Form Of Restricted Class B Units Agreement

EXHIBIT 10.7


THE MEMBERSHIP INTERESTS ("UNITS") ARE SUBJECT TO AN OPTION SET FORTH IN THIS AGREEMENT, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS LIMITED LIABILITY COMPANY. ANY TRANSFER OR ATTEMPTED TRANSFER OF ANY UNITS SUBJECT TO SUCH OPTION IS VOID WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF THE ISSUER OF THESE UNITS.


THE SECURITIES ACQUIRED UNDER THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT"). THEY MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT OR AN EXEMPTION THEREFROM IS AVAILABLE.


RESTRICTED CLASS B UNITS AGREEMENT


This Restricted Units Agreement (the "Agreement") is made as of the ____ day of __________, 1998, by and between Blue Martini LLC (the "Company") and the undersigned purchaser ("Purchaser").


Witnesseth:


Whereas, the Company desires to issue, and Purchaser desires to acquire, Class B Units of the Company ("Units") of the Company as herein described, on the terms and conditions hereinafter set forth; and


Whereas, the issuance of the Units hereunder is in connection with and in furtherance of the Company's compensatory benefit plan for participation of the Company's employees, directors, officers, consultants and advisors and is intended to comply with the provisions of Rule 701 promulgated by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Act").


Now, Therefore, it is agreed between the parties as follows:


1. Purchaser hereby agrees to acquire from the Company, and the Company agrees to issue to Purchaser _______________ (__________) of the Company's Units, at an agreed fair market value of __________ ($_____) per Unit. The purchase price for each Unit shall be __________ ($_____) and shall be payable in cash concurrently with the execution of this Agreement.


2. (a) All of the Units being acquired by Purchaser pursuant to this Agreement shall be subject to the option set forth in this paragraph 2 ("Purchase Option"). In the event Purchaser shall cease to provide services as an employee, director, officer, consultant or advisor of the Company (as the case may be) as determined by a majority of the Managers of the Company in their sole discretion, to the Company (a "Termination") at any time on or after _____, 1998 (the "Commencement Date") through __________________, 2002, the fourth anniversary of the Commencement Date, for any reason, or no reason, the Company shall have the right, at any


1


time within ninety (90) days after the date of a Termination, to exercise the Purchase Option, which consists of the right to purchase from Purchaser or Purchaser's personal representative, as the case may be, at a purchase price in an amount equal to the purchase price initially paid by Purchaser as described in paragraph 1 ("the Option Price"), up to but not exceeding the number of Units which have not vested under the provisions of subparagraph (b) below, upon the terms hereinafter set forth.


(b) The Company may exercise the Purchase Option as to the maximum portion of the Units specified in the following table:


Portion of the Units
If Termination Occurs Subject to Purchase Option
--------------------- --------------------------

Prior to the first anniversary 75%
of the Commencement Date


After the first anniversary and prior 75% - (x/48) 100%
to the fourth anniversary of the x = whole number of months following
Commencement Date the first anniversary of the
Commencement Date prior to a
Termination
On or after the fourth anniversary of 0%
the Commencement Date


3. The Purchase Option shall be exercised by written notice signed by an authorized officer of the Company and delivered or mailed as provided in paragraph 13. The Option Price shall be payable in cash.


4. The Company may assign its rights under paragraph 2 hereof.


5. Purchaser acknowledges that Purchaser is aware that the Units to be issued to Purchaser by the Company pursuant to this Agreement have not been registered under the Act, and that the Units are deemed to constitute "restricted securities" under Rule 701 and Rule 144 promulgated under the Act. In this connection, Purchaser warrants and represents to the Company that Purchaser is purchasing the Units for Purchaser's own account and that Purchaser has no present intention of distributing or selling said Units except as permitted under the Act and Section 25102(o) of the California Corporations Code. Purchaser further acknowledges that the exemption from registration under Rule 144 will not be available for at least two years from the date of sale of the Units unless at least one year from the date of sale (i) a public trading market then exists for securities of the Company, (ii) adequate information concerning the Company is then available to the public, and (iii) other terms and conditions of Rule 144 are complied with; and that any sale of the Units may be made only in limited amounts in accordance with such terms and conditions, and that exemption from registration under Rule 701 will not be available until ninety (90) days after the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 and that after such date the Units may be resold by persons other than affiliates in reliance on Rule 144 without


2


compliance with paragraphs (c), (d), (e) and (h) thereof, and by affiliates without compliance with paragraph (d) thereof.


6. As security for Purchaser's faithful performance of the terms of this Agreement and to insure the availability for delivery of Purchaser's Units upon exercise of the Purchase Option herein provided for, Purchaser agrees, at the closing hereunder (or as soon thereafter as practicable), to deliver to and deposit with the Company three (3) assignments duly endorsed (with date and number of Units left blank) in the form attached hereto as Exhibit A.


7. Purchaser shall not sell, transfer, assign or otherwise dispose of any of the Units then subject to the Purchase Option. Without in any way limiting the foregoing, Purchaser further agrees that Purchaser shall in no event make any disposition of all or any portion of the Units issued hereunder unless an ...