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                                                                   EXHIBIT 4(c)

                                 FORM OF DEBENTURE

THESE SECURITIES (INCLUDING ANY UNDERLYING SECURITIES) HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN
OPINION OF COUNSEL OR OTHER EVIDENCE REASONABLY SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION SHALL NO LONGER BE REQUIRED.


                                CLEARWORKS.NET, INC.
                             6% CONVERTIBLE DEBENTURE

$3,000,000                                                     DECEMBER 13, 1999
New York, New York

          1.   CONSIDERATION.  FOR VALUE RECEIVED, CLEARWORKS.NET, INC. a
Delaware corporation (the "undersigned" or the "Company"), hereby promises to
pay to the order of Candlelight Investors LLC, at its offices located at One
World Trade Center, Suite #4563, New York, New York 10048 or at such other
place as the holder hereof (the "holder" or the "Registered Holder") shall
designate to the undersigned in writing, in lawful money of the United States of
America or in New York Clearing House Funds, the principal amount of Three
Million Dollars on the Maturity Date (as defined below).  The undersigned
promises to pay the said principal sum in accordance with the terms of this
Debenture (as defined below).

          2.   PAYMENT.   On December 13, 2001 (the "Maturity Date") the
undersigned shall pay the holder all unpaid principal and interest, if any, on
this Debenture.  At the Company's option, any interest payment required to be
paid on this Debenture may be made in the form of the issuance to the holder of
the Company's common stock, par value $.001 per share (the "Common Stock"), with
the number of shares of such Common Stock to be payable in lieu of such interest
payments to be determined in accordance with the provisions of Section 6, as if
such interest payment were a portion of the principal amount of the Debenture to
be converted into Common Stock.

          Principal and interest shall be payable at the most recent address as
the Registered Holder shall have designated to the Company in writing.  No
payment of the principal of this Debenture may be made prior to the Maturity
Date by the Company without the consent of the Registered Holder, except as
otherwise provided herein.

          3.   OVERDUE INTEREST PAYMENTS.  Interest on the indebtedness
evidenced by

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this Debenture after default or maturity accelerated or otherwise shall be
due and payable at the rate of ten (10%) percent per annum, subject to the
limitations of applicable law.

          4.   HOLIDAYS.  If this Debenture or any installment hereof becomes
due and payable on a Saturday, Sunday or public holiday under the laws of the
State of New York and the State of Texas, the due date hereof shall be extended
to the next succeeding business day and interest shall be payable at the rate of
six (6%) percent per annum during such extension.  All payments received by the
holder shall be applied first to the payment of all accrued interest payable
hereunder.

          5.   ISSUANCE OF DEBENTURES.  This Debenture has been issued by the
Company pursuant to the authorization of the Board of Directors of the Company
(the "Board") and issued pursuant to a Securities Purchase Agreement, dated as
of December 13, 1999, by and between the Company and the Purchaser identified
therein (the "Securities Purchase Agreement").  Pursuant to the Securities
Purchase Agreement, the Company issued $3,000,000 principal amount of the
Debentures and warrants to purchase (the "Warrants") 210,000 shares of the
Company's Common Stock.  The Securities Purchase Agreement contains certain
additional terms that are binding upon the Company and each Registered Holder of
the Debentures.  A copy of the Securities Purchase Agreement may be obtained by
any registered holder of the Debentures from the Company upon written request.
Capitalized terms used but not defined herein shall have the meanings set forth
in the Securities Purchase Agreement, including the Exhibits thereto. This
Debenture  and the other 6% Convertible Debentures due 2001 issued by the
Company pursuant to the terms of the Securities Purchase Agreement, together
with any debentures from time to time issued in replacement thereof, whether
pursuant to transfer and assignment, partial conversion thereof or otherwise,
are collectively referred to herein as the "Debentures."

          6.   CONVERSION.  (a) Subject to and in compliance with the provisions
hereof, the holder shall have the right to convert all or a portion of the
outstanding principal amount of this Debenture into such number of shares of
Common Stock (the shares of Common Stock issuable upon conversion of, and
issuable in lieu of interest payments on, this Debenture, if any, are
hereinafter referred to as the "Conversion Shares") as shall equal the quotient
obtained by dividing (x) the principal amount of this Debenture to be converted
by (y) the Applicable Conversion Price (as hereinafter defined) and by surrender
of this Debenture, such surrender to be made in the manner provided herein.

               (b)  For purposes hereof the term "Applicable Conversion Price"
shall mean the lesser of: (i) three dollars thirty cents ($3.30) (the "Fixed
Price") or (ii) the product obtained by multiplying (x) the Average Lowest
Closing Price (as hereinafter defined) by (y) .92; provided, however, if on the
Notice Date (as defined below) the closing bid price for the Common Stock is
less than one dollar and fifty cent ($1.50) per share, the Applicable Conversion
Price shall be the Average Lowest Closing Price.

               For purposes hereof the "Average Lowest Closing Price" with
respect to any conversion elected to be made by the holder shall be the average
of the three (3) lowest daily


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closing bid prices (each such price is referred to individually as a
"Floating Reference Price" and, collectively, as the "Floating Reference
Prices") during the thirty (30) trading days immediately preceding the date
on which the holder gives the Company a written notice of the holder's
election to convert outstanding principal of this Debenture (the "Notice
Date"). The closing bid price on any trading day shall be (a) if the Common
Stock is then listed or quoted on either the NASD Bulletin Board, the NASDAQ
SmallCap Market or the NASDAQ National Market, the reported closing bid price
for the Common Stock as reported by Bloomberg, L.P. ("Bloomberg") or The Wall
Street Journal (the "Journal") or on such day (or, if not so reported, as
otherwise reported by The NASDAQ Small Cap Market, NASDAQ National Market or
the NASD Bulletin Board, as the case may be), (b) if the Common Stock is
listed on either the American Stock Exchange or New York Stock Exchange, the
closing bid price for the Common Stock on such exchange on such day as
reported by Bloomberg or the Journal or (c) if neither (a) nor (b) apply but
the Common Stock is quoted in the over-the-counter market, another recognized
exchange, or on the pink sheets, the last reported bid price thereof on such
date.  If the prices of the Common Stock cannot be calculated on such date on
any of the foregoing bases, such prices on such date shall be the fair market
value as mutually determined by the Company and the Registered Holder for
which the calculation is required in order to determine the Applicable
Conversion Price; PROVIDED, HOWEVER, that if the Company and the Registered
Holder are unable to mutually determine the fair market value, such fair
market value shall be determined by a nationally recognized investment
banking firm or firm of independent chartered accountants of recognized
standing (which firm may be the firm that regularly examines the financial
statements of the Company) (an "Appraiser") selected in good faith by the
Board and holders of a majority in interest of the Debentures. "Trading day"
shall mean any day on which the Company's Common Stock is traded for any
period on the principal securities exchange or other securities market on
which the Common Stock is then being traded.

               (c)  If, during any period following December 13, 1999 (the
"Original Issue Date"), as a result of the occurrence of any of the events set
forth in Section 3(f) or 3(g) of the Registration Rights Agreement, dated as of
December 13, 1999, by and between the Company and the Purchasers set forth
therein (the "Registration Rights Agreement"), the Purchasers set forth therein
are not able to sell shares of Common Stock issuable upon conversion of, or in
lieu of interest payments on, this Debenture pursuant to a registration
statement filed pursuant to such agreement, the Registered Holder shall have the
right, for any purpose under this Debenture during such period and thereafter,
to designate as the Applicable Conversion Price any Conversion Price that would
have been applicable during such period had the Registered Holder delivered a
Notice of Conversion with respect to any portion of this Debenture.  "Conversion
Date" shall have the meaning given such term in Section 5(b) of the Securities
Purchase Agreement.

               (d)  The Registered Holder shall convert this Debenture in
accordance with Section 5(b) of the Securities Purchase Agreement.  If the
Company fails to deliver to the holder a certificate or certificates for shares
of Common Stock in the period set forth in the Securities Purchase Agreement,
the Company shall make certain payments to the holder in accordance with Section
5(d) of the Securities Purchase Agreement.


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               (e)  If the entire outstanding principal amount of this Debenture
is not converted, the Company shall also issue and deliver to such holder a new
Debenture of like tenor in the principal amount equal to the principal which was
not converted and dated the Original Issue Date. Each conversion shall be deemed
to have been effected immediately prior to the close of business on the date on
which a Notice of Conversion shall have been delivered as aforesaid, and the
person or persons in whose name or names any certificate of certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares represented thereby at
such time on such date.

               (f)  All shares of Common Stock delivered upon conversion of, or
in lieu of interest payments on, this Debenture will, upon delivery, be duly
authorized, validly issued and fully paid and nonassessable.

               (g)  No fractional shares of Common Stock shall be issued upon
conversion of, or in lieu of interest payments on, this Debenture. Instead of
any fractional share of Common Stock which would otherwise be deliverable upon
the conversion of, or in lieu of interest  payments on, the principal of this
Debenture, the Company shall pay to the holder an amount in cash (computed to
the nearest cent) equal to the Average Closing Price multiplied by the fraction
of a share of Common Stock represented by such fractional interest.

               (h)  The issuance of certificates for shares of Common Stock upon
any conversion of, or in lieu of interest payments on, this Debenture shall be
made without charge to the payee hereof for any tax or other expense in respect
to the issuance of such certificates, all of which taxes and expenses shall be
paid by the Company, and such certificates shall be issued only in the name of
the registered holder of this Debenture.

               (i)  Notwithstanding anything herein to the contrary, at no
time shall the Registered Holder (including its officers, directors and
affiliates) maintain in the aggregate beneficial ownership (as defined for
purposes of Section 16 of the Securities Exchange Act of 1934, as amended) of
shares of Common Stock in excess of 4.9% of the Company's outstanding Common
Stock and accordingly, the Registered Holder may only convert this Debenture
up to the point where its aggregate beneficial ownership (as defined for
purposes of Section 16 of the Securities Exchange Act of 1934, as amended) of
shares of Common Stock is equal or less than 4.9% of the Company's
outstanding Common Stock.

          7.   REDEMPTION BY COMPANY.  (a) If, after the Original Issue Date,
there shall occur a Change in Control of the Company (as defined below), then,
at the option of the Registered Holder, the Company shall, on the effective date
of and subject to the consummation of such Change in Control, redeem this
Debenture for cash from the Registered Holder at a redemption price equal to
125% of the aggregate principal and accrued interest outstanding under this
Debenture.  Nothing in this subsection shall limit the Registered Holder's right
to convert this Debenture on or prior to such Change in Control.  For purposes
hereof, a "Change in Control" shall be deemed to have occurred if (A) any person
or group (as defined for purposes of Regulation 13D of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) shall


                                       4
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have become the beneficial owner or owners of more than 50% of the
outstanding voting stock of the Company; (B) there shall have occurred a
merger or consolidation in which the Company or an affiliate of the Company
is not the survivor or in which holders of the Common Stock of the Company
shall have become entitled to receive cash, securities of the Company other
than voting common stock or securities of any other person; (C) at any time
persons constituting the Existing Board of Directors cease for any reason
whatsoever to constitute at least a majority of the members of the Board of
Directors of the Company; or (D) there shall have occurred a sale of all or
substantially all the assets of the Company.  For purposes hereof, the term
"Existing Board of Directors" shall mean the persons constituting the Board
of Directors of the Company on the date hereof, together with each new
director whose election, or nomination for election by the Company's
stockholders is approved by a vote of the majority of the members of the
Existing Board of Directors who are in office immediately prior to the
election or nomination of such director.

          (b)  In the event that the Company is subject to Nasdaq Rule 4310 or
4460, if  prior to the time the stockholders of the Company shall have approved
the transactions contemplated by the Securities Purchase Agreement as provided
in clause (B) below, the number of shares of Common Stock issued (i) upon
conversion of the Debentures and (ii) in lieu of interest payments on the
Debentures, if any, (collectively, the "Conversion Shares"), shall be equal to
or more than 19.9% of the number of the shares of capital stock outstanding on
the Initial Closing Date (a "Redemption Event"), the Company shall have the
option to (A) redeem the outstanding principal amount of this Debenture at the
redemption price of one hundred twenty-five percent (125%) of the principal
amount hereof plus accrued interest on this Debenture, if any, or (B) call a
special meeting of its stockholders for the purpose of approving the
transactions contemplated by the Securities Purchase Agreement, including the
issuance of the Debentures and Warrants on the terms set forth therein, together
with any other approvals that shall be required so as to cause the transactions
contemplated by the Securities Purchase Agreement to remain in compliance with
the Rules and Regulations of Nasdaq (including Rule 4460 of Nasdaq's
Non-Qualitative Designation Criteria on the occurrence of a Redemption Event;
such approvals are referred to herein as the "Required Approvals").  The
Company shall determine within five (5) business days following the
occurrence of any Redemption Event which of such actions it shall take, and
shall promptly furnish notice to the Purchaser as to such determination,
including, if applicable, a notice of redemption.  If the Company does not
make a determination within such five (5) day period, this Debenture shall be
redeemed the first business day following the end of such five (5) day period,
if any, at the redemption price of one hundred twenty-five percent (125%) of
the principal amount hereof plus accrued interest on the Debenture, if any.

          (c)  If the Company elects to call a special meeting of its
stockholders pursuant to Section 6(b) to obtain the Required Approvals, the
Company shall obtain such Required Approvals within thirty (30) days of the
distribution of the notice described in such Section (such thirty (30) day
period is referred to herein as an "Approval Period").  If such approval is not
obtained within the Approval Period, this Debenture shall be redeemed on the
first business day following the Approval Period at the redemption price of one
hundred twenty-five percent (125%) of the principal amount hereof plus accrued
interest on the Debenture, if any.


                                       5
<PAGE>

               (d)  If the Company fails to have a registration statement
effective within one hundred fifty (150) days of the date of the Stock Purchase
Agreement, the Company shall pay a cash penalty equal to 2% of the outstanding
Debentures per month.

               (e)  If the Company shall be required to redeem the Debentures
pursuant to any of the terms or conditions set forth in this Section 7, the
Company shall remit the redemption price to the Registered Holder thereof
immediately upon such redemption.

     8.   COVENANTS.

               (a)  The Company will pay all taxes, assessments and governmental
charges lawfully levied or assessed upon it, its property and any part thereof,
and upon its income for profits, and any part thereof, before the same shall
become delinquent; and will duly observe, and conform to, all lawful
requirements of any governmental authority relative to any of its property, and
all covenants, terms and conditions upon or under which any of its property is
held; provided that nothing in this Section shall require the Company to observe
or conform to any requirement of governmental authority so long as the validity
thereof shall be contested in good faith by appropriate proceedings or to pay
any such tax, assessment or governmental charges so long as the validity thereof
shall be contested in good faith by appropriate proceedings and adequate
reserves with respect thereto shall have been set aside on the books of the
Company.

               (b)  Subject to the other provisions of this Debenture, the
Company at all times will maintain its corporate existence and right to carry on
its business and will duly procure all necessary renewals and extensions thereof
and use its best efforts to maintain, preserve and renew all of its rights,
powers, privileges and franchises; PROVIDED, HOWEVER, that nothing herein
contained shall be construed to prevent the Company from ceasing or omitting to
exercise any rights, powers, privileges or franchises which, in the judgment of
the Board, can no longer be profitably exercised, nor to prevent the
consolidation, merger or liquidation of any subsidiary or subsidiaries of the
Company with or into the Company.

               (c)  The Company will at no time close its stock transfer books
against the transfer of any shares of Common Stock issued or issuable upon the
conversion of, or in lieu of interest payments on, the Debentures, in any manner
which interferes with the timely conversion of such Debentures.

               (d)  As used in this Debenture, the term "Common Stock" shall
include all stock of any class or classes (however designated) of the Company,
authorized on or after the date hereof, the holders of which shall have the
right, without limitation as to amount, either to all or to a share of the
balance of current dividends and liquidating dividends after the payment of
dividends and distributions on any shares entitled to preference, and the
holders of which shall ordinarily be entitled to vote for the election of the
directors of the Company.  The Company shall not, without the prior written
consent of the Registered Holder of this Debenture, issue any shares of its
capital stock, other than as permitted by Section 4(i) of the Securities
Purchase Agreement, in exchange for Debentures as provided hereunder or upon
exercise of the Warrants in accordance with the terms thereof.


                                       6
<PAGE>

               (e)  The Company will not, by amendment of its Articles of
Incorporation or By-laws or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder or
pursuant to the Securities Purchase Agreement by the Company, and will at all
times assist in good faith in the carrying out of all the provisions of this
Debenture and the Securities Purchase Agreement and in the taking of all such
action as may be necessary or appropriate in order to protect the conversion
rights of the Registered Holders of the Debentures against impairment.

          (f)  In the event of any taking by the Company of a record of the
holders of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend (other than a cash dividend) or
other distribution, any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any other right, the Company shall mail to each Registered Holder of the
Debentures, at least ten (10) days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right.

          9.   LIMITATION ON CERTAIN CORPORATE ACTS.  The Company hereby
covenants and agrees that upon any consolidation or merger or upon the transfer
of all or substantially all of the property or assets of the Company, the due
and punctual payment of the principal and interest on all the Debentures
according to their tenor and the due and punctual performance and observance of
all the terms, covenants and conditions of the Debentures and the Securities
Purchase Agreement to be kept and performed by the Company shall be expressly
assumed by the corporation formed by such consolidation, or into which the
Company shall have merged or by the purchaser of such property or assets; and
such assumption shall be an express condition of such merger or consolidation
agreement or agreement for the transfer of property or assets.

          10.  EVENTS OF DEFAULT.  In case one or more of the following events
of default shall have occurred:

               (a)  default in the due and punctual payment of interest upon or
principal of any of the Debentures as and when the same becomes due and payable
either at maturity or otherwise; or

               (b)  failure to deliver the shares of Common Stock required to be
delivered upon conversion of, or in lieu of interest payments on, the
Debentures in the manner and at the time required by Section 5 of the Securities
Purchase Agreement; or

               (c)  failure of the Company to have authorized the number of
shares of Common Stock issuable upon conversion of, or in lieu of interest
payments on, the Debentures, or exercise of the Warrants; or


                                       7
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               (d)  failure on the part of the Company to duly observe or
perform any of its other covenants or agreements contained in, or to cure any
material breach in a material representation or covenant contained in the
Securities Purchase Agreement, the Debentures or the Registration Rights
Agreement for a period of ten (10) days after the date on which written notice
of such failure or breach requiring the same to be remedied has been given by a
Registered Holder to the Company; or

               (e)  a decree or order by a court having jurisdiction has been
entered adjudging the Company (or any Material Subsidiary (as herein after
defined))  bankrupt or insolvent, or approving a petition seeking reorganization
of the Company (or any Material Subsidiary) under any applicable bankruptcy law
and such decree or order has continued undischarged or unstayed for a period of
thirty (30) days; or a decree or order of a court having jurisdiction for the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency of the Company (or any Material Subsidiary) or of all or
substantially all of its property, or for the winding-up or liquidation of its
affairs, has been entered, and has remained in force undischarged or unstayed
for a period of thirty (30) days; or

               (f)  the Company (or any Material Subsidiary) institutes
proceedings to be adjudicated a voluntary bankrupt, or consents to the filing of
a bankruptcy proceeding against it, or files a petition or answer or consent
seeking reorganization under applicable law, or consents to the filing of any
such petition or to the appointment of a receiver or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of all or substantially all of its
property, or makes an assignment for the benefit of creditors, or admits in
writing its inability to pay its debts generally as they become due; or if the
Company (or any Material Subsidiary) shall suffer any writ of attachment or
execution or any similar process to be issued or levied against it or any
significant part of its property which is not released, stayed, bonded or
vacated within thirty (30) days after its issue or levy; or if the Company (or
any Material Subsidiary) takes corporate action in furtherance of any of the
aforesaid purposes or conditions; or

               (g)  if any default shall occur under any indenture, mortgage,
agreement, instrument or commitment evidencing or under which there is at the
time outstanding any indebtedness of the Company (or a Material Subsidiary), in
excess of $100,000, or which results in such indebtedness, in an aggregate
amount (with other defaulted indebtedness) in excess of $100,000 becoming due
and payable prior to its due date and if such indenture or instrument so
requires, the holder or holders thereof (or a trustee on their behalf) shall
have declared such indebtedness due and payable, provided, however, the
foregoing shall not be deemed to be an event of default while the Company is
diligently contesting such default in good faith and by appropriate proceedings
so long as (i) adequate book reserves have been established with respect thereto
in accordance with U.S. generally accepted accounting principles and (ii) until
such time that there is a foreclosure or acceleration of indebtedness under such
indenture mortgage, agreement, instrument or commitment or an action which
impairs the Company or the assets of the Company or the rights of the holder
under this Debenture; or

               (h)  if any of the Company or its subsidiaries shall default in
the observance or performance of any material term or provision of a material
agreement to which it


                                       8
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is a party or by which it is bound, and such default is not waived or cured
within the applicable grace period , provided, however, the foregoing shall
not be deemed to be an event of default while the Company is diligently
contesting such default in good faith and by appropriate proceedings so long
as (i) adequate book reserves have been established with respect thereto in
accordance with U.S. generally accepted accounting principles and (ii) until
such time that there is a lien, foreclosure or acceleration of indebtedness
under such material, agreement which impairs the Company or the assets of the
Company or the rights of the holder under this Debenture; or

               (i)  if a final judgment which, either alone or together with
other outstanding final judgments against the Company and its subsidiaries,
exceeds an aggregate of $100,000 shall be rendered against the Company (or any
Material Subsidiary) and such judgment shall have continued undischarged or
unstayed for thirty (30) days after entry thereof;

then, in each and every such case other than those specified in clauses (e) and
(f) above, so long as such event of default has not been remedied and unless the
principal of all the Debentures has already become due and payable, the holder
of this Debenture, by notice in writing to the Company, may declare the
principal of this Debenture and the interest accrued thereon, if not already due
and payable, to be due and payable immediately, and upon any such declaration
the same shall become and shall be immediately due and payable, anything herein
contained to the contrary notwithstanding and, upon the occurrence of the events
specified in clauses (e) and (f) above, such principal and interest shall
automatically become and shall be due and payable immediately without any action
on the part of any holder of Debentures, anything herein contained to the
contrary notwithstanding.

               For purposes of this Section 10, "Material Subsidiary" means any
subsidiary with respect to which the Company has directly or indirectly
invested, loaned, advanced or guaranteed the obligations of, an aggregate amount
exceeding fifteen percent (15%) of the Company's gross assets, or the Company's
proportionate share of the assets or net income of which (based on the
subsidiary's most recent financial statements) exceed fifteen percent (15%) of
the Company's gross assets or net income, respectively, or the gross revenues of
which exceed fifteen percent (15%) of the gross revenues of the Company based
upon the most recent financial statements of such subsidiary and the Company.

          11.  TRANSFERABILITY.  This Debenture is transferable, in whole or in
part, only in accordance with the terms of Section 5 of the Securities Purchase
Agreement.  The Registered Holder may submit a written request, in person or by
his duly authorized attorney, for a transfer of this Debenture on the register
of the Company maintained at its principal offices.  The Company may deem and
treat the person in whose name this Debenture is registered as the absolute
owner hereof, for the purpose of receiving payment of the principal thereof and
interest hereon, whether or not the same shall be overdue, and for all other
purposes whatsoever, including but without limitation, the giving of any written
notices required hereunder, and the Company shall not be affected by any notice
to the contrary


                                       9
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          12.  STOCK SPLITS; DIVIDENDS; ADJUSTMENTS; REORGANIZATIONS.

               (a)  If the Company, at any time after the Original Issue Date,
(i) shall pay a stock dividend or otherwise make a distribution or distributions
on any equity securities (including investments or securities convertible into
or exchangeable for such equity securities) in shares of Common Stock, (ii)
issue any securities payable in shares of Common Stock, (iii) subdivide the
outstanding shares of Common Stock into a larger number of shares, (iv) combine
outstanding shares of Common Stock into a smaller number of shares, the Fixed
Price and each Floating Reference Price prior to the date of any such occurrence
(collectively, the "Reference Prices") shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
before such event and of which the denominator shall be the number of shares of
Common Stock outstanding after such event.  Any adjustment made pursuant to this
Section 12(a) shall become effective immediately after the record date for the
determination of shareholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of
an issuance, a subdivision or a combination.

               (b)  In the event that the Company, at any time after the
Original Issue Date while the Debentures are outstanding, issues or sells any
Common Stock or securities which are convertible into or exchangeable for its
Common Stock or any convertible or exchangeable securities, or any warrants or
other rights to subscribe for or to purchase or any options for the purchase of
its Common Stock or any such convertible or exchangeable securities (other than
shares or options issued pursuant to the Company's employee or director option
plans or shares issued upon exercise of options, warrants or rights outstanding
on the date of the Securities Purchase Agreement and listed in the Company's
most recent periodic report filed under the Exchange Act) at an effective
purchase price per share which is less than the Fixed Price then in effect, then
the Fixed Price in effect immediately prior to such issue or sale shall be
reduced effective concurrently with such issue or sale to an amount determined
by multiplying such Fixed Price then in effect by a fraction, (x) the numerator
of which shall be the sum of (1) the number of shares of Common Stock
outstanding immediately prior to such issue or sale, plus (2) the number of
shares of Common Stock which the aggregate consideration received by the Company
for such additional shares would purchase at such Fixed Price then in effect;
and (y) the denominator of which shall be the number of shares of Common Stock
of the Company outstanding immediately after such issue or sale.

               For the purposes of the foregoing adjustment, in the case of the
issuance of any convertible or exchangeable securities, warrants, options or
other rights to subscribe for or to purchase or exchange for, shares of Common
Stock ("Exchangeable Securities"),  the maximum number of shares of Common Stock
issuable upon exercise, conversion or exchange of such Exchangeable Securities
shall be deemed to be outstanding, provided that no further adjustment shall be
made upon the actual issuance of Common Stock upon exercise, exchange or
conversion of such Exchangeable Securities.

               (c)  If the Company, at any time after the Original Issue Date
while the Debentures are outstanding, shall distribute to all holders of Shares
of Common Stock evidences of its indebtedness or assets or rights or warrants to
subscribe for or purchase any security


                                      10
<PAGE>

(excluding those referred to in Section 12(b) above) then in each such case
the Fixed Price thereafter shall be determined by multiplying the Fixed Price
in effect immediately prior to the record date fixed for determination of
shareholders entitled to receive such distribution by a fraction of which the
denominator shall be the Market Price for Shares of Common Stock (as defined
below) determined as of the record date mentioned above, and of which the
numerator shall be such Market Price for Shares of Common Stock on such
record date less the then fair market value at such record date of the
portion of such assets or evidences of indebtedness so distributed applicable
to one outstanding share of Common Stock as determined by the Board in good
faith; PROVIDED, however that in the event of a distribution exceeding 25% of
the net assets of the Company, such fair market value shall be determined by
an Appraiser selected in good faith by the Board and holders of a majority in
interest of the Debentures.  In either case the adjustments shall be
described in a statement provided to all holders of Debentures of the portion
of assets or evidences of indebtedness so distributed or such subscription
rights applicable to one outstanding share of Common Stock.  Such adjustment
shall be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above.

               "Market Price for Shares of Common Stock" shall mean the price of
one share of Common Stock determined as follows:

                    (i)    If the Common Stock is then listed or quoted on
either the NASD Bulletin Board, the NASDAQ SmallCap Market or the NASDAQ
National Market, the reported closing bid price for the Common Stock as reported
by Bloomberg or the Journal on such day (or, if not so reported, as otherwise
reported by The NASDAQ Small Cap Market, NASDAQ National Market or the NASD
Bulletin Board, as the case may be);

                    (ii)   If the Common Stock is listed on the New York Stock
Exchange or the American Stock Exchange, the closing bid price for the Common
Stock on such exchange on such day as reported by Bloomberg or the Journal;

                    (iii)  If neither (i) nor (ii) apply but the Common Stock is
quoted in the over-the-counter market, another recognized exchange or on the
pink sheets, the last reported bid price thereof on such date; and

                    (iv)   If neither clause (i), (ii) or (iii) above applies,
the market value as determined by a nationally recognized investment banking
firm or other nationally recognized financial advisor retained by the Company
for such purpose, taking into consideration, among other factors, the earnings
history, book value and prospects for the Company, and the prices at which
shares of Common Stock recently have been traded.  Such determination shall be
conclusive and binding on all persons.

               (d)  (1) In the event that at any time or from time to time after
the Original Issue Date,  the Common Stock issuable upon the conversion of, or
in lieu of interest payments on,  the Debentures is changed into the same or a
different number of shares of any class or classes of stock, whether by merger,
consolidation, recapitalization, reclassification or


                                      11
<PAGE>

otherwise (other than a subdivision or combination of shares or stock
dividend or reorganization provided for elsewhere in this Paragraph 12), then
and as a condition to each such event provision shall be made in a manner
reasonably acceptable to the holders of Debentures so that each holder of
Debentures shall have the right thereafter to convert such Debenture into,
and to receive in lieu of interest payments, the kind of stock receivable
upon such recapitalization, reclassification or other change by holders of
shares of Common Stock, all subject to further adjustment as provided herein.
In such event, the formulae set forth herein for conversion and redemption
shall be equitably adjusted to reflect such change in number of shares or, if
shares of a new class of stock are issued, to reflect the market price of the
class or classes of stock (applying the same factors used in determining the
Fixed Price) issued in connection with the above described transaction.

                    (2)  If at any time or from time to time after the Initial
Closing Date there is a capital reorganization of the Common Stock, including by
way of a sale of all or substantially all of the assets of the Company (other
than a recapitalization, subdivision, combination, reclassification or exchange
of shares provided for elsewhere in this Paragraph 12), then, as a part of and a
condition to such reorganization, provision shall be made in a manner reasonably
acceptable to the holders of the Debentures so that the holders of the
Debentures shall thereafter be entitled to receive upon conversion of, or in
lieu of interest payments on, the Debentures the number of shares of stock or
other securities or property to which a holder of the number of shares of Common
Stock deliverable upon conversion, or in lieu of interest payments on, the
Debentures would have been entitled on such capital reorganization.  In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Paragraph 12 with respect to the rights of the holders of the Debentures
after the reorganization to the end that the provisions of this Paragraph 12
shall be applicable after that event and be as nearly equivalent as may be
practicable, including, by way of illustration and not limitation, by equitably
adjusting the formulae set forth herein for conversion and redemption to reflect
the market price of the securities or property (applying the same factors used
in determining the Market Price for Shares of Common Stock) issued in connection
with the above described transaction.

               (e)  If at any time during the period ending twelve (12) months
after the Original Issue Date,  the Company sells or agrees to sell (including
pursuant to a letter of intent, term sheet, or similar means) shares of Common
Stock or securities or options convertible into, exercisable for, or
exchangeable for, shares of Common Stock (other than (i) a sale pursuant to a
bona fide registered public offering of shares of Common Stock by the Company
conducted on the basis of a firm commitment underwriting raising at least
$10,000,000 and (ii) shares or options issued pursuant to the Company's
employee, director or consultant stock option plans) then, if the effective or
maximum sales price of the shares of Common Stock with respect to such
transaction (including the effective or maximum conversion exercise or exchange
price) ("Other Price") is less than the Fixed Price of the Debentures at such
time, the Company, at the option of a holder exercised by written notice to the
Company, shall adjust the Fixed Price applicable to the Debentures of such
holder not yet converted in form and substance reasonably satisfactory to such
holder of Debentures so that the conversion price applicable to those Debentures
shall, in no event, be greater, after giving effect to all other adjustments
contained therein, than the Other Price.


                                      12
<PAGE>

               (f)  Whenever any element of the Applicable Conversion Price is
adjusted pursuant to Section 12(a), (b), (c), (d) or (e), the Company shall
promptly mail to each holder of the Debentures, a notice setting forth the
Applicable Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment.

               (g)  In the event of any taking by the Company of a record date
of the holders of any class of securities for the purpose of determining the
holders thereof who are entitled to receive any dividend or other distribution,
any security or right convertible or exchangeable into or entitling the holder
thereof to receive additional shares of Common Stock, or any right to subscribe
for, purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the Company, shall
deliver to each holder of Debentures at least thirty (30) days prior to the date
specified therein, a notice specifying the date on which any such record is to
be taken for the purpose of such dividend, distribution, security or right and
the amount and character of such dividend, distribution, security or right.

          13.  REMEDIES CUMULATIVE.  The rights, powers and remedies given to
the payee under this Debenture shall be in addition to all rights, powers and
remedies given to it by virtue of the Securities Purchase Agreement, any
document or instrument executed in connection therewith, or any statute or rule
of law.

          14.  NON-WAIVER.  Any forbearance, failure or delay by the payee in
exercising any right, power or remedy under this Debenture, the Securities
Purchase Agreement, any documents or instruments executed in connection
therewith or otherwise available to the payee shall not be deemed to be a waiver
of such right, power or remedy, nor shall any single or partial exercise of any
right, power or remedy preclude the further exercise thereof.

          15.  MODIFICATIONS AND WAIVERS.  No modification or waiver of any
provision of this Debenture, the Securities Purchase Agreement or any documents
or instruments executed in connection therewith shall be effective unless it
shall be in writing and signed by the payee, and any such modification or waiver
shall apply only in the specific instance for which given.

          16.  ATTORNEY'S FEES.  If this Debenture shall not be paid when due
and shall be placed by the Registered Holder hereof in the hands of an attorney
for collection, through legal proceedings or otherwise, or if this Debenture
shall not be converted into shares of Common Stock on the Conversion Date,
subject to the provisions of Section 6 hereof, and an action is brought by the
Registered Holder with respect thereto, the Company shall pay reasonable
attorney's fees to the Registered Holder hereof, together with reasonable costs
and expenses of collection or enforcement incurred in connection with any such
action.

          17.  ENFORCEMENT; SPECIFIC PERFORMANCE.  (a)  In case any one or more
Events of Default shall occur and be continuing, a Registered Holder of a
Debenture then outstanding may proceed to protect and enforce the rights of such
holder by an action at law, suit in equity or other appropriate proceeding,
whether for the specific performance of any agreement contained herein or for an
injunction against a violation of any of the terms hereof or thereof, or


                                      13
<PAGE>

in aid of the exercise of any power granted hereby or thereby or by law.
Each holder agrees that it will give written notice to the other holders
prior to instituting any such action.

               (b)  The Company expressly agrees that each Registered Holder may
not have adequate remedies at law if the Company does not perform its
obligations under this Debenture.  Upon a breach of the terms or covenants of
this Debenture by the Company, the Registered Holder shall, each in addition to
all other remedies, be entitled to obtain injunctive relief, and an order for
specific performance of the Company's obligations hereunder.

          18.  GOVERNING LAW.  This Debenture and the rights and obligations of
the parties hereto, shall be governed, construed and interpreted according to
the laws of the State of New York.  The Company agrees that any final judgment
after exhaustion of all appeals or the expiration of time to appeal in any such
action or proceeding shall be conclusive and binding, and may be enforced in any
federal or state court in the United States by suit on the judgment or in any
other manner provided by law.  Nothing contained in this Debenture shall affect
or limit the right of the Registered Holder to serve any process or notice or
motion or other application in any other manner permitted by law, or limit or
affect the right of the Registered Holder to bring any action or proceeding
against the Company or any of its property in the courts of any other
jurisdiction.  The Company hereby consents to the jurisdiction of the federal
courts whose districts encompass any part of the City of New York or the state
courts of the State of New York sitting in the City of New York in connection
with any dispute arising under this Debenture, and hereby waives, to the maximum
extent permitted by law, any objection, including any objections based on FORUM
NON CONVENIENS, to the bringing of any such proceeding in such jurisdictions.

          19.  PAYEE DEFINED.  The term "payee" as used herein shall be deemed
to include the payee and its successors, endorsees and assigns.

          20.  WAIVER OF PRESENTMENT, ETC.  The undersigned hereby waives
presentment, demand for payment, protest, notice of protest and notice of
non-payment hereof.

          21.  HEADINGS. The headings contained in this Debenture are for
reference purposes only and shall not affect the meaning of interpretation of
this Debenture.

          22.  NOTICES.  Any notice to any party required or permitted hereunder
shall be given in writing (unless otherwise specified herein) and shall be
effective upon personal delivery, via facsimile (upon receipt of confirmation of
error-free transmission) or two business days following deposit of such notice
with an internationally recognized courier service, with postage prepaid and
addressed to such party at the address set forth in the first paragraph of this
Agreement with a copy to the Company at the address set forth below, and to the
other parties thereunto entitled at the following addresses, or at such other
addresses as a party may designate by five days advance written notice to each
of the other parties hereto.


                                      14
<PAGE>

COMPANY:              Clearworks.net, Inc.
                      2450 Fondren, Suite 200
                      Houston, Texas 77063
                      ATTENTION: Michael T. McClere, CEO
                      Tel:  (713) 334-2595
                      Fax:  (713) 334-7470

                      WITH A COPY TO:

                      Clearworks.net, Inc.
                      2450 Fondren, Suite 200
                      Houston, Texas 77063
                      ATTENTION: Celia Figueroa, Esq.
                      Tel:   (713) 334-7778
                      Fax:  (713) 334-7470

REGISTERED HOLDER:    Candlelight Investors LLC
                      c\o WEC Asset Management LLC
                      One World Trade Center, Suite #4563
                      New York, New York 10048
                      ATTENTION: Ethan Benovitz
                      Tel:  (212) 775-9299
                      Fax:  (212) 775-9311

                      WITH A COPY TO:

                      Pryor Cashman Sherman & Flynn LLP
                      410 Park Avenue
                      New York, New York 10022
                      ATTENTION: Mark Saks, Esq.
                      Tel:  (212) 326-0140
                      Fax: (212) 326-0806

          23.  AMENDMENTS AND MODIFICATION.  Changes in or additions to this
Debenture may be made, and compliance with any covenant or condition herein set
forth may be omitted only if the Company shall obtain the written consent from
the Registered Holder of this Debenture.


     [REMAINDER OF PAGE LEFT INTENTIONALLY BLANK, SIGNATURE PAGE TO FOLLOW]


                                      15
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Debenture to be executed as
of the date first written above.

                                       CLEARWORKS.NET, INC.


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