Document:

EXHIBIT 10.38

                     NOTE EXTENSION AND ASSUMPTION AGREEMENT

     This NOTE EXTENSION AND ASSUMPTION  AGREEMENT  (this  "Agreement") is dated
effective as of January 31, 2002, and is made by and between Western  Management
Services,  L.L.C.,  an Oregon limited  liability  company  ("Western"),  Wilhelm
Mortuary, Inc., an Oregon corporation ("Wilhelm"),  The Neptune Society, Inc., a
Florida corporation  ("Neptune  Society"),  Neptune Society of America,  Inc., a
California  corporation ("Neptune America"),  and Green Leaf Investors I, LLC, a
California  limited  liability  company  ("Greenleaf"),  with  reference  to the
following facts:

A.   Wilhelm  acquired  certain  equipment,  inventory,   receivables,  contract
     rights, general intangibles, trademarks and trade names and other assets of
     the businesses known as "Heritage  Memorial,"  "Heritage Memorial Society,"
     "Heritage  Memorial Cremation  Society," "The Heritage Society,"  "Heritage
     Cremation  Society," "Wilhelm  Mortuary,"  "Wilhelm Funeral Home," "Wilhelm
     Crematory,"   "Oregon  Cremation   Company,"  "Oregon  Cremation  &  Burial
     Company," and "AAA Cremation Company," pursuant to certain agreements dated
     July 5, 2000 by and among Wilhelm,  Heritage Memorial  Society,  L.L.C., an
     Oregon  limited  liability  company,  Community  Memorial  Centers,  L.L.C.
     ("CMC"), an Oregon limited liability company, David Schroeder, Michael Ashe
     and Neptune  Society  (collectively,  together  with certain  replacements,
     substitutions or accessions thereto and certain  after-acquired assets, the
     "Wilhelm  Assets").  Wilhelm also acquired certain real property  described
     more fully in Exhibit A attached hereto (the "Portland Property"),  used in
     connection with its business.  Neptune  Society,  parent of Neptune America
     and  Wilhelm,  issued a  debenture  in the  original  principal  amount  of
     $1,000,000 dated July 5, 2000 (the "CMC  Debenture")  payable to CMC or its
     order as consideration  for the Portland  Property.  Payments under the CMC
     Debenture are secured by, among other things, that certain Trust Deed dated
     July 5, 2000  executed by Western for the benefit of CMC,  recorded on July
     18, 2000 in Multnomah County,  Oregon as Fee No.  2000-098983,  encumbering
     the Portland Property (the "CMC Trust Deed").

B.   Wilhelm borrowed $1,575,000 from Greenleaf (the "Greenleaf Loan") under the
     terms of a Loan  Agreement  dated  August  8,  2001  (the  "Greenleaf  Loan
     Agreement"),  which  obligation  is evidenced  by a  promissory  note dated
     August 8, 2001,  due January  31, 2002 and bearing  interest at the rate of
     12% per annum,  payable  monthly in arrears  (the  "Greenleaf  Note"),  and
     secured by a first priority security interest granted in the Wilhelm Assets
     under a security  agreement dated August 8, 2001 (the  "Greenleaf  Security
     Interest")  and a trust deed dated  August 6, 2001,  recorded  on August 8,
     2001 in Multnomah County,  Oregon as Fee No.  2001-124418,  encumbering the
     Portland  Property (the  "Greenleaf  Trust Deed").  In connection  with the
     Greenleaf  Loan  Agreement,   the  following,   among  other,   agreements,
     certificates,  instruments or documents  were executed and  delivered:  the
     Greenleaf  Note;  the Greenleaf  Security  Agreement;  the Greenleaf  Trust
     Agreement;  Subordination Agreement among Greenleaf, CapEx L.P., a Delaware
     limited partnership  ("CapEx"),  and D.H. Blair Investment Banking Corp., a
     Delaware  corporation  ("DHB");  Subordination  Agreement among  Greenleaf,
     Emanuel   Weintraub   and  the  Emanuel   Weintraub   Inter  Vivos   Trust;
     Intercreditor  Agreement  among  Greenleaf,  CMC and  Wilhelm;  Guaranty by
     Neptune  Society;  Guaranty by Neptune  America;  Warrant issued by Neptune
     Society  to  Greenleaf  exercisable  to  acquire  30,000  shares of Neptune
     Society  common stock (the  "Greenleaf  Warrant");  Piggyback  Registration
     Agreement between Greenleaf and Neptune Society (the  "Registration  Rights
     Agreement");  Assignment  Agreement;  Forbearance Agreement between CMC and
     Neptune Society;  Unsecured  Environmental  Indemnity Agreement by Wilhelm,
     Neptune  Society  and  Neptune  America;   and  Loan  Put  Agreement  among
     Greenleaf,  David  Schroeder,  and  Michael  Ashe  (collectively  with  the
     Greenleaf Loan Agreement, the "Greenleaf Loan Documents");

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C.   Western,  Wilhelm,  Neptune  Society and Neptune  America have entered into
     that certain Asset  Purchase  Agreement  dated  effective as of January 31,
     2002 (the  "Asset  Purchase  Agreement"),  in the form  attached  hereto as
     Exhibit B, pursuant to which Western agreed to purchase  substantially  all
     of the  Wilhelm  Assets and the  Portland  Property  and to assume  certain
     liabilities of Wilhelm,  including, among others, the CMC Debenture and the
     Greenleaf Note.

D.   For the purposes of facilitating  the transactions  contemplated  under the
     Asset  Purchase  Agreement,  (a) Wilhelm has agreed to (i) pay  Greenleaf a
     loan  extension fee consisting of 300,000 shares of common stock of Neptune
     Society;  (ii) pay $75,000 of the principal amount of the Greenleaf Note by
     means of the  issuance by Neptune  Society to  Greenleaf  of a  convertible
     debenture with certain anti-dilution protections, in substantially the form
     attached hereto as Exhibit C (the "Greenleaf Convertible  Debenture"),  and
     (iii) pay  Greenleaf  all accrued and unpaid  interest  outstanding  on the
     Greenleaf Note as of March 8, 2002 (the "Closing  Date");  (b) Greenleaf is
     willing  to amend  the due  date of the  Greenleaf  Note to July 31,  2002,
     effective  as of  January  31,  2002;  (c) CMC is  willing  to enter into a
     subordination  agreement to subordinate the CMC Trust Deed to the Greenleaf
     Trust Deed, in  substantially  the form  attached  hereto as Exhibit D (the
     "CMC  Subordination  Agreement");  (d) David Schroeder and Michael Ashe are
     willing to acknowledge,  ratify and confirm the Loan Put Agreement  entered
     into with  Greenleaf;  and (e)  Neptune  Society is willing to enter into a
     Right of First Refusal Agreement with Greenleaf,  in substantially the form
     attached hereto as Exhibit E (the "First Right Agreement").

E.   Pursuant to Sections 2.2 and 2.4 of the Asset Purchase  Agreement,  Western
     agreed to assume  Wilhelm's  obligations  under the Greenleaf Note, the CMC
     Debenture,  the  Greenleaf  Trust Deed and the CMC Trust Deed (the "Assumed
     Obligations")  as  consideration  for the Wilhelm  Assets and the  Portland
     Property.

F.   Greenleaf is willing to (i) acknowledge Western's assumption of the Assumed
     Obligations  and (ii) consent to Wilhelm's  sale of the Wilhelm  Assets and
     Portland Property only upon (a) Western's acknowledgement of the grant of a
     first  priority  security  interest by Wilhelm to  Greenleaf in the Wilhelm
     Assets under the Greenleaf  Security  Agreement  dated August 8, 2001;  (b)
     Western's  acknowledgement  and assumption of the Greenleaf Trust Deed; (c)
     an  agreement  by Western  to pay  directly  to  Greenleaf  the  principal,
     interest and any  penalties  due after the Closing Date under the Greenleaf
     Note;  (d)  Western's  consent to  amendments  to Uniform  Commercial  Code
     financing  statements naming Western as an additional debtor and perfecting
     the  first  priority   security   interest  in  the  Wilhelm  Assets;   (e)
     acknowledgment  and  ratification by Neptune Society and Neptune America of
     the guaranty of Wilhelm's  obligations under the Greenleaf Note, as amended
     (each, a "Guaranty");  and (f) Neptune Society's  issuance of the Greenleaf
     Convertible Debenture to Greenleaf.

G.   Wilhelm is willing to acknowledge and agree to Western's  assumption of the
     Assumed  Obligations only upon obtaining a grant of a security  interest by
     Western  in the  Wilhelm  Assets,  subordinate  to the  Greenleaf  Security
     Interest,  the Greenleaf Trust Deed and the CMC Trust Deed, under the terms
     of a  security  agreement  in the form  attached  hereto as  Exhibit F (the
     "Wilhelm  Security  Agreement")  securing  Western's  obligations under the
     Assumed Obligations, the Asset Purchase Agreement and this Agreement.

H.   Western  is  willing  to enter  into this  Agreement  and the  transactions
     contemplated  herein to induce (i) Greenleaf to acknowledge  and consent to
     the assumption by Western of Wilhelm's obligations under the Greenleaf Note
     and the sale of the Wilhelm Assets and the Portland

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     Property; (ii) Neptune Society to issue the Greenleaf Convertible Debenture
     and (iii) Wilhelm to enter into the Asset Purchase Agreement.

     NOW THEREFORE,  in consideration of the premises,  the parties hereto agree
as follows:

     1. Amendment of Greenleaf Note. Wilhelm and Greenleaf hereby agree that the
Greenleaf Note is hereby amended to extend the due date of the Greenleaf Note to
July 31, 2002,  subject to: (a) the issuance by Neptune  Society to Greenleaf of
the  Greenleaf  Convertible  Debenture  as  payment by Wilhelm of $75,000 of the
principal amount of the Greenleaf Note and (b) payment by Wilhelm of all accrued
interest outstanding on the Greenleaf Note as of the Closing Date (in the amount
as set forth in the Estoppel and Investor  Representation  Certificate delivered
by Greenleaf in the form attached  hereto as Exhibit G). No separate  instrument
shall be required to evidence the amendment, contained in this Section 1, of the
due date of the Greenleaf Note to July 31, 2002.

     2. Payment of Loan Extension Fee.

          (a) Neptune  Society  will issue  Greenleaf  300,000  shares of common
stock of  Neptune  Society as a loan  extension  fee (the  "Loan  Extension  Fee
Shares");

          (b)  Greenleaf  acknowledges  and agrees that the Loan  Extension  Fee
Shares  have not been and will not be  registered  under the  Securities  Act of
1933, as amended (the "Act"), or the securities laws of any state, and are being
issued to  Greenleaf  in  reliance  upon an  exemption  from  such  registration
requirements;

          (c) Greenleaf  acknowledges that Neptune Society Company is relying on
certain  representations  and warranties  contained in the Estoppel and Investor
Representation  Certificate in determining to offer and issue the Loan Extension
Fee Shares and the Greenleaf  Debenture to Greenleaf in a manner exempt from the
registration requirements of the Act and applicable state securities laws;

          (d) Neptune  Society  acknowledges  that the Loan Extension Fee Shares
and the shares of common  stock  acquirable  upon  conversion  of the  Greenleaf
Debenture  are  "Registrable  Securities"  as that  term is  defined  under  the
Registration  Rights  Agreement  dated  August 8, 2001,  by and between  Neptune
Society and Greenleaf.

     3. Amendment of Greenleaf  Warrant.  Neptune  Society and Greenleaf  hereby
agree that the Greenleaf Warrant is hereby amended to extend the expiration date
of the Greenleaf  Warrant to December 31, 2005. No separate  instrument shall be
required  to  evidence  the  amendment,  contained  in  this  Section  3, of the
expiration  date of the  Greenleaf  Warrant  to  December  31,  2005;  provided,
however,  that upon the written  request of Greenleaf  and surrender of original
warrant,  Neptune Society will issue an amended and restated warrant certificate
reflecting this amendment.

     4. Assumption of Greenleaf Note.  Effective as of the Closing Date, Western
hereby  assumes and agrees to perform any and all  obligations  of Wilhelm under
the Greenleaf Note, as amended,  including,  but not limited to, the obligations
to make all payments of principal,  accrued interest and penalties, if any, when
due.  Without  limiting  the  generality  of the  foregoing,  Western  shall  be
primarily liable under the Greenleaf Note.

     5. First Right Agreement. Effective as of the Closing Date, Neptune Society
will enter into the First Right Agreement with Greenleaf.

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     6.  Consent  to  Transfer  and  Assumption  of  Greenleaf  Trust  Deed  and
Subordination  Agreement.  Effective as of the Closing Date, Western,  Greenleaf
and Wilhelm  will enter into a Consent to  Transfer  and  Assumption  of Deed of
Trust, and  Subordination  Agreement,  in the form attached hereto as Exhibit H,
which shall be recorded in Multnomah County.

     7. CMC  Subordination.  Effective as of the Closing Date, CMC and Greenleaf
will enter into the CMC Subordination Agreement.

     8. Wilhelm Trust Deed.  Western will execute and deliver the deed of trust,
security  agreement and fixture filing related to the Portland  Property,  which
shall be recorded in Multnomah County (the "Wilhelm Trust Deed").

     9. Acknowledgement of Assumption and Consent to Asset Purchase Agreement.

          (a)  Greenleaf  acknowledges  that  Western  has assumed and agrees to
perform any and all  obligations  of Wilhelm  under the  Greenleaf  Note and the
Greenleaf  Trust  Deed,  and  Greenleaf  agrees  to  accept  payments  under the
Greenleaf  Note from Western.  Notwithstanding  the  foregoing,  nothing in this
Agreement  shall release (i) Wilhelm from its obligations to Greenleaf under the
Greenleaf  Note or the Wilhelm  Security  Agreement or (ii) Neptune  Society and
Neptune America under their respective Guaranty.

          (b) Greenleaf  hereby  consents to the sale of the Wilhelm  Assets and
the  Portland  Property  to  Western,  the  assumption  by Western of  Wilhelm's
obligations under the Greenleaf Note and the CMC Debenture,  and the delivery of
the Wilhelm Trust Deed by Western.

     10.  Acknowledgement and Ratification of Security Interest.  Wilhelm hereby
acknowledges,  ratifies  and  confirms  that the  Wilhelm  Security  Interest is
subordinate to the Greenleaf Security Interest.

     11.  Acknowledgement  and  Ratification  of Guaranty.  Neptune  Society and
Neptune America affirm and ratify their respective  guaranty agreements provided
to  Greenleaf  and  confirm  that (a) each  person  or  entity  comprising  each
guarantor  does  irrevocably  and  unconditionally  guarantee to  Greenleaf  the
payment and performance of the obligations  under each Guaranty,  upon the terms
and conditions set forth in each Guaranty, and (b) each Guaranty remains in full
force and effect and binding upon the respective  guarantor without any setoffs,
defenses or counterclaims of any kind whatsoever.

     12.   Acknowledgement  of  Security  Interests  under  the  Greenleaf  Loan
Documents.  Western  hereby  acknowledges  and confirms  Greenleaf's  rights and
preferences,  including the continuing  security  interest in the Wilhelm Assets
and Portland Property arising out of the Greenleaf Loan Documents and such other
documents and instruments entered into in connection with the Greenleaf Loan and
this Agreement.

     13. Closing.

          (a) Closing  Place and Time.  The Closing  shall take place at the law
offices  of  Steven  Adler  at 2130  N.E.  Klickitat  Street,  Portland,  Oregon
97212-2459 on March 8, 2002 or such other date as the parties may agree.

          (b)  Conditions  to Closing.  Greenleaf's  obligation to amend the due
date of the  Greenleaf  Note and to consent to the  assumption  of the Greenleaf
Note is subject to satisfaction of all of the

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following  conditions before or  contemporaneously  with the Closing, any one or
more of which Greenleaf may waive in writing:

               (i) Truth of Representations and Warranties.  The representations
and warranties of Wilhelm,  Neptune Society,  Neptune  America,  CMC and Western
contained in this  Agreement,  the Greenleaf  Loan  Documents,  and in any other
certificate, instrument or document submitted by such parties to Greenleaf shall
be true and accurate in all material respects.

               (ii) Greenleaf Debenture.  Neptune Society shall have delivered a
debenture certificate representing the Greenleaf Convertible Debenture.

               (iii)  Delivery  of  Transaction  Documents.   Wilhelm,   Neptune
Society,  Neptune America,  and Western, as applicable,  shall have executed and
delivered to  Greenleaf,  or caused to be executed and delivered to Greenleaf by
the party or parties thereto, the following documents, each of which shall be in
form and substance satisfactory to Greenleaf:

                      (1)   this Agreement;
                      (2)   the Greenleaf Convertible Debenture;
                      (3)   Modification Endorsement for Title Policy for the
                            benefit of Greenleaf; and
                      (4)   such other documents and instruments reasonably
                            required by Greenleaf in connection with
                            transactions contemplated in this Agreement.

               (iv) Loan  Extension  Fee  Shares.  Neptune  Society  shall  have
delivered a certificate evidencing the Loan Extension Fee Shares to Greenleaf.

               (v) CMC  Subordination  Agreement.  CMC shall have  executed  and
delivered the CMC Subordination Agreement.

               (vi) Loan Put  Agreement  Acknowledgement.  David  Schroeder  and
Michael  Ashe  shall  have   executed  and   delivered  a  Loan  Put   Agreement
Acknowledgment in substantially the form attached here to as Exhibit I.

          (c) Other Closing Deliveries. In addition to the documents required to
be  delivered  to  Greenleaf in Section  11(a)(iii),  on the closing  date,  the
following documents shall be delivered:

               (i)  the Consent to Transfer and Assumption of Trust Deed;

               (ii) Wilhelm Trust Deed;

               (iii) Greenleaf Estoppel and Investor Representation Certificate;

               (iv) executed First Right Agreement;

               (v)  forms of UCC financing statements prepared by Greenleaf; and

               (vi) such other documents and instruments  reasonably required in
                    connection with transactions contemplated in this Agreement.

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     14. General Provisions.

          (a) Governing Law. This  Agreement  shall be governed by and construed
in accordance  with the laws of the state of Oregon without regard to the choice
of law provisions thereof. In the event of any litigation,  the prevailing party
shall be entitled to recover from the other party all of its attorneys' fees and
other expenses incurred in connection with such litigation.

          (b)  Non-assignability.  No Party shall  assign this  Agreement or any
rights  arising  hereunder  without  the prior  written  consent of Wilhelm  and
Greenleaf, which consent shall not be unreasonably withheld.

          (c)  Notice.  All notices  required  to be given under this  Agreement
shall be deemed  given  when  personally  served in  writing on the person to be
notified,  or on the second  business day following  placement in the U.S. Mail,
postage prepaid, to the applicable party at the addresses indicated below:

                  If to Western:

                  Western Management Services, L.L.C.
                  6637 SE Milwaukie Avenue
                  Portland, OR 97202
                  Fax:  (503)
                  Attn:  Michael Ashe, Manager

                  With a copy to:

                  Steven D. Adler, P.C.
                  2130 NE Klickitat Street
                  Portland, OR 97212-2459
                  Fax:  (503) 282-5833

                  If to Wilhelm, Neptune Society or Neptune America:

                  c/o The Neptune Society, Inc.
                  3500 West Olive, Suite 1430
                  Burbank, CA 91505
                  Fax:  (818) 953-9844
                  Attn:  David Schroeder, President

                  with a copy to:

                  Dorsey & Whitney LLP
                  1420 Fifth Avenue, Suite 3400
                  Seattle, Washington  98101
                  Fax:  (206) 903-8820
                  Attn:  Randal Jones, Esq.

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                  If to Greenleaf:

                  Green Leaf Investors I, LLC
                  4444 Lakeside Drive, Suite 340
                  Burbank, California 91505
                  Fax:  (818) 556-6994
                  Attn:  Tom R. Camp, Esq.

                  with a copy to:

                  Lane Powell Spears Lubersky LLP
                  601 SW Second Avenue, Suite 2100
                  Portland, Oregon 97204
                  Fax:  (503) 778-2200
                  Attn:  Jeffrey C. Wolfstone, Esq.

or, as to each party, at such other address as shall be designated by such party
in the written  notice to each other  party  complying  as to delivery  with the
terms of this paragraph.

          (d) Successors and Assigns.  Except as otherwise provided herein, this
Agreement  shall be binding on and shall  inure to the benefit of the parties to
it and their respective heirs,  legal  representatives,  successors and assigns.
The terms of this Agreement shall be enforceable by the parties hereto.

          (e) Amendment.  This Agreement constitutes the entire understanding of
the parties  with respect to the subject  matter  contained  herein,  and may be
amended only by a written instrument executed by the parties or their respective
successors or assigns.

          (f) Attorneys' Fees. In the event a suit,  action, or other proceeding
of any nature  whatsoever,  including any proceeding  under the U.S.  Bankruptcy
Code,  is  instituted in  connection  with any  controversy  arising out of this
Agreement or to interpret or enforce any rights hereunder,  the prevailing party
shall be entitled to recover from the losing party its attorneys',  paralegals',
accountants',  and other experts' fees and all other fees,  costs,  and expenses
actually  incurred  and  reasonably  necessary  in  connection   therewith,   as
determined by the court at trial or on any appeal or review,  in addition to all
other amounts provided by law.

          (g) Expenses  Related to this Agreement.  Neptune Society shall pay or
reimburse Greenleaf,  upon demand, all of Greenleaf's  reasonable  out-of-pocket
costs and expenses to the extent  incurred by Greenleaf in  connection  with the
negotiation,  preparation, review, carrying-out, amendment, waiver, refinancing,
restructuring,  reorganization  and enforcement of, and collection  pursuant to,
this  Agreement,  any  substitution  of security  under this  Agreement  and any
amendment of any financing  statement made or given pursuant to this  Agreement,
including,  without limitation,  Greenleaf's reasonable attorneys' fees; fees of
Greenleaf's  certified  public  accountants  and other outside  experts;  credit
reports;  appraisal  fees; lien searches;  escrow  charges;  recording or filing
fees;  insurance  premiums;  inspection,  due  diligence  and/or  audit  fees in
connection with the transactions contemplated in this Agreement.

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          (h)  Severability  Each paragraph of this Agreement shall be viewed as
separate  and  divisible,  and in the  event  that any  paragraph  is held to be
invalid, the remaining paragraphs shall continue in full force and effect.

          (i)  Counterparts:  This  Agreement  may be  executed in any number of
counterparts, each of which when delivered shall be deemed to be an original and
all of which  together  shall  constitute  one and the same  document.  A signed
facsimile or telefaxed copy of this Agreement shall be effectual and valid proof
of execution and delivery.

         [This space intentionally left blank - signature page follows]

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<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.

Wilhelm Mortuary, Inc.                      Western Management Services, L.L.C.

Per: /s/ David Schroeder                    Per:  /s/ Michael Ashe
     ------------------------                     -----------------------------
     Authorized Signatory                         Authorized Signatory

The Neptune Society, Inc.

Per: /s/ David Schroeder
    ------------------------
    Authorized Signatory

Neptune Society of America, Inc.

Per: /s/ David Schroeder
    ------------------------
    Authorized Signatory

Green Leaf Investors I, LLC, a California limited
liability company

By: The Apogee Management Company, Inc., a California
corporation, Manager

By: /s/ Tom Camp
    ----------------------------

Title:
    ----------------------------

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                                    EXHIBIT A

                        DESCRIPTION OF PORTLAND PROPERTY

Lots 1 and 2 and the East  one-half  of Lots 5, 6, 7 and 8,  Block 3,  CITY VIEW
PARK ADDITION TO THE CITY OF EAST PORTLAND,  in the City of Portland,  County of
Multnomah and State of Oregon.

SUBJECT, HOWEVER, TO THE FOLLOWING:

o    Taxes for the fiscal year 2001-2002 a lien not yet payable.

o    Trust Deed, including the terms and provisions thereof,  given to secure an
     indebtedness of $1,000,000.00
     Dated:            July 5, 2001
     Recorded:         July 18, 2000 as Fee No. 2000-098983
     Grantor:          Wilhelm Mortuary, Inc.
     Trustee:          Ticor Title Insurance Company
     Beneficiary:      Community Memorial Centers, L.L.C., an Oregon limited
                       liability company

o    Trust Deed, including the terms and provisions thereof,  given to secure an
     indebtedness of $1,575,000

     Dated:            August 6, 2001
     Recorded:         August 8, 2001 as Fee No. 2001-124418
     Grantor:          Wilhelm Mortuary, Inc.
     Trustee:          First American Title Insurance Company of Oregon
     Beneficiary:      Green Leaf Investors I, LLC

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                                    EXHIBIT B

                            ASSET PURCHASE AGREEMENT

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                                    EXHIBIT C

                         GREENLEAF CONVERTIBLE DEBENTURE

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<PAGE>

                                    EXHIBIT D

                             SUBORDINATION AGREEMENT

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                                    EXHIBIT E

                        FIRST RIGHT OF REFUSAL AGREEMENT

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                                    EXHIBIT F

                           WILHELM SECURITY AGREEMENT

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                                    EXHIBIT G

                ESTOPPEL AND INVESTOR REPRESENTATION CERTIFICATE

                                      -1-

<PAGE>

                                    EXHIBIT H

           CONSENT TO TRANSFER AND ASSUMPTION OF GREENLEAF TRUST DEED
                           AND SUBORDINATION AGREEMENT

                                      -1-
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                                    EXHIBIT I

                        LOAN PUT AGREEMENT ACKNOWLEDGMENT

                                      -1-EXHIBIT 10.39

THIS  DEBENTURE HAS NOT BEEN  REGISTERED  WITH THE UNITED STATES  SECURITIES AND
EXCHANGE  COMMISSION OR THE  SECURITIES  COMMISSION OF ANY STATE  PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER SECTION 4(2) OF THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES  ACT"). THIS DEBENTURE SHALL NOT CONSTITUTE AN OFFER TO
SELL NOR A SOLICITATION OF AN OFFER TO BUY THE DEBENTURE IN ANY  JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

THIS DEBENTURE MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT
TO AN  EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE  SECURITIES  ACT AND UNDER
APPLICABLE  STATE  SECURITIES  LAWS,  OR IN A  TRANSACTION  WHICH IS EXEMPT FROM
REGISTRATION  UNDER THE PROVISIONS OF THE SECURITIES ACT AND UNDER PROVISIONS OF
APPLICABLE STATE SECURITIES LAWS.

                            THE NEPTUNE SOCIETY, INC.

No. 001                                                               US$75,000

                 $75,000 CONVERTIBLE DEBENTURE DUE JULY 31, 2002

     THIS  DEBENTURE  is issued by The  Neptune  Society,  Inc.,  a  corporation
organized  and existing  under the laws of the State of Florida (the  "Company")
and is  designated  as its  US$75,000  Convertible  Debenture  Due July 31, 2002
("Debenture").

     FOR VALUE RECEIVED,  the Company promises to pay to Green Leaf Investors I,
LLC, a California  limited  liability  company,  or its  permitted  assigns (the
"Holder"),  the  principal  sum of  Seventy-five  Thousand  Dollars  and  00/100
(US$75,000)(the "Principal Amount") on July 31, 2002 (the "Maturity Date"). This
Debenture shall bear no interest on the unpaid Principal  Amount hereof,  except
in an Event of Default under the terms set forth in Section 1 hereto.

     This Debenture is subject to the following additional provisions:

     1. Interest and Payment in an Event of Default:  In an Event of Default, as
defined in Section 9 below,  unless such Event of Default shall have been waived
in writing by the Holder (which waiver shall not be deemed to be a waiver of any
subsequent  default),  (a) the Holder may demand payment of the Principal Amount
in cash, due immediately upon such demand,  and (b) interest shall accrue on the
Principal  Amount at the rate of  twelve  percent  (12%)  per  annum  based on a
360-day  year from  January  31,  2002 until the  Principal  Amount and  accrued
interest are paid in full.

                                       1
<PAGE>

     2.  Securities  Act  Compliance:  This Debenture has been issued subject to
investment  representations  of the  Holder  hereof  and may be  transferred  or
exchanged  only in compliance  with the  Securities Act of 1933, as amended (the
"Securities  Act"), and other applicable state and foreign  securities laws. The
Holder shall deliver  written notice to the Company of any proposed  transfer of
this Debenture.  In the event of any proposed  transfer of this  Debenture,  the
Company may  require,  prior to issuance of a new  Debenture in the name of such
other person, that it receive reasonable transfer documentation  including legal
opinions that the issuance of the Debenture in such other name does not and will
not cause a violation of the Securities  Act or any applicable  state or foreign
securities  laws.  Prior to due presentment for transfer of this Debenture,  the
Company  and any agent of the  Company  may treat the  person in whose name this
Debenture is duly  registered on the  Company's  records as the owner hereof for
the purpose of receiving  payment as herein provided and for all other purposes,
whether or not this  Debenture be overdue,  and neither the Company nor any such
agent shall be  affected  by notice to the  contrary.  This  Debenture  has been
executed and delivered  pursuant to the Note Extension and Assignment  Agreement
dated  effective as of January 31, 2002 between,  among others,  the Company and
the  original  Holder (the "Note  Extension  Agreement"),  and is subject to the
terms  and  conditions  of the Note  Extension  Agreement,  which  are,  by this
reference,  incorporated  herein and made a part hereof.  Capitalized terms used
and not  otherwise  defined  herein  shall have the  meanings set forth for such
terms in the Note Extension Agreement.

     3. Optional  Conversion:  The Holder of this Debenture is entitled,  at its
sole  option,  to convert at any time  after the date  hereof,  and prior to the
Maturity  Date, the Principal  Amount of this  Debenture or any portion  thereof
into the Company's $0.02 par value per share common stock ("Common Shares"),  at
a conversion  price for each Common Share equal to US$0.333333 per share subject
to certain  adjustments set forth in Section 6, below (the "Conversion  Price").
The Company  acknowledges  that the Common Shares  acquirable upon conversion of
this  Debenture are  "Registrable  Securities" as that term is defined under the
Piggyback  Registration  Agreement  dated  August 8, 2001,  by and  between  the
Company and Green Leaf Investors I, LLC.

     The Company will cause its transfer agent to issue the Common Shares to the
Holder of this Debenture  under the terms set forth in this Section 3 hereto and
addressed  to such  Holder at the last  address of such  Holder  provided to the
Company.  The  issuance  of the  Common  Shares  shall  constitute  a payment of
principal  hereunder and shall satisfy and discharge the liability for principal
on this Debenture with respect to such conversion.

     4. Conversion:

          (a) Conversion shall be effectuated by surrendering  this Debenture to
the Company (if such Conversion will convert all outstanding principal) together
with the form of conversion  notice attached hereto as Exhibit A (the "Notice of
Conversion"),  executed by the Holder of this Debenture evidencing such Holder's
intention to convert this Debenture or a specified  portion (as above  provided)
hereof, and accompanied, if required by the Company, by proper assignment hereof
in blank.  No  fraction of a share or scrip  representing  a fraction of a share
will be issued on conversion, but the number of shares issuable shall be rounded
up to the nearest  whole share.  The date on which Notice of Conversion is given
(the "Conversion Date") shall be deemed to be the date on which the Holder faxes
the Notice of Conversion duly

                                       2
<PAGE>

executed  to  the  Company,  with  conformation  of the  same.  All  Notices  of
Conversion shall be sent by fax and over-night commercial courier service on the
date of such notice to:

                         The Neptune Society, Inc.
                         3500 W. Olive, Suite 1430
                         Burbank, California  91505
                         Fax:  818-953-9844
                         Attn: Rodney Bagley, Chief Financial Officer

Certificates representing Common Shares upon conversion will be delivered to the
Holder  within three (3) Trading Days from the date the Notice of  Conversion is
delivered to the Company.  Delivery of shares upon  conversion  shall be made to
the address specified by the Holder in the Notice of Conversion.

          (b)  The  share  certificates  shall  bear  a  restrictive  legend  in
substantially the following form:

     THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
     AS AMENDED  ("SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY
     NOT BE SOLD,  TRANSFERRED  OR OTHERWISE  DISPOSED OF EXCEPT  PURSUANT TO AN
     EFFECTIVE  REGISTRATION  STATEMENT OR EXEMPTION FROM REGISTRATION UNDER THE
     FOREGOING LAWS. ACCORDINGLY,  THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED
     OR OTHERWISE  DISPOSED OF UNLESS (i) PURSUANT TO AN EFFECTIVE  REGISTRATION
     UNDER THE SECURITIES ACT OR (ii) IN A TRANSACTION  EXEMPT FROM REGISTRATION
     UNDER  THE  SECURITIES  ACT  AND  UNDER   PROVISIONS  OF  APPLICABLE  STATE
     SECURITIES LAWS.

     (c) The Holder  shall be  entitled  to exercise  its  conversion  privilege
notwithstanding the commencement of any case under 11 U.S.C.ss. 101 et seq. (the
"Bankruptcy  Code").  In the event the Company is a debtor under the  Bankruptcy
Code, the Company  hereby waives to the fullest  extent  permitted any rights to
relief it may have under 11 U.S.C.ss.362  in respect of the Holder's  conversion
privilege.

     5. Unconditional  Obligation: No provision of this Debenture shall alter or
impair the obligation of the Company,  which is absolute and  unconditional,  to
pay the Principal  Amount of, and interest on (if any), this Debenture as herein
prescribed. This Debenture is a direct obligation of the Company.

     6.  Anti-Dilution  Adjustment.  The  Conversion  Price  shall be subject to
adjustment from time to time as hereinafter provided in this Section 6:

          (a) If the Company at any time divides the  outstanding  Common Shares
into a greater  number of  shares  (whether  pursuant  to a stock  split,  stock
dividend or otherwise),  and conversely, if the outstanding shares of its Common
Shares are combined into a smaller  number of shares,  the  Conversion  Price in
effect   immediately   prior  to  such   division   or   combination   shall  be
proportionately  adjusted to reflect the  reduction  or increase in the value of
each such Common Share, subject to the proviso set forth in Section 6(d) below.

                                       3
<PAGE>

     (b) If any capital  reorganization or reclassification of the capital stock
of the  Company,  or  consolidation  or  merger  of  the  Company  with  another
corporation,  or the sale of all or  substantially  all of its assets to another
corporation shall be effected in such a way that holders of the Company's Common
Shares shall be entitled to receive stock,  securities or assets with respect to
or  in  exchange  for  such  common   stock,   then,  as  a  condition  of  such
reorganization,  reclassification,  consolidation,  merger or sale,  the  Holder
shall have the right to convert  and  receive  upon the basis and upon the terms
and  conditions  specified in this  Debenture  and in lieu of the Common  Shares
immediately  theretofore  acquirable and  receivable  upon the conversion of the
rights represented  hereby,  such shares of stock, other securities or assets as
would have been issued or delivered to the Holder if Holder had  converted  this
Debenture and had received such shares of common stock immediately prior to such
reorganization,  reclassification,  consolidation,  merger or sale.  The Company
shall not  effect any such  consolidation,  merger or sale  unless  prior to the
consummation  thereof  the  successor  corporation  (if other than the  Company)
resulting from such  consolidation or merger or the corporation  purchasing such
assets shall assume by written  instrument  executed and mailed to the Holder at
the last  address  of the  Holder  appearing  on the  books of the  Company  the
obligation  to deliver to the Holder such shares of stock,  securities or assets
as, in accordance with the foregoing  provisions,  the Holder may be entitled to
purchase.

     (c) If the Company  takes any other  action,  or if any other event occurs,
which does not come within the scope of the  provisions of Section 6(a) or 6(b),
but which should  result in an  adjustment  in the  Conversion  Price and/or the
number of shares  subject  to this  Debenture  in order to  fairly  protect  the
conversion  rights of the Holder,  an appropriate  adjustment in such conversion
rights shall be made by the Company, subject to the proviso set forth in Section
6(d) below.

     (d)  Upon  each  adjustment  of the  Conversion  Price,  the  Holder  shall
thereafter be entitled to purchase,  at the Conversion Price resulting from such
adjustment, the number of shares obtained by multiplying the Conversion Price in
effect  immediately prior to such adjustment by the number of shares purchasable
pursuant  hereto  immediately  prior to such adjustment and dividing the product
thereof  by the  Conversion  Price  resulting  from  such  adjustment.  Provided
however,  in no event shall the  Conversion  Price exceed  $0.333333  per Common
Share,  notwithstanding  a division,  combination,  stock split,  consolidation,
reorganization, reclassification or other transaction subject to this Section 6.

     (e) Upon any  adjustment of the  Conversion  Price,  the Company shall give
written notice thereof to the Holder stating the Conversion Price resulting from
such  adjustment  and the increase or decrease,  if any, in the number of shares
purchasable at such price upon the exercise of this Debenture,  setting forth in
reasonable  detail  the  method of  calculation  and the facts  upon  which such
calculation is based.

     7.  Jurisdiction:  This  Debenture  shall be governed by and  construed  in
accordance with the laws of the State of Oregon. Each of the parties consents to
the  jurisdiction  of the  federal  courts in Oregon or the state  courts of the
State of Oregon sitting in Portland,  Multnomah  County,  in connection with any
dispute  arising under this Debenture and hereby  waives,  to the maximum extent
permitted by law, any  objection,  including  any  objection  based on forum non
conveniens, to the bringing of any such proceeding in such jurisdictions.

                                       4
<PAGE>

     8. Taxes:  The Holder shall be solely  responsible  for any and all amounts
required  to be paid by Holder  under the  applicable  provisions  of the United
States income tax laws or other  applicable laws in connection with the issuance
of  this   Debenture,   and  Holder  shall  execute  and  deliver  all  required
documentation in connection therewith.

     9. Event of Default: The following shall constitute an "Event of Default":

          a.   Any of the  representations  or warranties made by the Company or
               by Wilhelm Mortuary, Inc., an Oregon corporation, wholly-owned by
               the Company,  herein or in the Note Extension  Agreement executed
               and delivered in connection  with the delivery of this  Debenture
               shall be false or misleading in any material  respect at the time
               made; or

          b.   The  Company  fails to issue  Common  Shares to the  Holder or to
               cause its Transfer  Agent to issue Common Shares upon exercise by
               the Holder of the  conversion  rights of the Holder in accordance
               with the terms of this  Debenture,  fails to transfer or to cause
               its Transfer Agent to transfer any  certificate for Common Shares
               issued to the Holder upon  conversion  of this  Debenture  as and
               when required by this  Debenture,  and such transfer is otherwise
               lawful,  and any such failure shall continue uncured for ten (10)
               business  days  after  written  notice  from the  Holder  of such
               failure; or

          c.   The  Company  shall fail to perform or observe,  in any  material
               respect,  any  other  covenant,   term,   provision,   condition,
               agreement or obligation of the Company under the Note  Conversion
               Agreement  or this  Debenture  and such  failure  shall  continue
               uncured  for a period of thirty  (30) days after  written  notice
               from the Holder of such failure; or

          d.   The Company  shall (1) admit in writing its  inability to pay its
               debts  generally as they mature;  (2) make an assignment  for the
               benefit of creditors or commence proceedings for its dissolution;
               or (3) apply for or  consent  to the  appointment  of a  trustee,
               liquidator or receiver for its or for a  substantial  part of its
               property or business; or

          e.   A trustee,  liquidator  or receiver  shall be  appointed  for the
               Company or for a  substantial  part of its  property  or business
               without its consent and shall not be discharged within sixty (60)
               days after such appointment; or

          f.   Any governmental agency or any court of competent jurisdiction at
               the instance of any  governmental  agency shall assume custody or
               control of the whole or any substantial portion of the properties
               or assets of the Company and shall not be dismissed  within sixty
               (60) days thereafter; or

          g.   Bankruptcy, reorganization, insolvency or liquidation proceedings
               or other  proceedings  for relief under any bankruptcy law or any
               law for the relief of debtors  shall be  instituted by or against
               the Company and, if instituted against the Company,  shall not be
               dismissed  within sixty (60) days after such  institution  or the
               Company shall by any action or answer approve of,

                                       5
<PAGE>

               consent to, or  acquiesce  in any such  proceedings  or admit the
               material allegations of, or default in answering a petition filed
               in any such proceeding

Then, or at any time  thereafter,  and in each and every such case,  unless such
Event of Default  shall have been waived in writing by the Holder  (which waiver
shall not be deemed to be a waiver of any  subsequent  default) at the option of
the Holder and in the Holder's  sole  discretion,  the Holder may consider  this
Debenture  immediately due and payable.  In an Event of Default,  the Holder may
immediately  enforce any and all of the Holder's  rights and  remedies  provided
herein or any other rights or remedies afforded by law.

     10. No Shareholder  Rights:  Nothing  contained in this Debenture  shall be
construed  as  conferring  upon  the  Holder  the  right  to vote or to  receive
dividends  or to consent or receive  notice as a  shareholder  in respect of any
meeting  of  shareholders  or any  rights  whatsoever  as a  shareholder  of the
Company, unless and to the extent converted in accordance with the terms hereof.

     11.  Notices:  Any notice,  demand or request  required or  permitted to be
given by the Company or the Holder pursuant to the terms of this Debenture shall
be in writing  and shall be deemed  given (i) when  delivered  personally  or by
verifiable facsimile transmission (with a hard copy to follow), (ii) on the next
Business  Day after  timely  delivery  to an  overnight  courier or (iii) on the
Business Day  actually  received if deposited  in the U.S.  mail  (certified  or
registered  mail,  return  receipt  requested,  postage  prepaid),  addressed as
follows:

            If to the Company:

            The Neptune Society, Inc.
            3500 W. Olive, Suite 1430
            Burbank, California  91505
            Attn:  Rodney Bagley, Chief Financial Officer

            with a copy to:

            Dorsey & Whitney LLP
            US Bank Building Center
            1420 5th Avenue - Suite 3400
            Seattle, WA 98101
            Attn:    Randal R. Jones
            Tel:     (206) 903-8814
            Fax:     (206) 903-8820

and if to the Holder,  at such  address as the Holder shall have  furnished  the
Company in writing.

                                       6
<PAGE>

     IN WITNESS  WHEREOF,  the  Company  has caused  this  Debenture  to be duly
executed by an officer thereunto duly authorized.

Dated:     March 8th, 2002

                                    The Neptune Society, Inc.

                                    By:
                                        ---------------------------------------
                                        Name:  Marco Markin
                                        Title:  Chief Executive Officer

Attest:

-----------------------

                                       7
<PAGE>

                                    EXHIBIT A

                              NOTICE OF CONVERSION

   (To be Executed by the Registered Holder in order to Convert the Debenture)

     The undersigned hereby irrevocably elects to convert $ ________________  of
the  principal  amount  of  Debenture  No.  001 of The  Neptune  Society,  Inc.,
US$75,000  Convertible  Debenture Due July 31, 2002, into Shares of Common Stock
("Common Shares") of The Neptune Society,  Inc. (the "Company") according to the
conditions hereof, as of the date written below.

In connection  with the exercise,  the  undersigned  (the  "Holder")  covenants,
represents and warrants to the Company that:

     1.   Holder 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 Common  Shares and it is able to bear the  economic
          risk of loss of its entire investment;

     2.   the Company has provided to Holder the  opportunity  to ask  questions
          and  receive  answers  concerning  the  terms  and  conditions  of the
          conversion  and Holder has had access to such  information  concerning
          the  Company as Holder has  considered  necessary  or  appropriate  in
          connection  with  Holder's  investment  decision to acquire the Common
          Shares;

     3.   Holder is acquiring  the Common  Shares for Holder's own account,  for
          investment   purposes  only  and  not  with  a  view  to  any  resale,
          distribution or other disposition of the common shares in violation of
          the United States securities laws;

     4.   unless   otherwise   notified  by  the  Company  in  writing,   Holder
          understands  that  the  Common  Shares  have  not been and will not be
          registered under the United States  Securities Act of 1933, as amended
          (the  "Securities  Act") or the  securities  laws of any  state of the
          United  States and that the  conversion  contemplated  hereby is being
          made in reliance on an exemption from such registration requirements;

     5.   the Holder  acknowledges  and agrees with the Company that the Company
          shall refuse to register  any  transfer of the Common  Shares not made
          pursuant to  registration  under the Securities Act, or pursuant to an
          available exemption from registration under the Securities Act;

     6.   if Holder  decides to offer,  sell or  otherwise  transfer  any of the
          Common Shares,  Holder will not offer, sell or otherwise  transfer any
          of such Common Shares directly or indirectly, unless:

          (i)  the sale is to the Company;

                                       8
<PAGE>

          (ii) the sale is made pursuant to an effective  registration statement
               under the Securities Act;

          (iii)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

          (iv) the Common Shares 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 Holder  has prior to such sale  furnished  to the  Company an
               opinion of counsel reasonably satisfactory to the Company;

     8.   the  certificates  representing  the Common  Shares 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; and

     9.   Holder  consents to the Company making an appropriate  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.

Dated this ______ day of __________________, 20 ____.

                                  ---------------------------------------------
                                  (Name of Holder - please print)

                                  By:
                                      -----------------------------------------
                                      (Authorized Signature)

                                      -----------------------------------------
                                      (Official Capacity or Title -
                                      please print)

                                      -----------------------------------------
                                      (Please print name of individual
                                       whose signature appears above if
                                       different than the name of the
                                       Holder printed above)

                                       9
<PAGE>

Number of Shares Issuable
upon this conversion:
                        --------------------------------------
Name:
      --------------------------------------------------------

Address:
         -----------------------------------------------------

Phone:                              Facsimile:
      ---------------------                   ----------------

                                       10

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