AXYS PHARMACEUTICALS INC
OPERATING AGREEMENT
<DOCUMENT>
<TYPE>EX-10.156
<SEQUENCE>5
<FILENAME>opagrllc.htm
<DESCRIPTION>OPERATING AGREEMENT
<TEXT>
<B><P ALIGN="CENTER"> Exhibit 10.156 </P>
<P ALIGN="CENTER">AXYS 468 LITTLEFIELD LLC</P>
</FONT><P ALIGN="CENTER">OPERATING AGREEMENT</P>
<P ALIGN="JUSTIFY">This Operating Agreement </B>(&quot;this Agreement&quot;)<B>
</B>is made as of May 4, 2001 by and between <B>Axys Pharmaceuticals, Inc.,
</B>a Delaware corporation (&quot;API&quot;)<B> </B>and <B>Axys 468 Littlefield
LLC</B>, a California limited liability company (the &quot;Company&quot;), with
respect to the operation of the Company.  Capitalized terms used in this
Agreement not otherwise defined herein have the meanings given to them in
Section&nbsp;6.</P>
<P ALIGN="JUSTIFY">The parties hereby agree as follows:</P>
<OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Formation Of
Company</FONT>.</LI></P>
<OL>

<FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Formation</FONT>.  </B>On May 4,
2001, the Company was organized as a California limited liability company under
and pursuant to the California Act by the filing of the Articles with the
Secretary of State of the State of California.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Principal Place Of
Business</FONT>.  </B>The principal place of business of the Company will be 180
Kimball Way, South San Francisco, California.  The Company may locate its other
places of business at any other place or places as the Manager may from time to
time deem advisable.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Term</FONT>.  </B>The term of
the Company commenced on May 4, 2001 upon the filing of the Articles with the
Secretary of State of the State of California and shall be of continuing
duration, unless the Company is dissolved in accordance with the provisions of
this Agreement or the California Act.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Company Purposes</FONT>. </B>The
purpose of the Company shall be to (i) invest in, develop, manage, and operate
the real property commonly known as 468 Littlefield Avenue, South San Francisco,
California (the &quot;Property&quot;), directly or through ownership interests
in other entities; and (ii) engage in any other lawful acts or activities for
which limited liability companies may be organized under the laws of the State
of California.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Tax
Classification</FONT>.</B>&#9;For U.S. federal and state tax purposes only, it
is intended that the Company's existence as a separate entity from its sole
Member, API, be disregarded pursuant to Code Section 7701 and the Treasury
Regulations promulgated thereunder and applicable state tax law (the "check-the-
box regulations").  Accordingly, the Manager will cause the Company to file such
elections and informational returns and perform such actions as may be required
under the check-the-box regulations. </LI></P></OL>

<P ALIGN="JUSTIFY">If at some future date the Member deems it advisable for
additional Persons to become Members of the Company, the Company and the Member
will cause this Agreement (including this Section 1.5) to be amended pursuant to
Section 7.3.</P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Manager And
Officers</FONT>.</LI></P>
<OL>

<FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Authority Of Manager.
</B></FONT>Except with respect to the matters as to which the approval of the
Member is expressly required hereunder, the Manager will have full and exclusive
authority to manage the business and affairs of the Company and to perform all
acts as may be necessary or appropriate for the conduct of the Company's
business.<B> </B>Unless authorized to do so by this Agreement or by the Manager,
no Member, agent or employee of the Company will have any power or authority to
bind the Company in any way, to pledge its credit or to render it liable for any
purpose.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Tenure, Election And
Qualifications Of Manager</FONT>.  </B>There will be one (1) Manager.  The
initial Manager will be API.  The Manager will hold office until the earliest of
(1)&nbsp;the election and qualification of its successor; and (2)&nbsp;its
dissolution, resignation or removal.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Resignation</FONT>.  </B>The
Manager may resign at any time by giving written notice to the Member.  The
resignation of a Manager will take effect upon receipt of notice thereof or at
such later time as will be specified in such notice; unless otherwise specified
therein, the acceptance of such resignation will not be necessary to make it
effective.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Removal</FONT>.</B>  The Manager
may be removed at any time, with or without cause, by the Member.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Vacancies</FONT>.</B>  Any
vacancy occurring in the office of Manager will be filled by the affirmative
vote of the Member.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Appointment Of Officers</FONT>.
</B>The Manager may appoint officers of the Company, including, but not limited
to:  (a)&nbsp;a president; (b)&nbsp;one or more vice presidents; (c)&nbsp;a
secretary and (d)&nbsp;a chief financial officer.  The Manager may delegate a
portion of the day-to-day management responsibilities to any such officers, and
such officers will have the authority to contract for, negotiate on behalf of
and otherwise represent the interests of the Company as authorized by the
Manager in any job description created by the Manager.  </LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Salaries</FONT>.</B>  The
Manager shall receive no salary or other compensation from the Company unless
approved by the Member; <I>provided, however,</I> the foregoing shall not
prevent any employee of or consultant to the Company from receiving salary or
other compensation from the Company with respect to his, her or its services as
an employee or consultant.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Other Compensation</FONT>.</B>
Each Member agrees and acknowledges that the Company shall pay to Manager as an
operating expense of the Property a construction management fee of $360,000 for
construction of improvements on the Property, which fee shall be paid to Manager
in equal monthly installments during the term of the construction loan from
Cupertino National Bank &amp; Trust.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Member Approval Of Certain
Matters</FONT>.</LI></P>
</B><P ALIGN="JUSTIFY">The Company will not take any of the following actions
without the written approval of the Member:</P>
<OL>

<P ALIGN="JUSTIFY"><LI>Any action for which Member approval is required under
the California Act;</LI></P>
<P ALIGN="JUSTIFY"><LI>Any action expressly described elsewhere in this
Agreement as requiring Member approval; and</LI></P>
<P ALIGN="JUSTIFY"><LI>Any transaction or series of related transactions outside
the normal course of business:</LI></P>
<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>that results in the sale of substantially all of the
assets of the Company; or</LI></P>
<P ALIGN="JUSTIFY"><LI>in which new equity securities of, or equity securities
in, the Company are issued.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Capital Contributions.
</B></FONT>The Member will contribute the property set forth in <I>Schedule A
</I>hereto as its Capital Contribution.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Records And
Reports</FONT>.</LI></P>
<OL>

<FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Records And Reports</FONT>.  </B>At
the expense of the Company, the Manager will maintain in the principal office of
the Company records and accounts of all operations and expenditures of the
Company for a period of five (5) years from the end of the Fiscal Year during
which the last entry was made on such record.  At a minimum the Company will
keep the following records:</LI></P>
<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>A current list of the full name and last known business
address of the Manager and the Member;</LI></P>
<P ALIGN="JUSTIFY"><LI>A copy of the Articles, together with executed copies of
any written powers of attorney pursuant to which this Agreement and any
certificate and all amendments thereto have been executed;</LI></P>
<P ALIGN="JUSTIFY"><LI>Copies of the Company's federal, foreign, state and local
income tax returns and reports, if any, for the three (3) most recent
years;</LI></P>
<P ALIGN="JUSTIFY"><LI>Copies of this Agreement and all amendments
thereto;</LI></P>
<P ALIGN="JUSTIFY"><LI>True and full information regarding the status of the
business and financial condition of the Company, including financial statements
of the Company for the three (3) most recent years; and</LI></P>
<P ALIGN="JUSTIFY"><LI>True and full information regarding the amount of cash
and a description and statement of the agreed value of any other property or
services contributed by the Member and that the Member has agreed to contribute
in the future, and the date on which such Person became a Member.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Member Access To Records</FONT>.
</B>Upon written request of the Member, setting forth the purpose for such
request, the Member will have the right, during ordinary business hours, to
inspect and copy such Company documents at the Member's expense1.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Returns And Other
Elections</FONT>.  </B>The Manager will cause the preparation and timely filing
of all tax returns required to be filed by the Company pursuant to the Code and
all other tax returns deemed necessary and required in each jurisdiction in
which the Company does business.  Copies of such returns, or pertinent
information therefrom, will be furnished to the Member within a reasonable time
after the end of the Company's Fiscal Year.  All elections permitted to be made
by the Company under federal or state laws will be made by the Manager in his,
her or its discretion.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Accounting Principles</FONT>.
</B>The books and records of the Company will be determined in accordance with
generally accepted accounting principles consistently applied under the accrual
method of accounting.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Dissolution</FONT>.</LI></P>
<OL>

<FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Dissolution Events</FONT>.  </B>The
Company will be dissolved upon the occurrence of any of the following events
(each, a &quot;Dissolution Event&quot;):</LI></P>
<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>the affirmative vote of the Member;</LI></P>
<P ALIGN="JUSTIFY"><LI>the entry of a decree of judicial dissolution under the
California Act; or</LI></P>
<P ALIGN="JUSTIFY"><LI>the withdrawal, bankruptcy or dissolution of the
Member.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Winding Up</FONT>.  </B>The
Company will cease to carry on its business, except insofar as may be necessary
for the winding up of its business, upon the occurrence of a Dissolution Event,
but its separate limited liability company existence will continue until a
Certificate of Dissolution has been filed with the Secretary of State of the
State of California or until a decree dissolving the Company has been entered by
a court of competent jurisdiction.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Liquidation</FONT>.  </B>In
settling accounts in dissolution, the assets of the Company will be applied in
the following order:</LI></P>
<OL TYPE="a">

<P ALIGN="JUSTIFY"><LI>to creditors, in the order of priority as provided by
law, and the balance</LI></P>
<P ALIGN="JUSTIFY"><LI>to the Member.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Dissolution</FONT>.</LI></P>
<OL TYPE="a">

</B><P ALIGN="JUSTIFY"><LI>When all debts, liabilities and obligations have been
paid and discharged or adequate provisions have been made therefor and all of
the remaining property and assets have been distributed to the Member, a
Certificate of Dissolution will be executed in such form as is prescribed by the
Secretary of State of the State of California and same is filed
therewith.</LI></P>
<P ALIGN="JUSTIFY"><LI>Upon the acceptance of the Certificate of Dissolution,
the existence of the Company will cease, except for the purpose of suits, other
proceedings and appropriate action as provided in the California Act.  The
Manager will thereafter be a trustee for the Member and creditors of the Company
and as such will have authority to distribute any Company property discovered
after dissolution, convey real estate and take such other action as may be
necessary on behalf of and in the name of the Company.</LI></P></OL>
</OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Definitions.</LI></P>
</B></FONT><P ALIGN="JUSTIFY">The following terms used in this Agreement have
the following meanings unless otherwise expressly provided elsewhere in this
Agreement:</P>
<OL>

<B><P ALIGN="JUSTIFY"><LI>&quot;Agreement&quot; </B>mean<B> </B>this
Agreement.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>&quot;Articles&quot; </B>means the Company's Articles
of Organization, as the same exists or may hereafter be amended.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>&quot;California Act&quot; </B>means the California
Beverly-Killea Limited Liability Company Act, as the same exists or may
hereafter be amended.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>&quot;Capital Contribution&quot; </B>means<B> </B>any
contribution to the capital of the Company in cash or property by the
Member.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>&quot;Code&quot; </B>means the Internal Revenue Code
of 1986, as the same exists or may hereafter be amended.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>&quot;Company&quot; </B>means AXYS 468
Littlefield<FONT SIZE=3> LLC</FONT>, a California limited liability
company.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>&quot;Dissolution Event&quot; </B>means any of the
events specified in Section 6.1.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>&quot;Fiscal Year&quot; </B>means the Company's fiscal
year.  The Company's fiscal year will be the same fiscal year as that of the
Member. </LI></P>
<B><P ALIGN="JUSTIFY"><LI>&quot;Manager&quot; </B>means the Person elected by
the Member pursuant to this Agreement and the California Act and shall initially
mean API.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>&quot;Member&quot; </B>means, as of a given time, each
person that is a member of the Company at such time and shall initially mean
API.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>&quot;Person&quot; </B>means any individual or
partnership, limited liability company, corporation, joint venture, trust, or
other business association or entity, and the heirs, executors, administrators,
legal representatives, successors, and assigns of such individual or entity
where the context so permits.</LI></P>
<B><P ALIGN="JUSTIFY"><LI>&quot;Treasury Regulations&quot; </B>means the Income
Tax Regulations, including any temporary regulations, promulgated under the
Code, as the same exists or may be amended from time to time.</LI></P></OL>

<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>General
Provisions</FONT>.</LI></P>
<OL>

<FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Notices</FONT>.  </B>Any notice,
demand or communication required or permitted to be given by any provision of
this Agreement will be deemed to have been sufficiently given or served for all
purposes if delivered personally to the party or to an executive officer of the
party to whom the same is directed or, if sent by registered or certified mail,
postage and charges prepaid, addressed to the intended recipient's address as it
appears in the Company's records.  Except as otherwise provided herein, any such
notice will be deemed to be given three (3) business days after the date on
which the same was deposited in a regularly maintained receptacle for the
deposit of United States mail, addressed and sent as set forth above.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Governing Law</FONT>.  </B>This
Agreement, and the application and interpretation hereof, will be governed
exclusively by the California Act.  </LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Amendments</FONT>.  </B>Any
amendment to this Agreement will not be effective unless signed by the
Member.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Execution Of Additional
Instruments</FONT>.  </B>The<B> </B>Member hereby agrees to execute such other
and further statements of interest and holdings, designations, powers of
attorney and other instruments necessary to comply with any laws, rules or
regulations.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Waivers</FONT>.  </B>The failure
of any party to seek redress for violation of or to insist upon the strict
performance of any covenant or condition of this Agreement will not prevent a
subsequent act from being a violation of this Agreement.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Rights And Remedies
Cumulative</FONT>.  </B>The rights and remedies provided by this Agreement are
cumulative, and the use of any one right or remedy by any party will not
preclude or waive the right to use any or all other remedies.  Such rights and
remedies are given in addition to any other rights the parties may have by law,
statute, ordinance or otherwise.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Severability</FONT>.  </B>If any
provision of this Agreement or the application thereof to any person or
circumstance is held to be invalid, illegal or unenforceable to any extent, the
remainder of this Agreement and the application thereof will not be affected and
will be enforceable to the fullest extent permitted by law.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Heirs, Successors And
Assigns</FONT>.  </B>Each and all of the covenants, terms, provisions and
agreements herein contained will be binding upon and inure to the benefit of the
parties and, to the extent permitted by this Agreement, their respective heirs,
legal representatives, successors and assigns.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Creditors</FONT>.  </B>None of
the provisions of this Agreement will be for the benefit of or enforceable by
any creditor of the Company.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Counterparts</FONT>.  </B>This
Agreement may be executed in counterparts, each of which will be deemed an
original but all of which will constitute one and the same instrument.</LI></P>
<B><FONT COLOR="#0000ff"><P ALIGN="JUSTIFY"><LI>Attorneys' Fees</FONT>.  </B>In
the event any dispute among the parties results in litigation, the prevailing
party or parties in such dispute will be entitled to recover from the losing
party or parties all fees, costs and expenses of enforcing any right or rights
of the prevailing party or parties under this Agreement including, without
limitation, reasonable fees of attorneys and accountants.</LI></P></OL>
</OL>

<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">&nbsp;</P>
<P ALIGN="JUSTIFY">The parties hereto have executed this Agreement as of the
date first above written.</P>
<U><P ALIGN="JUSTIFY"></P></U>
<TABLE CELLSPACING=0 BORDER=0 CELLPADDING=7 WIDTH=638>
<TR><TD WIDTH="50%" VALIGN="TOP">
<B><P>Axys Pharmaceuticals Inc., </B>a Delaware corporation</P><DIR>
<DIR>

<P>By: /s/ Douglas Altschuler</P>
<P>Name: Douglas Altschuler</P>
<P>Title: Vice President and General Counsel</P>
<P>&#9;</P>
<B><P ALIGN="JUSTIFY"></DIR>
</DIR>
</B></TD>
<TD WIDTH="50%" VALIGN="TOP">
<B><P>Axys 468 Littlefield LLC, </B>a California limited liability
company</P><DIR>

<P>By:<B>&#9;</B>Axys Pharmaceuticals, Inc., a Delaware corporation</P></DIR>

<P><B>&#9;</B>Its: Manager</P></DIR>
<P ALIGN="JUSTIFY">&#9;By: /s/ Douglas Altschuler</P><DIR>
<DIR>

<P>&#9;Name: Douglas Altschuler</P></DIR>
</DIR>

<P ALIGN="JUSTIFY">&#9;Title: Vice President and General Counsel</P>
<B><P ALIGN="JUSTIFY">&#9;</P>
</B><P ALIGN="JUSTIFY"></P>
<B><P ALIGN="JUSTIFY">&nbsp;</P>
</B><P>&nbsp;</TD>
</TR>
</TABLE>

<P ALIGN="JUSTIFY">&nbsp;</P>
<B><P ALIGN="CENTER">Schedule A</P>
<P ALIGN="CENTER">CAPITAL CONTRIBUTION</P></B>
<TABLE BORDER CELLSPACING=1 CELLPADDING=7 WIDTH=517>
<TR><TD WIDTH="55%" VALIGN="BOTTOM">
<B><P ALIGN="CENTER">Name of Member</B></TD>
<TD WIDTH="45%" VALIGN="BOTTOM">
<B><P ALIGN="CENTER">Capital</P>
<P ALIGN="CENTER">Contribution</B></TD>
</TR>
<TR><TD WIDTH="55%" VALIGN="TOP">
<P ALIGN="JUSTIFY"></P>
<P ALIGN="JUSTIFY">Axys Pharmaceuticals, Inc.</P>
<P ALIGN="JUSTIFY">180 Kimball Way</P>
<P ALIGN="JUSTIFY">South San Francisco, CA 94080</P>
<P ALIGN="JUSTIFY"></TD>
<TD WIDTH="45%" VALIGN="TOP">
<P>Assignment of Ground Lease dated October 30, 1998, the Property, and transfer
of all improvements located thereon.</P>
<B><P ALIGN="CENTER"></B></TD>
</TR>
</TABLE>

<B><P ALIGN="JUSTIFY">&nbsp;</P>
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