<PAGE>
 
                                                                   EXHIBIT 10.12

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SALE, TRANSFER, PLEDGE,
HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES EVIDENCED HEREBY OR ANY
PORTION THEREOF OR INTEREST THEREIN MAY NOT BE ACCOMPLISHED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND UNDER CALIFORNIA LAW, OR AN
OPINION OF COUNSEL SATISFACTORY IN FORM AND SUBSTANCE TO THE COMPANY TO THE
EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.


                                                              December ___, 1998


                              WARRANT CERTIFICATE

                 To Subscribe for and Purchase Common Stock of
                               GIANT GROUP, LTD.

                                75,000 Warrants


                         VOID AFTER December ___, 2003
                         -----------------------------

THIS WARRANT CERTIFICATE CERTIFIES that, for valuable consideration received,
L.H. Friend, Weinress, Frankson & Presson, Inc. or assigns, is the registered
holder of the number of Warrants set forth above (such number, as from time to
time to be adjusted as hereinafter provided) (individually, each a "Warrant",
and collectively, the "Warrants"). Each Warrant entitles the holder upon
exercise to subscribe for and purchase from GIANT GROUP, LTD., a Delaware
corporation (hereinafter called the "Company"), at the initial exercise price of
$7.25 per share (such price, as from time to time to be adjusted as hereinafter
provided, being hereinafter called the "Warrant Price"), at any time and from
time to time but not earlier than the Issue Date (as defined below) or later
than the Expiration Date (as defined below), one fully paid, nonassessable share
of Common Stock, $.01 par value, of the Company ("Common Stock"), subject
however, to the provisions and upon the terms and conditions hereinafter set
forth, including without limitation the provisions of Section 2 hereof. "Issue
Date" shall mean December ___, 1998. "Expiration Date" shall mean 5:00 p.m., Los
Angeles time, on December ___, 2003.

                                    Page 1
<PAGE>
 
Section 1.  Exercise of Warrant
     
   Payment of Warrant Price

The Warrants may be exercised, at any time and from time to time (but not
earlier than the Issue Date or later than the Expiration Date), by the holder
hereof (hereinafter referred to as the "Warrantholder"), in whole or in part
(but not as to a fractional share of Common Stock), by the completion of the
subscription form attached hereto and by the surrender of the Warrants (properly
endorsed) at the Company's offices at 9000 Sunset Boulevard, l6/th/ Floor, Los
Angeles, CA 90069 (or at such other location as the Company may designate by
notice in writing to the Warrantholder at the address of the Warrantholder
appearing on the books of the Company), and by payment to the Company of the
Warrant Price, in cash or by certified or official bank check, for each share
being purchased. In the event of any exercise of the rights represented by this
Warrant, a certificate or certificates for the shares of Common Stock so
purchased, registered in the name of the Warrantholder, shall be delivered to
the Warrantholder within a reasonable time, after the rights represented by this
Warrant shall have been so exercised; and, unless this Warrant has expired or
has been exercised in full, a new Warrant representing the number of shares with
respect to which this Warrant shall not then have been exercised shall also be
issued to the Warrantholder within a reasonable time. With respect to any such
exercise, the Warrantholder shall for all purposes be deemed to have become the
Warrantholder of record of the number of shares of Common Stock evidenced by
such certificate or certificates from the date on which this Warrant was
surrendered and payment of the Warrant Price was made irrespective of the date
of delivery of such certificate, except that, if the date of such surrender and
payment is a date on which the stock transfer books of the Company are closed,
such person shall be deemed to have become the Warrantholder of such shares at
the close of business on the next succeeding date on which the stock transfer
books are open. No fractional shares shall be issued upon exercise of the
Warrants and no payment or adjustment shall be made upon any exercise on account
of any cash dividends on the Common Stock issued upon such exercise. If any
fractional interest in a share of Common Stock would, except for the provisions
of this Section 1, be delivered upon any such exercise, the Company, in lieu of
delivering the fractional share thereof, shall pay to the Warrantholder an
amount in cash equal to the current market price of such fractional interest as
determined in good faith by the Board of Directors of the Company.

Section 2.  Adjustment of Number of Warrant Shares Issuable

Adjustment of Exercise Price and Number of Warrant Shares Issuable. The number
of shares of Common Stock issuable upon the exercise of each Warrant (the
"Warrant Number") is initially one. The Warrant Number is subject to adjustment
from time to time upon the occurrence of the events enumerated in, or as
otherwise provided in, this Section 2.

                                    Page 2
<PAGE>
 
    (a) Adjustment for Change in Capital Stock

    If the Company:
    
        (1) pays a dividend or makes a distribution on its Common Stock in 
    shares of its Common Stock;

        (2) subdivides or reclassifies its outstanding shares of Common Stock 
    into a greater number of shares;
       
        (3) combines or reclassifies its outstanding shares of Common Stock 
    into a smaller number of shares; or
       
        (4) issues by reclassification of its Common Stock any shares of its
    capital stock;

then the Warrant Number in effect immediately prior to such action shall be
proportionately adjusted so that the holder of any Warrant thereafter exercised
may receive the aggregate number and kind of shares of capital stock of the
Company which he or it would have owned immediately following such action if
such Warrant had been exercised immediately prior to such action.

The adjustment shall become effective immediately after the record date in the
case of a dividend or distribution and immediately after the effective date in
the case of a subdivision, combination or reclassification.

Such adjustment shall be made successively whenever any event listed above shall
occur.

The Company shall not issue shares of Common Stock as a dividend or distribution
on any class of capital stock other than Common Stock unless (i) such dividend
or distribution is not prohibited and (ii) the Warrantholder also receives such
dividend or distribution on a ratable basis.

    (b) When De Minimis Adjustment May Be Deferred

No adjustment in the Warrant Number need be made unless the adjustment would
require an increase or decrease of a least 0.5% in the Warrant Number. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment, provided that no such adjustment shall be deferred
                           --------   
beyond the date on which a Warrant is exercised.

All calculations under this Section 2 shall be made to the nearest 1/100th of a
share.

                                    Page 3
<PAGE>
 
    (c) Reorganizations

In case of any capital reorganization, other than in the cases referred to in
Sections 2(a) hereof, or the consolidation or merger of the Company with or into
another corporation (other then a merger or consolidation in which the Company
is the continuing corporation and which does not result in any reclassification
of the outstanding shares of Common stock into shares of other stock or other
securities or property), or the sale of the property of the Company as an
entirety or substantially as an entirety (collectively such actions being
hereinafter referred to as "Reorganizations"), there shall thereafter be
deliverable upon exercise of any Warrant (in lieu of the number of shares of
Common Stock theretofore deliverable) the number of shares of stock or other
securities or property to which a holder of the number of shares of Common Stock
that would otherwise have been deliverable upon the exercise of such Warrant
would have been entitled upon such Reorganization if such Warrant had been
exercised in full immediately prior to such Reorganization. In case of any
Reorganization, appropriate adjustment, as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a duly
adopted resolution certified by the Company's Secretary or Assistant Secretary,
shall be made in the application of the provisions herein set forth with respect
to the rights and interests of the Warrantholder so that the provisions set
forth herein shall thereafter be applicable, as nearly as possible, in relation
to any shares or other property thereafter deliverable upon exercise of the
Warrants.

    (d) Miscellaneous

For purposes of this Section 2, the term "shares of Common Stock" shall mean (i)
shares of any class of stock designated as Common Stock of the Company at the
date of this Agreement, and (ii) shares of any other class of stock resulting
from successive changes or reclassification of such shares consisting solely of
changes in par value, or from par value to no par value, or from no par value to
par value. In the event that at any time, as a result of an adjustment made
pursuant to this Section 2, the holders of Warrants shall become entitled to
purchase any securities of the Company other than, or in addition to, shares of
Common Stock, thereafter the number or amount of such other securities so
purchasable upon exercise of each Warrant shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Warrant Shares contained in subsections (a)
through (h) of this Section 2, inclusive, and the provisions of Sections 2, 3,
and 4, with respect to the Warrant Shares or the Common Stock shall apply on
like terms to any such other securities.

    (e) Notice of Adjustment

Upon any adjustment of the Warrant Number, then and in each such case the
Company shall give written notice thereof, by first-class mail, postage prepaid,
addressed to the Warrantholder at the address of such Warrantholder as shown on
the books of the Company, which notice shall state the Warrant shares resulting
from such adjustment, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.

                                    Page 4
<PAGE>
 
    (f) Stock to Be Reserved

The Company will at all times reserve and keep available out of its authorized
Common Stock or its treasury shares, solely for the purpose of issuance upon the
exercise of the Warrants as herein provided, such number of shares of Common
Stock as shall then be issuable upon the exercise of the Warrants. The Company
covenants that all shares of Common stock which shall be so issued shall be duly
and validly issued and fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, and, without limiting the
generality of the foregoing, the Company covenants that it will from time to
time take all such action as may be required to ensure that the par value per
share of the Common Stock is at all times equal to or less than the effective
Warrant Price. The Company will take all such action as may be necessary to
ensure that all such shares of Common Stock may be so issued without violation
of any applicable law or regulation, or of any requirements of any national
securities exchange or automated quotation system upon which the Common Stock of
the Company may be listed. The Company will not take any action which results in
any adjustment of the Warrant Price if the total number of shares of Common
Stock issued and issuable after such action upon exercise of the Warrant would
exceed the total number of shares of Common Stock then authorized by the
Company's Articles of Incorporation. The Company has not granted and will not
grant any right of first refusal with respect to shares issuable upon exercise
of this Warrant, and there are no preemptive rights associated with such shares.
The Company agrees that so long as any Warrants remain unexercised, it will not
grant warrants to purchase its Common Stock to any party that (i) give such
party demand registration rights which are exercisable in less than one year
from the date of the grant of such warrants, (ii) give such party demand
registration rights that are senior to those registration rights granted to the
Warrants hereunder or (iii) otherwise impair the registration or other rights
granted to the Warrants hereunder, in each case without notification to and
consent of the Warrantholder which consent shall not be

    (g) Issue Tax

The issuance of certificates for shares of Common Stock upon exercise of any
Warrant shall be made without a charge to the Warrantholder for any issuance tax
in respect thereof, provided that the Company shall not be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the Warrantholder.

    (h) Closing of Books

The Company will at no time close its transfer books against the transfer of the
shares of Common Stock issued or issuable upon the exercise of this Warrant in
any manner which interferes with the timely exercise of this Warrant.

                                    Page 5
<PAGE>
 
Section 3. Registration Rights
   
        (a) Demand Registration

For purposes of Section 3 only, the "Warrantholders" shall mean the holders of
the L.H. Friend, Weinress, Frankson and Presson, Inc.,_________________________
Warrants or their assigns. By operation of a majority, the Warrantholders shall
have the right, at any time, but not earlier than eighteen (18) months from the
Issue Date or later than the Expiration Date, to make written request of the
Company to register under the rules and regulations (the "Regulations") of the
Securities and Exchange Commission (the "SEC") all shares of Common Stock to be
purchased by the Warrantholders pursuant to the terms and conditions of such
Warrants (the "Registrable Stock"). The Registrable Stock specified in such
request or a request pursuant to Section 3(c) hereof is referred to herein as
the "Subject Stock." Promptly upon receipt of such request the Company shall
commence preparing and thereafter file with the SEC a preliminary prospectus
under cover of Form S-3, if the Company is then eligible to utilize such form,
or Form S-1 or such other appropriate form, if the Company is not eligible to
utilize Form S-3, for the registration of the Subject Stock ("registration
statement") and use its best efforts to cause such registration statement to
become effective (including, without limitation, filing post-effective
amendments, appropriate qualifications under applicable blue sky or other state
securities laws, and appropriate compliance with the Regulations) as soon as
practicable to permit or facilitate the sale and distribution of the Subject
Stock. Immediately upon receipt of a request for registration pursuant to this
Section 3(a), the Company shall notify the Warrantholders and each
Warrantholder shall be permitted to include shares of Common Stock in such
registration. The Company is obligated to effect only one (1) such registration
pursuant to this Section 3(a) of the Warrantholders certificates.

Notwithstanding the provisions of this Section 3(a), if the Company shall
furnish to each of the Warrantholders a certificate signed by the Chief
Executive Officer of the Company stating that in the good faith judgment of the
Board of Directors of the Company it would be seriously detrimental to the
Company and its shareholders for such a registration statement to be filed and
it is therefore essential to defer a filing of such registration statement, the
Company shall have the right to defer such filing for a period of not more than
one hundred twenty (120) days after receipt of the request of the Warrantholders
to effect such a registration; provided, however, that the Company may not
utilize this right more than once; and provided, further, that the majority of
the Warrantholders may, at any time following the receipt of such certificate,
in writing, withdraw such request for such registration and therefore preserve
the right provided in this Section 3(a) for the Warrantholders.

If the Warrantholders otherwise elect to withdraw such request for registration
and therefore preserve the right provided in this Section 3(a), then the
Warrantholders must pay to the Company the costs and expenses incurred by the
Company in connection with such registration 

                                    Page 6 
<PAGE>
 
request that would not have otherwise been incurred by the Company but for the
registration request.

The Company shall not be required to file any registration statement pursuant to
this Section 3 hereof (i) during any period when a registration statement of the
Company is currently on file with the Securities and Exchange Commission
provided that during such period the Company is diligently working to cause such
registration statement to become effective or (ii) within (90) days after the
effective date of any earlier registration statement filed by the Company, and
(iii) the Company shall have no obligation pursuant to this Section if at the
time the registration statement is proposed to be filed the Warrantholders may
freely sell the shares of Common Stock issuable upon exercise of this Warrant
pursuant to the Regulations of the SEC.

    (b) Preparation of Documents

Prior to filing a registration statement or any amendments or supplements
thereto required hereby, the Company will furnish to a single counsel selected
by the Warrantholders copies of all documents proposed to be filed, which
documents will be subject to the timely review of such counsel. In connection
therewith, the Company shall prepare and file a registration statement to effect
such registration. The Warrantholders agrees to provide all such information and
materials and take all such action as may be reasonably required in order to
permit the Company to comply with all applicable requirements of the SEC and to
obtain any desired acceleration of the effective date of such registration
statement.

    (c) Piggyback Registration

If (but without any obligation to do so) the Company proposes to register with
the SEC any of the Common Stock under the Regulations of the SEC (other than
pursuant to a request under Section 3(a) and other than securities to be issued
pursuant to a stock option or other employee benefit or similar plan, or in
connection with merger or an acquisition), the Company shall, as promptly as
practicable, give written notice to the Warrantholder (and the holders of Common
Stock issued upon the exercise of any of the Warrants) of its intention to
effect such registration. If, within 20 days after receipt of such notice and
after the Issue Date but before the Expiration Date, the Warrantholder submits a
written request to the Company specifying the amount of Registrable Stock that
the Warrantholder proposes to sell, the Company shall include the shares
specified in such request in such registration statement (and any related
qualification under blue sky laws or other compliance) and the Company shall
keep each such registration statement in effect and maintain compliance with
each federal and state law and regulation as set forth in Section 3(d);
provided, however, that inclusion in such registration statement shall be
subject to the following terms and conditions: (i) such shares need not be
included in any underwritten offering if the managing underwriter determines in
its best judgment that their inclusion would impair the success of the offering;
(ii) the Company shall bear all costs of registration, sale of the shares and
the fees and expense (if any) of a single legal counsel to the Warrantholders
other than underwriting discounts or commissions and (iii) the Company shall
have no obligation pursuant to 

                                    Page 7
<PAGE>
 
this Section if at the time the registration statement is proposed to be filed
the Warrantholders may freely sell the shares of Common Stock issuable upon
exercise of this Warrant pursuant to the Regulations of the SEC.

    (d) Covenants of the Company

In connection with any offering of Subject Stock registered pursuant to this
Warrant, the Company shall (a) furnish to the Warrantholder such number of
copies of any registration statement (including any preliminary offering
circular) as it may reasonably request in order to effect the offering and sale
of the Subject Stock to be offered and sold, but only while the Company shall be
required under the provisions hereof to cause the registration statement to
remain current, (b) take such action as shall be desirable or necessary to
qualify the Subject Stock covered by such registration statement under such blue
sky or other state securities laws for offer and sale as the Warrantholder shall
reasonably request, and (c) keep the Warrantholder advised in writing as to the
initiation of each registration and as to the completion thereof. Upon any
registration becoming effective pursuant to this Section 3, the Company shall
use its best efforts to: (i) keep such registration statement current for a
period of 120 days if such registration is filed on Form S-3 and otherwise for a
period of 90 days; (ii) prepare and file with the SEC such amendments and
supplements to such registration statement as may be necessary to comply with
the provisions of the Regulations of the SEC with respect to the disposition of
all securities covered by such registration statement; (iii) cause all such
Subject Stock registered pursuant to such registration statement to be listed on
each securities exchange or automated quotation system on which the Common Stock
is then listed or quoted; (iv) provide a transfer agent and registrar for all
Subject Stock registered pursuant to such registration statement and CUSIP
number for all such Subject Stock, in each case not later than the effective
date of such registration and (v) otherwise comply with all applicable rules and
regulations of the SEC.

    (e) Sales by the Company

In connection with any offering of Subject Stock pursuant to Section 3(a), the
Company agrees not to effect any public sale or distribution of Common Stock for
the seven-day period preceding, and the 90-day period beginning on, the
effective date of any such registration.

    (f) Expenses

With respect to the registration of Subject Stock pursuant to Section 3(a),
together with any inclusion of the Subject Stock in a so-called piggyback
registration pursuant to Section 3(c), the Company will pay all expenses
incident to its performance of or compliance with this Section 3 including,
without limitation, all registration and filing fees, fees and expenses of
compliance with securities or blue sky laws, printing expenses, messenger,
telephone and delivery expenses, and fees and disbursements of its counsel and
independent certified public accountants. The Warrantholder will be responsible
for any stock transfer taxes and broker's fees, all internal 

                                    Page 8
<PAGE>
 
management, personnel and administrative costs of the Warrantholder, if any,
incurred by it in connection with effecting any sales of the Warrantholder's
Common Stock.

    (g) Indemnification

The Company will indemnify, to the maximum extent permitted by law, the
Warrantholder, its officers and directors and each person who controls the
Warrantholder (within the meaning of the Regulation of the SEC) against all
losses, claims, damages, liabilities and expenses (or actions, proceedings or
settlements in respect thereof) caused by, arising out of or based on any untrue
or alleged untrue statement of a material fact contained in any registration
statement (or any amendment or supplement thereto) of the Company relating to
the sale of Subject Stock registered pursuant to this Section 3, or any
materials incorporated by reference therein, filed with the SEC, or any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as the same are caused by or contained in any information furnished in
writing to the Company by the Warrantholder expressly for use therein; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or expense arises out of or is
based upon an untrue statement or alleged untrue statement or omission made in
any preliminary prospectus if (i) such Warrantholder failed to send or deliver a
copy of the prospectus with or prior to the delivery of written confirmation of
the sale of Subject Stock and (ii) the prospectus would have completely
corrected such untrue statement or omission; and provided further that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or expense arises out of or is based upon an untrue
statement or alleged untrue statement, omission or alleged omission in the
prospectus, if such untrue statement or alleged untrue statement, omission or
alleged omission is completely corrected in an amendment or supplement to the
prospectus and if, having previously been furnished by or on behalf of the
Company with copies of the prospectus as so amended or supplemented, such
Warrantholder thereafter fails to deliver such prospectus as so amended or
supplemented prior to or concurrently with the sale of Subject Stock to the
person asserting such loss, claim, damage, liability or expense who purchased
such Subject Stock which is the subject thereof from such Warrantholder.

The Warrantholder severally agrees to indemnify and hold harmless the Company,
its directors and officers and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act of 1933, as
amended, or Section 20 of the Securities Exchange Act of 1934, as amended, to
the same extent as the foregoing indemnity from the Company to such
Warrantholder, but only with respect to information relating to such
Warrantholder furnished in writing by such Warrantholder expressly for use in
any registration statement or prospectus, or any amendment or supplement
thereto, or any preliminary prospectus. In case any action or proceeding shall
be brought against the Company or its directors or officers or any such
controlling person, in respect of which indemnity may be sought against a holder
of the Subject Stock, such holder shall have the rights and duties given the
Company and the Company or its directors or officers or such controlling person
shall have the rights and duties given to the Warrantholder by the preceding 
paragraph.

                                    Page 9
<PAGE>
 
Any person entitled to indemnification under this Section 3(g) will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the fees and
expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable
judgement of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.

The indemnifications set forth in this Section 3(g) shall survive the
termination or expiration of this Warrant.

Section 4. Notices of Record Dates

        In the event of:
  
        (1) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution (other than cash dividends out of
earned surplus), or any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any right to sell shares of stock of any class or any other right, or

        (2) any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any transfer of all or
substantially all the assets of the Company to or consolidation or merger of the
Company with or into any other corporation or entity, or

        (3) any voluntary or involuntary dissolution, liquidation or winding-up
of the Company, then and in each such event the Company will give notice to the
Warrantholder specifying (i) the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and stating the amount
and character of such dividend, distribution or right, and (ii) the date on
which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is to take place,
and the time, if any is to be fixed, as of which the Warrantholders of record
will be entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such 

                                    Page 10
<PAGE>
 
notice sha11 be given at least 20 days and not more than 90 days prior to the
date therein specified, and such notice shall state that the action in question
or the record date is subject to the effectiveness of a registration statement
under the Securities Act or to a favorable vote of stockholders, if either is 
required.

Section 5. No Shareholder Rights or Liabilities

This Warrant shall not entitle the Warrantholder to any voting rights or other
rights as a shareholder of the Company. No provision hereof, in the absence of
affirmative action by the Warrantholder to purchase shares of Common Stock, and
no mere enumeration herein of the rights or privileges of the Warrantholder
shall give rise to any liability of such Warrantholder for the Warrant Price or
as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

Section 6. Lost, Stolen, Mutilated or Destroyed Warrant

If this Warrant is lost, stolen, mutilated or destroyed, the Company may, on
such terms, including indemnification, as it may in its discretion reasonably
impose (which shall, in the case of a mutilated Warrant, include the surrender
thereof), issue a new Warrant of like denomination and tenor as the Warrant so
lost, stolen, mutilated or destroyed. Any such new Warrant shall constitute an
original contractual obligation of the Company, whether or not the allegedly
lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by
anyone.

Section 7. Notices

All notices, requests and other communications required or permitted to be given
or delivered hereunder shall be in writing, and shall be delivered, or shall be
sent by certified or registered mail, postage prepaid and addressed, if to the
Warrantholder to such Warrantholder at the address shown on such Warrantholder's
Warrant or at such other address as shall have been furnished to the Company by
notice from such Warrantholder. All notices, requests and other communications
required or permitted to be given or delivered hereunder shall be in writing,
and shall be delivered, or shall be sent by certified or registered mail,
postage prepaid and addressed to the Company at the Company's Address set forth
below; Attention: Secretary or at such other address as shall have been
furnished to the Warrantholder by notice from the Company. For purposes of this
warrant:

      The Address of the Holder: L.H. Friend, Weinress, Frankson & Presson, Inc.
                                 3333 Michelson Drive
                                 Suite 650
                                 Irvine, CA 92612

                                    Page 11
<PAGE>
 
      The Address of the Company: GIANT GROUP, LTD.
                                  9000 Sunset Boulevard, 16/th/ Floor
                                  Los Angeles, CA 90069

Section 8. Transfer

This Warrant and all rights hereunder may be transferred, in whole or in part,
upon surrender of this Warrant properly endorsed and upon payment of any
necessary transfer tax or other governmental charge imposed upon such transfer.
Upon any partial transfer the Company will issue and deliver to the
Warrantholder a new Warrant or Warrants with respect to the shares of Common
Stock not so transferred.

Section 9. Amendments and Waivers

This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought.

Section l0. Severability

If one more provisions of this Warrant are held to be unenforceable under
applicable law, such provision shall be excluded from this Warrant, and the
balance of this Warrant shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.

Section 11. Governing Law

This Warrant shall be governed by and construed under the laws of the State of
California.

Section 12. Headings

The headings in this Warrant are for purposes of reference only and shall not
limit or otherwise affect any of the terms hereof.

                                    Page 12
<PAGE>
 
IN WITNESS WHEREOF, GIANT GROUP, LTD. has executed this Warrant on and as of the
day and year first above written.

                                                   GIANT GROUP, LTD.
                                                   


                                                   By:_______________________
                                                      Burt Sugarman
                                                      President and CEO

Attest:


--------------------------
Name
Title

                                    Page 13
<PAGE>
 
SUBSCRIPTION FORM TO BE EXECUTED
UPON EXERCISE OF THIS WARRANT

                                                               December___, 1998


GIANT GROUP, LTD.

The undersigned, pursuant to the provisions set forth in the Warrant, hereby

agrees to subscribe for and purchase __________________ shares of Common Stock

covered by such Warrant, and herewith tenders $_______________________ in full

payment of the purchase price for such shares.

                                       By_________________________________ 
                                       L.H. Friend, Weinress, Frankson &
                                       Presson, Inc.

                                       3333 Michelson Drive 
                                       Suite 650
                                       Irvine, CA 92612

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