EXHIBIT 10.1


\    ELEVENTH  AMENDMENT  AND  WAIVER,  dated  as  of  October  15,  2007   (the
"Eleventh Amendment"),  to the Amended and Restated Loan and Security Agreement,
dated as of November 7, 2002 (as amended by Amendment No. 1, dated as of January
23, 2003,  the Waiver and Second  Amendment,  dated as of February 28, 2003, the
Waiver,  Consent  and Third  Amendment,  dated as of June 12,  2003,  the Fourth
Amendment,  dated January 12, 2004, the Waiver and Fifth Amendment,  dated as of
January 13, 2005,  the Sixth  Amendment,  dated as of April 22, 2005, the Waiver
and  Seventh  Amendment,  dated as of July  15,  2005,  the  Waiver  and  Eighth
Amendment,  dated as of  October  14,  2005,  the Ninth  Amendment,  dated as of
November 7, 2005 and the Consent and Tenth Amendment,  dated as of June 7, 2006,
the "Loan  Agreement"),  among ATC  FUNDING,  LLC, a limited  liability  company
organized  under  the  laws  of the  State  of  Delaware  ("ATC  Funding"),  ATC
HEALTHCARE SERVICES,  INC., a corporation  organized under the laws of the State
of Georgia  ("ATC  Healthcare"),  ATC STAFFING  SERVICES,  INC.,  a  corporation
organized  under the laws of the  State of New York  ("ATC  Stafing"),  CRITICAL
NURSING SOLUTIONS,  INC., a corporation organized under the laws of the State of
Delaware ("CNS"),  PHARMACY  RESERVES,  INC., a corporation  organized under the
laws  of  the  State  of  Delaware  ("Pharmacy  Reserves"),  APPLIED  MANAGEMENT
SOLUTIONS, INC., a corporation organized under the laws of the State of Delaware
("AMS";  AMS,  ATC  Funding,  ATC  Staffing,  CNS,  Pharmacy  Reserves  and  ATC
Healthcare,   each  a  "Borrower"  and  together,  jointly  and  severally,  the
"Borrowers",  and ATC  Healthcare  in its  capacity  as  primary  servicer,  the
"Primary   Servicer"),   and  ATC  HEALTHCARE,   INC.,  a  Delaware  corporation
("Parent"),  HFG HEALTHCO-4 LLC, a Delaware limited  liability company (together
with its  successors  and  assigns,  "HF-4"),  in its  capacity  as a Lender (as
hereinafter  defined),  HEALTHCARE FINANCE GROUP,  INC., a Delaware  corporation
(together with its successors and assigns,  "HFG"),  in its capacity as a Lender
(HF-4 and HFG, in such capacity, each a "Lender" and together, severally and not
jointly,  the  "Lenders"),  HFG  HEALTHCO-4  LLC,  in its  capacity as agent and
collateral agent for the Lenders (in such capacity, together with its successors
and assigns, the "Agent"), and HEALTHCARE FINANCE GROUP, INC. in its capacity as
a program  manager (in such capacity,  together with its successors and assigns,
"Program Manager"). Terms not otherwise defined in this Eleventh Amendment shall
have the meanings set forth in the Loan Agreement.


     HF-4 has delivered to the Parent a notice to exercise HFG's put right under
that  certain  Warrant to Purchase  53,763  Shares  Class A Common  Stock of ATC
Healthcare Inc., dated July 12, 2002 (as amended by Amendment No. 1 thereto, the
"Warrant")  issued  to  HF-4  for a  purchase  price  of  $100,000,  payable  in
immediately available funds (the "Put Price").

     The Borrowers have requested that HFG (a) increase the Revolving Commitment
to  $16,000,000,  (b)  make a term  loan  in the  initial  principal  amount  of
$2,274,766,  which  shall  be  utilized,  among  other  purposes  to  repay  all
outstanding  Overadvances,  and to pay the Put Price to HF-4 and  cancelling the
Warrant,  and to pay  certain  fees  and  expenses  relating  to  this  Eleventh
Amendment,  (c) reduce the interest rate  chargeable  on the Revolving  Loan and
make certain other adjustments and modifications  under the Loan Agreement,  (d)
waive compliance with certain financial covenants for the fiscal quarters ending
February  28,  2007,  May 31,  2007 and  August  31,  2007,  and (e)  extend the
Scheduled  Maturity  Date until  November  7, 2010.  HFG is willing to make such
amendments,  modifications  and adjustments to the Loan  Agreement,  subject and
pursuant to the terms and conditions set forth herein.



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<PAGE>


     Accordingly,  in  consideration  of the  foregoing  and for other  good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  hereby  are
acknowledged,  and subject to fulfillment of the conditions set forth below, the
parties hereto agree as follows:

SECTION 1 AMENDMENTS TO LOAN AGREEMENT

     Effective as of the Eleventh  Amendment  Effective Date, the parties hereto
agree to amend the Loan Agreement as follows:

     Subsection  1.1    Section  1.02(a) of the Loan Agreement is hereby amended
by (i) deleting the figure  "$15,000,000"  appearing on the second line thereof,
and (ii) substituting therefor the figure "$16,000,000".

     Subsection  1.2    Section  1.05(c) of the Loan Agreement is hereby amended
by (i) deleting the figure  "0.50%"  appearing on the second line  thereof,  and
(ii)  substituting  therefor  the figure  "0.75%".  Section  1.05(e) of the Loan
Agreement is hereby amended by deleting such clause in its entirety.

     Subsection  1.3    Sections 1.07 through 1.13  of  the  Loan  Agreement are
hereby  amended  by (i)  deleting  such  sections  in their  entirety,  and (ii)
substituting therefor the following:

          ss.  1.07 Term Loan.  (a) The Term  Loan.  On the  Eleventh  Amendment
     Effective Date, HFG hereby agrees to make a term loan (as it may be reduced
     pursuant  to the terms set forth  herein,  the "Term  Loan") in the initial
     principal amount of $2,274,766 (such amount, the "Term Loan Commitment").

          (b) Use of Proceeds.  Effective as of the Eleventh Amendment Effective
     Date,  the Borrowers  hereby  instruct the Lenders,  and the Lenders hereby
     agree, to utilize proceeds of the Term Loan, as follows:

          (i)  such  amount as is  necessary  to repay in full all  Overadvances
               outstanding;

          (ii) $412,500  to the Agent in payment of the  renegotiation  fee with
               respect to this Eleventh Amendment;

          (iii) $100,000 to HF-4 in payment of the Put Price;

          (iv) $104,766 to the Agent for the benefit of the Lenders,  in payment
               of default  interest accrued and unpaid on the Revolving Loan for
               the period from March 1, 2007 until May 31, 2007;

          (v)  $50,000  to the  Agent in  voluntary  prepayment  of the  Special
               Renewal Fee that is scheduled under Section 6.07(a) to be payable
               on November 7, 2007 (and which the  Borrowers  have agreed to pay


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<PAGE>


               on October 15, 2007 in partial  consideration  of the willingness
               of the Agent to enter into this Eleventh Amendment); and

          (vi) $180,000 to the Agent in payment of the Extension Fee.

          (c)  Acknowledgment.  The Borrowers and the Parent hereby  acknowledge
     and agree that the fees and payments being paid on the date hereof pursuant
     to  Section  1.07(b)  are  fully  earned  and  payable  as of the  Eleventh
     Amendment Effective Date.

          (d) Consent and Agreement to the Put. The Parent  hereby  consents and
     agrees to the put by HF-4 of the  Warrant  and, by payment of the Put Price
     pursuant  Section 1.07(b) above, and the Parent hereby purchases all of the
     Warrant from HF-4 and hereby further  cancels and terminates the Warrant in
     all respects.

          ss. 1.08  Prepayments (a) Issuances and Sales. The Borrowers shall (at
     the  Program  Manager's  discretion  following  notice of receipt  thereof)
     prepay the Term Loan in an amount to be  mutually  agreed upon by the Agent
     and the  Borrowers  prior to the  consummation  of any of the  below-listed
     transactions  (or  such  other  amount   reasonably   satisfactory  to  and
     determined by the Agent, but not in any event to exceed 50% of the cash net
     proceeds received;  the listed actions below may separately require consent
     of the  Lenders  pursuant  to the  provisions  of Exhibits IV and V hereof)
     from: (i) the issuance of any Debt or equity interests of the Parent or any
     of the Borrowers,  and (ii) the sale,  transfer or other disposition of any
     asset, business or property of the Parent or any Borrower,  any tax refund,
     payments on Debt or other notes  outstanding  or any other  payments of any
     nature whatsoever received outside the ordinary course of business.

          (b) Excess Cash Flow.  Concurrently  with each  delivery of  quarterly
     financial  statements pursuant to clause (j)(iii) of Exhibit IV hereto, the
     Borrower  shall make a prepayment  in respect of the Term Loan equal to the
     Excess Cash Flow Payment, if any.

          (c)  Application of Payments.  All  prepayments of the Term Loan under
     this  Section  1.08 shall be applied to the unpaid  principal  installments
     with respect to the Term Loan in inverse  order of  maturity,  and shall be
     accompanied  by all accrued and unpaid  interest on the portion of the Term
     Loan  being  prepaid  to the  date of  prepayment  and all  costs  and fees
     associated  with  such  prepayment.  So  long as no  Event  of  Default  is
     continuing,  no Early  Termination  Fee shall be  payable  with  respect to
     prepayments  made  pursuant  to Sections 1  .08(a)(i)  and 1.08(b)  hereof.
     Amounts prepaid pursuant to this Section 1.08 may not be reborrowed.

          ss. 1.09 Intentionally Omitted.



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          ss. 1.10 Amortization of Term Loan. The Borrowers shall, until payment
     in full of the Term Loan and  subject to early  prepayment  and  payment as
     provided herein, pay to the Agent on behalf of the Lenders, an amount equal
     to (i)  $10,476.60,  on each of the  initial  ten  Interest  Payment  Dates
     following the Eleventh Amendment  Effective Date, plus (ii) $55,555.56,  on
     the Interest  Payment Date  occurring on April 1, 2008 and on each Interest
     Payment Date  thereafter,  plus (iii) $60,000 on the Interest Payment Dates
     occurring on October 1, 2008 and October 1, 2009 (items (i), (ii) and (iii)
     collectively,  the  "Monthly  Amortization  Amount"),  plus (iv) $50,000 on
     November 7, 2007,  which amounts shall be applied  towards the reduction of
     the outstanding principal amount of the Term Loan. Amounts paid pursuant to
     this  Section  1.10  may  not be  reborrowed.  On the  Maturity  Date,  the
     remaining  principal amount of the Term Loan shall become,  without further
     action by any Person, immediately due and payable together with all accrued
     interest  thereon and any fees,  premiums,  charges or costs  provided  for
     hereunder with respect thereto.

          ss. 1.11 Intentionally Omitted.

          ss. 1.12 Interest and Default  Interest.  (a) Interest.  The Borrowers
     shall pay interest on the average daily outstanding principal amount of the
     Term Loan during the prior Month on (i) each Interest Payment Date and (ii)
     the Maturity Date (whether by acceleration or otherwise),  in each case, at
     an interest rate per annum equal to LIBOR plus the  Applicable  Margin,  in
     each case, as in effect for the applicable Interest Period.

          (b)  Default  Interest.   Notwithstanding  anything  to  the  contrary
     contained herein, while any Event of Default is continuing, interest on the
     Term Loan shall be payable on demand at a rate per annum  equal to 2.50% in
     excess of the rate then otherwise applicable to the Term Loan.

          ss. 1.13 Intentionally Omitted.

     Subsection 1.4     Section 3.02 of the Loan Agreement is hereby amended  by
(i) adding the following  new proviso at the end of the first  paragraph of such
Section, and (ii) deleting the second paragraph of such Section:

     ; provided,  however that distributions under this Section 3.02 are subject
     to the provisions of 3.03A. In furtherance of the foregoing,  while amounts
     received  by the Agent for the  benefit  of the  Lenders  pursuant  to this
     Section  3.02 shall be paid to HF-4 and HFG as their  respective  interests
     may appear  provided,  that if the amount of any  distributions  to be made
     pursuant to this Section 3.02 will be  insufficient  to satisfy in full (i)
     all amounts  then due and owing to HF-4,  then the Agent first shall pay to
     HF-4 all Collections  with respect to the Revolving Loan Senior  Collateral
     until the  amounts  then due and owing to HF-4 have been paid in full,  and
     only then pay any  excess  amounts  (together  with  collections  and other
     amounts with respect to the Term Loan Senior  Collateral)  to HFG until the


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<PAGE>


     amounts  then due and  owing to HFG have  been  paid in full,  and (ii) all
     amounts  then due and owing to HFG,  then the Agent  first shall pay to HFG
     all collections  with respect to the Term Loan Senior  Collateral until the
     amounts then due and owing to HFG have been paid in full, and only then pay
     any excess amounts (together with Collections with respect to the Revolving
     Loan Senior  Collateral)  to HF-4 until the  amounts  then due and owing to
     HF-4 have been paid in full

     Subsection 1.5     Section 3.03 of the Loan Agreement is hereby amended  by
(i) deleting such section in its entirety,  and (ii)  substituting  therefor the
following:

          ss. 3.03A. Distribution of Funds at the Maturity Date or Upon an Event
     of Default.  At the  Maturity  Date or upon the  occurrence  and during the
     continuance  of an Event of Default,  subject to the rights and remedies of
     the Agent and the Lenders  pursuant to Sections 3.03A and 4.02 hereof,  the
     Agent shall distribute any and all Collections and other distributions from
     the Collateral as follows:  FIRST, to the Agent and the Lenders,  an amount
     in cash equal to any and all accrued fees and collection costs as set forth
     in Sections 1.05,  1.12 and 6.05,  until such amount has been paid in full;
     SECOND,  from the Revolving  Loan Senior  Collateral,  to the Agent for the
     benefit of HF-4, an amount in cash equal to all accrued and unpaid interest
     on the Revolving Loan (at the rates  established  under Section 1.05) until
     such amount has been paid in full;  THIRD,  from the Revolving  Loan Senior
     Collateral,  to the Agent for the benefit of HF-4,  an amount in cash equal
     to the principal amount of the Revolving Loan, until such amount is paid in
     full; FOURTH,  from the Revolving Loan Senior Collateral,  to the Agent for
     the  benefit  of the  Revolving  Lenders,  an amount  in cash  equal to the
     payment of any other Lender Debt due and payable to the  Revolving  Lenders
     on such date, until such amount has been paid in full; FIFTH, from the Term
     Loan Senior  Collateral,  to the Agent for the benefit of HFG, an amount in
     cash  equal to all  accrued  and unpaid  interest  on the Term Loan (at the
     rates  established  under  Section 1.12) until such amount has been paid in
     full;  SIXTH,  from the Term Loan Senior  Collateral,  to the Agent for the
     benefit of HFG, an amount in cash equal to the principal amount of the Term
     Loan, until such amount is paid in full; SEVENTH, from the Term Loan Senior
     Collateral,  to the Agent for the benefit of the Term Lenders, an amount in
     cash equal to the  payment of any other  Lender Debt due and payable to the
     Term Lenders on such date, until such amount has been paid in full; EIGHTH,
     from the Revolving Loan Senior Collateral,  to the Agent for the benefit of
     the Term  Lenders,  an amount  in cash  equal to the  payment  of any other
     Lender  Debt due and payable to the Term  Lenders on such date,  until such
     amount has been paid in full; NINTH, from the Term Loan Senior  Collateral,
     to the Agent for the benefit of the  Revolving  Lenders,  an amount in cash
     equal to the  payment  of any  other  Lender  Debt due and  payable  to the
     Revolving  Lenders on such date,  until such  amount has been paid in full;
     and TENTH, to the Borrower  Representative on behalf of the Borrowers,  all
     remaining amounts of Collections.

          ss. 3 .03B.  Distribution Protocols Between the Agent and the Lenders.
     The Borrowers, the Agent and the Lenders intend the distribution provisions


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<PAGE>


     set forth in this Article III to be  consistent  in all  respects  with the
     priorities and other terms set forth in the Intercreditor Agreement. If any
     term of this Article III is inconsistent with any term of any such separate
     agreement,   the  terms  of  such  separate  agreement  shall  control.  In
     furtherance thereof, the parties hereto agree that:

               (i)  funds  that  the  Term  Lender  receives  that  are  clearly
          identified as  Collections  or proceeds with respect to Revolving Loan
          Senior  Collateral  shall  promptly  be  turned  over to the Agent for
          distribution  to the  Revolving  Lenders  until such amounts have been
          paid in full; and

               (ii) funds that the Agent or the Revolving  Lender  receives that
          are clearly  identified  as proceeds  with respect to Term Loan Senior
          Collateral  shall  promptly  be turned  over to the Term  Lenders  for
          distribution on the Lender Debt then due and owing to the Term Lenders
          until such amounts have been paid in full.

     Subsection  1.6    Article V of the Loan  Agreement  is  hereby  amended by
adding the following new Section 5.02:

          ss.  5.02 Lien  Priorities.  The  Borrower,  the Agent and the Lenders
     intend the rights and remedies set forth in this Article V to be consistent
     in all  respects  with the  priorities  and  other  terms  set forth in the
     Intercreditor Agreement.

     Subsection  1.7    Section  6.07(a) of the Loan Agreement is hereby amended
by adding the following prior to the period at the end of such subsection:

     ; provided,  that the Agent acknowledges receipt on October 15, 2007 of the
     portion of the Special Renewal Fee that would have been payable on November
     7, 2007. In connection with the extension of the Scheduled Maturity Date to
     November  7,  2010,  the  Borrowers  hereby  agree  to pay to the  Agent an
     extension fee of $180,000 (the "Extension Fee").

     Subsection  1.8    Section  6.07(d) of the Loan Agreement is hereby amended
by (i) deleting such subsection in its entirety , and (ii) substituting therefor
the following:

          (d) The Borrowers may not terminate or reduce the Revolving Commitment
     (in  whole  or in  part)  prior  to  November  7,  2008.  If the  Revolving
     Commitment is  terminated by the Lenders or the Revolving  Loan becomes due
     and payable  prior to the scheduled end of the Initial Term or Renewal Term
     (including by reason of an Event of Default)  pursuant to the terms hereof,
     the Borrowers shall immediately pay the Early Termination Fee to the Agent.

     Subsection  1.9    Section 6.10 of the Loan Agreement is hereby amended  by
(i) deleting such Section in its entirety,  and (ii)  substituting  therefor the
following:



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<PAGE>


          ss. 6.10 The Agent. (a) Appointment and Management. Each Lender hereby
     appoints  HFG  Healthco-4  LLC as the  Agent  for all  purposes  hereunder,
     including  with respect to rights and remedies set forth in Article IV, the
     Lien in the Collateral set forth in Article V, and the receipt and delivery
     on behalf of all Lenders all Written Notices hereunder.  Each Lender hereby
     acknowledges  and  agrees  that until  payment  in full of all Lender  Debt
     (other than any  amounts  owing to HFG in its  capacity as a Lender),  HF-4
     shall have the exclusive right, to manage, perform and enforce the terms of
     this Agreement and the related Documents and to exercise all privileges and
     rights  exercisable or  enforceable  by it thereunder,  according to HF-4's
     exercise of its normal business judgment; provided, however, that the Agent
     shall consult with and follow the direction of the Term Lender with respect
     to all  privileges and rights  exercisable or enforceable  against the Term
     Loan Senior Collateral.

          (b) Exclusive Source of Payment.  HFG acknowledges and agrees the sole
     source of  payments  relating  to the  Lender  Debt are the  payments  made
     pursuant to the terms of, or legal rights and remedies  accrued  under this
     Agreement, the related Documents and the Collateral thereunder.

          (c) Limitation on Liability.  HFG AGREES THAT, EXCEPT AS EXPRESSLY SET
     FORTH HEREIN AND ABSENT BAD FAITH OR WILLFUL  MISCONDUCT ON THE PART OF THE
     AGENT, THE AGENT SHALL NOT BE LIABLE TO HFG UNDER ANY CIRCUMSTANCES FOR ANY
     ACTION  TAKEN OR  OMITTED  TO BE TAKEN BY THE  AGENT  HEREUNDER,  UNDER THE
     RELATED DOCUMENTS OR IN CONNECTION HEREWITH.


          (d) Duty of Care. HFG specifically acknowledges that the Agent has not
     made  any  warranty  or  representation  to HFG  nor  shall  the  Agent  be
     responsible for (i) the due execution,  legality,  accuracy,  authenticity,
     genuineness,   sufficiency,   completeness,   validity,  enforceability  or
     collectibility  of this  Agreement  and the related  Documents  (including,
     without limitation,  any warranty or representation of the Borrowers or the
     Parent  contained  therein);   (ii)  the  solvency,   financial  condition,
     creditworthiness  or future  financial  condition  of the  Borrowers or the
     Parent; (iii) the performance of or compliance by the Borrowers with any of
     the terms or provisions of any of this Agreement and the related Documents;
     (iv)  inspecting any of the property,  books or records of the Borrowers or
     the Parent;  or (v) the  validity,  enforceability,  perfection,  priority,
     condition,  value or  sufficiency  of any Lien under this Agreement and the
     related Documents.

          (e) Restrictions on Future  Modifications.  The Agent may not, without
     the prior written consent of HFG, modify, amend or restate any provision of
     this  Agreement or any other  Document  that  relates  directly to the Term
     Loans or the Term Loan Senior Collateral without the prior consent of HFG.



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<PAGE>


     Subsection 1.10    The defined term "Accrued  Amounts"  appearing Exhibit I
of the Loan  Agreement  is hereby  amended by (i)  deleting  the phrase "(c) the
Collateral  Manager's Fee, and (d)", and (ii)  substituting  therefor the phrase
"and (c)".

     Subsection 1.11    The defined term "Outstanding Balance" appearing Exhibit
I of the Loan  Agreement is hereby  amended by (i)  deleting  the phrase  "seven
Business Day clearance  period"  appearing in the penultimate line thereof,  and
(ii) substituting therefor the phrase "three Business Day clearing period".

     Subsection  1.12   Exhibit  I of the Loan  Agreement  is hereby amended  by
deleting the following defined terms in their entirety:  "Advance Rate Reduction
Date",  "Designated  Amount",  "Direct  Deposit  L/C's",  "HF-4 Term Comm itment
Amount", "HFG Term Commitment Amount", "Letter of Credit Fee", "Letter of Credit
Obligations",  "Letters of Credit", "L/C Issuer", "L/C Sublimit", "Sale Efective
Date", "Term Advance", "Term Comm itment Amounts", "Term Loan Limit", "Term Loan
Commitment Period", "Workers' Comp L/C's".

     Subsection  1.13   Exhibit I of the Loan Agreement is hereby amended by (i)
deleting the defined terms "Advance",  "Applicable  Margin",  "Borrowing  Base",
"Commitment",  "Early Termination Fee" (introductory paragraph only), "Scheduled
Maturity  Date"  and  "Special  Margin",  and  (ii)  substituting  therefor  the
following new defined terms in their appropriate alphabetical order:

              "Advance" means a Revolving  Advance,  and "Advances"  means
         the Revolving Advances, collectively.

              "Applicable Margin" means (i) with respect to the Term Loan,
         4.50%,  and (ii) with respect to the Revolving  Loan,  either (x)
         4.25%, or (y) at such time as the remaining outstanding principal
         amount of the Term  Loan is  reduced  to  $750,000  or less,  the
         "Designated Percentage" set forth in the grid below.



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The Designated Percentage shall equal:
<TABLE>
<CAPTION>

<S>                                 <C>                                <C>
-----------------------------------------------------------------------------------------
IF                      CE is greater than $800,000      CE is greater than $1,000,000
-----------------------------------------------------------------------------------------
AND                     DSCR is greater than 1.35:1.00   DSCR is greater than 1.50:1.00
AND                     CL is greater than $2,500,000    CL is greater than 3,000,000
-----------------------------------------------------------------------------------------
Designated Percentage              3.25%                              2.95%
                                   -----                              -----
-----------------------------------------------------------------------------------------
</TABLE>

Where (each, as determined with respect to the immediately  prior fiscal quarter
concurrently  with each  delivery of  quarterly  financial  statements  for such
fiscal quarter pursuant to clause (j)(iii) of Exhibit IV hereto):

         CE       =    Consolidated EBITDA Parent for such fiscal quarter


         DSCR     =    Consolidated Debt Service Coverage Ratio Parent for such
                       fiscal quarter

         CL       =    the weighted average Consolidated Liquidity over each day
                       during such fiscal quarter

provided, that for all fiscal quarters in which such criteria are not fulfilled,
the Designated Percentage for the Revolving Loan shall equal 3.75%.

          "Borrowing  Base"  means,  as of any time,  an amount equal to (i) (x)
     during  any  period  that the Term  Loan has been paid in full (or is being
     paid in full as a result of the Revolving Advance being made on the date of
     such  calculation  at 90%)  and the  Special  Coverage  Test  has  been and
     continues to be  satisfied,  90%,  and (ii) at all other times,  85% of the
     Expected  Net  Value  of  Eligible  Receivables  as of such  time  (without
     duplication  of  Unbilled  Receivables)  in each  case and at all  times as
     determined  by reference  to and as set forth in the most recent  Borrowing
     Base  Certificate  delivered  to the Agent by the  Borrower as of such time
     minus  (ii)  the sum of (x)  Accrued  Amounts  and  unpaid  expenses  under
     Sections 1.05 and 6.05 plus (y) the Reserves, in each case as of such time.

          "Commitment"  means,  collectively,  the Revolving  Commitment and the
     Term Loan Commitment.

          "Early Termination Fee" means, as of any date of determination,  a fee
     in an amount equal to the product of (A) the  Commitment at such time times
     (B) the  percentage  set forth below  opposite  the  applicable  period for
     effective date of such termination:


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<PAGE>


--------------------------------------------------------------------------------
                   Date                                        Fee Percentage
                   ----                                        --------------
--------------------------------------------------------------------------------
Any date prior to 12 months prior to the Scheduled                   2.25%
Maturity Date
---------------------------------------------------------    -------------------
12 months prior to the Scheduled Maturity Date                       1.25%
through 6 months prior to the Scheduled Maturity
Date
---------------------------------------------------------    -------------------
6 months prior to the Scheduled Maturity Date                        0.50%
through the Scheduled Maturity Date

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

          "Scheduled Maturity Date" means November 7, 2010.

     Subsection 1.14    Exhibit I of the Loan Agreement  is  hereby  amended  by
adding the following new defined terms in their appropriate alphabetical order:

          "ECF  Denominator"  has the  meaning  set  forth in the  defined  term
     "Excess Cash Flow Ratio".

          "Eleventh   Amendment"  means  the  Eleventh  Amendment  to  the  Loan
     Agreement, dated as of October 15, 2007.

          "Eleventh  Amendment  Effective  Date"  means the date upon  which the
     conditions  precedent set forth in Section 5 of the Eleventh Amendment have
     been fulfilled in full or otherwise  waived by the Agent and the Lenders in
     writing.

          "Excess Cash Flow Ratio"  means,  calculated as the end of each fiscal
     quarter,  means (i) Consolidated EBITDA Parent,  divided by (ii) the sum of
     (x) all principal  and interest  payments on Debt due and owing during such
     fiscal  quarter,  plus (y) all Capital  Expenditures  of the Parent and its
     Subsidiaries expended during such fiscal quarter (the "ECF Denominator").

          "Excess Cash Flow Payment"  calculated  for each fiscal quarter of the
     Parent, means (i) to the extent that the Excess Cash Flow Ratio is equal to
     or exceeds 1.25:1.00 for such fiscal quarter, an amount equal to 50% of the
     difference  between  (x)  Consolidated  EBITDA  Parent,  and  (y)  the  ECF
     Denominator  for  such  fiscal  quarter,  and  (ii)  for all  other  fiscal
     quarters, zero.

          "Extension Fee" has the meaning set forth in Section 6.07(a).

          "Intercreditor  Agreement" means an Intercreditor  Agreement,  in form
     and  substance  satisfactory  to HF-4  and HFG,  dated  as of the  Eleventh
     Amendment  Effective  Date,  by and among the  Borrowers,  HF-4 and HFG, as
     amended, restated, supplemented or otherwise modified from time to time.



                                       10
<PAGE>


          "Put Price"  means,  with respect to the  purchase  price set forth in
     Article VII of the Warrant, $100,000.

          "Revolving  Lenders" means Lenders  holding a portion of the Revolving
     Advances.

          "Revolving  Loan Senior  Collateral"  means all Collateral  (including
     without limitation, the Receivables and Collections thereon) other than the
     Term Loan Senior Collateral.

          "Term Lenders" means Lenders holding a portion of the Term Loan.

          "Term Loan Commitment" has the meaning set forth in Section 1.07(a).

          "Term Loan Senior Collateral" means the Additional Collateral.

          "Warrant" means that certain Warrant to purchase 53,763 Shares Class A
     Common Stock of ATC  Healthcare  Inc.,  issued to HF-4 on July 12, 2002, as
     amended by Amendment No. 1 thereto.

          "Weekly Payroll" during any Month, means the average weekly payroll of
     the Borrowers (on a combined basis) during such Month.

     Subsection  1.15   The Loan  Agreement is  hereby  amended  by (i) deleting
the  reference  to "Letter of Credit  Obligations"  in the defined  term "Lender
Debt" in Exhibit I, (ii) deleting the phrase "and the issuance of each Letter of
Credit"  in the  introductory  paragraph  of clause 2 in  Exhibit  II, and (iii)
deleting the phrase "and issuances of Letters of Credit" appearing in clause (u)
of Exhibit III.

     Subsection  1.16   Exhibit IV of the Loan  Agreement is hereby  amended  by
(x) deleting clause (j)(iii) appearing therein,  and (ii) substituting  therefor
the following:

          (iii) as soon as  available  and in any event within 45 days after the
     end of each month commencing December 2007,  consolidated and consolidating
     balance  sheets of the  Parent and its  Subsidiaries  as of the end of such
     month and consolidated and consolidating  statements of income,  cash flows
     and retained earnings of the Parent and its Subsidiaries for such month and
     for the period  commencing at the beginning of the current  fiscal year and
     ending  with  the end of  such  month,  all in  reasonable  detail,  fairly
     presenting the financial  position and results of operations of the Parent,
     ATC Healthcare and their respective  Subsidiaries as set forth above, as at
     the date  thereof and for such  periods,  and prepared in  accordance  with
     GAAP,  certified by the chief financial  officer of Parent,  ATC Healthcare
     and each  Borrower,  and  accompanied  by a  certificate  of a  Responsible
     Officer of the Parent,  ATC  Healthcare  and each  Borrower  detailing  the
     Parent's  and the  Borrowers'  compliance  for such fiscal  period with all


                                       11
<PAGE>


     terms, including the financial covenants,  contained in the Agreement,  and
     to the extent any  non-compliance  exists, a description of the steps being
     taken by the Parent or the Borrowers to address such non-compliance;

     Subsection  1.17   Exhibit V of the Loan  Agreement  is hereby  amended  by
(x) deleting clauses (hh), (ii), (jj), (ll) and (oo) appearing therein, and (ii)
substituting  therefor the following new clauses (hh), (ii), (jj), (ll) and (oo)
in their appropriate alphabetical order:

          (hh) Debt Service Coverage Ratio.  Consolidated  Debt Service Coverage
     Ratio  Parent  at the end of any  Month  for the  three  Months  then  most
     recently ended is less than the following:

           Month Ending                                       Ratio
           ------------                                       -----
           November, 2007                                     0.60
           December, 2007                                     0.75
           January, 2008                                      1.00
           February, 2008                                     1.10
           March, 2008                                        1.20
           April, 2008                                        1.25
           May, 2008                                          1.25
           June, 2008                                         1.25
           July, 2008                                         1.30
            and each Month thereafter

          (ii) Senior Debt  Service  Coverage  Ratio.  Consolidated  Senior Debt
     Service  Coverage Ratio Parent at the end of any Month for the three Months
     then most recently ended is less than the following:


           Month Ending                                       Ratio
           ------------                                       -----
           November, 2007                                     0.77
           December, 2007                                     1.00
           January, 2008                                      1.23
           February, 2008                                     1.25
           March, 2008                                        1.25
           April, 2008                                        1.30
           May, 2008                                          1.30
           June, 2008                                         1.35
           July, 2008                                         1.35
           August, 2008                                       1.40
             and each Month thereafter

          (jj) Consolidated EBITDA.  Consolidated EBITDA Parent as of the end of
     any Month for the three  Months then most  recently  ended is less than the
     following:



                                       12
<PAGE>


           Month Ending                                Amount
           ------------                                ------
           November, 2007                              $350,000
           December, 2007                              $425,000
           January, 2008                               $500,000
           February, 2008                              $550,000
           March, 2008                                 $600,000
           April, 2008                                 $625,000
           May, 2008                                   $675,000
           June, 2008                                  $700,000
           July, 2008                                  $750,000
           August, 2008                                $800,000
           September, 2008                             $850,000
           October, 2008                               $875,000
           November, 2008                              $900,000
           December, 2008                              $925,000
           January, 2009                               $950,000
           February, 2009                              $1,000,000
             and each Month thereafter

          (ll) Consolidated Liquidity. Consolidated Liquidity at any time during
     the Month indicated below is less than the following:


           Month Ending                                Amount
           ------------                                ------
           November, 2007                              $150,000
           December, 2007                              $200,000
           January, 2008                               $250,000
           February, 2008                              $300,000
           March, 2008                                 $300,000
           April, 2008                                 $350,000
           May, 2008                                   $400,000
           June, 2008                                  $450,000
           July, 2008                                  $500,000
           August, 2008                                $550,000
           September, 2008                             $600,000
           October, 2008                               $650,000
           November, 2008                              $700,000

        December, 2008                        the greater of (x) $750,000 and
                                               (y) 50% of Weekly Payroll

        January, 2009                         the greater of (x) $800,000 and
                                               (y) 50% of Weekly Payroll

        February, 2009                        the greater of (x) $850,000 and
                                               (y) 50% of Weekly Payroll


                                       13
<PAGE>


        March, 2009                           the greater of (x) $1,000,000 and
         Through September, 2009              (y) 50% of Weekly Payroll

        October, 2009                         the greater of (x) $1,500,000 and
         Through November, 2010               (y) 100% of Weekly Payroll


          (oo) Consolidated Tangible Net Worth.  Consolidated Tangible Net Worth
     Parent at the end of any Month is less than the following:

           Month Ending                                Amount
           ------------                                ------
           November, 2007                              $(3,320,000)
           December, 2007                              $(3,369,000)
           January, 2008                               $(3,347,000)
           February, 2008                              $(3,295,000)
           March, 2008                                 $(3,275,000)
           April, 2008                                 $(3,230,000)
           May, 2008                                   $(3,155,000)
           June, 2008                                  $(2,975,000)
           July, 2008                                  $(2,859,000)
           August, 2008                                $(2,788,000)
           September, 2008                             $(2,712,000)
           October, 2008                               $(2,615,000)
           November, 2008                              $(2,514,000)
           December, 2008                              $(2,419,000)
           January, 2009                               $(2,338,000)
           February, 2009                              $(2,328,000)
           March, 2009                                 $(2,228,000)
           April, 2009                                 $(2,200,000)
           May, 2009                                   $(2,100,000)
           June, 2009                                  $(2,000,000)
           July, 2009                                  $(1,990,000)
           August, 2009                                $(1,925,000)
           September, 2009                             $(1,875,000)
           October, 2009                               $(1,800,000)
           November, 2009                              $(1,750,000)
           December, 2009                              $(1,700,000)
           January, 2010                               $(1,600,000)
           February, 2010                              $(1,550,000)
           March, 2010                                 $(1,500,000)
           April, 2010                                 $(1,450,000)
           May, 2010                                   $(1,400,000)
           June, 2010                                  $(1,400,000)
           July, 2010                                  $(1,400,000)
           August, 2010                                $(1,300,000)
           September, 2010                             $(1,300,000)
           October, 2010                               $(1,300,000)


                                       14
<PAGE>


           November, 2010                              $(1,300,000)

     ; plus,  for each Month,  the cash  proceeds  received by the Parent or the
     Borrowers  during such Month and each Month thereafter from the issuance of
     equity  interests  in  the  Borrowers  or the  Parent  (net  of  all  fees,
     discounts,  commissions and other issuance costs and expenses incurred with
     respect thereto).

     Subsection  1.18   Schedule V of the Loan Agreement  is  hereby  deleted in
its entirety.

 SECTION 2   REPRESENTATIONS AND WARRANTIES OF THE BORROWERS

     Each of the Borrowers and the Parent hereby  represents  and warrants as of
the date hereof as follows (which  representations  and warranties shall survive
the execution and delivery of this Eleventh Amendment):

          (a)  All  representations  and  warranties  made by the  Borrowers  in
     Article IV of the Loan  Agreement and each of the other  Documents are true
     and  correct in all  material  respects as of the date hereof with the same
     force and effect as if made on such date  (except  to the  extent  that any
     such representation or warranty relates expressly to an earlier date).

          (b) Each of the Borrowers has the requisite power to execute,  deliver
     and carry out the terms and provisions of this Eleventh Amendment.

          (c) This  Eleventh  Amendment has been duly executed and delivered and
     constitutes the legal, valid and binding  obligation of the Borrowers,  and
     is enforceable  in accordance  with its terms subject (i) as to enforcement
     of  remedies,  to  applicable   bankruptcy,   insolvency,   reorganization,
     moratorium and other similar laws  affecting the  enforcement of creditors'
     rights  generally,  from  time to  time  in  effect,  and  (ii) to  general
     principles of equity.

          (d) No event has occurred and is continuing which constitutes or would
     constitute  a Default  or an Event of  Default  under  the Loan  Agreement,
     except  for those  provisions  subject to the waiver set forth in Section 4
     below.

 SECTION 3   WAIVER

     Effective as of the Eleventh  Amendment  Effective Date, the Lenders hereby
waive  compliance by the Borrowers with Exhibit V, clauses (hh) through (oo) for
the fiscal  quarters ending February 28, 2007, May 31, 2007 and August 31, 2007;
so long as the financial  information  contained in the quarterly report on form
10Q for the  fiscal  quarter  ending  August  31,  2007 is  consistent  with the
financial  projections  provided to the Agent on October 11, 2007 and as revised
October 14, 2007.


                                       15
<PAGE>


 SECTION 4   SPECIAL COVENANT

     The Borrowers  and the Parent  hereby  covenant and agree to deliver to the
Agent on an ongoing basis and substantially simultaneously with delivery thereof
(with respect to future  submissions and  correspondence),  copies of all formal
submissions  and  correspondence  by the Parent to the American  Stock  Exchange
addressing the potential  de-listing of the Parent. The Borrowers and the Parent
hereby  acknowledge  and agree that the  failure to make such  deliveries  shall
constitute an Event of Default under the Loan Agreement.

 SECTION 5   ELEVENTH AMENDMENT EFFECTIVE DATE

     This Eleventh  Amendment  shall become  effective at the time and date (the
"Eleventh Amendment Efective Date") when the Agent and the Program Manager shall
have  received a  counterpart  of this  Eleventh  Amendment,  duly  executed and
delivered on behalf of each of the Borrowers.

 SECTION 6   CONTINUED EFFECT IVENESS

     Except as expressly set forth above in Section 2(d) with respect to matters
described on Schedule A hereto, nothing herein shall be deemed to be a waiver of
any  covenant,  or  agreement  contained  in, or any Default or Event of Default
under the Loan  Agreement and each of the parties hereto agrees that, all of the
covenants and  agreements and other  provisions  contained in the Loan Agreement
and the other Documents shall remain in full force and effect from and after the
Eleventh Amendment Effective Date.

 SECTION 7   COUNTERPARTS

     This Eleventh Amendment may be executed in two or more  counterparts,  each
of  which  shall  be an  original,  and  all of  which,  taken  together,  shall
constitute  a  single  instrument.  Delivery  of an  executed  counterpart  of a
signature page to this Amendment by telecopier shall be effective as delivery of
a manually executed counterpart of this Eleventh Amendment.

 SECTION 8   GOVERNING LAW

     THIS ELEVENTH  AMENDMENT  SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO ANY CONFLICT OF LAWS  PRINCIPLES  THEREOF THAT WOULD CALL
FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.



                                       16
<PAGE>


     IN WITNESS WHEREOF,  the parties hereto have caused this Eleventh Amendment
to be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.



ATC FUNDING, LLC                            CRITICAL NURSING SOLUTIONS, INC.
As a Borrower                               As a Borrower


By:    /s/   David Savitsky                 By:    /s/   David Savitsky
   ------------------------                    ------------------------
   Name:  DAVID SAVITSKY                       Name:  DAVID SAVITSKY
   Title: CHIEF EXECUTIVE OFFICER              Title: CHIEF EXECUTIVE OFFICER


ATC HEALTHCARE SERVICES, INC.               PHARMACY RESERVES, INC.
As a Borrower and as Primary Servicer       As a Borrower


By:    /s/   David Savitsky                 By:    /s/   David Savitsky
   ------------------------                    ------------------------
   Name:  DAVID SAVITSKY                       Name:  DAVID SAVITSKY
   Title: CHIEF EXECUTIVE OFFICER              Title: CHIEF EXECUTIVE OFFICER


ATC STAFFING SERVICES, INC.                 HFG HEALTHCO-4 LLC
As a Borrower                               As a Lender and as Agent
                                                  By: HFG Healthco-4, Inc.

By:    /s/   David Savitsky
   ------------------------                 By:    /s/   Mary L. Brady
   Name:  DAVID SAVITSKY                       ------------------------
   Title: CHIEF EXECUTIVE OFFICER              Name:  MARY L. BRADY
                                               Title: VICE PRESIDENT

APPLIED MANAGEMENT SOLUTIONS, INC.
As a Borrower                               HEALTHCARE FINANCE GROUP, INC.
                                            As a Lender and as Program Manager

By:    /s/   David Savitsky
   ------------------------                 By:    /s/   David Hyams
   Name:  DAVID SAVITSKY                       ------------------------
   Title: CHIEF EXECUTIVE OFFICER              Name:  DAVID HYAMS
                                               Title: CHIEF CREDIT OFFICER

ATC HEALTHCARE, INC.
As the Parent


By:    /s/   David Savitsky
   ------------------------
   Name: DAVID SAVITSKY
   Title:  CHIEF EXECUTIVE OFFICER




                                       17