Document:

AMENDMENT 1 TO EMPLOYMENT AGREEMENT

                                     PARTIES

     This Amendment 1 to Employment Agreement (this "Amendment") dated as of
August 29, 2002 is entered into by and between Telaxis Communications
Corporation, a Massachusetts corporation having its principal place of business
at 20 Industrial Drive East, South Deerfield, Massachusetts 01373 (the
"Company") and David L. Renauld, an individual with an address at 133 Turkey
Hill Road, Florence, Massachusetts 01062 (hereinafter called "Employee").

                                    RECITALS

     A. The Company and Employee are parties to an Employment Agreement, dated
as of December 20, 2000 (the "Agreement"). Capitalized terms used in this
Amendment without definition have the meanings given to those terms in the
Agreement.

     B. The parties desire to make certain changes to the Agreement.

                               TERMS OF AMENDMENT

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

     1. The third sentence of Section 2 of the Agreement is hereby amended by
replacing the current text of that sentence in its entirety with the following:

     The employment period described above is subject to earlier termination
pursuant to Section 3.6, 3.7.2, 4 or 5.

     2. Section 3.7.1 of the Agreement is hereby amended by replacing the
current text of that section in its entirety with the following:

          Termination By Company. In the event the Company terminates Employee's
          -----------------------
          employment under this Agreement pursuant to Section 5, the Company
          shall provide to Employee, in exchange for a release (in a form
          consistent with past practice of the Company) as to any and all claims
          Employee may have against the Company (which release, however, shall
          not release any claims relating to indemnification, contribution or
          insurance coverage), the Severance Benefits for (a) an eleven (11)
          month period after termination if termination shall occur (i) at any
          time prior to any Change in Control, (ii) after any Approved Change in
          Control, or (iii) more than one (1) year after an Unapproved Change in
          Control, or (b) a twenty-four (24) month period after termination if
          termination shall occur within one (1) year after an Unapproved Change
          in Control.

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     3. Section 3.7.2 of the Agreement is hereby amended by replacing the
current text of that section in its entirety with the following:

          Termination by Employee For Good Reason. After a Change in Control and
          ----------------------------------------
          provided Employee has Good Reason, Employee may terminate his
          employment under this Agreement upon fifteen (15) days written notice
          to the Company and the Company shall provide to Employee, in exchange
          for a release (in a form consistent with past practice of the Company)
          as to any and all claims Employee may have against the Company (which
          release, however, shall not release any claims relating to
          indemnification, contribution or insurance coverage), the Severance
          Benefits for an eleven (11) month period.

     4. Section 3.7.3(c) of the Agreement is hereby amended by replacing the
current text of that section in its entirety with the following:

          "Severance Benefits" shall mean Employee's base salary (for the
          applicable severance period) at the highest level in effect during the
          90-day period immediately preceding the date of termination, payable
          in full on the last day of the Employment Period, less required
          payroll deductions.

     5. On the last day of the Employment Period, the Company shall pay Employee
(using Employee's base salary at the highest level in effect during the 90-day
period immediately preceding the date of termination) for all unpaid vacation
days Employee shall have accrued through the last day of the Employment Period,
less any required payroll deductions.

     6. To the extent Employee is not fully vested on the last day of the
Employment Period, the Company shall immediately take all actions necessary and
appropriate to accelerate the vesting of Employee relating to the Company's
401(k) plan or, if the Company's 401(k) plan does not permit such acceleration,
provide equivalent cash compensation to Employee.

     7. Employee agrees to provide consultation and advice to the Company at
mutually acceptable times and locations for a period of up to three (3) months
following termination of employment, but in no event shall Employee be required
to provide consultation or advice to the extent that it interferes with any new
employment he has.

     8. Each of the parties agrees to execute, acknowledge, deliver and perform,
or cause to be executed, acknowledged, delivered and performed, at any time, or
from time to time, as the case may be, all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney and assurances as may be
necessary or proper to carry out the provisions or intent of this Amendment.

     9. Except as specifically amended by this Amendment, the Agreement shall
remain in full force and effect.

                            [SIGNATURE PAGE FOLLOWS]

                                       2
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                                    EXECUTION

     The parties executed this Amendment as a sealed instrument as of the date
first above written, whereupon it became binding in accordance with its terms.

                                         TELAXIS COMMUNICATIONS CORPORATION

                                         By:  /s/ John L. Youngblood
                                         ---------------------------
                                         Name:  John L. Youngblood
                                         Title:  President and CEO

                                         /s/ David L. Renauld
                                         -----------------------
                                         Name:  David L. Renauld

                                       3EXHIBIT 10.7

                           ARLINGTON HOSPITALITY INC.

                 INDEPENDENT DIRECTOR INDEMNIFICATION AGREEMENT

This  Indemnification  Agreement  ("Agreement")  is made as of this _____ day of
____________,  2002,  by and between  Arlington  Hospitality,  Inc.,  a Delaware
corporation (the "Company"), and ______________________ ("Indemnitee").

         WHEREAS,  the Company and Indemnitee  recognize the significant cost of
directors'  liability  insurance  and the general  reductions in the coverage of
such insurance;

         WHEREAS,  the Company and Indemnitee  further recognize the substantial
increase in corporate litigation in general, subjecting independent directors to
expensive  litigation  risks  at the  same  time as the  coverage  of  liability
insurance has been severely limited; and

         WHEREAS,  the  Company  desires to attract  and retain the  services of
highly  qualified  individuals,  such as  Indemnitee,  to serve  as  independent
directors of the Company and to  indemnify  its  independent  directors so as to
provide them with the maximum protection permitted by law.

         NOW,  THEREFORE,  in  consideration  for  Indemnitee's  services  as  a
director of the  Company,  the Company and  Indemnitee  hereby agree as follows:
Indemnification.

              Third Party Proceedings. The Company shall indemnify Indemnitee if
Indemnitee  is or  was a  party  or is  threatened  to be  made a  party  to any
threatened,  pending or completed  action,  suit,  proceeding or any alternative
dispute  resolution  mechanism,  whether  civil,  criminal,   administrative  or
investigative (other than an action by or in the right of the Company) by reason
of the  fact  that  Indemnitee  is or was a  director  of  the  Company,  or any
subsidiary  of the Company,  or by reason of the fact that  Indemnitee is or was
serving at the request of the Company as a director,  officer, employee or agent
of another corporation,  partnership,  joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments,  fines and amounts paid
in settlement (if such  settlement is approved in advance by the Company,  which
approval shall not be unreasonably withheld) actually and reasonably incurred by
Indemnitee  in  connection  with such action,  suit or  proceeding if Indemnitee
acted in good faith and in a manner Indemnitee  reasonably  believed to be in or
not opposed to the best  interests  of the  Company,  and,  with  respect to any
criminal action or proceeding,  had no reasonable cause to believe  Indemnitee's
conduct was  unlawful.  The  termination  of any action,  suit or  proceeding by
judgment,  order, settlement,  conviction,  or upon a plea of nolo contendere or
its equivalent,  shall not, of itself,  create a presumption that Indemnitee did
not act in good faith and in a manner which Indemnitee reasonably believed to be
in or not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that Indemnitee's
conduct was unlawful.

              Proceedings  By or in the Right of the Company.  The Company shall
indemnify Indemnitee if Indemnitee was or is a party or is threatened to be made
a party to any  threatened,  pending  or  completed  action or suit by or in the
right of the Company or any  subsidiary  of the Company to procure a judgment in
its  favor by reason of the fact that  Indemnitee  is or was a  director  of the
Company,  or any  subsidiary  of the  Company,  or by  reason  of the fact  that
Indemnitee  is or was  serving  at the  request of the  Company  as a  director,
officer, employee or agent of another corporation,  partnership,  joint venture,
trust or other enterprise,  against expenses (including attorneys' fees) and, to
the fullest  extent  permitted by law,  amounts paid in settlement  actually and
reasonably  incurred by Indemnitee in connection  with the defense or settlement

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of such  action  or suit if  Indemnitee  acted  in good  faith  and in a  manner
Indemnitee  reasonably believed to be in or not opposed to the best interests of
the  Company,  except  that no  indemnification  shall be made in respect of any
claim,  issue or matter as to which  Indemnitee  shall have been  adjudged to be
liable to the  Company  unless and only to the extent that the Court of Chancery
of the State of  Delaware  or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in  view  of all  the  circumstances  of the  case,  Indemnitee  is  fairly  and
reasonably  entitled to indemnity for such expenses  which the Court of Chancery
of the State of Delaware or such other court shall deem proper.  Notwithstanding
the foregoing, Indemnitee shall not be entitled to to be indemnified pursuant to
this  Section  1(b)  for  amounts  paid in  settlement  in  connection  with any
threatened, pending or completed action or suit which was approved or authorized
by the Board of Directors of the Company.

              Mandatory  Payment of Expenses.  To the extent that Indemnitee has
been  successful  on the merits or otherwise  in defense of any action,  suit or
proceeding  referred  to in  Subsections  (a) and (b) of this  Section  1, or in
defense of any claim,  issue or matter therein,  Indemnitee shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
Indemnitee in connection therewith.

Agreement  to  Serve.  In  consideration  of the  protection  afforded  by  this
Agreement,  Indemnitee  agrees  to  serve  at least  for the 90 days  after  the
effective  date of this  Agreement as a director  and not to resign  voluntarily
during  such period  without  the written  consent of a majority of the Board of
Directors. Following the applicable period set forth above, Indemnitee agrees to
continue  to serve in such  capacity at the will of the Company so long as he is
duly  appointed  or elected and  qualified  in  accordance  with the  applicable
provisions  of the Bylaws of the  Company or any  subsidiary  of the  Company or
until such time as he tenders his resignation in writing.

Expenses; Indemnification Procedure.

              Advancement  of Expenses.  The Company  shall advance all expenses
incurred by Indemnitee in connection with the investigation, defense, settlement
or appeal of any civil or criminal  action,  suit or  proceeding  referenced  in
Section 1(a) or (b) hereof (but not amounts  actually  paid in settlement of any
such action,  suit or proceeding).  Indemnitee  hereby  undertakes to repay such
amounts  advanced  only if,  and to the  extent  that,  it shall  ultimately  be
determined  that  Indemnitee is not entitled to be indemnified by the Company as
authorized  hereby.  The  advances  to be made  hereunder  shall  be paid by the
Company to Indemnitee  within thirty (30) days  following  delivery of a written
request  therefor  by  Indemnitee  to the  Company  (accompanied  by  reasonably
detailed supporting documentation of the amount sought).

              Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition
precedent to his right to be indemnified under this Agreement,  give the Company
notice in writing as soon as  practicable  of any claim made against  Indemnitee
for which  indemnification will or could be sought under this Agreement.  Notice
to the Company  shall be directed to the President of the Company at the address
shown on the  signature  page of this  Agreement  (or such other  address as the
Company  shall  designate  in writing  to  Indemnitee).  Notice  shall be deemed
received  three  business  days after the date  postmarked  if sent by  domestic
certified or registered mail, properly addressed,  five business days if sent by
airmail to a country outside of North America;  otherwise notice shall be deemed
received  when such  notice  shall  actually  be  received  by the  Company.  In
addition,  Indemnitee shall give the Company such information and cooperation as
it may reasonably require and as shall be within Indemnitee's power.

              Procedure.  Any  indemnification  and  advances  provided  for  in
Section 1 and this  Section 3 shall be made no later than thirty (30) days after
receipt of the written  request of Indemnitee.  If a claim under this Agreement,
under any  statute,  or under any  provision  of the  Company's  Certificate  of

<PAGE>

Incorporation  or Bylaws providing for  indemnification,  is not paid in full by
the Company within thirty (30) days after a written  request for payment thereof
has first been  received by the  Company,  Indemnitee  may, but need not, at any
time thereafter bring an action against the Company to recover the unpaid amount
of the claim and, subject to Section 13 of this Agreement, Indemnitee shall also
be entitled to be paid for the expenses (including  attorneys' fees) of bringing
such  action.  It shall be a defense to any such  action  (other  than an action
brought to enforce a claim for expenses  incurred in connection with any action,
suit or proceeding in advance of its final  disposition) that Indemnitee has not
met the standards of conduct which make it permissible  under applicable law for
the Company to indemnify Indemnitee for the amount claimed. However,  Indemnitee
shall be entitled to receive interim payments of expenses pursuant to Subsection
3(a) unless and until such defense has been finally  adjudicated  by court order
or judgment and up to one appeal of any such order or judgment if such appeal is
timely filed and pursued by  Indemnitee.  If such appeal is not timely filed and
pursued by  Indemnitee,  or if any such appeal is dismissed or denied,  then the
Company shall not be required to provide interim  payments of expenses  pursuant
to Subsection  3(a). It is the parties'  intention that if the Company  contests
Indemnitee's  right to  indemnification,  the question of Indemnitee's  right to
indemnification shall be for the court to decide, and neither the failure of the
Company  (including  its Board of  Directors,  any  committee or subgroup of the
Board of Directors, independent legal counsel, or its stockholders) to have made
a   determination   that   indemnification   of  Indemnitee  is  proper  in  the
circumstances  because  Indemnitee  has met the  applicable  standard of conduct
required  by  applicable  law,  nor  an  actual  determination  by  the  Company
(including  it Board of  Directors,  any  committee  or subgroup of the Board of
Directors,  independent legal counsel,  or its stockholders) that Indemnitee has
not met such  applicable  standard of conduct,  shall create a presumption  that
Indemnitee has or has not met the applicable standard of conduct.

              Notice to Insurers.  If, at the time of the receipt of a notice of
a claim  pursuant to Section  3(b) hereof,  the Company has  director  liability
insurance in effect, the Company shall give prompt notice of the commencement of
such  proceeding to the insurers in accordance  with the procedures set forth in
the  respective  policies.   The  Company  shall  thereafter  take  commercially
reasonable  action to cause such  insurers to pay, on behalf of the  Indemnitee,
all amounts  payable as a result of such proceeding in accordance with the terms
of such policies.

              Selection of Counsel.  In the event the Company shall be obligated
under  Section  3(a)  hereof  to pay  the  expenses  of any  proceeding  against
Indemnitee, the Company, if appropriate, shall be entitled to assume the defense
of such proceeding,  with counsel  approved by Indemnitee,  upon the delivery to
Indemnitee  of written  notice of its election to do so. After  delivery of such
notice, approval of such counsel by Indemnitee and the retention of such counsel
by the  Company,  the  Company  will not be  liable  to  Indemnitee  under  this
Agreement  for any fees of counsel  subsequently  incurred  by  Indemnitee  with
respect to the same  proceeding,  provided  that (i)  Indemnitee  shall have the
right to employ his counsel in any such proceeding at Indemnitee's  expense; and
(ii)  if (A) the  employment  of  counsel  by  Indemnitee  has  been  previously
authorized by the Company,  (B) Indemnitee shall have reasonably  concluded that
there may be a conflict of interest  between the Company and  Indemnitee  in the
conduct  of any such  defense,  or (C) the  Company  shall  not,  in fact,  have
employed  counsel to assume the  defense of such  proceeding,  then the fees and
expenses of Indemnitee's counsel shall be at the expense of the Company.
Additional Indemnification Rights; Nonexclusivity.

              Scope.  Notwithstanding any other provision of this Agreement, the
Company  hereby  agrees  to  indemnify  the  Indemnitee  to the  fullest  extent
permitted by law,  notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement,  the Company's Certificate

<PAGE>

of  Incorporation,  the  Company's  Bylaws  or by  statute.  In the event of any
change,  after the date of this Agreement,  in any applicable law,  statute,  or
rule which expands the right of a Delaware  corporation to indemnify a member of
its board of directors, such changes shall be, ipso facto, within the purview of
Indemnitee's  rights and Company's  obligations,  under this  Agreement.  In the
event of any change in any  applicable  law,  statute or rule which  narrows the
right of a Delaware corporation to indemnify a member of its board of directors,
such changes,  to the extent not otherwise required by such law, statute or rule
to be applied to this  Agreement  shall have no effect on this  Agreement or the
parties' rights and obligations hereunder.

              Nonexclusivity.  The  indemnification  provided by this  Agreement
shall not be deemed  exclusive of any rights to which Indemnitee may be entitled
under the Company's Certificate of Incorporation, its Bylaws, any agreement, any
vote of stockholders or disinterested  Directors, the General Corporation Law of
the State of Delaware, or otherwise,  both as to action in Indemnitee's official
capacity and as to action in another  capacity  while  holding such office.  The
indemnification  provided under this  Agreement  shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified  capacity even
though he may have  ceased to serve in such  capacity at the time of any action,
suit or other covered proceeding.

Partial  Indemnification.  If Indemnitee is entitled under any provision of this
Agreement  to  indemnification  by the  Company  for  some or a  portion  of the
expenses,  judgments,  fines or penalties actually or reasonably incurred by him
in the  investigation,  defense,  appeal or  settlement of any civil or criminal
action, suit or proceeding,  but not, however, for the total amount thereof, the
Company  shall  nevertheless  indemnify  Indemnitee  for  the  portion  of  such
expenses, judgments, fines or penalties to which Indemnitee is entitled.

Mutual  Acknowledgement.  Both the Company and  Indemnitee  acknowledge  that in
certain  instances,  Federal law or  applicable  public  policy may prohibit the
Company from  indemnifying  its  directors  under this  Agreement or  otherwise.
Indemnitee  understands and acknowledges  that the Company has undertaken or may
be  required  in the  future  to  undertake  with the  Securities  and  Exchange
Commission  to submit  the  question  of  indemnification  to a court in certain
circumstances  for a determination of the Company's right under public policy to
indemnify Indemnitee.

Director  Liability  Insurance.  The Company shall,  from time to time, make the
good faith  determination  whether or not it is  practicable  for the Company to
obtain and maintain a policy or policies of insurance with  reputable  insurance
companies  providing  the directors of the Company with coverage for losses from
wrongful  acts, or to ensure the Company's  performance  of its  indemnification
obligations under this Agreement.  Among other considerations,  the Company will
weigh the costs of obtaining  such  insurance  coverage  against the  protection
afforded by such  coverage.  In all  policies of director  liability  insurance,
Indemnitee  shall  be  named  as an  insured  in  such a  manner  as to  provide
Indemnitee  the same rights and benefits as are  accorded to the most  favorably
insured of the Company's directors.  Notwithstanding the foregoing,  the Company
shall have no  obligation  to obtain or maintain  such  insurance if the Company
determines in good faith that such insurance is not reasonably available, if the
premium costs for such insurance are  disproportionate to the amount of coverage
provided, if the coverage provided by such insurance is limited by exclusions so
as to provide  an  insufficient  benefit,  if  Indemnitee  is covered by similar
insurance  maintained by a subsidiary or parent of the Company,  or if the Board
of Directors in good faith  determines that maintaining such insurance is not in
the best interest of the Company's stockholders.

Severability.  Nothing  in this  Agreement  is  intended  to require or shall be
construed as  requiring  the Company to do or fail to do any act in violation of
applicable law. The Company's inability, pursuant to court order, to perform its

<PAGE>

obligations  under  this  Agreement  shall  not  constitute  a  breach  of  this
Agreement.  The provisions of this  Agreement  shall be severable as provided in
this Section 8. If this  Agreement or any portion hereof shall be invalidated on
any  ground by any  court of  competent  jurisdiction,  then the  Company  shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated,  and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.

Exceptions.  Any other  provision  herein to the contrary  notwithstanding,  the
Company shall not be obligated pursuant to the terms of this Agreement:

              Claims  Initiated by Indemnitee.  To indemnify or advance expenses
to  Indemnitee  with  respect  to  proceedings  or claims  initiated  or brought
voluntarily  by  Indemnitee  and not by way of defense,  except with  respect to
proceedings  brought to  establish or enforce a right to  indemnification  under
this  Agreement  or any other  statute or law or  otherwise  as  required  under
Section 145 of the Delaware General Corporation Law, but such indemnification or
advancement  of expenses may be provided by the Company in specific cases if the
Board of Directors has approved the initiation or bringing of such suit; or

              Lack of Good  Faith.  To  indemnify  Indemnitee  for any  expenses
incurred  by the  Indemnitee  with  respect  to  any  proceeding  instituted  by
Indemnitee  to enforce or  interpret  this  Agreement,  if a court of  competent
jurisdiction  determines  that  each  of the  material  assertions  made  by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or

              Insured   Claims.   To  indemnify   Indemnitee   for  expenses  or
liabilities of any type whatsoever  (including,  but not limited to,  judgments,
fines,  ERISA excise taxes or penalties,  and amounts paid in settlement)  which
have been paid directly to or on behalf of  Indemnitee  by an insurance  carrier
under a policy of directors' liability insurance maintained by the Company.

              Claims Under Section 16(b).  To indemnify  Indemnitee for expenses
and the payment of profits  arising from the purchase and sale by  Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.

Construction of Certain Phrases.

              For purposes of this Agreement,  references to the "Company" shall
include, in addition to the resulting corporation,  any constituent  corporation
(including  any  constituent of a constituent)  absorbed in a  consolidation  or
merger which, if its separate existence had continued,  would have had power and
authority to indemnify its directors, so that if Indemnitee is or was a director
of such  constituent  corporation,  or is or was  serving at the request of such
constituent  corporation  as a director,  officer,  employee or agent of another
corporation,  partnership, joint venture, trust or other enterprise,  Indemnitee
shall stand in the same position  under the  provisions of this  Agreement  with
respect to the resulting or surviving  corporation as Indemnitee would have with
respect to such constituent corporation if its separate existence had continued.

              For purposes of this Agreement,  references to "other enterprises"
shall include  employee  benefit plans;  references to "fines" shall include any
excise taxes  assessed on Indemnitee  with respect to an employee  benefit plan;
and  references  to "serving at the request of the  Company"  shall  include any
service  as a director  of the  Company  which  imposes  duties on, or  involves
services  by, such  director  with  respect to an  employee  benefit  plan,  its
participants,  or beneficiaries;  and if Indemnitee acted in good faith and in a
manner Indemnitee  reasonably believed to be in the interest of the participants
and  beneficiaries  of an employee  benefit plan,  Indemnitee shall be deemed to
have acted in a manner "not  opposed to the best  interests  of the  Company" as
referred to in this Agreement.

<PAGE>

Counterparts.  This Agreement may be executed in one or more counterparts,  each
of which shall  constitute an original.

Successors and Assigns. This Agreement shall be binding upon the Company and its
successors  and  assigns,  and shall  inure to the  benefit  of  Indemnitee  and
Indemnitee's estate, heirs, legal representatives and assigns.

Attorneys'  Fees. In the event that any action is instituted by Indemnitee under
this Agreement to enforce or interpret any of the terms hereof, Indemnitee shall
be  entitled  to be paid all court  costs  and  expenses,  including  reasonable
attorneys' fees, incurred by Indemnitee with respect to such action, unless as a
part of such action, the court of competent jurisdiction determines that each of
the material  assertions  made by Indemnitee as a basis for such action were not
made in good faith or were frivolous. In the event of an action instituted by or
in the name of the Company  under this  Agreement or to enforce or interpret any
of the terms of this  Agreement,  Indemnitee  shall be  entitled  to be paid all
court costs and expenses,  including  attorneys' fees, incurred by Indemnitee in
defense of such action (including with respect to Indemnitee's counterclaims and
cross-claims  made in such  action),  unless as a part of such  action the court
determines that each of Indemnitee's  material defenses to such action were made
in bad faith or were frivolous.

Notice.  All  notices,  requests,  demands and other  communications  under this
Agreement shall be in writing and shall be deemed duly given (i) if delivered by
hand and receipted for by the party addressee,  on the date of such receipt,  or
(ii) if mailed by domestic certified or registered mail with postage prepaid, on
the third business day after the date postmarked. Addresses for notice to either
party are as shown on the signature page of this  Agreement,  or as subsequently
modified by written notice.

Consent to  Jurisdiction.  The Company and  Indemnitee  each hereby  irrevocably
consent  to the  jurisdiction  of the  courts of the State of  Delaware  for all
purposes in  connection  with any action or  proceeding  which  arises out of or
relates  to this  Agreement  and agree  that any  action  instituted  under this
Agreement shall be brought only in the state courts of the State of Delaware.

Choice of Law. This Agreement shall be governed by and its provisions  construed
in  accordance  with the laws of the State of Delaware,  as applied to contracts
between  Delaware  residents  entered into and to be performed  entirely  within
Delaware without regard to the conflict of law principles thereof.

Period of  Limitations.  No legal action shall be brought and no cause of action
shall  be  asserted  by or in the  right  of  the  Company  against  Indemnitee,
Indemnitee's   estate,   spouse,   heirs,   executors   or   personal  or  legal
representatives  after the expiration of three years from the date of accrual of
such cause of action,  and any claim or cause of action of the Company  shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action  within such  two-year  period;  provided,  however,  that if any shorter
period of limitations is otherwise  applicable to any such cause of action, such
shorter period shall govern.

Subrogation.  In the event of payment under this Agreement, the Company shall be
subrogated  to the extent of such  payment to all of the rights of  recovery  of
Indemnitee,  who shall execute all documents required and shall do all acts that
may be necessary to secure such rights and to enable the Company  effectively to
bring suit to enforce such rights.

Amendment  and   Termination.   No  amendment,   modification,   termination  or
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall  constitute  a waiver  of any other  provisions  hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

Integration  and  Entire  Agreement.   This  Agreement  sets  forth  the  entire
understanding  between the parties hereto and supersedes and merges all previous
written  and  oral  negotiations,  commitments,  understandings  and  agreements

<PAGE>

relating to the subject matter hereof between the parties hereto.

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

                                               Arlington Hospitality Inc.

                                               ---------------------------------
                                               Signature of Authorized Signatory

                                               ---------------------------------
                                               Print Name and Title

                                               Address:
                                                       -------------------------

AGREED TO AND ACCEPTED:

INDEMNITEE:

--------------------------------------
Signature

--------------------------------------

Address:
        ------------------------------

        ------------------------------

        ------------------------------

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