LEASE TERMINATION AGREEMENT (CANYON PARK EAST)

Exhibit 10.4

* Confidential Treatment has been

requested for the marked portions

of this exhibit pursuant to Rule

24b-2 of the Securities Exchange

Act of 1934, as amended

LEASE TERMINATION AGREEMENT

(CANYON PARK EAST)

This Lease Termination Agreement (this “ Agreement ”) is entered into as of the 29 ^th day of June, 2009, by and between ARDEN REALTY LIMITED PARTNERSHIP, a Maryland limited partnership (“ Landlord ”) and TARGETED GENETICS CORPORATION, a Washington corporation (“ Tenant ”).

R E C I T A L S :

A. Landlord’s predecessor-in-interest, CarrAmerica Realty Corporation, a Maryland corporation, and Tenant entered into that certain Lease dated as of June 30, 2000 (“ Lease ”), whereby Landlord leased to Tenant, and Tenant leased from Landlord, those certain premises consisting of approximately 75,692 rentable square feet as more particularly described in the Lease (the “ Premises ”), in that certain building commonly known as Canyon Park East and located at 22011 26 ^th Avenue S.E., Bothell, Washington. The Lease is incorporated herein by this reference.

B. There is currently $[*] due, owing and unpaid by Tenant to Landlord under the Lease (the “ Past Due Amount” ), after application of Tenant’s Letter of Credit.

C. Tenant and Landlord desire to enter into this Agreement in order to terminate the Lease, to resolve the Past Due Amount and to release one another from their respective obligations thereunder, except as otherwise provided herein.

A G R E E M E N T :

NOW, THEREFORE, in consideration of the foregoing recitals and the conditions and the covenants hereinafter contained, and for other consideration hereinafter set forth, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

1. Termination of the Lease . Landlord and Tenant hereby agree that, conditioned upon the performance by the parties of the provisions of this Agreement, the Lease shall terminate and be of no further force or effect as of the date of full execution of this Agreement (“ Termination Date ”).

2. Return of Premises . Tenant hereby stipulates that it has vacated the Premises and restored and delivered exclusive possession of the same to Landlord on or about February 3, 2009 (“ Vacation Date ”). Any furniture, equipment or other property remaining in the Premises as of the Termination Date shall be considered abandoned by Tenant (“ Abandoned Property ”) and may be disposed of or utilized by Landlord in any manner whatsoever. Tenant hereby waives any and all rights and remedies under the Lease and/or Washington law with respect to the Abandoned Property.

3. Letter of Credit . Tenant and Landlord acknowledge that Tenant has relinquished to Landlord and Landlord applied Tenant’s Letter of Credit in the amount of $200,000.00 in or about February 2009, toward Tenant’s past due rental obligations in the ordinary course of business.

4. Past Due Amount/Default .

(a) As consideration for Landlord’s execution of this Agreement, Tenant agrees to and will pay to Landlord in good U.S. funds, via cashier’s checks or wire, the total sum of $500,000.00 (the “ Termination Fee ”), which sum, when paid, will represent full and final satisfaction of the Past Due Amount. Tenant agrees to and will pay the Past Due Amount to Landlord in installments pursuant to the following schedule (provided, however, that Tenant may

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elect to pay any installment of the Termination Fee at any time before its due date):

(b) Notwithstanding any provision to the contrary, in the event that Tenant fails to timely make any of the payments due under Paragraph 4(a) above within five (5) days following written notice that the payment is past due (either of which event shall constitute a “Default” under this Agreement), Tenant hereby stipulates that the entire Termination Fee, less any payments already made, will become immediately due and owing to Landlord. ¹

(c) Tenant agrees that if during the course of the above repayment schedule as outlined in subsection (a) of this Paragraph it obtains at least $[*] in net proceeds from any combination of debt or equity financing, that Tenant will notify Landlord within five (5) calendar days of receiving such financing proceeds and that any unpaid balance of the Termination Fee shall be accelerated and immediately due and payable to Landlord within ten (10) calendar days of such notification.

(d) Tenant further agrees that if during the course of the above repayment schedule as outlined in subsection (a) of this Paragraph Tenant receives a milestone payment from [*] as a result of the filing by [*] with a regulatory agency for marketing approval of [*] (the “ Milestone Payment ”), as provided under that certain [*] Agreement between Tenant and [*] dated [*], Tenant will notify Landlord within five (5) calendar days of receiving the Milestone Payment and will remit to Landlord within ten (10) calendar days of such notification an accelerated payment of $100,000.00. Such accelerated payment amount (i) shall be credited as payment of the full installment amounts due on [*] and as payment of half the installment amount due on [*], and (ii) shall not relieve Tenant of the obligation to make any other scheduled payment. For the avoidance of doubt, the parties

*Confidential Treatment Requested

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acknowledge and agree that (A) if the remaining amount of the Termination Fee not yet paid by Tenant is less than $100,000 at the time Tenant receives the Milestone Payment (if any), the accelerated payment due to Landlord under this subsection (d) shall be the remaining unpaid amount of the Termination Fee, and (B) Tenant’s obligation to make a payment to Landlord upon the receipt of the Milestone Payment (if any) shall terminate when the Termination Fee has been paid in full. Landlord acknowledges that there is no guarantee that AMT will achieve the milestone for which the Milestone Payme