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                                                                    EXHIBIT 4.08

                                  QSpace, Inc.

                             1999 STOCK OPTION PLAN
              Adopted by Board & Approve by Shareholders 6/29/1999

I.    PURPOSES AND TYPES OF OPTIONS. This 1999 Stock Option Plan (the "PLAN") is
      intended to increase the incentives of, and encourage stock ownership by,
      officers, directors, employees, consultants and other independent
      contractors (including members of the Company's Board of Directors who are
      not employees of the Company) providing services to QSpace, Inc., a
      California corporation (the "COMPANY"), or to corporations which are or
      become subsidiary corporations of the Company. As used in this Plan, the
      terms "PARENT CORPORATION" and "SUBSIDIARY CORPORATION" shall have the
      meanings set forth in Sections 424(e) and (f), respectively, of the
      Internal Revenue Code of 1986, as amended ("INTERNAL REVENUE CODE"). The
      Plan is intended to provide such officers, directors, employees and
      consultants and other independent contractors with a proprietary interest
      (or to increase their proprietary interest) in the Company, and to
      encourage them to continue their employment or engagement by the Company
      or its subsidiaries. Options granted pursuant to the Plan, at the
      discretion of the Company's Board of Directors ("BOARD"), may be either
      incentive stock options within the meaning of Section 422 of the Internal
      Revenue Code, or options that do not so qualify as incentive stock options
      and which are referenced herein as non-statutory stock options. This Plan
      is intended to be a written compensatory benefit plan within the meaning
      of Rule 701 of the Securities Act of 1933, as amended ("SECURITIES ACT").

II.   STOCK. The capital stock subject to the Plan shall be shares of the
      Company's authorized but unissued Common Stock ("COMMON STOCK"). Subject
      to adjustments pursuant to Section 8 hereof, the maximum aggregate number
      of shares of Common Stock which may be issued under the Plan is Two
      Million Seven Hundred Eighty-Five Thousand Six Hundred Fifty-Nine
      (2,785,659), or such lesser number of shares of Common Stock as permitted
      under Section 260.140.45 of Title 10 of the California Code of
      Regulations. In the event that any outstanding option under the Plan shall
      expire by its terms or is otherwise terminated for any reason (or if
      shares of Common Stock of the Company which are issued upon exercise of an
      option granted hereunder are subsequently reacquired by the Company
      pursuant to contractual rights of the Company under the particular stock
      option agreement), the shares of the Common Stock allocated to the
      unexercised portion of such option (or the shares so reacquired by the
      Company pursuant to the terms of the stock option agreement) shall again
      become available to be made subject to options granted under the Plan.
      Notwithstanding any other provision of this Plan, the aggregate number of
      shares of Common Stock subject to outstanding options granted under this
      Plan at any given time, plus the aggregate number of shares which have
      been issued upon exercise of all options granted under this Plan and which
      remain outstanding, shall never be permitted to exceed the maximum number
      of shares specified above in this Section 2 (subject to adjustments under
      Section 8).

III.  ADMINISTRATION. The Plan shall be administered by the Board. The
      interpretation and construction by the Board of any provision of this
      Plan, or of any option granted pursuant hereto, shall be final, binding
      and conclusive. No member of the Board shall be liable to the Company or
      to any Subsidiary or Parent corporation, or to the holder of any option
      granted hereunder, for any action, inaction, determination or
      interpretation made in good faith with respect to the Plan or any
      transaction hereunder. Notwithstanding the foregoing, the Board shall have
      the authority to delegate some or all of its duties to administer this
      Plan and to exercise its powers hereunder to a committee ("COMMITTEE")
      appointed by the Board. For purposes of this Plan, all references herein
      to "Board" shall be deemed to also refer to any such Committee. Any
      Committee charged with administration of the Plan shall have all the
      powers and

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      protections provided to the Board under this Plan until the Board shall
      revoke or restrict such powers or protections. More specifically, the
      Board, subject to compliance with the remaining provisions of this Plan,
      shall have the following powers and authority (which listing is provided
      by way of example and is not intended to be comprehensive or limiting to
      the extent of powers not included):

      A.   SELECTION OF OPTIONEES. To determine the persons providing services
           to the Company to whom, and the time or times at which, options to
           purchase Common Stock of the Company shall be granted;

      B.   NUMBER OF OPTION SHARES. To determine the number of shares of Common
           Stock to be subject to options granted to each such person;

      C.   EXERCISE PRICE. To determine the price to be paid for the shares of
           Common Stock upon the exercise of each option;

      D.   TERM AND EXERCISE SCHEDULE. To determine the term, vesting and
           exercise schedule of each option;

      E.   OTHER TERMS OF OPTIONS. To determine the terms and conditions of each
           stock option agreement (which need not be identical) entered into
           between the Company and any person to whom the Board determines to
           grant an option;

      F.   INTERPRETATION OF PLAN. To interpret the Plan and to prescribe, amend
           and rescind rules and regulations relating to the Plan;

      G.   AMENDMENT OF OPTIONS. With the consent of the holder thereof, to
           modify or amend any option granted under the Plan; and

      H.   GENERAL AUTHORITY. To take such actions and make such determinations
           deemed necessary or advisable by the Board for the administration of
           the Plan, subject to complying with the Plan and with applicable
           legal requirements.

IV.  ELIGIBILITY AND AWARD OF OPTIONS.

      A.   AUTHORITY TO GRANT AND ELIGIBILITY. The Board shall have full and
           final authority, in its discretion and at any time and from time to
           time during the term of this Plan, to grant or authorize the granting
           of options to such officers, directors and employees of, and
           consultants and other independent contractors retained by, the
           Company or its Subsidiary corporations as it may select, and to
           determine the number of shares of Common Stock to be subject to each
           option. Any individual who is eligible to receive a stock option
           under this Plan shall be eligible to hold more than one option at any
           given time, in the discretion of the Board. The Board shall have full
           and final authority in its discretion to determine, in the case of
           employees (including employees that are officers or directors),
           whether such options shall be incentive stock options or non-
           statutory stock options; however, no incentive stock option may be
           granted to any person who is not a bona fide employee of the Company
           or of a Subsidiary corporation of the Company. Persons selected by
           the Board who are prospective employees of, or consultants or other
           independent contractors to be retained by, the Company or its
           Subsidiary corporations, including members of the Board, shall be
           eligible to receive non-statutory stock options; provided, however,
           that in the case of such prospective employment or other engagement,
           the exerciseability of such options shall be subject in each case to
           such person in fact becoming an

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           employee or consultant or other independent contractor, as
           applicable, of the Company or its Subsidiary corporations.

      B.   CERTAIN RESTRICTIONS APPLICABLE TO STOCK OPTIONS. No incentive stock
           option shall be granted to any employee who, at the time such
           incentive stock option is granted, owns stock possessing more than
           ten percent (10%) of the total combined voting power of all classes
           of outstanding capital stock of the Company, or of any Parent
           corporation or Subsidiary corporation of the Company, unless the
           exercise price (as provided in Section 5.1 hereof) is not less than
           one hundred ten percent (110%) of the fair market value of the Common
           Stock on the date the incentive stock option is granted and the
           period within which the incentive stock option may be exercised (as
           provided in Section 5.2 hereof) does not exceed five (5) years from
           the date the incentive stock option is granted. In determining stock
           ownership for purposes of this Section 4.2, the provisions of Section
           422(b)(6) of the Internal Revenue Code shall control. An employee
           shall be considered as owning the voting capital stock owned,
           directly or indirectly, by or for his or her brothers and sisters,
           spouse, ancestors and lineal descendants. Voting capital stock owned,
           directly or indirectly, by or for a corporation, partnership, estate
           or trust shall be considered as being owned proportionately by or for
           its shareholders, partners or beneficiaries, as applicable.
           Additionally, for purposes of this Section, 4.2, outstanding capital
           stock shall include all capital stock actually issued and outstanding
           immediately after the grant of the option to the employee.
           Outstanding capital stock shall not include capital stock authorized
           for issue under outstanding options held by the employee or by any
           other person. Additionally, the aggregate fair market value
           (determined as of the date an option is granted) of the Common Stock
           with respect to which incentive stock options granted are exercisable
           for the first time by an employee during any one calendar year (under
           this Plan and under all other incentive stock option plans of the
           Company and of any Parent or Subsidiary corporation) shall not exceed
           One Hundred Thousand Dollars ($100,000). If the aggregate fair market
           value (determined as of the date an option is granted) of the Common
           Stock with respect to which incentive stock options granted are
           exercisable for the first time by an employee during any calendar
           year exceeds One Hundred Thousand Dollars ($100,000), the options for
           the first One Hundred Thousand Dollars ($100,000) worth of shares of
           Common Stock to become exercisable in such calendar year shall be
           incentive stock options and the options for the amount in excess of
           One Hundred Thousand Dollars ($100,000) that become exercisable in
           that calendar year shall be non-statutory stock options. In the event
           that the Internal Revenue Code or the regulations promulgated
           thereunder are amended after the effective date of the Plan to
           provide for a different limit on the fair market value of shares of
           Common Stock permitted to be subject to incentive stock options, such
           different limit shall be automatically incorporated herein and shall
           apply to options granted after the effective date of such amendment.

      C.   DATE OF GRANT. The date on which an option shall be granted shall be
           stated in each option agreement and shall be the date of the Board's
           authorization of such grant or such later date as may be set by the
           Board at the time such grant is authorized.

V.    TERMS AND PROVISIONS OF OPTION AGREEMENTS. Each option granted under the
      Plan shall be evidenced by a stock option agreement between the person to
      whom the option is granted and the Company. Each such agreement shall be
      subject to the following terms and conditions, and to such other terms and
      conditions not inconsistent herewith as the Board may deem appropriate in
      each case:

      A.   EXERCISE PRICE. The price to be paid for each share of Common Stock
           upon the exercise of an option shall be determined by the Board at
           the time the option is granted; provided however that (i) no non-
           statutory stock option shall have an exercise price less than eighty-
           five percent (85%)

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           of the fair market value of the Common Stock on the date the option
           is granted; (ii) no incentive stock option shall have an exercise
           price less than one hundred percent (100%) of the fair market value
           of the Common Stock on the date the option is granted; and (iii) all
           incentive stock options granted to a ten percent (10%) shareholders
           shall have the exercise price set at not less than one hundred ten
           percent (110%) of fair market value at the date of the grant, as
           provided in Section 4.2 hereof. For all purposes of this Plan, the
           fair market value of the Common Stock on any particular date shall be
           determined as follows:

           1.  If such Common Stock is then quoted on the Nasdaq National Market
               System, its last reported sale price on the Nasdaq National
               Market System on the trading day next preceding that date or, if
               no such reported sale takes place on the trading day next
               preceding such date, the average of its closing bid and asked
               prices on the Nasdaq National Market System on the trading day
               next preceding such date;

           2.  If such Common Stock is publicly traded and is then listed on a
               national securities exchange, its last reported sale price on the
               national securities exchange on which the Common Stock is then
               listed on the trading day next preceding that date or, if no such
               reported sale takes place on the trading day next preceding such
               date, the average of its closing bid and asked prices on the
               national securities exchange on which the Common Stock is then
               listed on the trading day next preceding such date; or

           3.  If none of the foregoing is applicable, by the Board in good
               faith, with such determination being based upon past arms-length
               sales by the Company of its equity securities and other factors
               considered relevant in determining the Company's fair value.

Notwithstanding anything to the contrary in this Section 5.1, any Option
Agreement may provide for alternative means of valuation for the purpose of
repurchase at fair market value of shares acquired.

      B.   TERM OF OPTIONS. The period or periods within which an option may be
           exercised shall be determined by the Board at the time the option is
           granted, but no exercise period shall exceed ten (10) years from the
           date the option is granted (or five (5) years in the case of any
           stock option granted to a ten percent (10%) shareholder as described
           in Section 4.2 hereof).

      C.   EXERCISEABILITY. Stock options granted under this Plan shall be
           exercisable at such future time or times (or may be fully exercisable
           upon grant), whether or not in installments, as shall be determined
           by the Board and provided in the form of stock option agreement,
           subject, however, to the requirement that all options granted under
           this Plan shall provide a right to exercise that accrues at a rate of
           at least twenty percent (20%) of the number of shares subject to the
           option for each year after the date of grant (i.e., at a rate so as
           to become fully exercisable at the end of five (5) years). Likewise,
           to the extent that options are immediately exercisable and shares
           purchased thereunder have vesting schedules such that the Company is
           entitled to repurchase at original exercise price a portion of the
           shares so acquired, all such option agreements to a person who is not
           an officer, director or consultant of the Company or a Parent or
           Subsidiary corporation of the Company (unless otherwise provided in
           the option agreement) shall provide for the lapsing of such purchase
           rights at a rate of at least twenty percent (20%) of the number of
           shares subject to the option for each year after the date of grant.
           Notwithstanding any other provisions of this Plan, no option may be
           exercised after the expiration of ten (10) years from the date of
           grant.

      D.   METHOD OF PAYMENT FOR COMMON STOCK UPON EXERCISE. Except as otherwise
           provided in the applicable stock option agreement (subject to the
           limitations of this Plan), the exercise price for

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           each share of Common Stock purchased under an option shall be paid in
           full in cash at the time of purchase (or by check acceptable to the
           Board). At the discretion of the Board, the stock option agreement
           may provide for (or the Board may permit) the exercise price to be
           paid by one or more of the following additional methods: (i) the
           surrender of shares of the Company's Common Stock, in proper form for
           transfer, owned by the person exercising the option and having a fair
           market value on the date of exercise equal to the exercise price,
           provided that such shares (A) have been outstanding for more than six
           (6) months and have been paid for within the meaning of Rule 144
           under the Securities Act (and, if such shares were purchased from the
           Company by use of a promissory note, such note has been fully paid
           with respect to such shares) or (B) were obtained by the optionee in
           the public market, (ii) to the extent permitted under the applicable
           provisions of the California Corporations Code, the delivery by the
           person exercising the option of a full recourse promissory note
           executed by such person, bearing interest at a per annum rate which
           is not less than the "test rate" as set by the regulations
           promulgated under Sections 483 or 1274, as applicable, of the
           Internal Revenue Code and as in effect on the date of exercise, or
           (iii) any combination of cash, shares of Common Stock or promissory
           notes, so long as the sum of the cash so paid, plus the fair market
           value of the shares of Common Stock so surrendered and the principal
           amounts of the promissory notes so delivered, is equal to the
           aggregate exercise price. Without limiting the generality of the
           foregoing, the form of option agreement may provide (or the Board may
           permit) that the option be exercised through a "net issue" exercise
           procedure (cash-less exercise), whereby the optionee may elect to
           receive shares of the Company's Common Stock having an aggregate fair
           market value at the date of exercise equal to the net value of the
           portion so exercised as of the exercise date. For purposes of the
           foregoing, the net value of any option (or portion thereof) as of
           such exercise date shall be equal to the aggregate fair market value
           of the shares subject to the option (or portion thereof being
           exercised) less the aggregate exercise price of the option (or
           portion thereof). In such event the Company shall issue to the
           optionee a number of shares of the Company's Common Stock having a
           fair market value as of the date of exercise equal to the net value
           of the option (or portion thereof being exercised). No shares of
           Common Stock shall be issued under any option until full payment
           therefor has been made in accordance with the terms of the stock
           option agreement (and in compliance with the Plan). Any promissory
           note accepted upon the exercise of an option from a person who is a
           consultant or other independent contractor retained by the Company or
           any Subsidiary shall be adequately secured by collateral other than
           the shares of the Common Stock acquired upon such exercise, in
           accordance with Section 409 of the California Corporations Code.
           Notwithstanding the foregoing, an Option may not be exercised by
           surrender to the Company of shares of the Company's Common Stock to
           the extent such surrender of stock would constitute a violation of
           the provisions of any law, regulation and/or agreement restricting
           the redemption of the Company's Common Stock. Additionally, if
           permitted by the form of stock option agreement, or at the Board's
           discretion, any such promissory note may permit the payment of
           principal and interest accruing thereunder by surrender of shares of
           the Company's Common Stock, in proper form for transfer, and having a
           fair market value on the date of payment and surrender equal to the
           dollar amount to be applied to principal and accrued interest
           thereunder. No promissory note shall be permitted if the exercise of
           an option using a promissory note will be in violation of any law.

      E.   NON-ASSIGNABILITY. No stock option granted under the Plan shall be
           assignable or transferable by an optionee except by will or the laws
           of descent and distribution and shall be exercisable only by the
           optionee during his or her lifetime; provided, however, that the
           Board may provide for the assignability and subsequent exercise of
           non-statutory stock options on such terms and

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           conditions as the Board, in its sole discretion, may from time to
           time determine consistent with applicable law and the purposes of the
           Plan.

      F.   TERMINATION OF EMPLOYMENT PROVISIONS APPLICABLE TO STOCK OPTIONS.
           Each stock option agreement shall comply with the following
           provisions relating to early termination of the option based upon
           termination of the optionee's service to the Company:

           1.  DEATH. If the optionee's service with the Company is terminated
               because of the death of optionee, any stock option which such
               optionee holds may be exercised, to the extent it was exercisable
               at the time of death, within such period after the date of death
               as the Board shall prescribe in the stock option agreement (but
               not less than six (6) months nor more than twelve (12) months
               after death), by the optionee's representative or by the person
               entitled thereto under the optionee's will or the laws of
               intestacy. If the option is not so exercised in accordance with
               the foregoing, it shall terminate upon the expiration of such
               prescribed period.

           2.  DISABILITY. If the optionee's employment with the Company is
               terminated because of the disability of the optionee, any stock
               option which the optionee holds may be exercised by optionee or
               the optionee's estate within such period after the date of
               termination of employment resulting from such disability (but not
               less than six (6) months nor more than twelve (12) months after
               termination by reason of disability) as the Board shall prescribe
               in the stock option agreement, to the extent such option would
               otherwise be exercisable on the date of such termination. If the
               option is not so exercised in accordance with the foregoing, it
               shall terminate upon the expiration of such prescribed period,
               unless the optionee dies prior thereto, in which event the
               optionee shall be treated as though his or her death occurred on
               the date of termination resulting from such disability and the
               provisions of Section 5.6.1 hereof shall apply.

           3.  CAUSE. If the optionee's employment is terminated for "cause" as
               defined by the terms of the Plan, the option agreement, a
               contract of employment or other service contract, or applicable
               law, any option held by the optionee shall expire on the
               optionee's termination date or at such late time and on such
               conditions as determined by the Board, in its sole discretion. In
               the absence of any other provisions in the option agreement, the
               term "cause" shall be defined as the willful breach or habitual
               neglect of the duties which optionee is required to perform under
               his or her employment or other service agreement with Company, or
               any act of dishonestly, fraud, misrepresentation or other acts of
               moral turpitude as would prevent the effective performance of
               optionee's duties.

           4.  TRANSFER TO RELATED CORPORATION. In the event that an optionee
               leaves the service of the Company to enter the service of any
               Parent or Subsidiary corporation of the Company, or if the
               optionee leaves the service of any such Parent or Subsidiary
               corporation to enter the service of the Company or of another
               Parent or Subsidiary corporation, such optionee shall be deemed
               to continue in service of the Company for all purposes of this
               Plan, and any reference to service with the Company shall also be
               deemed to refer to service with any Parent or Subsidiary of the
               Company.

           5.  RETIREMENT. If the optionee's employment is terminated by
               voluntary retirement at or after reaching sixty-five (65) years
               of age, the optionee may, within three (3) months following such
               termination, exercise the Option to the extent it was exercisable
               by the optionee on the date of such termination unless the
               optionee dies prior thereto, in which

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               event the optionee shall be treated as through the optionee had
               died on the date of retirement and the provisions of Section
               5.6.1 hereof shall apply.

           6.  OTHER SEVERANCE. In the event an optionee of the Company leaves
               the service of the Company for any reason other than as set forth
               above in this Section 5.6, any stock option which such optionee
               holds must be exercised, to the extent it was exercisable at the
               date such optionee left the service of the Company, not later
               than three (3) months after the date on which the optionee's
               service terminates (or such longer period of time as determined
               by the Board, in its sole description). The stock option shall
               terminate upon the expiration of such prescribed period.

           7.  EXTENSION IF EXERCISE PREVENTED BY LAW. Notwithstanding the
               foregoing, if the exercise of an option within the applicable
               time periods set forth above is prevented because the issuance of
               shares upon such exercise would constitute a violation of any
               applicable federal, state or foreign securities law or other law
               or regulation, the option shall remain exercisable until three
               (3) months after the date the optionee is notified by the Company
               that the option is exercisable, but in any event no later than
               the expiration of ten (10) years from the date of grant.

           8.  EXTENSION IF OPTIONEE SUBJECT TO SECTION 16(b). Notwithstanding
               the foregoing, if a sale within the applicable time periods set
               forth in this Section 5.6 of shares acquired upon the exercise of
               the option would subject the optionee to liability under Section
               16(b) of the Securities Exchange Act of 1934, as amended, the
               option shall remain exercisable until the earliest to occur of
               (i) the tenth (10th) day following the date on which a sale of
               such shares by the optionee would no longer be subject to such
               liability, (ii) the one hundred ninetieth (190th) day after the
               optionee's termination of service, or (iii) the option expiration
               date.

      G.  ALL OPTIONS SUBJECT TO TERMS OF THIS PLAN. In addition to the
          provisions contained in any option agreement granted under this Plan,
          each such stock option agreement shall provide that the same is
          subject to the terms and conditions of this Plan and each optionee
          shall be given a copy of this Plan. Further, any terms or conditions
          contained in any such stock option agreement granted hereunder which
          are inconsistent in any respect with the provisions of this Plan shall
          be disregarded and void, or shall be deemed amended to the extent
          necessary to comply with the provisions of this Plan and the intent of
          the Board.

      H.  OTHER PROVISIONS. Option agreements under the Plan shall contain such
          other provisions, including, without limitation: (i) restrictions and
          conditions upon the exercise of the option, (ii) rights of first
          refusal in favor of the Company (or its assignees) applicable to
          shares of Common Stock acquired upon exercise of an option which are
          subsequently proposed to be transferred by the optionee, (iii) lock-up
          agreements (applicable in the event of the public offering of the
          Common Stock of the Company) restricting an optionee from any sales or
          other transfers of option stock for a designated period of time
          following the effective date of a registration statement under the
          Securities Act, (iv) other restrictions on the transferability or
          right to retain shares of the Common Stock received upon the exercise
          of the option including repurchase rights at original cost based on a
          vesting schedule, (v) commitments to pay cash bonuses, make loans or
          transfer other property to an optionee upon exercise of any option,
          and (vi) restrictions required by federal and applicable state
          securities laws, all as the Board shall deem necessary or advisable;
          provided that no such additional provision shall be inconsistent with
          any other term or

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          condition of this Plan or applicable state law and no such additional
          provision shall cause any incentive stock option granted pursuant to
          this Plan to fail to qualify as an incentive stock option under
          Section 422 of the Internal Revenue Code. Without limiting the
          generality of the foregoing, the Board may provide in the form of
          stock option agreement that, (A) in lieu of an exercise schedule, the
          option may immediately be exercisable in full and provide a "vesting
          schedule" with respect to the stock so purchased, giving the Company
          (or its assignees) the right to repurchase the shares of Common Stock
          at cost (or some other specified amount) to the extent such shares
          have not become vested upon any termination of the optionee's
          employment as other engagement with the Company, which vesting may
          depend upon or be restated to the attainment of the time periods, or
          continued service to the Company pursuant to which the obligation to
          resell such shares to the Company shall lapse; (B) optionee's service
          or employment with the Company shall not be deemed to have terminated
          merely because of a change in the capacity in which the optionee
          renders service provided there is no interruption or termination of
          the optionee's service; or (C) an exercise or vesting schedule shall
          be accelerated upon the consummation of a "change in control" or
          similar event or any other event determined advisable by the Board.

VI.   SECURITIES LAW AND OTHER REGULATORY REQUIREMENTS. This Plan is intended to
      comply with Section 25102(o) of the California Corporations Code. Any
      provision of this Plan which is inconsistent with Section 25102(o) shall,
      without further act or amendment by the Company or the Board, be reformed
      to comply with the requirements of Section 25102(o). The Board shall
      require any potential optionee, as a condition of the exercise of an
      option, to represent and establish to the satisfaction of the Board that
      all shares of Common Stock to be acquired upon the exercise of such option
      will be acquired for investment and not for resale. No shares of Common
      Stock shall be issued upon the exercise of any option unless and until:
      (i) the Company and the optionee have satisfied all applicable
      requirements under the Securities Act of 1933 and the Securities Exchange
      Act of 1934, as amended, (ii) any applicable listing requirement of any
      stock exchange on which the Company's Common Stock is listed has been
      satisfied, and (iii) all other applicable provisions of state and federal
      law have been satisfied. The Board shall cause such legends to be placed
      on certificates evidencing shares of Common Stock issued upon exercise of
      an option as, in the opinion of the Company's counsel, may be required by
      federal and applicable state securities laws.

VII.  WITHHOLDING TAXES. The exercise of any option granted under this Plan
      shall be conditioned upon the optionee's payment to the Company of all
      amounts (in addition to the exercise price) required to meet federal,
      state, local or foreign taxes of any kind required by law to be withheld
      with respect to shares to be issued on exercise of such option. The Board,
      in its discretion, may declare cash bonuses to an optionee to satisfy any
      such withholding requirements or may incorporate provisions in the form of
      stock option agreement allowing (or after grant of the option may permit,
      in its discretion) an optionee to satisfy any such withholding
      obligations, in whole or in part, by delivery of shares of the Company's
      Common Stock already owned by the optionee and which are not subject to
      repurchase, forfeiture, vesting or other similar requirements or
      restrictions. The fair market value of any such shares used to satisfy
      such withholding obligations shall be determined as of the date the amount
      of tax to be withheld is to be determined. The Company shall have the
      right at any time to deduct from payments of any kind otherwise due to the
      optionee (whether shares of Common Stock issuable upon exercise of an
      Option, regular salary, commissions, or otherwise) any federal, state or
      local taxes of any kind required by law to be withheld with respect to any
      shares issued upon exercise of options granted under the Plan.

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VIII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.

      A.  STOCK SPLITS AND SIMILAR EVENTS; RECLASSIFICATIONS. The number of
          shares of Common Stock covered by outstanding options granted under
          this Plan and the exercise price thereof shall be proportionately
          adjusted for any increase or decrease in the number of issued and
          outstanding shares of Common Stock resulting from a subdivision or
          combination of such shares or the payment of a stock dividend (but
          only on the Common Stock) or a recapitalization or any other increase
          or decrease in the number of such outstanding shares of Common Stock
          effected without the receipt of consideration by the Company;
          provided, however, that the conversion of any convertible securities
          of the Company shall not be deemed to have been "effected without
          receipt of consideration." In the event that the shares of Common
          Stock covered by outstanding options granted under this Plan are
          reclassified by the Company, other than pursuant to a transaction
          described in Section 8.2, then such options shall apply to the
          appropriate number of shares of newly classified Common Stock
          designated by the Board.

      B.  MERGERS AND ACQUISITIONS. If the Company shall be a constuent
          corporation in any merger or consolidation which results in the
          holders of the outstanding voting securities of the Company
          (determined immediately prior to such merger or consolidation) owning,
          directly or indirectly, at least a majority of the beneficial interest
          in the outstanding voting securities of the surviving corporation or
          its parent corporation (determined immediately after such merger or
          consolidation), the option granted under the Plan shall pertain and
          apply to the securities or other property to which a holder of the
          number of shares subject to the unexercised portion of the option held
          by the optionee would have been entitled. Any of (i) a dissolution or
          liquidation of the Company; (ii) a sale of all or substantially all of
          the Company's business and assets; (iii) the direct or indirect sale
          or exchange in a single or series of related transactions by the
          shareholders of the Company or more than fifty percent (50%) of the
          voting stock of the Company which results in the holders of the
          outstanding voting securities of the Company (determined immediately
          prior to such sale or exchange) owning, directly or indirectly, less
          than a majority of the beneficial interests in the outstanding voting
          securities of the Company; or (iv) a merger or consolidation (in which
          the Company is a constituent corporation) which results in the holders
          of the outstanding voting securities of the Company (determined
          immediately prior to such merger of consolidation) owning, directly or
          indirectly, less than a majority of the beneficial interest in the
          outstanding voting securities of the surviving corporation or its
          parent corporation (determined immediately after such merger or
          consolidation) will cause the option to terminate, unless (A) the
          agreement of such sale, exchange, merger, consolidation or other
          transaction otherwise provides, or (B) a sale on the day preceding the
          scheduled consummation of such event (the "test date") of shares
          acquired upon the exercise of the option would subject the optionee to
          liability under Section 16(b) of the Securities Exchange Act of 1934,
          as amended, in which event the option shall remain exercisable until
          the earliest to occur of (I) the tenth (10th) day following the date
          on which a sale of such shares by the optionee would no longer be
          subject to such liability, (II) the one hundred ninetieth (190th) day
          after the test date, or (III) the option's expiration date.

      C.  BOARD'S DETERMINATION FINAL AND BINDING UPON OPTIONEES. The foregoing
          determinations and adjustments in this Section 8 relating to stock or
          securities of the Company shall be made by the Board, whose
          determination in that respect shall be final, binding and conclusive.
          The Company shall give notice of any such adjustment or action to each
          optionee; provided, however, that any such adjustment or action shall
          be effective and binding for all purposes, whether or not such notice
          is given or received.

                                       9
<PAGE>

      D.  NO FRACTIONS OF SHARES. Fractions of shares shall not be issued by the
          Company. Instead, such fractions of shares shall either be paid in
          cash at fair market value or shall be rounded up or down to the
          nearest share, as determined by the Board.

      E.  NO RIGHTS EXCEPT AS EXPRESSLY STATED. Except as hereinabove expressly
          provided in this Section 8, no additional rights shall accrue to any
          optionee by reason of any subdivision or combination of shares of the
          capital stock of any class or the payment of any stock dividend or any
          other increase or decrease in the number of shares of any class or by
          reason of any dissolution, liquidation, merger or consolidation or
          spin-off of assets or of stock of another corporation, and any issued
          by the Company of shares of stock of any class or of securities
          convertible into shares of stock of any class shall not affect, and no
          adjustment by reason thereof shall be made with respect to, the number
          or exercise price of shares subject to options granted hereunder.

      F.  NO LIMITATIONS ON COMPANY'S DISCRETION. The grant of options under
          this Plan shall not affect in any way the right or power of the
          Company to make adjustments, reclassifications, reorganizations or
          changes of its capital or business structure or to merge or
          consolidate or to dissolve, liquidate, sell or transfer all or any
          part of its business or assets.

IX.   NO ADDITIONAL EMPLOYMENT RELATED RIGHTS OR BENEFITS.

      A.  NO SPECIAL EMPLOYMENT RIGHTS. Nothing contained in this Plan or in any
          option granted hereunder shall confer upon any optionee any right with
          respect to the continuation of his or her employment or other
          engagement by the Company or interfere in any way with the right of
          the Company, subject to the terms of any separate employment or
          consulting agreement to the contrary, at any time to terminate such
          employment or consulting or other relationship or to increase or
          decrease the compensation of any optionee. Whether an authorized leave
          of absence, or absence in military or government service, shall
          constitute termination of an optionee's employment or other engagement
          shall be determined by the Board.

      B.  OTHER EMPLOYEE BENEFITS. The amount of any compensation deemed to be
          received by any employee or consultant as a result of the exercise of
          an option or the sale of shares received upon such exercise will not
          constitute compensation with respect to which any other employment (or
          other engagement) related benefits of such optionee are determined,
          including, without limitation, benefits under any bonus, pension,
          profit-sharing, life insurance or salary continuation plan, except as
          otherwise specifically determined by the Board or as a expressly
          provided for in the option agreement. The granting of an option shall
          impose no obligation upon the optionee to exercise such option.

X.     RIGHTS AS A SHAREHOLDER AND ACCESS TO INFORMATION. No optionee and no
       person claiming under or through any such optionee shall be, or have any
       of the rights or privileges of, a shareholder of the Company in respect
       of any of the shares issuable upon the exercise of any option granted
       under this Plan, unless and until the option is properly and lawfully
       exercised and a certificate representing the shares so purchased is duly
       issued to the optionee or to his or her estate. No adjustment shall be
       made for dividends or any other rights if the record date relating to
       such dividend or other right is before the date the optionee became a
       shareholder. Holders of options granted under this Plan and purchasers of
       shares upon the exercise of an option shall be provided annual financial
       statements. Upon written request to the Secretary of the Company, any
       optionee shall be entitled to inspect, at the executive offices of the
       Company, the information made available to shareholders of the Company
       pursuant to Sections 1500 et. seq. or any other applicable provisions of
       the California Corporations Code. The

                                       10
<PAGE>

      Company shall deliver to each optionee during the period for which he or
      she has one or more options outstanding, copies of all annual reports and
      other information which are provided to all shareholders of the Company,
      except the Company shall not be required to deliver such information to
      key employees whose duties in connection with the Company assure their
      access to equivalent.

XI.   MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. Subject to the limitations
      of this Plan, the Board may modify, extend or renew outstanding options
      granted under the Plan. Furthermore, the Board may, subject to the other
      provisions of this Plan, upon the cancellation of previously granted
      options having higher per share exercise prices, regrant options at a
      lower price; provided, however, that no such modification or cancellation
      and regrant of an option shall, without the written consent of the
      optionee, alter or impair any rights of the optionee under any option
      previously granted under the Plan.

XII.  USE OF PROCEEDS.  The proceeds received from the sale of shares of the
      Common Stock upon exercise of options granted under the Plan shall be used
      for general corporate purposes.

XIII. RESERVATION OF SHARES. The Company, during the term of this Plan, will at
      all times reserve and keep available such number of shares of its Common
      Stock as shall be sufficient to satisfy the requirements of the Plan and
      all options issued hereunder.

XIV.  TERM OF PLAN.

      A.  EFFECTIVE DATES. The Plan became effective when adopted by the Board
          on June 2, 1999, but no stock option granted under the Plan shall
          become exercisable unless and until the Plan shall have been approved
          by the Company's shareholders by the vote of the holders of a majority
          of the outstanding shares of the Company present and entitled to vote
          at a duly held meeting of the Company's shareholders (or by consent of
          the holders of the outstanding shares of the Company entitled to vote)
          in accordance with the requirements of the Company's Bylaws and the
          California Corporations Code. If such shareholder approval is not
          obtained within twelve (12) months after the date of the Board's
          adoption of the Plan, any incentive stock options previously granted
          under the Plan shall become non-statutory options and no further
          incentive stock options shall be granted. In addition, for purposes of
          compliance with the Rules of the California Commissioner of
          Corporations, Section 260.140.41(i), any stock options, whether
          incentive stock options or non-statutory stock options, which are
          exercised before shareholder approval is obtained, must be rescinded
          if shareholder approval is not obtained within twelve (12) months
          before or after the Plan is adopted and such shares shall not be
          counted in determining whether such approval is obtained. Subject to
          the foregoing limitation, options may be granted under the Plan at any
          time after the effective date and before the date fixed for
          termination of the Plan.

      B.  TERMINATION. Unless sooner terminated in accordance with Section 15,
          the Plan shall terminate upon the earlier of (i) the close of business
          on the last business day preceding the tenth (10th) anniversary of the
          earlier of (a) the date of the Plan's adoption by the Board occurs, or
          (b) the date of the Plan's approval by the Company's shareholders, or
          (ii) the date on which all shares available for issuance under the
          Plan shall have been issued pursuant to options granted under the Plan
          and none of such shares shall remain subject to contractual repurchase
          rights of the Company pursuant to "vesting" or other similar
          provisions. If the date of termination is determined under clause (i)
          above, then any options outstanding on such date shall continue to
          have force and effect in accordance with the provisions of the option
          agreements evidencing such options.

                                       11
<PAGE>

XV.   EARLY TERMINATION AND AMENDMENT OF THE PLAN. The Board may from time to
      time suspend or terminate the Plan or revise or amend it; provided,
      however, that, without the approval of the Company's shareholders at a
      duly held meeting of the Company's shareholders by the vote of a majority
      of the shares present and entitled to vote (or by written consent of the
      holders entitled to vote) in compliance with the requirements of the
      Company's Bylaws and the California Corporations Code, no such action of
      the Board shall:

      A.  INCREASES IN NUMBER OF SHARES SUBJECT TO THE PLAN. Increase the
          aggregate number of shares of the Common Stock which may be issued
          upon exercise of options granted under the Plan (except for
          adjustments made pursuant to Section 8 hereof);

      B.  CHANGES IN ELIGIBILITY. Change the designation of employees eligible
          to receive incentive stock options under the Plan;

      C.  PLAN DURATION. Extend the termination date beyond that provided in
          Section 14.2;

      D.  CHANGES NOT APPROVED BY LEGAL COUNSEL. Otherwise amend or modify the
          Plan (or outstanding options) under circumstances where shareholder
          approval is considered necessary in the opinion of legal counsel to
          the Company; or

      E.  CHANGES TO THIS SECTION. Amend this Section 15 to defeat its purposes.

In any event, no termination or amendment of the Plan may adversely affect any
then outstanding Option or any unexercised portion thereof, without the consent
of the Optionee, unless such termination or amendment is required to enable an
Option designated as an Incentive Stock Option to qualify as an Incentive Stock
Option or is necessary to comply with any applicable law, regulation or rule.

                                       12
<PAGE>

                               AMENDMENT TO THE
                      QSPACE, INC. 1999 STOCK OPTION PLAN

                                   RECITALS

     A.  On August 24, 2001, iPlace, Inc., a Delaware corporation ("iPlace") was
merged into a wholly owned subsidiary of Homestore.com, Inc., a Delaware
corporation ("Homestore"), pursuant to that certain Agreement and Plan of Merger
dated August 7, 2001, as amended (the "Merger Agreement");

     B.  The Homestore Board of Directors (the "Board") on August 3, 2001, (1)
approved the assumption by Homestore of the QSpace, Inc. 1999 Stock Option Plan
(the "Plan"), which was previously assumed by iPlace, and all of the then
outstanding options granted under the Plan and (2) approved the conversion of
options outstanding under the Plan to options to acquire Homestore common stock
as contemplated by the Merger Agreement;

     C.  It is advisable to amend the Plan to reflect Homestore's assumption of
the Plan.

                                   AMENDMENT

     The Plan is hereby amended as follows:

     1.   Section 1 "Purpose and Types of Options" is hereby amended it its
                     ----------------------------
entirety to read as follows:

     "This 1999 Stock Option Plan (the "Plan") was originally intended to
increase the incentives of, and encourage stock ownership by, officers,
directors, employees, consultants and other independent contractors (including
members of the QSpace, Inc. board of directors who were not employees of QSpace,
Inc.) providing services to QSpace, Inc., a California corporation, or to
corporations which were or became subsidiary corporations of QSpace. As used in
this Plan, the terms "Parent Corporation" and "Subsidiary Corporation" shall
                      ------------------       ----------------------
have the meanings set forth in Sections 424(e) and (f), respectively, of the
Internal Revenue Code of 1986, as amended ("Internal Revenue Code").  The Plan
                                            ---------------------
was intended to provide such officers, directors, employees and consultants and
other independent contractors with a proprietary interest (or to increase their
proprietary interest) in QSpace, and to encourage them to continue their
employment or engagement by QSpace or its subsidiaries.  The Plan and the
outstanding options under the Plan were subsequently assumed by iPlace, Inc. and
on August 24, 2001, pursuant to the Agreement and Plan of Merger among
Homestore.com, Inc. (the "Company"), iPlace, Inc. and certain stockholders of
                          -------
iPlace, Inc., the Plan and outstanding options granted under the Plan as of such
date were assumed by the Company, and such outstanding options were converted
into options to purchase shares of the Company's common stock, par value $.001
(the "Common Stock").  Options granted pursuant to the Plan, at the discretion
      ------------
of QSpace's board of directors, are intended to be either incentive stock
options within the meaning of Section 422 of the Internal Revenue Code, or
options that do not so qualify as incentive stock options and which are
referenced herein as nonqualified stock options.  This Plan is intended to be a
written compensatory plan within the meaning of Rule 701 of the Securities Act
of 1933, as

                                      13
<PAGE>

amended ("Securities Act").  As of August 24, 2001, no additional options shall
          --------------
be granted under this Plan."

     2.   Section 2 "Stock." is hereby amended in its entirety to read as
                     -----
follows:

     "On or after August 24, 2001, the maximum aggregate number of shares of
Common Stock that may be issued in connection with options granted under this
Plan is 947, which is equal to the number of shares that were subject to
outstanding options under the Plan immediately prior to its assumption by the
Company, as adjusted in accordance with the Merger Agreement to reflect the
conversion of the shares to shares of the Company's Common Stock (subject to
further adjustment as provided in Section 8)."

     3.   The first sentence of Section 3 "Administration" is hereby amended to
read as follows:  "The Plan shall be administered by the Company's Board of
Directors (the "Board").
                -----

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