Form of subordinated convertible debenture issued to purchasers pursuant to
      Convertible Debenture Purchase Agreements with the registrant, filed as Exhibit
      10.5 to this Registration Statement


    
       

      
        
          Exhibit
            4.7

           

          MAGNETECH
            INTEGRATED SERVICES CORP.

           

          SUBORDINATED
            SECURED CONVERTIBLE DEBENTURE

           

          NEITHER
            THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS DEBENTURE
            NOR THE
            SECURITIES INTO WHICH THIS DEBENTURE ARE CONVERTIBLE HAVE BEEN REGISTERED
            UNDER
            THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
            LAWS.

           

          THE
            SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
            (I) IN THE
            ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
            UNDER THE
            SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN
            A GENERALLY
            ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
            (II) UNLESS
            SOLD PURSUANT TO RULE 144 UNDER SAID ACT. THE HOLDER OF THIS DEBENTURE
            WILL, AND
            EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS DEBENTURE
            OF
            THE RESALE RESTRICTIONS REFERRED TO IN THE FOREGOING SENTENCE.

          


          


          
            	
                    $______________

                  	
                    _________,
                      2005

                  


          

          


          FOR
            VALUE
            RECEIVED, MAGNETECH
            INTEGRATED SERVICES CORP.,
            an
            Indiana corporation ("Company"), with its principal office at 1125 South
            Walnut
            Street, South Bend, Indiana 46619, promises to pay to the order of
            ______________________________________________ ("Holder"), the principal
            amount
            of ________________________________________ Dollars ($_________) on February
            28,
            2007 (the “Maturity Date”), in such coin or currency of the United States of
            America as at the time of payment shall be legal tender for the payment
            of
            public or private debts. Interest shall accrue daily and shall be payable
            on the
            unpaid balance of said principal amount from time to time outstanding
            at the
            rate of six percent (6%) per annum; provided, however, that for the period
            from
            and including the date of the occurrence of any Event of Default as set
            forth in
            Section 3, to but not including the date such Event of Default is cured
            or
            waived, the interest rate shall be increased to fifteen percent (15%)
            per annum.


          


          This
            Debenture is issued pursuant to a subordinated convertible debenture
            purchase
            agreement between the Company and the Holder ("Purchase Agreement") and
            is
            secured by a second lien on certain collateral more specifically described
            in
            that certain Security Agreement entered into by the Company for the benefit
            of
            the Holder and Strasbourger Pearson Tulcin Wolff, Inc., as agent for
            holders
            (the “Agent”), among others ("Security Agreement"), both of which are available
            for inspection at the Company's principal office. Reference herein to
            the
            Purchase Agreement and the Security Agreement shall in no way impair
            the
            absolute and unconditional obligation of the Company to pay both principal
            and
            interest hereon as provided herein, subject to the subordination provided
            below.


          
            
              
              

            

            
              
                

              

            

            
              
              

            

          


          1) Subordination.
            Notwithstanding anything herein to the contrary, the obligations of the
            Company
            created by this Debenture are subordinate in right of payment to any
            amounts
            owing by the Company pursuant to that certain Commercial Security Agreement
            dated November 1, 2004 by and between Magnetech Industrial Services Inc.,
            a
            wholly owned subsidiary of the Company (“Industrial”), and MFB Financial
            creating a $3 million credit facility (the “Credit Facility”). So long as the
            Credit Facility is not in default and there is no condition, event or
            act which,
            with the giving of notice, passage of time or both, would constitute
            a default,
            the Company may make interest payments; provided however no principal
            payments
            may be made without the prior consent of the lender of the Credit Facility.
            The
            Company reserves the right to refinance the obligations under the Credit
            Facility with new lenders in amounts not to exceed the maximum amount
            permitted
            under the existing Credit Facility. The Debentures without further action
            on the
            part of the holders or the Company will be subordinate to such new credit
            facility.

          


          2) Prepayment.
            Notwithstanding anything herein to the contrary, this Debenture may be
            prepaid
            or called by the Company at any time in whole, or in part, without penalty
            or
            premium, subject to the subordination in favor of the lender of the Credit
            Facility. Any notice to redeem ("Redemption Notice") must be given to
            all
            Registered Holders no less than thirty (30) days nor more than forty-five
            (45)
            days prior to the date set forth for redemption ("Redemption Date").
            The
            Registered Holder shall receive all of the principal and accrued interest
            in
            cash unless the Registered Holder elects to receive all of such principal
            and
            accrued interest in the number of shares of Common Stock as is equal
            to the
            Conversion Formula (as defined below) by sending written notice of such
            election
            to the Company at the address set forth in Section 9.4 no less than ten
            (10)
            days prior to the Redemption Date. This Debenture shall be paid (and
            prepaid, if
            applicable) only pro rata with certain additional debentures of like
            tenor being
            issued contemporaneously herewith, subject to each Holder’s conversion rights.
            The date designated for repayment in the Redemption Notice shall be the
            “Prepayment Date”.

          


          3) Events
            of Default.

          


          i) Upon
            the
            occurrence of any of the following events (herein called "Events of
            Default"):

          


          (1) The
            Company shall fail to pay the principal of or interest on this Debenture
            when
            due;

          


          (2) An
            Event
            of Default shall occur under the Credit Facility giving effect to any
            applicable
            notice provisions or cure periods set forth in the documents;

          


          (3) (A)
            The
            Company or any of its subsidiaries shall commence any proceeding or other
            action
            relating to it in bankruptcy or seek reorganization, arrangement, readjustment
            of its debts, receivership, dissolution, liquidation, winding-up, composition
            or
            any other relief under any bankruptcy law, or under any other insolvency,
            reorganization, liquidation, dissolution, arrangement, composition, readjustment
            of debt or any other similar act or law, of any jurisdiction, domestic
            or
            foreign, now or hereafter existing; or (B) the Company or any of its
            


          
            
              
              

            

            
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          subsidiaries
            shall admit the material allegations of any petition or pleading in connection
            with any such proceeding; or (C) the Company or any of its subsidiaries
            shall
            apply for, or consent or acquiesce to, the appointment of a receiver,
            conservator, trustee or similar officer for it or for all or a substantial
            part
            of its property; or (D) the Company or any of its subsidiaries shall
            make a
            general assignment for the benefit of creditors;

          


          (4) (A)
            The
            commencement of any proceedings or the taking of any other action against
            the
            Company or any of its subsidiaries in bankruptcy or seeking reorganization,
            arrangement, readjustment of its debts, liquidation, dissolution, arrangement,
            composition, or any other relief under any bankruptcy law or any other
            similar
            act or law of any jurisdiction, domestic or foreign, now or hereafter
            existing
            and the continuance of any of such events for sixty (60) days undismissed,
            unbonded or undischarged; or (B) the appointment of a receiver, conservator,
            trustee or similar officer for the Company or any of its subsidiaries
            for any of
            its property and the continuance of any of such events for sixty (60)
            days
            undismissed, unbonded or undischarged;

          


          



          
            
              
                


              

              
              

            

            
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          (5) An
            "Event
            of Default" (as defined in the Security Agreement) shall have occurred
            under the
            Security Agreement, after giving effect to any applicable notice provisions
            and
            cure periods set forth in the Security Agreement;

          


          (6) The
            Company or Industrial shall fail to perform any obligation of the Company
            contained in the Purchase Agreement if such failure continues for ten
            (10)
            consecutive days; provided, however, that if such failure is capable
            of being
            cured, such failure is not cured within ten (10) days after the Company's
            and/or
            Industrial’s receipt of written notice of same;

          


          (7) The
            Company shall fail to comply with any of its obligations under this Debenture,
            other than payment if such failure continues for ten (10) consecutive
            days;
            provided, such failure is not remedied within thirty (30) days after
            the
            Company's receipt of written notice of same;

          


          (8) The
            Company or any of its subsidiaries shall default with respect to any
            indebtedness for borrowed money (other than under this Debenture) in
            a principal
            amount in excess of $200,000 if either (a) the effect of such default
            is to
            allow the creditor to accelerate the maturity of such indebtedness (giving
            effect to any applicable grace periods) or (b) the holder of such indebtedness
            declares the Company or any of its subsidiaries to be in default (giving
            effect
            to any applicable grace periods); 

          


          (9) Any
            judgment or judgments against the Company or any of its subsidiaries
            or any
            attachment, levy or execution against any of its properties for any amount
            in
            excess of $50,000 in the aggregate shall remain unpaid, or shall not
            be
            released, discharged, dismissed, stayed or fully bonded for a period
            of
            forty-five (45) days or more after its entry, issue or levy, as the case
            may
            be;

          


          (x) Any
            representation or warranty made by the Company or Industrial in the Purchase
            Agreement shall have been incorrect in any material way; or

          



          
            
              
              

            

            
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          (xi) The
            Company shall fail to comply with any of its obligations under the Registration
            Rights Agreement, dated the date hereof, between the Company and the
            Holder if
            such failure continues for ten (10) days, provided, however, that if
            such
            failure is capable of being cured, such failure is not cured within ten
            (10)
            days after Company’s receipt of written notice of same;

          


          then,
            and
            in any such event, the Holder, at its option and without any written
            notice to
            the Company, may declare the entire principal amount of this Debenture
            then
            outstanding together with accrued unpaid interest thereon immediately
            due and
            payable, and the same shall forthwith become immediately due and payable
            without
            presentment, demand, protest, or other notice of any kind, all of which
            are
            expressly waived. The Events of Default listed herein are solely for
            the purpose
            of protecting the interests of the Holder of this Debenture. If the Debenture
            is
            not paid in full upon acceleration, as required above, interest shall
            accrue on
            the outstanding principal of and interest on this Debenture from and
            including
            the date of the Event of Default to but not including the date of payment
            at a
            rate equal to the lesser of fifteen percent (15%) per annum or the maximum
            interest rate permitted by applicable law.

          


          ii) Non-Waiver
            and Other Remedies.
            No
            course of dealing or delay on the part of the Holder of this Debenture
            in
            exercising any right hereunder shall operate as a waiver or otherwise
            prejudice
            the right of the Holder of this Debenture. No remedy conferred hereby
            shall be
            exclusive of any other remedy referred to herein or now or hereafter
            available
            at law, in equity, by statute or otherwise.

          


          iii) Collection
            Costs; Attorney's Fees.
            In the
            event this Debenture is turned over to an attorney for collection or
            Holder
            otherwise seeks advice of an attorney in connection with the exercise
            of its
            rights hereunder upon the occurrence of an Event of Default, the Company
            agrees
            to pay all reasonable costs of collection, including reasonable attorney's
            fees
            and expenses and all out of pocket expenses incurred in connection with
            such
            collection efforts, which amounts may, at the Holders option, be added
            to the
            principal hereof.

          


          4) Obligation
            to Pay Principal and Interest: Covenants.
            No
            provision of this Debenture shall alter or impair the obligation of the
            Company,
            which is absolute and unconditional, to pay the principal of and interest
            on
            this Debenture at the place, at the respective times, at the rates, and
            in the
            currency herein prescribed.

          


          a) Affirmative
            Covenants.
            The
            Company covenants and agrees that, while this Debenture is outstanding,
            it
            shall:

          


          i) Ensure
            that Industrial pay all senior obligations accruing under the Credit
            Facility;

          


          ii) Pay
            and
            discharge all taxes, assessments and governmental charges or levies imposed
            upon
            it or its subsidiaries, or upon its or its subsidiaries’ income and



          
            
              
              

            

            
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          profits,
            or upon any properties belonging to it or its subsidiaries before the
            same shall
            be in default; provided, however, that the Company and its subsidiaries
            shall
            not be required to pay any such tax, assessment, charge or levy that
            is being
            contested in good faith by proper proceedings and adequate reserves for
            the
            accrual of same are maintained if required by generally accepted accounting
            principles;

          


          iii) Preserve
            its and its subsidiaries’ corporate existence and continue to engage in business
            of the same general type as conducted as of the date hereof; and

          


          iv) Comply
            in
            all respects with all statutes, laws, ordinances, orders, judgments,
            decrees,
            injunctions, rules, regulations, permits, licenses, authorizations and
            requirements ("Requirement(s)") of all governmental bodies, departments,
            commissions, boards, companies or associations insuring the premises,
            courts,
            authorities, officials, or officers, that are applicable to the Company;
            except
            where the failure to comply would not have a material adverse effect
            on the
            Company; provided that nothing contained herein shall prevent the Company
            from
            contesting the validity or the application of any Requirements.

          


          b) Negative
            Covenants.
            The
            Company covenants and agrees that while this Debenture is outstanding
            it will
            not directly or indirectly:

          


          i) Make
            or
            forgive any loans to any Insiders or guarantee or otherwise in any way
            become or
            be responsible for indebtedness for borrowed money, or for obligations,
            in
            either case of any of the Insiders, contingently or otherwise, other
            than such
            guaranties existing as of the date hereof and advancement of expenses
            in the
            ordinary course of business. For purposes of this Debenture, “Insiders shall
            mean any officer, director or 5% or greater shareholder of the Company
            or
            Industrial;

          


          ii) Declare
            or pay any cash dividends or make any interest payments in cash to the
            holders
            of any of its or its subsidiaries’ outstanding equity or debt
            securities;

          


          iii) Sell,
            transfer or dispose of any of its or its subsidiaries’ assets other than in the
            ordinary course of its business and for fair value; 

          


          iv) Purchase,
            redeem, retire or otherwise acquire for value any of its or its subsidiaries’
            capital stock now or hereafter outstanding;

          


          v) Increase
            the salary or other compensation or benefits paid or provided to any
            officer or
            director of the Company or Industrial except to the extent that such
            increase
            (a) is commercially reasonable and in accordance with industry standards
            and (b)
            is approved by a majority of the non-employee members of the Board of
            Directors
            of such Borrower;

          


          (f) Directly
            or indirectly incur or guarantee, assume or suffer any indebtedness,
            other than
            (i) the indebtedness evidenced by this Debenture and the other Debentures
            and
            (ii) the Credit Facility; 


          
            
              
              

            

            
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          (g)
             Directly
            or indirectly issue any equity securities, or securities convertible
            into, or
            exchangeable or exercisable for any such equity securities; or

          


          (h) Directly
            or indirectly allow or suffer to exist any mortgage, lien, pledge, charge,
            security interest or other encumbrance upon or in any property or assets
            (including accounts and contract rights) owned by the Company or any
            of its
            subsidiaries other than any encumbrances of the Company or any of its
            subsidiaries as of the date hereof.

          


          5) Conversion.

          


          a) Right
            to Convert.
            Each
            Holder may at any time and from time to time, commencing thirty (30)
            days after
            the original issuance of the Debenture, convert all or any amount of
            the
            principal amount and accrued interest of the Debentures then owned by
            such
            Holder into such number of shares of Common Stock of the Company as is
            equal to
            the then-outstanding principal balance of this Debenture, divided by
            0.3404926
            (the “Conversion Formula”). 

          


          



          
            
              
                


              

              
              

            

            
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          b) Mechanics
            and Effect of Conversion.
            In
            order to convert the unpaid principal amount hereof and accrued interest
            thereon
            into shares of Common Stock, the Holder shall surrender this Debenture,
            with the
            form of Notice of Conversion annexed to this Debenture completed and
            executed,
            to the Company at its principal executive office. The Company shall,
            as soon as
            practicable, but not later than five (5) business days after the date
            of receipt
            of this Debenture, issue and deliver to a location in the United States
            designated by the Holder a certificate for the number of shares of Common
            Stock
            to which the Holder shall be entitled as aforesaid. Such conversion shall
            be
            deemed to have been made immediately prior to the close of business on
            the date
            on which the written notice is received by the Company in accordance
            herewith
            ("Conversion Date"), and the Holder shall be treated for all purposes
            as the
            record holder of such shares of Common Stock as of such Conversion
            Date.

          


          c) Issuance
            of Common Stock.
            All
            Common Stock which may be issued upon conversion of the Debenture will,
            upon
            issuance, be duly issued, fully paid and non-assessable and free from
            all taxes,
            liens, and charges with respect to the issue thereof. At all times that
            any
            Debentures are outstanding, the Company shall have authorized and shall
            have
            reserved for the purpose of issuance upon such conversion into Common
            Stock of
            all Debentures, a sufficient number of shares of Common Stock to provide
            for the
            conversion of all outstanding Debentures into the number of shares of
            Common
            Stock equal to the then effective Conversion Formula. Without limiting
            the
            generality of the foregoing, if, at any time, the Conversion Formula
            is
            decreased or increased, the number of shares of Common Stock authorized
            and
            reserved for issuance by the Company upon the conversion of the Debentures
            shall
            be proportionately increased or decreased, as the case may be.

          


          d) Adjustments.

          


          i) If
            the
            outstanding shares of the Company's Common Stock shall be subdivided
            or split
            into a greater number of shares, or a dividend in Common Stock shall
            be paid



          
            
              
              

            

            
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          in
            respect of Common Stock, the denominator of the Conversion Formula in
            effect
            immediately prior to such subdivision or at the record date of such dividend
            shall, simultaneously with the effectiveness of such subdivision or split
            or
            immediately after the record date of such dividend, be proportionately
            adjusted.
            If the outstanding shares of Common Stock shall be combined or reverse-split
            into a smaller number of shares, the denominator of the Conversion Formula
            in
            effect immediately prior to such combination or reverse-split shall,
            simultaneously with the effectiveness of such combination or reverse-split,
            be
            proportionately adjusted. When any adjustment is required to be made
            in the
            denominator of the Conversion Formula, the number of shares of Common
            Stock
            purchasable upon the conversion of this Debenture shall be changed to
            the number
            determined by dividing (i) an amount equal to the number of shares issuable
            upon
            the conversion of this Debenture immediately prior to such adjustment,
            multiplied by the denominator of the Conversion Formula in effect immediately
            prior to such adjustment, by (ii) the denominator of the Conversion Formula
            in
            effect immediately after such adjustment.

          


          ii) If
            there
            shall occur any capital reorganization or reclassification of the Company's
            Common Stock (other than a change in par value or a subdivision or combination
            as provided for in subsection (a) above), or the payment of a liquidating
            distribution, then, as part of any such reorganization, reclassification
            or
            liquidating distribution, lawful provision shall be made so that the
            Holder of
            this Debenture shall have the right thereafter to receive upon the conversion
            hereof (to the extent, if any, still convertible) the kind and amount
            of shares
            of stock or other securities or property which such Holder would have
            been
            entitled to receive if, immediately prior to any such reorganization,
            reclassification or liquidating distribution, as the case may be, such
            Holder
            had held the number of shares of Common Stock which were then purchasable
            upon
            the conversion of this Debenture. In any such case, appropriate adjustment
            (as
            reasonably determined by the Board of Directors of the Company) shall
            be made in
            the application of the provisions set forth herein with respect to the
            fights
            and interests thereafter of the Holder of this Debenture such that the
            provisions set forth in this Section 5.4 (including provisions with respect
            to
            adjustment of the denominator of the Conversion Formula) shall thereafter
            be
            applicable, as nearly as practicable, in relation to any shares of stock
            or
            other securities or property thereafter deliverable upon the conversion
            of this
            Debenture.

          


          (c) No
            adjustment in the Conversion Formula shall be required unless such adjustment
            would require an increase or decrease in the denominator of the Conversion
            Formula of at least .00001; provided, however, that any adjustments which
            by
            reason of this paragraph are not required to be made shall be carried
            forward
            and taken into account in any subsequent adjustment. All calculations
            under this
            Section 5.4 shall be made to the nearest share. 

          


          (d) Upon
            the
            happening of any event requiring an adjustment of the Conversion Formula
            hereunder, the Company shall forthwith give written notice thereto to
            the Holder
            of this Debenture stating the adjusted Conversion Formula and the adjusted
            number of shares purchasable upon the conversion hereof resulting from
            such
            event and setting forth in reasonable detail the method of calculation
            and the
            facts upon which such calculation is based.

          



          
            
              
              

            

            
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          e) Fractional
            Shares.
            The
            Company shall not be required to issue fractions of shares of Common
            Stock upon
            conversion. If any fractions of a share would, but for this Section 5.5,
            be
            issuable upon any conversion, in lieu of such fractional share the Company
            shall
            round up or down to the nearest whole number of shares, with a fraction
            of 1⁄2
            being rounded up.

          


          6.  Noncircumvention.
            The
            Company hereby covenants and agrees that the Company and its subsidiaries
            will
            not, by amendment of its Certificate of Incorporation, Bylaws or through
            any
            reorganization, transfer of assets, consolidation, merger, scheme of
            arrangement, 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
            of this Debenture, and will at all times in good faith carry out all
            of the
            provisions of this Debenture and take all action as may be required to
            protect
            the rights of the Holder of this Debenture.

          


          7.
            Voting
            Rights.
            The
            Holder shall have no voting rights as the holder of this Debenture, except
            as
            required by law, including but not limited to the Indiana Business Corporation
            Law, and as expressly provided in this Debenture.

          


          8. Issue
            of Debentures.
            This
            Debenture is one of a duly authorized issue of debentures of the Company,
            designated the Subordinated Secured Convertible Debentures is limited
            in
            aggregate principal amount of $4,000,000. The Debentures have been offered
            and
            sold pursuant to the Company’s Private Placement Memorandum dated January 25,
            2005. The obligations under this Debenture shall rank equally with all
            other
            Debentures of the same designation.

          


          9. Required
            Consent.
            The
            Company may not modify any of the terms of this Debenture except in accordance
            with the provisions of Section 9.

          


          9.1 The
            Agent, on behalf of the Holders, may modify, amend or supplement the
            terms of
            the Debentures in any way, and the Agent, on behalf of the Holders of
            the
            Debentures, may make, take or give any request, demand, authorization,
            direction, notice, consent, waiver or other action provided by the terms
            of the
            Debentures to be made, given or taken by Holders of Debentures.

          


          Any
            instrument given by the Agent on behalf of the Holders of the Debentures
            in
            connection with any consent to any such modification, amendment, supplement,
            request, demand, authorization, direction, notice, consent, waiver or
            other
            action will be irrevocable once given and will be conclusive and binding
            on all
            subsequent Holders of such Debenture or any Debenture issued directly
            or
            indirectly in exchange or substitution therefor or in lieu thereof. Any
            such
            modification, amendment, supplement, request, demand, authorization,
            direction,
            notice, consent, waiver or other action will be conclusive and binding
            on all
            Holders of Debentures, whether or not they have given such consent, and
            whether
            or not notation of such modification, amendment, supplement, request,
            demand,
            authorization, direction, notice, consent, waiver or other action is
            made upon
            the Debentures. Notice of any modification or amendment of, supplement
            to, or
            request, demand, authorization, direction, notice, consent, waiver or
            other
            action with respect to the Debentures shall be given to each registered
            Holder
            of Debentures affected thereby, in all cases as provided herein.

          



          
            
              
              

            

            
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          Debentures
            executed and delivered after the effectiveness of any such modification,
            amendment, supplement, request, demand, authorization, direction, notice,
            consent, waiver or other action shall bear a notation in the form reasonably
            approved by the Company as to any matter provided for in such modification,
            amendment, supplement, request, demand, authorization, direction, notice,
            consent, waiver or other action. New Debentures modified to conform to
            any such
            modification, amendment, supplement, request, demand, authorization,
            direction,
            notice, consent, waiver or other action may be prepared by the Company
            and
            executed and delivered in exchange for outstanding Debentures.

          


          9.2 Lost
            Documents.
            Upon
            receipt by the Company of evidence satisfactory to it of the loss, theft,
            destruction or mutilation of this Debenture or any Debenture exchanged
            for it,
            and (in the case of loss, theft or destruction) of indemnity satisfactory
            to it,
            and upon reimbursement to the Company of all reasonable expenses incidental
            thereto, and upon surrender and cancellation of such Debenture, if mutilated,
            the Company will make and deliver in lieu of such Debenture a new Debenture
            of
            like tenor and unpaid principal amount and dated as of the original date
            of the
            Debenture.

          9.3 Benefit.
            This
            Debenture shall be binding upon and inure to the benefit of the parties
            hereto
            and their legal representatives, successors and assigns.

          


          9.4 Notices
            and Addresses.
            All
            notices, offers, acceptances and any other acts under this Debenture
            (except
            payment) shall be in writing, and shall be sufficiently given if delivered
            to
            the addressee in person, by overnight courier service or similar receipted
            delivery, or, if mailed, postage prepaid, by certified mail, return receipt
            requested, as follows:

          


          
            	 	
                    To
                      Holder:

                  	
                    To
                      Holder's address listed on the Purchase Agreement

                  
	 	 	 
	 	
                    To
                      the Company:

                  	
                    Magnetech
                      Integrated Services Corp.

                  
	 	 	
                    1125
                      South Walnut Street 

                  
	 	 	
                    South
                      Bend, Indiana 46619

                  
	 	 	
                    Tel:
                      (574) 234-8131

                  
	 	 	
                    Fax:
                      (574) 232-7648

                  
	 	 	
                    Attn:
                      John A. Martell, President

                  


          

          


          or
            to
            such other address as any of them, by notice to the others may designate
            from
            time to time. Time shall be counted to, or from, as the case may be,
            the date of
            delivery in person, one (1) business day if delivered by overnight courier
            or
            three (3) business days after mailing.

          


          9.5 Governing
            Law.
            This
            Debenture shall be construed and enforced in accordance with, and all
            questions
            concerning the construction, validity, interpretation and performance
            of this
            Debenture shall be governed by, the internal laws of the State of New
            York,
            without giving effect to any choice of law or conflict of law provision
            or rule
            (whether of the State of 


          
            
              
              

            

            
              11

              
                

              

            

            
              
              

            

          


          New
            York
            or any other jurisdictions) that would cause the application of the laws
            of any
            jurisdictions other than the State of New York.

          


          9.6 Section
            Headings.
            Section
            headings herein have been inserted for reference only and shall not be
            deemed to
            limit or otherwise affect, in any matter, or be deemed to interpret in
            whole or
            in part any of the terms or provisions of this Debenture.

          


          9.7 Survival
            of Agreements.
            The
            agreements contained herein shall survive the delivery of this
            Debenture.

          



          
            
              
              

            

            
              12

              
                

              

            

            
              
              

            

          


          IN
            WITNESS WHEREOF, this Debenture has been executed and delivered on the
            date
            specified above by the duly authorized representative of the
            Company.

          


          
            	 	
                    MAGNETECH
                      INTEGRATED SERVICES CORP.

                  
	 	 	 
	 	 	 
	 	
                    By:

                  	 /s/
                    John A. Martell
	 	 	
                    John
                      A. Martell

                  
	 	 	
                    President
                      and Chief Executive Officer

                  


          

          


          



          
            
              
              

            

            
              13

              
                

              

            

            
              
              

            

          


          NOTICE
            OF CONVERSION

          


          (To
            Be
            Completed and Signed Only Upon Conversion of Debenture)

          


          


          
            	 	
                    TO:

                  	
                    MAGNETECH
                      INTEGRATED SERVICES CORP.

                  
	 	 	
                    1125
                      South Walnut Street 

                  
	 	 	
                    South
                      Bend, Indiana 46619

                  
	 	 	
                    Attn:
                      John A. Martell, President

                  


          

          


          The
            undersigned, the Holder of the attached Debenture, hereby surrenders
            such
            Debenture for conversion of $_________ in principal amount thereof for
            the
            number of shares of Common Stock of MAGNETECH INTEGRATED SERVICES CORP.
            equal to
            the Conversion Formula in effect upon your receipt of the foregoing Debenture
            and requests that a certificate for such shares be issued to the undersigned
            Holder at the address indicated below. 

          


          The
            undersigned hereby confirms to Magnetech Integrated Services Corp. the
            truth and
            accuracy of the representations and warranties made by the undersigned
            in the
            Purchase Agreement and accepted by the Company, as if such representations
            and
            warranties were made on the date hereof.

          


          
            	
                    Dated:

                  	 	 	 
	 	 	 	
                    Name
                      of Entity, if any

                  
	 	 	 	 
	 	 	 	 
	 	 	 	
                    Signature*

                  
	 	 	 	 
	 	 	 	 
	 	 	 	
                    Title,
                      if applicable

                  
	 	 	 	 
	 	 	 	 
	 	 	 	
                    Print
                      Name

                  
	 	 	 	 
	 	 	 	 
	 	 	 	
                    Address

                  
	 	 	 	 
	 	 	 	 


          

          _________________

          *  Must
            conform in all respects to name of Holder as specified on the face of
            the
            Debenture.


          
            
              
              

            

            
              14

              
                

              

            

            
              
              

            

          


          ASSIGNMENT

          


          (To
            be
            executed by the Holder to Effect a Transfer of the Attached
            Debenture)

          


          


          FOR
            VALUE
            RECEIVED, the undersigned does hereby sell, assign and transfer unto
            ________________________________________________, with an address of
            ___________________

          ______________________________________________________________________,
            all right, title and interest of the undersigned in the attached Debenture
            of
            Magnetech Integrated Services Corp. ("Company") and does hereby authorize
            the
            Company to transfer such right on the books of the Company.

          


          


          
            	
                    Dated:

                  	 	 	 
	 	 	 	
                    Name
                      of Entity, if any

                  
	 	 	 	 
	 	 	 	 
	 	 	 	
                    Signature*

                  
	 	 	 	 
	 	 	 	 
	 	 	 	
                    Title,
                      if applicable

                  
	 	 	 	 
	 	 	 	 
	 	 	 	
                    Print
                      Name

                  


          

          


           

          _____________

          


          
            	·  	
                    Must
                      conform in all respects to name of Holder as specified on the
                      face of the
                      Debenture.

                  


          

          


          


          


          


          13

           

           

           

           

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

    

     

     

    Schedule
      1

      


      Purchaser(s)

      


      
        
          MAGNETECH
            INTEGRATED SERVICES CORP.

          
            Private
              Placement of Subordinated Secured Convertible
              Debentures

          


          
            	
                    Purchaser

                  	 	
                    Closing
                      Date

                  	 	
                    Principal
                      Amount 

                    of
                      Debentures

                  	 	
                    Warrants

                  	 
	 	 	 	 	 	 	 	 
	
                    David
                      L. Cohen

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    100,000.00

                  	 	 	
                    105,729

                  	 
	
                    Michael
                      Poujol & Angela Poujol JTWROS

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    250,000.00

                  	 	 	
                    264,323

                  	 
	
                    Gregg
                      M. Gaylord & Linda S. Covillon Gaylord LV TR 1/18/99

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Pershing
                      as Cust., IRA FBO Thomas D'Avanzo

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Dr.
                      Frank Lake, III

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    30,000.00

                  	 	 	
                    31,719

                  	 
	
                    Dr.
                      Leo Mazzocchi & Nancy T. Mazzocchi JTWROS

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    25,000.00

                  	 	 	
                    26,432

                  	 
	
                    William
                      Sybesma & Martina Jane Sybesma JTWROS

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    75,000.00

                  	 	 	
                    79,297

                  	 
	
                    Gary
                      M. Glasscock

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    100,000.00

                  	 	 	
                    105,729

                  	 
	
                    Dr.
                      Domenic Strazzulla

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    RS
                      & VS Ltd., SJDE LLC Gen. Partner

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    25,000.00

                  	 	 	
                    26,432

                  	 
	
                    Stephen
                      T. Skoly, Jr.

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Thomas
                      J. Keeney

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    25,000.00

                  	 	 	
                    26,432

                  	 
	
                    Paul
                      Quattrocchi & Danielle Quattrocchi JTWROS

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    25,000.00

                  	 	 	
                    26,432

                  	 
	
                    Dr.
                      Barry G. Landry

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Robert
                      L. Thompson MD TR ISERP Profit Sharing Plan FBO Robert L. Thompson
                      MD

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    25,000.00

                  	 	 	
                    26,432

                  	 
	
                    Dr.
                      Michael O. Bernstein

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Steven
                      A. Lamb

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Norman
                      Dudey TR The Norman Dudey Trust U A Dated 6/10/1991 FBO Norman
                      Dudey

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Frank
                      R. Cserpes Jr. & Sharon M. Cserpes TRS Frank R. Cserpes Jr. Trust DTD
                      4/12/02 AMD DTD 1/22/03

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Edward
                      Lagomarsino

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    250,000.00

                  	 	 	
                    264,323

                  	 
	
                    Pershing
                      as Cust., SEP FBO Rodney Schorlemmer

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Mollie
                      Ann Peters

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    20,000.00

                  	 	 	
                    21,146

                  	 
	
                    Paul
                      V. Nugent Jr. & Jeanne Mentus Nugent JTWROS

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    25,000.00

                  	 	 	
                    26,432

                  	 
	
                    Albert
                      Jim Barboni

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    30,000.00

                  	 	 	
                    31,719

                  	 
	
                    StarInvest
                      Group, Inc.

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    400,000.00

                  	 	 	
                    422,917

                  	 
	
                    SwissFinanz
                      Partner AG

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    130,000.00

                  	 	 	
                    137,448

                  	 
	
                    Marcel
                      Riedel

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    20,000.00

                  	 	 	
                    21,146

                  	 
	
                    Alfred
                      Schneider

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    20,000.00

                  	 	 	
                    21,146

                  	 
	
                    Maya
                      Salzmann

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Daniel
                      Stahl

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    80,000.00

                  	 	 	
                    84,583

                  	 
	
                    Elizabeth
                      Kuhn

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Paul
                      Remensberger

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    20,000.00

                  	 	 	
                    21,146

                  	 
	
                    Heinz
                      Wattenhofer

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    25,000.00

                  	 	 	
                    26,432

                  	 
	
                    Rolph
                      R. Berg-Jaquet

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    10,000.00

                  	 	 	
                    10,573

                  	 
	
                    Marie
                      Luise Fuchs

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    10,000.00

                  	 	 	
                    10,573

                  	 
	
                    Josefine
                      Hausammann

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    10,000.00

                  	 	 	
                    10,573

                  	 
	
                    Hans
                      Hausammann

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    15,000.00

                  	 	 	
                    15,859

                  	 
	
                    Roger
                      Buerki

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    10,000.00

                  	 	 	
                    10,573

                  	 
	
                    Hans
                      Nef-Maag

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    60,000.00

                  	 	 	
                    63,437

                  	 
	
                    James
                      Ladner

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Max
                      Gertsch

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    15,000.00

                  	 	 	
                    15,859

                  	 
	
                    Roland
                      Bertschy

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    5,000.00

                  	 	 	
                    5,286

                  	 
	
                    Christian
                      Baumberger

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    10,000.00

                  	 	 	
                    10,573

                  	 
	
                    Fred
                      Kin

                  	 	 	
                    3/4/2005

                  	 	
                    $

                  	
                    20,000.00

                  	 	 	
                    21,146

                  	 
	
                    Robert
                      C. Ingram, III

                  	 	 	
                    3/8/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Kilmare
                      Worldwide Inc.

                  	 	 	
                    3/8/2005

                  	 	
                    $

                  	
                    25,000.00

                  	 	 	
                    26,432

                  	 
	
                    StarInvest
                      Group, Inc.

                  	 	 	
                    3/8/2005

                  	 	
                    $

                  	
                    400,000.00

                  	 	 	
                    422,916

                  	 
	
                    Joseph
                      Quattrocchi

                  	 	 	
                    3/8/2005

                  	 	
                    $

                  	
                    25,000.00

                  	 	 	
                    26,432

                  	 
	
                    Nasrollah
                      Jahdi

                  	 	 	
                    4/15/2005

                  	 	
                    $

                  	
                    25,000.00

                  	 	 	
                    26,432

                  	 
	
                    Highgate
                      House Funds, Ltd.

                  	 	 	
                    4/15/2005

                  	 	
                    $

                  	
                    500,000.00

                  	 	 	
                    528,645

                  	 
	
                    Pershing
                      LLC as Custodian, IRA fbo Richard J. Mullin

                  	 	 	
                    5/9/2005

                  	 	
                    $

                  	
                    100,000.00

                  	 	 	
                    105,729

                  	 
	
                    SwissFinanz
                      Partner AG

                  	 	 	
                    5/9/2005

                  	 	
                    $

                  	
                    60,000.00

                  	 	 	
                    63,437

                  	 
	
                    Daniel
                      Stahl

                  	 	 	
                    5/9/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    Paul
                      Remensberger

                  	 	 	
                    5/9/2005

                  	 	
                    $

                  	
                    20,000.00

                  	 	 	
                    21,146

                  	 
	
                    Hans
                      Hausammann

                  	 	 	
                    5/9/2005

                  	 	
                    $

                  	
                    20,000.00

                  	 	 	
                    21,146

                  	 
	
                    Hans-Peter
                      Knecht

                  	 	 	
                    5/9/2005

                  	 	
                    $

                  	
                    20,000.00

                  	 	 	
                    21,146

                  	 
	
                    Henry
                      Fortier, III

                  	 	 	
                    5/9/2005

                  	 	
                    $

                  	
                    25,000.00

                  	 	 	
                    26,432

                  	 
	
                    Frederick
                      P. Epstein

                  	 	 	
                    5/9/2005

                  	 	
                    $

                  	
                    50,000.00

                  	 	 	
                    52,865

                  	 
	
                    William
                      Sybesma

                  	 	 	
                    5/9/2005

                  	 	
                    $

                  	
                    75,000.00

                  	 	 	
                    79,297

                  	 
	
                    Gary
                      M. Glasscock

                  	 	 	
                    5/9/2005

                  	 	
                    $

                  	
                    40,000.00

                  	 	 	
                    42,292

                  	 
	
                    Joseph
                      Gazzola & Josephine Gazzola JTWROS

                  	 	 	
                    5/9/2005

                  	 	
                    $

                  	
                    25,000.00

                  	 	 	
                    26,432

                  	 
	 	 	 	 	 	 	 	 	 	 	 
	
                    TOTALS

                  	 	 	 	 	
                    $

                  	
                    4,025,000.00

                  	 	 	
                    4,255,601