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J.C.  MARTIN  COMPANY
INVESTMENT  REAL  ESTATE
1096  Toro  Canyon  Road
Santa  Barbara,  CA  93108
(805)  969-1243
Fax  (805)  969-0773


                               SUBLEASE AGREEMENT

1.     PARTIES.

     This  Sublease,  dated  July 1, 2001, is made between John E. and Carole D.
King  ("Sublessor"),  and  Turbodyne  Systems,  Inc.,  a  Nevada  corporation
("Sublessee").


2.     MASTER  LEASE.

     Sublessor  is  the  lessee  under  a written lease dated September 1, 1989,
wherein  Co-trustees  of  the  Preissman  and  May  Trusts  ('Lessor") leased to
Sublessor the real property in the City of Carpinteria, County of Santa Barbara,
State  of  California,  described as approximately 46,812 square feet along with
storage  and garage buildings on approximately 3.17 acres of land commonly known
as 6155 Carpinteria Avenue, Carpinteria, California to include all rights to use
road easements to the property ("Master Premises").  Said lease has been amended
by  the  following  amendments:

See  ADDENDUM  attached  hereto  and  made  a  part  hereof.
------------------------------------------------------------

said  lease  and  amendments  are herein collectively referred to as the "Master
Lease"  and  are  attached  hereto  as  Exhibit "A" and all terms of the "Master
Lease"  and  related  amendments  are  to be considered an integral part of this
Sub-lease.  In  addition,  the  "Master  Lease"  shall  dictate  any  conflicts.

3.     PREMISES.

     Sublessor  hereby  subleases  to  Sublessee on the terms and conditions set
forth in this Sublease the following portion of the Master Premises ("Premises")
the  entire

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property  including  all  buildings  and  exclusive  use of all the land and all
rights  to  easements.

4.     WARRANTY  BY  SUBLESSOR.

     Sublessor  warrants  and represents to Sublessee that the Master Leases has
not  been  amended  or  modified  except  as  expressly  set  forth herein, that
Sublessor is not now, and as of the commencement of the Term hereof will not be,
in  default  or  breach  of  any of the provisions of the Master Lease, and that
Sublessor  has  no knowledge of any claim by Lessor that Sublessor is in default
or  breach  of  any  of  the  provisions  of  the  Master  Lease.

5.     TERM.

     The  term  of  this  Sublease shall commence on July 1, 2001 ("Commencement
Date"),  or  when  Lessor consents to this Sublease (if such consent is required
under  the  Master  Lease),  whichever  shall last occur, and end on January 30,
2005,  ("Termination  Date"),  unless  otherwise sooner terminated in accordance
with  the  provisions  of  this  Sublease.

6.     RENT.

     6.1  Minimum  Rent.  Sublessee  shall  pay  to  Sublessor  as minimum rent,
without  deduction,  setoff,  notice,  or  demand, at 290 Pismo Street, San Luis
Obispo, CA  93401. or such other place as Sublessor shall designate from time to
time  by  notice  to  Sublessee,  the sum of Twenty Eight Thousand Eight Hundred
Forty  and  no/100  Dollars ($28,840.) per month, in advance on the first day of
each month of the first year of the Term.  Sublessee shall pay to Sublessor upon
execution  of  this  Sublease  the  sum  of  One Hundred Eighteen Thousand Seven
Hundred  Sixty  and  51/100  Dollars ($118,760.51) as rent for March 30, 2001 to
June  30,  2001 (see attached "EXHIBIT T" which includes late rent ($95,289.32),
late  rent  fees  ($11,536.00),  late tax payment fee ($1,240.19), attorney fees
($2,500)  and  annual  insurance  payment  ($8,195.).  In addition, the security
deposit  (see  Item  #7) will be increased by $28,840.  The security deposit and
the  other  abovementioned  owed  money  will  be  paid  out over four months as
outlined  below.

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     Payments will be made as follows to allow for Turbodyne to come current for
the  back rent, late fees, late tax payment fee, attorney fees, annual insurance
payment  and  increased  security  deposit:

Payment  Arrangement:
---------------------

July  30,  2001    $28,840  rent  plus  $35,000 plus $7,210 for increased
                   security  deposit
                                                       ($71,050  total)
August  20,  2001  $28,840 rent plus $35,000 plus $7,210 for increased
                   security  deposit
                                                       ($71,050  total)
September 20, 2001 $28,840  rent  plus  $35,000 plus $7,210 for increased
                   security  deposit
                                                       ($71,050  total)
October  20,2001   $28,840  rent  plus $13,760.51 plus $7,210 for increased
                   security  deposit
                                                       ($49,810.51  total)

If the Term begins or ends on a day other than the first or last day of a month,
the  rent  for  the  partial  months  shall  be  prorated  on  a per diem basis.
Additional  provisions:

     See  ADDENDUM  attached  hereto  and  made  a  part  hereof.
     ------------------------------------------------------------

     Sublessee's  rent  shall be based upon a current base rental figure of $.62
per  sq.  ft.  for the entire 46,812 sq. ft. of the premises, which includes the
37,549  sq.  ft.  of  the  main  building, the 6,113 sq. ft. of the storage area
attached  to  the main building and the 3,150 sq. ft. small

building  to  the rear of the property. The base rental figure shall be $28,840.
monthly  based upon the current value of money in United States dollars plus any
additional  cost  of  living  increases  outlined  in  the  ADDENDUM,  Item  #3.

6.2  Operating  Costs.  Therefore, the Master Lease requires Sublessor to pay to
Lessor all or a portion of the expenses of operating the building and/or project
of  which the Premises are a part ("Operating Costs"), including but not limited
to  taxes,  utilities,  or  Insurance,  then Sublessee shall pay to Sublessor as
additional  rent  One Hundred percent (100%) of the amounts payable by Sublessor
for  Operating  Costs  incurred  during the Term.  Such additional rent shall be
payable  as  and when Operating Costs incurred during the Term.  Such additional
rent  shall  be  payable as and when Operating Costs are payable by Sublessor to
Lessor.  If  the Master Lease provides for the payment by Sublessor of Operating
Costs  on the basis of an estimate thereof, then as and when adjustments between
estimated  and  actual  Operating  Costs  are  made  under the Master Lease, the
obligations  of  Sublessor  and  Sublessee hereunder shall be adjusted in a like
manner;  and  if any such adjustment shall occur after the expiration or earlier
termination  of  the Term, then the obligations of Sublessor and Sublessee under
this  Subsection  6.2  shall  survive such expiration or termination.  Sublessor
shall,  upon  request  by  Sublessee,  furnish  Sublessee  with  copies  of  all
statements submitted by Lessor of actual or estimated Operation Costs during the
Term  (2000-2001  Property  Taxes  -  $24,803.86,  Insurance  -  $8,195.).

     6.3  Late  Charge.  If  Sublessor  does not receive payment within ten (10)
days  of  the  date  in which the rent is due, Sublessee shall pay a late charge
equal  to  ten  percent  (10%)  of  the  overdue  amount.

7.     SECURITY  DEPOSIT.

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     Sublessee shall deposit with Sublessor upon execution of this Sublease (see
payment  schedule  in  Item  #6  above)  the  sum of Twenty Eight Thousand Eight
Hundred  Forty  Dollars  ($28,840.*)

*  (The  initial  security  deposit  of $20,000. was paid by American Appliance,
Inc.  to  John  E.  and  Carole  D.  King  and  has  been  credited to Turbodyne
Technologies,  Inc.  by  Ed  Halimi  of  American  Appliance,  Inc.)

as  security  for  Sublessee's  faithful  performance of Sublessee's obligations
hereunder  ("Security Deposit"). If Sublessee fails to pay rent or other charges
when  due  under this Sublease, or fails to perform any of its other obligations
hereunder, Sublessor may use or apply all or any portion of the Security Deposit
for  the payment of any rent or other amount then due thereunder and unpaid, for
the  payment of any other sum for which Sublessor may become obligated by reason
of  Sublessee's  default  or  breach,  or  for  any  loss or damage sustained by
Sublessor as a result of Sublessee's default or breach. If Sublessor so uses any
portion  of  the  Security  Deposit, Sublessee shall, within ten (10) days after
written  demand  by  Sublessor,  restore the Security Deposit to the full amount
originally  deposited,  and  Sublessee's  failure  to  do  so shall constitute a
default  under  this  Sublease.  Sublessor  shall  not  be  required to keep the
Security  Deposit  separate  from  its  general  accounts,  and  shall  have  no
obligation  or liability for payment of Interest on the Security Deposit. In the
event  Sublessor  assigns its interest in this Sublease, Sublessor shall deliver
to  its  assignee  so much of the Security Deposit as is then held by Sublessor.
Within  fourteen  (14) days after the Term has expired, or Sublessee has vacated
the Premises, or any final adjustment pursuant to Subsection 6.2 hereof has been
made,  whichever shall last occur, and provided Sublessee is not then in default
of any of its obligations hereunder, the Security Deposit, or so much thereof as
had not theretofore been applied by Sublessor, shall be returned to Sublessee or
to  the  last  assignee,  if  any,  of  Sublessee's  interest  hereunder.

8.     USE  OF  PREMISES.

     The Premises shall be used and occupied only for The Corporate Headquarters
and related function of a research and development and manufacturing company and
for  no  other  use  or  purposes.

     8.01  Manner  of  Use.  Lessee shall not cause or permit the Property to be
used  in  any  way  which  constitutes  a  violation  of  any  law, ordinance or
governmental  regulation or order, which annoys or interferes with the rights of
other  tenants  or  Sublessor,  or  which  constitutes  a  nuisance  or  waste.

     8.02 Hazardous Materials. Sublessee shall not cause or permit any hazardous
material  to  be  generated,  produced,  brought  upon, used, stored, treated or
disposed  of  in  or  about  the  Property  by Sublessee, its agents, employees,
contractors,  sub-sub-lessees,  or invitees without the prior written consent of
the  Sublessor.

     8.03  Alterations, Additions and Improvements. Sublessee shall not make any
alterations, additions or improvements to the Property without Sublessor's prior
written  consent.

     8.04  Condition  Upon  Termination.  Upon  termination  of  the  Sublease,
Sublessee  shall surrender the Property to the Sublessor, broom clean and in the
same  condition  as  received  except  for  ordinary  wear  and  tear.

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9.     DAMAGE  OR  DESTRUCTION

9.01     Partial  Damage  to  Property

     (a) Sublessee shall notify Sublessor in writing immediately upon any damage
to the Property. If the Property is only partially damaged (i.e., less than 50%)
or  remains  tenantable  (less than 50% of Sublessee's operations are materially
impaired)  and  if the insurance proceeds received by Sublessor (or Lessor) from
the  insurance policies for the Property are sufficient to pay for the necessary
repairs,  this  Sublease  shall remain in effect and Sublessor (or Lessor) shall
repair  the  damage  as  soon  as  reasonably  possible.

     (b)  If  the  insurance  proceeds received by Sublessor (or Lessor) are not
sufficient  to  pay  the entire cost of repair, or if the cause of the damage is
not  covered  by  the  insurance policies which Sublessor (or Lessor) maintains,
Sublessor  may  elect  either  to  (i)  repair  the damage as soon as reasonably
possible,  in  which case this Sublease shall remain in full force and effect or
(ii) terminate this Sublease as of the date the damage occurred. Sublessor shall
notify  Sublessee  within  thirty  (30)  days  of  the  receipt of notice of the
occurrence  of  the  damage  whether  Sublessor  elects  to repair the damage or
terminate  the  Sublease.

     (c)     Substantial or Total Destruction.  If the Property is substantially
or  totally  destroyed by any cause whatsoever (i.e., the damage to the Property
is  greater  than  partial  damage) and regardless whether Sublessor (or Lessor)
receives  any  insurance  proceeds, this Sublease shall terminate as of the date
the  destruction  occurred.  Notwithstanding  the  preceding  sentence,  if  the
Property  can  be  rebuilt  within six (6) months after the date of destruction,
Sublessor  (or  Lessor)  may  elect  to  rebuild the property at Sublessor's (or
Lessor's  own  expense.

10.     CONDEMNATION

     10.01  If  all  or  any portion of the Property is taken under the power of
eminent  domain  or sold under the threat of that power (all of which are called
"condemnation"),  this  Sublease shall terminate as to the part taken or sold on
the  date  the  condemning authority takes title or possession, whichever occurs
first.

11.     DEFAULTS;  REMEDIES

     11.01  Covenants  and  Conditions.  Sublessee's  performance  of  each  of
Sublessee's  obligations  under  this  Sublease  is  a  condition  as  well as a
covenant.  Sublessee's  right to continue in possession is conditioned upon such
performance.

     11.02  Defaults. Sublessee shall be in material default under the Sublease:

(a)     If  Sublessee  abandons  the premises or if Sublessee's absence from the
Property results in the cancellation of any insurance policies for the Property.

(b)     If  Sublessee  fails  to  pay  rent  or  any  other  charge  when  due.

(c)     If  Sublessee  fails  to  perform  any  of  Sublessee's  non-monetary
obligations  under  this Sublease for a period of thirty (30) days after written
notice  from  Sublessor.

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(d)    If Sublessee makes  a  general  assignment or general arrangement for the
benefit  of  creditors;  or  if a petition for adjudication of bankruptcy or for
reorganization  is filed by or against the Sublessee and is not dismissed within
thirty  (30)  days ; or if a trustee or receiver is appointed to take possession
of  substantially  all  of  Sublessee's  assets  located  at  the Property or of
Sublessee's  interest  in  this  Sublease  and possession is not restored within
thirty  (30)  days; or if substantially all of Sublessee's assets located at the
Property or of Sublessee's interest in this Sublease is subjected to attachment,
execution  or  other judicial seizure which is not discharged within thirty (30)
days.  If  a  court  of  competent  jurisdiction determines that any of the acts
described  in  this  subparagraph  is  not  a default under this Sublease, and a
trustee  is  appointed  to  take possession (or if Sublessee remains a debtor in
possession)  and  such  trustee  or  Sublessee  transfers  Sublessee''  interest
hereunder,  then Sublessor shall receive, as Additional Rent, the excess, if any
of  the  rent  (or any consideration) paid in connection with such assignment or
sub-sublease  over  the  rent  payable  by  Sublessee  under  this  Sublease.

     11.03     Remedies.  On  the  occurrence  of  any  material  default  by
Sublessee, Sublessor may at any time hereafter, with or without notice or demand
and  without  limiting  Sublessor  in  the exercise of any right or remedy which
Sublessor  may  have:


     (a)  Terminate  Sublessee's  right  to  possession  of  the Property by any
lawful  means,  in  which case this Sublease shall terminate and Sublessee shall
immediately  surrender  possession  of  the  Property to the Sublessor.  In such
event Sublessor shall be entitled to recover from Sublessee all damages incurred
by  Sublessor  by  reason of Sublessee's default, including (i) the worth at the
time  of  the  award  of  the Base Rent, Additional Rent and other charges Which
Sublessor  had earned at the time of the termination; (ii) the worth at the time
of  the  award  of the amount by which the unpaid Base Rent, Additional Rent and
other charges with Sublessor would have earned after termination; until the time
of  the  award  exceeds  the  amount  of  such rental loss that Sublessee proves
Sublessor  could  have  reasonably  avoided;  (iii) the worth at the time of the
award  of  the  amount  by which the unpaid Base Rent, Additional Rent and other
charges  which  Sublessee  would  have paid for the balance of the Sublease Term
after  the  time  of  the  award  exceeds  the  amount  of such rental loss that
Sublessee  proves  Sublessor  could  have reasonably avoided; and (iv) any other
amount  necessary  to  compensate  Sublessor  for  all the detriment proximately
caused  by  Sublessee's failure to perform its obligations under the Sublease or
which  in  the  ordinary  course  of things would be likely to result therefrom,
including,  but  no  limited  to,  any  costs  or  expenses  Sublessor incurs in
maintaining  or  preserving  the  Property  after  such  default,  the  cost  of
recovering  possession  of  the  Property,  expenses  of  reletting,  including
necessary  renovation  or  alteration  of  the  Property, Sublessor's reasonable
attorney's fees incurred in connection therewith, and any real estate commission
paid  or payable.  Lessor's exercise of any right or remedy shall not prevent it
from  exercising  any  other  right  or  remedy.

12.     ASSIGNMENT  AND  SUBLETTING.

     Sublessee  shall not assign this Sublease or further sublet all or any part
of  the Premises without the prior written consent of Sublessor (and the consent
of  Lessor,  if  such is required under the terms of the Master Lease).  Consent
shall not be unreasonably withheld.  No assignment of the Sublease shall release
Sublessee  or  change  Sublessee's  primary  responsibility  to pay the rent, to
perform  all  other  obligations  of  Sublessee  under  this Sublease or relieve
Sublessee  of  liability  under  this  Sublease.

13.     OTHER  TERMS  OF  SUBLEASE.

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     All  applicable  terms  and conditions of the Master Lease are incorporated
into  and  made  a  part  of  this  Sublease  as  if  Sublessor  were the lessor
thereunder,  Sublessee  the  lessee  thereunder,  and  the  Premises  the Master
Premises,  except  for  the  following:

          See  ADDENDUM  attached  hereto  and  made  a  part  hereof.

Sublessee  assumes  and  agrees  to  perform  the lessee's obligations under the
Master  Lease during the Term to the extent that such obligations are applicable
to  the  Premises,  except  that  the obligation to pay rent to Lessor under the
Master Lease shall be considered performed by Sublessee to the extent and in the
amount  rent is paid to Sublessor in accordance with Section 6 of this Sublease.
Sublessee  shall  not commit or suffer any act or omission that will violate any
of  the  provisions of the Master Lease.  Sublessor shall exercise due diligence
in  attempting to cause Lessor to perform its obligations under the Master Lease
for  the  benefit  of  Sublessee.  If the Master Lease terminates, this Sublease
shall  terminate  and  the parties shall be relieved of any further liability or
obligation  under  this  Sublease,  provided  however,  that if the Master Lease
terminates  as  a  result of a default or breach by Sublessor or Sublessee under
this Sublease and/or the Master Lease, then the defaulting party shall be liable
to  the  non  defaulting  party  for  the  damage  suffered  as a result of such
termination.
Notwithstanding  the foregoing, if the Master Lease gives Sublessor any right to
terminate  the  Master  Lease  in  the  event  of  a  partial  or  total damage,
destruction,  or  condemnation of the Master Premises or the building or project
of which the Master Premises are a part, the exercise of such right by Sublessor
shall  not  constitute  a  default  or  breach  hereunder.

14.     BROKER  PARTICIPATION.

     Sublessor  and Sublessee warrant and represent that they have dealt with no
real  estate  broker  in  connection  with  this Sublease other than J.C. Martin
Company  ("Broker")  and that no broker is entitled to any commission on account
of  this  Sublease.

15.     ATTORNEYS'  FEES.

     If  Sublessor,  Sublessee,  or  Broker shall commence an action against the
other  arising  out of or in connection with this Sublease, the prevailing party
shall  be  entitled to recover its costs of suit and reasonable attorney's fees.

16.     INSURANCE  POLICIES.

     (a) Liability Insurance. During the sublease term, Sublessee shall maintain
a  policy  of  commercial  general liability insurance (sometimes known as broad
form  general  liability  insurance)  insuring  Sublessee  against liability for
bodily  injury, property damage (including loss of property) and personal injury
arising  out of the operation, use or occupancy of the Property. Sublessee shall
name  Sublessor  and  Landlord  as  additionally  insured under such policy. The
initial  amount of such insurance shall be Five Million Dollars ($5,000,000. per
occurrence  and shall be subject to periodic increase in an amount determined by
Sublessor and/or Landlord in Sublessor's and/or Landlord's reasonable discretion
based  upon inflation, increased liability awards, recommendation of Sublessor's
or  Landlord's  professional  insurance advisers and other relevant factors. The
liability  insurance  obtained  by  Sublessee  under this Paragraph shall (i) be
primary  and  non-contributing;  (ii)  contain cross-liability endorsements; and
(iii)  insure  Sublessor  and/or  Landlord against Sublessee's performance under
Section  5.06  of  the Master Lease (Indemnity). The amount and coverage of such
insurance  shall  not  limit  Sublessee's liability nor relieve Sublessee of

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any  other  obligation  under  this Sublease. Sublessor and/or Landlord may also
obtain  comprehensive  public liability insurance in an amount and with coverage
determined  by  Sublessor  and/or  Landlord  insuring  Sublessor and/or Landlord
against  liability  arising out of ownership, operation, use or occupancy of the
Property.  The  policy  obtained  by  Sublessor  and/or  Landlord  shall  not be
contributory  and  shall  not  provide  primary  insurance.

     (b)       Property  and  Rental Income Insurance.  During the Sublease term
Sublessor  and/or Landlord shall maintain policies of insurance covering loss of
or  damage  to  the  Property in the full amount of its replacement value.  Such
policy shall contain an Inflation Guard Endorsement and shall provide protection
against  all  perils  mischief,  special  extended  perils (all risk), sprinkler
leakage  and  any  other perils which Sublessor and/or Landlord deems reasonably
necessary.  Sublessor and/or Landlord shall not obtain insurance for Sublessee's
fixtures  or  equipment  or  building improvements installed by Sublessee on the
property.  During  the  Sublease  Term,  Sublessor  and/or  Landlord  shall also
maintain  a rental income insurance policy with loss payable to Sublessor and/or
Landlord,  in  an  amount  equal  to  one  year'' Base Rent, plus estimated real
property  taxes  and  insurance  premiums.  Sublessee  shall  be  liable for the
payment  of  any  deductible  amount  under  Sublessor  and/or  Landlord's  or
Sublessee's  insurance policies maintained pursuant to this Section in an amount
not to exceed Ten Thousand Dollars ($10,000.).  Sublessee shall not do or permit
anything  to  be  done  which  invalidates  any  such  insurance  policies.

     (c)       Payment  of  Premiums.  Sublessee  shall pay all premiums for the
insurance  policies  described  in  this  Paragraph  and  (whether  obtained  by
Landlord,  Sublessor  or  Sublessee)  within fifteen (15) days after Sublessee's
receipt  of a copy of the premium statement or other evidence of the amount due,
except  Sublessor  and/or  Landlord  shall  pay  all  premiums  for  non-primary
comprehensive  public liability insurance which Sublessor and/or Landlord elects
to  obtain  as  provided in this Paragraph.  If insurance policies maintained by
Sublessor  and/or  Landlord  cover  improvements on real property other than the
Property,  Sublessor  and/or  Landlord shall deliver to Sublessee a statement of
the  premium  applicable  to  the  Property  showing  in  reasonable  detail how
Sublessee's  share  of  the  premium was computed.  If the Sublease Term expires
before  the  expiration  of  an  insurance policy maintained by Sublessor and/or
Landlord,  Sublessee  shall  be liable for the Sublessee's prorated share of the
insurance  premiums.  Before  the  Commencement Date, Sublessee shall deliver to
Sublessor  and/or  Landlord a copy of any policy of insurance which Sublessee is
required to maintain under this Section.  At least thirty (30) days prior to the
expiration  of  any  such  policy,  Sublessee  shall deliver to Sublessor and/or
Landlord  a  renewal of such policy.  As an alternative to providing a policy of
insurance, Sublessee shall have the right to provide a certificate of insurance,
executed  by  an  authorized  officer of the insurance company, showing that the
insurance  which Sublessee is required to maintain under this Section is in full
force  and  effect  and containing such other information which Sublessor and/or
Landlord  reasonably  requires.

(d)       General  Insurance  Provisions.

     (i)     Any  insurance  which  Sublessee is required to maintain under this
Sublease  shall include a provision which requires the insurance carrier to give
Sublessor  and  Landlord  30  days'  written notice prior to any cancellation or
modification  of  such  coverage.

     (ii)     If  Sublessee  fails to deliver any policy, certificate or renewal
to  Sublessor  and  Landlord  required under this Sublease within the prescribed
time  period  or  if any such policy is canceled or modified during the Sublease
Term  without  Sublessor's and Landlord's consent, Sublessor and/or Landlord may
obtain  such  insurance,  in  which

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case  Sublessee  shall  reimburse  Sublessor  or  Landlord  for the cost of such
insurance  within  fifteen  (15) days after receiving a statement that indicates
the  cost  of  such  insurance.

     (iii)     Sublessee  shall  maintain  all  insurance  required  under  this
Sublease  with companies holding a "General Policy Rating" of A-12 or better, as
set  forth  in  the  most  current  issue  of  "Best Key Rating Guide".  Niether
Sublessor  nor  Landlord  makes  no  representation  as  to the adequacy of such
insurance  to  protect  Landlord's  Sublessor's  or  Sublessee's  interests.
Therefore, Sublessee shall obtain any additional property or liability insurance
which  Sublessee  deems  necessary to protect Landlord, Sublessor and Sublessee.

     (iv)     Unless  prohibited  under  any  applicable  insurance  policies
maintained,  Landlord,  Sublessor  and  Sublessee  each hereby waive any and all
rights  of  recovery  against  the other(s), or against the officers, employees,
agents or representatives of the other for loss or damage to its property or the
property  of  the others under its control, is such loss or damage is covered by
any insurance policy in force (whether or not described in this Sublease) at the
time of such loss or damage.  Upon obtaining the required policies of insurance,
Landlord, Sublessor and Sublessee shall give notice to the insurance carriers of
this  mutual  waiver  of  subrogation.

17.     NOTICES.

     All  notices and demands which may or are to be required or permitted to be
given  by  either party on the other hereunder shall be in writing.  All notices
and  demands  by the Sublessor to Sublessee shall be sent by United States Mail,
postage  prepaid, addressed to the Sublessee at the Premises, and to the address
herein  below,  or  to  such  other  place  as  Sublessee  may from time to time
designate  in  a  notice  to  the  Sublessor.  All  notices  and  demands by the
Sublessee  to  Sublessor  shall  be sent by United States Mail, postage prepaid,
addressed  to  the  Sublessor at the address set forth herein, and to such other
person  or place as the Sublessor may from time to time designate in a notice to
the  Sublessee.

To  Sublessor:  King  Ventures,  290  Pismo  St.,  San  Luis  Obispo, CA  93401.

To Sublessee:  Turbodyne Systems, Inc., 6155 Carpinteria Avenue, Carpinteria, CA
93013.

18.     CONSENT  BY  LESSOR.

     THIS  SUBLEASE SHALL BE OF NO FORCE OR EFFECT UNLESS CONSENTED TO BY LESSOR
WITHIN  10  DAYS  AFTER EXECUTION HEREOF.  IF SUCH CONSENT IS REQUIRED UNDER THE
TERMS  OF  THE  MASTER  LEASE.

Date:                                         Date:  July  1,  2001
     --------------------------------


Sublessor:  John E. and Carole D. King       Sublessee: Turbodyne Systems, Inc.

By:  /s/ John E. King  Carol D. King          By:  /s/ Edward  Halimi
Title:  ____________________                  Title:  Corporate  President

By:  _____________________                    By:  _____________________

Title:  ____________________                  Title:  ____________________


9
<PAGE>
                          LESSOR'S CONSENT TO SUBLEASE

The  undersigned  ("Lessor"),  lessor under the Master Lease, hereby consents to
the  foregoing  Sublease  and  addendum without waiver of any restriction in the
Master  Lease  concerning  further  assignment  or subletting.  Lessor certifies
that,  as  of the date of Lessor's execution hereof, Sublessor is not in default
or  breach  of  any  of  the provisions of the Master Lease, and that the Master
Lease  has  not  been  amended  or modified except as expressly set forth in the
foregoing  Sublease.

Date:  ____________________

Lessor:  ____________________

By:  ____________________

Title:  ____________________

By:  ____________________

Title:  ____________________



Consult  your  advisors  -  This document has been prepared for approval by your
attorney.  No representation or recommendation is made by J.C. Martin Company as
to the legal sufficiency or tax consequences of this document or the transaction
to  which  it  relates.  These  are  questions  for  your  attorney.

In  any  real  estate  transaction,  it  is  recommended that you consult with a
professional,  such  as  a civil engineer, industrial hygienist or other person,
with  experience  in  evaluating  the  condition  of the property, including the
possible  presence  of  asbestos,  hazardous  materials  and underground storage
tanks.



10
<PAGE>

ADDENDUM TO THAT CERTAIN SUBLEASE DATED JULY 1, 2001 BY AND BETWEEN JOHN E. KING
AND  CAROLE D. KING, SUBLESSORS, AND TURBODYNE SYSTEMS, INC., SUBLESSEE, FOR THE
PROPERTY  COMMONLY  KNOWN  AS  6155  CARPINTERIA  AVE,  CARPINTERIA, CALIFORNIA.

The "Master Lease" between Sublessors, as Lessee, and the owners of the building
in  their  capacity  as  Lessor is incorporated in its entirety by this sublease
except  as  follows:

1.     The  Sublessee  shall be given occupancy of the premises on July 1, 2001.
Sublessee  shall  assume  all  of the responsibilities of the "Master Lease" and
Sublease.  Monthly  Sublease  payments  shall  begin  July  1,  2001.

2.     The  Sublease  shall  be for three (3) years and seven months (concurrent
with  the  "Master  Lease").

3.     The base rent payable under this Sublease shall be adjusted, upward only,
on  December 1st of each year of the Master Lease by three-fourths of the annual
percentage  increase of the Consumer Price Index of the U.S. Department of Labor
Bureau  of  Labor  Statistics,  CPI  for all Urban Consumers over the index year
1982-84-100.

4.     Sublessee and its agents shall be held harmless by Sublessor and incur no
responsibility  for any and all hazardous materials that may be discovered on or
in  the  property  and  building  which  occurred  prior to Sublessee's original
occupancy  of  the  site  on  December  1,  1994.

5.     Sublessee acknowledges that it is aware that the truck access to the rear
of  the  property  is  over  an  easement  on the adjoining property.  Sublessee
further acknowledges that it is aware of the requirements of the Master Lease in
the  event  the  easement  is  lost  for  any  reason.  Therefore, Sublessee and
Sublessor  agree  to  the  following.  In the event the easement is lost for any
reason,  Sublessor  shall immediately undertake to provide alternative access to
the  rear  of  the  property.  Sublessee shall cooperate fully with Sublessor in
this  effort  and  shall  pay  one-half  of  the cost, if any, to construct said
alternative  access.  Sublessor shall be responsible for said construction of an
alternative  access  and shall provide to Sublessee evidence of the construction
cost  for  Sublessee's  review.  In  the  event  Sublessor  does not immediately
undertake  to  provide  said alternative access, then Sublessee may, upon thirty
(30)  days  written  notice,  assume  construction  responsibilities  and charge
Sublessor  for  one  hundred  (100%) percent of the necessary improvement costs.

8.     Performance  of  this  Sublease  shall  be  guaranteed  by  Turbodyne
Technologies, Inc., a Delaware corporation as well as Turbodyne Systems, Inc., a
Nevada  corporation  and by Edward M. Halimi, personally.  Financial information
including  financial  statements  shall be provided to Sublessor for Sublessor's
review  and  approval  prior  to  the  execution  of  this lease by all parties.

11
<PAGE>

9.     Should Turbodyne Systems, Inc. decide to sub-sublease any portion of this
property  they  agree to contract with J.C. Martin Company for brokerage leasing
services  at  the  standard  leasing  agreements  common  in Santa Barbara, C.A.



Sublessor:                                   Sublessee:

/s/ John  E.  King                              /s/ Edward  Halimi
_____________________                         _____________________
John  E.  King                                   Edward  M.  Halimi,  Corporate
President                                        Turbodyne  Systems,  Inc.

/s/ Carol  D.  King"
_____________________
Carole  D.  King



ATTACHMENTS:  "MASTER  LEASE"  (Exhibit  "A")
               "EXHIBIT  T"



<PAGE>



                                   "EXHIBIT T"


<TABLE>
<CAPTION>



<CAPTION>

                                          King  Ventures
                                     Turbodyne  Open  Balance
                                         All  Transactions



Type                        Date        Num            Memo         Due Date   Open Balance   Amount
-----------------------  ----------  ----------  -----------------  ---------  ------------  ---------
<S>                      <C>         <C>         <C>                <C>        <C>           <C>
Invoice                   3/20/2001      971692  Rent               3/30/2001      8,769.32  28,840.00
Invoice                    4/6/2001      971701     03/01 Late Fee  4/6/2001       2,884.00   2,884.00
Invoice                   4/11/2001      971702  Prop Tax Late Fee  4/11/2001      1,240.19   1,240.19
Invoice                   4/20/2001      971704  Rent               4/30/2001     28,640.00  28,840.00
Invoice                    5/1/2001      971709     04/01 Late Fee  5/11/2001      2,884.00   2,884.00
Invoice                   5/20/2001      971710  Rent               5/30/2001     28,640.00  28,840.00
Invoice                    6/1/2001      971717     05/01 Late Fee  6/11/2001      2,884.00   2,884.00
Invoice                   6/11/2001      971716  Attorney Fees      6/21/2001      1,500.00   1,500.00
Invoice                   6/20/2001      971728  Rent               6/30/2001     28,640.00  28,840.00
Invoice                    7/1/2001      971731     06/01 Late Fee  7/11/2001      2,884.00   2,884.00
Invoice                    7/2/2001      971735  Prop Ins           7/12/2001      8,195.00   8,195.00
                                                                               ------------  ---------
                                                          Total Turbodyne, Inc.  117,160.51  137,831.19
                                                                                 ----------  ----------
                                                        Total 7-UP BLDG          117,760.51  138,831.19
                                                                                 ----------  ----------
                                                        TOTAL                    117,760.51  138,831.19
                                                                                 ==========  ==========

</TABLE>








                                                                         Page 1
<PAGE>

J.C.  MARTIN  COMPANY
INVESTMENT  REAL  ESTATE
1096  Toro  Canyon  Road
Santa  Barbara,  CA  93108
(805)  969-1243
Fax  (805)  969-0773

July  1,  2001
                        PERSONAL AND CORPORATE GUARANTEE

     1.     Sublease  - This agreement refers to the sublease dated July 1, 2001
            --------
between  John  E.  King  and  Carole D. King, Sublessors, and Turbodyne Systems,
Inc.,  a  Nevada  corporation,  Sublessee,  for  the  property  located  at 6155
Carpinteria  Avenue  in  Carpinteria,  CA.  The sublease begins July 1, 2001 and
ends  January  30, 2005.  The monthly lease payments total $28,840. per month in
the  seven months of the lease and then escalate with cost of living adjustments
in  the  remaining  years  of  the  lease.

     2.     The  following  entities  agree  to guarantee the performance of the
Sublease  to  insure  that  prompt  monthly lease payments are made and that the
Sublessors  are  guaranteed  full  payment  under  this  Sublease:

a.     Turbodyne  Technologies,  Inc.,  a  Delaware  corporation

b.     Turbodyne  Systems,  Inc.,  a  Nevada  corporation

c.     Edward  M.  Halimi  (a  personal  guarantee)

     3.     The  above  mentioned Sublease is subject to and contingent upon the
Sublessors,  John  E.  King  and  Carole  D.  King's  approval  of the financial
statements of the three entities mentioned in #2 above prior to the execution of
the  Sublease  by  all  parties.

1
<PAGE>

/s/ John  E.  King
_____________________                         _____________________
John E. King, Sublessor                       Frank  Walter,
                                              Corporate Secretary
                                              Turbodyne  Technologies,  Inc.
                                              Sublessee

 /s/ Carol D. King                            /s/ Edward  Halimi
_____________________                         _____________________
Carole D. King, Sublessor                     Edward  M.  Halimi
                                              President
                                              Turbodyne  Systems,  Inc.
                                              Sublessee

                                              /s/ Edward  Halimi
                                              _____________________
                                              Edward  M.  Halimi,  (personally)

2