EX-10.1

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
SECURITIES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OR (B) 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 OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY OR (II) UNLESS SOLD
PURSUANT TO RULE 144 UNDER SAID ACT.

BTHC VII, INC.

WARRANT TO PURCHASE COMMON STOCK

Warrant No.  
Original Issue Date: July 27, 2007

BTHC VII, INC., a Delaware corporation (the “Company”), hereby certifies that,
for value received, _________________ or its permitted registered assigns (the
“Holder”), is entitled to purchase from the Company up to a total of
_____________ shares of common stock, $0.001 par value per share (the “Common
Stock”), of the Company (each such share, a “Warrant Share” and all such shares,
the “Warrant Shares”) at an exercise price per share equal to $4.10 (as adjusted
from time to time as provided in Section 9 herein, the “Exercise Price”), at any
time and from time to time on or after the date that the Certificate of
Incorporation of the Company is amended to increase the number of authorized
shares to 100,000,000 (the “Trigger Date”) and through and including 5:30 P.M.,
New York City time, on the five year anniversary of the Trigger Date (the
“Expiration Date”), and subject to the following terms and conditions:

This Warrant (this “Warrant”) is one of a series of similar warrants issued
pursuant to that certain Securities Purchase Agreement, dated July 27, 2007, by
and among the Company and the Purchasers identified therein (the “Purchase
Agreement”). All such warrants are referred to herein, collectively, as the
“Warrants.”

1. Definitions. In addition to the terms defined elsewhere in this Warrant,
capitalized terms that are not otherwise defined herein have the meanings given
to such terms in the Purchase Agreement.

2. Registration of Warrants. 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 (which shall include the initial
Holder or, as the case may be, any registered assignee to which this Warrant is
permissibly assigned hereunder) 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.

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3. Registration of Transfers. Subject to the restrictions on transfer set forth
in Section 4.1 of the Purchase Agreement and compliance with all applicable
securities laws, the Company shall register the transfer of all or any portion
of this Warrant in the Warrant Register, upon (i) surrender of this Warrant,
with the Form of Assignment attached as Schedule 2 hereto duly completed and
signed, to the Company’s transfer agent or to the Company at its address
specified in the Purchase Agreement and (ii) if the Registration Statement is
not effective, (x) delivery, at the request of the Company, of an opinion of
counsel reasonably satisfactory to the Company to the effect that the transfer
of such portion of this Warrant may be made pursuant to an available exemption
from the registration requirements of the Securities Act and all applicable
state securities or blue sky laws and (y) delivery by the transferee of a
written statement to the Company certifying that the transferee is an
“accredited investor” as defined in Rule 501(a) under the Securities Act and
making the representations and certifications set forth in Sections 3.3(c), (d),
(e), (f), (g) and (h) of the Purchase Agreement, to the Company at its address
specified in the Purchase Agreement. Upon any such registration or transfer, a
new warrant to purchase Common Stock in substantially the form of this Warrant
(any such new warrant, a “New Warrant”) evidencing the portion of this Warrant
so transferred shall be issued to the transferee, and a New Warrant evidencing
the remaining portion of this Warrant not so transferred, if any, shall be
issued to the transferring Holder. The acceptance of the New Warrant by the
transferee thereof shall be deemed the acceptance by such transferee of all of
the rights and obligations of a Holder of a Warrant.

4. Exercise and Duration of Warrants.

    (a) All or any part of this Warrant shall be exercisable by the registered
Holder at any time and from time to time on or after the Trigger Date and
through and including 5:30 P.M., New York City time, on the Expiration Date.
Subject to Section 11 hereof, at 5:30 P.M., New York City time, on the
Expiration Date, the portion of this Warrant not exercised prior thereto shall
be and become void and of no value and this Warrant shall be terminated and no
longer outstanding.

    (b) The Holder may exercise this Warrant by delivering to the Company (i) an
exercise notice, in the form attached as Schedule 1 hereto (the “Exercise
Notice”), appropriately completed and duly signed and (ii) payment of the
Exercise Price for the number of Warrant Shares as to which this Warrant is
being exercised (which may take the form of a “cashless exercise” if so
indicated in the Exercise Notice and if a “cashless exercise” may occur at such
time pursuant to Section 10 below), and the date such items are delivered to the
Company (as determined in accordance with the notice provisions hereof) is an
“Exercise Date.” The delivery by (or on behalf of) the Holder of the Exercise
Notice and the applicable Exercise Price as provided above shall constitute the
Holder’s certification to the Company that its representations contained in
Sections 3.3(c), (d), (e), (f) and (g) of the Purchase Agreement are true and
correct as of the Exercise Date as if remade in their entirety (or, in the case
of any transferee Holder that is not a party to the Purchase Agreement, such
transferee Holder’s certification to the Company that such representations are
true and correct as to such assignee Holder as of the Exercise Date). The Holder
shall not be required to deliver the original Warrant in order to effect an
exercise hereunder. Execution and delivery of the Exercise Notice shall have the
same effect as cancellation of the original Warrant and issuance of a New
Warrant evidencing the right to purchase the remaining number of Warrant Shares.

    c) Notwithstanding any other provision contained herein to the contrary, at
any time after the two year anniversary of the Original Issue Date, in the event
that the Closing Sale Price of a share of Common Stock as traded on the OTC
Bulletin Board (or such other exchange or

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stock market on which the Common Stock may then be listed or quoted) equals or
exceeds $6.15 (appropriately adjusted for any stock split, reverse stock split,
stock dividend or other reclassification or combination of the Common Stock
occurring after the date hereof) for twenty (20) consecutive Trading Days
commencing after the date the Registration Statement (as defined in the
Registration Rights Agreement) has been declared effective, the Company, upon
thirty (30) days prior written notice (the “Notice Period”) given to the Holder
within one Business Day immediately following the end of such twenty (20)
Trading Day period, may call this Warrant, in whole but not in part, at a
redemption price equal to the Exercise Price per share of Common Stock then
purchasable pursuant to this Warrant; provided that (i) the Company
simultaneously calls all of the warrants issued pursuant to the Purchase
Agreement on the same terms and (ii) all of the shares of Common Stock issuable
hereunder either (A) are registered pursuant to an effective Registration
Statement (as defined in the Registration Rights Agreement) which has not been
suspended and for which no stop order is in effect, and pursuant to which the
Holder is able to sell such shares of Common Stock at all times during the
Notice Period or (B) no longer constitute Registrable Securities (as defined in
the Registration Rights Agreement). Notwithstanding any such notice by the
Company, the Holder shall have the right to exercise this Warrant prior to the
end of the Notice Period.

5. Delivery of Warrant Shares.

    (a) Upon exercise of this Warrant, the Company shall promptly (but in no
event later than three Trading Days after the Exercise Date) issue or cause to
be issued and cause to be delivered to or upon the written order of the Holder
and in such name or names as the Holder may designate (provided that, if the
Registration Statement is not effective and the Holder directs the Company to
deliver a certificate for the Warrant Shares in a name other than that of the
Holder or an Affiliate of the Holder, it shall deliver to the Company on the
Exercise Date an opinion of counsel reasonably satisfactory to the Company to
the effect that the issuance of such Warrant Shares in such other name may be
made pursuant to an available exemption from the registration requirements of
the Securities Act and all applicable state securities or blue sky laws), a
certificate for the Warrant Shares issuable upon such exercise, free of
restrictive legends, unless a registration statement covering the resale of the
Warrant Shares and naming the Holder as a selling stockholder thereunder is not
then effective or the Warrant Shares are not freely transferable without volume
restrictions pursuant to Rule 144(k) under the Securities Act or (ii) an
electronic delivery of the Warrant Shares to the Holder’s account at the
Depository Trust Company (“DTC”) or a similar organization. The Holder, or any
Person permissibly so designated by the Holder to receive Warrant Shares, shall
be deemed to have become the holder of record of such Warrant Shares as of the
Exercise Date. If the Warrant Shares are to be issued free of all restrictive
legends, the Company shall, upon the written request of the Holder, use its best
efforts to deliver, or cause to be delivered, Warrant Shares hereunder
electronically through The Depository Trust Company or another established
clearing corporation performing similar functions, if available; provided, that,
the Company may, but will not be required to, change its transfer agent if its
current transfer agent cannot deliver Warrant Shares electronically through such
a clearing corporation.

    (b) If by the close of the third Trading Day after delivery of a properly
completed Exercise Notice, the Company fails to deliver to the Holder the
required number of Warrant Shares in the manner required pursuant to Section
5(a), and if after such third Trading Day and prior to the receipt of such
Warrant Shares, the Holder purchases (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”), then the Company shall, within three Trading Days after
the Holder’s request and in the Holder’s sole

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discretion, either (1) pay in cash to the Holder an amount equal to the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased (the “Buy-In Price”), at which point the Company’s
obligation to deliver such certificate (and to issue such Warrant Shares) shall
terminate or (2) promptly honor its obligation to deliver to the Holder Warrant
Shares and pay cash to the Holder in an amount equal to the excess (if any) of
the Buy-In Price over the product of (A) such number of Warrant Shares, times
(B) the closing bid price of a share of Common Stock on the date of receipt of a
properly completed Exercise Notice.

    (c) To the extent permitted by law, the Company’s obligations to issue and
deliver Warrant Shares in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same,
or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of Warrant Shares. Nothing herein shall limit the 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 Common
Stock upon exercise of this Warrant as required pursuant to the terms hereof.

6. Charges, Taxes and Expenses. Issuance and delivery of certificates for shares
of Common Stock upon exercise of this Warrant shall be made without charge to
the Holder for any issue or transfer tax, transfer agent fee or other incidental
tax or expense in respect of the issuance of such certificates, all of which
taxes and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or Warrants in a name other than that of the Holder or an Affiliate thereof. The
Holder shall be responsible for all other tax liability that may arise as a
result of holding or transferring this Warrant or receiving Warrant Shares upon
exercise hereof.

7. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or
destroyed, the Company shall issue or cause to be issued in exchange and
substitution for and upon cancellation hereof, or in lieu of and substitution
for this Warrant, a New Warrant, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft or destruction (in such case)
and, in each case, a customary and reasonable indemnity (which shall not include
a surety bond), if requested. Applicants for a New Warrant under such
circumstances shall also comply with such other reasonable regulations and
procedures and pay such other reasonable third-party costs as the Company may
prescribe. If a New Warrant is requested as a result of a mutilation of this
Warrant, then the Holder shall deliver such mutilated Warrant to the Company as
a condition precedent to the Company’s obligation to issue the New Warrant.

8. Reservation of Warrant Shares. The Company covenants that, from and after the
Trigger Date, it will reserve and keep available out of the aggregate of its
authorized but unissued and otherwise unreserved Common Stock, solely for the
purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as
herein provided, no less than one hundred percent (100%) of the number of
Warrant Shares which are initially issuable and deliverable upon the exercise of
this entire Warrant, free from preemptive rights or any other contingent
purchase rights of persons other than the Holder (taking into account the
adjustments and restrictions of Section 9). The Company covenants that all
Warrant Shares so issuable and deliverable shall, upon issuance

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and the payment of the applicable Exercise Price in accordance with the terms
hereof, be duly and validly authorized, issued and fully paid and nonassessable.
The Company will take all such action as may be necessary to assure that such
shares of Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any securities exchange
or automated quotation system upon which the Common Stock may be listed.

9. Certain Adjustments. The Exercise Price and number of Warrant Shares issuable
upon exercise of this Warrant are subject to adjustment from time to time as set
forth in this Section 9.

    (a) Stock Dividends and Splits. If the Company, at any time while this
Warrant is outstanding, (i) pays a stock dividend on its Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in
shares of Common Stock, (ii) subdivides its outstanding shares of Common Stock
into a larger number of shares, or (iii) combines its outstanding shares of
Common Stock into a smaller number of shares, then in each such case the
Exercise Price shall be multiplied by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding immediately before such
event and the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event. Any adjustment made pursuant to clause
(i) of this paragraph shall become effective immediately after the record date
for the determination of stockholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii) of this
paragraph shall become effective immediately after the effective date of such
subdivision or combination.

    (b) Fundamental Transactions. If, at any time while this Warrant is
outstanding (i) the Company effects any merger or consolidation of the Company
with or into another Person, in which the Company is not the survivor or is not
publicly traded and the stockholders of the Company immediately prior to such
merger or consolidation do not own, directly or indirectly, at least fifty
percent (50%) of the voting securities of the surviving entity, (ii) the Company
effects any sale of all or substantially all of its assets or a majority of its
Common Stock is acquired by a third party, in each case, in one or a series of
related transactions, (iii) any tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which all or substantially
all of the holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (iv) 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 (other than as a result of a subdivision or
combination of shares of Common Stock covered by Section 9(a) above) (in any
such case, a “Fundamental Transaction”), then the Holder shall have the right
thereafter to receive, upon exercise of this Warrant, the same amount and kind
of securities, cash or property as it would have been entitled to receive upon
the occurrence of such Fundamental Transaction if it had been, immediately prior
to such Fundamental Transaction, the holder of the number of Warrant Shares then
issuable upon exercise in full of this Warrant without regard to any limitations
on exercise contained herein (the “Alternate Consideration”). The Company shall
not effect any such Fundamental Transaction unless prior to or simultaneously
with the consummation thereof, any successor to the Company, surviving entity or
the corporation purchasing or otherwise acquiring such assets or other
appropriate corporation or entity shall assume the obligation to deliver to the
Holder, such Alternate Consideration as, in accordance with the foregoing
provisions, the Holder may be entitled to purchase and/or receive (as the case
may be), and the other obligations under this Warrant. The provisions of this
paragraph (c) shall similarly apply to subsequent transactions analogous to a
Fundamental Transaction.

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     (c) Number of Warrant Shares. Simultaneously with any adjustment to the
Exercise Price pursuant to paragraph (a), (d) and (e) of this Section, the
number of Warrant Shares that may be purchased upon exercise of this Warrant
shall be increased or decreased proportionately, so that after such adjustment
the aggregate Exercise Price payable hereunder for the increased or decreased
number of Warrant Shares shall be the same as the aggregate Exercise Price in
effect immediately prior to such adjustment.

    (d) Subsequent Equity Sales.

          (i) Except as provided in subsection (d)(iii) hereof, if and whenever
the Company shall issue or sell, or is, in accordance with any of subsections
(d)(ii)(l) through (d)(ii)(7) hereof, deemed to have issued or sold (excluding
shares of Common Stock issued or deemed to have been issued by the Company in
connection with any Excluded Securities), any shares of Common Stock for no
consideration or for a consideration per share less than the Exercise Price in
effect immediately prior to the time of such issue or sale, then and in each
such case (a “Trigger Issuance”) the then-existing Exercise Price shall be
reduced as of the close of business on the effective date of the Trigger
Issuance, to a price determined as follows:

               Adjusted Exercise Price =      (A x B) + D

      A+C

 

                              where

                               “A” equals the number of shares of Common Stock
outstanding, including Additional Shares of Common Stock (as defined below)
deemed to be issued hereunder, immediately preceding such Trigger Issuance;

                               “B” equals the Exercise Price in effect
immediately preceding such Trigger Issuance;

                               “C” equals the number of Additional Shares of
Common Stock issued or deemed issued hereunder as a result of the Trigger
Issuance; and

                               “D” equals the aggregate consideration, if any,
received or deemed to be received by the Company upon such Trigger Issuance;

provided, however, that in no event shall the Exercise Price after giving effect
to such Trigger Issuance be greater than the original Exercise Price.

For purposes of this subsection (d), (i) “Additional Shares of Common Stock”
shall mean all shares of Common Stock issued by the Company or deemed to be
issued pursuant to this subsection (d), other than Excluded Securities and (ii)
“Excluded Securities” shall mean any Common Stock issued or issuable: (A) in
connection with any stock or option plan approved by the Board of Directors of
the Company; (B) upon the exercise of the Warrants; (C) pursuant to a bona fide
firm commitment underwritten public offering with which generates gross proceeds
to the Company in excess of $20,000,000 (other than an “at-the-market offering”
as defined in Rule 415(a)(4) under the 1933 Act and “equity lines”); (D) upon
conversion of any Options (as defined in subsection (d)(ii)(1)) or Convertible
Securities (as defined in subsection (d)(ii)(1)) which are outstanding on the
day immediately preceding the Original Issue Date, provided that the terms of
such Options or Convertible Securities are not amended, modified or changed on
or after the

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Original Issue Date; and (v) in connection with mergers, acquisitions, strategic
business partnerships or joint ventures, in each case with non-affiliated third
parties and otherwise on an arm’s-length basis, the primary purpose of which, in
the reasonable judgment of the Company’s Board of Directors, is not to raise
additional capital.

     (ii) For purposes of this subsection 9(d), the following subsections
(d)(ii)(l) to (d)(ii)(7) shall also be applicable:

          (1) Issuance of Rights or Options. In case at any time the Company
shall in any manner grant (directly and not by assumption in a merger or
otherwise) any warrants or other rights to subscribe for or to purchase, or any
options for the purchase of, Common Stock or any stock or security convertible
into or exchangeable for Common Stock (such warrants, rights or options being
called “Options” and such convertible or exchangeable stock or securities being
called “Convertible Securities”), whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately exercisable,
and the price per share for which Common Stock is issuable upon the exercise of
such Options or upon the conversion or exchange of such Convertible Securities
(determined by dividing (i) the sum (which sum shall constitute the applicable
consideration) of (x) the total amount, if any, received or receivable by the
Company as consideration for the granting of such Options, plus (y) the
aggregate amount of additional consideration payable to the Company upon the
exercise of all such Options, plus (z), in the case of such Options which relate
to Convertible Securities, the aggregate amount of additional consideration, if
any, payable upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (ii) the total maximum number of shares of
Common Stock issuable upon the exercise of such Options or upon the conversion
or exchange of all such Convertible Securities issuable upon the exercise of
such Options) shall be less than the Exercise Price in effect immediately prior
to the time of the granting of such Options, then the total number of shares of
Common Stock issuable upon the exercise of such Options or upon conversion or
exchange of the total amount of such Convertible Securities issuable upon the
exercise of such Options shall be deemed to have been issued for such price per
share as of the date of granting of such Options or the issuance of such
Convertible Securities and thereafter shall be deemed to be outstanding for
purposes of adjusting the Exercise Price. Except as otherwise provided in
subsection 9(d)(ii)(3), no adjustment of the Exercise Price shall be made upon
the actual issue of such Common Stock or of such Convertible Securities upon
exercise of such Options or upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities.

          (2) Issuance of Convertible Securities. In case the Company shall in
any manner issue (directly and not by assumption in a merger or otherwise) or
sell any Convertible Securities, whether or not the rights to exchange or
convert any such Convertible Securities are immediately exercisable, and the
price per share for which Common Stock is issuable upon such conversion or
exchange (determined by dividing (i) the sum (which sum shall constitute the
applicable consideration) of (x) the total amount received or receivable by the
Company as consideration for the issue or sale of such Convertible Securities,
plus (y) the aggregate amount of additional consideration, if any, payable to
the Company upon the conversion or exchange thereof, by (ii) the total number of
shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities) shall be less than the Exercise Price in effect
immediately prior to the time of such issue or sale, then the total maximum
number of shares of Common Stock issuable upon conversion or exchange of all
such Convertible Securities shall be deemed to have been issued for such price
per share as of the date of the issue or sale of such Convertible Securities and
thereafter shall be deemed to be

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outstanding for purposes of adjusting the Exercise Price, provided that (a)
except as otherwise provided in subsection 9(d)(ii)(3), no adjustment of the
Exercise Price shall be made upon the actual issuance of such Common Stock upon
conversion or exchange of such Convertible Securities and (b) no further
adjustment of the Exercise Price shall be made by reason of the issue or sale of
Convertible Securities upon exercise of any Options to purchase any such
Convertible Securities for which adjustments of the Exercise Price have been
made pursuant to the other provisions of subsection 9(d).

          (3) Change in Option Price or Conversion Rate. Upon the happening of
any of the following events, namely, if the purchase price provided for in any
Option referred to in subsection 9(d)(ii)(l) hereof, the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities referred to in subsections 9(d)(ii)(l) or 9(d)(ii)(2), or
the rate at which Convertible Securities referred to in subsections 9(d)(ii)(l)
or 9(d)(ii)(2) are convertible into or exchangeable for Common Stock shall
change at any time, the Exercise Price in effect at the time of such event shall
forthwith be readjusted to the Exercise Price which would have been in effect at
such time had such Options or Convertible Securities still outstanding provided
for such changed purchase price, additional consideration or conversion rate, as
the case may be, at the time initially granted, issued or sold. On the
termination of any Option for which any adjustment was made pursuant to this
subsection 9(d) or any right to convert or exchange Convertible Securities for
which any adjustment was made pursuant to this subsection 9(d) (including,
without limitation, upon the redemption or purchase for consideration of such
Convertible Securities by the Company), the Exercise Price then in effect
hereunder shall forthwith be changed to the Exercise Price which would have been
in effect at the time of such termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such termination,
never been issued.

          (4) Stock Dividends. Subject to the provisions of this Section 9(d),
in case the Company shall declare a dividend or make any other distribution upon
any stock of the Company (other than the Common Stock) payable in Common Stock,
Options or Convertible Securities, then any Common Stock, Options or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration.

           (5) Consideration for Stock. In case any shares of Common Stock,
Options or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the gross amount received
by the Company therefor. In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by the Company
shall be deemed to be the fair value of such consideration as determined in good
faith by the Board of Directors of the Company. In case any Options shall be
issued in connection with the issue and sale of other securities of the Company,
together comprising one integral transaction in which no specific consideration
is allocated to such Options by the parties thereto, such Options shall be
deemed to have been issued for such consideration as determined in good faith by
the Board of Directors of the Company.

           (6) Record Date. In case the Company shall take a record of the
holders of its Common Stock for the purpose of entitling them (i) to receive a
dividend or other distribution payable in Common Stock, Options or Convertible
Securities or (ii) to subscribe for or purchase Common Stock, Options or
Convertible Securities, then such record date shall be deemed to be the date of
the issue or sale of the shares of Common Stock deemed to have been

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issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

           (7) Treasury Shares. The number of shares of Common Stock outstanding
at any given time shall not include shares owned or held by or for the account
of the Company or any of its wholly-owned subsidiaries, and the disposition of
any such shares (other than the cancellation or retirement thereof) shall be
considered an issue or sale of Common Stock for the purpose of this subsection
(d).

     (e) 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.

     (f) Calculations. All calculations under this Section 9 shall be made to
the nearest cent or the nearest share, as applicable. The number of shares of
Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the sale or issuance of any such
shares shall be considered an issue or sale of Common Stock.

     (g) Notice of Adjustments. Upon the occurrence of each adjustment pursuant
to this Section 9, the Company at its expense will, at the written request of
the Holder, promptly compute such adjustment, in good faith, in accordance with
the terms of this Warrant and prepare a certificate setting forth such
adjustment, including a statement of the adjusted Exercise Price and adjusted
number or type of Warrant Shares or other securities issuable upon exercise of
this Warrant (as applicable), describing the transactions giving rise to such
adjustments and showing in detail the facts upon which such adjustment is based.
Upon written request, the Company will promptly deliver a copy of each such
certificate to the Holder and to the Company’s transfer agent.

     (h) Notice of Corporate Events. If, while this Warrant is outstanding, the
Company (i) declares a dividend or any other distribution of cash, securities or
other property in respect of its Common Stock, including, without limitation,
any granting of rights or warrants to subscribe for or purchase any capital
stock of the Company or any subsidiary, (ii) authorizes or approves, enters into
any agreement contemplating or solicits stockholder approval for any Fundamental
Transaction or (iii) authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, then, except if such notice and the
contents thereof shall be deemed to constitute material non-public information,
the Company shall promptly deliver to the Holder a notice describing the
material terms and conditions of such transaction but in no event later than ten
(10) Trading Days prior to the applicable record or effective date on which a
Person would need to hold Common Stock in order to participate in or vote with
respect to such transaction to the extent such prior notice is practicable, and
the Company will use commercially reasonable efforts to ensure that the Holder
is given the practical opportunity to exercise this Warrant prior to such time
so as to participate in or vote with respect to such transaction; provided,
however, that the failure to deliver such notice or any defect therein shall not
affect the validity of the corporate action required to be described in such
notice.

10. Payment of Exercise Price. The Holder shall pay the Exercise Price in
immediately available funds; provided, however, that to the extent a
registration statement covering the issuance of the Warrant Shares that are
subject to the exercise by the Holder pursuant to the Securities Act is not
available for the issuance of such Warrant Shares, the Holder may, in its sole
discretion, satisfy its obligation to pay the Exercise Price through a “cashless
exercise”, in which

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event the Company shall issue to the Holder the number of Warrant Shares
determined as follows:

 

    X = Y [(A-B)/A]      
  where:
        X = the number of Warrant Shares to be issued to the Holder.           Y
= the total number of Warrant Shares with respect to which this Warrant is being
exercised.           A = the average of the Closing Sale Prices of the shares of
Common Stock (as reported by Bloomberg Financial Markets) for the five Trading
Days ending on the date immediately preceding the Exercise Date.            

 B = the Exercise Price then in effect for the applicable Warrant Shares at the
time of such exercise.

For purposes of this Warrant, “Closing Sale Price” means, for any security as of
any date, the last trade price for such security on the principal securities
exchange or trading market for such security, as reported by Bloomberg Financial
Markets, or, if such exchange or trading market begins to operate on an extended
hours basis and does not designate the last trade price, then the last trade
price of such security prior to 4:00 P.M., New York City time, as reported by
Bloomberg Financial Markets, or if the foregoing do not apply, the last trade
price of such security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg Financial Markets, or, if no
last trade price is reported for such security by Bloomberg Financial Markets,
the average of the bid prices, or the ask prices, respectively, of any market
makers for such security as reported in the “pink sheets” by Pink Sheets LLC. If
the Closing Sale Price cannot be calculated for a security on a particular date
on any of the foregoing bases, the Closing Sale Price of such security on such
date shall be the fair market value as determined in good faith by the Company.
If the Holder disputes the fair market value of such security by written notice
to the Company and the Company and the Holder are unable to agree upon the fair
market value of such securities, then the Company shall, within two business
days submit via facsimile (a) the disputed determination of the Exercise Price
to an independent, reputable investment bank selected by the Company and
approved by the Holder or (b) the disputed arithmetic calculation of the Warrant
Shares to the Company’s independent, outside accountant. The Company shall cause
the investment bank or the accountant, as the case may be, to perform the
determinations or calculations and notify the Company and the Holder of the
results no later than ten business days from the time it receives the disputed
determinations or calculations. Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during the applicable calculation period. The party
whose determination of fair market value is further from the fair market value,
as determined by the investment bank or the accountant, shall pay the fees of
such investment bank or accountant.

For purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued pursuant to the

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Purchase Agreement (provided that the Commission continues to take the position
that such treatment is proper at the time of such exercise).

11.     

Limitations on Exercise.

     (a) Notwithstanding anything to the contrary contained herein, the number o
Warrant Shares that may be acquired by the Holder upon any exercise of this
Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to ensure that, following such exercise (or other issuance), the total
number of shares of Common Stock then beneficially owned by the Holder and its
Affiliates and any other Persons whose beneficial ownership of Common Stock
would be aggregated with the Holder’s for purposes of Section 13(d) of the
Exchange Act, does not exceed 4.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. Each delivery of an
Exercise Notice by the Holder will constitute a representation by the Holder
that it has evaluated the limitation set forth in this Section and determined
that issuance of the full number of Warrant Shares requested in such Exercise
Notice is permitted under this Section. The Company’s obligation to issue shares
of Common Stock in excess of the limitation referred to in this Section shall be
suspended (and, except as provided below, shall not terminate or expire
notwithstanding any contrary provisions hereof) until such time, if any, as such
shares of Common Stock may be issued in compliance with such limitation;
provided, that, if, as of 5:30 P.M., New York City time, on the Expiration Date,
the Company has not received written notice that the shares of Common Stock may
be issued in compliance with such limitation, the Company’s obligation to issue
such shares shall terminate. This provision shall not restrict the number of
shares of Common Stock which a Holder may receive or beneficially own in order
to determine the amount of securities or other consideration that such Holder
may receive in the event of a Fundamental Transaction as contemplated in Section
9 of this Warrant. By written notice to the Company, the Holder may waive the
provisions of this Section but any such waiver will not be effective until the
61st day after such notice is delivered to the Company, nor will any such waiver
effect any other Holder.

     (b) Notwithstanding anything to the contrary contained herein, the number
of Warrant Shares that may be acquired by the Holder upon any exercise of this
Warrant (or otherwise in respect hereof) shall be limited to the extent
necessary to ensure that, following such exercise (or other issuance), the total
number of shares of Common Stock then beneficially owned by such Holder and its
Affiliates and any other Persons whose beneficial ownership of Common Stock
would be aggregated with the Holder’s for purposes of Section 13(d) of the
Exchange Act, does not exceed 9.999% of the total number of issued and
outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such exercise). For such purposes, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. Each delivery of an
Exercise Notice hereunder will constitute a representation by the Holder that it
has evaluated the limitation set forth in this Section and determined that
issuance of the full number of Warrant Shares requested in such Exercise Notice
is permitted under this Section. The Company’s obligation to issue shares of
Common Stock in excess of the limitation referred to in this Section shall be
suspended (and, except as provided below, shall not terminate or expire
notwithstanding any contrary provisions hereof) until such time, if any, as such
shares of Common Stock may be issued in compliance with such limitation;
provided, that, if, as of 5:30 P.M., New York City time, on the Expiration Date,
the Company has not received written notice that the shares of Common Stock may
be issued in compliance with such limitation, the

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Company’s obligation to issue such shares shall terminate. This provision shall
not restrict the number of shares of Common Stock which a Holder may receive or
beneficially own in order to determine the amount of securities or other
consideration that such Holder may receive in the event of a Fundamental
Transaction as contemplated in Section 9 of this Warrant. The restriction in
this Section 11(b) shall not be waived.

12. No Fractional Shares. No fractional Warrant Shares will be issued in
connection with any exercise of this Warrant. In lieu of any fractional shares
which would, otherwise be issuable, subject to Section 11, the number of Warrant
Shares to be issued shall be rounded down to the next whole number and the
Company shall pay the Holder in cash the fair market value (based on the Closing
Sale Price) for any such fractional shares.

13. Notices. Any and all notices or other communications or deliveries hereunder
(including, without limitation, any Exercise Notice) shall be in writing and
shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in the Purchase Agreement prior to 5:30 P.M., New
York City time, on a Trading Day, (ii) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number specified in the Purchase Agreement on a day that is not a
Trading Day or later than 5:30 P.M., New York City time, on any Trading Day,
(iii) the Trading Day following the date of mailing, if sent by nationally
recognized overnight courier service specifying next business day delivery, or
(iv) upon actual receipt by the party to whom such notice is required to be
given, if by hand delivery. The address and facsimile number of a party for such
notices or communications shall be as set forth in the Purchase Agreement unless
changed by such party by two Trading Days’ prior notice to the other party in
accordance with this Section 13.

14. Warrant Agent. The Company shall serve as warrant agent under this Warrant.
Upon thirty (30) days’ notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant agent
may be merged or any corporation resulting from any consolidation to which the
Company or any new warrant agent shall be a party or any corporation to which
the Company or any new warrant agent transfers substantially all of its
corporate trust or shareholders services business shall be a successor warrant
agent under this Warrant without any further act. Any such successor warrant
agent shall promptly cause notice of its succession as warrant agent to be
mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last
address as shown on the Warrant Register.

15. Miscellaneous.

     (a) No Rights as a Shareholder. The Holder, solely in such Person’s
capacity as a holder of this Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person’s capacity as the Holder of this Warrant,
any of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of
stock, reclassification of stock, consolidation, merger, amalgamation,
conveyance or otherwise), receive notice of meetings, receive dividends or
subscription rights, or otherwise, prior to the issuance to the Holder of the
Warrant Shares which such Person is then entitled to receive upon the due
exercise of this Warrant. In addition, nothing contained in this Warrant shall
be construed as imposing any liabilities on the Holder to purchase any
securities (upon exercise of this Warrant or otherwise) or as a stockholder of
the Company, whether such liabilities are asserted by the Company or by
creditors of the Company. Notwithstanding this Section 15(a), the Company shall
provide the

12

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Holder with copies of the same notices and other information given to the
shareholders of the Company, contemporaneously with the giving thereof to the
shareholders.

     (b) Successors and Assigns. Subject to the restrictions on transfer set
forth in this Warrant and in Section 4.1 of the Purchase Agreement, and
compliance with applicable securities laws, this Warrant may be assigned by the
Holder. This Warrant may not be assigned by the Company except to a successor in
the event of a Fundamental Transaction. This Warrant shall be binding on and
inure to the benefit of the parties hereto and their respective successors and
assigns. Subject to the preceding sentence, nothing in this Warrant shall be
construed to give to any Person other than the Company and the Holder any legal
or equitable right, remedy or cause of action under this Warrant. This Warrant
may be amended only in writing signed by the Company and the Holder, or their
successors and assigns.

     (c) Governing Law; Jurisdiction. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be determined
in accordance with the provisions of the Purchase Agreement.

     (d) Headings. The headings herein are for convenience only, do not
constitute a part of this Warrant and shall not be deemed to limit or affect any
of the provisions hereof.

      (e) Severability. In case any one or more of the provisions of this
Warrant shall be invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant shall not
in any way be affected or impaired thereby, and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonable substitute therefor, and upon so agreeing, shall
incorporate such substitute provision in this Warrant.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,
SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
its authorized officer as of the date first indicated above.

  BTHC VII, INC.           By:     Name:   Title:    

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SCHEDULE 1
FORM OF EXERCISE NOTICE

(To be executed by the Holder to purchase shares of Common Stock under the
foregoing Warrant)

Ladies and Gentlemen:

(1) The undersigned is the Holder of Warrant No. __________ (the “Warrant”)
issued by BTHC VII, Inc., a Delaware corporation (the “Company”). Capitalized
terms used herein and not otherwise defined herein have the respective meanings
set forth in the Warrant.

(2) The undersigned hereby exercises its right to purchase Warrant Shares
pursuant to the Warrant pursuant to the Warrant.

(3) The Holder intends that payment of the Exercise Price shall be made as
(check one):

                                 o       Cash Exercise                          
               o        “Cashless Exercise” under Section 10

(4) If the Holder has elected a Cash Exercise, the Holder shall pay the sum of
$_______ in immediately available funds to the Company in accordance with the
terms of the Warrant.

(5) Pursuant to this Exercise Notice, the Company shall deliver to the Holder
_____________ Warrant Shares in accordance with the terms of the Warrant.

(6) By its delivery of this Exercise Notice, the undersigned represents and
warrants to the Company that in giving effect to the exercise evidenced hereby
the Holder will not beneficially own in excess of the number of shares of Common
Stock (as determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934) permitted to be owned under Section 11 of the Warrant to which this
notice relates.

Dated:_______________, _____

Name of Holder: ___________________________

By:__________________________________

Name: _______________________________

Title: _______________________________
(Signature must conform in all respects to name of Holder as specified on the
face of the Warrant)

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SCHEDULE 2

BTHC VII, INC.

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
__________________ (the “Transferee”) the right represented by the within
Warrant to purchase _________ shares of Common Stock of BTHC VII, Inc. (the
“Company”) to which the within Warrant relates and appoints
___________________________ attorney to transfer said right on the books of the
Company with full power of substitution in the premises. In connection
therewith, the undersigned represents, warrants, covenants and agrees to and
with the Company that:

(a)     

the offer and sale of the Warrant contemplated hereby is being made in
compliance with Section 4(1) of the United States Securities Act of 1933, as
amended (the “Securities Act”) or another valid exemption from the registration
requirements of Section 5 of the Securities Act and in compliance with all
applicable securities laws of the states of the United States;

  (b)     

the undersigned has not offered to sell the Warrant by any form of general
solicitation or general advertising, including, but not limited to, any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio, and
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising; and

  (c)     

the undersigned understands that the Company may condition the transfer of the
Warrant contemplated hereby upon the delivery to the Company by the undersigned
or the Transferee, as the case may be, of 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 securities laws of
the states of the United States.

 

Dated: ____________ ,___

      (Signature must conform in all respects to name of   holder as specified
on the face of the Warrant)           Address of Transferee                 In
the presence of:          

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