Document:

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                                                                   EXHIBIT 10.15

                                 SITESMITH, INC.

                       2000 EXECUTIVE STOCK INCENTIVE PLAN

                          NOTICE OF STOCK OPTION GRANT

Mark Spagnolo

     You have been granted an option to purchase Common Stock of SiteSmith, Inc.
(the "COMPANY") as follows:

     Board Approval Date:               July 11, 2000

     Date of Grant (Later of Board
     Approval Date or Commencement
     of Employment/Consulting):         July 11, 2000

     Exercise Price per Share:          $1.75

     Total Number of Shares Granted:    2,714,290

     Total Exercise Price:              $4,750,007.50

     Type of Option:                       0    Shares Incentive Stock Option
                                        ------

                                        2,714,290 Shares Nonstatutory Stock
                                        ---------
                                        Option

     Expiration Date:                   July 10, 2010

     Vesting Commencement Date:         July 1, 2000

     Vesting/Exercise Schedule:         This Option may be exercised, in
                                        whole or in part, at any time after the
                                        Date of Grant. So long as your
                                        employment or consulting relationship
                                        with the Company continues, the Shares
                                        underlying this Option shall vest in
                                        accordance with the following schedule:

                                        o 692,858 of the Shares subject to the
                                          Option shall be vested immediately
                                          upon the Date of Grant;

                                        o 716,667 of the Shares shall vest on
                                          the first anniversary of the Vesting
                                          Commencement Date;

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                                        o 36,904.8 of the Shares subject to the
                                          Option shall vest on the first of each
                                          month beginning on August 1, 2001
                                          through December 1, 2003; and

                                        o 33,503.6 of the Shares subject to the
                                          Option shall vest on the first of each
                                          month beginning on January 1, 2004
                                          through July 1, 2004,

                                        so that the Option shall be fully vested
                                        as of the fourth anniversary of the
                                        Vesting Commencement Date.

                                        In addition, vesting of the Option shall
                                        accelerate, and, if applicable, any
                                        repurchase right held by the Company
                                        with respect to Shares issued upon
                                        exercise of the Option shall lapse, in
                                        the event Optionee's employment
                                        relationship with the Company terminates
                                        under certain conditions as set forth in
                                        Sections 7(a)(i)(A), 7(a)(ii)(D) and
                                        7(a)(iv)(C) of that certain Employment
                                        Agreement between Optionee and the
                                        Company dated June 30, 2000 (the
                                        "EMPLOYMENT AGREEMENT").

                                        Further, in the event of a Change of
                                        Control (as defined in the Plan), the
                                        Option shall become fully vested and, if
                                        applicable, any repurchase right held by
                                        the Company with respect to Shares
                                        issued upon exercise of the Option shall
                                        lapse in full, in either case as of
                                        immediately prior to consummation of the
                                        Change of Control transaction, as set
                                        forth in Section 2(e)(iii) of the
                                        Employment Agreement.

      Termination Period:               This Option may be exercised for 90 days
                                        after termination of employment or
                                        consulting relationship except as set
                                        out in Section 5 of the Stock Option
                                        Agreement (but in no event later than
                                        the Expiration Date). Optionee is
                                        responsible for keeping track of these
                                        exercise periods following termination
                                        for any reason of his or her service
                                        relationship with the Company. The
                                        Company will not provide further notice
                                        of such periods.

     Transferability:                   This Option may not be transferred.

     By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the

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SiteSmith, Inc. 2000 Executive Stock Incentive Plan and the Stock Option
Agreement, both of which are attached and made a part of this document.

     In addition, you agree and acknowledge that your rights to any Shares
underlying the Option will be earned only as you provide services to the Company
over time, that the grant of the Option is not as consideration for services you
rendered to the Company prior to your Vesting Commencement Date, and that
nothing in this Notice or the attached documents confers upon you any right to
continue your employment or consulting relationship with the Company for any
period of time, nor does it interfere in any way with your right or the
Company's right to terminate that relationship at any time, for any reason, with
or without cause.

                                         SITESMITH, INC.

/s/ MARK SPAGNOLO                        By:  /s/ Marv Tseu
--------------------------------         Name:  Marv Tseu
Mark Spagnolo                            Title:  CEO

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<PAGE>

                                 SITESMITH, INC.

                       2000 EXECUTIVE STOCK INCENTIVE PLAN

                             STOCK OPTION AGREEMENT

     1. GRANT OF OPTION. SiteSmith, Inc., a Delaware corporation (the
"COMPANY"), hereby grants to Mark Spagnolo ("OPTIONEE"), an option (the
"OPTION") to purchase the total number of shares of Common Stock (the "SHARES")
set forth in the Notice of Stock Option Grant (the "NOTICE"), at the exercise
price per Share set forth in the Notice (the "EXERCISE PRICE") subject to the
terms, definitions and provisions of the SiteSmith, Inc. 2000 Executive Stock
Incentive Plan (the "PLAN") adopted by the Company, which is incorporated in
this Agreement by reference. Unless otherwise defined in this Agreement, the
terms used in this Agreement shall have the meanings defined in the Plan.

     2. DESIGNATION OF OPTION. This Option is intended to be a Nonstatutory
Stock Option.

     3. EXERCISE OF OPTION. This Option shall be exercisable during its term in
accordance with the Vesting/Exercise Schedule set out in the Notice and with the
provisions of Section 10 of the Plan as follows:

          (a) RIGHT TO EXERCISE.

               (i) This Option may not be exercised for a fraction of a share.

               (ii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Section 5 below, subject to the limitations contained in this Section 3.

               (iii) In no event may this Option be exercised after the
Expiration Date of the Option as set forth in the Notice.

          (b) METHOD OF EXERCISE.

               (i) This Option shall be exercisable by execution and delivery of
the Early Exercise Notice and Restricted Stock Purchase Agreement attached
hereto as EXHIBIT A, the Exercise Notice and Restricted Stock Purchase Agreement
attached hereto as EXHIBIT B, or any other form of written notice approved for
such purpose by the Company which shall state Optionee's election to exercise
the Option, the number of Shares in respect of which the Option is being
exercised, and such other representations and agreements as to the holder's
investment intent with respect to such Shares as may be required by the Company
pursuant to the provisions of the Plan. Such written notice shall be signed by
Optionee and shall be delivered to the Company by such means as are determined
by the Plan Administrator in its discretion to

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constitute adequate delivery. The written notice shall be accompanied by payment
of the Exercise Price. This Option shall be deemed to be exercised upon receipt
by the Company of such written notice accompanied by the Exercise Price.

               (ii) As a condition to the exercise of this Option and as further
set forth in Section 12 of the Plan, Optionee agrees to make adequate provision
for federal, state or other tax withholding obligations, if any, which arise
upon the vesting or exercise of the Option, or disposition of Shares, whether by
withholding, direct payment to the Company, or otherwise.

               (iii) The Company is not obligated, and will have no liability
for failure, to issue or deliver any Shares upon exercise of the Option unless
such issuance or delivery would comply with the Applicable Laws, with such
compliance determined by the Company in consultation with its legal counsel.
This Option may not be exercised until such time as the Plan has been approved
by the stockholders of the Company, or if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would
constitute a violation of any applicable federal or state securities or other
law or regulation, including any rule under Part 221 of Title 12 of the Code of
Federal Regulations as promulgated by the Federal Reserve Board. As a condition
to the exercise of this Option, the Company may require Optionee to make any
representation and warranty to the Company as may be required by the Applicable
Laws. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to Optionee on the date on which the Option is exercised
with respect to such Shares.

     4. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of the
following, or a combination of the following, at the election of Optionee:

          (a) cash, check or, subject to Section 153 of the Delaware General
Corporation Law, promissory note (in the form attached as Exhibit C to this
agreement);

          (b) prior to the date, if any, upon which the Common Stock becomes a
Listed Security, by surrender of other shares of Common Stock of the Company
that have an aggregate Fair Market Value on the date of surrender equal to the
Exercise Price of the Shares as to which the Option is being exercised. In the
case of shares acquired directly or indirectly from the Company, such shares
must have been owned by Optionee for more than six (6) months on the date of
surrender (or such other period of time as is necessary to avoid the Company's
incurring adverse accounting charges); or

          (c) following the date, if any, upon which the Common Stock is a
Listed Security, delivery of a properly executed exercise notice together with
irrevocable instructions to a broker approved by the Company to deliver promptly
to the Company the amount of sale or loan proceeds required to pay the exercise
price.

     5. TERMINATION OF RELATIONSHIP. Following the date of termination of
Optionee's Continuous Service Status for any reason (the "TERMINATION DATE"),
Optionee may exercise the Option only as set forth in the Notice and this
Section 5. To the extent that Optionee is not entitled to exercise this Option
as of the Termination Date, or if Optionee does not exercise this

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Option within the Termination Period set forth in the Notice or the termination
periods set forth below, the Option shall terminate in its entirety. In no
event, may any Option be exercised after the Expiration Date of the Option as
set forth in the Notice.

          (a) TERMINATION. In the event of termination of Optionee's Continuous
Service Status other than as a result of Optionee's disability or death,
Optionee may, to the extent otherwise so entitled at the date of such
termination (the "TERMINATION DATE"), exercise this Option during the
Termination Period set forth in the Notice.

          (b) OTHER TERMINATIONS. In connection with any termination other than
a termination covered by Section 5(a), Optionee may exercise the Option only as
described below:

               (i) TERMINATION UPON DISABILITY OF OPTIONEE. In the event of
termination of Optionee's Continuous Service Status as a result of Optionee's
disability, Optionee may, but only within twelve months from the Termination
Date, exercise this Option to the extent Optionee was entitled to exercise it as
of such Termination Date.

               (ii) DEATH OF OPTIONEE. In the event of the death of Optionee (a)
during the term of this Option and while an Employee or Consultant of the
Company and having been in Continuous Service Status since the date of grant of
the Option, or (b) within thirty (30) days after Optionee's Termination Date,
the Option may be exercised at any time within twelve months following the date
of death by Optionee's estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent Optionee was
entitled to exercise the Option as of the Termination Date.

     6. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by him or her. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee.

     7. TAX CONSEQUENCES. Below is a brief summary as of the date of this Option
of certain of the federal tax consequences of exercise of this Option and
disposition of the Shares under the laws in effect as of the Date of Grant. THIS
SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.

          As a Nonstatutory Stock Option, there may be a regular federal (and
state) income tax liability upon the exercise of the Option. Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the fair market value of the Shares on
the date of exercise over the Exercise Price. If Optionee is an Employee, the
Company will be required to withhold from Optionee's compensation or collect
from Optionee and pay to the applicable taxing authorities an amount equal to a
percentage of this compensation income at the time of exercise. If Shares issued
upon exercise of a Nonstatutory Stock Option are held for at least one year, any
gain realized on disposition of the Shares will be treated as long-term capital
gain for federal income tax purposes.

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          If this Option is exercised with respect to unvested Shares, certain
other tax consequences may apply. Optionee is advised to consult his or her own
tax advisor with respect to these consequences.

     8. LOCK-UP AGREEMENT. In connection with the initial public offering of the
Company's securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities, Optionee hereby
agrees not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any securities of the Company however and
whenever acquired (other than those included in the registration) without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the public offering.

     9. EFFECT OF AGREEMENT. Optionee acknowledges receipt of a copy of the Plan
and represents that he or she is familiar with the terms and provisions thereof
(and has had an opportunity to consult counsel regarding the Option terms), and
hereby accepts this Option and agrees to be bound by its contractual terms as
set forth herein and in the Plan. Optionee hereby agrees to accept as binding,
conclusive and final all decisions and interpretations of the Plan Administrator
regarding any questions relating to the Option. In the event of a conflict
between the terms and provisions of the Plan and the terms and provisions of the
Notice and this Agreement, the Plan terms and provisions shall prevail. The
Option, including the Plan, constitutes the entire agreement between Optionee
and the Company on the subject matter hereof and supersedes all proposals,
written or oral, and all other communications between the parties relating to
such subject matter; provided however that the provisions of the Employment
Agreement referenced in the Notice of Option Grant (including any terms included
in such provisions which are defined elsewhere in the Employment Agreement) are
specifically incorporated herein by reference.

                            [SIGNATURE PAGE FOLLOWS]

                                      -4-
<PAGE>

     This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one
document.

                                            SITESMITH, INC.

/s/ MARK SPAGNOLO                           By:/s/ Marv Tseu
---------------------------------           Name: Marv Tseu
Dated:  7/11/2000                           Title: CEO
       ------------

                                      -5-
<PAGE>

                                    EXHIBIT A

                                 SITESMITH, INC.

                       2000 EXECUTIVE STOCK INCENTIVE PLAN

          EARLY EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

     This Agreement ("AGREEMENT") is made as of July 11, 2000, by and between
SiteSmith, Inc., a Delaware corporation (the "COMPANY"), and Mark Spagnolo
("PURCHASER"). To the extent any capitalized terms used in this Agreement are
not defined, they shall have the meaning ascribed to them in the 2000 Executive
Stock Incentive Plan.

     1. EXERCISE OF OPTION. Subject to the terms and conditions hereof,
Purchaser hereby elects to exercise his or her option to purchase shares of the
Common Stock (the "SHARES") of the Company under and pursuant to the Company's
2000 Executive Stock Incentive Plan (the "PLAN") and the Stock Option Agreement
between the Purchaser and the Company (the "OPTION AGREEMENT"). Of these Shares,
Purchaser has elected to purchase 692,858 of those Shares which have become
vested as of the date hereof under the Vesting Schedule set forth in the Notice
of Stock Option Grant (the "VESTED SHARES") and 716,667 Shares which have not
yet vested under such Vesting Schedule (the "UNVESTED SHARES"). The purchase
price for the Shares shall be $1.75 per Share for a total purchase price of
$2,466,668.75. The term "SHARES" refers to the purchased Shares and all
securities received in replacement of the Shares or as stock dividends or
splits, all securities received in replacement of the Shares in a
recapitalization, merger, reorganization, exchange or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
entitled by reason of Purchaser's ownership of the Shares.

     2. TIME AND PLACE OF EXERCISE. The purchase and sale of the Shares under
this Agreement shall occur at the principal office of the Company simultaneously
with the execution and delivery of this Agreement in accordance with the
provisions of Section 3(b) of the Option Agreement. On such date, the Company
will deliver to Purchaser a certificate representing the Shares to be purchased
by Purchaser (which shall be issued in Purchaser's name) against payment of the
exercise price therefor by Purchaser by (a) check made payable to the Company,
(b) cancellation of indebtedness of the Company to Purchaser, (c) delivery of
shares of the Common Stock of the Company in accordance with Section 4 of the
Option Agreement, (d) subject to the provisions of Section 153 of the Delaware
General Corporation Law, delivery of a promissory note in the form attached as
EXHIBIT C to the Option Agreement (or in any form acceptable to the Company), or
(e) a combination of the foregoing. If Purchaser delivers a promissory note as
partial or full payment of the purchase price, Purchaser will also deliver a
Pledge and Security Agreement in the form attached to EXHIBIT D to the Option
Agreement (or in any form acceptable to the Company).

     3. LIMITATIONS ON TRANSFER. In addition to any other limitation on transfer
created by applicable securities laws, Purchaser shall not assign,

<PAGE>

encumber or dispose of any interest in the Shares while the Shares are subject
to the Company's Repurchase Option (as defined below). After any Shares have
been released from such Repurchase Option, Purchaser shall not assign, encumber
or dispose of any interest in such Shares except in compliance with the
provisions below and applicable securities laws.

          (a) REPURCHASE OPTION.

               (i) In the event of the voluntary or involuntary termination of
Purchaser's employment or consulting relationship with the Company for any
reason (including death or disability), with or without cause, the Company shall
upon the date of such termination (the "TERMINATION DATE") have an irrevocable,
exclusive option (the "REPURCHASE OPTION") for a period of 90 days from such
date to repurchase all or any portion of the Shares held by Purchaser as of the
Termination Date which have not yet been released from the Company's Repurchase
Option at the original purchase price per Share specified in Section 1 (adjusted
for any stock splits, stock dividends and the like).

               (ii) Unless the Company notifies Purchaser within 90 days from
the date of termination of Purchaser's employment or consulting relationship
that it does not intend to exercise its Repurchase Option with respect to some
or all of the Shares, the Repurchase Option shall be deemed automatically
exercised by the Company as of the 90th day following such termination, provided
that the Company may notify Purchaser that it is exercising its Repurchase
Option as of a date prior to such 90th day. Unless Purchaser is otherwise
notified by the Company pursuant to the preceding sentence that the Company does
not intend to exercise its Repurchase Option as to some or all of the Shares to
which it applies at the time of termination, execution of this Agreement by
Purchaser constitutes written notice to Purchaser of the Company's intention to
exercise its Repurchase Option with respect to all Shares to which such
Repurchase Option applies. The Company, at its choice, may satisfy its payment
obligation to Purchaser with respect to exercise of the Repurchase Option by
either (A) delivering a check to Purchaser in the amount of the purchase price
for the Shares being repurchased, or (B) in the event Purchaser is indebted to
the Company, canceling an amount of such indebtedness equal to the purchase
price for the Shares being repurchased, or (C) by a combination of (A) and (B)
so that the combined payment and cancellation of indebtedness equals such
purchase price. In the event of any deemed automatic exercise of the Repurchase
Option pursuant to this Section 3(a)(ii) in which Purchaser is indebted to the
Company, such indebtedness equal to the purchase price of the Shares being
repurchased shall be deemed automatically canceled as of the 90th day following
termination of Purchaser's employment or consulting relationship unless the
Company otherwise satisfies its payment obligations. As a result of any
repurchase of Shares pursuant to this Section 3(a), the Company shall become the
legal and beneficial owner of the Shares being repurchased and shall have all
rights and interest therein or related thereto, and the Company shall have the
right to transfer to its own name the number of Shares being repurchased by the
Company, without further action by Purchaser.

               (iii) One hundred percent (100%) of the Unvested Shares purchased
hereunder shall initially be subject to the Repurchase Option. The Unvested
Shares shall be released from the Repurchase Option in accordance with the
Vesting Schedule set forth in the Notice of Stock Option Grant (subject to the
vesting acceleration referred to in such Notice of Grant and incorporated by
reference from the Employment Agreement) until all Shares are

                                      -2-
<PAGE>

released from the Repurchase Option. Fractional shares shall be rounded to the
nearest whole share.

          (b) RIGHT OF FIRST REFUSAL. Before any Shares held by Purchaser or any
transferee of Purchaser (either being sometimes referred to herein as the
"HOLDER") may be sold or otherwise transferred (including transfer by gift or
operation of law), the Company or its assignee(s) shall have a right of first
refusal to purchase the Shares on the terms and conditions set forth in this
Section 3(b) (the "RIGHT OF FIRST REFUSAL").

               (i) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company a written notice (the "NOTICE") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee ("PROPOSED TRANSFEREE"); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
terms and conditions of each proposed sale or transfer. The Holder shall offer
the Shares at the same price (the "OFFERED PRICE") and upon the same terms (or
terms as similar as reasonably possible) to the Company or its assignee(s).

               (ii) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within 30
days after receipt of the Notice, the Company and/or its assignee(s) may, by
giving written notice to the Holder, elect to purchase all, but not less than
all, of the Shares proposed to be transferred to any one or more of the Proposed
Transferees, at the purchase price determined in accordance with subsection
(iii) below.

               (iii) PURCHASE PRICE. The purchase price ("PURCHASE PRICE") for
the Shares purchased by the Company or its assignee(s) under this Section 3(b)
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.

               (iv) PAYMENT. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness, or by any combination thereof
within 30 days after receipt of the Notice or in the manner and at the times set
forth in the Notice.

               (v) HOLDER'S RIGHT TO TRANSFER. If all of the Shares proposed in
the Notice to be transferred to a given Proposed Transferee are not purchased by
the Company and/or its assignee(s) as provided in this Section 3(b), then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee at
the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 60 days after the date of the Notice and provided
further that any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferee agrees in writing that
the provisions of this Section 3 shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, or if the Holder
proposes to change the price or other terms to make them more favorable to the
Proposed Transferee, a new Notice shall be given to the Company, and the Company
and/or its

                                      -3-
<PAGE>

assignees shall again be offered the Right of First Refusal before any Shares
held by the Holder may be sold or otherwise transferred.

               (vi) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. Anything to the
contrary contained in this Section 3(b) notwithstanding, the transfer of any or
all of the Shares during Purchaser's lifetime or on Purchaser's death by will or
intestacy to Purchaser's Immediate Family or a trust for the benefit of
Purchaser's Immediate Family shall be exempt from the provisions of this Section
3(b). "IMMEDIATE FAMILY" as used herein shall mean spouse, lineal descendant or
antecedent, father, mother, brother or sister. In such case, the transferee or
other recipient shall receive and hold the Shares so transferred subject to the
provisions of this Section, and there shall be no further transfer of such
Shares except in accordance with the terms of this Section 3.

          (c) INVOLUNTARY TRANSFER.

               (i) COMPANY'S RIGHT TO PURCHASE UPON INVOLUNTARY TRANSFER. In the
event, at any time after the date of this Agreement, of any transfer by
operation of law or other involuntary transfer (including death or divorce, but
excluding a transfer to Immediate Family as set forth in Section 3(b)(vi) above)
of all or a portion of the Shares by the record holder thereof, the Company
shall have an option to purchase all of the Shares transferred at the greater of
the purchase price paid by Purchaser pursuant to this Agreement or the Fair
Market Value of the Shares on the date of transfer. Upon such a transfer, the
person acquiring the Shares shall promptly notify the Secretary of the Company
of such transfer. The right to purchase such Shares shall be provided to the
Company for a period of thirty (30) days following receipt by the Company of
written notice by the person acquiring the Shares.

               (ii) PRICE FOR INVOLUNTARY TRANSFER. With respect to any stock to
be transferred pursuant to Section 3(c)(i), the price per Share shall be a price
set by the Board of Directors of the Company that will reflect the current value
of the stock in terms of present earnings and future prospects of the Company.
The Company shall notify Purchaser or his or her executor of the price so
determined within thirty (30) days after receipt by it of written notice of the
transfer or proposed transfer of Shares. However, if the Purchaser does not
agree with the valuation as determined by the Board of Directors of the Company,
the Purchaser shall be entitled to have the valuation determined by an
independent appraiser to be mutually agreed upon by the Company and the
Purchaser and whose fees shall be borne equally by the Company and the
Purchaser.

          (d) ASSIGNMENT. The right of the Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.

          (e) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares or
any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement, including, insofar as applicable, the
Repurchase Option. In the event of any purchase by the Company hereunder where
the Shares or interest are held by a transferee, the transferee shall be
obligated, if requested by the Company, to transfer the Shares or interest to
the

                                      -4-
<PAGE>

Purchaser for consideration equal to the amount to be paid by the Company
hereunder. In the event the Repurchase Option is deemed exercised by the Company
pursuant to Section 3(a)(ii) hereof, the Company may deem any transferee to have
transferred the Shares or interest to Purchaser prior to their purchase by the
Company, and payment of the purchase price by the Company to such transferee
shall be deemed to satisfy Purchaser's obligation to pay such transferee for
such Shares or interest, and also to satisfy the Company's obligation to pay
Purchaser for such Shares or interest. Any sale or transfer of the Shares shall
be void unless the provisions of this Agreement are satisfied.

          (f) TERMINATION OF RIGHTS. The right of first refusal granted the
Company by Section 3(b) above and the option to repurchase the Shares in the
event of an involuntary transfer granted the Company by Section 3(c) above shall
terminate upon the first sale of Common Stock of the Company to the general
public pursuant to a registration statement filed with and declared effective by
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "SECURITIES ACT").

     4. ESCROW OF UNVESTED SHARES. For purposes of facilitating the enforcement
of the provisions of Section 3 above, Purchaser agrees, immediately upon receipt
of the certificate(s) for the Shares subject to the Repurchase Option, to
deliver such certificate(s), together with an Assignment Separate from
Certificate in the form attached to this Agreement as ATTACHMENT A executed by
Purchaser and by Purchaser's spouse (if required for transfer), in blank, to the
Secretary of the Company, or the Secretary's designee, to hold such
certificate(s) and Assignment Separate from Certificate in escrow and to take
all such actions and to effectuate all such transfers and/or releases as are in
accordance with the terms of this Agreement. Purchaser hereby acknowledges that
the Secretary of the Company, or the Secretary's designee, is so appointed as
the escrow holder with the foregoing authorities as a material inducement to
make this Agreement and that said appointment is coupled with an interest and is
accordingly irrevocable. Purchaser agrees that said escrow holder shall not be
liable to any party hereof (or to any other party). The escrow holder may rely
upon any letter, notice or other document executed by any signature purported to
be genuine and may resign at any time. Purchaser agrees that if the Secretary of
the Company, or the Secretary's designee, resigns as escrow holder for any or no
reason, the Board of Directors of the Company shall have the power to appoint a
successor to serve as escrow holder pursuant to the terms of this Agreement.

     5. INVESTMENT AND TAXATION REPRESENTATIONS. In connection with the purchase
of the Shares, Purchaser represents to the Company the following:

          (a) Purchaser is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Shares. Purchaser is
purchasing these securities for investment for his or her own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act or under any applicable provision of
state law. Purchaser does not have any present intention to transfer the Shares
to any person or entity.

                                      -5-
<PAGE>

          (b) Purchaser understands that the Shares have not been registered
under the Securities Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.

          (c) Purchaser further acknowledges and understands that the securities
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Purchaser
further acknowledges and understands that, except as set forth in Section
2(e)(iv) of the Employment Agreement, the Company is under no obligation to
register the securities. Purchaser understands that the certificate(s)
evidencing the securities will be imprinted with a legend which prohibits the
transfer of the securities unless they are registered or such registration is
not required in the opinion of counsel for the Company.

          (d) Purchaser is familiar with the provisions of Rules 144 and 701,
each promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly, from
the issuer of the securities (or from an affiliate of such issuer), in a
non-public offering subject to the satisfaction of certain conditions. Purchaser
understands that the Company provides no assurances as to whether he or she will
be able to resell any or all of the Shares pursuant to Rule 144 or Rule 701,
which rules require, among other things, that the Company be subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended, that
resales of securities take place only after the holder of the Shares has held
the Shares for certain specified time periods, and under certain circumstances,
that resales of securities be limited in volume and take place only pursuant to
brokered transactions. Notwithstanding this paragraph (d), Purchaser
acknowledges and agrees to the restrictions set forth in paragraph (e) below.

          (e) Purchaser further understands that in the event all of the
applicable requirements of Rule 144 or 701 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rule 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk.

          (f) Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted any tax consultants Purchaser
deems advisable in connection with the purchase or disposition of the Shares and
that Purchaser is not relying on the Company for any tax advice.

     6. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.

          (a) LEGENDS. The certificate or certificates representing the Shares
shall bear the following legends (as well as any legends required by applicable
state and federal corporate and securities laws):

                                      -6-
<PAGE>

               (i)  THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                    REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN
                    ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
                    CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
                    SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE
                    REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
                    COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT
                    REQUIRED UNDER THE SECURITIES ACT OF 1933.

               (ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
                    TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN
                    AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF
                    WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

               (iii) IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS
                    SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY
                    CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF
                    THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
                    EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

          (b) STOP-TRANSFER NOTICES. Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

          (c) REFUSAL TO TRANSFER. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.

     7. NO EMPLOYMENT RIGHTS. Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a parent or subsidiary
of the Company, to terminate Purchaser's employment or consulting relationship,
for any reason, with or without cause.

     8. SECTION 83(B) ELECTION. Purchaser understands that Section 83(a) of the
Internal Revenue Code of 1986, as amended (the "CODE"), taxes as ordinary income
for a Nonstatutory Stock Option the difference between the amount paid for the
Shares and the Fair Market Value of

                                      -7-
<PAGE>

the Shares as of the date any restrictions on the Shares lapse. In this context,
"RESTRICTION" means the right of the Company to buy back the Shares pursuant to
the Repurchase Option set forth in Section 3(a) of this Agreement. Purchaser
understands that Purchaser may elect to be taxed at the time the Shares are
purchased, rather than when and as the Repurchase Option expires, by filing an
election under Section 83(b) (an "83(B) ELECTION") of the Code with the Internal
Revenue Service within 30 days from the date of purchase. Even if the Fair
Market Value of the Shares at the time of the execution of this Agreement equals
the amount paid for the Shares, the election must be made to avoid income under
Section 83(a) in the future. Purchaser understands that failure to file such an
election in a timely manner may result in adverse tax consequences for
Purchaser. Purchaser further understands that an additional copy of such
election form should be filed with his or her federal income tax return for the
calendar year in which the date of this Agreement falls. Purchaser acknowledges
that the foregoing is only a summary of the effect of United States federal
income taxation with respect to purchase of the Shares hereunder, and does not
purport to be complete. Purchaser further acknowledges that the Company has
directed Purchaser to seek independent advice regarding the applicable
provisions of the Code, the income tax laws of any municipality, state or
foreign country in which Purchaser may reside, and the tax consequences of
Purchaser's death.

     Purchaser agrees that he or she will execute and deliver to the Company
with this executed Agreement a copy of the Acknowledgment and Statement of
Decision Regarding Section 83(b) Election (the "ACKNOWLEDGMENT") attached hereto
as ATTACHMENT B. Purchaser further agrees that he or she will execute and submit
with the Acknowledgment a copy of the 83(b) Election attached hereto as
ATTACHMENT C (for tax purposes in connection with the early exercise of an
option) if Purchaser has indicated in the Acknowledgment his or her decision to
make such an election.

     9. LOCK-UP AGREEMENT. In connection with the initial public offering of the
Company's securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities, Purchaser agrees
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any securities of the Company however or whenever
acquired (other than those included in the registration) without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the public offering.

     10. MISCELLANEOUS.

          (a) GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

          (b) ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This Agreement sets forth
the entire agreement and understanding of the parties relating to the subject
matter herein and merges all prior discussions between them; provided however
that Section 2(e)(iv) of the

                                      -8-
<PAGE>

Employment Agreement referenced in Section 5(c) above is specifically
incorporated herein by reference. No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, shall be effective
unless in writing signed by the parties to this Agreement. The failure by either
party to enforce any rights under this Agreement shall not be construed as a
waiver of any rights of such party.

          (c) SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.

          (d) CONSTRUCTION. This Agreement is the result of negotiations between
and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly, this Agreement shall be deemed to be the product
of all of the parties hereto, and no ambiguity shall be construed in favor of or
against any one of the parties hereto.

          (e) NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed sufficient when delivered personally or sent
by telegram or fax or 48 hours after being deposited in the U.S. mail, as
certified or registered mail, with postage prepaid, and addressed to the party
to be notified at such party's address as set forth below or as subsequently
modified by written notice.

          (f) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

          (g) SUCCESSORS AND ASSIGNS. The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by the Company's successors
and assigns. The rights and obligations of Purchaser under this Agreement may
only be assigned with the prior written consent of the Company.

                            [SIGNATURE PAGE FOLLOWS]

                                      -9-
<PAGE>

          The parties have executed this Early Exercise Notice and Restricted
     Stock Purchase Agreement as of the date first set forth above.

                                        COMPANY:

                                        SITESMITH, INC.

                                        By: /s/ Marv Tseu

                                        Name: Marv Tseu

                                        Title: CEO

                                        PURCHASER:

                                        Mark Spagnolo

                                        /s/ Mark Spagnolo
                                         (Signature)

                                        Address:   841 Creekwood Circle
                                                   Fairview, TX 75069

I, Debra L. Spagnolo, spouse of Mark Spagnolo, have read and hereby approve the
foregoing Agreement. In consideration of the Company's granting my spouse the
right to purchase the Shares as set forth in the Agreement, I hereby agree to be
bound irrevocably by the Agreement and further agree that any community property
or other such interest that I may have in the Shares shall hereby be similarly
bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with
respect to any amendment or exercise of any rights under the Agreement.

                                        /s/ Debra L. Spagnolo
                                        Spouse of Mark Spagnolo

                                      -10-
<PAGE>

                                  ATTACHMENT A

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

          FOR VALUE RECEIVED and pursuant to that certain Early Exercise Notice
and Restricted Stock Purchase Agreement between the undersigned ("PURCHASER")
and SiteSmith, Inc. (the "COMPANY") dated _______________, ____ (the
"AGREEMENT"), Purchaser hereby sells, assigns and transfers unto the Company
_________________________________ (________) shares of the Common Stock of the
Company, standing in Purchaser's name on the books of the Company and
represented by Certificate No. ____, and does hereby irrevocably constitute and
appoint ________________________________________________ to transfer said stock
on the books of the Company with full power of substitution in the premises.
THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE
ATTACHMENTS THERETO.

Dated:
      ----------------
                                        Signature:

                                        /s/ MARK SPAGNOLO
                                        ---------------------------------------
                                        Mark Spagnolo

                                        /s/ DEBRA L. SPAGNOLO
                                        ---------------------------------------
                                        Spouse of Mark Spagnolo (if applicable)

Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to enable the Company to exercise its Repurchase
Option set forth in the Agreement without requiring additional signatures on the
part of Purchaser.

<PAGE>

                                  ATTACHMENT B

                    ACKNOWLEDGMENT AND STATEMENT OF DECISION
                        REGARDING SECTION 83(B) ELECTION

     The undersigned (which term includes the undersigned's spouse), a purchaser
of ___________ shares of Common Stock of SiteSmith, Inc., a Delaware corporation
(the "COMPANY") by exercise of an option (the "OPTION") granted pursuant to the
Company's 2000 Executive Stock Incentive Plan (the "PLAN"), hereby states as
follows:

     1. The undersigned acknowledges receipt of a copy of the Plan relating to
the offering of such shares. The undersigned has carefully reviewed the Plan and
the option agreement pursuant to which the Option was granted.

     2. The undersigned either [check and complete as applicable]:

          (a) X  has consulted, and has been fully advised by, the undersigned's
              own tax advisor, Patrick Murray,whose business address is
                               --------------
              McKinney, TX 75070, regarding the federal, state and local tax
              ------------------
              consequences of purchasing shares under the Plan, and
              particularly regarding the advisability of making elections
              pursuant to Section 83(b) of the Internal Revenue Code of
              1986, as amended (the "Code") and pursuant to the
              corresponding provisions, if any, of applicable state law; or

          (b)  has knowingly chosen not to consult such a tax advisor.

     3. The undersigned hereby states that the undersigned has decided [check as
applicable]:

          (a) X  to make an election pursuant to Section 83(b) of the Code, and
              is submitting to the Company, together with the undersigned's
              executed Early Exercise Notice and Restricted Stock Purchase
              Agreement, an executed form entitled "Election Under Section 83(b)
              of the Internal Revenue Code of 1986;" or

          (b) not to make an election pursuant to Section 83(b) of the Code.

<PAGE>

     4. Neither the Company nor any subsidiary or representative of the Company
has made any warranty or representation to the undersigned with respect to the
tax consequences of the undersigned's purchase of shares under the Plan or of
the making or failure to make an election pursuant to Section 83(b) of the Code
or the corresponding provisions, if any, of applicable state law.

Date: 7/11/2000                         /s/ Mark Spagnolo
      ------------                      Mark Spagnolo

Date: 7/11/2000                         /s/ Debra L. Spagnolo
      ------------                      Spouse of Mark Spagnolo

                                      -2-
<PAGE>

                                  ATTACHMENT C

                          ELECTION UNDER SECTION 83(B)
                      OF THE INTERNAL REVENUE CODE OF 1986

     The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code, to include in taxpayer's gross income or alternative
minimum taxable income, as applicable, for the current taxable year, the amount
of any income that may be taxable to taxpayer in connection with taxpayer's
receipt of the property described below:

1.   The name, address, taxpayer identification number and taxable year of the
     undersigned are as follows:

     NAME OF TAXPAYER: Mark Spagnolo

     NAME OF SPOUSE: Debra L. Spagnolo

     ADDRESS: 841 Creekwood Circle, Fairview, TX 75069

     IDENTIFICATION NO. OF TAXPAYER: ###-##-####

     IDENTIFICATION NO. OF SPOUSE: ###-##-####

     TAXABLE YEAR: 2000

2.   The property with respect to which the election is made is described as
     follows:

     716,667 shares of the Common Stock of SiteSmith, Inc., a Delaware
     -------
     corporation (the "COMPANY").

3.   The date on which the property was transferred is: July 11, 2000

4.   The property is subject to the following restrictions:

     Repurchase option at cost in favor of the Company upon termination of
     taxpayer's employment or consulting relationship.

5.   The fair market value at the time of transfer, determined without regard to
     any restriction other than a restriction which by its terms will never
     lapse, of such property is: $1,254,167.25
                                 -------------

6.   The amount (if any) paid for such property: $1,254,167.25
                                                 -------------

The undersigned has submitted a copy of this statement to the person for whom
the services were performed in connection with the undersigned's receipt of the
above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.

THE UNDERSIGNED UNDERSTANDS THAT THE FOREGOING ELECTION MAY NOT BE REVOKED
EXCEPT WITH THE CONSENT OF THE COMMISSIONER.

Dated: 7/11/2000                        /s/ Mark Spagnolo
                                        Mark Spagnolo
Dated: 7/11/2000                        /s/ Debra L. Spagnolo
                                        Debra L. Spagnolo

<PAGE>

                               RECEIPT AND CONSENT

     The undersigned hereby acknowledges receipt of a photocopy of Certificate
No. ______ for ________ shares of Common Stock of SiteSmith, Inc. (the
"COMPANY").

     The undersigned further acknowledges that the Secretary of the Company, or
his or her designee, is acting as escrow holder pursuant to the Early Exercise
Notice and Restricted Stock Purchase Agreement Purchaser has previously entered
into with the Company. As escrow holder, the Secretary of the Company, or his or
her designee, holds the original of the aforementioned certificate issued in the
undersigned's name.

Dated:
       --------------

                                        ---------------------------------------
                                        Mark Spagnolo

<PAGE>

                                    EXHIBIT B

                                 SITESMITH, INC.

                       2000 EXECUTIVE STOCK INCENTIVE PLAN

             EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

     This Agreement ("AGREEMENT") is made as of ______, by and between
SiteSmith, Inc., a Delaware corporation (the "COMPANY"), and Mark Spagnolo
("PURCHASER"). To the extent any capitalized terms used in this Agreement are
not defined, they shall have the meaning ascribed to them in the 2000 Executive
Stock Incentive Plan.

     1. EXERCISE OF OPTION. Subject to the terms and conditions hereof,
Purchaser hereby elects to exercise his or her option to purchase ______________
shares of the Common Stock (the "SHARES") of the Company under and pursuant to
the Company's 2000 Executive Stock Incentive Plan (the "PLAN") and the Stock
Option Agreement dated __________, (the "OPTION AGREEMENT"). The purchase price
for the Shares shall be $1.75 per Share for a total purchase price of
$__________. The term "SHARES" refers to the purchased Shares and all securities
received in replacement of the Shares or as stock dividends or splits, all
securities received in replacement of the Shares in a recapitalization, merger,
reorganization, exchange or the like, and all new, substituted or additional
securities or other properties to which Purchaser is entitled by reason of
Purchaser's ownership of the Shares.

     2. TIME AND PLACE OF EXERCISE. The purchase and sale of the Shares under
this Agreement shall occur at the principal office of the Company simultaneously
with the execution and delivery of this Agreement in accordance with the
provisions of Section 3(b) of the Option Agreement. On such date, the Company
will deliver to Purchaser a certificate representing the Shares to be purchased
by Purchaser (which shall be issued in Purchaser's name) against payment of the
exercise price therefor by Purchaser by (a) check made payable to the Company,
(b) cancellation of indebtedness of the Company to Purchaser, (c) delivery of
shares of the Common Stock of the Company in accordance with Section 4 of the
Option Agreement, (d) subject to Section 153 of the Delaware General Corporation
Law, delivery of a promissory note in the form attached as Exhibit C to the
Option Agreement (or in any form acceptable to the Company) or (e) by a
combination of the foregoing. If Purchaser delivers a promissory note as partial
or full payment of the purchase price, Purchaser will also deliver a Pledge and
Security Agreement in the form attached as Exhibit D to the Option Agreement (or
in any form acceptable to the Company).

     3. LIMITATIONS ON TRANSFER. In addition to any other limitation on transfer
created by applicable securities laws, Purchaser shall not assign, encumber or
dispose of any interest in the Shares except in compliance with the provisions
below and applicable securities laws.

          (a) RIGHT OF FIRST REFUSAL. Before any Shares held by Purchaser or any
transferee of Purchaser (either being sometimes referred to herein as the
"HOLDER") may be sold or otherwise transferred (including transfer by gift or
operation of law), the Company or

                                      -1-
<PAGE>

its assignee(s) shall have a right of first refusal to purchase the Shares on
the terms and conditions set forth in this Section 3(a) (the "RIGHT OF FIRST
REFUSAL").

               (i) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company a written notice (the "NOTICE") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee ("PROPOSED TRANSFEREE"); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
terms and conditions of each proposed sale or transfer. The Holder shall offer
the Shares at the same price (the "OFFERED PRICE") and upon the same terms (or
terms as similar as reasonably possible) to the Company or its assignee(s).

               (ii) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within
thirty (30) days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Shares proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (iii) below.

               (iii) PURCHASE PRICE. The purchase price ("PURCHASE PRICE") for
the Shares purchased by the Company or its assignee(s) under this Section 3(a)
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.

               (iv) PAYMENT. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness, or by any combination thereof
within 30 days after receipt of the Notice or in the manner and at the times set
forth in the Notice.

               (v) HOLDER'S RIGHT TO TRANSFER. If all of the Shares proposed in
the Notice to be transferred to a given Proposed Transferee are not purchased by
the Company and/or its assignee(s) as provided in this Section 3(a), then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee at
the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 60 days after the date of the Notice and provided
further that any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferee agrees in writing that
the provisions of this Section 3 shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, or if the Holder
proposes to change the price or other terms to make them more favorable to the
Proposed Transferee, a new Notice shall be given to the Company, and the Company
and/or its assignees shall again be offered the Right of First Refusal before
any Shares held by the Holder may be sold or otherwise transferred.

               (vi) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. Anything to the
contrary contained in this Section 3(a) notwithstanding, the transfer of any or
all of the Shares during Purchaser's lifetime or on Purchaser's death by will or
intestacy to Purchaser's Immediate Family or a trust for the benefit of
Purchaser's Immediate Family shall be exempt from the provisions of this Section
3(a). "IMMEDIATE FAMILY" as used herein shall mean

                                      -2-
<PAGE>

spouse, lineal descendant or antecedent, father, mother, brother or sister. In
such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Section, and there shall be no
further transfer of such Shares except in accordance with the terms of this
Section 3.

          (b) INVOLUNTARY TRANSFER.

               (i) COMPANY'S RIGHT TO PURCHASE UPON INVOLUNTARY TRANSFER. In the
event, at any time after the date of this Agreement, of any transfer by
operation of law or other involuntary transfer (including death or divorce, but
excluding a transfer to Immediate Family as set forth in Section 3(a)(vi) above)
of all or a portion of the Shares by the record holder thereof, the Company
shall have an option to purchase all of the Shares transferred at the greater of
the purchase price paid by Purchaser pursuant to this Agreement or the fair
market value of the Shares on the date of transfer. Upon such a transfer, the
person acquiring the Shares shall promptly notify the Secretary of the Company
of such transfer. The right to purchase such Shares shall be provided to the
Company for a period of thirty (30) days following receipt by the Company of
written notice by the person acquiring the Shares.

               (ii) PRICE FOR INVOLUNTARY TRANSFER. With respect to any stock to
be transferred pursuant to Section 3(b)(i), the price per Share shall be a price
set by the Board of Directors of the Company that will reflect the current value
of the stock in terms of present earnings and future prospects of the Company.
The Company shall notify Purchaser or his or her executor of the price so
determined within thirty (30) days after receipt by it of written notice of the
transfer or proposed transfer of Shares. However, if the Purchaser does not
agree with the valuation as determined by the Board of Directors of the Company,
the Purchaser shall be entitled to have the valuation determined by an
independent appraiser to be mutually agreed upon by the Company and the
Purchaser and whose fees shall be borne equally by the Company and the
Purchaser.

          (c) ASSIGNMENT. The right of the Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.

          (e) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares or
any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement. Any sale or transfer of the Company's Shares
shall be void unless the provisions of this Agreement are satisfied.

     (f) TERMINATION OF RIGHTS. The right of first refusal granted the Company
by Section 3(a) above and the option to repurchase the Shares in the event of an
involuntary transfer granted the Company by Section 3(b) above shall terminate
upon the first sale of Common Stock of the Company to the general public
pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "SECURITIES ACT"). Upon termination of the right of first refusal described
in Section 3(b) above, a new certificate or certificates

                                      -3-
<PAGE>

representing the Shares not repurchased shall be issued, on request, without the
legend referred to in Section 5(a)(ii) herein and delivered to Purchaser.

     4. INVESTMENT AND TAXATION REPRESENTATIONS. In connection with the purchase
of the Shares, Purchaser represents to the Company the following:

          (a) Purchaser is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Shares. Purchaser is
purchasing these securities for investment for his or her own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act or under any applicable provision of
state law. Purchaser does not have any present intention to transfer the Shares
to any person or entity.

          (b) Purchaser understands that the Shares have not been registered
under the Securities Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.

          (c) Purchaser further acknowledges and understands that the securities
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Purchaser
further acknowledges and understands that, except as set forth in Section
2(e)(iv) of the Employment Agreement, the Company is under no obligation to
register the securities. Purchaser understands that the certificate(s)
evidencing the securities will be imprinted with a legend which prohibits the
transfer of the securities unless they are registered or such registration is
not required in the opinion of counsel for the Company.

          (d) Purchaser is familiar with the provisions of Rules 144 and 701,
each promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly, from
the issuer of the securities (or from an affiliate of such issuer), in a
non-public offering subject to the satisfaction of certain conditions. Purchaser
understands that the Company provides no assurances as to whether he or she will
be able to resell any or all of the Shares pursuant to Rule 144 or Rule 701,
which rules require, among other things, that the Company be subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended, that
resales of securities take place only after the holder of the Shares has held
the Shares for certain specified time periods, and under certain circumstances,
that resales of securities be limited in volume and take place only pursuant to
brokered transactions. Notwithstanding this paragraph (d), Purchaser
acknowledges and agrees to the restrictions set forth in paragraph (e) below.

          (e) Purchaser further understands that in the event all of the
applicable requirements of Rule 144 or 701 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to

                                      -4-
<PAGE>

Rule 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk.

          (f) Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted any tax consultants Purchaser
deems advisable in connection with the purchase or disposition of the Shares and
that Purchaser is not relying on the Company for any tax advice.

     5. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.

          (a) LEGENDS. The certificate or certificates representing the Shares
shall bear the following legends (as well as any legends required by applicable
state and federal corporate and securities laws):

               (i)   THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                     REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN
                     ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
                     CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
                     SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE
                     REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
                     COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT
                     REQUIRED UNDER THE SECURITIES ACT OF 1933.

               (ii)  THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
                     TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN
                     AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY
                     of WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

               (iii) IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS
                     SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY
                     CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT
                     OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
                     CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S
                     RULES.

          (b) STOP-TRANSFER NOTICES. Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop

                                      -5-
<PAGE>

transfer" instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.

          (c) REFUSAL TO TRANSFER. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.

     6. NO EMPLOYMENT RIGHTS. Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a parent or subsidiary
of the Company, to terminate Purchaser's employment or consulting relationship,
for any reason, with or without cause.

     7. LOCK-UP AGREEMENT. In connection with the initial public offering of the
Company's securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities, Purchaser agrees
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any securities of the Company however or whenever
acquired (other than those included in the registration) without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the public offering.

     8. MISCELLANEOUS.

          (a) GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

          (b) ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This Agreement sets forth
the entire agreement and understanding of the parties relating to the subject
matter herein and merges all prior discussions between them; provided however
that Section 2(e)(iv) of the Employment Agreement referenced in Section 4(c)
above is specifically incorporated herein by reference. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
shall be effective unless in writing signed by the parties to this Agreement.
The failure by either party to enforce any rights under this Agreement shall not
be construed as a waiver of any rights of such party.

          (c) SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so

                                      -6-
<PAGE>

excluded and (iii) the balance of the Agreement shall be enforceable in
accordance with its terms.

          (d) CONSTRUCTION. This Agreement is the result of negotiations between
and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly, this Agreement shall be deemed to be the product
of all of the parties hereto, and no ambiguity shall be construed in favor of or
against any one of the parties hereto.

          (e) NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed sufficient when delivered personally or sent
by telegram or fax or forty-eight (48) hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, and addressed to
the party to be notified at such party's address as set forth below or as
subsequently modified by written notice.

          (f) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

          (g) SUCCESSORS AND ASSIGNS. The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by the Company's successors
and assigns. The rights and obligations of Purchaser under this Agreement may
only be assigned with the prior written consent of the Company.

                            [Signature Page Follows]

                                      -7-
<PAGE>

     The parties have executed this Exercise Notice and Restricted Stock
Purchase Agreement as of the date first set forth above.

                                        COMPANY:

                                        SITESMITH, INC.

                                        By:
                                           ------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------

                                        PURCHASER:

                                        Mark Spagnolo

                                        ---------------------------------------
                                        (Signature)

                                        Address:
                                                -------------------------------

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

I, ______________________, spouse of Mark Spagnolo, have read and hereby approve
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall hereby by similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.

                                        --------------------------------------
                                        Spouse of Mark Spagnolo

                                      -8-
<PAGE>

                                    EXHIBIT C

                                 PROMISSORY NOTE

$2,466,527.80                                           Santa Clara, California
                                                                  July 11, 2000

     For value received, the undersigned promises to pay SiteSmith, Inc., a
Delaware corporation (the "Company"), at its principal office the principal sum
of $2,466,527.80 with interest from the date hereof at a rate of 6.51% per
annum, compounded semiannually, on the unpaid balance of such principal sum.
Such principal and interest shall be due and payable on the earlier of (a) July
1, 2004 or (b) the 60th day following voluntary or involuntary termination of
the undersigned's employment with the Company for any reason whatsoever;
provided however that in the even of the undersigned's death at any time prior
to full payment as required above, the Note shall become due and payable in full
one year after the date of death (it being understood that nothing in this
clause shall permit the undersigned's death to extend the term of this Note if
such death occurs at a time when the undersigned is in default hereunder).

     Principal and interest are payable in lawful money of the United States of
America. AMOUNTS DUE UNDER THIS NOTE MAY BE PREPAID AT ANY TIME WITHOUT INTEREST
OR PENALTY.

     Should suit be commenced to collect any sums due under this Note, such sum
as the Court may deem reasonable shall be added hereto as attorneys' fees. The
makers and endorsers have severally waived presentment for payment, protest
notice of protest and notice of nonpayment of this Note.

     This Note is full recourse, is further secured by a pledge of certain
shares of Common Stock of the Company and is subject to the terms of a Pledge
and Security Agreement between the undersigned and the Company of even date
herewith.

                                        /s/ MARK SPAGNOLO
                                        ---------------------------------------
                                        Mark Spagnolo

<PAGE>

                                    EXHIBIT D

                          PLEDGE AND SECURITY AGREEMENT

     This Pledge and Security Agreement (the "AGREEMENT") is entered into this
11th day of July, 2000 by and between SiteSmith, Inc., a Delaware corporation
(the "COMPANY") and Mark Spagnolo ("PURCHASER").

                                    RECITALS

     In connection with Purchaser's exercise of an option to purchase certain
shares of the Company's Common Stock (the "SHARES") pursuant to an Option
Agreement dated July 11, 2000 between Purchaser and the Company, Purchaser is
delivering a promissory note of even date herewith (the "NOTE") in full or
partial payment of the exercise price for the Shares. The company requires that
the Note be secured by a pledge of the Shares or the terms set forth below.

                                    AGREEMENT

     In consideration of the Company's acceptance of the Note as full or partial
payment of the exercise price of the Shares, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:

     1. The Note shall become payable in full as set forth in the first
paragraph of the Note.

     2. Purchaser shall deliver to the Secretary of the Company, or his or her
designee (hereinafter referred to as the "PLEDGE HOLDER"), all certificates
representing the Shares, together with an Assignment Separate from Certificate
in the form attached to this Agreement as ATTACHMENT A executed by Purchaser and
by Purchaser's spouse (if required for transfer), in blank, for use in
transferring all or a portion of the Shares to the Company if, as and when
required pursuant to this Agreement. In addition, if Purchaser is married,
Purchaser's spouse shall execute the signature page attached to this Agreement.

     3. As security for the payment of the Note and any renewal, extension or
modification of the Note, Purchaser hereby grants to the Company a security
interest in and pledges with and delivers to the Company Purchaser's Shares
(sometimes referred to herein as the "COLLATERAL").

     4. In the event that Purchaser prepays all or a portion of the Note, in
accordance with the provisions thereof, Purchaser intends, unless written notice
to the contrary is delivered to the Pledge Holder, that the Shares represented
by the portion of the Note so repaid, including annual interest thereon, shall
continue to be so held by the Pledge Holder, to serve as independent collateral
for the outstanding portion of the Note for the purpose of commencing the
holding period set forth in Rule 144(d) promulgated under the Securities Act of
1933, as amended (the "SECURITIES ACT"). If written notice is provided by
Purchaser to the Pledge Holder requesting a release of the Shares upon
prepayment of a portion of the

<PAGE>

Note, then the Pledge Holder will release to Purchaser that number of Shares
equal to the amount paid under the Note (less the portion of the payment
attributable to interest on the principal prepaid) divided by $1.75; provided,
however, that no Shares subject to the Repurchase Option described in Section
3(a) of the Early Exercise Notice and Restricted Stock Purchase Agreement shall
be released until lapse of the Repurchase Option with respect to such Shares.

     5. In the event of any foreclosure of the security interest created by this
Agreement, the Company may sell the Shares at a private sale or may repurchase
the Shares itself. The parties agree that, prior to the establishment of a
public market for the Shares of the Company, the securities laws affecting sale
of the Shares make a public sale of the Shares commercially unreasonable. The
parties further agree that the repurchasing of such Shares by the Company, or by
any person to whom the Company may have assigned its rights under this
Agreement, is commercially reasonable if made at a price determined by the Board
of Directors in its discretion, fairly exercised, representing what would be the
fair market value of the Shares reduced by any limitation on transferability,
whether due to the size of the block of shares or the restrictions of applicable
securities laws.

     6. In the event of default in payment when due of any indebtedness under
the Note, the Company may elect then, or at any time thereafter, to exercise all
rights available to a secured party under the California Commercial Code
including the right to sell the Collateral at a private or public sale or
repurchase the Shares as provided above. The proceeds of any sale shall be
applied in the following order:

          (a) To the extent necessary, proceeds shall be used to pay all
reasonable expenses of the Company in enforcing this Agreement and the Note,
including, without limitation, reasonable attorney's fees and legal expenses
incurred by the Company.

          (b) To the extent necessary, proceeds shall be used to satisfy any
remaining indebtedness under Purchaser's Note.

          (c) Any remaining proceeds shall be delivered to Purchaser.

     7. Upon full payment by Purchaser of all amounts due under the Note, Pledge
Holder shall deliver to Purchaser all Shares in Pledge Holder's possession
belonging to Purchaser, and Pledge Holder shall thereupon be discharged of all
further obligations under this Agreement; PROVIDED, HOWEVER, that Pledge Holder
shall nevertheless retain the Shares as escrow agent if at the time of full
payment by Purchaser said Shares are still subject to a Repurchase Option in
favor of the Company.

                                      -2-
<PAGE>

     The parties have executed this Pledge and Security Agreement as of the date
first set forth above.

                                        COMPANY:

                                        SITESMITH, INC.

                                        By:
                                           ------------------------------------

                                        Name:
                                              ---------------------------------
                                              (print)

                                        Title:
                                               --------------------------------

                                        Address:
                                        3283 Scott Blvd.
                                        Santa Clara, CA  95054

                                        PURCHASER:

                                        MARK SPAGNOLO

                                        ---------------------------------------
                                        (Signature)

                                        ---------------------------------------
                                        (Print Name)

                                        Address:   841 Creekwood Circle
                                                   Fairview, TX  75069

                                      -3-
<PAGE>

                                  ATTACHMENT A

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

     FOR VALUE RECEIVED and pursuant to that certain Pledge and Security
Agreement between the undersigned ("PURCHASER") and SiteSmith, Inc. (the
"COMPANY") dated _______________, ____ (the "AGREEMENT"), Purchaser hereby
sells, assigns and transfers unto the Company _________________________________
(________) shares of the Common Stock of the Company, standing in Purchaser's
name on the books of the Company and represented by Certificate No. ____, and
does hereby irrevocably constitute and appoint
________________________________________________ to transfer said stock on the
books of the Company with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT.

Dated:
      -------------
                                        Signature:

                                        ---------------------------------------
                                        Mark Spagnolo

                                        ---------------------------------------
                                        Spouse of Mark Spagnolo (if applicable)

Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to perfect the security interest of the Company
pursuant to the Agreement.

<PAGE>

                                     RECEIPT

     The undersigned hereby acknowledges receipt of Certificate No. _____ for
__________ shares of Common Stock of SiteSmith, Inc.

Dated:
       ---------------

                                        ---------------------------------------
                                        Mark Spagnolo

<PAGE>

                               RECEIPT AND CONSENT

     The undersigned hereby acknowledges receipt of a photocopy Certificate No.
_____ purchaser for __________ shares of Common Stock of SiteSmith, Inc. (the
"COMPANY").

     The undersigned further acknowledges that the Secretary of the Company, or
his or her designee, is acting as Pledge Holder pursuant to the Pledge and
Security Agreement Purchaser has previously entered into with the Company. As
Pledge Holder, the Secretary of the Company, or his or her designee, holds the
original of the aforementioned certificate issued in the undersigned's name.

Dated:
       ---------------

                                        ---------------------------------------
                                        Mark Spagnolo

<PAGE>

                                     RECEIPT

     SiteSmith, Inc.(the "COMPANY") hereby acknowledges receipt of (check as
     applicable):

     _____ A check in the amount of $__________

     _____ The cancellation of indebtedness in the amount of $__________

     _____ Certificate No. ____ representing ______ shares of the Company's
           Common Stock with a fair market value of $__________

     _____ A promissory note in the amount of $__________.

     given by Mark Spagnolo as consideration for Certificate No. ______ for
     ___________ shares of Common Stock of the Company.

Dated:
       ------------------
                                        SITESMITH, INC.

                                        By:
                                           ------------------------------------

                                        Name:
                                              ---------------------------------
                                              (print)

                                        Title:
                                               --------------------------------

<PAGE>

                                 SITESMITH, INC.

                       2000 EXECUTIVE STOCK INCENTIVE PLAN

                          NOTICE OF STOCK OPTION GRANT

Mark Spagnolo

     You have been granted an option to purchase Common Stock of SiteSmith, Inc.
(the "COMPANY") as follows:

     Board Approval Date:              July 11, 2000

     Date of Grant (Later of Board
     Approval Date or Commencement
     of Employment/Consulting):        July 11, 2000

     Exercise Price per Share:         $1.75

     Total Number of Shares Granted:   285,710

     Total Exercise Price:             $499,992.50

     Type of Option:                   285,710 Shares Incentive Stock Option
                                       -------

                                        0   Shares Nonstatutory Stock Option
                                       ---

     Expiration Date:                  July 10, 2010

     Vesting Commencement Date:        July 1, 2000

     Vesting/Exercise Schedule:        So long as your employment or consulting
                                       relationship with the Company continues,
                                       the Shares underlying this Option shall
                                       vest and become exercisable in
                                       accordance with the following schedule:

                                       o 57,142 of the Shares subject to the
                                         Option shall be vested and exercisable
                                         immediately upon the Date of Grant;

                                       o 33,333 of the Shares subject to the
                                         Option shall vest and become
                                         exercisable on the first anniversary of
                                         the Vesting Commencement Date;

                                      -1-
<PAGE>

                                       o 4,761.83 of the Shares subject to the
                                         Option shall vest and become
                                         exercisable on the first of each month
                                         beginning on August 1, 2001 through
                                         December 1, 2003; and

                                       o 8,163.14 of the Shares subject to the
                                         Option shall vest and become
                                         exercisable on the first of each month
                                         beginning on January 1, 2004 through
                                         July 1, 2004,

                      so that the Option shall be fully vested as of the fourth
                             anniversary of the Vesting Commencement Date.

                                        In addition, vesting and exercisability
                                        of the Option shall accelerate, and, if
                                        applicable, any repurchase right held by
                                        the Company with respect to Shares
                                        issued upon exercise of the Option shall
                                        lapse, in the event Optionee's
                                        employment relationship with the Company
                                        terminates under certain conditions as
                                        set forth in Sections 7(a)(i)(A),
                                        7(a)(ii)(D) and 7(a)(iv)(C) of that
                                        certain Employment Agreement between
                                        Optionee and the Company dated June 30,
                                        2000 (the "EMPLOYMENT AGREEMENT").

                                        Further, in the event of a Change of
                                        Control (as defined in the Plan), the
                                        Option shall become fully vested and
                                        exercisable and, if applicable, any
                                        repurchase right held by the Company
                                        with respect to Shares issued upon
                                        exercise of the Option shall lapse in
                                        full, in either case as of immediately
                                        prior to consummation of the Change of
                                        Control transaction, as set forth in
                                        Section 2(e)(iii) of the Employment
                                        Agreement.

     Termination Period:                This Option may be exercised for 90 days
                                        after termination of employment or
                                        consulting relationship except as set
                                        out in Section 5 of the Stock Option
                                        Agreement (but in no event later than
                                        the Expiration Date). Optionee is
                                        responsible for keeping track of these
                                        exercise periods following termination
                                        for any reason of his or her service
                                        relationship with the Company. The
                                        Company will not provide further notice
                                        of such periods.

     Transferability:                   This Option may not be transferred.

                                      -2-
<PAGE>

     By your signature and the signature of the Company's representative below,
you and the Company agree that this option is granted under and governed by the
terms and conditions of the SiteSmith, Inc. 2000 Executive Stock Incentive Plan
and the Stock Option Agreement, both of which are attached and made a part of
this document.

     In addition, you agree and acknowledge that your rights to any Shares
underlying the Option will be earned only as you provide services to the Company
over time, that the grant of the Option is not as consideration for services you
rendered to the Company prior to your Vesting Commencement Date, and that
nothing in this Notice or the attached documents confers

                                      -3-
<PAGE>

upon you any right to continue your employment or consulting relationship with
the Company for any period of time, nor does it interfere in any way with your
right or the Company's right to terminate that relationship at any time, for any
reason, with or without cause.

                                        SITESMITH, INC.

/s/ Mark Spagnolo                       By:  /s/ Marv Tseu
-------------------------------
Mark Spagnolo                           Name:
                                              ---------------------------------
                                        Title:  CEO

                                      -4-
<PAGE>

                                 SITESMITH, INC.

                       2000 EXECUTIVE STOCK INCENTIVE PLAN

                             STOCK OPTION AGREEMENT

     1. GRANT OF OPTION. SiteSmith, Inc., a Delaware corporation (the
"COMPANY"), hereby grants to Mark Spagnolo ("OPTIONEE"), an option (the
"OPTION") to purchase the total number of shares of Common Stock (the "SHARES")
set forth in the Notice of Stock Option Grant (the "NOTICE"), at the exercise
price per Share set forth in the Notice (the "EXERCISE PRICE") subject to the
terms, definitions and provisions of the SiteSmith, Inc. 2000 Executive Stock
Incentive Plan (the "PLAN") adopted by the Company, which is incorporated in
this Agreement by reference. Unless otherwise defined in this Agreement, the
terms used in this Agreement shall have the meanings defined in the Plan.

     2. DESIGNATION OF OPTION. This Option is intended to be an Incentive Stock
Option as defined in Section 422 of the Code only to the extent permitted under
applicable tax rules and then only to the extent so designated in the Notice,
and to the extent it is not so designated or to the extent the Option does not
qualify as an Incentive Stock Option, it is intended to be a Nonstatutory Stock
Option.

     Notwithstanding the above, if designated as an Incentive Stock Option, in
the event that the Shares subject to this Option (and all other Incentive Stock
Options granted to Optionee by the Company or any Parent or Subsidiary,
including under other plans of the Company) that first become exercisable in any
calendar year have an aggregate fair market value (determined for each Share as
of the date of grant of the option covering such Share) in excess of $100,000,
the Shares in excess of $100,000 shall be treated as subject to a Nonstatutory
Stock Option, in accordance with Section 5(b) of the Plan.

     3. EXERCISE OF OPTION. This Option shall be exercisable during its term in
accordance with the Vesting/Exercise Schedule set out in the Notice and with the
provisions of Section 10 of the Plan as follows:

          (a) RIGHT TO EXERCISE.

               (i) This Option may not be exercised for a fraction of a share.

               (ii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Section 5 below, subject to the limitations contained in this Section 3.

               (iii) In no event may this Option be exercised after the
Expiration Date of the Option as set forth in the Notice.

<PAGE>

          (b) METHOD OF EXERCISE.

          (i) This Option shall be exercisable by execution and delivery of the
Exercise Notice and Restricted Stock Purchase Agreement attached hereto as
EXHIBIT A, or any other form of written notice approved for such purpose by the
Company which shall state Optionee's election to exercise the Option, the number
of Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such Shares as may be required by the Company pursuant to the provisions of
the Plan. Such written notice shall be signed by Optionee and shall be delivered
to the Company by such means as are determined by the Plan Administrator in its
discretion to constitute adequate delivery. The written notice shall be
accompanied by payment of the Exercise Price. This Option shall be deemed to be
exercised upon receipt by the Company of such written notice accompanied by the
Exercise Price.

          (ii) As a condition to the exercise of this Option and as further set
forth in Section 12 of the Plan, Optionee agrees to make adequate provision for
federal, state or other tax withholding obligations, if any, which arise upon
the vesting or exercise of the Option, or disposition of Shares, whether by
withholding, direct payment to the Company, or otherwise.

          (iii) The Company is not obligated, and will have no liability for
failure, to issue or deliver any Shares upon exercise of the Option unless such
issuance or delivery would comply with the Applicable Laws, with such compliance
determined by the Company in consultation with its legal counsel. This Option
may not be exercised until such time as the Plan has been approved by the
stockholders of the Company, or if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would
constitute a violation of any applicable federal or state securities or other
law or regulation, including any rule under Part 221 of Title 12 of the Code of
Federal Regulations as promulgated by the Federal Reserve Board. As a condition
to the exercise of this Option, the Company may require Optionee to make any
representation and warranty to the Company as may be required by the Applicable
Laws. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to Optionee on the date on which the Option is exercised
with respect to such Shares.

     4. METHOD OF PAYMENT. Payment of the Exercise Price shall be by any of the
following, or a combination of the following, at the election of Optionee:

          (a) cash, check or, subject to Section 153 of the Delaware General
Corporation Law, promissory note (in the form attached as Exhibit B to this
agreement);

          (b) prior to the date, if any, upon which the Common Stock becomes a
Listed Security, by surrender of other shares of Common Stock of the Company
that have an aggregate Fair Market Value on the date of surrender equal to the
Exercise Price of the Shares as to which the Option is being exercised. In the
case of shares acquired directly or indirectly from the Company, such shares
must have been owned by Optionee for more than six (6) months on the date of
surrender (or such other period of time as is necessary to avoid the Company's
incurring adverse accounting charges); or

                                      -2-
<PAGE>

          (c) following the date, if any, upon which the Common Stock is a
Listed Security, delivery of a properly executed exercise notice together with
irrevocable instructions to a broker approved by the Company to deliver promptly
to the Company the amount of sale or loan proceeds required to pay the exercise
price.

     5. TERMINATION OF RELATIONSHIP. Following the date of termination of
Optionee's Continuous Service Status for any reason (the "TERMINATION DATE"),
Optionee may exercise the Option only as set forth in the Notice and this
Section 5. To the extent that Optionee is not entitled to exercise this Option
as of the Termination Date, or if Optionee does not exercise this Option within
the Termination Period set forth in the Notice or the termination periods set
forth below, the Option shall terminate in its entirety. In no event, may any
Option be exercised after the Expiration Date of the Option as set forth in the
Notice.

          (a) TERMINATION. In the event of termination of Optionee's Continuous
Service Status other than as a result of Optionee's disability or death,
Optionee may, to the extent otherwise so entitled at the date of such
termination (the "TERMINATION DATE"), exercise this Option during the
Termination Period set forth in the Notice.

          (b) OTHER TERMINATIONS. In connection with any termination other than
a termination covered by Section 5(a), Optionee may exercise the Option only as
described below:

               (i) TERMINATION UPON DISABILITY OF OPTIONEE. In the event of
termination of Optionee's Continuous Service Status as a result of Optionee's
disability, Optionee may, but only within twelve months from the Termination
Date, exercise this Option to the extent Optionee was entitled to exercise it as
of such Termination Date.

               (ii) DEATH OF OPTIONEE. In the event of the death of Optionee (a)
during the term of this Option and while an Employee or Consultant of the
Company and having been in Continuous Service Status since the date of grant of
the Option, or (b) within thirty (30) days after Optionee's Termination Date,
the Option may be exercised at any time within twelve months following the date
of death by Optionee's estate or by a person who acquired the right to exercise
the Option by bequest or inheritance, but only to the extent Optionee was
entitled to exercise the Option as of the Termination Date.

     6. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by him or her. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of Optionee.

     7. TAX CONSEQUENCES. Below is a brief summary as of the date of this Option
of certain of the federal tax consequences of exercise of this Option and
disposition of the Shares under the laws in effect as of the Date of Grant. THIS
SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING
OF THE SHARES.

                                      -3-
<PAGE>

          As a Nonstatutory Stock Option, there may be a regular federal (and
state) income tax liability upon the exercise of the Option. Optionee will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the fair market value of the Shares on
the date of exercise over the Exercise Price. If Optionee is an Employee, the
Company will be required to withhold from Optionee's compensation or collect
from Optionee and pay to the applicable taxing authorities an amount equal to a
percentage of this compensation income at the time of exercise. If Shares issued
upon exercise of a Nonstatutory Stock Option are held for at least one year, any
gain realized on disposition of the Shares will be treated as long-term capital
gain for federal income tax purposes.

          If this Option is exercised with respect to unvested Shares, certain
other tax consequences may apply. Optionee is advised to consult his or her own
tax advisor with respect to these consequences.

     8. LOCK-UP AGREEMENT. In connection with the initial public offering of the
Company's securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities, Optionee hereby
agrees not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any securities of the Company however and
whenever acquired (other than those included in the registration) without the
prior written consent of the Company or such underwriters, as the case may be,
for such period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the public offering.

     9. EFFECT OF AGREEMENT. Optionee acknowledges receipt of a copy of the Plan
and represents that he or she is familiar with the terms and provisions thereof
(and has had an opportunity to consult counsel regarding the Option terms), and
hereby accepts this Option and agrees to be bound by its contractual terms as
set forth herein and in the Plan. Optionee hereby agrees to accept as binding,
conclusive and final all decisions and interpretations of the Plan Administrator
regarding any questions relating to the Option. In the event of a conflict
between the terms and provisions of the Plan and the terms and provisions of the
Notice and this Agreement, the Plan terms and provisions shall prevail. The
Option, including the Plan, constitutes the entire agreement between Optionee
and the Company on the subject matter hereof and supersedes all proposals,
written or oral, and all other communications between the parties relating to
such subject matter; provided however that the provisions of the Employment
Agreement referenced in the Notice of Option Grant (including any terms included
in such provisions which are defined elsewhere in the Employment Agreement) are
specifically incorporated herein by reference.

                            [SIGNATURE PAGE FOLLOWS]

                                      -4-
<PAGE>

     This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original and all of which together shall constitute one
document.

                                        SITESMITH, INC.

/s/ Mark Spagnolo                       By: /s/ Marv Tseu
-------------------------------         Name:
                                             ----------------------------------
Dated:  7/11/2000                       Title: CEO

                                      -5-
<PAGE>

                                    EXHIBIT A

                                 SITESMITH, INC.

                       2000 EXECUTIVE STOCK INCENTIVE PLAN

             EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

     This Agreement ("AGREEMENT") is made as of ______, by and between
SiteSmith, Inc., a Delaware corporation (the "COMPANY"), and Mark Spagnolo
("PURCHASER"). To the extent any capitalized terms used in this Agreement are
not defined, they shall have the meaning ascribed to them in the 2000 Executive
Stock Incentive Plan.

     1. EXERCISE OF OPTION. Subject to the terms and conditions hereof,
Purchaser hereby elects to exercise his or her option to purchase ______________
shares of the Common Stock (the "SHARES") of the Company under and pursuant to
the Company's 2000 Executive Stock Incentive Plan (the "PLAN") and the Stock
Option Agreement dated __________, (the "OPTION AGREEMENT"). The purchase price
for the Shares shall be $1.75 per Share for a total purchase price of
$__________. The term "SHARES" refers to the purchased Shares and all securities
received in replacement of the Shares or as stock dividends or splits, all
securities received in replacement of the Shares in a recapitalization, merger,
reorganization, exchange or the like, and all new, substituted or additional
securities or other properties to which Purchaser is entitled by reason of
Purchaser's ownership of the Shares.

     2. TIME AND PLACE OF EXERCISE. The purchase and sale of the Shares under
this Agreement shall occur at the principal office of the Company simultaneously
with the execution and delivery of this Agreement in accordance with the
provisions of Section 3(b) of the Option Agreement. On such date, the Company
will deliver to Purchaser a certificate representing the Shares to be purchased
by Purchaser (which shall be issued in Purchaser's name) against payment of the
exercise price therefor by Purchaser by (a) check made payable to the Company,
(b) cancellation of indebtedness of the Company to Purchaser, (c) delivery of
shares of the Common Stock of the Company in accordance with Section 4 of the
Option Agreement, (d) subject to Section 153 of the Delaware General Corporation
Law, delivery of a promissory note in the form attached as Exhibit B to the
Option Agreement (or in any form acceptable to the Company) or (e) by a
combination of the foregoing. If Purchaser delivers a promissory note as partial
or full payment of the purchase price, Purchaser will also deliver a Pledge and
Security Agreement in the form attached as Exhibit C to the Option Agreement (or
in any form acceptable to the Company).

     3. LIMITATIONS ON TRANSFER. In addition to any other limitation on transfer
created by applicable securities laws, Purchaser shall not assign, encumber or
dispose of any interest in the Shares except in compliance with the provisions
below and applicable securities laws.

          (a) RIGHT OF FIRST REFUSAL. Before any Shares held by Purchaser or any
transferee of Purchaser (either being sometimes referred to herein as the
"HOLDER") may be sold or otherwise transferred (including transfer by gift or
operation of law), the Company or

<PAGE>

its assignee(s) shall have a right of first refusal to purchase the Shares on
the terms and conditions set forth in this Section 3(a) (the "RIGHT OF FIRST
REFUSAL").

               (i) NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company a written notice (the "NOTICE") stating: (i) the Holder's
bona fide intention to sell or otherwise transfer such Shares; (ii) the name of
each proposed purchaser or other transferee ("PROPOSED TRANSFEREE"); (iii) the
number of Shares to be transferred to each Proposed Transferee; and (iv) the
terms and conditions of each proposed sale or transfer. The Holder shall offer
the Shares at the same price (the "OFFERED PRICE") and upon the same terms (or
terms as similar as reasonably possible) to the Company or its assignee(s).

               (ii) EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within
thirty (30) days after receipt of the Notice, the Company and/or its assignee(s)
may, by giving written notice to the Holder, elect to purchase all, but not less
than all, of the Shares proposed to be transferred to any one or more of the
Proposed Transferees, at the purchase price determined in accordance with
subsection (iii) below.

               (iii) PURCHASE PRICE. The purchase price ("PURCHASE PRICE") for
the Shares purchased by the Company or its assignee(s) under this Section 3(a)
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.

               (iv) PAYMENT. Payment of the Purchase Price shall be made, at the
option of the Company or its assignee(s), in cash (by check), by cancellation of
all or a portion of any outstanding indebtedness, or by any combination thereof
within 30 days after receipt of the Notice or in the manner and at the times set
forth in the Notice.

               (v) HOLDER'S RIGHT TO TRANSFER. If all of the Shares proposed in
the Notice to be transferred to a given Proposed Transferee are not purchased by
the Company and/or its assignee(s) as provided in this Section 3(a), then the
Holder may sell or otherwise transfer such Shares to that Proposed Transferee at
the Offered Price or at a higher price, provided that such sale or other
transfer is consummated within 60 days after the date of the Notice and provided
further that any such sale or other transfer is effected in accordance with any
applicable securities laws and the Proposed Transferee agrees in writing that
the provisions of this Section 3 shall continue to apply to the Shares in the
hands of such Proposed Transferee. If the Shares described in the Notice are not
transferred to the Proposed Transferee within such period, or if the Holder
proposes to change the price or other terms to make them more favorable to the
Proposed Transferee, a new Notice shall be given to the Company, and the Company
and/or its assignees shall again be offered the Right of First Refusal before
any Shares held by the Holder may be sold or otherwise transferred.

               (vi) EXCEPTION FOR CERTAIN FAMILY TRANSFERS. Anything to the
contrary contained in this Section 3(a) notwithstanding, the transfer of any or
all of the Shares during Purchaser's lifetime or on Purchaser's death by will or
intestacy to Purchaser's Immediate Family or a trust for the benefit of
Purchaser's Immediate Family shall be exempt from the provisions of this Section
3(a). "IMMEDIATE FAMILY" as used herein shall mean

                                      -2-
<PAGE>

spouse, lineal descendant or antecedent, father, mother, brother or sister. In
such case, the transferee or other recipient shall receive and hold the Shares
so transferred subject to the provisions of this Section, and there shall be no
further transfer of such Shares except in accordance with the terms of this
Section 3.

          (b) INVOLUNTARY TRANSFER.

               (i) COMPANY'S RIGHT TO PURCHASE UPON INVOLUNTARY TRANSFER. In the
event, at any time after the date of this Agreement, of any transfer by
operation of law or other involuntary transfer (including death or divorce, but
excluding a transfer to Immediate Family as set forth in Section 3(a)(vi) above)
of all or a portion of the Shares by the record holder thereof, the Company
shall have an option to purchase all of the Shares transferred at the greater of
the purchase price paid by Purchaser pursuant to this Agreement or the fair
market value of the Shares on the date of transfer. Upon such a transfer, the
person acquiring the Shares shall promptly notify the Secretary of the Company
of such transfer. The right to purchase such Shares shall be provided to the
Company for a period of thirty (30) days following receipt by the Company of
written notice by the person acquiring the Shares.

               (ii) PRICE FOR INVOLUNTARY TRANSFER. With respect to any stock to
be transferred pursuant to Section 3(b)(i), the price per Share shall be a price
set by the Board of Directors of the Company that will reflect the current value
of the stock in terms of present earnings and future prospects of the Company.
The Company shall notify Purchaser or his or her executor of the price so
determined within thirty (30) days after receipt by it of written notice of the
transfer or proposed transfer of Shares. However, if the Purchaser does not
agree with the valuation as determined by the Board of Directors of the Company,
the Purchaser shall be entitled to have the valuation determined by an
independent appraiser to be mutually agreed upon by the Company and the
Purchaser and whose fees shall be borne equally by the Company and the
Purchaser.

          (c) ASSIGNMENT. The right of the Company to purchase any part of the
Shares may be assigned in whole or in part to any shareholder or shareholders of
the Company or other persons or organizations.

          (e) RESTRICTIONS BINDING ON TRANSFEREES. All transferees of Shares or
any interest therein will receive and hold such Shares or interest subject to
the provisions of this Agreement. Any sale or transfer of the Company's Shares
shall be void unless the provisions of this Agreement are satisfied.

          (f) TERMINATION OF RIGHTS. The right of first refusal granted the
Company by Section 3(a) above and the option to repurchase the Shares in the
event of an involuntary transfer granted the Company by Section 3(b) above shall
terminate upon the first sale of Common Stock of the Company to the general
public pursuant to a registration statement filed with and declared effective by
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "SECURITIES ACT"). Upon termination of the right of first refusal
described in Section 3(b) above, a new certificate or certificates

                                      -3-
<PAGE>

representing the Shares not repurchased shall be issued, on request, without the
legend referred to in Section 5(a)(ii) herein and delivered to Purchaser.

     4. INVESTMENT AND TAXATION REPRESENTATIONS. In connection with the purchase
of the Shares, Purchaser represents to the Company the following:

          (a) Purchaser is aware of the Company's business affairs and financial
condition and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Shares. Purchaser is
purchasing these securities for investment for his or her own account only and
not with a view to, or for resale in connection with, any "distribution" thereof
within the meaning of the Securities Act or under any applicable provision of
state law. Purchaser does not have any present intention to transfer the Shares
to any person or entity.

          (b) Purchaser understands that the Shares have not been registered
under the Securities Act by reason of a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of Purchaser's
investment intent as expressed herein.

          (c) Purchaser further acknowledges and understands that the securities
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Purchaser
further acknowledges and understands that, except as set forth in Section
2(e)(iv) of the Employment Agreement, the Company is under no obligation to
register the securities. Purchaser understands that the certificate(s)
evidencing the securities will be imprinted with a legend which prohibits the
transfer of the securities unless they are registered or such registration is
not required in the opinion of counsel for the Company.

          (d) Purchaser is familiar with the provisions of Rules 144 and 701,
each promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly, from
the issuer of the securities (or from an affiliate of such issuer), in a
non-public offering subject to the satisfaction of certain conditions. Purchaser
understands that the Company provides no assurances as to whether he or she will
be able to resell any or all of the Shares pursuant to Rule 144 or Rule 701,
which rules require, among other things, that the Company be subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended, that
resales of securities take place only after the holder of the Shares has held
the Shares for certain specified time periods, and under certain circumstances,
that resales of securities be limited in volume and take place only pursuant to
brokered transactions. Notwithstanding this paragraph (d), Purchaser
acknowledges and agrees to the restrictions set forth in paragraph (e) below.

          (e) Purchaser further understands that in the event all of the
applicable requirements of Rule 144 or 701 are not satisfied, registration under
the Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact that Rules 144
and 701 are not exclusive, the Staff of the Securities and Exchange Commission
has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to

                                      -4-
<PAGE>

Rule 144 or 701 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk.

          (f) Purchaser understands that Purchaser may suffer adverse tax
consequences as a result of Purchaser's purchase or disposition of the Shares.
Purchaser represents that Purchaser has consulted any tax consultants Purchaser
deems advisable in connection with the purchase or disposition of the Shares and
that Purchaser is not relying on the Company for any tax advice.

     5. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.

          (a) LEGENDS. The certificate or certificates representing the Shares
shall bear the following legends (as well as any legends required by applicable
state and federal corporate and securities laws):

               (i)  THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                    REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN
                    ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN
                    CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH
                    SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE
                    REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF
                    COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT
                    REQUIRED UNDER THE SECURITIES ACT OF 1933.

               (ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE
                    TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN
                    AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF
                    WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

               (iii) IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS
                    SECURITY, OR ANY INTEREST THEREIN, OR TO RECEIVE ANY
                    CONSIDERATION THEREFOR, WITHOUT THE PRIOR WRITTEN CONSENT OF
                    THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA,
                    EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.

          (b) STOP-TRANSFER NOTICES. Purchaser agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop

                                      -5-
<PAGE>

transfer" instructions to its transfer agent, if any, and that, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.

          (c) REFUSAL TO TRANSFER. The Company shall not be required (i) to
transfer on its books any Shares that have been sold or otherwise transferred in
violation of any of the provisions of this Agreement or (ii) to treat as owner
of such Shares or to accord the right to vote or pay dividends to any purchaser
or other transferee to whom such Shares shall have been so transferred.

     6. NO EMPLOYMENT RIGHTS. Nothing in this Agreement shall affect in any
manner whatsoever the right or power of the Company, or a parent or subsidiary
of the Company, to terminate Purchaser's employment or consulting relationship,
for any reason, with or without cause.

     7. LOCK-UP AGREEMENT. In connection with the initial public offering of the
Company's securities and upon request of the Company or the underwriters
managing any underwritten offering of the Company's securities, Purchaser agrees
not to sell, make any short sale of, loan, grant any option for the purchase of,
or otherwise dispose of any securities of the Company however or whenever
acquired (other than those included in the registration) without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed 180 days) from the effective date of such
registration as may be requested by the Company or such managing underwriters
and to execute an agreement reflecting the foregoing as may be requested by the
underwriters at the time of the public offering.

     8. MISCELLANEOUS.

          (a) GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
California, without giving effect to principles of conflicts of law.

          (b) ENTIRE AGREEMENT; ENFORCEMENT OF RIGHTS. This Agreement sets forth
the entire agreement and understanding of the parties relating to the subject
matter herein and merges all prior discussions between them; provided however
that Section 2(e)(iv) of the Employment Agreement referenced in Section 4(c)
above is specifically incorporated herein by reference. No modification of or
amendment to this Agreement, nor any waiver of any rights under this Agreement,
shall be effective unless in writing signed by the parties to this Agreement.
The failure by either party to enforce any rights under this Agreement shall not
be construed as a waiver of any rights of such party.

          (c) SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so

                                      -6-
<PAGE>

excluded and (iii) the balance of the Agreement shall be enforceable in
accordance with its terms.

          (d) CONSTRUCTION. This Agreement is the result of negotiations between
and has been reviewed by each of the parties hereto and their respective
counsel, if any; accordingly, this Agreement shall be deemed to be the product
of all of the parties hereto, and no ambiguity shall be construed in favor of or
against any one of the parties hereto.

          (e) NOTICES. Any notice required or permitted by this Agreement shall
be in writing and shall be deemed sufficient when delivered personally or sent
by telegram or fax or forty-eight (48) hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, and addressed to
the party to be notified at such party's address as set forth below or as
subsequently modified by written notice.

          (f) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

          (g) SUCCESSORS AND ASSIGNS. The rights and benefits of this Agreement
shall inure to the benefit of, and be enforceable by the Company's successors
and assigns. The rights and obligations of Purchaser under this Agreement may
only be assigned with the prior written consent of the Company.

                            [Signature Page Follows]

                                      -7-
<PAGE>

     The parties have executed this Exercise Notice and Restricted Stock
Purchase Agreement as of the date first set forth above.

                                        COMPANY:

                                        SITESMITH, INC.

                                        By:
                                           ------------------------------------
                                        Name:
                                             ----------------------------------
                                        Title:
                                              ---------------------------------

                                        PURCHASER:

                                        Mark Spagnolo

                                        ---------------------------------------
                                        (Signature)

                                        Address: ------------------------------

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

I, ______________________, spouse of Mark Spagnolo, have read and hereby approve
the foregoing Agreement. In consideration of the Company's granting my spouse
the right to purchase the Shares as set forth in the Agreement, I hereby agree
to be irrevocably bound by the Agreement and further agree that any community
property or other such interest shall hereby by similarly bound by the
Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any
amendment or exercise of any rights under the Agreement.

                                        ---------------------------------------
                                        Spouse of Mark Spagnolo

                                      -8-
<PAGE>

                                    EXHIBIT B

                                 PROMISSORY NOTE

$__________                                              Santa Clara, California
                                                            ______________, 20__

     For value received, the undersigned promises to pay SiteSmith, Inc., a
Delaware corporation (the "COMPANY"), at its principal office the principal sum
of $__________ with interest from the date hereof at a rate of _____% per annum,
compounded semiannually, on the unpaid balance of such principal sum. Such
principal and interest shall be due and payable on __________.

     Principal and interest are payable in lawful money of the United States of
America. AMOUNTS DUE UNDER THIS NOTE MAY BE PREPAID AT ANY TIME WITHOUT INTEREST
OR PENALTY.

     Should suit be commenced to collect any sums due under this Note, such sum
as the Court may deem reasonable shall be added hereto as attorneys' fees. The
makers and endorsers have severally waived presentment for payment, protest
notice of protest and notice of nonpayment of this Note.

     This Note is full recourse, is further secured by a pledge of certain
shares of Common Stock of the Company and is subject to the terms of a Pledge
and Security Agreement between the undersigned and the Company of even date
herewith.

                                        ---------------------------------------
                                        Mark Spagnolo

<PAGE>

                                    EXHIBIT C

                          PLEDGE AND SECURITY AGREEMENT

     This Pledge and Security Agreement (the "AGREEMENT") is entered into this
_____ day of ____________ by and between SiteSmith, Inc., a Delaware
corporation (the "COMPANY") and Mark Spagnolo ("PURCHASER").

                                    RECITALS

     In connection with Purchaser's exercise of an option to purchase certain
shares of the Company's Common Stock (the "SHARES") pursuant to an Option
Agreement dated __________ between Purchaser and the Company, Purchaser is
delivering a promissory note of even date herewith (the "NOTE") in full or
partial payment of the exercise price for the Shares. The company requires that
the Note be secured by a pledge of the Shares or the terms set forth below.

                                    AGREEMENT

     In consideration of the Company's acceptance of the Note as full or partial
payment of the exercise price of the Shares, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
agree as follows:

     1. The Note shall become payable in full as set forth in the first
paragraph of the Note.

     2. Purchaser shall deliver to the Secretary of the Company, or his or her
designee (hereinafter referred to as the "PLEDGE HOLDER"), all certificates
representing the Shares, together with an Assignment Separate from Certificate
in the form attached to this Agreement as ATTACHMENT A executed by Purchaser and
by Purchaser's spouse (if required for transfer), in blank, for use in
transferring all or a portion of the Shares to the Company if, as and when
required pursuant to this Agreement. In addition, if Purchaser is married,
Purchaser's spouse shall execute the signature page attached to this Agreement.

     3. As security for the payment of the Note and any renewal, extension or
modification of the Note, Purchaser hereby grants to the Company a security
interest in and pledges with and delivers to the Company Purchaser's Shares
(sometimes referred to herein as the "COLLATERAL").

     4. In the event that Purchaser prepays all or a portion of the Note, in
accordance with the provisions thereof, Purchaser intends, unless written notice
to the contrary is delivered to the Pledge Holder, that the Shares represented
by the portion of the Note so repaid, including annual interest thereon, shall
continue to be so held by the Pledge Holder, to serve as independent collateral
for the outstanding portion of the Note for the purpose of commencing the
holding period set forth in Rule 144(d) promulgated under the Securities Act of
1933, as amended (the "SECURITIES ACT"). If written notice is provided by
Purchaser to the Pledge Holder requesting a release of the Shares upon
prepayment of a portion of the

<PAGE>

Note, then the Pledge Holder will release to Purchaser that number of Shares
equal to the amount paid under the Note (less the portion of the payment
attributable to interest on the principal prepaid) divided by $1.75; provided,
however, that no Shares subject to the Repurchase Option described in Section
3(a) of the Early Exercise Notice and Restricted Stock Purchase Agreement shall
be released until lapse of the Repurchase Option with respect to such Shares.

     5. In the event of any foreclosure of the security interest created by this
Agreement, the Company may sell the Shares at a private sale or may repurchase
the Shares itself. The parties agree that, prior to the establishment of a
public market for the Shares of the Company, the securities laws affecting sale
of the Shares make a public sale of the Shares commercially unreasonable. The
parties further agree that the repurchasing of such Shares by the Company, or by
any person to whom the Company may have assigned its rights under this
Agreement, is commercially reasonable if made at a price determined by the Board
of Directors in its discretion, fairly exercised, representing what would be the
fair market value of the Shares reduced by any limitation on transferability,
whether due to the size of the block of shares or the restrictions of applicable
securities laws.

     6. In the event of default in payment when due of any indebtedness under
the Note, the Company may elect then, or at any time thereafter, to exercise all
rights available to a secured party under the California Commercial Code
including the right to sell the Collateral at a private or public sale or
repurchase the Shares as provided above. The proceeds of any sale shall be
applied in the following order:

          (a) To the extent necessary, proceeds shall be used to pay all
reasonable expenses of the Company in enforcing this Agreement and the Note,
including, without limitation, reasonable attorney's fees and legal expenses
incurred by the Company.

          (b) To the extent necessary, proceeds shall be used to satisfy any
remaining indebtedness under Purchaser's Note.

          (c) Any remaining proceeds shall be delivered to Purchaser.

     7. Upon full payment by Purchaser of all amounts due under the Note, Pledge
Holder shall deliver to Purchaser all Shares in Pledge Holder's possession
belonging to Purchaser, and Pledge Holder shall thereupon be discharged of all
further obligations under this Agreement; PROVIDED, HOWEVER, that Pledge Holder
shall nevertheless retain the Shares as escrow agent if at the time of full
payment by Purchaser said Shares are still subject to a Repurchase Option in
favor of the Company.

                                      -2-
<PAGE>

     The parties have executed this Pledge and Security Agreement as of the date
first set forth above.

                                        COMPANY:

                                        SITESMITH, INC.

                                        By:
                                           ------------------------------------

                                        Name:
                                              ---------------------------------
                                              (print)

                                        Title:
                                               --------------------------------

                                        Address:
                                        3283 Scott Blvd.
                                        Santa Clara, CA  95054

                                        PURCHASER:

                                        MARK SPAGNOLO

                                        ---------------------------------------
                                        (Signature)

                                        ---------------------------------------
                                        (Print Name)

                                        Address:

                                      -3-
<PAGE>

                               ATTACHMENT A

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

     FOR VALUE RECEIVED and pursuant to that certain Pledge and Security
Agreement between the undersigned ("PURCHASER") and SiteSmith, Inc. (the
"COMPANY") dated _______________, ____ (the "AGREEMENT"), Purchaser hereby
sells, assigns and transfers unto the Company _________________________________
(________) shares of the Common Stock of the Company, standing in Purchaser's
name on the books of the Company and represented by Certificate No. ____, and
does hereby irrevocably constitute and appoint
________________________________________________ to transfer said stock on the
books of the Company with full power of substitution in the premises. THIS
ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT.

Dated:
       ---------------
                                        Signature:

                                        ---------------------------------------
                                        Mark Spagnolo

                                        ---------------------------------------
                                        Spouse of Mark Spagnolo (if applicable)

Instruction: Please do not fill in any blanks other than the signature line. The
purpose of this assignment is to perfect the security interest of the Company
pursuant to the Agreement.

<PAGE>

                                     RECEIPT

     The undersigned hereby acknowledges receipt of Certificate No. _____ for
__________ shares of Common Stock of SiteSmith, Inc.

Dated:
      ----------------
                                        ---------------------------------------
                                        Mark Spagnolo

<PAGE>

                               RECEIPT AND CONSENT

     The undersigned hereby acknowledges receipt of a photocopy Certificate No.
_____ purchaser for __________ shares of Common Stock of SiteSmith, Inc. (the
"COMPANY").

     The undersigned further acknowledges that the Secretary of the Company, or
his or her designee, is acting as Pledge Holder pursuant to the Pledge and
Security Agreement Purchaser has previously entered into with the Company. As
Pledge Holder, the Secretary of the Company, or his or her designee, holds the
original of the aforementioned certificate issued in the undersigned's name.

Dated:
      ------------                      ---------------------------------------
                                        Mark Spagnolo

<PAGE>

                                     RECEIPT

     SiteSmith, Inc.(the "COMPANY") hereby acknowledges receipt of (check as
applicable):

     _____ A check in the amount of $__________

     _____ The cancellation of indebtedness in the amount of $__________

     _____ Certificate No. ____ representing ______ shares of the Company's
           Common Stock with a fair market value of $__________

     _____ A promissory note in the amount of $__________.

     given by Mark Spagnolo as consideration for Certificate No. ______ for
___________ shares of Common Stock of the Company.

Dated:
       -----------------                SITESMITH, INC.

                                        By:
                                           ------------------------------------

                                        Name:
                                              ---------------------------------
                                              (print)

                                        Title:
                                              ---------------------------------<PAGE>
                                                                   EXHIBIT 10.16
December 30, 1999

Mr. Richard Dym
225 Wooded View Drive
Los Gatos, CA  95032

Dear Richard,

I am delighted to offer you the position of Vice President, Marketing, with
SiteSmith, Inc. You will report directly to me, Marv Tseu, President and CEO.

The following summarizes the details of our verbal offer:

START DATE:                         January 10, 2000

TITLE:                              Vice President, Marketing

ANNUAL BASE SALARY:                 $150,000 (Plus you are eligible for any
                                    executive bonus plan that is
                                    implemented for Senior Management)

STOCK OPTION GRANT:                 300,000 Shares
(Stock Option Grant is subject to the rules of the SiteSmith, Inc. Employee
Stock Plan, Vesting Schedule, and Approval of the Board of Directors. This plan
will be sent under separate cover.)

VACATION:                           16 Personal Time Off (PTO) days per year

SiteSmith, Inc., is an "at will employer" thus either you or the Company may
terminate the employment relationship at any time for any reason with or without
cause. If SiteSmith terminates you for any reason other than that cause, you
will receive a severance package equal to six months salary.

In addition, in the event that SiteSmith hires a new CEO and your position is
materially changed (i.e. reduction of position, salary, significant change in
job location), this change will be construed as a constructive termination and
you will be given a separation package of six months salary and acceleration of
50% of unvested shares. This provision is only in effect for the initial 12
months after a new CEO is hired. This provision does not apply to termination
for cause.

In the event of a change of control where over 50% of the ownership of the
company changes and there is a material change in position as described above
within 12 months of the effective date of change, you will be given the same
severance package of six months salary, but you will have full acceleration of
the unvested shares. This provision does not apply to termination for cause. If
your position is unchanged after a change of control, you will be considered an
active employee and there will be no change in your status. You will continue to
vest shares based on the original vesting schedule.
<PAGE>

You will also be eligible for coverage under the SiteSmith, Inc., Medical and
Dental plans and Life Insurance plan. Descriptions of these plans will be
provided when you report for work.

Enclosed is our company's Confidentiality Agreement and Invention Assignment
Agreement. Please be sure to read each of these Agreements and understand that
you will be asked to sign each Agreement as a condition of employment.

We are pleased to extend this offer to you until December 31, 1999. To accept,
please sign below and return to Rosa Cooper, HR Manager, SiteSmith, 3283 Scott
Blvd., Santa Clara, CA 95054. Please retain the duplicate for your records.

Richard, we are very excited about the prospects of working with you. In fact,
we believe that you will be an important contributor towards our continued
success.

Sincerely,

/s/ Marv Tseu
Marv Tseu
President and CEO

Accepted and Agreed to by:

/s/ RICHARD DYM                                          12/31/99
-----------------------------------------------------    ----------------------
Name                                                     Date

-----------------------------------------------------
Start Date (if different from above)

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