EXHIBIT 10.23


                            THE NEPTUNE SOCIETY, INC.          Debenture No. --

                              A Florida Corporation

                              CONVERTIBLE DEBENTURE

THE SECURITIES  REPRESENTED BY THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES  ACT OF 1933 (THE "ACT") OR  APPLICABLE  STATE  SECURITIES  LAWS (THE
"STATE  ACTS"),  AND  SHALL  NOT BE SOLD,  PLEDGED,  HYPOTHECATED,  DONATED,  OR
OTHERWISE  TRANSFERRED  (WHETHER OR NOT FOR  CONSIDERATION) BY THE HOLDER EXCEPT
UPON THE ISSUANCE TO THE  CORPORATION  OF A FAVORABLE  OPINION OF ITS COUNSEL OR
SUBMISSION TO THE  CORPORATION OF SUCH OTHER EVIDENCE AS MAY BE  SATISFACTORY TO
COUNSEL FOR THE  CORPORATION,  TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE
IN VIOLATION OF THE ACT AND THE STATE ACTS.

                                                               December 24, 1999

     THE NEPTUNE SOCIETY,  INC., a Florida corporation (the  "Corporation"),  is
indebted and, for value received, promises to pay to or to the order of [HOLDER]
(together  with any successor  thereto and any other person who becomes a holder
of this Debenture, "Holder"), on February 24, 2004 (the "Due Date") (unless this
Debenture  shall have been  sooner  called for  redemption  or the amount  owing
hereunder  accelerated  upon the  occurrence of a Default  Event as  hereinafter
provided),  upon presentation of this Debenture,  [DOLLARS]  ($-----------) (the
"Principal  Amount") and to pay interest on the Principal  Amount at the rate of
thirteen per cent (13%) per annum as provided herein.

     This Debenture is issued by the Corporation  pursuant to and subject to the
terms  and  conditions  of a  Debenture  and  Warrant  Purchase  Agreement  (the
"Debenture  Purchase  Agreement")  dated as of  November  24,  1999,  among  the
Corporation,  CapEx  L.P.,  a  Delaware  limited  partnership,  and D. H.  Blair
Investment Banking Corp., a New York corporation.  Pursuant to the provisions of
Section 8 of the Debenture Purchase Agreement,  CapEx L.P. has been appointed by
each  Purchaser  thereunder  of a Debenture  (including  this  Debenture) as its
agent, (in such capacity,  "Agent") for the purposes,  inter alia of electing to
exercise the rights of Holder under this Debenture, and in connection therewith,
the  Corporation  shall,  in  respect  of  all  of its  obligations  under  this
Debenture,  be entitled to rely upon the grant and  delegation  of  authority to
Agent provided for in Section 8 of the Debenture Purchase Agreement, and to deal
with Agent without further inquiry, with respect to all such obligations owed by
it under this Debenture to Holder (including  without limitation all obligations
of the  Corporation  to make  payments  on  account  of  principal  or  interest
hereunder).

     The Corporation covenants, promises and agrees as follows:

1.   Interest

     1.1 Current and Deferred  Interest.  Subject to Section 1.2, interest which
shall  accrue on the  Principal  Amount  shall be payable as to  one-half of the
amount  thereof or six and one-half  percent (6 1/2%) per annum (such portion of
interest  being  hereinafter  sometimes  referred to as "Current  Interest")  in
arrears in monthly installments on the first day of each month in each and


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every  calendar  year  until the  Principal  Amount and all  accrued  and unpaid
Current  Interest shall have been paid in full. The remaining  one-half,  or six
and one-half percent (6 1/2 %) per annum, of interest  accruing on the Principal
Amount (such  portion of interest  being  hereinafter  sometimes  referred to as
"Deferred Interest") shall accrue and be payable on the Due Date or such earlier
date on which the  Principal  Amount  shall  become  due and  payable  as herein
provided.  If this Debenture  shall be issued on a date other than the first day
of a calendar  month,  the Current  Interest and the Deferred  Interest  payable
shall be prorated for the number of days of such  calendar  month period  during
which  this  Debenture  shall  have been  issued and  outstanding.  Any  overdue
installment of Current  Interest shall bear interest (which shall be included in
and be deemed to be Current  Interest) at the aforesaid rate of thirteen percent
(13%),  compounded  monthly,  on each  interest  payment date,  until paid.  For
greater  certainty,  no Deferred  Interest shall bear interest  unless it is not
paid on the date when the same shall  become due, in which case all such overdue
Deferred  Interest  shall  from  such  date be  included  in and be deemed to be
Current Interest on which  additional  Current Interest at the aforesaid rate of
of thirteen percent (13%),  compounded  monthly,  on each interest payment date,
shall accrue and be payable  until all such overdue  Deferred  Interest is paid.
All accrued and unpaid Current  Interest and Deferred  Interest shall be payable
on the Due Date or such earlier date on which the Principal  Amount shall become
due and payable as herein provided.  The first payment of Current Interest shall
be made to Agent  on  January  1,  2000 at 1670  Broadway  Suite  3350,  Denver,
Colorado 80202.  All subsequent  payments of principal or interest shall be made
to Agent at 518 Seventeenth St., Suite 1700, Denver,  Colorado 80202, or at such
other place as may be designated by Agent.

     1.2  Default  Interest.  In the event that a Default  Event (as  defined in
Section  7.1) shall occur,  and for so long as such  Default  Event shall remain
unremedied  and Agent  shall not have waived the same,  all amounts  owing under
this Debenture,  whether in respect of the Principal  Amount,  Current Interest,
Deferred  Interest  or  otherwise,  shall  bear  additional  interest  ("Default
Interest") in addition to the interest  hereinbefore provided for at the rate of
two percent (2%) per annum,  compounded monthly, which Default Interest shall be
payable  on each  interest  payment  date on  which  Current  Interest  shall be
payable,  with  Default  Interest  accruing on any  accrued  and unpaid  Default
Interest.

2.   Conversion.

     2.1 Conversion  Right.  Holder shall have the right, at Holder's option, at
any time and from time to time during the period (the "Conversion  Period") from
nine (9) months  following  the date  hereof to the Due Date,  to  convert  this
Debenture,   in  whole  or  in  part,   into  such  number  of  fully  paid  and
non-assessable  shares of voting  Common Stock of the  Corporation  (the "Common
Stock") as shall be provided herein.

     2.2 Notice.  Holder may  exercise  the  conversion  right  provided in this
Section 2 by Agent giving written notice on its behalf (the "Conversion Notice")
to the  Corporation  of the  exercise  of such right and  stating the address to
which the stock certificate or stock certificates for the shares of Common Stock
to be issued (to be in the name of Holder)  shall be delivered.  The  Conversion
Notice shall be  accompanied by this  Debenture.  The number of shares of Common
Stock that shall be issuable upon  conversion of this Debenture  shall equal Six
Hundred  Thousand  (600,000)  multiplied by the Conversion  Ratio as defined and
determined  in  accordance  with Section 3 in effect on the date the  Conversion
Notice is given; provided,  however, that in the event that this Debenture shall
have



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<PAGE>

been  partially  redeemed  or  converted  prior to the  date of such  Conversion
Notice,  shares of Common Stock shall be issued pro rata, rounded to the nearest
whole share.

     2.3  Certificates.  Conversion shall be deemed to have been effected on the
date the Conversion Notice is given (the "Conversion Date").  Within 10 business
days after receipt of the Conversion  Notice,  the  Corporation  shall issue and
deliver by hand against a signed receipt therefor or by United States registered
mail,  return  receipt  requested,  to the  address  designated  by Agent in the
Conversion  Notice, a stock certificate or stock certificates of the Corporation
representing  the number of shares of Common  Stock to which  Holder is entitled
and a check or cash in payment of all Current Interest accrued and unpaid on the
Debenture up to and including the Conversion Date.

     2.4  Forgiveness  of Deferred  Interest.  Upon the conversion of all or any
portion of the Principal Amount hereof,  any and all Deferred Interest which has
accrued  prior to the  Conversion  Date (but,  for  greater  certainty,  not any
Default Interest accruing upon any overdue  installment of Deferred Interest) on
the portion of the Principal  Amount so converted  shall be absolutely  forgiven
and shall not after conversion be required to be paid .

     2.5 Accrued Interest.  For greater  certainty,  no conversion in part or in
whole of the  Principal  Amount  shall  extinguish  or  satisfy,  or relieve the
Corporation of its obligation to pay, any interest other than Deferred  Interest
on such Principal  Amount,  or interest on such interest,  accruing prior to the
effective date of such conversion.

     2.6 New  Debenture.  In the  event  that  any  amounts  remain  outstanding
hereunder after giving effect to such conversion,  the Corporation shall issue a
new  debenture,  in form  identical to this  debenture,  except that it shall be
equal in  principal  amount to the amount of the  Principal  Amount  outstanding
hereunder  immediately  following such  conversion,  and the number of shares of
Common Stock into which such debenture shall be convertible specified in Section
2.2 above shall be the number of such shares  remaining at the Conversion  Date,
after giving effect to such conversion.

     2.7 No Fractional  Shares.  No  fractional  share or scrip  representing  a
fractional  share shall be required  to be issued  upon the  conversion  of this
Debenture.  If the  conversion of this  Debenture  would  otherwise  result in a
fractional  share,  the  Corporation  shall,  in lieu of issuing such fractional
share,  pay to Agent (on behalf of Holder)  an amount  equal to the fair  market
value of the fractional share based upon the then prevailing  market price for a
whole share.

3.   Conversion Ratio

     3.1 Initial  Conversion  Ratio.  On the date hereof,  the Conversion  Ratio
shall equal one (1.0),  provided,  however,  that the Conversion  Ratio shall be
subject to  adjustment  in  accordance  with and at the times  provided  in this
Section 3.

     3.2 Additional Common Stock.

     (a) If and whenever any shares of Additional  Common Stock (as  hereinafter
defined) shall be issued by the  Corporation (i) for a cash  consideration  less
than the amount per share



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determined  by dividing (a) $5.00 by (b) the  Conversion  Ratio in effect at the
close of business on the  business  day  immediately  preceding  the day of such
issue (the "Initial Conversion Ratio"), or (ii) without  consideration,  then in
each such case, the Initial Conversion Ratio shall be increased  effective as of
the  opening of  business  on the date of such issue (the  "Issue  Date") to the
Conversion  Ratio  determined:  (1) by  multiplying  (A)  $5.00  times  (B)  the
aggregate  number of shares of Common Stock issued and  outstanding at the close
of business on the Issue Date (the "Issue Date  Shares") and (2) by dividing the
product thus  determined  by the sum of the  following  clauses (3) and (4): (3)
$5.00  divided  by (x)  the  Initial  Conversion  Ratio  and the  quotient  thus
determined  multiplied  by (y) the number of shares of Common  Stock  issued and
outstanding at the close of business on the business day  immediately  preceding
the Issue Date;  plus (4) the amount of the  consideration  (if any) received by
the  Corporation  for the shares of Additional  Common Stock issued on the Issue
Date.

     (b) In case of the  issuance  of shares of  Additional  Common  Stock for a
consideration  part or all of  which  shall  be  cash,  the  amount  of the cash
consideration  therefor shall be deemed to be the amount of the cash received by
the Corporation for such shares,  or, if such shares of Additional  Common Stock
are offered by the Corporation for subscription,  the subscription price, or, if
such shares of Additional  Common Stock shall be sold to underwriters or dealers
pursuant to a public  offering  other than by  subscription,  the initial public
offering price,  less any compensation or discount in the sale,  underwriting or
purchase  thereof  by  underwriters  or  dealers  or others  performing  similar
services or for any expenses incurred in connection therewith.

     (c) In case of the issuance of any shares of Additional  Common Stock for a
consideration  part or all of which shall be other than cash,  the amount of the
consideration  therefor  other than cash  shall be deemed to be the Fair  Market
Value for such  consideration  as  determined  in  accordance  with  Section 8.1
hereof.  In case of the  reclassification  of  securities  into shares of Common
Stock,  the  shares of Common  Stock  issued in such  reclassification  shall be
deemed to have been issued for a consideration other than cash immediately prior
to the  close  of  business  on the  date  fixed  for the  determination  of the
stockholders entitled to receive such shares of Common Stock.

     (d) Shares of  Additional  Common  Stock issued by way of dividend or other
distribution  on any class of stock of the  Corporation  shall be deemed to have
been issued without  consideration and shall be deemed to have been issued as of
the opening of business on the business day immediately following the date fixed
for the  determination of the stockholders  entitled to receive such dividend or
other distribution.

     (e) The term "Additional Common Stock" as used herein shall mean all shares
of Common Stock (or shares of any other class of securities  of the  Corporation
entitling  the  holder  thereof  to  participate  in  any  distribution  of  the
Corporation's  remaining  assets  after  payment to the  holders  of  securities
entitled to a preferential  distribution  upon any  dissolution,  liquidation or
winding-up of the  Corporation)  issued by the  Corporation on or after November
24, 1999,  whether or not subsequently  reacquired or retired by the Corporation
other than:

          (i) shares of Common Stock issued upon the  conversion  of any of this
     Debenture;


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<PAGE>

          (ii) shares issued by way of dividend or other  distribution on shares
     of Common Stock  referred to in paragraph (i) of this Section  3.2(e) or on
     shares of Common Stock  resulting  from any  subdivision  or combination of
     Common Stock referred to in paragraph (i) of this Section 3.2(e); or

          (iii)  shares  ("Acquisition  Shares")  issued by the  Corporation  in
     connection with and as consideration for the acquisition by the Corporation
     or any Subsidiary of the assets or stock of another corporation pursuant to
     a bona fide purchase and sale  transaction  with one or more persons acting
     at arm's length from the Corporation, the Subsidiaries and their respective
     directors, officers and significant shareholders, provided such transaction
     is in good faith approved by the Board of Directors of the Corporation.

     (f) In case of the issuance of

          (i) options to purchase  or rights to  subscribe  for shares of Common
     Stock,

          (ii) securities by their terms  convertible into, or exchangeable for,
     shares of Common Stock, or

          (iii) options to purchase or rights to subscribe for such  convertible
     or exchangeable securities,

then in each such case, for all purposes of this Section 3.2 (including  without
limitation for the purpose of determining  the Issue Date Shares  referred to in
Section  3.2(a)(1)(B)  and the number of Common  Stock  issued  and  outstanding
immediately preceding the Issue Date referred to in Section 3.2(a)(2)(y)):

          (iv)  The  aggregate   maximum   number  of  shares  of  Common  Stock
     deliverable  upon  exercise  of such  options  to  purchase  or  rights  to
     subscribe for Common Stock shall be deemed to be Additional Common Stock at
     the time such options or rights were issued and for a  consideration  equal
     to the consideration  (determined in the manner provided in Sections 3.2(b)
     and 3.2(c)) if any,  received by the Corporation  upon the issuance of such
     options or rights plus the minimum  purchase price provided in such options
     or rights for the shares of Common Stock covered thereby.

          (v) The aggregate  number of shares of Common Stock  deliverable  upon
     conversion  of, or in exchange for, any such  convertible  or  exchangeable
     securities  or upon the  exercise  of  options  to  purchase  or  rights to
     subscribe for such  convertible or  exchangeable  securities and subsequent
     conversion  or exchange  thereof  shall be deemed to be  Additional  Common
     Stock at the time such  securities  were  issued or such  options or rights
     were issued and for a consideration equal to the consideration  received by
     the  Corporation  for any such  securities  or  related  options  or rights
     (excluding  any cash  received  on account of accrued  interest  or accrued
     distributions),  plus the additional consideration,  if any, to be received
     by the  Corporation  upon the conversion or exchange of such  securities



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<PAGE>

     or the exercise of any related options or rights (the consideration in each
     case to be  determined  in the  manner  provided  in  Sections  3.2(b)  and
     3.2(c)).

          (vi) In the  event of any  change  in the  number  of shares of Common
     Stock deliverable upon exercise of any such options or rights or securities
     other than a change resulting from the antidilution provisions thereof, the
     Conversion  Ratio  shall  be  readjusted  effective  as of the date of such
     change to the  Conversion  Ratio  which  would have been  obtained  had the
     adjustment  made upon the issuance of such options or rights or  securities
     not  converted  prior to such  change or  options  or rights or  securities
     related to such  securities not converted prior to such change been made on
     the basis of such change.

          (vii) On the expiration of any such options or rights, the termination
     of any such rights to convert or exchange or the  expiration of any options
     or rights  related to such  convertible  or  exchangeable  securities,  the
     Conversion  Ratio shall forthwith be readjusted to such Conversion Ratio as
     would have  obtained  had the  adjustment  made upon the  issuance  of such
     options, rights, securities or options or rights related to such securities
     been made upon the basis of the  issuance  of only the  number of shares of
     Common Stock  actually  issued upon the exercise of such options or rights,
     upon the conversion or exchange of such securities, or upon the exercise of
     the options or rights related to such securities and subsequent  conversion
     or exchange thereof.

     (g) The  provisions  of this  Section  3.2 shall  not  apply to any  Equity
Offering with respect to which the  provisions of Section  5.16(b) shall require
an adjustment to the Conversion Ratio.

     3.3 Subdivisions and Combinations. In case issued and outstanding shares of
Common Stock shall be subdivided or split up into a greater  number of shares of
the Common Stock,  the Conversion  Ratio in effect at the opening of business on
the business day immediately  preceding the date fixed for the  determination of
the  stockholders  whose shares of Common Stock shall be  subdivided or split up
(the "Split Record Date") shall be proportionately increased, and in case issued
and  outstanding  shares of Common Stock shall be combined into a smaller number
of shares of Common  Stock,  the  Conversion  Ratio in effect at the  opening of
business  on the  business  day  immediately  preceding  the date  fixed for the
determination of the stockholders whose shares of Common Stock shall be combined
(the  "Combination  Record  Date")  shall  be  proportionately  decreased,  such
increase or decrease,  as the case may be, becoming effective  immediately after
the opening of business on the business day  immediately  after the Split Record
Date or the  Combination  Record  Date,  as the case may be. In the event of any
subdivision  or split up,  the  number of shares  of  Common  Stock  issued  and
outstanding immediately after such subdivision or split up, to the extent of the
excess thereof over the number of shares of Common Stock issued and  outstanding
immediately  before such  subdivision or split up,  exclusive of that portion of
such  excess  attributable  to the  subdivision  of  shares  excluded  from  the
definition of Additional  Common Stock,  shall be deemed to be Additional Common
Stock  and to have  been  issued  without  consideration  immediately  after the
opening of business on the business day immediately after the Split Record Date.

     3.4  Reorganizations,  Reclassifications,  Mergers,  Etc.  In  case  of any
capital  reorganization,  any  reclassification  of the stock of the Corporation
(other  than as a  result  of a  stock  dividend  or  subdivision,  split  up or
combination of shares),  or the merger of the  Corporation  with



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or into another  person or entity (other than a merger in which the  Corporation
is the  continuing  corporation  and which  does not result in any change in the
Common Stock) or of the sale, exchange,  lease, transfer or other disposition of
all or  substantially  all of the properties and assets of the Corporation as an
entirety  or the  participation  by the  Corporation  in share  exchange  as the
corporation  the  stock  of  which  is  to be  acquired,  this  Debenture  shall
(effective  on the opening of business on the date after the  effective  date of
such reorganization, reclassification, merger, sale or exchange, lease, transfer
or other  disposition or share exchange) be convertible into the kind and number
of shares of stock or other  securities or property of the Corporation or of the
corporation resulting from surviving such merger or to which such properties and
assets  shall  have been  sold,  exchanged,  leased,  transferred  or  otherwise
disposed or which was the corporation  whose securities were exchanged for those
of the  Corporation  to which the holder of the number of shares of Common Stock
deliverable  (at the close of business  on the date  immediately  preceding  the
effective date of such reorganization, reclassification, merger, sale, exchange,
lease,  transfer or other disposition or share exchange) upon conversion of this
Debenture would have been entitled upon such  reorganization,  reclassification,
merger, sale, exchange,  lease, transfer or other disposition or share exchange.
The  provisions  of  this  Section  3.4  shall  similarly  apply  to  successive
reorganizations, reclassifications, mergers, sales, exchanges, leases, transfers
or other dispositions or other share exchanges.

     3.5 Notice of Adjustment.  Whenever the Conversion  Ratio shall be adjusted
as provided in this Article 3, the Corporation  shall promptly  prepare and send
to Agent a statement,  signed by the chief financial officer of the Corporation,
showing in detail the facts requiring such  adjustment and the Conversion  Ratio
that shall be in effect after such adjustment.

     3.6 Notice of Adjustment Events. In the event the Corporation shall propose
to take any  action  of the  types  described  in this  Article  3  hereof,  the
Corporation  shall give notice to Agent,  which notice shall  specify the record
date,  if any, with respect to any such action and the date on which such action
is to take place.  Such  notice  shall be given on or prior to the earlier of 10
days prior to the record date or the date which such action shall be taken. Such
notice  shall  also set  forth  such  facts  with  respect  thereto  as shall be
reasonably  necessary  to indicate the effect of such action (to the extent such
effect may be known at the date of such notice) on the Conversion  Ratio and the
number,  kind or class of shares or other  securities or property which shall be
deliverable  or  purchasable  upon the  occurrence of such action or deliverable
upon  conversion of this  Debenture.  Failure to give notice in accordance  with
this Section 3.4 shall not render such action  ultra  vires,  illegal or invalid
but shall constitute default hereunder.

     3.7  Taxes.  The  Corporation  shall  pay all  documentary,  stamp or other
transactional  taxes and  charges  attributable  to the  issuance or delivery of
shares of stock of the Corporation upon conversion;  provided, however, that the
Corporation  shall not be  required  to pay any taxes  which may be  payable  in
respect of any transfer  involved in the issuance or delivery of any certificate
for  such  shares  in a name  other  than  that  of the  record  holder  of this
Debenture.

     3.8 Reservation of Shares.  The Corporation  shall at all times reserve and
keep  available,  free from  preemptive  rights,  unissued or treasury shares of
Common Stock sufficient to effect the conversion of this Debenture.


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<PAGE>

4.   Preemptive Rights

     4.1  Preemptive  Rights.  Except for the issuance of shares of Common Stock
described in either of Sections 3.2(e)(i) or (ii) and except for any public sale
of  Equity  Securities  (as  hereinafter  defined)  within  120 days of the date
hereof,  whenever the Board of Directors of the Corporation  shall authorize the
issuance  of (a)  shares  of  Common  Stock,  (b) any  other  securities  of the
corporation  entitled to participate  with the Common Stock in a distribution of
the  Corporation's  remaining  assets  (after  distribution  to all  holders  of
securities  entitled to such  distribution  in priority to the holders of Common
Stock), or (c) any rights, options or warrants to purchase, or securities of any
type whatsoever that are, or may become,  convertible into, or exchangeable for,
securities  of the  type  referred  to in  Section  4.1(a)  or (b)  (hereinafter
collectively  referred to as "Equity  Securities"),  the Equity Securities shall
first be offered ratably to the existing  holders of Equity  Securities and this
Debenture  on the date of the  authorization  by the Board of  Directors of such
issuance.  Holder and the holder of the other convertible debenture issued under
the Debenture  Purchase  Agreement (each, a "Preemptive  Rightholder")  shall be
entitled to exercise preemptive rights for that number of such Equity Securities
equal to the percentage of the total number of shares of Common Stock into which
this  Debenture  may be  converted  pursuant  to Section 2 hereof  (the  "Equity
Percentage").  For the  purposes  of  calculating  the Equity  Percentage,  each
Preemptive  Rightholder  shall be deemed to be the owner of the number of shares
of Common Stock into which its  debenture  may be  converted  and such shares of
Common  Stock  shall be deemed to be issued  and  outstanding.  Each  Preemptive
Rightholder  shall be entitled to exercise the preemptive rights provided herein
with respect to the whole of such proportionate  share or with respect to only a
part thereof.

     4.2 Consideration for Equity Securities. The preemptive rights provided for
in this Section 4 shall entitle Holder to subscribe for, purchase,  or otherwise
acquire any Equity  Securities  to be offered for sale, at a price or prices not
less  favorable  than the price or prices at which such  Equity  Securities  are
proposed  to be  offered  for  sale  to  others  (net  of any  expenses  of,  or
compensation  for,  underwriting  or  purchase  of  such  Equity  Securities  by
underwriters or dealers).  In the event that the  Corporation  proposes to offer
for sale to others any Equity  Securities for a  consideration  other than cash,
such  preemptive  rights shall be  exercisable by a Preemptive  Rightholder  for
cash, in an amount which shall equal the Fair Market Value of any  consideration
other than cash determined in accordance with Section 8.1.

     4.3 Issuance Notice.  The Corporation shall, on the 10th business day after
the date of authorization of the issuance of any Equity Securities,  give notice
to Agent (the "Issuance  Notice") of such  authorization,  which Issuance Notice
shall  specify the number of shares of Equity  Securities  to be issued,  a full
description of such class of Equity Securities and the offering price thereof.

     4.4 Acceptance or Decline of Offer. The preemptive  rights granted pursuant
to this  Section 4 with  respect  to any Equity  Securities  to be issued by the
Corporation  shall be exercised by the  Preemptive  Rightholder by the giving of
notice by Agent of such  exercise  within 10 business days after receipt by such
Holder of the Issuance Notice (the "Preemptive Rights Period"). In the event any
Preemptive Rightholder fails or declines to purchase his/her proportionate share
of the Equity  Securities  so offered (a  "Declining  Rightholder"),  the Equity
Securities not purchased by the Declining Rightholders shall be offered to those
Preemptive  Rightholders who shall have duly exercised their  preemptive  rights
with respect to that issue (the "Accepting Rightholders"). Each



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Accepting  Rightholder  shall be entitled to purchase the Equity  Securities not
purchased by the Declining  Rightholders  (the  "Reoffered  Securities")  in the
proportion which the Equity  Percentage of the Accepting  Rightholders  bears to
the aggregate of the Equity Percentages of all Accepting Rightholders; provided,
however,  that each Accepting  Rightholder shall be entitled to exercise his/her
preemptive  rights to purchase  Reoffered  Securities  only with  respect to the
whole of such  proportionate  share  thereof and not with respect to only a part
thereof.  On the 10th business day after the expiration of the Preemptive Rights
Period, the Corporation shall give notice (the "Reoffer Notice") to Agent of the
amount of Reoffered Securities available for purchase.

     4.5 Acceptance or Decline of Reoffered  Securities.  The preemptive  rights
granted  with  respect to the  Reoffered  Securities  shall be  exercised by the
giving of notice by Agent on behalf of an Accepting Rightholder of such exercise
within 5 business days after receipt by the Agent of the Reoffer Notice.  In the
event that any  Accepting  Rightholder  fails or declines  to purchase  his/ her
proportionate  share  of  such  Reoffered  Securities,   then  such  unpurchased
Reoffered   Securities   shall  continue  to  be  offered  in  the  same  manner
proportionately  to those Accepting  Rightholders on whose behalf Agent properly
exercised  their  rights to purchase  the  Reoffered  Securities  most  recently
offered to them, until such time as all of the Securities to be issued have been
purchased  or all  Accepting  Rightholders  shall  have  failed or  declined  to
purchase any of the Reoffered Securities most recently offered to them, at which
time the  preemptive  rights granted by this Section 5 shall have been exhausted
with respect to that particular issue of Securities.

5.   Covenants of the Corporation

     The Corporation hereby covenants and agrees with Holder that so long as any
of the Principal Amount or any Current  Interest,  Deferred  Interest or Default
Interest remains unpaid:

     5.1 To pay indebtedness. The Corporation will well, duly and punctually pay
or cause to be paid to Holder all  indebtedness  due  hereunder at the dates and
places, in the currencies and in the manner mentioned herein.

     5.2 To maintain  existence.  The  Corporation  will, and will cause each of
Neptune  Society of America,  Inc., a California  corporation  ("Neptune  USA"),
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") to, at all times maintain its corporate
existence.

     5.3 To carry on its business.  The Corporation will, and will cause each of
the Subsidiaries to, carry on its business in a proper and efficient manner, and
will keep or cause to be kept  proper  books of account  and make or cause to be
made therein true and faithful entries of all material dealings and transactions
in  relation  to its  business  and  will  make  available  or  cause to be made
available such books of account for inspection by Holder and its representatives
during normal business hours.

     5.4 To pay  taxes.  The  Corporation  will,  and  will  cause  each  of the
Subsidiaries to, pay or cause to be paid all taxes,  rates,  government fees and
dues levied, assessed or imposed upon it and



                                       9
<PAGE>

upon its  property  or any part  thereof,  as and when the same  become  due and
payable,  save and except  when and so long as the  validity  of any such taxes,
rates,  fees,  dues,  levies,  assessments or imposts is in good faith by proper
legal  proceedings  contested by it in which event it shall satisfy Agent and if
requested by Agent furnish security satisfactory to Agent that such contestation
will  involve no  forfeiture  of any of its  property  and to duly  observe  and
conform to all valid and material  requirements  of any  governmental  authority
relative to any of its property and all covenants,  terms and conditions upon or
under  which such  property  is held  provided,  however,  that  nothing  herein
contained shall require it to observe any such requirements so long as it shall,
in good faith, be contesting its obligation to observe such requirements.

     5.5 Not to Amend Articles or By-Laws.  The Corporation  shall not, and will
cause each of the  Subsidiaries  not to, without Agent's prior written  consent,
amend or restate its articles of  incorporation  nor amend,  repeal,  replace or
restate any of its by-laws or any unanimous  shareholders  agreement relating to
it.

     5.6 To perform  obligations and to renew.  The  Corporation  will, and will
cause each of the  Subsidiaries  to,  from time to time  punctually  observe and
perform all material obligations and pay and discharge all amounts payable under
or by virtue of, and  defend,  and ensure the  enforceability  of any  exclusive
rights to, any patent, trademark, lease, license, concession, franchise or right
held by it so long as the same is of commercial value to it and during such time
will  not  suffer  or  permit  any  default  for  which  any of the  same may be
terminated  so that  its  interest  therein  may at all  times be  preserved  as
unimpaired;  provided  however that nothing herein  contained  shall require the
Corporation  or any  Subsidiary to make any such payments so long as it shall in
good faith contest its liability therefor.

     5.7 Not to Sell Assets, Issue Options,  Mergers, Etc. The Corporation shall
not, and will cause each of the Subsidiaries not to:

     (a) sell, lease or otherwise transfer the undertaking,  property and assets
of  any  of  its  operating   divisions  or   subsidiaries  as  an  entirety  or
substantially  as an entirety in one or more  transactions,  or, sell,  lease or
otherwise  dispose of its  undertaking,  property  and assets as an  entirety or
substantially as an entirety or of its controlling interest in any subsidiary of
the Corporation or any Subsidiary in one or more transactions;

     (b) issue any Equity  Securities of the type  described in Section  4.1(c),
other than, in the case of the Corporation only, (i) stock options to employees,
officers or directors of the  Corporation  or a Subsidiary  pursuant to employee
stock  option  plans  approved  of by Agent and in any event not where the total
number of shares of Common  Stock  obtainable  under all such Equity  Securities
outstanding  (including  options and warrants existing as of the date hereof) is
greater  than 10% of the issued and  outstanding  shares of Common Stock at that
time, and (ii) Acquisition Shares; provided that, for greater certainty, nothing
herein shall  prohibit the  Corporation  from issuing  shares  issuable upon any
exercise of the 275,000 common share warrants of the Corporation  existing as of
the date hereof or issue  276,667  shares of Common Stock  pursuant to an agency
agreement between the Corporation and Standard Securities Capital Corporation;


                                       10
<PAGE>

     (c) in the case of each  Subsidiary,  issue shares of any class of stock to
any person other than the sole  shareholder of all issued and outstanding  stock
prior thereto; or

     (d) amalgamate or merge with any other  corporation or effect any corporate
reorganization;

without the prior written consent of Agent.

     5.8  To  repair.   The  Corporation  will,  and  will  cause  each  of  the
Subsidiaries  to, at all  times,  repair  and keep in repair  and good order and
condition,  or cause to be so  repaired  and kept in repair  and good  order and
condition, all buildings,  erections,  machinery, plant and equipment used in or
in connection  with its business which are necessary for efficient  operation up
to a modern standard of usage,  and renew and replace or cause to be renewed and
replaced  all  and  any  of  the  same  which  may  become  worn,   dilapidated,
unserviceable,  inconvenient, obsolete or destroyed, even by a fortuitous event,
fire or other cause,  and which are necessary for efficient  operation,  and, at
all  reasonable  times  during  normal  business  hours  allow Agent or its duly
authorized agent access to its premises in order to view the state and condition
of the same.

     5.9 To insure.

     (a)  Property  Cover - The  Corporation  will,  and will  cause each of the
Subsidiaries to, insure at its own expense the assets of the Corporation or such
Subsidiary  at all  times  during  the term  hereof  to an  amount  equal to the
replacement  value thereof with a company or companies that are nationally known
or are approved by Agent, against loss or damage by fire, lightning,  explosion,
windstorm,  aircraft or vehicles or other insurable hazards which are now or may
hereafter  from time to time be insured  against by the terms of a standard fire
extended  coverage  insurance  or  additional  perils  supplemental  contract of
insurance including, if applicable, boiler and pressure vessel insurance against
loss or damage to property of a class or kind similar to the property and assets
of  the  Corporation.  The  Corporation  shall,  and  will  cause  each  of  the
Subsidiaries  to, also  maintain  such other  insurance  policies as Agent shall
reasonably  require in connection with the Corporation and the  Subsidiaries and
their business including,  without restriction,  business interruption insurance
and liability insurance.

     (b) Renewal Receipt - The Corporation shall, 15 days prior to the expiry of
any insurance policy required hereby,  deliver or cause to be delivered to Agent
a renewal receipt,  binder or new policy,  or otherwise  satisfy Agent that such
insurance has been renewed.

     5.10 Compliance With Laws. The  Corporation  shall,  and will cause each of
the  Subsidiaries  to, carry on its business in compliance  with all  applicable
laws, regulations,  by-laws and orders including,  without limitation,  all laws
relating to environment  protection,  the  maintenance and disposal of hazardous
materials  and  wastes,  land  use  and  occupational  safety  and  health.  The
Corporation  shall  give  notice to Agent of any  notice  received  by it or any
Subsidiary of any violation of such laws, regulations,  by-laws or orders of any
impending or threatened investigations or proceedings in connection therewith or
of any  proceedings  commenced or  threatened  by any other person in connection
with environmental, health or safety matters.


                                       11
<PAGE>

     5.11 To Grant Security. To secure payment of its indebtedness,  liabilities
and obligations  under this Debenture (a) the  Subsidiaries  have each delivered
their guarantee agreements  ("Guarantees") to Agent; and (b) the Corporation and
the  Subsidiaries  have each executed and delivered to Agent  concurrently  with
this Debenture security agreements (the "Security Agreements") granting to Agent
a  security  interest  in all of the  Corporation's  and each such  Subsidiary's
property now owned or hereafter  acquired.  At any and all times the Corporation
will, and will cause each of the Subsidiaries  to, at its expense,  do, execute,
acknowledge  and deliver or will cause to be done,  executed,  acknowledged  and
delivered  all and every such further  mortgages,  security  agreements or other
instruments, transfers and assurances as Agent shall reasonably require, for the
purpose of giving to Agent,  and  preserving in favor of Agent, a valid mortgage
or security  interest of the nature specified in the Security  Agreements,  upon
all of the Corporation's and the Subsidiaries'  real and personal  property.  In
particular,  without  restriction,  the Corporation will, and will cause each of
the  Subsidiaries  to, upon request by Agent,  deliver a mortgage on any and all
real property  hereafter acquired by the Corporation or any Subsidiary and, upon
the  acquisition  by the  Corporation  or such  Subsidiary of any real property,
subject  only  to  encumbrances  approved  of in  writing  by  Agent  and  other
encumbrances  permitted by Section  5.12.  The  Corporation  shall not, and will
cause  each of the  Subsidiaries  not to, at any time  have its chief  executive
office or assets (other than  inventory and mobile  equipment  used to transport
inventory)  having an aggregate  recorded book value to it in excess of $250,000
located in  jurisdictions  in which the Agent has not been given  prior  written
notice and the opportunity to first record or register the Security Agreement or
other  security  in  favor of Agent in all  appropriate  public  offices  at the
Corporation's expense.

     5.12 Not to Permit Encumbrances.  The Corporation shall not, and will cause
each of the  Subsidiaries  not to,  create  or  permit  to  exist  any  security
interest,  mortgage,  charge,  pledge, lien or other encumbrance upon its assets
provided  that the  foregoing  shall not apply to  prevent,  and there  shall be
permitted:

     (a) security on the assets of the  Corporation  or any Subsidiary to secure
Neptune USA's obligations under that certain promissory note (the "Vendor Note")
dated March 31, 1999,  executed by Neptune USA (then  called  "Lari  Acquisition
Company,  Inc.") to and in favor of certain holders,  in the principal amount of
$19,000,000.

     (b) security on the assets of the  Corporation  or any Subsidiary to secure
Neptune USA's  obligations  under that certain  Promissory  Note dated March 31,
1999, executed by Neptune USA (then called "Lari Acquisition Company,  Inc.") to
and in favor of Emanuel  Weintraub  Intervivos Trust, in the principal amount of
$2,000,000;  provided always that such security is consistent with the terms and
conditions of the  Inter-Creditor  Agreement of even date herewith between Agent
and the Emanuel Weintraub Intervivos Trust; and

     (c) Purchase Money  Mortgages (as hereinafter  defined)  existing as of the
date hereof or entered into after the date hereof under which the Corporation or
a Subsidiary is the primary  obligor,  provided such Purchase Money Mortgages do
not in the  aggregate  secure an amount in excess of $350,000.  For the purposes
hereof,  "Purchase Money Mortgage" means any mortgage,  security interest, title
retention,  lien or other  encumbrance on property given,  assumed or arising by
operation  of law to secure  payment of, or to provide the obligor with funds to
pay the whole or any part of,  the  consideration  for the  acquisition  of such
property (and for such purposes any capital or operating



                                       12
<PAGE>

lease  shall be deemed to be a  Purchase  Money  Mortgage  in the  amount of the
aggregate of all remaining lease payments required to be made thereunder,  other
than under  extensions  exercisable  only by the  Corporation  or the Subsidiary
party  thereto),  or to secure  any  renewal,  extension  or  refunding  of such
encumbrance and of the indebtedness  represented  thereby upon the same property
provided that the indebtedness secured thereby and the security therefor are not
increased thereby.

     5.13 Not to Incur Indebtedness for Borrowed Money;  Non-Equity  Securities.
The  Corporation  shall not,  and will cause  each of the  Subsidiaries  not to,
incur,  guarantee or otherwise become liable in respect of, any indebtedness for
borrowed money (including without limitation Purchase Money Mortgages), or issue
any class of shares or other securities other than Equity Securities, subsequent
to the date  hereof  without  the prior  written  consent  of Agent,  except for
Purchase Money Mortgages in accordance with Section 5.12.

     5.14 To Pay  Expenses.  The  Corporation  shall pay all costs,  charges and
expenses  (including legal fees and  disbursements)  of or incurred by Agent and
Holder in connection with this Debenture,  the Security Agreements and any other
security  documents  delivered after the date hereof to Agent, and all ancillary
documents or the enforcement hereof and of such security.

     5.15 Marco  Markin.  Mr.  Marco  Markin  shall be the  President  and Chief
Executive  Officer of the  Corporation  on the date hereof  and,  within 30 days
following the date hereof,  the Corporation  will obtain 10 year minimum,  level
premium, term life insurance on the life of Mr. Markin in the amount of at least
$5,000,000,  naming  Agent as  beneficiary,  and will  use its best  efforts  to
maintain  such  insurance  during  the term  thereof  and will pay all  premiums
thereunder.  In the  event  of Mr.  Markin's  death  while  any  portion  of the
Principal  Amount or any  interest  remains  outstanding  hereunder or under the
other  debenture  issued by the Corporation  pursuant to the Debenture  Purchase
Agreement,  the  proceeds  of such  life  insurance  shall be  deposited  into a
collateral  account  with a financial  institution  acceptable  to Agent,  which
account (and all rights  therein and proceeds  thereof) shall be assigned by the
Corporation  to Agent as additional  collateral  security for the  Corporation's
obligations  hereunder,  and shall be released to the Corporation  only upon the
conversion  of the  entire  Principal  Amount  of this  Debenture  or  upon  the
repayment  in full of the  Principal  Amount and all other  amounts  outstanding
hereunder.  At any time and from time to time prior to Mr.  Markin's death where
the Principal  Amount and the principal  amount owing under the other  debenture
issued by the  Corporation  pursuant to the Debenture  Purchase  Agreement  (the
"Total Debenture  Principal  Amount") is less than  $5,000,000,  the Corporation
shall be entitled,  by notice given to Agent,  but not  required,  to reduce the
amount of such insurance (or replace such insurance policy with a like policy in
such less  amount),  provided  that the new amount of insurance is not less than
the Total  Debenture  Principal  Amount at that time.  Upon the  satisfaction by
repayment,  redemption or conversion of the Total Debenture Principal Amount and
all other  indebtedness owing under this Debenture and under the other debenture
issued by the Corporation  pursuant to the Debenture Purchase  Agreement,  Agent
shall do all  things  necessary  to assign the  benefit  of such life  insurance
policy to the Corporation.  It is hereby expressly acknowledged by Agent and the
Purchasers that the proceeds of such life insurance  policy or policies shall be
payable to Agent solely as additional collateral security for the obligations of
the   Corporation   under  the  Debentures  and  the  Security,   and  under  no
circumstances shall Agent or either Purchaser be entitled to any portion of such
proceeds  in excess of such  obligations,  but shall be  required  to remit such
excess  to the  Corporation  after  the full  satisfaction  of such  obligations
forthwith upon request.



                                       13
<PAGE>

     5.16 Equity Offerings.

     (a) Qualified  Secondary  Offering.  The  Corporation  shall,  on or before
August 31,  2000,  complete a Qualified  Secondary  Offering.  For the  purposes
hereof,  "Qualified  Secondary  Offering" shall mean a sale to the public of the
Corporation's  shares of Common Stock as part of a single underwritten  offering
by a first-tier  or  second-tier  investment  bank  acceptable  to Holder acting
reasonably,  which provides to the Corporation net proceeds, after all costs and
expenses  associated  therewith  (including  without  limitation   underwriters'
commissions  and  issuance  expenses)  of not  less  than  ten  million  dollars
($10,000,000),  all of which net proceeds  shall be used to repay and retire all
remaining  indebtedness of the Corporation under the Vendor Note (or, where such
proceeds exceed such  indebtedness,  that portion of such proceeds equal to such
indebtedness shall be so used). In the event that a Qualified Secondary Offering
is not so completed on or before August 31, 2000, then, in addition to any other
rights and  remedies  Agent or Holder may have  hereunder,  then the  Conversion
Ratio shall  automatically  be  increased to that amount equal to the product of
the Conversion Ratio in effect immediately prior to such increase  multiplied by
5.00 and divided by 4.25.

     (b) Equity  Offerings.  Where, in any public offering or private  placement
(an "Equity  Offering") of Equity Securities the price per share of Common Stock
(or, in the case of Equity  Securities  other than Common  Stock,  the price for
such number of Equity  Securities  as are  equivalent  to,  convertible  into or
exchangeable  for a share of Common  Stock) (in each case net of the Fair Market
Value (determined under Section 8.1) of any warrants, options or other rights to
acquire Equity Securities  attaching to or offered concurrently with the offered
Equity Securities, and net of all brokerage fees and commissions) (the "Offering
Price") is less than $5.00 divided by the Conversion Ratio in effect immediately
prior to  completion  of such Equity  Offering,  the  Conversion  Ratio shall be
increased to the extent,  if any,  necessary  such that  immediately  after such
Equity   Offering  this  Debenture  shall  in  accordance  with  such  increased
Conversion Ratio be convertible into that number of shares of Common Stock which
is the greater of:

          (i) that  number of shares of Common  Stock into which this  Debenture
     would  otherwise be convertible  in accordance  with the provisions of this
     Debenture (other than this Section 5.16(b)); and

          (ii) that  number  obtained  by dividing  $3,000,000  by the  Offering
     Price, multiplying the quotient thereby obtained by the Conversion Ratio in
     effect  immediately  prior to completion of such Equity Offering,  and then
     subtracting  from the product so obtained the number of Conversion  Shares,
     if any, previously issued by the Corporation  pursuant to any conversion of
     a portion of the Principal Amount.

The provisions of this Section 5.16 shall apply to successive  Equity Offerings,
including without limitation any Qualified Secondary Offering.

     5.17  Reporting  Requirements.  Corporation  shall  provide and deliver the
following financial statements and other reports to Agent:



                                       14
<PAGE>

     (a) Balance Sheet and Income  Statement.  Within 60 days after the last day
of each fiscal  quarter of  Corporation,  a copy of  Corporation's  consolidated
balance sheet and income statement  prepared by Corporation as of the end of and
for such quarter and certified by Corporation to be true and correct and to have
been prepared in accordance with generally accepted  accounting  principles that
are  consistent  with those  previously  applied in  Corporation's  most  recent
financial statement.

     (b) Financial Statements. Upon preparation, but in any event within 90 days
after  the  last  day of each  fiscal  year of the  Corporation,  the  financial
statements of the  Corporation as of the end of and for such fiscal year setting
forth in comparative form the correspondence figures of the financial statements
showing the balance sheet,  the income  statement and the source and application
of funds statement as of the end of the preceding fiscal year, all in reasonable
detail and  certified  by a firm of  independent  certified  public  accountants
acceptable to Holder.

     (c) Additional  Information.  Such further information as may reasonably be
necessary  or  as  Holder  may  reasonably  request  to  determine  whether  the
Corporation is complying with its obligations  under this  Agreement,  the Notes
and the security  documents,  or to  determine  the  financial  condition of the
Corporation.

     5.18 Financial Covenant.  The Corporation shall at all times maintain (on a
consolidated  basis) Fixed Charge  Coverage Ratio of at least  1.6:1.0.  For the
purposes hereof:

     (a) "Cash Flow" means, for any period, the sum without duplication,  of (i)
net income and (ii) to the extent net income has been reduced  thereby,  (a) all
income taxes of the Corporation  accrued in accordance  with generally  accepted
accounting  principles  ("GAAP")  for  such  period  (other  than  income  taxes
attributable to  extraordinary  or non recurring gains or losses),  (b) interest
expense,  (c)  non-cash  charges,  and (d)  the  amount  of any  and  all  lease
obligations,  including  but not limited to equipment  leases and real  property
leases,  of the Corporation  paid,  accrued,  or scheduled to be paid or accrued
during such period, all determined in accordance with GAAP;

     (b) "Fixed Charges" means, for any period, the sum without duplication,  of
(i) the interest expense, calculated in accordance with GAAP, of the Corporation
for such period, (ii) the interest expense,  calculated in accordance with GAAP,
of the Corporation that was capitalized during such period,  (iii) the amount of
all cash  dividend  payments  paid,  accrued or  scheduled to be paid or accrued
during such period,  (iv) principal payments due on all outstanding notes of the
Corporation  during such period (with the exception of the Vendor Note), and (v)
the  amount of any and all  lease  obligations,  including  but not  limited  to
equipment leases and real property leases, of the Corporation paid,  accrued, or
scheduled to be paid or accrued,  during such period, by the Corporation and the
Subsidiaries.

     (c) "Fixed Charge  Coverage  Ratio" means, in accordance with GAAP, for the
full fiscal quarter ending on or prior to the date of  determination,  the ratio
of Cash Flow of the  Corporation  for such  period to the Fixed  Charges  of the
Corporation for such period.

     5.19 Employment  Agreement.  The Corporation  shall use its best efforts to
enter into a one-year employment agreement,  renewable by the Corporation for at
least one further term of one



                                       15
<PAGE>

year, with Mr. Marco Markin  forthwith and in any event within 60 days after the
date hereof, and shall provide Agent with a copy thereof.

     5.20 Agent Entitled to Perform Covenants.  If the Corporation shall fail to
perform any covenant on its part herein contained, Agent may, in its discretion,
perform  any such  covenant  capable of being  performed  by it and, if any such
covenant  requires the payment or expenditure of money,  Agent may make payments
or expenditures  with its own funds, or with money borrowed by or advanced to it
for such  purposes,  but shall be under no  obligation so to do; and all sums so
expended or advanced  shall be at once payable by the  Corporation on demand and
shall bear interest at the annual rate of fifteen  percent (15%) until paid, and
shall  be  payable  out of any  funds  coming  into the  possession  of Agent in
priority to the other indebtedness hereunder, but no such performance or payment
shall be deemed to relieve the Corporation from any default  hereunder nor shall
the right of Agent under this  subsection  impose any  obligation  upon Agent to
perform any covenant of the Corporation.

6.   Redemption and Prepayment

     6.1  Generally.  Except as provided in this  Article 6 and in Section  7.1,
Holder shall have no right to require any portion of the Principal  Amount to be
repaid,  and the  Corporation  shall have no right to prepay any  portion of the
Principal Amount, prior to the Due Date.

     6.2  Redemption  By Holder.  Holder  shall have the right,  exercisable  by
written notice given by Agent (a "Retraction  Notice") given to the  Corporation
at any time after the fifth anniversary of the date of this Debenture and before
the Due Date to require the  Corporation  to redeem this  Debenture in full (but
not in part), and to pay on such date (the "Retraction Date") as is specified in
such Retraction  Notice and is not less than ten (10) days following the date of
receipt by the  Corporation  of the  Retraction  Notice  the  entire  unpaid and
unredeemed  balance of the Principal  Amount and all accrued and unpaid interest
on the Debenture up to and  including the  Retraction  Date  (including  Current
Interest, Deferred Interest and Default Interest).

     6.3 By Corporation Upon Qualified Secondary Offering.  In the event that at
any time:

     (a) during the Conversion Period;

     (b) at which the Corporation shall not be in default hereunder;

     (c) the  Corporation  shall  propose  to  complete  a  Qualified  Secondary
Offering (as hereinbefore  defined) and shall not less that 30 days prior to the
date of closing of such Qualified  Secondary  Offering give Agent written notice
of such Qualified Secondary Offering and the terms thereof (and attaching a copy
of  the  executed  term  sheet  or  other  document  from  the   underwriter  or
underwriters underwriting such Qualified Secondary Offering); and

     (d) during the period  from  receipt of such notice to such  closing  Agent
shall have the  opportunity  to convert  this  Debenture  on behalf of Holder in
whole or in part;


                                       16
<PAGE>

then the remaining  Principal  Amount of this Debenture  shall become subject to
redemption  at  the  option  of the  Corporation  in  whole  (but  not in  part)
concurrently  with the  closing of such  Qualified  Secondary  Offering  without
penalty or premium.

     6.4 By Corporation. In the event that at any time:

     (a) during the Conversion Period;

     (b) after the second anniversary of the date hereof;

     (c) at which the Corporation shall not be in default hereunder;

     (d) the closing  price per share of Common Stock (if such shares are listed
on a national securities  exchange) or the closing bid per share of Common Stock
(if such shares are quoted on the  Over-The-Counter  Exchange)  (in either case,
the  "Closing  Price/Bid")  is at or  above  $7.50  (adjusted  for  any  and all
subdivisions  or  combinations  of the  Common  Stock  occurring  after the date
hereof) for each of 30 consecutive trading days after such second anniversary;

     (e) the Corporation  shall,  within 10 days following the expiry of such 30
trading day period,  give Agent  written  notice of its intention to redeem this
Debenture pursuant to this Section 6.4; and

     (f) during the period of 10 days  after  receipt of such  notice,  Agent on
behalf of Holder shall have the  opportunity  to convert this Debenture in whole
or in part;

then the remaining  Principal  Amount of this Debenture  shall become subject to
redemption  at the option of the  Corporation  in whole (but not in part) at any
time during the period of one  hundred and eighty  (180) days after the last day
of such 30 trading day period without penalty or premium.

     6.5  Extension of Time. In the event that Holder shall be precluded for any
reason  (including  without  limitation  any  applicable  securities  laws) from
converting  this  Debenture  in whole or in part and  provided  Agent shall have
given the Corporation  notice of such reason within such 10 day period, the time
periods  set out above  shall be  extended  by the  number of days  Holder is so
precluded. No interest hereunder (including, for greater certainty,  interest on
overdue interest) shall accrue,  however,  during such period that conversion is
precluded,  except where the reason for such  preclusion is the direct result of
actions or omissions by the Corporation or any Subsidiary.

     6.6 Notice.  Subject to Section 6.7, the Corporation may exercise its right
to redeem this  Debenture  prior to the Due Date  pursuant to either of Sections
6.3 and 6.4 by giving notice (the "Redemption  Notice") thereof to Agent,  which
notice shall specify the terms of redemption (including the place at which Agent
may obtain payment),  the principal amount of this Debenture to be redeemed (the
"Redemption  Amount")  and  shall  fix a date for  redemption  (the  "Redemption
Date"),  which  date  shall not be less than 10 days nor more than 30 days after
the date of the Redemption Notice.


                                       17
<PAGE>

     6.7  Priority  of  Notices.  Notwithstanding  any other  provision  of this
Debenture,  the Corporation shall not be permitted to redeem any portion of this
Debenture in respect of which the  Corporation  shall have received prior to the
Redemption Date either a Retraction Notice or a Conversion Notice.

     6.8 Convenant By Holder.  By its  acceptance  hereof,  Holder agrees not to
sell to a  member  of the  public  any of the  Conversion  Shares  or any of the
Warrant  Shares (as defined in the  Debenture  and Warrant  Purchase  Agreement)
during any period (up to twenty-five (25) consecutive trading days provided that
each previous  consecutive trading day meets the $7.50 test described in Section
6.4(d))  following a period of five  consecutive  trading  days during which the
Corporation met such test.

7.   Default

     7.1  Default  Events.  The  entire  unpaid  and  unredeemed  balance of the
Principal  Amount  and all  Current  Interest,  Deferred  Interest  and  Default
Interest  accrued and unpaid on this Debenture  shall, at the election of Agent,
be and become  immediately due and payable,  and the Security  Agreement and any
and  all  other  security  documents  held by  Agent  shall  become  immediately
enforceable,  upon the  occurrence  of any of the  following  events (a "Default
Event"):

     (a) the non-payment by the  Corporation  when due of principal and interest
or of any other  payment as provided in this  Debenture  or with  respect to any
other indebtedness owed by the Corporation;

     (b) default by the Corporation in the performance of or compliance with any
term  in any of  Sections  5.16,  or any  provision  of the  Debenture  Purchase
Agreement;

     (c) default by the Corporation in the performance of or compliance with any
other term or provision of this Debenture or the Security Agreement,  where such
default  is  not  remedied  within  thirty  (30)  days  after  Agent  gives  the
Corporation written notice thereof;

     (d) the occurrence of a breach by Mr. Marco Markin of his obligations under
Section 7 of the Right of First Refusal  Agreement of even date herewith between
him, the Corporation,  Holder and the holder of the other debenture issued under
the Debenture Purchase Agreement;

     (e) the  occurrence  of a material  breach by Mr.  Marco  Markin  under his
employment  agreement  to be entered  into  pursuant  to  Section  5.19 (as such
agreement is constituted on the date entered into and as the same may be amended
with the  written  consent  of Agent and  without  consideration  of any  waiver
thereof by the Corporation);

     (f) Mr.  Marco Markin  ceasing to hold the offices of  President  and Chief
Executive Officer of the Corporation;

     (g) the  Corporation  (i) applies for or consents to the appointment of, or
if there shall be a taking of possession by, a receiver,  custodian,  trustee or
liquidator for the  Corporation or any of its property;  (ii) becomes  generally
unable to pay its debts as they become due; (iii) makes a general



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<PAGE>

assignment for the benefit of creditors or becomes  insolvent;  (iv) files or is
served with any  petition for relief  under the  Bankruptcy  Code or any similar
federal or state statute;  (v) has any judgment  entered against it in excess of
$250,000 in any one instance or in the aggregate during any consecutive 12 month
period or has any  attachment  or levy made to or against any of its property or
assets;  (vi) defaults with respect to any evidence of indebtedness or liability
for borrowed money, or any such  indebtedness  shall not be paid as and when due
and  payable;  or (vii) has  assessed  or imposed  against it, or if there shall
exist,  any general or specific  lien for any  federal,  state or local taxes or
charges against any of its property or assets; or

     (h) any failure by the  Corporation  to issue and deliver  shares of Common
Stock as provided herein upon conversion of this Debenture.

     7.2 Payment of Prior Ranking Indebtedness. Upon the occurrence of a Default
Event, in addition to (and not in substitution  for,  exclusive of nor dependent
on) any other remedies  contained herein,  in the Security  Agreements or in any
existing or future  security  document  granted by the Corporation or any of the
Subsidiaries to Agent, and to all other remedies existing at law or in equity or
by statute,  Agent,  shall be permitted to make payments to parties having prior
charges or encumbrances  on properties  owned by the Company or on properties on
which the Company may hold charges or encumbrances (including without limitation
payments on amounts  owing under the Vendor  Note),  and the full amount of such
payments  shall be due and payable  upon demand by Agent,  and shall be added to
and shall form part of the Principal Amount of this Debenture, on which interest
shall accrue and be payable as  hereinbefore  provided,  and in respect of which
the Security shall secure the due and prompt repayment thereof;  provided always
however  that no portion of such  payments  shall be  subject to  conversion  in
accordance with Section 2.

     7.3 Remedies Cumulative. Each right, power or remedy of Agent, on behalf of
Holder,  upon  the  occurrence  of any  Default  Event as  provided  for in this
Debenture or now or hereafter  existing at law or in equity or by statute  shall
be  cumulative  and  concurrent  and shall be in addition to every other  right,
power or remedy  provided for in this Debenture or now or hereafter  existing at
law or in equity or by statute, and the exercise or beginning of the exercise by
the holder or  transferee  hereof of any one or more of such  rights,  powers or
remedies  shall not preclude the  simultaneous  or later  exercise by Agent,  on
behalf of Holder, of any or all such other rights, powers or remedies.

8.   General

     8.1 Fair Market Value. The term Fair Market Value as used in this Debenture
with  respect to assets or  property  received by the  Corporation  or any other
person  shall be the fair  market  value,  regardless  of any  prior  accounting
treatment, of such assets or property,  determined in good faith by agreement of
Agent and the Board of Directors of the  Corporation.  If Agent and the Board of
Directors shall be unable to agree as to such fair market value, the fair market
value shall be determined by the independent certified public accountant at that
time  retained  by the  Corporation  to  audit  its  books  and  records,  and a
determination  by such independent  certified public  accountant shall be final,
conclusive and binding or, if there be none, or if such accountant  shall refuse
or be unable to make such a  determination  then the sole  issue of fair  market
value  shall be  submitted  to and  settled  by  binding  arbitration  under and
pursuant to the Colorado  Uniform  Arbitration Act and



                                       19
<PAGE>

the rules and  regulations  of the  American  Arbitration  Association,  and the
decision or award of the arbitrator or arbitrators in such arbitration  shall be
final, conclusive and binding and a final judgment may be entered thereon by any
court of competent jurisdiction.

     8.2 Failure to Act and Waiver. No failure or delay by Holder to insist upon
the strict  performance  of any term of this Debenture or to exercise any right,
power or remedy consequent upon a default hereunder shall constitute a waiver of
any such term or of any such breach,  or preclude Agent from exercising any such
right,  power or remedy at any later time or times.  By accepting  payment after
the due date of any amount  payable  under this  Debenture,  Agent  shall not be
deemed to waive  the  right  either  to  require  payment  when due of all other
amounts  payable  under this  Debenture,  or to declare a default for failure to
effect such payment of any such other amount.

     The  failure  of Agent to give  notice  of any  failure  or  breach  of the
Corporation  under this Debenture  shall not constitute a waiver of any right or
remedy in respect of such continuing failure or breach or any subsequent failure
or breach.

     8.3 Consent to  Jurisdiction.  The  Corporation  hereby agrees and consents
that any action, suit or proceeding arising out of this Debenture may be brought
in any appropriate  court in the State of Colorado,  including the United States
District  Court for the  District  of  Colorado,  or in any other  court  having
jurisdiction over the subject matter,  all at the sole election of Agent, and by
the  issuance  and  execution  of this  Debenture  the  Corporation  irrevocably
consents to the jurisdiction of each such court.

     8.4 Transfer. This Debenture may only be transferred in accordance with the
provisions  of  Section  10.4  of  the  Debenture  Purchase  Agreement  and  the
requirements set out in the legend on the first page hereof.

     8.5  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) business day after
deposit  with a  nationally  recognized  overnight  courier,  special  next  day
delivery, with verification of receipt. All communications shall be sent:

     to the Corporation at:

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



                                       20
<PAGE>

     to Agent, on behalf of Holder, prior to January 15, 2000, at:

                  [HOLDER]
                  [ADDRESS]

     and, thereafter, at:

                  [HOLDER]
                  [ADDRESS]

with a copy to:

                  [HOLDER CONTACT]
                  [ADDRESS]

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

     8.6 Governing  Law. This  Debenture  shall be governed by and construed and
enforced in accordance with the laws of the State of Colorado  without regard to
conflicts  of law  principles,  or,  where  applicable,  the laws of the  United
States.

         IN WITNESS  WHEREOF,  the  Corporation  has caused this Debenture to be
duly executed under its corporate seal.

WITNESS:                                     THE NEPTUNE SOCIETY, INC.

                                             By:
--------------------------------                 -------------------------------
                                                 Marco Markin, President




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