Document:

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               AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

         This Agreement dated as of August 31, 1998 is among DYAX CORP.
(formerly known as Biotage, Inc.), a Delaware corporation (the "Company"),
and certain stockholders of the Company that are signatories hereto
(including for this purpose certain stockholders who have agreed in writing
to be bound by the terms of this Agreement).

                                 R E C I T A L S

         This Agreement amends and restates in its entirety the Amended and
Restated Registration Rights Agreement dated as of October 30, 1996 among the
Company and certain of such stockholders, as the same has been amended from
time to time prior to the date hereof (the "Prior Agreement").

         Each Existing Stockholder (as defined below) owns (i) that number of
shares of Class A Series 1 Preferred Stock, par value $0.01 per share, of the
Company (the "SERIES 1 STOCK"), and/or Registrable Shares (as defined below)
of Common Stock, par value $0.01 per share (the "COMMON STOCK"), of the
Company set forth opposite the name of such Existing Stockholder on SCHEDULE
I and/or (ii) that number of shares of the Company's Common Stock, Class A
Series 2 Preferred Stock (the "SERIES 2 STOCK") and/or Class A Series 3
Preferred Stock (the "SERIES 3 STOCK") and/or Class A Series 4 Preferred
Stock (the "SERIES 4 STOCK") set forth opposite the name of such Existing
Stockholder on SCHEDULE II.

         The Company is preparing to issue as of the date of this Agreement
shares of its Class A Series 5 Preferred Stock (the "SERIES 5 STOCK" and,
collectively with the Series 1 Stock, the Series 2 Stock, the Series 3 Stock
and the Series 4 Stock, the "PREFERRED STOCK") and to extend to the
purchasers of such Series 5 Stock (the "ADDITIONAL STOCKHOLDERS") certain of
the rights provided to the Existing Stockholders under the Prior Agreement.
The Preferred Stock is convertible into Common Stock pursuant to the terms of
the Company's Restated Certificate of Incorporation. The Additional
Stockholders and their holdings of Series 5 Stock purchased in the First
Closing (as that term is defined in the Convertible Preferred Stock Purchase
Agreement (the "Purchase Agreement") of even date herewith between the
Company and the Additional Stockholders) are listed on SCHEDULE III. Schedule
III of the Agreement may be revised from time to time to include more
Additional Stockholders following Subsequent Closings under the Purchase
Agreement.

         The Company and the Stockholders (as defined below) deem it to be in
their respective best interests to set forth the rights of the Stockholders
in connection with public offerings and sales of the Common Stock.

         NOW, THEREFORE, in consideration of the premises and mutual
covenants and obligations hereinafter set forth, the Company and the
Stockholders hereby agree as follows:

         SECTION 1.  CERTAIN DEFINITIONS.

         As used in this Agreement, the following terms have the following
respective meanings:

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         "COMMISSION" means the Securities and Exchange Commission, or any
other Federal agency at the time administering the Securities Act and/or the
Exchange Act.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934 or any
similar Federal statute, and the rules and regulations of the Commission
issued under such Act, as they each may, from time to time, be in effect.

         "EXISTING STOCKHOLDERS" means, individually and collectively, the
holders of Registrable Shares who were parties to the Prior Agreement.

         "INITIAL PUBLIC OFFERING" shall mean the closing of the first fully
underwritten, firm commitment public offering pursuant to an effective
Registration Statement covering the offer and sale by the Company of its
Common Stock, resulting in aggregate net proceeds to the Company (after
deducting underwriting discounts and commissions) of at least $20,000,000 and
at a per share price of at least (i) $10.00 per share if the offering is
closed prior to August 31, 1999 and (ii) $15.00 if the offering is closed
thereafter (each such amount to be equitably adjusted upon the occurrence of
any stock split, stock dividend, combination, reclassification or other
similar event).

         "REGISTRABLE SHARES" means (i) the shares of Common Stock issued or
issuable upon the conversion of the Preferred Stock, (ii) the shares of
Common Stock listed on SCHEDULE I attached hereto issued upon conversion of
the former Class A Preferred Stock and the former Class B Preferred Stock of
the Company and (iii) any other shares of Common Stock of the Company issued
or issuable in respect of such shares of Common Stock or in respect of shares
of the Preferred Stock (because of stock splits, stock dividends,
reclassifications, recapitalizations or similar events). Wherever reference
is made in this Agreement to a request or consent of holders of a certain
percentage of Registrable Shares, or to a number or percentage of Registrable
Shares held by a Stockholder, such reference shall be deemed to mean
Registrable Shares on a Common Stock equivalent basis and to include all
shares of Preferred Stock convertible into Registrable Shares.

         "REGISTRATION EXPENSES" has the meaning ascribed thereto in Section
5.

         "REGISTRATION STATEMENT" means a registration statement filed by the
Company with the Commission for a public offering and sale of securities of
the Company (other than a registration statement on Form S-8 or Form S-4, or
their successors, or any other form for a limited purpose, or any
registration statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation).

         "SECURITIES ACT" means the Securities Act of 1933 or any similar
Federal statute, and the rules and regulations of the Commission issued under
such Act, as they each may, from time to time, be in effect.

         "STOCKHOLDERS" means, individually and collectively, the Existing
Stockholders, the Additional Stockholders, and any other stockholders (or any
of them) of the Company that are signatories hereto, and any persons or
entities to whom the rights granted under this Agreement are transferred by
such stockholders (or any of them), and their successors or assigns to the
extent permitted by Section 14 hereof.

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         SECTION 2.  REQUIRED REGISTRATIONS.

         (a) Commencing on the earlier of (i) February 28, 2001, or (ii) one
(1) year after the Initial Public Offering of the Company, a Stockholder or
Stockholders holding in the aggregate at least 50% of the Registrable Shares
or stockholders holding in the aggregate at least 50% of the Series 5 Stock
or the Common Stock into which the Series 5 Stock is convertible, may
request, in writing, that the Company effect the registration on Form S-1 or
Form SB-2 (or any successor forms) Registrable Shares having an anticipated
net aggregate offering price in excess of $5,000,000 (after deducting
underwriting discounts and commissions). Any demand registration pursuant to
this Section 2 must be underwritten on a firm commitment basis and the right
of other Stockholders to participate shall be conditioned on such
Stockholders' participation in such underwriting upon the same terms and
conditions. Upon receipt of any such request, the Company shall promptly give
written notice of such proposed registration to all Stockholders. Such
Stockholders shall have the right, by giving written notice to the Company
within 30 days after the Company provides its notice, to elect to have
included in such registration such of their Registrable Shares as such
Stockholders may request in such notice of election, subject to the approval
of the underwriter managing the offering. Thereupon, the Company shall, as
expeditiously as possible, use its best efforts to effect the registrations,
on Form S-1 or Form SB-2 (or any successor form), of all Registrable Shares
which the Company has been requested to so register.

         (b) At any time after the Company becomes eligible to file a
Registration Statement on Form S-3 (or any successor form relating to
secondary offerings), a Stockholder or Stockholders holding in the aggregate
Registrable Shares having a market value of $1,000,000, may request the
Company, in writing, to effect the registration on Form S-3 (or any successor
form), of all or such portion of the Registrable Shares as such holder or
holders shall specify. Upon receipt of any such request, the Company shall
promptly give written notice of such proposed registration to all
Stockholders. Such Stockholders shall have the right, by giving written
notice to the Company within 30 days after the Company provides its notice,
to elect to have included in such registration such of their Registrable
Shares as such Stockholders may request in such notice of election.
Thereupon, the Company shall, as expeditiously as possible, use its best
efforts to effect the registration on Form S-3 (or any successor form) of all
Registrable Shares which the Company has been so requested to register.

         (c) The Company shall not be required to effect more than two
registrations pursuant to paragraph (a) above provided however the Additional
Stockholders shall be entitled to demand the filing of a registration
statement pursuant to paragraph (a) above on not less than two occasions
whether or not they have included any of their Registrable Shares in prior
Registration Statements filed as a result of the demand by other Stockholders
pursuant to paragraph (a) above. Unless otherwise requested by the selling
Stockholders, a registration pursuant to paragraph (a) above shall not count
as one of the permitted registrations until it has become effective. Unless
otherwise requested by the selling Stockholders, the last registration
pursuant to paragraph (a) above shall not count as one of the permitted
registrations unless the holders of Registrable Shares are able to register
and sell at least ninety percent (90%) of the Registrable Shares requested to
be included in such registration. In addition, the Company shall not be
required to effect any registration (other than on Form S-3 or any successor
form relating to secondary offerings) within six months after the effective
date of any other Registration Statement of the

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Company. Under paragraph (b) above, the Stockholder or Stockholders holding
in the aggregate Registrable Shares having a market value of $1,000,000 shall
have the right to require the Company to effect an unlimited number of
registrations on Form S-3, however, in any one year the Company shall not be
required to effect more than one such registration on Form S-3, and any such
registration on Form S-3 shall be separated from any previous registration by
a period of at least six months.

         (d) If at the time of any request to register Registrable Shares
pursuant to this Section 2, the Company is engaged or has firm plans to
engage within 90 days of the time of the request in a registered public
offering as to which the Stockholders may include Registrable Shares pursuant
to Section 3 or is engaged in any other activity which, in the good faith
determination of the Company's Board of Directors, would be adversely
affected by the requested registration to the material detriment of the
Company, then the Company may at its option direct that such request be
delayed for a period not in excess of one hundred twenty (120) days from the
effective date of such offering or the date of commencement of such other
material activity, as the case may be, such right to delay a request to be
exercised by the Company not more than once.

         SECTION 3.  INCIDENTAL REGISTRATION.

         (a) Whenever the Company proposes to file a Registration Statement
(other than pursuant to Section 2), it will, prior to such filing, give
written notice to all Stockholders of its intention to do so and, upon the
written request of a Stockholder or Stockholders given within 20 days after
the Company provides such notice (which request shall state the intended
method of disposition of such Registrable Shares), the Company shall use its
best efforts to cause all Registrable Shares which the Company has been
requested to register to be registered under the Securities Act to the extent
necessary to permit their sale or other disposition in accordance with the
intended methods of distribution specified in the request of such
Stockholder(s); provided that the Company shall have the right to postpone or
withdraw any registration effected pursuant to this Section 3 without
obligation to any Stockholder.

         (b) In connection with any offering under this Section 3 involving
an underwriting, the Company shall not be required to include any Registrable
Shares in such underwriting unless the holders thereof accept the terms of
the underwriting as agreed upon between the Company and the underwriters
selected by it, and then only in such quantity as will not, in the opinion of
the underwriters, jeopardize the success of the offering by the Company. If
in the Opinion of the managing underwriter the registration of all, or part
of, the Registrable Shares which the holders have requested to be included
would materially and adversely affect such public offering, then the Company
shall be required to include in the underwriting only that number of
Registrable Shares, if any, which the managing underwriter believes may be
sold without causing such adverse effect. In the event of such a reduction in
the number of shares to be included in the underwriting, all shares other
than Registrable Shares shall be excluded from the underwriting before any
Registrable Shares are excluded from the underwriting and the holders of
Registrable Shares who have requested registration shall participate in the
underwriting pro rata based upon their total ownership of Registrable Shares
(or in any other proportion as agreed upon by such holders) and if any holder
would thus be entitled to include more shares than such holder requested to
be registered, the excess shall be allocated among other requesting holders
pro rata based on their ownership of Registrable Shares.

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         SECTION 4. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of this Agreement to use its best efforts to
effect the registration of any of the Registrable Shares under the Securities
Act, the Company shall:

         (a) provide to the selling Stockholders drafts of the Registration
Statement and an opportunity to comment thereon and participate in the
preparation thereof prior to filing the Registration Statement with the
Commission;

         (b) file with the Commission the Registration Statement and use its
best efforts to cause the Registration Statement to become and remain
effective;

         (c) as expeditiously as possible prepare and file with the
Commission any amendments and supplements to the Registration Statement and
the prospectus included in the Registration Statement as may be necessary to
keep the Registration Statement effective for a period of not less than 120
days from the effective date;

         (d) as expeditiously as possible furnish to each selling Stockholder
such reasonable numbers of copies of the prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and
such other documents as the selling Stockholders may reasonably request in
order to facilitate the public sale or other disposition of the Registrable
Shares owned by the selling Stockholders; and

         (e) as expeditiously as possible use its best efforts to register or
qualify the Registrable Shares covered by the Registration Statement under
the securities or blue sky laws of such states as the selling Stockholders
shall reasonably request, and do any and all other acts and things that may
be necessary or desirable to enable the selling Stockholders to consummate
the public sale or other disposition in such jurisdictions of the Registrable
Shares owned by the selling Stockholders; PROVIDED, HOWEVER, that the Company
shall not be required in connection with this paragraph (e) to qualify as a
foreign corporation or execute a general consent to service of process in any
jurisdiction.

         (f) obtain for the selling Stockholders such opinions of counsel to
the Company or comfort letters from the Company's accountants, addressed to
the selling Stockholders, as may be deemed reasonably requested by the
selling Stockholders holding a majority of the Registrable Shares included in
the Registration Statement.

         If the Company has delivered preliminary or final prospectuses to
the selling Stockholders and after having done so the prospectus is amended
to comply with the requirements of the Securities Act, the Company shall
promptly notify the Selling Stockholders and, if requested, the selling
Stockholders shall immediately cease making offers of Registrable Shares and
shall return all prospectuses to the Company. The Company shall promptly
provide the selling Stockholders with revised prospectuses and, following
receipt of the revised prospectuses, the selling Stockholders shall be free
to resume making offers of the Registrable Shares.

         SECTION 5. ALLOCATION OF EXPENSES. The Company shall pay the
Registration Expenses for the registrations requested by the Stockholders
pursuant to Section 2 of this Agreement and of all registrations pursuant to
Section 3 of this Agreement. If a registration

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requested by the Stockholders pursuant to paragraph (a) of Section 2 is
withdrawn at the request of the Stockholders requesting it (other than as a
result of information concerning the business or financial condition of the
Company which is made known to the Stockholders after the date on which such
registration was requested) and if the requesting Stockholders elect not to
have such registration counted as a registration requested under paragraph
(a) of Section 2, the requesting Stockholders shall pay the Registration
Expenses of such registration pro rata in accordance with the number of their
Registrable Shares previously proposed to be included in such registration.
For purposes of this Agreement, the term "Registration Expenses" shall mean
all expenses incurred by the Company in complying with this Agreement,
including, without limitation, all registration and filing fees, exchange
listing fees, printing expenses, fees and disbursements of counsel for the
Company and one counsel for the selling Stockholders, state blue sky fees and
expenses, and the expense of any special audits incident to or required by
any such registration, but excluding underwriting discounts and selling
commissions. Such underwriting discounts and selling commissions shall be
borne pro rata by the selling Stockholders in accordance with the number of
their Registrable Shares included in such registration.

         SECTION 6. INDEMNIFICATION. In the event of any registration of any
of the Registrable Shares under the Securities Act pursuant to this
Agreement, the Company will indemnify and hold harmless the seller of such
Registrable Shares, each underwriter of such Registrable Shares and each
other person if any, who controls such seller or underwriter within the
meaning of the Securities Act or the Exchange Act against any losses, claims,
damages or liabilities, joint or several, to which such seller, underwriter
or controlling person may become subject under the Securities Act, the
Exchange Act, state securities laws or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in such Registration Statement, or
any amendment or supplement to such Registration Statement, or arise out of
or are based upon the omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and the Company will reimburse such seller, underwriter or
controlling person for any legal or any other expenses reasonably incurred by
such seller, underwriter or controlling person, respectively, in connection
with investigating or defending any such loss, claim, damage, liability or
action; PROVIDED, HOWEVER, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out
of or is based upon any untrue statement or omission made in such
Registration Statement, preliminary prospectus or prospectus, or any such
amendment or supplement, in reliance upon and in conformity with information
furnished to the Company, in writing, by or on behalf of such seller,
underwriter or controlling person specifically for use in the preparation
thereof.

         In the event of any registration of any of the Registrable Shares
under the Securities Act pursuant to this Agreement, each seller of
Registrable Shares included in such registration, severally and not jointly,
will indemnify and hold harmless the Company, each of its directors and
officers and each underwriter (if any) and each person, if any, who controls
the Company or any such underwriter within the meaning of the Securities Act
or the Exchange Act, against any losses, claims, damages or liabilities,
joint or several, to which the Company, such directors and officers,
underwriter or controlling persons may become under the Securities Act,
Exchange Act,

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state securities laws or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement under which such Registrable Shares were
registered under the Securities Act, any preliminary prospectus or final
prospectus contained in the Registration Statement, or any amendment or
supplement to the Registration Statement, or arise out of or are based upon
any omission or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, if
the statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of such
seller, specifically for use in connection with the preparation of such
Registration Statement, prospectus, amendment or supplement; PROVIDED,
HOWEVER, that the obligations of such seller hereunder shall be limited to an
amount equal to the proceeds to such seller from Registrable Shares sold in
such registration. Indemnification of any underwriter pursuant to this
Section 6 shall not be interpreted as providing relief of such underwriter
from any or all of its due diligence obligations. Further, an underwriter
shall not be entitled to indemnification pursuant to this subsection in the
event that it fails to deliver to any selling Stockholder any preliminary or
final or revised prospectus, as required by the Rules and Regulations of the
Commission. Finally, in the event that any error in a preliminary prospectus
of the Company is subsequently corrected in the final prospectus of the
Company for a particular offering, no indemnification shall be provided
pursuant to this Section unless the Company has provided the seller of
Registrable Shares against whom indemnification is sought with sufficient
copies of the final prospectus and any amendments and supplements thereto in
accordance with the Company's obligations under Section 4 of this Agreement.

         Each party entitled to indemnification under this Section 6 (the
"Indemnified Party ) shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such
claim or any litigation resulting therefrom; PROVIDED, that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval shall
not be unreasonably withheld); and, PROVIDED, FURTHER, that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement. The Indemnified
Party may participate in such defense at such party's expense; PROVIDED,
HOWEVER, that the Indemnifying Party shall pay such expense if representation
of such Indemnified Party by the counsel retained by the Indemnifying Party
would be inappropriate due to actual or potential differing interests between
the Indemnified Party and any other party represented by such counsel in such
proceeding. No Indemnifying Party, in the defense of any such claim or
litigation shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party of a release from all liability in respect of such
claim or litigation, and no Indemnified Party shall consent to entry of any
judgment or settle such claim or litigation without the prior written consent
of the Indemnifying Party.

         Except to the extent otherwise provided above, if the
indemnification provided for in this Section 6 is for any reason unavailable
or insufficient to hold harmless an indemnified party then each such
indemnifying party in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of the losses, claims, damages,

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judgments or liabilities referred to above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, the
holders of Registrable Shares and the underwriters from the offering of the
shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company, the holders of Registrable Shares and the
underwriters in connection with the statement or omission which resulted in
such losses, claims, damages, judgments or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the
Company, the holders of Registrable Shares and the underwriters shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the shares (before deducting expenses) received by the Company
and the holders of Registrable Shares and the total underwriting discounts
and commissions received by the underwriters bear to each other. The relative
fault of the Company, the holders of Registrable Shares and the underwriters
shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, the holder of Registrable Shares or the underwriters and that
party's relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statements or omissions.

         SECTION 7. INDEMNIFICATION WITH RESPECT TO UNDERWRITTEN OFFERING. In
the event that Registrable Shares are sold pursuant to a Registration
Statement in an underwritten offering pursuant to Section 2, the Company
agrees to enter into an underwriting agreement containing customary
representations and warranties with respect to the business and operations of
an issuer of the securities being registered and customary covenants and
agreements to be performed by such issuer, including without limitation
customary provisions with respect to indemnification by the Company of the
underwriters of such offering.

         SECTION 8. INFORMATION BY HOLDER. Each holder of Registrable Shares
included in any registration shall furnish to the Company such information
regarding such holder and the distribution proposed by such holder as the
Company may request in writing and as shall be required in connection with
any registration, qualification or compliance referred to in this Agreement.

         SECTION 9. "STAND-OFF" AGREEMENT. Stockholders, if requested by the
Company and an underwriter of Common Stock or other securities of the
Company, shall agree not to sell or otherwise transfer or dispose of any
Registrable Shares of the Company held by such Stockholder for a specified
period of time (not to exceed 180 days) following the effective date of a
Registration Statement; PROVIDED THAT, all Stockholders holding more than
five percent of the outstanding Common Stock and all officers and directors
of the Company enter into similar agreements. Such agreement shall be in
writing in a form satisfactory to the Company and such underwriter. The
Company may impose stop-transfer instructions with respect to the Registrable
Shares or other securities subject to the foregoing restriction until the end
of the stand-off period.

         SECTION 10. RULE 144 REQUIREMENTS. With a view to making available
to the Stockholders the benefits of Rule 144 promulgated under the Securities
Act and any other rule or regulation of the Commission that may at any time
permit a Stockholder to sell securities of the Company to the public without
registration, the Company agrees to use its best efforts to:

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         (a) make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;

         (b) use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act (at any time after it has become subject
to such reporting requirements); and

         (c) furnish to any holder of Registrable Shares upon request a
written statement by the Company as to its compliance with the reporting
requirements of said Rule 144 (at any time after 90 days after the closing of
the first sale of securities by the Company pursuant to a Registration
Statement), and of the Securities Act and the Exchange Act (at any time after
it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports and
documents of the Company as such holder may reasonably request to avail
itself of said Rule 144 or any similar rule or regulation of the Commission
allowing it to sell any such securities without registration.

         SECTION 11. SELECTION OF UNDERWRITER. In the case of any
registration effected pursuant to Section 2, the requesting Stockholders
shall have the right to designate the managing underwriter, subject to the
approval of the Company, which approval may not be unreasonably withheld or
delayed.

         SECTION 12. NO CONFLICT OF RIGHTS. The Company shall not, after the
date hereof, grant any registration rights which would adversely affect or
impair the registration rights granted hereby.

         SECTION 13. SUCCESSORS AND ASSIGNS. Except as provided in Section 14
hereof, the provisions of this Agreement shall be binding upon and inure to
the benefit of, the respective successors, assigns, heirs, executors and
administrators of the parties hereto.

         SECTION 14. ASSIGNMENT. (a) The rights granted to the Stockholders
under this Agreement may not be transferred except to (i) a member of such
Stockholder's immediate family or a trust for the exclusive benefit of one or
more persons who are members of such Stockholder's immediate family, either
during the lifetime of such Stockholder or in death by will or intestacy or
(ii) any transferee or successor who is (x) a general or limited partner,
officer or other affiliate of such Stockholder or any other affiliate of the
Company (regardless of whether such transferee is a direct or indirect
competitor of the Company) or (y) who acquires at least 80,000 Registrable
Shares (equitably adjusted to reflect stock splits, dividends, combinations
and like adjustments) (or such lesser number of shares as may constitute such
Stockholder's entire holding of Registrable Shares) and who is not directly
or indirectly a competitor of the Company or a partner, officer, director,
employee or owner of more than 1% of the outstanding securities of any
publicly traded direct or indirect competitor of the Company; PROVIDED,
HOWEVER, that the Company is given written notice by the transferee stating
the name and address of the transferee and identifying the securities with
respect to which such rights are being assigned. Notwithstanding the
foregoing restrictions with respect to competitors, a professional
institutional investor owning up to 20% of the outstanding securities of a
direct or indirect competitor of the Company may be a transferee of such
rights provided that it complies with the provisions of the previous
sentence. For purposes hereof the term "affiliate" shall mean,

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with respect to the Company, any officer, director or holder of 5% or more of
any class of the Company's stock and, with respect to any Stockholder, any
person who or which controls, is controlled by or under common control with
such Stockholder.

         (b) TRANSFEREES. Any transferee to whom rights under this Agreement
are transferred shall, as a condition to such transfer, deliver to the
Company a written instrument by which such transferee agrees to be bound by
the obligations imposed upon the Stockholders hereby to the same extent as if
such transferee were a Stockholder hereunder.

         (c) SUBSEQUENT TRANSFEREES. A transferee to whom rights are
transferred pursuant to this Section 14 may not again transfer such rights to
any other person or entity, other than as provided in (a) and (b) above.

         SECTION 15. TERMINATION OF REGISTRATION RIGHTS. Notwithstanding any
other provision of this Agreement, the Company shall not be required pursuant
to this Agreement (i) to give notice of any proposed registration pursuant to
Section 2 or Section 3 to any Stockholder if, based on record holdings, such
Stockholder could then sell pursuant to Rule 144 (or any similar rule) under
the Securities Act in a single 90-day period all Registrable Shares
registered in the name of such holder, or (ii) to include in any offering any
Registrable Shares of a Stockholder holding fewer than 100,000 Registrable
Shares if such Stockholder could then sell pursuant to Rule 144 (or any
similar rule) under the Securities Act in a single 90-day period all of such
Registrable Shares requested to be registered in such offering, provided,
however, that any Additional Stockholder that is a limited partnership or
limited liability company shall be entitled to include any of its Registrable
Shares in a proposed registration to the extent that such Additional
Stockholder requires such registration for distribution to its limited
partner or member.

         SECTION 16. NOTICES. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be
delivered by hand, telecopy or telegram, overnight courier or first class
certified or registered mail, return receipt requested, postage prepaid:

         If to the Company, to Dyax Corp., One Kendall Square, Building 600
-5th Floor, Cambridge, MA 02139, Attn: President, or such other address or
addresses as may have been furnished in writing by the Company to the
Stockholders, with a copy to Nathaniel S. Gardiner, Esq., Palmer & Dodge LLP,
One Beacon Street, Boston, Massachusetts 02108;

         If to any Stockholder, to its address set forth on SCHEDULE I,
SCHEDULE II or SCHEDULE III (with a copy to additional parties so listed for
any such Stockholder), as the case may be, or such other address or addresses
as may have been furnished to the Company in writing by such Stockholder.

         Notices provided in accordance with this Section 16 shall be deemed
delivered on the date of personal delivery, telecopy or telegram, the next
business day after delivery by overnight courier, or 48 hours after the date
of mailing.

                                        10

<PAGE>

         SECTION 17. ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter, including without limitation the Prior
Agreement.

         SECTION 18. AMENDMENTS AND WAIVERS. This Agreement may be amended
and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the holders of a
majority of the Registrable Shares; provided, however, that no amendment may
be made that would adversely affect the distinct rights of the Additional
Stockholders under Section 2 hereof without the express consent of the
Additional Stockholders holding at least 50.1% of the Series 5 Stock. Any
amendment or waiver effected in accordance with this Section 18 shall be
binding upon each holder of Registrable Shares and the Company. No waivers of
or exceptions to any term, condition or provision of this Agreement, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.

         SECTION 19. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Execution of an
undertaking agreeing to be bound by the terms of this Agreement shall be
deemed to be a counterpart signature to this Agreement.

         SECTION 20. HEADINGS. The headings of the sections, subsections and
paragraphs of this Agreement have been added for convenience only and shall
not be deemed to be a part of this Agreement.

         SECTION 21. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provision.

         SECTION 22. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.

                  [Remainder of Page Intentionally left blank]

                           [Signature Pages to follow]

                                         11

<PAGE>

         IN WITNESS WHEREOF, the undersigned have hereunto set their hand as
of the day and year first above written.

                                  COMPANY:

                                  DYAX CORP.

                                  By:      /s/ HENRY E. BLAIR
                                     --------------------------------
                                           Henry E. Blair
                                           President

                                        12

<PAGE>

                                  STOCKHOLDERS:

                                  OAK INVESTMENT PARTNERS IV
                                  By Oak Associates IV, Limited Partnership, as
                                  General Partner

                                  By:      /s/ EILEEN M. MORE
                                     --------------------------------
                                           Eileen M. More
                                           General Partner

                                  OAK IV AFFILIATES FUND
                                  By Oak IV Affiliates, as General Partner

                                  By:      /s/ EILEEN M. MORE
                                     --------------------------------
                                           Eileen M. More
                                           General Partner

                                  GATEWAY VENTURE PARTNERS
                                  III, L.P.

                                  By Gateway Associates, L.P.,
                                           as General Partner

                                  By: /s/ CONSTANTINE ANAGNOSTOPOULOS
                                     --------------------------------
                                           Constantine Anagnostopoulos

                                  H&Q HEALTHCARE INVESTORS

                                  By:      /s/ ALAN G. CARR
                                     --------------------------------
                                           Alan G. Carr
                                           President

                                          13

<PAGE>

                                  H&Q LIFE SCIENCES INVESTORS

                                  By:      /s/ ALAN G. CARR
                                     --------------------------------
                                           Alan G. Carr
                                           President

                                  LOEB INVESTORS CO. 106C

                                  By Pinpoint Partners Corporation,
                                           as General Partner

                                  By:      /s/ THOMAS KEMPNER
                                     --------------------------------
                                           Thomas Kempner
                                           President

                                  LOEB INVESTORS CO. 106

                                  By Pinpoint Partners Corporation,
                                           as General Partner

                                  By:      /s/ THOMAS KEMPNER
                                     --------------------------------
                                           Thomas Kempner
                                           President

                                  LOEB INVESTORS CO. 106A

                                  By Pinpoint Partners Corporation,
                                           as General Partner

                                  By:      /s/ THOMAS KEMPNER
                                     --------------------------------
                                           Thomas Kempner
                                           President

                                            14

<PAGE>

                                  LOEB INVESTORS CO. 106B

                                  By Pinpoint Partners Corporation,
                                           as General Partner

                                  By:      /s/ THOMAS KEMPNER
                                     --------------------------------
                                           Thomas Kempner
                                           President

                                  /s/ RICHARD SILVERMAN
                                  -----------------------------------
                                  Richard Silverman

                                  PRINCE VENTURE PARTNERS IV
                                  LIMITED PARTNERSHIP

                                  By Prince Ventures Limited Partnership,
                                           as General Partner

                                  By:      /s/ JAMES FORDYCE
                                     --------------------------------
                                           James Fordyce
                                           General Partner

                                  /s/ CHARLES I. TYLER
                                  -----------------------------------
                                  Charles I. Tyler

                                  /s/ MARGARET B. TYLER
                                  -----------------------------------
                                  Margaret B. Tyler

                                  -----------------------------------
                                  George J. Hill

                                  /s/ JOSEPH BUTERA
                                  -----------------------------------
                                  Joseph Butera

                                           15

<PAGE>

                                  /s/ HENRY R. LEWIS
                                  -----------------------------------
                                  Henry R. Lewis

                                  /s/ SIDNEY R. KNAFEL
                                  -----------------------------------
                                  Sidney R. Knafel

                                  /s/ HENRY E. BLAIR
                                  -----------------------------------
                                  Henry E. Blair

                                  ZINSMEYER TRUSTS PARTNERSHIP

                                  By:      /s/ ANDREW R. ZINSMEYER
                                     --------------------------------
                                           Andrew R. Zinsmeyer
                                           Managing Partner

                                  BANCBOSTON VENTURES, INC.

                                  By:      /s/ MARCIA T. BATES
                                     --------------------------------
                                           Marcia T. Bates
                                           Managing Director

                                  GMMI SBIC, INC.

                                  By GMM Investors Corp.,
                                  as General Partner

                                  By:      /s/ JAMES GOODMAN
                                     --------------------------------
                                           James Goodman
                                           President

                                         16

<PAGE>

                                  BERWICK PARTNERS II

                                  By:      /s/ ANTHONY BIANCANELLO
                                     --------------------------------
                                           Anthony Biancanello
                                           General Partner

                                  NEW YORK LIFE INSURANCE
                                  COMPANY

                                  By:      /s/ RICHARD F. DRAKE
                                     --------------------------------
                                           Richard F. Drake
                                           Director, Venture Capital

                                  /s/ PETER FEINSTEIN
                                  -----------------------------------
                                  Peter Feinstein

                                  HEALTHCARE VENTURES V, L.P.

                                  By HealthCare Partners V, L.P.,
                                  as General Partner

                                  By: /s/ JEFFREY STEINBERG
                                     --------------------------------
                                           Jeffrey Steinberg,
                                           Administrative Partner

                                        17

<PAGE>

                                  /s/ ROBERT ANDERSON
                                  -----------------------------------
                                  Robert Anderson

                                  -----------------------------------
                                  Mike Grossman

                                  /s/ FRANK HANO
                                  -----------------------------------
                                  Frank Hano

                                  /s/ JOHN NESTLE
                                  -----------------------------------
                                  John Nestle

                                  /s/ JACK ANDEREGG
                                  -----------------------------------
                                  Jack Anderegg

                                  -----------------------------------
                                  William Nichols

                                         18

<PAGE>

                                  RHO MANAGEMENT TRUST II

                                  By Rho Management Company, Inc.
                                          as Investment Advisor

                                  By:      /s/ JOSHUA RUCH
                                     --------------------------------
                                           Joshua Ruch

                                  HUDSON TRUST
                                  c/o Summit Asset Management

                                  By:      /s/ SCOTT M. CICCONE
                                     --------------------------------
                                           Scott M. Ciccone
                                           Attorney-in-fact

                                  ALTA BIOPHARMA PARTNERS, L.P.

                                  By Alta BioPharma Management, LLC

                                  By:   /s/ DANIEL JANNEY
                                     --------------------------------
                                           Daniel Janney
                                           Member

                                  ALTA EMBARCADERO BIOPHARMA, LLC

                                  By Alta Embarcadero BioPharma, LLC

                                  By:   /s/ GARRETT GRUENER
                                     --------------------------------
                                           Garrett Gruener
                                           Member

                                    /s/ HENRY E. BLAIR
                                  -----------------------------------
                                  Henry E. Blair

                                    /s/ JOSEPH L. BUTERA
                                  -----------------------------------
                                  Joseph L. Butera

                                         19

<PAGE>

                                    /s/ AUSTIN R. CAMPBELL
                                  -----------------------------------

                                    /s/ MYRA B. CAMPBELL
                                  -----------------------------------
                                  Austin R. Campbell and Myra B. Campbell
                                  as Co-Owners

                                  CGC INVESTORS, L.P.

                                  By:  /s/ A. BARR DOLAN
                                     --------------------------------
                                           A. Barr Dolan
                                           General Partner

                                  CGC INVESTORS, L.P.

                                  By:  /s/ STEVEN P. BIRD
                                     --------------------------------
                                           Steven P. Bird
                                           General Partner

                                  CHARTER GROWTH CAPITAL, L.P.

                                  By:  /s/ A. BARR DOLAN
                                     --------------------------------
                                           A. Barr Dolan
                                           General Partner

                                             20

<PAGE>

                                  CHARTER GROWTH CAPITAL, L.P.

                                  By:  /s/ STEVEN P. BIRD
                                     --------------------------------
                                           Steven P. Bird
                                           General Partner

                                  CHARTER GROWTH CAPITAL
                                  CO-INVESTMENT FUND, L.P.

                                  By:  /s/ A. BARR DOLAN
                                     --------------------------------
                                           A. Barr Dolan
                                           General Partner

                                  CHARTER GROWTH CAPITAL
                                  CO-INVESTMENT FUND, L.P.

                                  By:  /s/ STEVEN P. BIRD
                                     --------------------------------
                                           Steven P. Bird
                                           General Partner

                                   /s/ THOMAS J. DIETZ
                                  -----------------------------------
                                  Thomas J. Dietz

                                   /s/ ROBERT A. DISHMAN
                                  -----------------------------------
                                  Robert A. Dishman

                                  DYAX CHASE PARTNERS
                                  (ALTA BIO), LLC

                                  By Alta Chase BioPharma Management, LLC

                                  By:  /s/ DANIEL JANNEY
                                     --------------------------------
                                           Daniel Janney
                                           Member

                                        22

<PAGE>

                                  GENZYME CORPORATION

                                  By:  /s/ PETER WIRTH
                                     --------------------------------
                                           Peter Wirth
                                           Executive Vice President and
                                           Chief Legal Officer

                                  H&Q HEALTHCARE INVESTORS

                                  By:  /s/ ALAN G. CARR
                                     --------------------------------
                                           Alan G. Carr
                                           President

                                  H&Q LIFE SCIENCES INVESTORS

                                  By:  /s/ ALAN G. CARR
                                     --------------------------------
                                           Alan G. Carr
                                           President

                                  ING BARING (U.S.) CAPITAL
                                  COPRORATION

                                  By:  /s/ CHRISTOPHER S. MOORE
                                     --------------------------------
                                           Christopher S. Moore
                                           Vice President

                                   /s/ SUSAN DANA JONES
                                  -----------------------------------

                                   /s/ KENNETH ARNOLD
                                  -----------------------------------
                                  Susan Dana Jones and Kenneth Arnold as
                                  Co-Owners

                                   /s/ SYDNEY R. KNAFEL
                                  -----------------------------------
                                  Sydney R. Knafel

                                         22

<PAGE>

                                  LOEB INVESTORS CO. 106C

                                  By Pinpoint Partners Corporation
                                           as General Partner

                                  By:  /s/ THOMAS L. KEMPNER
                                     --------------------------------
                                  Thomas L. Kempner, President

                                   /s/ GEORGE J. MILSTEIN
                                  -----------------------------------

                                   /s/ ELIZABETH MILSTEIN
                                  -----------------------------------
                                  George J. Milstein and Elizabeth Milstein
                                  as Co-Owners

                                   /s/ JOSEPH E. MULLANEY, III
                                  -----------------------------------
                                  Joseph E. Mullaney, III

                                   /s/ RICHARD H. OSGOOD
                                  -----------------------------------
                                  Richard H. Osgood

                                   /s/ C. FRED TONEY
                                  -----------------------------------
                                  C. Fred Toney

                                   /s/ CHARLES I. TYLER
                                  -----------------------------------

                                   /s/ MARGARET B. TYLER
                                  -----------------------------------
                                  Charles I. Tyler and Margaret B. Tyler
                                  as Co-Owners

                                         23<PAGE>

                                  EXHIBIT 10.40
            AGREEMENT AND WARRANT TO PURCHASE 5,000,000 COMMON SHARES

            Agreement and Warrant to Purchase 5,000,000 Common Shares
                            HUDSON HOTELS CORPORATION

         This certifies that, for value received, RHD Capital Ventures LLC, the
registered holder hereof (the "Warrantholder") is entitled to purchase from
Hudson Hotels Corporation, a New York corporation with its principal office at
300 Bausch & Lomb Place, Rochester, New York 14604 (the "Company") Five Million
(5,000,000) shares of common stock of the Company (the "Shares") at or before
5:00 p.m. Eastern Standard Time on May 23, 2005 at the purchase price per share
of $1.00 per share (the "Warrant Price"), subject to the following terms and
conditions. The number of Shares purchasable upon exercise of this Warrant and
the Warrant Price per Share shall be subject to adjustment from time to time as
set forth herein.

1.       CONSIDERATION FOR WARRANT.

         This Warrant is granted in consideration of the payment of $1,000,000
to the Company by the Warrantholder, of which $250,000 has been paid in cash and
the balance of $750,000 by execution and delivery of the Warrantholder's
Promissory Note in the form attached hereto as Exhibit A.

2.       EXERCISE.

         This Warrant may be exercised in whole or in part at any time by
presentation of this Warrant with the Purchase Form as attached hereto duly
completed and executed, together with payment of the Warrant Price at the
principal office of the Company. Payment of the Warrant Price may be made in
cash, by wire transfer or by check. Upon surrender of the Warrant and payment of
such Warrant Price as aforesaid, the Company shall issue and cause to be
delivered with all reasonable dispatch to or upon the written order of the
Warrantholder and in such name or names as the Warrantholder may designate a
certificate or certificates for the number of full Shares so purchased upon the
exercise of the Warrant, together with Fractional Warrants, as provided in
Section 8 hereof, in respect of any fractional Shares otherwise issuable upon
such surrender. Such certificate or certificates shall be deemed to have been
issued and any person so designated to be named therein shall be deemed to have
become a holder of record of such Shares as of the date of the surrender of the
Warrant and the payment of the Warrant Price, as aforesaid, notwithstanding that
the certificates representing the Shares shall not actually have been delivered
or that the stock transfer books of the Company shall then be closed. The
Warrant shall be exercisable, at the election of the Warrantholder, either in
full or from time to time in part and, in the event that a certificate
evidencing the Warrant is exercised in respect of less than all of the Shares
specified therein at any time prior to the Termination Date, a new certificate
evidencing the remaining Warrant will be issued by the Company.

                                       1
<PAGE>

3.       RESERVATION OF SHARES.

         There has been reserved, and the Company shall at all times keep
reserved so long as the Warrant remains outstanding, out of its authorized
Common Shares, such number of Shares as shall be subject to purchase under the
Warrant. Every transfer agent for the Common Shares and other securities of the
Company issuable upon the exercise of the Warrant will be irrevocably authorized
and directed at all times to reserve such number of authorized Shares and other
securities as shall be requisite for such purpose. The Company will keep a copy
of this Warrant on file with every transfer agent for the Common Shares and
other securities of the Company issuable upon the exercise of the Warrant. The
Company will supply such transfer agent with duly executed stock and other
certificates for such purpose.

4.       FURTHER OBLIGATIONS OF COMPANY.

         4.1      The Company covenants and agrees that all Shares which may be
                  delivered upon exercise of this Warrant shall, upon delivery,
                  be fully paid and non-assessable, and be free from all taxes,
                  liens and charges with respect to the purchase thereof
                  hereunder, and without limiting the generality of the
                  foregoing, the Company covenants and agrees that it shall from
                  time to time take all such action as may be necessary to
                  assure that the par value per share of the Common Shares is at
                  all times equal to or less than the then current Warrant Price
                  per share of the Common Shares issuable pursuant to this
                  Warrant.

                   1.2    If the Warrantholder claims that this Warrant has been
                   mutilated, lost, destroyed or wrongfully taken, the Company
                   shall issue and deliver to the Warrantholder a replacement
                   Warrant provided that the requirements of Section 8-405 of
                   the New York Uniform Commercial Code has been met and, if
                   this Warrant has been mutilated, that it is surrendered to
                   the Company.

5.       REGISTRATION AND TRANSFER.

         The Warrant shall be registered on the books of the Company when issued
and shall be transferable only on the books of the Company maintained at its
principal office in Rochester, New York, or wherever its principal executive
offices may then be located, upon delivery thereof duly endorsed by the
Warrantholder or its duly authorized attorney or representative, or accompanied
by proper evidence of succession, assignment or authority to transfer. Upon any
registration or transfer, the Company shall execute and deliver a new Warrant to
the person entitled thereto.

6.       EXCHANGE OF WARRANT CERTIFICATE.

         This Warrant certificate may be exchanged for another certificate or
certificates entitling the Warrantholder to purchase a like aggregate number of
Shares as the certificate or certificates surrendered then entitled the
Warrantholder to purchase. The Warrantholder desiring to exchange

                                       2
<PAGE>

a Warrant certificate shall make such request in writing delivered to the
Company, and shall surrender, properly endorsed, the certificate evidencing the
Warrant to be so exchanged. Thereupon, the Company shall execute and deliver to
the person entitled thereto a new Warrant certificate as so requested.

7.       ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES.

         7.1.       GENERAL. The number of Shares purchasable upon the exercise
                    of the Warrant and the Warrant Price shall be subject to
                    adjustment from time to time upon the happening of certain
                    events, as follows:

                    7.1.1.       In case the Company shall, with regard to its
                                 Common Shares (or securities convertible into
                                 or exchangeable for Common Shares) (A) pay a
                                 dividend in Common Shares or make a
                                 distribution in Common Shares, (B) subdivide
                                 its outstanding Common Shares into a greater
                                 number of Shares, (C) combine its outstanding
                                 Common Shares into a smaller number of Common
                                 Shares, or (D) issue by reclassification of its
                                 Common Shares other securities of the Company,
                                 the number of Shares purchasable upon exercise
                                 of the Warrant immediately prior thereto shall
                                 be adjusted so that the Warrantholder shall be
                                 entitled to receive the kind and number of
                                 Shares or other securities of the Company which
                                 it would have owned or would have been entitled
                                 to receive after the happening of any of the
                                 events described above, had the Warrant been
                                 exercised immediately prior to the happening of
                                 such event or any record date with respect
                                 thereto. Any adjustment made pursuant to this
                                 subsection shall become effective immediately
                                 after the effective date of such event
                                 retroactive to the record date, if any, for
                                 such event.

                    7.1.2.       No adjustment in the number of Shares
                                 purchasable hereunder shall be required unless
                                 such adjustment would require an increase or
                                 decrease of at least one percent in the
                                 aggregate number of Shares then purchasable
                                 upon the exercise of the Warrant; provided
                                 however, that any adjustments which by reason
                                 of this Section 7.1.2 are not required to be
                                 made immediately shall be carried forward and
                                 taken into account in any subsequent
                                 adjustment.

                    7.1.3.       Whenever the number of Shares purchasable upon
                                 the exercise of the Warrant is adjusted as
                                 herein provided, the Warrant Price payable upon
                                 exercise of the Warrant shall be adjusted by
                                 multiplying such Warrant Price immediately
                                 prior to such adjustment by a fraction, of
                                 which the numerator shall be the number of
                                 Shares purchasable upon the exercise of the
                                 Warrant immediately prior to such adjustment,
                                 and of which the denominator shall be the
                                 number of shares so purchasable immediately
                                 thereafter.

                                       3
<PAGE>

                    7.1.4.       Whenever the number of Shares purchasable upon
                                 the exercise of this Warrant or the Warrant
                                 Price is adjusted as herein provided, the
                                 Company shall cause to be promptly mailed to
                                 the Warrantholder in accordance with the
                                 provisions of Section 11 hereof, notice of such
                                 adjustment or adjustments and a certificate of
                                 a firm of independent public accountants
                                 selected by the Board of Directors of the
                                 Company (who may be the regular accountants
                                 employed by the Company) setting forth the
                                 number of Shares purchasable upon the exercise
                                 of the Warrant and the Warrant Price after such
                                 adjustment, a brief statement of the facts
                                 requiring such adjustment, and the computation
                                 by which such adjustment was made.

                    7.1.5.       For the purpose of this Section 7.1, the term
                                 "Common Shares" shall mean (A) the class of
                                 shares designated as the Common Shares of the
                                 Company at the date of this Agreement, or (B)
                                 any other class of shares resulting from
                                 successive changes or reclassifications of such
                                 Common Shares including changes in par value,
                                 or from par value to no par value, or from no
                                 par value to par value. In the event that at
                                 any time, as a result of an adjustment made
                                 pursuant to this Section 7, the Warrantholder
                                 shall become entitled to purchase any shares of
                                 the Company other than Common Shares,
                                 thereafter the number of such other shares so
                                 purchasable upon exercise of the Warrant and
                                 the Warrant Price of such shares shall be
                                 subject to adjustment from time to time in a
                                 manner and on terms as nearly equivalent as
                                 practicable to the provisions with respect to
                                 the Shares contained in this Section 7.

         7.2.       NO ADJUSTMENT OF DIVIDENDS. Except as provided in Section
                    7.1, no adjustment in respect of dividends shall be made
                    during the term of the Warrant or upon the exercise of the
                    Warrant.

         7.3.       PRESERVATION OF PURCHASE RIGHTS UPON REORGANIZATION,
                    RECLASSIFICATION, CONSOLIDATION, MERGER, etc. In case of any
                    capital reorganization or reclassification of the Common
                    Shares of the Company, or in case of any consolidation of
                    the Company with or merger of the Company into another
                    corporation or in case of any sale or conveyance to another
                    person of the property, assets or business of the Company as
                    an entirety or substantially as an entirety, the Company or
                    such successor or purchaser, as the case may be, shall
                    execute with the Warrantholder an agreement that the
                    Warrantholder shall have the right thereafter upon payment
                    of the Warrant Price in effect immediately prior to such
                    action to purchase upon exercise of the Warrant the kind and
                    amount of shares and other securities and property which it
                    would have owned or have been entitled to receive after the
                    happening of such reorganization or reclassification,
                    consolidation, merger, sale or conveyance had the Warrant
                    been

                                       4
<PAGE>

                    exercised immediately prior to such action. In the event of
                    a merger described in Section 368(a)(2)(E) of the Internal
                    Revenue Code of 1986, as amended, in which the Company is
                    the surviving corporation, the right to purchase Shares
                    under the Warrant shall terminate on the date of such merger
                    and thereupon the Warrant shall become null and void but
                    only if the controlling corporation shall agree to
                    substitute for the Warrant its warrant which entitles the
                    holder thereof to purchase upon its exercise the kind and
                    amount of shares and other securities and property which it
                    would have owned or had been entitled to receive had the
                    Warrant been exercised immediately prior to such merger. The
                    adjustments required by this Section 7.3 shall be effected
                    in a manner which shall be as nearly equivalent as may be
                    practicable to the adjustments provided for elsewhere in
                    this Section 7. The provisions of this Section 7.3 shall
                    similarly apply to successive consolidations, mergers, sales
                    or conveyances.

         7.4.       STATEMENT ON WARRANTS. Irrespective of any adjustments in
                    the Warrant Price or the number or kind of Shares
                    purchasable upon the exercise of the Warrant, the Warrant
                    certificate or certificates theretofore or thereafter issued
                    may continue to express the same price and number and kind
                    of Shares as are stated in this initially issued Warrant.

8.       FRACTIONAL SHARES.

         The Company shall not be required to issue fractional Shares on the
exercise of the Warrant. If any fraction of a Share would, except for the
provisions of this Section 8, be issuable on the exercise of the Warrant (or
specified portion thereof), the Company shall issue to the Warrantholder a
fractional Warrant entitling Warrantholder, upon surrender with other fractional
Warrants aggregating one or more full Shares, to purchase such full Shares. If
fractional Warrants do not aggregate a full Share, their value (over and above
their exercise price) shall be paid in full in cash upon exercise to the
exercising Warrantholder.

9.       REGISTRATION.

         9.1.       The Company agrees that, upon exercise of the Warrant by the
                    Warrantholder, the Company will prepare and file a
                    registration statement under the Securities Act of 1933 (the
                    "Act") covering all or any of the Shares and will use its
                    best efforts to cause such registration statement to become
                    effective as soon as practicable and to remain effective and
                    current, and take all other action necessary under any
                    Federal or state law or regulation of any governmental
                    authority to permit all Warrant Shares to be sold or
                    otherwise disposed of and will maintain such compliance with
                    each such Federal and state law and regulation of any
                    governmental authority for the period necessary for the
                    Holder and such Holders to effect the proposed sale or other
                    disposition.

         9.2.       To the extent not registered under Section 9.1 above, if at
                    any time before June 1, 2005, the Company proposes to
                    register or qualify any of its securities under the Act or
                    any other applicable federal or state law or regulation of
                    governmental authority, it will each such time give written
                    notice to all the then holders of this Warrant, if this

                                        5
<PAGE>

                    Warrant has not yet expired, and to all holders of Shares
                    acquired by reason of exercise of this Warrant, of its
                    intention to do so and, upon the written request of any such
                    holder given within thirty (30) days after receipt of any
                    such notice (which request shall specify the number of
                    Shares intended to be sold or disposed of and describe the
                    nature of any proposed sale or other disposition thereof),
                    the Company will use its best efforts to cause such Shares
                    so specified (up to 50% of total number of Shares) to be
                    registered or qualified under such laws or regulations, to
                    the extent requisite to permit the sale or other disposition
                    thereof (in accordance with the method described by such
                    holder, provided such method is in accordance with law). The
                    Company will keep effective and maintain any registration or
                    qualification specified in this Section 9.2 for a period of
                    not less than six months.

         9.3.       Whenever the Company is required by the provisions of
                    Section 9.1 or 9.2 of this Section 9 to effect a
                    registration or qualification of any Shares, the Company
                    will furnish to each holder whose Shares are the subject of
                    such registration or qualification such number of copies of
                    any prospectus (including any preliminary or summary
                    prospectus) or other like document as such holder may
                    reasonably request in order to effect the sale of the
                    securities to be sold by such holder, and will use its best
                    efforts to qualify such securities under such state
                    securities or Blue Sky laws as may be requisite for such
                    purpose. All expenses incurred by the Company in connection
                    with any registration or qualification, including
                    registration or filing fees, printing expenses and fees,
                    compensation of regular employees of the Company and
                    disbursements of counsel and of independent accountants of
                    the Company shall be borne by the Company. Underwriters'
                    commissions (if any) and the fees of counsel for any holder
                    of Shares subject to such registration or qualification
                    shall be borne (in such respective amounts as shall be
                    determined by them) by the person or persons requesting such
                    registration or qualification pursuant to this Section 9.

         9.4.       Each holder whose securities are the subject of registration
                    or qualification under this Section 9 agrees to furnish to
                    the Company such information concerning such holder as may
                    be requested by the Company which is necessary in connection
                    with any such registration or qualification.

         9.5.       In the event that the Company shall be obligated to use its
                    best efforts to effect any registration or qualification
                    under either Section 9.1 or 9.2:

                    9.5.1.       The Company will indemnify and hold harmless
                                 each holder whose securities are the subject of
                                 a registration or qualification under this
                                 Section 9 and each underwriter of the
                                 securities so registered or qualified
                                 (including any broker or dealer through whom
                                 such securities may be sold) and each person,
                                 if any, who controls any such holder or any
                                 such underwriter within the meaning of Section
                                 15 of the Act, from and against any and all
                                 losses, claims, damages,

                                        6
<PAGE>

                                 expenses or liabilities, joint or several, to
                                 which they or any of them may become subject
                                 under the Act or under any other statute or at
                                 common law or otherwise, and except as
                                 hereinafter provided, will reimburse each such
                                 holder and each of the underwriters and each
                                 such controlling person, if any, for any legal
                                 or other expenses reasonably incurred by them
                                 or any of them in connection with investigating
                                 or defending any actions, whether or not
                                 resulting in any liability, insofar as such
                                 losses, claims, damages, expenses, liabilities
                                 or actions arise out of or are based upon any
                                 untrue statement or alleged untrue statement of
                                 a material fact contained in the registration
                                 statement, in any preliminary or amended
                                 preliminary prospectus or in the prospectus (or
                                 the registration statement or prospectus as
                                 from time to time amended or supplemented by
                                 the Company), or arise out of or are based upon
                                 the omission or alleged omission to state
                                 therein a material fact required to be stated
                                 therein or necessary in order to make the
                                 statements therein not misleading, unless such
                                 untrue statement or omission was made in such
                                 registration statement, preliminary or amended
                                 preliminary prospectus or prospectus in
                                 reliance upon and in conformity with
                                 information furnished in writing to the Company
                                 in connection therewith by such holder or any
                                 underwriter expressly for use therein. Promptly
                                 after receipt by any holder or any underwriter
                                 or any person controlling such holder or such
                                 underwriter of notice of the commencement of
                                 any action in respect of which indemnity may be
                                 sought against the Company, such holder or such
                                 underwriter, as the case may be, will notify
                                 the Company in writing of the commencement
                                 thereof, and subject to the provisions
                                 hereinafter stated, the Company shall assume
                                 the defense of such action (including the
                                 employment of counsel, who shall be counsel
                                 satisfactory to such holder or such underwriter
                                 or such person, as the case may be), and the
                                 payment of expenses insofar as such action
                                 shall relate to any alleged liability in
                                 respect of which indemnity may be sought
                                 against the Company. Each holder or any
                                 underwriter or any such controlling person
                                 shall have the right to employ separate counsel
                                 in any such action and to participate in the
                                 defense thereof but the fees and expenses of
                                 such counsel shall not be at the expense of the
                                 Company unless the employment of such counsel
                                 has been specifically authorized by the
                                 Company. The Company shall not be liable to
                                 indemnify any person for any settlement of any
                                 such action effected without the Company's
                                 consent; and

                    9.5.2.       each holder will indemnify and hold harmless
                                 the Company, each of its directors, each of its
                                 officers who has signed the registration
                                 statement and each person, if any, who controls
                                 the Company within the meaning of Section 15 of
                                 the Act from and against any and all

                                        7
<PAGE>

                                 losses, claims, damages, expenses or
                                 liabilities, joint or several, to which they or
                                 any of them may become subject under the Act or
                                 under any other statute or at common law or
                                 otherwise, and except as hereinafter provided,
                                 will reimburse the Company and each such
                                 director, officer or controlling person for any
                                 legal or other expenses reasonably incurred by
                                 them or any of them in connection with
                                 investigating or defending any actions whether
                                 or not resulting in any liability, insofar as
                                 such losses, claims, damages, expenses,
                                 liabilities or actions arise out of or are
                                 based upon any untrue statement or alleged
                                 untrue statement of a material fact contained
                                 in the registration statement, in any
                                 preliminary or amended preliminary prospectus
                                 or in the prospectus (or the registration
                                 statement or prospectus as from time to time
                                 amended or supplemented) or arise out of or are
                                 based upon the omission or alleged omission to
                                 state therein a material fact required to be
                                 stated therein or necessary in order to make
                                 the statements therein not misleading, but only
                                 insofar as any such statement or omission was
                                 made in reliance upon and in conformity with
                                 information furnished in writing to the Company
                                 in connection therewith by such holder
                                 expressly for use therein. Promptly after
                                 receipt of notice of the commencement of any
                                 action in respect of which indemnity may be
                                 sought against any holder, the Company will
                                 notify such holder in writing of the
                                 commencement thereof, and such holder, the
                                 Company will notify such holder in writing of
                                 the commencement thereof, and such holder
                                 shall, subject to the provisions hereinafter
                                 stated, assume the defense of such action
                                 (including the employment of counsel, who shall
                                 be counsel satisfactory to the Company) and the
                                 payment of expenses insofar as such action
                                 shall relate to an alleged liability in respect
                                 of which indemnity may be sought against such
                                 holder. The Company and each such director,
                                 officer or controlling person shall have the
                                 right to employ separate counsel in any such
                                 action and to participate in the defense
                                 thereof but the fees and expenses of such
                                 counsel shall not be at such holder's expense
                                 unless the employment of such counsel has been
                                 specifically authorized by such holder. Such
                                 holder shall not be liable to indemnify any
                                 person for any settlement of any such action
                                 effected without such holder's consent.

10.      NO RIGHTS AS SHAREHOLDER; NOTICES TO WARRANTHOLDER.

         Nothing contained in this Agreement or in any of the Warrants shall be
construed as conferring upon the Warrantholder or its transferees any rights as
a shareholder of the Company, including the right to vote, receive dividends, or
consent as a shareholder in respect of any meeting of shareholders for the
election of directors of the Company or any other matter. However, the Company
shall be required to give notice in writing to the Warrantholder of any

                                        8
<PAGE>

meeting of shareholders of the Company or any proposed consent of the
shareholders as provided in Section 11 hereof at least twenty (20) days prior to
the date fixed as a record date or the date of closing the transfer books for
the determination of the shareholders entitled to any relevant dividend,
distribution, subscription rights or other rights or for the determination of
shareholders entitled to vote at any such meeting or as to which any consent is
requested. Such notice shall specify such record date or the date of closing the
transfer books, as the case may be.

11.      NOTICES.

         Any notice pursuant to this Agreement by the Company or by the
Warrantholder shall be in writing and shall be deemed to have been duly given if
delivered by hand or if mailed by certified mail, return receipt requested,
postage prepaid, addressed as follows:

         11.1.      If to the Warrantholder - addressed to RHD Capital Ventures
                    LLC, 300 Willowbrook Office Park, Fairport, New York 14450,
                    Attn: Richard Sands.

         11.2.      If to the Company - addressed to Hudson Hotels Corporation,
                    300 Bausch & Lomb Place, Rochester, NY 14604, Attn: E.
                    Anthony Wilson, Chairman or to such other address as any
                    such party may designate by notice to the other party.
                    Notices shall be deemed given at the time they are delivered
                    personally or three days after they are mailed in the manner
                    set forth above.

12.      SUCCESSORS.

         All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Warrantholder shall bind and inure to the benefit
of their respective successors and assigns hereunder.

13.      MERGER OR CONSOLIDATION OF THE COMPANY.

         The Company will not merge or consolidate with or into any other
corporation or sell all or substantially all of its property to another person,
unless the provisions of Section 7.3 are complied with.

14.      APPLICABLE LAW.

         This Agreement shall be deemed to be a contract made under the laws of
the State of New York and for all purposes shall be construed in accordance with
the laws of said State applicable to contracts made and to be performed entirely
within such State.

15.      COUNTERPARTS.

         This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

16.      HEADINGS.

         The headings in this Agreement are for reference purposes only and
shall not affect in any way the meaning or interpretation of this Agreement.

                                        9
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
on this 24th day of May, 2000 by its duly authorized officers and the corporate
seal hereunto fixed.

                                               HUDSON HOTELS CORPORATION

(corporate seal)
                                               By:  ____________________________
Attest:                                               E. Anthony Wilson
                                                      President

-------------------------
Alan S. Lockwood
Secretary

                                       10

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