THE SECURITIES  EVIDENCED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED  ("SECURITIES  ACT"), OR UNDER THE SECURITIES
LAWS OF ANY  STATE  OR OTHER  JURISDICTION.  THE  SECURITIES  MAY NOT BE SOLD OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE  SECURITIES LAWS OF ANY STATE
OR JURISDICTION,  OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE  HEREOF,  AGREES
THAT IT WILL NOT SELL,  TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED.

NOT EXERCISABLE  PRIOR TO JUNE 18, 1997. VOID AFTER 5:00 P.M. EASTERN TIME, JUNE
18, 2002.



                                 PURCHASE OPTION

                                For 50,000 Shares

No. 1997-PO-1                          of

                         H.E.R.C. PRODUCTS INCORPORATED

                            (A Delaware Corporation)

1.       Purchase Option.

                  THIS CERTIFIES THAT, in  consideration  of $16.66 duly paid by
or on behalf of GKN Securities  Corp.  ("Holder"),  as registered  owner of this
Purchase  Option,  to  H.E.R.C.  Products  Incorporated  ("Company"),  Holder is
entitled,  at any  time  or  from  time  to  time  at or  after  June  18,  1997
("Commencement  Date"),  and at or before 5:00 p.m., Eastern Time, June 18, 2002
("Expiration Date"), but not thereafter, to subscribe for, purchase and receive,
in whole or in part,  up to 25,000 shares  ("Shares")  of the  Company's  common
stock,  $.Ol par value  ("Common  Stock").  The Shares  issuable  hereunder  are
sometimes collectively referred to herein as the "Securities." If the Expiration
Date is a day on which banking institutions are authorized by law to close, then
this Purchase  Option may be exercised on the next  succeeding  day which is not
such a day in  accordance  with  the  terms  herein.  This  Purchase  Option  is
initially  exercisable at $1.3125 per Share purchased;  provided,  however, that
upon the  occurrence  of any of the events  specified  in Section 6 hereof,  the
rights  granted by this Purchase  Option,  including the exercise  price for the
Shares  and the  number  of  shares of  Common  Stock to be  received  upon such
exercise,  shall be adjusted as therein  specified.  The term  "Exercise  Price"
shall mean the initial exercise price or the adjusted exercise price,  depending
on the context.  This Purchase  Option is one of a number of such options issued
by the Company to GKN and its designees ("Purchase Options").
<PAGE>
2.       Exercise.

         2.1 Exercise  Form.  In order to exercise  this  Purchase  Option,  the
exercise form attached  hereto must be duly executed and completed and delivered
to the Company,  together with this Purchase  Option and payment of the Exercise
Price for the Securities  being  purchased by wire transfer,  certified check or
official  bank check.  If the  subscription  rights  represented  hereby are not
exercised at or before 5:00 p.m.,  Eastern  time,  on the  Expiration  Date this
Purchase  Option shall become and be void without  further force or effect,  and
all rights represented hereby shall cease and expire.

         2.2 Legend.  Each  certificate for the securities  purchased under this
Purchase  Option shall bear a legend as follows unless such Securities have been
registered under the Securities Act:

                  "The securities  represented by this certificate have not been
                  registered  under  the  Securities  Act of  1933,  as  amended
                  ("Securities Act") or applicable state law. The securities may
                  not be offered for sale, sold or otherwise  transferred except
                  pursuant  to an  effective  registration  statement  under the
                  Securities Act, or pursuant to an exemption from  registration
                  under the Securities Act and applicable state law."

         2.3      Cashless Exercise.

                  2.3.1  Determination of Amount.  In lieu of the payment of the
Exercise Price in the manner  required by Section 2.1, the Holder shall have the
right (but not the  obligation)  to pay the  Exercise  Price for the  Securities
being  purchased with this Purchase Option upon exercise by the surrender to the
Company of any  exercisable  but  unexercised  portion of this  Purchase  Option
having a "Value" (as defined below), at the close of trading on the last trading
day  immediately  preceding the exercise of this Purchase  Option,  equal to the
Exercise  Price  multiplied  by the  number  of shares  of  Common  Stock  being
purchased upon exercise ("Cashless  Exercise Right").  The sum of (a) the number
of shares of Common Stock being  purchased upon exercise of the  non-surrendered
portion of this Purchase Option pursuant to this Cashless Exercise Right and (b)
the number of shares of Common  Stock  underlying  the portion of this  Purchase
Option  being  surrendered,  shall  not in any event be  greater  than the total
number of shares of Common Stock  purchasable upon the complete exercise of this
Purchase  Option if the  Exercise  Price were paid in cash.  The  'Value" of the
portion of the  Purchase  Option  being  surrendered  shall equal the  remainder
derived from  subtracting  (a) the Exercise  Price  multiplied  by the number of
shares of Common  Stock  underlying  the portion of this  Purchase  Option being
surrendered  from (b) the Market Price of the shares of Common Stock  multiplied
by the number of shares of Common Stock  underlying the portion of this Purchase
Option  being  surrendered.  As used herein,  the term  "Market  Price" shall be
deemed to be the last  reported  sale price of the Common  Stock at the close of
trading on the last  trading  day  immediately  preceding  the  exercise of this
Purchase Option,  or, in case no such reported sale takes place on such day, the
average of the last reported  sale prices for the  immediately  preceding  three
trading days, in either case as officially reported by the principal  securities
exchange on which the Common Stock is listed or admitted to trading,  or, if the
Common  Stock is not listed or  admitted to trading on any  national  securities
exchange or if any such  exchange on which the Common Stock is listed is not its
principal trading market,  the last reported sale price as furnished by the NASD
through the Nasdaq National Market or SmallCap  Market,  or, if applicable,  the
OTC Bulletin  Board, or if the Common Stock is not listed or admitted to trading
on the  Nasdaq  National  Market or  SmallCap  Market or OTC  Bulletin  Board or
similar organization, as determined in good faith by
                                       2
<PAGE>
resolution  of  the  Board  of  Directors  of the  Company,  based  on the  best
information  available to it. In addition to the above, the Holder may surrender
any other  security  issued by the  Company,  including  but not limited to unit
purchase options,  warrants, options and common stock in payment of the Exercise
Price, having a value, determined substantially as set forth above.

                  2.3.2 Mechanics of Cashless  Exercise.  The Cashless  Exercise
Right  may be  exercised  by the  Holder  on any  business  day on or after  the
Commencement  Date and not later than the  Expiration  Date by delivering to the
Company  the  Purchase  Option  or other  security  of the  Company  with a duly
executed  exercise  form  attached  hereto with the  cashless  exercise  section
completed.

3.       Transfer.

         3.1  General  Restrictions.  The  registered  Holder  of this  Purchase
Option, by its acceptance hereof,  agrees that it will sell,  transfer or assign
or hypothecate  this Purchase  Option only in compliance with or exemptions from
applicable  securities  laws.  In order to make any  permitted  assignment,  the
Holder must  deliver to the Company the  assignment  form  attached  hereto duly
executed and  completed,  together with this Purchase  Option and payment of all
transfer  taxes,  if any,  payable in  connection  therewith.  The Company shall
immediately  transfer this Purchase Option on the books of the Company and shall
execute and deliver a new Purchase  Option or Purchase  Options of like tenor to
the  appropriate  assignee(s)  expressly  evidencing  the right to purchase  the
aggregate number of Shares purchasable  hereunder or such portion of such number
as shall be contemplated by any such assignment.

         3.2  Restrictions  Imposed  by the Act.  This  Purchase  Option and the
Securities  underlying this Purchase Option shall not be transferred  unless and
until (i) the Company has received the opinion of counsel reasonably  acceptable
to the Company that this Purchase Option or the Securities,  as the case may be,
may be transferred  pursuant to an exemption from registration under the Act and
applicable state law, the availability of which is established to the reasonable
satisfaction of the Company,  or (ii) a registration  statement relating to such
Purchase Option or Securities, as the case may be, has been filed by the Company
and declared effective by the Securities and Exchange Commission ("Commission").

4.       New Purchase Options to be Issued.

         4.1  Partial  Exercise  or  Transfer.  Subject to the  restrictions  in
Section 3 hereof,  this Purchase Option may be exercised or assigned in whole or
in part.  In the event of the exercise or  assignment  hereof in part only,  the
Company shall cause to be delivered to the Holder  without charge a new Purchase
Option of like tenor in the name of the Holder  evidencing the right to purchase
the  aggregate  number of Shares as to which this  Purchase  Option has not been
exercised or assigned.

         4.2  Lost  Certificate.   Upon  receipt  by  the  Company  of  evidence
satisfactory  to it of the  loss,  theft,  destruction  or  mutilation  of  this
Purchase  Option and of  reasonably  satisfactory  indemnification,  the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any such
new  Purchase  Option  executed and  delivered as a result of such loss,  theft,
mutilation or destruction shall constitute a substitute  contractual  obligation
on the part of the Company.
                                       3
<PAGE>
5.       Registration Rights.

         5.1      Registration Requirement.

                  5.1.1  Obligation  to  Register.  The  Company  agrees to file
within  four  months  after the  Commencement  Date,  a  registration  statement
("Registration  Statement")  under  the  Securities  Act  with  the  Commission,
registering  for  resale  the  Securities  and use its best  efforts to have the
Registration  Statement declared  effective by the six-month  anniversary of the
Commencement Date.

                  5.1.2  Terms.  The  Company  shall bear all fees and  expenses
(including  counsel fees and expenses)  attendant to registering  the Securities
under Section 5.1.1 hereof, filing the Registration  Statement with the NASD and
listing the  Securities on Nasdaq and the BSE, but the Holders shall pay any and
all  underwriting  commissions and the expenses of any legal counsel selected by
the Holders to represent them in connection with the sale of the Securities. The
Company  agrees to qualify or  register  the  Securities  in such  states as are
reasonably requested by the Holder(s); provided, however, that in no event shall
the  Company be required to  register  the  Securities  in a state in which such
registration  would cause (i) the Company to be obligated to register or license
to do business in such state, or (ii) the principal  stockholders of the Company
to be  obligated to escrow  their  shares of capital  stock of the Company.  The
Company shall cause any Registration  Statement filed pursuant to this Section 5
to  remain  effective  and  current  for so long as the  Holder  owns any of the
Securities,  of if  earlier,  the  Holder may sell all the  Securities  he holds
pursuant to an exemption from registration under the Act.

         5.2      General Terms.

                  5.2.1   Indemnification.   The  Company  shall  indemnify  the
Holder(s) of the  Securities to be sold pursuant to any  registration  statement
hereunder and each person,  if any, who controls such Holders within the meaning
of  Section 15 of the  Securities  Act and/or  Section  20(a) of the  Securities
Exchange Act of 1934,  as amended  ("Exchange  Act"),  against all loss,  claim,
damage, expense or liability (including all reasonable attorneys' fees and other
expenses  reasonably  incurred in investigating,  preparing or defending against
any  claim  whatsoever  incurred  by the  indemnified  party  in any  action  or
proceeding   between  the  indemnitor  and  indemnified  party  or  between  the
indemnified  party and any third  party or  otherwise)  to which any of them may
become subject under the  Securities  Act, the Exchange Act or any other statute
or at common law or otherwise under the laws of foreign countries,  arising from
such registration statement or based upon any untrue statement or alleged untrue
statement of a material fact contained in (i) any  preliminary  prospectus,  the
registration  statement or prospectus  (as from time to time each may be amended
and supplemented); (ii) in any post-effective amendment or amendments or any new
registration  statement and prospectus in which is included the  Securities;  or
(iii) any application or other document or written  communication  (collectively
called "application")  executed by the Company or based upon written information
furnished by the Company in any  jurisdiction in order to qualify the Securities
under the  securities  laws  thereof  or filed  with the  Commission,  any state
securities  commission  or agency,  Nasdaq or any  securities  exchange;  or the
omission or alleged omission  therefrom of a material fact required to be stated
therein  or  necessary  to  make  the  statements   therein,  in  light  of  the
circumstances under which they were made, not misleading,  unless such statement
or  omission  is  made  in  reliance  upon,  and  in  conformity  with,  written
information  furnished to the Company with respect to the Holders  expressly for
use in a  preliminary  prospectus,  registration  statement  or  prospectus,  or
amendment or supplement thereof, or in any application,  as the case may be. The
Company  agrees  promptly  to  notify  the  Holder  of the  commencement  of any
litigation or
                                       4
<PAGE>
proceedings against the Company or any of its officers, directors or controlling
persons in connection  with the issue and sale or resale of the Securities or in
connection with the registration statement or prospectus.

                  5.2.2 Exercise of Purchase Option.  Nothing  contained in this
Purchase  Option shall be construed as requiring the Holder(s) to exercise their
Purchase  Options  prior to or after  the  initial  filing  of any  registration
statement or the effectiveness thereof.

                  5.2.3  Documents  Delivered  to  Holders.  The  Company  shall
furnish to each Holder  participating  in any of the foregoing  offerings and to
each underwriter of any such offering,  if any, a signed counterpart,  addressed
to such  Holder or  underwriter,  of (i) an opinion  of counsel to the  Company,
dated  the  effective  date  of  such  registration   statement  (and,  if  such
registration includes an underwritten public offering, an opinion dated the date
of the closing under any underwriting  agreement  related  thereto),  and (ii) a
"cold comfort"  letter dated the effective date of such  registration  statement
(and, if such registration  includes an underwritten  public offering,  a letter
dated the date of the closing under the  underwriting  agreement)  signed by the
independent  public  accountants  who  have  issued a  report  on the  Company's
financial  statements  included  in such  registration  statement,  in each case
covering  substantially  the same  matters  with  respect  to such  registration
statement  (and  the  prospectus  included  therein)  and,  in the  case of such
accountants'  letter,  with  respect  to events  subsequent  to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants'  letters  delivered to  underwriters in underwritten  public
offerings of securities.  The Company shall also deliver promptly to each Holder
participating  in the  offering  requesting  the  correspondence  and  memoranda
described  below and to the managing  underwriter  copies of all  correspondence
between  the  Commission  and the  Company,  its  counsel  or  auditors  and all
memoranda  relating to discussions with the Commission or its staff with respect
to the registration  statement and permit each Holder and underwriter to do such
investigation,  upon  reasonable  advance  notice,  with respect to  information
contained in or omitted from the  registration  statement as it deems reasonably
necessary  to comply with  applicable  securities  laws or rules of the National
Association of Securities  Dealers,  Inc.  ("NASD").  Such  investigation  shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors,  all to such
reasonable  extent and at such reasonable  times and as often as any such Holder
shall reasonably request.

                  5.2.4 Underwriting Agreement.  The Company shall enter into an
underwriting agreement with the managing  underwriter(s) selected by any Holders
whose Securities are being registered pursuant to this Section 5. Such agreement
shall be  reasonably  satisfactory  in form and  substance to the Company,  each
Holder and such managing  underwriters,  and shall contain such representations,
warranties and covenants by the Company and such other terms as are  customarily
contained  in  agreements  of that type used by the  managing  underwriter.  The
Holders  shall  be  parties  to  any  underwriting   agreement  relating  to  an
underwritten sale of their Securities and may, at their option, require that any
or all the  representations,  warranties  and covenants of the Company to or for
the  benefit of such  underwriters  shall also be made to and for the benefit of
such Holders.  Such Holders shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters  except as they
may  relate  to such  Holders,  their  shares  and  their  intended  methods  of
distribution.

                  5.2.5  Documents  to be Delivered  by  Holder(s).  Each of the
Holder(s)  participating in any of the foregoing  offerings shall furnish to the
Company  a  completed  and  executed   questionnaire  provided  by  the  Company
requesting information customarily sought of selling securityholders.
                                       5
<PAGE>
6.       Adjustments.

         6.1  Adjustments  to  Exercise  Price  and  Number of  Securities.  The
Exercise  Price and the number of shares of Common Stock  issuable upon exercise
of this  Purchase  Option  shall be subject to  adjustment  from time to time as
hereinafter set forth:

                  6.1.1 Stock  Dividends - Split-Ups.  If after the date hereof,
and subject to the  provisions of Section 6.2 below,  the number of  outstanding
shares of Common  Stock is increased  by a stock  dividend  payable in shares of
Common Stock or by a split-up of shares of Common Stock or other similar  event,
then,  on the effective  date of such stock  dividend or split up, the number of
shares of Common  Stock  issuable on exercise of each  Purchase  Option shall be
increased in proportion to such increase in outstanding shares.

                  6.1.2  Aggregation  of Shares.  If after the date hereof,  and
subject to the  provisions of Section 6.2, the number of  outstanding  shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event,  then, upon the effective date of
such  consolidation,  combination or  reclassification,  the number of shares of
Common Stock issuable on exercise of each Purchase  Option shall be decreased in
proportion to such decrease in outstanding shares.

                  6.1.3  Adjustments in Exercise  Price.  Whenever the number of
shares of Common Stock  purchasable upon the exercise of this Purchase Option is
adjusted,  as provided in this Section 6.1, the Exercise Price shall be adjusted
(to the nearest cent) by multiplying  such Exercise Price  immediately  prior to
such  adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock  purchasable  upon the exercise of this  Purchase  Option
immediately prior to such adjustment,  and (y) the denominator of which shall be
the number of shares of Common Stock so purchasable immediately thereafter.

                  6.1.4 Replacement of Securities Upon  Reorganization,  etc. If
after the date  hereof any capital  reorganization  or  reclassification  of the
Common  Stock of the  Company,  or  consolidation  or merger of the Company with
another  corporation,  or the sale of all or substantially  all of its assets to
another  corporation  or other  similar  event  shall be  effected,  then,  as a
condition of such  reorganization,  reclassification,  consolidation,  merger or
sale,  lawful  and  fair  provision  shall be made  whereby  the  Holders  shall
thereafter  have the right to purchase and receive,  upon the basis and upon the
terms  and  conditions  specified  in this  Purchase  Option  and in lieu of the
Securities immediately  theretofore purchasable and receivable upon the exercise
of this Purchase Option, such shares of stock,  securities,  or assets as may be
issued or payable with  respect to or in exchange  for the number of  Securities
immediately  theretofore  purchasable  and receivable  upon the exercise of this
Purchase  Option,  had  such  reorganization,  reclassification,  consolidation,
merger or sale not taken place.  In such event,  appropriate  provision shall be
made with  respect  to the  rights  and  interests  of the  Holders  so that the
provisions hereof (including, without limitation,  provisions for adjustments of
the Exercise Price and of the number of securities purchasable upon the exercise
of this Purchase Option) shall thereafter be applicable,  as nearly as may be in
relation to any share of stock,  securities,  or assets  thereafter  deliverable
upon the exercise hereof. The Company shall not effect any such  reorganization,
reclassification,   consolidation,   merger  or  sale   unless,   prior  to  the
consummation  thereof,  the  successor  corporation  (if other than the Company)
resulting from such transaction shall assume by written instrument  executed and
delivered  to the  Holders  the  obligation  to  deliver  such  shares of stock,
securities or assets.
                                       6
<PAGE>
         6.2  Elimination  of  Fractional  Interests.  The Company  shall not be
required to issue certificates  representing  fractions of Common Stock upon the
exercise or transfer of the Purchase  Option,  nor shall it be required to issue
scrip or pay cash in lieu of any  fractional  interests,  it being the intent of
the parties that all  fractional  interests  shall be eliminated by rounding any
fraction up or down to the  nearest  whole  number of shares of Common  Stock or
other securities, properties or rights.

7.  Reservation  and Listing.  The Company  shall at all times  reserve and keep
available out of its authorized  shares of Common Stock,  solely for the purpose
of issuance  upon  exercise of the  Purchase  Options,  such number of shares of
Common Stock or other securities, properties or rights as shall be issuable upon
the exercise  thereof.  The Company  covenants and agrees that, upon exercise of
the Purchase  Options and payment of the Exercise Price therefor,  all shares of
Common Stock and other securities  issuable upon such exercise shall be duly and
validly  issued,  fully paid and  non-assessable  and not subject to  preemptive
rights of any  stockholder.  The Company further  covenants and agrees that upon
exercise of the Warrants  underlying the Shares included in this Purchase Option
and payment of the  exercise  prices  therefor,  all shares of Common  Stock and
other securities  issuable upon such exercises shall be duly and validly issued,
fully  paid and  non-assessable  and not  subject  to  preemptive  rights of any
stockholder.  As long as the Purchase Options shall be outstanding,  the Company
shall use its best efforts to cause the Common Stock  issuable  upon exercise of
the Purchase  Options to be listed  (subject to official  notice of issuance) on
all securities exchanges (or, if applicable on Nasdaq) on which the Common Stock
is then listed and/or quoted.

8.       Certain Notice Requirements.

         8.1 Holder's Right to Receive Notice. Nothing herein shall be construed
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company.  If, however, at any time
prior to the expiration of the Purchase  Options and their exercise,  any of the
events  described  in  Section  8.2 shall  occur,  then,  in one or more of said
events,  the Company  shall give written  notice of such event at least  fifteen
days  prior to the  date  fixed as a  record  date or the  date of  closing  the
transfer  books  for the  determination  of the  stockholders  entitled  to such
dividend,  distribution,  conversion or exchange of  securities or  subscription
rights, or entitled to vote on such proposed dissolution,  liquidation,  winding
up or sale.  Such  notice  shall  specify  such  record  date or the date of the
closing of the transfer books, as the case may be.

         8.2 Events Requiring Notice.  The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company  shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive any dividend or distribution,  (ii)
the Company  shall offer to all the holders of its Common  Stock any  additional
shares  of  capital  stock of the  Company  or  securities  convertible  into or
exchangeable for shares of capital stock of the Company, or any option, right or
warrant to subscribe therefor, or (iii) a dissolution,  liquidation, winding up,
consolidation,  merger  or  reorganization  of the  Company  or a sale of all or
substantially all of its property, assets and business shall be proposed.

         8.3 Notice of Change in Exercise  Price.  The Company  shall,  promptly
after an event  requiring a change in the Exercise Price pursuant to Section 6.1
hereof,  send notice to the Holders of such event and change  ("Price  Notice").
The Price Notice shall  describe the event
                                       7
<PAGE>
causing the change and the method of calculating  same and shall be certified as
being true and accurate by the Company's President and Chief Financial Officer.

         8.4 Transmittal of Notices. All notices,  requests,  consents and other
communications  under this  Purchase  Option  shall be in  writing  and shall be
deemed to have been duly made on the date of delivery if delivered personally or
sent by overnight courier,  with acknowledgment of receipt to the party to which
notice is given,  or on the  fifth day after  mailing  if mailed to the party to
whom notice is to be given,  by registered  or certified  mail,  return  receipt
requested,  postage  prepaid and properly  addressed  as follows:  (i) if to the
registered Holder of the Purchase Option, to the address of such Holder as shown
on the  books  of the  Company,  or (ii)  if to the  Company,  to its  principal
executive office.

9.       Miscellaneous.

         9.1 Amendments. The Company and GKN may from time to time supplement or
amend this Purchase  Option  without the approval of any of the Holders in order
to cure any ambiguity,  to correct or supplement any provision  contained herein
which may be defective or inconsistent  with any other provisions  herein, or to
make any other  provisions in regard to matters or questions  arising  hereunder
which  the  Company  and  GKN  may  deem  necessary  or  desirable.   All  other
modifications  or  amendments  shall  require the  written  consent of the party
against whom enforcement of the modification or amendment is sought.

         9.2 Headings. The headings contained herein are for the sole purpose of
convenience  of reference,  and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Purchase Option.

         9.3 Entire  Agreement.  This  Purchase  Option  constitutes  the entire
agreement of the parties hereto with respect to the subject  matter hereof,  and
supersedes all prior  agreements  and  understandings  of the parties,  oral and
written, with respect to the subject matter hereof.

         9.4 Binding  Effect.  This  Purchase  Option  shall inure solely to the
benefit of and shall be binding  upon,  the  Holder  and the  Company  and their
respective  successors,  legal  representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this  Purchase  Option or any  provisions
herein contained.

         9.5 Governing Law;  Submission to  Jurisdiction.  This Purchase  Option
shall be governed by and construed  and enforced in accordance  with the laws of
the State of New York,  without  giving effect to conflict of laws.  The Company
hereby agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Purchase Option shall be brought and enforced in the
courts  of the State of New York or of the  United  States  of  America  for the
Southern  District of New York, and  irrevocably  submits to such  jurisdiction,
which jurisdiction  shall be exclusive.  The Company hereby waives any objection
to such exclusive  jurisdiction  and that such courts  represent an inconvenient
forum.  Any  process or summons to be served  upon the  Company may be served by
transmitting  a copy thereof by registered  or certified  mail,  return  receipt
requested,  postage prepaid, addressed to it at the address set forth in Section
8 hereof.  Such mailing shall be deemed personal  service and shall be legal and
binding upon the Company in any action,  proceeding or claim. The Company agrees
that the  prevailing  party(ies) in any such action shall be entitled to recover
from the other  party(ies)  all of its reasonable  attorneys'  fees and expenses
relating to such action or proceeding  and/or  incurred in  connection  with the
preparation therefor.
                                       8
<PAGE>
         9.6  Waiver,  Etc.  The  failure of the Company or the Holder to at any
time enforce any of the  provisions of this Purchase  Option shall not be deemed
or construed to be a waiver of any such provision,  nor to in any way affect the
validity of this  Purchase  Option or any  provision  hereof or the right of the
Company or any Holder to  thereafter  enforce  each and every  provision of this
Purchase Option. No waiver of any breach,  non-compliance or  non-fulfillment of
any of the  provisions  of this  Purchase  Option shall be effective  unless set
forth in a written  instrument  executed by the party or parties against whom or
which  enforcement  of such waiver is sought;  and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.

         9.7 Execution in Counterparts.  This Purchase Option may be executed in
one or more  counterparts,  and by the  different  parties  hereto  in  separate
counterparts,  each of which shall be deemed to be an original, but all of which
taken together shall  constitute  one and the same  agreement,  and shall become
effective when one or more  counterparts  has been signed by each of the parties
hereto and delivered to each of the other parties hereto.

         9.8 Exchange  Agreement.  As a condition  of the  Holder's  receipt and
acceptance of this Purchase Option, Holder agrees that, at any time prior to the
complete  exercise  of this  Purchase  Option by Holder,  if the Company and GUN
enter into an agreement ("Exchange Agreement") pursuant to which they agree that
all outstanding  Purchase  Options will be exchanged for securities or cash or a
combination of both, then Holder shall agree to such exchange and become a party
to the Exchange Agreement.

                  IN WITNESS  WHEREOF,  the  Company  has caused  this  Purchase
Option to be signed by its duly  authorized  officer as of the 18th day of June,
1997.

                                             H.E.R.C. PRODUCTS INCORPORATED

                                             By:    /s/ S. Steven Carl
                                                --------------------------------
                                                S. Steven Carl, Chief Executive
                                                Officer
                                       9
<PAGE>
Form to be used to exercise Purchase Option:


H.E.R.C. Products Incorporated
2202 West Lone Cactus Drive, #15
Phoenix, Arizona 85027



Date:___________________,19__

         The  undersigned  hereby  elects  irrevocably  to  exercise  the within
Purchase Option and to purchase ____ Shares of Common Stock,  $.Ol par value, of
H.E.R.C.  Products  Incorporated and hereby makes payment of $_____________  (at
the rate of $_____________  per Share) in payment of the Exercise Price pursuant
thereto.  Please  issue the  Common  Stock as to which this  Purchase  Option is
exercised in accordance with the instructions given below.

                                       or
                                       --

         The  undersigned  hereby  elects  irrevocably  to  exercise  the within
Purchase Option and to purchase ____ Shares of Common Stock,  $.Ol par value, of
H.E.R.C.  Products  Incorporated by surrender of the unexercised  portion of the
within Purchase Option or other security of H.E.R.C. Products Incorporated (with
a "Value" of  $___________  based on a "Market Price" of  $___________ ). Please
issue the Common Stock in accordance with the instructions given below.


                                             -----------------------------------
                                             Signature



                                             -----------------------------------
                                             Signature Guaranteed

                  NOTICE:  The signature to this form must  correspond  with the
name as written upon the face of the within Purchase Option in every  particular
without  alteration  or  enlargement  or  any  change  whatsoever  and  must  be
guaranteed  by a bank,  other than a savings bank, or by a trust company or by a
firm having membership on a registered national securities exchange.


          Please issue securities as follows: Name:
                                                   -----------------------------

                                              Address:
                                                      --------------------------

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

                                              I.D.#:
                                                    ----------------------------
                                       10
<PAGE>
Form to be used to assign Purchase Option:

                                   ASSIGNMENT

         (To be  executed by the  registered  Holder to effect a transfer of the
within Purchase Option):

         FOR VALUE RECEIVED,  _______________________________  does hereby sell,
assign and transfer unto  _______________________________  the right to purchase
_______________________________  Shares of  Common  Stock of  H.E.R.C.  Products
Incorporated ("Company") evidenced by the within Purchase Option and does hereby
authorize the Company to transfer such right on the books of the Company.


Dated: ______________, 19__


                                             -----------------------------------
                                             Signature



         NOTICE:  The  signature to this form must  correspond  with the name as
written upon the face of the within Purchase Option in every particular  without
alteration or enlargement or any change whatsoever.
                                       11
<PAGE>
THE SECURITIES  EVIDENCED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED  ("SECURITIES  ACT"), OR UNDER THE SECURITIES
LAWS OF ANY  STATE  OR OTHER  JURISDICTION.  THE  SECURITIES  MAY NOT BE SOLD OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE  SECURITIES LAWS OF ANY STATE
OR JURISDICTION,  OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE  HEREOF,  AGREES
THAT IT WILL NOT SELL,  TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED.

NOT EXERCISABLE  PRIOR TO JUNE 18, 1997. VOID AFTER 5:00 P.M. EASTERN TIME, JUNE
18, 2002.



                                 PURCHASE OPTION

                                For 25,000 Shares

No. 1997-PO-2                          of

                         H.E.R.C. PRODUCTS INCORPORATED

                            (A Delaware Corporation)

1.       Purchase Option.

                  THIS CERTIFIES THAT, in  consideration  of $16.66 duly paid by
or on behalf of David Nussbaum ("Holder"),  as registered owner of this Purchase
Option, to H.E.R.C.  Products Incorporated  ("Company"),  Holder is entitled, at
any time or from time to time at or after June 18, 1997  ("Commencement  Date"),
and at or before 5:00 p.m., Eastern Time, June 18, 2002 ("Expiration Date"), but
not thereafter,  to subscribe for, purchase and receive, in whole or in part, up
to 25,000  shares  ("Shares")  of the  Company's  common  stock,  $.Ol par value
("Common  Stock").  The Shares  issuable  hereunder are  sometimes  collectively
referred to herein as the "Securities." If the Expiration Date is a day on which
banking  institutions are authorized by law to close,  then this Purchase Option
may  be  exercised  on the  next  succeeding  day  which  is  not  such a day in
accordance with the terms herein. This Purchase Option is initially  exercisable
at $1.3125 per Share purchased;  provided,  however, that upon the occurrence of
any of the  events  specified  in Section 6 hereof,  the rights  granted by this
Purchase  Option,  including the exercise price for the Shares and the number of
shares of Common Stock to be received upon such  exercise,  shall be adjusted as
therein  specified.  The term "Exercise  Price" shall mean the initial  exercise
price or the adjusted  exercise price,  depending on the context.  This Purchase
Option is one of a number of such  options  issued by the Company to GKN and its
designees ("Purchase Options").
<PAGE>
2.       Exercise.

         2.1 Exercise  Form.  In order to exercise  this  Purchase  Option,  the
exercise form attached  hereto must be duly executed and completed and delivered
to the Company,  together with this Purchase  Option and payment of the Exercise
Price for the Securities  being  purchased by wire transfer,  certified check or
official  bank check.  If the  subscription  rights  represented  hereby are not
exercised at or before 5:00 p.m.,  Eastern  time,  on the  Expiration  Date this
Purchase  Option shall become and be void without  further force or effect,  and
all rights represented hereby shall cease and expire.

         2.2 Legend.  Each  certificate for the securities  purchased under this
Purchase  Option shall bear a legend as follows unless such Securities have been
registered under the Securities Act:

                  "The securities  represented by this certificate have not been
                  registered  under  the  Securities  Act of  1933,  as  amended
                  ("Securities Act") or applicable state law. The securities may
                  not be offered for sale, sold or otherwise  transferred except
                  pursuant  to an  effective  registration  statement  under the
                  Securities Act, or pursuant to an exemption from  registration
                  under the Securities Act and applicable state law."

         2.3      Cashless Exercise.

                  2.3.1  Determination of Amount.  In lieu of the payment of the
Exercise Price in the manner  required by Section 2.1, the Holder shall have the
right (but not the  obligation)  to pay the  Exercise  Price for the  Securities
being  purchased with this Purchase Option upon exercise by the surrender to the
Company of any  exercisable  but  unexercised  portion of this  Purchase  Option
having a "Value" (as defined below), at the close of trading on the last trading
day  immediately  preceding the exercise of this Purchase  Option,  equal to the
Exercise  Price  multiplied  by the  number  of shares  of  Common  Stock  being
purchased upon exercise ("Cashless  Exercise Right").  The sum of (a) the number
of shares of Common Stock being  purchased upon exercise of the  non-surrendered
portion of this Purchase Option pursuant to this Cashless Exercise Right and (b)
the number of shares of Common  Stock  underlying  the portion of this  Purchase
Option  being  surrendered,  shall  not in any event be  greater  than the total
number of shares of Common Stock  purchasable upon the complete exercise of this
Purchase  Option if the  Exercise  Price were paid in cash.  The  'Value" of the
portion of the  Purchase  Option  being  surrendered  shall equal the  remainder
derived from  subtracting  (a) the Exercise  Price  multiplied  by the number of
shares of Common  Stock  underlying  the portion of this  Purchase  Option being
surrendered  from (b) the Market Price of the shares of Common Stock  multiplied
by the number of shares of Common Stock  underlying the portion of this Purchase
Option  being  surrendered.  As used herein,  the term  "Market  Price" shall be
deemed to be the last  reported  sale price of the Common  Stock at the close of
trading on the last  trading  day  immediately  preceding  the  exercise of this
Purchase Option,  or, in case no such reported sale takes place on such day, the
average of the last reported  sale prices for the  immediately  preceding  three
trading days, in either case as officially reported by the principal  securities
exchange on which the Common Stock is listed or admitted to trading,  or, if the
Common  Stock is not listed or  admitted to trading on any  national  securities
exchange or if any such  exchange on which the Common Stock is listed is not its
principal trading market,  the last reported sale price as furnished by the NASD
through the Nasdaq National Market or SmallCap  Market,  or, if applicable,  the
OTC Bulletin  Board, or if the Common Stock is not listed or admitted to trading
on the  Nasdaq  National  Market or  SmallCap  Market or OTC  Bulletin  Board or
similar organization, as determined in good faith by
                                       2
<PAGE>
resolution  of  the  Board  of  Directors  of the  Company,  based  on the  best
information  available to it. In addition to the above, the Holder may surrender
any other  security  issued by the  Company,  including  but not limited to unit
purchase options,  warrants, options and common stock in payment of the Exercise
Price, having a value, determined substantially as set forth above.

                  2.3.2 Mechanics of Cashless  Exercise.  The Cashless  Exercise
Right  may be  exercised  by the  Holder  on any  business  day on or after  the
Commencement  Date and not later than the  Expiration  Date by delivering to the
Company  the  Purchase  Option  or other  security  of the  Company  with a duly
executed  exercise  form  attached  hereto with the  cashless  exercise  section
completed.

3.       Transfer.

         3.1  General  Restrictions.  The  registered  Holder  of this  Purchase
Option, by its acceptance hereof,  agrees that it will sell,  transfer or assign
or hypothecate  this Purchase  Option only in compliance with or exemptions from
applicable  securities  laws.  In order to make any  permitted  assignment,  the
Holder must  deliver to the Company the  assignment  form  attached  hereto duly
executed and  completed,  together with this Purchase  Option and payment of all
transfer  taxes,  if any,  payable in  connection  therewith.  The Company shall
immediately  transfer this Purchase Option on the books of the Company and shall
execute and deliver a new Purchase  Option or Purchase  Options of like tenor to
the  appropriate  assignee(s)  expressly  evidencing  the right to purchase  the
aggregate number of Shares purchasable  hereunder or such portion of such number
as shall be contemplated by any such assignment.

         3.2  Restrictions  Imposed  by the Act.  This  Purchase  Option and the
Securities  underlying this Purchase Option shall not be transferred  unless and
until (i) the Company has received the opinion of counsel reasonably  acceptable
to the Company that this Purchase Option or the Securities,  as the case may be,
may be transferred  pursuant to an exemption from registration under the Act and
applicable state law, the availability of which is established to the reasonable
satisfaction of the Company,  or (ii) a registration  statement relating to such
Purchase Option or Securities, as the case may be, has been filed by the Company
and declared effective by the Securities and Exchange Commission ("Commission").

4.       New Purchase Options to be Issued.

         4.1  Partial  Exercise  or  Transfer.  Subject to the  restrictions  in
Section 3 hereof,  this Purchase Option may be exercised or assigned in whole or
in part.  In the event of the exercise or  assignment  hereof in part only,  the
Company shall cause to be delivered to the Holder  without charge a new Purchase
Option of like tenor in the name of the Holder  evidencing the right to purchase
the  aggregate  number of Shares as to which this  Purchase  Option has not been
exercised or assigned.

         4.2  Lost  Certificate.   Upon  receipt  by  the  Company  of  evidence
satisfactory  to it of the  loss,  theft,  destruction  or  mutilation  of  this
Purchase  Option and of  reasonably  satisfactory  indemnification,  the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any such
new  Purchase  Option  executed and  delivered as a result of such loss,  theft,
mutilation or destruction shall constitute a substitute  contractual  obligation
on the part of the Company.
                                       3
<PAGE>
5.       Registration Rights.

         5.1      Registration Requirement.

                  5.1.1  Obligation  to  Register.  The  Company  agrees to file
within  four  months  after the  Commencement  Date,  a  registration  statement
("Registration  Statement")  under  the  Securities  Act  with  the  Commission,
registering  for  resale  the  Securities  and use its best  efforts to have the
Registration  Statement declared  effective by the six-month  anniversary of the
Commencement Date.

                  5.1.2  Terms.  The  Company  shall bear all fees and  expenses
(including  counsel fees and expenses)  attendant to registering  the Securities
under Section 5.1.1 hereof, filing the Registration  Statement with the NASD and
listing the  Securities on Nasdaq and the BSE, but the Holders shall pay any and
all  underwriting  commissions and the expenses of any legal counsel selected by
the Holders to represent them in connection with the sale of the Securities. The
Company  agrees to qualify or  register  the  Securities  in such  states as are
reasonably requested by the Holder(s); provided, however, that in no event shall
the  Company be required to  register  the  Securities  in a state in which such
registration  would cause (i) the Company to be obligated to register or license
to do business in such state, or (ii) the principal  stockholders of the Company
to be  obligated to escrow  their  shares of capital  stock of the Company.  The
Company shall cause any Registration  Statement filed pursuant to this Section 5
to  remain  effective  and  current  for so long as the  Holder  owns any of the
Securities,  of if  earlier,  the  Holder may sell all the  Securities  he holds
pursuant to an exemption from registration under the Act.

         5.2      General Terms.

                  5.2.1   Indemnification.   The  Company  shall  indemnify  the
Holder(s) of the  Securities to be sold pursuant to any  registration  statement
hereunder and each person,  if any, who controls such Holders within the meaning
of  Section 15 of the  Securities  Act and/or  Section  20(a) of the  Securities
Exchange Act of 1934,  as amended  ("Exchange  Act"),  against all loss,  claim,
damage, expense or liability (including all reasonable attorneys' fees and other
expenses  reasonably  incurred in investigating,  preparing or defending against
any  claim  whatsoever  incurred  by the  indemnified  party  in any  action  or
proceeding   between  the  indemnitor  and  indemnified  party  or  between  the
indemnified  party and any third  party or  otherwise)  to which any of them may
become subject under the  Securities  Act, the Exchange Act or any other statute
or at common law or otherwise under the laws of foreign countries,  arising from
such registration statement or based upon any untrue statement or alleged untrue
statement of a material fact contained in (i) any  preliminary  prospectus,  the
registration  statement or prospectus  (as from time to time each may be amended
and supplemented); (ii) in any post-effective amendment or amendments or any new
registration  statement and prospectus in which is included the  Securities;  or
(iii) any application or other document or written  communication  (collectively
called "application")  executed by the Company or based upon written information
furnished by the Company in any  jurisdiction in order to qualify the Securities
under the  securities  laws  thereof  or filed  with the  Commission,  any state
securities  commission  or agency,  Nasdaq or any  securities  exchange;  or the
omission or alleged omission  therefrom of a material fact required to be stated
therein  or  necessary  to  make  the  statements   therein,  in  light  of  the
circumstances under which they were made, not misleading,  unless such statement
or  omission  is  made  in  reliance  upon,  and  in  conformity  with,  written
information  furnished to the Company with respect to the Holders  expressly for
use in a  preliminary  prospectus,  registration  statement  or  prospectus,  or
amendment or supplement thereof, or in any application,  as the case may be. The
Company  agrees  promptly  to  notify  the  Holder  of the  commencement  of any
litigation or
                                       4
<PAGE>
proceedings against the Company or any of its officers, directors or controlling
persons in connection  with the issue and sale or resale of the Securities or in
connection with the registration statement or prospectus.

                  5.2.2 Exercise of Purchase Option.  Nothing  contained in this
Purchase  Option shall be construed as requiring the Holder(s) to exercise their
Purchase  Options  prior to or after  the  initial  filing  of any  registration
statement or the effectiveness thereof.

                  5.2.3  Documents  Delivered  to  Holders.  The  Company  shall
furnish to each Holder  participating  in any of the foregoing  offerings and to
each underwriter of any such offering,  if any, a signed counterpart,  addressed
to such  Holder or  underwriter,  of (i) an opinion  of counsel to the  Company,
dated  the  effective  date  of  such  registration   statement  (and,  if  such
registration includes an underwritten public offering, an opinion dated the date
of the closing under any underwriting  agreement  related  thereto),  and (ii) a
"cold comfort"  letter dated the effective date of such  registration  statement
(and, if such registration  includes an underwritten  public offering,  a letter
dated the date of the closing under the  underwriting  agreement)  signed by the
independent  public  accountants  who  have  issued a  report  on the  Company's
financial  statements  included  in such  registration  statement,  in each case
covering  substantially  the same  matters  with  respect  to such  registration
statement  (and  the  prospectus  included  therein)  and,  in the  case of such
accountants'  letter,  with  respect  to events  subsequent  to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants'  letters  delivered to  underwriters in underwritten  public
offerings of securities.  The Company shall also deliver promptly to each Holder
participating  in the  offering  requesting  the  correspondence  and  memoranda
described  below and to the managing  underwriter  copies of all  correspondence
between  the  Commission  and the  Company,  its  counsel  or  auditors  and all
memoranda  relating to discussions with the Commission or its staff with respect
to the registration  statement and permit each Holder and underwriter to do such
investigation,  upon  reasonable  advance  notice,  with respect to  information
contained in or omitted from the  registration  statement as it deems reasonably
necessary  to comply with  applicable  securities  laws or rules of the National
Association of Securities  Dealers,  Inc.  ("NASD").  Such  investigation  shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors,  all to such
reasonable  extent and at such reasonable  times and as often as any such Holder
shall reasonably request.

                  5.2.4 Underwriting Agreement.  The Company shall enter into an
underwriting agreement with the managing  underwriter(s) selected by any Holders
whose Securities are being registered pursuant to this Section 5. Such agreement
shall be  reasonably  satisfactory  in form and  substance to the Company,  each
Holder and such managing  underwriters,  and shall contain such representations,
warranties and covenants by the Company and such other terms as are  customarily
contained  in  agreements  of that type used by the  managing  underwriter.  The
Holders  shall  be  parties  to  any  underwriting   agreement  relating  to  an
underwritten sale of their Securities and may, at their option, require that any
or all the  representations,  warranties  and covenants of the Company to or for
the  benefit of such  underwriters  shall also be made to and for the benefit of
such Holders.  Such Holders shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters  except as they
may  relate  to such  Holders,  their  shares  and  their  intended  methods  of
distribution.

                  5.2.5  Documents  to be Delivered  by  Holder(s).  Each of the
Holder(s)  participating in any of the foregoing  offerings shall furnish to the
Company  a  completed  and  executed   questionnaire  provided  by  the  Company
requesting information customarily sought of selling securityholders.
                                       5
<PAGE>
6.       Adjustments.

         6.1  Adjustments  to  Exercise  Price  and  Number of  Securities.  The
Exercise  Price and the number of shares of Common Stock  issuable upon exercise
of this  Purchase  Option  shall be subject to  adjustment  from time to time as
hereinafter set forth:

                  6.1.1 Stock  Dividends - Split-Ups.  If after the date hereof,
and subject to the  provisions of Section 6.2 below,  the number of  outstanding
shares of Common  Stock is increased  by a stock  dividend  payable in shares of
Common Stock or by a split-up of shares of Common Stock or other similar  event,
then,  on the effective  date of such stock  dividend or split up, the number of
shares of Common  Stock  issuable on exercise of each  Purchase  Option shall be
increased in proportion to such increase in outstanding shares.

                  6.1.2  Aggregation  of Shares.  If after the date hereof,  and
subject to the  provisions of Section 6.2, the number of  outstanding  shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event,  then, upon the effective date of
such  consolidation,  combination or  reclassification,  the number of shares of
Common Stock issuable on exercise of each Purchase  Option shall be decreased in
proportion to such decrease in outstanding shares.

                  6.1.3  Adjustments in Exercise  Price.  Whenever the number of
shares of Common Stock  purchasable upon the exercise of this Purchase Option is
adjusted,  as provided in this Section 6.1, the Exercise Price shall be adjusted
(to the nearest cent) by multiplying  such Exercise Price  immediately  prior to
such  adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock  purchasable  upon the exercise of this  Purchase  Option
immediately prior to such adjustment,  and (y) the denominator of which shall be
the number of shares of Common Stock so purchasable immediately thereafter.

                  6.1.4 Replacement of Securities Upon  Reorganization,  etc. If
after the date  hereof any capital  reorganization  or  reclassification  of the
Common  Stock of the  Company,  or  consolidation  or merger of the Company with
another  corporation,  or the sale of all or substantially  all of its assets to
another  corporation  or other  similar  event  shall be  effected,  then,  as a
condition of such  reorganization,  reclassification,  consolidation,  merger or
sale,  lawful  and  fair  provision  shall be made  whereby  the  Holders  shall
thereafter  have the right to purchase and receive,  upon the basis and upon the
terms  and  conditions  specified  in this  Purchase  Option  and in lieu of the
Securities immediately  theretofore purchasable and receivable upon the exercise
of this Purchase Option, such shares of stock,  securities,  or assets as may be
issued or payable with  respect to or in exchange  for the number of  Securities
immediately  theretofore  purchasable  and receivable  upon the exercise of this
Purchase  Option,  had  such  reorganization,  reclassification,  consolidation,
merger or sale not taken place.  In such event,  appropriate  provision shall be
made with  respect  to the  rights  and  interests  of the  Holders  so that the
provisions hereof (including, without limitation,  provisions for adjustments of
the Exercise Price and of the number of securities purchasable upon the exercise
of this Purchase Option) shall thereafter be applicable,  as nearly as may be in
relation to any share of stock,  securities,  or assets  thereafter  deliverable
upon the exercise hereof. The Company shall not effect any such  reorganization,
reclassification,   consolidation,   merger  or  sale   unless,   prior  to  the
consummation  thereof,  the  successor  corporation  (if other than the Company)
resulting from such transaction shall assume by written instrument  executed and
delivered  to the  Holders  the  obligation  to  deliver  such  shares of stock,
securities or assets.
                                       6
<PAGE>
         6.2  Elimination  of  Fractional  Interests.  The Company  shall not be
required to issue certificates  representing  fractions of Common Stock upon the
exercise or transfer of the Purchase  Option,  nor shall it be required to issue
scrip or pay cash in lieu of any  fractional  interests,  it being the intent of
the parties that all  fractional  interests  shall be eliminated by rounding any
fraction up or down to the  nearest  whole  number of shares of Common  Stock or
other securities, properties or rights.

7.  Reservation  and Listing.  The Company  shall at all times  reserve and keep
available out of its authorized  shares of Common Stock,  solely for the purpose
of issuance  upon  exercise of the  Purchase  Options,  such number of shares of
Common Stock or other securities, properties or rights as shall be issuable upon
the exercise  thereof.  The Company  covenants and agrees that, upon exercise of
the Purchase  Options and payment of the Exercise Price therefor,  all shares of
Common Stock and other securities  issuable upon such exercise shall be duly and
validly  issued,  fully paid and  non-assessable  and not subject to  preemptive
rights of any  stockholder.  The Company further  covenants and agrees that upon
exercise of the Warrants  underlying the Shares included in this Purchase Option
and payment of the  exercise  prices  therefor,  all shares of Common  Stock and
other securities  issuable upon such exercises shall be duly and validly issued,
fully  paid and  non-assessable  and not  subject  to  preemptive  rights of any
stockholder.  As long as the Purchase Options shall be outstanding,  the Company
shall use its best efforts to cause the Common Stock  issuable  upon exercise of
the Purchase  Options to be listed  (subject to official  notice of issuance) on
all securities exchanges (or, if applicable on Nasdaq) on which the Common Stock
is then listed and/or quoted.

8.       Certain Notice Requirements.

         8.1 Holder's Right to Receive Notice. Nothing herein shall be construed
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company.  If, however, at any time
prior to the expiration of the Purchase  Options and their exercise,  any of the
events  described  in  Section  8.2 shall  occur,  then,  in one or more of said
events,  the Company  shall give written  notice of such event at least  fifteen
days  prior to the  date  fixed as a  record  date or the  date of  closing  the
transfer  books  for the  determination  of the  stockholders  entitled  to such
dividend,  distribution,  conversion or exchange of  securities or  subscription
rights, or entitled to vote on such proposed dissolution,  liquidation,  winding
up or sale.  Such  notice  shall  specify  such  record  date or the date of the
closing of the transfer books, as the case may be.

         8.2 Events Requiring Notice.  The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company  shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive any dividend or distribution,  (ii)
the Company  shall offer to all the holders of its Common  Stock any  additional
shares  of  capital  stock of the  Company  or  securities  convertible  into or
exchangeable for shares of capital stock of the Company, or any option, right or
warrant to subscribe therefor, or (iii) a dissolution,  liquidation, winding up,
consolidation,  merger  or  reorganization  of the  Company  or a sale of all or
substantially all of its property, assets and business shall be proposed.

         8.3 Notice of Change in Exercise  Price.  The Company  shall,  promptly
after an event  requiring a change in the Exercise Price pursuant to Section 6.1
hereof,  send notice to the Holders of such event and change  ("Price  Notice").
The Price Notice shall  describe the event
                                       7
<PAGE>
causing the change and the method of calculating  same and shall be certified as
being true and accurate by the Company's President and Chief Financial Officer.

         8.4 Transmittal of Notices. All notices,  requests,  consents and other
communications  under this  Purchase  Option  shall be in  writing  and shall be
deemed to have been duly made on the date of delivery if delivered personally or
sent by overnight courier,  with acknowledgment of receipt to the party to which
notice is given,  or on the  fifth day after  mailing  if mailed to the party to
whom notice is to be given,  by registered  or certified  mail,  return  receipt
requested,  postage  prepaid and properly  addressed  as follows:  (i) if to the
registered Holder of the Purchase Option, to the address of such Holder as shown
on the  books  of the  Company,  or (ii)  if to the  Company,  to its  principal
executive office.

9.       Miscellaneous.

         9.1 Amendments. The Company and GKN may from time to time supplement or
amend this Purchase  Option  without the approval of any of the Holders in order
to cure any ambiguity,  to correct or supplement any provision  contained herein
which may be defective or inconsistent  with any other provisions  herein, or to
make any other  provisions in regard to matters or questions  arising  hereunder
which  the  Company  and  GKN  may  deem  necessary  or  desirable.   All  other
modifications  or  amendments  shall  require the  written  consent of the party
against whom enforcement of the modification or amendment is sought.

         9.2 Headings. The headings contained herein are for the sole purpose of
convenience  of reference,  and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Purchase Option.

         9.3 Entire  Agreement.  This  Purchase  Option  constitutes  the entire
agreement of the parties hereto with respect to the subject  matter hereof,  and
supersedes all prior  agreements  and  understandings  of the parties,  oral and
written, with respect to the subject matter hereof.

         9.4 Binding  Effect.  This  Purchase  Option  shall inure solely to the
benefit of and shall be binding  upon,  the  Holder  and the  Company  and their
respective  successors,  legal  representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this  Purchase  Option or any  provisions
herein contained.

         9.5 Governing Law;  Submission to  Jurisdiction.  This Purchase  Option
shall be governed by and construed  and enforced in accordance  with the laws of
the State of New York,  without  giving effect to conflict of laws.  The Company
hereby agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Purchase Option shall be brought and enforced in the
courts  of the State of New York or of the  United  States  of  America  for the
Southern  District of New York, and  irrevocably  submits to such  jurisdiction,
which jurisdiction  shall be exclusive.  The Company hereby waives any objection
to such exclusive  jurisdiction  and that such courts  represent an inconvenient
forum.  Any  process or summons to be served  upon the  Company may be served by
transmitting  a copy thereof by registered  or certified  mail,  return  receipt
requested,  postage prepaid, addressed to it at the address set forth in Section
8 hereof.  Such mailing shall be deemed personal  service and shall be legal and
binding upon the Company in any action,  proceeding or claim. The Company agrees
that the  prevailing  party(ies) in any such action shall be entitled to recover
from the other  party(ies)  all of its reasonable  attorneys'  fees and expenses
relating to such action or proceeding  and/or  incurred in  connection  with the
preparation therefor.
                                       8
<PAGE>
         9.6  Waiver,  Etc.  The  failure of the Company or the Holder to at any
time enforce any of the  provisions of this Purchase  Option shall not be deemed
or construed to be a waiver of any such provision,  nor to in any way affect the
validity of this  Purchase  Option or any  provision  hereof or the right of the
Company or any Holder to  thereafter  enforce  each and every  provision of this
Purchase Option. No waiver of any breach,  non-compliance or  non-fulfillment of
any of the  provisions  of this  Purchase  Option shall be effective  unless set
forth in a written  instrument  executed by the party or parties against whom or
which  enforcement  of such waiver is sought;  and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.

         9.7 Execution in Counterparts.  This Purchase Option may be executed in
one or more  counterparts,  and by the  different  parties  hereto  in  separate
counterparts,  each of which shall be deemed to be an original, but all of which
taken together shall  constitute  one and the same  agreement,  and shall become
effective when one or more  counterparts  has been signed by each of the parties
hereto and delivered to each of the other parties hereto.

         9.8 Exchange  Agreement.  As a condition  of the  Holder's  receipt and
acceptance of this Purchase Option, Holder agrees that, at any time prior to the
complete  exercise  of this  Purchase  Option by Holder,  if the Company and GUN
enter into an agreement ("Exchange Agreement") pursuant to which they agree that
all outstanding  Purchase  Options will be exchanged for securities or cash or a
combination of both, then Holder shall agree to such exchange and become a party
to the Exchange Agreement.

                  IN WITNESS  WHEREOF,  the  Company  has caused  this  Purchase
Option to be signed by its duly  authorized  officer as of the 18th day of June,
1997.

                                             H.E.R.C. PRODUCTS INCORPORATED

                                             By:    /s/ S. Steven Carl
                                                --------------------------------
                                                S. Steven Carl, Chief Executive
                                                Officer
                                       9
<PAGE>
Form to be used to exercise Purchase Option:


H.E.R.C. Products Incorporated
2202 West Lone Cactus Drive, #15
Phoenix, Arizona 85027



Date:___________________,19__

         The  undersigned  hereby  elects  irrevocably  to  exercise  the within
Purchase Option and to purchase ____ Shares of Common Stock,  $.Ol par value, of
H.E.R.C.  Products  Incorporated and hereby makes payment of $_____________  (at
the rate of $_____________  per Share) in payment of the Exercise Price pursuant
thereto.  Please  issue the  Common  Stock as to which this  Purchase  Option is
exercised in accordance with the instructions given below.

                                       or
                                       --

         The  undersigned  hereby  elects  irrevocably  to  exercise  the within
Purchase Option and to purchase ____ Shares of Common Stock,  $.Ol par value, of
H.E.R.C.  Products  Incorporated by surrender of the unexercised  portion of the
within Purchase Option or other security of H.E.R.C. Products Incorporated (with
a "Value" of  $___________  based on a "Market Price" of  $___________ ). Please
issue the Common Stock in accordance with the instructions given below.


                                             -----------------------------------
                                             Signature



                                             -----------------------------------
                                             Signature Guaranteed

                  NOTICE:  The signature to this form must  correspond  with the
name as written upon the face of the within Purchase Option in every  particular
without  alteration  or  enlargement  or  any  change  whatsoever  and  must  be
guaranteed  by a bank,  other than a savings bank, or by a trust company or by a
firm having membership on a registered national securities exchange.


          Please issue securities as follows: Name:
                                                   -----------------------------

                                              Address:
                                                      --------------------------

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

                                              I.D.#:
                                                    ----------------------------
                                       10
<PAGE>
Form to be used to assign Purchase Option:

                                   ASSIGNMENT

         (To be  executed by the  registered  Holder to effect a transfer of the
within Purchase Option):

         FOR VALUE RECEIVED,  _______________________________  does hereby sell,
assign and transfer unto  _______________________________  the right to purchase
_______________________________  Shares of  Common  Stock of  H.E.R.C.  Products
Incorporated ("Company") evidenced by the within Purchase Option and does hereby
authorize the Company to transfer such right on the books of the Company.


Dated: ______________, 19__


                                             -----------------------------------
                                             Signature



         NOTICE:  The  signature to this form must  correspond  with the name as
written upon the face of the within Purchase Option in every particular  without
alteration or enlargement or any change whatsoever.
                                       11
<PAGE>
THE SECURITIES  EVIDENCED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED  ("SECURITIES  ACT"), OR UNDER THE SECURITIES
LAWS OF ANY  STATE  OR OTHER  JURISDICTION.  THE  SECURITIES  MAY NOT BE SOLD OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE  SECURITIES LAWS OF ANY STATE
OR JURISDICTION,  OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE  HEREOF,  AGREES
THAT IT WILL NOT SELL,  TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED.

NOT EXERCISABLE  PRIOR TO JUNE 18, 1997. VOID AFTER 5:00 P.M. EASTERN TIME, JUNE
18, 2002.



                                 PURCHASE OPTION

                                For 25,000 Shares

No. 1997-PO-3                          of

                         H.E.R.C. PRODUCTS INCORPORATED

                            (A Delaware Corporation)

1.       Purchase Option.

                  THIS CERTIFIES THAT, in  consideration  of $16.66 duly paid by
or on behalf of Roger Gladstone ("Holder"), as registered owner of this Purchase
Option, to H.E.R.C.  Products Incorporated  ("Company"),  Holder is entitled, at
any time or from time to time at or after June 18, 1997  ("Commencement  Date"),
and at or before 5:00 p.m., Eastern Time, June 18, 2002 ("Expiration Date"), but
not thereafter,  to subscribe for, purchase and receive, in whole or in part, up
to 25,000  shares  ("Shares")  of the  Company's  common  stock,  $.Ol par value
("Common  Stock").  The Shares  issuable  hereunder are  sometimes  collectively
referred to herein as the "Securities." If the Expiration Date is a day on which
banking  institutions are authorized by law to close,  then this Purchase Option
may  be  exercised  on the  next  succeeding  day  which  is  not  such a day in
accordance with the terms herein. This Purchase Option is initially  exercisable
at $1.3125 per Share purchased;  provided,  however, that upon the occurrence of
any of the  events  specified  in Section 6 hereof,  the rights  granted by this
Purchase  Option,  including the exercise price for the Shares and the number of
shares of Common Stock to be received upon such  exercise,  shall be adjusted as
therein  specified.  The term "Exercise  Price" shall mean the initial  exercise
price or the adjusted  exercise price,  depending on the context.  This Purchase
Option is one of a number of such  options  issued by the Company to GKN and its
designees ("Purchase Options").
<PAGE>
2.       Exercise.

         2.1 Exercise  Form.  In order to exercise  this  Purchase  Option,  the
exercise form attached  hereto must be duly executed and completed and delivered
to the Company,  together with this Purchase  Option and payment of the Exercise
Price for the Securities  being  purchased by wire transfer,  certified check or
official  bank check.  If the  subscription  rights  represented  hereby are not
exercised at or before 5:00 p.m.,  Eastern  time,  on the  Expiration  Date this
Purchase  Option shall become and be void without  further force or effect,  and
all rights represented hereby shall cease and expire.

         2.2 Legend.  Each  certificate for the securities  purchased under this
Purchase  Option shall bear a legend as follows unless such Securities have been
registered under the Securities Act:

                  "The securities  represented by this certificate have not been
                  registered  under  the  Securities  Act of  1933,  as  amended
                  ("Securities Act") or applicable state law. The securities may
                  not be offered for sale, sold or otherwise  transferred except
                  pursuant  to an  effective  registration  statement  under the
                  Securities Act, or pursuant to an exemption from  registration
                  under the Securities Act and applicable state law."

         2.3      Cashless Exercise.

                  2.3.1  Determination of Amount.  In lieu of the payment of the
Exercise Price in the manner  required by Section 2.1, the Holder shall have the
right (but not the  obligation)  to pay the  Exercise  Price for the  Securities
being  purchased with this Purchase Option upon exercise by the surrender to the
Company of any  exercisable  but  unexercised  portion of this  Purchase  Option
having a "Value" (as defined below), at the close of trading on the last trading
day  immediately  preceding the exercise of this Purchase  Option,  equal to the
Exercise  Price  multiplied  by the  number  of shares  of  Common  Stock  being
purchased upon exercise ("Cashless  Exercise Right").  The sum of (a) the number
of shares of Common Stock being  purchased upon exercise of the  non-surrendered
portion of this Purchase Option pursuant to this Cashless Exercise Right and (b)
the number of shares of Common  Stock  underlying  the portion of this  Purchase
Option  being  surrendered,  shall  not in any event be  greater  than the total
number of shares of Common Stock  purchasable upon the complete exercise of this
Purchase  Option if the  Exercise  Price were paid in cash.  The  'Value" of the
portion of the  Purchase  Option  being  surrendered  shall equal the  remainder
derived from  subtracting  (a) the Exercise  Price  multiplied  by the number of
shares of Common  Stock  underlying  the portion of this  Purchase  Option being
surrendered  from (b) the Market Price of the shares of Common Stock  multiplied
by the number of shares of Common Stock  underlying the portion of this Purchase
Option  being  surrendered.  As used herein,  the term  "Market  Price" shall be
deemed to be the last  reported  sale price of the Common  Stock at the close of
trading on the last  trading  day  immediately  preceding  the  exercise of this
Purchase Option,  or, in case no such reported sale takes place on such day, the
average of the last reported  sale prices for the  immediately  preceding  three
trading days, in either case as officially reported by the principal  securities
exchange on which the Common Stock is listed or admitted to trading,  or, if the
Common  Stock is not listed or  admitted to trading on any  national  securities
exchange or if any such  exchange on which the Common Stock is listed is not its
principal trading market,  the last reported sale price as furnished by the NASD
through the Nasdaq National Market or SmallCap  Market,  or, if applicable,  the
OTC Bulletin  Board, or if the Common Stock is not listed or admitted to trading
on the  Nasdaq  National  Market or  SmallCap  Market or OTC  Bulletin  Board or
similar organization, as determined in good faith by
                                       2
<PAGE>
resolution  of  the  Board  of  Directors  of the  Company,  based  on the  best
information  available to it. In addition to the above, the Holder may surrender
any other  security  issued by the  Company,  including  but not limited to unit
purchase options,  warrants, options and common stock in payment of the Exercise
Price, having a value, determined substantially as set forth above.

                  2.3.2 Mechanics of Cashless  Exercise.  The Cashless  Exercise
Right  may be  exercised  by the  Holder  on any  business  day on or after  the
Commencement  Date and not later than the  Expiration  Date by delivering to the
Company  the  Purchase  Option  or other  security  of the  Company  with a duly
executed  exercise  form  attached  hereto with the  cashless  exercise  section
completed.

3.       Transfer.

         3.1  General  Restrictions.  The  registered  Holder  of this  Purchase
Option, by its acceptance hereof,  agrees that it will sell,  transfer or assign
or hypothecate  this Purchase  Option only in compliance with or exemptions from
applicable  securities  laws.  In order to make any  permitted  assignment,  the
Holder must  deliver to the Company the  assignment  form  attached  hereto duly
executed and  completed,  together with this Purchase  Option and payment of all
transfer  taxes,  if any,  payable in  connection  therewith.  The Company shall
immediately  transfer this Purchase Option on the books of the Company and shall
execute and deliver a new Purchase  Option or Purchase  Options of like tenor to
the  appropriate  assignee(s)  expressly  evidencing  the right to purchase  the
aggregate number of Shares purchasable  hereunder or such portion of such number
as shall be contemplated by any such assignment.

         3.2  Restrictions  Imposed  by the Act.  This  Purchase  Option and the
Securities  underlying this Purchase Option shall not be transferred  unless and
until (i) the Company has received the opinion of counsel reasonably  acceptable
to the Company that this Purchase Option or the Securities,  as the case may be,
may be transferred  pursuant to an exemption from registration under the Act and
applicable state law, the availability of which is established to the reasonable
satisfaction of the Company,  or (ii) a registration  statement relating to such
Purchase Option or Securities, as the case may be, has been filed by the Company
and declared effective by the Securities and Exchange Commission ("Commission").

4.       New Purchase Options to be Issued.

         4.1  Partial  Exercise  or  Transfer.  Subject to the  restrictions  in
Section 3 hereof,  this Purchase Option may be exercised or assigned in whole or
in part.  In the event of the exercise or  assignment  hereof in part only,  the
Company shall cause to be delivered to the Holder  without charge a new Purchase
Option of like tenor in the name of the Holder  evidencing the right to purchase
the  aggregate  number of Shares as to which this  Purchase  Option has not been
exercised or assigned.

         4.2  Lost  Certificate.   Upon  receipt  by  the  Company  of  evidence
satisfactory  to it of the  loss,  theft,  destruction  or  mutilation  of  this
Purchase  Option and of  reasonably  satisfactory  indemnification,  the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any such
new  Purchase  Option  executed and  delivered as a result of such loss,  theft,
mutilation or destruction shall constitute a substitute  contractual  obligation
on the part of the Company.
                                       3
<PAGE>
5.       Registration Rights.

         5.1      Registration Requirement.

                  5.1.1  Obligation  to  Register.  The  Company  agrees to file
within  four  months  after the  Commencement  Date,  a  registration  statement
("Registration  Statement")  under  the  Securities  Act  with  the  Commission,
registering  for  resale  the  Securities  and use its best  efforts to have the
Registration  Statement declared  effective by the six-month  anniversary of the
Commencement Date.

                  5.1.2  Terms.  The  Company  shall bear all fees and  expenses
(including  counsel fees and expenses)  attendant to registering  the Securities
under Section 5.1.1 hereof, filing the Registration  Statement with the NASD and
listing the  Securities on Nasdaq and the BSE, but the Holders shall pay any and
all  underwriting  commissions and the expenses of any legal counsel selected by
the Holders to represent them in connection with the sale of the Securities. The
Company  agrees to qualify or  register  the  Securities  in such  states as are
reasonably requested by the Holder(s); provided, however, that in no event shall
the  Company be required to  register  the  Securities  in a state in which such
registration  would cause (i) the Company to be obligated to register or license
to do business in such state, or (ii) the principal  stockholders of the Company
to be  obligated to escrow  their  shares of capital  stock of the Company.  The
Company shall cause any Registration  Statement filed pursuant to this Section 5
to  remain  effective  and  current  for so long as the  Holder  owns any of the
Securities,  of if  earlier,  the  Holder may sell all the  Securities  he holds
pursuant to an exemption from registration under the Act.

         5.2      General Terms.

                  5.2.1   Indemnification.   The  Company  shall  indemnify  the
Holder(s) of the  Securities to be sold pursuant to any  registration  statement
hereunder and each person,  if any, who controls such Holders within the meaning
of  Section 15 of the  Securities  Act and/or  Section  20(a) of the  Securities
Exchange Act of 1934,  as amended  ("Exchange  Act"),  against all loss,  claim,
damage, expense or liability (including all reasonable attorneys' fees and other
expenses  reasonably  incurred in investigating,  preparing or defending against
any  claim  whatsoever  incurred  by the  indemnified  party  in any  action  or
proceeding   between  the  indemnitor  and  indemnified  party  or  between  the
indemnified  party and any third  party or  otherwise)  to which any of them may
become subject under the  Securities  Act, the Exchange Act or any other statute
or at common law or otherwise under the laws of foreign countries,  arising from
such registration statement or based upon any untrue statement or alleged untrue
statement of a material fact contained in (i) any  preliminary  prospectus,  the
registration  statement or prospectus  (as from time to time each may be amended
and supplemented); (ii) in any post-effective amendment or amendments or any new
registration  statement and prospectus in which is included the  Securities;  or
(iii) any application or other document or written  communication  (collectively
called "application")  executed by the Company or based upon written information
furnished by the Company in any  jurisdiction in order to qualify the Securities
under the  securities  laws  thereof  or filed  with the  Commission,  any state
securities  commission  or agency,  Nasdaq or any  securities  exchange;  or the
omission or alleged omission  therefrom of a material fact required to be stated
therein  or  necessary  to  make  the  statements   therein,  in  light  of  the
circumstances under which they were made, not misleading,  unless such statement
or  omission  is  made  in  reliance  upon,  and  in  conformity  with,  written
information  furnished to the Company with respect to the Holders  expressly for
use in a  preliminary  prospectus,  registration  statement  or  prospectus,  or
amendment or supplement thereof, or in any application,  as the case may be. The
Company  agrees  promptly  to  notify  the  Holder  of the  commencement  of any
litigation or
                                       4
<PAGE>
proceedings against the Company or any of its officers, directors or controlling
persons in connection  with the issue and sale or resale of the Securities or in
connection with the registration statement or prospectus.

                  5.2.2 Exercise of Purchase Option.  Nothing  contained in this
Purchase  Option shall be construed as requiring the Holder(s) to exercise their
Purchase  Options  prior to or after  the  initial  filing  of any  registration
statement or the effectiveness thereof.

                  5.2.3  Documents  Delivered  to  Holders.  The  Company  shall
furnish to each Holder  participating  in any of the foregoing  offerings and to
each underwriter of any such offering,  if any, a signed counterpart,  addressed
to such  Holder or  underwriter,  of (i) an opinion  of counsel to the  Company,
dated  the  effective  date  of  such  registration   statement  (and,  if  such
registration includes an underwritten public offering, an opinion dated the date
of the closing under any underwriting  agreement  related  thereto),  and (ii) a
"cold comfort"  letter dated the effective date of such  registration  statement
(and, if such registration  includes an underwritten  public offering,  a letter
dated the date of the closing under the  underwriting  agreement)  signed by the
independent  public  accountants  who  have  issued a  report  on the  Company's
financial  statements  included  in such  registration  statement,  in each case
covering  substantially  the same  matters  with  respect  to such  registration
statement  (and  the  prospectus  included  therein)  and,  in the  case of such
accountants'  letter,  with  respect  to events  subsequent  to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants'  letters  delivered to  underwriters in underwritten  public
offerings of securities.  The Company shall also deliver promptly to each Holder
participating  in the  offering  requesting  the  correspondence  and  memoranda
described  below and to the managing  underwriter  copies of all  correspondence
between  the  Commission  and the  Company,  its  counsel  or  auditors  and all
memoranda  relating to discussions with the Commission or its staff with respect
to the registration  statement and permit each Holder and underwriter to do such
investigation,  upon  reasonable  advance  notice,  with respect to  information
contained in or omitted from the  registration  statement as it deems reasonably
necessary  to comply with  applicable  securities  laws or rules of the National
Association of Securities  Dealers,  Inc.  ("NASD").  Such  investigation  shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors,  all to such
reasonable  extent and at such reasonable  times and as often as any such Holder
shall reasonably request.

                  5.2.4 Underwriting Agreement.  The Company shall enter into an
underwriting agreement with the managing  underwriter(s) selected by any Holders
whose Securities are being registered pursuant to this Section 5. Such agreement
shall be  reasonably  satisfactory  in form and  substance to the Company,  each
Holder and such managing  underwriters,  and shall contain such representations,
warranties and covenants by the Company and such other terms as are  customarily
contained  in  agreements  of that type used by the  managing  underwriter.  The
Holders  shall  be  parties  to  any  underwriting   agreement  relating  to  an
underwritten sale of their Securities and may, at their option, require that any
or all the  representations,  warranties  and covenants of the Company to or for
the  benefit of such  underwriters  shall also be made to and for the benefit of
such Holders.  Such Holders shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters  except as they
may  relate  to such  Holders,  their  shares  and  their  intended  methods  of
distribution.

                  5.2.5  Documents  to be Delivered  by  Holder(s).  Each of the
Holder(s)  participating in any of the foregoing  offerings shall furnish to the
Company  a  completed  and  executed   questionnaire  provided  by  the  Company
requesting information customarily sought of selling securityholders.
                                       5
<PAGE>
6.       Adjustments.

         6.1  Adjustments  to  Exercise  Price  and  Number of  Securities.  The
Exercise  Price and the number of shares of Common Stock  issuable upon exercise
of this  Purchase  Option  shall be subject to  adjustment  from time to time as
hereinafter set forth:

                  6.1.1 Stock  Dividends - Split-Ups.  If after the date hereof,
and subject to the  provisions of Section 6.2 below,  the number of  outstanding
shares of Common  Stock is increased  by a stock  dividend  payable in shares of
Common Stock or by a split-up of shares of Common Stock or other similar  event,
then,  on the effective  date of such stock  dividend or split up, the number of
shares of Common  Stock  issuable on exercise of each  Purchase  Option shall be
increased in proportion to such increase in outstanding shares.

                  6.1.2  Aggregation  of Shares.  If after the date hereof,  and
subject to the  provisions of Section 6.2, the number of  outstanding  shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event,  then, upon the effective date of
such  consolidation,  combination or  reclassification,  the number of shares of
Common Stock issuable on exercise of each Purchase  Option shall be decreased in
proportion to such decrease in outstanding shares.

                  6.1.3  Adjustments in Exercise  Price.  Whenever the number of
shares of Common Stock  purchasable upon the exercise of this Purchase Option is
adjusted,  as provided in this Section 6.1, the Exercise Price shall be adjusted
(to the nearest cent) by multiplying  such Exercise Price  immediately  prior to
such  adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock  purchasable  upon the exercise of this  Purchase  Option
immediately prior to such adjustment,  and (y) the denominator of which shall be
the number of shares of Common Stock so purchasable immediately thereafter.

                  6.1.4 Replacement of Securities Upon  Reorganization,  etc. If
after the date  hereof any capital  reorganization  or  reclassification  of the
Common  Stock of the  Company,  or  consolidation  or merger of the Company with
another  corporation,  or the sale of all or substantially  all of its assets to
another  corporation  or other  similar  event  shall be  effected,  then,  as a
condition of such  reorganization,  reclassification,  consolidation,  merger or
sale,  lawful  and  fair  provision  shall be made  whereby  the  Holders  shall
thereafter  have the right to purchase and receive,  upon the basis and upon the
terms  and  conditions  specified  in this  Purchase  Option  and in lieu of the
Securities immediately  theretofore purchasable and receivable upon the exercise
of this Purchase Option, such shares of stock,  securities,  or assets as may be
issued or payable with  respect to or in exchange  for the number of  Securities
immediately  theretofore  purchasable  and receivable  upon the exercise of this
Purchase  Option,  had  such  reorganization,  reclassification,  consolidation,
merger or sale not taken place.  In such event,  appropriate  provision shall be
made with  respect  to the  rights  and  interests  of the  Holders  so that the
provisions hereof (including, without limitation,  provisions for adjustments of
the Exercise Price and of the number of securities purchasable upon the exercise
of this Purchase Option) shall thereafter be applicable,  as nearly as may be in
relation to any share of stock,  securities,  or assets  thereafter  deliverable
upon the exercise hereof. The Company shall not effect any such  reorganization,
reclassification,   consolidation,   merger  or  sale   unless,   prior  to  the
consummation  thereof,  the  successor  corporation  (if other than the Company)
resulting from such transaction shall assume by written instrument  executed and
delivered  to the  Holders  the  obligation  to  deliver  such  shares of stock,
securities or assets.
                                       6
<PAGE>
         6.2  Elimination  of  Fractional  Interests.  The Company  shall not be
required to issue certificates  representing  fractions of Common Stock upon the
exercise or transfer of the Purchase  Option,  nor shall it be required to issue
scrip or pay cash in lieu of any  fractional  interests,  it being the intent of
the parties that all  fractional  interests  shall be eliminated by rounding any
fraction up or down to the  nearest  whole  number of shares of Common  Stock or
other securities, properties or rights.

7.  Reservation  and Listing.  The Company  shall at all times  reserve and keep
available out of its authorized  shares of Common Stock,  solely for the purpose
of issuance  upon  exercise of the  Purchase  Options,  such number of shares of
Common Stock or other securities, properties or rights as shall be issuable upon
the exercise  thereof.  The Company  covenants and agrees that, upon exercise of
the Purchase  Options and payment of the Exercise Price therefor,  all shares of
Common Stock and other securities  issuable upon such exercise shall be duly and
validly  issued,  fully paid and  non-assessable  and not subject to  preemptive
rights of any  stockholder.  The Company further  covenants and agrees that upon
exercise of the Warrants  underlying the Shares included in this Purchase Option
and payment of the  exercise  prices  therefor,  all shares of Common  Stock and
other securities  issuable upon such exercises shall be duly and validly issued,
fully  paid and  non-assessable  and not  subject  to  preemptive  rights of any
stockholder.  As long as the Purchase Options shall be outstanding,  the Company
shall use its best efforts to cause the Common Stock  issuable  upon exercise of
the Purchase  Options to be listed  (subject to official  notice of issuance) on
all securities exchanges (or, if applicable on Nasdaq) on which the Common Stock
is then listed and/or quoted.

8.       Certain Notice Requirements.

         8.1 Holder's Right to Receive Notice. Nothing herein shall be construed
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company.  If, however, at any time
prior to the expiration of the Purchase  Options and their exercise,  any of the
events  described  in  Section  8.2 shall  occur,  then,  in one or more of said
events,  the Company  shall give written  notice of such event at least  fifteen
days  prior to the  date  fixed as a  record  date or the  date of  closing  the
transfer  books  for the  determination  of the  stockholders  entitled  to such
dividend,  distribution,  conversion or exchange of  securities or  subscription
rights, or entitled to vote on such proposed dissolution,  liquidation,  winding
up or sale.  Such  notice  shall  specify  such  record  date or the date of the
closing of the transfer books, as the case may be.

         8.2 Events Requiring Notice.  The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company  shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive any dividend or distribution,  (ii)
the Company  shall offer to all the holders of its Common  Stock any  additional
shares  of  capital  stock of the  Company  or  securities  convertible  into or
exchangeable for shares of capital stock of the Company, or any option, right or
warrant to subscribe therefor, or (iii) a dissolution,  liquidation, winding up,
consolidation,  merger  or  reorganization  of the  Company  or a sale of all or
substantially all of its property, assets and business shall be proposed.

         8.3 Notice of Change in Exercise  Price.  The Company  shall,  promptly
after an event  requiring a change in the Exercise Price pursuant to Section 6.1
hereof,  send notice to the Holders of such event and change  ("Price  Notice").
The Price Notice shall  describe the event
                                       7
<PAGE>
causing the change and the method of calculating  same and shall be certified as
being true and accurate by the Company's President and Chief Financial Officer.

         8.4 Transmittal of Notices. All notices,  requests,  consents and other
communications  under this  Purchase  Option  shall be in  writing  and shall be
deemed to have been duly made on the date of delivery if delivered personally or
sent by overnight courier,  with acknowledgment of receipt to the party to which
notice is given,  or on the  fifth day after  mailing  if mailed to the party to
whom notice is to be given,  by registered  or certified  mail,  return  receipt
requested,  postage  prepaid and properly  addressed  as follows:  (i) if to the
registered Holder of the Purchase Option, to the address of such Holder as shown
on the  books  of the  Company,  or (ii)  if to the  Company,  to its  principal
executive office.

9.       Miscellaneous.

         9.1 Amendments. The Company and GKN may from time to time supplement or
amend this Purchase  Option  without the approval of any of the Holders in order
to cure any ambiguity,  to correct or supplement any provision  contained herein
which may be defective or inconsistent  with any other provisions  herein, or to
make any other  provisions in regard to matters or questions  arising  hereunder
which  the  Company  and  GKN  may  deem  necessary  or  desirable.   All  other
modifications  or  amendments  shall  require the  written  consent of the party
against whom enforcement of the modification or amendment is sought.

         9.2 Headings. The headings contained herein are for the sole purpose of
convenience  of reference,  and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Purchase Option.

         9.3 Entire  Agreement.  This  Purchase  Option  constitutes  the entire
agreement of the parties hereto with respect to the subject  matter hereof,  and
supersedes all prior  agreements  and  understandings  of the parties,  oral and
written, with respect to the subject matter hereof.

         9.4 Binding  Effect.  This  Purchase  Option  shall inure solely to the
benefit of and shall be binding  upon,  the  Holder  and the  Company  and their
respective  successors,  legal  representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this  Purchase  Option or any  provisions
herein contained.

         9.5 Governing Law;  Submission to  Jurisdiction.  This Purchase  Option
shall be governed by and construed  and enforced in accordance  with the laws of
the State of New York,  without  giving effect to conflict of laws.  The Company
hereby agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Purchase Option shall be brought and enforced in the
courts  of the State of New York or of the  United  States  of  America  for the
Southern  District of New York, and  irrevocably  submits to such  jurisdiction,
which jurisdiction  shall be exclusive.  The Company hereby waives any objection
to such exclusive  jurisdiction  and that such courts  represent an inconvenient
forum.  Any  process or summons to be served  upon the  Company may be served by
transmitting  a copy thereof by registered  or certified  mail,  return  receipt
requested,  postage prepaid, addressed to it at the address set forth in Section
8 hereof.  Such mailing shall be deemed personal  service and shall be legal and
binding upon the Company in any action,  proceeding or claim. The Company agrees
that the  prevailing  party(ies) in any such action shall be entitled to recover
from the other  party(ies)  all of its reasonable  attorneys'  fees and expenses
relating to such action or proceeding  and/or  incurred in  connection  with the
preparation therefor.
                                       8
<PAGE>
         9.6  Waiver,  Etc.  The  failure of the Company or the Holder to at any
time enforce any of the  provisions of this Purchase  Option shall not be deemed
or construed to be a waiver of any such provision,  nor to in any way affect the
validity of this  Purchase  Option or any  provision  hereof or the right of the
Company or any Holder to  thereafter  enforce  each and every  provision of this
Purchase Option. No waiver of any breach,  non-compliance or  non-fulfillment of
any of the  provisions  of this  Purchase  Option shall be effective  unless set
forth in a written  instrument  executed by the party or parties against whom or
which  enforcement  of such waiver is sought;  and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.

         9.7 Execution in Counterparts.  This Purchase Option may be executed in
one or more  counterparts,  and by the  different  parties  hereto  in  separate
counterparts,  each of which shall be deemed to be an original, but all of which
taken together shall  constitute  one and the same  agreement,  and shall become
effective when one or more  counterparts  has been signed by each of the parties
hereto and delivered to each of the other parties hereto.

         9.8 Exchange  Agreement.  As a condition  of the  Holder's  receipt and
acceptance of this Purchase Option, Holder agrees that, at any time prior to the
complete  exercise  of this  Purchase  Option by Holder,  if the Company and GUN
enter into an agreement ("Exchange Agreement") pursuant to which they agree that
all outstanding  Purchase  Options will be exchanged for securities or cash or a
combination of both, then Holder shall agree to such exchange and become a party
to the Exchange Agreement.

                  IN WITNESS  WHEREOF,  the  Company  has caused  this  Purchase
Option to be signed by its duly  authorized  officer as of the 18th day of June,
1997.

                                             H.E.R.C. PRODUCTS INCORPORATED

                                             By:    /s/ S. Steven Carl
                                                --------------------------------
                                                S. Steven Carl, Chief Executive
                                                Officer
                                       9
<PAGE>
Form to be used to exercise Purchase Option:


H.E.R.C. Products Incorporated
2202 West Lone Cactus Drive, #15
Phoenix, Arizona 85027



Date:___________________,19__

         The  undersigned  hereby  elects  irrevocably  to  exercise  the within
Purchase Option and to purchase ____ Shares of Common Stock,  $.Ol par value, of
H.E.R.C.  Products  Incorporated and hereby makes payment of $_____________  (at
the rate of $_____________  per Share) in payment of the Exercise Price pursuant
thereto.  Please  issue the  Common  Stock as to which this  Purchase  Option is
exercised in accordance with the instructions given below.

                                       or
                                       --

         The  undersigned  hereby  elects  irrevocably  to  exercise  the within
Purchase Option and to purchase ____ Shares of Common Stock,  $.Ol par value, of
H.E.R.C.  Products  Incorporated by surrender of the unexercised  portion of the
within Purchase Option or other security of H.E.R.C. Products Incorporated (with
a "Value" of  $___________  based on a "Market Price" of  $___________ ). Please
issue the Common Stock in accordance with the instructions given below.


                                             -----------------------------------
                                             Signature



                                             -----------------------------------
                                             Signature Guaranteed

                  NOTICE:  The signature to this form must  correspond  with the
name as written upon the face of the within Purchase Option in every  particular
without  alteration  or  enlargement  or  any  change  whatsoever  and  must  be
guaranteed  by a bank,  other than a savings bank, or by a trust company or by a
firm having membership on a registered national securities exchange.


          Please issue securities as follows: Name:
                                                   -----------------------------

                                              Address:
                                                      --------------------------

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

                                              I.D.#:
                                                    ----------------------------
                                       10
<PAGE>
Form to be used to assign Purchase Option:

                                   ASSIGNMENT

         (To be  executed by the  registered  Holder to effect a transfer of the
within Purchase Option):

         FOR VALUE RECEIVED,  _______________________________  does hereby sell,
assign and transfer unto  _______________________________  the right to purchase
_______________________________  Shares of  Common  Stock of  H.E.R.C.  Products
Incorporated ("Company") evidenced by the within Purchase Option and does hereby
authorize the Company to transfer such right on the books of the Company.


Dated: ______________, 19__


                                             -----------------------------------
                                             Signature



         NOTICE:  The  signature to this form must  correspond  with the name as
written upon the face of the within Purchase Option in every particular  without
alteration or enlargement or any change whatsoever.
                                       11
<PAGE>
THE SECURITIES  EVIDENCED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED  ("SECURITIES  ACT"), OR UNDER THE SECURITIES
LAWS OF ANY  STATE  OR OTHER  JURISDICTION.  THE  SECURITIES  MAY NOT BE SOLD OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE  SECURITIES LAWS OF ANY STATE
OR JURISDICTION,  OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE  HEREOF,  AGREES
THAT IT WILL NOT SELL,  TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED.

NOT EXERCISABLE  PRIOR TO JUNE 18, 1997. VOID AFTER 5:00 P.M. EASTERN TIME, JUNE
18, 2002.



                                 PURCHASE OPTION

                                For 25,000 Shares

No. 1997-PO-4                          of

                         H.E.R.C. PRODUCTS INCORPORATED

                            (A Delaware Corporation)

1.       Purchase Option.

                  THIS CERTIFIES THAT, in  consideration  of $16.66 duly paid by
or on  behalf  of  Robert  Gladstone  ("Holder"),  as  registered  owner of this
Purchase  Option,  to  H.E.R.C.  Products  Incorporated  ("Company"),  Holder is
entitled,  at any  time  or  from  time  to  time  at or  after  June  18,  1997
("Commencement  Date"),  and at or before 5:00 p.m., Eastern Time, June 18, 2002
("Expiration Date"), but not thereafter, to subscribe for, purchase and receive,
in whole or in part,  up to 25,000 shares  ("Shares")  of the  Company's  common
stock,  $.Ol par value  ("Common  Stock").  The Shares  issuable  hereunder  are
sometimes collectively referred to herein as the "Securities." If the Expiration
Date is a day on which banking institutions are authorized by law to close, then
this Purchase  Option may be exercised on the next  succeeding  day which is not
such a day in  accordance  with  the  terms  herein.  This  Purchase  Option  is
initially  exercisable at $1.3125 per Share purchased;  provided,  however, that
upon the  occurrence  of any of the events  specified  in Section 6 hereof,  the
rights  granted by this Purchase  Option,  including the exercise  price for the
Shares  and the  number  of  shares of  Common  Stock to be  received  upon such
exercise,  shall be adjusted as therein  specified.  The term  "Exercise  Price"
shall mean the initial exercise price or the adjusted exercise price,  depending
on the context.  This Purchase  Option is one of a number of such options issued
by the Company to GKN and its designees ("Purchase Options").
<PAGE>
2.       Exercise.

         2.1 Exercise  Form.  In order to exercise  this  Purchase  Option,  the
exercise form attached  hereto must be duly executed and completed and delivered
to the Company,  together with this Purchase  Option and payment of the Exercise
Price for the Securities  being  purchased by wire transfer,  certified check or
official  bank check.  If the  subscription  rights  represented  hereby are not
exercised at or before 5:00 p.m.,  Eastern  time,  on the  Expiration  Date this
Purchase  Option shall become and be void without  further force or effect,  and
all rights represented hereby shall cease and expire.

         2.2 Legend.  Each  certificate for the securities  purchased under this
Purchase  Option shall bear a legend as follows unless such Securities have been
registered under the Securities Act:

                  "The securities  represented by this certificate have not been
                  registered  under  the  Securities  Act of  1933,  as  amended
                  ("Securities Act") or applicable state law. The securities may
                  not be offered for sale, sold or otherwise  transferred except
                  pursuant  to an  effective  registration  statement  under the
                  Securities Act, or pursuant to an exemption from  registration
                  under the Securities Act and applicable state law."

         2.3      Cashless Exercise.

                  2.3.1  Determination of Amount.  In lieu of the payment of the
Exercise Price in the manner  required by Section 2.1, the Holder shall have the
right (but not the  obligation)  to pay the  Exercise  Price for the  Securities
being  purchased with this Purchase Option upon exercise by the surrender to the
Company of any  exercisable  but  unexercised  portion of this  Purchase  Option
having a "Value" (as defined below), at the close of trading on the last trading
day  immediately  preceding the exercise of this Purchase  Option,  equal to the
Exercise  Price  multiplied  by the  number  of shares  of  Common  Stock  being
purchased upon exercise ("Cashless  Exercise Right").  The sum of (a) the number
of shares of Common Stock being  purchased upon exercise of the  non-surrendered
portion of this Purchase Option pursuant to this Cashless Exercise Right and (b)
the number of shares of Common  Stock  underlying  the portion of this  Purchase
Option  being  surrendered,  shall  not in any event be  greater  than the total
number of shares of Common Stock  purchasable upon the complete exercise of this
Purchase  Option if the  Exercise  Price were paid in cash.  The  'Value" of the
portion of the  Purchase  Option  being  surrendered  shall equal the  remainder
derived from  subtracting  (a) the Exercise  Price  multiplied  by the number of
shares of Common  Stock  underlying  the portion of this  Purchase  Option being
surrendered  from (b) the Market Price of the shares of Common Stock  multiplied
by the number of shares of Common Stock  underlying the portion of this Purchase
Option  being  surrendered.  As used herein,  the term  "Market  Price" shall be
deemed to be the last  reported  sale price of the Common  Stock at the close of
trading on the last  trading  day  immediately  preceding  the  exercise of this
Purchase Option,  or, in case no such reported sale takes place on such day, the
average of the last reported  sale prices for the  immediately  preceding  three
trading days, in either case as officially reported by the principal  securities
exchange on which the Common Stock is listed or admitted to trading,  or, if the
Common  Stock is not listed or  admitted to trading on any  national  securities
exchange or if any such  exchange on which the Common Stock is listed is not its
principal trading market,  the last reported sale price as furnished by the NASD
through the Nasdaq National Market or SmallCap  Market,  or, if applicable,  the
OTC Bulletin  Board, or if the Common Stock is not listed or admitted to trading
on the  Nasdaq  National  Market or  SmallCap  Market or OTC  Bulletin  Board or
similar organization, as determined in good faith by
                                       2
<PAGE>
resolution  of  the  Board  of  Directors  of the  Company,  based  on the  best
information  available to it. In addition to the above, the Holder may surrender
any other  security  issued by the  Company,  including  but not limited to unit
purchase options,  warrants, options and common stock in payment of the Exercise
Price, having a value, determined substantially as set forth above.

                  2.3.2 Mechanics of Cashless  Exercise.  The Cashless  Exercise
Right  may be  exercised  by the  Holder  on any  business  day on or after  the
Commencement  Date and not later than the  Expiration  Date by delivering to the
Company  the  Purchase  Option  or other  security  of the  Company  with a duly
executed  exercise  form  attached  hereto with the  cashless  exercise  section
completed.

3.       Transfer.

         3.1  General  Restrictions.  The  registered  Holder  of this  Purchase
Option, by its acceptance hereof,  agrees that it will sell,  transfer or assign
or hypothecate  this Purchase  Option only in compliance with or exemptions from
applicable  securities  laws.  In order to make any  permitted  assignment,  the
Holder must  deliver to the Company the  assignment  form  attached  hereto duly
executed and  completed,  together with this Purchase  Option and payment of all
transfer  taxes,  if any,  payable in  connection  therewith.  The Company shall
immediately  transfer this Purchase Option on the books of the Company and shall
execute and deliver a new Purchase  Option or Purchase  Options of like tenor to
the  appropriate  assignee(s)  expressly  evidencing  the right to purchase  the
aggregate number of Shares purchasable  hereunder or such portion of such number
as shall be contemplated by any such assignment.

         3.2  Restrictions  Imposed  by the Act.  This  Purchase  Option and the
Securities  underlying this Purchase Option shall not be transferred  unless and
until (i) the Company has received the opinion of counsel reasonably  acceptable
to the Company that this Purchase Option or the Securities,  as the case may be,
may be transferred  pursuant to an exemption from registration under the Act and
applicable state law, the availability of which is established to the reasonable
satisfaction of the Company,  or (ii) a registration  statement relating to such
Purchase Option or Securities, as the case may be, has been filed by the Company
and declared effective by the Securities and Exchange Commission ("Commission").

4.       New Purchase Options to be Issued.

         4.1  Partial  Exercise  or  Transfer.  Subject to the  restrictions  in
Section 3 hereof,  this Purchase Option may be exercised or assigned in whole or
in part.  In the event of the exercise or  assignment  hereof in part only,  the
Company shall cause to be delivered to the Holder  without charge a new Purchase
Option of like tenor in the name of the Holder  evidencing the right to purchase
the  aggregate  number of Shares as to which this  Purchase  Option has not been
exercised or assigned.

         4.2  Lost  Certificate.   Upon  receipt  by  the  Company  of  evidence
satisfactory  to it of the  loss,  theft,  destruction  or  mutilation  of  this
Purchase  Option and of  reasonably  satisfactory  indemnification,  the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any such
new  Purchase  Option  executed and  delivered as a result of such loss,  theft,
mutilation or destruction shall constitute a substitute  contractual  obligation
on the part of the Company.
                                       3
<PAGE>
5.       Registration Rights.

         5.1      Registration Requirement.

                  5.1.1  Obligation  to  Register.  The  Company  agrees to file
within  four  months  after the  Commencement  Date,  a  registration  statement
("Registration  Statement")  under  the  Securities  Act  with  the  Commission,
registering  for  resale  the  Securities  and use its best  efforts to have the
Registration  Statement declared  effective by the six-month  anniversary of the
Commencement Date.

                  5.1.2  Terms.  The  Company  shall bear all fees and  expenses
(including  counsel fees and expenses)  attendant to registering  the Securities
under Section 5.1.1 hereof, filing the Registration  Statement with the NASD and
listing the  Securities on Nasdaq and the BSE, but the Holders shall pay any and
all  underwriting  commissions and the expenses of any legal counsel selected by
the Holders to represent them in connection with the sale of the Securities. The
Company  agrees to qualify or  register  the  Securities  in such  states as are
reasonably requested by the Holder(s); provided, however, that in no event shall
the  Company be required to  register  the  Securities  in a state in which such
registration  would cause (i) the Company to be obligated to register or license
to do business in such state, or (ii) the principal  stockholders of the Company
to be  obligated to escrow  their  shares of capital  stock of the Company.  The
Company shall cause any Registration  Statement filed pursuant to this Section 5
to  remain  effective  and  current  for so long as the  Holder  owns any of the
Securities,  of if  earlier,  the  Holder may sell all the  Securities  he holds
pursuant to an exemption from registration under the Act.

         5.2      General Terms.

                  5.2.1   Indemnification.   The  Company  shall  indemnify  the
Holder(s) of the  Securities to be sold pursuant to any  registration  statement
hereunder and each person,  if any, who controls such Holders within the meaning
of  Section 15 of the  Securities  Act and/or  Section  20(a) of the  Securities
Exchange Act of 1934,  as amended  ("Exchange  Act"),  against all loss,  claim,
damage, expense or liability (including all reasonable attorneys' fees and other
expenses  reasonably  incurred in investigating,  preparing or defending against
any  claim  whatsoever  incurred  by the  indemnified  party  in any  action  or
proceeding   between  the  indemnitor  and  indemnified  party  or  between  the
indemnified  party and any third  party or  otherwise)  to which any of them may
become subject under the  Securities  Act, the Exchange Act or any other statute
or at common law or otherwise under the laws of foreign countries,  arising from
such registration statement or based upon any untrue statement or alleged untrue
statement of a material fact contained in (i) any  preliminary  prospectus,  the
registration  statement or prospectus  (as from time to time each may be amended
and supplemented); (ii) in any post-effective amendment or amendments or any new
registration  statement and prospectus in which is included the  Securities;  or
(iii) any application or other document or written  communication  (collectively
called "application")  executed by the Company or based upon written information
furnished by the Company in any  jurisdiction in order to qualify the Securities
under the  securities  laws  thereof  or filed  with the  Commission,  any state
securities  commission  or agency,  Nasdaq or any  securities  exchange;  or the
omission or alleged omission  therefrom of a material fact required to be stated
therein  or  necessary  to  make  the  statements   therein,  in  light  of  the
circumstances under which they were made, not misleading,  unless such statement
or  omission  is  made  in  reliance  upon,  and  in  conformity  with,  written
information  furnished to the Company with respect to the Holders  expressly for
use in a  preliminary  prospectus,  registration  statement  or  prospectus,  or
amendment or supplement thereof, or in any application,  as the case may be. The
Company  agrees  promptly  to  notify  the  Holder  of the  commencement  of any
litigation or
                                       4
<PAGE>
proceedings against the Company or any of its officers, directors or controlling
persons in connection  with the issue and sale or resale of the Securities or in
connection with the registration statement or prospectus.

                  5.2.2 Exercise of Purchase Option.  Nothing  contained in this
Purchase  Option shall be construed as requiring the Holder(s) to exercise their
Purchase  Options  prior to or after  the  initial  filing  of any  registration
statement or the effectiveness thereof.

                  5.2.3  Documents  Delivered  to  Holders.  The  Company  shall
furnish to each Holder  participating  in any of the foregoing  offerings and to
each underwriter of any such offering,  if any, a signed counterpart,  addressed
to such  Holder or  underwriter,  of (i) an opinion  of counsel to the  Company,
dated  the  effective  date  of  such  registration   statement  (and,  if  such
registration includes an underwritten public offering, an opinion dated the date
of the closing under any underwriting  agreement  related  thereto),  and (ii) a
"cold comfort"  letter dated the effective date of such  registration  statement
(and, if such registration  includes an underwritten  public offering,  a letter
dated the date of the closing under the  underwriting  agreement)  signed by the
independent  public  accountants  who  have  issued a  report  on the  Company's
financial  statements  included  in such  registration  statement,  in each case
covering  substantially  the same  matters  with  respect  to such  registration
statement  (and  the  prospectus  included  therein)  and,  in the  case of such
accountants'  letter,  with  respect  to events  subsequent  to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants'  letters  delivered to  underwriters in underwritten  public
offerings of securities.  The Company shall also deliver promptly to each Holder
participating  in the  offering  requesting  the  correspondence  and  memoranda
described  below and to the managing  underwriter  copies of all  correspondence
between  the  Commission  and the  Company,  its  counsel  or  auditors  and all
memoranda  relating to discussions with the Commission or its staff with respect
to the registration  statement and permit each Holder and underwriter to do such
investigation,  upon  reasonable  advance  notice,  with respect to  information
contained in or omitted from the  registration  statement as it deems reasonably
necessary  to comply with  applicable  securities  laws or rules of the National
Association of Securities  Dealers,  Inc.  ("NASD").  Such  investigation  shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors,  all to such
reasonable  extent and at such reasonable  times and as often as any such Holder
shall reasonably request.

                  5.2.4 Underwriting Agreement.  The Company shall enter into an
underwriting agreement with the managing  underwriter(s) selected by any Holders
whose Securities are being registered pursuant to this Section 5. Such agreement
shall be  reasonably  satisfactory  in form and  substance to the Company,  each
Holder and such managing  underwriters,  and shall contain such representations,
warranties and covenants by the Company and such other terms as are  customarily
contained  in  agreements  of that type used by the  managing  underwriter.  The
Holders  shall  be  parties  to  any  underwriting   agreement  relating  to  an
underwritten sale of their Securities and may, at their option, require that any
or all the  representations,  warranties  and covenants of the Company to or for
the  benefit of such  underwriters  shall also be made to and for the benefit of
such Holders.  Such Holders shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters  except as they
may  relate  to such  Holders,  their  shares  and  their  intended  methods  of
distribution.

                  5.2.5  Documents  to be Delivered  by  Holder(s).  Each of the
Holder(s)  participating in any of the foregoing  offerings shall furnish to the
Company  a  completed  and  executed   questionnaire  provided  by  the  Company
requesting information customarily sought of selling securityholders.
                                       5
<PAGE>
6.       Adjustments.

         6.1  Adjustments  to  Exercise  Price  and  Number of  Securities.  The
Exercise  Price and the number of shares of Common Stock  issuable upon exercise
of this  Purchase  Option  shall be subject to  adjustment  from time to time as
hereinafter set forth:

                  6.1.1 Stock  Dividends - Split-Ups.  If after the date hereof,
and subject to the  provisions of Section 6.2 below,  the number of  outstanding
shares of Common  Stock is increased  by a stock  dividend  payable in shares of
Common Stock or by a split-up of shares of Common Stock or other similar  event,
then,  on the effective  date of such stock  dividend or split up, the number of
shares of Common  Stock  issuable on exercise of each  Purchase  Option shall be
increased in proportion to such increase in outstanding shares.

                  6.1.2  Aggregation  of Shares.  If after the date hereof,  and
subject to the  provisions of Section 6.2, the number of  outstanding  shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event,  then, upon the effective date of
such  consolidation,  combination or  reclassification,  the number of shares of
Common Stock issuable on exercise of each Purchase  Option shall be decreased in
proportion to such decrease in outstanding shares.

                  6.1.3  Adjustments in Exercise  Price.  Whenever the number of
shares of Common Stock  purchasable upon the exercise of this Purchase Option is
adjusted,  as provided in this Section 6.1, the Exercise Price shall be adjusted
(to the nearest cent) by multiplying  such Exercise Price  immediately  prior to
such  adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock  purchasable  upon the exercise of this  Purchase  Option
immediately prior to such adjustment,  and (y) the denominator of which shall be
the number of shares of Common Stock so purchasable immediately thereafter.

                  6.1.4 Replacement of Securities Upon  Reorganization,  etc. If
after the date  hereof any capital  reorganization  or  reclassification  of the
Common  Stock of the  Company,  or  consolidation  or merger of the Company with
another  corporation,  or the sale of all or substantially  all of its assets to
another  corporation  or other  similar  event  shall be  effected,  then,  as a
condition of such  reorganization,  reclassification,  consolidation,  merger or
sale,  lawful  and  fair  provision  shall be made  whereby  the  Holders  shall
thereafter  have the right to purchase and receive,  upon the basis and upon the
terms  and  conditions  specified  in this  Purchase  Option  and in lieu of the
Securities immediately  theretofore purchasable and receivable upon the exercise
of this Purchase Option, such shares of stock,  securities,  or assets as may be
issued or payable with  respect to or in exchange  for the number of  Securities
immediately  theretofore  purchasable  and receivable  upon the exercise of this
Purchase  Option,  had  such  reorganization,  reclassification,  consolidation,
merger or sale not taken place.  In such event,  appropriate  provision shall be
made with  respect  to the  rights  and  interests  of the  Holders  so that the
provisions hereof (including, without limitation,  provisions for adjustments of
the Exercise Price and of the number of securities purchasable upon the exercise
of this Purchase Option) shall thereafter be applicable,  as nearly as may be in
relation to any share of stock,  securities,  or assets  thereafter  deliverable
upon the exercise hereof. The Company shall not effect any such  reorganization,
reclassification,   consolidation,   merger  or  sale   unless,   prior  to  the
consummation  thereof,  the  successor  corporation  (if other than the Company)
resulting from such transaction shall assume by written instrument  executed and
delivered  to the  Holders  the  obligation  to  deliver  such  shares of stock,
securities or assets.
                                       6
<PAGE>
         6.2  Elimination  of  Fractional  Interests.  The Company  shall not be
required to issue certificates  representing  fractions of Common Stock upon the
exercise or transfer of the Purchase  Option,  nor shall it be required to issue
scrip or pay cash in lieu of any  fractional  interests,  it being the intent of
the parties that all  fractional  interests  shall be eliminated by rounding any
fraction up or down to the  nearest  whole  number of shares of Common  Stock or
other securities, properties or rights.

7.  Reservation  and Listing.  The Company  shall at all times  reserve and keep
available out of its authorized  shares of Common Stock,  solely for the purpose
of issuance  upon  exercise of the  Purchase  Options,  such number of shares of
Common Stock or other securities, properties or rights as shall be issuable upon
the exercise  thereof.  The Company  covenants and agrees that, upon exercise of
the Purchase  Options and payment of the Exercise Price therefor,  all shares of
Common Stock and other securities  issuable upon such exercise shall be duly and
validly  issued,  fully paid and  non-assessable  and not subject to  preemptive
rights of any  stockholder.  The Company further  covenants and agrees that upon
exercise of the Warrants  underlying the Shares included in this Purchase Option
and payment of the  exercise  prices  therefor,  all shares of Common  Stock and
other securities  issuable upon such exercises shall be duly and validly issued,
fully  paid and  non-assessable  and not  subject  to  preemptive  rights of any
stockholder.  As long as the Purchase Options shall be outstanding,  the Company
shall use its best efforts to cause the Common Stock  issuable  upon exercise of
the Purchase  Options to be listed  (subject to official  notice of issuance) on
all securities exchanges (or, if applicable on Nasdaq) on which the Common Stock
is then listed and/or quoted.

8.       Certain Notice Requirements.

         8.1 Holder's Right to Receive Notice. Nothing herein shall be construed
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company.  If, however, at any time
prior to the expiration of the Purchase  Options and their exercise,  any of the
events  described  in  Section  8.2 shall  occur,  then,  in one or more of said
events,  the Company  shall give written  notice of such event at least  fifteen
days  prior to the  date  fixed as a  record  date or the  date of  closing  the
transfer  books  for the  determination  of the  stockholders  entitled  to such
dividend,  distribution,  conversion or exchange of  securities or  subscription
rights, or entitled to vote on such proposed dissolution,  liquidation,  winding
up or sale.  Such  notice  shall  specify  such  record  date or the date of the
closing of the transfer books, as the case may be.

         8.2 Events Requiring Notice.  The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company  shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive any dividend or distribution,  (ii)
the Company  shall offer to all the holders of its Common  Stock any  additional
shares  of  capital  stock of the  Company  or  securities  convertible  into or
exchangeable for shares of capital stock of the Company, or any option, right or
warrant to subscribe therefor, or (iii) a dissolution,  liquidation, winding up,
consolidation,  merger  or  reorganization  of the  Company  or a sale of all or
substantially all of its property, assets and business shall be proposed.

         8.3 Notice of Change in Exercise  Price.  The Company  shall,  promptly
after an event  requiring a change in the Exercise Price pursuant to Section 6.1
hereof,  send notice to the Holders of such event and change  ("Price  Notice").
The Price Notice shall  describe the event
                                       7
<PAGE>
causing the change and the method of calculating  same and shall be certified as
being true and accurate by the Company's President and Chief Financial Officer.

         8.4 Transmittal of Notices. All notices,  requests,  consents and other
communications  under this  Purchase  Option  shall be in  writing  and shall be
deemed to have been duly made on the date of delivery if delivered personally or
sent by overnight courier,  with acknowledgment of receipt to the party to which
notice is given,  or on the  fifth day after  mailing  if mailed to the party to
whom notice is to be given,  by registered  or certified  mail,  return  receipt
requested,  postage  prepaid and properly  addressed  as follows:  (i) if to the
registered Holder of the Purchase Option, to the address of such Holder as shown
on the  books  of the  Company,  or (ii)  if to the  Company,  to its  principal
executive office.

9.       Miscellaneous.

         9.1 Amendments. The Company and GKN may from time to time supplement or
amend this Purchase  Option  without the approval of any of the Holders in order
to cure any ambiguity,  to correct or supplement any provision  contained herein
which may be defective or inconsistent  with any other provisions  herein, or to
make any other  provisions in regard to matters or questions  arising  hereunder
which  the  Company  and  GKN  may  deem  necessary  or  desirable.   All  other
modifications  or  amendments  shall  require the  written  consent of the party
against whom enforcement of the modification or amendment is sought.

         9.2 Headings. The headings contained herein are for the sole purpose of
convenience  of reference,  and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Purchase Option.

         9.3 Entire  Agreement.  This  Purchase  Option  constitutes  the entire
agreement of the parties hereto with respect to the subject  matter hereof,  and
supersedes all prior  agreements  and  understandings  of the parties,  oral and
written, with respect to the subject matter hereof.

         9.4 Binding  Effect.  This  Purchase  Option  shall inure solely to the
benefit of and shall be binding  upon,  the  Holder  and the  Company  and their
respective  successors,  legal  representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this  Purchase  Option or any  provisions
herein contained.

         9.5 Governing Law;  Submission to  Jurisdiction.  This Purchase  Option
shall be governed by and construed  and enforced in accordance  with the laws of
the State of New York,  without  giving effect to conflict of laws.  The Company
hereby agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Purchase Option shall be brought and enforced in the
courts  of the State of New York or of the  United  States  of  America  for the
Southern  District of New York, and  irrevocably  submits to such  jurisdiction,
which jurisdiction  shall be exclusive.  The Company hereby waives any objection
to such exclusive  jurisdiction  and that such courts  represent an inconvenient
forum.  Any  process or summons to be served  upon the  Company may be served by
transmitting  a copy thereof by registered  or certified  mail,  return  receipt
requested,  postage prepaid, addressed to it at the address set forth in Section
8 hereof.  Such mailing shall be deemed personal  service and shall be legal and
binding upon the Company in any action,  proceeding or claim. The Company agrees
that the  prevailing  party(ies) in any such action shall be entitled to recover
from the other  party(ies)  all of its reasonable  attorneys'  fees and expenses
relating to such action or proceeding  and/or  incurred in  connection  with the
preparation therefor.
                                       8
<PAGE>
         9.6  Waiver,  Etc.  The  failure of the Company or the Holder to at any
time enforce any of the  provisions of this Purchase  Option shall not be deemed
or construed to be a waiver of any such provision,  nor to in any way affect the
validity of this  Purchase  Option or any  provision  hereof or the right of the
Company or any Holder to  thereafter  enforce  each and every  provision of this
Purchase Option. No waiver of any breach,  non-compliance or  non-fulfillment of
any of the  provisions  of this  Purchase  Option shall be effective  unless set
forth in a written  instrument  executed by the party or parties against whom or
which  enforcement  of such waiver is sought;  and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.

         9.7 Execution in Counterparts.  This Purchase Option may be executed in
one or more  counterparts,  and by the  different  parties  hereto  in  separate
counterparts,  each of which shall be deemed to be an original, but all of which
taken together shall  constitute  one and the same  agreement,  and shall become
effective when one or more  counterparts  has been signed by each of the parties
hereto and delivered to each of the other parties hereto.

         9.8 Exchange  Agreement.  As a condition  of the  Holder's  receipt and
acceptance of this Purchase Option, Holder agrees that, at any time prior to the
complete  exercise  of this  Purchase  Option by Holder,  if the Company and GUN
enter into an agreement ("Exchange Agreement") pursuant to which they agree that
all outstanding  Purchase  Options will be exchanged for securities or cash or a
combination of both, then Holder shall agree to such exchange and become a party
to the Exchange Agreement.

                  IN WITNESS  WHEREOF,  the  Company  has caused  this  Purchase
Option to be signed by its duly  authorized  officer as of the 18th day of June,
1997.

                                             H.E.R.C. PRODUCTS INCORPORATED

                                             By:    /s/ S. Steven Carl
                                                --------------------------------
                                                S. Steven Carl, Chief Executive
                                                Officer
                                       9
<PAGE>
Form to be used to exercise Purchase Option:


H.E.R.C. Products Incorporated
2202 West Lone Cactus Drive, #15
Phoenix, Arizona 85027



Date:___________________,19__

         The  undersigned  hereby  elects  irrevocably  to  exercise  the within
Purchase Option and to purchase ____ Shares of Common Stock,  $.Ol par value, of
H.E.R.C.  Products  Incorporated and hereby makes payment of $_____________  (at
the rate of $_____________  per Share) in payment of the Exercise Price pursuant
thereto.  Please  issue the  Common  Stock as to which this  Purchase  Option is
exercised in accordance with the instructions given below.

                                       or
                                       --

         The  undersigned  hereby  elects  irrevocably  to  exercise  the within
Purchase Option and to purchase ____ Shares of Common Stock,  $.Ol par value, of
H.E.R.C.  Products  Incorporated by surrender of the unexercised  portion of the
within Purchase Option or other security of H.E.R.C. Products Incorporated (with
a "Value" of  $___________  based on a "Market Price" of  $___________ ). Please
issue the Common Stock in accordance with the instructions given below.


                                             -----------------------------------
                                             Signature



                                             -----------------------------------
                                             Signature Guaranteed

                  NOTICE:  The signature to this form must  correspond  with the
name as written upon the face of the within Purchase Option in every  particular
without  alteration  or  enlargement  or  any  change  whatsoever  and  must  be
guaranteed  by a bank,  other than a savings bank, or by a trust company or by a
firm having membership on a registered national securities exchange.


          Please issue securities as follows: Name:
                                                   -----------------------------

                                              Address:
                                                      --------------------------

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

                                              I.D.#:
                                                    ----------------------------
                                       10
<PAGE>
Form to be used to assign Purchase Option:

                                   ASSIGNMENT

         (To be  executed by the  registered  Holder to effect a transfer of the
within Purchase Option):

         FOR VALUE RECEIVED,  _______________________________  does hereby sell,
assign and transfer unto  _______________________________  the right to purchase
_______________________________  Shares of  Common  Stock of  H.E.R.C.  Products
Incorporated ("Company") evidenced by the within Purchase Option and does hereby
authorize the Company to transfer such right on the books of the Company.


Dated: ______________, 19__


                                             -----------------------------------
                                             Signature



         NOTICE:  The  signature to this form must  correspond  with the name as
written upon the face of the within Purchase Option in every particular  without
alteration or enlargement or any change whatsoever.
                                       11
<PAGE>
THE SECURITIES  EVIDENCED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED  UNDER THE
SECURITIES ACT OF 1933, AS AMENDED  ("SECURITIES  ACT"), OR UNDER THE SECURITIES
LAWS OF ANY  STATE  OR OTHER  JURISDICTION.  THE  SECURITIES  MAY NOT BE SOLD OR
OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE  REGISTRATION  STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE  SECURITIES LAWS OF ANY STATE
OR JURISDICTION,  OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED.

THE REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE  HEREOF,  AGREES
THAT IT WILL NOT SELL,  TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED.

NOT EXERCISABLE  PRIOR TO JUNE 18, 1997. VOID AFTER 5:00 P.M. EASTERN TIME, JUNE
18, 2002.



                                 PURCHASE OPTION

                                For 25,000 Shares

No. 1997-PO-5                          of

                         H.E.R.C. PRODUCTS INCORPORATED

                            (A Delaware Corporation)

1.       Purchase Option.

                  THIS CERTIFIES THAT, in  consideration  of $16.66 duly paid by
or on behalf of  Lester  Rosenkrantz  ("Holder"),  as  registered  owner of this
Purchase  Option,  to  H.E.R.C.  Products  Incorporated  ("Company"),  Holder is
entitled,  at any  time  or  from  time  to  time  at or  after  June  18,  1997
("Commencement  Date"),  and at or before 5:00 p.m., Eastern Time, June 18, 2002
("Expiration Date"), but not thereafter, to subscribe for, purchase and receive,
in whole or in part,  up to 25,000 shares  ("Shares")  of the  Company's  common
stock,  $.Ol par value  ("Common  Stock").  The Shares  issuable  hereunder  are
sometimes collectively referred to herein as the "Securities." If the Expiration
Date is a day on which banking institutions are authorized by law to close, then
this Purchase  Option may be exercised on the next  succeeding  day which is not
such a day in  accordance  with  the  terms  herein.  This  Purchase  Option  is
initially  exercisable at $1.3125 per Share purchased;  provided,  however, that
upon the  occurrence  of any of the events  specified  in Section 6 hereof,  the
rights  granted by this Purchase  Option,  including the exercise  price for the
Shares  and the  number  of  shares of  Common  Stock to be  received  upon such
exercise,  shall be adjusted as therein  specified.  The term  "Exercise  Price"
shall mean the initial exercise price or the adjusted exercise price,  depending
on the context.  This Purchase  Option is one of a number of such options issued
by the Company to GKN and its designees ("Purchase Options").
<PAGE>
2.       Exercise.

         2.1 Exercise  Form.  In order to exercise  this  Purchase  Option,  the
exercise form attached  hereto must be duly executed and completed and delivered
to the Company,  together with this Purchase  Option and payment of the Exercise
Price for the Securities  being  purchased by wire transfer,  certified check or
official  bank check.  If the  subscription  rights  represented  hereby are not
exercised at or before 5:00 p.m.,  Eastern  time,  on the  Expiration  Date this
Purchase  Option shall become and be void without  further force or effect,  and
all rights represented hereby shall cease and expire.

         2.2 Legend.  Each  certificate for the securities  purchased under this
Purchase  Option shall bear a legend as follows unless such Securities have been
registered under the Securities Act:

                  "The securities  represented by this certificate have not been
                  registered  under  the  Securities  Act of  1933,  as  amended
                  ("Securities Act") or applicable state law. The securities may
                  not be offered for sale, sold or otherwise  transferred except
                  pursuant  to an  effective  registration  statement  under the
                  Securities Act, or pursuant to an exemption from  registration
                  under the Securities Act and applicable state law."

         2.3      Cashless Exercise.

                  2.3.1  Determination of Amount.  In lieu of the payment of the
Exercise Price in the manner  required by Section 2.1, the Holder shall have the
right (but not the  obligation)  to pay the  Exercise  Price for the  Securities
being  purchased with this Purchase Option upon exercise by the surrender to the
Company of any  exercisable  but  unexercised  portion of this  Purchase  Option
having a "Value" (as defined below), at the close of trading on the last trading
day  immediately  preceding the exercise of this Purchase  Option,  equal to the
Exercise  Price  multiplied  by the  number  of shares  of  Common  Stock  being
purchased upon exercise ("Cashless  Exercise Right").  The sum of (a) the number
of shares of Common Stock being  purchased upon exercise of the  non-surrendered
portion of this Purchase Option pursuant to this Cashless Exercise Right and (b)
the number of shares of Common  Stock  underlying  the portion of this  Purchase
Option  being  surrendered,  shall  not in any event be  greater  than the total
number of shares of Common Stock  purchasable upon the complete exercise of this
Purchase  Option if the  Exercise  Price were paid in cash.  The  'Value" of the
portion of the  Purchase  Option  being  surrendered  shall equal the  remainder
derived from  subtracting  (a) the Exercise  Price  multiplied  by the number of
shares of Common  Stock  underlying  the portion of this  Purchase  Option being
surrendered  from (b) the Market Price of the shares of Common Stock  multiplied
by the number of shares of Common Stock  underlying the portion of this Purchase
Option  being  surrendered.  As used herein,  the term  "Market  Price" shall be
deemed to be the last  reported  sale price of the Common  Stock at the close of
trading on the last  trading  day  immediately  preceding  the  exercise of this
Purchase Option,  or, in case no such reported sale takes place on such day, the
average of the last reported  sale prices for the  immediately  preceding  three
trading days, in either case as officially reported by the principal  securities
exchange on which the Common Stock is listed or admitted to trading,  or, if the
Common  Stock is not listed or  admitted to trading on any  national  securities
exchange or if any such  exchange on which the Common Stock is listed is not its
principal trading market,  the last reported sale price as furnished by the NASD
through the Nasdaq National Market or SmallCap  Market,  or, if applicable,  the
OTC Bulletin  Board, or if the Common Stock is not listed or admitted to trading
on the  Nasdaq  National  Market or  SmallCap  Market or OTC  Bulletin  Board or
similar organization, as determined in good faith by
                                       2
<PAGE>
resolution  of  the  Board  of  Directors  of the  Company,  based  on the  best
information  available to it. In addition to the above, the Holder may surrender
any other  security  issued by the  Company,  including  but not limited to unit
purchase options,  warrants, options and common stock in payment of the Exercise
Price, having a value, determined substantially as set forth above.

                  2.3.2 Mechanics of Cashless  Exercise.  The Cashless  Exercise
Right  may be  exercised  by the  Holder  on any  business  day on or after  the
Commencement  Date and not later than the  Expiration  Date by delivering to the
Company  the  Purchase  Option  or other  security  of the  Company  with a duly
executed  exercise  form  attached  hereto with the  cashless  exercise  section
completed.

3.       Transfer.

         3.1  General  Restrictions.  The  registered  Holder  of this  Purchase
Option, by its acceptance hereof,  agrees that it will sell,  transfer or assign
or hypothecate  this Purchase  Option only in compliance with or exemptions from
applicable  securities  laws.  In order to make any  permitted  assignment,  the
Holder must  deliver to the Company the  assignment  form  attached  hereto duly
executed and  completed,  together with this Purchase  Option and payment of all
transfer  taxes,  if any,  payable in  connection  therewith.  The Company shall
immediately  transfer this Purchase Option on the books of the Company and shall
execute and deliver a new Purchase  Option or Purchase  Options of like tenor to
the  appropriate  assignee(s)  expressly  evidencing  the right to purchase  the
aggregate number of Shares purchasable  hereunder or such portion of such number
as shall be contemplated by any such assignment.

         3.2  Restrictions  Imposed  by the Act.  This  Purchase  Option and the
Securities  underlying this Purchase Option shall not be transferred  unless and
until (i) the Company has received the opinion of counsel reasonably  acceptable
to the Company that this Purchase Option or the Securities,  as the case may be,
may be transferred  pursuant to an exemption from registration under the Act and
applicable state law, the availability of which is established to the reasonable
satisfaction of the Company,  or (ii) a registration  statement relating to such
Purchase Option or Securities, as the case may be, has been filed by the Company
and declared effective by the Securities and Exchange Commission ("Commission").

4.       New Purchase Options to be Issued.

         4.1  Partial  Exercise  or  Transfer.  Subject to the  restrictions  in
Section 3 hereof,  this Purchase Option may be exercised or assigned in whole or
in part.  In the event of the exercise or  assignment  hereof in part only,  the
Company shall cause to be delivered to the Holder  without charge a new Purchase
Option of like tenor in the name of the Holder  evidencing the right to purchase
the  aggregate  number of Shares as to which this  Purchase  Option has not been
exercised or assigned.

         4.2  Lost  Certificate.   Upon  receipt  by  the  Company  of  evidence
satisfactory  to it of the  loss,  theft,  destruction  or  mutilation  of  this
Purchase  Option and of  reasonably  satisfactory  indemnification,  the Company
shall execute and deliver a new Purchase Option of like tenor and date. Any such
new  Purchase  Option  executed and  delivered as a result of such loss,  theft,
mutilation or destruction shall constitute a substitute  contractual  obligation
on the part of the Company.
                                       3
<PAGE>
5.       Registration Rights.

         5.1      Registration Requirement.

                  5.1.1  Obligation  to  Register.  The  Company  agrees to file
within  four  months  after the  Commencement  Date,  a  registration  statement
("Registration  Statement")  under  the  Securities  Act  with  the  Commission,
registering  for  resale  the  Securities  and use its best  efforts to have the
Registration  Statement declared  effective by the six-month  anniversary of the
Commencement Date.

                  5.1.2  Terms.  The  Company  shall bear all fees and  expenses
(including  counsel fees and expenses)  attendant to registering  the Securities
under Section 5.1.1 hereof, filing the Registration  Statement with the NASD and
listing the  Securities on Nasdaq and the BSE, but the Holders shall pay any and
all  underwriting  commissions and the expenses of any legal counsel selected by
the Holders to represent them in connection with the sale of the Securities. The
Company  agrees to qualify or  register  the  Securities  in such  states as are
reasonably requested by the Holder(s); provided, however, that in no event shall
the  Company be required to  register  the  Securities  in a state in which such
registration  would cause (i) the Company to be obligated to register or license
to do business in such state, or (ii) the principal  stockholders of the Company
to be  obligated to escrow  their  shares of capital  stock of the Company.  The
Company shall cause any Registration  Statement filed pursuant to this Section 5
to  remain  effective  and  current  for so long as the  Holder  owns any of the
Securities,  of if  earlier,  the  Holder may sell all the  Securities  he holds
pursuant to an exemption from registration under the Act.

         5.2      General Terms.

                  5.2.1   Indemnification.   The  Company  shall  indemnify  the
Holder(s) of the  Securities to be sold pursuant to any  registration  statement
hereunder and each person,  if any, who controls such Holders within the meaning
of  Section 15 of the  Securities  Act and/or  Section  20(a) of the  Securities
Exchange Act of 1934,  as amended  ("Exchange  Act"),  against all loss,  claim,
damage, expense or liability (including all reasonable attorneys' fees and other
expenses  reasonably  incurred in investigating,  preparing or defending against
any  claim  whatsoever  incurred  by the  indemnified  party  in any  action  or
proceeding   between  the  indemnitor  and  indemnified  party  or  between  the
indemnified  party and any third  party or  otherwise)  to which any of them may
become subject under the  Securities  Act, the Exchange Act or any other statute
or at common law or otherwise under the laws of foreign countries,  arising from
such registration statement or based upon any untrue statement or alleged untrue
statement of a material fact contained in (i) any  preliminary  prospectus,  the
registration  statement or prospectus  (as from time to time each may be amended
and supplemented); (ii) in any post-effective amendment or amendments or any new
registration  statement and prospectus in which is included the  Securities;  or
(iii) any application or other document or written  communication  (collectively
called "application")  executed by the Company or based upon written information
furnished by the Company in any  jurisdiction in order to qualify the Securities
under the  securities  laws  thereof  or filed  with the  Commission,  any state
securities  commission  or agency,  Nasdaq or any  securities  exchange;  or the
omission or alleged omission  therefrom of a material fact required to be stated
therein  or  necessary  to  make  the  statements   therein,  in  light  of  the
circumstances under which they were made, not misleading,  unless such statement
or  omission  is  made  in  reliance  upon,  and  in  conformity  with,  written
information  furnished to the Company with respect to the Holders  expressly for
use in a  preliminary  prospectus,  registration  statement  or  prospectus,  or
amendment or supplement thereof, or in any application,  as the case may be. The
Company  agrees  promptly  to  notify  the  Holder  of the  commencement  of any
litigation or
                                       4
<PAGE>
proceedings against the Company or any of its officers, directors or controlling
persons in connection  with the issue and sale or resale of the Securities or in
connection with the registration statement or prospectus.

                  5.2.2 Exercise of Purchase Option.  Nothing  contained in this
Purchase  Option shall be construed as requiring the Holder(s) to exercise their
Purchase  Options  prior to or after  the  initial  filing  of any  registration
statement or the effectiveness thereof.

                  5.2.3  Documents  Delivered  to  Holders.  The  Company  shall
furnish to each Holder  participating  in any of the foregoing  offerings and to
each underwriter of any such offering,  if any, a signed counterpart,  addressed
to such  Holder or  underwriter,  of (i) an opinion  of counsel to the  Company,
dated  the  effective  date  of  such  registration   statement  (and,  if  such
registration includes an underwritten public offering, an opinion dated the date
of the closing under any underwriting  agreement  related  thereto),  and (ii) a
"cold comfort"  letter dated the effective date of such  registration  statement
(and, if such registration  includes an underwritten  public offering,  a letter
dated the date of the closing under the  underwriting  agreement)  signed by the
independent  public  accountants  who  have  issued a  report  on the  Company's
financial  statements  included  in such  registration  statement,  in each case
covering  substantially  the same  matters  with  respect  to such  registration
statement  (and  the  prospectus  included  therein)  and,  in the  case of such
accountants'  letter,  with  respect  to events  subsequent  to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants'  letters  delivered to  underwriters in underwritten  public
offerings of securities.  The Company shall also deliver promptly to each Holder
participating  in the  offering  requesting  the  correspondence  and  memoranda
described  below and to the managing  underwriter  copies of all  correspondence
between  the  Commission  and the  Company,  its  counsel  or  auditors  and all
memoranda  relating to discussions with the Commission or its staff with respect
to the registration  statement and permit each Holder and underwriter to do such
investigation,  upon  reasonable  advance  notice,  with respect to  information
contained in or omitted from the  registration  statement as it deems reasonably
necessary  to comply with  applicable  securities  laws or rules of the National
Association of Securities  Dealers,  Inc.  ("NASD").  Such  investigation  shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors,  all to such
reasonable  extent and at such reasonable  times and as often as any such Holder
shall reasonably request.

                  5.2.4 Underwriting Agreement.  The Company shall enter into an
underwriting agreement with the managing  underwriter(s) selected by any Holders
whose Securities are being registered pursuant to this Section 5. Such agreement
shall be  reasonably  satisfactory  in form and  substance to the Company,  each
Holder and such managing  underwriters,  and shall contain such representations,
warranties and covenants by the Company and such other terms as are  customarily
contained  in  agreements  of that type used by the  managing  underwriter.  The
Holders  shall  be  parties  to  any  underwriting   agreement  relating  to  an
underwritten sale of their Securities and may, at their option, require that any
or all the  representations,  warranties  and covenants of the Company to or for
the  benefit of such  underwriters  shall also be made to and for the benefit of
such Holders.  Such Holders shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters  except as they
may  relate  to such  Holders,  their  shares  and  their  intended  methods  of
distribution.

                  5.2.5  Documents  to be Delivered  by  Holder(s).  Each of the
Holder(s)  participating in any of the foregoing  offerings shall furnish to the
Company  a  completed  and  executed   questionnaire  provided  by  the  Company
requesting information customarily sought of selling securityholders.
                                       5
<PAGE>
6.       Adjustments.

         6.1  Adjustments  to  Exercise  Price  and  Number of  Securities.  The
Exercise  Price and the number of shares of Common Stock  issuable upon exercise
of this  Purchase  Option  shall be subject to  adjustment  from time to time as
hereinafter set forth:

                  6.1.1 Stock  Dividends - Split-Ups.  If after the date hereof,
and subject to the  provisions of Section 6.2 below,  the number of  outstanding
shares of Common  Stock is increased  by a stock  dividend  payable in shares of
Common Stock or by a split-up of shares of Common Stock or other similar  event,
then,  on the effective  date of such stock  dividend or split up, the number of
shares of Common  Stock  issuable on exercise of each  Purchase  Option shall be
increased in proportion to such increase in outstanding shares.

                  6.1.2  Aggregation  of Shares.  If after the date hereof,  and
subject to the  provisions of Section 6.2, the number of  outstanding  shares of
Common Stock is decreased by a consolidation, combination or reclassification of
shares of Common Stock or other similar event,  then, upon the effective date of
such  consolidation,  combination or  reclassification,  the number of shares of
Common Stock issuable on exercise of each Purchase  Option shall be decreased in
proportion to such decrease in outstanding shares.

                  6.1.3  Adjustments in Exercise  Price.  Whenever the number of
shares of Common Stock  purchasable upon the exercise of this Purchase Option is
adjusted,  as provided in this Section 6.1, the Exercise Price shall be adjusted
(to the nearest cent) by multiplying  such Exercise Price  immediately  prior to
such  adjustment by a fraction (x) the numerator of which shall be the number of
shares of Common Stock  purchasable  upon the exercise of this  Purchase  Option
immediately prior to such adjustment,  and (y) the denominator of which shall be
the number of shares of Common Stock so purchasable immediately thereafter.

                  6.1.4 Replacement of Securities Upon  Reorganization,  etc. If
after the date  hereof any capital  reorganization  or  reclassification  of the
Common  Stock of the  Company,  or  consolidation  or merger of the Company with
another  corporation,  or the sale of all or substantially  all of its assets to
another  corporation  or other  similar  event  shall be  effected,  then,  as a
condition of such  reorganization,  reclassification,  consolidation,  merger or
sale,  lawful  and  fair  provision  shall be made  whereby  the  Holders  shall
thereafter  have the right to purchase and receive,  upon the basis and upon the
terms  and  conditions  specified  in this  Purchase  Option  and in lieu of the
Securities immediately  theretofore purchasable and receivable upon the exercise
of this Purchase Option, such shares of stock,  securities,  or assets as may be
issued or payable with  respect to or in exchange  for the number of  Securities
immediately  theretofore  purchasable  and receivable  upon the exercise of this
Purchase  Option,  had  such  reorganization,  reclassification,  consolidation,
merger or sale not taken place.  In such event,  appropriate  provision shall be
made with  respect  to the  rights  and  interests  of the  Holders  so that the
provisions hereof (including, without limitation,  provisions for adjustments of
the Exercise Price and of the number of securities purchasable upon the exercise
of this Purchase Option) shall thereafter be applicable,  as nearly as may be in
relation to any share of stock,  securities,  or assets  thereafter  deliverable
upon the exercise hereof. The Company shall not effect any such  reorganization,
reclassification,   consolidation,   merger  or  sale   unless,   prior  to  the
consummation  thereof,  the  successor  corporation  (if other than the Company)
resulting from such transaction shall assume by written instrument  executed and
delivered  to the  Holders  the  obligation  to  deliver  such  shares of stock,
securities or assets.
                                       6
<PAGE>
         6.2  Elimination  of  Fractional  Interests.  The Company  shall not be
required to issue certificates  representing  fractions of Common Stock upon the
exercise or transfer of the Purchase  Option,  nor shall it be required to issue
scrip or pay cash in lieu of any  fractional  interests,  it being the intent of
the parties that all  fractional  interests  shall be eliminated by rounding any
fraction up or down to the  nearest  whole  number of shares of Common  Stock or
other securities, properties or rights.

7.  Reservation  and Listing.  The Company  shall at all times  reserve and keep
available out of its authorized  shares of Common Stock,  solely for the purpose
of issuance  upon  exercise of the  Purchase  Options,  such number of shares of
Common Stock or other securities, properties or rights as shall be issuable upon
the exercise  thereof.  The Company  covenants and agrees that, upon exercise of
the Purchase  Options and payment of the Exercise Price therefor,  all shares of
Common Stock and other securities  issuable upon such exercise shall be duly and
validly  issued,  fully paid and  non-assessable  and not subject to  preemptive
rights of any  stockholder.  The Company further  covenants and agrees that upon
exercise of the Warrants  underlying the Shares included in this Purchase Option
and payment of the  exercise  prices  therefor,  all shares of Common  Stock and
other securities  issuable upon such exercises shall be duly and validly issued,
fully  paid and  non-assessable  and not  subject  to  preemptive  rights of any
stockholder.  As long as the Purchase Options shall be outstanding,  the Company
shall use its best efforts to cause the Common Stock  issuable  upon exercise of
the Purchase  Options to be listed  (subject to official  notice of issuance) on
all securities exchanges (or, if applicable on Nasdaq) on which the Common Stock
is then listed and/or quoted.

8.       Certain Notice Requirements.

         8.1 Holder's Right to Receive Notice. Nothing herein shall be construed
as conferring upon the Holders the right to vote or consent or to receive notice
as a stockholder for the election of directors or any other matter, or as having
any rights whatsoever as a stockholder of the Company.  If, however, at any time
prior to the expiration of the Purchase  Options and their exercise,  any of the
events  described  in  Section  8.2 shall  occur,  then,  in one or more of said
events,  the Company  shall give written  notice of such event at least  fifteen
days  prior to the  date  fixed as a  record  date or the  date of  closing  the
transfer  books  for the  determination  of the  stockholders  entitled  to such
dividend,  distribution,  conversion or exchange of  securities or  subscription
rights, or entitled to vote on such proposed dissolution,  liquidation,  winding
up or sale.  Such  notice  shall  specify  such  record  date or the date of the
closing of the transfer books, as the case may be.

         8.2 Events Requiring Notice.  The Company shall be required to give the
notice described in this Section 8 upon one or more of the following events: (i)
if the Company  shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive any dividend or distribution,  (ii)
the Company  shall offer to all the holders of its Common  Stock any  additional
shares  of  capital  stock of the  Company  or  securities  convertible  into or
exchangeable for shares of capital stock of the Company, or any option, right or
warrant to subscribe therefor, or (iii) a dissolution,  liquidation, winding up,
consolidation,  merger  or  reorganization  of the  Company  or a sale of all or
substantially all of its property, assets and business shall be proposed.

         8.3 Notice of Change in Exercise  Price.  The Company  shall,  promptly
after an event  requiring a change in the Exercise Price pursuant to Section 6.1
hereof,  send notice to the Holders of such event and change  ("Price  Notice").
The Price Notice shall  describe the event
                                       7
<PAGE>
causing the change and the method of calculating  same and shall be certified as
being true and accurate by the Company's President and Chief Financial Officer.

         8.4 Transmittal of Notices. All notices,  requests,  consents and other
communications  under this  Purchase  Option  shall be in  writing  and shall be
deemed to have been duly made on the date of delivery if delivered personally or
sent by overnight courier,  with acknowledgment of receipt to the party to which
notice is given,  or on the  fifth day after  mailing  if mailed to the party to
whom notice is to be given,  by registered  or certified  mail,  return  receipt
requested,  postage  prepaid and properly  addressed  as follows:  (i) if to the
registered Holder of the Purchase Option, to the address of such Holder as shown
on the  books  of the  Company,  or (ii)  if to the  Company,  to its  principal
executive office.

9.       Miscellaneous.

         9.1 Amendments. The Company and GKN may from time to time supplement or
amend this Purchase  Option  without the approval of any of the Holders in order
to cure any ambiguity,  to correct or supplement any provision  contained herein
which may be defective or inconsistent  with any other provisions  herein, or to
make any other  provisions in regard to matters or questions  arising  hereunder
which  the  Company  and  GKN  may  deem  necessary  or  desirable.   All  other
modifications  or  amendments  shall  require the  written  consent of the party
against whom enforcement of the modification or amendment is sought.

         9.2 Headings. The headings contained herein are for the sole purpose of
convenience  of reference,  and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Purchase Option.

         9.3 Entire  Agreement.  This  Purchase  Option  constitutes  the entire
agreement of the parties hereto with respect to the subject  matter hereof,  and
supersedes all prior  agreements  and  understandings  of the parties,  oral and
written, with respect to the subject matter hereof.

         9.4 Binding  Effect.  This  Purchase  Option  shall inure solely to the
benefit of and shall be binding  upon,  the  Holder  and the  Company  and their
respective  successors,  legal  representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or claim
under or in respect of or by virtue of this  Purchase  Option or any  provisions
herein contained.

         9.5 Governing Law;  Submission to  Jurisdiction.  This Purchase  Option
shall be governed by and construed  and enforced in accordance  with the laws of
the State of New York,  without  giving effect to conflict of laws.  The Company
hereby agrees that any action, proceeding or claim against it arising out of, or
relating in any way to this Purchase Option shall be brought and enforced in the
courts  of the State of New York or of the  United  States  of  America  for the
Southern  District of New York, and  irrevocably  submits to such  jurisdiction,
which jurisdiction  shall be exclusive.  The Company hereby waives any objection
to such exclusive  jurisdiction  and that such courts  represent an inconvenient
forum.  Any  process or summons to be served  upon the  Company may be served by
transmitting  a copy thereof by registered  or certified  mail,  return  receipt
requested,  postage prepaid, addressed to it at the address set forth in Section
8 hereof.  Such mailing shall be deemed personal  service and shall be legal and
binding upon the Company in any action,  proceeding or claim. The Company agrees
that the  prevailing  party(ies) in any such action shall be entitled to recover
from the other  party(ies)  all of its reasonable  attorneys'  fees and expenses
relating to such action or proceeding  and/or  incurred in  connection  with the
preparation therefor.
                                       8
<PAGE>
         9.6  Waiver,  Etc.  The  failure of the Company or the Holder to at any
time enforce any of the  provisions of this Purchase  Option shall not be deemed
or construed to be a waiver of any such provision,  nor to in any way affect the
validity of this  Purchase  Option or any  provision  hereof or the right of the
Company or any Holder to  thereafter  enforce  each and every  provision of this
Purchase Option. No waiver of any breach,  non-compliance or  non-fulfillment of
any of the  provisions  of this  Purchase  Option shall be effective  unless set
forth in a written  instrument  executed by the party or parties against whom or
which  enforcement  of such waiver is sought;  and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver of
any other or subsequent breach, non-compliance or non-fulfillment.

         9.7 Execution in Counterparts.  This Purchase Option may be executed in
one or more  counterparts,  and by the  different  parties  hereto  in  separate
counterparts,  each of which shall be deemed to be an original, but all of which
taken together shall  constitute  one and the same  agreement,  and shall become
effective when one or more  counterparts  has been signed by each of the parties
hereto and delivered to each of the other parties hereto.

         9.8 Exchange  Agreement.  As a condition  of the  Holder's  receipt and
acceptance of this Purchase Option, Holder agrees that, at any time prior to the
complete  exercise  of this  Purchase  Option by Holder,  if the Company and GUN
enter into an agreement ("Exchange Agreement") pursuant to which they agree that
all outstanding  Purchase  Options will be exchanged for securities or cash or a
combination of both, then Holder shall agree to such exchange and become a party
to the Exchange Agreement.

                  IN WITNESS  WHEREOF,  the  Company  has caused  this  Purchase
Option to be signed by its duly  authorized  officer as of the 18th day of June,
1997.

                                             H.E.R.C. PRODUCTS INCORPORATED

                                             By:    /s/ S. Steven Carl
                                                --------------------------------
                                                S. Steven Carl, Chief Executive
                                                Officer
                                       9
<PAGE>
Form to be used to exercise Purchase Option:


H.E.R.C. Products Incorporated
2202 West Lone Cactus Drive, #15
Phoenix, Arizona 85027



Date:___________________,19__

         The  undersigned  hereby  elects  irrevocably  to  exercise  the within
Purchase Option and to purchase ____ Shares of Common Stock,  $.Ol par value, of
H.E.R.C.  Products  Incorporated and hereby makes payment of $_____________  (at
the rate of $_____________  per Share) in payment of the Exercise Price pursuant
thereto.  Please  issue the  Common  Stock as to which this  Purchase  Option is
exercised in accordance with the instructions given below.

                                       or
                                       --

         The  undersigned  hereby  elects  irrevocably  to  exercise  the within
Purchase Option and to purchase ____ Shares of Common Stock,  $.Ol par value, of
H.E.R.C.  Products  Incorporated by surrender of the unexercised  portion of the
within Purchase Option or other security of H.E.R.C. Products Incorporated (with
a "Value" of  $___________  based on a "Market Price" of  $___________ ). Please
issue the Common Stock in accordance with the instructions given below.


                                             -----------------------------------
                                             Signature



                                             -----------------------------------
                                             Signature Guaranteed

                  NOTICE:  The signature to this form must  correspond  with the
name as written upon the face of the within Purchase Option in every  particular
without  alteration  or  enlargement  or  any  change  whatsoever  and  must  be
guaranteed  by a bank,  other than a savings bank, or by a trust company or by a
firm having membership on a registered national securities exchange.


          Please issue securities as follows: Name:
                                                   -----------------------------

                                              Address:
                                                      --------------------------

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

                                              I.D.#:
                                                    ----------------------------
                                       10
<PAGE>
Form to be used to assign Purchase Option:

                                   ASSIGNMENT

         (To be  executed by the  registered  Holder to effect a transfer of the
within Purchase Option):

         FOR VALUE RECEIVED,  _______________________________  does hereby sell,
assign and transfer unto  _______________________________  the right to purchase
_______________________________  Shares of  Common  Stock of  H.E.R.C.  Products
Incorporated ("Company") evidenced by the within Purchase Option and does hereby
authorize the Company to transfer such right on the books of the Company.


Dated: ______________, 19__


                                             -----------------------------------
                                             Signature



         NOTICE:  The  signature to this form must  correspond  with the name as
written upon the face of the within Purchase Option in every particular  without
alteration or enlargement or any change whatsoever.
                                       11