LANDLORD?S CONSENT TO SUBLEASE

Exhibit 10.4

LANDLORD’S CONSENT TO SUBLEASE

This Agreement is made as of September 22, 2005, among ( “Landlord” ), Teutsch Partners, Conoco Phillips Company, a Delaware corporation ( “Tenant” ), and Zymogenetics, ( “Subtenant” ).

RECITALS:

A. Pursuant to a Lease dated as of September 19, 2003 (the “Lease” ), between Landlord and Tenant, Tenant is leasing from Landlord certain premises (the “Premises” ) situated on the 2nd floor of the building (the “Building” ) currently known as the 1144 Eastlake Building, located at 1144 Eastlake Ave. East, Seattle WA.

B. Pursuant to a Sublease in the form attached to this Agreement as Exhibit A (the “Sublease” ), Tenant has agreed to sublease to Subtenant a portion of the Premises, as more particularly described in the Sublease.

C. Pursuant to the terms of the Lease, Tenant must obtain the prior written consent of Landlord to any sublease of all or any portion of the Premises. Landlord is prepared to consent to the Sublease on the terms and conditions of this Agreement.

AGREEMENT:

Landlord hereby consents to the Sublease, subject to the following terms, covenants and agreements of the parties, and in consideration of such consent, Tenant and Subtenant agrees as follows:

1. Neither the Sublease nor this Agreement shall be construed to relieve Tenant of any liabilities or obligations whatsoever under the lease. Tenant shall continue to be fully and primarily liable for the full performance of all obligations of the tenant under the Lease.

2. Subtenant and Tenant acknowledge and agree the Sublease and all of Subtenant’s rights thereunder shall be subject and subordinated in all respects to the Lease. If the Lease terminates or is terminated prior to the expiration of the term of the Sublease, the Sublease also shall terminate; provided, however, at Landlord’s sole option, following a termination of the Lease, the Sublease shall remain in full force and effect, in which event Subtenant shall attorn to Landlord and recognize Landlord as Subtenant’s landlord under the Sublease, upon the terms and conditions and at the rental rate specified in the Sublease, and for the then remaining term of the Sublease, except Landlord shall not be bound by any provision of the Sublease which in any way increases Landlord’s duties, obligations or liabilities to Subtenant beyond those owed to tenant under the Lease. Subtenant shall execute and deliver at any time and from time to time upon the request of landlord, any instruments which may be necessary or appropriate to evidence such attornment. Landlord shall not in any event (i) be liable to Subtenant for any act, omission or breach of the Sublease by Tenant, (ii) be subject to any offsets or defenses which Subtenant might have against Tenant, (iii) be bound by any rent or additional rent which Subtenant might have paid in advance to Tenant, or (iv) be bound to honor any rights of Subtenant in and to any

security or other deposits paid by Subtenant pursuant to the Lease except to the extent Tenant has turned over such security or other deposits to Landlord. If Tenant is in default under the terms of the Lease, Landlord shall have the right to take all actions available to Landlord under the Lease and by law, including but not limited to the right to commence an unlawful detainer action against Tenant and Subtenant.

3. Whenever the Lease gives Landlord a right of involvement, such as a right to approve, consent, cooperate or decide, Landlord shall have such right with respect to both Tenant and Subtenant. If Landlord and Tenant disagree over any decision requiring both of their consents or approvals, Landlord’s decision shall control. For example, the Lease requires Landlord’s prior consent to any alterations or additions to the Premises. If Subtenant desires to make alterations or additions to the Premises, it must obtain the prior consent of both Landlord and Tenant.

4. Tenant will pay Landlord’s attorneys’ fees in reviewing the Sublease and preparing this Agreement, not to exceed $1,500.00.

5. The indemnity and other agreements contained in the Sublease (or incorporated therein by reference) shall apply with equal force and effect between Subtenant and Landlord (with Subtenant indemnifying Landlord in accordance with the terms of the Sublease), and Landlord shall be named as an additional insured on any insurance maintained by Subtenant under the Sublease.

6. This Agreement shall not relieve Tenant of its obligation to obtain Landlord’s consent to (a) any further sublease of all or part of the Premises, or (b) any assignment of the Lease; nor shall the Sublease or this Agreement be construed as conferring upon Subtenant any right to further sublease the Premises or assign its rights under the Sublease in either case without Landlord’s consent.

7. A failure by Tenant or Subtenant to comply with any of the terms or conditions of this Agreement shall constitute a default under the Lease. If any party to this Agreement commences an action or other legal proceeding to enforce performance of any of the terms or provisions hereof or of the Lease, the prevailing party in such action or proceeding shall, in addition to such other relief as it may obtain, be entitled to recover from the other parties all of its costs incurred, including reasonable attorneys’ fees, in any such action or proceeding or any appeal from any order, award or judgment therein.

8. In addition to Landlord’s rights under this Agreement, the Lease, at law or in equity, if Tenant is in default under any of the terms or provisions of the Lease, Landlord may elect to receive directly from Subtenant all sums due or payable to Tenant by Subtenant pursuant to the Sublease, and upon receipt of written notice from Landlord to do so, Subtenant shall thereafter pay Landlord any sums becoming due or payable under the Sublease. Tenant hereby consents to such direct payment and authorizes and directs Subtenant to comply with any notice given by Landlord to Subtenant pursuant to the proceeding sentence. Neither the service of such written notice nor the receipt and acceptance of such direct payments shall cause Landlord to be deemed to have assumed any of Tenant’s duties, obligations and/or liabilities to Subtenant under the Sublease, nor shall such event impose upon the Landlord the duty or obligation to accept an attornment by Subtenant following a termination of the Lease.

9. Any options to extend the Lease, rights of first refusal to lease additional space or right to expand the Premises may not be exercised by or for the benefit of Subtenant.

10. Subtenant and Tenant shall not amend or modify the Sublease without Landlord’s prior written consent.

11. This Agreement shall be binding and inure to the benefit of the parties and their respective successors and assigns, subject, however, to all restrictions on assignment and subletting contained in the Lease or in this Agreement. In the event of any litigation or other legal proceeding between the parties to enforce or interpret this Agreement, the unsuccessful party or parties shall pay to the prevailing party or parties, all costs, expenses and reasonable attorneys’ fees incurred by the prevailing party or parties, whether such fees and expenses are incurred in trial court, on appeal, in bankruptcy court or in any other legal proceeding.

Dated as of the day and year first above written.

SUBLEASE AGREEMENT

THIS AGREEMENT (hereinafter referred to as the “Sublease”) is made and entered into as of the          day of September 2005, between ConocoPhillips Company, a Delaware corporation, (hereinafter referred to as “Sublessor”) and ZymoGenetics, Inc., a Washington corporation, (hereinafter referred to as “Sublessee”).

W I T N E S S E T H :

WHEREAS, Sublessor desires to sublease its interest in a portion of the “Premises”, as defined in the Prime Lease (as such term is hereinafter defined), to Sublessee; and

WHEREAS, Sublessee desires to sublease the Sublease Premises from Sublessor upon the terms and conditions contained herein.

NOW, THEREFORE, for good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged by said parties, the parties hereto do hereby agree as follows:

1. Sublease Premises . Sublessor hereby leases to Sublessee and Sublessee hereby leases from Sublessor approximately 7,128 rentable square feet of space on the 2nd floor (currently identified as Suite 201) of 1144 Eastlake Building (the “Building”) which is located at 1144 Eastlake Avenue E, Seattle, Washington 98109, as shown on the floor plan, less the area shown hatched in black, attached hereto as Exhibit “A” and made a part hereof (the “Sublease Premises”) for a term of 37 months, commencing on the later of October 1, 2005 or the date Sublessor delivers the Sublease Premises to Sublessee (the “Commencement Date”)-and ending at 11:59 p.m. on October 31, 2008, regardless of the actual Commencement Date, (hereinafter sometimes referred to as the “Sublease Term”), unless sooner terminated as hereinafter provided, and subject to the contingencies specified in Article 14 hereof. Sublessee agrees that the Sublease Commencement Date shall be the later of October 1, 2005, or the date of actual delivery of the Sublease Premises to Sublessee. Sublessor and Sublessee further agree that if the Commencement Date is later than October 1, 2005, Sublessee’s payment of Monthly Rental and Additional Rent in the amounts applicable for the specific period of time on the actual Commencement Date as reflected in the rent schedule shown below in Article 2(a) and Article 2(c) shall be payable on or before the actual date of commencement. Upon the request of either party or Prime Lessor, Sublessor and Sublessee shall execute a Commencement Date Certificate in the form attached hereto as Exhibit “C.”

(b) Late or Early Delivery. In the event Sublessor is unable to deliver possession of the Premises at the commencement of the term, Sublessor shall not be liable for any damage caused thereby, nor shall this Sublease be void or voidable but Sublessee shall not be liable for rent until such time as Sublessor offers to deliver possession of the Premises to Sublessee, but the term hereof shall not be extended by such delay. If Sublessee, with Sublessor’s and Prime Lessor’s consents, takes possession prior to the commencement of the term, Sublessee shall do so subject to all the covenants and conditions hereof except for the payment of Monthly Rent and Additional Rent which shall be free from such prior date to the commencement of the term until October 1, 2005 which Monthly Rent and Additional Rent thereafter shall be as reflected in the rent schedule shown below in Article 2.

2. Rent; Security Deposit; Parking .

(a) Sublessee agrees to pay to Sublessor at the address Sublessor designates herein, or at such other place as Sublessor may designate in writing, without demand, counterclaim, deduction or setoff, in legal tender, base rental for the Sublease Term payable in monthly base rental installments (“Monthly Rental”) as follows:

Sublessee shall pay the Monthly Rental and any other sum due hereunder as rent, whether or not designated as rent, to ConocoPhillips Company, ATTN: Tax ID 91-1144498, 21064 Network Place, Chicago, IL 60673-1210. The reference “Tax ID 91-1144498” shall to be inserted on all rental checks. Sublessee shall pay the Monthly Rental in advance not later than the 1st day of every month during the Sublease Term. Notwithstanding the above, concurrently with its execution hereof, Sublessee has paid to Sublessor the first month’s rent due under this Sublease.

Notwithstanding the foregoing, if Sublessee receives a notice from the Prime Lessor that the Sublessor has defaulted on its monetary obligations under the Prime Lease, then from and after that date Sublessee receives such notice, regardless of any subsequent cure of such default, Sublessee shall have the right but not the obligation to deliver all subsequent Monthly Rental and Additional Rent accruing hereunder directly to the Prime Lessor for Sublessor’s account (or to continue to pay Sublessor directly).

(b) The Base Year for the Sublease shall be 2005.

(c) Sublessee shall pay monthly as “Additional Rent” the Sublessee’s Pro Rata Share of Expenses, Taxes and Insurance, as defined in Article 4.2 of the Prime Lease that exceeds the Base Year Operating Costs as defined therein. The Sublessee’s Pro Rata Share is estimated in Article 1.4 of the Prime Lease as 8.92% or as modified by the Prime Lessor. Any cap (currently at 5%) on such expenses stated in the Prime Lease’s paragraph 4.2 shall apply to this Sublease as well.

(d) Sublessor and Sublessee agree that there shall be no initial security deposit required. Sublessor reserves the right to demand, and Sublessee agrees to pay, a deposit of $20,000 should Sublessee default per the terms of Article 10 below, if such default is not cured within the applicable notice and cure period. Upon notice to Sublessee by Sublessor, the following language shall be added language to the Sublease:

“Sublessee shall pay to Sublessor $20,000.00 as security for Sublessee’s payment of Monthly Rental and performance of its other obligations under this Sublease and any renewals or extensions of this Sublease. If Sublessee defaults in its payment of Monthly Rental or performance of its other obligations under this Sublease, Sublessor may use all or part of the security deposit for the payment of Monthly Rental or any other amount in default, or for the payment of any other amount that Sublessor may spend or become obligated to spend by reason of Sublessee’s default, or for the payment to Sublessor of any other loss or damage that Sublessor may suffer by reason of Sublessee’s default. If Sublessor so uses any portion of the security deposit, Sublessee will restore the security deposit to its original amount within five (5) days after written demand from Sublessor. Sublessor will not be required to keep the security deposit separate for its own funds and Sublessee will not be entitled to interest on the security deposit. The security deposit will not be a limitation on Sublessor’s damages or other rights under this Sublease, or a payment of liquidated damages, or an advance payment of the Monthly Rental. Upon expiration of the Sublease Term or earlier termination of this Sublease the security deposit shall be returned to Sublessee within a reasonable amount of time after such termination, reduced by such amounts as may be required by Sublessor to remedy defaults on the part of Sublessee in the payment of Monthly Rental, to repair damage to the Sublease Premises and the Building caused by Sublessee, its agents, employees, invitees and licensees and to clean the Sublease Premises.”

(e) At no additional charge to Sublessee, Sublessee shall be entitled to the use, on a non-exclusive basis, fourteen (14) parking stalls in the Building and the non-exclusive use of three (3) additional parking stalls located either in the Building or in surface parking lots in the vicinity of the Building. Use of such parking stalls shall be upon such terms and conditions and subject to such reasonable rules and regulations as

Prime Lessor or Sublessor may publish from time to time and otherwise strictly in accordance with and subject to the terms and conditions of Article 30 of the Prime Lease (but without any requirement that Sublessee pay the amounts stated therein for such stalls) as such amounts are included in the Monthly Rental as stated in Article 2 above.

3. Subordinate to Prime Lease, Sublessor Covenants .

(a) That certain so-called Office Lease entered into as of the 19 ^th day of September, 2003 by and between Sublessor, as tenant therein, and 1144 Eastlake LLC, as landlord therein (“Prime Lessor”), pursuant to which Sublessor leases and occupies approximately 7,128 rentable square feet of space on the 2nd floor of the Building (the “Premises”), is herein referred to as the “Prime Lease”. The Sublease Premises is comprised of the entire Premises. A copy of the Prime Lease, including all amendments and exhibits thereto is attached hereto as Exhibit “B” and made a part hereof. Sublessee acknowledges that it is familiar with the terms of the Prime Lease. In the event of any termination of the Prime Lease, this Sublease shall automatically terminate and Sublessor shall have no further liability to Sublessee. Except as may be inconsistent with the terms hereof, and subject to Sublessor performing its covenants stated in Article 3(b) below, all the terms, covenants, restrictions and conditions in the Prime Lease contained as of the date of this Sublease, shall be applicable to this Sublease with the same force and effect as if the Sublessor were the “lessor” under the Prime Lease (except with respect to Prime Lessor’s obligations to provide services under the Prime Lease, as to which Section 6 hereof shall prevail) and Sublessee were the “lessee” thereunder; and in the case of any breach hereof by Sublessee, Sublessor shall have all the rights against Sublessee as would be available to Prime Lessor against Sublessor as “lessee” under the Prime Lease. This Sublease is in all respects subject to and subordinate to the terms and conditions of the Prime Lease. Except as expressly contradicted by the terms of this Sublease, Sublessee agrees to be bound by all of the covenants, restrictions, terms and conditions of the Prime Lease in its use and occupancy of the Sublease Premises, and Sublessee covenants and agrees to perform all obligations of Sublessor arising under the Prime Lease during the term of this Sublease, and to refrain from violating or breaching any of the terms, covenants, restrictions and conditions of the Prime Lease.

(b) Sublessor hereby covenants and agrees for the Sublessee’s benefit as follows:

(i) To timely pay all Base Rent, Additional Rent and any other amounts due to Prime Lessor or otherwise under the Prime Lease;

(ii) Sublessor hereby waives irrevocably its Extension Rights under the Prime Lease at Article 1.5(c), covenants not to exercise such rights and agrees that the Prime Lessor may rely upon its statement in this subsection as a complete waiver;

(iii) Not to voluntarily cause, permit or consent to the termination or alternation of the Prime Lease, without first obtaining Sublessee’s consent which consent shall not be unreasonably withheld.

(iv) Sublessee shall and may peacefully have, hold and enjoy the Sublease Premises free from any person claiming a right thereto through Sublessor, subject to the terms of this Sublease and the Prime Lease, provided Sublessee pays the Monthly Rental and Additional Rent and fully performs all of its covenants and agreements;

(v) To deliver, as soon as practicable via facsimile, copies of all notices it receives from the Prime Lessor relating to the Sublease Premises, this Sublease or otherwise under the Prime Lease; and

(vi) Upon request by Sublessee, if reasonably determined necessary by Sublessee to establish privity of contract or other standing to compel Prime Lessor to perform, Sublessor will agree join as a co-plaintiff or co-petitioner with Sublessee in any action against Prime Lessor concerning a breach of Prime Lessor’s obligations under the Prime Lease; provided, however, that as a condition concurrent with Sublessor’s agreement to join in such action, Sublessee agrees (A) to reimburse Sublessor

immediately upon demand as Additional Rent, all of Sublessor’s expenses, including attorney’s fees, in connection with such action; (B) that by virtue of making a request for joinder, Sublessee has agreed to indemnify, defend and hold Sublessor harmless, for any of Sublessor’s claims, losses, costs, expenses and/or damages arising from or relating to Sublessee’s actions under this Subsection 3(b)(vi), including, but not limited to attorney’s fees and costs.

4. Insurance . Sublessee shall maintain at all times during the term of this Sublease, at its sole expense, comprehensive general liability insurance against claims for bodily injury, personal injury, and property damage occurring on, in or about the Sublease Premises in the amount of $10,000,000 per occurrence and shall name Sublessor and Prime Lessor as additional insureds. Sublessee shall also maintain, at its sole expense, physical damage insurance, on all of its personal property, including removable trade fixtures, located in the Sublease Premises and on all additions and leasehold improvements in the Sublease Premises. Such insurance shall be written on an “all risks” of physical loss or damage basis, for the full replacement cost value new without deduction for depreciation of the covered items and in amounts that meet any coinsurance clauses of the policies of insurance and shall include a vandalism and malicious mischief endorsement, sprinkler leakage coverage and earthquake sprinkler leakage coverage. All such insurance policies shall comply with all requirements of the Prime Lease, and shall be maintained with an insurance company licensed in the State of Washington with a Best’s rating of “A-VIII” or better in Best’s Insurance Guide. Sublessee shall deliver the certificate(s) of all such insurance prior to the commencement date of this Sublease and upon request, at any time thereafter. The insurance certificates shall provide that such insurance shall not be cancelled or materially adversely amended without at least thirty (30) days prior written notice to Sublessor and Prime Lessor. Sublessee agrees to have any and all physical damage coverage and all material damage insurance that will either include in the policy a right of Sublessee to waive subrogation without affecting the insureds’ rights to recover under the policy, or endorsed with the following subrogation clause: “This insurance shall not be invalidated should the insurer waive in writing prior to a loss any or all right of recovery against any party for loss occurring to the property described herein.” Sublessee hereby expressly waives all rights of recovery which it might otherwise have against Sublessor or Prime Lessor, for any loss or damage to personal property to the extent that such loss is covered, or would be covered by the insurance, required by this Article 4, if it were in effect. Sublessee shall further cause its insurers to waive any right of subrogation that they might otherwise have against Sublessor or Prime Lessor. Should premiums paid by the Sublessor or Prime Lessor increase due to Sublessee’s operations, the contents within the Sublease Premises or improvements made to the Sublease Premises, Sublessee shall promptly pay the increased amount of the premium upon request to Sublessor or Prime Lessor, respectively.

5. “As Is” Condition; Use; Alterations . Sublessee shall assume all of Sublessor’s obligations in Article 8 of the Prime Lease and shall take the Sublease Premises on an “as is” basis, subject to Sublessor delivering the Sublease Premises with the equipment listed on attached Exhibit “DD” (the “Sublease Premises FF&E”). As used herein “as is” means the condition the Sublease Premises and the Sublease Premises FF&E are in as of the execution date of this Sublease, subject to ordinary wear and tear. Sublessee’s taking possession of any portion of the Sublease Premises with such Sublease Premises FF&E shall be conclusive evidence against Sublessee that such portion of the Sublease Premises was in a good order and satisfactory condition when Sublessee took possession. No promise of Sublessor to alter, remodel, repair or improve the Sublease Premises and no representation respecting the condition of the Sublease Premises or the Building or any portion thereof have been made by Sublessor to Sublessee except as otherwise provided above in this Article 5. SUBLESSOR HEREBY EXPRESSLY DISCLAIMS AND NEGATES, AND SUBLESSEE HEREBY WAIVES, ALL WARRANTIES OF ANY KIND OR TYPE WHATSOEVER WITH RESPECT TO THE SUBLEASED PREMISES, THE SUBLEASE PREMISES FF&E, THE BUILDING, OR ANY IMPROVEMENTS LOCATED THEREON, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING BY WAY OF DESCRIPTION BUT NOT LIMITATION ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, CONDITION OR SAFETY. SUBLESSEE EXPRESSLY

AGREES THAT NEITHER SUBLESSOR, NOR ANYONE ACTING FOR OR ON BEHALF OF THE SUBLESSOR, HAS MADE ANY REPRESENTATION, WARRANTY, STATEMENT OR PROMISE, EXPRESS OR IMPLIED, TO SUBLESSEE CONCERNING THE QUALITY, VALUE, PHYSICAL ASPECTS OR CONDITIONS OF THE SUBLEASED PREMISES, THE SUBLEASE PREMISES FF&E, THE BUILDING OR ANY IMPROVEMENTS LOCATED THEREON, OR ANY OTHER MATTER WITH RESPECT THERETO, AND THAT SUBLESSEE HAS NOT RELIED UPON ANY REPRESENTATION, WARRANTY, STATEMENT OR PROMISE. SUBLESSEE AGREES THAT IT HAS MADE A PERSONAL INSPECTION OF THE SUBLEASED PREMISES, THE SUBLEASE PREMISES FF&E, THE BUILDING, AND ANY BUILDINGS AND OTHER IMPROVEMENTS LOCATED THEREON AND IS IN ALL RESPECTS SATISFIED WITH THE CONDITION AND FITNESS THEREOF AND ACCEPTS THE SAME “AS IS”, “WHERE IS” AND WITH ALL FAULTS, IN ITS PRESENT CONDITION AND STATE OF REPAIR. THE PARTIES ACKNOWLEDGE AND AGREE THAT DISCLAIMERS OF THE WARRANTIES CONTAINED IN THIS SECTION ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER. SUBLESSOR DOES NOT WARRANT EITHER EXPRESSLY OR IMPLIEDLY THE CONDITION OR FITNESS OF THE PROPERTY SUBLEASED HEREUNDER, ANY SUCH WARRANTY BEING HEREBY EXPRESSLY NEGATIVED. The Sublease Premises shall be used and occupied by Sublessee solely for the purpose of general office uses and for no other purpose. Sublessee covenants and agrees that it will, at its expense, comply with all laws, ordinances, orders, directions, requirements, rules and regulations of all governmental authorities (including federal, state, county and municipal authorities), now in force or which may hereafter be in force, which shall impose any duty upon Prime Lessor, Sublessor or Sublessee with respect to the use, occupancy or alteration of the Sublease Premises and of all insurance bodies applicable to the Sublease Premises and to the Sublessee’s use or occupancy thereof. Sublessee shall not use or permit the use of the Sublease Premises in any manner that will tend to create waste or a nuisance or to disturb other tenants of the Building or that will violate any of the terms or provisions of the Prime Lease.

Any alterations, additions or improvements desired by Sublessee shall be at Sublessee’s sole cost and expense and must be first approved in writing by Sublessor and Prime Lessor, with the requirements for approvals, the standards and timetables therefore as set forth and pursuant to the provisions stated in the Prime Lease at Article 9.3 therein, but including both Sublessor and Prime Lessor as approving parties, when applicable. Any such additions, alterations or modifications shall be carried out by Sublessee, at its own expense, in accordance with the provisions of the Prime Lease. Sublessee shall indemnify and hold harmless Sublessor and Prime Lessor from any and all costs, expenses, claims or liabilities, incurred in connection with the installation by Sublessee of any additions, alterations or modifications to or of the Sublease Premises, except to the extent done at the direction of the Sublessor or Prime Lessor.

6. Services . Notwithstanding anything to the contrary contained herein, the only services or rights to which Sublessee is entitled hereunder are those to which Sublessor is entitled to as “lessee” under the Prime Lease and that for all such services and rights Sublessee will look to Prime Lessor under the Prime Lease. Except as expressly setforth in Article 3(b) above, nothing contained in this Sublease shall in any way obligate Sublessor to perform any act required to be performed by the Prime Lessor under the Prime Lease, nor shall Sublessor incur any liability of Sublessee by virtue of the Prime Lessor’s failure to perform any act required of it or Prime Lessor’s failure to give any consent under the Prime Lease. Sublessor agrees to use reasonable efforts to cause Prime Lessor to provide the services required of Prime Lessor under the Prime Lease.

7. No Acts . Sublessee shall neither do nor permit anything to be done which would cause the Prime Lease to be terminated or forfeited or any claims to accrue to the benefit of Prime Lessor by reasons of any right of termination or forfeiture reserved or vested in Prime Lessor under the Prime Lease, or any rights to damages accruing to or for the benefit of Prime Lessor under the Prime Lease, and Sublessee shall indemnify and hold Sublessor harmless from and against all loss, cost, damage or expense, including,

but not limited to, attorneys’ fees and court costs, incurred by Sublessor by reason of any default on the part of Sublessee by reason of which the Prime Lease may be terminated or forfeited, or any claim shall accrue to the benefit of or for Sublessor under the Prime Lease. Sublessee agrees to indemnify, defend, protect and hold Sublessor harmless from and against any and all claims, demands, actions, suits, judgments, decrees, orders, liabilities, or expenses including reasonable attorneys’ fees and disbursements arising out of or on account of any damage or injuries, including wrongful death sustained or claimed to have been sustained to any person or property in or upon the Sublease Premises by any person whatsoever unless the same shall result directly and exclusively from the gross negligence or intentional misconduct of Sublessor. Sublessor shall not be liable for damage to person or property sustained by Sublessee or any other person, however such damage may have been caused, except to the extent resulting from the Sublessor’s gross negligence or intentional misconduct.

8. Surrender . Upon the termination or expiration of this Sublease at any time and for any reason, Sublessee will immediately quit and peacefully surrender possession of the Sublease Premises and Sublessee agrees to return the Sublease Premises in the same condition as they existed at the date of Sublessee’s occupancy, except for ordinary wear and tear and except for alterations and improvements approved by Sublessor and Prime Lessor, and Sublessee shall remove all of its personal property therefrom. If Sublessee remains in possession of the Sublease Premises after the end of the term of this Sublease with the prior consent of Sublessor, and the Prime Lease is still in effect, then Sublessee will occupy the Sublease Premises as a tenant from month to month, subject to all conditions, provisions and obligations of this Sublease in effect on the last day of the term. If Sublessee remains in possession of the Sublease Premises after the end of the term of this Sublease without the consent of Sublessor, and the Prime Lease is still in effect, then Sublessee shall indemnify Sublessor against all claims, losses, costs, expenses, and damages arising therefrom.

9. No Assignment . Except as otherwise expressly provided herein, Sublessee shall not assign this Sublease or any interest hereunder or further sublet all or any part of the Sublease Premises, or permit the use of the Sublease Premises by any party other than Sublessee and the employees of Sublessee, without the prior written consent of Sublessor and Prime Lessor in each instance, which will not be unreasonably withheld, conditioned or delayed, all in accordance with the terms and conditions of Article 12 of the Prime Lease. Sublessee shall not permit Sublessee’s interest in this Sublease to be vested in any third party by operation of law or otherwise. In the event such consent is obtained, any rents or other consideration received under any such proposed sublease which exceed the rent as defined in this Sublease or any consideration for an assignment shall be paid to Sublessor as and when received by Sublessee. For purposes of this Article 9, an assignment of this Sublease shall be deemed to occur upon any change in the ownership of Sublessee as described in Article 12 of the Prime Lease, provided however that Sublessee shall be permitted to transfer this Sublease or its interest in the Sublease Premises without obtaining Sublessor or Prime Lessor’s consent for those transfers described in the Prime Lease’s Article 12.4.

10. Default . The following events shall be deemed to be events of default by Sublessee under this Sublease:

(a) Sublessee shall fail to pay any installment of rent hereby reserved as and when the same shall become due if the failure continues for three (3) business days after written notice to Sublessee (“Monetary Default). Sublessor may, at its sole option, invoke the provisions of Article 2(d) above regardless or whether or not a Monetary Default is cured;

(b) Sublessee shall fail (other than a Monetary Default) to comply with any term, provision or covenant of the Prime Lease or this Sublease and shall not cure such failure within thirty (30) days after written notice thereof to Sublessee. However, if Sublessee’s failure to comply cannot reasonably be cured within thirty (30) days, Sublessee shall be allowed additional time as is reasonably necessary to cure the failure so long as: (1) Sublessee commences to cure the failure within thirty (30) days, and (2) Sublessee diligently pursues a course of action that will cure the failure and bring

Sublessee back into compliance with the Prime Lease and the Sublease. However, if Sublessee’s failure to comply creates a hazardous condition, the failure must be cured immediately upon notice to Sublessee;

(c) Sublessee shall become insolvent, or shall make a transfer in order to defraud creditors or shall make an assignment for the benefit of creditors or admits in writing its inability to pay its debts when due;

(d) Sublessee shall file a petition under any section or chapter of the National Bankruptcy Act, as amended, or under any similar law or statute of the United States or any state thereof; or Sublessee shall be adjudged bankrupt or insolvent in proceedings filed against Sublessee thereunder;

(e) A receiver or trustee shall be appointed for all or substantially all of the assets of Sublessee not removed or dismissed within sixty (60) days;

(f) Sublessee shall otherwise cause Sublessor to be in default under the Prime Lease.

(g) Sublessee shall abandon the entire Sublease Premises.

Upon the occurrence of any such events of default, which is not cured within the applicable notice and cure periods stated above, Sublessor shall have all the Landlord rights set forth in Article 20 of the Prime Lease and Sublessee shall be deemed “Tenant” for all purposes therein and herein.

10A. Sublessor Default .

(a) If Sublessor breaches any covenant or agreement of this Sublease, then and in such event Sublessee shall have the remedies set forth in Article 21 of the Prime Lease as if Sublessee was the Tenant and Sublessor was the Landlord as those terms are used therein. The limitation of liability for Landlord contained in Article 21 of the Prime Lease shall not apply to this Sublease.

(b) To its knowledge, Sublessor represents and warrants to Sublessee that (i) neither Sublessor or Landlord is in breach of or in default under the Prime Lease and no event has occurred that, with notice and/or lapse of time, would constitute a breach or default by Sublessor or Prime Lessor under the Prime Lease, and (ii) a true, correct, and complete copy of the Prime Lease as in effect on the Effective Date is attached hereto as Exhibit “B”.

11. Force Majeure . Sublessor and Sublessee shall not be liable for delay caused by strikes, riots, acts of God, national emergencies, acts of public enemy, civil insurrection, difficulty in obtaining materials or any other causes beyond Sublessor’s or Sublessee’s control (except insufficiency of funds) in performing any of the covenants required hereunder to be performed by Sublessor and Sublessee, except the payment of rent and other sums to be paid by Sublessee hereunder.

12. Default Rate . Sublessor and Sublessee further agree that in the event Sublessee at any time during the Sublease Term is in default in the payment of rent, Sublessor shall have the right to charge interest at the rate of eighteen percent (18%) per annum or the highest rate allowed by law, whichever is lower (the “Default Rate”), commencing on the sixth (6th) day after rent is due and continuing until rental payments are current. Sublessee hereby agrees to pay said interest upon notification by Sublessor.

13. Indemnity . Sublessee agrees that, to the extent not expressly prohibited by law, Sublessor and Prime Lessor, and their respective officers, agent and employees, shall not be liable for nor shall rent abate as a result of, any direct or consequential damage (including damage claimed for actual or constructive eviction) either to person or property, sustained by Sublessee or by other persons, due to the Building or any part thereof or any appurtenances thereof becoming out of repair, or due to any act or neglect of any tenant or occupant of the Building, or any other person. To the fullest extent permitted by law, Sublessee shall protect, indemnify and hold Sublessor and

Prime Lessor and their respective officers, agents, servants and employees harmless from and against any and all loss, costs, damages, claims, liabilities and expenses (including, without limitation, court costs and attorneys’ fees) of whatever nature arising from (i) injury to persons or damage to property on the Sublease Premises or in or about the Building arising out of or in connection with Sublessee’s use or occupancy of the Sublease Premises or Sublessee’s activities in the Building, or arising from any act or negligence of Sublessee, or its agents, contractors, servants, employees or invitees, or (ii) failure of Sublessee to perform its obligations under this Sublease, including those provisions of the Prime Lease incorporated herein by reference.

14. Consent of Prime Lessor . This Sublease and the obligations of both parties hereunder, are conditioned upon the written consent of Prime Lessor under the Prime Lease. This Sublease and any modifications or amendments thereof shall not take effect and be binding upon Sublessor until Sublessor obtains the written consent of Prime Lessor. Sublessor shall not be liable to Sublessee for any delay in delivering the Sublease Premises to Sublessee beyond the commencement date.

15. Notices . Any notice or demand which either party may or must give to the other hereunder shall be in writing and shall be deemed delivered when personally delivered or deposited in the United States mail, postage prepaid, certified with return receipt requested, addressed to the parties hereto at the respective addresses set out opposite their names below, or at such other address as they have hereafter specified by written notice:

Sublessor:

ConocoPhillips Company

ATTN: Marilynn Jackson

Plaza Office Building, 830C

Bartlesville, OK 74004

Office: 918-661-0993

Fax: 918-662-2226

Email: marilynn.l.jackson@conocophillips.com

With a copy to:

ConocoPhillips Company

ATTN: Randy Booth

1232 Park Street, Suite 300

Paso Robles, CA 93446

Office: 805-226-2641

Fax: 805-239-4410

Email: randy.w.booth@conocophillips.com

Sublessee:

ZymoGenetics, Inc.

ATTN: Shinko Campos, VP Operations

1144 Eastlake Avenue E., Suite 201

Seattle, WA 98109

Office: 206-442-6620

Fax: 206-442-6608

Email: shc@zgi.com

16. Brokerage . Grubb & Ellis Company, 601 Union Street, Suite 1400, Seattle, WA 98101 (“Sublessor’s Agent”) has acted as agent for Sublessor in this transaction. The Staubach Company, 2025 First Avenue, Suite 1212, Seattle, WA 98121 (“Sublessee’s Agent”) has acted as agent for Sublessee in this transaction. Sublessor and Sublessee hereby covenant and agree to one another that no brokerage fees or commissions are due any other Brokerage with respect to or in conjunction with this Sublease. Sublessor and Sublessee hereby indemnify one another, and hold one another harmless, from and against all loss, cost, damage or expense, including but not limited to, attorneys’ fees and court costs incurred by a party hereto as a result of any claims for brokerage fees or commissions due which are made by, through or under the other party hereto except those due Sublessor’s Agent by Sublessor per a separate agreement and except those due Sublessee’s Agent by Sublessor of a fee equal to $1.00 per square foot per year based on the sublease term.

17. Service of Process . Sublessee hereby appoints, as its agent to receive service of all dispossessory or restraint proceedings and notices thereunder, and all notices required under this Sublease, the person in charge of the Sublease Premises at the time of occupying said Sublease Premises; and if no person is in charge of, or occupying the Sublease Premises, then such service or notice may be made by attaching the same on the main entrance of the Sublease Premises and mailing a copy thereof to Sublessee’s last known address or any other address which Sublessee may have requested that notices be mailed by written notice to Sublessor.

18. No Other Agreements . All prior understandings and agreements between the parties are merged within this Sublease which alone fully and completely sets forth the understanding of the parties hereto. This Sublease may not be changed or terminated in any manner other than by an agreement in writing, executed by the party against whom enforcement of the change or termination is sought.

19. Binding Effect . This Sublease shall inure to the benefit of and be a burden upon Prime Lessor, Sublessor and Sublessee and their respective transferees, successors and permitted assigns, subject, in the case of Sublessee, to the provisions of Section 9 hereof.

20. Governing Law . This Sublease shall be governed by and interpreted in accordance with the laws of the State of Washington and the parties hereby consent to the jurisdiction and venue of the King County Superior Court, in Seattle, Washington.

21. Miscellaneous .

(a) Rights Reserved by Sublessor .

(i) Sublessor may enter the Sublease Premises at reasonable times during normal business hours, on twenty-four (24) hours’ advance notice to Sublessee for the purpose of inspecting the Sublease Premises. Sublessor shall at all times be accompanied by Sublessee’s agents and shall not be permitted access to those areas containing confidential or trade secret information. Sublessee shall conduct such inspections so as to minimize the inconvenience or disturbance to Sublessee in its business. Prime Lessor’s entry to the Sublease Premises shall be governed by the Prime Lease.

(ii) If Sublessee breaches any covenant or condition of this Sublease and as a result of such breach Sublessor shall be in default under the terms of the Lease, Sublessor may, after the expiration of any applicable notice and cure period, and thereafter upon notice to Sublessee (except that no notice need be given in cases of emergency), to cure such breach at Sublessee’s expense. The cost of such cure shall be deemed Additional Rental payable hereunder on demand.

(b) Jointly Prepared Document . This Sublease is the result of prior negotiations, agreements and understandings of the parties hereto and is to be construed as the jointly prepared product of the parties hereto.

(c) Conflict . In the event of a conflict between the terms of this Sublease and the terms of Prime Lease as to and between the parties hereto, the terms of this Sublease shall control.

(d) Time . Time is of the essence of this Sublease.

(e) Severability . If any term or provision of this Sublease or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Sublease, or the application of such term or provision to persons or circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby and each remaining term or provision of this Sublease shall be valid and enforced to the fullest extent permitted by law.

(g) Captions . The captions used herein are for identification only and are not a part of this Sublease.

IN WITNESS WHEREOF, the Sublessor, Sublessee and Prime Lessor have duly fixed their names on the dates indicated below but effective as of the date first above written.

The undersigned, being the Prime Lessor under the Prime Lease, hereby consents to the foregoing Sublease and to the terms and provisions contained therein.

SUBLESSEE’S ACKNOWLEDGMENT

I, the undersigned, a Notary Public, in and for the County and State aforesaid, do hereby certify that James A. Johnson, personally known to me to be the authorized agent of ZymoGenetics, Inc., a Washington corporation, and personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that as the authorized agent of said entity being authorized so to do, he executed the foregoing instrument on behalf of said entity, by subscribing the name of such entity by himself as such managing member, as a free and voluntary act, and as the free and voluntary act and deed of said entity under the foregoing instrument for the uses and purposes therein set forth.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

[Notary Seal]

SUBLESSOR’S ACKNOWLEDGMENT

On                      before me, Tracey R. Gutierrez, Notary Public, personally appeared Tim R. Thompson, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that which the person acted, executed the instrument.

WITNESS my hand and official seal.

[Notary Seal]

PRIME LESSOR’S ACKNOWLEDGMENT

I, the undersigned, a Notary Public, in and for the County and State aforesaid, do hereby certify that John Teutsch, personally known to me to be the authorized agent of 1144 Eastlake LLC, a Washington limited liability company, and personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and acknowledged that as the authorized agent of said entity being authorized so to do, he executed the foregoing instrument on behalf of said entity, by subscribing the name of such entity by himself as such managing member, as a free and voluntary act, and as the free and voluntary act and deed of said entity under the foregoing instrument for the uses and purposes therein set forth.

GIVEN under my hand and official seal this 30 ^th day of September, 2005.

OFFICE LEASE AGREEMENT

This Office Lease Agreement (the “Lease”) is made and entered into as of the 19 ^th day of September, 2003, (“Effective Date”) by and between, 1144 Eastlake LLC, a Washington limited liability company (“Landlord”), and Conoco Phillips Company, a Delaware corporation (“Tenant”).

(a) The “Term” shall be a period of Sixty (60) calendar months, plus any partial month in which the Commencement Date occurs. The Term shall commence on the date (“Commencement Date”) that is the first to occur of the following events (i) seven (7) days following the date on which Landlord notifies Tenant that Landlord’s Work (defined in Exhibit C) is substantially complete, (ii) the date on which Tenant takes possession or commences beneficial occupancy of the Premises. or (iii) if substantial completion of Landlord’s Work is delayed due to Tenant’s failure to perform its obligations under this Lease, then seven (7) days following the date determined by Landlord as the date upon which Landlord’s Work would have been substantially completed, but for Tenant’s failure to perform. Unless terminated early in accordance with this Lease the Term shall end Sixty (60) calendar months after the Commencement Date (the “Termination Date”), provided however if the Lease commences on any day other than the first of the month the Lease shall terminate Sixty (60) calendar months after the last day of the month in which the Lease commenced. Landlord shall use commercially reasonable efforts to complete Landlord’s Work prior to November 1, 2003.

(b) Notwithstanding the foregoing, Tenant shall have a one time right to terminate this Lease as of the end of the thirty-sixth (36 ^th ) full calendar month of the Term by giving Landlord written notice at least six (6) months prior to such data; provided that Tenant shall pay Landlord, at least ten (10) days prior to the date of such early termination, an amount equal to the sum of (i) the unamortized tenant improvement expenditures (including without limitation permits, design, construction costs, etc.) made by Landlord to prepare the Premises for Tenant, (ii) the unamortized leasing commissions paid by Landlord with respect to this Lease, and (iii) an amount equal to twelve (12) months of Base Monthly Rent at the rates applicable to the twelve (12) months immediately following the date of early termination. As used herein, the “unamortized” portion of an expenditure means the amount remaining after amortization of the expenditure over the first thirty-six (36) months of the Lease Term, assuming that the entire expenditure was to be amortized over the sixty (60) month term in equal monthly installments with interest at ten percent (10%) per annum.

(c) Tenant is granted the right (“Extension Right”) to extend the term of this Lease beyond the Termination Date of the initial Term for one period of sixty (60) months (the “Extended Term”). Tenant may not exercise its Extension Right if it is then in default beyond any applicable cure period or if it has ever been in default beyond any applicable cure period more than two (2) times in any twelve (12) month period. Tenant may exercise its Extension Right by delivering written notice thereof to Landlord not later than nine (9) months prior to the expiration of the initial term. In the Extended Term, all terms and conditions of this Lease shall apply except (i) there shall be no additional renewal terms; (ii) the Base Monthly Rent for the Extended Term shall be the then prevailing Fair Market Rent, provided that in no event shall the Base Monthly Rent for the Extended Term be less than the Base Monthly Rent for the last month of the initial term; (iii) parking rates during the Extended Term shall be at the than-prevailing rates for the Building; and (iv) the Base Year and Base Year Operating Expenses shall be reset to the calendar year in which falls the first day of the Extended Term.

Extension Rights shall apply to all of the Premises than under lease to Tenant. Tenant’s Extension Right is personal and may not be exercised by any assignee or sublessee other than an affiliate of Tenant or a successor by merger or consolidation.

The term “Fair Market Rent” for the purposes of this Lease shall mean the annual amount per rentable square foot that Landlord has accepted in current, new comparable transactions in the Building for comparable space, for a comparable period of time, with improvements comparable to those existing in the Premises on the date Tenant exercises its Extension Right (or with such restoration as Tenant would be required to make upon termination of the Lease, if such would increase the Fair Market Rent) from non-expansion, non-renewal and non-equity tenants, or if there are not a sufficient number of current comparable transactions in the Building, what a willing, comparable, new, non-expansion, non-renewal, non-equity tenant would pay, and a willing, comparable landlord of a comparable building would accept under the transaction as further defined above.

If Landlord and Tenant are not able to agree on the Fair Market Rent for the Extended Term within thirty (30) days after Tenant’s notice of election to renew, then such Fair Market Rent shall be determined as follows. Landlord and Tenant shall each select an appraiser with at least ten years experience in the Seattle commercial market. If the two appraisers are unable to agree within ten (10) days after their selection, they shall select a similarly qualified third appraiser (the “Neutral Appraiser”). Within twenty (20) days after selection of the Neutral Appraiser, the three appraisers shall simultaneously exchange determinations of Fair Market Rent. If the lowest appraisal is not less than ninety percent (90%) if the highest appraisal, t