DYNAGEN, INC.

                      Non-Qualified Stock Option Agreement


         DYNAGEN,  INC., a Delaware  corporation (the "Company"),  hereby grants
this 28th day of October, 1996, to Michael Sorell (the "Optionee"), an option to
purchase a maximum of 330,000 shares (the "Option Shares") of Common Stock, $.01
par  value  (the  "Common  Stock"),  at the  price of $1.31  per  share,  on the
following terms and conditions:

         1.  GRANT AS  NON-QUALIFIED  OPTION;  OTHER  OPTIONS.  This  Option  is
intended to be a  Non-Qualified  Option (rather than an incentive stock option),
and the Board of Directors or any committee appointed by the Board to administer
the Company's options  (hereinafter,  all references to the "Committee" mean the
committee  so appointed or the Board if no such  committee  has been  appointed)
intends to take appropriate  action, if necessary,  to achieve this result. This
Option is in addition to any other options  heretofore  or hereafter  granted to
the Optionee by the Company,  but a duplicate  original of this instrument shall
not affect the grant of another option.

         2. EXTENT OF OPTION IF BUSINESS RELATIONSHIP CONTINUES. If the Optionee
has  continued  to serve the Company in the  capacity of an  employee,  officer,
director,  agent,  advisor,  or consultant  (such service is described herein as
maintaining or being involved in a "Business Relationship" with the Company), on
the  following  dates,  the Optionee may exercise  this Option for the number of
Option Shares set opposite the applicable date:

    Less than one year from the date hereof      -     No shares

    One year but less than two years from        -     25% of the Option Shares
    the date hereof

    Two years but less than three years from     -     An additional 35% of the
    the date hereof                                    Option Shares

    Three years from the date hereof             -     An additional 40% of the
                                                       Option Shares

The  foregoing  rights are  cumulative  and,  while the  Optionee  continues  to
maintain a Business  Relationship  with the Company,  may be exercised up to and
including  the date  which is seven  (7)  years  from the date  this  Option  is
granted.  All of the  foregoing  rights  are  subject  to  Sections  3 and 4, as
appropriate, if the Optionee ceases to maintain a Business Relationship with the
Company or dies,  becomes disabled or undergoes  dissolution while involved in a
Business Relationship with the Company.

         3.  TERMINATION  OF BUSINESS  RELATIONSHIP.  If the Optionee  ceases to
maintain a Business Relationship with the Company, other than by reason of death
or  disability as defined 







in Section 4, no further  installments  of this Option shall become  exercisable
and this Option shall  terminate  after the passage of thirty (30) days from the
date the Business  Relationship ceases, but in no event later than the scheduled
expiration  date. In such a case, the Optionee's only rights  hereunder shall be
those which are properly exercised before the termination of this Option.

         4. DEATH; DISABILITY. If the Optionee dies while involved in a Business
Relationship  with the Company,  this Option may be exercised,  to the extent of
the  number of Option  Shares  with  respect  to which the  Optionee  could have
exercised it on the date of his death, by his estate, personal representative or
beneficiary to whom this Option has been assigned  pursuant to Section 9, at any
time within 180 days after the date of death,  but not later than the  scheduled
expiration  date. If the Optionee's  Business  Relationship  with the Company is
terminated by reason of disability,  this Option may be exercised, to the extent
of the number of Option  Shares with  respect to which the  Optionee  could have
exercised it on the date the Business  Relationship was terminated,  at any time
within  180 days  after the date of such  termination,  but not  later  than the
scheduled  expiration  date.  At the  expiration  of such 180-day  period or the
scheduled expiration date, whichever is the earlier, this Option shall terminate
and the only rights hereunder shall be those as to which the Option was properly
exercised   before  such   termination.   If  the  Optionee  is  a  corporation,
partnership,  trust or  other  entity  that is  dissolved,  liquidated,  becomes
insolvent  or enters  into a merger or  acquisition  with  respect to which such
Optionee is not the surviving entity at the time when such entity is involved in
a  Business  Relationship  with  the  Company,  this  Option  shall  immediately
terminate as of the date of such event,  and the only rights  hereunder shall be
those as to which this Option shall immediately terminate as of the date of such
event,  and the only rights hereunder shall be those as to which this Option was
properly exercised before such dissolution or other event.

         5.  PARTIAL  EXERCISE.  Exercise of this Option up to the extent  above
stated  may be made in part at any time and from time to time  within  the above
limits,  except that this Option may not be exercised  for a fraction of a share
unless such exercise is with respect to the final  installment  of stock subject
to this Option and a fractional  share (or cash in lieu  thereof) must be issued
to permit the  Optionee  to  exercise  completely  such final  installment.  Any
fractional  share with respect to which an  installment of this Option cannot be
exercised  because of the limitation  contained in the preceding  sentence shall
remain  subject to this Option and shall be available for later  purchase by the
Optionee in accordance with the terms hereof.

         6.  PAYMENT OF PRICE.  The option  exercise  price is payable in United
States dollars and may be paid:

                  (a) in cash or by check,  or any combination of the foregoing,
equal in amount to the option exercise price; or

                  (b) in the discretion of the Committee,  in cash, by check, by
delivery of shares of the Company's  Common Stock having a fair market value (as
determined  by the  Committee)  equal as of the date of  exercise  to the option
exercise price,  or by any combination of the foregoing,  equal in amount to the
option exercise price.


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         If the  Optionee  delivers  shares of Common Stock held by the Optionee
(the "Old  Stock")  to the  Company  in full or  partial  payment  of the option
exercise  price,  and the Old Stock so delivered is subject to  restrictions  or
limitations  imposed by agreement  between the  Optionee  and the  Company,  the
Common  Stock  received by the  Optionee on the exercise of this Option shall be
subject to all restrictions  and limitations  applicable to the Old Stock to the
extent that the Optionee paid for such Common Stock by delivery of Old Stock, in
addition to any restrictions or limitations imposed by this Agreement.

         7. AGREEMENT TO PURCHASE FOR INVESTMENT.  By acceptance of this Option,
the Optionee  agrees that a purchase of Option Shares under this Option will not
be  made  with a view  of  their  distribution,  as  that  term  is  used in the
Securities Act of 1993, as amended (the "Securities Act"), unless in the opinion
of counsel to the Company such distribution is in compliance with or exempt from
the  registration  and  prospectus   requirements  of  the  Securities  Act  and
applicable  state securities laws, and the Optionee agrees to sign a certificate
to such  effect  at the time of  exercising  this  Option  and  agrees  that the
certificate  for the Option Shares so purchased shall be inscribed with a legend
to ensure  compliance  with the Securities Act and applicable  state  securities
laws.

         8. METHOD OF EXERCISING OPTION.  Subject to the terms and conditions of
this  Agreement,  this Option may be exercised by written notice to the Company,
at the principal  executive office of the Company,  or to such transfer agent as
the Company  shall  designate.  Such notice shall state the election to exercise
this  Option  and the  number of Option  Shares in  respect of which it is being
exercised  and shall be signed by the person so  exercising  this  Option.  Such
notice shall be accompanied by payment of the full exercise price of such Option
Shares,  and the Company shall deliver a  certificate  representing  such Option
Shares  as  soon  as  practicable  after  the  notice  shall  be  received.  The
certificate  for the Option  Shares as to which this  Option  shall have been so
exercised  shall be  registered  in the name of the  person so  exercising  this
Option  (or,  if this  Option  shall be  exercised  by the  Optionee  and if the
Optionee  shall so  request  in the  notice  exercising  this  Option,  shall be
registered in the name of the Optionee and another person jointly, with right of
survivorship)  and shall be delivered  as provided  above to or upon the written
order of the person  exercising  this Option.  In the event this Option shall be
exercised,  pursuant to Section 4 hereof, by any person other than the Optionee,
such  notice  shall be  accompanied  by  appropriate  proof of the right of such
person to exercise this Option.  All Option Shares that shall be purchased  upon
the  exercise  of this  Option  as  provided  herein  shall  be  fully  paid and
nonassessable.

         9.  OPTION  NOT  TRANSFERABLE.  This  Option  is  not  transferable  or
assignable  except by will, by the laws of descent and  distribution or pursuant
to a qualified  domestic relations order as defined in the Internal Revenue Code
of 1986, as amended,  or Title I of the Employee Retirement Income Security Act,
or the rules thereunder.

         10. NO OBLIGATION TO EXERCISE OPTION.  The grant and acceptance of this
Option imposes no obligation on the Optionee to exercise it.


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         11. NO OBLIGATION TO CONTINUE  BUSINESS  RELATIONSHIP.  The Company and
any  related  corporations  are not by this  Option  obligated  in any manner to
continue to maintain a Business  Relationship  with the Optionee in any capacity
whatsoever.

         12. NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE. The Optionee shall have no
rights as a stockholder  with respect to Option Shares subject to this Agreement
until a stock certificate therefore has been issued to the Optionee and is fully
paid for by the Optionee.

         13.  ADJUSTMENTS.  Upon the occurrence of any of the following  events,
the Optionee's rights with respect to this Option shall be adjusted as follows:

                  A. STOCK  DIVIDENDS AND STOCK SPLITS.  If the shares of Common
         Stock shall be subdivided or combined into a greater or smaller  number
         of shares or if the Company shall issue any shares of Common Stock as a
         stock dividend on its outstanding Common Stock, the Option Shares shall
         be   appropriately   increased   or  decreased   proportionately,   and
         appropriate  adjustments  shall be made in the purchase price per share
         to reflect such subdivision, combination or stock dividend.

                  B.  RECAPITALIZATION  OR  REORGANIZATION.  In the  event  of a
         recapitalization  or  reorganization  of the  Company  (other  than  an
         Acquisition  as defined in Section 16) pursuant to which  securities of
         the Company or of another  corporation  are issued with  respect to the
         outstanding  shares of Common Stock,  the Optionee upon exercising this
         Option  shall be entitled to receive for the  purchase  price paid upon
         such exercise the securities he would have received if he had exercised
         the Option prior to such recapitalization or reorganization.

                  C.  DISSOLUTION OR  LIQUIDATION.  In the event of the proposed
         dissolution or liquidation of the Company,  this Option shall terminate
         immediately  prior to the  consummation  of such proposed  action or at
         such  other  time and  subject  to such  other  conditions  as shall be
         determined by the Committee.

                  D.  ISSUANCES  OF  SECURITIES.  Except as  expressly  provided
         herein,  no issuance by the Company of shares of stock of any class, or
         securities convertible into shares of stock of any class, shall affect,
         and no adjustment by reason  thereof shall be made with respect to, the
         number of price of shares subject to this Option.  No adjustments shall
         be made for dividends paid cash or in property other than securities of
         the Company.

                  E. CAPITAL CHANGES AND BUSINESS  SUCCESSIONS.  In the event of
         any stock dividend, stock split, combination, recapitalization or other
         similar change in the capital structure of the Company, this Option and
         the Option  price shall be equitably  adjusted  and, in lieu of issuing
         fractional  shares  upon  exercise   thereof,   this  Option  (and  the
         corresponding Option Shares) shall be rounded upward or downward to the
         nearest  whole share  (rounding  upward for all amounts  equal to or in
         excess of .51). In particular,  without affecting the generality of the
         foregoing, it is understood that for the purposes of Sections 2 through
         4  hereof,  inclusive,  maintaining  or being  involved  in a  Business


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         Relationship with the Company includes maintaining or being involved in
         a Business  Relationship  with its  parent (if any) and any  present or
         future subsidiaries of the Company.

         14.  WITHHOLDING TAXES. The Optionee hereby agrees that the Company may
withhold from the Optionee's wages or other  remuneration the appropriate amount
of federal, state and local taxes attributable to the Optionee's exercise of any
installment of this Option. At the Company's discretion,  the amount required to
be withheld may be withheld in cash from such wages or other remuneration, or in
kind from the Common Stock otherwise  deliverable to the Optionee on exercise of
this Option.  The Optionee further agrees that, if the Company does not withhold
an amount from the Optionee's wages or other remuneration  sufficient to satisfy
the Company's withholding obligation, the Optionee will reimburse the Company on
demand, in cash, for the amount underwithheld.

         15. NO  EXERCISE  OF OPTION IF  BUSINESS  RELATIONSHIP  TERMINATED  FOR
MISCONDUCT.  If the  Business  Relationship  of the Optionee is  terminated  for
"Misconduct,"  this Option shall  terminate on the date of such  termination and
this  Option  shall  thereupon  not be  exercisable  to any  extent  whatsoever.
"Misconduct" is conduct, as determined by the Board of Directors,  involving one
or more of the following: (i) disloyalty, gross negligence, dishonesty or breach
of  fiduciary  duty  to  the  Company;  or  (ii)  the  commission  of an  act of
embezzlement,  fraud or  deliberate  disregard  of the rules or  policies of the
Company  which  results in loss,  damage or injury to the Company;  or (iii) the
unauthorized  disclosure of any trade secret or confidential  information of the
Company;  or (iv) the commission of an act which constitutes  unfair competition
with the  Company  or which  induces  any  customer  of the  Company  to break a
contract with the Company. In making such determination,  the Board of Directors
shall act fairly and in utmost good faith.

         16.  ACCELERATION AND VESTING OF OPTION FOR BUSINESS  COMBINATIONS.  If
the  Company is to be  consolidated  with or  acquired  by  another  entity in a
merger,  sale of all or  substantially  all of the Company's assets or otherwise
(an  "Acquisition"),  then this Option shall,  if the  Committee so  designates,
become fully vested and  exercisable  by the Optionee  immediately  prior to the
consummation of such Acquisition.

         17.  GOVERNING  LAW;  SUCCESSORS AND ASSIGNS.  This Agreement  shall be
governed by and interpreted in accordance with the internal laws of the State of
Delaware  and  shall  be  binding  upon  the  heirs,  personal  representatives,
executors, administrators, successors and assigns of the parties.

         18.  EXPRESS  CONSIDERATION  FOR  OPTION  GRANT.  This  Option is being
granted  to  the  Optionee  on  the  express   condition  and  for  the  express
consideration  that the Optionee has previously  executed,  or will  immediately
execute  and  deliver  in  connection   with  this  Option  grant,   a  form  of
nondisclosure,  assignment of inventions and/or noncompetition agreement (or any
combination thereof) satisfactory to the Company. If such agreement has not been
executed, or if the Optionee refuses to execute such agreement,  this Option may
be canceled by the Company in its sole and absolute discretion.


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         19. ENTIRE AGREEMENT.  This Agreement embodies the entire agreement and
understanding  between the parties  hereto  with  respect to the subject  matter
hereof.


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         IN WITNESS  WHEREOF,  the  Company  and the  Optionee  have caused this
instrument  to be  executed,  and the Optionee  whose  signature  appears  below
acknowledges acceptance of an original copy of this Agreement.

/s/ Michael Sorell
_____________________________               DYNAGEN, INC.
SIGNATURE OF OPTIONEE

Michael Sorell                                    /s/ Indu A. Muni
_____________________________               By:_____________________________
Print Name of Optionee

                                                       President
_____________________________               Title: ___________________________
Street Address


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Social Security Number




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