Document:

Exhibit 10.1

BROKER'S NAME:  Steve Bathgate
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                IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING.
               SIGNIFICANT REPRESENTATIONS ARE CALLED FOR HEREIN.

                             SUBSCRIPTION AGREEMENT
                                       and
                           LETTER OF INVESTMENT INTENT
                           ---------------------------

                     6% CONVERTIBLE SERIES C PREFERRED STOCK
                                       of
                              ATC HEALTHCARE, INC.

David Savitsky
ATC Healthcare, Inc.
1983 Marcus Avenue
Lake Success, NY 11042

Gentlemen:

         The undersigned (the "Subscriber") hereby tenders this subscription for
the purchase of securities (the "Securities") of ATC Healthcare, Inc. (the
"Company"), consisting of units ("Units") comprising certain 6% Convertible
Series C Preferred Stock ("Stock") and common stock purchase warrants
("Warrants"). The Units are described in the Summary of Terms attached to this
Subscription Agreement as Exhibit A (the "Term Sheet"). The Subscriber
understands that a subscription for the Units may be rejected for any reason and
that, in the event that this subscription is rejected, the funds delivered
herewith will be promptly returned, without interest thereon or deduction
therefrom. By execution below, the Subscriber acknowledges that the Company is
relying upon the accuracy and completeness of the representations contained
herein in complying with their obligations under applicable securities laws.

         1. Subscription Commitment. The Subscriber acknowledges that the
minimum subscription is Fifty Thousand Seventeen and 50/100 Dollars
($50,017.50). The Subscriber hereby subscribes for the purchase of the number of
Securities specified below and, as full payment therefor, agrees to pay by wire
transfer to the account of the Company the amount specified below.

         500 Shares Series C Preferred Stock At $1.35 per Unit for an Warrants
         to Purchase 741,000 Shares of Common Stock aggregate of $1,000,350.00

<PAGE>

         The Subscriber understands that this subscription is not binding on the
Company until accepted by the Company, which acceptance is at the discretion of
the Company and is to be evidenced by the Company's execution of this
Subscription Agreement where indicated. If the subscription is rejected, the
Company shall return to the Subscriber, without interest or deduction, any
payment tendered by the Subscriber, and the Company and the Subscriber shall
have no further obligation to each other hereunder. Unless and until rejected by
the Company, this subscription shall be irrevocable by the Subscriber. The
Subscriber understands that the Company may, in the event that the offering to
which the Term Sheet relates is oversubscribed, reduce this subscription in any
amount and to any extent, whether or not pro rata reductions are made of any
other investor's subscription.

         2. Subscriber's Representations and Warranties. In order to induce the
Company to accept this subscription, the Subscriber hereby represents and
warrants to, and covenants with, the Company as follows:

         (a) The Subscriber has had the opportunity to review the following
filings with the Securities and Exchange Commission by the Company (the "SEC
Filings"):

               (i)  The Company's Annual Report on Form 10-K/A, filed with the
                    SEC on September 26, 2005; and

               (ii) The Company's Quarterly Report on Form 10-Q, filed with the
                    SEC on January 17, 2006;

               (ii) The Company's Proxy Statement on Schedule 14A, filed with
                    the SEC on June 28, 2005.

The Subscriber has also been given access to full and complete information
regarding the Company and has utilized such access to the Subscriber's
satisfaction for the purpose of obtaining such information regarding the Company
as the Subscriber has reasonably requested; and, particularly, the Subscriber
has been given reasonable opportunity to ask questions of, and receive answers
from, representatives of the Company concerning the terms and conditions of the
offering of the Securities and to obtain any additional information, to the
extent reasonably available;

         (b) Except for the SEC Filings, the Term Sheet and certain other
documents as listed on Exhibit B hereto (the SEC Filings, Term Sheet and other
documents listed on Exhibit B together referred to as the "Documents"), the
Subscriber has not been furnished with any other materials or literature
relating to the offer and sale of the Securities; except as set forth in the
Documents, no representations or warranties have been made to the Subscriber by
the Company, any selling agent of the Company, or any agent, employee, or
affiliate of the Company or such selling agent.

         (c) The Subscriber acknowledges that certain of the documents or
information referenced on Exhibit B attached to this Subscription Agreement may
contain forward-looking statements that are prone to substantial risks and
uncertainties. These forward-looking statements are not historical facts, but
are based on the Company's current expectations, estimates and projections about
its industry, its beliefs, and its assumptions. Words such as "anticipates,"
"believes," "expects," "plans," "future," "projections," and "forecasted" are
intended to identify forward-looking statements. The Subscriber further
acknowledges that these statements are not guarantees of future performance and
are subject to various risks, uncertainties and other factors, some of which are
beyond the Company's control and difficult to predict, and could cause actual
results to differ materially from those expressed or forecasted in the
forward-looking statements. These forward-looking statements reflect the
Company's view only as of the date of the particular document in which they are
contained.

                                       2
<PAGE>

         (d) The Subscriber believes that an investment in the securities is
suitable for the Subscriber based upon the Subscriber's investment objectives
and financial needs. The Subscriber (i) has adequate means for providing for the
Subscriber's current financial needs and personal contingencies; (ii) has no
need for liquidity in this investment; (iii) at the present time, can afford a
complete loss of such investment; and (iv) does not have an overall commitment
to investments which are not readily marketable that is disproportionate to the
Subscriber's net worth, and the Subscriber's investment in the Securities will
not cause such overall commitment to become excessive.

         (e) The Subscriber, in reaching a decision to subscribe, has such
knowledge and experience in financial and business matters that the Subscriber
is capable of reading and interpreting financial statements and evaluating the
merits and risk of an investment in the Securities and has the net worth to
undertake such risks.

         (f) The Subscriber was not offered or sold the Securities, directly or
indirectly, by means of any form of general advertising or general solicitation,
including, but not limited to, the following: (1) any advertisement, article,
notice or other communication published in any newspaper, magazine, or similar
medium of or broadcast over television or radio; or (2) to the knowledge of the
undersigned, any seminar or meeting whose attendees had been invited by any
general solicitation or general advertising.

         (g) The Subscriber has obtained, to the extent the Subscriber deems
necessary, the Subscriber's own personal professional advice with respect to the
risks inherent in the investment in the securities, and the suitability of an
investment in the Securities in light of the Subscriber's financial condition
and investment needs;

         (h) The Subscriber recognizes that the Securities as an investment
involves a high degree of risk.

         (i) The information contained in this agreement is true, complete and
correct in all material respects as of the date hereof; the Subscriber
understands that the Company's determination that the exemption from the
registration provisions of the Securities Act of 1933, as amended (the "Act"),
which is based upon non-public offerings and applicable to the offer and sale of
the Securities, is based, in part, upon the representations, warranties, and
agreements made by the Subscriber herein; and the Subscriber consents to the
disclosure of any such information, and any other information furnished to the
Company, to any governmental authority, self-regulatory organization, or, to the
extent required by law, to any other person.

         (j) The Subscriber realizes that (i) the purchase of the Securities is
a long-term investment; (ii) the purchaser of the Securities must bear the
economic risk of investment for an indefinite period of time because the
Securities have not been registered under the Securities Act of 1933 or under
the securities laws of any state and, therefore, the Securities cannot be resold
unless they are subsequently registered under said laws or exemptions from such
registrations are available; and (iii) the transferability of the Securities is
restricted and (A) requires conformity with the restrictions contained in
paragraph 2 below and (B) legends will be placed on the certificate(s)
representing the Securities referring to the applicable restrictions on
transferability; and

                                       3
<PAGE>

         (k) The Subscriber certifies, under penalties of perjury, that the
Subscriber is NOT subject to the backup withholding provisions of Section
3406(a)(i)(C) of the Internal Revenue Code.

         (l) Stop transfer instructions will be placed with the transfer agent
for the Securities, and a legend may be placed on any certificate representing
the Securities substantially to the following effect:

         THIS SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
         COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), IN
         RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN THE ACT AND
         REGULATION D UNDER THE ACT. AS SUCH, THE PURCHASE OF THIS SECURITY WAS
         NECESSARILY WITH THE INTENT OF INVESTMENT AND NOT WITH A VIEW FOR
         DISTRIBUTION. THEREFORE, ANY SUBSEQUENT TRANSFER OF THIS SECURITY OR
         ANY INTEREST THEREIN WILL BE UNLAWFUL UNLESS IT IS REGISTERED UNDER THE
         ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE.

         (m) THE SUBSCRIBER UNDERSTANDS THAT BATHGATE CAPITAL PARTNERS LLC IS
ACTING AS A FINDER ON THIS TRANSACTION, AND THE COMPANY WILL PAY BATHGATE
CAPITAL PARTNERS A FINDER'S FEE OF A CASH PAYMENT OF SEVEN PERCENT (7%) OF MY
INVESTMENT AND WARRANTS EQUAL TO SEVEN PERCENT (7%) OF MY INVESTMENT, AS
DESCRIBED IN THE DOCUMENTS. THE SUBSCRIBER FURTHER UNDERSTANDS THAT BATHGATE
CAPITAL PARTNERS HAS DONE ONLY A LIMITED AMOUNT OF DUE DILIGENCE ON THE COMPANY
AND THE INVESTMENT, AND REPRESENTS TO BATHGATE CAPITAL PARTNERS THAT THE
SUBSCRIBER IS NOT RELYING ON BATHGATE CAPITAL PARTNERS FOR PERFORMING SUCH
INVESTIGATIONS.

         3. Company's Representations and Warranties. In order to induce the
Subscriber to enter into this subscription, the Company hereby represents and
warrants to, and covenants with, the Subscriber as follows:

         (a) Documents. The Documents have been carefully prepared by the
Company. The Documents do not include any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. Any additional written information authorized by the
Company to be provided to prospective purchasers shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

                                       4
<PAGE>

         (b) No Material Adverse Change. Except as may be reflected in or
contemplated by the Documents, subsequent to the dates as of which information
is given in the Documents, and prior to the acceptance of subscription proceeds
from an Investor (referred to herein as a "Closing"), (i) there has not been any
material adverse change in the business, properties, options to lease, leases,
financial condition, management, or otherwise of the Company or in the Company's
business taken as a whole, (ii) there has not been any material transaction
entered into by the Company other than transactions in the ordinary course of
business; (iii) the Company has not incurred any material obligations,
contingent or otherwise, which are not disclosed in the Documents; (iv) there
has not been any change in the capital stock or adverse change in the short-term
or long-term debt (except current payments) of the Company; and (v) the Company
has not paid or declared any dividends or other distributions.

         (c) No Defaults. The Company is not in default in the performance of
any obligation, agreement or condition contained in any debenture, note or other
evidence of indebtedness or any indenture or loan agreement of the Company,
other than as set forth in the Documents or as will not materially and adversely
impact the Company or its present or prospective business. The execution and
delivery of this Agreement and the consummation of the transactions herein
contemplated, and compliance with the terms of this Agreement will not conflict
with or result in a breach of any of the terms, conditions or provisions of, or
constitute a default under, the articles of incorporation or bylaws of the
Company, or any note, indenture, mortgage, deed of trust, or other agreement or
instrument to which the Company is a party or by which it or any of its property
is bound, or any existing law, order, rule, regulation, writ, injunction, or
decree or any government, governmental instrumentality, agency or body,
arbitrator, tribunal or court, domestic or foreign, having jurisdiction over the
Company or its property other than breaches that would not materially and
adversely impact the Company or its present or prospective business. The
consent, approval, authorization, or order of any court or governmental
instrumentality, agency or body is not required for the consummation of the
transactions herein contemplated except such as may be required under the
securities laws of any state or jurisdiction.

         (d) Organization and Standing. The Company is, and at the Closing will
be, duly organized and validly existing in good standing as a corporation under
the laws of its state of incorporation and with full power and authority to own
its property and conduct its business, present and proposed, as described in the
Documents; the Company has full power and authority to enter into this Agreement
and to issue the securities comprising the Units, and the Company is duly
qualified and in good standing as a foreign corporation in all jurisdictions in
which the character of the property owned or leased or the nature of the
business transacted by it makes such qualification necessary. The Company has
paid all fees required by the jurisdiction of organization and any jurisdiction
in which it is qualified as a foreign corporation.

         (e) Legality of Units. The securities comprising the Units have been
duly and validly authorized and, when issued or sold and delivered against
payment therefor as provided in this Agreement, will be validly issued, fully
paid and nonassessable. Upon the due conversion of the Stock and due exercise of
the Warrants, the Common Stock of the Company issued thereunder will be validly
issued, duly paid and non-assessable. A sufficient number of shares of Common
Stock of the Company has been reserved for issuance upon conversion of the Stock
and upon exercise of the Warrants.

                                       5
<PAGE>

         (f) Prior Sales. No securities of the Company have been sold by the
Company or by, or on behalf of, or for the benefit of, any person or persons
controlling, controlled by, or under common control with the Company at any time
prior to the date hereof, except as set out in the Documents. No prior
securities sales by the Company or any affiliate are required to be integrated
with the proposed sale of the Units such that the availability of Regulation D
or any other claimed exemption from the registration requirements of the Act
would be made unavailable to the offer and sale of the Units.

         (g) Litigation. There is and at the Closing there will be no action,
suit or proceeding before any court or governmental agency, authority or body
pending or to the knowledge of the Company threatened which might result in
judgments against the Company, or its officers, directors, employees or agents
which the Company is obligated to indemnify, not adequately covered by insurance
and which collectively might result in any material adverse change in the
condition (financial or otherwise), the business or the prospects of the Company
or would materially affect the properties or assets of the Company.

         (h) Contracts. Each contract to which the Company is a party and to
which reference is made in the Documents has been duly and validly executed, is
in full force and effect in all material respects in accordance with their
respective terms, and none of such contracts has been assigned by the Company;
and the Company knows of no present situation or condition or fact which would
prevent compliance with the terms of such contracts, as amended to date. Except
for amendments or modifications of such contracts in the ordinary course of
business, the Company has no intention of exercising any right which it may have
to cancel any of its obligations under any of such contracts, and has no
knowledge that any other party to any of such contracts has any intention not to
render full performance under such contracts.

         (i) Tax Returns. The Company has filed all federal, state and municipal
tax returns which are required to be filed, and has paid all taxes shown on such
returns or otherwise owed by it and on all assessments received by it to the
extent such taxes have become due. All other taxes with respect to which the
Company is obligated have been paid or adequate accruals have been set up to
cover any such unpaid taxes, including all federal and state withholding and
FICA payments.

         (j) Property. Except as otherwise set forth in the Documents, the
Company has good title, free and clear of all liens, encumbrances and defects,
except liens for current taxes not due and payable, to all property and assets
which are described in the Documents as being owned by the Company, subject only
to such exceptions as are not material and do not adversely affect the present
or prospective business of the Company. All of the claims, options to lease,
leases and subleases material to the business of the Company under which the
Company holds or uses any real or personal property, including those described
or referred to in the Documents, are in full force and effect, and the Company
is not in default in respect of any of the terms or provisions of any such
claims, options to lease, leases or subleases, and no claim of any sort has been
asserted by anyone adverse to the Company's rights under any such claims,
options to lease, leases or subleases or affecting or questioning the Company's
rights to the continued possession of the claimed, optioned, leased or subleased
property covered by such claim, options to lease, lease or sublease.

                                       6
<PAGE>

         (k) Authority. The execution and delivery by the Company of this
Agreement has been duly authorized, and this Agreement is the valid, binding and
legally enforceable obligation of the Company.

         (l) Use of Proceeds. The Company will apply the proceeds from the sale
of the Units for acquisition of Critical Nursing Solutions Inc., general working
capital and to fund offering expenses.

         (m) No Limitations on Payment of Dividends. Except as otherwise set
forth in the Documents, there are no limitations, either contractual or
otherwise, nor will the Company enter into any agreement with any other party,
which prevents or limits the Company's ability to declare or pay dividends on
its Common Stock.

         (n) Fair Market Value. The Company's Board of Directors has determined
in good faith that the price of a share of Class A Common Stock of the Company
determined by virtue of the sale of the Stock is at or in excess of the "Fair
Market Value" as defined in the terms of that certain Certificate of Designation
establishing the terms of the 7% Convertible Series A Preferred Stock of the
Company.

         4. Restricted Nature of the Securities. The Subscriber has been advised
and understands that (a) the Securities have not been registered under the
Securities Act of 1933 or applicable state securities laws and that the
securities are being offered and sold pursuant to exemptions from such laws; (b)
the Documents may not have been filed with or reviewed by certain state
securities administrators because of the limited nature of the offering; (c)
except as provided in paragraph 11 hereunder, the Company is under no obligation
to register the Securities under the Act or any state securities laws, or to
take any action to make any exemption from any such registration provisions
available. The Subscriber represents and warrants that the Securities are being
purchased for the Subscriber's own account and for investment purposes only, and
without the intention of reselling or redistributing the same; the Subscriber
has made no agreement with others regarding any of the Securities; and the
Subscriber's financial condition is such that it is not likely that it will be
necessary to dispose of any of such Securities in the foreseeable future. The
Subscriber is aware that, in the view of the Securities and Exchange Commission,
a purchase of such securities with an intent to resell by reason of any
foreseeable specific contingency or anticipated change in market value, or any
change in the condition of the Company, or in connection with a contemplated
liquidation settlement of any loan obtained for the acquisition of such
securities and for which such securities were pledged, would represent an intent
inconsistent with the representations set forth above.

         5. Residence. The Subscriber represents and warrants that the
Subscriber is a bona fide resident of, is domiciled in and received the offer
and made the decision to invest in the Securities in the state set forth on the
signature page hereof, and the Securities are being purchased by the Subscriber
in the Subscriber's name solely for the Subscriber's own beneficial interest and
not as nominee for, or on behalf of, or for the beneficial interest of, or with
the intention to transfer to, any other person, trust or organization, except as
specifically set forth in paragraph 18 of this Subscription Agreement and Letter
of Investment Intent.

                                       7
<PAGE>

         6. Investor Qualification. The Subscriber represents and warrants that
the Subscriber or the purchaser of the Securities named in paragraph 18 comes
within at least one category marked below, and that for any category marked the
Subscriber has truthfully set forth the factual basis or reason the Subscriber
comes within that category. ALL INFORMATION IN RESPONSE TO THIS PARAGRAPH WILL
BE KEPT STRICTLY CONFIDENTIAL. The Subscriber agrees to furnish any additional
information which the Company deems necessary in order to verify the answers set
forth below.

Category I       ___       The Subscriber is an individual (not a partnership,
                           corporation, etc.) whose individual net worth, or
                           joint net worth with the Subscriber's spouse,
                           presently exceeds $1,000,000.

                           Explanation. In calculation of net worth the
                           Subscriber may include equity in personal property
                           and real estate, including the Subscriber's principal
                           residence, cash, short term investments, stocks and
                           securities. Equity in personal property and real
                           estate should be based on the fair market value of
                           such property less debt secured by such property.

Category II      ___       The Subscriber is an individual (not a partnership,
                           corporation, etc.) who had an individual net income
                           in excess of $200,000 in each of the last two years,
                           or joint income with his/her spouse in excess of
                           $300,000 in each of the last two years, and has a
                           reasonable expectation of reaching the same income
                           level in the current year.

Category III     ___       The Subscriber is an executive officer or director of
                           the Company.

Category IV      _X_       The Subscriber is a bank; savings and loan; insurance
                           company; registered broker or dealer; registered
                           investment company; registered business development
                           company; licensed small business investment company
                           (SBIC); or employee benefit plan within the meaning
                           of Title I of ERISA whose plan fiduciary is either a
                           bank, savings and loan, insurance company or
                           registered investment advisor or whose total assets
                           exceed $5,000,000; or a self-directed employee
                           benefit plan with investment decisions made solely by
                           persons that are accredited investors.

                                        SBIC
                           -----------------------------------------------------

                           -----------------------------------------------------
                                (describe entity)

Category V       ___       The Subscriber is a private business development
                           company as defined in Section 202(a)(22) of the
                           Investment Advisers Act of 1940.

                                       8
<PAGE>

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

                           -----------------------------------------------------
                                    (describe entity)

Category VI      ___       The Subscriber is an entity with total assets in
                           excess of $5,000,000 which was not formed for the
                           purpose of investing in the Units and which is one of
                           the following:

                           _____        a corporation; or

                           _____        a partnership; or

                           _____        a business trust; or

                           _____        a tax-exempt organization described in
                                        Section 501(c)(3) of the Internal
                                        Revenue Code of 1986, as amended.

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

                           -----------------------------------------------------
                                    (describe entity)

Category VII     ___       The Subscriber is a trustee for a trust that is
                           revocable by the grantor at any time (including an
                           IRA) and the grantor qualifies under either Category
                           I or Category II above. A copy of the declaration of
                           trust or trust agreement and a representation as to
                           the net worth or income of the grantor is enclosed.

Category VIII    ___       The Subscriber is an entity all the equity owners of
                           which are "accredited investors" within one or more
                           of the above categories, other than Category IV or
                           Category V. [If relying upon this category alone,
                           each equity owner must complete a separate copy of
                           this Agreement.]

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

                           -----------------------------------------------------
                                    (describe entity)

Category IX      ___       The Subscriber is a trust with total assets in excess
                           of $5,000,000, not formed for the specific purpose of
                           acquiring the Securities, whose purchase is directed
                           by a person who has such knowledge and experience in
                           financial and business matters that he is capable of
                           evaluating the merits and risks of the prospective
                           investment.

                                       9
<PAGE>

         7. Disclosure of Stock Ownership. In the registration statement
referred to in paragraph 11 below, the Company needs to disclose the number of
shares of stock of the Company the Subscriber owns in addition to those being
purchased in this offering.

Does the Subscriber beneficially own shares of stock of the Company or
securities convertible into shares of common stock of the Company prior to this
subscription?

                           Yes __X__                 No _____

If so, state the number of shares common stock of the Company you beneficially
own and the number of shares of common stock into which any other security you
hold could be converted. If you are uncertain about the number of shares of
common stock into which any other security you hold could be converted, state
the name of the convertible security and the number of shares or principal
amount, as applicable.

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If this information changes, please notify the Company.

Please note that a "beneficial owner" of shares means any person who, directly
or indirectly, through any contract, arrangement, understanding, relationship or
otherwise has or shares voting power (including the power to vote, or to direct
the voting of, such shares), and/or investment power (including the power to
dispose of, or to direct the disposition of, such shares). Include shares owned
by your spouse or relatives and over which you have or share "voting power" or
"investment power" or both. Please note that the same security may be
beneficially owned by more than one person. In the case of options or warrants,
shares which will be issuable upon the exercise of same are deemed to be
beneficially owned by you if you may exercise the option or warrant within 60
days

         8. Additional Representations. The undersigned, if other than an
individual, makes the following additional representations:

                  (a) The Subscriber was not organized for the specific purpose
of acquiring the Securities; and

                  (b) This Subscription Agreement and Letter of Investment
Intent has been duly authorized by all necessary action on the part of the
Subscriber, has been duly executed by an authorized officer or representative of
the Subscriber, and is a legal, valid and binding obligation of the Subscriber
enforceable in accordance with its terms.

         9. Sophistication. The Subscriber further represents and warrants that
he has such knowledge and experience in financial and business matters so as to
be capable of evaluating the merits and risks of an investment in the Securities
and protecting the Subscriber's own interests in this transaction, and does not
desire to utilize the services of any other person in connection with evaluating
such merits and risks.

                                       10
<PAGE>

         10. Transferability and Assignability. Neither this Subscription
Agreement nor any of the rights of the Subscriber hereunder may be transferred
or assigned by the Subscriber. The Subscriber agrees that the Subscriber may not
cancel, terminate, or revoke this Subscription Agreement or any agreement of the
Subscriber made hereunder (except as otherwise specifically provided herein) and
that this Subscription Agreement shall survive the death or disability of the
Subscriber and shall be binding upon the Subscriber's heirs, executors,
administrators, successors, and assigns.

         11. Registration Rights. The Company shall include the Securities in a
registration statement to be filed with the SEC no later than 10 business days
after the termination of the offering, and the Company shall use its best
efforts to cause the registration statement to be declared effective as soon as
possible thereafter. These rights are more fully described in the Registration
Rights Agreement that is attached to this Subscription Agreement as Exhibit B
(the "Registration Rights Agreement"). By executing this Subscription Agreement,
the Subscriber agrees to the terms of the Registration Rights Agreement.

         12. NASD Membership - Individual Investor. Are you a member of the
NASD,(1) a person associated with a member(2) of the NASD, or an affiliate of a
member?

                           Yes _____                 No __X__

If "Yes," please list any members of the NASD with whom you are associated or
affiliated.

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         13. NASD Membership - Corporate Investor. If you are a corporation, are
any of your officers, directors or 5% shareholders a member of the NASD, a
person associated with a member of the NASD, or an affiliate of a member?

                           Yes __X__                 No _____

If "Yes," please list the name of the respective officer, director or 5%
shareholder and any members of the NASD with whom they are associated or
affiliated.

_______________________

(1) The NASD defines a "member" as being either any broker or dealer admitted to
membership in the NASD or any officer or partner of such a member, or the
executive representative of such a member or the substitute for such
representative.

(2) The NASD defines a "person associated with a member" as being every sole
proprietor, general or limited partner, officer, director or branch manager or
such member, or any natural person occupying a similar status or performing
similar functions, or any natural person engaged in the investment banking or
securities business who is directly or indirectly controlling or controlled by
such member (for example, any employee), whether or not any such person is
registered or exempt from registration without the NASD. Thus, "person
associated with a member" includes a sole proprietor, general or limited
partner, officer, director or branch manager or an organization of any kind
(whether a corporation, partnership or other business entity) which itself is a
"member" or a "person associated with a member." In addition, an organization of
any kind is a "person associated with a member" if its sole proprietor or anyone
of its general or limited partners, officers, director or branch managers is a
"member" or "person associated with a member."

                                       11
<PAGE>

Eugene C. McColley, Manager of the General Partner, is a NASD Member.
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Bathgate Capital Partners
-------------------------

         14. Survival. The representations and warranties of the Subscriber set
forth herein shall survive the sale of the Units pursuant to this Subscription
Agreement.

         15. Notices. All notices or other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
mailed by certified or registered mail, return receipt requested, postage
prepaid, as follows: if to the Subscriber, to the address set forth below; and
if to the Company to the address at the beginning of this letter, or to such
other address as the Company or the Subscriber shall have designated to the
other by like notice.

         16. Applicable to FLORIDA residents only. The Subscriber has been
informed and recognizes that (a) the Units have not been registered under the
Florida Securities Act, and (b) under Section 517.061(12) of the Florida
Securities Act, the Subscriber may void the sale of any Securities within three
(3) days after the tender of this Subscription Agreement and payment hereunder
to the Company.

         17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.

         18. Title. Manner in Which Title is To Be Held.

             Place an "X" in one space below:

             (a) _____       Individual Ownership

             (b) _____       Community Property

             (c) _____       Joint Tenant with Right of Survivorship (both
                             parties must sign)

             (d) __X__       Partnership

             (e) _____       Tenants in Common

             (f) _____       Corporation

             (g) _____       Trust

             (h) _____       Other (Describe):

                      Roaring Fork Capital SBIC, L.P.
             -------------------------------------------------------------------

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

             -------------------------------------------------------------------
             Please print above the exact name(s) in which the Securities are to
be held.

         19. State of Residence. My state of residence and the state in which I
received the offer to invest and made the decision to invest in the Securities
is Colorado.

                                       12
<PAGE>

         20. Date of Birth. My date of birth is ______________________.

IN NO EVENT WILL THE COMPANY, BATHGATE CAPITAL PARTNERS LLC, OR ANY OF THEIR
AFFILIATES OR THE PROFESSIONAL ADVISORS ENGAGED BY THEM BE LIABLE IF FOR ANY
REASON RESULTS OF OPERATIONS OF THE COMPANY ARE NOT AS PROJECTED IN THE
DOCUMENTS. INVESTORS MUST LOOK SOLELY TO, AND RELY ON, THEIR OWN ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES OF INVESTING IN THE SECURITIES.

                           SIGNATURE PAGE ON NEXT PAGE

                                       13
<PAGE>

                                   INDIVIDUAL
                                   ----------

The Subscriber hereby represents he has read this entire Subscription Agreement.

                                                     Dated:
                                                            --------------------

                                               Address to Which Correspondence
                                               Should be Directed

------------------------------------------     ---------------------------------
Signature (Individual)

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

------------------------------------------     ---------------------------------
Signature (All record holders should sign)     City, State and Zip Code

------------------------------------------     ---------------------------------
Name(s) Typed or Printed                       Tax Identification or Social
                                               Security Number

                                               (    )
------------------------------------------     ---------------------------------
                                               Telephone Number

                                       14
<PAGE>

                CORPORATION, PARTNERSHIP, TRUST, OR OTHER ENTITY
                ------------------------------------------------

                                               Address to Which Correspondence
                                               Should be Directed

                                               8400 E. Prentice Ave
Roaring Fork Capital SBIC, L.P.                Suite 745
------------------------------------------     ---------------------------------
Name of Entity
By: Roaring Fork Capital Management LLC, Its GP

By:  /s/ G. Michael Machens                    Greenwood Village, CO 80111
     -------------------------------------     ---------------------------------
     *Signature                                City, State and Zip Code

Its: Manager of General Partner                71-0953148
     -------------------------------------     ---------------------------------
     Title                                     Tax Identification or Social
                                               Security Number

G. Michael Machens                             (303) 694-1300
------------------------------------------     ---------------------------------
Name Typed or Printed                          Telephone Number

*If Securities are being subscribed for by an entity, the Certificate of
Signatory must also be completed.

                            CERTIFICATE OF SIGNATORY
                            ------------------------

         To be completed if Securities are being subscribed for by an entity.

         I, G. Michael Machens, am the Manager of Roaring Fork Capital
Management LLC, the General Partner of Roaring Fork Capital SBIC, L.P. (the
"Entity").

         I certify that I am empowered and duly authorized by the Entity to
execute and carry out the terms of the Subscription Agreement and Letter of
Investment Intent and to purchase and hold the Securities, and certify that the
Subscription Agreement and Letter of Investment Intent has been duly and validly
executed on behalf of the Entity and constitutes a legal and binding obligation
of the Entity.

         IN WITNESS WHEREOF, I have hereto set may hand this 31st day of May
2006.

                                             /s/ G. Michael Machens
                                             -----------------------------------
                                             Signature

                                       15
<PAGE>

                                   ACCEPTANCE
                                   ----------

This Subscription Agreement is accepted as of May 31, 2006.

                                         ATC HEALTHCARE, INC.

                                         By: /s/ Andrew Reiben
                                             -----------------------------------
                                             Authorized Officer

                                         Date:  5/31/2006
                                                ---------

                                       16Exhibit 10.2

                          REGISTRATION RIGHTS AGREEMENT
                          -----------------------------

                     6% CONVERTIBLE SERIES C PREFERRED STOCK
                              AND RELATED WARRANTS
                                       of
                              ATC HEALTHCARE, INC.

         This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
June 9, 2006 by and among (i) ATC Healthcare, Inc., a Delaware corporation (the
"Company"), (ii) Roaring Fork Capital SBIC LP ("Roaring Fork") and (iii) any
other person who has executed a Subscription Agreement and Letter of Investment
Intent with the Company with respect to the purchase of the Company's newly
created 6% Convertible Series C Preferred Stock (the "Stock") and accompanying
Warrants to purchase shares of Class A Common Stock (the "Warrants"), thereby
accepting and joining in this Agreement, whose subscription has been accepted by
the Company (collectively, together with Roaring Fork, the "Initial Investors"
and each individually, an "Initial Investor") (the acceptance of the
subscription proceeds from one or more Initial Investors shall be referred to as
a "Closing"), and (iii) each person or entity that subsequently becomes a party
to this Agreement pursuant to, and in accordance with, the provisions of Section
11 hereof (collectively, the "Investor Permitted Transferees" and each
individually an "Investor Permitted Transferee").

         WHEREAS, the Company has agreed to issue and sell to the Initial
Investors, and the Initial Investors have agreed to purchase Stock from the
Company, together with accompanying Warrants, all upon the terms and conditions
set forth in those certain Subscription Agreements and Letters of Investment
Intent between the Company and the Initial Investors (each, a "Subscription
Agreement" and collectively, the "Subscription Agreements"); and

         WHEREAS, in connection with the offering and purchase of the Stock and
Warrants pursuant to the Subscription Agreements, the Company has entered into a
Finder's Agreement with Bathgate Capital Partners LLC (the "Finder") pursuant to
which, among other things, the Company has agreed to make certain commission
payments to Finder and to issue Finder certain warrants to purchase the
Company's Class A Common Stock (the "Finder's Warrants"), as more fully
described in the Finder's Agreement (for purposes of this Agreement, the terms
"Warrant" and "Warrants" as used herein shall be deemed to include the Warrants
issued to the Investors and the Finder's Warrants); and

         WHEREAS, in connection with the execution and delivery of the
Subscription Agreements, the Company has agreed with the Initial Investors to
provide them with the rights set forth in this Agreement.

                  NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties hereto hereby agree as follows:

<PAGE>

         1. DEFINITIONS. The following terms shall have the meanings provided
therefor below:

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and all of the rules and regulations promulgated thereunder.

                  "Investors" shall mean, collectively, the Initial Investors
and the Investor Permitted Transferees; provided, however, that the term
Investors shall not include any of the Initial Investors or any Investor
Permitted Transferee that ceases to own or hold any Registrable Shares.

                  "Issuance Price" shall mean Two Thousand and 70/100 Dollars
($2,000.70) per share of Series C Preferred Stock, as adjusted to reflect the
occurrence of any stock split, stock dividend, stock combination, stock
subdivision or similar recapitalization affecting such share.

                  "Last Sale Price" shall mean the last sale price on the
American Stock Exchange, or if the Company's Common Stock is not traded on the
American Stock Exchange, the reported last sale price for the Company's Common
Stock, as furnished by the National Association of Securities Dealers, Inc., for
the applicable period.

                  "Majority Holders" shall mean, at the relevant time of
reference thereto, those Investors holding and/or having the right to acquire,
as the case may be, more than fifty percent (50%) of the Registrable Shares held
by all of the Investors.

                  "Penalty Warrants" shall mean those warrants described in
paragraph 3(c) of this Agreement.

                  "Qualifying Holder" shall have the meaning ascribed thereto in
Section 11 hereof.

                  "Registrable Shares" shall mean the shares of Class A Common
Stock issuable upon the conversion of the Stock, the shares of Class A Common
Stock purchasable upon the exercise of Warrants, and the shares of Class A
Common Stock purchasable upon the exercise of the Penalty Warrants; provided,
however, that such term shall not include any of such shares of Common Stock
that become or have become eligible for resale pursuant to Rule 144(k).

                  "Rule 144" shall mean Rule 144 promulgated under the
Securities Act and any successor or substitute rule, law or provision.

                  "SEC" shall mean the Securities and Exchange Commission.

                  "Securities Act" shall mean the Securities Act of 1933, as
amended, and all of the rules and regulations promulgated thereunder.

         2. EFFECTIVENESS. The Company shall be required to use commercially
reasonable efforts to keep the Mandatory Registration Statement (as defined in
Section 3(a)) continuously effective until such date that is the earlier of (i)
the date when all of the Registrable Shares registered thereunder shall have
been sold or (ii) the second (2nd) anniversary of the date the Mandatory
Registration Statement is first declared effective.

                                       2
<PAGE>

         3. MANDATORY REGISTRATION; PIGGYBACK REGISTRATION.

            (a) Within ten (10) business days of the Final Closing, the Company
will prepare and file with the SEC a registration statement on Form S-3 or its
equivalent for the purpose of registering under the Securities Act all of the
Registrable Shares for resale by, and for the account of, the Investors as
selling stockholders thereunder (the "Mandatory Registration Statement"). The
Mandatory Registration Statement shall permit the Investors to offer and sell,
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
any or all of the Registrable Shares. The Company agrees to use reasonable
efforts to cause the Mandatory Registration Statement to become effective as
soon as practicable.

            (b) The offer and sale of the Registrable Shares pursuant to the
Mandatory Registration Statement shall not be underwritten.

            (c) In the event the Company does not file the Mandatory
Registration Statement with the SEC by the Filing Deadline (as defined below),
the Company shall issue to each of the Investors Penalty Warrants to purchase
the Company's Class A Common Stock in a number equal to each Ninety Cents $0.90
of the Issuance Price of the Stock paid by the Investor to the Company. The
exercise price for the Penalty Warrants shall be equal to the lower of (i) the
thirty (30) day average Last Closing Price immediately prior to the day of
Default or (ii) Sixty Cents ($0.60) per share. The Penalty Warrants shall be
exercisable for a period of five (5) years. Each Penalty Warrant shall be in
substantially the form as attached as Exhibit B hereto. For purposes of this
Agreement, the "Filing Deadline" shall be four (4) months following the final
closing of the Investors' purchase of the Stock and Warrants under the
Subscription Agreements (the "Final Closing"), which Final Closing shall be
deemed to have occurred on the earlier of (i) the date 1499 shares of Series C
Preferred Stock have been sold by the Company or (ii) June 30, 2006.

            (d) In the event that the Mandatory Registration Statement is not
declared effective by the SEC by the earlier to occur of (i) 150 days after its
filing or (ii) 150 days after the Filing Deadline, then the Company shall be
required to pay to each Investor a penalty payment equal to Five Percent (5%) of
the Issuance Price of the Stock paid by such Investor. In the event that the
Mandatory Registration Statement is not declared effective by the SEC by the
earlier to occur of (i) 180 days after its filing or (ii) 180 days after the
Filing Deadline, then the Company shall be required to pay to each Investor an
additional penalty payment equal to Five Percent (5%) of the Issuance Price of
the Stock paid by such Investor. Such penalty, if any, arising under this
Section 3(d) shall be payable by the Company within ten (10) days

            (e) If (but without any obligation to do so) at any time prior to
the third anniversary of this Agreement, after an Investor has fully exercised
any Warrant(s) or Penalty Warrant(s), 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 each Investor written notice of such registration. Upon the
written request of an Investor given within twenty (20) days after receipt of
such written notice from the Company, the Company shall cause to be included in
the Mandatory Registration Statement all of the Registrable Securities that the
Investor has requested to be registered (a "Piggyback Registration Statement");

                                       3
<PAGE>

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. If, at any time after giving written notice of its
intention to register any such Registrable Securities and prior to the effective
date of the Piggyback Registration Statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such Registrable Securities, the Company may, at its
election, give written notice of such determination to each Investor and,
thereupon, in the case of a determination not to register, the Company need not
register any Registrable Securities in connection with such registration.

         4. OBLIGATIONS OF THE COMPANY. In connection with the Company's
obligation under Section 3 hereof to file a Mandatory Registration Statement or
Piggyback Registration Statement with the SEC (collectively, a "Registration
Statement") and to use its reasonable efforts to cause the Registration
Statement to become effective as soon as practicable, the Company shall, as
expeditiously as reasonably possible:

            (a) Prepare and file with the SEC such amendments and supplements to
the Registration Statement and the prospectus used in connection therewith as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Shares covered by the Registration
Statement;

            (b) Furnish or otherwise make available to the Investors such number
of copies of a prospectus, including a preliminary prospectus, in conformity
with the requirements of the Securities Act, and such other documents
(including, without limitation, prospectus amendments and supplements as are
prepared by the Company in accordance with Section 4(a) above) as the Investors
may reasonably request in order to facilitate the disposition of such Investors'
Registrable Shares;

            (c) Notify the Investors, at any time when a prospectus relating to
the Registration Statement is required to be delivered under the Securities Act,
of the happening of any event as a result of which the prospectus included in or
relating to the Registration Statement contains an untrue statement of a
material fact or omits any fact necessary to make the statements therein not
misleading; and, thereafter, the Company will promptly prepare (and, when
completed, give notice to each Investor) a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of such
Registrable Shares, such prospectus will not contain an untrue statement of a
material fact or omit to state any fact necessary to make the statements therein
not misleading; provided that upon such notification by the Company, the
Investors will not offer or sell Registrable Shares until the Company has
notified the Investors that it has prepared a supplement or amendment to such
prospectus and delivered copies of such supplement or amendment to the selling
Investors (it being understood and agreed by the Company that the foregoing
proviso shall in no way diminish or otherwise impair the Company's obligation to
promptly prepare a prospectus amendment or supplement as above provided in this
Section 4(c) and deliver copies of same as above provided in Section 4(b)
hereof); and

                                       4
<PAGE>

            (d) Use commercially reasonable efforts to register and qualify the
Registrable Shares covered by the Registration Statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
appropriate in the opinion of the Company, 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 states
or jurisdictions, and provided further that (notwithstanding anything in this
Agreement to the contrary with respect to the bearing of expenses) if any
jurisdiction in which any of such Registrable Shares shall be qualified shall
require that expenses incurred in connection with the qualification therein of
any such Registrable Shares be borne by the selling Investors, then the selling
Investors shall, to the extent required by such jurisdiction, pay their pro rata
share of such qualification expenses.

            (e) The Company shall file additional registration statements or
amendments to register any additional shares of Class A Common Stock that may be
issuable upon conversion of the Stock or upon exercise of Warrants or Penalty
Warrants as a result of any change in the Conversion Price or the per share
price of any Warrant or Penalty Warrant.

         5. FURNISH INFORMATION. Each Investor shall furnish to the Company such
information regarding the Investor and the securities held by it as the Company
shall reasonably request and as shall be required in order to effect any
registration by the Company pursuant to this Agreement, unless such Investor
desires to exclude its Registrable Securities from the Registration Statement.

         6. EXPENSES OF REGISTRATION. All expenses incurred in connection with
the registration of the Registrable Shares pursuant to this Agreement (excluding
underwriting, brokerage and other selling commissions and discounts), including
without limitation all registration and qualification and filing fees, printing,
and fees and disbursements of counsel and auditors for the Company, shall be
borne by the Company.

         7. DELAY OF REGISTRATION. The Investors shall not take any action to
restrain, enjoin or otherwise delay any registration as the result of any
controversy which might arise with respect to the interpretation or
implementation of this Agreement.

         8. INDEMNIFICATION.

            (a) Notwithstanding any termination of this Agreement, the Company
will indemnify and hold harmless each Investor, any investment banking firm
acting as an underwriter for the Investors, any broker/dealer acting on behalf
of any Investors and each officer and director of such Investor, such
underwriter, such broker/dealer and each person, if any, who controls such
Investor, such underwriter or broker/dealer within the meaning of the Securities
Act, against any losses, claims, damages or liabilities, joint or several, to
which they may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, in any preliminary
prospectus or final prospectus relating thereto or in any amendments or
supplements to the Registration Statement or any such preliminary prospectus or
final prospectus, or arise out of or are based upon 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; and will reimburse such
Investor, such underwriter, broker/dealer or such officer, director or
controlling person for any legal or other expenses reasonably incurred by them

                                       5
<PAGE>

in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 8(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, damage,
liability or action to the extent that it arises out of or is based upon an
untrue statement or alleged untrue statement or omission made in connection with
the Registration Statement, any preliminary prospectus or final prospectus
relating thereto or any amendments or supplements to the Registration Statement
or any such preliminary prospectus or final prospectus, in reliance upon and in
conformity with written information furnished specifically for inclusion in the
Registration Statement or any such preliminary prospectus or final prospectus by
the Investors, any underwriter for them or controlling person with respect to
them.

            (b) Notwithstanding any termination of this Agreement, each Investor
will severally and not jointly indemnify and hold harmless the Company, each of
its directors, each of its officers who have signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of the
Securities Act, against any losses, claims, damages or liabilities to which the
Company or any such director, officer, or controlling person may become subject
to, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereto) arise out of or are based
upon any untrue or alleged untrue statement of any material fact contained in
the Registration Statement or any preliminary prospectus or final prospectus,
relating thereto or in any amendments or supplements to the Registration
Statement or any such preliminary prospectus or final prospectus, or arise out
of or are based upon 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, in each case to the extent and only to the extent that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, in any preliminary prospectus
or final prospectus relating thereto or in any amendments or supplements to the
Registration Statement or any such preliminary prospectus or final prospectus,
in reliance upon and in conformity with written information furnished by the
Investor specifically for inclusion in the Registration Statement, or any
preliminary prospectus or final prospectus; and such Investor will reimburse any
legal or other expenses reasonably incurred by the Company or any such director,
officer, or controlling person in connection with investigating or defending any
such loss, claim, damage, liability or action, provided, however, that the
liability of each Investor hereunder shall be limited to the proceeds (net of
underwriting discounts and commissions, if any) received by such Investor from
the sale of Registrable Shares covered by the Registration Statement, and
provided, further, however, that the indemnity agreement contained in this
Section 8(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 those Investor(s) against which the request for indemnity is being
made (which consent shall not be unreasonably withheld).

            (c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under this Section 8, 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 desires, jointly with
any other indemnifying party similarly noticed, to assume at its expense the
defense thereof with counsel mutually satisfactory to the indemnifying parties
with the consent of the indemnified party which consent will not be unreasonably

                                       6
<PAGE>

withheld, conditioned or delayed. In the event that the indemnifying party
assumes any such defense, the indemnified party may participate in such defense
with its own counsel and at its own expense, provided, however, that the counsel
for the indemnifying party shall act as lead counsel in all matters pertaining
to such defense or settlement of such claim and the indemnifying party shall
only pay for such indemnified party's expenses for the period prior to the date
of the indemnifying party's participation in such defense. The failure to notify
an indemnifying party promptly of the commencement of any such action, if
prejudicial to his ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
8, but the omission so to notify the indemnifying party will not relieve him of
any liability which he may have to any indemnified party otherwise other than
under this Section 8.

            (d) Notwithstanding anything to the contrary herein, the
indemnifying party shall not be entitled to settle any claim, suit or proceeding
unless in connection with such settlement the indemnified party receives an
unconditional release with respect to the subject matter of such claim, suit or
proceeding and such settlement does not contain any admission of fault by the
indemnified party.

         9. REPORTS UNDER THE EXCHANGE ACT. With a view to making available to
the Investors the benefits of Rule 144 and any other rule or regulation of the
SEC that may at any time permit the Investors to sell the Registrable Shares to
the public without registration, the Company agrees to use commercially
reasonable efforts: (i) to make and keep public information available, as those
terms are understood and defined in the General Instructions to Form S-3, or any
successor or substitute form, and in Rule 144, (ii) to file with the SEC in a
timely manner all reports and other documents required to be filed by an issuer
of securities registered under the Securities Act or the Exchange Act, (iii) as
long as any Investor owns any Stock, Warrants or Registrable Shares, to furnish
in writing upon such Investor's request a written statement by the Company that
it has complied with the reporting requirements of Rule 144 and of the
Securities Act and the Exchange Act, and to furnish to such Investor a copy of
the most recent annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as may be reasonably requested in
availing such Investor of any rule or regulation of the SEC permitting the
selling of any Registrable Shares without registration and (iv) undertake any
additional actions reasonably necessary to maintain the availability of the
Registration Statement or the use of Rule 144.

         10. DEFERRAL AND LOCK-UP. Notwithstanding anything in this Agreement to
the contrary, if the Company shall furnish to the selling Investors a
certificate signed by the President or Chief Executive Officer of the Company
stating that the Board of Directors of the Company has made the good faith,
reasonable determination (i) that continued use by the selling Investors of the
Registration Statement for purposes of effecting offers or sales of Registrable
Shares pursuant thereto would require, under the Securities Act, premature
disclosure in the Registration Statement (or the prospectus relating thereto) of
material, nonpublic information concerning the Company, its business or
prospects or any proposed material transaction involving the Company, (ii) that
such premature disclosure would be materially adverse to the Company, its
business or prospects or any such proposed material transaction or would make
the successful consummation by the Company of any such material transaction
significantly less likely and (iii) that it is therefore advisable to suspend
the use by the Investors of such Registration Statement (and the prospectus
relating thereto) for purposes of effecting offers or sales of Registrable
Shares pursuant thereto, then the right of the selling Investors to use the
Registration Statement (and the prospectus relating thereto) for purposes of
effecting offers or sales of Registrable Shares pursuant thereto shall be
suspended for a period (the "Suspension Period") of not more than 60 days after
delivery by the Company of the certificate referred to above in this Section 10.
During the Suspension Period, none of the Investors shall offer or sell any
Registrable Shares pursuant to or in reliance upon the Registration Statement
(or the prospectus relating thereto). The Company shall use commercially
reasonable efforts to cause the termination of the Suspension Period to occur as
promptly as practicable.

                                       7
<PAGE>

         11. TRANSFER OF REGISTRATION RIGHTS.

            (a) None of the rights of any Investor under this Agreement shall be
transferred or assigned to any person unless (i) such person is a Qualifying
Holder (as defined below), and (ii) such person agrees to become a party to, and
bound by, all of the terms and conditions of, this Agreement by duly executing
and delivering to the Company an Instrument of Adherence in the form attached as
Exhibit A hereto. For purposes of this Section 11, the term "Qualifying Holder"
shall mean, with respect to any Investor, any direct transferee from such
Investor of those Registrable Shares held or that may be acquired by such
Investor. None of the rights of any Investor under this Agreement shall be
transferred or assigned to any Person (including, without limitation, a
Qualifying Holder) that acquires Registrable Shares in the event that and to the
extent that such Person is eligible to resell such Registrable Shares pursuant
to Rule 144(k) of the Securities Act (or any successor or substitute rule) or
may otherwise resell such Registrable Shares pursuant to an exemption from the
registration provisions of the Securities Act.

            (b) Notwithstanding anything to the contrary contained in this
Section 11, to the extent the Company previously has registered the Registrable
Shares pursuant to a Registration Statement which has been declared effective by
the SEC and, thereafter, an Investor assigns its Registrable Shares 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).

         12. ENTIRE AGREEMENT. This Agreement constitutes and contains the
entire agreement and understanding of the parties with respect to the subject
matter hereof, and it also supersedes any and all prior negotiations,
correspondence, agreements or understandings with respect to the subject matter
hereof.

         13. MISCELLANEOUS.

            (a) This Agreement may not be amended, modified or terminated, and
no rights or provisions may be waived, except with the written consent of the
Majority Holders and the Company. The Company may not assign any of its rights
or obligations arising under this Agreement without the written consent of the
Majority Holders, except to the extent that such assignment is the result of a
merger or consolidation of the Company.

                                       8
<PAGE>

            (b) This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York, and shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors or assigns, provided that the terms and
conditions of Section 11 hereof are satisfied. This Agreement shall also be
binding upon and inure to the benefit of any transferee of any of the Stock,
Warrants or the Registrable Shares provided that the terms and conditions of
Section 11 hereof are satisfied. Notwithstanding anything in this Agreement to
the contrary, if at any time any Investor shall cease to own any Stock, Warrants
or Registrable Shares, all of such Investor's rights under this Agreement shall
immediately terminate.

            (c) (i) Any notices, reports or other correspondence (hereinafter
collectively referred to as "Correspondence") required or permitted to be given
hereunder shall be sent by courier (overnight or same day) or telecopy or
delivered by hand to the party to whom such Correspondence is required or
permitted to be given hereunder. The date of giving any notice shall be the date
of its actual receipt.

                (i) All Correspondence to the Company shall be addressed in the
manner set forth in the Subscription Agreement.

                (ii) All Correspondence to any Investor shall be sent to such
Purchaser at the address set forth in the Subscription Agreement.

            (d) Any entity may change the address to which Correspondence to it
is to be addressed by notification as provided for herein.

            (e) The parties acknowledge and agree that in the event of any
breach of this Agreement, remedies at law may be inadequate, and each of the
parties hereto shall be entitled to seek specific performance of the obligations
of the other parties hereto and such appropriate injunctive relief as may be
granted by a court of competent jurisdiction.

            (f) This Agreement may be executed in a number of counterparts, all
of which together shall for all purposes constitute one Agreement, binding on
all the parties hereto notwithstanding that all such parties have not signed the
same counterpart.

                                       9
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date and year first above written.

                                         ATC HEALTHCARE, INC.

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

                                         ROARING FORK CAPITAL SBIC LP

                                         By: Roaring Fork Capital Management LLC
                                             Its General Partner

                                         By:    /s/ G. Michael Machens
                                                --------------------------------

                                         Name:  G. Michael Machens
                                                --------------------------------

                                         Title: Manager of General Partner
                                                --------------------------------

                                       10

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