SGI INTERNATIONAL, S-8, 1998-12-02

SGI INTERNATIONAL
S-8, 1998-12-02
ENGINEERING SERVICES

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As filed with the Securities and Exchange Commission on December 2, 1998
File No. 2-93124
=============================================================================

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
=============

FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

SGI INTERNATIONAL
(Exact Name of Registrant as Specified in its Charter)
=====================

Utah
(State or Other Jurisdiction of Incorporation)

33-0119035
(I.R.S. Employer Identification No.)

1200 Prospect Street, Suite 325, La Jolla, California, CA 92037
(Address of Registrant's Principal Executive Office)

Standard Executive Employment Agreement dated as of January 1, 1996,
July 1, 1996, March 1, 1997, July 9, 1997,
Non-Standard Executive Employment Agreement dated as of
August 5, 1997, January 13, 1998,
Standard Employment Agreement dated as of January 1, 1996,
March 4, 1996, March 18, 1996, May 23, 1996, July 18, 1996, July 29, 1996,
August 1, 1996, September 30, 1996, November 12, 1996, December 12, 1996,
December 18, 1996, December 30, 1996, February 11, 1997,
Standard Executive Employment Agreement (AMS) dated as of
January 1, 1996, July 14, 1997,
Standard Employment Agreement (AMS) dated as of July 25, 1996,
Standard Directors Agreements dated as of July 1, 1995, August 1, 1996,
Non-Standard Consulting Agreement dated September 19, 1995, February 27, 1996,
July 12, 1996, May 12, 1997, December 15, 1997, August 17, 1998,
January 5, 1998, October 1, 1998, October 21, 1998
(Full title of the plan)
- -------------------------------------------------------------------------------
Joseph A. Savoca
Chief Executive Officer
c/o SGI International
1200 Prospect Street, Suite 325
La Jolla, California 92037
(Name and address of agent for service)

619/551-1090
(Telephone number, including area code, of agent for service)
- -------------------------------------------------------------------------------

Copies of correspondence to:

David A. Fisher
Fisher Thurber, LLP
4225 Executive Square, Suite 1600
La Jolla, California 92037-1483
(619) 535-9400

<TABLE>
Calculation of Registration Fee
- ---------------------------------------

Title of Securities Amount to be Proposed Maximum Proposed Amount of
to be Registered (2) Registered (1) Offering Price Maximum Aggregate Registration
per share (1) Offering Price (2) Fee
- -------------------- ---------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
Common Stock, 1,045,250 shares $ 1.17 $ 1,222,943 $ 360.77
No Par Value

(1) Solely for the purpose of determining the registration fee, based on the weighted average exercise price of the common shares
underlying the Warrants which may be exercised in connection with the referenced Employment and Consulting Agreements.

(2) Relates solely to the common stock underlying the warrants issued in connection with the referenced employment and consulting
agreements.

</TABLE>

<PAGE>

PART I
- -------------

Item 1. Plan Information

Not Applicable

Item 2. Registrant Information and Employee Plan Annual Information

Not Applicable

PART II
- -------------

Item 3. Incorporation of Documents by Reference

The following documents, which have been filed with the Securities and Exchange
Commission, are hereby incorporated by reference as of their respective dates as
a part hereof:

(a) The Company's Annual Report on Form 10-K/A for the year ended December 31,
1997;

(b) The Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998.

(c) The description of the Common Stock contained in the Company's Registration
Statement on Form 8-A dated April 6, 1988, as amended by an amendment to
Application or Report on Form 8 dated April 13, 1988.

Additionally, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), prior to the filing of a post-effective amendment
hereto which indicates that all of the shares of the Common Stock offered hereby
have been sold or which deregisters all such shares then remaining unsold, shall
be deemed to be incorporated by reference herein and to be part hereof from the
date of filing of such documents.

Item 4. Description of Securities

Not applicable.

Item 5. Interests of Named Experts and Counsel

David Fisher, a partner in Fisher Thurber, counsel to the Company owns a warrant
to purchase 10,000 shares of common stock of the Company at $2.00 per share.

Item 6. Indemnification of Directors and Officers

Under the Company's Bylaws, and in accordance with Section 16-10a-901 et seq. of
the Utah Revised Business Corporation Act ("Utah Corporation Act"), the Company
shall indemnify any person who was or is a party or is threatened to made a
party to any threatened, pending, or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director or officer of the Company, or is or was serving at
the request of the Company as an officer or director or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses reasonably incurred by him or imposed on him in the connection with or
resulting from the defense of such action, suit or other proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company, and with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith or in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Company, or with respect to any criminal action or proceeding,
that the person had reasonable cause to believe that his conduct was unlawful.

The Company's Bylaws provide the Company shall pay for expenses incurred
defending a civil or criminal action, suit or proceeding against a director or
officer of the Company, and shall be paid in advance of the final disposition of
the action, suit or proceeding, upon receipt of an undertaking by or on behalf
of the officer or director, that he shall repay the amount advanced, if it is
ultimately determined he is not entitled to be indemnified by the Company. The
Board of Directors shall approve such undertaking, but shall be liberal with
respect to the requirements for the undertaking, to promote the beneficial and
remedial purposes of protecting those persons who serve as directors and
officers. The Company's Bylaws also provide the Company may purchase and
maintain insurance on behalf of any person who is or was a director or officer,
or employee of the Company, or is or was serving at the request of another

2
<PAGE>
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him or incurred by him in any capacity, or arising
out of his status as such, whether or not the Company would have the power to
indemnify him against liability under the provisions of the Bylaws.

Section 16-10a-901 et seq. of the Utah Corporation Act provides for the
indemnification of officers, directors and agents of the Company against
expenses, judgments, fines and amounts paid in settlement under certain
conditions and subject to certain limitations. The Company currently maintains
officer and director liability insurance with policy limits of $2,000,000.

Pursuant to authorization provided under the Bylaws and the Utah Corporation
Act, the Company has entered into indemnification agreements with each of its
directors and officers. Generally, the indemnification agreements attempt to
provide the maximum protection permitted by Utah law as it may be amended from
time to time. Moreover, the indemnification agreements provide for certain
additional indemnification. Under such additional indemnification provisions,
however, an individual will not receive indemnification for judgments,
settlements or expenses if he or she is found liable to the Company (except to
the extent the court determines he or she is fairly and reasonably entitled to
indemnity for expenses), for settlements not approved by the Company or for
settlements and expenses if the settlement is not approved by the court. The
indemnification agreements provide for the Company to advance to the individual
any and all reasonable expenses (including legal fees and expenses) incurred in
investigating or defending any such action, suit or proceeding. The individual
must repay such advances upon a final judicial decision that he or she is not
entitled to indemnification. The Company's Bylaws contain a provision of similar
effect relating to advancement or expenses to a director or officer, subject to
an undertaking to repay if it is ultimately determined that indemnification is
unavailable.

Item 7. Exemption from Registration Claimed

Not applicable.

Item 8. Exhibits

The following exhibits are filed pursuant to Item 601 of Regulation S-K:

4.20 Form of Standard Executive Employment Agreement (SGI) dated as of January
1, 1996 (except where noted) between Registrant and: Ernest P. Esztergar;
Richard Gibbens; R. Brent Lassetter; John R. Taylor; Joseph A. Savoca; Ming
Wang; David Newman (7/01/96); David Philips (7/01/96)(2). Robert Walty (3/1/97);
Larry Wiese (3/1/97); George Donlou (7/9/97) (2).

4.20.1 Non Standard Executive Employment Agreement (SGI) dated as of
August 5, 1997 between Registrant and Marvin Schwedock.(2)

4.20.2 Form of Non Standard Executive Employment Agreement (SGI) dated as of
January 13, 1998, between Registrant and Ronald Lukasiewicz. (2)

4.21 Form of Standard Employment Agreement (SGI) dated as of January 1, 1996
(except where noted) between Registrant and: Nancy Propp; Claudine Savatt;
Kimberly Krmpotich (03/18/96); Barry Meisen (5/23/96); Jessica Yates (12/2/96);
Gina Hilton (7/18/96); James LaBar (3/4/96); Casey Laris (9/30/96); Scott
Reynolds (11/12/96); Tanya Schaffer (8/1/96); Eric Weiner (7/29/96)(2).
Rowena Bunnell (2/11/97); Tatyana Kuperman (12/30/96); Joshua Li (12/18/96)(2).

4.22 Form of Standard Executive Employment Agreement (AMS) dated as of January
1, 1996, (except where noted) between Registrant's subsidiary and; Clarence
Dyksterhuis, Amir Modarres-Khiabani (1). Kevin Charbonneau (7/14/97) (2).

4.23 Form of Standard Employment Agreement (AMS) dated as of July 25, 1996,
between Registrant's subsidiary and: Steve Rodriques; Carl Timmerman; Gary
Vasey; Dave Burrows; Neil DeGuire; Mitch Johnson; Douglas King; Kathy
Brickman.(2)

4.24 Form of Standard Directors Agreement dated as of July 1, 1995, (except
where noted) between Registrant and Norman Grant, William Kerr, William Harris
(8/1/96), Bernard Baus (8/1/96). (2)

4.25 Non-Standard Consulting Agreement dated as of May 12, 1997,
between Registrant and David A. Fisher. (2)

4.25.1 Form of Non-Standard Consulting Agreement dated February 27, 1996,
between Registrant and Geoffrey Dolbear.(2) Ebbe Skov (9/19/95), Judith Ware
(7/12/96)(1).

4.25.2 Form of Non-Standard Consulting Agreement between Registrant and Richard
Redoutey (1/5/98); Ronald Lukasiewicz (12/15/97). (2)

4.25.3 Non-Standard Consulting Agreement between Registrant and John W.
Hart (8/17/98). (2)

3
<PAGE>

4.25.4 Form of Non-Standard Consulting Agreement dated October 1, 1998, between
Registrant and Jeffrey Montag; Thomas Hoover; Jeffrey Breault. (2)

4.25.5 Form of Non-Standard Consulting Agreement dated October 21, 1998, between
Registrant and William Davis; John Russo. (2)

4.25.6 Form of Non-Standard Consulting Agreement dated October 21, 1998, between
Registrant and Michael Rose. (2)

5. Opinion of Fisher Thurber, LLP. regarding the legality of the Common Stock
registered hereby.(2)

23. Consent of J.H. Cohn LLP, Independent Auditors.(2)

23.1 Consent of Ernst & Young LLP. (2)

23.2 Consent of Fisher Thurber, LLP.(include in Exhibit 5).(2)

(1) Incorporated by reference to Registration Statement on Form S-8 (File No.
2-93124) filed dated December 27, 1996.
(2) Filed herewith.

Item 9. Undertakings

The Company hereby undertakes:

(1) To file, during any period in which offers or sales of the Common Stock are
being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the Securities Act
of 1933, as amended (the "Securities Act");

(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement;

(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided that
if the information in paragraphs (i) and (ii) above and to be included in a
post-effective amendment hereto is contained in periodic reports filed by the
registrant pursuant to section 13 or section 15(d) of the Exchange Act and is
incorporated by reference in the S-8 Registration Statement, no post-effective
amendment hereto shall be filed;

(2) that, for the purpose of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and

(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.

Additionally, the undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to section 13(a) or section 15(d) of the Exchange Act
(and where applicable, each filing of an employee benefit plan's annual report
pursuant to section 15(d) of the Exchange Act), that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.

Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the SEC such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expense incurred or paid by a director, officer
or controlling person in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

4
<PAGE>

SIGNATURES
- ------------

Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of La Jolla, State of California, on December 2, 1998.

SGI INTERNATIONAL

By: /s/ Joseph A. Savoca
- ---------------------------------
Joseph A. Savoca, Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.

Signature Title Date
========= ====== ========

Chairman of the Board and
Chief Executive Officer

/s/Joseph A. Savoca
- --------------------- December 2, 1998
Joseph A. Savoca

Director
/s/Ernest P. Esztergar
- --------------------- December 2, 1998
Ernest P. Esztergar

Director
/s/Norman A. Grant
- --------------------- December 2, 1998
Norman A. Grant

Director
/s/William A. Kerr
- --------------------- December 2, 1998
William A. Kerr

Director
/s/ Bernard V. Baus
- --------------------- December 2, 1998
Bernard V. Baus

Director
/s/ William R. Harris
- --------------------- December 2, 1998
William R. Harris

Director
/s/ James W. Mahler
- --------------------- December 2, 1998
James W. Mahler

<PAGE>

Exhibit Index
- ---------------

No. Description

4.20 Form of Standard Executive Employment Agreement (SGI) between Registrant
and: Robert Walty (3/1/97); Larry Wiese (3/1/97); George Donlou (7/9/97).

4.20.1 Non-Standard Executive Employment Agreement (SGI) dated as of August 5,
1997 between Registrant and Marvin Schwedock.

4.20.2 Non-Standard Executive Employment Agreement (SGI) dated as of January 13,
1998, between Registrant and Ronald Lukasiewicz.

4.21 Form of Standard Employment Agreement (SGI) between Registrant and: Rowena
Bunnell (2/11/97); Tatyana Kuperman (12/30/96); Joshua Li (12/18/96).

4.22 Form of Standard Executive Employment Agreement (AMS) dated as of July 14,
1997, between Registrant's subsidiary and; Kevin Charbonneau.

4.24 Form of Standard Directors Agreement dated as of July 1, 1995, (except
where noted) between Registrant and Norman Grant, William Kerr, William Harris
(8/1/96), Bernard Baus (8/1/96).

4.25 Non-Standard Consulting Agreement dated as of May 12, 1997, between
Registrant and David A. Fisher.

4.25.1 Form of Non-Standard Consulting Agreement dated February 27, 1996,
between Registrant and Geoffrey Dolbear.

4.25.2 Form of Non-Standard Consulting Agreement between Registrant and Richard
Redoutey (1/5/98); Ronald Lukasiewicz (12/15/97).

4.25.3 Form of Non Standard Consulting Agreement between Registrant and John W.
Hart (8/17/98).

4.25.4 Form of Non Standard Consulting Agreement dated October 1, 1998, between
Registrant and Jeffrey Montag; Thomas Hoover; Jeffrey Breault.

4.25.5 Form of Non Standard Consulting Agreement dated October 21, 1998, between
Registrant and William Davis; John Russo.

4.25.6 Form of Non-Standard Consulting Agreement dated October 21, 1998, between
Registrant and Michael Rose.

5. Opinion of Fisher Thurber, LLP. regarding the legality of the Common Stock
registered hereby.

23. Consent of J.H. Cohn LLP, Independent Accountants.

23.1 Consent of Ernst & Young LLP.

23.2 Consent of Fisher Thurber, LLP.(included in Exhibit 5).

This SGI EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is effective as of the
____ day of ____, 19__, (the "Effective Date"), by and between SGI
International, a Utah Corporation ("SGI"), and ________________, an individual
("Employee").

In consideration of the mutual agreements and the promises herein contained, the
parties hereto agree as follows:

1. Employment. SGI hereby employs Employee and Employee hereby accepts
employment with SGI on the terms and conditions set forth in this Agreement.

2. Term of Employment. The term of this Agreement shall commence on the
Effective Date and terminate on December 31, 1998, notice of termination by
Employer is given in writing Ninety (90) days prior to the initial termination
or any extended termination date, and provided further, that the Agreement has
not already been terminated earlier pursuant to Section 5. If the Agreement is
not so terminated at the end of the original term or any succeeding term, and
the Agreement has not been terminated pursuant to Section 5, then it shall be
automatically extended for an additional one year period. Notwithstanding the
above, in the event that SGI is acquired, merged into another corporation, or
there is a change of management control at SGI brought about by a chance in the
composition of the board of directors, then this Agreement shall be extended on
the date of such change of management control for an additional one (1) year
term, subject to termination and renewal as described above.

3. Duties. Employee shall devote his full productive time to the duties assigned
to him. "Full productive time" is hereby defined as that time reasonably
necessary to perform his required duties in a timely manner, but not less than
forty (40) hours per week, for fifty-two (52) weeks per year, less holidays,
sick leave, and vacation time in accordance with the then-prevailing policies of
SGI as set forth in the SGI Employee Handbook, which is hereby incorporated
herein by this reference. Employee's performance shall be reviewed at least
annually by SGI.

4. Compensation. As full compensation for Employee's services hereunder, SGI
agrees to pay Employee the following:

(a) Employee shall receive a salary in the amount set forth in Exhibit A,
attached hereto and incorporated herein, for the first year of this Agreement,
payable on the fifteenth and last day of each month. Employee shall also be
covered by SGI's group medical insurance, and such other group benefits granted
to employees pursuant to the then prevailing policies of SGI.

(b) As incentive compensation, SGI Warrants in an amount to be decided in the
sole discretion of SGI's Board of Directors, provided, however, that a warrant
in an amount set forth on Exhibit A shall be issued as of the Effective Date.

(c) As further incentive compensation, such bonuses and benefits as SGI's Board
of Directors, in its sole
discretion, shall determine, provided, however, that certain additional
compensation payable once only is also set forth on Exhibit A.

(d) Employee shall also be paid his actual costs of moving from _________ to
________ up to an amount of $________.

(e) Compensation shall be reviewed by SGI and Employee at least annually.

5. Involuntary Termination. This Agreement shall be deemed terminated and the
employment relationship between SGI and Employee severed upon the occurrence of
any of the following:

(a) Employee dies.

(b) Employee fails or refuses to faithfully and diligently perform the usual
customary duties of his employment or adhere to the reasonable policies,
standards, and regulations of SGI, which from time to time may be established.

6. Voluntary Termination. Employee may voluntarily terminate at any time by
giving Employer two weeks written notice of termination.

7. Rights Upon Termination. In the event this Agreement is terminated, any
amount due to Employee shall be prorated as of the date of termination and paid
to the Employee, or to his estate, as appropriate.

7
<PAGE>

8. General Relationship. Employee shall be considered an employee of SGI within
the meaning of all federal, state, and local laws and regulations including, but
not limited to, laws and regulations governing unemployment insurance, workmen's
compensation, industrial accident, labor and taxes.

9. Assignment. This Agreement can not be assigned by either party.

10. Severability. In the event that any of the provisions of this Agreement are
deemed to be invalid or unenforceable, the same shall be deemed severable from
and shall not cause the invalidity of the remainder of this Agreement.

11. Prior Agreements. This Agreement contains the sole and entire agreement
between the parties with respect to the entire subject matter hereof, and any
and all prior discussions, negotiations, commitments, understandings and
agreements relating thereto are hereby superseded and terminated as of the
Effective Date. No representations, whether written or oral, express or implied,
other than those contained herein, have been made by any party hereto.

12. Notices. All notices, requests, demands and other communications required or
permitted by this Agreement shall be in writing and shall be deemed to have been
duly delivered upon: (i) personal delivery to the party to whom such notice is
to be given; or (ii) five (5) business days after deposit in the United States
mail, first class postage prepaid and properly addressed to such party.

13. Miscellaneous.

(a) The failure of either party at any time to require performance by in
accordance with the strict terms of this Agreement shall in no way effect the
other such party's rights thereafter to enforce the same, nor shall the waiver
of any breach of any provision hereof be held to be a waiver of any succeeding
breach of any provision or a waiver of the provision itself.

(b) This Agreement cannot be modified except by a writing signed by the parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
at San Diego, California.

SGI International, a Utah Corporation Employee

By: /s/ Joseph A. Savoca
- -------------------------------
Joseph A. Savoca, Chairman/CEO

This SGI EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is effective as of the 5th
day of August, 1997, (the "Effective Date"), by and between SGI International, a
Utah Corporation ("SGI"), and Marvin J. Schwedock, Ph.D., an individual
("Employee").

In consideration of the mutual agreements and the promises herein contained, the
parties hereto agree as follows:

1. Employment. SGI hereby employs Employee and Employee hereby accepts
employment with SGI on the terms and conditions set forth in this Agreement.

2. Term of Employment. The term of this Agreement shall commence on the
Effective Date and terminate on December 31, 1998, notice of termination by
Employer is given in writing Ninety (90) days prior to the initial termination
or any extended termination date, and provided further, that the Agreement has
not already been terminated earlier pursuant to Section 7. If the Agreement is
not so terminated at the end of the original term or any succeeding term, and
the Agreement has not been terminated pursuant to Section 7, then it shall be
automatically extended for an additional one year period. Notwithstanding the
above, in the event that SGI is acquired, merged into another corporation, or
there is a change of management control at SGI brought about by a change in the
composition of the board of directors, then this Agreement shall be extended,
with the employee retaining his present position, compensation and employent
location, on the date of such change of management control for an additional one
(1) year term, subject to termination and renewal as described above.

3. Duties. Employee shall devote his full productive time to the duties assigned
to him. "Full productive time" is hereby defined as that time reasonably
necessary to perform his required duties in a timely manner, but not less than
forty (40) hours per week, for fifty-two (52) weeks per year, less holidays and
sick leave in accordance with the then-prevailing policies of SGI as set forth
in the SGI Employee Handbook, which is hereby incorporated herein by this
reference. Employee's performance shall be reviewed at least annually by SGI.

4. Vacation. Two weeks for 1997 including scheduled vacation for September 30 -
October 6; three weeks for 1998-2001; four weeks in 2002 and beyond. Since
pro-rata vacation for 1997 would be 5/12 x 15 days or 6.2 days, and Employee
plans to take 10 days (two weeks) vacation, Employee agrees to spend 3.8 days at
OCET to provide input on the PDU prior to Employee's official start date at
times to be mutually agreed upon.

5. Compensation. As full compensation for Employee's services hereunder, SGI
agrees to pay Employee the following:

(b) As further incentive compensation, such bonuses and benefits as SGI's Board
of Directors, in its sole discretion, shall determine.

6. Bonus. Employee will be eligible to participate in SGI's stock bonus plan(s)
following six (6) months of service. Bonuses are based on performance and
awarded in the form of stock warrants issued at a strike price equal to the
closing stock price at the date of issue and exercisable one year from the date
of issue. Bonuses are discretionary, awarded on individual performance, and not
directly tied to company performance or stock price, although consideration is
given to stock price in the timing of bonuses.

7. Involuntary Termination. This Agreement shall be deemed terminated and the
employment relationship between SGI and Employee severed upon the occurrence of
any of the following:

(a) Employee dies.

9
<PAGE>

8. Voluntary Termination. Employee may voluntarily terminate at any time by
giving Employer two weeks written notice of termination.

9. Rights Upon Termination. In the event this Agreement is terminated, any
amount due to Employee shall be prorated as of the date of termination and paid
to the Employee, or to his estate, as appropriate.

10. General Relationship. Employee shall be considered an employee of SGI within
the meaning of all federal, state, and local laws and regulations including, but
not limited to, laws and regulations governing unemployment insurance, workmen's
compensation, industrial accident, labor and taxes.

11. Assignment. This Agreement can not be assigned by either party.

12. Severability. In the event that any of the provisions of this Agreement are
deemed to be invalid or unenforceable, the same shall be deemed severable from
and shall not cause the invalidity of the remainder of this Agreement.

13. Prior Agreements. This Agreement contains the sole and entire agreement
between the parties with respect to the entire subject matter hereof, and any
and all prior discussions, negotiations, commitments, understandings and
agreements relating thereto are hereby superseded and terminated as of the
Effective Date. No representations, whether written or oral, express or implied,
other than those contained herein, have been made by any party hereto.

14. Notices. All notices, requests, demands and other communications required or
permitted by this Agreement shall be in writing and shall be deemed to have been
duly delivered upon: (i) personal delivery to the party to whom such notice is
to be given; or (ii) five (5) business days after deposit in the United States
mail, first class postage prepaid and properly addressed to such party.

15. Miscellaneous.

(a) The failure of either party at any time to require performance by in
accordance with the strict terms of this Agreement shall in no way effect the
other such party=s rights thereafter to enforce the same, nor shall the waiver
of any breach of any provision hereof be held to be a waiver of any succeeding
breach of any provision or a waiver of the provision itself.

(b) This Agreement cannot be modified except by a writing signed by the parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
at San Diego, California.

SGI International, a Utah Corporation Employee

By: /s/ Joseph A. Savoca /s/ Marvin J. Schwedock
- ---------------------------- -------------------------
Joseph A. Savoca, Chairman/CEO Marvin J. Schwedock, Ph.D.

This SGI EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is effective as of the
13th day of January 1998 (the "Effective Date"), by and between SGI
International, a Utah Corporation ("SGI"), and Dr. Ronald J. Lukasiewicz, an
individual ("Employee").

In consideration of the mutual agreements and the promises herein contained, the
parties hereto agree as follows:

1. Employment. SGI hereby employs Employee and Employee hereby accepts
employment with employment to begin on March 1, 1998, and salary to be paid
based on a prorated basis for hours worked from the Effective Date to March 1,
1998, with SGI on the terms and conditions set forth in this Agreement.

2. Term of Employment. The term of this Agreement shall commence on the
Effective Date and terminate on December 31, 1998, provided notice of
termination by Employer is given in writing Ninety (90) days prior to the
initial termination or any extended termination date, and provided further, that
the Agreement has not already been terminated earlier pursuant to Section 5. If
the Agreement is not so terminated at the end of the original term or any
succeeding term, and the Agreement has not been terminated pursuant to Section
5, then it shall be automatically extended for an additional one year period.
Notwithstanding the above, in the event that SGI is acquired, merged into
another corporation, or there is a change of management control at SGI brought
about by a change in the composition of the board of directors, then this
Agreement shall be extended on the date of such change of management control for
an additional one (1) year term, with salary, position and location to remain
the same, subject to termination and renewal as described above.

3. Duties. Employee shall devote his full productive time to the duties assigned
to him. "full productive time" is hereby defined as that time reasonably
necessary to perform his required duties in a timely manner, but not less than
forty (40) hours per week, for fifty-two (52) weeks per year, less holidays,
sick leave, and vacation time in accordance with the then-prevailing policies of
SGI as set forth in the SGI Employee Handbook, which is hereby incorporated
herein by this reference. Employee's performance shall be reviewed at least
annually by SGI.

4. Compensation. As full compensation for Employee's services hereunder, SGI
agrees to pay Employee the following:

(b) As incentive compensation, SGI Warrants in an amount to be decided in the
sole discretion of SGI's Board of Directors.

(c) As further incentive compensation, such bonuses and benefits as SGI's Board
of Directors, in its sole discretion, shall determine.

(d) Compensation shall be reviewed by SGI and Employee at least annually.

(e) Reimbursement for reasonable expenses of relocating to San Diego, including
all reasonable expenses for
insuring, packing, crating, shipping and unpacking household furnishings and
personal effects, including in-transit storage charges for up to 30 days, if
necessary, not to exceed $10,000.00. In lieu of direct reimbursement for costs
associated to the sale of your current residence and purchase of a new residence
in San Diego and other costs of relocation, you will be given warrants for
30,000 shares of SGI restricted common stock, which will be registered at the
next S-8 registration of employee stock. The filing for this stock will be
executed in January of 1998.

5. Involuntary Termination. This Agreement shall be deemed terminated and the
employment relationship between SGI and Employee severed upon the occurrence of
any of the following:

(a) Employee dies.

11
<PAGE>

6. Voluntary Termination. Employee may voluntarily terminate at any time by
giving Employer two weeks written notice of termination.

9. Assignment. This Agreement can not be assigned by either party.

13. Miscellaneous.

(a) The failure of either party at any time to require performance in accordance
with the strict terms of this
Agreement shall in no way effect the other such party's rights thereafter to
enforce the same, nor shall the waiver of any breach of any provision hereof be
held to be a waiver of any succeeding breach of any provision or a waiver of the
provision itself.

(b) This Agreement cannot be modified except by a writing signed by the parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
at San Diego, California.

SGI International, a Utah Corporation Employee

By: /s/ Joseph A. Savoca /s/ Ronald J. Lukasiewicz
- ----------------------------- ----------------------------
Joseph A. Savoca, Chairman/CEO Dr. Ronald J. Lukasiewicz

This EMPLOYMENT AGREEMENT ("Agreement") is effective as of this ___ day
of_________, 19__ (the "Effective Date"), by and between SGI International., a
Utah Corporation ("SGI"), and __________, an individual ("Employee").

In consideration of the mutual agreements and the promises herein contained, the
parties hereto agree as follows:

1. Employment. SGI hereby employs Employee and Employee hereby accepts
employment with SGI on the terms and conditions set forth in this Agreement.

2. Term of Employment. The term of this Agreement shall commence on the
Effective Date and continue until terminated, which may be done by either party
at any time on fourteen (14) days written notice to the other party.

3. Duties. Employee shall devote his full productive time to the duties assigned
to him. AFull productive time" is hereby defined as that time reasonably
necessary to perform his required duties in a timely manner, but not less than
forty (40) hours per week, for fifty-two (52) weeks per year, less holidays,
sick leave, and vacation time in accordance with the then-prevailing policies of
SGI.

4. Compensation. In consideration of Employee=s performing the duties described
herein, SGI agrees to compensate employee as set forth in Exhibit A, attached
hereto and incorporated herein, payable on the fifteenth and the last day of
each month. Employee shall also be covered by SGI's Group Medical Insurance, and
such other group benefits granted to employees pursuant to the then prevailing
policies of SGI.

Employee shall also receive:

(a) As incentive compensation, such bonuses and benefits as SGI's Board of
Directors, in its sole discretion, shall determine.

(b) As further incentive compensation, SGI Warrants in an amount to be decided
in the sole discretion of SGI=s Board of Directors.

(d) Compensation shall be reviewed by SGI and Employee at least annually.

5. Integration. This Agreement shall not be modified or amended, except by a
writing signed by both parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
at La Jolla, California.

SGI International Employee Name
1200 Prospect Street, Ste. 325 Address
La Jolla, CA 92037 City, State Zip

By: /s/ Joseph A. Savoca Employee
- --------------------------- Signature
Joseph A. Savoca Name
Chairman/CEO

This Assembly and Manufacturing Systems Executive Employment Agreement
("Agreement") is effective as of this the 14th day of July, 1997 (the "Effective
Date"), by and between Assembly & Manufacturing Systems, Inc., a California
Corporation ("AMS"), and Kevin Charbonneau, an individual ("Employee").

In consideration of the mutual agreements and the promises herein contained,
the parties hereto agree as

1. Employment. AMS hereby employs Employee and Employee hereby accepts
employment with AMS on the terms and conditions set forth in this Agreement.

2. Term of Employment. The term of this agreement shall commence on the
effective Date and continue until terminated, provided notice of termination by
Employer is given in writing Ninety (90) days prior to the initial termination
or any extended termination date, and provided further, that the Agreement has
not already been terminated earlier pursuant to Section 5. If the Agreement is
not so terminated at the end of the original term or any succeeding term and the
Agreement has not been terminated pursuant to Section 5, then it shall be
automatically extended for an additional one year period. Notwithstanding the
above, in the event that AMS is acquired, merged into another corporation, or
there is a change of management control at AMS brought about by a change in the
composition of the board of directors, then this Agreement shall be extended on
the date of such change of management control for a additional one(l) year term,
subject to termination and renewal as described above.

3. Duties. Employee shall devote his full productive time to the duties assigned
to him. "Full productive time" is hereby defined as that time reasonably
necessary to perform his required duties in a timely manner, but not less than
forty (40) hours per week, for fifty two (52) weeks per year, less holidays,
sick leave, and vacation time in accordance with the then-prevailing policies of
AMS. Employee's performance shall be reviewed at least annually by AMS.

4. Compensation. As full compensation for Employee's services, AMS agrees to pay
Employee the following:

(a) Employee shall receive a salary in the amount set forth in Exhibit A,
attached hereto and incorporated herein, for the first year of the Agreement,
payable weekly. Employee shall also be covered by AMS's group medical insurance,
and such other group benefits granted to employees pursuant to the then
prevailing policies of AMS.

(b) As further incentive compensation, SGI Warrants in an amount to be decided
in the sole discretion of SGI's Board of Directors.

(c) As further incentive compensation, such bonuses and benefits as AMS's Board
of Directors, in its sole discretion, shall determine.

(d) Compensation shall be reviewed by AMS and Employee at least annually.

5. Involuntary Termination. This Agreement shall be deemed terminated and the
employment relationship between AMS and Employee severed upon the occurrence of
any of the following:

(a) Employee dies.

(b) Employee fails or refused to faithfully and diligently perform the usual
customary duties of his employment or adhere to the reasonable policies,
standards, and regulations of AMS, which from time to time may be established

6. Voluntary Termination. Employee may voluntarily terminate at any time by
giving Employer two weeks written notice of termination.

7. Rights Upon Termination. In the event this Agreement is terminated, any
amount due to Employee shall be prorated as of the date of termination and paid
to the Employee, or the his estate, as appropriate.

8. General Relationship. Employee shall be considered an employee of AMS within
the meaning of all federal, state, and local laws and regulations including, but
not limited to, laws and regulations governing unemployment insurance, workmen's
compensation, industrial accident, labor and taxes.

14
<PAGE>
9. Assignment. This Agreement cannot be assigned by either party.

11. Prior Agreements. This Agreement contains the sole and entire agreement
between the parities with respect to the entire subject matter hereof, and any
and all prior discussions, negotiations, commitments, understandings and
agreements relating thereto are hereby superseded and terminated as of the
Effective Date. No representations, whether written or oral, express or implied
other than those contained herein, have been made by any party hereto.

12. Notices: All notices, requests, demands and other communications required or
permitted by this agreement shall be in writing and shall be deemed to have been
duly delivered upon: (i) personal delivery to the party to whom such notice is
to be given; or (ii) five (5) business days after deposit in the United States
mail, first class postage prepaid and properly addressed to such party.

13. Miscellaneous.

(a) The failure of either party at any time to require performance by in
accordance with the strict tams of this Agreement shall in no way effect such
party's rights thereafter to enforce the same, nor shall the waiver of any
breach of any provision hereof be held to be a waiver of any succeeding breach
of any provision or a waiver of the provision itself.

(b) This Agreement cannot be modified except in writing signed by the parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
at Simi Valley, California.

Assembly & Manufacturing Systems, Inc.
A California Corporation
2222 Shasta Way
Simi Valley, CA 93065 Employee

By: /s/ Dominick S. Savo /s/ Kevin Charbonneau
- ----------------------------- -----------------------
Dominick S. Savo Kevin Charbonneau
President

This EMPLOYMENT AGREEMENT ("Agreement") is effective as of this 25th day of
July, 1996 (the "Effective Date"), by and between Assembly & Manufacturing
Systems Inc., a California Corporation ("AMS"), and______________, an individual
("Employee").

In consideration of the mutual agreements and the promises herein contained, the
parties hereto agree as follows:

1. Employment. AMS hereby employs Employee and Employee hereby accepts
employment with AMS on the terms and conditions set forth in this Agreement.

4. Compensation. In consideration of Employee's performing the duties described
herein, AMS agrees to compensate employee at the rate of ________________per
hour. Employee shall also be covered by AMS's Group Medical Insurance, and such
other group benefits granted to employees pursuant to the then prevailing
policies of AMS.

Employee shall also receive:

(a) As incentive compensation, such bonuses and benefits as AMS's Board of
Directors, in its sole discretion, shall determine.

(b) As further incentive compensation, SGI Warrants in an amount to be decided
in the sole discretion of SGI=s Board of Directors.

(d) Compensation shall be reviewed by AMS and Employee at least annually.

5. Integration. This Agreement shall not be modified or amended, except by a
writing signed by both parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
at Simi Valley, California.

Assembly & Manufacturing Systems, Inc. Employee
2222 Shasta Way
Simi Valley, CA 93065

By: /s/ Dominick Savo
- ------------------------------- ------------------------
Dominick S. Savo, Employee
President

This SGI DIRECTOR AGREEMENT ("Agreement") is effective as of the ___ day of
_____, 19___ (the "Effective Date"), by and between SGI International, a Utah
Corporation ("SGI" or "Company"), and , an individual ("Director").

In consideration of the mutual agreements and the promises herein contained, the
parties hereto agree as follows:

1. Status. SGI recognizes that Director is providing time and experience to SGI
and that Director undertakes certain responsibilities to SGI as a result
thereof.

2. Compensation. In recognition of the time and experience being provided by
Director, SGI has entered into a separate Indemnification Agreement with
Director and also agrees to reimburse Director for certain preapproved costs of
attending Board of Director meetings. Company also will provide at the
discretion of the entire board of directors and the Chief Executive Officer of
the Company warrants, from time to time, as compensation for the time and effort
of Director.

3. General Relationship. Director shall not be considered an employee of SGI
within the meaning of any federal, state, and local laws and regulations
including, but not limited to, laws and regulations governing unemployment
insurance, workmen's compensation, industrial accident, labor and taxes.

4. Nondisclosure of Information Concerning Business. Director specifically
agrees that he will not at any time, in any fashion, form, or manner, either
directly or indirectly, divulge, disclose, or communicate to any person, firm,
or corporation in any manner whatsoever any information of any kind, nature, or
description concerning any matters affecting or relating to the business of SGI,
including, without limiting the generality of the foregoing, the names of any of
its customers, shareholders, business partners, or the particulars relating to
any of its technologies, or any other information of, about, or concerning the
business of SGI, its manner of operation, its plans, processes or other data of
any kind, nature, or description without regard to whether any or all of the
foregoing matters would be deemed to be confidential, material, or important.

5. Assignment. This Agreement can not be assigned by either party.

6. Severability. In the event that any of the provisions of this Agreement are
deemed to be invalid or unenforceable, the same shall be deemed severable from
the remainder of this Agreement and shall not cause the invalidity of the
remainder of this Agreement.

7. Notices. All notices, requests, demands and other communications required or
permitted by this Agreement shall be in writing and shall be deemed to have been
duly delivered upon: (i) personal delivery to the party to whom such notice is
to be given; or (ii) five (5) business days after deposit in the United States
mail, first class postage prepaid and properly addressed to such party at the
address set forth after the signature of such party, or at such other address as
such party may provide to the other in writing.

8. Miscellaneous.

This Agreement cannot be modified except by a writing signed by the parties.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
at San Diego, California.

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

By /s/ Joseph A. Savoca
- ---------------------------

Director
- ---------------------------
Signatures

This addendum No. 1 to the Attorney Client Fee Agreement between SGI
International ("SGI") and Fisher Thurber LLP dated March 12, 1992 ("Fee
Agreement") is effective May 12, 1997. The fee Agreement is incorporated herein
by this reference. The terms of this Addendum No. 1 shall supplement and shall
not prevail over or suspersede any terms of the Fee Agreement. Section 4 of
the Fee Agreement is amended to add the folowing to the last sentence therein:

1.In consideration for legal services provided by Fisher Thurber LLP, SGI may,
upon resolution of its Board of Directors, at its election at one time or from
time to time grant to Fisher Thurber LLP securities of SGI in any manner or
upon any terms which are accepted by Fisher Thurber LLP.

SGI does hereby acknowledge it is granting a warrant to purchase 10,000 shares
of common stock of SGI at $2.00 per share to Fisher Thurber LLP, and Fisher
Thurber LLP does hereby accept such warrant.

Counterparts.
- -------------
This Addendum No. 1 may be executed in one or more counterparts, each of which
shall be an original and all of which together shall be one and the same.

Ratification.
- ------------
Except as set forth in this Addendum No. 1, each party reaffirms and ratifies
the terms of the Fee Agreement and confirms the Fee Agreement remains in full
force and effect.

SGI International

By: /s/Joseph A. Savoca
----------------------
Joseph A. Savoca

Fisher Thurber LLP

By: /s/ David Fisher
---------------------
David Fisher

This Consulting Agreement ("Agreement") is entered into this ___day of
__________, by and between SGI International, a Utah corporation ("SGI") and
_________________ ("Consultant").

1. Performance by Consultant. Consultant agrees to provide consulting services
(the "Services") relating to the development of the OCET technology. Such
Services will include consultation relative to the performance, data,
measurement, analysis, and recommendations as to the development and improvement
of the OCET technology. The Services shall also include, but not be limited to,
advice, assistance, and information supplied by Consultant, or developed with
the use of any of Consultant's information, equipment, personnel, goods or
facilities. The specific tasks will be agreed to in writing and attached to this
Agreement as a Statement of Work or as a Supplemental Statement of Work by SGI's
Technical Director, Dr. Ernest Esztergar and ______________________.

2. Payment for Services.

a. Consulting Fee. SGI agrees to pay Consultant for the Services at the rate of
_____________a day for an eight hour day. The compensation shall be prorated for
any portion of a day worked by Consultant and shall also be prorated between
payment in cash and in stock as described herein. _____________of such
_______________rate shall be paid in cash and the remainder shall be paid in
stock. The amount of such stock shall be determined by dividing the amount to be
paid in stock by the closing bid price of SGII as of the date of the invoice
submitted by Consultant.

b. Expenses. Consultant shall be reimbursed for reasonable expenses, including
but not limited to travel, long distance telephone charges, and mileage at the
rate of $.315 a mile.

c. Invoices. Consultant shall invoice SGI monthly for Services rendered during
the preceding month. The invoice will describe the work performed during such
period, set out the hours of work by day and by task and reflect the amount and
details of any expenses. Consultant agrees that SGI may audit the billing and
expense documentation for a period of one year from the date of the invoice
submittal. All invoices will be due and payable by SGI within thirty (30) days
after receipt. Payments will be made to ________________________., ADDRESS,
CITY, STATE ZIP

3. Obligations of Consultant.

a. Key Person. SGI and _________ agree that the Services will be performed
personally by ___________________. If the services are not performed by
___________________ then SGI has the right to terminate this Agreement
immediately.

b. Consultations, Reports. Consultant agrees to make available _______________
for any meetings requested by SGI. If SGI requests it, Consultant
shall also prepare and submit to SGI each month a written report setting forth
the status of such work performed by Dolbear in a format to be mutually agreed
upon by Consultant and SGI.

c. Regeneration of Lost or Damaged Data. With respect to any data which
Consultant has lost or damaged, Consultant shall, at its own expenses, promptly
replace or regenerate such data from Consultant's own information, or obtain, at
Consultant's own expense, new data by reperforming work or recovering damaged
data from Consultant's or SGI's data sources.

4. Obligations of SGI. SGI agrees to make available to Consultant, upon
reasonable notice, computer programs, data, and any documentation required by
Consultant to complete the Services.

5. Statements of Work.

a. Supplements. When required by SGI, the parties shall in good faith negotiate
Supplemental Statements of Work ("Supplements"), each of which upon signing
shall be deemed a part of this Agreement. Supplements, which shall be entered
into as required by SGI, shall be substantially in the form of Appendix B
hereto. Unless otherwise agreed in a Supplement, the following provisions shall
govern Supplements generally:

i. Term. In the absence of an express provision for the duration or early
termination of a Supplement, such agreements shall be terminable without cause
on thirty (30) days written notice by either party to the other.

ii. Payment. Supplements may call for lump sum or periodic payments, or payments
against performance milestones, and for compensation based on time and materials
or on a fixed price. In the event the payment defined in a Supplement is
different than the payment described in the body of the Agreement, the terms of
the Supplement shall govern.

19
<PAGE>
iii. Specifications. Supplements shall include specific descriptions of the
tasks and scope of work to be accomplished by Consultant.

b. Costs of Negotiation. Consultant shall not bill SGI for any of its costs in
putting together a Supplement and if any Supplement is not finalized then
Consultant shall bear its own costs relating to such negotiation. Further, the
fact that the parties negotiate a Supplement, but do not finalize it, shall not
constitute any obligation on the part of SGI to make any payment to Consultant.

c. Other. Each Supplement may contain such additional terms and conditions as
may be mutually agreed to by the parties. In the event of any conflict between
the terms of this Agreement and any Supplement, the terms of the Supplement
shall govern. In the event, there is no conflict then the Supplement shall be
considered an integrated part of this Agreement.

6. Ownership. Consultant agrees that SGI is the owner of all right, title and
interest in the technical information and data (the "Technical Information")
relating to the drying, cleaning and other processing of coal, bitumen, crude
oil, resid and other carbonaceous material and oil materials, as well as any
developments or improvements related thereto, as well as any related process
control technology, computational techniques or related trade secrets or
intellectual property. SGI shall also own all other related material used by,
developed for, or paid for, by it in connection with the performance of any
Services provided by Consultant before or after the date set forth above.

7. Confidentiality and Disclosure.

a. Disclosure. Consultant desires to have the Technical Information disclosed to
him to enable him to render the Services to SGI, including but not limited to
the following: evaluation and development of SGI's OCET Technology, which can be
used for converting bitumens and heavy oils to clean solid fuels, transportation
fuels, light distillates, and other uses. SGI is prepared to make such Technical
Information as it deems necessary available to Consultant for the aforesaid
purpose on the following understanding:

For the purpose of this Agreement:

The term "Technical Information and Data" shall not include any information
which:

(i) is "publically available" information. The phrase "publically available"
information shall mean readily accessible to the public in a written
publication, and shall not include information which is only available by a
substantial searching of the published literature, and information the substance
of which must be pieced together from a number of different publications and
sources;

(ii) is known to Consultant from sources other than SGI or its Affiliates prior
to the receipt of the same hereunder from SGI or its Affiliates;

(iii) is received by Consultant without restriction on disclosure from a third
party who is legally in possession of such information and has a right to reveal
the same to Consultant.

(iv) Affiliate(s)" of SGI shall mean any person or entity directly or indirectly
controlling, controlled by or under common control with SGI.

(v) "Developments" shall mean and include inventions, discoveries,
modifications, and improvements, whether patentable or not, together with the
physical embodiment of same whether copyrightable or not, related to SGI's
business.

Notwithstanding anything herein to the contrary in this Agreement, Consultant
shall have the right to use general skills and capabilities developed as a
result of his performance of Services for his own benefit or the benefit of
others subject to the obligations of Consultant set forth hereinafter.

b. Confidentiality. Consultant agrees to hold the Technical Information in
confidence and not to reproduce or disclose it to others nor to use it, except
as herein authorized in writing or as may later be authorized in writing by SGI.

c. Usage. Both parties agree that the Consultant may use such Technical
Information in connection with, but only in connection with, the purpose
previously stated herein.

8. Development and Assignment.

a. Developments. Consultant recognizes that Developments have occurred and/or
are expected and likely to occur in the future as the result of the performance
of Consultant's Services, and Consultant covenants and agrees to hold all
Developments as a result of the performance of such Services or based on SGI's
Technical Information IN TRUST for the use and benefit of SGI, and hereby
assigns and agrees to assign all such Developments to SGI.

20
<PAGE>
b. Consultant Disclosure. Consultant shall promptly disclose in writing to SGI
any and all Developments made by Consultant, and or any members of his staff,
incident to or as a result of the performance of such Services; and Consultant
hereby assigns and agrees to assign all of its right, title and interest, in all
such Developments to SGI. All such Developments shall be treated as Technical
Information of SGI and the obligations of this Agreement shall apply thereto.
Consultant further agrees to and does hereby assign to SGI all right, title and
interest in and to the intellectual property, rights, and processes or
techniques embodying the Developments, including all rights of copyright or
rights to patent or use as a trade secret such Developments, both within the
United States and throughout the world. The obligations of Section 7 and 8 are
continuing and shall survive the termination of the Agreement.

c. Assignment Consultant shall execute and/or require his agents, servants or
employees to execute all applications, assignments, or other instruments of any
kind which SGI, at SGI's expense, shall deem proper or necessary to apply for,
obtain and enforce letters patent and/or copyright of the United States or any
foreign country or otherwise to protect SGI's interest in such Developments.

d. Retention. Unless otherwise authorized in writing by SGI, all documents,
drawings and writings provided to Consultant by SGI hereunder or developed by
Consultant hereunder, and all copies thereof shall be returned promptly to SGI
upon completion or termination of the Services hereunder.

9. Warranties. Consultant hereby warrants that he will carry out his work in
accord with generally accepted practices. SGI's sole remedy shall consist of the
reperformance of any disputed work. SGI must notify Consultant of any
dissatisfaction with the work of Consultant within sixty (60) days after
completion of the work in question.

10. Termination. This Agreement shall be effective on the Effective Date and
continue in full force and effect until terminated by either party. Either party
may terminate this Agreement on thirty (30) days notice to the other party.

11. Status, Liability, Indemnity.

a. Independent Contractor. Consultant is and at all times during the term of
this Agreement shall be an independent contractor providing professional
consulting services to SGI. Nothing contained in this Agreement shall be
construed to create a relationship of principal and agent, employer and
employee, servant and master, partnership or joint venture between the parties.
Consultant shall have no power to commit or bind SGI in any manner whatsoever.

b. Liability-Indemnity. SGI shall have no liability to Consultant or to others
for acts of Consultant. Consultant shall defend, indemnify, and hold harmless
SGI from and against any and all claims of whatsoever kind and nature arising
out of the negligent acts or omissions of Consultant, Consultant's employees or
others acting for or representing Consultant.

12. Limitation of Liability. In no event shall either of the parties hereto be
liable to the other for the payment of any consequential, indirect, or special
damages, including lost profits. The provisions of this Section, shall not apply
in any way to Consultant's obligations to replace, regenerate or obtain lost or
damaged data or to indemnify any indemnified party.

13. Injunctive Relief. It is hereby understood and agreed that damages shall be
an inadequate remedy in the event of a breach by Consultant of this Agreement
and that any such breach by Consultant will cause SGI great and irreparable
injury and damage. Accordingly, Consultant agrees that SGI shall be entitled,
without waiving any additional rights or remedies otherwise available to SGI at
law or in equity or by statute, to injunctive and other equitable relief in the
event of a breach or intended or threatened breach by Consultant of this
Agreement or any Supplement.

14. Assignment.

a. Consent Required. Consultant shall not assign or subcontract the whole or any
part of this Agreement without SGI's written consent, which can be withheld for
any reason.

b. Subcontracting. Any subcontract made by Consultant with the consent of SGI,
which must be obtained before Consultant enters into any subcontract, shall
incorporate by reference all of the terms of this Agreement. Consultant agrees
to guarantee the performance of any subcontractor used in the performance of the
Services.

15. Conflicting Assignments. During the term of this Agreement, Consultant shall
not accept any conflicting assignments, which would put Consultant in a position
where he would be rendering advice to a potential competitor of the OCET
Technology or providing advice, which might disclose any of the techniques or
Technical Information related to the OCET Technology.

21
<PAGE>
16. Conformity with Laws. Consultant shall be responsible for compliance with
all laws or regulations applicable to the Services being provided under this
Agreement. Consultant shall directly receive, respond to, defend and be
responsible for any citation, assessment, fine or penalty because of its failure
to comply with such laws or regulations. Consultant also shall defend, indemnify
and hold SGI harmless against any losses, costs, damages, or fines resulting
from Consultant's failure to comply with such laws or regulations.

17. Disputes. If any dispute of any kind arises between the parties with respect
to the Consultant's performance under this Agreement, then the dispute shall be
submitted to arbitration in San Diego, California to the American Arbitration
Association ("AAA"). The dispute shall be submitted to an arbitrator selected
from a panel of arbitrators submitted to the parties by the AAA. If the parties
fail to agree on an arbitrator, the AAA shall appoint an arbitrator and in the
absence of such appointment, the parties may request an appointment by request
to the San Diego Superior Court. Reasonable discovery shall be allowed in any
such arbitration. The decision of the arbitrator shall be binding to the same
extent as if the award were made by a court of competent jurisdiction.

18. Insurance Coverage. During the term of this Agreement Consultant shall
obtain at its own expense and maintain in full force and effect the following
insurance coverage in the amounts specified.

18.1 Employer's Liability Insurance. Consultant shall obtain, if applicable, and
maintain Statutory Worker's Compensation and Employers Liability Insurance as
required by law.

18.2 Automobile Bodily Injury and Property Damage Liability Insurance.
Consultant shall obtain and maintain automobile bodily injury and property
damage liability insurance covering automobiles owned by or hired by Consultant
with limits of at least $100,000 each occurrence for bodily injury and for
property damage.

19. Notices. Any and all notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given or received when delivered
personally or forty-eight (48) hours after being mailed, via first class,
postage prepaid, to the addresses set forth immediately below of the parties
hereto or to such other addresses as either of the parties hereto may from time
to time designate in writing to the other party.

SGI: SGI International
1200 Prospect, Suite 325
La Jolla, California 90037
Attn.: Ernest P. Esztergar

Consultant:
ADDRESS
CITY, STATE ZIP

20. Applicable Law. The provisions of this Agreement shall be construed and
enforced in accordance with the laws of the State of California.

21. Entire Agreement and Amendments. This Agreement constitutes the entire
understanding and agreement between the parties relating to the subject matter
hereof and supersedes any prior written or oral understanding or agreement
between the parties relating to the subject matter hereof. This Agreement shall
not be amended, altered, or supplemented in any way except by an instrument in
writing, signed by the duly authorized representative of the parties, that
expressly references this Agreement.

22. Waivers. The failure or delay of either party to exercise or enforce at any
time any of the provisions of this Agreement shall not constitute or be deemed a
waiver of that party's right thereafter to enforce each and every provision of
the Agreement and shall not otherwise affect the validity of this Agreement.

23. Severability. If any provision of this Agreement is finally determined to be
contrary to, prohibited by, or invalid under applicable laws or regulations,
such provision shall become inapplicable and shall be deemed omitted from this
Agreement. Such determination shall not, however, in any way invalidate the
remaining provisions of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and in
the year first above written.

SGI Consultant

SGI International, a Utah Corporation

By: /s/ Ernest P. Esztergar By:
________________________________ ______________________
Ernest P. Esztergar

This Consulting Agreement ("Agreement") is entered into this ____ day of ______
19__ (the "Effective Date"), by and between OCET Corporation, a Delaware
Corporation ("OCET") and ___________________("Consultant").

1. Performance by Consultant. Consultant agrees to provide consulting services
(the "Services") per the attached addendum. Such Services will include
consultation relative to the performance, data, measurement, analysis, and
recommendations as to the development and improvement of the OCET Technology.
The Services shall also include, but not be limited to, advice, assistance, and
information supplied by Consultant, or developed with the use of any of
Consultant's information, equipment, personnel, goods or facilities. The
specific tasks will be agreed to in writing by Robert Walty and Consultant.

2. Payment for Services.

a. Consulting Fee. OCET agrees to pay Consultant for the Services at the rate of
________per hour. The compensation shall be paid 1/2 in cash and 1/2 in stock as
described herein. The amount of stock shall be determined by dividing the amount
to be paid in stock by the average closing bid price of SGI International common
stock for the quarter then ended. Delivery of and right thereto for payment in
common stock shall be due and payable to Consultant quarterly. Consultant shall
be paid by OCET within fifteen (15) days of receipt of an acceptable invoice
from Consultant.

b. Expenses. Consultant shall be reimbursed for reasonable expenses, including,
but not limited to, travel, long distance telephone charges, materials and
supplies used in the performance of his duties, and mileage at the rate of $.30
a mile for all business travel.

c. Invoices. Consultant shall invoice OCET monthly for Services rendered during
each month. The invoice will describe the work performed during such period, set
out the hours of work by day and by task, and reflect the amount and details of
any expenses. Consultant agrees that OCET may audit the billing and expense
documentation for a period of one year from the date of the invoice submittal.
All invoices will be paid as described above.

3. Personal Service Contract. OCET and Consultant agree that the Services will
be performed personally by Consultant unless otherwise agreed in writing, prior
to the performance of the work. If the services are not performed by Consultant,
then OCET has the right to terminate this Agreement immediately.

4. Obligations of OCET. OCET agrees to make available to Consultant, upon
reasonable notice, computer programs, data, and any documentation required by
Consultant to complete the Services.

5. Term. This Agreement shall be effective and shall continue for a period of
two months from the Effective Date unless terminated in writing by either party.

6. Ownership. Consultant agrees that OCET is the owner of all right, title and
interest in the technical information and data (the "Technical Information")
relating to the processing of oil, resid and other carbonaceous material and oil
materials, and to the drying, cleaning and other processing of coal, bitumen,
crude as well as any developments or improvement related thereto, and as well as
any related process control technology, computational techniques or related
trade secrets or intellectual property. OCET shall also own all other technical
information and related material used by, developed for, or paid for, by it in
connection with the performance of any Services provided by Consultant before or
after the date set forth above.

7. Confidentially and Disclosure.

a. Disclosure. Consultant desires to have the Technical Information disclosed to
him to enable him to render the Services to OCET, including but not limited to,
the following: evaluation and development of OCET's Technology, which can be
used, among other things, for precipitating asphaltenes out of Resid and for
converting bitumens and heavy oils to clean solid fuels, transportation fuels,
light distillates, and other uses. OCET is prepared to make such Technical
Information as it deems necessary available to Consultant for the aforesaid
purpose on the following understanding:

For the purpose of the Agreement:

The term "Technical Information" shall not include any information which:

(i) is "publicly available" information. The phrase "publicly available"
information shall mean readily accessible to the public in written publication,
and shall not include information which is only available by a substantial
searching of the published literature, and information the substance of which
must be pieced together from a number of different publications and sources;

23
<PAGE>
(ii) is known to Consultant from sources other than OCET or its Affiliates prior
to the receipt of the same hereunder from OCET or its Affiliates;

(iii) is received by Consultant without restriction on disclosure from a third
party who is legally in possession of such information and has a right to reveal
the same to Consultant.

(iv) "Affiliate(s)" of OCET shall mean any person or entity directly or
indirectly controlling, controlled by or under common control with OCET.

(v) "Developments" shall mean and include inventions, discoveries,
modifications, and improvements, whether patentable or not, together with the
physical embodiment of the same whether copyrightable or not, related to OCET's
business.

b. Confidentiality. Consultant agrees to hold the Technical Information in
confidence and not to reproduce or disclose it to others nor to use it except as
herein authorized in writing or as may later be authorized in writing by OCET.

c. Usage. Both parties agree that the Consultant may use such Technical
Information in connection with, but only in connection with, providing Services
to OCET.

8. Developments and Assignment.

a. Developments. Consultant recognizes that Developments have occurred and/or
are expected and likely to occur in the future as the result of the performance
of Consultant's Services, and Consultant covenants and agrees to hold all
Developments as a result of the performance of such Services or based on OCET's
Technical Information in trust for the use and benefit of OCET, and hereby
assigns and agrees to assign all such Developments to OCET.

b. Consultant Disclosure. Consultant shall promptly disclose in writing to OCET
any and all Developments made by Consultant, and or by any members of his staff,
incident to or as a result of the performance of such Services; and Consultant
hereby assigns and agrees to assign all of its right, title and interest, in all
such Developments to OCET. All such Developments shall be treated as Technical
Information of OCET and the obligations of Consultant under this Agreement shall
apply thereto. Consultant further agrees to and does hereby assign to OCET all
right, title and interest in and to the intellectual property, rights, and
processes or techniques embodying the Developments, including all rights of
copyright or rights to patent or use as a trade secret such Developments, both
within the United States and throughout the world. The obligation of Sections 7
and 8 are continuing and shall survive the termination of this Agreement.

c. Assignment. Consultant shall execute and/or require his agents, servants or
employees to execute all applications, assignments, or other instruments of any
kind which OCET, at OCET's expense, shall deem proper or necessary to apply for,
obtain and enforce letters patent and/or copyrights of the United States or of
any foreign country or otherwise to protect OCET's interest in such
Developments.

d. Retention. Unless otherwise authorized in writing by OCET, all documents,
drawings and writings provided to Consultant by OCET hereunder or developed by
Consultant hereunder, and all copies thereof shall be returned promptly to OCET
upon completion or termination of Services.

9. Warranties. Consultant hereby warrants that he will carry out his work in
accord with generally accepted practices.

10. Termination. This Agreement shall be effective on the Effective Date and
continue in full force and effect until terminated in writing by either party,
upon five days written notice.

11. Independent Contractor. Consultant is and at all times during the term of
this Agreement shall be an independent contractor providing professional
consulting services to OCET. Nothing contained in this Agreement shall be
construed to create a relationship of principal and agent, employer and
employee, servant and master, partnership or joint venture between the parties.
Consultant shall have no power to commit or bind OCET in any manner whatsoever.

12. Limitation of Liability. In no event shall either of the parties hereto be
liable to the other for the payment of any consequential, indirect, or special
damages, including lost profits.

<PAGE>

13. Injunctive Relief. It is hereby understood and agreed that damages are an
inadequate remedy in the event of a breach by Consultant of this Agreement and
that any such breach by Consultant will cause OCET great and irreparable injury
and damage. Accordingly, Consultant agrees that OCET shall be entitled, without
waiving any additional rights or remedies otherwise available to OCET at law or
in equity or by statute, and without posting any bond, to seek injunctive and
other equitable relief in the event of a breach or intended or threatened breach
by Consultant of this Agreement.

24
<PAGE>
14. Assignment.

a. Consent Required. Consultant shall not assign or subcontract the whole or any
part of this Agreement without OCET's written consent, which can be withheld for
any reason.

b. Subcontracting. Any subcontract made by Consultant with the consent of OCET,
which must be obtained before Consultant enters into any subcontract, shall
incorporate by reference all of the terms of this Agreement. Consultant agrees
to guarantee the performance of any subcontractor used in the performance of the
Services.

15. Conflicting Assignments. During the term of this Agreement, Consultant shall
not accept conflicting assignments, which would put Consultant in a position
where he would be rendering advice or providing information to any party who
might be a potential competitor of OCET presently or in the future, nor shall
Consultant provide any advice, which might disclose any Developments or
Technical Information related to the OCET Technology.

16. Disputes. If any dispute of any kind arises between the parties with respect
to the Consultant's performance under this Agreement, then the dispute shall be
submitted to arbitration in San Diego, California to the American Arbitration
Association ("AAA"). The dispute shall be submitted to an arbitrator selected
from a panel of arbitrators submitted to the parties by the AAA. If the parties
fail to agree on an arbitrator, the AAA shall appoint an arbitrator and in the
absence of such appointment, the parties may request an appointment by making an
application to the San Diego Superior Court to order an appointment. Reasonable
discovery, including but not limited to depositions and interrogatories, shall
be allowed in any such arbitration. The decision of the arbitrator shall be
binding to the same extent as if the award were made by a court of competent
jurisdiction.

17. Notices. Any and all notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given or received when delivered
personally or forty-eight (48) hours after being mailed, via first class,
postage prepaid, to the addresses set forth immediately below of the parties
hereto or to such other addresses as either of the parties hereto from time to
time designate in writing to the other party.

OCET: OCET Corporation
11588 Sorrento Valley Rd #21,San Diego, CA 92121
Attn: Robert Walty

Consultant: NAME
ADDRESS, CITY STATE ZIP Phone: PHONE

18. Applicable Law. The provisions of this Agreement shall be construed and
enforced in accordance with the laws of the State of California.

19. Entire Agreement and Amendments. This Agreement constitutes the entire
understanding and agreement between the parties relating to the subject matter
hereof and supersedes any prior written or oral understanding or agreement
between the parties relating to the subject matter hereof. This Agreement shall
not be amended, altered, or supplemented in any way except by an instrument in
writing, signed by the duly authorized representative of the parties, that
expressly references this Agreement.

20. Waivers. The failure or delay of either party to exercise or enforce at any
time any of the provisions of this Agreement shall not constitute or be deemed a
waiver of that party's right thereafter to enforce each and every provision of
the Agreement and shall not otherwise affect the validity of this Agreement.

21. Severability. If any provision of this Agreement is finally determined to be
contrary to, prohibited by, or invalid under applicable laws or regulations,
such provision shall become inapplicable and shall be deemed omitted from this
Agreement. Such determination shall not, however, in any way invalidate the
remaining provisions of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and in
the year first above written.

OCET Consultant

OCET Corporation
a Delaware Corporation

By: /s/ Joseph A. Savoca By: SIGNATURE
- -------------------------- ------------------------
Joseph A. Savoca

This Consulting Agreement ("Agreement") is entered into this 17th day
of August 1998 (the "Effective Date"), by and between SGI International, a Utah
corporation ("SGI") and John W. Hart ("Consultant").

1. Performance by Consultant. Consultant agrees to provide consulting services
(the "Services") to SGI. Such Services will include consultation relative to the
performance, data, measurement, analysis, and recommendations as to the
development and improvement of the LFC Process, the products of such process,
and business related thereto. The Services shall also include, but not be
limited to, advice, assistance, and information supplied by Consultant, or
developed with the use of any of Consultant's information, equipment, personnel,
goods or facilities.

2. Payment for Services.

a. Consulting Fee. SGI agrees to pay Consultant for the Services at the rate
of $______ per month, plus travel expenses. Consultant shall be paid by SGI
on the 15th and 30th of each month.

b. Expenses. Consultant shall be reimbursed for reasonable expenses, including,
but not limited to, travel, long distance telephone charges, and mileage at the
rate of $0.325 a mile for all business travel and for up to $_____ for a laptop
computer and SGI shall bear the costs of office space and facilities at the
location in Denver specified in Section 17.

3. Personal Service Contract. SGI and Consultant agree that the Services will be
performed personally by Consultant. If the services are not performed by
Consultant, then SGI has the right to terminate this Agreement immediately.

4. Obligations of SGI. SGI agrees to make available to Consultant, upon
reasonable notice, computer programs, data, and any documentation required by
Consultant to complete the Services.

5. Term. This Agreement shall be effective and shall continue on a month to
month basis. Absent termination in writing by either party within a thirty day
period prior to the end of a one year term, the Agreement shall continue for an
additional one year term.

6. Ownership. Consultant agrees that SGI is the owner of all right, title and
interest in the technical information, data and business information and data
(the "Proprietary Information") relating to the business of SGI and to the LFC
Process, and to the drying, cleaning and other processing of coal, as well as
any developments or improvement related thereto, and as well as any related
process control technology, computational techniques or related trade secrets or
intellectual property. SGI shall also own all other technical information and
related material used by, developed for, or paid for, by it in connection with
the performance of any Services provided by Consultant before or after the date
set forth above. 7. Confidentially and Disclosure.

a. Disclosure. Consultant desires to have the Proprietary Information disclosed
to him to enable him to render the Services to SGI, including but not limited
to the Proprietary Information. SGI is prepared to make such Proprietary
Information as it deems necessary available to Consultant for the aforesaid
purpose on the following understanding:

For the purpose of the Agreement:

The term "Proprietary Information" shall not include any information which:

(ii) is known to Consultant from sources other than SGI or its Affiliates prior
to the receipt of the same hereunder from SGI or its Affiliates;

(iii) is received by Consultant without restriction on disclosure from a third
party who is legally in possession of such information and has a right to
reveal the same to Consultant.

(iv) "Affiliate(s)" of SGI shall mean any person or entity directly or
indirectly controlling, controlled by or under common control with SGI.

26
<PAGE>
Notwithstanding anything herein to the contrary in this Agreement, Consultant
shall have the right to use general skills and capabilities developed as a
result of his performance of Services for his own benefit or the benefit of
others subject to the obligation of Consultant set forth hereinafter.

b. Confidentiality. Consultant agrees to hold the Proprietary Information in
confidence and not to reproduce or disclose it to others nor to use it except
as herein authorized in writing or as may later be authorized in writing by
SGI.

c. Usage. Both parties agree that the Consultant may use such Proprietary
Information in connection with, but only in connection with, providing Services
to SGI.

8. Developments and Assignment.

a. Developments. Consultant recognizes that Developments have occurred
and/or are expected and likely to occur in the future as the result of the
performance of Consultant's Services, and Consultant covenants and agrees to
hold all Developments as a result of the performance of such Services or based
on SGI's Proprietary Information in trust for the use and benefit of SGI, and
hereby assigns and agrees to assign all such Developments to SGI.

b. Consultant Disclosure. Consultant shall promptly disclose in writing
to SGI any and all Developments made by Consultant, and or by any members of his
staff, incident to or as a result of the performance of such Services; and
Consultant hereby assigns and agrees to assign all of its right, title and
interest, in all such Developments to SGI. All such Developments shall be
treated as Proprietary Information of SGI and the obligations of Consultant
under this Agreement shall apply thereto. Consultant further agrees to and does
hereby assign to SGI all right, title and interest in and to the intellectual
property, rights, and processes or techniques embodying the Developments,
including all rights of copyright or rights to patent or use as a trade secret
such Developments, both within the United States and throughout the world. The
obligation of Sections 7 and 8 are continuing and shall survive the termination
of this Agreement.

c. Assignment. Consultant shall execute and/or require his agents,
servants or employees to execute all applications, assignments, or other
instruments of any kind which SGI, at SGI's expense, shall deem proper or
necessary to apply for, obtain and enforce letters patent and/or copyrights of
the United States or of any foreign country or otherwise to protect SGI's
interest in such Developments.

9. Warranties. Consultant hereby warrants that he will carry out his work in
accord with generally accepted professional practices applicable to the
services.

10. Termination. This Agreement shall be effective on the Effective Date and
continue in full force and effect until the parties agree to terminiate said
agreement.

11. Independent Contractor. Consultant is and at all times during the term of
this Agreement shall be an independent contractor providing professional
consulting services to SGI. Nothing contained in this Agreement shall be
construed to create a relationship of principal and agent, employer and
employee, servant and master, partnership or joint venture between the parties.
Consultant shall have no power to commit or bind SGI in any manner whatsoever.

12. Limitation of Liability. In no event shall either of the parties hereto be
liable to the other for the payment of any consequential, indirect, or special
damages, including lost profits.

13. Assignment.

a. Consent Required. Consultant shall not assign or subcontract the whole or
any part of this Agreement without SGI's written consent, which can be withheld
for any reason.

b. Subcontracting. Any subcontract made by Consultant with the consent of SGI,
which must be obtained before Consultant enters into any subcontract, shall
incorporate by reference all of the terms of this Agreement. Consultant
agrees to guarantee the performance of any subcontractor used in the performance
of the Services.

14. Conflicting Assignments. During the term of this Agreement, Consultant shall
not accept conflicting assignments, which would put Consultant in a position
where he would be rendering advice or providing information to any party who
might be a potential competitor of SGI presently or in the future, nor shall
Consultant provide any advice, which might disclose any Developments or
Proprietary Information.

27
<PAGE>

15. Disputes. If any dispute of any kind arises between the parties with respect
to the Consultant's performance under this Agreement, then the dispute shall be
submitted to arbitration in San Diego, California to the American Arbitration
Association ("AAA"). The dispute shall be submitted to an arbitrator selected
from a panel of arbitrators submitted to the parties by the AAA. If the parties
fail to agree on an arbitrator, the AAA shall appoint an arbitrator and in the
absence of such appointment, the parties may request an appointment by making an
application to the San Diego Superior Court to order an appointment. Reasonable
discovery, including but not limited to depositions and interrogatories, shall
be allowed in any such arbitration. The decision of the arbitrator shall be
binding to the same extent as if the award were made by a court of competent
jurisdiction.

16. Notices. Any and all notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given or received when delivered
personally or forty-eight (48) hours after being mailed, via first class,
postage prepaid, to the addresses set forth immediately below of the parties
hereto or to such other addresses as either of the parties hereto from time to
time designate in writing to the other party.

SGI: SGI International
1200 Prospect, Suite 325
La Jolla, California 90037
Attn: Richard J. Gibbens

Consultant: John W. Hart

17. Applicable Law. The provisions of this Agreement shall be construed and
enforced in accordance with the laws of the State of California.

18. Entire Agreement and Amendments. This Agreement constitutes the entire
understanding and agreement between the parties relating to the subject matter
hereof and supersedes any prior written or oral understanding or agreement
between the parties relating to the subject matter hereof. This Agreement shall
not be amended, altered, or supplemented in any way except by an instrument in
writing, signed by the duly authorized representative of the parties, that
expressly references this Agreement.

19. Waivers. The failure or delay of either party to exercise or enforce at any
time any of the provisions of this Agreement shall not constitute or be deemed a
waiver of that party's right thereafter to enforce each and every provision of
the Agreement and shall not otherwise affect the validity of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and in
the year first above written.

SGI Consultant

SGI International
a Utah Corporation

By: /s/ Richard Gibbens By: /s/ John W. Hart
_______________________ __________________________
Richard J. Gibbens John W. Hart

This Consulting Agreement ("Agreement") is entered into this 1st day of
October 1998 (the "Effective Date"), by and between SGI International, a Utah
corporation ("SGI") and ________________ ("Consultant").

1. Performance by Consultant. Consultant agrees to provide consulting services
(the "Services") relating to strategic planning, negotiation and other services
as requested by the Company. The Services shall also include, but not be limited
to, advice, assistance, and information supplied by Consultant, or developed
with the use of any of Consultant's information, equipment, personnel, goods or
facilities.

2. Payment for Services.

a. Consulting Fee. SGI agrees to pay Consultant for the Services in an amount
described on Exhibit A attached hereto.

b. Additional Compensation. SGI International may also issue warrants to
Consultant in an amount determined by its Board of Directors.

4. Obligations of SGI. SGI agrees to make available to Consultant, upon
reasonable notice, computer programs, data, and any documentation required by
Consultant to complete the Services.

5. Term. This Agreement shall be effective and shall continue for a period for
one year. Absent termination in writing by either party within a thirty day
period prior to the end of each one year term, the Agreement shall continue for
one additional one year term.

6. Ownership. Consultant agrees that SGI is the owner of all right, title and
interest in proprietary information and data (the "Proprietary Information"),
including but not limited to that relating to the processing of oil, resid and
other carbonaceous material and oil materials, and to the drying, cleaning and
other processing of coal, bitumen, crude as well as any developments or
improvement related thereto, and as well as any related process control
technology, computational techniques or related trade secrets or intellectual
property. SGI shall also own all other technical and confidential information
and related material used by, developed for, or paid for, by it in connection
with the performance of any Services provided by Consultant before or after the
date set forth above.

7. Confidentially and Disclosure.

a. Disclosure. Consultant desires to have the Proprietary Information
disclosed to him to enable him to render the Services to SGI. SGI is prepared to
make such Proprietary Information as it deems necessary available to Consultant
for the aforesaid purpose on the following understanding:

For the purpose of the Agreement:

The term "Proprietary Information" shall not include any information which:

(ii) is known to Consultant from sources other than SGI or its Affiliates prior
to the receipt of the same hereunder from SGI or its Affiliates;

(iii) is received by Consultant without restriction on disclosure from a third
party who is legally in possession of such information and has a right to
reveal the same to Consultant.

(iv) "Affiliate(s)" of SGI shall mean any person or entity directly or
indirectly controlling, controlled by or under common control with SGI.

29
<PAGE>
b. Confidentiality. Consultant agrees to hold the Proprietary Information in
confidence and not to reproduce or disclose it to others nor to use it except
as herein authorized in writing or as may later be authorized in writing by SGI.

c. Usage. Both parties agree that the Consultant may use such Proprietary
Information in connection with, but only in connection with, providing Services
to SGI.

8. Termination. This Agreement shall be effective on the Effective Date and
continue in full force and effect until terminated in writing by either party
during a thirty (30) day period prior to the end of the term of the Agreement.

9. Independent Contractor. Consultant is and at all times during the term of
this Agreement shall be an independent contractor providing professional
consulting services to SGI. Nothing contained in this Agreement shall be
construed to create a relationship of principal and agent, employer and
employee, servant and master, partnership or joint venture between the parties.
Consultant shall have no power to commit or bind SGI in any manner whatsoever.

10. Limitation of Liability. In no event shall either of the parties hereto be
liable to the other for the payment of any consequential, indirect, or special
damages, including lost profits.

11. Notices. Any and all notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given or received when delivered
personally or forty-eight (48) hours after being mailed, via first class,
postage prepaid, to the addresses set forth immediately below of the parties
hereto or to such other addresses as either of the parties hereto from time to
time designate in writing to the other party.

SGI: SGI International
1200 Prospect, Suite 325
La Jolla, California 90037
Attn: Joseph A. Savoca

Consultant:

12. Applicable Law. The provisions of this Agreement shall be construed and
enforced in accordance with the laws of the State of California.

13. Entire Agreement and Amendments. This Agreement constitutes the entire
understanding and agreement between the parties relating to the subject matter
hereof and supersedes any prior written or oral understanding or agreement
between the parties relating to the subject matter hereof. This Agreement shall
not be amended, altered, or supplemented in any way except by an instrument in
writing, signed by the duly authorized representative of the parties, that
expressly references this Agreement.

14. Waivers. The failure or delay of either party to exercise or enforce at any
time any of the provisions of this Agreement shall not constitute or be deemed a
waiver of that party's right thereafter to enforce each and every provision of
the Agreement and shall not otherwise affect the validity of this Agreement.

15. Severability. If any provision of this Agreement is finally determined to be
contrary to, prohibited by, or invalid under applicable laws or regulations,
such provision shall become inapplicable and shall be deemed omitted from this
Agreement. Such determination shall not, however, in any way invalidate the
remaining provisions of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and in
the year first above written.

SGI Consultant

SGI International
a Utah Corporation

By: /s/ Joseph A. Savoca By:
- -------------------------- ----------------------------
Joseph A. Savoca

This Consulting Agreement ("Agreement") is entered into this 21st day of
October 1998 (the "Effective Date"), by and between SGI International, a Utah
corporation ("SGI") and _______________ ("Consultant").

1. Performance by Consultant.

Consultant agrees to provide certain consulting services (the "Services") to
SGI relating to strategic planning, political consulting, tax issues, or other
services requested by SGI. The Services shall also include, but not be limited
to, advice, assistance, and information supplied by Consultant, or developed
with the use of any of Consultant's information, equipment, personnel, goods or
facilities.

2. Payment for Services.

a. Consulting Fee. SGI agrees to pay Consultant for the Services at a rate to
be agreed upon based on the Services to be provided. In the event that
Consultant is provided with a warrant or stock as part of its payment for the
Services, SGI shall include the stock underlying such warrant in the next
Registration Statement that it files, providing there is no limitation or
restriction that would preclude it from doing so.

b. Expenses. Consultant shall be reimbursed for all pre-approved, reasonable
expenses, including, but not limited to, travel, long distance telephone
charges, and mileage at the rate of $.30 a mile for all business travel.

c. Invoices. Consultant shall invoice SGI monthly for Services rendered
during any month. The invoice will describe the work performed during such
period, set out the hours of work by day and by task, and reflect the amount and
details of any expenses. Consultant agrees that SGI may audit the billing and
expense documentation for a period of one year from the date of the invoice
submittal.

3. Personal Service Contract.

SGI and Consultant agree that the Services will be performed personally by
Consultant. If the Services are not performed by Consultant, then SGI has the
right to terminate this Agreement immediately.

4. Term.

This Agreement shall be effective and shall continue for a period for one year.
This Agreement may be terminated at anytime by either party by providing thirty
days advance written notice of termination.

5. Confidentially and Disclosure.

a. Disclosure. Consultant desires to have Technical Information (as defined
below) disclosed to him to enable him to render the Services to SGI, including
but not limited to, the following: evaluation and development of SGI's
strategic business directions, and may include information on SGI's technology
developments (The "Technical Information") on the following understanding:

For the purpose of the Agreement:

The term "Technical Information" shall not include any information which:

(ii) is known to Consultant from sources other than SGI or its Affiliates prior
to the receipt of the same hereunder from SGI or its Affiliates;

(iii) is received by Consultant without restriction on disclosure from a third
party who is legally in possession of such information and has a right to
reveal the same to Consultant.

(iv) "Affiliate(s)" of SGI shall mean any person or entity directly or
indirectly controlling, controlled by or under common control with SGI.

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Notwithstanding anything herein to the contrary in this Agreement, Consultant
shall have the right to use general skills and capabilities developed as a
result of his performance of Services for his own benefit or the benefit of
others subject to the obligation of Consultant set forth hereinafter.

b. Confidentiality. Consultant agrees to hold the Technical Information in
confidence and not to reproduce or disclose it to others nor to use it except
as herein authorized in writing or as may later be authorized in writing by SGI.

c. Usage. Both parties agree that the Consultant may use such Technical
Information in connection with, but only in connection with, providing Services
to SGI.

6. Termination.

This Agreement shall be effective on the Effective Date and continue in full
force and effect until terminated in writing by either party.

7. Independent Contractor.

Consultant is and at all times during the term of this Agreement shall be an
independent contractor providing professional consulting services to SGI.
Nothing contained in this Agreement shall be construed to create a relationship
of principal and agent, employer and employee, servant and master, partnership
or joint venture between the parties. Consultant shall have no power to commit
or bind SGI in any manner whatsoever.

8. Notices.

Any and all notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given or received when delivered personally
or forty-eight (48) hours after being mailed, via first class, postage prepaid,
to the addresses set forth immediately below of the parties hereto or to such
other addresses as either of the parties hereto from time to time designate in
writing to the other party.

SGI: Consultant:

SGI International
1200 Prospect, Suite 325, La Jolla, CA 92037
Attn: Joseph A. Savoca

9. Applicable Law.

The provisions of this Agreement shall be construed and enforced in accordance
with the laws of the State of California.

10. Entire Agreement and Amendments.

This Agreement constitutes the entire understanding and agreement between the
parties relating to the subject matter hereof and supersedes any prior written
or oral understanding or agreement between the parties relating to the subject
matter hereof. This Agreement shall not be amended, altered, or supplemented in
any way except by an instrument in writing, signed by the duly authorized
representative of the parties, that expressly references this Agreement.

11. Waivers.

The failure or delay of either party to exercise or enforce at any time any of
the provisions of this Agreement shall not constitute or be deemed a waiver of
that party's right thereafter to enforce each and every provision of the
Agreement and shall not otherwise affect the validity of this Agreement.

12. Severability.

If any provision of this Agreement is finally determined to be contrary to,
prohibited by, or invalid under applicable laws or regulations, such provision
shall become inapplicable and shall be deemed omitted from this Agreement. Such
determination shall not, however, in any way invalidate the remaining
provisions of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and in
the year first above written.

SGI Consultant

SGI International, a Utah Corporation

By: By:
- ----------------------------- ----------------------
Joseph A. Savoca

This Consulting Agreement ("Agreement") is entered into this 21st day of
October 1998 (the "Effective Date"), by and between SGI International, a Utah
corporation ("SGI") and Michael Rose ("Consultant").

1. Performance by Consultant.

Consultant agrees to provide certain consulting services (the "Services") to
SGI relating to strategic planning, political consulting, tax issues, contract
analysis, and other services requested by SGI. The Services shall also include,
but not be limited to, advice, assistance, and information supplied by
Consultant, or developed with the use of any of Consultant's information,
equipment, personnel, goods or facilities.

2. Payment for Services.

a. Consulting Fee. SGI agrees to pay Consultant for the Services at a rate to
be agreed upon in writing based on the Services to be provided. In the event
that Consultant is provided with a warrant or stock as part of its payment for
the Services, SGI shall include the stock underlying such warrant in the next
Registration Statement that it files, providing there is no limitation or
restriction that would preclude it from doing so.

c. Invoices. Consultant shall invoice SGI monthly for Services rendered during
any month. The invoice will describe the work performed during such period, set
out the hours of work by day and by task, and reflect the amount and details of
any expenses. Consultant agrees that SGI may audit the billing and expense
documentation for a period of one year from the date of the invoice submittal.

3. Personal Service Contract.

SGI and Consultant agree that the Services will be performed personally by
Consultant. If the Services are not performed by Consultant, then SGI has the
right to terminate this Agreement immediately.

4. Term.

5. Confidentially and Disclosure.

a. Disclosure. Consultant desires to have Proprietary Information (as defined
below) disclosed to him to enable him to render the Services to SGI which may
include information related to SGI's business, customers, technology
developments or other proprietary information (the "Proprietary Information")
on the following understanding:

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For the purpose of the Agreement:

The term "Proprietary Information" shall not include any information which:

(ii) is known to Consultant from sources other than SGI or its Affiliates prior
to the receipt of the same hereunder from SGI or its Affiliates;

(iii) is received by Consultant without restriction on disclosure from a third
party who is legally in possession of such information and has a right to
reveal the same to Consultant.

(iv) "Affiliate(s)" of SGI shall mean any person or entity directly or
indirectly controlling, controlled by or under common control with SGI.

c. Usage. Both parties agree that the Consultant may use such Proprietary
Information in connection with, but only in connection with, providing Services
to SGI.

6. Termination.

This Agreement shall be effective on the Effective Date and continue in full
force and effect until terminated in writing by either party.

7. Independent Contractor.

8. Notices.

SGI: Consultant:

SGI International Michael Rose
1200 Prospect, Suite 325 14 Deer Creek Lane
La Jolla, CA 90037 Mt. Kisco, NY 10549
Attn: Joseph A. Savoca

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9. Applicable Law.

The provisions of this Agreement shall be construed and enforced in accordance
with the laws of the State of California.

10. Entire Agreement and Amendments.

11. Waivers.

12. Severability.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and in
the year first above written.

SGI Consultant

SGI International, a Utah Corporation

/s/ Joseph A. Savoca /s/ Michael Rose
By:--------------------- By:--------------------
Joseph A. Savoca Michael Rose

We hereby consent to the incorporation by reference in this Registration
Statement on form S-8, which is being filed by SGI International on or about
December 1, 1998, of our report, dated March 27, 1998, on the consolidated
financial statements of SGI International and subsidiaries (the "Company") as
of and for the year ended December 31, 1997, which appears in the Company's
Annual Report on Form 10-K/A for the fiscal year ended December 31, 1997, and
contains an explanatory paragraph with respect to the Company's ability to
continue as a going concern.

J.H. Cohn LLP

/s/ J.H. Cohn

San Diego, California
November 30, 1998

We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the Standard Employment Agreement dated as of
February 11, 1997, December 30, 1996, December 18, 1996, December 12, 1996,
November 12, 1996, September 30, 1996, August 1, 1996, July 29, 1996,
July 18, 1996, May 23, 1996, March 18, 1996, March 4, 1996, January 1, 1996,
the Standard Executive Employment Agreement dated as of July 9, 1997, March 1,
1997, July 1, 1996, January 1, 1996, the Standard Directors Agreements dated as
of August 1, 1996, July 1, 1995, the Non-Standard Executive Employment
Agreement dated as of January 13, 1998, August 5, 1997, the Standard Executive
Employment Agreement (AMS) dated as of July 14, 1997, January 1, 1996, the
Standard Employment Agreement (AMS) dated as of July 25, 1996, and Non Standard
Consulting Agreement dated October 21, 1998, October 1, 1998, January 5, 1998,
August 17, 1998, December 15, 1997, May 12, 1997, July 12, 1996, February 27,
1996, and September 19, 1995, of our report dated March 20, 1997, except for
Note 11, as to which the date is April 14, 1997, with respect to the
consolidated financial statements of SGI International included in its Annual
Report (Form 10-K) for the year ended December 31, 1996,filed with the
Securities and Exchange Commission.

/s/ Ernst & Young
- ----------------------
Ernst & Young LLP

San Diego, Ca
November 30, 1998

December 2, 1998

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

Re: Form S-8 Registration Statement

Gentlemen:

We have examined the Registration Statement on Form S-8 (the "Registration
Statement") to be filed by you with the Securities and Exchange Commission
on or about December 2, 1998, to register 1,045,250 shares of common stock, no
par value per share (the "Common Stock"), of SGI International, a Utah
Corporation (the "Company"). The Common Stock is issuable soley upon exercise
of the warrants referenced in the Employment Agreements and Consulting
Agreements included in the Registration Statement.

For purposes of rendering this opinion, we have made such legal and factual
examinations as we have deemed necessary under the circumstances and, as part
of such examination, we have examined, among other things, originals and
copies, certified and otherwise, identified to our satisfaction, of such
documents, corporate records and other instruments as we have deemed necessary
or appropriate. For the purporses of such examination, we have assumed the
genuineness of all signatures on orignial documents and the conformity to
original documents of all copies submitted to us.

On the basis of and relying upon the foregoing examination and assumptions,
we are of the opinion that, assuming the Registration Statement shall have
become effective pursuant to the provisions of the Securities Act of 1933,
as amended, the shares of Common Stock being offered in the Registration
Statement, when issued in accordance with the Registration Statement and the
provisions of the Employment Agreements, Consulting Agreements and Warrants will
be validly issued, fully paid and nonassessable.

We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and any amendments thereto.

Very Truly yours,

FISHER THRUBER LLP

By: /s/ David Fisher
- -----------------------
David Fisher