Document:

exv10w12

Exhibit 10.12

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

          THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), dated as of January 1, 2009
(the “Effective Date”), is entered into among Altra Holdings, Inc., a Delaware corporation
(“Holdings”), Altra Industrial Motion, Inc., a Delaware corporation and wholly-owned subsidiary of
Holdings (“Altra,” and together with Holdings, the “Companies”), and Carl Christenson
(“Executive”). This Agreement amends and restates in its entirety that certain Employment
Agreement, dated as of January 6, 2005, as amended, among Holdings, Altra and the Executive.
Certain capitalized terms used in this Agreement are defined in Section 12 hereof.

          Holdings, Altra and Executive desire to enter into this agreement relating to Executive’s
employment by the Companies.

          The parties hereto agree as follows:

     1. Employment. The Companies shall employ Executive, and Executive hereby agrees to be
employed by the Companies, upon the terms and conditions set forth in this Agreement for the period
beginning on the Effective Date and ending as provided in Section 3 hereof (the “Employment
Period”).

     2. Position and Duties.

          (a) Position. During the Employment Period, Executive shall serve as the Chief
Executive Officer of the Companies and in such capacity shall have the duties, responsibilities and
authority that are normally associated with such office, subject to the direction and supervision
of the Board. Executive shall report directly to the Board.

          (b) Duties. Executive shall devote substantially all of his business time and
attention (except for permitted vacation periods and periods of illness or incapacity and other
activities approved by the Board from time to time) to the business and affairs of the Companies
and their Subsidiaries.

     3. Termination. The Employment Period shall terminate on the fifth anniversary of the
Effective Date (the “Initial Term”) and shall automatically renew for successive one (1) year
periods unless one party gives written notice to the other at least six (6) months prior to the end
of the Initial Term, or at least six (6) months prior to the end of any one (1) year renewal
period, that the Agreement shall not be further extended. The date on which the Employment Period
terminates after any notice of non-renewal is referred to herein as the “Expiration Date.”
Notwithstanding the foregoing, the Companies and Executive agree that Executive is an “at-will”
employee, subject only to the contractual rights upon termination set forth herein, and that the
Employment Period (a) shall terminate automatically at any time upon Executive’s death, (b) shall
terminate automatically at any time upon the Board’s determination of Executive’s Disability, (c)
may be terminated by the Board at any time for any reason or no reason (whether for Cause or
without Cause) by giving Executive written notice of the termination, and (d) may be terminated by
Executive for any reason or no reason (including for Good Reason) by giving

 

 

the Companies written notice at least 30 days in advance of his termination date.
Notwithstanding anything herein to the contrary, in no event shall delivery of a notice of
non-renewal by the Companies be deemed a termination without Cause. Notwithstanding the foregoing,
if the Expiration Date occurs and this Agreement terminates pursuant to this Section 3
because the Companies have delivered notice of non-renewal of this Agreement , the obligations of
Executive under Section 8 (Noncompetition) shall terminate on such Expiration Date;
provided, however, that the obligations of Executive under Section 8
(Noncompetition) shall survive such Expiration Date and be enforceable thereafter during the
Noncompete Period (as defined in Section 8) in the event the Companies elect, in their sole
and absolute discretion, to pay Executive the severance benefits described in Section 5(a)
of this Agreement (in which event the Executive shall execute and deliver the release contemplated
therein). The date that the Employment Period is terminated for any reason is referred to herein
as the “Termination Date.”

     4. Base Salary and Benefits.

          (a) Base Salary. During the Employment Period, Executive’s base salary shall be Four
Hundred Twenty Five Thousand dollars ($425,000) per year (the “Base Salary”). The Base Salary shall
be reviewed annually. The Base Salary shall not be reduced prior to the Expiration Date, and after
any increase of such Base Salary approved by the Board, the term “Base Salary” in this Agreement
shall refer to the Base Salary as so increased. The Base Salary shall be payable in regular
installments in accordance with the Companies’ general payroll practices.

          (b) Performance Bonus. In addition to the Base Salary, Executive shall be eligible
for a maximum annual incentive target bonus payment of Seventy Five percent (75%) of his Base
Salary (a “Performance Bonus”), in accordance with the Companies’ bonus performance plan approved
by the Board in its sole discretion.

          (c) Expenses. The Companies will reimburse Executive for all reasonable travel and
other business expenses incurred by Executive during the Employment Period in connection with the
performance of his duties and obligations under this Agreement, subject to Executive’s compliance
with such limitations and reporting requirements with respect to expenses as may be established by
the Companies from time to time.

          (d) Other Benefits. During the Employment Period, Executive will be entitled to
participate in all compensation or employee benefit plans or programs and receive all benefits and
perquisites for which salaried employees of the Companies generally are eligible under any plan or
program now or established later by the Companies on the same basis as other senior executives of
the Companies. Nothing in this Agreement will preclude the Companies from amending or terminating
any of the plans or programs applicable to salaried employees or senior executives as long as such
amendment or termination is applicable to all salaried employees or all senior executives, as the
case may be. Executive shall be entitled to four weeks of paid vacation each year, which may be
taken in accordance with the Companies’ vacation policy.

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          (e) Indemnification. To the fullest extent permitted by law and the certificates of
incorporation of the Companies, the Executive (and his heirs, executors and administrators) shall
be indemnified by the Companies and their successors and assigns. The obligations of the Companies
pursuant to this Section shall survive the termination of the Employment Period.

     5. Severance.

          (a) Termination without Cause or for Good Reason. If, prior to the Expiration Date,
the Employment Period is terminated by the Companies without Cause or by the Executive for Good
Reason, (i) Executive shall be entitled to receive for the Severance Period (A) his annual Base
Salary as in effect immediately prior to the Termination Date paid in the same manner and in the
same installments as previously paid and (B) to the extent permitted by such plans as in effect on
the Termination Date, at the Companies’ expense the continuation of medical and dental benefits
through the Severance Period and (ii) Executive (or his estate) shall be entitled to receive (A)
all earned or accrued but unpaid Base Salary, reimbursement of expenses and any other benefits to
which Executive is entitled through the Termination Date, (B) any Performance Bonus that was
earned, but not paid, as of, and pro rated through, the Termination Date, and (C) all amounts or
benefits to which Executive is entitled under any applicable employee-benefit plan or arrangement
of the Companies in which Executive was a participant during his employment with the Companies, in
accordance with the terms of such plan or arrangement and (iii) notwithstanding any provision to
the contrary in the Equity Incentive Plan or Executive’s award agreements related thereto, all of
Executive’s outstanding equity awards under the Equity Incentive Plan shall immediately vest and be
released from all forfeiture restrictions thereon. When used herein, the “Severance Period” means
the 12-month period from and after the Termination Date. The Companies’ obligations under this
Section 5(a) shall be subject to the condition that Executive deliver a complete release in
favor of the Companies and their respective Subsidiaries, affiliates, officers, directors,
employees, principals and attorneys, in form and substance satisfactory to the Companies.

          (b) Death or Disability. In the event of the death or Disability of Executive during
the Employment Period, the Companies’ obligation to make payments or provide any other benefits
under this Agreement shall cease as of the date of death or Disability of Executive;
provided that (i) Executive (or his estate) shall be entitled to receive (A) all earned or
accrued but unpaid Base Salary, reimbursement of expenses and any other benefits to which Executive
is entitled through the Termination Date, (B) any Performance Bonus that was earned, but not paid,
as of, and pro rated through, the Termination Date, and (C) all amounts or benefits to which
Executive is entitled under any applicable employee-benefit plan or arrangement of the Companies in
which Executive was a participant during his employment with the Companies, in accordance with the
terms of such plan or arrangement and (ii) notwithstanding any provision to the contrary in the
Equity Incentive Plan or applicable award agreements, Executive’s outstanding equity awards granted
on January 25, 2005 and August 30, 2006 shall immediately vest in their entirety and be released
from all forfeiture restrictions thereon.

          (c) Other Termination. If the Employment Period is terminated by the Companies for
Cause or by Executive for any reason other than Good Reason, Executive shall not be entitled to any
severance payments and all of Executive’s benefits shall cease to be

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effective immediately as of the Termination Date (except as required by law). All of
Executive’s rights to fringe benefits and bonuses hereunder (if any) which accrue or become payable
after the termination of the Employment Period shall cease upon such termination; provided
that Executive (or his estate) shall be entitled to receive (x) all earned or accrued but unpaid
Base Salary, reimbursement of expenses and any other benefits to which Executive is entitled
through the Termination Date, (y) any Performance Bonus that was earned, but not paid, as of, and
pro rated through, the Termination Date, and (z) all amounts or benefits to which Executive is
entitled under any applicable employee-benefit plan or arrangement of the Companies in which
Executive was a participant during his employment with the Companies, in accordance with the terms
of such plan or arrangement.

          (d) Other Benefits. Except as required by law or as specifically provided in this
Section 5, the Companies’ obligation to make any payments or provide any other benefits
hereunder shall terminate automatically as of the Termination Date.

          (e) Termination of Severance. If Executive breaches any of the provisions of
Sections 6 through 9 hereof, the Companies shall no longer be obligated to make any
additional payments or provide any other benefits pursuant to this Section 5.

          (f) Pro Rated Performance Bonus. If Executive shall be entitled to any pro rated
Performance Bonus pursuant to Section 5 (a), (b) or (c), the Companies shall not be
required to make payment to Executive of such pro rated Performance Bonus until such time that the
Companies make payment of similar bonuses to other participants in the Companies’ bonus performance
plan after the completion of the fiscal year in which the bonuses were earned.

     6. Confidential Information. Executive acknowledges that the information, observations
and data (including without limitation trade secrets, know-how, research plans, business,
accounting, distribution and sales methods and systems, sales and profit figures and margins and
other technical or business information, business, marketing and sales plans and strategies, cost
and pricing structures, and information concerning acquisition opportunities and targets nationwide
in or reasonably related to any business or industry in which any the Companies or their respective
Subsidiaries is engaged) disclosed or otherwise revealed to him, or discovered or otherwise
obtained by him or of which he becomes aware, directly or indirectly, while employed by the
Companies or their Subsidiaries (including, in each case, those obtained prior to the date of this
Agreement) concerning the business or affairs of the Companies or any of their respective
Subsidiaries (collectively, “Confidential Information”) are the property of the Companies or their
respective Subsidiaries, as the case may be, and agrees that the Companies have a protectable
interest in such Confidential Information. Therefore, Executive agrees that he shall not (during
his employment with the Companies or at any time thereafter) disclose to any unauthorized person or
use for his own purposes any Confidential Information without the prior written consent of the
Board, unless and to the extent that the aforementioned matters: (a) become or are generally known
to and available for use by the public other than as a result of Executive’s acts or omissions or
(b) are required to be disclosed by judicial process or law (provided that Executive shall give
prompt advance written notice of such requirement to the Companies to enable the Companies to seek
an appropriate protective order or confidential treatment). Executive shall deliver to the
Companies at the termination of the Employment

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Period, or at any other time the Companies may request, all memoranda, notes, plans, records,
reports, computer tapes, printouts and software and other documents and data (and copies thereof)
which constitute Confidential Information or Work Product (as defined below) which he may then
possess or have under his control.

     7. Work Product. Executive hereby assigns to the Companies all right, title and
interest in and to all inventions, developments, methods, process, designs, analyses, reports and
all similar or related information (in each case whether or not patentable), all copyrightable
works, all trade secrets, confidential information and know-how, and all other intellectual
property rights that both (a) are conceived, reduced to practice, developed or made by Executive
while employed by the Companies and their Subsidiaries and (b) either (i) relate to the Companies’
or any of their Subsidiaries’ actual or anticipated business, research and development or existing
or future products or services, or (ii) are conceived, reduced to practice, developed or made using
any of equipment, supplies, facilities, assets or resources of the Companies or any of their
Subsidiaries (including but not limited to, any intellectual property rights) (“Work Product”).
Executive shall promptly disclose such Work Product to the Board and perform all actions reasonably
requested by the Board (whether during or after the Employment Period) to establish and confirm the
Companies’ ownership of the Work Product (including, without limitation, executing and delivering
assignments, consents, powers of attorney, applications and other instruments).

     8. Noncompetition. In further consideration of the compensation to be paid to
Executive hereunder, Executive acknowledges that in the course of his employment with the Companies
and their Subsidiaries he has become and shall become familiar with the Companies’ trade secrets
and with other Confidential Information concerning the Companies and their Subsidiaries and that
his services have been and shall be of special, unique and extraordinary value to the Companies and
their Subsidiaries. Therefore, Executive agrees that, during the period of Executive’s employment
with the Companies and for 12 months thereafter (the “Noncompete Period”), he shall not, without
prior written approval by the Board, directly or indirectly (whether for compensation or otherwise)
own or hold any interest in, manage, operate, control, consult with, render services for, or in any
manner participate in any business which competes in any material respect with the businesses of
the Companies or their Subsidiaries conducted or proposed to be conducted during the Employment
Period (collectively, the “Business”), either as a general or limited partner, proprietor, common
or preferred shareholder, officer, director, agent, employee, consultant, trustee, affiliate or
otherwise. Executive acknowledges that the Companies’ and their Subsidiaries’ businesses are
planned to be conducted nationally and internationally and agrees that the provisions in this
Section 8 shall operate in the market areas of the United States and outside the United
States in which the Companies conduct or plan to conduct business on and prior to the Termination
Date. Nothing in this Section 8 shall prohibit Executive from being a passive owner of not
more than 2% of the outstanding securities of any publicly traded company engaged in the Business,
so long as Executive has no active participation in the business of such company.

     9. Non-Solicitation. During the Noncompete Period, Executive shall not directly or
indirectly through another entity (i) induce or attempt to induce any employee of the Companies or
any Subsidiary to leave the employ of the Companies or such Subsidiary, or in any way

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interfere with the relationship between the Companies or any Subsidiary and any employee
thereof, (ii) solicit to hire any person who was an employee of the Companies or any Subsidiary at
any time during the 12 months preceding the termination of the Employment Period or (iii) induce or
attempt to induce any customer, developer, client, member, supplier, licensee, licensor, franchisee
or other business relation of the Companies or any Subsidiary to cease doing business with the
Companies or such Subsidiary, or in any way interfere with the relationship between any such
customer, developer, client, member, supplier, licensee, licensor, franchisee or business relation
and the Companies or any Subsidiary (including, without limitation, making any negative statements
or communications about the Companies or their Subsidiaries).

     10. Enforcement. If, at the time of enforcement of any of Sections 6 through
9, a court of competent jurisdiction shall hold that the period, scope or area restrictions
stated herein are unreasonable under circumstances then existing, the parties hereto agree that the
maximum period, scope or area reasonable under such circumstances shall be substituted for the
stated period, scope or area and that the court shall be allowed and directed to revise the
restrictions contained herein to cover the maximum period, scope and area permitted by applicable
law. The parties hereto acknowledge and agree that Executive’s services are unique and he has
access to Confidential Information and Work Product, that the provisions of Sections 6
through 9 are necessary, reasonable and appropriate for the protection of the legitimate
business interests of the Companies and their respective Subsidiaries, that irreparable injury will
result to the Companies and their respective Subsidiaries if Executive breaches any of the
provisions of Sections 6 through 9 and that money damages would not be an adequate
remedy for any breach by Executive of this Agreement and that the Companies will not have any
adequate remedy at law for any such breach. Therefore, in the event of a breach or threatened
breach of this Agreement, the Companies or any of their successors or assigns, in addition to other
rights and remedies existing in their favor, shall be entitled to specific performance and/or
immediate injunctive or other equitable relief from any court of competent jurisdiction in order to
enforce or prevent any violations of the provisions hereof (without the necessity of showing actual
money damages, or posting a bond or other security). Nothing contained herein shall be construed
as prohibiting the Companies or any of their successors or assigns from pursuing any other remedies
available to it for such breach or threatened breach, including the recovery of damages.

     11. Executive’s Representations and Acknowledgements. Executive hereby represents and
warrants to the Companies that (i) the execution, delivery and performance of this Agreement by
Executive do not and shall not conflict with, breach, violate or cause a default under any
contract, agreement, instrument, order, judgment or decree to which Executive is a party or by
which he is bound, (ii) Executive is not a party to or bound by any employment agreement,
noncompete agreement or confidentiality agreement with any other Person, (iii) Executive shall not
use any confidential information or trade secrets of any third party in connection with the
performance of his duties hereunder, and (iv) this Agreement constitutes the valid and binding
obligation of Executive, enforceable against Executive in accordance with its terms. Executive
hereby acknowledges and represents that he has consulted with independent legal counsel regarding
his rights and obligations under this Agreement and that he fully understands the terms and
conditions contained herein and intends for such terms and conditions to be binding on and
enforceable against Executive. Executive acknowledges and agrees that the provisions of
Sections 6 through 9 are in consideration of: (i) Executive’s employment by the

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Companies; and (ii) additional good and valuable consideration as set forth in this Agreement,
the receipt and sufficiency of which are hereby acknowledged. Executive expressly agrees and
acknowledges that the restrictions contained in Sections 6 through 9 do not
preclude Executive from earning a livelihood, nor do they unreasonably impose limitations on
Executive’s ability to earn a living. In addition, Executive agrees and acknowledges that the
potential harm to the Companies of its non-enforcement outweighs any harm to Executive of its
enforcement by injunction or otherwise. Executive acknowledges that he has carefully read this
Agreement and has given careful consideration to the restraints imposed upon Executive by this
Agreement, and is in full accord as to their necessity for the reasonable and proper protection of
the Confidential Information. Executive expressly acknowledges and agrees that each and every
restraint imposed by this Agreement is reasonable with respect to subject matter, time period and
geographical area.

     12. Definitions.

          “Affiliate” means, with respect to any Person, any Person controlling, controlled by or under
common control with such Person.

          “Board” means the Board of Directors of each of the Companies, respectively.

          “Cause” means (i) Executive’s material breach of the terms of any agreement between Executive
and the Companies; (ii) Executive’s willful failure or refusal to perform material duties as Chief
Executive Officer; (iii) Executive’s willful insubordination or disregard of the legal directives
of the Board which are not inconsistent with the scope, ethics and nature of Executive’s duties and
responsibilities; (iv) Executive’s engaging in misconduct which has a material adverse impact on
the reputation, business, business relationships or financial condition of the Companies; (v)
Executive’s commission of an act of fraud or embezzlement against the Companies or any of their
Subsidiaries; or (vi) any conviction of, or plea of guilty or nolo contendere by, Executive with
respect to a felony (other than a traffic violation), a crime involving moral turpitude, fraud or
misrepresentation; provided, however, that Cause shall not be deemed to exist under any of clauses
(i), (ii) or (iii) unless Executive has been given reasonably detailed written notice of the
grounds for such Cause and Executive has not effected a cure within twenty (20) days of the date of
receipt of such notice.

          “Disability” means a determination by independent competent medical authority (selected by the
Board) that Executive is unable to perform his duties under this Agreement and in all reasonable
medical likelihood such inability will continue for a period in excess of 120 days (whether or not
consecutive) in any 365 day period.

          “Equity Incentive Plan” means Holdings’ 2004 Equity Incentive Plan as amended.

          “Good Reason” means any of the following: (i) without Executive’s express written consent, any
change in Executives job title, any change in Executive’s reporting relationships or a significant
reduction of Executive’s duties, position or responsibilities relative to Executive’s duties,
position or responsibilities in effect immediately prior to such reduction, or Executive’s removal
from such position, duties and responsibilities, unless he is provided with

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comparable duties, position and responsibilities; (ii) a material reduction by the Companies
in the kind or level of employee benefits to which he is entitled immediately prior to such
reduction with the result that Executive’s overall benefits package is significantly reduced; or
(iii) the Companies’ failure to cause Executive’s employment agreement and its obligations
thereunder to be expressly assumed by the Companies’ successor.

          “Person” means an individual, a partnership, a limited liability company, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision thereof.

          “Subsidiary” means, with respect to any Person, any corporation, limited liability company,
partnership, association or business entity of which (i) if a corporation, a majority of the total
voting power of shares of stock entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof or (ii) if a limited liability company, partnership, association or other
business entity (other than a corporation), a majority of partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one
or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or
Persons shall be deemed to have a majority ownership interest in a limited liability company,
partnership, association or other business entity (other than a corporation) if such Person or
Persons shall be allocated a majority of limited liability company, partnership, association or
other business entity gains or losses or shall be or control any managing director or general
partner of such limited liability company, partnership, association or other business entity. For
purposes hereof, references to a “Subsidiary” of any Person shall be given effect only at such
times that such Person has one or more Subsidiaries, and, unless otherwise indicated, the term
“Subsidiary” refers to a Subsidiary of either of the Companies.

     13. Notices. Any notice provided for in this Agreement must be in writing and must be
either personally delivered, mailed by first class mail (postage prepaid and return receipt
requested), sent by reputable overnight courier service (charges prepaid), or faxed to the
recipient at the address below indicated:

To the Companies:

Altra Holdings, Inc.

Altra Industrial Motion, Inc.

300 Granite Street

Suite 201

Braintree, MA 02184

Attention: Glenn E. Deegan, V.P., General Counsel and Secretary

Telecopy No.: (781) 843-0615

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with a copy to:

Weil, Gotshal & Manges LLP

201 Redwood Shores Parkway

Redwood Shores, CA 94065

Attention:      Craig W. Adas

Telecopy No.: (650) 802-3100

To Executive:

Carl Christenson

46 Arrowwood Drive

Scituate, MA 02066

Telecopy No.: (781) 545-0663

With a copy to:

Henderson & Henderson, P.C.

76 South Main Street

Cohasset, MA 02025-2007

Attention:      Richard Henderson

Telecopy No.: (781) 383-9005

or such other address or to the attention of such other person as the recipient party shall have
specified by prior written notice to the sending party. Any notice under this Agreement shall be
deemed to have been given when personally delivered, one business day after sent by reputable
overnight courier service, five days after deposit in the U.S. mail (or when actually received, if
earlier), or at such time as it is transmitted via facsimile, with receipt confirmed.

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     14. General Provisions.

          (a) Expenses. The Companies and Executive will each pay their own costs and expenses
incurred in connection with the negotiation and execution of this Agreement and the agreements
contemplated hereby.

          (b) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall
not affect any other provision or any other jurisdiction, but this Agreement shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.

          (c) Complete Agreement. This Agreement, those documents expressly referred to herein
and other documents of even date herewith, embody the complete agreement and understanding among
the parties and supersede and preempt any prior understandings, agreements or representations by or
among the parties, written or oral, which may have related to the subject matter hereof in any way.

          (d) Counterparts. This Agreement may be executed in separate counterparts, each of
which is deemed to be an original and all of which taken together constitute one and the same
agreement.

          (e) Successors and Assigns. Except as otherwise provided herein, this Agreement shall
bind and inure to the benefit of and be enforceable by Executive, the Companies and their
respective successors and assigns, including any entity with which the Companies may merge or
consolidate or to which all or substantially all of its assets may be transferred;
provided, however, that any such assignment by the Companies shall include all
rights and obligations hereunder, including the severance obligations provided in Section
5; and, provided further, that Executive shall not be entitled to assign his rights or
obligations under this Agreement without the prior written consent of the Companies.

          (f) Governing Law. All issues and questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be
governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts,
without giving effect to any choice of law or conflict of law rules or provisions (whether of the
Commonwealth of Massachusetts or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the Commonwealth of Massachusetts.

          (g) Remedies. The parties hereto agree and acknowledge that money damages would not
be an adequate remedy for any breach of the provisions of this Agreement and that any party may in
its sole discretion apply to any court of law or equity of competent jurisdiction (without posting
any bond or deposit) for specific performance and/or other injunctive relief in order to enforce or
prevent any violations of the provisions of this Agreement.

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          (h) Amendment and Waiver. The provisions of this Agreement may be amended and waived
only with the prior written consent of the Companies and Executive.

          (i) Business Days. If any time period for giving notice or taking action hereunder
expires on a day which is a Saturday, Sunday or legal holiday in the state in which the Companies’
chief executive office is located, the time period shall be automatically extended to the business
day immediately following such Saturday, Sunday or holiday.

          (j) No Strict Construction. The language used in this Agreement shall be deemed to be
the language chosen by the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.

* * * *

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          IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written
above.

	 	 	 	 	 
	 	ALTRA INDUSTRIAL MOTION, INC.

 	 
	 	By:  	/s/ Christian Storch
 	 
	 	 	Christian Storch 	 
	 	 	Chief Financial Officer 	 
	 
	 	ALTRA HOLDINGS, INC.

 	 
	 	By:  	/s/ Christian Storch
 	 
	 	 	Christian Storch 	 
	 	 	Chief Financial Officer 	 
	 
	 	EXECUTIVE

 	 
	 	/s/ Carl R. Christenson
 	 
	 	Carl Christenson 	 
	 	 	 
	 

Date: March 3, 2009

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT]EX-10.79

Exhibit 10.79

Amendment To

And

Consent Regarding

Loan and Security Agreement

     THIS AMENDMENT TO AND CONSENT REGARDING LOAN AND SECURITY AGREEMENT (this “Amendment”) is
entered as of December 19, 2008 by and between Silicon Valley Bank (“Bank”) and ATS Medical, Inc.,
a Minnesota corporation (the “Borrower”) whose address is 3905 Annapolis Lane, Suite 105,
Minneapolis, Minnesota 55447.

Recitals

     A. Bank and Borrower have entered into that certain Loan and Security Agreement dated as of
July 28, 2004 (as amended, modified, supplemented or restated from time to time, the “Loan
Agreement”).

     B. Bank has extended credit to Borrower for the purposes permitted in the Loan Agreement.

     C. Borrower has requested that Bank amend the Loan Agreement and provide certain consents as
set forth herein.

     D. Bank has agreed to so amend certain provisions of the Loan Agreement, but only to the
extent, in accordance with the terms, subject to the conditions and in reliance upon the
representations and warranties set forth below.

Agreement

     Now, Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to
be legally bound, the parties hereto agree as follows:

     1. Definitions. Capitalized terms used but not defined in this Amendment shall have the
meanings given to them in the Loan Agreement.

SVBwp/ATS/08-12 Amend-Consent/Amend-3

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     2. Consents.

          2.1 Consent to Acquisition. Borrower has requested that Bank consent to Borrower purchasing
certain assets (the “Novarre Assets”) from Novarre Surgical (“Seller”) for a cash price not
exceeding $2,150,000. In connection with the Borrower’s request for Bank’s consent, the Borrower
represents, warrants and agrees as follows: no Default or Event of Default shall occur as a
result of the Borrower’s purchase of the Novarre Assets and the Novarre Assets shall be purchased
free and clear of all Liens. Notwithstanding anything to the contrary contained in the Loan
Documents, Bank hereby consents to Borrower’s purchase of the Novarre Assets (the “Novarre
Purchase”), for the price described above, on or before January 31, 2008, conditioned upon the
following (which conditions Borrower agrees to satisfy): (a) no Default or Event of Default has
occurred and is continuing at the time of, or would occur as a result of, Borrower’s purchase of
the Novarre Assets, (b) the Novarre Assets shall be purchased free and clear of all Liens, and
(c) on or after the date hereof and prior to Borrower’s purchase of the Novarre Assets, Borrower
shall have satisfied the Additional Conditions (as defined below). This consent does not
constitute a consent to any other transaction or event, whether or not similar or related to the
Novarre Purchase, including, without limitation, any other transaction or event that may be
described in any asset purchase documentation related to the Novarre Purchase. In addition, for
purposes of clarity and not for purposes of broadening by implication what Bank is consenting to,
Borrower acknowledges that Bank is not consenting to any breach of any financial covenant
contained in the Loan Documents that may result from the Novarre Purchase.

          2.2 Consent to Settlement and Security Interest. Borrower has requested that Bank consent
to Borrower (i) paying a total amount of $7,500,000 to CarboMedics, Inc., in an installment of
$3,000,000 by December 29, 2008 and an installment of $4,500,000 by April 30, 2009, in settlement
of the breach of contract action by CarboMedics, Inc. against ATS Medical in the United States
District Court for the District of Minnesota captioned CarboMedics, Inc. v. ATS Medical, Inc.,
06-6401 (PJS/JJG), and (ii) providing CarboMedics, Inc. with a security interest in certain of
Borrower’s Inventory to secure Borrowers obligation to pay CarboMedics, Inc. such $7,500,000 (the
“Settlement Amount”). Notwithstanding anything to the contrary contained in the Loan Documents, Bank hereby consents to Borrower
paying the Settlement Amount to CarboMedics, Inc. pursuant to the above-described schedule and to
Borrower providing CarboMedics, Inc. with a security interest in components, valves, raw
materials, work in process, or materials used for or consumed to produce valves, and all finished
goods inventory, which includes components or valves (whether contained in sealed packages and
whether such packages contain other goods) (the “Specified Inventory”), to secure the Settlement
Amount, such consents to the foregoing (the “Settlement-Related Transactions”) being conditioned
upon the following (which conditions Borrower agrees to satisfy): (a) no Default or Event of
Default has occurred and is continuing at the time of, or would occur as a result of, the
Settlement-Related Transactions, (b) the security interest granted to CarboMedics, Inc. shall be
limited to the Specified Inventory, and such limitation must be reflected in the documentation
pursuant to which Borrower grants a security interest to CarboMedics, Inc. and in any UCC
financing statement filed with respect thereto, (c) the Settlement Amount must be fully paid and
satisfied, the security interest granted to CarboMedics, Inc. must be released and any UCC
financing statement filed in connection therewith terminated, and Borrower must provide Bank with
evidence of the foregoing reasonably satisfactory to Bank, by April 30, 2009, and (d) on or after
the date hereof and prior to consummation of any of the Settlement Transactions, Borrower shall
have satisfied the Additional Conditions (as defined below). This consent does not constitute a
consent to any other transaction or event, whether or not similar or related to the
Settlement-Related Transactions, including, without limitation, any other transaction or event
that may be described in any documentation related to the Settlement-Related Transactions. In
addition, for purposes of clarity and not for purposes of broadening by implication what Bank is
consenting to, Borrower acknowledges that Bank is not consenting to any breach of any financial
covenant contained in the Loan Documents that may result from the Settlement-Related
Transactions.

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          2.3 Additional Conditions to Consents. As additional conditions (the “Additional
Conditions”) precedent to the consents provided in Sections 2.1 and 2.2 above, Borrower shall
have (a) received net proceeds of at least $18,000,000 from the issuance of stock to Essex
Woodlands Health Ventures Fund VIII, L.P., and (b) in accounts maintained with Bank unrestricted
and unencumbered (except in favor of Bank) cash and Cash Equivalents in an aggregate amount of at
least $4,500,000. For purposes of this Amendment, “Cash Equivalents” means (a) marketable direct
obligations issued or unconditionally guaranteed by the United States or any agency or any State
thereof having maturities of not more than one (1) year from the date of acquisition; (b)
commercial paper maturing no more than one (1) year after its creation and having the highest
rating from either Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) Bank’s
certificates of deposit issued maturing no more than one (1) year after issue; and (d) money
market funds at least ninety-five percent (95%) of the assets of which constitute Cash
Equivalents of the kinds described in clauses (a) through (c) of this definition.

     3. Amendments to Loan Agreement.

          3.1 Amendment to Liquidity Ratio. Section 6.7 of the Loan Agreement reads as follows:

“Borrower will maintain at all times, on a consolidated basis:

(i) Liquidity Ratio.

          Commencing with the month ending June 30, 2008 and each
month ending thereafter through December 31, 2008:

     (A) As of the end of each of the first two months of each
fiscal quarter, a ratio of (y) the sum of (1) unrestricted cash
(and equivalents) of Borrower on deposit with Bank plus (2) 50%
of Borrower’s accounts receivable arising from the sale or lease
of goods, or provision of services, in the ordinary course of
business, (z) divided by Indebtedness of Borrower to Bank for
borrowed money, of equal to or greater than 1.10 to 1.00; and

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     (B) As of the end of the third month of each fiscal quarter,
a ratio of (y) the sum of (1) unrestricted cash (and equivalents)
of Borrower on deposit with Bank plus (2) 50% of Borrower’s
accounts receivable arising from the sale or lease of goods, or
provision of services, in the ordinary course of business, (z)
divided by Indebtedness of Borrower to Bank for borrowed money,
of equal to or greater than 1.40 to 1.00.

     Notwithstanding the foregoing, if the amount of Borrower’s
Eligible Accounts ever becomes less than 50% of Borrower’s
accounts receivable arising from the sale or lease of goods, or
provision of services, in the ordinary course of business, then
part “2” above (of each of clause (A) and (B)) shall be deemed to
read “(2) the lesser of the amount of Borrower’s Eligible
Accounts or 50% of Borrower’s accounts receivable arising from
the sale or lease of goods, or provision of services, in the
ordinary course of business”, unless the Bank shall consent in
writing otherwise.

     Commencing January 1, 2009 and each month ending thereafter:

A ratio of (y) the sum of (1) unrestricted cash (and equivalents)
of Borrower on deposit with Bank plus (2) 50% of Borrower’s
accounts
receivable arising from the sale or lease of goods, or provision
of services, in the ordinary course of business, (z) divided by
Indebtedness of Borrower to Bank for borrowed money, of equal to
or greater than 1.40 to 1.00. Notwithstanding the foregoing, if
the amount of Borrower’s Eligible Accounts ever becomes less than
50% of Borrower’s accounts receivable arising from the sale or
lease of goods, or provision of services, in the ordinary course
of business, then part “2” above shall be deemed to read “(2) the
lesser of the amount of Borrower’s Eligible Accounts or 50% of
Borrower’s accounts receivable arising from the sale or lease of
goods, or provision of services, in the ordinary course of
business”, unless the Bank shall consent in writing otherwise.”

The language “equal to or greater than 1.40 to 1.00” contained in said Section 6.7 (in two
places) is hereby amended to read “equal to or greater than 2.00 to 1.00”, provided that,
if no Event of Default has occurred and is continuing, upon Borrower’s written request
made within 60 days after the security interest granted to CarboMedics, Inc. has been
released and any UCC financing statement filed in connection therewith has been terminated
and Borrower has provided Bank with evidence of the foregoing reasonably satisfactory to
Bank, Bank shall enter into an amendment with Borrower amending such language to again
read “equal to or greater than 1.40 to 1.00”.

SVBwp/ATS/08-12 Amend-Consent/Amend-3

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          3.2 Deposit Requirement. Until the security interest granted to CarboMedics, Inc. has been
released and any UCC financing statement filed in connection therewith has been terminated and
Borrower has provided Bank with evidence of the foregoing reasonably satisfactory to Bank,
Borrower shall at all times maintain with Bank unrestricted and unencumbered (except in favor of
Bank) cash and Cash Equivalents in an aggregate amount of at least $4,500,000 and Borrower shall
not make any withdrawal or transfer or take any other action that would result in such amount
being reduced to below $4,500,000.

          3.3 Conforming Changes to Compliance Certificate. The Bank may make such changes to the
Compliance Certificate that is required pursuant to Section 6.2(c) of the Loan Agreement as from
time to time may be necessary to conform the Compliance Certificate to any amendments that have
been or may hereinafter be made to the Loan Agreement. For purposes of illustration and not by
way of limitation, the required Liquidity Ratio as set forth in the Compliance Certificate shall
be changed to “2:00:1.00” to conform with the amendment to the Liquidity Ratio being made
pursuant to this Amendment.

          4. Limitation of Amendments.

          4.1 The consents and amendments set forth herein are effective for the purposes set forth
herein and shall be limited precisely as written and shall not be deemed to (a) be a consent to
any amendment, waiver or modification of any other term or condition of any Loan Document, or (b)
otherwise prejudice any right or remedy which Bank may now have or may have in the future under
or in connection with any Loan Document.

          4.2 This Amendment shall be construed in connection with and as part of the Loan Documents
and all terms, conditions, representations, warranties, covenants and agreements set forth in the Loan Documents, except as herein amended, are
hereby ratified and confirmed and shall remain in full force and effect.

          5. Representations and Warranties. To induce Bank to enter into this Amendment, Borrower
hereby represents and warrants to Bank as follows:

          5.1 Immediately after giving effect to this Amendment (a) the representations and warranties
contained in the Loan Documents are true, accurate and complete in all material respects as of
the date hereof (except to the extent such representations and warranties relate to an earlier
date, in which case they are true and correct as of such date), and (b) no Event of Default has
occurred and is continuing;

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          5.2 Borrower has the power and authority to execute and deliver this Amendment and to
perform its obligations under the Loan Agreement, as amended by this Amendment;

          5.3 The Third Restated Articles of Incorporation of ATS Medical, Inc. filed with the
Minnesota Secretary of State on June 11, 2008, a copy of which was provided to Bank via email on
June 18, 2008, remain true, accurate and complete and have not been amended, supplemented or
restated and are and continue to be in full force and effect;

          5.4 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Agreement, as amended by this Amendment, have been duly
authorized;

          5.5 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Agreement, as amended by this Amendment, do not and will not
contravene (a) any law or regulation binding on or affecting Borrower, (b) any contractual
restriction with a Person binding on Borrower, (c) any order, judgment or decree of any court or
other governmental or public body or authority, or subdivision thereof, binding on Borrower, or
(d) the organizational documents of Borrower;

          5.6 The execution and delivery by Borrower of this Amendment and the performance by Borrower
of its obligations under the Loan Agreement, as amended by this Amendment, do not require any
order, consent, approval, license, authorization or validation of, or filing, recording or
registration with, or exemption by any governmental or public body or authority, or subdivision
thereof, binding on Borrower, except as already has been obtained or made; and

          5.7 This Amendment has been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against Borrower in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization, liquidation, moratorium
or other similar laws of general application and equitable principles relating to or affecting
creditors’ rights.

          6. Counterparts. This Amendment may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same instrument.

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6

 

     7. Fees and Expenses. In consideration for Bank entering into this Amendment, Borrower shall
concurrently pay Bank a fee in the amount of $10,000, which fee is deemed fully earned on the date
hereof, and shall be non-refundable and in addition to all interest and other fees payable to Bank
under the Loan Documents. Without limitation on the terms of the Loan Documents, Borrower agrees
to reimburse Bank for all its costs and expenses (including reasonable attorneys’ fees) incurred in
connection with this Amendment. Bank is authorized to charge said fees, costs and expenses to
Borrower’s loan account or any of Borrower’s deposit accounts maintained with Bank.

     8. Effectiveness. This Amendment shall be deemed effective upon (a) the due execution and
delivery of this Amendment by each party hereto, and (b) Bank’s receipt of the Acknowledgment of
Amendment and Reaffirmation of Guaranty substantially in the form attached hereto as Schedule 1,
duly executed and delivered by each guarantor named therein.

[Signature page follows]

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7

 

     In
Witness Whereof, the parties hereto have caused this Amendment to be duly executed
and delivered as of the date first written above.

	 	 	 	 	 	 	 
	BANK	 	BORROWER
	 
	Silicon Valley Bank	 	ATS Medical, Inc.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Nick Honigman
	 	By:
	 	/s/ Michael R. Kramer
	 

	 	 
	 	 	 	 
	Name:

	 	Nick Honigman
	 	Name:
	 	Michael R. Kramer
	Title:

	 	Relationship Manager
	 	Title:
	 	Chief Financial Officer

SVBwp/ATS/08-12 Amend-Consent/Amend-3

 

 

Schedule 1

ACKNOWLEDGMENT OF AMENDMENT

AND REAFFIRMATION OF GUARANTY

     Section 1. Each of the undersigned guarantors hereby acknowledges and confirms that it has
reviewed and approved the terms and conditions of the Amendment to and Consent Regarding Loan and
Security Agreement of substantially even date herewith (the “Amendment”).

     Section 2. Each guarantor hereby consents to the Amendment and agrees that its guaranty
relating to the Obligations of Borrower under the Loan Agreement shall continue in full force and
effect, shall be valid and enforceable and shall not be impaired or otherwise affected by the
execution of the Amendment or any other document or instrument delivered in connection herewith.

     Section 3. Each guarantor represents and warrants that, after giving effect to the Amendment,
all representations and warranties contained in the guaranty are true, accurate and complete as if
made the date hereof.

Dated as of December 19, 2008

	 	 	 	 	 	 	 
	3F THERAPEUTICS, INC.	 	ATS ACQUISITION CORP.
	 
	 	 	 	 	 	 
	By:

	 	/s/ Michael Dale
	 	By:
	 	/s/ Michael Dale
	 

	 	 
	 	 	 	 
	Name:

	 	Michael Dale
	 	Name:
	 	Michael Dale
	Title:

	 	Director
	 	Title:
	 	Director

SVBwp/ATS/08-12 Amend-Consent/Amend-3

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