EXHIBIT
10.12

     

    PROMISSORY
NOTE & AGREEMENT

     

    
      	
              $100,000.00

            	
              Date:
      June 30, 2010    

            


    

    


    
      For value
received, the undersigned Atossa Genetics, Inc. (the “Borrower”), at 4105 E
Madison St, Suite
320 Seattle, WA 98112, promises to pay to the order of Steven Quay, (the
“Lender”), at 4105 E
Madison St, Suite 320, Seattle WA 98112or at such other place as the Lender may
designate
in writing) the sum of One Hundred Thousand Dollars ($100,000.00) with interest
from June
30, 2010, on the unpaid principal at the rate of 10.00% per
annum.

    

    


    A loan
initiation fee of $4,000.00 is charged.

    


    The
unpaid principal, initiation fee, and accrued interest shall be payable in full
on, or before, December
30, 2010.

    


    All
payments on this Note shall be applied first in payment of initiation fee, then
to accrued interest
and any remainder in payment of principal.

    


    If any
payment obligation under this Note is not paid when due, the remaining unpaid
principal balance
and any accrued interest and fee shall become due immediately at the option of
the Lender.

    


    The
Borrower reserves the right to prepay this Note (in whole or in part) prior to
the Due Date with no
prepayment penalty.

    


    If any
payment obligation under this Note is not paid when due, the Borrower promises
to pay all costs of
collection, including reasonable attorney fees, whether or not a lawsuit is
commenced as part of
the collection process.

    


    If any of
the following events of default occur, this Note and any other obligations of
the Borrower to the Lender shall become due immediately, without demand or
notice:

    


    1) the
failure of the Borrower to pay the principal and any accrued interest in full on
or before the Due Date;

    


    2) the
filing of bankruptcy proceedings involving the Borrower as a
debtor;

    


    3) the
application for the appointment of a receiver for the Borrower;

    


    4) the
making of a general assignment for the benefit of the Borrower’s
creditors;

    


    5) the
insolvency of the Borrower;


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    
      If any
one or more of the provisions of this Note are determined to be unenforceable,
in whole or in part,
for any reason, the remaining provisions shall remain fully
operative.

    

    


    All
payments of principal and interest on this Note shall be paid in the legal
currency of the United
States. The Borrower waives presentment for payment, protest, and notice of
protest and nonpayment
of this Note.

    


    No
renewal or extension of this Note, delay in enforcing any right of the Lender
under this Note, or
assignment by Lender of this Note shall affect the liability or the obligations
of the Borrower. All
rights of the Lender under this Note are cumulative and may be exercised
concurrently or consecutively
at the Lender’s option.

     

    This Note
shall be construed in accordance with the laws of the State of
Washington.

     

    Signed
this 30th day of June,
2010,

     

    
      	
              Borrower:

            	 
      
	
              ATOSSA
      GENETICS Inc.

            	 
      
	 
      	 
      
	
              /s/ Robert L. Kelly

            	 
      
	
              By:
      Robert L. Kelly

            	 
      
	
              Its:
      President

            	 
      
	 
      	 
      
	
              STEVEN
      C. QUAY, M.D., PH.D.

            	 
      
	 
      	 
      
	
              /s/ Steven C. Quay

            	 
      


    

     

    
      
         


      

      
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