Document:

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

                                    LONG-TERM
                          COMMON STOCK PURCHASE WARRANT

                 To Purchase 1,454,545 Shares of Common Stock of

                                  ASTRALIS LTD.

            THIS COMMON STOCK PURCHASE WARRANT (the "Warrant") certifies that,
for value received, Lipworth Capital Limited (the "Holder"), is entitled, upon
the terms and subject to the limitations on exercise and the conditions
hereinafter set forth, at any time on or after the date hereof (the "Initial
Exercise Date") and on or prior to the close of business on the five year
anniversary of the Initial Exercise Date (the "Termination Date") but not
thereafter, to subscribe for and purchase from Astralis Ltd., a Delaware
corporation (the "Company"), up to 1,454,545 shares (the "Warrant Shares") of
Common Stock, par value $0.0001 per share, of the Company (the "Common Stock").
The purchase price of one share of Common Stock under this Warrant shall be
equal to the Exercise Price, as defined in Section 2(b). Holder acknowledges
that this Warrant shall not be exercisable until and unless the Company has
received Shareholder Approval.

      Section 1. Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in that certain Securities Purchase
Agreement (the "Purchase Agreement"), dated August 17, 2005, among the Company
and the purchasers signatory thereto.

      Section 2. Exercise.

            a) Exercise of Warrant. Exercise of the purchase rights represented
      by this Warrant may be made, in whole or in part, at any time or times on
      or after the Initial Exercise Date and on or before the Termination Date
      by delivery to the Company of a duly executed facsimile copy of the Notice
      of Exercise Form

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      annexed hereto (or such other office or agency of the Company as it may
      designate by notice in writing to the registered Holder at the address of
      such Holder appearing on the books of the Company); provided, however,
      within 5 Trading Days of the date said Notice of Exercise is delivered to
      the Company, the Holder shall have surrendered this Warrant to the Company
      and the Company shall have received payment of the aggregate Exercise
      Price of the shares thereby purchased by wire transfer or cashier's check
      drawn on a United States bank.

            b) Exercise Price. The exercise price of the Common Stock under this
      Warrant shall be $0.165, subject to adjustment hereunder (the "Exercise
      Price").

            c) Cashless Exercise. If at any time after one year from the date of
      issuance of this Warrant there is no effective Registration Statement
      registering, or no current prospectus available for, the resale of the
      Warrant Shares by the Holder during any period when the Registration
      Statement is required to be effective pursuant to the Registration Rights
      Agreement (and subject to permitted suspensions as set forth therein),
      then this Warrant may also be exercised at such time by means of a
      "cashless exercise" in which the Holder shall be entitled to receive a
      certificate for the number of Warrant Shares equal to the quotient
      obtained by dividing [(A-B) (X)] by (A), where:

            (A) = the VWAP on the Trading Day immediately preceding the date of
                  such election;

            (B) = the Exercise Price of this Warrant, as adjusted; and

            (X) = the number of Warrant Shares issuable upon exercise of this
                  Warrant in accordance with the terms of this Warrant by means
                  of a cash exercise rather than a cashless exercise.

            For purposes of this Warrant, "VWAP" shall mean, for any date, the
      price determined by the first of the following clauses that applies: (a)
      if the Common Stock is then listed or quoted on a Trading Market, the
      daily volume weighted average price of the Common Stock for such date (or
      the nearest preceding date) on the primary Trading Market on which the
      Common Stock is then listed or quoted as reported by Bloomberg Financial
      L.P. (based on a Trading Day from 9:30 a.m. EST to 4:02 p.m. Eastern Time)
      using the VAP function; (b) if the Common Stock is not then listed or
      quoted on the Trading Market and if prices for the Common Stock are then
      reported in the "Pink Sheets" published by the Pink Sheets, LLC (or a
      similar organization or agency succeeding to its functions of reporting
      prices), the most recent bid price per share of the Common Stock so
      reported; or (c) in all other cases, the fair market value of a share of
      Common Stock as determined by a nationally recognized-independent
      appraiser selected in good faith by Purchasers holding a majority of the
      principal amount of Shares then outstanding.

            d) [Reserved].

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            e) Mechanics of Exercise.

                        i. Authorization of Warrant Shares. The Company
                  covenants that all Warrant Shares which may be issued upon the
                  exercise of the purchase rights represented by this Warrant
                  will, upon exercise of the purchase rights represented by this
                  Warrant, be duly authorized, validly issued, fully paid and
                  nonassessable and free from all taxes, liens and charges in
                  respect of the issue thereof (other than taxes in respect of
                  any transfer occurring contemporaneously with such issue).

                        ii. Delivery of Certificates Upon Exercise. Certificates
                  for shares purchased hereunder shall be transmitted by the
                  transfer agent of the Company to the Holder by crediting the
                  account of the Holder's prime broker with the Depository Trust
                  Company through its Deposit Withdrawal Agent Commission
                  ("DWAC") system if the Company is a participant in such
                  system, and otherwise by physical delivery to the address
                  specified by the Holder in the Notice of Exercise within 3
                  Trading Days from the delivery to the Company of the Notice of
                  Exercise Form, surrender of this Warrant and payment of the
                  aggregate Exercise Price as set forth above ("Warrant Share
                  Delivery Date"). This Warrant shall be deemed to have been
                  exercised on the date the Exercise Price is received by the
                  Company. The Warrant Shares shall be deemed to have been
                  issued, and Holder or any other person so designated to be
                  named therein shall be deemed to have become a holder of
                  record of such shares for all purposes, as of the date the
                  Warrant has been exercised by payment to the Company of the
                  Exercise Price and all taxes required to be paid by the
                  Holder, if any, pursuant to Section 2(e)(vii) prior to the
                  issuance of such shares, have been paid.

                        iii. Delivery of New Warrants Upon Exercise. If this
                  Warrant shall have been exercised in part, the Company shall,
                  at the time of delivery of the certificate or certificates
                  representing Warrant Shares, deliver to Holder a new Warrant
                  evidencing the rights of Holder to purchase the unpurchased
                  Warrant Shares called for by this Warrant, which new Warrant
                  shall in all other respects be identical with this Warrant.

                        iv. Rescission Rights. If the Company fails to cause its
                  transfer agent to transmit to the Holder a certificate or
                  certificates representing the Warrant Shares pursuant to this
                  Section 2(e)(iv) by the tenth Trading Day after the Warrant
                  Share Delivery Date, then the Holder will have the right to
                  rescind such exercise.

                        v. Compensation for Buy-In on Failure to Timely Deliver
                  Certificates Upon Exercise. In addition to any other rights
                  available to the Holder, if the Company fails to cause its
                  transfer agent to transmit to the Holder a certificate or
                  certificates representing the Warrant Shares pursuant to an

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<PAGE>

                  exercise on or before the tenth Trading Day after the Warrant
                  Share Delivery Date, and if after such date the Holder is
                  required by its broker to purchase (in an open market
                  transaction or otherwise) shares of Common Stock to deliver in
                  satisfaction of a sale by the Holder of the Warrant Shares
                  which the Holder anticipated receiving upon such exercise (a
                  "Buy-In") and the Holder in fact completes the Buy-In
                  transaction to its detriment, then the Company shall (1) pay
                  in cash to the Holder the amount by which (x) the Holder's
                  total purchase price (including brokerage commissions, if any)
                  for the shares of Common Stock so purchased exceeds (y) the
                  amount obtained by multiplying (A) the number of Warrant
                  Shares that the Company was required to deliver to the Holder
                  in connection with the exercise at issue times (B) the price
                  at which the sell order giving rise to such purchase
                  obligation was executed, and (2) at the option of the Holder,
                  either reinstate the portion of the Warrant and equivalent
                  number of Warrant Shares for which such exercise was not
                  honored or deliver to the Holder the number of shares of
                  Common Stock that would have been issued had the Company
                  timely complied with its exercise and delivery obligations
                  hereunder. For example, if the Holder purchases Common Stock
                  having a total purchase price of $11,000 to cover a Buy-In
                  with respect to an attempted exercise of shares of Common
                  Stock with an aggregate sale price giving rise to such
                  purchase obligation of $10,000, under clause (1) of the
                  immediately preceding sentence the Company shall be required
                  to pay the Holder $1,000. The Holder shall provide the Company
                  written notice indicating the amounts payable to the Holder in
                  respect of the Buy-In, together with applicable confirmations
                  and other evidence reasonably requested by the Company.
                  Nothing herein shall limit a Holder's right to pursue any
                  other remedies available to it hereunder, at law or in equity
                  including, without limitation, a decree of specific
                  performance and/or injunctive relief with respect to the
                  Company's failure to timely deliver certificates representing
                  shares of Common Stock upon exercise of the Warrant as
                  required pursuant to the terms hereof.

                        vi. No Fractional Shares or Scrip. No fractional shares
                  or scrip representing fractional shares shall be issued upon
                  the exercise of this Warrant. As to any fraction of a share
                  which Holder would otherwise be entitled to purchase upon such
                  exercise, the Company shall pay a cash adjustment in respect
                  of such final fraction in an amount equal to such fraction
                  multiplied by the Exercise Price.

                        vii. Charges, Taxes and Expenses. Issuance of
                  certificates for Warrant Shares shall be made without charge
                  to the Holder for any issue or transfer tax or other
                  incidental expense in respect of the issuance of such
                  certificate, all of which taxes and expenses shall be paid by
                  the Company, and such certificates shall be issued in the name
                  of the Holder or in such name or names as may be directed by
                  the Holder; provided, however, that in the event certificates
                  for Warrant Shares are to be issued in a name other than the

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<PAGE>

                  name of the Holder, this Warrant when surrendered for exercise
                  shall be accompanied by the Assignment Form attached hereto
                  duly executed by the Holder; and the Company may require, as a
                  condition thereto, the payment of a sum sufficient to
                  reimburse it for any transfer tax incidental thereto.

                        viii. Closing of Books. The Company will not close its
                  stockholder books or records in any manner which prevents the
                  timely exercise of this Warrant, pursuant to the terms hereof.

      Section 3. Certain Adjustments.

            a) Stock Dividends and Splits. If the Company, at any time while
      this Warrant is outstanding: (A) pays a stock dividend or otherwise make a
      distribution or distributions on shares of its Common Stock or any other
      equity or equity equivalent securities payable in shares of Common Stock
      (which, for avoidance of doubt, shall not include any shares of Common
      Stock issued by the Company pursuant to this Warrant or any other Warrant
      issued in connection with the Purchase Agreement), (B) subdivides
      outstanding shares of Common Stock into a larger number of shares, (C)
      combines (including by way of reverse stock split) outstanding shares of
      Common Stock into a smaller number of shares, or (D) issues by
      reclassification of shares of the Common Stock any shares of capital stock
      of the Company, then in each case the Exercise Price shall be multiplied
      by a fraction of which the numerator shall be the number of shares of
      Common Stock (excluding treasury shares, if any) outstanding immediately
      before such event and of which the denominator shall be the number of
      shares of Common Stock outstanding immediately after such event and the
      number of shares issuable upon exercise of this Warrant shall be
      proportionately adjusted. Any adjustment made pursuant to this Section
      3(a) shall become effective immediately after the record date for the
      determination of stockholders entitled to receive such dividend or
      distribution and shall become effective immediately after the effective
      date in the case of a subdivision, combination or re-classification.

            b) Subsequent Equity Sales. If the Company or any Subsidiary
      thereof, as applicable, at any time while this Warrant is outstanding,
      shall offer, sell, grant any option to purchase or offer, sell or grant
      any right to reprice its securities, or otherwise dispose of or issue (or
      announce any offer, sale, grant or any option to purchase or other
      disposition) any Common Stock or Common Stock Equivalents entitling any
      Person to acquire shares of Common Stock, at an effective price per share
      less than the then Exercise Price (such lower price, the "Base Share
      Price" and such issuances collectively, a "Dilutive Issuance"), as
      adjusted hereunder (if the holder of the Common Stock or Common Stock
      Equivalents so issued shall at any time, whether by operation of purchase
      price adjustments, reset provisions, floating conversion, exercise or
      exchange prices or otherwise, or due to warrants, options or rights per
      share which is issued in connection with such issuance, be entitled to
      receive shares of Common Stock at an effective price per share which is
      less than the Exercise Price, such issuance shall be deemed to have
      occurred for less than the Exercise Price on such date of the Dilutive
      Issuance), then, the Exercise Price shall be reduced and only reduced to
      equal the Base Share Price and the number of Warrant Shares issuable

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<PAGE>

      hereunder shall be increased such that the aggregate Exercise Price
      payable hereunder, after taking into account the decrease in the Exercise
      Price, shall be equal to the aggregate Exercise Price prior to such
      adjustment. Such adjustment shall be made whenever such Common Stock or
      Common Stock Equivalents are issued. Notwithstanding the foregoing, no
      adjustments shall be made, paid or issued under this Section 3(b) in
      respect of an Exempt Issuance. The Company shall notify the Holder in
      writing, no later than the Trading Day following the issuance of any
      Common Stock or Common Stock Equivalents subject to this section,
      indicating therein the applicable issuance price, or of applicable reset
      price, exchange price, conversion price and other pricing terms (such
      notice the "Dilutive Issuance Notice"). For purposes of clarification,
      whether or not the Company provides a Dilutive Issuance Notice pursuant to
      this Section 3(b), upon the occurrence of any Dilutive Issuance, after the
      date of such Dilutive Issuance the Holder is entitled to receive a number
      of Warrant Shares based upon the Base Share Price regardless of whether
      the Holder accurately refers to the Base Share Price in the Notice of
      Exercise.

            c) Pro Rata Distributions. If the Company, at any time prior to the
      Termination Date, shall distribute to all holders of Common Stock (and not
      to Holders of the Warrants) evidences of its indebtedness or assets
      (including cash and cash dividends) or rights or warrants to subscribe for
      or purchase any security other than the Common Stock (which shall be
      subject to Section 3(b)), then in each such case the Exercise Price shall
      be adjusted by multiplying the Exercise Price in effect immediately prior
      to the record date fixed for determination of stockholders entitled to
      receive such distribution by a fraction of which the denominator shall be
      the VWAP determined as of the record date mentioned above, and of which
      the numerator shall be such VWAP on such record date less the then per
      share fair market value at such record date of the portion of such assets
      or evidence of indebtedness so distributed applicable to one outstanding
      share of the Common Stock as determined by the Board of Directors in good
      faith. In either case the adjustments shall be described in a statement
      provided to the Holder of the portion of assets or evidences of
      indebtedness so distributed or such subscription rights applicable to one
      share of Common Stock. Such adjustment shall be made whenever any such
      distribution is made and shall become effective immediately after the
      record date mentioned above.

            d) Fundamental Transaction. If, at any time while this Warrant is
      outstanding, (A) the Company effects any merger or consolidation of the
      Company with or into another Person, (B) the Company effects any sale of
      all or substantially all of its assets in one or a series of related
      transactions, (C) any tender offer or exchange offer (whether by the
      Company or another Person) is completed pursuant to which holders of
      Common Stock are permitted to tender or exchange their shares for other
      securities, cash or property, or (D) the Company effects any
      reclassification of the Common Stock or any compulsory share exchange
      pursuant to which the Common Stock is effectively converted into or
      exchanged for other securities, cash or property (in any such case, a
      "Fundamental Transaction"), then, upon any subsequent exercise of this
      Warrant, the Holder shall have the right to receive, for each Warrant
      Share that would have been issuable upon such exercise immediately prior
      to the occurrence of such Fundamental Transaction, at the option of the
      Holder, (a) upon exercise of this Warrant, the number of shares of Common

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<PAGE>

      Stock of the successor or acquiring corporation or of the Company, if it
      is the surviving corporation, and any additional consideration (the
      "Alternate Consideration") receivable upon or as a result of such
      reorganization, reclassification, merger, consolidation or disposition of
      assets by a Holder of the number of shares of Common Stock for which this
      Warrant is exercisable immediately prior to such event or (b) if the
      Company is acquired in an all cash transaction, cash equal to the value of
      this Warrant as determined in accordance with the Black-Scholes option
      pricing formula. For purposes of any such exercise, the determination of
      the Exercise Price shall be appropriately adjusted to apply to such
      Alternate Consideration based on the amount of Alternate Consideration
      issuable in respect of one share of Common Stock in such Fundamental
      Transaction, and the Company shall apportion the Exercise Price among the
      Alternate Consideration in a reasonable manner reflecting the relative
      value of any different components of the Alternate Consideration. If
      holders of Common Stock are given any choice as to the securities, cash or
      property to be received in a Fundamental Transaction, then the Holder
      shall be given the same choice as to the Alternate Consideration it
      receives upon any exercise of this Warrant following such Fundamental
      Transaction. To the extent necessary to effectuate the foregoing
      provisions, any successor to the Company or surviving entity in such
      Fundamental Transaction shall issue to the Holder a new warrant consistent
      with the foregoing provisions and evidencing the Holder's right to
      exercise such warrant into Alternate Consideration. The terms of any
      agreement pursuant to which a Fundamental Transaction is effected shall
      include terms requiring any such successor or surviving entity to comply
      with the provisions of this Section 3(d) and insuring that this Warrant
      (or any such replacement security) will be similarly adjusted upon any
      subsequent transaction analogous to a Fundamental Transaction.

            e) Calculations. All calculations under this Section 3 shall be made
      to the nearest cent or the nearest 1/100th of a share, as the case may be.
      For purposes of this Section 3, the number of shares of Common Stock
      deemed to be issued and outstanding as of a given date shall be the sum of
      the number of shares of Common Stock (excluding treasury shares, if any)
      issued and outstanding.

            f) Voluntary Adjustment By Company. The Company may at any time
      during the term of this Warrant reduce the then current Exercise Price to
      any amount and for any period of time deemed appropriate by the Board of
      Directors of the Company.

            g) Notice to Holders.

                        i. Adjustment to Exercise Price. Whenever the Exercise
                  Price is adjusted pursuant to this Section 3, the Company
                  shall promptly mail to each Holder a notice setting forth the
                  Exercise Price after such adjustment and setting forth a brief
                  statement of the facts requiring such adjustment. If the
                  Company issues a variable rate security, despite the
                  prohibition thereon in the Purchase Agreement, the Company
                  shall be deemed to have issued Common Stock or Common Stock
                  Equivalents at the lowest possible conversion or exercise
                  price at which such securities may be converted or exercised
                  in the case of a Variable Rate Transaction (as defined in the
                  Purchase Agreement).

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                        ii. Notice to Allow Exercise by Holder. If (A) the
                  Company shall declare a dividend (or any other distribution)
                  on the Common Stock; (B) the Company shall declare a special
                  nonrecurring cash dividend on or a redemption of the Common
                  Stock; (C) the Company shall authorize the granting to all
                  holders of the Common Stock rights or warrants to subscribe
                  for or purchase any shares of capital stock of any class or of
                  any rights; (D) the approval of any stockholders of the
                  Company shall be required in connection with any
                  reclassification of the Common Stock, any consolidation or
                  merger to which the Company is a party, any sale or transfer
                  of all or substantially all of the assets of the Company, of
                  any compulsory share exchange whereby the Common Stock is
                  converted into other securities, cash or property; (E) the
                  Company shall authorize the voluntary or involuntary
                  dissolution, liquidation or winding up of the affairs of the
                  Company; then, in each case, the Company shall cause to be
                  mailed to the Holder at its last address as it shall appear
                  upon the Warrant Register of the Company, at least 10 calendar
                  days prior to the applicable record or effective date
                  hereinafter specified, a notice stating (x) the date on which
                  a record is to be taken for the purpose of such dividend,
                  distribution, redemption, rights or warrants, or if a record
                  is not to be taken, the date as of which the holders of the
                  Common Stock of record to be entitled to such dividend,
                  distributions, redemption, rights or warrants are to be
                  determined or (y) the date on which such reclassification,
                  consolidation, merger, sale, transfer or share exchange is
                  expected to become effective or close, and the date as of
                  which it is expected that holders of the Common Stock of
                  record shall be entitled to exchange their shares of the
                  Common Stock for securities, cash or other property
                  deliverable upon such reclassification, consolidation, merger,
                  sale, transfer or share exchange; provided, that the failure
                  to mail such notice or any defect therein or in the mailing
                  thereof shall not affect the validity of the corporate action
                  required to be specified in such notice. The Holder is
                  entitled to exercise this Warrant during the 10 day period
                  commencing on the date of such notice to the effective date of
                  the event triggering such notice.

      Section 4. Transfer of Warrant.

            a) Transferability. Subject to compliance with any applicable
      securities laws and the conditions set forth in Sections 5(a) and 4(d)
      hereof and to the provisions of Section 4.1 of the Purchase Agreement,
      this Warrant and all rights hereunder are transferable, in whole or in
      part, upon surrender of this Warrant at the principal office of the
      Company, together with a written assignment of this Warrant substantially
      in the form attached hereto duly executed by the Holder or its agent or
      attorney and funds sufficient to pay any transfer taxes payable upon the
      making of such transfer. Upon such surrender and, if required, such
      payment, the Company shall execute and deliver a new Warrant or Warrants
      in the name of the assignee or assignees and in the denomination or

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      denominations specified in such instrument of assignment, and shall issue
      to the assignor a new Warrant evidencing the portion of this Warrant not
      so assigned, and this Warrant shall promptly be cancelled. A Warrant, if
      properly assigned, may be exercised by a new holder for the purchase of
      Warrant Shares without having a new Warrant issued.

            b) New Warrants. This Warrant may be divided or combined with other
      Warrants upon presentation hereof at the aforesaid office of the Company,
      together with a written notice specifying the names and denominations in
      which new Warrants are to be issued, signed by the Holder or its agent or
      attorney. Subject to compliance with Section 4(a), as to any transfer
      which may be involved in such division or combination, the Company shall
      execute and deliver a new Warrant or Warrants in exchange for the Warrant
      or Warrants to be divided or combined in accordance with such notice.

            c) Warrant Register. The Company shall register this Warrant, upon
      records to be maintained by the Company for that purpose (the "Warrant
      Register"), in the name of the record Holder hereof from time to time. The
      Company may deem and treat the registered Holder of this Warrant as the
      absolute owner hereof for the purpose of any exercise hereof or any
      distribution to the Holder, and for all other purposes, absent actual
      notice to the contrary.

            d) Transfer Restrictions. If, at the time of the surrender of this
      Warrant in connection with any transfer of this Warrant, the transfer of
      this Warrant shall not be registered pursuant to an effective registration
      statement under the Securities Act and under applicable state securities
      or blue sky laws, the Company may require, as a condition of allowing such
      transfer (i) that the Holder or transferee of this Warrant, as the case
      may be, furnish to the Company a written opinion of counsel (which opinion
      shall be in form, substance and scope customary for opinions of counsel in
      comparable transactions) to the effect that such transfer may be made
      without registration under the Securities Act and under applicable state
      securities or blue sky laws, (ii) that the holder or transferee execute
      and deliver to the Company an investment letter in form and substance
      acceptable to the Company and (iii) that the transferee be an "accredited
      investor" as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
      promulgated under the Securities Act or a qualified institutional buyer as
      defined in Rule 144A(a) under the Securities Act.

      Section 5. Miscellaneous.

            a) Title to Warrant. Prior to the Termination Date and subject to
      compliance with applicable laws and Section 4 of this Warrant, this
      Warrant and all rights hereunder are transferable, in whole or in part, at
      the office or agency of the Company by the Holder in person or by duly
      authorized attorney, upon surrender of this Warrant together with the
      Assignment Form annexed hereto properly endorsed. The transferee shall
      sign an investment letter in form and substance reasonably satisfactory to
      the Company.

            b) No Rights as Shareholder Until Exercise. This Warrant does not
      entitle the Holder to any voting rights or other rights as a shareholder
      of the Company prior to the exercise hereof. Upon the surrender of this
      Warrant and the payment of the aggregate Exercise Price (or by means of a
      cashless exercise), the Warrant Shares so purchased shall be and be deemed
      to be issued to such Holder as the record owner of such shares as of the
      close of business on the later of the date of such surrender or payment.

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            c) Loss, Theft, Destruction or Mutilation of Warrant. The Company
      covenants that upon receipt by the Company of evidence reasonably
      satisfactory to it of the loss, theft, destruction or mutilation of this
      Warrant or any stock certificate relating to the Warrant Shares, and in
      case of loss, theft or destruction, of indemnity or security reasonably
      satisfactory to it (which, in the case of the Warrant, shall not include
      the posting of any bond), and upon surrender and cancellation of such
      Warrant or stock certificate, if mutilated, the Company will make and
      deliver a new Warrant or stock certificate of like tenor and dated as of
      such cancellation, in lieu of such Warrant or stock certificate.

            d) Saturdays, Sundays, Holidays, etc. If the last or appointed day
      for the taking of any action or the expiration of any right required or
      granted herein shall be a Saturday, Sunday or a legal holiday, then such
      action may be taken or such right may be exercised on the next succeeding
      day not a Saturday, Sunday or legal holiday.

            e) Authorized Shares.

                  The Company covenants that during the period the Warrant is
            outstanding, it will reserve from its authorized and unissued Common
            Stock a sufficient number of shares to provide for the issuance of
            the Warrant Shares upon the exercise of any purchase rights under
            this Warrant. The Company further covenants that its issuance of
            this Warrant shall constitute full authority to its officers who are
            charged with the duty of executing stock certificates to execute and
            issue the necessary certificates for the Warrant Shares upon the
            exercise of the purchase rights under this Warrant. The Company will
            take all such reasonable action as may be necessary to assure that
            such Warrant Shares may be issued as provided herein without
            violation of any applicable law or regulation, or of any
            requirements of the Trading Market upon which the Common Stock may
            be listed.

                  Except and to the extent as waived or consented to by the
            Holder, the Company shall not by any action, including, without
            limitation, amending its certificate of incorporation or through any
            reorganization, transfer of assets, consolidation, merger,
            dissolution, issue or sale of securities or any other voluntary
            action, avoid or seek to avoid the observance or performance of any
            of the terms of this Warrant, but will at all times in good faith
            assist in the carrying out of all such terms and in the taking of
            all such actions as may be necessary or appropriate to protect the
            rights of Holder as set forth in this Warrant against impairment.
            Without limiting the generality of the foregoing, the Company will
            (a) not increase the par value of any Warrant Shares above the
            amount payable therefor upon such exercise immediately prior to such
            increase in par value, (b) take all such action as may be necessary
            or appropriate in order that the Company may validly and legally
            issue fully paid and nonassessable Warrant Shares upon the exercise

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            of this Warrant, and (c) use commercially reasonable efforts to
            obtain all such authorizations, exemptions or consents from any
            public regulatory body having jurisdiction thereof as may be
            necessary to enable the Company to perform its obligations under
            this Warrant.

                  Before taking any action which would result in an adjustment
            in the number of Warrant Shares for which this Warrant is
            exercisable or in the Exercise Price, the Company shall obtain all
            such authorizations or exemptions thereof, or consents thereto, as
            may be necessary from any public regulatory body or bodies having
            jurisdiction thereof.

            f) Jurisdiction. All questions concerning the construction,
      validity, enforcement and interpretation of this Warrant shall be
      determined in accordance with the provisions of the Purchase Agreement.

            g) Restrictions. The Holder acknowledges that the Warrant Shares
      acquired upon the exercise of this Warrant, if not registered, will have
      restrictions upon resale imposed by state and federal securities laws.

            h) Nonwaiver and Expenses. No course of dealing or any delay or
      failure to exercise any right hereunder on the part of Holder shall
      operate as a waiver of such right or otherwise prejudice Holder's rights,
      powers or remedies, notwithstanding the fact that all rights hereunder
      terminate on the Termination Date. If the Company willfully and knowingly
      fails to comply with any provision of this Warrant, which results in any
      material damages to the Holder, the Company shall pay to Holder such
      amounts as shall be sufficient to cover any costs and expenses including,
      but not limited to, reasonable attorneys' fees, including those of
      appellate proceedings, incurred by Holder in collecting any amounts due
      pursuant hereto or in otherwise enforcing any of its rights, powers or
      remedies hereunder.

            i) Notices. Any notice, request or other document required or
      permitted to be given or delivered to the Holder by the Company shall be
      delivered in accordance with the notice provisions of the Purchase
      Agreement.

            j) Limitation of Liability. No provision hereof, in the absence of
      any affirmative action by Holder to exercise this Warrant or purchase
      Warrant Shares, and no enumeration herein of the rights or privileges of
      Holder, shall give rise to any liability of Holder for the purchase price
      of any Common Stock or as a stockholder of the Company, whether such
      liability is asserted by the Company or by creditors of the Company.

            k) Remedies. Holder, in addition to being entitled to exercise all
      rights granted by law, including recovery of damages, will be entitled to
      specific performance of its rights under this Warrant. The Company agrees
      that monetary damages would not be adequate compensation for any loss
      incurred by reason of a breach by it of the provisions of this Warrant and
      hereby agrees to waive the defense in any action for specific performance
      that a remedy at law would be adequate.

                                       11
<PAGE>

            l) Successors and Assigns. Subject to applicable securities laws,
      this Warrant and the rights and obligations evidenced hereby shall inure
      to the benefit of and be binding upon the successors of the Company and
      the successors and permitted assigns of Holder. The provisions of this
      Warrant are intended to be for the benefit of all Holders from time to
      time of this Warrant and shall be enforceable by any such Holder or holder
      of Warrant Shares.

            m) Amendment. This Warrant may be modified or amended or the
      provisions hereof waived with the written consent of the Company and the
      Holder.

            n) Severability. Wherever possible, each provision of this Warrant
      shall be interpreted in such manner as to be effective and valid under
      applicable law, but if any provision of this Warrant shall be prohibited
      by or invalid under applicable law, such provision shall be ineffective to
      the extent of such prohibition or invalidity, without invalidating the
      remainder of such provisions or the remaining provisions of this Warrant.

            o) Headings. The headings used in this Warrant are for the
      convenience of reference only and shall not, for any purpose, be deemed a
      part of this Warrant.

                              ********************

                                       12
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated: August 18, 2005

                                       ASTRALIS LTD.

                                       By:
                                           ------------------------------------
                                           Name:
                                           Title:

                                       13
<PAGE>

                               NOTICE OF EXERCISE

TO: ASTRALIS LTD.

            (1) The undersigned hereby elects to purchase ________ Warrant
Shares of the Company pursuant to the terms of the attached Warrant (only if
exercised in full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

            (2) Payment shall take the form of (check applicable box):

                  [ ] in lawful money of the United States; or

                  [ ] the cancellation of such number of Warrant Shares as is
                  necessary, in accordance with the formula set forth in
                  subsection 2(c), to exercise this Warrant with respect to the
                  maximum number of Warrant Shares purchasable pursuant to the
                  cashless exercise procedure set forth in subsection 2(c).

            (3) Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

                  ----------------------------------------

The Warrant Shares shall be delivered to the following:

                  ----------------------------------------

                  ----------------------------------------

            (4) Accredited Investor. The undersigned is an "accredited investor"
as defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity:
                          -----------------------------------------------------
Signature of Authorized Signatory of Investing Entity:
                                                       ------------------------
Name of Authorized Signatory:
                              -------------------------------------------------
Title of Authorized Signatory:
                               ------------------------------------------------
Date:
      -------------------------------------------------------------------------

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

            FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

                                                whose address is
-----------------------------------------------

---------------------------------------------------------------.

---------------------------------------------------------------.

                                                Dated:
                                                       ------------------,----

                  Holder's Signature:
                                      -----------------------------

                  Holder's Address:
                                    -------------------------------

                                    -------------------------------

Signature Guaranteed:
                      ----------------------------------------

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.EXHIBIT 10.1

                              GRILL CONCEPTS, INC.

                        INCENTIVE STOCK OPTION AGREEMENT

     This Incentive Stock Option Agreement (Option Agreement) is between Grill
Concepts, Inc., a Delaware corporation (the "Company''), and
                                                             -----------------
("Optionee"), who agree as follows:

     Section 1. Introduction. The Company has heretofore adopted the Grill
                ------------
Concepts, Inc. 1998 Stock Option Plan (the "Plan") for the purpose of providing
eligible key employees, consultants and directors of the Company and its
Affiliates (as defined in the Plan) with increased incentive to render services,
to exert maximum effort for the business success of the Company and to
strengthen the identification of employees, consultants and directors with the
shareholders. The Company, acting through the Compensation Committee of its
Board of Directors (the "Committee"), has determined that its interests will be
advanced by the issuance to Optionee of an incentive stock option under the
Plan.

     Section2. Option.Subject to the terms and conditions contained herein, the
               -------
Company hereby irrevocably grants to Optionee the right and option ("Option") to
purchase from the Company        shares of the Company's common stock, $.00004
                         --------
par value ("Common Stock''), at a price of $      per share, which is deemed to
                                            ------
be not less than the fair market value of the Common Stock at the date of grant
of this Option.

     Section 3. Option Period.The Option herein granted may be exercised by
                --------------
Optionee in whole or in part at any time during a 10 year period beginning on
          (the Option Period), subject to the limitation that said Option shall
----------
not be exercisable for more than a percentage of the aggregate number of shares
offered by this Option determined as follows:

     (a)  commencing one year from the date of commencement of the Option
          Period, twenty percent (20%) of the shares offered by this Option may
          be purchased.

     (b)  commencing two years from the date of commencement of the Option
          Period, an additional twenty percent (20%) of the shares offered by
          this Option may be purchased.

     (c)  commencing three years from the date of commencement of the
          Option Period, an additional twenty percent (20%) of the shares
          offered by this Option may be purchased.

<PAGE>

     (d)  commencing four years from the date of commencement of the Option
          Period, an additional twenty percent (20%) of the shares offered by
          this Option may be purchased.

     (e)  commencing five years from the date of commencement of the Option
          Period, an additional twenty percent (20%) of the shares offered by
          this Option may be purchased

Notwithstanding anything in this Option Agreement to the contrary, the
Committee, in its sole discretion may waive the foregoing schedule of vesting
and upon written notice to Optionee, accelerate the earliest date or dates on
which any of the Options granted hereunder are exercisable.

     SECTION 4.  PROCEDURE FOR EXERCISE.  The Option herein granted may be
                 -----------------------
exercised by the delivery by Optionee of written notice to the Secretary of the
Company setting forth the number of shares of Common Stock with respect to which
the Option is being exercised. The notice shall be accompanied by, at the
election of the Optionee, (i) cash, cashier's check, bank draft, or postal or
express money order payable to the order of the Company, (ii) certificates
representing shares of Common Stock theretofore owned by Optionee duly endorsed
for transfer to the Company, (iii) if approved by the Committee, a copy of
irrevocable instructions to a broker to deliver promptly to the Company the
amount of sale or loan proceeds necessary to pay the exercise price of the
Options being exercised or such other form of payment of the exercise price of
this Option as the Committee shall, in its sole and absolute discretion,
determine to be acceptable, or (iv) any combination of the preceding, equal in
value to the aggregate exercise price. Notice may also be delivered by telecopy
provided that the exercise price of such shares is received by the Company via
wire transfer on the same day the telecopy transmission is received by the
Company. The notice shall specify the address to which the certificates for such
shares are to be mailed. An option to purchase of Common Stock in accordance
with this Plan, shall be deemed to have been exercised immediately prior to the
close of business on the date (i) written notice of such exercise and (ii)
payment in full of the exercise price for the number of share for which Options
are being exercised, are both received by the Company and Optionee shall be
treated for all purposes as the record holder of such shares of Common Stock as
of such date.

     As promptly as practicable after receipt of such written notice and
payment, the Company shall deliver to Optionee certificates for the number of
shares with respect to which such Option has been so exercised, issued in
Optionee's name or such other name as Optionee directs; provided, however, that
such delivery shall be deemed effected for all purposes when a stock transfer
agent of the Company shall have deposited such certificates in the United States
mail, addressed to Optionee at the address specified pursuant to this Section 4.

<PAGE>

     SECTION 5. TERMINATION OF EMPLOYMENT. If Optionee ceases to be employed by
                -------------------------
the Company or its Affiliates for any reason other than death or disability any
Option which is exercisable on the date of such termination of employment shall
expire three-months from such date of termination of employment; provided,
however, the Committee, in its sole discretion, may allow -an Optionee to
exercise all or a portion of the Options granted but unexercised for a period of
time after Optionee's termination of employment.

     SECTION 6. DISABILITV OR DEATH.  In the event Optionee dies or is
                -------------------
determined to be disabled while Optionee is employed by the Company, the options
previously granted to Optionee may be exercised (to the extent Optionee would
have been entitled to do so at the date of death or the determination of
disability) at any time and from time to time, within a three-month period after
such death or determination of disability, by the Optionee, the guardian of
Optionee's estate, the executor or administrator of Optionee's estate or by the
person or persons to whom Optionee's rights under this Option Agreement shall
pass by will or the laws of descent and distribution, but in no event may the
Option be exercised after its expiration under the terms of this Option
Agreement. An Optionee shall be deemed to be disabled if, in the opinion of a
physician selected by the Cornmittee, Optionee is incapable of performing
services for the Company of the kind Optionee was performing at the time the
disability occurred by reason of any medically determinable physical or mental
impairment which can be expected to result in death or to be of long, continued
and indefinite duration. The date of determination of disability for purposes
hereof shall be the date of such determination by such physician.

     SECTION 7. TRANSFERABILITY. This Option shall not be transferable by
                ----------------
Optionee otherwise than by Optionee's will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order as defined in
the Code or Title I of the Employee Retirement Income Security Act, as amended,
or the rules thereunder. During the lifetime of Optionee, the Option shall be
exercisable only by Optionee. Any heir or legatee of Optionee shall take rights
herein granted subject to the terms and conditions hereof. No such transfer of
this Option Agreement to heirs or legatees of Optionee shall be effective to
bind the Company unless the Company shall have been furnished with written
notice thereof and a copy of such evidence as the Committee may deem necessary
to establish the validity of the transfer and the acceptance by the transferee
or transferees of the terms and conditions hereof

     SECTION 8.   NO RIGHTS AS SHAREHOLDER. Optionee shall have no rights
                  ------------------------
as a shareholder with respect to any shares of Common Stock covered by this
Option Agreement until the Option is exercised by written notice and accompanied
by payment as provided in Section 4 of this Option Agreement.

     SECTION 9.  EXTRAORDINARY CORPORATE TRANSACTIONS. The existence of
                 -------------------------------------
outstanding Options shall not affect in any way the right or power of the
Company or it's shareholders to make or authorize any or all adjustments,
recapitalizations, reorganization or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issuance of Common Stock or subscription rights thereto, or any issuance of
bonds, debentures, preferred or prior preference stock ahead of or affecting the

<PAGE>

Common Stock or the rights thereof, or the dissolution or liquidation of the
Company, or any sale or transfer of all or any part of its assets or business,
or any other corporate act or proceedings, whether of a similar character or
otherwise. If the Company recapitalizes or otherwise changes its capital
structure, or merges, consolidates, sells all of its assets or dissolves (each
of the foregoing a 'Fundamental Change`), then thereafter upon any exercise of
the Option, Optionee shall be entitled to purchase under the Option, in lieu of
the number of shares of Common Stock as to which the Option shall then be
exercisable, the number and class of shares of stock and securities to which
Optionee would have been entitled pursuant to the terms of the Fundamental
Change if, immediately prior to such Fundamental Change, Optionee had been the
holder of record of the number of shares of Common Stock as to which the Option
is then exercisable. If (i) the Company shall not be the surviving entity in any
merger or consolidation (or survives only as a subsidiary of another entity),
(ii) the Company sells all or substantially all of its assets to any other
person or entity (other than a wholly-owned subsidiary), (iii) any person or
entity (including a "group" as contemplated by Section 13(d)(3) of the Exchange
Act) acquires or gains ownership or control of (including, without limitation,
power to vote) more than 50% of the outstanding shares of Common Stock, (iv) the
Company is to be dissolved and liquidated, or (v) as a result of or in
connection with a contested election of directors, the persons who were
directors of the Company before such election shall cease to constitute a
majority of the Board (each such event in clauses (i) through (v) above is
referred to herein as a "Corporate Change"), the committee, in its sole
discretion, may accelerate the time at which all or a portion of Optionee's
Option may be exercised for a limited period of time before or after a specified
date.

     SECTION 10. CHANGES IN CAPITAL STRUCTURE.If the outstanding shares of
                 -----------------------------
Common Stock or other securities of the Company, or both, for which the Option
is then exercisable shall at any time be changed or exchanged by declaration of
a stock dividend, stock split, combination of shares, or recapitalization, the
number and kind of shares of Common Stock or other securities subject to the
Plan or subject to the Option and the exercise price, shall be appropriately and
equitably adjusted so as to maintain the proportionate number of shares or other
securities without changing the aggregate exercise price.

     SECTION 11.  COMPIIANCE WITH SECURITIES LAWS. Upon the acquisition of any
                  -------------------------------
shares pursuant to the exercise of the Option herein granted, Optionee (or any
person acting under Section 7) will enter into such written representations,
warranties and agreements as the Company may reasonably request in order to
comply with applicable securities laws or with this Option Agreement.

     SECTION 12.  COMPLIANCE WITH LAWS. Notwithstanding any of the other
                  ---------------------
provisions hereof, Optionee agrees that he or she will not exercise the Option
granted hereby, and that the Company will not be obligated to issue any shares
pursuant to this Option Agreement, if the exercise of the Option or the issuance
of such shares of Common Stock would constitute a violation by Optionee or by
the Company of any provision of any law or regulation of any governmental
authority.

<PAGE>

      SECTION 13.  NO RIGHT TO EMPLOYMENT  Optionee who is an employee
                   ----------------------
shall be considered to be in the employment of the Company so long as he or she
remains an employee of the Company or its Affiliates. Any questions as to
whether and when there has been a termination of such employment and the cause
of such termination shall be determine by the Committee, and its determination
shall be final. Nothing contained herein shall be construed as conferring upon
Optionee the right to continue in the employ of the Company, nor shall anything
contained herein be construed or interpreted to limit the ''employment at will"
relationship between Optionee and the Company.

     SECTION 14. RESOLUTION OF DISPUTES.As a condition of the granting of the
                 -----------------------
Option hereby, Optionee, and Optionee's heirs, personal representations and
successors agree that any dispute or disagreement which may arise hereunder
shall be determined by the Committee in its sole discretion and judgment, and
that any such determination and any interpretation by the Committee of the terms
of this Option Agreement shall be final and shall be binding and conclusive, for
all purposes, upon the Company, Optionee, and Optionee's heirs, personal
representatives and successors.

     SECTION 15.  LEGENDS ON CERTIFICATE. The certificates representing the
                  ----------------------
shares of Common Stock purchased by exercise of the Option will be stamped or
otherwise imprinted with legends in such form as the Company or its counsel may
require with respect to any applicable restrictions on sale or transfer and will
reflect stop-transfer instructions with respect to such shares.

     SECTION 16.   NOTICES. Every notice hereunder shall be in writing and shall
                   -------
be given by registered or certified mail. All notices of the exercise of any
Option hereunder shall be directed to Grill Concepts, Inc., 11661 San Vicente
Blvd., Suite 404, Los Angeles, California 90049, Attention: Secretary. Any
notice given by the Company to Optionee directed to Optionee at the address on
file with the Company shall be effective to bind Optionee and any other person
who shall acquire rights hereunder. The Company shall be under no obligation
whatsoever to advise Optionee of the existence, maturity or termination of any
of Optionee's rights hereunder and Optionee shall be deemed to have familiarized
himself or herself with all matters contained herein and in the Plan which may
affect any of Optionee's rights or privileges hereunder.

     SECTION 17.  CONSTRUCTION AND INTERPRETATION. Whenever the term "
                  -------------------------------
Optionee'' is used herein under circumstances applicable to any other person or
persons to whom this award, in accordance with the provisions of Section 7
hereof, may be transferred, the word "Optionee", shall be deemed to include such
person or persons.

     SECTION 18.  NOTICE OF DISPOSITION. If Optionee disposes of any shares of
                  ----------------------
Common Stock acquired pursuant to the exercise of an Option granted hereunder
prior to the earlier of (i) two years from the date of this Option Agreement or
(ii) one year from the date the shares of Common Stock were acquired, Optionee
shall notify the Company of such disposition within ten days of its occurrence
and deliver to the Company any amount of federal or state income tax withholding
required by law. Payment of the withholding shall be made in accordance with
Section 10 of the Plan. If the Optionee fails to pay the withholding tax, the
Company is authorized to withhold from any cash remuneration then or thereafter
payable to the Optionee any tax required to be withheld by reason of any
disposition named herein.

<PAGE>

     SECTION 19.   AGREEMENT SUBJECT TO PLAN. This Option Agreement is subject
                   -------------------------
to the Plan. The terms and provisions of the Plan (including any subsequent
amendments thereto) are hereby incorporated herein be reference thereto. In the
event of a conflict between any term or provision contained herein and a term or
provision of the Plan, the applicable terms and provisions of the Plan will
govern and prevail. All definitions of words and terms contained in the Plan
shall be applicable to this Option Agreement.

     SECTION 20.  BINDING EFFECT.This Option Agreement shall be binding upon and
                  ---------------
inure to the benefit of any successors to the Company and all persons lawfully
claiming under Optionee as provided herein.

           IN WITNESS WHEREOF, this Incentive Stock Option Agreement has been
executed as of the      day of               .
                   -----       --------------

                                                GRILL CONCEPTS, INC.

ATTEST:
                                                By: /S/ Robert Spivak
                                                    ------------------
--------------------------                      Name:  Robert Spivak
                                                Title:  President

                                                -----------------------
                                                Name:

<PAGE>

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