal year in which the Date of
Termination occurs times (y) a fraction the numerator of which is the number of
days of the then-current fiscal year that have elapsed prior to the Date of
Termination and the denominator of which is 365 and (B) the full amount of the
target bonus for the Executive with respect to such fiscal year and (iv) all
unvested options to purchase Company Common Stock and shares of restricted
Company Common Stock then held by the Executive shall continue to vest pursuant
to their terms during the Continuation Period, and the Executive shall be
entitled to exercise all such vested options only during the Continuation Period
and the ninety-day period commencing at the end of the Continuation Period,
after which time all options to purchase Company Common Stock held by the
Executive will immediately expire. Other than as set forth herein, the Company
shall have no further obligations to the Executive under this Agreement or
otherwise (other than pursuant to any employee benefit plan). For purposes of
this Section 8(d), "Continuation Period" shall mean the 12-month period
commencing on the Date of Termination.

                  If requested by the Company, the Executive will execute a
customary general release in a form satisfactory to the Company in furtherance
of this Agreement and as a condition to the receipt of any benefits under this
Section 8(d). Nothing in this Section 8(d) shall be deemed to operate or shall
operate as a release, settlement or discharge of any liability of the Executive
to the Company or others for any action or omission by the Executive, including
without limitation any actions which formed the basis for termination of the
Executive's employment for Cause.

                  (e)      Liquidated Damages. The parties acknowledge and agree
that damages suffered by the Executive as a result of termination by the Company
without Cause shall be extremely difficult or impossible to establish or prove,
and agree that the payments and benefits provided pursuant to Section 8(d) shall
constitute liquidated damages for any breach of this Agreement by the Company
through the Date of Termination. The Executive agrees that, except for such
other payments and benefits to which the Executive may be entitled as expressly
provided by the terms of this Agreement or any applicable Company plan, such
liquidated damages shall be in lieu of all other claims that the Executive may
make with respect to termination of the Executive's employment, the Employment
Period or any such breach of this Agreement. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this
Agreement, and, except as specifically provided in clause (ii) of Section 8(d),
such amounts shall not be reduced whether or not the Executive obtains other
employment.

                  9.       Noncompetition; Nonsolicitation; Confidentiality.

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                  (a)      Noncompetition. THIS SECTION 9(a) SHALL HAVE NO FORCE
OR EFFECT, AND SHALL NOT BE DEEMED A PART OF THIS AGREEMENT, DURING ANY AND ALL
PERIODS IN WHICH THE EXECUTIVE PERFORMS SERVICES AS AN EMPLOYEE OF THE COMPANY
PRINCIPALLY IN THE STATE OF CALIFORNIA, BUT SHALL BECOME IMMEDIATELY EFFECTIVE
IF AND TO THE EXTENT THE EXECUTIVE PERFORMS SERVICES AS AN EMPLOYEE OF THE
COMPANY PRINCIPALLY IN A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA. The
Executive acknowledges that in the course of the Executive's employment with the
Company and its Affiliates and their predecessors, the Executive has and will
continue to become familiar with the trade secrets of, and other confidential
information concerning, the Company and its Affiliates and their predecessors,
that the Executive's services will be of special, unique and extraordinary value
to the Company and its Affiliates and that the Company's ability to accomplish
its purposes and to successfully pursue its business plan and compete in the
marketplace depends substantially on the skills and expertise of the Executive.
Therefore, and in further consideration of the compensation being paid to the
Executive hereunder, the Executive agrees that, during the Employment Period and
for a period of twelve months following the Executive's termination of
employment with the Company for any reason other than a termination of
employment in which Section 8(d) applies (in which case the restrictions set
forth in Sections 9(a) and (b) shall not apply following the Executive's
termination of employment with the Company) (the "Restricted Period"), the
Executive shall not directly or indirectly own, manage, control, participate in,
consult with, render services for, or in any manner engage in any business
competing with the businesses of the Company or its Affiliates, in any country
where the Company or its Affiliates conducts business; provided, however, that
passive investments amounting to no more than three percent of the voting equity
of a business shall not be prohibited hereby.

                  (b)      Nonsolicitation. During the Restricted Period, the
Executive shall not directly or indirectly through another entity (i) induce or
attempt to induce any employee of the Company or any Affiliate to leave the
employ of the Company or such Affiliate, or in any way willfully interfere with
the relationship between the Company or any Affiliate and any employee thereof;
or (ii) induce or attempt to induce any customer, supplier, licensee or other
business relation of the Company or any Affiliate to cease doing business with
the Company or such Affiliate, or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company or any Affiliate.

                  (c)      Information. The Executive acknowledges that the
information, observations and data obtained by the Executive concerning the
business and affairs of the Company and its Affiliates and their predecessors
during the course of the Executive's performance of services for, or employment
with, any of the foregoing persons (whether

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or not compensated for such services) are the property of the Company and its
Affiliates, including information concerning acquisition opportunities in or
reasonably related to the business or industry of the Company or its Affiliates
of which the Executive becomes aware during such period. Therefore, the
Executive agrees that the Executive will not at any time (whether during or
after the Employment Period) disclose to any unauthorized person or, directly or
indirectly, use for the Executive's own account, any of such information,
observations, data or any Work Product (as defined below) or Copyrightable Work
(as defined below) without the Board's consent, unless and to the extent that
the aforementioned matters become generally known to and available for use by
the public other than as a direct or indirect result of the Executive's acts or
omissions to act or the acts or omissions to act of other senior or junior
management employees of the Company and its Affiliates. The Executive agrees to
deliver to the Company at the termination of the Executive's employment, or at
any other time the Company may request in writing (whether during or after the
Employment Period), all memoranda, notes, plans, records, reports and other
documents, regardless of the format or media (and copies thereof), relating to
the business of the Company and its Affiliates and their predecessors
(including, without limitation, all acquisition prospects, lists and contact
information) which the Executive may then possess or have under the Executive's
control.

                  (d)      Intellectual Property. The Executive acknowledges
that all inventions, innovations, improvements, developments, methods, designs,
analyses, drawings, reports, trade secrets, know-how, ideas, computer programs,
and all similar or related information (whether or not patentable) that relate
to the actual or anticipated business, research and development or existing or
future products or services of the Company or its Affiliates and their
predecessors that are conceived, developed, made or reduced to practice by the
Executive while employed by the Company or any of its predecessors ("Work
Product") belong to the Company, and the Executive hereby assigns, and agrees to
assign, all of the Executive's rights, title and interest in and to the Work
Product to the Company. Any copyrightable work ("Copyrightable Work") prepared
in whole or in part by the Executive in the course of the Executive's work for
any of the foregoing entities shall be deemed a "work made for hire" under the
copyright laws, and the Company shall own all rights therein. To the extent that
it is determined, by any authority having jurisdiction, that any such
Copyrightable Work is not a "work made for hire," the Executive hereby assigns
and agrees to assign to the Company all the Executive's rights, title and
interest, including, without limitation, copyright in and to such Copyrightable
Work. The Executive shall promptly disclose such Work Product and Copyrightable
Work to the Board and perform all actions reasonably requested by the Board
(whether during or after the Employment Period) to establish and confirm the
Company's ownership (including, without limitation, assignments, consents,
powers of attorney and other instruments).

                  (e)      Enforcement. The Executive acknowledges that the
restrictions contained in this Section 9 are reasonable and necessary, in view
of the nature of the

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Company's business, in order to protect the legitimate interests of the Company,
and that any violation thereof would result in irreparable injury to the
Company. If, at the time of enforcement of this Section 9, a court holds that
the restrictions stated herein are unreasonable under circumstances then
existing, the parties hereto agree that the maximum duration, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area and that the court shall be allowed to revise
the restrictions contained herein to cover the maximum duration, scope and area
permitted by law. If the provisions of this Section 9 shall be deemed illegal by
any jurisdiction, the provisions of this Section 9 shall be deemed ineffective
within such jurisdiction.

                  Because the Executive's services are unique and because the
Executive has access to confidential information, the parties hereto agree that
money damages would be an inadequate remedy for any breach of any provision of
this Agreement. Therefore, in the event of a breach or threatened breach by the
Executive of any provision of this Agreement, the Company may, in addition to
other rights and remedies existing in its favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in order
to enforce, or prevent any violations of, the provisions hereof (without posting
a bond or other security).

                  10.      Notices. All notices, demands, requests or other
communications required or permitted to be given or made hereunder shall be in
writing and shall be delivered, telecopied or mailed by first class registered
or certified mail, postage prepaid, addressed as follows:

                  (a)      If to the Company:

                           Conexant Systems, Inc.
                           4000 MacArthur Boulevard, West Tower
                           Newport Beach, CA 92660
                           Fax: (949) 483-9475
                           Attention: Dennis E. O'Reilly, Senior Vice President,
                                      Chief Legal Officer and Secretary

                  (b)      If to the Executive:

at the address on the books and records of the Company at the time of such
notice, or to such other address as may be designated by either party in a
notice to the other. Each notice, demand, request or other communication that
shall be given or made in the manner described above shall be deemed
sufficiently given or made for all purposes three days after it is deposited in
the U.S. mail, postage prepaid, or at such time as it is delivered to the
addressee (with the return receipt, the delivery receipt, the answer back

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or the affidavit of messenger being deemed conclusive evidence of such delivery)
or at such time as delivery is refused by the addressee upon presentation.

                  11.      Severability. The invalidity or unenforceability of
any one or more provisions of this Agreement shall not affect the validity or
enforceability of the other provisions of this Agreement, which shall remain in
full force and effect.

                  12.      Survival. It is the express intention and agreement
of the parties hereto that the provisions of Sections 8, 9 and 10 shall survive
the termination of employment of the Executive. In addition, all obligations of
the Company to make payments hereunder shall survive any termination of this
Agreement on the terms and conditions set forth herein.

                  13.      Assignment. The rights and obligations of the parties
to this Agreement shall not be assignable or delegable, except that (i) in the
event of the Executive's death, the personal representative or legatees or
distributees of the Executive's estate, as the case may be, shall have the right
to receive any amount owing and unpaid to the Executive hereunder; and (ii) the
rights and obligations of the Company hereunder shall be assignable and
delegable in connection with any subsequent merger, consolidation, or sale of
all or substantially all of the assets of the Company and any similar event with
respect to any successor corporation. Notwithstanding anything herein to the
contrary, the rights and obligations of the Company hereunder shall inure to the
benefit of, and shall be binding upon, any successor to the Company or its
business by merger or otherwise, whether or not there is an express assignment,
delegation or assumption of such rights and obligations.

                  14.      Binding Effect. Subject to any provisions hereof
restricting assignment, this Agreement shall be binding upon the parties hereto
and shall inure to the benefit of the parties and their respective heirs,
devisees, executors, administrators, legal representatives, successors and
assigns.

                  15.      Amendment; Waiver. This Agreement shall not be
amended, altered or modified except by an instrument in writing duly executed by
the parties hereto. No waiver by either of the parties hereto of a breach of or
a default under any of the provisions of this Agreement shall thereafter be
construed as a waiver of any subsequent breach or default of a similar nature.
The failure of either of the parties, on one or more occasions, to enforce any
of the provisions of this Agreement or to exercise any right or privilege
hereunder shall not be construed as a waiver of any such provisions, rights or
privileges hereunder, or a waiver of any subsequent breach or default of a
similar nature.

                  16.      Headings. Section and subsection headings contained
in this Agreement are inserted for convenience of reference only, shall not be
deemed to be a

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part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.

                  17.      Governing Law. This Agreement, the rights and
obligations of the parties hereto, and any claims or disputes relating thereto,
shall be governed by and construed in accordance with the laws of the State of
New Jersey.

                  18.      Entire Agreement. Except as otherwise provided in
this Section 18, this Agreement constitutes the entire agreement between the
parties respecting the employment of the Executive and replaces and supersedes
the Replaced Agreements upon commencement of the Employment Period, there being
no representations, warranties or commitments between the parties except as set
forth herein. Notwithstanding any other provision of this Agreement to the
contrary, the Continued Agreement shall remain in full force and effect in
accordance with its terms, and in the event of any conflict between this
Agreement and the Continued Agreement, the agreement with terms more favorable
to the Executive will control, without duplication. The Executive agrees and
acknowledges that following the Effective Time, the Executive shall have no
rights under the Replaced Agreements and shall have no claim against the Company
or any of its Affiliates or predecessors with respect to the Replaced
Agreements.

                  19.      Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be an original and all of which shall
be deemed to constitute one and the same instrument.

                  20.      Definitions.

                  "Affiliate" means any entity from time to time designated by
the Board and any other entity directly or indirectly controlling or controlled
by or under common control with the Company. For purposes of this definition,
"control" means the power to direct the management and policies of such entity,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

                  "Board" means the board of directors of the Company.

                  "Cause" means (i) the Executive's indictment or conviction of
or entering into a plea of guilty or no contest to a felony or a crime involving
moral turpitude or the intentional commission of any other act or omission
involving dishonesty or fraud; (ii) habitual neglect of the Executive's duties
as described in Section 3, which neglect continues uncorrected for ten days
following written notice to the Executive by the

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Company; (iii) as determined by the Board, excessive absenteeism,
insubordination, misconduct or malfeasance; or (iv) violation of work rules or a
policy set by the Board.

                  "Date of Termination" means (i) if the Executive's employment
is terminated by the Executive's death, the date of the Executive's death; (ii)
if the Executive's employment is terminated because of the Executive's
Disability, thirty days after Notice of Termination, provided that the Executive
shall not have returned to the performance of the Executive's duties on a full
time basis during such thirty-day period; (iii) if the Executive's employment is
terminated by the Company for Cause, the date specified in the Notice of
Termination; (iv) if the Executive's employment is terminated pursuant to
delivery of a Notice of Non-Renewal, the end of the then effective term of
employment hereunder; or (v) if the Employment Period is terminated for any
other reason, the date on which Notice of Termination is given.

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                  IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement, or have caused this Agreement to be duly executed on their behalf, as
of the day and year first hereinabove written.

                                               CONEXANT SYSTEMS, INC.

                                               By: /s/ Michael H. Vishny
                                               ---------------------------------
                                                   Name: M.H. Vishny
                                                   Title: Sr. Vice President
                                                          Human Resources

                                               LEWIS C. BREWSTER

                                               /s/ Lewis C. Brewster
                                               ---------------------------------

                                       13<PAGE>
                                                                   EXHIBIT 10.25

      SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

         This Second Amendment to Amended and Restated Loan and Security
Agreement (this "Second Amendment") is dated as of April 30, 2004, by and
between ARLINGTON HOSPITALITY, INC., a Delaware corporation ("Borrower") and
LASALLE BANK NATIONAL ASSOCIATION, a national banking association ("Bank").

                                    RECITALS

         WHEREAS, the Borrower and the Bank are parties to that certain Amended
and Restated Loan and Security Agreement dated as of April 30, 2003 (as the same
has previously been amended, as the same is amended hereby and as the same may
be further amended, modified or restated from time to time, the "Loan
Agreement"), evidencing, among other things, the making of a certain revolving
loan by the Bank to the Borrower;

         WHEREAS, the Borrower has informed the Bank that it was in violation of
(i) the Tangible Net Worth covenant contained in Section 10.1 [Tangible Net
Worth] of the Loan Agreement for the period ending December 31, 2003 and (ii)
the Annual Income covenant contained in Section 10.6 [Annual Income] of the Loan
Agreement for the period ending December 31, 2003;

         WHEREAS, the Borrower has now requested that the Bank (i) waive the
violations of the Tangible Net Worth and the Annual Income covenants of the Loan
Agreement for the period ending December 31, 2003; (ii) amend the Tangible Net
Worth covenant contained in Section 10.1 [Tangible Net Worth] of the Loan
Agreement pursuant to the terms and conditions contained herein; (iii) amend the
Total Liabilities to Worth covenant contained in Section 10.2 [Total Liabilities
to Worth] of the Loan Agreement pursuant to the terms and conditions contained
herein; and (iv) renew the Revolving Loan for a period of one year to April 30,
2005, among other things; and

         WHEREAS, the Bank has agreed to (i) waive the violations of the
Tangible Net Worth and the Annual Income covenants of the Loan Agreement for the
period ending December 31, 2003; (ii) revise the Loan Agreement covenants
referenced above pursuant to the terms and conditions contained herein; and
(iii) renew the Revolving Loan for a period of one year to April 30, 2005, among
other things.

         NOW, THEREFORE, in consideration of the mutual promises herein
contained, and for other good and valuable consideration (the receipt,
sufficiency and adequacy of which are hereby acknowledged), the parties hereto
hereby agree as follows:

         1. Definitions. Terms capitalized herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Loan Agreement, as
amended from time to time.

         2. Amendments to Loan Agreement.

The Loan Agreement is hereby modified in the following manner:

<PAGE>

         a.       The definition of the term "Maturity Date" in Article 1
                  [DEFINTIONS] of the Loan Agreement is hereby deleted in its
                  entirety and replaced with the following:

                  "Maturity Date" shall be April 30, 2005, unless extended by
                  the Bank pursuant to any modification, extension, substitution
                  or renewal note executed by the Borrower and accepted by the
                  Bank in its sole and absolute discretion.

         b.       The definition of the term "Revolving Interest Rate" in
                  Article 1 [DEFINTIONS] of the Loan Agreement is hereby deleted
                  in its entirety and replaced with the following:

                  "Revolving Interest Rate" shall mean a fixed interest rate of
                  ten percent (10%) per annum.

         c.       The definition of the term "Revolving Loan Commitment" in
                  Article 1 [DEFINTIONS] of the Loan Agreement is hereby deleted
                  in its entirety and replaced with the following:

                  "Revolving Loan Commitment" shall mean (a) Four Million and
                  00/100 Dollars ($4,000,000.00) until February 27, 2005 and (b)
                  Three Million Five Hundred Thousand and 00/100 Dollars
                  ($3,500,000.00) from and after February 28, 2005; in each
                  case, as may be further reduced by (i) an amount equal to the
                  net proceeds to Borrower or any Subsidiary from the sale of
                  any Mortgaged Premises, after payment of the Senior Mortgage
                  Indebtedness thereon and costs of sale of such Mortgaged
                  Premises (except to the extent the Bank, in its sole
                  discretion, agrees to accept a Mortgage on a Substitute
                  Mortgaged Premises in lieu of a further reduction of its
                  commitment hereunder) or (ii) such other reserves as the Bank
                  determines in its sole discretion.

         d.       The definition of the term "Tangible Assets" in Article 1
                  [DEFINTIONS] of the Loan Agreement is hereby deleted in its
                  entirety and replaced with the following:

                  "Tangible Assets" shall mean the total of all assets appearing
                  on a consolidated balance sheet of the Borrower prepared in
                  accordance with GAAP (with inventory being valued at the lower
                  of cost or market), after deducting all proper reserves
                  (including reserves for Depreciation, obsolescence and
                  amortization but excluding non-cash impairment charges arising
                  out of the listing or marketing specific hotel properties for
                  sale until the date of the sale of such property, when any
                  loss on the sale shall be recognized) less the sum of (i)
                  goodwill, patents, trademarks, prepaid expenses, deposits, the
                  cash value of any life insurance policies owned by the
                  Borrower, deferred charges and other personal property which
                  is classified as intangible property in accordance with GAAP
                  and (ii) any amounts due from shareholders, affiliates,
                  officers or employees of the Borrower.

         e.       The following affirmative covenant is hereby added to the Loan
                  Agreement as Section 9.16 [Collateral Assignment of Proceeds
                  Agreement]:

                                       2

<PAGE>

                  The Borrower covenants and agrees that it will execute a
                  Collateral Assignment of Proceeds Agreement (in the form of
                  Exhibit B attached hereto) and cause any applicable Subsidiary
                  to execute to execute such Collateral Assignment of Proceeds
                  Agreement with respect to any existing or future contracts for
                  the sale of real property of Borrower or any Subsidiary of
                  Borrower contemporaneous with the execution of this Second
                  Amendment or any such contract, as applicable.

         f.       Section 10.1 [Tangible Net Worth] of the Loan Agreement is
                  hereby deleted in its entirety and replaced with the
                  following:

                  Tangible Net Worth. As at June 30, 2004 and as at the end of
                  each of its fiscal quarters thereafter, the Borrower and its
                  Subsidiaries shall maintain consolidated Tangible Net Worth in
                  an amount not less than Eight Million Five Hundred Thousand
                  and 00/100 Dollars ($8,500,000.00).

         g.       Section 10.2 [Total Liabilities to Worth] of the Loan
                  Agreement is hereby deleted in its entirety and replaced with
                  the following:

                  Total Liabilities to Worth. As of the end of each of its
                  fiscal quarters, the Borrower and its Subsidiaries shall
                  maintain a Total Liabilities to Worth Ratio of not greater
                  than 3.50 to 1.00.

         3. Conditions Precedent. The amendments contained in Section 2 herein
are subject to, and contingent upon, the Bank receiving each of the following
items, each in form and substance acceptable to the Bank, dated of even date
herewith:

         a.       Amendment. Four duly executed counterparts of this Second
                  Amendment signed by the Borrower;

         b.       Substitution Revolving Note. A duly executed Substitution
                  Promissory Note) in the form of Exhibit A attached hereto);

         c.       Collateral Assignment of Proceeds Agreement. Duly executed
                  counterparts of Collateral Assignment of Proceeds Agreements
                  (in the form of Exhibit B attached hereto) in connection with
                  the sale of the following real properties: 2820 Hotel Ave.,
                  Huntington, Indiana, 2245 Hadley Rd., Plainfield, Indiana and
                  1314 12th Street SW, LeMars, Iowa, executed by Borrower and
                  the appropriate Subsidiary of Borrower;

         d.       Fees. A commitment fee in the amount of $25,000.00 and a
                  covenant waiver fee in the amount of $10,000.00;

         e.       Secretary's Certificate. A secretary's Certificate issued by
                  the Secretary of Borrower consisting of the following items:
                  (i) Articles of Incorporation, (ii) By-laws, (iii) a
                  resolution of the directors of Borrower (A) authorizing the
                  execution and delivery of this Second Amendment and the
                  documents contemplated hereby, and (B) consenting to the
                  actions taken by Borrower in connection herewith and (iv) a
                  statement of incumbency; and

                                       3
<PAGE>

         f.       Other items. Such other documents, certificates, schedules,
                  exhibits, instruments and agreements as the Bank shall
                  reasonably request

         4. Waiver and Forbearance. The Bank hereby waives (i) the violations
created by the Borrower's failure to be in compliance with the Tangible Net
Worth covenant contained in Section 10.1 [Tangible Net Worth] of the Loan
Agreement as of December 31, 2003 and for any period prior thereto and any Event
of Default created thereby, and (ii) the violation created by the Borrower's
failure to be in compliance with the Annual Income covenant contained in Section
10.6 [Annual Income] of the Loan Agreement as of December 31, 2003 and for any
period prior thereto and any Event of Default created thereby. This waiver shall
be a limited waiver for the time period stated herein and shall not constitute a
course of conduct or dealing. Additionally, except as expressly provided herein,
this Second Amendment shall not constitute a waiver of any existing defaults of
the Borrower, and the Bank expressly reserves and retains all of their rights
and remedies under the Loan Agreement with respect to this or any other
violations or breaches of the Loan Agreement. Moreover, the Bank hereby agrees
to forbear from pursuing any of its rights and remedies under the Loan Agreement
as a result of the Events of Default created by the Borrower's violation of the
Tangible Net Worth covenant contained in Section 10.1 [Tangible Net Worth] of
the Loan Agreement as of December 31, 2003 and Borrower's violation of the
Annual Income covenant contained in Section 10.6 [Annual Income] of the Loan
Agreement as of December 31, 2003, all subject to the terms and provisions
hereof.

         5. Representations and Warranties. The Borrower hereby represents and
warrants to the Bank that on and as of the date hereof and after giving effect
to this Second Amendment:

         a.       The Borrower has the power and authority to execute, deliver
                  and perform its obligations under this Second Amendment. This
                  Second Amendment has been duly authorized by all necessary
                  corporate action of the Borrower. This Second Amendment
                  constitutes the legal, valid and binding obligation of the
                  Borrower, enforceable against each Borrower in accordance with
                  its terms, subject to the effect of any applicable bankruptcy,
                  insolvency, reorganization or similar law affecting creditor's
                  rights generally and general principles of equity;

         b.       The execution and delivery of this Second Amendment and the
                  performance by the Borrower of its obligations under the Loan
                  Agreement, as amended hereby, do not and will not conflict
                  with any provision of law or of the charter or bylaws of the
                  Borrower or of any agreement binding upon the Borrower;

         c.       As of the date hereof, no Event of Default under the Loan
                  Agreement or event or condition which, with the giving of
                  notice or the passage of time, shall constitute an Event of
                  Default, has occurred or is continuing; and

         d.       As of the date hereof, the representations and warranties of
                  the Borrower in the Loan Agreement are true and correct as
                  though made of even date herewith, except to the extent that
                  such representations and warranties expressly relate to an
                  earlier date.

         6. Intentionally Omitted.

                                       4
<PAGE>

         7. Reference to Loan Agreement; No Waiver.

         a.       References. Upon the effectiveness of this Second Amendment,
                  each reference in the Loan Agreement to "this Agreement,"
                  "hereunder," "hereof," "herein" or words of like import shall
                  mean and be a reference to the Loan Agreement, as amended
                  hereby.

         b.       No Waiver. The Bank's failure, at any time or times hereafter,
                  to require strict performance by the Borrower of any provision
                  or term of the Loan Agreement or this Second Amendment shall
                  not waive, affect or diminish any right of the Bank hereafter
                  to demand strict compliance and performance herewith or
                  therewith. Any suspension or waiver by the Bank of a breach of
                  this Second Amendment or any Event of Default under the Loan
                  Agreement shall not suspend, waive or affect any other breach
                  of this Second Amendment or any Event of Default under the
                  Loan Agreement or other Loan Documents, whether the same is
                  prior or subsequent thereto and whether of the same or of a
                  different kind or character. None of the undertakings,
                  agreements, warranties, covenants and representations of the
                  Borrower contained in this Second Amendment, shall be deemed
                  to have been suspended or waived by the Bank unless such
                  suspension or waiver is (i) in writing and signed by the Bank,
                  and (ii) delivered to the Borrower. In no event shall the
                  Bank's execution and delivery of this Second Amendment
                  establish a course of dealing among the Bank, the Borrower or
                  other obligor, or in any other way obligate the Bank to hereby
                  provide any amendments or waivers with respect to the Loan
                  Agreement. The terms and provisions of this Second Amendment
                  shall be limited precisely as written and, except as provided
                  in Section 4 hereof, shall not be deemed (i) to be a consent
                  to or a modification or waiver of any other term or condition
                  of the Loan Agreement or other Loan Documents or (ii) to
                  prejudice any right or remedy which the Bank may now have
                  under or in connection with the Loan Agreement.

         c.       Full Force and Effect. The Loan Agreement and other Loan
                  Documents shall remain in full force and effect and are hereby
                  ratified and confirmed.

         8. Successors and Assigns. This Second Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; provided, however, the Borrower may not assign any of its rights or
obligations under this Second Amendment without the prior written consent of
Bank.

         9. Severability. Wherever possible, each provision of this Second
Amendment shall be interpreted in such a manner so as to be effective and valid
under applicable law, but if any provision of this Second Amendment is held to
be prohibited by or invalid under applicable law, such provision or provisions
shall be ineffective only to the extent of such provision or invalidity, without
invalidating the remainder of this Second Amendment.

         10. Governing Law. This Second Amendment shall be deemed to be a
contract made under the laws of the State of Illinois, and the rights and
obligations of the parties hereunder shall

                                       5
<PAGE>

be construed in accordance with and be enforced and governed by the internal
laws of the State of Illinois, without regard to choice of law or conflicts of
law principles.

         11. Release by the Borrower. In further consideration of Bank's
execution of this Second Amendment, the Borrower hereby forever remises,
releases, acquits, satisfies and forever discharges the Bank and their
successors, assigns, affiliates, officers, employees, directors, agents and
attorneys (collectively, the "Releasees") from any and all claims, demands,
liabilities, disputes, damages, suits, controversies, penalties, fees, costs,
expenses, actions and causes of action (whether at law or in equity) and
obligations of every nature whatsoever whether liquidated or unliquidated, known
or unknown, matured or unmatured, fixed or contingent, that the Borrower ever
had, now have, or may have against or seek from any or all of the Releasees,
which arise from or relate to any actions which any or all of the Releasees may
have taken or omitted to take prior to the date this Second Amendment was
executed, including, without limitation, with respect to the Loan Agreement and
other Loan Documents, other than for the Bank's gross negligence or willful
misconduct. The Borrower acknowledges that the Bank is specifically relying upon
the representations, warranties and agreements contained herein and that such
representations, warranties and agreements constitute a material inducement to
the Bank in entering into this Second Amendment.

         12. Counterparts. This Second Amendment may be executed in one or more
counterparts, each of which taken together shall constitute one and the same
instrument, admissible into evidence

         13. Recitals. The Recitals set forth above are hereby incorporated
herein and made a part hereof.

         14. No Impairment. The Borrower and the Bank intend that this Second
Amendment shall not in any manner constitute a novation and shall in no way
adversely affect, diminish or impair the Loan Agreement, the Loan Documents or
the liens created thereby securing the payment of the Obligations and that such
liens are and shall be and remain prior liens and shall not in any manner be
waived or subordinated, the purpose of this Second Amendment being to carry
forward all liens security the Obligations, which are acknowledged by the
parties hereto to be valid and subsisting.

         15. Further Modifications. The Borrower acknowledges and agrees that by
the granting of this Second Amendment, the Bank shall not be in any way
obligated to further modify, extend, or amend the Loan Agreement or the Loan
Documents, or to forebear or forestall any collection efforts or other remedies
it may have under the Loan Agreement or the Loan Documents or at law.

                            [SIGNATURE PAGE FOLLOWS]

                                       6
<PAGE>

         IN WITNESS WHEREOF, the undersigned have caused this Second Amendment
to Loan Agreement to be duly executed and delivered as of the date first above
written.

                            BORROWER:

                            ARLINGTON HOSPITALITY, INC., a Delaware
                            corporation

                            By:  /s/ Jerry H. Herman
                                 ----------------------------------------------
                                 Name:  Jerry H. Herman
                                        ---------------------------------------
                                 Title: Chief Executive Officer
                                        ---------------------------------------

                            By:  /s/ James B. Dale
                                 ----------------------------------------------
                                 Name:  James B. Dale
                                        ---------------------------------------
                                 Title: Senior V.P. and Chief Financial Officer
                                        ---------------------------------------

                            Attest:

                            By:  /s/ Leon Vainikos
                                 ----------------------------------------------
                                 Name:  Leon Vainikos
                                        ---------------------------------------
                                 Title: General Counsel
                                        ---------------------------------------

                            BANK:

                            LASALLE BANK NATIONAL ASSOCIATION, a national
                            banking association

                            By:  /s/ Alan L. Clark
                                 ----------------------------------------------
                                 Name:  Alan L. Clark
                                        ---------------------------------------
                                 Title: Senior Vice President
                                        ---------------------------------------

                                       7
<PAGE>

                                    EXHIBIT A
                                     FORM OF

                           SECOND AMENDED AND RESTATED
                                 REVOLVING NOTE

                                                        Chicago, Illinois
$4,000,000.00                                           Dated: April 30, 2004
                                                        Due: April 30, 2005

                  FOR VALUE RECEIVED, ARLINGTON HOSPITALITY, INC., a Delaware
corporation (together with its respective successors and assigns, individually
and collectively, the "Borrower"), promises to pay to the order of LASALLE BANK
NATIONAL ASSOCIATION, a national banking association (the "Bank"), the principal
sum of FOUR MILLION AND 00/100 DOLLARS ($4,000,000.00), or, if less, the
aggregate unpaid principal amount of all advances made by the Bank to the
Borrower hereunder, on April 30, 2005.

                  This Note constitutes the Second Amended and Restated
Revolving Note issued pursuant to an Amended and Restated Loan and Security
Agreement dated as of April 30, 2003 as amended by that certain First Amendment
to Amended and Restated Loan and Security Agreement dated July 14, 2003 and that
certain Second Amendment to Amended and Restated Loan and Security Agreement of
even date herewith, all of which amended and restated a certain original Loan
and Security Agreement dated as of February 1, 2002, which had also been amended
by a certain First Amendment to Loan and Security Agreement dated as of August
9, 2002 and a certain Second Amendment to Loan and Security Agreement dated as
of December 10, 2002 (collectively all of the foregoing are hereinafter referred
to as the "Loan Agreement") by and between the Borrower and the Bank, to which
Loan Agreement reference is hereby made for a statement of the terms and
conditions under which the Revolving Loans evidenced hereby may be made and a
description of the terms and conditions upon which this Note may be prepaid in
whole or in part, but shall not constitute payment of that certain Revolving
Note dated February 1, 2002, as replaced by that certain Substitute Revolving
Note dated December 10, 2002, as replaced by that certain Amended and Restated
Revolving Note dated April 30, 2003 or constitute a novation thereof. In case an
Event of Default, as defined in the Loan Agreement, shall occur, the entire
unpaid principal and accrued interest may be automatically due and payable or
may be declared due and payable as provided in the Loan Agreement.

                  The unpaid principal shall bear interest from the date hereof
until paid as set forth in the Loan Agreement. Interest shall be payable in
accordance with the terms of the Loan Agreement.

                  This Note is subject to optional and mandatory prepayment in
certain circumstances, all as set forth in the Loan Agreement.

                  In the event that any installment of the principal of, or
interest on, this Note, is not paid when due (whether at stated maturity, by
acceleration or otherwise), the entire principal amount outstanding shall bear
interest at an annual rate equal to the Revolving Loan Interest

                                       8
<PAGE>

Rate (as defined in the Loan Agreement) plus five percent (5%) per annum, from
the due date until all overdue amounts have been paid in full.

                  Payments of both principal and interest are to be made in
lawful money of the United States of America at the offices of the Bank at 135
South LaSalle Street, Chicago, Illinois 60603, or at such other place as the
holder shall designate in writing to the maker.

                  This Note is secured by a security interest in the Collateral
(as defined in the Loan Agreement) and by those certain Mortgages (as defined in
the Loan Agreement) dated of even date herewith, each made by a Subsidiary (as
defined in the Loan Agreement) for the benefit of the Bank.

                  The maker and all endorsers hereby severally waive presentment
for payment, protest and demand, notice of protest, demand and of dishonor and
nonpayment of this Note. Borrower hereby agrees to pay all reasonable fees and
expenses incurred by the Bank or any subsequent holder, including the reasonable
fees of counsel, in connection with protection and enforcement of the rights of
the Bank or any subsequent holder under this Note, including without limitation
the collection of any amounts due under this Note and the protection and
enforcement of such rights in any bankruptcy, reorganization or insolvency
proceeding involving the Borrower.

                  This Note is binding upon Borrower and its successors and
assigns and shall inure to the benefit of the Bank and its successors and
assigns. This Note is made under and governed by the laws of the State of
Illinois, without regard to conflicts of laws principles.

                            [SIGNATURE PAGE FOLLOWS]

                                       9
<PAGE>

                  IN WITNESS WHEREOF, Borrower has executed this Amended and
Restated Revolving Note as of the day and year first above written.

                                      ARLINGTON HOSPITALITY, INC.
                                      a Delaware corporation

                                      By:
                                         --------------------------------------
                                      Its:
                                          -------------------------------------
                                      Name:
                                           ------------------------------------

                                  Attest:

                                  By:
                                      -----------------------------------------
                                      Name:
                                            -----------------------------------
                                      Title:
                                            -----------------------------------

                                       10
<PAGE>

                                    EXHIBIT B
                                     FORM OF

                   COLLATERAL ASSIGNMENT OF PROCEEDS AGREEMENT

         THIS COLLATERAL ASSIGNMENT OF PROCEEDS AGREEMENT (this "ASSIGNMENT") is
made as of April 30, 2004 between ARLINGTON HOSPITALITY, INC., a Delaware
corporation whose address is 2355 South Arlington Heights Road, Arlington
Heights, Illinois 60005 and AP HOTELS OF MISSISSIPPI, INC., a [_________]
corporation (collectively, the "ASSIGNOR"), and LASALLE BANK NATIONAL
ASSOCIATION, a national banking association, whose address is 135 South LaSalle
Street, Chicago, Illinois 60603 (the "BANK").

                                   BACKGROUND

         A. The Bank and the Assignor have entered into a financing arrangement
evidenced by (i) that certain Amended and Restated Loan and Security Agreement
dated as of April 30, 2003 as amended by that certain First Amendment to Amended
and Restated Loan and Security Agreement dated as of July 14, 2003 and that
certain Second Amendment to Amended and Restated Loan and Security Agreement
dated April 30, 2004 (collectively, the "LOAN AGREEMENT"), pursuant to which the
Bank may extend loans and other financial accommodations to the Assignor, and
(ii) the other documents referred to, related to, or contemplated in said Loan
Agreement (the foregoing agreements and documents, along with the Loan
Agreement, as amended, modified and supplemented from time to time are
collectively referred to as the "LOAN DOCUMENTS").

         B. As a condition to entering into the Second Amendment, and as
additional security for the repayment of all of the Obligations (as defined in
the Loan Agreement), the Bank has required that Assignor assign to the Bank all
the rights of Assignor in and to the net proceeds due Assignor under that
certain [______________________] dated as of [___________] by and between
Assignor and [____________] (the "Real Estate Contract") for the sale of the
real and personal property located at [________________], [_________],
Mississippi (the "Property").

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants set forth herein, and to secure the payment and performance of the
Obligations, Assignor agrees as follows:

         1. Assignment of Proceeds. Subject to the terms and provisions of this
Assignment, and as collateral security for the payment and performance of the
Obligations, Assignor hereby assigns, transfers and sets over to the Bank all of
Assignor's right, title and interest in all of the net proceeds due Assignor
under the Real Estate Contract after payment of (i) the Senior Mortgage
Indebtedness with regard to the Property, if any (as defined in the Loan
Agreement), (ii) reasonable and customary costs of sale of the Property and
(iii) deduction of the amount of Seller financing of the purchase price of the
Property, not to exceed fifteen percent (15%) of the gross purchase price as set
forth in the Real Estate Contract, pursuant to the terms and conditions of the
Real Estate Contract.

                                       11
<PAGE>

         2. Representations, Warranties and Promises. To the best of Assignor's
knowledge, after due inquiry, Assignor represents, warrants and agrees:

                  (a) The Real Estate Contract is valid and enforceable and has
not been altered, modified or amended in any manner whatsoever;

                  (b) Assignor is not in default under any of the terms,
covenants or conditions of the Real Estate Contract; and

                  (c) Assignor shall not, without the Bank's prior written
consent, assign or transfer all or any portion of the Real Estate Contract on
the proceeds due Assignor thereunder to any other party.

         3. Events of Default. Assignor shall be in default under this
Assignment upon the occurrence of any one or more of the following events or
conditions:

                  (a) Any failure of Assignor to comply with any of the terms
and conditions hereof or the Real Estate Contract, which failure remains uncured
after any applicable notice or grace period;

                  (b) the occurrence of any Event of Default under the Loan
Agreement which remains uncured after any applicable notice or grace period;

                  (c) the occurrence of a default or an event of default under
any of the other Loan Documents which remains uncured after any applicable
notice or grace period; and

                  (d) breach of any warranty, representation or promise in any
material respect made by Assignor under this Assignment.

         4. Right of the Bank Upon Default. After the occurrence of an Event of
Default Assignor agrees that, at the option of the Bank and in addition to such
other rights and remedies as may be afforded to the Bank under the Loan
Document, by law or in equity, the Bank shall have the right, without giving
notice to or obtaining the consent of Assignor, to exercise, enforce or avail
itself of any of the rights, powers, privileges, authorizations or benefits
assigned and transferred to the Bank pursuant to this Assignment.

         5. Appointment of the Bank. Assignor does hereby irrevocably appoint
the Bank as Assignor's true and lawful attorney, with full power (in the name of
Assignor or otherwise) to, after an Event of Default, enforce compliance by any
other party with any term or provision of the Real Estate Contract, to endorse
each and every check or other instrument or order in connection therewith, and
to file any claim, take any action, or institute any proceeding which the Bank
may deem to be necessary or advisable.

         6. Non-Assumption. This Assignment shall not be construed in any manner
whatsoever as an assumption by the Bank of any of the obligations of Assignor
under the Real Estate Contract or otherwise.

                                       12
<PAGE>

         7. Indemnification. Assignor shall and does hereby agree to indemnify
the Bank for, and to hold the Bank harmless from any and all liability, loss or
damage which may or might be incurred under the Real Estate Contract or under or
by reason of this Assignment and for any and all claims and demands whatsoever
which may be asserted against the Bank by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants, or
agreements contained in the Real Estate Contract, except to the extent any such
loss is due to the Bank's gross negligence or willful misconduct.

         8. Law Governing. This Assignment and the rights and obligations of the
parties hereunder shall be construed and interpreted in accordance with the laws
of the State of Illinois applicable to agreements made and to be wholly
performed in such state.

         9. Assigns. This Assignment and all rights and liabilities hereunder
shall inure to the benefit of the Bank and its successors and assigns, and shall
be binding on the Assignor and Assignor's administrators, successors and
assigns.

         10. Miscellaneous. All terms used in this Assignment which are not
defined herein but are defined in the Loan Agreement shall have the meanings
ascribed to them therein. It is further clarified that the bank's rights under
paragraphs 4 and 5 hereof may be exercised only after the occurrence of an Event
of Default.

         Assignor acknowledges that this Assignment is and shall be effective
upon execution by the Assignor and delivery to and acceptance hereof by the
Bank, and it shall not be necessary for the Bank to execute any acceptance
hereof or otherwise to signify or express its acceptance hereof to Assignor.

                            [SIGNATURE PAGE FOLLOWS]

                                       13
<PAGE>

         IN WITNESS WHEREOF, the Assignor and the Bank have executed this
Collateral Assignment of Proceeds Agreement as of the date first above written.

                                    ASSIGNOR:

                                    ARLINGTON HOSPITALITY, INC.,
                                    a Delaware corporation

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

                                    Attest:

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

                                    AP HOTELS OF MISSISSIPPI, INC., a
                                    [_________] corporation

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

                                    Agreed and accepted:

                                    BANK:

                                    LASALLE BANK NATIONAL ASSOCIATION,
                                    a national banking association

                                    By:
                                       ----------------------------------------
                                    Name:
                                         --------------------------------------
                                    Title:
                                          -------------------------------------

                                       14

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