EXHIBIT 10.22

                            THE NEPTUNE SOCIETY, INC.

                    DEBENTURE AND WARRANT PURCHASE AGREEMENT

     This Debenture and Warrant Purchase Agreement (this "Agreement") is entered
into as of November  24,  1999,  by and between The  Neptune  Society,  Inc.,  a
Florida corporation (the "Company"), CapEx, L.P., a Delaware limited partnership
("CapEx"),  and D.H. Blair  Investment  Banking  Corp.,  a New York  corporation
("DHB") (together with CapEx, the "Purchasers").

     In consideration of the mutual promises  hereinafter set forth, the parties
hereto agree as follows:

1.   AGREEMENT TO SELL AND PURCHASE

     1.1 Sale and Purchase.  Subject to the terms and conditions  hereof, at the
Closing (as defined in Section 2 below),  the Company hereby agrees to issue and
sell to the Purchasers,  and the Purchasers  agree to purchase from the Company,
the following convertible secured debentures (the "Debentures") due February 24,
2004, in the respective  principal  amounts set out opposite the name of each of
the Purchasers below, each Debenture to be in the form of the Debenture attached
hereto as Exhibit A and to be  convertible  (subject to  adjustment  and therein
provided)  into the  number  of  shares of the  Company's  Common  Stock set out
opposite the name of each of the Purchasers  below in accordance  with the terms
thereof:

    Purchaser                Principal Amount           Shares Convertible Into
    ---------                ----------------           -----------------------
    CapEx                    $3,000,000                          600,000

    DHB                      $2,000,000                          400,000

     1.2  Sale of  Warrant.  In  connection  with and in  consideration  for the
offering of the  Debentures  (the  "Offering"),  the  Company  will issue to the
Purchasers  four warrants (the  "Warrants")  exercisable for five years from the
date of issue to  purchase  from the  Company  the number of shares  (subject to
adjustment as therein  provided) of the Company's  Common Stock set out opposite
the name of each of the Purchasers below, at the respective  exercise prices set
out below  opposite the name of such  Purchaser,  each such Warrant to be in the
form of the Warrant attached hereto as Exhibit B:

     Purchaser              Shares Purchasable          Exercise Price per Share
     ---------              ------------------          ------------------------
     CapEx                     120,000                         $5.21
     DHB                        80,000                         $5.21
     CapEx                     120,000                         $6.25
     DHB                        80,000                         $6.25



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2.   CLOSING, DELIVERY AND PAYMENT

     2.1 The closing of the sale and purchase of the Debentures and the Warrants
under this Agreement (the "Closing")  shall take place at 10:00 a.m. on December
24, 1999, at the offices of Moye, Giles, O'Keefe,  Vermeire & Gorrell, LLP, 1225
Seventeenth Street, Suite 2900, Denver, Colorado 80202, or at such other time or
place as the  Company and the  Purchasers  may  mutually  agree (such date being
hereinafter  referred to as the "Closing Date"). At the Closing,  the Purchasers
shall pay to the Company,  by certified  check or wire  transfer of  immediately
available  funds,  the Purchase  Price,  and the Company shall,  at the Closing,
deliver  to the  Purchasers  the  Debentures  and the  Warrants,  each dated the
Closing Date.

     2.2 At the Closing,  upon and in  consideration  of the  completion  of the
Offering,  the  Company  shall pay to CapEx,  on  behalf  of the  Purchasers,  a
non-refundable fee of $100,000.

3.   REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     The Company  hereby  represents  and warrants to each of the  Purchasers as
follows:

     3.1 Organization,  Subsidiaries, Good Standing, Qualification and Power and
Authority. The Company is a corporation duly organized,  validly existing and in
good  standing  under the laws of the State of Florida.  The Company is the sole
registered  and  beneficial  owner of all  classes of  capital  stock of each of
Neptune  Society of America,  Inc., a California  corporation  ("Neptune  USA").
Neptune  USA is the sole  registered  and  beneficial  owner of all  classes  of
capital  stock of each of Neptune  Management  Corp.,  a California  corporation
("Neptune  Management"),  Neptune Pre-Need Plan, Inc.  ("Neptune  Pre-Need"),  a
California corporation and Heritage Alternatives, Inc. ("Heritage", and together
with Neptune USA and Neptune  Management,  the  "Subsidiaries").  Neptune USA is
also the sole registered and beneficial owner of all classes of capital stock of
Neptune  Pre-Need Plan, Inc.  ("Neptune  Pre-Need"),  a California  corporation.
Neptune Pre-Need is an inactive company, with no significant assets, liabilities
or  business  operations.  The  Company and each  Subsidiary  has all  requisite
corporate  power and authority to own and operate its  properties and assets and
to carry on its business as presently  conducted and as presently proposed to be
conducted,  and is duly  qualified to do business  and is in good  standing as a
foreign  corporation  in each  jurisdiction  in which the  failure to so qualify
would have a material adverse effect on its business,  properties,  prospects or
financial condition. The Company and each Subsidiary has all requisite corporate
power and authority (a) to execute and deliver this  Agreement,  the Debentures,
the Warrants, the Right of First Refusal Agreement the form of which is attached
hereto as  Exhibit  C (the  "Right of First  Refusal  Agreement")  and the other
agreements,  instruments and documents contemplated to be executed and delivered
by it pursuant to this Agreement (this Agreement, the Debentures,  the Warrants,
the Right of First Refusal  Agreement and such other agreements  instruments and
documents being herein sometime  collectively  referred to as, the  "Transaction
Documents"), (b) to issue and sell the Debentures and to issue the shares of the
Company's   Common  Stock  issuable  upon  conversion  of  the  Debentures  (the
"Conversion Shares"), (c) to issue and sell the Warrants and to issue the shares
of the  Company's  Common Stock  issuable  upon  exercise of the  Warrants  (the
"Warrant Shares"),  and (d) to carry out the other provisions of the Transaction
Documents.  The  Company  has no  subsidiaries  or  affiliates  other  than  the
Subsidiaries and Neptune Pre-Need and does not, directly or indirectly,  own any
interest in or control any  corporation,  partnership,  joint venture,  or other
business entity.


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     3.2  Capitalization.  All issued and outstanding shares of the common stock
of the Company  ("Common  Stock") and all issued and  outstanding  shares of the
common  stock of the each of the  Subsidiaries  have  been duly  authorized  and
validly issued and are fully paid and nonassessable.  The issued and outstanding
capital  stock of the  Company  and the  Subsidiaries  immediately  prior to the
Closing will be as set forth on Schedule 3.2 attached hereto and incorporated by
reference herein.  Except as set forth on Schedule 3.2, there are no outstanding
(or deemed outstanding)  options,  warrants or other rights to purchase from the
Company or any of the  Subsidiaries  any of its  securities.  To the best of the
Company's  knowledge,  the only persons who beneficially own more than 4% of the
Company's  issued and outstanding  stock is, through various  entities,  Emanuel
Weintraub and members of his family.

     3.3 Authorization; Binding Obligations. All corporate action on the part of
the  Company and each  Subsidiary,  its  officers,  directors  and  shareholders
necessary for the authorization of the Transaction Documents and the performance
of all of its obl igations thereunder and for the authorization,  sale, issuance
and delivery of the  Debentures,  the Warrants,  the  Conversion  Shares and the
Warrant  Shares  has  been  taken or will be taken  prior  to the  Closing.  The
Conversion  Shares and the Warrant Shares have been or will prior to the Closing
be duly and validly  reserved for issuance and,  when issued upon  conversion of
the Debentures or upon the exercise of the Warrants, as the case may be, will be
validly issued,  fully paid and  nonassessable.  The Company shall take all such
action as may be necessary to assure that an adequate number of shares of Common
Stock is authorized and reserved for issuance of the  Conversion  Shares and the
Warrant  Shares.  This  Agreement has been duly  authorized  and executed by the
Company. This Agreement constitutes, and the Debentures, the Warrants, the Right
of First  Refusal  Agreement  and the  other  Transaction  Documents  will  once
executed constitute,  valid, legal and binding obligations of the Company or the
Subsidiary  party thereto,  as the case may be,  enforceable in accordance  with
their  terms,  except to such  limitations  as may  result  from any  applicable
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  laws
relating to or affecting the enforcement of creditors' rights generally.

     3.4 No Real  Property.  Neither the Company nor any  Subsidiary  or Neptune
Pre-Need owns or has any interest in any real estate.

     3.5 Consents and  Approvals.  Except as required by the  Securities  Act of
1933, as amended,  or any state securities laws, no filings with, notices to, or
approvals of any  governmental or regulatory body are required to be obtained or
made by the Company or any Subsidiary in connection with the consummation of the
transactions contemplated hereby.

     3.6 No  Violations.  The  execution  and  delivery of this  Agreement,  the
Debentures,  the Warrants or the other Transaction Documents and the performance
by the Company and the Subsidiaries party thereto of their obligations hereunder
and thereunder (a) do not and will not conflict with or violate any provision of
the Company's or such Subsidiary's  Certificate of Incorporation or bylaws,  and
(b) do not and will not (i)  conflict  with or result in a breach of the  terms,
conditions or provisions of, (ii)  constitute a default  under,  (iii) result in
the creation of any encumbrance  upon the capital stock or assets of the Company
or such  Subsidiary  pursuant to, (iv) give any third party the right to modify,
terminate or accelerate any obligation  under,  (v) result in a violation of, or
(vi) require any autho rization, consent, approval, exemption or other action by
or



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<PAGE>

notice to any court or  administrative or governmental body or other third party
pursuant to, any law, statute, rule or regulation or any agreement or instrument
or any order,  judgment  or decree to which the  Company or such  Subsidiary  is
subject or by which any of its assets are bound except for such  consents  which
have been obtained by the Company or such Subsidiary.

     3.7 Compliance  with Laws. The business of the Company and each  Subsidiary
has been  conducted in compliance  with all applicable  laws and  regulations of
governmental  authorities,  except for such  violations  that have been cured or
that, individually or in the aggregate, may not reasonably be expected to have a
material  adverse  effect on the business,  operations,  financial  condition or
prospects  of the  Company  or such  Subsidiary.  Neither  the real or  personal
properties  owned,  leased,   operated  or  occupied  by  the  Company  or  such
Subsidiary,  nor the use,  operation  or  maintenance  thereof (i)  violates any
applicable  laws, or regulations of any government or governmental  authorities,
or (ii) violates any  restrictive or similar  covenant,  agreement,  commitment,
understanding or arrangement.

     3.8 Licenses;  Permits; Related Approvals.  Except for Neptune Management's
funeral  establishment  licenses  and  Heritage's  crematory  license  which are
pending  transfer from their  previous  owners by the State of  California,  the
Company and each of the Subsidiaries possesses all licenses,  permits, consents,
approvals, authorizations,  qualifications, and orders (hereinafter collectively
referred  to as  "Permits")  of all  governments  and  governmental  authorities
legally  required  to enable the  Company  or such  Subsidiary  to  conduct  its
business in all  jurisdictions  in which such  business is conducted  (including
without  limitation  all  federal,  state  and  local  Permits  relating  to the
operation of funeral homes,  crematoriums and related operations included in the
Company's and the Subsidiaries'  business). All of the Permits are in full force
and  effect,  and no  suspension,  modification  or  cancellation  of any of the
Permits is pending or threatened.

     3.9 Title to Assets.  Except as set forth on Schedule 3.9  attached  hereto
and incorporated by reference  herein,  each of the Company and the Subsidiaries
has good and  marketable  title to its property and assets free and clear of all
mortgages,  security  interests,  liens,  claims, and other  encumbrances.  With
respect to the property and assets it leases, the Company and each Subsidiary is
in material  compliance  with such leases and, to its  knowledge,  holds a valid
leasehold  interest  free of any security  interests,  liens,  claims,  or other
encumbrances.  As at the Closing Date, the Company and the Subsidiaries will not
have tangible  assets having an aggregate book value in excess of $250,000,  nor
the chief executive  office of any of them,  located in any  jurisdiction  other
than the States of Florida and California.

     3.10 Vendor  Note.  As of the date  hereof,  Neptune USA is indebted to the
holders of a  promissory  note dated  March 31,  1999 in the  initial  principal
amount  of  $19,000,000  (the  "Vendor  Note"),   in  the  principal  amount  of
$14,874,215.82. Neither the Company nor any of the Subsidiaries is in default of
any of its obligations  owed to the holders of the Vendor Note, as amended by an
amendment  agreement  between  Neptune USA and certain of the holders  dated for
reference  the 1st of  August,  1999,  the  Security  Agreement  in favor of the
holders of the Vendor Note entered into by Neptune  USA,  the  Subsidiaries  and
Neptune  Pre-Need,  Management  and  Heritage  dated as of March 31,  1999,  the
Guarantee of the Company of Neptune USA's  obligations under the Vendor Note, or
any other agreements, instruments or documents relating to the Vendor Note, such
Security  Agreement,  such Guarantee or such other  agreements,  instruments and
documents.  Without  limiting



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the  generality  of the  foregoing,  Neptune USA has fully  performed all of its
obligations under each of the Acquisition  Documents (as such term is defined in
the Vendor Note).

     3.11 Defaults.  The Company and each of the  Subsidiaries is not in default
in the  performance,  observance or  fulfillment of any  obligation,  agreement,
covenant,  or condition  contained in any contract,  indenture,  mortgage,  loan
agreement, note, lease or other instrument to which it is a party or by which it
or any of its  properties may be bound,  other than such  violations or defaults
that would not  individually or in the aggregate have a material  adverse effect
on the Company's or such Subsidiary's business, prospects, properties, condition
(financial or other), results of operations or net worth.

     3.12 Intellectual  Property.  Except as set forth on Schedule 3.12 attached
hereto and  incorporated  by reference  herein,  the  following  statements  are
correct,  other than such  exceptions  that  would not have a  material  adverse
effect on the Company or Subsidiaries.  The Company and each of the Subsidiaries
owns or has a license to use all  intellectual  property  used in its  business.
Neither the Company nor any Subsidiary has infringed, and is now infringing,  on
any  proprietary  right  belonging to any other  person,  firm,  or entity.  The
Company and each of the  Subsidiaries  has the exclusive  right and authority to
use all of its creations  and  inventions,  trade  secrets,  processes,  models,
designs,  software and  formulas as are  necessary to enable the Company or such
Subsidiary  to conduct and to continue to conduct all phases of its  business in
the manner  presently  conducted by it and in  accordance  with the its business
plan.  The  Company  and  each  Subsidiary  is the sole  owner of the its  trade
secrets, free and clear of any liens,  encumbrances,  restrictions,  or legal or
equitable  claims of others  and the  Company or such  Subsidiary  has taken all
reasonable security measures to protect the secrecy, confidentiality,  and value
of these trade secrets. Any of the Company's and the Subsidiaries' employees and
any other  persons  who,  either  alone or in concert  with  others,  developed,
invented,  discovered,  derived,  programmed,  or designed these secrets, or who
have knowledge of or access to information  relating to them,  have assigned and
transferred their rights to such trade secrets to the Company or such Subsidiary
and each such person has been put on notice and, if necessary,  has entered into
agreements  that these secrets are proprietary to the Company or each Subsidiary
and  are  not  to  be  divulged  or  misused.  All  of  the  Company's  and  the
Subsidiaries'  intellectual  property of a proprietary nature is presently valid
and protectible, and is not part of the public knowledge or literature.

     3.13  Proprietary  Rights.  Neither  the  Company  nor any  Subsidiary  has
received any communications  alleging that it has violated or, by conducting its
business as proposed would violate,  any proprietary rights of any other person,
nor is the Company or any Subsidiary aware of any basis for the foregoing.

     3.14 No  Litigation.  Except as set forth on Schedule 3.14 attached  hereto
and  incorporated by reference  herein,  there is no action,  suit or proceeding
pending or, to the knowledge of the Company, threatened against or affecting the
Company, any of the Subsidiaries or any of their properties or rights before any
court or by or before any  governmental  body or arbitration  board or tribunal,
and the  Company and the  Subsidiaries  are not in default  with  respect to any
final judgment,  writ,  injunction,  decree,  rule or regulation of any court or
federal,  state,  local or other  governmental  department,  commission,  board,
bureau, agency or instrumentality, domestic or foreign.


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     3.15 Financial  Statements;  Undisclosed  Liabilities.  Attached  hereto as
Schedule 3.15 and  incorporated by reference  herein are copies of the Company's
audited  combined  balance  sheet as of December  31,  1998,  and its  unaudited
consolidated  balance  sheet as of September  30, 1999,  the  Company's  audited
combined  statement of  operations  and  retained  earnings for the period ended
December 31, 1998 and its unaudited  consolidated  statement of  operations  and
retained  earnings for the period ended  September  30, 1999,  and the Company's
audited combined statement of changes in financial position for the period ended
December 31, 1998 and its unaudited  combined  statement of changes in financial
position  for the period  ended  September  30, 1999  (hereinafter  collectively
referred to as the  "Financial  Statements").  The Financial  Statements  are in
accordance  with the books and  records of the  Company,  are true,  correct and
complete and accurately present the Company's financial position as of the dates
set forth therein and the results of the Company's operations and changes in the
Company's  financial position for the periods then ended, all in conformity with
generally  accepted  accounting  principles applied on a consistent basis during
each period and on a basis consistent with that of prior periods.  Except (i) as
disclosed in the Financial Statements,  (ii) as disclosed in this Agreement, and
(iii) as are incurred in the ordinary course of the routine daily affairs of the
Company's and the  Subsidiaries'  business,  nei ther the Company nor any of the
Subsidiaries  has any liabilities or obligations of any nature or kind, known or
unknown, whether accrued, absolute,  contingent, or otherwise. There is no basis
for  assertion  against the Company or any of the  Subsidiaries  of any material
claim,  liability or obligation not fully disclosed in the Financial  Statements
or in this Agreement.

     3.16 Tax  Matters.  The Company and each of the  Subsidiaries  has duly and
timely  filed,  or obtained  extensions  of time for filing,  all  material  tax
returns required by federal,  state and local  authorities (the "Returns").  All
information reported on the Returns is true, accurate, and complete. The Company
is not a party to, and is not aware of, any pending or threatened action,  suit,
proceeding,  or  assessment  against  it for  the  collection  of  taxes  by any
government. The Company and each of the Subsidiaries has paid in full all taxes,
interest,  penalties,  assessments  and  deficiencies  owed by it to all  taxing
authorities.

     3.17 Rule 144. The Company has maintained all reports and documents and has
taken all  actions as may be  necessary  or useful in order to allow a holder of
Registrable  Securities  (as  defined  in  Article  5  below)  to sell  any such
securities without registration in accordance with Rule 144 under the Securities
Act of 1933, as amended (the "Securities Act").

     3.18 Full  Disclosures.  All  factual  information  heretofore  or herewith
furnished by or on behalf of the Company to the Purchasers for purposes of or in
connection with this Agreement or any transaction contemplated hereby (including
the Company's  business plan) is and all statements made by  representatives  of
the Company in connection  with the negotiation of this Agreement do not contain
any untrue  statement  of a  material  fact or omit to state any  material  fact
necessary to make the statements  contained  herein not misleading.  There is no
fact known to the Company which materially adversely affects the accuracy of the
representations  and  warranties  contained in this  Agreement or the  financial
condition, operations, business, earnings, assets, or liabilities of the Company
or any of the Subsidiaries.

     3.19 No Brokers or  Finders.  The  Company  has not  engaged  any broker or
finder and no claims for brokerage  commissions or finder's fees arranged by the
Company will arise in connection with the Company's execution of this Agreement.


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4.   REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS

     The Purchasers each severally and not jointly hereby  represent and warrant
to the Company as follows:

     4.1 Requisite  Power and Authority.  Such Purchaser has all necessary power
and  authority  to  execute  and  deliver  this  Agreement  and to carry out its
provisions.  All  actions  on such  Purchaser's  part  required  for the  lawful
execution and delivery of this Agreement have been or will be effectively  taken
prior to the Closing.

     4.2 Investment Representations. Such Purchaser understands that none of the
Debenture,  the Warrants,  the  Conversion  Shares and the Warrant  Shares to be
acquired by such Purchaser has yet been  registered  under the  Securities  Act.
Such Purchaser also  understands that such Debenture and such Warrants are being
offered  and sold  pursuant  to an  exemption  from  registration  contained  in
regulations  under  the  Securities  Act  based in part  upon  such  Purchaser's
representations contained in this Agreement.

     (a) Acquisition for Own Account.  Such Purchaser is acquiring the Debenture
and/or the  Conversion  Shares and the Warrants  and/or the Warrant Shares to be
acquired  by it for its own  account for  investment  only,  and not with a view
towards their distribution in violation of applicable securities laws.

     (b) Accredited Investor. Such Purchaser represents that it is an accredited
investor within the meaning of Regulation D under the Securities Act.

     (c)  Non-Foreign  Status.  Such  Purchaser  certifies  that  it  is  not  a
nonresident  alien for  purposes of income  taxation (as such term is defined in
the Internal Revenue Code of 1986, as amended, and Income Tax Regulations).

     (d) Such  Purchaser  has such  knowledge  and  experience  in financial and
business  matters  as to be  capable  of  evaluating  the merits and risks of an
investment in the Debenture,  the Warrants, the Debenture Shares and the Warrant
Shares (collectively, the "Securities") and it is able to bear the economic risk
of loss of its entire investment.

     (e) The  Company has  provided to such  Purchaser  the  opportunity  to ask
questions  and  receive  answers  concerning  the  terms and  conditions  of the
Offering and it has had access to such information  concerning the Company as it
has  considered  necessary or  appropriate  in  connection  with its  investment
decision to acquire the Securities.

     (f) Such  Purchaser  agrees that if it decides to offer,  sell or otherwise
transfer any of the Securities,  it will not offer,  sell or otherwise  transfer
any of such Securities directly or indirectly, unless:

          (i)       the  sale  is  made  pursuant  to  registration   under  the
                    Securities Act;

          (ii)      the  sale  is  made  pursuant  to  the  exemption  from  the
                    registration  requirements under the Securities Act provided
                    by Rule 144 thereunder and in accordance with any applicable
                    state securities or "Blue Sky" laws; or


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<PAGE>

          (iii)     the  Securities  are  sold in a  transaction  that  does not
                    require   registration  under  the  Securities  Act  or  any
                    applicable  state laws and  regulations  governing the offer
                    and  sale of  securities,  and it has  prior  to  such  sale
                    furnished  to the  Company an opinion of counsel  reasonably
                    satisfactory to the Company.

     (g)  Such   Purchaser   understands   and  agrees  that  the   certificates
representing the Securities will bear a legend stating that such shares have not
been registered  under the Securities Act or the securities laws of any state of
the  United  States and may not be offered  for sale or sold  unless  registered
under the Securities Act and the securities laws of all applicable states of the
United States or an exemption from such registration requirements is available.

     (h) Such Purchaser understands and agrees that the Warrants may not be sold
or transferred unless the Warrant Shares are registered under the Securities Act
and any  applicable  state  securities  laws or  unless an  exemption  from such
registration  requirements is available and that  certificates  representing the
Warrants will bear a legend to such effect.

     (i) Such Purchaser consents to the Company making a notation on its records
or  giving  instructions  to any  transfer  agent  of the  Company  in  order to
implement the restrictions on transfer set forth and described herein.

5.   REGISTRATION RIGHTS RELATING TO CONVERSION SHARES AND WARRANT SHARES

     5.1 Definitions.  As used in this Article 5, the following terms shall have
the following respective meanings:

     (a) "Equity Securities" means (i) any securities of the Company entitled to
participate  with the Common Stock in a distribution of the Company's  remaining
assets  (after  distribution  to all  holders  of  securities  entitled  to such
distribution in priority to the holders of Common Stock) and (ii) any securities
convertible  into or  exercisable  or  exchangeable  for  securities of the type
referred to in Section 5.1(a)(i).

     (b) "Exchange Act" shall mean the  Securities  Exchange Act of 1934 (or any
similar successor federal  statute),  as amended,  and the rules and regulations
thereunder, all as the same shall be in effect from time to time.

     (c) "Founders"  shall mean one or both, as the context  requires,  of Marco
Markin and Emanuel Weintraub.

     (d) "Public  Offering" shall mean an  underwritten  public offering (with a
nationally  recognized  underwriter)  of Common  Stock  pursuant to an effective
registration statement under the Securities Act.

     (e) "Public  Sale" means any sale of  Registrable  Securities to the public
pursuant to an offering  registered  under the  Securities  Act or to the public
through a broker, dealer or market maker pursuant to the provisions of Rule 144.


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<PAGE>

     (f)  "registers,"   "registered,"  and  "registration"  shall  refer  to  a
registration  effected  by  preparing  and filing a  registration  statement  in
compliance  with the  Securities  Act and the  declaration  or  ordering  of the
effectiveness of such registration statement by the SEC.

     (g) "Registrable Securities" shall mean (i) the Conversion Shares, (ii) the
Warrant Shares, and (iii) any shares of Common Stock or Equity Securities issued
as a dividend or other  distribution  with  respect to or in exchange  for or in
replacement  of the shares  referenced  in Sections  5.1(g)(i)  and  5.1(g)(ii),
provided, however, that Registrable Securities shall not include any such shares
or Equity  Securities that have previously been registered  under the Securities
Act or that have otherwise been sold to the public in an open-market transaction
under Rule 144.

     (h) "Registration  Expenses" shall mean all expenses incurred in connection
with effecting any registration  pursuant to this Agreement,  including  without
limitation all registration,  qualification and filing fees,  printing expenses,
escrow fees, fees and  disbursements  of counsel for the Company,  blue sky fees
and expenses,  expenses of any regular or special audits incident to or required
by any such  registration,  and the fees and  expenses  of one  counsel  for the
selling holders of Registrable Securities, but excluding Selling Expenses.

     (i) "Rule  144"  shall  mean Rule 144 as  promulgated  by the SEC under the
Securities  Act, as such Rule may be amended  from time to time,  or any similar
successor rule that may be promulgated by the SEC.

     (j) "SEC" shall mean the  Securities  and Exchange  Commission or any other
federal agency at the time administering the Securities Act.

     (k) "Securities  Act" shall mean the Securities Act of 1933 (or any similar
successor  federal  statute),   as  amended,   and  the  rules  and  regulations
thereunder, all as the same shall be in effect from time to time.

     (l) "Selling  Expenses" shall mean all stock transfer  taxes,  underwriting
discounts,  expenses for special  counsel of a selling  stockholder  and selling
commissions applicable to the sale of Registrable Securities.

     5.2 Demand Registration.

     (a) Request for Registration. Subject to Sections 5.2(b) and 5.2(e), at any
time after 8 months from the issue of the Debentures, when any of the Debentures
or any Registrable Securities are outstanding, Agent (as such term is defined in
Section 8) may, by notice (the "Demand Notice") given by Agent,  demand that the
Company effect one (1)  registration  under the Securities Act utilizing  either
(i) a  registration  on Form S-1 or any similar or successor form (provided that
such  registered  offering  represents  not fewer than 250,000  shares of Common
Stock),  or (ii) a registration on Form S-3 or any similar or successor form, if
available  (provided  that such  registered  offerings  represent not fewer than
250,000 shares of Common Stock) (either,  a "Demand  Registration").  Nothing in
this Article 5 shall permit Agent to demand or require the Company to effect any
registration  under the  Securities  Act in  respect  of the  Debentures  or the
Warrants,  but Agent shall be permitted to give the Demand  Notice in respect of
any Registrable  Securities  issuable upon a future conversion of the Debentures
or exercise of the Warrants,  prior to the issue of such Registrable Securities.
The number of shares  required for effecting a  registration  under this Section


                                       9
<PAGE>

5.2(a) shall be adjusted for stock  splits,  combinations,  stock  dividends and
distributions and similar events occurring after the date hereof.

     (b) Deferral of Demand Registration. The Company shall use its best efforts
to file a registration  statement with respect to a Demand Registration demanded
pursuant to Section  5.2(a) as soon as  practicable  and in any event  within 30
days after receipt of the Demand Notice; provided,  however, that if the Company
selects an underwriter to distribute the Registrable  Securities  covered by the
Demand  Regstration  and such  underwriter  determines  in good faith that,  and
provides  Agent with a certificate  (an  "Underwriter  Notice") of an officer of
such underwriter  certifying that in its view such Demand  Registration would be
materially  detrimental  to the  Company  or would  negatively  impact any other
material corporate transaction and concludes,  as a result, that it is advisable
to defer the  filing  of such  registration  statement  at such  time,  then the
Company  shall have the right to defer such filing for the period  during  which
such registration would be detrimental;  provided, however, that the Company may
not defer the filing for a period of more than 90 days following  receipt of the
Demand Notice. In addition,  and  notwithstanding the Demand Notice, the Company
shall not be  required to effect a  registration  statement  if,  within 10 days
after  receiving any Demand  Notice,  the Company  delivers a notice (a "Company
Registration  Notice") to Agent of its intent to file a  registration  statement
within the following 60 days and does so file such registration within such time
period.  In addition,  the Company may, not more than once in each calendar year
and provided  that in such  calendar  year neither an  Underwriter  Notice nor a
Company  Registration  Notice shall have been  previously  given,  and no Demand
Notice shall have been given at any time prior  thereto,  be entitled to provide
to Agent a written notice (a "Company Deferral Notice") stating that the Company
has determined  that it would be materially  detrimental to the Company or would
negatively impact on other material  corporate  transactions for Agent to give a
Demand Notice within the period of 60 days following the date of receipt of such
Company  Deferral Notice,  in which case,  Agent shall not be permitted,  during
such 60 day period, to give a Demand Notice.

     (c)  Underwriting.  If the Purchasers  intend to distribute the Registrable
Securities covered by a Demand  Registration by means of an underwriting,  Agent
shall so advise the  Company as a part of its Demand  Notice  made  pursuant  to
Section 5.2(a). Agent shall have the right to select the managing underwriter(s)
of recognized  national  reputation  for an  underwritten  Demand  Registration,
subject to the approval of the Company's  Board of Directors  (which will not be
unreasonably  withheld  or  delayed).  The right of any  holder  of  Registrable
Securities  to  participate  in an  underwritten  Demand  Registration  shall be
conditioned upon such holder's  participation in such underwriting in accordance
with the terms  and  conditions  thereof,  and Agent  shall be  responsible  for
ensuring that all holders enter into an underwriting agreement in customary form
with the underwriter and the Company.

     (d)  Priorities.  The holders of Registrable  Securities will have absolute
priority  over any other  securities  proposed to be  included  in a  registered
offering  pursuant to Section 5.2(a) hereof. If other securities are included in
any Demand  Registration that is not an underwritten  offering,  all Registrable
Securities  included in such offering  shall be sold prior to the sale of any of
such  other  securities.   If  other  securities  are  included  in  any  Demand
Registration that is an underwritten  offering, and the managing underwriter for
such  offering  advises the Company that in its opinion the amount of securities
to be  included  exceeds  the  amount  of  securities  which can be sold in such
offering without adversely  affecting the marketability  thereof  (including the
price at which such securities are to be sold), the Company will include in such
registration all Registrable Securities



                                       10
<PAGE>

requested to be included therein prior to the inclusion of any other securities.
If the  number  of  Registrable  Securities  requested  to be  included  in such
registration  exceeds  the  amount of  securities  which in the  opinion  of the
underwriter can be sold without  adversely  affecting the  marketability of such
offering,  such  Registrable  Securities  shall be  included  pro rata among the
holders thereof based on the percentage of the outstanding  Common Stock held by
each such holder  (assuming the complete  conversion of the Debent ures, and the
exercise in full of the  Warrants  and any other  options,  warrants and similar
rights held by such holders).

     (e) One Registration.  Where the Company has effected the Registration,  it
shall have no obligation to effect any further Demand  Registrations;  provided,
however,  that  where  at any  time  within  two (2)  years  after  such  Demand
Registration  was made  pursuant to Section  5.2(a)(ii)  the time period  within
which any issue or trade of Registrable  Securities is required to be made under
such  registration has passed or will in 30 days pass, the Purchasers shall have
the right to demand (by notice given by Agent on their  behalf) that the Company
effect a further  registration  (including a new Demand  Registration) as may be
required for registration of the Registrable Securities.

     5.3 Piggyback Registrations.

     (a) Request for  Inclusion.  At any time after the  completion  of a Public
Offering after the date hereof,  if the Company shall  determine to register any
of its  securities  for its own  account or for the  account  of other  security
holders of the  Company on any  registration  form  (other  than a  registration
relating to either Form S-4 or S-8) which permits the  inclusion of  Registrable
Securities  (a "Piggyback  Registration"),  the Company will promptly give Agent
written notice  thereof and,  subject to Section  5.3(c),  shall include in such
registration all of the Registrable  Securities requested to be included therein
pursuant to the written  request of Agent received within twenty (20) days after
delivery of the Company's notice.

     (b) Underwriting.  If the Piggyback Registration relates to an underwritten
public  offering,  the  Company  shall so advise  Agent as a part of the written
notice given pursuant to Section 5.3(a).  In such event, the right of any holder
of  Registrable   Securities  to  participate  in  such  registration  shall  be
conditioned upon such holder's  participation in such underwriting in accordance
with the terms and conditions thereof.  Agent shall be responsible for answering
that all  holders  of  Registrable  Securities  proposing  to  distribute  their
securities  through such  underwriting  enter into an underwriting  agreement in
customary form with the underwriter or underwriters  selected by the Company and
the Company.

     (c) Priorities.  If such proposed Piggyback Registration is an underwritten
offering and the managing underwriter for such offering advises the Company that
the amount of securities  requested to be included therein exceeds the amount of
securities that can be sold in such offering, or if the Company and the managing
underwriter  shall in good faith  determine to reduce the number of shares to be
offered by the Company pursuant to a reasonable assessment of market conditions,
(i) the  number of  Registrable  Securities  requested  to be  included  in such
Piggyback  Registration,  (ii)  the  number  of  securities  determined  by  the
directors of the Company in good faith to be sold by the Company,  and (iii) the
number of securities,  if any, to be sold by any other  security  holders of the
Company exercising Demand  Registration  rights in such offering,  shall each be
reduced  pro rata  among  the  holders  on the  basis of the  percentage  of the
outstanding Common Stock held by such



                                       11
<PAGE>

holders  (assuming the complete  conversion of the Debenture and the exercise in
full of the Warrant and any other  options,  warrants and similar rights held by
such holders).

     5.4 Expenses of  Registration.  Except as provided in this Section 5.4, the
Company shall bear all  Registration  Expenses  incurred in connection  with the
Demand  Registration  and any  Piggyback  Registrations.  All  Selling  Expenses
incurred  by the  Company  relating to  Registrable  Securities  included in any
Demand Registration or Piggyback Registration, shall be reimbursed by Agent.

     5.5 Registration  Procedures.  In the case of each registration effected by
the Company  pursuant to this Article 5, the Company will keep Agent  advised in
writing  as to the  initiation  of such  registration  and as to the  completion
thereof. The Company will use its reasonable efforts to:

     (a) cause such registration to be declared effective by the SEC and, in the
case of a Demand Registration,  keep such registration effective for a period of
two years or until the holders of Registrable  Securities  included therein have
completed the  distribution  described in the  registratio n statement  relating
thereto, whichever first occurs;

     (b) prepare and file with the SEC such  amendments and  supplements to such
registration   statement  and  the  prospectus  used  in  connection  with  such
registration statement (including post-effective amendments) as may be necessary
to comply with the  provisions of the  Securities  Act and the Exchange Act with
respect  to the  disposition  of all  securities  covered  by such  registration
statement;

     (c) obtain  appropriate  qualifications  of the securities  covered by such
registration  under state securities or "blue sky" laws in such jurisdictions as
may be requested by Agent;

     (d)  furnish  such  number of  prospectuses  and other  documents  incident
thereto,  including any amendment of or supplement to the  prospectus,  as Agent
from time to time may reasonably request;

     (e) notify Agent at any time when a prospectus relating thereto is required
to be delivered  under the  Securities  Act, of the  happening of any event as a
result of which the prospectus included in such registration  statement, as then
in effect,  includes an untrue  statement of a material fact or omits to state a
material fact required to be stated  therein or necessary to make the statements
therein not  misleading  or incomplete  in the light of the  circumstances  then
existing, and at the request of Agent, prepare and furnish to Agent a reasonable
number of copies of a supplement to or an amendment of such prospectus as may be
necessary so that,  as  thereafter  delivered to the  purchasers of such shares,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated  therein or necessary to make the
statements   therein  not   misleading   or  incomplete  in  the  light  of  the
circumstances  then existing;  cause all Registrable  Securities covered by such
registration to be listed on each securities exchange or inter-dealer  quotation
system on which similar securities issued by the Company are then listed;

     (f) provide a transfer agent and registrar for all  Registrable  Securities
covered by such  registration  and, if  necessary,  a CUSIP  number for all such
Registrable  Securities,  in each case not later than the effective date of such
registration;


                                       12
<PAGE>

     (g) otherwise  comply with all applicable rules and regulations of the SEC,
and make available to its security holders,  as soon as reasonably  practicable,
an earnings  statement  covering the period of at least 12 months,  but not more
than 18 months,  beginning  with the first month after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act; and

     (h) in connection with any underwritten  Demand  Registration,  the Company
will enter  into an  underwriting  agreement  reasonably  satisfactory  to Agent
containing  customary  underwriting  provisions,  including  indemnification and
contribution provisions.

     5.6 Indemnification.

     (a) The Company will indemnify  each  Purchaser,  each of such  Purchaser's
officers and directors,  and each person  controlling  such Purchaser within the
meaning of Section 15 of the Securities Act, with respect to each  registration,
qualification  or compliance  effected  pursuant to this Article 5 or otherwise,
against all  expenses,  claims,  losses,  damages and  liabilities  (or actions,
proceedings or settlements  in respect  thereof)  arising out of or based on any
untrue  statement (or alleged untrue  statement) of a material fact contained in
any  prospectus,  offering  circular or other  document  (including  any related
registration  statement,   notification  or  the  like)  incident  to  any  such
registration,  qualification or compliance, or based on any omission (or alleged
omission)  to state  therein a material  fact  required to be stated  therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the  Securities  Act applicable to the Company and relating to action
or inaction  required of the Company in connection  with any such  registration,
qualification or compliance, and will reimburse each such indemnified person for
any  legal  and any  other  expenses  reasonably  incurred  in  connection  with
investigating and defending or settling any such claim, loss, damage,  liability
or action;  provided,  however,  that the Company will not be liable in any such
case to the extent that any such  claims,  loss,  damage,  liability  or expense
arises out of or is based on any untrue statement or omission based upon written
information  furnished  to the  Company  by  such  Purchaser  and  stated  to be
specifically  for  use  therein.  It is  agreed  that  the  indemnity  agreement
contained in this Section  5.6(a) shall not apply to amounts paid in  settlement
of any such loss,  claim,  damage,  liability  or action if such  settlement  is
effected  without  the  consent  of the  Company  (which  consent  has not  been
unreasonably withheld).

     (b) Each of the  Purchasers,  to the  extent it is a holder of  Registrable
Securities  included in any  registration  effected  pursuant to this Article 5,
shall indemnify the Company, each of its directors,  officers, agents, employees
and representatives, and each person who controls the Company within the meaning
of Section 15 of the Securities  Act,  against all claims,  losses,  damages and
liabilities  (or  actions in  respect  thereof)  arising  out of or based on any
untrue  statement (or alleged untrue  statement) of a material fact contained in
any  such  registration  statement,   prospectus,  offering  circular  or  other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated  therein or necessary to make the  statements  therein not
misleading,  and will  reimburse such  indemnified  persons for any legal or any
other expenses reasonably incurred in connection with investigating or defending
any such claim, loss,  damage,  liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue statement)
or  omission  (or  alleged  omission)  is made in such  registration  statement,
prospectus,  offering  circular or other document in reliance upon and in strict
conformity with written information  furnished to the Company by Agent on behalf
of such Purchaser; provided, however, that (x) such Purchaser shall



                                       13
<PAGE>

not be liable  hereunder for any amounts in excess of the net proceeds  received
by such Purchaser pursuant to such registration, and (y) the obligations of such
Purchaser  hereunder  shall not apply to amounts paid in  settlement of any such
claims,  losses,  damages or liabilities (or actions in respect thereof) if such
settlement is effected  without the consent of such Purchaser (which consent has
not been unreasonably withheld).

     (c) Each party  entitled  to  indemnification  under this  Section 5.6 (the
"Indemnified  Party")  shall  give  notice  to the  party  required  to  provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the  Indemnifying  Party to assume  the  defense of any such claim or any
litigation   resulting   therefrom,   provided  that  counsel  selected  by  the
Indemnifying  Party,  who  shall  conduct  the  defense  of  such  claim  or any
litigation  resulting  therefrom,  shall be  approved by the  Indemnified  Party
(whose approval shall not unreasonably be withheld),  and the Indemnified  Party
may participate in such defense at such party's  expense,  and provided  further
that the failure of any  Indemnified  Party to give  notice as  provided  herein
shall not relieve the Indemnifying  Party of its obligations  under this Section
5.6 to the extent such failure is not prejudicial.  No Indemnifying Party in the
defense of any such claim or litigation  shall,  except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include an unconditional  release of such Indemnified  Party from
all liability in respect to such claim or  litigation.  Each  Indemnified  Party
shall furnish such  information  regarding itself or the claim in question as an
Indemnifying  Party may reasonably request in writing and as shall be reasonably
required  in  connection  with  defense of such claim and  litigation  resulting
therefrom.

     (d) If the  indemnification  provided  for in this Section 5.6 is held by a
court of competent  jurisdiction to be unavailable to an Indemnified  Party with
respect to any loss,  liability,  claim,  damage or expense referred to therein,
then the  Indemnifying  Party, in lieu of indemnifying  such  Indemnified  Party
hereunder,  shall  contribute to the amount paid or payable by such  Indemnified
Party as a result of such  loss,  liability,  claim,  damage or  expense in such
proportion as is appropriate  to reflect the relative fault of the  Indemnifying
Party on the one hand and of the  Indemnified  Party on the other in  connection
with the statements or omissions which resulted in such loss, liability,  claim,
damage or expense as well as any other relevant  equitable  considerations.  The
relative fault of the Indemnifying  Party and of the Indemnified  Party shall be
determined by reference  to, among other  things,  whether the untrue or alleged
untrue  statement of a material  fact or the  omission to state a material  fact
relates to information  supplied by the Indemnifying Party or by the Indemnified
Party and the parties'  relative  intent,  knowledge,  access to information and
opportunity to correct or prevent such statement or omission.

     (e)  Notwithstanding  the  foregoing,  to the extent that the provisions on
indemnification and contribution  contained in an underwriting agreement entered
into in connection with an underwritten public offering are in conflict with the
foregoing  provisions,  the  provisions  in  the  underwriting  agreement  shall
control.

     5.7 Other  Obligations.  With a view to making  available  the  benefits of
certain rules and  regulations of the SEC which may effectuate the  registration
of Registrable  Securities or permit the sale of  Registrable  Securities to the
public without registration, the Company agrees to:


                                       14
<PAGE>

     (a) after its initial  registration under the Securities Act, exercise best
efforts to cause the Company to be eligible to utilize  Form S-3 (or any similar
form) for the registration of Registrable Securities;

     (b) at such time as any  Registrable  Securities  are eligible for transfer
under  Rule  144(k),  upon the  request of Agent on behalf of the holder of such
Registrable  Securities,   promptly  remove  any  restrictive  legend  from  the
certificates  evidencing  such  securities,  at no cost to Agent or such  holder
where  such  holder is a  Purchaser  hereunder,  and at the cost of Agent in any
other case;

     (c) make and keep available public information as defined in Rule 144 under
the  Securities Act at all times from and after its initial  registration  under
the Securities Act;

     (d) file with the SEC in a timely  manner all reports  and other  documents
required of the Company  under the  Securities  Act and the  Exchange Act at any
time after it has become subject to such reporting requirements; and

     (e) furnish Agent upon request a written statement by the Company as to its
compliance  with the reporting  requirements  of Rule 144 (at any time following
the  effective  date of the first  registration  statement  filed by the Company
under the  Securities  Act for an  offering  of its  securities  to the  general
public),  and of the  Securities  Act and the Exchange Act (at any time after it
has become  subject to such reporting  requirements),  a copy of the most recent
annual or quarterly report of the Company,  and such other reports and documents
as a holder of Registrable  Securities may reasonably request in availing itself
of any rule or regulation of the  Commission  (including  Rule 144A)  allowing a
holder  of  Registrable   Securities  to  sell  any  such   securities   without
registration.

     5.8  Termination  of  Registration  Rights.  The right of Agent to  request
inclusion of Registrable Securities in any registration pursuant to this Article
5 shall  terminate  at the date that is the  earlier  of: (a) that date that all
Registrable  Securities  have been  registered  under the  Securities Act has or
otherwise been sold to the public in an open-market  transaction under Rule 144;
and (b) the later of (i) the fifth anniversary of the Closing Date, and (ii) the
second anniversary of the date on which the last Conversion Shares obtainable by
either Purchaser have been obtained by conversion of such Purchaser's Debenture;
provided, however, that where a Company Deferral Notice has been given within 70
days prior to the date on which  termination would otherwise occur, it shall not
occur for 60 days  beyond  the end of the 60 day  period  during  which a Demand
Notice cannot be given pursuant to Section 5.2(b).

     5.9  Go-Along  Rights.  In the event that,  in  connection  with any Public
Offering by the Company,  any of the Founders or any other any Equity Securities
becomes  entitled  to  sell  some  or all of  such  Equity  Securities  (or  any
securities of the Company into which such Equity  Securities are  convertible or
for which such Equity  Securities are  exercisable or  exchangeable)  as part of
such Public Offering  (collectively,  the "Selling  Shareholders"),  the Company
will  promptly  give Agent  written  notice  thereof  and shall  include in such
registration  all the Registerable  Securities  requested to be included therein
pursuant  to the  written  request  of Agent on  behalf of the  holders  of such
Registerable  Securities  received within twenty (20) days after delivery of the
Company's notice; provided always, however, that such holders collectively shall
be entitled to sell no more than  twenty-five  percent (25%) of the aggregate of
all outstanding securities (including such Registerable  Securities) sold by the
Selling Shareholders and such holders of Registrable Securities electing to



                                       15
<PAGE>

sell  Registerable  Securities,  and to the extent that the aggregate  number of
Registerable Securities requested to be included in the Public Offering pursuant
to the written  request of Agent  received  within the aforesaid  period exceeds
such  entitlement,  the number of shares to be  included  by the holders of such
Registerable  Securities  in such  registration  shall be reduced pro rata among
such  holders on the basis of the number of shares  specified  to be included in
such written request of Agent for such holders respectively.

6.   CONDITIONS PRECEDENT TO PURCHASERS' OBLIGATIONS

     The obligation of the Purchasers to purchase and pay for the Debentures and
the  Warrants  to be  delivered  to it at the  Closing  shall be  subject to the
satisfaction of the following conditions as of the Closing Date:

     6.1 the  representations  and  warranties of the Company  contained in this
Agreement,  the Debenture and the Warrant shall be true and correct on and as of
the Closing Date;

     6.2 prior to or concurrent with the Closing, the other parties (besides the
Purchasers)  thereto  shall  have  entered  into  the  Right  of  First  Refusal
Agreement;

     6.3 prior to or concurrent  with the Closing,  Mr. Emanuel  Weintraub,  the
Emanuel  Weintraub  Intervivos  Trust and Leo Robert  Dennis (the  "Notification
Holders"),   shall  have  entered  into  an  agreement  in  form  and  substance
satisfactory  to  Agent in  their  absolute  discretion  pursuant  to which  the
Notification  Holders  agree to give  certain  notices  to Agent  on  behalf  of
Purchasers and confirm certain matters to the Purchasers;

     6.4 prior to or  concurrent  with the Closing,  the holders of that certain
promissory note (the "Weintraub Note") dated March 31, 1999, executed by Neptune
USA (then called "Lari  Acquisition  Company,  Inc.") to and in favor of Emanuel
Weintraub  Inter  Vivos  Trust,  in the  principal  amount  of  $2,000,000,  the
Purchasers  and the Company  shall have entered into a  subordination  agreement
relating to the Weintraub Note whereby such holders  subordinate  payment of the
Weintraub  Note and all  security  held by them  therefor to and in favor of the
prior  payment  of the  Debentures  and  all  security  held  by  Agent  for the
Purchasers,  in  form  and  substance  satisfactory  to  Agent  in its  absolute
discretion;

     6.5  concurrent  with the  Closing,  Agent  shall  have  received  evidence
satisfactory to it that:

     (a) the  Guarantees of the  Subsidiaries  and the Security  Agreements  (as
defined in the Debentures) and any additional security  instruments or documents
required by the Purchasers  have been executed and delivered,  and all necessary
consents,  subordinations,  releases, discharges and other instruments have been
obtained as may be necessary,  for the security constituted thereby to enjoy the
priority thereby contemplated, subject only to the encumbrances permitted by the
Debentures;

     (b) the Company has a free cash balance  available to it, as of the Closing
Date,  of no less than  $2,500,000  (less any  amounts  used by the  Company and
disclosed in writing to the Purchasers  during the period from September 1, 1999
to the Closing Date for acquisitions or capital expenditures);


                                       16
<PAGE>

     (c) except as may be required by the  Securities  Act of 1933,  as amended,
and any applicable state securities laws, the Company and the Subsidiaries  have
obtained any and all  consents,  approvals  and  acknowledgments  of all persons
whose consents, approvals and acknowledgments may be required, including without
limitation all requisite corporate,  shareholder and governmental  consents,  as
are necessary for the consummation of the transactions hereby contemplated;

     6.6 concurrent  with the Closing,  the  Purchasers  shall have received the
opinions of counsel acceptable to Agent in the States of Florida and California,
in form and substance satisfactory to Agent; and

     6.7  prior to or  concurrent  with the  Closing,  the  Company  shall  have
delivered to Agent its Year 2000 business plan.

7.   COMPANY COVENANTS

     The Company covenants and agrees with the Purchasers that:

     7.1 Use of Proceeds.  The Company  shall use the proceeds  from the sale of
the  Debenture  solely for the purpose of paying down  principal and accrued but
unpaid  interest  owing under the Vendor Note.  Such proceeds shall be paid, and
escrow arrangements  mutually  acceptable to Agent and the Company,  pursuant to
the Company's  written  direction  directly on or after Closing to City National
Bank,  N.A.,  the escrow  agent  appointed  by the holders of the Vendor Note by
Joint Written Instructions to Escrow Agent dated April 22, 1999, as amended.

     7.2  Reservation  of  Common  Stock.  The  Company  will  reserve  and keep
available that maximum number of its authorized but unissued Common Stock as may
be required for the issuance of Conversion Shares and the Warrant Shares.

     7.3 Board  Meeting  Attendance.  Until  such time as either  (a) 75% of the
principal  amount of the Debenture has been converted into the Company's  Common
Stock,  or (b) the  Debenture  shall have been  repaid in full,  Agent  shall be
entitled to receive notice of and to have a  representative  attend all meetings
(including telephonic meetings) and all adjournments of meetings of the Board of
Directors  and any committee  thereof  (including  committees  comprised of both
directors and non-directors). Failure to provide notice (on the same basis as is
required for all board members and in any event on not less than three  business
days)  of  or to  permit  such  representative  to  attend  such  meeting  shall
constitute  a  material  breach  of  the  provisions  of  this  Agreement.  Such
representative  shall have no voting  rights at any such  meeting,  but shall be
entitled to participate fully in all discussions that take place thereat.

8.   CAPEX AS AGENT FOR THE PURCHASER

     8.1 Provisions  for the Benefit of Purchasers  Only. The provisions of this
Section 8 relate to the  rights and  obligations  of the  Purchasers  and Agent,
inter se, and shall be operative as between the  Purchasers  and Agent only, and
the Company  shall not have any rights or be  entitled to rely for any  purposes
upon such provisions, save as provided in section 8.2(b).


                                       17
<PAGE>

     8.2 Authorization and Action.

     (a) Each  Purchaser  appoints  CapEx,  L.P. as its agent (in such capacity,
"Agent"),  for the  purposes of  collecting  payments,  electing to exercise the
rights  of the  Purchasers  under  this  Agreement  and  the  other  Transaction
Documents  as herein and  therein  provided,  and holding  and  enforcing  those
security documents  referred to in the Debentures (and hereinafter  referred to)
as  the  "Security"  in  accordance  with  the  terms  of  this  Agreement,  and
distributing  any funds  received  either as  payments  from the  Company  or on
realization  of the  Security  in  accordance  with  this  Agreement.  For  such
purposes,  each Purchaser  authorizes  Agent on behalf of such Purchaser to take
such action and to exercise such rights, powers and discretions as are expressly
delegated to it under this Agreement and the other Transaction  Documents and on
the  terms  hereof or  thereof  together  with such  other  rights,  powers  and
discretions as are reasonably  incidental  thereto;  provided  always,  however,
that,  without the consent of both  Purchasers,  Agent shall not:  (i) effect or
agree to any  change in the  interest  rate,  payment  dates,  maturity  date or
conversion rights under the Debentures;  or (ii) fail to elect under Section 7.1
of the Debentures to accelerate  repayment of all indebtedness  owing thereunder
upon the  occurrence of a Default Event and proceed to enforce all security held
by Agent for such indebtedness. Agent may perform any of its duties hereunder or
thereunder by or through its agents,  officers or employees.  Agent shall not be
required to exercise any right, power or discretion or take any action as to any
matters not expressly  provided for by this  Agreement or the other  Transaction
Documents (including,  without limitation,  enforcement of the collection of any
amounts  owing to the  Purchasers  hereunder).  Agent  shall not be  required to
exercise any right,  power or  discretion  or to take any action  which  exposes
Agent to  personal  liability  or risk  thereof  or which  is  contrary  to this
Agreement,  the other  Transaction  Documents or  applicable  law. The duties of
Agent, as agent, shall be mechanical and  administrative in nature.  Agent shall
not have,  by reason of this  Agreement or the other  Transaction  Documents,  a
fiduciary relationship in respect of either Purchaser.

     (b) Agent  shall  only act on  behalf of the  Purchasers  in  dealings  and
communications  with the Company as set out in this Agreement,  and shall be the
only person to so act, except as may be otherwise  agreed in writing between the
parties  hereto.  The Company and the  Subsidiaries  may rely upon the grant and
delegation of authority  provided in this section 8 from each of the  Purchasers
to Agent without further inquiry.

     8.3 Exoneration.

     (a)  Agent and its  limited  and  general  partners,  and their  respective
directors, officers, managers, members, shareholders,  agents or employees shall
not be liable to any person,  company or firm  (including the Purchasers and the
Company)  for any action taken or omitted to be taken by any of them (other than
actions  taken or omitted to be taken by Agent in its  capacity as a  Purchaser,
including,   without   limitation,   actions  giving  rise  to   indemnification
obligations  pursuant  to  Section  5.6(b))  under or in  connection  with  this
Agreement or the other  Transaction  Documents  unless directly due to their own
gross negligence or wilful misconduct.

     (b) Without limiting the generality of the foregoing Section 8.3(a):

          (i) subject to sections 8.8 and 9, Agent may retain,  consult with and
          pay legal counsel,  independent accountants and other experts selected
          by it (provided that all



                                       18
<PAGE>

          reasonable  costs  and fees in  respect  thereof  shall be paid by the
          Company as  provided  for in Section 9) and Agent  shall not be liable
          for any  action  taken or  omitted  to be taken in good faith by it in
          accordance with the advice of such counsel, accountants or experts;

          (ii) Agent  shall not incur any  liability  by acting upon any notice,
          consent,  certificate or other  instrument or writing (which may be by
          telegram,  telecopy,  cable or telex) believed by it at the time to be
          genuine  or by  acting  upon any  representation  or  warranty  of the
          Company made hereunder;

          (iii) Agent may assume without inquiry or investigation  that no event
          of  default,  default,  or other  event  which is,  or which  with the
          passing of time or giving of notice or both  would  become an event of
          default under the Debentures or any other  Transaction  Document,  has
          occurred  unless it has received  from the Company or any  Purchaser a
          notice thereof  specifying the nature of the relevant event  whereupon
          Agent may assume that such event has occurred as therein described and
          that an default  hereunder or default or event of default  thereunder,
          as the case may be, has occurred; and

          (iv) Agent  shall not have any duty to  ascertain  or to inquire as to
          the  performance  or  observance  of any of the  terms,  covenants  or
          conditions of this  Agreement or any other  Transaction  Document,  to
          inspect the property (including the books and records) of the Company,
          the Subsidiaries or any of the other parties,  or to conduct any other
          inquiry  usual for a lender;  Agent  shall not be  responsible  to any
          Purchaser for the due execution,  legality, validity,  enforceability,
          genuineness,  sufficiency  or  value  of  this  Agreement,  any  other
          Transaction  Document or any security  provided by the Company and the
          Subsidiaries.

     8.4  Agent  as  Purchaser.  Agent,  which  is  also a  Purchaser  as to its
Debenture,  shall have the same rights and powers under this  Agreement  and the
other Transaction  Documents as any other Purchaser and may exercise the same as
though it were not  Agent;  and the terms  "Purchaser"  or  "Purchasers"  shall,
unless  otherwise  expressly  indicated,   include  Agent  in  its  capacity  as
Purchaser.  Subject to any restrictions on the Company herein,  Agent may accept
deposits from, lend money to, and generally  engage in any kind of business with
the Company and any other party,  all as if Agent were not agent  hereunder  and
without any duty to account therefor to either Purchaser.

     8.5 Credit  Decision.  Each Purchaser has entered into this Agreement after
its own  negotiations  with the  Company  and is and will  continue to be solely
responsible for its own  independent  appraisal of and  investigations  into the
financial condition, creditworthiness, affairs and nature of the Company and all
other  credit and  banking  matters  relative  to this  Agreement  and the other
Transaction Documents.  Each Purchaser confirms to Agent that it has not relied,
and will not hereafter rely, on Agent:

     (a) to check or  inquire  on its  behalf  into the  adequacy,  accuracy  or
completeness of any  information  provided by the Company under or in connection
with  this  Agreement  or the  transactions  herein  contemplated  and that each
Purchaser shall be responsible for obtaining directly



                                       19
<PAGE>

from the Company,  through  requests made by Agent to the Company on its behalf,
such  information,  documents  or  other  information  as each  Purchaser  deems
necessary from time to time; or

     (b) to assess or keep under review on its behalf the  financial  condition,
creditworthiness,  affairs or nature of the Company,  the  Subsidiaries or their
respective  properties or any other credit or banking  matters  relative to this
Agreement.

A copy of this  Agreement  including all Schedules  hereto has been, or prior to
such  Purchaser  entering into this  Agreement  will be, made  available to each
Purchaser for review by it and each Purchaser is, or will be, satisfied with the
form and substance of this Agreement  including all Schedules hereto;  and Agent
is not liable in any way to such  Purchaser in respect  thereof or in respect of
the accuracy or completeness of any information or data, financial or otherwise,
made  available to such  Purchaser in connection  with the  negotiation  of this
Agreement or for any statements,  warranties or representations  whether made in
writing or orally made in connection with the negotiation of this Agreement.

     8.6 Security.

     (a) Each of the Purchasers  hereby  acknowledges that the guarantees of the
Subsidiaries  and the  Security  Agreements,  and any  and all  security  now or
hereafter held to secure the aggregate of all indebtedness  owing by the Company
under the Debentures  (the  "Security") and the remedies  provided  hereunder or
thereunder are for the benefit of the Purchasers such that the Security and such
remedies  shall enure to benefit of all the Purchasers  until such  indebtedness
shall have been repaid in full.

     (b) Except as contemplated by section 8.6(c), no part of the Security shall
be discharged or otherwise  surrendered to the Company,  in whole or in part, by
Agent or any of the Purchasers without the consent of all of the Purchasers, but
none of the Purchasers or Agent shall be liable or responsible to the others for
any loss or damages  suffered  as a result of any action  taken or omitted to be
taken with respect to any of the Security, except as provided in this Agreement,
or any  invalidity  or  unenforceability  of any of the  Security for any reason
whatsoever,  including  without  limiting the generality of the  foregoing,  any
negligent omission to comply with any filing or registration  requirement or any
renewal filing or  registration  requirement or other  requirement  necessary to
perfect or maintain any security interest.

     (c) Each of the Purchasers agrees that its rights under the Security are to
be exercised not severally,  but  collectively,  by Agent in accordance with the
terms hereof or thereof. The Company hereby confirms that Agent may exercise the
rights of the Purchasers  under the Security  collectively  if the Purchasers so
require,  or severally for the benefit of the  Purchasers,  if the Purchasers so
require. Notwithstanding the foregoing, where, in the sole opinion of Agent, the
exigencies  of the  situation  warrant such action,  Agent may (but shall not be
required to do so) without notice to or the consent of the Purchasers  take such
action on behalf of the  Purchasers as it deems  appropriate or desirable in the
interests of the Purchasers. Each of the Purchasers covenants that upon any such
consent of the Purchasers  being given, it shall  co-operate fully with Agent to
the extent  requested by Agent in the  collective  realization  of the Security.
Each Purchaser agrees to do all acts and things and to make, execute and deliver
all  agreements  and other  instruments  so as to fully carry out and effect the
intent and purpose of this section 8.


                                       20
<PAGE>

     (d) No  representation  or  warranty  with  respect  to the  authorization,
execution,  delivery,  registration,  validity,  enforceability  or value of the
Security or of any other kind or character in relation  thereto shall be binding
on any of the  Purchasers  or  Agent  unless  expressly  made  in  writing.  The
Purchasers  acknowledge that Agent has not made any  representation  or warranty
whatsoever to the  Purchasers  with respect to any of the Security held or to be
held by it.

     8.7 Sharing of Payments.  All Purchasers  shall share in payments  received
from or other  recoveries from the Company or any of the Subsidiaries in respect
of their indebtedness  (including amounts paid by the Company in accordance with
the Debentures and this Agreement, amounts received on any exercise of any right
of counterclaim,  set-off,  banker's lien or similar right and amounts recovered
on the  realization  of the Security)  pari passu,  equally and ratably on a pro
rata  basis  between  the  Purchasers,  based  upon the  respective  amounts  of
indebtedness owing under their Debentures.

     8.8 Indemnification. The Purchasers agree to indemnify Agent (to the extent
not reimbursed by the Company)  ratably  according to the respective  amounts of
indebtedness  owing  under  their  Debentures  from  and  against  any  and  all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or  disbursements of any nature or kind whatsoever which may be
imposed on,  incurred  by, or asserted  against  Agent in its  capacity as Agent
hereunder  in any way  relating to or arising out of this  Agreement,  any other
Transaction  Document  or any  action  taken  or  omitted  by Agent  under  this
Agreement or any other Transaction Document; provided that no Purchaser shall be
liable  for any  portion  of such  liabilities,  obligations,  losses,  damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from Agent's gross  negligence or wilful  misconduct.  Without  limitation  each
Purchaser  agrees to reimburse Agent promptly upon demand for its rateable share
as  above  described  of   out-of-pocket   expenses   (including  the  fees  and
disbursements of counsel) incurred by Agent in connection with the determination
or  preservation  of any  rights  of  Agent  or  the  Purchasers  under,  or the
enforcement of, or legal advice in respect of rights or responsibilities  under,
this Agreement or other Transaction  Documents,  to the extent that Agent is not
reimbursed for such expenses by the Company on demand.

     8.9 Selling  Expenses.  Agent shall be  entitled to be  reimbursed  for all
Selling  Expenses  incurred  by it  pursuant  to Section  5.4 by the  holders of
Registrable  Securities  included  in the  Registration  to which  such  Selling
Expenses relate, and may require payment of any holder's estimated share thereof
to it as a  precondition  to  including  such  Registrable  Securities  in  such
Registration.

     8.10 Exchange of  Information.  The Company  agrees that each Purchaser and
Agent may provide to the other Purchasers or Agent such  information  concerning
the  financial  position  and  property  and  operations  of the Company and the
Subsidiaries  as, in the opinion of such Purchaser or Agent,  is relevant to the
ability of the Company and the Subsidiaries to fulfil their obligations under or
in connection with this Agreement and the other Transaction Documents.

     8.11  Replacement of Agent.  Upon any dissolution of Agent,  Agent shall be
entitled to transfer to its limited  partners or to one or more  corporations or
limited partnerships,  the majority of the shareholders or partners of which are
limited and or general  partners of Agent,  all of its rights as Agent under the
Transaction  Documents.  In connection  with such  distribution,  Agent shall be


                                       21
<PAGE>

entitled to assign to its limited partners or such  corporations or partnerships
Agent's rights hereunder. In addition,  after the occurrence of a Default Event,
as  defined  in the  Debentures,  should  Agent  fail to take  any of the  steps
referred to in Section 8.2(a)(ii) forthwith after the occurrence of such Default
Event (or any subsequent Default Event), either Purchaser may immediately remove
Agent from its  position  and appoint a  successor  Agent in the stead of CapEx,
L.P. Upon the acceptance of any  appointment  as Agent  hereunder by a successor
Agent,  such successor Agent shall  thereupon  succeed to and become vested with
all the rights,  powers,  privileges and duties of the retiring  Agent,  and the
retiring Agent shall be then  discharged from its further duties and obligations
as Agent  under  this  Agreement  provided  that the Agent  shall  execute  such
documents  as may be  necessary or desirable to assign and transfer the retiring
Agent's  interest in this  Agreement,  the  Security  and the other  Transaction
Documents to the successor  Agent.  After any retiring  Agent's  resignation  or
removal  hereunder as Agent, the provisions of this Section 8 shall inure to its
benefit  as to any  actions  taken or  omitted to be taken by it while it was an
Agent under this Agreement.

9.   EXPENSE REIMBURSEMENT

     The Company  hereby agrees to reimburse  Agent on behalf of the  Purchasers
for  all  of  its  out-of-pocket   expenses  incurred  in  connection  with  the
transactions   contemplated   hereby,   including  all  out-of-pocket   expenses
(including  filing fees and other third party  charges)  incurred in  connection
with its third party due diligence  costs,  the  preparation  and negotiation of
this  Agreement,  the  Debenture,  the  Security  Agreement  (as  defined in the
Debenture), the Warrant, and the Right of First Refusal Agreement, and all other
documents evidencing the transactions  contemplated herein (including reasonable
attorneys' fees). Agent acknowledges  receiving a $7,500.00 advance on or before
mutual  execution  of the term sheet dated  November 17, 1999 on account of such
expenses.

10.  MISCELLANEOUS

     10.1 Currency.  Except as may be otherwise expressly  provided,  all dollar
amounts herein are references to United States dollars.

     10.2 Governing  Law. This Agreement  shall be governed by the internal law,
and not the law of conflicts, of the State of Colorado.

     10.3 Survival.  The representations,  warranties,  covenants and agreements
made  herein  shall  survive  any  investigation  made  by or on  behalf  of the
Purchasers  and  the  closing  of  the  transactions  contemplated  hereby.  All
statements  as  to  factual  matters  contained  in  any  certificate  or  other
instrument  delivered  by or  on  behalf  of  the  Company  pursuant  hereto  in
connection  with the  transactions  contemplated  hereby  shall be  deemed to be
representations and warranties by the Company hereunder solely as of the date of
such certificate or instrument.

     10.4  Successors and Assigns.  Except as provided in Section 8.11,  neither
Purchaser  shall be entitled to assign its rights under this Agreement or any of
the other  Transaction  Documents,  without  the consent of the  Company,  which
consent shall not be unreasonably withheld or delayed; provided always, however,
that no such  consent  shall be  required  for either  Purchaser  to assign such
rights to any person or group of persons  controlling  or owning the majority of
all beneficial interests in such Purchaser,  any other entity controlled by such
person or persons, or an entity controlled by such Purchaser, provided that such
entity shall  continue to be so controlled by such persons or such



                                       22
<PAGE>

Purchaser as applicable.  The  provisions  hereof shall inure to the benefit of,
and be binding upon, the successors,  permitted  assigns,  heirs,  executors and
administrators of the parties hereto.

     10.5 Entire Agreement;  Amendment and Waiver. This Agreement, the Schedules
and Exhibits hereto and the other documents  expressly delivered pursuant hereto
or thereto supersede any other agreement, whether written or oral, that may have
been  made or  entered  into  by the  parties  hereto  relating  to the  matters
contemplated  hereby,  and  constitute  the full and  entire  understanding  and
agreement  between the parties with regard to the  subjects  hereof and thereof,
and no  party  shall be  liable  or bound  to any  other  in any  manner  by any
representations, warranties, covenants and agreements except as specifically set
forth or  incorporated by reference  herein and therein.  Neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated except by a
written instrument signed by the Company and the Purchasers.

     10.6  Severability.  In case  any  provision  of this  Agreement  shall  be
invalid, illegal or unenforceable,  the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

     10.7  Notices.  All notices  required or  permitted  hereunder  shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be  notified;  (ii) when sent by  confirmed  telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (iii) five (5) days after having been sent by registered or certified mail,
return receipt  requested,  postage  prepaid;  or (iv) one (1) day after deposit
with a nationally recognized overnight courier,  special next day delivery, with
verification of receipt. All communications shall be sent:

to the Company at:

                  The Neptune Society Inc.
                  100 North First Street
                  Suite 205
                  Burbank, California
                  91502
                  Attention:  Marco Markin, President



                                       23
<PAGE>

to the Purchasers, prior to January 15, 2000, at:

                  c/o CapEx, L.P.
                  1670 Broadway Suite 3350
                  Denver, CO 80202
                  Telecopier No. (303) 869-4644
                  Telephone No. (303) 869-4700
                  Attention:  Evan Zucker, Managing Partner

                  and, thereafter, at:

                  c/o CapEx, L.P.
                  518 17th St., Suite 1700
                  Denver, CO  80202
                  Telecopier No. (303) 869-4644
                  Telephone No. (303) 869-4700
                  Attention:  Evan Zucker, Managing Partner

with a copy to:

                  Moye, Giles, O'Keefe, Vermeire & Gorrell LLP
                  1225 Seventeenth Street, 29th floor
                  Denver, Colorado 80202-5528
                  Telecopier No. (303) 292-4510
                  Telephone No. (303) 292-2900
                  Attention: Edward D. White III, Esq.

or at such other  address as the  Company or Agent on behalf of  Purchasers  may
designate by ten (10) days advance written notice to the other parties hereto.

     10.8 Counterparts;  Facsimile. This Agreement may be executed in any number
of counterparts,  each of which shall be an original,  but all of which together
shall constitute one instrument. This Agreement may be executed and delivered by
facsimile.





                                       24
<PAGE>

     10.9  Broker's  Fees.  Each party hereto  represents  and warrants  that no
agent,  broker,  investment banker,  person or firm acting on behalf of or under
the  authority  of such party  hereto is or will be entitled to any  broker's or
finder's fee or any other  commission  directly or indirectly in connection with
the transactions contemplated herein.

     IN WITNESS  WHEREOF,  the parties hereto have executed this Agreement as of
the date set forth in the first paragraph hereof.

         COMPANY:

         THE NEPTUNE SOCIETY, INC.


         By: -----------------------------
         Name:  --------------------------
         Title:  -------------------------

         PURCHASERS:


CAPEX, L.P.                                  D.H. BLAIR INVESTMENT BANKING CORP.

By Its General Partner, RBP, LLC


By: ----------------------------------      By: --------------------------------
    Name:  Evan Zucker                          Name:  J. Morton Davis
    Title:  Managing Member                     Title:  Chairman





                                       25
<PAGE>



                                    Exhibit A

                              FORM OF THE DEBENTURE







                                       26
<PAGE>



                                    Exhibit B

                               FORM OF THE WARRANT







                                       27
<PAGE>



                                    Exhibit C

                    FORM OF RIGHT OF FIRST REFUSAL AGREEMENT










                                       28