Exhibit 4.3
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BROKER'S NAME:
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IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING.
SIGNIFICANT REPRESENTATIONS ARE CALLED FOR HEREIN.
SUBSCRIPTION AGREEMENT
and
LETTER OF INVESTMENT INTENT
Xxxxx Xxxxxxxx
ATC Healthcare, Inc.
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
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 secured convertible notes
("Notes") 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 $50,000. 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.
At $ per Unit for
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Number of Units an aggregate of $
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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. 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 Companies filings
with the Securities and Exchange Commission (the "SEC Filings"), including:
(i) The Company's Annual Report on Form 10-K, filed with the SEC on
June 13, 2005, and as amended on July 29, 2005;
(ii) The Company's Proxy Statement on Schedule 14A, filed with the SEC
on June 28, 2005;
(iii) The Company's Form 8-K filed with the SEC on September 7, 2005;
(iv) The Company's Form 8-K filed with the SEC on July 20, 2005; and
(v) The Company's Form 8-K filed with the SEC on June 17, 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 and the Term Sheet (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 believes that an investment in the securities is
suitable for the Subscriber based upon the Subscriber 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.
(d) 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.
(e) 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.
(f) 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;
(g) The Subscriber recognizes that the Securities as an investment
involves a high degree of risk.
(h) 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.
(i) 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; (iii) there is presently no public market for the
Securities and the Subscriber may be unable to liquidate the Subscriber's
investment in the event of an emergency, or pledge the Securities as collateral
for a loan; and (iv) 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
(j) 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.
(k) 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. FURTHERMORE, IT IS
UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY OR ANY INTEREST
THEREIN, WITHOUT THE OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT THE
PROPOSED TRANSFER OR SALE DOES NOT AFFECT THE EXEMPTIONS RELIED UPON BY THE
COMPANY IN ORIGINALLY DISTRIBUTING THE SECURITY AND THAT REGISTRATION IS
NOT REQUIRED.
(l) 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 FINDERS FEE OF A CASH PAYMENT OF SEVEN PERCENT (7%) OF MY
INVESTMENT AND WARRANTS EQUAL TO EIGHT PERCENT (8%) OF MY INVESTMENT, AS
DESCRIBED IN THE DOCUMENTS. THE SUBSCRIBER FURHER 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. 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 10 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. The Subscriber further
represents and agrees that if, contrary to the foregoing intentions, the
Subscriber should later desire to dispose of or transfer any of such securities
in any manner, the Subscriber shall not do so unless and until (i) said
Securities shall have first been registered under the Act and all applicable
securities laws; or (ii) the Subscriber shall have first delivered to the
Company a written notice declaring such holder's intention to effect such
transfer and describe in sufficient detail the manner and circumstances of the
proposed transfer, which notice shall be accompanied either by a written opinion
of legal counsel who shall be reasonably satisfactory to the Company, which
opinion shall be addressed to the Company and reasonably satisfactory in form
and substance to the Company's counsel, to the effect that the proposed sale or
transfer is exempt from the registration provisions of the Act and all
applicable state securities laws, or by a "no action" letter from the Securities
and Exchange Commission to the effect that the transfer of the Securities
without registration will not result in recommendation by the staff of the
Commission that action be taken with respect thereto.
4. 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 16 of this Subscription Agreement and Letter
of Investment Intent.
5. Investor Qualification. The Subscriber represents and warrants that
the Subscriber or the purchaser of the Securities named in paragraph 16 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 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.
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(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.
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(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
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a partnership; or
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a business trust; or
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a tax-exempt organization described in Section
---- 501(c)(3) of the Internal Revenue Code of 1986, as
amended.
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(describe entity)
Category VII The Subscriber is a trustee for a trust that is revocable by
---- the grantor at any time (including an XXX) 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.]
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(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.
6. In the registration statement referred to in paragraph 11 below, the
Company needs to disclose the number of shares the Subscriber owns in addition
to those being purchased in this offering. Does the Subscriber beneficially own
shares of common stock of the Company or securities convertible into shares of
common stock of the Company prior to this subscription?
Yes No
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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.
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
7. 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.
8. 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.
9. Reliance on Representations. The Subscriber understands the meaning
and legal consequences of the representations, warranties, agreements,
covenants, and confirmations set out above and agrees that the subscription made
hereby may be accepted in reliance thereon. The Subscriber agrees to indemnify
and hold harmless the Company and any selling agent (including for this purpose
their employees, and each person who controls either of them within the meaning
of Section 20 of the Securities Exchange Act of 1934, as amended) from and
against any and all loss, damage, liability or expense, including reasonable
costs and attorney's fees and disbursements, which the Company, or such other
persons may incur by reason of, or in connection with, any representation or
warranty made herein not having been true when made, any misrepresentation made
by the Subscriber or any failure by the Subscriber to fulfill any of the
covenants or agreements set forth herein, in the Purchaser Questionnaire or in
any other document provided by the Subscriber to the Company.
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 Shares underlying
the Notes in a registration statement to be filed with the SEC no later than 10
business days after the termination of the offering, and to 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
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If "Yes," please list any members of the NASD with whom you are associated
or affiliated.
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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 No
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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.
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13. Survival. The representations and warranties of the Subscriber set
forth herein shall survive the sale of the Units pursuant to this Subscription
Agreement.
14. 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.
15. (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.
16. 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.
17. 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) Partnership
---
(e) Tenants in Common
---
(f) Corporation
---
(g) Trust
---
(h) Other (Describe):
---
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Please print above the exact name(s) in which the Securities are to be
held.
18. 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 .
19. Date of Birth. My date of birth is:
IN NO EVENT WILL THE COMPANY, THE PLACEMENT AGENT, 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
SIGNATURES
The Subscriber hereby represents he has read this entire Subscription Agreement.
Dated:
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INDIVIDUAL
Address to Which Correspondence
Should be Directed
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Signature (Individual)
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Signature (All record holders should City, State and Zip Code
sign)
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Name(s) Typed or Printed Tax Identification or Social Security
Number
( )
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Telephone Number
CORPORATION, PARTNERSHIP, TRUST, OR OTHER ENTITY
Address to Which Correspondence
Should be Directed
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Name of Entity
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By:
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*Signature City, State and Zip Code
Its:
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Title Tax Identification or Social Security
Number
( )
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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, , am the of
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(the "Entity").
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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 day of ,
2005. ------ -------
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Signature
ACCEPTANCE
This Subscription Agreement is accepted as of , 2005.
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ATC HEALTHCARE, INC..
By:
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Authorized Officer
Date:
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