COMMON STOCK AND WARRANT PURCHASE AGREEMENT

Exhibit 10.86

================================================================================

COMMON STOCK AND WARRANT

PURCHASE AGREEMENT

ATC Healthcare, Inc.

January 12, 2007

================================================================================

<PAGE>

COMMON STOCK AND WARRANT

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

PURCHASE AGREEMENT

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

THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT (this "Agreement"), dated

as of January 12, 2007, is by and among ATC Healthcare, Inc., a Delaware

corporation (the "Company"), and Roaring Fork Capital SBIC, L.P., a Delaware

limited partnership ("Roaring Fork" or the "Purchaser").

Recitals

--------

A. The Company and Roaring Fork are executing and delivering this Agreement

in reliance upon the exemption from securities registration afforded by Section

4(2) of the Securities Act and Rule 506 of Regulation D as promulgated by the

SEC under the Securities Act.

B. Roaring Fork wishes to purchase, and the Company wishes to sell, upon

the terms and conditions stated in this Agreement, (i) 2,000,000 shares of

Common Stock (the "Shares") and (ii) warrants, in substantially the form

attached hereto as Exhibit A (the "Warrants") to acquire up to 1,000,000 shares

of Common Stock (the "Warrant Shares").

C. The Shares, the Warrants and the Warrant Shares collectively are

referred to herein as the "Securities".

The parties hereto, in consideration of the premises and their mutual

covenants and agreements herein set forth and intending to be legally bound

hereby, covenant and agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Certain Definitions. In addition to other words and terms defined

elsewhere in this Agreement, the following words and terms have the meanings set

forth below (and such meanings shall be equally applicable to both the singular

and plural form of the terms defined, as the context may require):

"Affiliate" shall mean with respect to any Person, any other Person that is

directly or indirectly controlling, controlled by or under common control with

such Person or entity or any of its Subsidiaries, and the term "control"

(including the terms "controlled by" and "under common control with") shall mean

having, directly or indirectly, the power to direct or cause the direction of

the management and policies of a Person, whether through ownership of voting

securities or by contract or otherwise. Without limiting the foregoing, (i) the

ownership of ten percent (10%) or more of the voting securities of a Person

shall be deemed to constitute control and notwithstanding anything to the

contrary herein, and (ii) neither Roaring Fork nor any of its Affiliates shall

be deemed to be Affiliates of the Company by virtue of the transactions

contemplated in this Agreement.

- 1 -

<PAGE>

"Agreement" shall mean this Common Stock and Warrant Purchase Agreement, as

the same may be amended, restated, supplemented or otherwise modified from time

to time.

"Board" shall mean the Board of Directors of ATC Healthcare, Inc.

"Business" shall mean the principal business of the Company as set forth in

Section 4.1(b) hereof and as such shall continue to be conducted following the

purchase and sale of the Common Stock and the Warrants hereby.

"Business Day" shall mean any day other than a Saturday, Sunday or other

day on which banking institutions in Denver, Colorado are authorized or required

by law to close.

"Bylaws" shall mean the Bylaws or analogous instrument governing

operations, including all amendments and supplements thereto.

"Charter Documents" shall mean the certificate of incorporation filed with

the appropriate Governmental Authorities, including all amendments and

supplements thereto.

"Closing" shall mean the closing of the purchase and sale of the Common

Stock and the Warrants pursuant to this Agreement.

"Closing Date" shall mean January 12, 2007.

"Code" shall mean the Internal Revenue Code of 1986, as amended.

"Common Stock" shall mean the Class A Common Stock of the Company.

"Company" shall have the meaning assigned to such term in the introductory

paragraph hereto, except as provided otherwise in this Agreement.

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as

the same may from time to time be amended, and the rules and regulations of any

governmental agency or authority, as from time to time in effect, promulgated

thereunder.

"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.

"Fiscal Year" or "fiscal year" shall mean each 12-month period ending on

December 31 of each year.

"Governmental Authorities" shall mean any federal, state or municipal court

or other governmental department, commission, board, bureau, agency or

instrumentality, governmental or quasi-governmental, domestic or foreign.

"IRS" shall mean the Internal Revenue Service and any governmental body or

agency succeeding to the functions thereof.

"Laws" shall mean all U.S. and foreign federal, state or local statutes,

laws, rules, regulations, ordinances, codes, policies, rules of common law, and

the like, now or hereafter in effect, including any judicial or administrative

interpretations thereof, and any judicial or administrative orders, consents,

decrees or judgments.

- 2 -

<PAGE>

"Lien" shall mean any security interest, pledge, bailment, mortgage,

hypothecation, deed of trust, conditional sales and title retention agreement

(including any lease in the nature thereof), charge, encumbrance or other

similar arrangement or interest in real or personal property, whether such

interest is based on common law, statute or contract.

"Material Adverse Effect" shall mean a material adverse effect on the

business, properties, assets, liabilities or condition (financial or otherwise)

of the Company, individually and/or taken as a whole.

"Person" shall mean any individual, partnership, limited partnership,

corporation, limited liability Company, association, joint stock company, trust,

joint venture, unincorporated organization or governmental entity or department,

agency or political subdivision thereof.

"Plan" shall mean any employee benefit plan (within the meaning of Section

3(3) of ERISA), established or maintained by the Company or any member of the

Controlled Group.

"Principal Market" shall mean the American Stock Exchange.

"Properties and Facilities" shall have the meaning assigned to such term in

Section 4.1(r) hereof.

"Property" shall mean, as to any Person, all types of real, personal,

tangible, intangible or mixed property owned by such Person whether or not

included in the most recent balance sheet of such Person and its subsidiaries

under GAAP.

"Proprietary Rights" shall mean all patents, trademarks, trade names,

service marks, copyrights, inventions, production methods, licenses, formulas,

know-how, trade secrets and good will related to any of the foregoing,

regardless of whether such are registered with any Governmental Authorities,

including applications therefor.

"Purchase Documents" shall mean this Agreement (including all schedules

attached to the Agreement), the Registration Rights Agreement, the Common Stock

and the Warrants as any or all of the foregoing may be supplemented or amended

from time to time.

"Purchaser" shall have the meaning assigned to such term in the

introductory paragraph hereto.

"Registrable Securities" shall mean the Shares, the Warrant Shares and any

shares issued or issuable upon any stock split, dividend or other distribution,

recapitalization or similar event, or any exercise or other price adjustment

with respect to the Common Stock.

"Roaring Fork" shall mean Roaring Fork Capital SBIC, L.P., the Purchaser,

which is managed by Roaring Fork Capital Management, LLC.

- 3 -

<PAGE>

"SBA Compliance Agreement" means the SBA Compliance Agreement between the

Company and Roaring Fork dated as of January 12, 2007.

"SEC" means the U.S. Securities and Exchange Commission.

"Securities" means the Shares, Warrants and the Warrant Shares.

"Securities Act" shall mean the Securities Act of 1933, as amended.

"Subsidiary" of any corporation shall mean any other corporation or limited

liability company of which the outstanding capital stock possessing a majority

of voting power in the election of directors (otherwise than as the result of a

default) is owned or controlled by such corporation directly or indirectly

through Subsidiaries.

"Trading Day" means (i) a day on which the Common Stock is traded on a

Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock

is not listed on a Trading Market (other than the OTC Bulletin Board), a day on

which the Common Stock is traded in the over-the-counter market, as reported by

the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any

Trading Market, a day on which the Common Stock is quoted in the

over-the-counter market as reported by the National Quotation Bureau

Incorporated (or any similar organization or agency succeeding to its functions

of reporting prices); provided, that in the event that the Common Stock is not

listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day

shall mean a Business Day.

"Trading Market" means whichever of the New York Stock Exchange, the

American Stock Exchange, the NASDAQ Global Market, the NASDAQ Global Select

Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common

Stock is listed or quoted for trading on the date in question.

"Transaction Documents" shall have the meaning assigned to such term in

Section 4.1(f) hereof.

"Transactions" shall mean the purchase of the Shares and the Warrants as

contemplated by this Agreement, and all other agreements contemplated hereby and

thereby.

1.2 Accounting Principles. The character or amount of any asset, liability,

capital account or reserve and of any item of income or expense to be

determined, and any consolidation or other accounting computation to be made,

and the construction of any definition containing a financial term, pursuant to

this Agreement shall be determined or made in accordance with generally accepted

accounting principles in the United States of America consistently applied

("GAAP").

1.3 Other Definitional Provisions; Construction. Whenever the context so

requires, neuter gender includes the masculine and feminine, the singular number

includes the plural and vice versa. The words "hereof" "herein" and "hereunder"

and words of similar import when used in this Agreement shall refer to this

Agreement as a whole and not in any particular provision of this agreement, and

references to section, article, annex, schedule, exhibit and like references are

references to this Agreement unless otherwise specified. References in this

Agreement to any Persons shall include such Persons' successors and permitted

assigns.

- 4 -

<PAGE>

ARTICLE 2

ISSUE AND SALE OF COMMON STOCK AND WARRANTS

2.1 Authorization and Issuance of the Shares and Warrants. The Company has

duly authorized the offering of the Shares and Warrants to Roaring Fork.

2.2 Purchase Price. Subject to the terms and conditions and in reliance

upon the representations, warranties and agreements set forth herein, the

Company shall sell to Roaring Fork for $600,000 invested in the Company (the

"Purchase Price"), and Roaring Fork shall purchase from the Company, the Shares

and the Warrants. Roaring Fork and the Company agree that the Shares and the

Warrants constitute an "investment unit" for purposes of Section 1273(c)(2) of

the Code. On or before the Closing Date, Roaring Fork shall notify the Company

of its determination of the allocation of the issue price of such investment

unit between the Shares and the Warrants in accordance with Section 1273(c)(2)

of the Code and Treasury Regulation Section 1.1273-2(h), and neither Roaring

Fork nor the Company shall take any position inconsistent with such allocation

in any tax return or in any judicial or administrative proceeding in respect of

taxes.

2.3 The Closing. Delivery of and payment for the Shares and the Warrants to

be sold to Roaring Fork will be made on the Closing Date at such place and date

as may be mutually agreeable to the Company and Roaring Fork. Delivery of the

Shares and Warrants shall be made to Roaring Fork against payment of the

$600,000, by check or by wire transfer of immediately available funds in the

manner agreed to by the Company and Roaring Fork. The Shares and the Warrants

shall be issued in the name of Roaring Fork.

ARTICLE 3

CONDITIONS

3.1 Conditions to Purchase of Securities. The obligation of Roaring Fork to

purchase and pay for the Shares and Warrants is subject to the satisfaction,

prior to or at the Closing, of the following conditions at the time of its

purchase:

(a) Representations and Warranties True. The representations and warranties

contained in Article 4 hereof shall be true and correct in all material respects

at and as of the Closing Date as though then made, except to the extent of

changes caused by the transactions expressly contemplated herein.

(b) Material Adverse Change. Except as described in the SEC Reports, there

will have been no material adverse change in the business of the Company since

September 30, 2006.

- 5 -

<PAGE>

(c) Closing Documents. The Company shall have delivered or ordered to be

delivered to the Purchaser all of the following documents in form and substance

satisfactory to the Purchaser:

(i) the certificate for the Shares, duly completed and executed by the

Company;

(ii) the Warrants, duly completed and executed by the Company;

(iii) the Registration Rights Agreement, duly completed and executed

by the Company;

(iv) the Amendments to the Certificate of Designation of the Series C

Preferred Stock and the warrants issued to Roaring Fork in connection with

the purchase and sale of the Series C Preferred Stock changing the

conversion price of the Series C Preferred Stock to $.40 and the exercise

price of the warrants to $.45, respectively.

(v) a copy of the Charter Documents and Bylaws of the Company

certified by the Secretary or Assistant Secretary of the Company as of the

Closing Date;

(vi) copies of the resolutions duly adopted by the Board authorizing

the execution, delivery and performance by the Company of this Agreement

and each of the other agreements, instruments and documents contemplated

hereby to which the Company is a party, and the consummation of all of the

other Transactions, certified as of each Closing Date by the president or

secretary of the Company;

(vii) a certificate dated as of the Closing Date from the President

and Secretary, as officers of the Company, stating that the conditions

specified in this Section 3.1 have been fully satisfied or waived by

Roaring Fork with respect to its purchase;

(viii) the SBA Compliance Agreement, duly completed and executed by

the Company; and

(ix) such other documents relating to the Transactions contemplated by

this Agreement that Roaring Fork may reasonably request.

(d) Proceedings. All proceedings taken or required to be taken in

connection with the transactions contemplated hereby to be consummated at or

prior to the Closing and all documents incident thereto will be satisfactory in

form and substance to Roaring Fork.

- 6 -

<PAGE>

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

4.1 Representations and Warranties of the Company. Unless the context

requires otherwise, all references to the "Company" shall include each of the

Company's Subsidiaries, unless the context requires otherwise. As a material

inducement to Roaring Fork to enter into this Agreement and purchase the Shares

and the Warrants, the Company hereby represents and warrants to Roaring Fork as

follows:

(a) Organization and Power. The Company is duly organized, validly existing

and in good standing under the laws of its state of organization. The Company

has all requisite corporate or other organizational power and authority and all

material licenses, permits, approvals and authorizations necessary to own and

operate its properties, to carry on its businesses as now conducted and

presently proposed to be conducted and to carry out the Transactions, and is

qualified to do business in every jurisdiction where the failure to so qualify

might reasonably be expected to have a Material Adverse Effect. The Company has

its principal place of business in Lake Success, New York. The copies of the

Charter Documents and Bylaws of the Company that have been furnished to Roaring

Fork reflect all amendments made thereto at any time prior to the date of this

Agreement and are correct and complete.

(b) Principal Business. The Company is primarily engaged in providing

medical supplemental staffing services (the "Business").

(c) SEC Reports; Financial Statements. Except as set forth on Schedule

4.1(c), the Company has filed all reports required to be filed by it under the

Securities Act and the Exchange Act, including pursuant to Section 13(a) or

15(d) thereof reports filed on Form 10-K, Form 10-Q, and Form 8-K, for the two

years preceding the date hereof (or such shorter period as the Company was

required by law to file such reports) (the foregoing materials being

collectively referred to herein as the "SEC Reports" and, together with the

Schedules to this Agreement (if any), the "Disclosure Materials") on a timely

basis or has timely filed a valid extension of such time of filing and has filed

any such SEC Reports prior to the expiration of any such extension. Attached as

Schedule 4.1(c) is a list of any SEC Reports not available on the EDGAR system.

As of their respective dates, the SEC Reports complied in all material respects

with the requirements of the Securities Act and the Exchange Act and the rules

and regulations of the SEC promulgated thereunder, and none of the SEC Reports,

when filed, contained any untrue statement of a material fact or omitted to

state a material fact required to be stated therein or necessary in order to

make the statements therein, in light of the circumstances under which they were

made, not misleading. The financial statements of the Company included in the

SEC Reports comply in all material respects with applicable accounting

requirements and the rules and regulations of the SEC with respect thereto as in

effect at the time of filing. Such financial statements have been prepared in

accordance with GAAP applied on a consistent basis during the periods involved,

except as may be otherwise specified in such financial statements or the notes

thereto, and fairly present in all material respects the financial position of

the Company and its consolidated Subsidiaries as of and for the dates thereof

and the results of operations and cash flows for the periods then ended,

subject, in the case of unaudited statements, to normal, immaterial, year-end

audit adjustments. The Company's Common Stock is registered pursuant to Section

12(g) of the Exchange Act, and the Company has taken no action designed to, or

which to its knowledge is likely to have the effect of, terminating the

registration of the Common Stock under the Exchange Act nor has the Company

received any notification that the SEC is contemplating terminating such

registration. No other information provided by or on behalf of the Company to

Roaring Fork which is not included in the SEC Reports, including in any

disclosure schedules, contains any untrue statement of a material fact or omits

to state any material fact necessary in order to make the statements therein, in

the light of the circumstance under which they are or were made not misleading.

- 7 -

<PAGE>

(d) Capitalization and Related Matters. As of the Closing Date and

immediately thereafter, the authorized capital stock of the Company and the

shares of stock that are issued, outstanding and reserved for issuance upon

conversion of notes, exercise of warrants and Options and exercise of the

Warrants hereunder (after giving effect to anti-dilution adjustments) are as set

forth on Schedule 4.1(d) hereto. As of the Closing Date, the Company will not

have outstanding any capital stock or securities convertible or exchangeable for

any shares of its capital stock except as set forth in Schedule 4.1(d), and will

not have outstanding any rights or options to subscribe for or to purchase its

capital stock or any stock or securities convertible into or exchangeable for

its capital stock, except as set forth in Schedule 4.1(d). As of the Closing

Date, the Company will not be subject to any obligation (contingent or

otherwise) to repurchase or otherwise acquire or retire any shares of its

capital stock, except as set forth herein and the Charter Documents,

respectively, as in effect on the date hereof. As of the Closing, all of the

outstanding shares of the Company's capital stock will be validly issued, fully

paid and nonassessable. Except as set forth on the Schedule 4.1(d), there are no

statutory or contractual stockholders' preemptive rights or notices with respect

to the issuance of the Shares and Warrants hereunder. Subject to and based on

the accuracy of all representations made by Roaring Fork in this Offering, the

Company has not violated any applicable federal or state securities laws in

connection with the offer, sale or issuance of any of its capital stock, and the

offer, sale and issuance of the Shares and Warrants hereunder do not require

registration under the Securities Act or any applicable state securities laws.

(e) Subsidiaries. Except as set forth on Schedule 4.1(e), the Company does

not own, or hold any rights to acquire, any shares of stock or any other

security or interest in any other Person. The Company has no Subsidiaries except

as set forth on Schedule 4.1(e).

(f) Authorization; No Breach. The execution, delivery and performance of

the Purchase Documents, and the SBA Compliance Agreement (collectively, the

"Transaction Documents"), and the consummation of the Transactions have been

duly authorized by the Company. The Company has the requisite corporate power

and authority to enter into and perform its obligations under the Transaction

Documents and to issue the Shares, Warrants and Warrant Shares in accordance

with the terms hereof and thereof. Except as set forth in Section 4.1(f), no

further filing, consent, or authorization is required by the Company, its Board

of Directors, or its stockholders. Except as set forth on Schedule 4.1(f), the

execution, delivery and performance of the Transaction Documents by the Company

and the consummation by the Company of the transactions contemplated hereby and

thereby (including, without limitation, the issuance of the Shares and Warrants

and reservation for issuance and issuance of the Warrant Shares) will not (i)

result in a violation of any certificates or articles of incorporation, articles

of formation, certificates or articles of designations or other constituent

documents of the Company or any of its Subsidiaries, any capital stock of the

Company or any of its Subsidiaries or bylaws of the Company or any of its

Subsidiaries or (ii) conflict with, or constitute a default (or an event which

would with notice or lapse of time or both would become a default) in any

respect under, or give to others any rights of termination, amendment,

acceleration or cancellation of, any agreement, indenture or instrument to which

the Company or any of its Subsidiaries is a party, or (iii) result in a

violation of any law, rule, regulation, order, judgment or decree, including

foreign, federal and state securities laws and regulations and the rules and

regulations of the Principal Market, applicable to the Company or any of its

Subsidiaries or by which any property or asset of the Company or any of its

Subsidiaries is bound or effective.

- 8 -

<PAGE>

(g) Enforceability. This Agreement constitutes, and each of the other

Transaction Documents when duly executed and delivered by the Company will

constitute, legal, valid and binding obligations of the Company enforceable in

accordance with their respective terms.

(h) No Material Adverse Change. Except as disclosed in Schedule 4.1(h),

since the date of the latest audited financial statements included within the

SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has

been no event, occurrence or development that has had or that could reasonably

be expected to result in a Material Adverse Effect, (ii) the Company has not

incurred any liabilities (contingent or otherwise) other than (A) trade

payables, accrued expenses and other liabilities incurred in the ordinary course

of business consistent with past practice and (B) liabilities not required to be

reflected in the Company's financial statements pursuant to GAAP or required to

be disclosed in filings made with the Commission, (iii) the Company has not

altered its method of accounting or the identity of its auditors, (iv) the

Company has not declared or made any dividend or distribution of cash or other

property to its stockholders or purchased, redeemed or made any agreements to

purchase or redeem any shares of its capital stock, and (v) except as set forth

on Schedule 4.1(h), the Company has not issued any equity securities to any

officer, director or Affiliate. The Company does not have pending before the SEC

any request for confidential treatment of information.

(i) Litigation. Except as described in the SEC Reports, the Company has not

received notice of the filing of any material actions, suits or proceedings at

law or in equity or by or before any arbitrator or any Governmental Authority

(collectively, "Lawsuits") now pending nor, to the best knowledge of the

Company's management after due inquiry, have any material Lawsuits been

threatened against or filed by or materially affecting the Company or against

any of its directors or officers or Affiliates relating to the assets or rights

of the Company or the Business.

(j) Compliance with Laws. The Company is not in violation of any applicable

Law in any material respect. The Company is not in default with respect to any

judgment, order, writ, injunction, decree, rule or regulation of any

Governmental Authority. There is no investigation, enforcement action or

regulatory action pending or threatened against or affecting the Company by any

Governmental Authority. There is no remedial or other corrective action that the

Company is required to take to remain in compliance with any judgment, order,

writ, injunction or decree of any Governmental Authority or to maintain any

material permits, approvals or licenses granted by any Governmental Authority in

full force and effect. During the past five (5) years, n