LFC TECHNOLOGIES, LLC

                        AMENDMENT TO OPERATING AGREEMENT

This AMENDMENT TO OPERATING AGREEMENT (this "Amendment") is entered into as of 
the 14th day of January, 1999, by and between MLFC Corporation, a California 
corporation, ("MLFC"), and SGI INTERNATIONAL, a Utah corporation ("SGI," and 
together with MLFC, the "Members").

RECITALS

A. The parties hereto have entered into that certain Operating Agreement for 
LFC Technologies, LLC dated as of the date hereof (the "Agreement").

B. MLFC and SGI desire to amend the in accordance with, and subject to, the 
terms and conditions hereinafter set forth.

NOW, THEREFORE, the parties hereto hereby amend the Agreement as follows:

1. Section 3.3 of the Agreement is hereby amended to read in its entirety as 
follows:

Further Contributions. The liability of the Members to the Company is limited 
to their Capital Contributions as specified in Schedule 3.2 attached hereto, as 
it may be amended from time to time pursuant to Section 14.2. No additional 
Capital Contributions, or other funds, whether by way of contribution of 
capital, loan or otherwise, shall be required of any Member except that each
Member shall contribute One Hundred Twenty-Five Thousand Dollars ($125,000) to
the Company every three (3) calendar months after the date hereof for a period
of two years following the date hereof. No interest shall accrue on any Capital
Contribution and no Member shall have the right to withdraw or be repaid any
Capital Contribution except as provided in this Agreement.

2. Schedule 3.2 to the Agreement is hereby amended to read in its entirety as 
described in Schedule 3.2 attached hereto.

3. As amended by the provisions of this Amendment, the Agreement shall remain 
in full force and effect in accordance with its terms.

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day 
and year first above written.

MLFC CORPORATION

By: /s/ HAJIME KATSUMURA
Name: Hajime Katsumura
Title: President

SGI INTERNATIONAL

By: /s/ JOSEPH A. SAVOCA
Name: Joseph A. Savoca
Title: Chief Executive Officer, Chairman of the Board

SCHEDULE 3.2

INITIAL CAPITAL CONTRIBUTION

Members Initial Capital Initial Initial Contribution Membership Ownership
Units Percentage

MLFC Corporation $126,000 50 50%

Address for Notices
520 Madison Avenue
New York, NY 10022

SGI International $126,000 50 50%

Address for Notices
1200 Prospect
Suite 325
La Jolla, California 92037

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