**EXHIBIT
      10.29**




April
      19,
      2007





Keith
      E.
      Palmer


1506
      Maple Crest Drive


Castleton,
      NY 12033





Dear
      Keith,





It
      is our
      pleasure to formally continue your position of Chief Financial Officer and
      Executive Vice President, Finance for American Bio Medica Corporation (“ABMC” or
      the “Company”), reporting directly to the ABMC Chief Executive Officer. This
      agreement supersedes all other agreements whether written or verbal and may
      not
      be amended except by a writing signed by you and the Chief Executive Officer,
      and approved by the Board of Directors. Your position will be primarily located
      at our New York corporate facility although overnight travel may be required
      from time to time. You will perform all duties as are generally associated
      with
      the position of Chief Financial Officer and Executive Vice President, Finance,
      as directed by the Chief Executive Officer. Below, we have outlined the major
      terms and conditions applicable to your position.





**Term**





Your
      employment with ABMC will be for a term of one year unless sooner terminated
      for
      cause, beginning on the date set forth above and automatically renewed for
      successive one-year terms unless either side gives written notice of intent
      not
      to renew at least 60 days prior to the end of any one-year term. If AMBC
      terminates your employment for cause, this agreement shall be terminated and
      you
      will be entitled to no severance and no further compensation or benefits from
      ABMC, other than payment of salary and benefits up to and including the date
      of
      termination.





**Compensation**





Effective
      with the signing of this Employment letter, your base salary will be $12,416
      per
      month, which is equivalent to $149,000 on an annualized basis, to be paid
      retroactive to January 1, 2007. You will be eligible for your first performance
      review by the Board of Directors in January 2008.





If
      you so
      desire, the cost of your health insurance (including family coverage if you
      so
      require) shall be borne 100% by the Company. Please notify Human Resources
      if
      you wish to receive this benefit.





You
      shall
      receive a car allowance of $10,000 per year, to be paid on a monthly basis
      and
      subject to tax on your part, and reimbursement for any approved company related
      expenses.





You
      shall
      participate in the Management Bonus Program as approved by the Board of
      Directors on January 19, 2005, and as amended by the Board of Directors on
      November 9, 2005.





**Benefits**





·
            20
                vacation days


·
            Usual
                corporate holidays


·
            2
                personal days


·
            401
                (k)





**Severance**





In
      the
      unlikely event that ABMC elects to terminate your employment for anything other
      than cause, you will receive severance pay equal to twelve (12) months of your
      current base salary at the time of separation, with continuation of all medical
      benefits during the twelve-month period at ABMC’s expense. Cause shall be
      defined as (1) death, (2) commission of a felony (3) acts of dishonesty, fraud
      or malfeasance in connection with your service on behalf of the Company, (4)
      gross dereliction of duty willful failure to carry out any lawful directive
      of
      the Chief Executive Officer or the Board of Directors, or material violations
      of
      Company policies which continue after Company has provided Employee with written
      notice thereof and a period of thirty (30) days to cure such action or
      misconduct or (5) disability of a period of more than 6 months). The severance
      payment will be made under the current pay cycle, each pay period, during the
      12
      months, subject to all customary withholdings.









Additionally,
      you may resign your position and elect to exercise this severance provision
      at
      your option under the following circumstances:





·
            If
                you are required to relocate by the Company or its Board of Directors
                more
                than 50 miles from the Company’s Kinderhook facility as a condition of
                continued employment


·
            A
                substantial change in responsibilities normally assumed by a Chief
                Financial Officer and Executive VP at the direction of the Company
                or its
                Board of Directors (i.e. demotion)


·
            You
                are asked to commit or conceal the commitment of any illegal act
                by any
                officer or member of the board of directors of the
                Company





**Change
      in Control**





If
      there
      is a Change in Control (defined below) of ABMC, you may elect to resign your
      position and to receive a lump sum severance payment equal to two times your
      annual base salary (“CIC Payment”). If you elect to resign, ABMC will pay you
      the CIC Payment within thirty days after you make your election, which election
      must be in writing and received by ABMC’s Board of Directors within ten days
      after a Change in Control. In the event you continue employment with ABMC or
      any
      successor to ABMC following a Change in Control or fail to make an election
      within ten days after a Change in Control, you will not be entitled to receive
      the CIC Payment.





Change
      in
      Control is defined as follows:





(i)  the
      approval by shareholders of ABMC of a merger or consolidation of ABMC with
      any
      other corporation, other than a merger or consolidation which would result
      in
      the voting securities of ABMC outstanding immediately prior thereto continuing
      to represent (either by remaining outstanding or by being converted into voting
      securities of the surviving entity) more than fifty percent (50%) of the total
      voting power represented by the voting securities of ABMC or such surviving
      entity outstanding immediately after such merger or consolidation;
      or





(ii)  the
      approval by the shareholders of ABMC of a plan of complete liquidation of ABMC
      or an agreement for the sale or disposition by ABMC of all or substantially
      all
      of ABMC’s assets.





**Restrictive
      Covenants**





**Company
      Handbook/Compliance Certification**





You
      are
      aware that it is your responsibility to read the ABMC Employee Handbook
      thoroughly and comply with the policies contained in the Handbook. You
      understand that the policies, benefits and information contained in the Handbook
      are subject to change and that revisions to the Handbook may be made. Any such
      changes will be communicated through official written notices and you hereby
      acknowledge that any such revisions may supercede, modify or eliminate existing
      policies. Only a majority of the Executive Officers, or a majority of the Board
      of Directors may adopt revisions to the policies contained in the Handbook.
      In
      no circumstance may a change to the employee handbook reduce the salary,
      benefits or other conditions outlined in this employment agreement.





You
      agree
      that in addition to any covenants included in this Employment Letter, you will
      sign a Compliance Certification simultaneously with the signing of this
      Employment Letter. If a conflicting covenant exists between the Employment
      Letter and the Compliance Certification and/or the Company Handbook, the
      Employment Letter shall be the ruling document.





**Non-Solicitation**





During
      the twelve (12) months immediately following your termination from employment
      with ABMC for any reason, you agree that:





·
            You
                will not, directly or indirectly, solicit in any manner or capacity
                whatsoever, including by way of illustration, but not limitation,
                call
                upon, mail or e-mail notices to, or make telephone calls to, any
                Customer
                (defined below) or Customer Prospect (defined below) of ABMC, for
                the
                purpose of selling any Covered Services (defined below) or engaging
                in any
                business which directly or indirectly competes with
                ABMC.









·
            You
                will not solicit, endeavor to entice away from ABMC, or otherwise
                interfere with the relationship of ABMC with any person who is employed
                (or, but for any violation of this agreement, would have been employed)
                by
                or otherwise engaged to perform services for ABMC, whether for your
                own
                account or for the account of any other person or
                entity.





·
            You
                will not, directly or indirectly, solicit in any manner or capacity
                whatsoever, including by way of illustration, but not limitation,
                call
                upon, mail, or e-mail notices to, or make telephone call to, any
                supplier
                or vendor of ABMC for the purpose of engaging in any business which
                directly or indirectly competes with
                ABMC.





**Confidentiality**





You
      agree
      not to disclose any Confidential Information (defined below) and you promise
      to
      take all reasonable precautions to prevent its unauthorized dissemination,
      both
      at all times during your employment with ABMC and after termination of your
      employment for any reason. You agree to limit the disclosure of any Confidential
      Information to only those employees and agents of ABMC who have a need to know
      the information and who have similarly agreed to keep such information
      confidential. Upon termination of your employment or upon request, you will
      deliver to ABMC all documents and electronic files containing Confidential
      Information and any personal property owned by ABMC.





You
      further agree not to use any Confidential Information for your own benefit
      or
      for the benefit of anyone other than ABMC. You acknowledge that all Confidential
      Information is and remains the property of ABMC and that no license or rights
      in
      the Confidential Information has been or is granted to you.





“Confidential
      Information" means and includes all information not previously known by you
      prior to your employment with ABMC relating to marketing, advertising, public
      relations, development, services, trade secrets, trade "know-how," business
      plans, Customer (as defined below) and Customer Prospect (as defined below)
      lists, distributor lists, Customers and Customer Prospects information,
      distributor information, financial data, personnel data, employee compensation
      and benefits information, new personnel acquisition plans, details of contracts,
      pricing policies, operational methods, marketing plans or strategies, service
      development techniques or plans, business acquisition or investment plans,
      or
      other confidential and proprietary information related to the business or
      affairs of ABMC and/or its Customers or Customer Prospects.





The
      term
      "Customer" means any person or entity for which ABMC performed any Covered
      Services during the one (1) year period immediately preceding the termination
      of
      your employment with ABMC for any reason whatsoever.





"Customer
      Prospect" means any person or entity to which ABMC made a new business
      presentation or proposal, whether formal or informal related to Covered Services
      during the one (1) year period immediately preceding the termination of your
      employment with ABMC for any reason whatsoever.





“Covered
      Services” means any services or products of whatever kind or character offered
      or provided by ABMC to any person or entity.





**Enforcement**





If
      any
      provision of the covenants in this agreement shall be held invalid or
      unenforceable, the remainder nevertheless shall remain in full force and effect.
      If any provision is held invalid or unenforceable with respect to particular
      circumstances, it nevertheless shall remain in full force and effect in all
      other circumstances.









If,
      in
      connection with any action taken by ABMC to enforce the provisions of the
      covenants of this agreement, a court shall hold that all or any portion of
      the
      restrictions contained therein are unreasonable under the circumstances then
      existing so as to render such covenants invalid or unenforceable, the parties
      agree that any court of competent jurisdiction may reform such unreasonable
      restrictions to the extent necessary to make such restrictions reasonable under
      the circumstances then existing so as to render such restrictions both valid
      and
      enforceable.





You
      acknowledge and agree that all of the covenants contained in this agreement
      are
      necessary for the protection of ABMC's valuable and legitimate business
      interests and are reasonable in scope and content. Accordingly, you acknowledge
      and agree that if you violate any of the provisions of this agreement ABMC
      shall
      sustain irreparable harm and, therefore, in addition to the other remedies
      which
      ABMC may have under this agreement or otherwise, ABMC will be entitled to
      specific performance, injunctive, and other equitable relief.





You
      agree
      to indemnify, save and hold harmless ABMC from and
      against any and all claims, damages, losses, costs and expenses (including
      reasonable attorneys' fees) incurred by ABMC in any action in which a court
      enforces the terms of the covenants of this agreement.





**Other
      Employment Information**





In
      making
      this offer ofcontinued employment, ABMC has relied on your representations
      that:
      (a) you are not currently a party to any contract of employment that might
      impede your ability to accept this offer or to perform the services completed
      thereby; and (b) that you are not subject to any non-competition arrangement
      or
      other restrictive covenants that might restrict your employment at ABMC as
      contemplated by this offer.





**Exclusive
      Service**





You
      will
      perform services exclusively for ABMC and you will not perform services for
      any
      other persons or entities related to or conducting business with the Company
      for
      personal profit during the term of this agreement without the written agreement
      of the Board of Directors.





**Miscellaneous**





This
      writing represents the entire agreement with respect to your employment and
      any
      prior agreements or understandings, written or oral, are merged herein. This
      agreement shall be governed by the laws of the State of New York. ABMC will
      not
      be deemed to have waived any provision of this agreement except by a signed
      writing. This agreement may not be amended, except by a signed writing. Notices
      given pursuant to this Agreement shall be in writing and delivered personally
      or
      by nationally recognized overnight courier in the case of ABMC to its Kinderhook
      facility to the attention of the Chief Executive Officer and in your case to
      your home address as set forth in ABMC’s personnel file.





Keith,
      we
      are enthusiastic about your appointment as Chief Financial Officer and Executive
      Vice President, Finance and our expectation is that you will continue to make
      a
      tremendous contribution to the long-term success of ABMC.





Sincerely,




/s/
                    Edmund JaskiewiczEdmund
                    Jaskiewicz
                  Chairman
                    of the Board of Directors & President
                  By
                    order of the American Bio Medica Corporation Board of
                    Directors
  Accepted
                      this 19 Day of April, 2007:/s/
                        Keith E. PalmerKeith
                        E. Palmer