Document:

Exhibit 4.4
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THIS NOTE, AND THE SECURITIES  INTO WHICH IT IS CONVERTIBLE  (COLLECTIVELY,  THE
"SECURITIES"),  HAVE NOT BEEN REGISTERED  WITH THE UNITED STATES  SECURITIES AND
EXCHANGE  COMMISSION OR THE SECURITIES  COMMISSION OF ANY STATE.  THE SECURITIES
ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION D
PROMULGATED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "ACT").  THE
SECURITIES ARE "RESTRICTED" AND MAY NOT BE OFFERED OR SOLD UNLESS THE SECURITIES
ARE REGISTERED UNDER THE ACT OR SOLD PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION  REQUIREMENTS  OF THE ACT  AND IN SUCH  CASE  THE  COMPANY  WILL BE
PROVIDED  WITH AN  OPINION  OF  COUNSEL  AND OTHER  SUCH  INFORMATION  AS IT MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE.

                    CONVERTIBLE NOTE DATED SEPTEMBER 12, 2005

                              ATC HEALTHCARE, INC.

                              12% Convertible Note

                             Due September 14, 2006

No.  _______                                        $_______________________

This Convertible Note is issued by ATC HEALTHCARE, INC., a Delaware corporation
(the "Company"), to ________________________________ (together with its
permitted successors and assigns, the "Holder") pursuant to exemptions from
registration under the Securities Act of 1933, as amended. Section 1.01
Principal and Interest. For value received, on September 12, 2006, the Company
hereby promises to pay to the order of the Holder in lawful money of the United
States of America and in immediately available funds the principal sum of
____________________Dollars (US $______________), together with interest on the
unpaid principal of this Note at the rate of twelve percent (12%) per year
(computed on the basis of a 365-day year and the actual days elapsed) from the
date of this Note until paid, with such interest only being paid in the
Company's stock as provided herein. At the Holder's option, the entire principal
amount and all accrued interest shall be either (a) paid to the Holder on the
First (1st) anniversary from the date hereof or (b) converted in accordance with
Section 1.02 herein. This Note is one of a series of Notes having an aggregate
principal amount of not more than One Million Two Hundred Fifty Thousand and
No/100 Dollars ($1,250,000.00) which are identical except as to the principal
amount and date of issuance thereof. Such Notes are referred to herein
collectively as the "Notes."

<PAGE>

     Section 1.02   Optional Conversion. The Holder is entitled, at its option,
at any time to convert all, but not less than all, of the outstanding principal
amount of this Note, plus accrued but unpaid interest, into shares (the
"Conversion Shares") of the Company's Class A common stock, $.01 par value per
share ("Common Stock"), at the price per share (the "Conversion Price") equal to
Thirty-Seven Cents ($0.37). No fraction of shares or scrip representing
fractions of shares will be issued on conversion, but the number of shares
issuable shall be rounded to the nearest whole share. To convert this Note in
whole or part, the Holder shall deliver written notice thereof, substantially in
the form of Exhibit A to this Note, with appropriate insertions (the "Conversion
Notice"), to the Company at its address as set forth herein together with the
original of this Note. The date upon which the conversion shall be effective
(the "Conversion Date") shall be deemed to be the date set forth in the
Conversion Notice, which shall be no earlier than the date the notice is
delivered to the Company.

     Section 1.03   Mandatory Conversion. The Notes will be automatically
converted in full (both principal and accrued but unpaid interest), at the
Conversion Price, upon the effectiveness of a registration statement filed by
the Company that registers the shares of Common Stock underlying the Notes,
without any action on the part of the Holder. Following automatic conversion in
accordance with this Section, this Note shall solely evidence the right of the
Holder to receive the stock into which this Note has been converted, which
shares shall be delivered to the Holder promptly following delivery of this Note
by the Holder to the Company.

     Section 1.04   Reservation of Common Stock. The Company shall reserve and
keep available out of its authorized but un-issued shares of Common Stock,
solely for the purpose of effecting the conversion of this Note, such number of
shares of Common Stock as shall from time to time be sufficient to effect such
conversion. All certificates evidencing shares of Common Stock issued hereunder
shall bear a legend substantially similar to the one at the top of this Note.

     Section 1.05   Registration Rights. The Company is obligated to register
the resale of the Conversion Shares under the Securities Act of 1933, as
amended, pursuant to the terms of a Registration Rights Agreement, between the
Company and the Holder of even date herewith (the "Registration Rights
Agreement").

     Section 1.06   Interest Payments. The interest payable hereunder will be
paid at the time of maturity to the person in whose name this Note is registered
and only in the form of shares of Common Stock valued at the Conversion Price.
No fractional shares will be issued under this Section; therefore, in the event
that the value of the Common Stock per share does not equal the total interest
due, the Company will pay the balance in cash.

     Section 1.07   Paying Agent and Registrar. Initially, the Company will act
as paying agent and registrar. The Company may change any paying agent,
registrar, or Company-registrar by giving the Holder not less than ten (10)

<PAGE>

business days' written notice of its election to do so, specifying the name,
address, telephone number and facsimile number of the paying agent or registrar.
The Company may act in any such capacity.

     Section 1.08   Holder's Consent for Prepayment. The Company shall not be
entitled to prepay this Note in whole or in part without the consent of the
Holder.

     Section 2.01   Notice. Notices regarding this Note shall be sent to the
parties at the following addresses, unless a party notifies the other parties,
in writing, of a change of address:

If to the Company, to:             ATC Healthcare, Inc.
                                   1983 Marcus Avenue
                                   Lake Success, NY 11042
                                   Attention:    Andrew Reiben
                                   Telephone:    (516) 750-1600
                                   Facsimile:    (516) 750-1754

With a copy to:                    DKW Law Group, LLC
                                   US Steel Tower -- 58th Floor
                                   600 Grant Street
                                   Pittsburg, PA 15219
                                   Attention:    David Hirsch, Esq.
                                   Telephone:    (412) 355-2960
                                   Facsimile:    (412) 355-2609

If to the Holder:                  The address set forth in the Subscription
                                   Agreement relating to this Note.

     Section 2.02   Defaults and Remedies

     (a)     Events of Default. An "Event of Default" occurs if (i) the Company
does not make the payment of the principal of, and interest on, this Note when
the same becomes due and payable at maturity or otherwise, (ii) the Company
fails to comply with any of its other obligations under this Note, and such
failure continues for the period and after the notice specified below, (iii) the
Company, pursuant to or within the meaning of any Bankruptcy Law (as hereinafter
defined): (1) commences a voluntary case; (2) consents to the entry of an order
for relief against it in an involuntary case; (3) consents to the appointment of
a Custodian (as hereinafter defined) of it or for all or substantially all of
its property; (4) makes a general assignment for the benefit of its creditors;
or (5) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that: (A) is for relief against the Company in an involuntary
case; (B) appoints a Custodian of the Company for all or substantially all of
its property, or (C) orders the liquidation of the Company, and the order or
decree remains unstayed and in effect for 90 days.

     (b)     As used in this Section 2.02, the term "Bankruptcy Law" means Title
11 of the United States Code or any similar federal or state law for the relief
of debtors. The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.

<PAGE>

    (c)      A default under clause 2.02(a)(ii) above is not an Event of Default
until the holders of at least 25% of the aggregate principal amount of the Notes
notify the Company of such default and the Company does not cure it within ten
(10) days after the receipt of such notice, which must specify the default,
demand that it be remedied and state that it is a "Notice of Default."

    (d)      Acceleration upon Event of Default, Right to Maintain an Action. If
an Event of Default occurs and is continuing, the holders of at least 25% of the
aggregate principal amount of the Notes may, by notice given to the Company,
declare the principal of and accrued interest on this Note and the other Notes
to be due and payable immediately. Nothing herein shall prevent the Holder from
bringing a lawsuit to recover unpaid interest or seek other appropriate remedies
upon the occurrence of an Event of Default, whether or not the Note is
accelerated.

     Section 2.03  Governing Law. This Note shall be deemed to be made under and
shall be construed in accordance with the laws of the State of Delaware without
giving effect to the principals of conflict of laws thereof. Each of the parties
consents to the jurisdiction of the U.S. District Court sitting in the District
of the State of New York or the state courts of the State of New York sitting in
Nassau County, New York in connection with any dispute arising under this Note
and hereby waives, to the maximum extent permitted by law, any objection,
including any objection based on forum non conveniens to the bringing of any
such proceeding in such jurisdictions. The Holder shall be entitled to
reimbursement from the Company of the reasonable collection costs incurred by
the Holder under this Note, including, but not limited to, reasonable attorneys'
fees.

     Section 2.04  Amendment; Waiver. This Note may not be amended without the
written consent of the Holder. To the fullest extent permitted by law and except
as otherwise provided herein, the Company waives demand, presentment, protest,
notice of dishonor, suit against or joinder of any other person, and all other
requirements necessary to charge or hold the Company liable with respect to this
Note.

     Section 2.05  Severability. The invalidity of any of the provisions of this
Note shall not invalidate or otherwise affect any of the other provisions of
this Note, which shall remain in full force and effect.

     Section 2.06  Entire Agreement and Amendments. This Note represents the
entire agreement between the parties hereto with respect to the subject matter
hereof and there are no representations, warranties or commitments, except as
set forth herein. This Note may be amended only by an instrument in writing
executed by the parties hereto.

<PAGE>

     IN WITNESS WHEREOF, with the intent to be legally bound hereby, the Company
as executed this 12% Convertible Note as of the date first written above.

                                      ATC HEALTHCARE, INC.

                                      By:
                                         --------------------------------

                                      Name:
                                           ------------------------------

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

<PAGE>

                                    EXHIBIT A
                                    ---------

                              NOTICE OF CONVERSION
                              --------------------

           (To be executed by the Holder in order to Convert the Note)

TO:

The undersigned hereby irrevocably elects to convert all of the principal amount
of the above Note into Shares of Class A Common Stock of ATC Healthcare, Inc. in
accordance with the provisions therein.

Conversion Date:
                                         ---------------------------------------
Conversion Price per share:              $
                                          --------------------------------------
Number of shares of Common Stock to be
issued:
                                         ---------------------------------------
Please issue the shares of Common Stock
in the following name and to the
following address:
                                         ---------------------------------------
Issue to:
                                         ---------------------------------------
Address:
                                         ---------------------------------------

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

Authorized Signature:
                                         ---------------------------------------
Name:
                                         ---------------------------------------
Title:
                                         ---------------------------------------
Phone Number:
                                         ---------------------------------------
Conversion Date:
                                         ---------------------------------------
Conversion Price per share:              $
                                          --------------------------------------
Number of shares of Common Stock to be
issued:
                                         ---------------------------------------
Please issue the shares of Common Stock
in the following name and to the
following address:
                                         ---------------------------------------
Issue to:
                                         ---------------------------------------
Address:
                                         ---------------------------------------

<PAGE>

Authorized Signature:
                                         ---------------------------------------
Name:
                                         ---------------------------------------
Title:
                                         ---------------------------------------
Phone Number:
                                         ---------------------------------------Exhibit 4.5
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THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"), OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION, UNLESS THE HOLDER HEREOF PROVIDES THE COMPANY
WITH AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT THE PROPOSED SALE OR
TRANSFER IS EXEMPT FROM SUCH REGISTRATION REQUIREMENTS.

                               WARRANT TO PURCHASE
                                    SHARES OF
                              CLASS A COMMON STOCK

                          Void after September 14, 2010

     THIS IS TO CERTIFY that, as of this 14th day of September,  2005, for value
received   and   subject   to   the    provisions    hereinafter    set   forth,
________________________________ (the "Purchaser"), is entitled to purchase from
ATC Healthcare,  Inc., a Delaware corporation (the "Company"),  at any time from
the date hereof to and including  September 14, 2010 (the "Expiration Date"), at
a price  initially  equal  to  Sixty  Cents  ($0.60)  per  share  (the  "Warrant
Calculation Price"), _____________ (______) (the "Warrant Number") shares of the
Class A Common Stock of the Company (the "Stock").

     The aggregate price for the shares of Stock purchasable  hereunder shall be
equal to the  initial  Warrant  Calculation  Price  multiplied  by the number of
shares initially purchasable  hereunder.  Such aggregate price is not subject to
adjustment and is herein sometimes referred to as the "aggregate Warrant Price."
The Warrant  Calculation  Price per share is, however,  subject to adjustment as
hereinafter  provided (such price,  or such price as last adjusted,  as the case
may be, being herein referred to as the "per share Warrant Price").  The Warrant
Number is likewise subject to adjustment as hereinafter provided.

     1.     Exercise of  Warrant.  Subject  to  the conditions  hereinafter  set
forth,  this Warrant may be exercised in whole at any time, or in part from time
to time,  by the holder  hereof,  by the  surrender  of this  Warrant  (with the
subscription  form at the end hereof duly  executed) at the principal  office of
the Company in Lake Success, New York or at such other office as the Company may
designate  by written  notice to the holder  hereof  within the  above-mentioned
period and, at the  election of the holder,  either by paying to the Company the
aggregate Warrant Price (or the proportionate part thereof if exercised in part)
for the shares so purchased  in current  funds,  in which case payment  shall be
made in cash or by certified or official bank check, or by cashless  exercise as
hereinafter  set forth.  At its  option,  the holder may  request,  pursuant  to
Section 1, that the Company  exchange  this Warrant for a  particular  number of
shares subject to the Warrant (the "Converted  Warrant Shares") by delivering to
the holder,  without  payment by the holder of the Warrant  Price or any cash or
other consideration,  that number of shares of Stock as is equal to the quotient
obtained by dividing  the Net Value (as  hereinafter  defined) of the  Converted
Warrant  Shares by the Fair Market Value (as  determined (i) by reference to the
current  market  price  based  upon the  average  last sale  price for the three
business days prior to exercise,  if the Stock is publicly traded or (ii) by the
Board of Directors  acting in good faith if the Stock is not publicly traded) of
a single share of Stock,  determined in each case as of the close of business on
the date of exercise of this Warrant.  The "Net Value" of the Converted  Warrant
Shares shall be determined  by  subtracting  the aggregate  Warrant Price of the
Converted  Warrant  Shares from the aggregate Fair Market Value of the Converted

<PAGE>

Warrant  Shares.  All other  provisions of the Warrants  shall apply to any such
exchange of the Warrants pursuant to the terms of this Section 1.

     If this  Warrant is exercised in respect of fewer than all of the shares of
Stock at the time purchasable hereunder,  the holder hereof shall be entitled to
receive a new  Warrant  covering  the  number of shares in respect of which this
Warrant shall not have been  exercised  and setting forth the aggregate  Warrant
Price  applicable to such shares.  Notwithstanding  anything to the contrary set
forth herein,  this Warrant or any new Warrant issued as the result of a partial
exercise hereof and all rights and options  hereunder or thereunder shall expire
and shall be wholly null and void to the extent this Warrant or such new warrant
is not  exercised  before it expires at the close of business on the  Expiration
Date.

     2.     Reservation of Stock. The Company  covenants and  agrees that during
the period within which the rights represented by this Warrant may be exercised,
the Company  will at all times have  authorized,  and in reserve,  a  sufficient
number  of  shares  of its  Stock to  provide  for the  exercise  of the  rights
represented by this Warrant.

     3.     Protection  Against  Dilution. The  Warrant  Number  is  subject  to
adjustment from time to time upon the occurrence of the events enumerated in, or
as otherwise provided in, this Section 3.

            3.1     Adjustment for Change in Capital Stock. If the Company:

            (1) pays a dividend or makes a  distribution  on its Stock in shares
     of its Stock;

            (2) subdivides or reclassifies its outstanding shares  of Stock into
     a greater number of shares;

            (3) combines or reclassifies its outstanding  shares of Stock into a
     smaller number of shares;

            (4) makes a distribution  on  its Stock  in shares of  capital stock
     other than Stock; or

            (5)  issues  by reclassification  of  its Stock  any shares  of  its
     capital stock;

     then the Warrant Number in effect immediately prior to such action shall be
     proportionately  adjusted so that the may receive the aggregate  number and
     kind of shares of capital stock of the Company or other capital stock which
     such  holder  would have owned  immediately  following  such action if such
     Warrant  had been  exercised  immediately  prior to such  action.  If, as a
     result of any  adjustment  pursuant to this  Section  3.1, the holder shall
     become  entitled  to  receive  shares of two or more  classes  or series of
     securities  of the  Company or  otherwise,  the Board of  Directors  of the
     Company shall  equitably  determine the allocation of the adjusted  Warrant
     Price between or among shares of the holder of such allocation.

     The adjustment shall become effective  immediately after the record date in
the case of a dividend or distribution and immediately  after the effective date
in the case of a subdivision, combination or reclassification.

     Such adjustment shall be made successively  whenever any event listed above
shall occur.

<PAGE>

            3.2 Notice of Adjustment.  Whenever the  Warrant Number  or  Warrant
Calculation  Price is adjusted  under this  section,  the Company  shall provide
notice thereof to the holder within thirty (30) days of such adjustment.

            3.3 Additional Adjustments. In the event of any and  all adjustments
to the Warrant  Number in accordance  with this Section 3, the per share Warrant
Price shall be adjusted so that it is equal to the quotient of (a) the aggregate
Warrant Price and (b) the Warrant Number as adjusted.

     4.     Mergers,  Consolidations,  Sales;  Non-Impairment  of   Rights.  The
Company will not, by amendment of its  Certificate of  Incorporation  or through
any reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issuance or sale of securities or any other voluntary action, avoid
or seek to avoid the  performance of any of the terms of this Warrant,  but will
at all times in good faith take all necessary  action to carry out the intent of
all such terms.  Without  limiting the generality of the foregoing,  the Company
(a) will not cause the par value of any  securities  receivable  on  exercise of
this Warrant to be in excess of the amount  payable  therefor on such  exercise,
and (b) will take all  action as may be  necessary  or  appropriate  so that the
Company may validly and legally  issue fully paid and  nonassessable  shares (or
other  securities or property  deliverable  hereunder) upon the exercise of this
Warrant.  In  the  event  the  Company  sells  or  otherwise  transfers  all  or
substantially  all of its assets to another  corporation  or other  entity  and,
following the sale or transfer,  a majority of the combined  voting power of the
then-outstanding securities of the other corporation or entity immediately after
the sale or transfer is held in the aggregate by the holders of Voting Stock (as
defined below)  immediately prior to the sale or transfer,  then, as a condition
of such sale or transfer,  lawful and adequate  provision  shall be made whereby
the holder of this Warrant shall  thereafter  have the right to receive upon the
basis and upon the  terms and  conditions  specified  herein  and in lieu of the
shares of Common  Stock  immediately  theretofore  purchasable  hereunder,  such
shares of stock,  securities or assets as may (by virtue of such  consolidation,
merger,  sale,  reorganization  or  reclassification)  be issued or payable with
respect to or in exchange  for a number of  outstanding  shares of Common  Stock
equal to the  number  of  shares  of Common  Stock  immediately  theretofore  so
purchasable hereunder had such sale or transfer not taken place, and in any such
case  appropriate  provision  shall  be made  with  respect  to the  rights  and
interests  of the holder of this Warrant to the end that the  provisions  hereof
(including, without limitation,  provisions for adjustment of the Warrant Number
and the per share Warrant Price) shall thereafter be applicable as nearly as may
be,  in  relation  to any  shares  of stock,  securities  or  assets  thereafter
deliverable upon exercise of this Warrant. The Company shall not effect any such
sale or  transfer  unless  prior  to or  simultaneously  with  the  consummation
thereof,  the entity purchasing such assets shall assume by written  instrument,
reasonably  satisfactory  to the holder of this Warrant,  executed and mailed or
delivered  to the  holder of this  Warrant,  the  obligation  to deliver to such
holder such shares of stock,  securities  or assets as, in  accordance  with the
foregoing provisions, such holder may be entitled to receive.

     5.     Dissolution   or  Liquidation.  In   the   event  of  any   proposed
distribution of the assets of the Company in dissolution or liquidation  (except
under  circumstances  when the  foregoing  Section  4 shall be  applicable)  the
Company  shall mail notice  thereof to the holder of this Warrant and shall make
no distribution to shareholders until the expiration of 30 days from the date of
mailing  of the  aforesaid  notice  and,  in any such  case,  the holder of this
Warrant may exercise this Warrant within 30 days from the date of the mailing of
such notice,  and all rights herein granted not so exercised  within such 30 day
period shall thereafter become null and void.

<PAGE>

     6.     Change of Control.  In the event of a Change of Control,  as defined
below, the Company shall provide notice thereof to the holder of this Warrant at
least ten (10) days prior to the contemplated closing date or occurrence of such
Change of  Control  (the  "Contemplated  Closing  Date").  Upon the  Purchaser's
receipt of the Company's  notice of a Change of Control,  the Purchaser  may, at
its option, elect to exercise this Warrant pursuant to Section 1 hereof.  Should
the  Purchaser  decline or fail to exercise  this  Warrant  before 5:00 p.m. New
York, New York time on the  Contemplated  Closing Date,  then this Warrant shall
immediately prior to the closing of the Change of Control be deemed to have been
exercised by cashless exercise, as provided for in Section 1 hereof, without any
further  action  on the  part of the  Purchaser,  and  all  rights  and  options
hereunder  shall  expire  and  shall be wholly  null and void.  In the case of a
cashless  exercise  pursuant to this  Section,  from and after the  Contemplated
Closing  Date,  the  Purchaser  shall be  deemed  the  holder  of  record of the
securities  issuable  upon  exercise of this  Warrant,  and this  Warrant  shall
represent  only the right to receive,  upon return of the Warrant to the Company
for  cancellation,  a certificate  representing  the securities  issuable to the
Purchaser upon exercise of this Warrant.

     For  purposes of this  Warrant,  a "Change of  Control"  shall be deemed to
occur if any of the following occur:

            (i) The Company is merged, consolidated or  reorganized into or with
another   corporation  or  other  entity,   and  as  a  result  of  the  merger,
consolidation  or  reorganization  less than a majority of the  combined  voting
power  of  the   then-outstanding   securities  of  the  corporation  or  entity
immediately  after the  transaction  is held in the  aggregate by the holders of
Voting Stock immediately prior to the transaction;

            (ii) The Company sells  or otherwise transfers all  or substantially
all of its assets to another corporation or other entity and, as a result of the
sale or  transfer,  less than a majority  of the  combined  voting  power of the
then-outstanding securities of the other corporation or entity immediately after
the sale or transfer  is held in the  aggregate  by the holders of Voting  Stock
immediately prior to the sale or transfer; or

            (iii) Any person or group of persons (within  the meaning of Section
13(d)(3) of the Securities  Exchange Act of 1934) that holds less than 5% of the
Voting Stock of the Company outstanding on the date of the first issuance of any
of the Warrants becomes the beneficial owner of a majority of the Voting Stock.

     For purposes of this  Warrant,  the term  "Voting  Stock" means the capital
stock of the Company of any class or series  entitled to vote  generally  in the
election of directors.

     7.     Fractional Shares. Fractional  shares shall not be  issued  upon the
exercise of this Warrant but in any case where the holder hereof  would,  except
for the  provisions  of this  paragraph,  be entitled  under the terms hereof to
receive a  fractional  share upon the  complete  exercise of this  Warrant,  the
Company shall, upon the exercise of this Warrant for the largest number of whole
shares then called for, pay a sum in cash equal to the excess of the Fair Market
Value of such  fractional  share  over the  proportional  part of the per  share
Warrant Price represented by such fractional share.

     8.     Fully Paid Stock;  Taxes. The Company  covenants and agrees that the
shares of stock  represented by each and every  certificate  for its Stock to be
delivered on any exercise of this Warrant  shall,  at the time of such delivery,
be duly  authorized,  validly  issued  and  outstanding  and be  fully  paid and
nonassessable.  The Company  further  covenants and agrees that it will pay when

<PAGE>

due and payable any and all federal and state taxes, other than taxes on income,
which may be payable in  respect  of this  Warrant or any Stock or  certificates
therefor  upon the  exercise of the rights  herein  provided for pursuant to the
provisions  hereof.  The Company shall not, however,  be required to pay any tax
which may be payable in respect of any  transfer  involved in the  transfer  and
delivery of stock  certificates in the name other than that of the holder of the
Warrant converted,  and any such tax shall be paid by such holder at the time of
presentation.

     9.     Closing of Transfer Books. The holder of this Warrant shall continue
to have the right to exercise  this  Warrant even during a period when the stock
transfer books of the Company for its Stock are closed. The Company shall not be
required, however, to deliver certificates of its Stock upon such exercise while
such books are duly closed for any  purpose,  but the Company may  postpone  the
delivery of the certificates for such Stock until the opening of such books, and
they shall, in such case, be delivered forthwith upon the opening thereof, or as
soon as practicable thereafter.

     10.     Restrictions on Transferability of  Warrants and Shares; Compliance
with Securities Act; Exchange,  Assignment or Loss of Warrant.  This Warrant and
the Stock issued upon the  exercise  hereof,  and any  security  into which such
Stock may be convertible  ("Underlying  Stock") shall not be transferable except
upon the  conditions  hereinafter  specified,  which  conditions are intended to
insure compliance with the provisions of the Securities Act of 1933, as amended,
or any similar Federal statute at the time in effect (the  "Securities  Act") in
respect of the  transfer of any Warrant or any such Stock or any  security  into
which such Stock may be convertible.

             10.1  Assignments  Generally.  Except as may otherwise be expressly
provided herein, this Warrant is exchangeable, without expense, at the option of
the holder,  upon compliance with the express  provisions of this Section 10 and
presentation and surrender of the Warrant to the Company,  for other Warrants of
different  denominations  entitling  the  holder  thereof  to  purchase  in  the
aggregate  the same  number  of  shares  of  Stock  purchasable  hereunder.  Any
assignment  shall be made by  surrender  of this Warrant to the Company with the
Form of Assignment  annexed hereto duly executed and funds sufficient to pay any
transfer tax. Upon  compliance  with the express  provisions of this Section 10,
the Company  shall,  without  charge,  cause to be executed and  delivered a new
Warrant in the name of the assignee  named in such  instrument of assignment and
this Warrant shall promptly be canceled. This Warrant may be divided or combined
with other warrants that carry the same rights upon  presentation  hereof to the
Company together with a written notice specifying the names and denominations in
which new Warrants are to be issued and signed by the holder hereof.

             10.2    Notice  of  Proposed  Transfer; Opinion. The holder of each
Warrant  or any  Underlying  Stock  that is not the  subject  of a  registration
statement effective under the Securities Act ("Restricted Stock"), by acceptance
thereof,  agrees to give prior  written  notice to the Company of such  holder's
intention  to transfer  such  Warrant or the  Restricted  Stock (as  hereinafter
defined)  relating  thereto or such Restricted  Stock (or any portion  thereof),
describing  briefly  the  manner and  circumstances  of the  proposed  transfer,
including the identity of the proposed  transferee and the  consideration  to be
paid thereby.  Promptly after receiving such written  notice,  the Company shall
present  copies thereof to Company  counsel and, if required by the Company,  to
counsel  designated  by such holder.  If in the opinion of each such counsel the
proposed  transfer may be effected without  registration or qualification  under
any  Federal  or State  law of such  Warrant  or the  Underlying  Shares or such
Restricted  Stock,  the Company,  as promptly as practicable,  shall notify such
holder of such opinion and of the terms and conditions,  if any, to be observed,
whereupon  such  holder  shall be  entitled  to  transfer  such  Warrant or such
Restricted  Stock,  all in accordance with the terms of the notice  delivered to
such holder by the Company.

<PAGE>

             If in the opinion of either of such counsel  (such opinion to state
the  basis of the legal  conclusions  reached  therein)  the  proposed  transfer
described in the written notice given pursuant to this  subparagraph  may not be
effected without such  registration or qualification or without  compliance with
the conditions of an exemptive  regulation of the Commission,  the Company shall
promptly  notify such holder and thereafter such holder shall not be entitled to
effect  such  transfer  until  receipt of a  subsequent  notice from the Company
pursuant to the  immediately  preceding  sentence or until such  registration or
qualification  or filing  has become  effective.  All fees and  expenses  of the
Company's counsel shall be borne by the Company and the fees of the counsel,  if
any, designated by any holder of this Warrant or Restricted Stock shall be borne
by such holder.

             Notwithstanding  anything  to the  contrary  set forth  herein,  no
opinion of counsel  shall be required in the case of transfers to  affiliates of
the holder of this Warrant or of the Underlying Stock.

             10.3. Certain Assignments Following  Registration.  Notwithstanding
anything to the contrary  contained  herein,  if the Company has  registered the
Underlying  Stock pursuant to a Registration  Statement  which has been declared
effective by the Securities and Exchange Commission ("SEC") and, thereafter, the
holder purports to assigns all or a portion of the Underlying Stock to any other
person, the assignee shall have the right to cause the Registration Statement to
be amended or the prospectus related thereto to be supplemented,  in either case
to name such assignee as a selling  stockholder,  provided that (i) the use of a
post-effective  amendment  or a  supplement  to the  prospectus  is permitted by
applicable law for such purpose, and (ii) all costs and expenses to the Company,
including without limitation legal and accounting expenses, incurred to so amend
such  Registration  Statement or supplement the Prospectus  shall be paid by the
assignee  requesting such amendment (or shared on a pro rata basis to the extent
more than one assignee requests such amendment).

             10.4.  Restrictive  Legends.  Each  Warrant  shall bear on the face
thereof a legend  substantially  in the form of the notice endorsed on the first
page of this Warrant.

             Each  certificate for shares of Underlying  Stock initially  issued
upon the exercise of any Warrant and each  certificate  for shares of Underlying
Stock  issued to a  subsequent  transferee  of such  certificate  shall,  unless
otherwise  permitted  by the  provisions  of this  Section  10, bear on the face
thereof a legend reading substantially as follows:

     THE TRANSFER, SALE, ASSIGNMENT, PLEDGE AND ENCUMBRANCE OF OTHER DISPOSITION
     OF THE SHARES OF CLASS A COMMON STOCK  REPRESENTED BY THIS  CERTIFICATE ARE
     SUBJECT TO CERTAIN  RESTRICTIONS SET FORTH IN THE WARRANT UNDER WHICH THESE
     SHARES  WERE  ISSUED  AND WHICH  TERMS  CONTINUE  IN EFFECT  FOLLOWING  THE
     EXERCISE  THEREOF.  A COPY OF THE  WARRANT  IS ON FILE IN THE OFFICE OF THE
     SECRETARY  OF THE  COMPANY.  NO  SALE  OR  OTHER  TRANSFER  OF  THE  SHARES
     REPRESENTED  BY THIS  CERTIFICATE  MAY BE EFFECTED  EXCEPT  PURSUANT TO THE
     TERMS OF THE WARRANT.

             10.5 Removal of Legend. In the event that the Company shall receive
an opinion of its counsel or counsel of the holder,  which opinion is reasonably
acceptable to it, that,  in the opinion of such counsel,  such legend is not, or
is no longer, necessary or required (including,  without limitation,  because of
the availability of the exemption  afforded by Rule 144 of the General Rules and

<PAGE>

Regulations of the Securities and Exchange  Commission),  the Company shall,  or
shall  instruct its transfer  agents and  registrars to, remove such legend from
the  certificates  evidencing  the  Restricted  Stock or issue new  certificates
without such legend in lieu thereof.

     11. Partial Exercise and Partial  Assignment.  If this Warrant be exercised
in part only,  the holder  hereof  shall be  entitled  to receive a new  Warrant
covering  the number of shares in respect of which this  Warrant  shall not have
been  exercised as provided in paragraph 1 hereof.  If this Warrant is partially
assigned,  this Warrant  shall be  surrendered  at the  principal  office of the
Company (with the partial assignment form at the end hereof duly executed),  and
thereupon a new Warrant shall be issued to the holder hereof covering the number
of shares not assigned and setting  forth the  proportionate  aggregate  Warrant
Price  applicable  to such shares not  assigned.  The  assignee of such  partial
assignment  of this  Warrant  shall also be  entitled  to receive a new  Warrant
covering  the number of shares so assigned and setting  forth the  proportionate
aggregate Warrant Price applicable to such assigned shares.

     12. Registration Rights

             12.1  Definitions. As used in this Section 12, the following  terms
shall have the meanings set forth below:

             (a) The terms  "register,"  "registered" and  "registration"  shall
refer  to a  registration  effected  by  preparing  and  filing  a  registration
statement or similar document in compliance with the Act, and the declaration or
ordering of the effectiveness of such registration statement or document.

             (b) The term  "Registrable  Securities"  shall mean together in the
aggregate:  (A) the  Underlying  Stock issued or issuable  upon exercise of this
Warrant  and (B) the Stock held by or issuable  upon  exercise of any warrant or
conversion   of   convertible   security  to  any  other  persons  with  similar
registration rights as provided in this Warrant.

             (c) The term "Holder" means any person owning of record Registrable
Securities.

             12.2 Piggy-back Registration Rights. If (but without any obligation
to do so) at any time  prior to the date one (1) year  after the  Purchaser  has
fully  exercised  this  Warrant,  the Company  proposes  to register  any of its
securities  under  the  Act in  connection  with  the  public  offering  of such
securities  solely for cash (other than a registration  on Form S-4, Form S-8 or
any form which does not include  substantially  the same information as would be
required to be included in a  registration  statement  covering  the sale of the
Registrable  Securities and a registration statement relating to a PIPE (private
investment public equity) or similar transaction),  the Company shall, each such
time,  promptly give the Holder  written notice of such  registration.  Upon the
written  request of the Holder  given within  twenty (20) days after  receipt of
such  written  notice  from the  Company,  the  Company  shall,  subject  to the
provisions  of  Section  10,  cause to be  registered  under  the Act all of the
Registrable Securities that the Holder has requested to be registered; provided,
however,  that if the managing  underwriter of any underwritten  offering by the
Company expresses reasonable written objection to the registration of all of the
Registrable   Securities,   then  the  Registrable  Securities  which  shall  be
registered in such offering on behalf of holders of Registrable Securities shall
be reduced in the  proportion  equal to the average  proportion  of reduction as
that of all such holders seeking  registration in connection with such offering,
subject to any rights granted to other holders of securities of the Company that
are expressly by the terms of their agreements with the Company entitled to have
priority   registration   rights.  The  inclusion  of  any  of  the  Purchaser's

<PAGE>

Registrable  Securities  in a  registration  statement  filed by the Company and
declared  effective  by the SEC  shall  be  deemed  to be the  exercise  by such
Purchaser of the piggy-back registration rights granted herein to such Purchaser
except as to such  Registrable  Securities as were not registered as a result of
the immediately preceding sentence.

             12.3  Obligations of the Company.  Whenever  required  hereunder to
effect the  registration  of any Registrable  Securities,  the Company shall, as
expeditiously as reasonably possible:

             (a) Prepare  and file with the SEC a  registration  statement  with
respect  to  such  Registrable  Securities  and act  diligently  to  cause  such
registration  statement  to become  effective  as  promptly as  practicable  and
maintain the effectiveness of the registration statement (i) in the case of firm
commitment  underwritten  public offering,  until each underwriter has completed
the distribution of all of the securities  purchased by it, and (ii) in the case
of any other offering, 180 days after the effective date thereof, except that in
the case of  registrations  on Form S-3 or its  equivalent,  those  registration
statements  shall in any  event be kept  effective  until at least  one (1) year
after the Purchaser has fully exercised this Warrant.

             (b) Prepare and file with the SEC such  amendments and  supplements
to such  registration  statement and the prospectus used in connection with such
registration  statement as may be necessary to comply with the provisions of the
Act  with  respect  to  the  disposition  of  all  securities  covered  by  such
registration statement.

             (c)  Furnish  to  the  Purchasers  such  numbers  of  copies  of  a
prospectus,   including  a  preliminary  prospectus,   in  conformity  with  the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.

             (d) Use its best  efforts to register  and  qualify the  securities
covered  by  such  registration  statement  under  the  securities  laws of such
jurisdictions  as  shall  be  reasonably  requested  by the  Purchasers  for the
distribution of the securities covered by the registration  statement,  provided
that the Company shall not be required in connection therewith or as a condition
thereto  to qualify to do  business  or to file a general  consent to service of
process in any such jurisdiction.

             (e) In the event of any underwritten  public  offering,  enter into
and perform its obligations under an underwriting agreement with terms generally
satisfactory to the managing underwriter of such offering.

             (f) Notify the  Purchasers,  promptly  after the Company shall have
received notice thereof,  of the time when the  registration  statement  becomes
effective or any supplement to any prospectus forming a part of the registration
statement has been filed.

             (g)  Notify  the  Purchasers  of  any  stop  order  suspending  the
effectiveness of the registration  statement and use its reasonable best efforts
to remove such stop order.

             12.4 Furnish Information.  It shall be a condition precedent to the
obligations  of the  Company  to  take  any  action  pursuant  hereto  that  the
Purchaser,  having  chosen  to have  its  Registrable  Securities  included  for
registration,  shall  furnish to the  Company  such  information  regarding  the
Purchaser,  its Registrable Securities and the intended method of disposition of
such  securities as shall be required to effect the  registration  thereof.  The

<PAGE>

Purchaser  shall  be  required  to  represent  to  the  Company  that  all  such
information that is given is complete and accurate in all material respects. The
Purchaser  shall  deliver  to the  Company  a  statement  in  writing  from  the
beneficial  owners of such  securities  that such  beneficial  owners  bona fide
intend to sell, transfer or otherwise dispose of such securities.

             12.5 Expenses.

             (a) Registration  Expenses. All expenses incurred by the Company in
complying  with the terms of Sections  12.2 and 12.3 hereof,  including  without
limitation,  all  registration  and filing  fees,  printing  expenses,  fees and
disbursements of counsel for the Company,  "Blue Sky" fees and expenses, and the
expense of any special audits  incident to or required by any such  registration
(but excluding the compensation of regular  employees of the Company which shall
be paid in any event by the Company) shall be borne by the Company.

             (b) Selling  Expenses.  All underwriting  discounts,  underwriters'
expense allowance, and selling commissions applicable to the sale of Registrable
Securities  by the  Purchasers  and all fees and  disbursements  of any  special
counsel  (other  than  the  Company's  regular  counsel)  shall  be borne by the
Purchasers of the Registrable  Securities so registered pro rata on the basis of
the number of Registrable Securities so registered.

             12.6 Underwriting Requirements;  Lock-up Provisions. All Purchasers
proposing to distribute their Registrable  Securities through an underwriting in
which the Company has proposed or is proposing to  participate,  shall (together
with the Company and any other Purchasers  distributing their securities through
such underwriting)  enter into an underwriting  agreement in customary form with
the underwriter or underwriters selected for underwriting by the Company. If any
Purchaser disapproves of the terms of any such underwriting,  such Purchaser may
elect to withdraw  therefrom  by written  notice to the Company and the managing
underwriter;  such  notice to be given by the  Purchaser  not later than two (2)
business days following receipt of the Company's notice (which shall include the
terms of the  underwriting  agreement) to Purchaser that the Company will file a
registration  statement  (not  later  than five (5)  business  days  after  such
Company's  notice) which will include a preliminary  prospectus which sets forth
the  number  of  shares  of  Common  Stock to be  offered  for  sale by  selling
stockholders.  Any  Registrable  Securities  excluded  or  withdrawn  from  such
underwriting  shall  not be  withdrawn  from  such  registration  except  at the
election of the Purchaser.

     Notwithstanding  the  foregoing,  the  Purchaser  acknowledges  that if the
Company  elects to  distribute  its shares in an  underwritten  public  offering
(whether or not any  Registrable  Securities held by Purchaser are included as a
part of such  offering),  the  underwriter  may  require as a  condition  of the
offering that the Purchaser agree to a lock-up of the Registrable Securities for
a  period  commencing  10 days  prior  to the  anticipated  commencement  of the
offering and continuing for up to 180 days after completion of the offering (the
"Lock-up  Provision").  The  Purchaser  agrees  that,  if  requested by any such
underwriter and not waived by the Company,  such Purchaser will be bound by such
Lock-up Provisions if required by such underwriter.

             12.7 Indemnification.  In the event that any Registrable Securities
are included in a registration statement pursuant hereto:

             (a) To the extent  permitted by law, the Company will indemnify and
hold  harmless  each  Purchaser,  the officers,  directors,  employees,  agents,
attorneys and partners of each  Purchaser,  any  underwriter  (as defined in the
Act) for such Purchaser and each person,  if any, who controls such Purchaser or

<PAGE>

underwriter  within the  meaning of the Act or the  Exchange  Act,  against  any
losses,  claims,  damages or  liabilities  (joint or  several) to which they may
become  subject  under the Act, the Exchange Act or other  federal or state law,
insofar as such losses,  claims,  damages or liabilities  (or actions in respect
thereof)  arise  out of or are  based  upon  any  of the  following  statements,
omissions or violations (collectively,  a "Violation"): (A) any untrue statement
or alleged untrue  statement of a material fact  contained in such  registration
statement,  including any preliminary  prospectus or final prospectus  contained
therein or any  amendments or supplements  thereto;  (B) the omission or alleged
omission to state  therein a material  fact  required to be stated  therein,  or
necessary to make the statements therein not misleading; or (C) any violation or
alleged  violation by the Company of the Act, the Exchange  Act, any  applicable
state  securities law or any rule or regulation  promulgated  under the Act, the
Exchange  Act or any  applicable  state  securities  law;  and the Company  will
reimburse the Purchaser for any legal or other expenses  reasonably  incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action;  provided,  however, that the indemnity agreement contained
in this Subsection  10.9(a) shall not apply to amounts paid in settlement of any
such loss,  claim,  damage,  liability or action if such  settlement is effected
without the  consent of the Company  (which  consent  shall not be  unreasonably
withheld),  nor shall the  Company be liable in any such case for any such loss,
claim,  damage,  liability  or action to the extent  that it arises out of or is
based upon a Violation  which  occurs in reliance  upon and in  conformity  with
written  information  furnished  expressly  for  use  in  connection  with  such
registration by any such Purchaser, underwriter or controlling person; provided,
however, that the Company will not be liable in any such case to the extent that
any such  loss,  claim,  damage or  liability  arises out of or is based upon an
untrue  statement or alleged  untrue  statement or omission or alleged  omission
made in said registration  statement,  said preliminary  prospectus,  said final
prospectus  or said  amendment or  supplement in reliance upon and in conformity
with written information furnished by such Purchaser or any other Purchaser, for
use  in the  preparation  thereof;  and  further  provided,  however,  that  the
foregoing  indemnity  agreement is subject to the condition that,  insofar as it
relates to any untrue statement,  alleged untrue statement,  omission or alleged
omission made in any  preliminary  prospectus  but eliminated or remedied in the
prospectus,  such  indemnity  agreement  shall not inure to the  benefit  of any
underwriter or broker,  if a copy of the final  prospectus was not sent or given
to such person with or prior to the  confirmation of the sale of such securities
to such person.

             (b) To the extent  permitted by law,  each selling  Purchaser  will
indemnify  and hold  harmless the Company,  its  directors,  its  officers,  its
employees, its agents, its attorneys, any person who controls the Company within
the meaning of the Act or the Exchange Act, any underwriter  (within the meaning
of the Act) for the Company and any person who controls such underwriter against
any  losses,  claims,  damages or  liabilities  joint or  several)  to which the
Company or any such director,  officer,  employee, agent, attorney,  controlling
person, or underwriter or controlling person may become subject,  under the Act,
the Exchange Act or other federal or state law, insofar as such losses,  claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any  Violation,  in each case to the extent (and only to the  extent)  that
such  Violation   occurs  in  reliance  upon  and  in  conformity  with  written
information furnished by the Purchaser expressly for use in connection with such
registration;  and the  Purchaser  will  reimburse  any legal or other  expenses
reasonably  incurred by the Company or any such director,  officer,  controlling
person,   underwriter  or  controlling   person  thereof,   in  connection  with
investigating or defending any such loss,  claim,  damage,  liability or action;
provided,  however,  that the indemnity  agreement  contained in this Subsection
10.9(b) shall not apply to amounts paid in  settlement of any such loss,  claim,
damage,  liability or action if such settlement is effected  without the consent
of the Purchaser,  which consent shall not be unreasonably withheld, and further
provided that Purchaser's obligations under this subsection shall not exceed the

<PAGE>

amount  invested  by  Purchaser  in the  securities  that  are  included  in the
registration to which the violation relates.

             (c)  Promptly  after  receipt by an  indemnified  party  under this
Section  10.9  of  notice  of the  commencement  of any  action  (including  any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 10.9, notify the
indemnifying party in writing of the commencement  thereof, and the indemnifying
party  shall  have  the  right  to  participate  in,  and,  to  the  extent  the
indemnifying  party so  desires,  jointly  with  any  other  indemnifying  party
similarly  notified,  to  assume  the  defense  thereof  with  counsel  mutually
satisfactory to the parties; provided,  however, that an indemnified party shall
have the right to retain its own counsel,  with the fees and expenses to be paid
by the indemnifying  party, if  representation  of such indemnified party by the
counsel retained by the indemnifying  party would be inappropriate due to actual
or potential  differing  interests  between such indemnified party and any other
party  represented by such counsel in such proceeding.  The failure to notify an
indemnifying  party within a  reasonable  time of the  commencement  of any such
action,  to the extent  prejudicial to its ability to defend such action,  shall
relieve such indemnifying  party of any liability to the indemnified party under
this Section 10.9, but the omission so to notify the indemnifying party will not
relieve it of any liability that it may have to any indemnified  party otherwise
than under this Section.

             12.8 Reports Under  Exchange  Act.  Following  registration  of the
Company's  securities under the Exchange Act and with a view of making available
to the  Purchasers  the benefits of Rule 144  promulgated  under the Act and any
other rule or  regulation  of the SEC that may at any time permit a Purchaser to
sell securities of the Company to the public without  registration,  the Company
agrees to:

             (a) use its  best  efforts  to make  and  keep  public  information
available,  as those terms are understood and defined in Rule 144, at all times;
and

             (b) use its best  efforts  to file with the SEC in a timely  manner
all reports and other  documents  required of the Company  under the Act and the
Exchange Act.

             12.9  Purchaser's  Acceptance  of  Obligations.  Acceptance of this
Warrant  by its  Purchaser(s)  shall be deemed  to  constitute  the  unqualified
acceptance by the Purchaser of all of the terms and conditions set forth herein.

     13.     Lost, Stolen Warrants, etc. In case any Warrant shall be mutilated,
stolen or destroyed, the Company may issue a new Warrant of like date, tenor and
denomination  and  deliver the same in exchange  and  substitution  for and upon
surrender and cancellation of any mutilated  Warrant,  or in lieu of any Warrant
lost, stolen or destroyed,  upon receipt of evidence satisfactory to the Company
of the loss, theft or destruction of such Warrant, and upon receipt of indemnity
satisfactory to the Company.

     14.     Warrant Holder Not  Shareholder.  This Warrant does not confer upon
the holder  hereof  any right to vote or to  consent  or to receive  notice as a
shareholder of the Company,  as such, in respect of any matters  whatsoever,  or
any other rights or liabilities as a shareholder,  prior to the exercise  hereof
as hereinbefore provided.

     15.     Severability. Should  any  part of this Warrant for any  reason  be
declared  invalid,  such decision shall not affect the validity of any remaining

<PAGE>

portion,  which  remaining  portion  shall remain in force and effect as if this
Warrant had been executed with the invalid portion thereof eliminated, and it is
hereby  declared  the  intention  of the  parties  hereto  that they  would have
executed and accepted the remaining  portion of this Warrant  without  including
therein any such part, parts or portion which may, for any reason,  be hereafter
declared invalid.

     16.     Notice. All notices and other communications  required or permitted
to be given under any Agreement shall be deemed given when personally  delivered
or sent by certified mail, return receipt requested,  postage prepaid, overnight
delivery or confirmed  facsimile  transmission  to the parties at the  following
address or fax number:

             To the Company at:

                    ATC Healthcare, Inc.
                    1983 Marcus Avenue
                    Lake Success, NY  11042
                    Attention:  Chief Financial Officer
                    Facsimile No.:  (516) 750-1754

             With a copy to:

                    David J. Hirsch, Esquire
                    DKW Law Group LLC
                    58th Floor, US Steel Building
                    600 Grant Street
                    Pittsburgh, PA 15219
                    Facsimile No.: (412) 355-2609

             To the  Purchaser  at: The address  set forth in  the  Subscription
             Agreement  under which  the Purchaser acquired, among other things,
             this Warrant.

or, as to either party or any subsequent  holder of this Warrant,  to such other
address and/or  facsimile  number as such party  designates by written notice to
the other party or parties.

     17.     Miscellaneous.

             (a) This Warrant  shall be governed by,  construed  and enforced in
accordance with the law of the State of Delaware, without regard to its conflict
of laws principles.

             (b) The  agreements  which are  contained  herein shall survive the
exercise of this Warrant to the extent applicable thereafter.

             (c)  This  Warrant  is one of a  series  of  substantially  similar
warrants  (the  "Warrants")  having  the  same  exercise  price  and  issued  in
connection with the purchase of Convertible  Notes of the Company.  This Warrant
may be changed,  waived,  discharged  or  terminated by an instrument in writing
signed by the holders of Warrants  exercisable  into more than 50% of the shares
of Stock into which all the Warrants are exercisable as of the date of execution
of the change, waiver, discharge or termination.

<PAGE>

             IN WITNESS  WHEREOF,  the  Company  has caused  this  Warrant to be
signed and attested by its duly authorized officers as of the day and year first
set forth above.

                                       ATC HEALTHCARE, INC.

                                       By
                                         -----------------------------
                                           Andrew C. Reiben
                                           Senior Vice President/Chief Financial
                                           Officer

ATTEST:

----------------------------
David Savitsky, CEO

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