Document:

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                                                                    EXHIBIT 10.4

                           FORM OF SERVICE AGREEMENT

     THIS SERVICE AGREEMENT (this "Agreement") is entered into as of August __,
2000 (the "Effective Date") by and between BRE Properties, Inc., a Maryland
corporation ("Owner"), and VelocityHSI, INC., a Delaware corporation
("Provider").  Owner and Provider are each referred to as a "Party" or
collectively as the "Parties."  All capitalized terms have the meanings set
forth herein unless otherwise indicated.

                                R E C I T A L S
                               ----------------

     A.   Provider provides an assortment of high speed data and localized
multiple dwelling unit ("MDU") services, including high speed Internet access
through its VelocityHSI service, community specific portals through its
KlickLANE (TM) service and e-mail services and Web pages individualized for
particular communities through its ZippityKlik (TM) service (collectively, the
"VelocityHSI Services");

     B.   Owner owns, operates, leases and manages the MDU(s) detailed on
Exhibit "A" attached hereto (each a "Complex" and collectively, the
-----------
"Complexes");

     C.   Provider and Owner desire to provide for the provision of VelocityHSI
Services to the Complexes on the basis of, and subject to the terms and
conditions set forth below.

                               A G R E E M E N T
                               -----------------

     NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, and other good and valuable consideration, the Parties hereto
agree as follows:

1.   Term of Agreement.  This Agreement shall commence as of the Effective Date
     ------------------
     and shall continue until terminated by either Party (the "Term"). Owner may
     terminate the Agreement at any time after the earlier of (i) six (6) months
     from the date hereof or (ii) thirty (30) days after completion of the
     initial installation described in Section 2.1, upon thirty (30) days prior
                                       -----------
     written notice to Provider and Provider may terminate the Agreement at any
     time upon one hundred eighty (180) days prior written notice to Owner.

2.   Provider Obligations.  During the Term, Provider will perform each of the
     ---------------------
     following obligations:

     2.1  Initial Installation.  As soon as practicable after the Effective
          ---------------------
          Date, Provider shall install the Infrastructure, as hereafter defined,
          in each Complex. The exact configuration of the Infrastructure for
          each complex shall be determined by Provider based upon the factors
          unique to each Complex, including but not limited to, the construction
          style, size, existing data and telecommunications systems and Complex
          amenities. Provider shall provide Owner with a description of the
          system to be installed. It is anticipated that this process will take
          thirty (30) to forty-five (45) days.

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     2.2  VelocityHSI Services.  Upon substantial completion of the
          ---------------------
          Infrastructure, and for the entire Term, Provider shall, consistent
          with the terms and conditions contained in this Agreement and subject
          to a resident's compliance with Provider's generally applicable
          Subscriber's agreement, Provider shall provide any of the generally
          available VelocityHSI Services to any Complex resident so requesting.
          All VelocityHSI Services shall be provided in compliance with the
          standards detailed on Exhibit "B" and consistent with industry
                                -----------
          standards. The Parties agree that the exact package of services
          included with the VelocityHSI Services may be modified from time to
          time in Provider's discretion due to system upgrades and changes in
          technology, in accordance with the terms of this Agreement.

     2.3  Web Portal Service.  Provider will design, host and maintain a Complex
          -------------------
          specific community web portal for each Complex (each a "Web Portal").
          The Web Portal will provide information regarding the Complex
          amenities and special programs, links and access to Complex
          maintenance service requests and messaging to and from the Complex
          management for the Complex residents. Provider shall be responsible
          for periodically revising and providing such reasonable modifications,
          and maintenance as Owner may request, including, updating and posting
          current events, notices, and information for the Complex residents;
          provided that the exact design, layout and content at the Web Portal
          shall be determined by Provider.

          (a)  Each Web Portal shall be co-branded with Provider's and Owner's
               marks, logo's and/or name, and may contain such other banners,
               advertising, content or links as Provider may determine, in its
               discretion.

          (b)  Notwithstanding the foregoing:

               (i)  Provider shall comply with all reasonable requests of Owner
                    regarding inclusion of content specific to the Complex,
                    Owner, or other Complexes, including without limitation,
                    current events, notices, promotions and similar information.
                    Provider shall consult with Owner, and consider all
                    reasonable requests regarding the initial lay out and design
                    of each Web Portal.

               (ii) Provider shall not knowingly permit or use any (1) content
                    which contains obscene material, sexual explicit adult
                    programming, or indecent material as defined in 47 C.F.R.
                    76.701(g); (2) any material soliciting or promoting unlawful
                    activity; or (3) content that may or could have been subject
                    to the telecommunications act of 1996, relating to the
                    scrambling of sexually explicit adult video service
                    programming.

          (c)  Each Web Portal will be segmented into one or more areas as
               Provider determines. The basic area, containing information and
               basic services related to the Complex shall be accessible to all
               Subscribers at no charge. Additional portions of the Web Portal
               may be accessible on a restricted

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               basis, whether by upgraded subscription, pay-per-view, or
               otherwise, as Provider determines, provided, however, that any
               such services shall be made available to all residents of the
               Complex upon the same terms and conditions.

     2.4  Owner Internet Connection and Services.  Provider shall provide Owner
          ---------------------------------------
          with one high speed Internet connection for each Complex during the
          entire Term for use by Owner's employees and agents in connection with
          management and operation of the Complexes. Provider shall include a
          dedicated, password protected, portion of each Complex's Web Portal
          for use by Owner's employees.

     2.5  Subscriber Support.  Provider will provide reasonable onsite technical
          -------------------
          support for Subscribers, at reasonable times designated by Provider
          and as detailed in Exhibit "C", including assistance with initial or
                             -----------
          subsequent configuration of Subscriber supplied equipment and 24-7
          toll-free telephone subscriber assistance.

     2.6  Permits Licenses, etc.  Provider shall possess and maintain during the
          ----------------------
          entire Term all material permits, including, without limitation, any
          building or use permits relating to the Infrastructure, licenses,
          franchise rights, trademarks, trademark rights, trade names, trade
          name rights, copyrights, and all other intellectual property rights,
          including requisite licenses or rights from third parties which are
          required to provide the VelocityHSI Services to each Complex in
          accordance with this Agreement.

     2.7  Insurance Obligations.  Provider shall procure and maintain the
          ----------------------
          following insurance policies in no less than the following minimum
          policy amounts (or such other minimum amounts, if higher, as are
          required by law):

          (a)  All risk property insurance covering the full replacement cost of
               the Infrastructure and all other personal property and
               improvements installed or placed in or on the Complexes by
               Provider.

          (b)  Commercial General Liability Insurance with policy limits of at
               least one million dollars ($1,000,000) per occurrence, and two
               million dollars ($2,000,000) aggregate.

          (c)  Workman's compensation insurance with limits in compliance with
               the laws of the State in which each Complex is located.

          (d)  Vehicular liability insurance with personal injury limits of not
               less than five hundred thousand dollars ($500,000) for one person
               and one million dollars ($1,000,000) for two or more persons and
               vehicular liability property damage insurance with a limit of not
               less than fifty thousand dollars ($50,000) to cover all vehicle
               accidents.

          (e)  The liability and property policy shall each name Owner as an
               additional insured, insure on an occurrence and not a claims made
               basis, be issued by companies licensed to do business in the
               state in which each Complex is

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               located, provided that the insurer will endeavor to provide
               thirty (30) days written notice to Owner prior to cancellation,
               and contain a cross liability/ severability of interests clause
               and a contractual liability endorsement (any policy issued to
               Owner providing duplicate or similar coverage shall be deemed
               excess over Provider's policies). Any all risk property insurance
               obtained by Owner and Provider shall include a waiver of
               subrogation by the insurers and all rights based upon an
               assignment from its insured against Owner or Provider, their
               officers, trustees, directors, employees, agents, invitees and
               contractors in connection with any loss or damage thereby insured
               against.

          (f)  Provider warrants that it meets or exceeds all insurance
               requirements stated herein and those that are required by the
               laws in the State in which each Complex is located.

     2.8  Marketing Support.  Provider shall provide each Complex on-site
          ------------------
          training, reference material and telephone support for the Complex
          staff, marketing and sales support materials, and a demonstration
          Kiosk for display in the Complex's common area.

3.   Owner Obligations.  During the entire Term, Owner will perform and observe
     ------------------
     each of the following obligations:

     3.1  Use of Equipment Room.  Owner shall allow Provider access and use of a
          ----------------------
          lockable equipment room in each Complex as reasonably required for the
          Infrastructure.

     3.2  Access to Property.  Owner shall, at no cost to Provider, provide
          -------------------
          Provider and Provider's employees, authorized agents and contractors
          with reasonable access to all portions of the Complexes as may be
          necessary to fulfil Provider's obligations hereunder, including
          without limitation all installation, service, maintenance and repair
          obligations. Such access shall include on demand access to mechanical
          rooms or similar areas of the Complex. To the extent that access to
          any leased unit is required, Provider agrees to comply with any policy
          or requirement generally applicable to Owner's maintenance personnel,
          including any advanced notice procedures. As to all other portions of
          each Complex, Provider agrees to comply with all of Owner's reasonable
          access and security policies such as contacting a Complex manager when
          on site.

     3.3  Permit/Information Assistance.  Owner shall provide Provider with
          ------------------------------
          access to all information and plans regarding the Complexes reasonably
          required for the installation of the infrastructure and providing of
          services hereunder, including, without limitation any "as built" or
          architectural information of the Complexes and access to any
          individuals or entities who regularly perform service work on the
          Complexes' systems, including electrical, HVAC, and telecommunications
          systems. Furthermore, Owner shall, at Provider's sole cost and
          expense, take all reasonable actions, including executing permit
          and/or use applications, to assist

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          Provider in obtaining all permits or governmental approvals associated
          with the installation, and maintenance of the Infrastructure, and
          provision of the VelocityHSI Services.

     3.4  Marketing/Promotion.  Owner agrees to use its best efforts to
          -------------------
          maximize the use of VelocityHSI Services by residents of the
          Complexes. These efforts will include, but not be limited to,
          promotional activities such as the display of print advertising and
          newsletters, allowing Provider use of common areas for promotional
          functions and such other efforts and activities as Provider may
          reasonably request. Owner shall, as condition to leasing a unit,
          require all tenants to execute the "Free Services" portion of the
          standard form Subscription Agreement.

     3.5  Cooperation with Inventory.  Owner shall use its best efforts to
          ---------------------------
          assist Provider in preventing theft and destruction of all portions of
          the Infrastructure including Infrastructure located in the
          Subscriber's unit, such as set top access units, and wireless
          keyboards. Such efforts shall include, without limitation verifying
          that all Infrastructure in a residential unit is accounted for and
          free from obvious damage after a Subscriber vacates a unit.

     3.6  Cooperation to Prevent Fraudulent Use.  If Owner becomes aware of any
          --------------------------------------
          illegal access of the VelocityHSI Services, Owner agrees to advise
          Provider about residents who are illegally obtaining such service. If
          access to an individual unit is needed to confirm such illegal use,
          Owner shall cooperate to the extent permitted by state and Federal
          laws governing the access to an individual unit.

4.   Revenue Allocation.  Owner shall be entitled to receive the following
     -------------------
     payments relating to the VelocityHSI Services.

     4.1  Subscriber Fees.  Provider shall pay Owner ten percent (10%) of all
          ---------------
          gross revenue received by Provider from residents of the Complexes who
          subscribe for the VelocityHSI Services (each a "Subscriber"), subject
          to the limitations set forth in Section 6.3. Additionally, for each
          new Subscriber enrolled by Owner or Owner's designee, Provider shall
          pay Owner or such designee twenty-five ($25) dollars.

     4.2  Advertising and Commission Revenue.  Provider shall pay Owner ten
          -----------------------------------
          percent (10%) of all gross revenue received by Provider attributable
          to the Complexes' Web Portal from (i) advertising displayed on the Web
          Portal or (ii) any commission, referral fee, or similar payment from
          any unaffiliated vendor or service provider received by reason of a
          Subscriber's use or purchase of such third party's good or services
          (collectively the "Third Party Revenue").

     4.3  Payment Procedures.
          ------------------

          (a)  To the extent that Third Party Revenue is generated as a result
               of advertisements or the use/sale of, goods or services offered
               or displayed on the Web Portal of apartment projects other than
               the Complexes, Owner

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               shall be entitled to receive a pro rata portion of the gross
               revenue on a per project, per "hit," per display or any other
               reasonable basis so long as such method is consistently applied
               to all Complexes receiving a portion of a particular revenue
               source. To the extent commercially reasonable, it is Provider's
               intention to allocate Third Party Revenue to the complex
               generating the revenue.

          (b)  For purposes of this Section 4, "gross revenue" shall mean, as
                                    ---------
               it relates to Section 4.2, any third party revenue actually
                             -----------
               received by Provider from third parties, other than Subscribers,
               net of sales commissions, discounts, returns, allowances, or
               similar adjustments, sales, use or similar taxes, or other
               reasonable out-of-pocket expenses incurred in procuring such
               revenue but exclusive of any other expenses, including
               programming, hosting, hardware or administrative costs and, as to
               Section 4.1, any revenue actually received by Provider for fees
               ------------
               paid by Subscribers for the use of, or access to the VelocityHSI
               Services, plus the tax gain on any hardware sold or leased to a
               Subscriber less discounts, returns, allowances or similar
               adjustments.

          (c)  Provider shall remit to Owner all payments due under this Section
                                                                         -------
               4, allocable to the immediately preceding month, together with a
               -
               detailed accounting thereof on or before the twenty-fifth of each
               month. Such accounting shall detail:

               (i)  The total Subscriber revenue by major category from each
                    Complex (such as subscription, pay-per-use, non-recurring
                    fees, pass through expenses).

               (ii) A breakdown of the advertising revenue detailing the revenue
                    allocable to each advertiser and any calculations described
                    in Section 4.3(a).
                       --------------

     4.4  Maintenance and Inspection of Records.
          -------------------------------------

          (a)  Provider shall keep complete and accurate books and records and
               related documentation in accordance with generally accepted
               accounting principles and this contract to support and document
               all amounts becoming payable to Owner hereunder and concerning
               revenues described in Sections 4.1 and 4.2. Provider shall
                                     --------------------
               promptly, written request from Owner, notify Owner of the
               location at which such records are currently located. Provider
               shall maintain its books and records for such period or periods
               of time as may be required by the rules and regulations of the
               Internal Revenue Service applicable to the retention of business
               records.

          (b)  From time to time during the Term and for a period of one (1)
               year thereafter, Owner shall have the right, to be exercised by
               Owner or its

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               designee upon thirty (30) days notice to Provider, but not more
               often than annually, to audit the books and records of Provider
               as necessary to verify amounts payable to Owner under this
               Agreement. Provider shall make available to Owner or its designee
               such books and records as are relevant to the payments due Owner
               under this Agreement or as may be reasonably requested by Owner
               to perform such audit. Provider shall immediately pay to Owner
               any unpaid amounts due to Owner disclosed by such audit. If the
               audit indicates Provider overpaid Owner, Provider shall be
               entitled to deduct such amounts from future payments due
               hereunder. If the audit discloses an underpayment to Owner for a
               calendar quarter of more than two percent (2%) of the total
               amount payable to Owner in that calendar quarter, as verified by
               an independent auditing firm, Provider shall pay all reasonable
               costs and expenses of such independent auditor that relate to
               such audit; otherwise Owner shall pay such costs.

5.   Infrastructure Ownership Operation and Repair.
     ---------------------------------------------

     5.1  Infrastructure.  Provider shall, at its sole cost and expense,
          --------------
          install, operate and maintain all hardware and on-site equipment, up
          to the point of connection with the Subscriber's hardware, necessary
          for, or associated with, providing the VelocityHSI Services (all such
          Provider equipment is collectively referred to as the
          "Infrastructure"). All Infrastructure will be installed at mutually
          agreed upon location(s) and utilizing agreed upon methods. The
          Infrastructure, and any personal property on any Complex belonging to
          Provider, shall be there at the sole risk of Provider, and Owner shall
          not be liable for damage thereto or theft, misappropriation or loss
          thereof, except due to Owner's gross negligence or willful misconduct.
          Provider shall perform all construction and maintenance of the
          Infrastructure in a safe, good and workmanlike manner in such a way as
          to minimize interference with the operation of the Complex;

     5.2  Operation, Maintenance and Repair.
          ---------------------------------

          (a)  Provider shall provide the Infrastructure, the VelocityHSI
               Services and otherwise perform its obligations hereunder in
               accordance with, in all material respects, federal, state and
               local laws, if any, which may be applicable thereto. Provider, at
               its sole cost and expense, shall promptly repair all damage to
               the Complex and all improvements thereon caused by Provider and
               its agents, employees and contractors to substantially original
               condition, to the reasonable satisfaction of Owner.

          (b)  Provider agrees to keep the Infrastructure in good working order,
               repair and condition throughout the term of the Agreement, and
               not to materially disrupt or interfere with other providers of
               services in the Complex or with any resident's use and enjoyment
               of their leased premises or the common areas of the Complexes or
               with Owner's operation of the Complex except to the extent
               Provider is in compliance, and subject to, the provisions of
               Section 3.2 this Section 5.
               -----------      ---------

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     5.3  Removal of Infrastructure upon Termination.  Upon expiration or
          ------------------------------------------
          earlier termination of this Agreement, Provider shall have the right
          (subject to Provider's obligation to repair damage to the Complex as
          set forth in Section 5.2(a) above), at its expense, to remove the
                       --------------
          Infrastructure, if any, from the Property within sixty (60) days from
          the date of such expiration or termination.

6.   Provision of VelocityHSI Services to Subscribers.
     -------------------------------------------------

     6.1  Resident Support and Installation.  Support and installation services
          ---------------------------------
          provided by Provider shall at all times conform with the service
          levels specified in Exhibit "C". All such responses and support
                              -----------
          provided by Provider shall be in material compliance with governmental
          laws and/or regulations and within general industry standards.
          Requests for individual installations of VelocityHSI Services shall be
          completed within a reasonable timeframe. Provider shall not enter a
          leased unit except in compliance with Section 3.2. Provider will have
                                                -----------
          its employees, agents and contractors carry identification badges when
          on any Complex, in order that on-site management and residents of the
          Complex may confirm that such persons are on the Complex on behalf of
          Provider pursuant to this Agreement.

     6.2  Subscriber Access Pricing.  The initial price for subscriptions to the
          -------------------------
          VelocityHSI Services and for ancillary changes is set forth in Exhibit
                                                                         -------
          "D". This pricing may be modified in Provider's sole and absolute
          ---
          discretion provided, however, that Provider shall not, without Owner's
          prior written approval, increase or decrease the price of any
          subscription package by more than the greater of (I) ten dollars ($10)
          per month or (ii) twenty five percent (25%) in the aggregate during
          any twelve (12) month period. Such access shall be provided at a
          price, service quality and content comparable to the services of other
          companies which provide similar high-speed data access technologies
          and services similar to the VelocityHSI Services. Subscribers will be
          charged and billed individually by Provider for any VelocityHSI
          Services they receive, and Provider shall be solely responsible for
          all billing and collection therefor.

     6.3  Real Estate Investment Trust Protections.  Notwithstanding any
          ----------------------------------------
          provision to the contrary in this Agreement:

          (a)  (i) Provider shall not provide any services to Subscribers unless
               such services are also available to such Subscribers from other
               telecommunications service providers, (ii) Provider shall not
               provide any services to any Subscribers that it does not also
               provide to other customers who are not Subscribers, (iii) any
               services provided by Provider to a Subscriber will not be
               customized to fit the specific needs of such Subscriber, (iv)
               this Agreement is a bona fide agreement, negotiated at arm's
               length between Owner and Provider, and is of a type customarily
               entered into by landlords and service providers in the geographic
               area in which Owner's Complexes are located, (v) the services
               offered or provided by Provider to Subscribers will be selected
               by Subscribers from a

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               menu of services, all of which are generally available to other
               customers of Provider, (vi) Provider shall not provide any
               services to residents of a Complex unless such services are of a
               type which are customarily rendered to tenants of residential
               apartment buildings in the geographic areas in which the Complex
               is located and (vii) Provider shall not charge any Subscribers an
               amount for Services which is based on the net income or profits
               of any person. Provider shall not provide any services (the
               "Outside Services") to residents of the Complexes which are
               beyond the scope of the VelocityHSI Services described in this
               Agreement, subject to the limitations set forth in this Section
               6.3(a), without Owner's permission, which permission may be given
               or withheld in Owner's sole discretion.

          (b)  For any Outside Services provided by Provider to residents beyond
               those VelocityHSI Services described in Section 6.3(a) and
               approved by Owner, or any services provided to nontenants through
               the Complex, except as otherwise agreed to by Owner and Provider
               (i) the cost of the additional services must be borne by
               Provider, (ii) a separate charge must be made for such services
               pursuant to a separate service agreement with the service
               recipient, (iii) the amount of the separate charge must be
               received and retained only by Provider and shall not be included
               in the calculation of the amount of gross revenues payable to
               Owner, and (iv) Provider must be adequately compensated for such
               services ((i) through (iv) above are referred to below as the
               "Outside Service Requirements"). If Owner permits Provider to
               perform an Outside Service subject to the Outside Service
               Requirements, and outside tax counsel selected by Owner
               subsequently concludes that Owner's participation in the gross
               revenues generated by such Outside Service should not jeopardize
               the tax status as a real estate investment trust of Owner or the
               qualification of its revenues as "rents from real property" for
               federal income tax purposes, Owner may request that such gross
               revenues thereafter be included in the determination of
               Provider's gross revenues for purposes of calculating the amount
               payable to Owner pursuant to this Agreement. If Provider does not
               agree to any such request, Owner shall be entitled to retract the
               approval it granted to Provider to provide such Outside Service,
               in which case Provider shall cease to provide such Outside
               Service. Outside Services offered by Provider pursuant to the
               terms of this Section 6.3(b) shall be set forth in written
               addendum to this Agreement.

7.   Grant of Exclusive License.  Owner shall not accept or agree to accept any
     --------------------------
     commission, fee or other compensation from any other party providing
     services similar to the VelocityHSI Services to the Complexes, nor shall
     Owner provide or allow for the providing of marketing, promotion, sales, or
     support of marketing or sales of services similar to the VelocityHSI
     Services in or on the Complexes.

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8.   Public Announcements.  Neither Party shall make or allow any media
     --------------------
     releases, public announcements, and/or public disclosures by either Party
     or its employees, agents or representatives relating to this Agreement or
     the subject matter hereof without the express written consent of the other
     Party. The disclosing Party shall provide the other Party with the proposed
     text and medium of the announcement at least five (5) business days prior
     to release. If the non-disclosing Party has not objected to the release
     within three (3) business days, it shall be deemed approved. This
     restriction shall not apply to any announcement beyond the control of this
     disclosing Party, or that is otherwise permitted pursuant to Section 12.

9.   Complex Title Matters.
     ----------------------

     9.1  Execution and Recording of Memorandum.  Concurrently with the
          --------------------------------------
          execution of this Agreement, Owner shall execute, and Provider shall
          be entitled to record, a Memorandum of Existence of VelocityHSI
          Services and Right of Entry Agreement in substantially the terms
          attached hereto as Exhibit "E" (the "Memorandum") for each
                             -----------
          Complex. The Memorandum shall be prepared and executed in a form
          acceptable for filing in the appropriate local recorder's office. The
          Parties agree that the purpose of the Memorandum is solely to provide
          notice of this Agreement. In the event of a conflict between the
          Agreement and the Memorandum, this Agreement shall control.

     9.2  Execution and Recording of Quit Claim Deed.  Concurrently with the
          -------------------------------------------
          execution of this Agreement, Owner and Provider shall execute and
          acknowledge a quit claim deed in the form of Exhibit "F" attached
                                                       -----------
          hereto (the "Quit Claim Deed") for each Complex. The Quit Claim Deed
          shall be prepared and executed in a form acceptable for filing in the
          appropriate local recorder's office. Upon termination or expiration of
          this Agreement, and no sooner, Owner may, but only in good faith and
          concurrently with giving written notice to Provider, (1) file the
          executed Quit Claim Deed in the appropriate recorder's office, or (2)
          file any other document in such recorder's office, which states, among
          other things, that this Agreement is terminated and the easement and
          rights of access, and any other interests in the Complex (exclusive of
          Provider's ownership of the Infrastructure), granted to Provider, are
          terminated.

     9.3  Subordination and Non-Disturbance.  Provider agrees that, subject to
          ---------------------------------
          the concurrent execution of a non-disturbance agreement in favor of
          Provider, Provider will cause this Agreement and all rights hereunder
          to be subject and subordinate to all leases, mortgages, and/or deed of
          trust which may now or hereafter affect the Complex, and to all
          renewals, modifications, consolidations, replacements and extensions
          thereof. Provider shall execute such documents as may be reasonably
          required to effect the provisions of this Section.

10.  Ownership of Property.
     ---------------------

     10.1 Owner acknowledges and agrees that as between Owner and Provider,
          Provider owns all right, title and interest in and to the VelocityHSI
          Services and related

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          products, including and not limited to trademarks, service marks,
          proprietary information and all other intellectual property,
          including, without limitation, all compilation copyrights with respect
          to VelocityHSI (to the extent not copyrightable by a third party) and
          other content relating to VelocityHSI Services as the same may be
          modified, adjusted or added to at any time and from time to time.
          Except as otherwise expressly provided herein, Owner shall not have or
          acquire any ownership interest in or to the Infrastructure or any
          property relating to the VelocityHSI Services.

     10.2 The foregoing Section 10.1 shall not apply to the content provided by
                        ------------
          Owner for display on, or incorporation in, the Web Portal. Owner
          represents and warrants that it has full authority, through ownership
          or otherwise, to display and utilize and cause Provider to display and
          utilize all content provided to Provider for incorporation in any Web
          Portal.

     10.3 Neither Party shall use the trademarks, service marks or trade names
          of the other or its affiliates in any advertising or promotional
          material or otherwise without the express prior written permission of
          the other Party, and except as otherwise specifically contemplated by
          this Agreement.

11.  Taxes.  Provider shall pay any taxes, assessments and other governmental
     -----
     charges or fees, attributable to its use of the Complexes or provision of
     the Services, including any increase in real property taxes, use and
     occupancy taxes, sales or other taxes applicable to its payments pursuant
     to this Agreement (other than Owner's franchise, income taxes or estate
     taxes), and any applicable taxes or assessments against the personal
     property owned by Provider located in the Building. Upon request, Provider
     shall provide Owner with timely evidence satisfactory to Owner that all
     taxes due and payable for its property have been paid.

12.  Confidentiality Obligations.
     ---------------------------

     12.1 Confidential Information.  The receiving Party shall hold all
          ------------------------
          Confidential Information in confidence. "Confidential Information"
          shall mean (a) any information clearly marked "Proprietary" or
          "Confidential"; (b) any information which by its nature or character
          is clearly of the type the disclosing Party considers confidential;
          and (c) any information regarding Owner's residents. Information which
          is conveyed orally and does not meet the requirements of Subsections
                                                                   -----------
          (b) or (c), above, shall be deemed confidential only if prior to
          -----------------
          disclosure it is indicated as being confidential and written
          confirmation identifying the confidential or proprietary information
          is provided to the receiving Party within ten (10) business days after
          it was discussed orally.

     12.2 Restrictions.  Each Party shall use reasonable efforts and
          ------------
          procedures, and at least the same efforts and procedures as are used
          with such Party's own Confidential Information, to maintain the
          confidentiality of Confidential Information disclosed to it and not
          show or otherwise disclose such Confidential Information without the
          prior written consent of the disclosing Party. Each Party shall use
          the

                                       11
<PAGE>

          Confidential Information solely for purpose of performing its
          obligations under this Agreement. Unless approved in advanced by the
          non-disclosing Party, except for the existence of this Agreement, the
          terms and provisions of this Agreement shall remain strictly
          confidential and shall not be disclosed to any third party other than
          a Party's attorneys, accountants, other professional advisers,
          potential purchasers of the Properties, and unless otherwise required
          by law.

     12.3 Authorized Disclosures.  Notwithstanding the obligations described in
          ----------------------
          Section 12.2, above, neither Party shall have any obligation to
          ------------
          maintain the confidentiality of any Confidential Information which:

          (a)  based upon advice of legal counsel, the Party is requested to
               disclose to comply with any applicable law or regulation;

          (b)  is or becomes publicly available by other than unauthorized
               disclosure by the receiving Party;

          (c)  is independently developed by the receiving Party;

          (d)  is received from a third party who has lawfully obtained such
               Confidential Information without a confidentiality restriction;
               or

          (e)  if required by any court of competent jurisdiction or other
               governmental authority, the receiving Party may disclose to such
               authority, data, information or material involving or pertaining
               to Confidential Information to the extent required by such order,
               provided that the receiving Party shall first have used its
               reasonable efforts to notify the disclosing Party so that the
               disclosing Party may seek to maintain the confidentiality of such
               data, information or materials.

13.  VelocityHSI Services Warranty and Limitation of Liability.
     ---------------------------------------------------------

     13.1 Limitations of Liability.  EXCEPT FOR CERTAIN PRODUCTS AND SERVICES
          ------------------------
          SPECIFICALLY IDENTIFIED AS BEING OFFERED BY PROVIDER, PROVIDER DOES
          NOT CONTROL ANY MATERIALS, INFORMATION, PRODUCTS OR SERVICES ON THE
          INTERNET. THE INTERNET CONTAINS UNEDITED MATERIALS, SOME OF WHICH IS
          SEXUALLY EXPLICIT OR MAY BE OFFENSIVE. PROVIDER HAS NO CONTROL OVER
          AND ACCEPTS NO RESPONSIBILITY FOR SUCH MATERIALS. PROVIDER ASSUMES NO
          RESPONSIBILITY AND RISK FOR USE OF THE VELOCITY SERVICES AND THE
          INTERNET AND IS NOT RESPONSIBLE FOR EVALUATING THE ACCURACY,
          COMPLETENESS, AND USEFULNESS OF ALL SERVICES, PRODUCTS, AND OTHER
          INFORMATION, AND THE QUALITY AND MERCHANTABLENESS OF ALL MERCHANDISE
          PROVIDED THROUGH THE VELOCITY SERVICES OR THE INTERNET.

                                       12
<PAGE>

     13.2 THE VELOCITY SERVICES ARE PROVIDED ON AN "AS IS" AND "AS AVAILABLE"
          BASIS. PROVIDER DOES NOT WARRANT OR REPRESENT THE VELOCITY SERVICES
          WILL OPERATE ON UNINTERRUPTED, ERROR-FREE BASIS OR BE FREE OF VIRUSES,
          OR OTHER HARMFUL COMPONENTS. EXCEPT AS EXPRESSLY PROVIDED OTHERWISE IN
          THIS AGREEMENT, PROVIDER MAKES NO EXPRESS WARRANTIES AND OWNER WAIVES
          ALL IMPLIED WARRANTIES INCLUDING, BUT NOT LIMITED TO WARRANTIES OF
          TITLE, NONINFRINGEMENT, MERCHANTABILITY AND FITNESS FOR A PARTICULAR
          PURPOSE REGARDING ANY MERCHANDISE, INFORMATION OR SERVICE PROVIDED
          THROUGH OR AS PART OF THE VELOCITY SERVICES OR THE INTERNET GENERALLY.
          NO ADVICE OR INFORMATION GIVEN BY PROVIDER OR ITS REPRESENTATIVES
          SHALL CREATE A WARRANTY UNLESS EXPRESSLY SET FORTH IN THIS AGREEMENT.

     13.3 Limitation of Remedies.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS
          ----------------------
          AGREEMENT, NEITHER PROVIDER NOR OWNER SHALL BE LIABLE FOR ANY REASON
          FOR INCIDENTAL, SPECIAL, PUNITIVE, INDIRECT, EXEMPLARY, MULTIPLE OR
          CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST PROFITS OF
          ANY NATURE WHATSOEVER.

14.  Indemnification. Each Party (the "Indemnifying Party") agrees to indemnify,
     ---------------
     protect, defend and hold the other Party, and its successors, officers,
     directors, employees, agents and assigns (the "Indemnified Party") harmless
     from and with respect to any loss or damage (including reasonable
     attorney's fees and costs), arising out of or relating to any suit or
     proceeding brought against the Indemnified Party insofar as such suit or
     proceeding shall be based upon a claim by a third party alleging facts or
     circumstances or based upon a claim of wrongdoing by the Indemnifying
     Party, provided the Indemnified Party gives the Indemnifying Party prompt
     written notice of any such claim and provides the Indemnifying Party such
     reasonable cooperation and assistance as the Indemnifying Party may request
     from time to time in the defense thereof. The Indemnifying Party shall have
     the right to assume defense of the claim with counsel reasonably acceptable
     to the Indemnified Party. The Indemnified Party shall be entitled to
     participate in the defense of the claim with its own counsel at its sole
     expense. Neither Party shall enter into a settlement that imposes liability
     on the other without the other Party's consent, which consent shall not be
     unreasonably withheld, delayed or conditioned.

15.  Default, Termination
     --------------------

     15.1 Default.  Upon the occurrence of any of the following events, a Party
          --------
          shall be deemed to be in default under this Agreement:

          (a)  Material failure to perform the defaulting Party's obligations
               hereunder, including but not limited to, Provider's failure to
               (i) maintain the service standards set forth in Section 6
                                                               ---------
               hereof,(ii) make the payments to Owner set

                                       13
<PAGE>

               forth in Section 4  hereof and (iii) comply with the service
                        ---------
               limits set forth in Section 6.3;
                                   -----------

          (b)  The defaulting Party's insolvency, the making of a general
               assignment for the benefit of its creditors, suffering or
               permitting the appointment of a receiver or similar officer for
               its business or assets or availing itself of, or becoming subject
               to, any proceeding under the United States Federal Bankruptcy
               Laws or any federal or state statute relating to solvency or the
               protection of the rights of creditors; or

          (c)  Making of any warranty, representation, statement or response in
               connection with this Agreement which was untrue in any material
               respect on the date it was made by the defaulting Party.

     15.2 Remedies.  In the event the defaulting Party fails to cure any
          --------
          default set forth hereunder within thirty (30) days, except for (a)
          defaults under Section 15.1(b) which shall have a cure period of
                         ---------------
          ninety (90) days, and (b) defaults under Section 6 which shall have
                                                   ---------
          a cure period of five (5) days, and after written notice of such
          default by the nondefaulting Party, the nondefaulting Party may
          terminate this Agreement without further obligation on the part of the
          nondefaulting Party, and pursue any claims at law or in equity
          permitted under this Agreement against the defaulting Party.

16.  Dispute Resolution Procedures. Any dispute arising out of or in connection
     ------------------------------
     with this Agreement shall be resolved only by binding arbitration by a
     panel of three arbiters, by the American Arbitration Association in
     accordance with the Rules for Commercial Disputes Resolution in San
     Francisco, California. Written notice of the demand for arbitration shall
     be served on the other Party to this agreement and filed with the
     arbitration service. The demand for arbitration shall be made within a
     reasonable time after the dispute has arisen, and in no event shall it be
     made after the date upon which it would have been barred by the terms of
     this agreement or applicable law. Each arbitrator must be experienced in
     the subject matter of the arbitration. Arbitration shall be completed not
     later than 180 days following its initiation. In reaching their award, the
     arbitrators shall follow and be bound by substantive California law.
     However, arbitrators shall in no manner award punitive damages, damages
     calculated by applying a multiplier, or any other damages excluded pursuant
     to Section 15.3. The award shall be in writing and shall contain findings
        ------------
     of fact and conclusion of law and shall set forth the nature, amount and
     manner of calculation of all damages. The award shall be final and binding,
     and judgment may be entered upon it in any court having jurisdiction. This
     provision has been expressly agreed to by the Parties with full
     understanding that it acts to waive their respective constitutional rights
     to a trial by judge or jury and their respective rights to punitive or
     emotional distress damages.

17.  Notices.  Any notice or other communication required or permitted under
     -------
     this Agreement shall be in writing and may be personally delivered or sent
     by a nationally-recognized overnight courier or by Certified mail return
     receipt requested, postage pre-paid. All notices personally delivered shall
     be effective at the time of such delivery. All notices

                                       14
<PAGE>

     sent by Certified mail shall be effective five (5) days after deposited in
     the US mail. All notices sent by overnight courier shall be effective one
     (1) business day after delivery to such courier service. All notices
     transmitted by any other means shall only be effective forty-eight (48)
     hours after actual receipt. All notices shall be addressed as follows:

          If to Provider at:

                     VelocityHSI, Inc. at:
                     Attn:  Michael Todd
                     2175 North California Boulevard, Suite 810
                     Walnut Creek, CA 94596
                     Facsimile:  925-952-5697

          If to Owner at:

                     BRE Properties, Inc.
                     Attn:  LeRoy E. Carlson
                     44 Montgomery Street, 36th Floor
                     San Francisco, CA  94104
                     Facsimile:  415-445-6577

     Any Party may designate a change of address, or require that notices be
     provided to duplicate locations, upon ten (10) days written notice.

18.  Attorneys' Fees.  The prevailing Party of the dispute or controversy
     ---------------
     resolved by arbitration or court action shall recover its attorney's fees
     and costs (including costs of experts) associated with such arbitration or
     court action from the other Party.

19.  Assignment.  Owner may assign its rights and obligations under this
     ----------
     Agreement, in whole or in part, to an affiliate without consent of
     Provider.

20.  Miscellaneous.
     --------------

     20.1 Entire Agreement/Severability.  This Agreement, together with all
          -----------------------------
          attachments and exhibits hereto, constitutes the entire Agreement of
          the Parties and supersedes all prior and contemporaneous agreements,
          representations and understandings between the Parties. In the event
          that any provision contained in this Agreement should, for any reason,
          be held to be invalid or unenforceable in any respect, such
          unenforceable provisions shall be reduced in scope or duration to the
          extent necessary in order to make the same enforceable.

     20.2 Amendment; Modification.  The Agreement may not be supplemented,
          -----------------------
          amended, modified or otherwise altered except by written instrument
          executed by all the Parties hereto and no course of dealing or trade
          usage among or between the Parties shall be effective to supplement,
          amend, modify or alter this Agreement.

                                       15
<PAGE>

     20.3 Survival.  Each Party's obligations under Section 12, Confidentiality
          ---------                                 ----------
          Obligations, and Section 16, Dispute Resolution Procedures, shall
                           ----------
          survive the termination of this Agreement.

     20.4 Choice of Law.  This Agreement shall be governed by and construed in
          -------------
          accordance with the laws of the State of California applicable to
          contracts entered into and to be performed entirely within the State
          of California by residents of the State of California.

     20.5 Captions.  The captions appearing in this Agreement are included
          --------
          solely for convenience of reference and shall not be construed or
          interpreted to affect the meaning or interpretation of this Agreement.

     20.6 Hiring Prohibited.  During the term of this Agreement and for a
          -----------------
          period of one (1) year thereafter, no personnel of either Party who
          was directly involved in the performance of this Agreement shall
          solicit for hire or hire any employee of the other Party who was
          directly involved in the performance of this Agreement.

     20.7 Relationship of the Parties.  The Parties do not intend for this
          ---------------------------
          Agreement or the relationship established thereby to be considered
          anything other than one between independent contractors, and shall not
          be construed as the formation of a joint venture or partnership
          between the Parties for any purpose.

     20.8 No Third Party Beneficiaries.  The Parties do not intend to create,
          ----------------------------
          and this Agreement does not create, any rights in any entities or
          individuals who are not Parties to this Agreement.

     20.9 Counterparts.  This Agreement may be signed in counterparts, each of
          ------------
          which shall be deemed an original and all of which together shall be
          deemed to be one and the same document.

                                     * * *

                                       16
<PAGE>

     In witness of their agreement, the Parties have caused the Agreement to be
executed below by their authorized representatives as of the date first written
above.

                              PROVIDER
                              VelocityHSI, Inc.

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

                              OWNER

                              BRE Properties, Inc.

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

                                       17
<PAGE>

Exhibits:

Exhibit A:  Description of Complexes
Exhibit B:  Service Reliability Standards
Exhibit C:  Subscriber Support Standards
Exhibit D:  Schedule of Initial Pricing
Exhibit E:  Sample Memorandum of Existence
            of Service Agreement
Exhibit F:  Quit Claim Deed

                                       18
<PAGE>

                                   EXHIBIT A

                            Description of Complexes

                                       19
<PAGE>

                                   EXHIBIT B

                   VelocityHSI Services Reliability Standards

                        PERCENT OF NETWORK AVAILABILITY

     This parameter is generally indicative of the availability of the network
for Subscribers to transport and download data to and from the Internet or, in
the event that the Subscriber data is to be fulfilled by computers within
Provider's systems, generally indicative of the ability to transport data to
Provider's servers and the availability of the servers.

     This parameter is calculated by dividing the number of seconds that the
network is available for each Subscriber by the total number of Subscriber-
seconds in each calendar month and multiplying by 100.

     Specifically excluded from the Network Availability calculation shall be
regularly scheduled maintenance windows or ad hoc maintenance windows scheduled
and announced 24 hours in advance by Provider through the Front Page.  Also,
specifically excluded from the Network Availability calculation shall be periods
of time where the access or availability is limited or prevented through Owner's
actions, intentional or otherwise, including a failure to maintain electrical
service to the Infrastructure.

     Provider shall exhibit greater than 98% Network Availability per month.

                                       20
<PAGE>

                                   EXHIBIT C

            Subscriber Support/Installation Standards and Procedures

This Exhibit sets out the Subscriber support and Subscriber installation
requirements associated with the VelocityHSI Services and Provider's obligations
under the Agreement.  Subject to the terms and provisions of the Agreement, the
Subscriber support and Subscriber installation procedures shall meet the
operations specification and requirements stated herein, which are generally
stated in terms of events or outcomes, rather than terms of specific hardware,
software or procedural requirements.

A.   Telephone Support Centers.  Provider shall establish and maintain a toll
     -------------------------
free customer support number which will be capable of answering questions
regarding each of the following matters:

 .  Inquiries about the VelocityHSI Services
 .  Ordering and scheduling installation or maintenance of VelocityHSI Services
 .  Billing inquiries
 .  Initial technical support inquires
 .  Technical support for all VelocityHSI Services and VelocityHSI Hardware

     The Telephone Support Center shall respond to calls consistent with the
following guidelines:

 .  All calls shall be answered consistent with the Provider/Owner cobranding.
 .  Operate the support center on a 24x7 basis.
 .  Maintain sufficient customer service staff and call center capacity to
   connect to Subscribers within ___ minutes of call entering processing
   operation.
 .  Develop and publish escalation procedure for Customer Service Representatives
   related to network issues.
 .  Resolve billing issues within 24 hours 95% of time, on a monthly basis.
 .  Resolve connection issues within 24 hours 95% of time, on a monthly basis.
 .  Resolve technical issues within 24 hours if a phone call is required 95% of
   time, on a monthly basis.
 .  Resolve technical issues within 48 hours if a truck roll is required 95% of
   time, on a monthly basis.
 .  Develop and publish procedures for Owner to contact Provider regarding
   technical issues related to the VelocityHSI Services.

B.   Subscriber Installation Standards and Procedures.
     -------------------------------------------------

Provider shall be responsible for all aspects of assisting Subscribers with
installing the necessary hardware and software associated with utilizing the
VelocityHSI services.  In order to satisfy this

                                       21
<PAGE>

obligation, Provider shall perform each of the following services and comply
with the following guidelines.

 .  Verify that potential Subscriber' personal computers meets Provider's
   established minimum requirements for the supplied software and utilization of
   the VelocityHSI Services;

 .  Make an appointment with each new Subscriber to meet the installation
   personnel for the installation of the VelocityHSI Services in the
   Subscriber's unit;

 .  Collect the Subscriber information required to install, provision and
   complete the set up of Subscriber's VelocityHSI Services. Provider will
   develop an appropriate paper-form-based system or automated system to
   facilitate this process;

 .  Provide, or cause to be provided, necessary in unit connections to the
   Infrastructure using the most appropriate methods, all as previously agreed
   to with Owner pursuant to Section 5.1.;
                             ------------

 .  Maintain a sufficient inventory of all software and hardware required to
   install the VelocityHSI Services as may be required to complete Subscriber
   installations;

 .  Issue, on either a rental or purchase basis, and install hardware or software
   which may generally be required to be installed on Subscriber's system (such
   as network cards or other specialized interfaces) for the service requested
   by the Subscriber;

 .  Meet the Subscriber at the Subscriber's location at the scheduled time within
   the tolerances and limits as defined in accordance with the Customer Service
   Standards discussed above;

 .  Offer the Subscriber, at the time of installation, a brief introduction to
   the VelocityHSI Services. This introduction will include how to launch the
   service, how to find the training material and the subscriber support section
   on the Complex Font Page, how to find the on Provider's Web site and how to
   call Subscriber Support Center for technical assistance or support;

 .  Obtain signatures required to verify that each Subscriber installation was
   executed properly and to the satisfaction of the Subscriber; and

 .  Provide Owner with a copy of the installation transaction documentation
   verifying that the completed installation is ready for billing.

C.   Support/Installation Performance Ratios and Reporting.
     ------------------------------------------------------

1.   Percent Subscriber Service Order Commitments Timely Met

This parameter is generally indicative of the timely beginning of work on orders
from Subscribers for new service or orders to make changes in, or repairs to,
their existing service and the successful fulfillment of agreed upon service
appointments.  The parameter is calculated by dividing the total Subscriber
service orders begun on or before the date and within the hour range promised to
the Subscriber that the service order would be started by the total number of
service orders initiated in each calendar month and multiplying by 100.
Provider shall exhibit greater than 90% Subscriber Service Order Commitments
Timely Met per month.

2.   Percent Subscriber Service Order Completion Commitments Timely Met

This parameter is generally indicative of the timely completion of work on
orders from Subscribers for new service or orders to make changes in or repairs
to their existing service and the timely completion of those service orders. The
timely completion parameter is calculated by

                                       22
<PAGE>

dividing the total Subscriber Service Orders completed on or before the date and
time promised to the Subscriber that the service order would be completed by the
total number of service orders initiated in each calendar month and multiplying
by 100. Provider shall exhibit greater than 90% Subscriber Service Order
Completion Commitments Timely Met per month.

3.   Percent Subscriber Support Calls Timely Answered

This parameter is based upon the number of Subscriber calls to the telephone
support center answered within 15 seconds by a human operator or by an automated
response system, and if answered by the automated system, answered by a human
operator within 45 seconds of selecting to be connected to a human operator.
This parameter is calculated by dividing the number of calls answered with the
above time frames by the total number of telephone support center calls answered
in each calendar month and multiplying by 100.  Provider shall exhibit greater
than 90% of Subscriber Support Calls Timely Answered within the above
parameters.

4.   Percent of Trouble Reports Resolved Timely

For purposes of this item, Trouble refers to problems or errors in the
Infrastructure, or other parts of Provider's system, but shall exclude
Subscriber error, defects in Subscriber's equipment (including cabling, computer
or other hardware or software) or defects in public data distribution, including
the Internet, or other utility systems.

This parameter is related to the number of Trouble Reports resolved within the
following windows: For Trouble Reports received by Provider at the telephone
support center prior to 1:00 p.m. Pacific Time, Monday through Friday, excepting
holidays, such reports will be cleared by the end of the next business day.
This parameter is calculated by dividing the total trouble reports cleared on or
before the date and clock hour promised to the Subscriber by the total number of
trouble reports resolved in each calendar month and multiplying by 100.
Provider shall exhibit greater than 90% Trouble Reports Resolved Timely per
month, according to the terms of this section for trouble that can be resolved
by Provider alone.

5.   Percent of Subscriber Bills Prepared Timely

This parameter is related to the generation of Subscriber Bills for delivery to
Subscribers by mail, electronic mail or credit card billing.  This parameter is
calculated by dividing the number of Subscriber Bills generated and sent to
Subscribers within twenty (20) business days of the end of the billing cycle by
the total number Subscriber Bills generated in each calendar month and
multiplying by 100.  Provider shall exhibit greater than 95% Subscriber Bills
Prepared Timely per month.

6.   Percent of Subscriber Bills Prepared Accurately

This parameter is related to the accuracy of Subscriber Bills for delivery to
Subscribers by mail, electronic mail or credit card billing.  This parameter is
calculated by dividing the number of Subscriber generated that do not require an
adjustment due to a billing error caused Provider by

                                       23
<PAGE>

the total number Subscriber Bills generated in each calendar month and
multiplying by 100. Provider shall exhibit greater than 95% Subscriber Bills
Prepared Accurately per month.

7.   Reports

Provider shall provide to Owner reports within thirty (30) business days of the
end of each calendar month, the reports listed below in this section, each of
which may be provided separately or provided on a consolidated basis:

A report depicting total Subscribers, gross new Subscribers and gross
Subscribers terminated separated by product tier and Complex.

New service orders, trouble reports opened and closed or cleared as appropriate
separated by date and Complex, and compliance with items 1, 2 and 4 above.

Aggregate Provider telephone support center data depicting the distribution of
call waiting time in general and the percent calls answered and calls abandoned
respectively, and compliance with item 3, above

Billing summaries describing the date(s) bills were sent to Subscribers, and
compliance with items 5 and 6 above.

                                       24
<PAGE>

                                   EXHIBIT D

                          Schedule of Initial Pricing

              [to be reviewed and revised based on final pricing]

I.  RECURRING VELOCITY SERVICE ACCESS REVENUE

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
             Type of Subscription Plan                        Monthly Access Fee
             -------------------------                        ------------------
--------------------------------------------------------------------------------
<S>                                                           <C>
Free Services (includes use of set top box and wireless            No Charge
keyboard to access certain limited Complex intranet services;
no internet access)
--------------------------------------------------------------------------------
Gold Plan (Same as above with basic high speed Internet access     $34.95/month
for one personal computer.)
--------------------------------------------------------------------------------
Platinum Plan (Same as Gold Plan for up to three personal          $59.95/month
computers)
--------------------------------------------------------------------------------
</TABLE>

II.       ONE-TIME CHARGES AND/OR PASS-THROUGH CHARGES

Installation fee                $49.95

Installation fee will be waived for Free Service package and may be waived for
all other packages at Provider's discretion.

Subscriber Equipment Required for Interface
With VelocityHSI Services:

Service Calls                   $______/ hour

                                       25
<PAGE>

                                   EXHIBIT E

            Sample Memorandum of Existence of VelocityHSI Services

                                   Agreement

            Execution copy to be formatted in compliance with local
                             filing requirements.

                          MEMORANDUM OF EXISTENCE OF

                        VELOCITYHSI SERVICES AGREEMENT

     A license has been granted by ______________________________, on behalf of
itself ("Grantor") to VelocityHSI, Inc., a Delaware corporation ("Grantee"),
under a certain VelocityHSI Services Agreement effective ___________________,
2000 by and between Grantor and Grantee (the "Agreement"). The license permits
Grantee, among other things, the right to provide certain data transmission and
communications services, as described in the Agreement, and to engage in any
other act or activity contemplated by the Agreement at the Complex described
herein.

     As used in the Agreement, the term "Complex" means that the real property
consisting of approximately ______ apartment units located in the city of
________, County of _______, State of ______, at the address commonly known as
[Name and Address of Apartment Community]. Whose legal description is as
follows:

     In the event of any conflict between the terms and conditions of this
Memorandum of Existence of VelocityHSI Services Agreement and the terms and
conditions of the Agreement, the terms and conditions of the Agreement shall
control. The Parties agree that the sole purpose of this Memorandum of Velocity
Services Agreement is to provide notice of the Agreement.

    Executed this ______ day of _________, 200_.

                                       26
<PAGE>

                                   EXHIBIT F

                                Quit Claim Deed

            Execution copy to be formatted in compliance with local

                              filing requirements.

     FOR GOOD AND VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, the undersigned hereby quit-claims to ______________________, a
_________ _______________, ("Owner") without representation or warranty, its
entire right, title and interest in the property described on Attachment 1
attached hereto and incorporated by this reference (the "Complex").

     By this Quit Claim Deed, the undersigned further agrees (i) the VelocityHSI
Services Agreement (the "Agreement"), dated as of ________________________ 20__,
between the undersigned and Owner, as evidenced by the Memorandum of Existence
of VelocityHSI Services Agreement Easement recorded on _________________, 200__,
as Instrument No. _________________, in the County of __________, __________ has
expired or been terminated, and (ii) the easement and rights of access, and any
other interests in the Property granted to the undersigned therein have expired
or been terminated.

     Nothing in this QuitClaim Deed shall in any way serve as a transfer or
waiver of the undersigned's rights to personal property, defined in the
Agreement as "Infrastructure," stored or installed in or on the Complex

DATED this __ day of _________, 20__.

                                       27<PAGE>

                                                                    EXHIBIT 10.5
                                    FORM OF

                               VELOCITYHSI, INC.

                         REGISTRATION RIGHTS AGREEMENT
                         -----------------------------

     This Registration Rights Agreement (the "Agreement") is made as of August
                                              ---------
__, 2000, by and among VelocityHSI, Inc., a Delaware corporation (the

"Company"), and BRE Properties, Inc., a Maryland Corporation ("BRE").
 -------

                                   AGREEMENT
                                   ---------

     The parties hereby agree as follows:

1.  Registration Rights.
    -------------------

    1.1  Definitions.
         -----------

         (a)  The term "Common Stock" means the Company's common stock, par
                        ------------
value $0.01 per share.

         (b)  The term "Exchange Act" means The Securities Exchange Act of 1934,
                        ------------
as amended.

         (c)  The term "Form S-3" means such form under the Securities Act as
                        --------
is in effect on the date hereof or any successor form under the Securities Act;

         (d)  The term "Holder" means any person owning or having the right to
                        ------
acquire Registrable Securities or any assignee thereof in accordance with
Section 1.12 of this Agreement.

         (e)  The term "Initial Public Offering" means the first firm commitment
                        -----------------------
underwritten public offering by the Company of shares of its Common Stock
pursuant to a registration statement under the Securities Act.

         (f)  The terms "register," "registered" and "registration" refer to a
                         --------    ----------       ------------
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities, and the declaration or
ordering of effectiveness of such registration statement or document;

         (g)  The term "Registrable Securities" means the 1,357,425 shares of
                        ----------------------
Common Stock which are owned by BRE on the date hereof and will not be
distributed to shareholders of BRE in connection with the Spin-Off;
provided, however, that shares of Common Stock shall cease to be Registrable
--------  -------
Securities when (i) the shares are sold pursuant to the provisions of Rule 144,
(ii) the shares are held by a Holder who is not an affiliate of the Company
within the meaning of Rule 144 (a "Rule 144 Affiliate") and may be sold pursuant
to
<PAGE>

Rule 144(k), (iii) the shares are held by a Holder who is a Rule 144 Affiliate
and all the shares may be sold pursuant to Rule 144 within a period of three
months in accordance with volume limitation set forth in Rule 144(e)(1), or (iv)
the shares have otherwise been transferred in a transaction that would
constitute a sale under the Securities Act and the shares may be resold without
subsequent registration under the Securities Act;

         (h)  The term "Rule 144" means Rule 144 under the Securities Act or
                        --------
any similar provisions then in force.

         (i)  The term "SEC" means the Securities and Exchange Commission; and
                        ---

         (j)  The term "Securities Act" means The Securities Act of 1933, as
                        --------------
amended.

         (k)  The term "Spin-Off" shall mean the distribution of shares of
                        --------
Common Stock to shareholders of BRE as contemplated by the registration
statement of the Company, at the time of effectiveness of the registration
statement, filed with the SEC (Registration No. 333-36162).

    1.2  Request for Registration.
         ------------------------

         (a)  If the Company shall receive at any time subsequent to the 180th
day following the effective date of the registration statement for the Company's
Initial Public Offering, a written request from the Holders of at least fifty
percent (50%) of the Registrable Securities then outstanding that the Company
file a registration statement under the Securities Act covering the registration
of at least 30% of the Registrable Securities then outstanding (or a lesser
percent if the anticipated aggregate offering price of the Registrable
Securities covered by the request, net of underwriting discounts and
commissions, would exceed $10 million dollars), then the Company shall, within
ten (10) days of the receipt thereof, give written notice of such request to all
Holders and shall, subject to the limitations of Subsection 1.2(b), use
reasonable commercial efforts to effect as soon as practicable, the registration
under the Securities Act of all Registrable Securities which the Holders request
to be registered. The Company shall file with the SEC the registration statement
required to effect the foregoing registration within 45 days after the date on
which the Company provides the foregoing notice of the request to Holders.

         (b)  If the Holders initiating the registration request hereunder
("Initiating Holders") intend to distribute the Registrable Securities covered
  ---------- -------
by their request by means of an underwriting, they shall so advise the Company
as a part of their request made pursuant to this Section 1.2 and the Company
shall include such information in the written notice referred to in Subsection
1.2(a). The underwriter will be selected by a majority in interest of the
Initiating Holders and shall be reasonably acceptable to the Company. In such
event, the right of any Holder to include his Registrable Securities in such
registration shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting (unless otherwise mutually agreed by a majority in interest of the
Initiating Holders and such Holder) to the extent provided herein. All Holders
proposing to

                                      -2-
<PAGE>

distribute their securities through such underwriting shall (together with the
Company as provided in Subsection 1.5(e)) enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provision of this Section 1.2, if the
underwriter advises the Initiating Holders in writing that marketing factors
require a limitation of the number of shares to be underwritten, then the
Initiating Holders shall so advise all Holders of Registrable Securities which
would otherwise be underwritten pursuant hereto, and the number of shares of
Registrable Securities that may be included in the underwriting shall be
allocated among all Holders thereof, including the Initiating Holders, in
proportion (as nearly as practicable) to the amount of Registrable Securities of
the Company owned by each Holder; provided, however,
                                  --------  -------
that the number of shares of Registrable Securities to be included in such
underwriting shall not be reduced unless all other securities are first entirely
excluded from the underwriting.

         (c)  In addition, the Company shall not be obligated to effect, or to
take any action to effect, any registration pursuant to this Section 1.2:

              (i)   After the Company has effected two (2) registrations
pursuant to this Section 1.2 and such registrations have been declared or
ordered effective;

              (ii)  During the period starting with the date sixty (60) days
prior to the Company's good faith estimate of the date of filing of, and ending
on a date one hundred eighty (180) days after the effective date of, a
registration statement subject to Section 1.3 hereof; provided that the Company
is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective; or

              (iii) If the Initiating Holders propose to dispose of shares of
Registrable Securities that may then be registered on Form S-3 pursuant to a
request made pursuant to Section 1.4 below.

         1.3  Company Registration.
              --------------------

              (a)  If the Company proposes to register (including for this
purpose a registration effected by the Company for stockholders other than the
Holders) any of its stock under the Securities Act in connection with the public
offering of such securities solely for cash (other than the registration in
connection with the Spin-Off, the registration in connection with the Initial
Public Offering, a registration pursuant to a registration statement on Form S-
4, S-8 or any successor thereto, a registration in which the only stock being
registered is Common Stock issuable upon conversion of debt securities which are
also being registered, or any registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities), the
Company shall, at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within twenty (20)
days after the Company has given such notice in accordance with Section 2.3, the
Company shall cause to be registered under the Securities Act all of the
Registrable Securities that each such Holder has requested to be registered.

                                      -3-
<PAGE>

              (b)  In connection with any offering involving an underwriting of
shares of the Company's capital stock, the Company shall not be required under
Section 1.3(a) to include any of the Holders' securities in such underwriting
unless they accept the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it (or by other persons entitled to
select the underwriters), and then only in such quantity as the underwriters
determine in their sole discretion will not jeopardize the success of the
offering by the Company. Notwithstanding the provisions of Section 1.3(a)
hereof, (i) if the registration referred to in Section 1.3(a) hereof relates to
an underwritten primary offering on behalf of the Company and the managing
underwriters of the offering determine in their sole discretion that the
aggregate amount of securities of the Company which the Company, Holders of
Registrable Securities and holders of other piggyback registration rights
propose to include in the registration statement exceeds the maximum amount of
securities compatible with the success of the offering, the Company will include
in the registration, up to such maximum amount, first, the securities which the
Company proposes to sell, and second, pro rata, the Registrable Securities and
the securities proposed to be included by any holders of other piggyback
registration rights, and (ii) if the registration referred to in Section 1.3(a)
hereof is an underwritten secondary registration on behalf of any of the other
security holders of the Company (the "Secondary Offering Security Holders") and
the managing underwriters determine in their sole discretion that the aggregate
amount of securities which the Holders of Registrable Securities, the Secondary
Offering Security Holders and the holders of other piggyback registration rights
propose to include in the registration exceeds the maximum amount of securities
compatible with the success of the offering, the Company will include in the
registration, up to such maximum amount, first, the securities to be sold for
the account of the Secondary Offering Security Holders, and second, pro rata,
the Registrable Securities and the securities proposed to be included by any
holders of other piggyback registration rights. The managing underwriters shall
have the right to terminate entirely the participation of the Holders of
Registrable Securities if the managing underwriters eliminate entirely the
participation in the registration of all the other holders electing to include
securities in the registration (other than the Company and the Secondary
Offering Security Holders) because it is not practicable to include such
securities in the registration.

              (c)  The Company shall have the right to terminate or withdraw
any registration initiated by it under this Section 1.3 prior to the
effectiveness of such registration whether or not any Holder has elected to
include Registrable Securities in such registration.

         1.4  Form S-3 Registration. If the Company shall receive from any
              ---------------------
Holder or Holders of not less than twenty-five percent (25%) of the Registrable
Securities then outstanding a written request or requests that the Company
effect a registration on Form S-3 with respect to all or a part of the
Registrable Securities owned by such Holder or Holders, the Company will:

              (a)  promptly give written notice of the proposed registration to
all other Holders; and

              (b)  use reasonable commercial efforts to effect such registration
on Form S-3 as soon as practicable of such Holder's or Holders' Registrable
Securities specified in

                                      -4-
<PAGE>

such request, together with the Registrable Securities of any other Holder or
Holders joining in such request as are specified in a written request given
within twenty (20) days after mailing of such notice by the Company;
provided, however, that the Company shall not be obligated to effect any such
--------  -------
registration pursuant to this Section 1.4 (i) if Form S-3 is not available for
the registration of the Registrable Securities, (ii) if the Company has, within
the twelve-month period preceding the date of such request, already effected two
registrations on Form S-3 for the Holders pursuant to this Section 1.4, (iii) in
any particular jurisdiction in which the Company would be required to qualify to
do business or to execute a general consent to service of process in effecting
such registration or any related qualification or compliance; or (iv) during the
period ending one hundred eighty (180) days after the effective date of a
registration statement subject to Section 1.3.

              (c)  Subject to the foregoing and to the provisions of
Section 1.6, the Company shall file a registration statement covering the
Registrable Securities so requested to be registered as soon as practicable
after receipt of the request or requests of the Holders. Registrations effected
pursuant to this Section 1.4 shall not be counted as demands for registration
effected pursuant to Section 1.2 .

              (d)  The substantive provisions of Section 1.2(b) shall apply to
the registration if it relates to an underwritten offering.

         1.5  Obligations of the Company. Whenever required under this Section
              --------------------------
1 to effect the registration of any Registrable Securities, the Company shall,
as expeditiously as reasonably possible:

              (a)  Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use reasonable commercial efforts to
cause such registration statement to become effective, and, upon the request of
the Holders of a majority of the Registrable Securities registered thereunder,
keep such registration statement effective for up to ninety (90) days.

              (b)  Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of the securities covered by such
registration statement.

              (c)  Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by them.

              (d)  Use reasonable commercial efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
         --------
or as a condition thereto to qualify to do business,

                                      -5-
<PAGE>

to subject itself to taxation or to file a general consent to service of process
in any such states or jurisdictions.

              (e)  In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

              (f)  Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.

         1.6  Material Developments; Suspension of Offering.
              ----------------------------------------------
              (a)  Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall not be required to file a registration statement or
to keep any registration statement effective if the negotiation or consummation
of a transaction by the Company is pending or an event has occurred, which
negotiation, consummation or event would require additional disclosure by the
Company in the registration statement of material information which the
Company (in the judgment of management of the Company) has a bona fide business
                                                             ---------
purpose for keeping confidential and the nondisclosure of which in the
registration statement might cause the registration statement to fail to comply
with applicable disclosure requirements; provided, however, that the Company
                                         --------  -------
(i) will promptly notify the Holders of Registrable Securities otherwise
entitled to registration of the foregoing and (ii) may not delay, suspend or
withdraw the registration statement for such reason more than twice in any
twelve (12) month period or three times in any twenty-four (24) month period or
for more than one hundred twenty (120) days at any time. Upon receipt of any
notice from the Company of the happening of any event during the period the
registration statement is effective which is of a type specified in the
preceding sentence or as a result of which the registration statement or related
prospectus contains any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statement therein, in light of the circumstances under which they were made not
misleading, the Holders agree that they will immediately discontinue offers and
sales of the Registrable Securities under the registration statement until they
receive copies of a supplemental or amended prospectus that corrects the
misstatements or omissions and receive notice that any post-effective amendment
has become effective. If so directed by the Company, the Holders will deliver to
the Company any copies of the prospectus covering the Registrable Securities in
their possession at the time of receipt of such notice. In the event the Company
shall give notice of the happening of an event of the kind described in this
Section 1.6(a), the Company shall extend the period during which the affected
registration statement is required to be maintained pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of notice pursuant to this Section 1.6(a) to the date when the Company
shall make available a prospectus supplemented or amended to conform with the
requirements of the Securities Act.

                                      -6-
<PAGE>

              (b)  If all reports required to be filed by the Company pursuant
to the Exchange Act have not been filed by the required date without regard to
any extension, or if the consummation of any business combination by the Company
has occurred or is probable for purposes of Rule 3-05 or Article 11 of
Regulation S-X under the Securities Act, upon written notice thereof by the
Company to the Holders, the rights of the Holders to offer, sell or distribute
any Registrable Securities pursuant to any registration statement or to require
the Company to take action with respect to the registration of any Registrable
Securities pursuant to this Agreement shall be suspended until the date on which
the Company has filed such reports or obtained and filed the financial
information required by Rule 3-05 or Article 11 of Regulation S-X to be included
or incorporated by reference, as applicable, in the registration statement and
the Company shall notify the Holders as promptly as practicable when such
suspension is no longer required.

         1.7  Furnish Information. It shall be a condition precedent to the
              -------------------

obligations of the Company to take any action pursuant to this Section 1 with
respect to the Registrable Securities of any selling Holder that such Holder
shall furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such Holder's Registrable
Securities. The Company shall have no obligation with respect to any
registration requested pursuant to this Agreement if, as a result of the
application of the preceding sentence, the number of shares or the anticipated
aggregate offering price of the Registrable Securities to be included in the
registration does not equal or exceed the number of shares or the anticipated
aggregate offering price required to originally trigger the Company's obligation
to initiate such registration.

         1.8  Expenses of Registration. In connection with any registration of
              ------------------------
Registrable Securities hereunder, the Company shall pay the following
registration expenses incurred in connection with the registration: (i) all
registration and filing fees, (ii) fees and expenses of compliance with
securities or blue sky laws, (iii) printing expenses, (iv) internal Company
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), (v) fees and
expenses incurred in connection with the listing of the Registrable Securities
on each securities exchange on which similar securities issued by the Company
are then listed, (vi) fees and disbursements of counsel for the Company and the
independent public accountants of the Company, and (vii) the fees and expenses
of any experts retained by the Company in connection with the registration. The
Holders shall be responsible for the payment of any and all other expenses
incurred by them in connection with the registration and sale of Registrable
Securities, including, without limitation, brokerage and sales commissions,
underwriting fees, discounts and commissions attributable to the Registrable
Securities, fees and disbursements of counsel representing the Holders, and any
transfer taxes relating to the sale or disposition of the Registrable
Securities.

         1.9  Delay of Registration.  No Holder shall have any right to obtain
              ---------------------
or seek an injunction restraining or otherwise delaying any such registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.

                                      -7-
<PAGE>

         1.10  Indemnification.
               ---------------
         (a) Indemnification by the Company. The Company agrees to indemnify
             ------------------------------
and hold harmless each Holder that has sold Registrable Securities pursuant to a
registration statement in which such Registrable Securities were included
pursuant to this Section 1 ("Selling Holder"), its officers, directors and
agents, and each person, if any, who controls such Selling Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
from and against any and all losses, claims, damages and liabilities caused by
any untrue statement or alleged untrue statement of a material fact contained in
any such registration statement (a "Resale Registration Statement") or the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or arising out of any
untrue statement or alleged untrue statement of a material fact contained in any
prospectus contained in the Resale Registration Statement at the time it became
effective (a "Resale Prospectus"), or the omission or alleged omission therefrom
of a material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading, except insofar
as such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company by such Selling Holder or on
such Selling Holder's behalf expressly for inclusion therein; provided, however,
                                                              --------  -------
that the Company will not be liable in any case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based upon any
untrue statement or omission contained in a Resale Prospectus which was
corrected in a supplement or amendment thereto if such claim is brought by a
purchaser of Registrable Securities from the Selling Holder and the Selling
Holder failed to deliver to such purchaser the supplement or amendment to the
Resale Prospectus in a timely manner.

              (b) Indemnification by Holders of Registrable Securities.
                  ----------------------------------------------------

          Each Selling Holder agrees to indemnify and hold harmless the Company,
its officers, directors and agents and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act to the same extent as the indemnity set forth in Section
1.10(a) from the Company to Selling Holders, but only with respect to
information relating to such Selling Holder furnished in writing by such Selling
Holder or on such Selling Holder's behalf expressly for use in any Resale
Registration Statement or Resale Prospectus or any amendment or supplement
thereto.  Each Holder also agrees to indemnify and hold harmless underwriters of
the Registrable Securities, their officers and directors and each person who
controls such underwriters within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act on substantially the same basis as that of
the indemnification of the Company provided in this Section 1.10(b).

              (c)  Conduct of Indemnification Proceedings. Each indemnified
                   ---------------------------------------
party shall give reasonably prompt notice to each indemnifying party of any
action or proceeding commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify the indemnifying party (i) shall not
relieve it from any liability which it may have under the indemnity agreement
provided in Section 1.10(a) or 1.10(b) above, unless and to the extent it

                                      -8-
<PAGE>

did not otherwise learn of such action and the lack of notice by the indemnified
party results in the forfeiture by the indemnifying party of substantial rights
and defenses and (ii) shall not, in any event, relieve the indemnifying party
from any obligations to the indemnified party other than the indemnification
obligation provided under Section 1.10(a) or 1.10(b) above. If the indemnifying
party so elects within a reasonable time after receipt of notice, the
indemnifying party may assume the defense of the action or proceeding at the
indemnifying party's own expense with counsel chosen by the indemnifying party
and approved by the indemnified party, which approval shall not be unreasonably
withheld; provided, however, that if the defendants in any such action or
          --------  -------
proceeding include both the indemnified party and the indemnifying party and the
indemnified party reasonably determines based upon advice of legal counsel
experienced in such matters, that there may be legal defenses available to it
which are different from or in addition to those available to the indemnifying
party, then the indemnified party shall be entitled to separate counsel at the
indemnifying party's expense, which counsel shall be chosen by the indemnified
party and approved by the indemnifying party, which approval shall not be
unreasonably withheld; provided further, that it is understood that the
                       -------- -------
indemnifying party shall not be liable for the fees, charges and disbursements
of more than one separate firm. If the indemnifying party does not assume the
defense, after having received the notice referred to in the first sentence of
this Section, the indemnifying party will pay the reasonable fees and expenses
of counsel for the indemnified party; in that event, however, the indemnifying
party will not be liable for any settlement effected without the written consent
of the indemnifying party. If an indemnifying party assumes the defense of an
action or proceeding in accordance with this Section, the indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
party incurred thereafter in connection with that action or proceeding except as
set forth in the proviso in the second sentence of this Section 1.10(c). Unless
and until a final judgment is rendered that an indemnified party is not entitled
to the costs of defense under the provisions of this Section, the indemnifying
party shall reimburse, promptly as they are incurred, the indemnified party's
costs of defense.

         (d)  Contribution.
              ------------

              (i) If the indemnification provided for in Section 1.10(a) or
1.10(b) hereof is unavailable to an indemnified party or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by indemnified party as a result of
such losses, claims, damages or liabilities as between the Company on the one
hand and each Selling Holder on the other, in such proportion as is appropriate
to reflect the relative fault of the Company and of each Selling Holder in
connection with such statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of each
Selling Holder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or such Selling Holder, and the Company's and the
Selling Holder's relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

                                      -9-
<PAGE>

              (ii) The Company and the Selling Holders agree that it would not
be just and equitable if contribution pursuant to this Section 1.10(d) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in Section
1.10(d)(i). The amount paid or payable by an indemnifying party as a result of
the losses, claims, damages or liabilities referred to in Sections 1.10(a) and
1.10(b) hereof shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by the indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 1.10(d), no Selling Holder shall
be required to contribute any amount in excess of the amount by which the total
price at which the securities of such Selling Holder were offered to the public
exceeds the amount of any damages which such Selling Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.

         (e) Conflict with Underwriting Agreement.  Notwithstanding the
             ------------------------------------
foregoing, to the extent that the provisions on indemnification and contribution
contained in the underwriting agreement entered into in connection with the
underwritten sale of Registrable Securities effected pursuant to a registration
statement filed pursuant hereto are in conflict with the foregoing provisions,
the provisions in the underwriting agreement shall control.

         1.11  Reports Under Securities Exchange Act of 1934.  With a view to
               ---------------------------------------------
making available to the Holders the benefits of Rule 144 and any other rule or
regulation of the SEC that may at any time permit a Holder to sell securities of
the Company to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:

              (a)  make and keep public information available, as those terms
are understood and defined in Rule 144, at all times for so long as the Company
remains subject to the periodic reporting requirements under Sections 13 or
15(d) of the Exchange Act;

              (b)  take such action, including the voluntary registration of its
Common Stock under Section 12 of the Exchange Act, as is necessary to enable the
Holders to utilize Form S-3 for the sale of their Registrable Securities;

              (c)  file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
              (d)  furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
Securities Act and the Exchange Act, or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested in availing any Holder of
any rule or regulation of the SEC which permits the selling of any such
securities without registration or pursuant to such form.

                                     -10-
<PAGE>

         1.12  Assignment of Registration Rights. The rights to cause the
               ---------------------------------
Company to register Registrable Securities pursuant to this Section 1 may be
assigned (but only with all related obligations) by a Holder to a transferee or
assignee of such securities that is a subsidiary or parent of a Holder acquires
from such Holder at least 100,000 Registrable Securities (as appropriately
adjusted for stock splits and the like; provided the Company is, within a
                                        --------
reasonable time after such transfer, furnished with written notice of the name
and address of such transferee or assignee and the securities with respect to
which such registration rights are being assigned; and provided, further, that
                                                       --------  -------
such assignment shall be effective only if immediately following such transfer
the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act.

         1.13  Market-Standoff Agreement.
               -------------------------

              (a)  Market-Standoff Period; Agreement.  In connection with the
                   ---------------------------------
Initial Public Offering and upon request of the Company or the underwriters
managing the Initial Public Offering, each Holder 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 without the prior written consent of the
Company or such underwriters, as the case may be, for such period of time (not
to exceed one hundred eighty (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 Company's Initial Public Offering.

              (b) Stop-Transfer Instructions. In order to enforce the foregoing
                  --------------------------
covenants, the Company may impose stop-transfer instructions with respect to the
securities of each Holder.

              (c)  Transferees Bound.  Each Holder agrees that it will not
                   -----------------
transfer securities of the Company unless each transferee agrees in writing to
be bound by all of the provisions of this Section 1.13.

    2.  Miscellaneous.
        -------------

        2.1  Successors and Assigns.  Except as otherwise provided in this
             ----------------------
     Agreement, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective permitted successors and assigns
of the parties. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.

        2.2  Entire Agreement; Amendments and Waivers. This Agreement
             ----------------------------------------
constitutes the full and entire understanding and agreement among the parties
with regard to the subject matter hereof. Any term of this Agreement may be
amended or waived only with the written consent of the Company and the holders
of a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this Section 2.2 shall be

                                     -11-
<PAGE>

binding upon each holder of any Registrable Securities then outstanding, each
future holder of all such Registrable Securities, and the Company.

          2.3  Notices.  Unless otherwise provided, any notice required or
               -------
permitted by this Agreement shall be in writing and shall be deemed sufficient
upon delivery, when delivered personally or by overnight courier 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 or fax number as set forth
below or as subsequently modified by written notice.

          2.4  Expenses.  If any action at law or in equity is necessary to
               --------
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.

          2.5  Governing Law.  This Agreement and all acts and transactions
               -------------
pursuant hereto shall be governed, construed and interpreted in accordance with
the laws of the State of California, as applied to agreements among California
residents entered into and wholly to be performed within the State of California
(without reference to any choice of law rules that would require the application
of the laws of any other jurisdiction).

          2.6  Counterparts.  This Agreement may be executed in two or more
               ------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

          2.7  Titles and Subtitles.  The titles and subtitles used in this
               --------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                            [Signature Pages Follow]
<PAGE>

     The parties have executed this Registration Rights Agreement as of the date
first above written.

VELOCITYHSI, INC.

By:  _____________________________
     Name:
     Title:

Address:

2175 North California Boulevard
Suite 810
Walnut Creek, CA  94596
Fax:  (925) 952-5697

BRE PROPERTIES, INC.

By:  _____________________________
     Name:
     Title:

Address:

44 Montgomery Street, 36th Floor
San Francisco, CA  94104
Fax:  (415) 445-6505

                                      A-1

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