repeat injections for patients to sustain aesthetic benefits

EXHIBIT 10.18

SUBLEASE AGREEMENT

     THIS SUBLEASE AGREEMENT (the “Sublease”) entered into as of June 1, 2005, between INFOSONICS CORPORATION, a Maryland corporation (“Sublandlord”) and Artes Medical USA, Inc., a Delaware Corporation (“Subtenant”).

RECITALS

     A. Pursuant to that certain Building Lease Agreement dated as of January 26, 2004 (the “Master Lease”) between ROBERT JEAN LICHTER and GAIL F. LICHTER, Trustees of the LICHTER FAMILY TRUST FIRST AMENDED AND RESTATED DECLARATION OF TRUST DATED NOVEMBER 7,1996, and KENNETH R. SATTERLEE AND CANDACE C. SATTERLEE, Trustees of THE SATTERLEE FAMILY TRUST UTD APRIL 24, 1986, as tenants-in-common (collectively, “Master Landlord”), as Landlord, and Sublandlord, as tenant, Sublandlord obtained the leasehold estate created by the Master Lease in and to the Premises (said term and other capitalized terms used herein having the definitions given to such terms in the Master Lease unless otherwise expressly defined herein), a copy of the Master Lease being attached hereto and made a part hereof as Exhibit A. Under the Master Lease, the Premises consists of approximately 31,925 rentable square feet of space.

     B. Sublandlord desires to sublet that portion of the Premises as hereinafter described to Subtenant and Subtenant desires to sublet such portion of the Premises from Sublandlord upon all of the terms, covenants and conditions herein stated.

     NOW THEREFORE, in consideration of the mutual agreements set forth herein, the parties hereto, intending to be legally bound hereby agree as follows:

     1. Premises.

          1.1 Sublease Premises. Sublandlord hereby leases to Subtenant and Subtenant hereby leases from Sublandlord, upon the terms, covenants and conditions herein set forth, that portion of the Premises described as the entire second floor mezzanine of the Building of which the Premises forms a part, consisting of approximately 8,000 square feet, as depicted on Exhibit B attached hereto and made a part hereof (“Sublease Premises”) including the right to use of the Common Area upon the Premises to the extent of Sublandlord’s right to use the Common Areas under the Master Lease, including the use of twenty (20) parking spaces, subject to all of the terms and provisions of the Master Lease. Sublandlord will deliver the Sublease Premises to Subtenant in their current “as is” condition. At the termination of this Sublease, Subtenant shall surrender possession of the Sublease Premises to Sublandlord or Sublandlord’s successors. Sublandlord expressly reserves the rights of entry provided for in this Sublease and at law and its right of reversion upon the termination of this Sublease.

          1.2 Term. The term of this Sublease (the “Term”) shall be for approximately five years and ten months commencing on the Commencement Date (which shall be not later than June 1, 2005) and continuing through the day immediately prior to the scheduled expiration date of the Master Lease (i.e., March 31, 2011), unless (i) the Master Lease is earlier terminated pursuant to the provisions thereof, including without limitation, the provisions of Section 2.4 of the Master Lease, or (ii) the Sublandlord acquires the Building and the underlying real property from Master Landlord

 

in accordance with Section 37 of the Master Lease and elects, in Sublandlord’s sole and absolute discretion, to terminate this Sublease. In such event, this Sublease shall be terminated upon the effective date of any such event without any further action required of Sublandlord, unless this Sublease is earlier terminated pursuant to the provisions hereof. In no event shall the expiration date of the Sublease exceed the Termination Date of the Master Lease.

          1.3 Use. Subtenant agrees to use the Sublease Premises in accordance with the provisions of the Master Lease and this Sublease, and for no other purpose.

     2. Rent.

          2.1 Rent: Base Rent payable for the Sublease Premises (“Base Rent”) during the initial twelve (12) month period of the Term shall be Twelve Thousand Four Hundred Dollars ($12,400.00) per month. Base Rent shall be increased annually on each anniversary of the Commencement Date by an amount equal to five percent (5%) of the Base Rent payable for the immediately preceding twelve (12) month period. Rent shall be payable in advance on the first (1^st) day of each month during the Term, and shall be subject to a late charge equal to six percent (6%) of such overdue amount if not received by the tenth (10^th) day of such month. Furthermore, in the event that the term of this Sublease begins or ends on a date that is not the first day of a month, Base Rent will be prorated as of that date. Concurrent with Subtenant’s execution of this Sublease, Subtenant will deliver to Sublandlord the first month’s base rent in the amount of Twelve Thousand Four Hundred Dollars ($12,400.00) plus the amount of Twenty-five Thousand Dollars ($25,000.00) as a security deposit to be held by Sublandlord under the terms of Section 4 of the Master Lease. The parties acknowledge that Additional Rent shall not include those costs incurred by Sublandlord under the Master Lease which are defined as Operating Expenses in Section 3.3 of the Master Lease, except for the proportional cost of water, sewer, gas, electricity, heating, ventilation, air conditioning and other utilities or services provided to the Building as defined in the Master Lease, which shall be billed directly to Subtenant all as set forth in Section 10 herein below.

          2.2 Additional Rent. In addition to Base Rent, Subtenant shall pay as additional rent (“Additional Rent”) hereunder without notice or demand and without abatement, setoff or deduction of any amount whatsoever, all other sums, amounts, costs, liabilities, obligations and other payments required or agreed to be paid by or assumed by Subtenant under this Sublease, including, without limitation, twenty-five percent (25%) of the cost of utilities services to the Building, as provided herein below, during the Term, which shall be separately billed to Subtenant on a monthly basis. In the event of any failure on the part of Subtenant to pay any of the same, Sublandlord shall have (in addition to all other rights and remedies), all the rights and remedies provided for herein or by law in the case of non-payment of Base Rent.

          2.3 Payment of Rent. Rent shall be paid in cash or check, subject to collection, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, to Sublandlord at the Premises, or at such other place or to such other party as Sublandlord may from time to time designate by notice to Subtenant. As used in this Sublease, the term “Rent” shall mean Base Rent, and Additional Rent. Any Rent which is not paid when due shall bear interest at the Default Rate from the due date until paid.

          2.4 No Termination, Abatement, etc. Except as otherwise specifically set forth herein, this Sublease shall not terminate, nor shall Subtenant be entitled to any abatement,

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deduction, deferment or reduction of Rent, or setoff against Rent, nor shall the respective obligations of Sublandlord and Subtenant be otherwise affected, by reason of damage to or destruction of the Sublease Premises from whatever cause, any taking or takings by eminent domain, the law or unlawful prohibition of the use or occupancy of the Sublease Premises for its intended purpose, the interference with such use or occupancy by any private person, corporation or other entity, or for any other cause whether similar or dissimilar to the foregoing, any present or future law to the contrary notwithstanding. The obligations of Sublandlord and Subtenant hereunder shall be separate and independent covenants and agreements and the rent payable by Subtenant hereunder shall continue to be payable in all events unless the obligations to pay the same shall be terminated pursuant to an express provision of this Sublease. Subtenant shall remain obligated under this Sublease in accordance with its terms, and shall not take any action to terminate, rescind or avoid this Sublease, notwithstanding any bankruptcy, insolvency, reorganization, composition, readjustment, liquidation, dissolution, winding up or other proceedings affecting Sublandlord or any assignee of Sublandlord, and notwithstanding any action with respect to this Sublease that may be taken by a trustee or receiver of Sublandlord or any assignee of Sublandlord or by any court proceedings.

     3. Master Lease. As applied to this Sublease, the words “Landlord” and “Tenant” in the Master Lease will be deemed to refer to Sublandlord and Subtenant, respectively, under this Sublease.

          3.1 Except as otherwise expressly provided in Section 3 of this Sublease, the covenants, agreements, provisions, and conditions of the Master Lease, to the extent that they relate to the Sublease Premises and to the extent that they are not inconsistent with the terms of this Sublease, are made a part of and incorporated into this Sublease as if recited in full in this Sublease, including, without limitation, Subtenant’s maintenance obligations with respect to the Sublease Premises under Section 6.2 of the Master Lease.

          3.2 The rights and obligations of the Master Landlord and the Tenant under the Master Lease will be deemed the rights and obligations of Sublandlord and Subtenant, respectively, under this Sublease, and will inure to the benefit of, and be binding on, Sublandlord and Subtenant, respectively. As between the parties to this Sublease only, in the event of a conflict between the terms of the Master Lease and the terns of this Sublease, the terms of this Sublease will control.

     4. Performance By Sublandlord; Status of Master Lease

          4.1 Subtenant recognizes that Sublandlord is not in a position to render any of the services or to perform any of the obligations required of Master Landlord by the terms of the Master Lease. Therefore, despite anything to the contrary in this Sublease, Subtenant agrees that performance by Sublandlord of its obligations under this Sublease is conditioned on performance by the Master Landlord of its corresponding obligations under the Master Lease, and Sublandlord will not be liable to Subtenant for any default of the Master Landlord under the Master Lease.

          4.2 Subject to master lease, Subtenant will not have any claim against Sublandlord based on the Master Landlord’s failure or refusal to comply with any of the provisions of the Master Lease unless that failure or refusal is a result of Sublandlord’s act or failure to act. Despite the Master Landlord’s failure or refusal to comply with any of those provisions of the Master Lease, this Sublease will remain in full force and effect and Subtenant will pay the base rent

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and additional rent and all other charges provided for in this Sublease without any abatement, deduction or setoff. Except as expressly provided in this Sublease, Subtenant agrees to be subject to, and bound by, all of the covenants, agreements, terms, provisions, and conditions of the Master Lease, as though Subtenant was the Tenant under the Master Lease.

          4.3 Obtaining Master Landlord’s consent. Whenever the consent of the Master Landlord is required under the Master Lease, and whenever the Master Landlord fails to perform its obligations under the Master Lease, Sublandlord agrees to use its reasonable, good faith efforts to obtain, at Subtenant’s sole cost and expense, that consent or performance on behalf of Subtenant, as requested by Subtenant for its benefit.

          4.4 No Existing Defaults. Sublandlord represents and warrants to Subtenant that the Master Lease is in full force and effect, and Sublandlord has neither given nor received a notice of default under the Master Lease.

          4.5 Preservation of Master Lease. Subtenant and Sublandlord will each refrain from any act or omission that would result in the failure or breach of any of the covenants, provisions, or conditions of the Master Lease on the part of the Tenant under the Master Lease.

     5. Insurance and Condemnation Proceedings. Despite anything contained in the Master Lease to the contrary, as between Sublandlord and Subtenant only, in the event of damage to or condemnation of the Sublease Premises, all insurance proceeds or condemnation awards received by Sublandlord under the Master Lease will be deemed to be the property of Sublandlord, and Sublandlord will have no obligation to rebuild or restore the Subleased Premises.

     6. Insurance. Subtenant shall provide insurance equivalent to the insurance required of Sublandlord by Section 7 of the Master Lease. The company or companies writing any insurance which Subtenant is required to take out and maintain or cause to be taken out or maintained pursuant to the Master Lease, and hereunder, as well as the form of such insurance shall at all times be subject to Master Landlord’s and Sublandlord’s approval (which approval in the case of Sublandlord shall not be unreasonably withheld). Public liability and casualty insurance policies evidencing such insurance shall name Master Landlord and Sublandlord and/or their respective designees as additional insureds, shall be primary and non-contributory and shall also contain a provision by which the insurer agrees that such policy shall not be cancelled except after 30 days’ written notice to Master Landlord and Sublandlord and/or such designees. None of the insurance which Subtenant is required to carry hereunder shall contain any deductible provisions except to the extent approved by Master Landlord and Sublandlord (which approval in the case of Sublandlord shall not be unreasonably withheld). All such policies, or certificates thereof, shall be deposited with Master Landlord and Sublandlord promptly upon commencement of Subtenant’s obligation to procure the same. At least 30 days prior to the expiration date of any policy, a renewal policy or certificate thereof shall be deposited with Master Landlord and Sublandlord. If Subtenant shall fail to perform any of its obligations pursuant to this paragraph, Sublandlord may perform the same and the cost thereof shall be payable upon Sublandlord’s demand therefor as Additional Rent.

          6.1 Subtenant shall not do or suffer to be done, or keep or suffer to be kept, anything in, upon or about the Sublease Premises which will contravene Master Landlord’s or Sublandlord’s policies of hazard or liability insurance or which will prevent Master Landlord or Sublandlord from procuring such policies from companies acceptable to Master Landlord or