<PAGE>

                                                                     EXHIBIT 4.4
 
         THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
       REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
            THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD,
       TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THAT
       ACT AND UNDER APPLICABLE STATE SECURITIES LAW OR REGISTRATION OF
          SUCH SECURITIES UNDER THAT ACT AND UNDER THE PROVISIONS OF
        APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED OR UNLESS THE 
         SALE OR TRANSFER IS MADE IN COMPLIANCE WITH RULE 144 OR 144A
       PROMULGATED UNDER SUCH ACT AND, IF REASONABLY REQUESTED BY STYLES
          ON VIDEO, INC. (THE "COMPANY"), THE COMPANY HAS RECEIVED AN
          OPINION OF ITS COUNSEL THAT THE SECURITIES OR THE SALE OR 
                    TRANSFER ARE EXEMPT FROM REGISTRATION.

                             STYLES ON VIDEO, INC.

                              WARRANT CERTIFICATE

                           Dated as of May 15, 1996

                 SERIES C-2 WARRANTS TO PURCHASE COMMON STOCK
                 --------------------------------------------

No. C-2                                         Certificate for 250,000 Warrants

 
            STYLES ON VIDEO, INC., a Delaware corporation (the "Company"),
       hereby certifies that in partial consideration for the rendition of
       consulting services pursuant to his Consulting Agreement with the Company
       dated as of April 19, 1996 and for other value received, K. Eugene
       Shutler, an individual ("Initial Holder"), or registered assigns, is the
       registered owner of the number of Series C-2 Warrants of the Company set
       forth above. This Warrant Certificate evidences 250,000 Series C-2
       Warrants (the "Warrants").

            Each Warrant entitles the registered owner thereof to purchase one
       share (each such share being referred to herein as a "Warrant Share" and
       all such shares being referred to herein, collectively, as the "Warrant
       Shares"), as adjusted from time to time as provided in Section 7 hereof,
       of Common Stock, $.001 par value per share, of the Company ("Common
       Stock"). Each Vested Warrant (as defined below) may be exercised from
       time to time, but subject to the limitations on exercisability
       hereinafter set forth, prior to 5:00 P.M. on November 20, 2005 (the
       "Expiration Date"), subject to the following terms and conditions.

                      Section 1. Registration and Vesting.
                                 ------------------------

            (a) The Company shall register each Warrant, upon records to be
       maintained by the Company for such purpose (such records being referred
       to herein as the "Register"), in the name of the record holder of such
       Warrant from time to time. The Company may deem and treat the registered
       holder of each Warrant as the absolute owner thereof for the purpose of
       any exercise thereof or

                                      -1-
<PAGE>
 
       any distribution thereof, and for all other purposes, and the Company
       shall not be affected by any notice to the contrary.

            (b) The holder's right to purchase shares of Common Stock pursuant
       to this Warrant Certificate shall vest in accordance with the following
       schedule: 100,000 Warrants shall vest as of April 19, 1996; and 12,500
       Warrants shall vest on May 19, 1996, and monthly thereafter until all
       250,000 Warrants shall have vested on April 19, 1997.

            Section 2.      Registration of Transfers and Exchanges.
                            ---------------------------------------

            (a) Registration Issuance Of New Warrant Certificates. The Company
                -------------------------------------------------           
       shall register in the Register the transfer of any Warrants upon the
       surrender of this Warrant Certificate, with the Form of Assignment
       attached as Annex A hereto duly filled in and signed (and with a
       signature guarantee for the transfer of any Warrants by a registered
       holder which is not the initial registered holder of this Warrant
       Certificate), to the Company at the office of the Company set forth in
       Section 3(c) hereof. Upon any such registration of transfer, a new
       Warrant Certificate, in substantially the form of this Warrant
       Certificate, evidencing the Warrants so transferred shall be issued to
       the transferee of such Warrants and a new Warrant Certificate, in
       substantially the form of this Warrant Certificate, evidencing the
       remaining Warrants, if any, not so transferred, shall be issued to the
       then-registered holder thereof. The Company shall at no time close the
       Register against the permitted transfer of any Warrant or Warrant Share
       in any manner which materially interferes with the timely exercise of
       such Warrant.

            (b) Warrants Exchangeable for Different Denominations. This Warrant
                -------------------------------------------------            
       Certificate is exchangeable, upon the surrender hereof by the holder
       hereof at the office of the Company set forth in Section 3(c) hereof, for
       new Warrant Certificates, in substantially the form of this Warrant
       Certificate, evidencing in the aggregate the right to purchase the number
       of Warrant Shares which may then be purchased under this Warrant
       Certificate. Each such new Warrant Certificate shall be dated the date of
       such exchange and represent the right to purchase such number of Warrant
       Shares as shall be designated by the holder of this Warrant Certificate
       at the time of such surrender.

            Section 3.      Duration. Termination and Exercise of Warrants.
                            ----------------------------------------------

            (a) Vested Warrants shall be exercisable by the registered holder
       thereof from Time to time on any business day, (x) on or prior to 5:00
       P.M. Los Angeles time on the Expiration Date, but only (y) on or after
       the earlier to occur of (i) October 31, 1996, (ii) the date on which all
       corporate and shareholder action on the part of the Company shall have
       been taken to authorize and reserve for issuance a number of shares of
       Common Stock at least

                                      -2-
<PAGE>
 
       equal to the product of the number of Warrants evidenced hereby times the
       Adjusted Warrant Share Amount (as defined below) and (iii) the first date
       on which any of the Series B Warrants (originally issued to International
       Digital Investors, L.P.("IDI")), the Series C Warrants (originally issued
       to Dana I. Arnold), the Settlement Warrants {issued in connection with
       the settlement of various lawsuits against the Company) or the Series C-1
       Warrants (originally issued to Dr. Ann Graham Ehringer) (collectively,
       the "Other Warrants") becomes exercisable, in whole or in part. At 5:00
       P.M., Los Angeles time, on the Expiration Date, each Warrant not
       exercised prior thereto shall be and become void and of no value.
 
            (b) Subject to the provisions of this Warrant Certificate, including
       adjustments to the Exercise Price and to the number of Warrant Shares
       issuable upon the exercise of each Warrant pursuant to Section 7 hereof,
       each holder of a Vested Warrant on or prior to the Expiration Date shall
       have the right to purchase from the Company (and the Company shall be
       obligated to issue and sell to such holder of a Vested Warrant) at the
       Exercise Price one fully-paid Warrant Share which is nonassessable.
 
            (c) Subject to Sections 4, 10 and 11 hereof, upon (i) surrender of
       this Warrant Certificate, with the Form of Election to Purchase attached
       as Annex B hereto (the "Form of Election to Purchase") duly filled in and
       signed, to the Company at its office at 667 Rancho Conejo, Newbury Park,
       California 91320. Attention: President, or at such other address as the
       Company may specify in writing to the then-registered holder of the
       Vested Warrants, and (ii) payment of the Exercise Price, multiplied by
       the number of Warrant Shares then issuable upon exercise of the Vested
       Warrants being so exercised, the Company shall promptly, but in any event
       within three days of its receipt of the Form of Election to Purchase,
       together with the Warrant Certificate and receipt of payment of the
       Exercise Price, issue and cause to be delivered to or upon the written
       order of the registered holder of the Vested Warrants being so exercised,
       and in such name or names as such registered holder may designate
       (subject to Section 4 hereof and to the Note Purchase Agreement), a
       certificate for the Warrant Shares issued upon such exercise of such
       Vested Warrants, provided that any and all such certificates shall bear a
       legend regarding the transferability of the Warrant Shares substantially
       similar to the legend appearing on the first page of this Warrant
       Certificate. Any person so designated to be named in such certificate for
       such Warrant Shares shall be deemed to have become the holder of record
       of such Warrant Shares as of the Date of Election to Purchase such
       Vested Warrants. The "Date of Election to Purchase" any Vested Warrant
       means the date on which the Company shall have received (1) this Warrant
       Certificate, with the Form of Election to Purchase duly filled in and
       signed, and (2) payment of the Exercise Price for such Vested Warrant.

                                      -3-
<PAGE>
 
            (d) In lieu of delivering the Exercise Price in cash, a holder may,
       at its option, instruct the Company in the Form of Election to Purchase
       to retain, in payment of the Exercise Price, a number of Warrant Shares
       (the "Payment Shares") equal to the quotient of the aggregate Exercise
       Price of the Vested Warrants then being exercised divided by the Market
       Price of such shares as of the date of exercise, and to deduct the number
       of Payment Shares from the Warrant Shares to be delivered to such holder.

            (e) The Warrants evidenced by this Warrant Certificate shall be
       exercisable either as an entirety or, from time to time, for part only of
       the number of Vested Warrants evidenced hereby. If fewer than all of the
       Warrants evidenced by this Warrant Certificate are exercised at any time,
       the Company, at its expense, shall issue to the registered holder a new
       Warrant Certificate, in substantially the form of this Warrant
       Certificate, for the remaining number of Warrants evidenced by this
       Warrant Certificate.

            Section 4.      Payment of Taxes. The Company shall pay all issuance
                            ----------------                                  
       and transfer taxes and charges that may be imposed on the Company or on
       the Warrants or the Warrant Shares in respect of the transfer of
       Warrants, or the issuance or delivery of the Certificates for Warrant
       Shares or other securities in respect of the Warrant Shares upon the
       exercise or conversion of Warrants; provided, however, that the Company
                                           --------  -------
       shall not be required to pay any such tax or other charge imposed in
       respect of the transfer of Warrants, or the issuance or delivery of
       certificates for Warrant Shares or other securities in respect of the
       Warrant Shares upon the exercise of Warrants, to a person or entity other
       than a then-existing registered holder of Warrants.

            Section 5.      Mutilated or Missing Warrant Certificate. If this
                            ----------------------------------------
       Warrant Certificate shall be mutilated, lost, stolen or destroyed, upon
       request by the registered holder of the Warrants, the Company shall
       issue, in exchange for and upon cancellation of the mutilated Warrant
       Certificate, or in substitution for the lost, stolen or destroyed Warrant
       Certificate, a new Warrant Certificate, in substantially the form of this
       Warrant Certificate, of like tenor and representing the equivalent number
       of Warrants, but, in the case of loss, theft or destruction of this
       Warrant Certificate and, if requested by the Company, indemnity also
       satisfactory to it.

            Section 6.      Reservation and Issuance of Warrant Shares.
                            ------------------------------------------

            (a) The Company shall on or prior to October 31, 1996 and at all
       times thereafter have authorized, and reserve and keep available, for the
       purpose of enabling it to satisfy any obligation to issue Warrant Shares
       upon the exercise of the Warrants, the number of Warrant Shares
       deliverable upon exercise of the Warrants. The Company shall take any
       further corporate action which may be necessary in order that the Company
       may


                                      -4-
<PAGE>
 
       validly and legally issue at the Exercise Price, Warrant Shares that are
       fully-paid and nonassessable.

            (b) The Company covenants that all Warrant Shares will upon issuance
       in accordance with the terms of this Warrant Certificate, be (i) duly
       authorized, validly issued fully-paid and nonassessable and (ii) free
       from all taxes or other governmental charges with respect to the issuance
       thereof (not including (y) income taxes payable by the holders of
       Warrants being exercised in respect of gains thereon, and (z) transfer
       taxes, in accordance with the provisions of Section 4 above) and from all
       liens, charges and security interests created by the Company.

            (c) If the issuance of any Warrant Shares required to be reserved
       pursuant to paragraph (a) of this Section 6 requires registration with or
       approval of any governmental authority under any Federal or state law
       (other than the Securities Act and state securities laws), before such
       Warrant Shares may be issued upon the exercise thereof, the Company
       shall, at its expense and as expeditiously as possible, use its best
       efforts to cause such Warrant Shares to be duly registered or approved,
       as the case may be, provided, however, that the Company will not be
                           --------  -------                            
       required to qualify generally to do business in any jurisdiction where it
       is not then so qualified, to subject itself to taxation in any
       jurisdiction where it is not then subject to taxation, or take any action
       which would subject it to general service of process in any jurisdiction
       where it is not then so subject.

            Section 7.      Adjustments.
                            -----------

            (a) Adjustments of Number of Warrant Shares. The number of Warrant
                ---------------------------------------                     
       Shares issuable upon the exercise of each Warrant shall be subject to
       adjustment from time to time as hereinafter provided. Upon each
       adjustment pursuant to any of paragraphs (b), (c), (d) or (e) of this
       Section 7, each Warrant shall thereafter entitle the holder thereof to
       purchase at the Exercise Price the number of Warrant Shares resulting
       from such adjustment (the "Adjusted Warrant Share Amount")

            (b) Adjustment upon Issuance of Common Stock. If at any time after
                ----------------------------------------                    
       the date hereof, the Company shall issue or sell any shares of Common
       Stock for a consideration per share less than the Market Price (as
       hereinafter defined) immediately prior to the time of such issue or sale,
       then, forthwith upon such issue or sale, the Adjusted Warrant Share
       Amount shall be equal to the product of the Adjusted Warrant Share Amount
       in effect immediately prior to the time of such issue or sale multiplied
       by a fraction, the numerator of which shall be the product of
       (x) the total number of shares of Common Stock outstanding immediately
       after such issue or sale multiplied by (y) the Market Price immediately
       prior to such issue or sale, and the denominator of which shall be the
       sum of (A) the number of shares

                                      -5-
<PAGE>
 
       of Common Stock outstanding immediately prior to such issue or sale
       multiplied by the Market Price immediately prior to such issue or sale
       plus (B) the aggregate consideration received by the Company upon such
       issue or sale.
       
            (c)  Other Adjustment Events and Provisions. For the purposes of
                 --------------------------------------
       this Section 7, the following clauses shall also be applicable.
       
                 (i) Issuance of Rights, Warrant or Options. Except as provided
                     --------------------------------------
            in clauses (iii) and (xii) of this Section 7(c) hereof, in case at
            any time the Company shall grant, issue or sell (whether directly or
            by assumption in a merger or otherwise) any rights or warrants
            (other than the Warrants) to subscribe for or to purchase, or any
            options for the purchase of, Common Stock or any stock or securities
            convertible into or exchangeable for Common Stock (such convertible
            or exchangeable stock or securities being herein called "Convertible
            Securities") whether or not such rights or warrants or 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 rights or warrants or
            options or upon conversion or exchange of such Convertible
            Securities (determined as provided below) shall be less than the
            Market Price determined as of the date of granting such rights or
            warrants or options, as the case may be, then the total maximum
            number of shares of Common Stock issuable upon the exercise of such
            rights (other than rights issued pursuant to a stockholders' rights
            plan adopted by the Company pursuant to which the acquisition by any
            third party of a specified percentage of shares of Common Stock
            triggers the exercisability of such rights to purchase Common Stock
            for so long as no event has occurred triggering such right to
            exercise) or warrants or options or upon conversion or exchange of
            the total maximum amount of such Convertible Securities issuable
            upon the exercise of such rights or warrants or options shall (as of
            the date of granting of such rights or warrants or options) be
            deemed to be outstanding and to have been issued for such price per
            share. Except as provided in clause (v) of this Section 7(c), no
            further adjustment of the Adjusted Warrant Share Amount shall be
            made upon the actual issue of such Common Stock or such Convertible
            Securities upon exercise of such rights or warrants or options or
            upon the actual issue of such Common Stock upon conversion or
            exchange of such Convertible Securities, for the purposes of this
            clause (i), the price per share for which Common Stock is issuable
            upon the exercise of any such rights or warrants or options or upon
            conversion or exchange of any such Convertible Securities shall be
            determined by dividing (A) the total amount, if any, received or
            receivable by the Company as consideration for the granting of such
            rights of warrants or

                                      -6-
<PAGE>
 
            options, plus the minimum aggregate amount of additional
            consideration payable to the Company upon the exercise of all such
            rights or warrants or options, plus, in the case of such rights or
            warrants or options which relate to Convertible Securities, the
            minimum 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 (B) the total maximum
            number of shares of Common Stock issuable upon the exercise of such
            rights or warrants or options or upon the conversion or exchange of
            all such Convertible Securities issuable upon the exercise of such
            rights or warrants or options.

                  (ii) Issuance of Convertible Securities. In case the Company
                       ----------------------------------
            shall issue (whether directly or by assumption in a merger or
            otherwise) or sell any Convertible Securities (other than the Series
            B Preferred Stock or the Other Warrants), whether or not the rights
            to exchange or convert thereunder are immediately exercisable, and
            the price per share for which Common Stock is issuable upon the
            conversion or exchange of such Convertible Securities (determined as
            provided below) shall be less than the Market Price determined as of
            the date of such issue or sale of such Convertible Securities, then
            the total maximum number of shares of Common Stock issuable upon
            conversion or exchange of all such Convertible Securities shall (as
            of the date of the issue or sale of such Convertible Securities) be
            deemed to be outstanding and to have been issued for such price per
            share, provided that (A) except as provided in clause (v) of this
            Section 7(c), no further adjustments of the Adjusted Warrant Share
            Amount shall be made upon the actual issue of such Common Stock upon
            conversion or exchange of such Convertible Securities and (B) if any
            such issue or sale of such Convertible Securities is made upon
            exercise of any rights or warrants to subscribe for or to purchase
            or any option to purchase any such Convertible Securities for which
            adjustments of the Adjusted Warrant Share Amount have been or are
            to be made pursuant to clause (i) of this Section 7(c), no further
            adjustment of the Adjusted Warrant Share Amount shall be made by
            reason of such issue or sale. For the purposes of this clause (ii),
            the price per share for which Common Stock is issuable upon
            conversion or exchange of Convertible Securities shall be determined
            by dividing (1) the total amount received or receivable by the
            Company as consideration for the issue or sale of such Convertible
            Securities, plus the minimum aggregate amount of additional
            consideration, if any, payable to the Company upon the conversion or
            exchange thereof, by (2) the total maximum number of shares of
            Common Stock issuable upon the conversion or exchange of all such
            Convertible Securities.

                  (iii)       [Intentionally omitted].

                                      -7-
<PAGE>
 
                  (iv) Misstatement of Outstanding Common Stock. If the number
                       ----------------------------------------
            of shares of Common Stock issued and outstanding as of the date on
            which the Company has given its representation pursuant to Section
            3.2(a) of the Note Purchase Agreement or if the number of shares of
            Common Stock issuable pursuant to outstanding warrants, options, or
            rights including conversion or preemptive rights) or agreements for
            the purchase or acquisition from the Company of any of its shares of
            capital stock on which the Company has given its representation
            pursuant to Section 3.2(d) of the Note Purchase Agreement is greater
            than the respective number set forth in such representations, the
            Adjusted Warrant Share Amount shall be equal to the product of the
            Adjusted Warrant Share Amount immediately prior to any adjustment
            hereunder, multiplied by a fraction the numerator of which is the
            total number of shares of Common Stock actually outstanding or
            issuable as of the date of such representation and the denominator
            of which is the total number of shares of Common Stock that the
            Company represented were outstanding or issuable.
 
                  (v) Change in Option Price or Conversion Rate. If the purchase
                      -----------------------------------------
            price provided for in any rights or warrants or options referred to
            in clause (i) above, or the additional consideration, if any,
            payable upon the conversion or exchange of Convertible Securities
            referred to in clause (i) or (ii) above, or the date at which any
            Convertible Securities referred to in clause (i) or (ii) above are
            convertible into or exchangeable for Common Stock, shall change
            (other than under or by reason of an event resulting in a change
            pursuant to provisions set forth in the documents governing such
            rights, warrants, options or Convertible Securities designed to
            protect against dilution, to the extent such event also results in
            an adjustment pursuant to this Section 7), then the Adjusted Warrant
            Share Amount in effect at the time of such event shall forthwith be
            readjusted to the Adjusted Warrant Share Amount which would have
            been in effect at such time had such rights, warrants, 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
            expiration of any such option or warrant or right or the termination
            of any such right to convert or exchange such Convertible
            Securities, the Adjusted Warrant Share Amount then in effect
            hereunder shall forthwith be decreased to the Adjusted Warrant Share
            Amount which would have been in effect at the time of such
            expiration or termination had such right, warrant, option or
            convertible Security, to the extent outstanding immediately prior to
            such expiration or termination, never been issued, and the Common
            Stock issuable thereunder shall no longer be deemed to be
            outstanding. If the purchase price provided for in any such

                                      -8-
<PAGE>
 
            right or warrant or option referred to in clause (ii) above or the
            rate at which any Convertible Securities referred to in clause (i)
            or (ii) above are convertible into or exchangeable for Common Stock
            shall change at any time under or by reason of provisions set forth
            in the documents governing such rights, warrants, options or
            Convertible Securities designed to protect against dilution, then in
            case of the delivery of Common Stock upon the exercise of any right
            or warrant or option or upon conversion or exchange of any Such
            Convertible Security, the Adjusted Warrant Share Amount then in
            effect hereunder shall forthwith be adjusted to such respective
            amount as would have obtained had such right, warrant, option or
            Convertible Security never been issued as to such Common Stock and
            had adjustments been made upon the issuance of the shares of Common
            Stock delivered as aforesaid, but only if as a result of such
            adjustment the Adjusted Warrant Share Amount then in effect
            hereunder is thereby increased.

                  (vi) Stock Dividends. In case the Company shall declare a
                       ---------------
            dividend or make any other distribution upon any stock of the
            Company payable in Common Stock or Convertible Securities, any
            Common Stock 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.

                  (vii)      Consideration for Stock. In case any shares of
                             -----------------------
            Common Stock or Convertible Securities or any right or warrants or
            options to purchase any such Common Stock or Convertible Securities
            shall be issued or sold

                       (A) for cash, the consideration received therefor shall
                  be deemed to be the amount received by the Company therefor,
                  without deduction therefrom of any expenses incurred or any
                  underwriting commission or concessions paid or allowed by the
                  Company in connection therewith.

                       (B) 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 by the Board of Directors of the Company, in good
                  faith and in the exercise of reasonable business judgment,
                  without deduction of any expenses incurred or any underwriting
                  commissions or concessions paid or allowed by the Company in
                  connection therewith, which determination shall be conclusive
                  and which determination of valuation shall be sent in writing
                  by the Boards of Directors to the registered holders of
                  Warrants; provided, however, that if the fair value of the
                            --------  ---------                             
                  non-cash consideration the value of which is being

                                      -9-
<PAGE>
 
                  determined exceeds $1,000,000, the Board of Directors of the
                  Company shall provide written notice of its valuation to the
                  Warrantholders, and in the event that the holders of at least
                  thirty-three percent (33%) of the then-outstanding Warrants
                  disagree with such valuation, such Warrantholders may provide
                  written notice of such disagreement (which notice shall
                  include such Warrantholder's valuation and the basis therefor)
                  to the Company within 15 days following such notice from the
                  Board of Directors. For a period of 15 days following the
                  delivery of the last timely delivered notice of disagreement,
                  the Company and such Warrantholders shall in good faith seek
                  to agree upon a valuation. If at the end of such 15 day period
                  the Company and such Warrantholders have not agreed upon a
                  valuation, then the value of the non-cash consideration the
                  value of which is being determined shall be determined in an
                  arbitration conducted in the same manner as an arbitration
                  conducted to determine Market Price as provided in 7(c)(x)(B).
 
                       (C) in connection with any merger or consolidation in
                  which the Company is the surviving corporation (other than any
                  consolidation or merger in which the previously outstanding
                  shares of Common Stock of the Company shall be changed into or
                  exchanged for the stock or other securities of another
                  corporation), the amount of consideration therefor shall be
                  deemed to be the fair value as determined reasonably and in
                  good faith by the board of directors of the Company of such
                  portion of the assets and business of the non-surviving
                  corporation as such board may determine to be attributable to
                  such shares of Common Stock, Convertible Securities, rights or
                  warrants or options, as the case may be.
 
       In the event of any consolidation or merger of the Company in which the
       Company is not the surviving corporation or in which the previously
       outstanding shares of Common Stock of the Company shall be changed into
       or exchanged for the stock or other securities of another corporation or
       in the event of any sale of all or substantially all of the assets of the
       Company for stock or other securities of any corporation, the Company
       shall be deemed to have issued a number of shares of its Common Stock for
       stock or securities or other property of the other corporation computed
       on the basis of the actual exchange ratio on which the transaction was
       predicated and for a consideration equal to the fair market value on the
       date of such transaction of all such stock or securities or other
       property of the other corporation, and if any such calculation results in
       adjustment of the Adjusted Warrant Share amount, the determination of the
       number of shares of Common Stock issuable upon exercise of the Warrants
       immediately prior to the merger, consolidation or sale, for
       
                                      -10-
<PAGE>
 
       purposes of paragraph (f) of this Section 7, shall be made after giving
       effect to such adjustment of the Adjusted Warrant Share Amount.

                  (viii)     Record Date. In case the Company shall take a
                             -----------
            record of the holders of its Common Stock for the purpose of
            entitling them (A) to receive a dividend or other distribution
            payable in Common Stock or in Convertible Securities, or (B) to
            subscribe for or purchase Common Stock 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 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 or
            subscription or purchase, as the case may be.

                  (ix) 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, but the disposition of any
            such shares shall be considered an issue or sale of Common Stock for
            the purposes of this Section 7(c).

                  (x) Definition of Market Price. "Market Price" shall mean the
                      --------------------------   ------------
            greater of:

                       (A) $0.075, and

                       (B) (I) if shares of the Common Stock are listed or
                  admitted to trading on any exchange or quoted through NASDAQ
                  or any similar organization, the average of the daily closing
                  prices per share of the Common Stocks for the 20 consecutive
                  trading days immediately preceding the date of public
                  announcement of the event giving rise to adjustment under this
                  Section 7 or, if no such public announcement is made with
                  respect to such event, the average of the daily closing prices
                  per share of the Common Stock for the 20 consecutive trading
                  days immediately preceding the day as of which "Market Price"
                  is being determined. The closing price of each day shall be
                  the last sale price regular way or, in case no such sale takes
                  place on such day, the average of the closing bid and asked
                  prices regular way, in either case on the New York Stock
                  Exchange, or, if shares of the Common Stock are not listed or
                  admitted to trading on the New York Stock Exchange, on the
                  principal national securities exchange on which the shares are
                  listed or admitted to trading, or if the shares are not so
                  listed or admitted to trading, the average of the highest
                  reported bid and lowest reported asked prices as furnished by
                  the National Association of Securities Dealers, Inc. through
                  NASDAQ or through a

                                      -11-
<PAGE>
 
                  similar organization if NASDAQ is no longer reporting such
                  information.

                           (II) if such shares of Common Stock are not listed or
                  admitted to trading on any exchange or quoted through NASDAQ
                  or any similar organization, such value shall be determined by
                  the Board of Directors of the Company, in good faith and in
                  the exercise of reasonable business judgment, without taking
                  into consideration any premium for shares representing control
                  of the Company, any discount for any minority interest therein
                  or any restrictions on transfer under Federal and applicable
                  state securities laws or otherwise, which determination shall
                  be conclusive, and which determination of valuation shall be
                  sent in writing by the Board of Directors to the registered
                  holders of Warrants, provided, however, that if the Market
                                       --------  -------
                  Price of the shares of Common Stock the value of which is
                  being determined exceeds $1,000,000, the Board of Directors of
                  the Company shall provide written notice of its determination
                  of Market Price and in the event that the holders of at
                  least thirty-three percent (33%) of the then-outstanding
                  Warrants disagree with such valuation, such Warrantholders may
                  provide written notice of such disagreement (which notice
                  shall include such Warrantholder's valuation and the basis
                  therefor) to the Company within 15 days following such notice
                  from the Board of Directors. For a period of 15 days following
                  the delivery of the last timely delivered notice of
                  disagreement, the Company and such Warrantholders shall in
                  good faith seek to agree upon a valuation. If at the end of
                  such 15 day period the Company and such Warrantholders have
                  not agreed upon a valuation, then, to the fullest extent
                  permitted by law, the value of the shares of Common Stock
                  shall be determined, at the request of any party, by
                  arbitration conducted in the English language in Los Angeles,
                  California in accordance with and to the extent permitted by
                  the Delaware Arbitration Act and, to the extent not
                  inconsistent therewith, the Rules for Large, Complex Cases of
                  the American Arbitration Association. The parties to the
                  arbitration shall attempt to select an arbitrator from such
                  members. If the parties to the arbitration do not agree on the
                  selection of an arbitrator within twenty (20) days after the
                  date demand for the arbitration is filed, an arbitrator having
                  such experience shall be selected in accordance with such
                  Rules of the American Arbitration Association. The arbitrator
                  shall set forth his or her determination in writing (which
                  shall be sent to each party to such arbitration) and shall
                  enumerate in reasonable detail the basis of his or her
                  determination. No party to the arbitration may seek,

                                      -12-
<PAGE>
 
                  and the arbitrator shall not award, punitive or exemplary
                  damages. To the fullest extent permitted by applicable law,
                  any judgment or award rendered by the arbitrator shall be
                  final, conclusive and binding. Judgment may be entered on any
                  final, unappealable arbitration award by any state or federal
                  court having jurisdiction thereof. To the fullest extent
                  permitted by applicable law, any controversy concerning
                  whether a dispute is an arbitrable dispute or as to the
                  interpretation or enforceability of this Section
                  7(c)(x)(B)(II) shall be determined by the arbitrator. The
                  arbitration proceedings as well as the fact such proceedings
                  occur, shall be kept confidential by the parties hereto and
                  may only be disclosed to their personal representatives and
                  advisors or as required by law and insofar as is necessary to
                  confirm, correct, vacate or enforce the award. In the event of
                  a breach of this provision, the arbitrator is expressly
                  authorized to assess damages and each of the parties hereto
                  consents to the expansion of the scope of arbitration for such
                  purpose. The pendency of any arbitration under this Section
                  7(c)(x)(B)(II) shall not relieve any party hereto of its
                  obligations under this Agreement. To the fullest extent
                  permitted by applicable law, if the Company or any
                  Warrantholder shall resort to legal proceedings for injunctive
                  or other similar relief pending the outcome of any such
                  arbitration proceeding or prior to the initiation thereof,
                  such party shall not be deemed to have waived Its rights to
                  cause such matter or any other mater to be referred to
                  arbitration pursuant to this Section 7(c)(x)(B)(II). The
                  parties intend that this agreement to arbitrate be valid,
                  enforceable and irrevocable. The designation of situs or a
                  governing law for this Warrant Certificate or the arbitration
                  shall not be deemed an election to preclude application of the
                  Federal Arbitration Act if it would be applicable. The
                  arbitrator shall have authority in his or her discretion to
                  grant injunctive relief, award specific performance and impose
                  sanctions upon any party to any such arbitration. The fees,
                  expenses and charges of any arbitration pursuant to this
                  Section 7(c)(x)(B)(II) shall be borne (1) by the Company, if
                  the arbitrator renders a valuation of the shares of Common
                  Stock that is higher than the valuation rendered by the Board
                  of Directors or (2) by the Warrantholders who have notified
                  the Company in writing of their objection to the valuation of
                  the Board of Directors, pro rata in proportion to the number
                  of shares of Common Stock issuable upon exercise of their
                  respective Warrants, if the arbitrator renders a valuation of
                  the shares of Common Stock that is equal to or less than the
                  valuation rendered by the Board of Directors.

                                      -13-
<PAGE>
 
                           (xi) Determination of Market Price under Certain
                                -------------------------------------------
                  Circumstances. Anything herein to the contrary
                  -------------
                  notwithstanding, in case the Company shall issue any shares of
                  Common Stock or Convertible Securities in connection with the
                  acquisition by the Company of the stock or assets of any other
                  corporation or the merger of any other corporation into the
                  Company, the Market Price shall be determined as of the date
                  the number of shares of Common Stock or Convertible Securities
                  (or in the case of Convertible Securities other than stock,
                  the aggregate principal amount of Convertible Securities) was
                  determined (as set forth in a written agreement between the
                  Company and the other party to the transaction) rather than on
                  the date of issuance of such shares of Common Stock or
                  Convertible Securities.
 
                           (xii) Certain Issues Excepted. Anything herein to the
                                 -----------------------
                  contrary notwithstanding, the Company shall not be required to
                  make any adjustment of the Adjusted Warrant Share Amount
                  whatsoever upon the issuance of
 
                               (A) (i) Up to 593,741 shares of Common Stock, net
                           of repurchases, issuable to employees, directors,
                           consultants or advisors under options presently
                           outstanding which were issued prior to the date of
                           the Warrants pursuant to stock option and restricted
                           stock purchase agreements approved by the
                           stockholders and directors of this corporation
                           (excluding the options for 150,000 shares to be
                           surrendered by Guy de Vreese and canceled in
                           connection with settlement of pending litigation),
                           (ii) up to 1,750,000 shares of Common Stock issued or
                           issuable to present or former shareholders of the
                           corporation pursuant to Warrants anticipated to be
                           issued in connection with settlement of pending
                           litigation, (iii) up to 7,747,499 shares of Common
                           Stock usable to Dana I. Arnold pursuant to the Series
                           C Warrants in consideration for the return and
                           cancellation of his holdings of common stock of FYI,
                           (iv) up to 53,286,228 shares of Common Stock issued
                           or issuable to IDI pursuant to the Series B Warrants,
                           (v) the 200,000 shares of Common Stock issued or
                           issuable to IDI upon conversion of the Series B
                           Preferred Stock, (vi) up to 80,000 shares of Common
                           Stock issued or issuable to Dr. Ann Graham Ehringer
                           pursuant to the Series C-1 Warrants issued in
                           consideration for her services on the Independent
                           Committee established to review the transaction
                           contemplated by the Note Purchase Agreement with IDI,
                           (vii) shares of Common Stock usable upon the exercise
                           of the Settlement Warrants, and (viii) such
                           additional number of shares of Common Stock as may be
                           fixed by the Board of Directors of this corporation
                           issuable or issued to employees, directors,
                           consultants or advisors of this corporation pursuant
                           to stock option or restricted

                                      -14-
<PAGE>
 
                  stock purchase plans approved by the stockholders and
                  directors of this corporation provided that the aggregate
                  number of shares of Common Stock issuable upon the exercise of
                  options or other rights issued pursuant to such plans,
                  exclusive of any options or other rights that have been
                  exercised, plus the aggregate number of share of Common Stock
                  issued upon exercise of such options or rights or otherwise
                  issued pursuant to such plans, shall not exceed 400,000 (as
                  such number may be proportionally adjusted upon any stock
                  split or combination or upon a merger or other corporate
                  reorganization).

                       (B) Common Stock issued or issuable upon conversion of
                  the Series A Preferred Stock and Series B Preferred Stock, or

                       (C) Common Stock issued or issuable upon exercise of the
                  Warrants, the Series A Warrants, the Series B Warrants, the
                  Settlement Warrants, the Series C-1 Warrants, or any other
                  warrants outstanding on the date hereof.

                  The Company shall not be required to make any such adjustment
            upon the issuance of shares or the granting of any options or
            Warrants or rights referred to in Section 7(c)(xii)(A), (B) and (C)
            if and to the extent that the Issuance of the shares covered thereby
            is expected by this use.

            (d) Certain Special Dividends. In case the Company shall declare a
                -------------------------
       dividend or make any other distribution (other than a distribution
       referred to in paragraph (c) of this Section 7) upon the Common Stock
       (other than regular periodic cash dividends), then in each case the
       Adjusted Warrant Share Amount in effect immediately prior to the
       declaration of such dividend or making of such distribution shall be
       adjusted so that such Adjusted Warrant Share Amount shall equal the
       number of Warrant Shares determined by multiplying the Adjusted Warrant
       Share Amount in effect immediately prior to the close of business on the
       date fixed for the determination of stockholders entitled to receive such
       dividend or distribution by a fraction, the numerator of which shall be
       the Market Price on the date fixed for such determination and the
       denominator of which shall be the Market Price on the date fixed for such
       determination less, in the case of a dividend or distribution in cash,
       the amount per share of Common Stock so declared or, in the case of any
       other dividend or distribution, the then fair market value (as determined
       reasonably and in good faith by the Board of Directors of the Company) of
       the portion of the property so distributed applicable to one share of
       Common Stock, such adjustment to become effective immediately prior to
       the opening of business on the day following the date fixed for the
       determination of stockholder, entitled to

                                      -15-
<PAGE>
 
       receive such distribution, provided, however that for this purpose,
       Market Price shall be determined as provided in Section 7(c)(x) without
       regard to Section 7(c)(x)(A).

            (e) Subdivision or Combination of Stock. In case the Company shall
                -----------------------------------
       at any time subdivide the outstanding shares of Common Stock into a
       greater number of shares, the Adjusted Warrant Share Amount in effect
       immediately prior to such subdivision shall be proportionately increased,
       and conversely, in case the outstanding shares of Common Stock shall be
       combined into a smaller number of shares, the Adjusted Warrant Share
       Amount in effect immediately prior to such combination shall be
       proportionately reduced.

            (f) Adjustment for Consolidation, Merger, Sale of Assets,
                -----------------------------------------------------
       Reorganization, etc. In case the Company (i) consolidates with or merges
       -------------------
       into any other corporation and is not the continuing or surviving
       corporation of such consolidation or merger, or (ii) permits any other
       corporation to consolidate with or merge into the Company and the Company
       is the continuing or surviving corporation but, in connection with such
       consolidation or merger, the Common Stock is changed into or exchanged
       for stock or other securities of any other corporation or cash or any
       other assets, or (iii) transfers all or substantially all of its
       properties and assets to any other corporation, or (iv) effects a capital
       reorganization or reclassification of the capital stock of the Company in
       such a way that holders of Common Stock shall be entitled to receive
       stock, securities, cash or assets with respect to or in exchange for
       Common Stock, then, and in each such case, proper provision shall be made
       so that, upon the basis and upon the terms and in the manner provided in
       this Section 7(f), the holder of this Warrant Certificate, upon the
       exercise of each Warrant at any time after the consummation of such
       consolidation, merger, transfer, reorganization or reclassification,
       shall be entitled to receive (at the aggregate Exercise Price in effect
       for all shares of Common Stock issuable upon such exercise immediately
       prior to such consummation as adjusted to the time of such transaction),
       in lieu of the Adjusted Warrant Share Amount prior to such consummation,
       the stock and other securities, cash and assets to which a holder of a
       number of shares of Common Stock equal to the Warrant Share Amount would
       have been entitled upon such consummation (subject to adjustments
       subsequent to such corporate action as nearly equivalent as possible to
       the adjustments provided for in this Section 7).

            (g) Notice Of Adjustment. Whenever the Adjusted Warrant Share Amount
                --------------------
       is adjusted then and in each such case the Company shall promptly, but in
       no event later than 20 days after the date of occurrence of the event
       causing such adjustment, deliver a certificate of an officer of the
       Company (the "Officer's Certificate") to the registered holder of the
       Warrants, which Officer's Certificate shall state the Adjusted Warrant
       Share

                                      -16-
<PAGE>
 
       Amount resulting from such adjustment and or the increase or decrease, if
       any, in the number of shares of Common Stock or other stock or property
       issuable upon the exercise of each Warrant, setting forth in reasonable
       detail the method of calculation and the facts upon which such
       calculation is based, including, if applicable, the Market Price as
       determined in accordance with paragraph (c)(x) of this Section 7. The
       Company shall keep at its office copies of all certificates and cause the
       same to be available for inspection at said office during normal business
       hours by any holder of a Warrant or any prospective purchaser of a
       Warrant designated by a holder thereof.

            (h) Other Notices. In case at any time:
                -------------

                (i) the Company shall declare or pay any cash dividend on the
            Common Stock (other than a regular periodic cash dividend);

                (ii) the Company shall declare or pay any dividend payable in
            stock upon the Common Stock or make any distribution (other than a
            regular periodic cash dividend) to the holders of the Common Stock;

                (iii) the Company shall offer for subscription pro rata to the
            holders of the Common Stock any additional shares of stock of any
            class or other rights;

                (iv) the Company shall authorize the distribution to all
            holders of the Common Stock of evidence of its indebtedness or
            assets (other than a regular periodic cash dividend);

                (v) there shall be any capital reorganization, or
            reclassification of the capital stock of the Company, or
            consolidation or merger of the Company with another corporation
            (other than a subsidiary of the Company in which the Company is the
            surviving or continuing corporation and no change occurs in the
            Common Stock of the Company), or sale of all or substantially all of
            the Company's assets to, another corporation;

                (vi) there shall be a voluntary or involuntary dissolution,
            liquidation, bankruptcy, assignment for the benefit of creditors or
            winding up of the Company, or

                (vii) the Company proposes to take any other action or an event
            occurs which would require an adjustment pursuant to paragraph (i)
            of this Section 7, then, in any one or more of such cases, the
            Company shall give written notice, addressed to the holder of this
            Warrant Certificate at the address of such holder as shown on the
            books of the Company, of (A) the date on which the books of the
            Company shall close or a record shall be taken for any such
            dividend,

                                      -17-
<PAGE>
 
            distribution or subscription rights, as the case may be, or
            (B) the date (or, if not then known, a reasonable approximation
            thereof by the Company) on which any such reorganization,
            reclassification, consolidation, merger, sale, dissolution,
            liquidation, bankruptcy, assignment for the benefit of creditors,
            winding up or other action, as the case may be, shall take place.
            Such notice shall also specify (or, if not then known, reasonably
            approximate) the date as of which the holders of Common Stock of
            record shall participate in any such dividend, distribution or
            subscription rights, as the case may be, or shall be entitled to
            exchange their Common Stock for securities or other property
            deliverable upon any such reorganization, reclassification,
            consolidation, merger, sale, dissolution, liquidation, bankruptcy
            assignment for the benefit of creditors, winding up, or other
            action, as the case may be. Such written notice shall also 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 security holders, if either is required.
            Such written notice shall be given (1) at least 15 days prior to any
            event specified in any of clauses (i), (ii) or (iv) of this Section
            7(h) and, with respect to any event specified in clause (i) of this
            Section 7(h), at least five days prior to the date on which the
            books of the Company shall close or a record shall be taken for such
            event, (2) at least 20 days prior to any event specified in clauses
            (iii), (v) and (vii} of this Section 7(h) and (3) with respect to
            events specified in clause (i) of this Section 7(h), (x) at least 30
            days prior to a voluntary dissolution or liquidation of the Company
            (y) at least three days prior to a voluntary bankruptcy, assignment
            for the benefit of creditors or winding up of the Company, or (z)
            promptly after an involuntary bankruptcy, assignment for the benefit
            of creditors or winding up of the Company. The failure to give such
            written notice required by this Section 7(h) or any defect therein
            shall not affect any vote upon, or the taking of, any such action.

            (i) Certain Events. If any event occurs as to which in the
                --------------
       reasonable opinion of the Company or the holder of this Warrant
       Certificate, in good faith, the other provisions of this Section 7 are
       not strictly applicable but the lack of any adjustment would not in the
       opinion of the Company or such holder fairly protect the purchase rights
       of the holder of this Warrant Certificate in accordance with the basic
       intent and principles of such provisions, or if strictly applicable would
       not fairly protect the purchase rights of the holder of this Warrant
       Certificate in accordance with the basic intent and principles of such
       provisions, then the Company shall appoint a firm of independent
       certified public accountants (which may be the regular auditors of the
       Company) of recognized national standing, which shall give the opinion
       upon the adjustment, if any, on a

                                      -18-
<PAGE>
 
       basis consistent with the basic intent and principles established in the
       other provisions of this Section 7, necessary to preserve, without
       dilution, the exercise rights of the registered holder of this Warrant
       Certificate. Upon receipt of such opinion, the Company shall forthwith
       make the adjustments described therein.

            (j) Prohibition of Certain Action. The Company shall not, by
                -----------------------------
       amendment of 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 to be observed
       or performed under this Warrant Certificate by the Company, but shall at
       all times in good faith assist in the carrying out of all the provisions
       of this Section 7. Without limiting the generality of the foregoing the
       Company (a) shall not increase the par value of any shares of Common
       Stock receivable upon the exercise of the Warrants to an amount that is
       greater than the Exercise Price then in effect, (b) shall take all such
       action as may be necessary or appropriate in order that the Company may
       validly and legally issue fully-paid and nonassessable shares of Common
       Stock upon the exercise of all Warrants from time to time outstanding and
       (c) shall not take any action which results in any adjustment of the
       Adjusted Warrant Share Amount if such Adjusted Warrant Share Amount
       issuable after the action would exceed the total number of shares of
       Common Stock then authorized by the Company's certificate of
       incorporation and available for the purpose of issue upon such exercise.

            Section 8.  Exercise Price. The Exercise Price of each Warrant
                        --------------
       shall be $0,075.

            Section 9.  No Stock Rights. Except as may be provided in the
                        ---------------
       Stockholders Agreement, no holder of this Warrant Certificate, as such,
       shall be entitled to vote or be deemed the holder of Common Stock or any
       other securities of the Company which may at any time be issuable on the
       exercise hereof, nor shall anything contained herein be construed to
       confer upon the holder of this Warrant Certificate, as such, the rights
       of a stockholder of the Company or the right to vote for the election of
       directors or upon any matter submitted to stockholders at any meeting
       thereof, or to give or withhold consent to any corporate action, to
       exercise any preemptive right, to receive notice of meetings or other
       actions affecting stockholders (except as provided herein), or to receive
       dividends or subscription rights or otherwise, until the Date of Election
       to Purchase Warrants shall have occurred.

            Section 10. Fractional Warrant Shares. No fractional Warrant
                        -------------------------
       Shares shall be issued upon exercise of the Warrants, and the number of
       shares of Common Stock to be issued shall be rounded to the nearest whole
       share. Whether or not fractional shares are issuable upon such exercise
       shall be determined on the

                                      -19-
<PAGE>
 
       basis of the total number of shares of the Warrant the holder is at that
       time exercising and the number of shares of Common Stock issuable upon
       such aggregate exercise.

            Section 11. Absence of Registration. Neither the Warrants nor
                        -----------------------
       the Warrant Shares have been registered under the Securities Act. The
       holder of this Warrant Certificate, by acceptance hereof, represents that
       such holder is acquiring the warrants to be issued to such holder for
       such holder's own account and not with a view to the distribution
       thereof, and agrees not to sell, transfer, pledge or hypothecate any
       Warrants or any Warrant Shares except in accordance with applicable law
       and the legend on the first page of this Warrant Certificate to the
       extent that such legend complies with applicable law.

            Section 12. Notices. All notices, requests, demands and other
                        -------
       communications relating to this Warrant Certificate shall be in writing,
       including by telecopier, addressed, if to the registered owner hereof, to
       it at the address furnished by the registered owner to the Company, and
       if to the Company, at its office at 667 Rancho Conejo, Newbury Park,
       California 91320. Attention President, Telecopier (805) 376-8364 or to
       such other address as any party shall notify the other part in writing,
       and shall be effective, upon receipt and, in the case of written notice
       by mail, three days after placement into the mails (first class, postage
       prepaid), and in the case of notice by telecopier on the same day as sent
       if the transmission is confirmed at or before 5:00 p.m. local time in the
       place of receipt, otherwise on the next business day.

            Section 13. Binding Effect. This Warrant Certificate shall be
                        --------------                                 
       binding upon and inure to the sole and exclusive benefit of the Company,
       its successors and assigns, and the registered holder or holders from
       time to time of the Warrants and the Warrant Shares.

            Section 14. Survival of Rights and Duties. This Warrant
                        -----------------------------
       Certificate shall terminate and be of no further force and effect on the
       earlier of 5:00 p.m., Los Angeles time, on the Expiration Date or the
       date on which all of the Warrants have been exercised, except that the
       provisions of Sections 6(b) and 11 of this Warrant Certificate shall
       continue in full force and effect after such termination date.

            Section 15. Governing Law. This Warrant Certificate shall be
                        -------------
       construed in accordance with and governed by the laws of the State of
       California without regard to principles of conflicts of laws.

            Section 16. Modification and Waiver. This Warrant Certificate
                        -----------------------
       and any term hereof may be changed, waived, discharged or terminated only
       by an instrument in writing signed

                                      -20-
<PAGE>
 
       by the part against which enforcement of such change, waiver, discharge
       or termination is sought.
       
            IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
       to be executed under its corporate seal by its officers thereunto duly
       authorized as of the date hereof.
 
                             STYLES ON VIDEO, INC.

                             By: /s/ N.H. Galgas
                                 --------------------------

                             Name:    N.H. Galgas
                                   ------------------------

                             Title:   CFO
                                    -----------------------

 

                                      -21-
<PAGE>
 
                                    ANNEX A
                                    -------

                               FORM OF ASSIGNMENT

            FOR VALUE RECEIVED, ________________________________ hereby sells,
       assigns and transfers to each assignee set forth below all of the rights
       of the undersigned in and to the number of Warrants (as defined in and
       evidenced by the foregoing Warrant Certificate) set opposite the name of
       such assignee below and in and to the foregoing Warrant Certificate with
       respect to such Warrants and the Warrant Shares (as defined in the
       Warrant Certificate) issuable upon exercisable of such Warrants.

       Name of Assignee         Address              Number of Warrants
       ----------------         -------              ------------------

            If the aggregate number of such Warrants shall not constitute all
       the Warrants evidenced by the foregoing Warrant Certificate, the
       undersigned requests that a new Warrant Certificate evidencing the
       Warrants not so assigned be issued in the name of and delivered to the
       undersigned.

                                 Name of
                                 Warrantholder (Print)    
                                                       -----------------------



       Dated                     (By) 
             -------------           -----------------------------------------

       [SIGNATURE GUARANTEE]         ATTEST
       (Not Required for
        Initial Registered
        Warrantholder)            --------------------------------------------  
                                     Secretary

                                      -22-
<PAGE>
 
                                    ANNEX B
                                    -------

                          FORM OF ELECTION TO PURCHASE

       (To Be Executed by the Warrantholder if the Warrantholder Desires
       to Exercise ________ Warrants Evidenced by the foregoing Warrant
       Certificate)

       To Styles on Video, Inc.:

            The undersigned hereby irrevocably elects to exercise Warrants (as
       defined in and evidenced by the foregoing Warrant Certificate) for, and
       to purchase thereunder, Warrant Shares issuable upon exercise of such
       Warrants and payment by the Warrantholder of the Exercise Price.

            The Warrantholder hereby elects to pay the Exercise Price by
       complying with clause ____ below.

            A. the delivery of $___________ in cash and any applicable taxes,
       subject to Section 4 of the Warrant Certificate, payable by the
       undersigned pursuant to such Warrant Certificate, or

            B. instructing Styles on Video, Inc. to retain a number of Warrant
       Shares (the "Payment Shares") equal to the quotient of the aggregate
       Exercise Price of the Warrants hereby exercised divided by the Market
       Price of such shares as of the date of exercise, and to deduct the number
       of Payment Shares from the Warrant Shares to be delivered.

            The undersigned requests that certificates for such shares be issued
       in the name of the following:

                                      PLEASE INSERT SOCIAL SECURITY OR TAX
                                      IDENTIFICATION NUMBER
                                      
                                      -----------------------------------------

       -------------------------------
       (Please print name and address)
      
       -------------------------------

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

            If such number of Warrants shall not constitute all the Warrants
       evidenced by the foregoing Warrant Certificate, the undersigned requests
       that a new Warrant Certificate evidencing the Warrants not so exercised
       be issued in the name of and delivered to the following:

-------------------------------------------------------------------------------
                         (Please print name and address)

                                      -23-
<PAGE>
 
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
Capitalized terms used herein but not otherwise defined shall have the meanings
ascribed to them in the Warrant Certificate.
 
Dated                                   Name of
      -------------                 Warrantholder (Print)                      
                                                         ----------------------
[SIGNATURE GUARANTEE]               (By) /s/
(Not Required for                        --------------------------------------
Initial Registered
Warrantholder)                      (Title)

                                      -24-