EXHIBIT 3.1

                        AMENDED CERTIFICATE OF SECRETARY


I, the undersigned, do hereby certify:

1. That I am the duly elected and acting Secretary of SGI International, a Utah
Corporation.

2. The Resolution set forth below is a true and correct copy of a
Resolution passed by the SGI Board of Directors on October 16, 1998,
amending the established Series 98-C Convertible Preferred Stock.

IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of the corporation on October 16, 1998.

/s/ JOHN R. TAYLOR
-----------------------------------
John R. Taylor, Secretary

RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board by provisions of the Certificate of Incorporation of the
Company, as amended (the "Certificate of Incorporation"), and the Corporation
Laws of the State of Utah, the issuance of a series of Preferred Stock, which
shall consist of Two Thousand Two Hundred (2,200) shares, out of Twenty Million
(20,000,000) shares of Preferred Stock which the Company has authority to issue,
be, and the same hereby is, authorized, and the Board hereby fixes the powers,
designations, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restriction thereof, of the
shares of such series (in addition to the powers, designations, preferences, and
relative, participating, optional or to other special rights and the
qualification, limitations or restrictions thereof, set forth in the Certificate
of Incorporation which may be applicable to the Preferred Stock) authorized by
this resolution as follows:

(a) Designation and Rank

The designation of the series of Preferred Stock authorized by this
resolution shall be 98-C Six Percent (6%) Convertible Preferred Stock (the
"Series 98-C Preferred Stock"). The Series 98-C Preferred Stock shall have a
liquidation preference (the "Liquidation Preference") of One Thousand ($1,000)
Dollars per share. The Series 98-C Preferred Stock shall rank prior to the
Company's Common Stock and to all other classes and series of equity securities
of the Company now or hereafter authorized, issued, or outstanding, other than
any classes or series of equity securities of the Company ranking on a parity
with or senior to the Series 98-C Preferred Stock as to dividend rights or
rights upon liquidation, winding up or dissolution of the Company. The Series
98-C Preferred Stock shall be junior to all previous Series of Preferred Stock
as to both the payment of dividends and the distribution of assets upon
liquidation, dissolution, or winding up of the Company, and shall be junior to
all outstanding debt of the Company. The Series 98-C Preferred Stock shall be
subject to the creation of senior stock, parity stock and junior stock to the
extent not expressly prohibited by the Company's Certificate of Incorporation.

(b) Voting Rights

Each holder of the Series 98-C Preferred Stock shall have no voting
rights or powers whatsoever on any matters concerning the Company.

(c) Dividend Provisions

(1) The holders of shares of Series 98-C Preferred Stock shall
be entitled to receive dividends, out of any assets legally available therefore,
prior and in preference to any declaration or payment of any dividend (payable
other than in Common Stock of this Company) on the Common Stock of this Company,
at a per share rate equal to six percent (6%) per annum of the amount of the
respective Liquidation Preference of the Series 98-C Preferred Stock as set
forth in Section (a) hereof, payable upon conversion. Any dividends payable
pursuant to the provisions of this paragraph shall, at the Company's option, be
payable in cash, or unrestricted shares of Common Stock of the Company within
five (5) business days of when due. In the event the Company chooses to issue
Common Stock as payment of the dividends, but at such time such Common Stock has
not been included in an effective registration statement, the Company may delay
issuance of the Common Stock until such time as these shares of Common Stock are
subject to an effective registration statement. Dividends, as set forth above,
will continue to accrue on any unpaid and/or delayed dividends until such time
as such Common Stock is issued, and the Company shall issue such additional
number of shares of Common Stock for such additional dividends. If the Company
elects to pay the dividends in shares of Common Stock and if these shares of
Common Stock are not subject to an effective registration statement within one
hundred eighty (180) calendar days after the Company has received payment for
the Series 98-C Preferred Stock (the "Closing Date"), the Company will pay to
the holder, on or before the 183rd calendar day after the Closing Date all
accrued and unpaid dividends in immediately available funds, in accordance with
the mandatory redemption provisions contained herein. The number of shares of
Common Stock to be issued by the Company in lieu of a cash payment for dividends
due as set forth herein shall be equal to the number of shares of Common Stock
resulting from dividing the dollar amount of dividends owed by the Conversion
Price (as defined below).

(2) Such dividends shall accrue on each share of Series 98-C
Preferred Stock from the Closing Date, and shall accrue from day to day whether
or not earned or declared. Such dividends shall be cumulative so that if such
dividends in respect of any previous or current annual dividend period, at the
annual rate specified above, shall not have been paid or declared and a sum
sufficient for the payment thereof set apart, for all Series 98-C Preferred
Stock at the time outstanding, the deficiency shall first be fully paid before
any dividend or other distribution shall be paid on or declared or set apart for
the Series 98-C Preferred Stock or Common Stock. Dividends on the Series 98-C
Preferred Stock shall be non-participating and the holders of the Series 98-C
Preferred Stock shall not be entitled to participate in any other dividends
beyond the cumulative dividends specified herein.

(d) Liquidation

1. General. Upon any liquidation, dissolution or winding up of
the Company, the holders of the Series 98-C Preferred Stock shall be entitled to
be paid out of the assets of the Company available for distribution to
stockholders, before any distribution or payment is made upon any Common Stock
or any other stock ranking as to the distribution of assets upon liquidation,
dissolution or winding up of the Company junior to the Series 98-C Preferred
Stock, an amount in cash equal to the amount of any accumulated but unpaid
dividends as described in Paragraph (c) herein, plus the Liquidation Preference
of the Series 98-C Preferred Stock (collectively, the "Liquidation Value"), and
shall not be entitled to any further payment. After the full preferential
Liquidation Value has been paid to, or determined and set apart for the Series
98-C Preferred Stock, the remaining assets shall be paid in accordance with the
laws of the State of Utah. Written notice of such liquidation, dissolution or
winding up, stating a payment date, the amount of the payment and the place
where the amounts distributable shall be payable, shall be mailed by certified
or registered mail, return receipt requested, not less than 60 calendar days
prior to the payment date stated therein, to each record holder of any share of
Series 98-C Preferred Stock. Neither the consolidation or merger of the Company
into or with any other company or companies, nor the sale or transfer by the
Company of all or any part of its assets, nor the reduction of the capital stock
of the Company, shall be deemed to be a liquidation, dissolution, or winding up
of the Company for purposes hereof.

2. Partial Distribution of Assets. If the amounts available
for distribution with respect to the Series 98-C Preferred Stock and all other
outstanding stock of the Company ranking on a parity with the Series 98-C
Preferred Stock upon liquidation are not sufficient to satisfy the full
liquidation rights of all the outstanding Series 98-C Preferred Stock and stock
ranking on a parity therewith, then the holders of each series of such stock
will share ratably in any such distribution of assets in proportion to the full
respective preferential amount (which in the case of Preferred Stock ranking on
a parity with or senior to Series 98-C may include accumulated dividends) to
which they are entitled.

(e) Conversion.

1. General. Subject to the other provisions hereof including
paragraph (f) herein, each share of the Series 98-C Preferred Stock shall be
convertible, at the option of the holder as described in paragraph 2 below, into
that number of shares of fully paid and nonassessable shares of Common Stock
which is to be derived from dividing the Conversion Rate by the Conversion
Price. For purposes of this Certificate of Secretary, the "Conversion Rate"
shall mean the Liquidation Preference of One Thousand ($1,000) Dollars per share
of Series 98-C Preferred Stock. For purposes hereof, the "Conversion Price"
shall be determined as of the business date the notice of conversion is received
by the Company via facsimile ("Conversion Date") and shall be equal to the
lesser of: (a) one hundred percent (100%) of the Closing Bid Price (as defined
below) of the shares of Common Stock on the trading day immediately preceding
the Closing Date, or (b) seventy five percent (75%) of the Market Price, where
the "Market Price" is defined as the average of the five lowest Closing Bid
Prices of the Common Stock during the five trading days immediately preceding
the Conversion Date (such five trading day period is hereby referred to as the
"Lookback Period"). After the last trading day of each month that the Series
98-C Preferred Stock remains outstanding, starting on the first day of the
fourth month after the Closing Date the Lookback Period will be increased by two
trading days until the Lookback Period equals a maximum of 30 trading days. The
"Closing Bid Price" of the Common Stock shall be deemed to be the reported last
bid price as reported by Bloomberg LP or if unavailable, on the principal
national 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, the closing bid price as reported by NASDAQ or
such other system then in use, or, if the Common Stock is not quoted by any such
organization, the closing bid price in the over-the-counter market as furnished
by the principal national securities exchange on which the Common Stock is
traded. If certificates for Common Stock are not delivered within five (5)
business days of the Conversion Date, then the holder of the Series 98-C
Preferred Stock will be entitled to revoke the relevant notice of conversion by
delivering a notice to such effect to the Company whereupon the Company and the
holder shall each be restored to their respective positions immediately prior to
the delivery of such notice of conversion or be entitled to liquidated damages
as set forth in (e) 3 below.

2. Exercise of Conversion Rights. Subject to the limitations
described in paragraph (f) herein, the Series 98-C Preferred Stock shall first
be convertible at the earlier of: (i) the date the Form S-2 or S-3 registration
statement (the "Registration Statement") filed by the Company, which includes
the shares of Common Stock underlying the Series 98-C Preferred Stock, is
declared effective by the Securities and Exchange Commission, or (ii) the sixty
first (61st) calendar day after the Closing Date. The holder of the Series 98-C
Preferred Stock agrees that it shall not convert any portion of the Series 98-C
Preferred Stock, which would result in such holder being deemed the owner, at
any specific point in time, of more than 4.99% of the then outstanding shares of
Common Stock. The preceding sentence shall not interfere with such holder's
right, over time, to convert the full face value of the 98-C Preferred Stock,
into more than 4.99% of the then outstanding shares of Common Stock in the
aggregate. In no event shall the aforementioned 4.99% restriction apply in the
event of an Event of Default (as defined below) has occurred and remains uncured
for ten business days.

An "Event of Default" shall have occurred upon the following:

(i) failure on the part of the Company to observe or
perform any material covenant contained in any agreement between the
Company and the holder of the Series 98-C Preferred Stock for 30
calendar days from the date of such occurrence;

(ii) the trading in the Common Stock shall have been
suspended by the SEC or by the OTC Bulletin Board (or if the Common
Stock is then listed and approved for trading on either the New York
Stock Exchange, the American Stock Exchange, the NASDAQ Stock Market's
Small Cap Stock Market, or the NASDAQ Stock Market's National Market
and then have been so suspended, and has not within ten trading days
after such suspension been listed on the OTC Bulletin Board) except for
any suspension or trading of limited duration solely to permit
dissemination of material information regarding the Company and except
if, at the time there is any suspension, the Common Stock is then
listed and approved for trading on either the OTC Bulletin Board, the
New York Stock Exchange, the American Stock Exchange, the NASDAQ Stock
Market's Small Cap Stock Market, or the NASDAQ Stock Market's National
Market within ten (10) trading days thereof;

(iii) failure of the Company to file listing
applications within twenty (20) business days of the Company being
required to do so by the market or exchange in which the Common Stock
is then so listed, which failure is not cured within five (5) business
days of such failure;


(iv) the Company shall have its Common Stock delisted
from the OTC Bulletin Board for at least ten (10) consecutive trading
days and is unable to obtain a listing on either the New York Stock
Exchange, the American Stock Exchange, the NASDAQ Stock Market's Small
Cap Stock Market or the NASDAQ Stock Market's National Market within
such ten (10) trading days;

(v) the Registration Statement shall not have been
declared effective by the SEC within 180 calendar days after the
Closing Date, or such effectiveness shall not be maintained until (i)
the date that all of the shares of Common Stock underlying the Series
98-C Preferred Stock have been sold pursuant to the Registration
Statement, (ii) the date that the shares of Common Stock underlying the
Series 98-C Preferred Stock may be sold under the provisions of Rule
144, without volume limitation, or (iii) two (2) years after the
effective date of the Registration Statement;

(vi) the Company or any material subsidiary has
commenced a voluntary case or other proceeding seeking liquidation,
winding-up, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency, moratorium or other similar
law now or hereafter in effect of seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or has consented to any such relief
or to the appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against it, or has
made a general assignment for the benefit of creditors, or has failed
generally to pay its material debts as they become due, or has taken
any corporate action or has taken any corporate action to authorize any
of the foregoing;

(vii) an involuntary case or other proceeding has
been commenced against the Company or any material subsidiary seeking
liquidation, winding-up, reorganization or other relief with respect to
it or its debts under any bankruptcy, insolvency, moratorium or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of
it or any substantial part of its property, and such involuntary case
or other proceeding shall remain undismissed and unstayed for a period
of 60 calendar days, or an order for relief has been entered against
the Company or any subsidiary under the federal bankruptcy laws as now
or hereafter in effect;

(viii) default in any material provision (including
payment) of any agreement governing the terms of any debt of the
Company or any subsidiary in excess of $1,000,000, which has not been
cured, extended, or otherwise agreed to, within any applicable period
of grace associated therewith;

(ix) judgments or orders for the payment of money
which in the aggregate at any one time exceed $1,000,000 and are not
covered by insurance have been rendered against the Company or any
subsidiary by a court of competent jurisdiction and such judgments or
orders shall continue unsatisfied and unstayed for a period of 60
calendar days; or

(x) any material representation, warranty,
certification or statement made by the Company in any agreement entered
into between the Company and any holder of Series 98-C Preferred Stock,
or which is contained in any certificate, document or financial or
other statement furnished at any time under or in connection with any
such agreement shall prove to have been untrue in any material respect
when made.

3. Mechanics of Conversion. The holder of the Series 98-C
Preferred Stock shall exercise its right to convert the Series 98-C Preferred
Stock by telecopying an executed and completed notice of conversion to the
Company and delivering the original notice of conversion to the Company by
express courier. The holder of the Series 98-C Preferred Stock shall be required
to deliver the original Series 98-C Preferred Stock certificate to the Company,
provided the full face value of the Series 98-C Preferred Stock certificate has
been fully converted. The notice of conversion shall be deemed effective upon
facsimile receipt by the Company. Each business date on which a notice of
conversion is telecopied to and received by the Company in accordance with the
provisions hereof shall be deemed a Conversion Date. The Company will use its
best efforts to transmit the certificates representing shares of Common Stock
issuable upon conversion of any Series 98-C Preferred Stock to the holder via
express courier, by electronic transfer or otherwise within three business days
after the Conversion Date, provided the Company has received the original duly
executed notice of conversion prior to such time. The person or persons entitled
to receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock as of such date. Each fully converted Series 98-C Preferred Stock
certificate shall be sent to Company within three business days of such
Conversion Date. In the event that a holder partially converts a Series 98-C
Preferred Stock certificate such holder shall fully convert the remaining
balance of such certificate prior to converting any part of another certificate
in holder's possession. In the event that the Common Stock issuable upon
conversion of the Series 98-C Preferred Stock is not delivered within five
business days of the Conversion Date, the Company shall pay to such holder, in
immediately available funds, immediately upon demand, as liquidated damages for
such failure and not as a penalty, for each $100,000 principal amount of the
Series 98-C Preferred Stock sought to be converted, $500 for each of the first
ten calendar days late, and $1,000 per calendar day thereafter that the shares
of Common Stock issuable upon conversion of the Series 98-C Preferred Stock are
not delivered, which liquidated damages shall run from the sixth business day
after the Conversion Date. Any and all payments required pursuant to this
paragraph shall be payable only in cash, and shall not relieve the Company of
any of its obligations created hereunder, including but not limited to, delivery
of the shares of Common Stock due upon conversion of the Series 98-C Preferred
Stock.

4. Adjustment Provisions. The number of shares of Common Stock
issuable upon the conversion of the Series 98-C Preferred Stock and the
Conversion Price shall be subject to adjustment as follows:

(i) In case the Company shall (i) pay a dividend on Common Stock in Common Stock
or securities convertible into, exchangeable for or otherwise entitling a holder
thereof to receive Common Stock, (ii) declare a dividend payable in cash on its
Common Stock and at substantially the same time offer its shareholder a right to
purchase new Common Stock (or securities convertible into, exchangeable for or
other security entitling a holder thereof to receive Common Stock) from proceeds
of such dividend (all Common Stock so issued shall be deemed to have been issued
as a stock dividend), (iii) subdivide its outstanding shares of Common Stock
into a greater number of shares of Common Stock, (iv) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, or (v)
issue by reclassification of its Common Stock any shares of Common Stock of the
Company, the number of shares of Common Stock issuable upon conversion of the
Series 98-C Preferred Stock immediately prior thereto shall be adjusted so that
the holders of the Series 98-C Preferred Stock shall be entitled to receive
after the happening of any of the events described above that number and kind of
shares as the holders would have received had such Series 98-C Preferred Stock
been converted immediately prior to the happening of such event or any record
date with respect thereto. Any adjustment made pursuant to this subdivision
shall become effective immediately after the close of business on the record
date in the case of a stock dividend and shall become effective immediately
after the close of business on the record date in the case of a stock split,
subdivision, combination or reclassification.

(ii) Any adjustment in the numbers of shares of
Common Stock issuable hereunder otherwise required to
be made by this Section (e)(4) will not have to be made if such adjustment would
not require an increase or decrease in one percent (1%) or more in the number of
shares of Common Stock issuable upon conversion of the Series 98-C Preferred
Stock. No adjustment in the number of shares of Common Stock issuable upon
conversion will be made for the issuance of shares of capital stock to
directors, employees or independent contractors pursuant to the Company's or any
of its subsidiaries' stock option, stock ownership or other benefit plans or
arrangements or trusts related thereto or for issuance of any shares of Common
Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of additional
optional amounts in shares of Common Stock under such plan.

(iii) Whenever the number of shares of Common Stock
issuable upon the conversion of the Series 98-C
Preferred Stock is adjusted, as herein provided, the Conversion Price shall be
adjusted (to the nearest cent) by multiplying such Conversion Price immediately
prior to such adjustment by a fraction of which the numerator shall be the
number of shares of Common Stock issuable upon the exercise of each share of
Series 98-C Preferred Stock immediately prior to such adjustment, and of which
the denominator shall be the number of shares of Common Stock issuable
immediately thereafter.

5. Mergers, etc. In the case of any (i) consolidation or
merger of the Company into any entity (other than a consolidation or merger that
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock of the Company), (ii) sale, transfer, lease
or conveyance of all or substantially all of the assets of the Company as an
entirety or substantially as an entirety, or (iii) reclassification, capital
reorganization or change of the Common Stock (other than solely a change in par
value, or from par value to no par value), in each case as a result of which
shares of Common Stock shall be converted into the right to receive stock,
securities or other property (including cash or any combination thereof), each
holder of a share of Series 98-C Preferred Stock then outstanding shall have the
right thereafter to convert such share only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
sale, transfer, capital reorganization or reclassification by a holder of the
number of shares of Common Stock of the Company into which such shares of Series
98-C Preferred Stock would have been converted immediately prior to such
consolidation, merger, sale, transfer, capital reorganization or
reclassification, assuming such holder of Common Stock of the Company (A) is not
an entity with which the Company consolidated or into which such sale or
transfer was made, as the case may be ("constituent entity"), or an affiliate of
the constituent entity, and (B) failed to exercise his or her rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer (provided
that if the kind or amount of securities, cash or other property receivable upon
such consolidation, merger, sale or transfer is not the same for each share of
Common Stock of the Company held immediately prior to such consolidation,
merger, sale or transfer by other than a constituent entity or an affiliate
thereof and in respect of which the Company merged into the Company or to which
such rights or election shall not have been exercised ("non-electing share"),
then for the purpose of this Section (e)(5) the kind and amount of securities,
cash or other property receivable upon such consolidation, merger, sale or
transfer by each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). If necessary,
appropriate adjustment shall be made in the application of the provision set
forth herein with respect to the rights and interest thereafter of the holders
of shares of Series 98-C Preferred Stock, to the end that the provisions set
forth herein shall thereafter correspondingly be made applicable, as nearly as
may reasonably be, in relation to any shares of stock or other securities or
property thereafter deliverable on the conversion of the shares. The above
provisions shall similarly apply to successive consolidations, mergers, sales,
transfers, capital reorganizations and reclassifications. The Company shall not
effect any such consolidation, merger, sale or transfer unless prior to or
simultaneously with the consummation thereof the successor Company or entity (if
other than the Company) resulting from such consolidation, merger, sale or
transfer shall assume, by written instrument, the obligation to deliver to the
holder of each share of Series 98-C Preferred Stock such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to receive under this Section (e)(5).

6. No Impairment. This Company will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Section (e) and in taking of all such action as may be
necessary or appropriate in order to protect the conversion rights of the
holders of Series 98-C Preferred Stock against impairment.

7. Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of the Series 98-C Preferred Stock. Any
fractional shares issuable upon conversion of the Series 98-C Preferred Stock
shall be rounded up to the nearest whole share or, at the election of the
Company, the Company shall pay the holder thereof an amount in cash equal to the
closing bid price thereof.

8. Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price of Series 98-C Preferred
Stock pursuant to Section (e)(4), the Company, at its expense, shall promptly
compute such adjustment or readjustment in accordance with the terms hereof and
prepare and furnish to each holder of such Series 98-C Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment are based. The Company
shall, upon written request at any time of any holder of Series 98-C Preferred
Stock, furnish or cause to be furnished to such holder a certificate setting
forth (A) the Conversion Price at the time in effect, and (B) the number of
shares of Common Stock and the amount, if any, of other property which at the
time would be received upon the conversion of a share of Series 98-C Preferred
Stock.

9. Reservation of Common Stock Issuable Upon Conversion. The
Company shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock solely for the purpose of effecting the
conversion of shares of Series 98-C Preferred Stock, such numbers of its shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Series 98-C Preferred Stock. If at any
time the number of authorized but unissued shares of Common Stock shall be
insufficient to satisfy the conversion rights hereunder, in addition to such
other remedies as shall be available to the holder of Series 98-C Preferred
Stock, the Company will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.

(f) Redemption

1. Optional Redemption by the Company. For so long as no Event
of Default shall have occurred, and be continuing, and the Company has not
received a notice of conversion for such shares, the Company may, at its option,
repay, in whole or in part, the Series 98-C Preferred Stock shares at the
Redemption Price as defined below. The Series 98-C Preferred Stock is redeemable
as a series, in whole or in part, by the Company by providing written notice
(the "Redemption Notice") to the holder of the Series 98-C Preferred Stock via
facsimile at his or her address as the same shall appear on the books of the
Company (the business date and time, between the hours of 9:00 a.m. and 5:00
eastern time, the Redemption Notice is received by the holders of the Series
98-C Preferred Stock via facsimile is defined to be the "Redemption Notice
Date"). Within three business days after the Redemption Notice Date the Company
shall arrange payment of the Redemption Price (as defined below) in immediately
available funds to the holder for the shares of Series 98-C Preferred Stock
which are the subject of the Redemption Notice (such date of payment referred to
as the "Redemption Date"). Partial redemptions shall be in an aggregate
principal amount of at least $100,000. If fewer than all of the outstanding
shares of Series 98-C Preferred Stock are to be redeemed, the Company will
select those to be redeemed pro-rata amongst the then holders of the Series 98-C
Preferred Stock.

2. Mandatory Redemption. In the event the Series 98-C
Preferred Stock has not been converted two (2) years from the Closing Date, or
such next business date thereafter (the "Mandatory Redemption Date"), the Series
98-C Preferred Stock shall automatically be redeemed by the Company as if the
Company voluntarily elected such redemption in accordance with the procedure,
terms and conditions set forth in this Certificate of Secretary, with the
Mandatory Redemption Date being deemed a Redemption Date.

3. Notice of Redemption. The Notice of Redemption shall set
forth (i) the Redemption Date and the place fixed for redemption, (ii) the
"Redemption Price", which shall be equal to one hundred twenty five percent
(125%) of the Liquidation Value which Liquidation Value shall include cumulative
dividends as provided herein which have accrued and are unpaid through the
Redemption Date, and (iii) a statement that dividends on the shares of Series
98-C Preferred Stock to be redeemed will cease to accrue on such Redemption
Date, and (iv) a statement of or reference to the conversion right set forth in
Section (e) hereof. If fewer than all the shares of the Series 98-C Preferred
Stock owned by such holder are then to be redeemed, the notice shall specify the
number of shares thereof that are to be redeemed and, if practicable, the
numbers of the certificates representing such shares. Within three business days
of the Notice of Redemption Date, the Company shall wire transfer the
appropriate amount of funds into the escrow account of Goldstein, Goldstein &
Reis, LLP who shall disburse such funds to the holders of the Series 98-C
Preferred Stock which are the subject of the Notice of Redemption upon
confirmation from the Company and the holders of the Series 98-C Preferred Stock
that the redemption provisions have been complied with. If the Company fails to
comply with the aforementioned redemption provisions in any manner whatsoever on
two separate occasions, it shall waive its rights in the future to serve a
Redemption Notice upon the holders of the Series 98-C Preferred Stock at any
time. The holders may serve a notice of conversion upon the Company up until the
Redemption Date, and any time thereafter. In the event the Company receives a
notice of conversion during the time period between the Notice of Redemption
Date and the Redemption Date, and the Company has complied with all of the
redemption procedures set forth herein, the aforementioned notice of conversion
shall be deemed null and void. In the event the aforementioned occurs and the
Company has not complied with all of the redemption provisions set forth herein
the Company must comply with the delivery requirements upon conversion as set
forth herein.

4. Mechanics of Redemption. Subject to the occurrence of the
wire transfer of the Redemption Price as described in Section (f)(3) above, each
share of Series 98-C Preferred Stock to be redeemed shall be automatically
canceled and converted into a right to receive the Redemption Price, and all
rights of the Series 98-C Preferred Stock, including the right to conversion
shall cease without further action.

5. Adjustment of Redemption Price. The Redemption Price shall
be adjusted proportionally upon any adjustment of the Conversion Price under
Section (e) (4) hereof and in the event of any stock dividend, stock split,
combination of shares or similar event.

(g) Liquidated Damages. Upon the occurrence of any of the following
events the Company shall, within five business days after facsimile written
request of the majority of the then holders of the Series 98-C Preferred Stock,
pay to such requesting holders of the then outstanding shares of Series 98-C
Preferred Stock in immediately available funds, one hundred twenty five percent
(125%) of the Liquidation Preference in accordance with the procedures set forth
in Section (f) above. The parties hereby agree that the damages Holders could
suffer as a result of any of the below events are not reasonably ascertainable.
The damages agreed to by the parties herein constitute their best estimate of
the loss Holders would suffer as a result of any of such events.

(i) the occurrence of a change of control which is defined as:
(a) any person who acquires directly or indirectly, more than 50% of the
outstanding shares of any class of voting securities of the Company, and (b)
where the individuals constituting the Board of Directors on the Closing Date
shall cease to constitute a majority of the Board of Directors, unless the
election of each director who was not a director prior thereto was approved by a
majority vote of the directors then in office of the Company;

(ii) a transfer of all or substantially all of the assets of
the Company to any person in a single transaction or series of related
transactions;

(iii) a consolidation, merger or amalgamation of the Company
with or into another person in which the Company is not the surviving entity
(other than a merger which is effected solely to change the jurisdiction of
incorporation of the Company and results in a reclassification, conversion or
exchange of outstanding shares of Common Stock solely into shares of Common
Stock);

(iv) the Registration Statement has been declared effective by
the SEC and subsequently effectiveness is suspended, which suspension lasts for
a period of more than forty five (45) calendar days;

(v) the issuance of the maximum number of shares of Common
Stock called for in the Registration Statement and the failure within ninety
(90) days thereafter to issue additional shares of Common Stock;

(vi) the consummation by the Company of one or more equity
financings which result in net proceeds to the Company in excess of $4,000,000;
or

(vii) an Event of Default has occurred.

Up until the date that the aforementioned liquidated damages are paid
to the requesting holders, the holders shall retain all rights, preferences, and
privileges contained in this Certificate of Secretary, including, but not
limited to, the conversion rights set forth herein. Notwithstanding the above,
the Company has no obligation to honor a conversion notice for the Series 98-C
Preferred Stock for which the Company has paid liquidated damages as set forth
in this Section. In any event, the non-requesting holders shall retain all
rights preferences and privileges contained in this Certificate of Secretary,
including, but not limited to, the conversion rights set forth herein.

(h) Notices.

1. Upon the Company. Any notice pursuant to the terms thereof
to be given or made by a holder of shares of the 98-C Preferred Stock to or upon
the Company shall be sufficiently given or made if sent by facsimile or by mail,
postage prepaid, addressed (until another address is sent by the Company to the
holder) as follows:

SGI International
1200 Prospect Street, Suite 325
La Jolla, CA 92037

2. Upon Series 98-C Preferred Stock Holders. Any notice
pursuant to the terms hereof to be given or made by the Company to or upon any
holder of shares of Series 98-C Preferred Stock shall be sufficiently given or
made if sent by mail, postage prepaid, addressed (until another address is sent
by the holder to the Company) to the address of such holder on the records of
the Company.

(i) Status of Redeemed, Converted or Retired Shares. Shares of Series
98-C Preferred Stock either (i) redeemed, (ii) purchased, (iii) elected by the
holders thereof to be the subject of liquidated damages which have been paid by
the Company as set forth above, or (iv) otherwise acquired for value by the
Company or converted by the holder (including the payment of liquidated damages
as set forth in Section (g) above), , shall after such acquisition, have the
status of canceled shares of Preferred Stock. In the event any shares of Series
98-C Preferred Stock shall be converted or redeemed pursuant to the conversion
and/or redemption terms contained herein, the shares so converted shall be
canceled and shall not be issuable by the Company, shall have the status of
authorized but unissued shares of Preferred Stock and may be reissued by the
Company at anytime as shares of any series of Preferred Stock other than Series
98-C Preferred Stock.

IN WITNESS WHEREOF, SGI International, has caused this Amended Certificate of
Secretary to be signed by its Vice President, and attested to by its Secretary,
this 16th day of October, 1998.

SGI INTERNATIONAL

    /s/ RICHARD J. GIBBENS
By:_______________________________

Title: VP Operations
Attest:

/s/ JOHN R. TAYLOR
-----------------------------
John R. Taylor, Secretary