First 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 July 17, 1998,
     establishing the Series 98-A Convertible Preferred Stock.

     IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the
seal of the corporation on July 17, 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 Seven Hundred Fifty (2,750) 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-A six percent (6%) Convertible Preferred Stock (the
"Series 98-A Preferred Stock"). The Series 98-A Preferred Stock shall have a
liquidation preference (the "Liquidation Preference") of One Thousand ($1,000)
per share. The Series 98-A 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-A Preferred Stock as to dividend rights or rights
upon liquidation, winding up or dissolution of the Company. The Series 98-A
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-A 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-A 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-A 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-A Preferred Stock as set
forth in Section (a) hereof, payable on a pro rata basis on conversion. Any
dividends payable pursuant to the provisions of this paragraph shall, at the
Company's option, be payable in cash or Common Stock of the Company.

          (2) Such dividends shall accrue on each share from the date of
its original issuance, 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-A 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-A
Preferred Stock or Common Stock. Dividends on the Series 98-A Preferred Stock
shall be nonparticipating and the holders of the Series 98-A 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-A 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-A 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-A 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-A Preferred Stock, the remaining assets shall be paid to, the Common Stock.
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 days prior to the payment date stated
therein, to each record holder of any share of Series 98-A 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-A Preferred Stock and all other
outstanding stock of the Company ranking on a parity with the Series 98-A
Preferred Stock upon liquidation are not sufficient to satisfy the full
liquidation rights of all the outstanding Series 98-A 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-A 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-A 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, the Conversion Rate shall mean the
Liquidation Preference of $1,000 per share of Preferred Stock. For purposes
hereof, the Conversion Price shall be determined as of the date the notice of
conversion is received by the Company ("Conversion Date") and shall be equal to
the lesser of: (a) the average closing bid price of the shares of Common Stock
over the five (5) day trading period ending on the day immediately prior to the
Closing Date as such Closing Date is defined in the 6% Convertible Preferred
Stock Subscription Agreement (the "Subscription Agreement") for the Series 98-A
Preferred Stock, executed by the Purchaser of Series 98-A Preferred Stock, or
(b) seventy five percent (75%) of the average of the closing bid price on the
five (5) trading days ending on the day immediately prior to the Conversion
Date. The closing bid price shall be deemed to be the reported last bid price
regular way 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. In the event that the Common Stock issuable upon conversion of the
Series 98-A Preferred Stock is not delivered, as a direct result of the
negligence or action or inaction of the Company only, within five (5) business
days of receipt by the Company of a valid notice of conversion and the Preferred
Certificate for the Series 98-A Preferred Stock to be converted ("Receipt
Conversion Date"), the Company shall pay to the holder, in immediately available
funds, upon demand, as liquidated damages for such failure and not as a penalty,
for each $100,000 of the Series 98-A Preferred Stock sought to be converted,
$500 for each of the first ten (10) days and $1,000 per day thereafter that the
shares of Common Stock issuable upon conversion of the Series 98-A Preferred
Stock are not delivered, which liquidated damages shall run from the sixth
business day after the Receipt Conversion Date. Any and all payments required
pursuant to this paragraph shall be payable only in cash.

          2. Exercise of Conversion Rights. Subject to the limitations
described in paragraph (f) herein, the Series 98-A Preferred Stock shall first
be convertible at the earlier of: (i) the date the amendment (the "Amended
Registration Statement") to the Form S-2 registration statement filed January
23, 1998 for the shares of Common Stock underlying the Series 98-A Preferred
Stock is declared effective by the Securities and Exchange Commission ("SEC") or
(ii) sixty (60) days from the Closing Date as defined in the Subscription
Agreement ("Closing Date"). If the Amended Registration Statement is not filed
by the forty fifth (45) day from the Closing Date or declared effective by the
SEC by the ninetieth (90th) day following the Closing Date, then the Company
shall pay to the holder thereof liquidated damages in cash, at the rate of one
percent and one half (1.5%) of the Liquidation Value pro rata for the first
month, and two percent (2%) of the Liquidation Value for each month thereafter.
The liquidated damages will be payable until the Amended Registration Statement
has been filed and/or has been declared effective. Absent the filing of the
Amended Registration Statement or the Amended Registration Statement having been
declared effective such liquidated damages will be payable up to one year from
the Closing Date, at such time as the Holder shall be allowed to effect
conversions into freely tradable Common Stock pursuant to rule 144. The
liquidated damages will be payable in cash upon demand within five (5) business
days. Subject to the limitations described in this paragraph regarding the
period of time when the Series 98-A Preferred Stock shall first be convertible,
the Series 98-A Preferred Stock shall be convertible for two (2) years from the
Closing Date, and all of the Series 98-A Preferred Stock must be converted by
the second anniversary of the Closing Date. The holder of the Series 98-A
Preferred Stock shall further be prohibited from converting any portion of the
Series 98-A Preferred Stock which would result in the holder being deemed the
beneficial owner in accordance with the provisions of Rule 13d-3 of the
Securities Act of 1934, as amended, of 4.99% or more of the issued and
outstanding Common Stock of the Company.

          3. Mechanics of Conversion. The holder of the Series 98-A
Preferred Stock shall exercise its right to convert the Series 98-A Preferred
Stock by telecopying an executed and completed notice of conversion to the
Company and delivering the original notice of conversion and the certificate
representing the Series 98-A Preferred Stock to the Company by express courier.
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-A Preferred Stock (together with the certificates representing the
Series 98-A Preferred Stock not so converted) to the holder via express courier,
by electronic transfer or otherwise within five business days after the
Conversion Date if the Company has received the original duly executed notice of
conversion and Series 98-A Preferred Stock certificate being so converted by
such date. 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. If
certificates for Common Stock are not delivered within five (5) business days of
actual receipt of a duly completed election to convert and the Preferred
Certificate to be converted, then the holder of the Series 98-A 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.

          4. Adjustment Provisions. The number of shares of Common Stock
issuable upon the conversion of the 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-A Preferred Stock immediately prior
thereto shall be adjusted so that the holders of the Series 98-A 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-A 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-A Preferred Stock. No adjustment in the Conversion
Rate 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-A 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-A 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-A 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-A 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-A 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-A 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-A Preferred Stock against impairment.

          7. Fractional Shares. Any fractional shares issuable upon
conversion of the Series 98-A Preferred Stock shall be rounded 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. Whether or not
fractional shares are issuable upon conversion shall be determined on the basis
of the total number of shares of Series 98-A Preferred Stock the holder is at
the time converting to Common Stock and the number of shares of Common Stock
issuable upon such aggregate conversion.

          8. Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price of Series 98-A 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-A 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-A 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-A 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-A 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-A 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-A 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.

          10. Status of Converted Shares. In the event any shares of
Series 98-A Preferred Stock shall be converted pursuant to Section (e) hereof,
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-A Preferred Stock.

     (f) Redemption

          1. Optional Redemption by the Company. Holders of Series 98-A
Convertible Preferred Shares do not have the right to cause redemption of their
Series 98-A Convertible Preferred Shares. For any Series 98-A Preferred Stock
for which a notice of conversion has not been sent, the Series 98-A Convertible
Preferred Shares are callable by the Company as a series, in whole or in part,
by the Company thereafter providing thirty (30) days prior written notice to the
holder of the Series 98-A Preferred Stock ("Redemption Date"), by a payment in
U.S. dollars of one hundred thirty percent (130%) of the Liquidation Value of
$1,000 per share as defined in paragraphs (a), (c), and (d) above ("Redemption
Price") which Liquidation Value shall include cumulative dividends as provided
in paragraph (c) herein accrued and unpaid through the Redemption Date. On the
date the Company sends a notice of redemption to the holders of the Series 98-A
Convertible Preferred Stock ("Holders") and wire transfers the appropriate
amount of funds into the escrow account described in the 6% Convertible
Preferred Stock Subscription Agreement, whichever event date is the latter
("Notice of Redemption Date"), the Holder's right to convert the Series 98-A
Convertible Preferred Stock shall terminate and be canceled immediately,
provided, however, the Company shall only have the right to redeem the Series
98-A Preferred Stock when, on the Redemption Date, the closing bid price, as
defined in paragraph (e)(1) herein, of the shares of Common Stock into which the
Series 98-A Preferred Stock is convertible, is less than the closing bid price
on the date the Holder or the original subscriber executed the 6% Convertible
Preferred Stock Subscription Agreement. If fewer than all of the outstanding
shares of Series 98-A Convertible Preferred Stock are to be redeemed, the
Company will select those to be redeemed pro-rata, by lot or by other method
deemed equitable by the Company in its sole discretion.

          2. Notice of Redemption. Notice of any redemption, setting
forth (i) the Redemption Date and the place fixed for redemption, (ii) the
Redemption Price, and (iii) a statement that dividends on the shares of Series
98-A 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 (including that the right to give a notice of conversion in
respect of any shares to be redeemed shall terminate on the Notice of Redemption
Date), shall be mailed, postage prepaid, at least thirty (30) days prior to the
Redemption Date to each holder of record of the Series 98-A Preferred Stock to
be redeemed at his or her address as the same shall appear on the books of the
Company. If fewer than all the shares of the Series 98-A 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. Upon notice of its right to redeem the
Series 98-A Preferred Stock, the Company shall wire transfer the appropriate
amount of funds into an escrow account mutually agreed upon by both the Company
and the holder of the Series 98-A Preferred Stock within three (3) business days
of such notice. Additionally, if after the passage of three (3) business days
from the receipt by the holder of the notice of the Company's right to redeem
the Series 98-A Preferred Stock and the time funds are received by the escrow
agent, the Company has not deposited into escrow the appropriate amount of funds
to redeem the Series 98-A Preferred Stock, the Company shall pay to the holder
an amount equal to five (5%) percent per month of the Liquidation Preference on
a pro rata basis in cash. After the escrow agent is in receipt of such funds, he
shall notify the holder to surrender the appropriate amount of Series 98-A
Preferred Stock. If after three (3) business days from the date the notice of
redemption is received by the holder the funds have not been received by the
escrow agent, then the holder shall again have the right to convert the Series
98-A Preferred Stock and the Company shall have the right to redeem the Series
98-A Preferred Stock but only upon simultaneously sending a notice of redemption
to the holder and wire transferring the appropriate amount of funds.

          3. Mechanics of Redemption. At any time up to the date
immediately prior to the Notice of Redemption Date, the holders shall have the
right to convert the Series 98-A Preferred Stock into Common Stock as more fully
provided in Section (e) hereof. Unless so converted, at the close of business on
the Notice of Redemption Date, subject to the conditions described in paragraph
(f)(1) herein, each share of Series 98-A 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-A Preferred Stock, including the right to
conversion shall cease without further action. At any time following the Notice
of Redemption Date, holders of the Series 98-A Preferred Stock may surrender
their certificates at the office of the Company or any transfer agent therefor,
duly endorsed and with signature guaranteed. As soon as practicable after
surrender of the certificate, the Company or transfer agent, as the case may be,
shall forward payment of the Redemption Price to the holder thereof or his
assignee.

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

          5. Retired Shares. Shares of Series 98-A Preferred Stock
redeemed, purchased or otherwise acquired for value by the Company, including by
redemption in accordance with Section (f) hereof, shall after such acquisition,
have the status of authorized and unissued shares of Preferred Stock and may be
reissued by the Company at any time as shares of any Series of Preferred Stock
other than as shares of Series 98-A Preferred Stock.

     (g) Notices.

          1. Upon the Company. Any notice pursuant to the terms thereof
to be given or made by a holder of shares of 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-A 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-A 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.

     IN WITNESS WHEREOF, SGI International, has caused this Certificate to
be signed by its Senior Vice President, and attested to by its Secretary, this
17th day of July, 1998.

                                             SGI INTERNATIONAL

                                                  /s/ RICHARD J. GIBBENS
                                             By:__________________________

                                             Title: VP - Operations

Attest:

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