96-B CONVERTIBLE PREFERRED SHARE CERTIFICATE
                Incorporated Under the Laws of Utah


        96B-00


 This certifies that:


is the registered holder of              [  ] share(s)of

Fully Paid and Non-Assessable Series 96-B Preferred Share(s),

                          $.01 Par Value,
                                 of
                          SGI INTERNATIONAL

1.   Each Series 96-B Preferred Share evidenced by this Certificate is 
transferrable on the books of the Corporation by the Holder hereof, 
in person or by duly authorized attorney, upon surrender of this 
Certificate properly endorsed.

2.   Each Series 96-B Convertible Preferred Share shall be convertible
into 3,000 SGI Common Shares ("Conversion Shares")without cost, on the 
first to occur of the following: (1) August 30, 1998; OR, (2) on the date a
Registration Statement filed by SGI with the Securities & Exchange 
Commission, including the registration of the Conversion Shares, is 
declared effective by the SEC.

3.   Series 96-B Preferred Shares have no voting rights

4.   Series 96-B Preferred Shares and the Common Stock into which they are
convertible will, upon issuance, be fully paid and non-assessable.

5.   In the event that the Corporation shall at any time after issuance of 
a Series 96-B Preferred Share: (i) declare or pay to the holders of the 
Common Stock a dividend payable in any kind of shares of stock of the 
Corporation; or (ii) split, reverse split or otherwise reclassify its 
Common Stock into the same or a different number of shares with or
without par value or into shares of any class or classes; or (iii) 
consolidate or merge with or transfer its property as an entirety or 
substantially as an entirety to any other corporation; or (iv) make any
distribution of its assets to holders of its Common Stock as a liquidation 
or partial liquidation dividend or by way of return of capital; then, 
upon subsequent conversion of a Series 96-B Preferred Share, a shareholder 
shall receive in exchange for a Series 96-B Preferred Share, in addition to,
in reduction of, or in substitution  for, the shares of Common Stock to 
which he would otherwise be entitled upon such exercise, such additional 
shares of Common Stock, or lesser number shares of Common Stock, as the 
case may be, or stock or script of the Corporation, or such reclassified
shares of stock of the Corporation, or such shares of securities or property
of the Corporation  resulting from such consolidation or merger or transfer,
or such assets of the Corporation, so that the value so received by the
shareholder is equivalent to the value which would have been received (and 
the total consideration exchangeable by the shareholder is equivalent to 
the total consideration which would otherwise have been exchangeable) had 
the shareholder converted a Series 96-B Preferred Share into shares of 
Common Stock immediately prior to the happening of any of the foregoing
events.

6.   THE SERIES 96-B PREFERRED SHARE(S) REPRESENTED BY THIS CERTIFICATE 
AND THE COMMON STOCK INTO WHICH THEY ARE CONVERTIBLE HAVE NOT BEEN 
REGISTERED UNDER THE SECURITIES ACT OF 1933. THE SHARE(S) HAVE BEEN 
ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD OR OTHERWISE T
RANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SHARES UNDER THE SECURITIES ACT OF 1933, OR A PRIOR OPINION OF 
COUNSEL SATISFACTORY TO THE ISSUER, THAT REGISTRATION IS NOT REQUIRED
UNDER THAT ACT.

7.   SGI agrees that the common stock underlying this Convertible Preferred 
Share shall be granted "piggyback" registration rights as set forth herein. 
The corporation shall be obligated to shareholder as follows:

During the period of two years from the date hereof, whenever the 
Corporation proposes to file with the SEC a Registration Statement (other
than as to securities issued pursuant to an employee benefit plan or as to 
a transaction subject to Rule 145 promulgated under the Act), it shall at
least 20 days prior to each such filing, give written notice of such proposed 
filing to shareholders at its address as it appears on the records of the 
Corporation, and shall offer to include in such filing all common shares 
issuable upon conversion of this Convertible Preferred Share upon receipt by 
the Corporation, not less than 10 days prior to the proposed filing date, of a 
request therefor setting forth the facts with respect to such shares reasonably
necessary to be included in such Registration Statement.  The Corporation shall
keep such Registration Statement effective for a period of at least 90 days. 
If such Registration Statement relates to an underwritten offering, and if the 
managing underwriter for said offering advises the Company in writing that the 
inclusion of all or any portion of such shares would be detrimental to said 
offering, or if upon due consideration, the Board of Directors reasonably
determines that the inclusion of all or any portion of such shares would be 
detrimental to the best interests of the Company, the shares shall not be 
included in the Registration statement. In the event that the underwriter or 
the Board of Directors conclude that the inclusion of any portion of such 
securities in the offering would not be detrimental thereto, and such portion 
is less than the amount requested for inclusion, then the amount to be included
shall be prorated among the requesting Shareholders and other security holders 
of the Company possessing similar registration rights.

8.   In the event of the voluntary liquidation, dissolution or other 
termination of the Corporation, the holders of the Series 96-B Preferred
Shares shall be entitled to recover only a cash payment of Thirteen 
Thousand Dollars ($13,000.00) per Series 96-B Preferred Share. Such payment
shall be made before any payment or distribution is made to the holders of 
the Common Stock, or any other series of Preferred Stock of the Corporation,
other than previously issued Series of Preferred Shares.

In witness whereof the said Corporation has caused this Certificate to be
signed by its duly authorized officers and its Corporate Seal to be affixed
hereto this day     of        , 1996.


CHAIRMAN OF THE BOARD                        SECRETARY

     /s/                                     /s/
---------------------------                  ------------------------

STOCK POWER

FOR VALUE RECEIVED,

hereby sell, assign and transfer unto

----------------------------------------
Please insert Social Security or other identifying number of assignee

(Please print or typewrite name and address, including zip code, of assignee)

Shares of capital stock represented by the within Certificate, and do
hereby irrevocably constitute and appoint


Attorney to transfer the said stock on the books of the within named 

Corporation with full power of substitution in the premises.


DATED:
SIGNATURE

NOTICE:   The signature to this assignment must correspond with the name 
as written upon the face of the certificate in every particular, without 
alteration or enlargement or any change whatever.