<PAGE>
 
                                                                    EXHIBIT 4.2

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO THE SECURITIES OR "BLUE
SKY" LAWS OF ANY STATE. SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED, HYPOTHECATED OR OTHERWISE ASSIGNED, EXCEPT PURSUANT TO (i) A
REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS EFFECTIVE UNDER
SUCH ACT, (ii) RULE 144 OR RULE 144A UNDER SUCH ACT, OR (iii) ANY OTHER
EXEMPTION FROM REGISTRATION UNDER SUCH ACT, PROVIDED THAT, IF REQUESTED BY THE
COMPANY, AN OPINION OF COUNSEL REASONABLY SATISFACTORY IN FORM AND SUBSTANCE IS
FURNISHED TO THE COMPANY THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACT IS AVAILABLE.

                                                            For the Purchase of
                                                            _________ shares of
Warrant No. ______                                                 Common Stock

                          WARRANT FOR THE PURCHASE OF
                            SHARES OF COMMON STOCK
                                      OF
                                7TH LEVEL, INC.
                           (A DELAWARE CORPORATION)

     7th Level, Inc., a Delaware corporation ("Company"), hereby certifies that
_________________, or its registered assigns ("Registered Holder"), is entitled,
subject to the terms set forth below, to purchase from the Company, at any time
or from time to time commencing from June 1, 1998 until March 30, 2005, unless
there is a Change of Control (as defined), at which time this Warrant may be
exercised immediately, ________ shares of Common Stock, $.01 par value, of the
Company ("Common Stock"), at an initial exercise price equal to $.01 per share
(subject to adjustment as provided below).  Notwithstanding the foregoing, to
the extent that this Warrant remains unexercised at the time the Company is sold
to an unaffiliated person, then immediately after such sale, this Warrant shall
be deemed to have expired worthless.  The shares of Common Stock purchasable
upon exercise of this Warrant, and the price payable hereunder for each of such
shares, each as adjusted from time to time pursuant to the provisions of this
Warrant, are hereinafter referred to as the "Warrant Shares" and the "Per Share
Warrant Price," respectively.

     1.   Exercise.

          (a) This Warrant may be exercised by the Registered Holder, in whole
or in part, by surrendering this Warrant, with the purchase form appended hereto
as Exhibit I duly executed by such Registered Holder, at the principal office of
the Company, or at such other office or agency as the Company may designate,
accompanied by proper payment of the Per Share Warrant Price multiplied by the
number of shares being purchased.  Payment of the Per 
<PAGE>
 
Share Warrant Price shall be made in lawful money of the United States.
Notwithstanding anything to the contrary contained herein, the Per Share Warrant
Price, as adjusted from time to time pursuant to the provisions of this Warrant,
shall never be less than the per share par value of the Common Stock.

          The aggregate Per Share Warrant Price may be paid: (a) in cash, (b) by
surrender to the Company of shares of Common Stock which have been held by the
Registered Holder for at least 6 months with a fair value, on the date of
exercise that is equal to the Per Share Warrant Price in respect of the number
of Warrants exercised, (c) by surrender to the Company of Warrants (as provided
below) or (d) by a combination of (a), (b) or (c) hereof.  The Registered Holder
shall have the right to convert Warrants or any portion thereof (the "Conversion
Right") into Warrant Shares as provided in this Section, but only if the
Warrants shall otherwise be exercisable under the provisions of this Warrant.
Upon exercise of the Conversion Right with respect to a particular number of
Warrants (the "Converted Warrants"), the Company shall deliver to the Registered
Holder (without payment by the Registered Holder of any cash or other
consideration) that number of Warrant Shares equal to the quotient obtained by
dividing (a) the difference between (i) the product of the fair value per share
of Common Stock as of the date the Conversion Right is exercised (the
"Conversion Date") and the number of Warrant Shares into which the Converted
Warrants could have been exercised hereunder and (ii) the aggregate Per Share
Warrant Price that would have been payable upon such exercise of the Converted
Warrants as of the Conversion Date, by (b) the fair value per share of Common
Stock as of the Conversion Date.  For purposes of this Section, the fair value
per share of Common Stock shall mean the average Market Price of the Common
Stock for the ten Trading Days immediately preceding the Conversion Date.

          As used herein, "Market Price" means, with respect to the shares of
Common Stock, (a) if the shares are listed or admitted for trading on any
national securities exchange or included in The Nasdaq National Market or Nasdaq
SmallCap Market, the last reported sales price as reported on such exchange or
market; (b) if the shares are not listed or admitted for trading on any national
securities exchange or included in The Nasdaq National Market or Nasdaq SmallCap
Market, the average of the last reported closing bid and asked quotation for the
shares as reported on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") or a similar service if NASDAQ is not reporting such
information; (c) if the shares are not listed or admitted for trading on any
national securities exchange or included in The Nasdaq National Market or Nasdaq
SmallCap Market or quoted by NASDAQ or a similar service, the average of the
last reported bid and asked quotation for the shares as quoted by a market maker
in the shares (or if there is more than one market maker, the bid and asked
quotation shall be obtained from two market makers and the average of the lowest
bid and highest asked quotation).  In the absence of any available public
quotations for the Common Stock, the Board of Directors of the Company ("Board")
shall determine in good faith the fair value of the Common Stock, which
determination shall be set forth in a certificate by the Secretary of the
Company.

                                       2
<PAGE>
 
          As used in this Section 1, Trading Day means, in the event that the
Common Stock is listed or admitted to trading on the New York Stock Exchange (or
any successor to such exchange), a day on which the New York Stock Exchange (or
such successor) is open for the transaction of business, or, if the Common Stock
is not listed or admitted to trading on such exchange, a day on which the
principal national securities exchange on which the Common Stock is listed is
open for the transaction of business, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange, a day on which any New
York Stock Exchange member firm is open for the transaction of business.

          As used herein, a "Change of Control" means when a person, or group of
persons acting together, acquires more than 50% of the shares of Common Stock
outstanding, as determined on a fully-diluted basis.

          (b) Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the day on which the
Warrant shall have been surrendered to the Company as provided in subsection
1(a) above and the Per Share Warrant Price shall have been paid. At such time,
the person or persons in whose name or names any certificates for Warrant Shares
shall be issuable upon such exercise as provided in subsection 1(c) below, shall
be deemed to have become the holder or holders of record of the Warrant Shares
represented by such certificates.

          (c) As soon as practicable after the exercise of this Warrant in whole
or in part, and in any event within 20 days thereafter, the Company at its
expense will cause to be issued in the name of, and delivered to, the Registered
Holder, or, subject to the terms and conditions hereof, as such Registered
Holder (upon payment by such Registered Holder of any applicable transfer taxes)
may direct:

              (a) a certificate or certificates for the number of full Warrant
Shares to which such Registered Holder shall be entitled upon such exercise
plus, in lieu of any fractional share to which such Registered Holder would
otherwise be entitled, cash in an amount determined pursuant to Section 3
hereof, and

              (b) in case such exercise is in part only, a new warrant or
warrants (dated the date hereof) of like tenor, calling in the aggregate on the
face or faces thereof for the number of Warrant Shares equal (without giving
effect to any adjustment therein) to the number of such shares called for on the
face of this Warrant, minus the number of such shares purchased by the
Registered Holder upon such exercise as provided in subsection 1(a) above.

     2.   Adjustments.  The number and kind of securities issuable upon the
exercise of this Warrant and the Per Share Warrant Price shall be subject to
adjustment from time to time in accordance with the following provisions:

          (a) Certain Definitions.  For purposes of this Warrant:

                                       3
<PAGE>
 
              (i)   The term "Additional Shares of Common Stock" shall mean all
          shares of Common Stock issued, or deemed to be issued by the Company
          pursuant to subsection (e) of this Section 2, after the first date of
          issuance of this Warrant (the "Original Issue Date") except:

                    (A) issuances of Common Stock, Convertible Securities,
              warrants and/or Options granted or approved to be granted by the
              Board or a committee thereof prior to the first date of issuance
              of the Company's Series A Preferred Stock (the "Series A Stock");

                    (B) issuances of Common Stock, Convertible Securities and/or
              Options to officers, employees, consultants or directors;
              provided that such issuances pursuant to this clause (B) in the
              aggregate do not exceed more than 10% of the shares of Common
              Stock outstanding, as determined on a fully-diluted basis (the
              "Management Securities"); and

                    (C) issuances of Common Stock, warrants or Class B
              Convertible Preferred Stock resulting from the provisions of  the
              Securities Purchase Agreement dated as of May 6, 1998, by and
              among the Company, Alpine Associates, a New Jersey Limited
              Partnership and East West Capital Associates, Inc. and the
              Securities Purchase Agreement dated as of May 6, 1998 by and
              among the Company and the Purchasers parties thereto relating to
              the sale of the Series A Stock, and in each case the documents
              executed, filed or delivered in connection therewith.

              (ii)  The term "Common Stock" shall mean (A) the Common Stock and
          (B) the stock of the Company of any class, or series within a class,
          whether now or hereafter authorized, which has the right to
          participate in the distribution of either earnings or assets of the
          Company without limit as to the amount or percentage.

              (iii) The term "Convertible Securities" shall mean any evidence
          of indebtedness, shares or other securities (other than this Warrant)
          convertible into or exercisable or exchangeable for Common Stock.

              (iv)  The term "Options" shall mean any and all rights, options or
          warrants (other than the Management Securities) to subscribe for,
          purchase or otherwise in any manner acquire Common Stock or
          Convertible Securities.

          (b) Subdivision or Combination of Shares.  In case outstanding shares
of Common Stock shall be subdivided, the Per Share Warrant Price shall be
proportionately reduced as of the effective date of such subdivision, or as of
the date a record is taken of the holders of Common Stock for the purpose of so
subdividing, whichever is earlier.  In case outstanding 

                                       4
<PAGE>
 
shares of Common Stock shall be combined, the Per Share Warrant Price shall be
proportionately increased as of the effective date of such combination, or as of
the date a record is taken of the holders of Common Stock for the purpose of so
combining, whichever is earlier.

          (c) Stock Dividends.  In case shares of Common Stock are issued as a
dividend or other distribution on the Common Stock (or such dividend is
declared), the Per Share Warrant Price shall be adjusted, as of the date a
record is taken of the holders of Common Stock for the purpose of receiving such
dividend or other distribution (or if no such record is taken, as at the
earliest of the date of such declaration, payment or other distribution), to the
Per Share Warrant Price determined by multiplying the Per Share Warrant Price in
effect immediately prior to such declaration, payment or other distribution by a
fraction (i) the numerator of which shall be the number of shares of Common
Stock outstanding immediately prior to the declaration or payment of such
dividend or other distribution, and (ii) the denominator of which shall be the
total number of shares of Common Stock outstanding immediately after the
declaration or payment of such dividend or other distribution.  In the event
that the Company shall declare or pay any dividend on the Common Stock payable
in any right to acquire Common Stock for no consideration, then the Company
shall be deemed to have made a dividend payable in Common Stock in an amount of
shares equal to the maximum number of shares issuable upon exercise of such
rights to acquire Common Stock.

          (d) Issuance of Additional Shares of Common Stock.  If the Company
shall issue any Additional Shares of Common Stock (including Additional Shares
of Common Stock deemed to be issued pursuant to subsection (e) below) after the
Original Issue Date (other than as provided in the foregoing subsections (b) and
(c)), for no consideration or for a consideration per share less than the Market
Price in effect on the date of and immediately prior to such issue, then in such
event, the Per Share Warrant Price shall be reduced, concurrently with such
issue, to a price equal to the quotient obtained by dividing:

              (A) an amount equal to (x) the total number of shares of Common
          Stock outstanding immediately prior to such issuance or sale
          multiplied by the Market Price in effect immediately prior to such
          issuance or sale, plus (y) the aggregate consideration received or
          deemed to be received by the Company upon such issuance or sale, by

              (B) the total number of shares of Common Stock outstanding
          immediately after such issuance or sale.

          (e) Deemed Issue of Additional Shares of Common Stock.  Except as set
forth in subsection (a) above, if the Company at any time or from time to time
after the Original Issue Date shall issue any Convertible Securities or Options
or shall fix a record date for the determination of holders of any class of
securities then entitled to receive any such Options or Convertible Securities,
then the maximum number of shares (as set forth in the instrument relating
thereto without regard to any provisions contained therein designed to protect
against 

                                       5
<PAGE>
 
dilution) of Common Stock issuable upon the exercise of such Options, or, in the
case of Convertible Securities and Options therefor, the conversion or exchange
of such Convertible Securities, shall be deemed to be Additional Shares of
Common Stock issued as of the time of such issue of Options or Convertible
Securities or, in case such a record date shall have been fixed, as of the close
of business on such record date, provided that in any such case in which
Additional Shares of Common Stock are deemed to be issued:

              (i)   no further adjustments in the Per Share Warrant Price shall
          be made upon the subsequent issue of Convertible Securities or shares
          of Common Stock upon the exercise of such Options or the issue of
          Common Stock upon the conversion or exchange of such Convertible
          Securities;

              (ii)  if such Options or Convertible Securities by their terms
          provide, with the passage of time or otherwise, for any increase or
          decrease in the consideration payable to the Company, or increase or
          decrease in the number of shares of Common Stock issuable, upon the
          exercise, conversion or exchange thereof, the Per Share Warrant Price
          computed upon the original issuance of such Options or Convertible
          Securities (or upon the occurrence of a record date with respect
          thereto), and any subsequent adjustments based thereon, upon any such
          increase or decrease becoming effective, shall be recomputed to
          reflect such increase or decrease insofar as it affects such Options
          or the rights of conversion or exchange under such Convertible
          Securities (provided, however, that no such adjustment of the Per
          Share Warrant Price shall affect Common Stock previously issued upon
          exercise of this Warrant);

              (iii) upon the expiration of any such Options or any rights of
          conversion or exchange under such Convertible Securities which shall
          not have been exercised, the Per Share Warrant Price computed upon the
          original issue of such Options or Convertible Securities (or upon the
          occurrence of a record date with respect thereto), and any subsequent
          adjustments based thereon, shall, upon such expiration, be recomputed
          as if:

                    (A) in the case of Options or Convertible Securities, the
              only Additional Shares of Common Stock issued were the shares of
              Common Stock, if any, actually issued upon the exercise of such
              Options or the conversion or exchange of such Convertible
              Securities and the consideration received therefor was the
              consideration actually received by the Company (x) for the issue
              of all such Options, whether or not exercised, plus the
              consideration actually received by the Company upon exercise of
              the Options or (y) for the issue of all such Convertible
              Securities which were actually converted or exchanged plus the
              additional consideration, if any, actually received by the
              Company upon the conversion or exchange of the Convertible
              Securities; and

                                       6
<PAGE>
 
                    (B) in the case of Options for Convertible Securities, only
               the Convertible Securities, if any, actually issued upon the
               exercise thereof were issued at the time of issue of such
               Options, and the consideration received by the Company for the
               Additional Shares of Common Stock deemed to have been then issued
               was the consideration actually received by the Company for the
               issue of all such Options, whether or not exercised, plus the
               consideration deemed to have been received by the Company upon
               the issue of the Convertible Securities with respect to which
               such Options were actually exercised.

               (iv) No readjustment pursuant to clause (ii) or (iii) above shall
          have the effect of increasing the Per Share Warrant Price to an amount
          which exceeds the lower of (x) the Per Share Warrant Price on the
          original adjustment date or (y) the Per Share Warrant Price that would
          have resulted from any issuance of Additional Shares of Common Stock
          between the original adjustment date and such readjustment date.

               (v)  In the case of any Options which expire by their terms not
          more than 30 days after the date of issue thereof, no adjustment of
          the Per Share Warrant Price shall be made until the expiration or
          exercise of all such Options, whereupon such adjustment shall be made
          in the same manner provided in clause (iii) above.

          (f) Determination of Consideration.  For purposes of this Section 2,
the consideration received by the Company for the issue of any Additional Shares
of Common Stock shall be computed as follows:

              (i)   Cash and Property.  Such consideration shall:

                    (A) insofar as it consists of cash, be the aggregate amount
              of cash received by the Company; and

                    (B) insofar as it consists of property other than cash, be
              computed at the fair value thereof at the time of the issue, as
              determined in good faith by the vote of a majority of the Board
              or if the Board cannot reach such agreement, by a qualified
              independent public accounting firm, other than the accounting
              firm then engaged as the Company's independent auditors.

              (ii)  Options and Convertible Securities.  The consideration per
          share received by the Company for Additional Shares of Common Stock
          deemed to have been issued pursuant to subsection (e) above, relating
          to Options and Convertible Securities shall be determined by dividing:

                                       7
<PAGE>
 
                    (A) the total amount, if any, received or receivable by the
              Company as consideration for the issue of such Options or
              Convertible Securities, plus the minimum aggregate amount of
              additional consideration (as set forth in the instruments
              relating thereto, without regard to any provision contained
              therein designed to protect against dilution) payable to the
              Company upon the exercise of such Options or the conversion or
              exchange of such Convertible Securities, or in the case of
              Options for Convertible Securities, the exercise of such Options
              for Convertible Securities and the conversion or exchange of such
              Convertible Securities, by

                    (B) the maximum number of shares of Common Stock (as set
              forth in the instruments relating thereto, without regard to any
              provision contained therein designed to protect against dilution)
              issuable upon the exercise of such Options or conversion or
              exchange of such Convertible Securities.

          (g) Other Provisions Applicable to Adjustment Under this Section.  The
following provisions shall be applicable to the adjustments in Per Share Warrant
Price as provided in this Section 2:

              (i)   Treasury Shares.  The number of shares of Common Stock at
          any time outstanding shall not include any shares thereof then
          directly or indirectly owned or held by or for the account of the
          Company.

              (ii)  Other Action Affecting Common Stock.  If the Company shall
          take any action affecting the outstanding number of shares of Common
          Stock other than an action described in any of the foregoing
          subsections 2(b) through 2(e) hereof, inclusive, which would have an
          inequitable effect on the holders of this Warrant, then the Per Share
          Warrant Price shall be adjusted in such manner and at such time as the
          Board on the advice of the Company's independent public accountants
          may in good faith determine to be equitable in the circumstances.

              (iii) Minimum Adjustment.  No adjustment of the Per Share
          Warrant Price shall be made if the amount of any such adjustment would
          be an amount less than one percent (1%) of the Per Share Warrant Price
          then in effect, but any such amount shall be carried forward and an
          adjustment in respect thereof shall be made at the time of and
          together with any subsequent adjustment which, together with such
          amount and any other amount or amounts so carried forward, shall
          aggregate an increase or decrease of one percent (1%) or more.

              (iv)  Certain Adjustments.  The Per Share Warrant Price shall not
          be adjusted upward except in the event of a combination of the
          outstanding shares of 

                                       8
<PAGE>
 
          Common Stock into a smaller number of shares of Common Stock or in the
          event of a readjustment of the Per Share Warrant Price pursuant to
          Section 2(e)(ii) or (iii).

          (h) Notices of Adjustments.  Whenever the Per Share Warrant Price is
adjusted as herein provided, an officer of the Company shall compute the
adjusted Per Share Warrant Price in accordance with the foregoing provisions and
shall prepare a written certificate setting forth such adjusted Per Share
Warrant Price and showing in detail the facts upon which such adjustment is
based, and such written instrument shall promptly be delivered to the
recordholders of this Warrant.

     3.   Fractional Shares.  The Company shall not be required upon the
exercise of this Warrant to issue any fractional shares, but shall make an
adjustment therefor in cash on the basis of the mean between the low bid and
high asked prices for the Warrant Shares on the over-the-counter market as
reported by the National Association of Securities Dealers, Inc. or the closing
market price of the Warrant Shares on a national securities exchange on the
trading day immediately prior to the date of exercise, whichever is applicable,
or if neither is applicable, then on the basis of the then fair market value of
a Warrant Share as shall be reasonably determined by the Board.

     4.   Limitation on Sales, etc.  The Registered Holder acknowledges that
this Warrant and the Warrant Shares have not been registered under the
Securities Act of 1933, as amended (the "Act"), and agrees, except as specified
in the proviso hereto, not to sell, pledge, distribute, offer for sale, transfer
or otherwise dispose of this Warrant or any Warrant Shares issued upon its
exercise in the absence of (a) an effective registration statement under the Act
as to this Warrant or the Warrant Shares issued upon its exercise or both, as
the case may be, and registration or qualification of this Warrant or such
Warrant Shares under any applicable Blue Sky or state securities law then in
effect, or (b) an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required; provided that the Registered
Holder may transfer this Warrant at any time to any of its affiliates.

          Without limiting the generality of the foregoing, unless the offering
and sale of the Warrant Shares to be issued upon the exercise of the Warrant
shall have been effectively registered under the Act and unless the sale is to
an affiliate of the Registered Holder, the Company shall be under no obligation
to issue the shares covered by such exercise unless and until the Registered
Holder shall have executed an investment letter in form and substance reasonably
satisfactory to the Company, including a warranty at the time of such exercise
that it is acquiring such shares for its own account, for investment and not
with a view to, or for sale in connection with, the distribution of any such
shares, in which event a legend in substantially the following form shall be
endorsed upon the certificate(s) representing the Warrant Shares issued pursuant
to such exercise:

                                       9
<PAGE>
 
          The securities represented by this certificate have not been
          registered under the Securities Act of 1933, as amended, or pursuant
          to the securities or "Blue Sky" Laws of any state.  Such securities
          may not be offered, sold, transferred, pledged, hypothecated or
          otherwise assigned, except pursuant to (i) a registration statement
          with respect to such securities which is effective under such Act,
          (ii) Rule 144 or Rule 144A under such Act, or (iii) any other
          exemption from registration under such Act, provided that, if
          requested by the Company, an opinion of counsel reasonably
          satisfactory in form and substance is furnished to the Company that an
          exemption from the registration requirements of such Act is available.

     5.   Valid Issuance; Reservation of Stock.  All shares of Common Stock
which may be issued in connection with the exercise provisions set forth herein
shall, upon issuance by the Company, be validly issued, fully paid and
nonassessable, free from preemptive rights and free from all taxes, liens or
charges with respect thereto created or imposed by the Company. The Company will
at all times reserve and keep available, solely for issuance and delivery upon
the exercise of this Warrant, such Warrant Shares and other stock, securities
and property, as from time to time shall be issuable upon the exercise of this
Warrant.

     6.   Replacement of Warrants.  Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and (in the case of loss, theft or destruction) upon delivery of an
indemnity agreement in an amount reasonably satisfactory to the Company, or (in
the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will issue, in lieu thereof, a new Warrant of like tenor.

     7.   Transfers, etc.  The Company will maintain a register containing the
names and addresses of the Registered Holders of this Warrant.  Any Registered
Holder may change its, his or her address as shown on the warrant register by
written notice to the Company requesting such change.  Until any transfer of
this Warrant is made in the warrant register, the Company may treat the
Registered Holder of this Warrant as the absolute owner hereof for all purposes
and shall not be bound to recognize any equitable or other claim to or interest
in this Warrant on the part of any other person; provided, however, that if and
when this Warrant is properly assigned in blank, the Company may (but shall not
be obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.

     8.   Registration Rights.  This Warrant shall entitle the Registered Holder
of this Warrant to the registration, holdback and piggyback rights set forth in
the Registration Rights Agreement attached hereto.

                                       10
<PAGE>
 
     9.   Mailing of Notices, etc.  All notices and other communications from
the Company to the Registered Holder of this Warrant shall be mailed by first-
class certified or registered mail, postage prepaid, sent by reputable overnight
delivery or by facsimile to the address furnished to the Company in writing by
the last Registered Holder of this Warrant who shall have furnished an address
to the Company in writing. All notices and other communications from the
Registered Holder of this Warrant or in connection herewith to the Company shall
be mailed by first-class certified or registered mail, postage prepaid, sent by
reputable overnight delivery or by facsimile (972-498-0111) to the Company at
its offices at 1110 East Collins Boulevard, Suite 122, Richardson, Texas 75081,
to the attention of President, or such other address, or to the attention of
such other officer, as the Company shall so notify the Registered Holder, with a
copy to The Schupak Group, 730 Fifth Avenue, Suite 1901, New York, New York
10022, telecopier no. (212) 262-1031, to the attention of Donald Schupak.

     10.  No Rights as Stockholders.  Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.

     11.  Change or Waiver.  Any term of this Warrant may be changed or waived
only by an instrument in writing signed by the party against whom enforcement of
the change or waiver is sought.

     12.  Headings.  The headings of this Warrant are for purposes of reference
only and shall not limit or otherwise affect the meaning of any provision of
this Warrant.

     13.  Governing Law.  This Warrant will be governed by and construed in
accordance with the law of the State of New York without regard to the
principles of conflict of law.

Dated: May __, 1998                7TH LEVEL, INC.

                                   By:
                                       -------------------------------
                                        Donald Schupak
                                        Chairman of the Board

                                       11
<PAGE>
 
                                   EXHIBIT I

                                 PURCHASE FORM
                                 -------------

To:   7th Level, Inc.
      1110 East Collins Boulevard
      Richardson, Texas 75081
                                                        Dated:

     In accordance with the provisions set forth in the attached Warrant, the
undersigned hereby irrevocably elects to purchase _________ shares of the Common
Stock covered by such Warrant and herewith makes payment therefor in full at the
price per share provided for in such Warrant.

     The undersigned has had the opportunity to ask questions of and receive
answers from the officers of the Company regarding the affairs of the Company
and related matters, and has had the opportunity to obtain additional
information necessary to verify the accuracy of all information so obtained.

     The undersigned understands that the shares have not been registered under
the Securities Act of 1933, as amended, or the securities laws of any other
jurisdiction, and hereby represents to the Company that the undersigned is
acquiring the shares for its own account, for investment, and not with a view
to, or for sale in connection with, the distribution of any such shares.


                                 Signature
                                           ---------------------------
                                 Address
                                           ---------------------------

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

                                       12