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                                  EXHIBIT 4.18
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                              EMPLOYMENT AGREEMENT

         This agreement ("Agreement") is effective as of the 1st day of March,
1994, by and between SGI International, a Utah Corporation ("Employer"), and
Kimberly A. Krmpotich, an individual ("Employee").

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

         1. Employer hereby agrees to employ Employee, and Employee agrees to be
employed, upon the terms and conditions set forth herein, as Administrative
Assistant/Receptionist, commencing on the date hereof and ending March 1, 1997.

         2. Employee shall receive a salary of One thousand four hundred eighty
dollars ($1,520.00) per month, payable no less frequently than the fifteenth and
the last day of each month.

             (a) As additional incentive compensation, Employer shall grant to
Employee a Warrant to purchase one thousand (1,000) shares of SGI restricted
common stock at an exercise price of $1.72 per share, which Warrant shall expire
on 12/31/01.

             (b) As further Incentive Compensation, such bonuses and benefits as
Employer's Board of Directors, in its sole discretion shall determine.

             (c) Compensation shall be reviewed by Employer and Employee at
least annually.

             (d) Additional terms in Employer's Employee Handbook are hereby
incorporated by reference as if fully set forth herein.

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

         4. This Agreement shall constitute a contract under the laws of the
State of California and shall be governed and construed in accordance with the
laws of said state as to both interpretation and performance.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed at La Jolla, California as of the day first above written.

         SGI INTERNATIONAL                         EMPLOYEE

By /s/  JOSEPH A. SAVOCA                           /s/  KIMBERLY A. KRMPOTICH
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        Joseph A. Savoca                                Kimberly A. Krmpotich