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                                                                   Exhibit 10.30


                               COMMERCIAL LEASE

     THIS LEASE is made as of the date specified in the Basic Lease Information,
by and between TRANOD, a California general partnership, ("Landlord") and
PETOPIA.COM ("Tenant").

                                   ARTICLE 1
                                   Premises

1.1  Subject to the reservation specified in Paragraph 1.2, and subject to all
     recorded easements, covenants, encumbrances and conditions, Landlord hereby
     leases to Tenant, and Tenant hereby leases from Landlord, for the term and
     subject to the covenants hereinafter set forth, the Premises and the
     Building situated thereon.

                                   ARTICLE 2
                                     Term

2.1  The term of this Lease shall be the term specified in the Basic Lease
     Information. The term shall commence on the Commencement Date specified in
     the Basic Lease Information (the "Commencement Date") and, unless sooner
     terminated as hereinafter provided, shall end on the expiration date
     specified in the Basic Lease Information (the "Expiration Date").
     Notwithstanding the foregoing, the term of this Lease shall not commence
     until Landlord substantially completes the ground floor improvements and
     delivers to Tenant the ground floor space of the Building for Tenant's
     temporary use and occupation during the construction of improvements on the
     second floor of the Building. If Landlord, for any reason whatsoever, is
     not able to deliver possession of the ground floor on the Commencement Date
     this Lease shall not be void or voidable and Landlord shall not be liable
     to Tenant for any loss or damage resulting therefrom, but the Commencement
     Date shall be postponed until the date on which Landlord delivers
     possession of the ground floor, provided, however, if Landlord does not
     substantially complete Landlord's work as described in paragraph 23.1
     hereof, then Tenant shall have the right to terminate this Lease. Any delay
     in delivery of possession shall not operate to extend the term hereof.

2.2  If any part of the Premises is suitable for occupancy by Tenant prior to
     the scheduled Commencement Date, Tenant may take early occupancy of that
     part of the Premises prior to the scheduled Commencement Date, but the term
     of this Lease shall not commence until the scheduled Commencement Date. If
     Tenant takes early occupancy of part of the Premises under this paragraph
     2.2, Tenant's early occupancy shall be subject to all of the covenants in
     this Lease, which shall be binding on and apply to Tenant during the early
     occupancy except that Tenant will be relieved of any obligation to pay to
     Landlord the Base Rent payable under paragraph 3.1 hereof. Instead, Tenant
     shall pay to Landlord a fee to be agreed upon as between Tenant and
     Landlord prior to early occupancy. Tenant shall give Landlord written
     notice of Tenant's request to take early occupancy of any part of the
     premises; the notice shall specify the requested date of early occupancy
     and the part of the Premises to be

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occupied.

                                   ARTICLE 3
                                     Rent

3.1  During the term of this Lease, with the exception of the period of
     construction of the Landlord and Tenant Improvements, Tenant shall pay to
     Landlord the base monthly rent specified in the Basic Lease Information
     (the "Base Rent"), subject to increase as provided in paragraph 3.2. Tenant
     shall pay Landlord a reduced monthly rent in the sum of until substantial
     completion of the Landlord and Tenant Improvements specified in Exhibits
     "C" and "D" and the delivery of the entire Premises to Tenant.

3.2  The Base Rent shall be increased on the first day of the 13/th/ month of
     the term of this Lease, and on each anniversary thereafter (the "Rental
     Adjustment Date") by 2.5 percent per annum.

3.3  Throughout the term of this Lease, Tenant shall pay, as additional rent,
     all amounts of money and charges required to be paid by Tenant under this
     Lease, whether or not those amounts of money or charges are designated
     "additional rent." As used in this Lease, "rent" shall mean any sum payable
     by Tenant to Landlord under this Lease.

3.4  It is the intention of Landlord and Tenant that the Base Rent (including
     annual increases) payable by Tenant to Landlord during the entire term of
     this Lease shall be absolutely net of all Operating Expenses, Property
     Taxes and Insurance Expenses. The provisions of this Lease for payment by
     Tenant of all Operating Expenses and all Property Taxes and Insurance
     Expenses are intended to pass on to Tenant and to reimburse Landlord for
     other costs associated with the Building or the Premises. Landlord and
     Tenant agree that statements in this Lease to the effect the Landlord is to
     perform certain of its obligations hereunder at its own or sole cost or
     expense shall not be interpreted as excluding any cost or expense from
     Operating Expenses, Property Taxes, or Insurance Expenses if the cost or
     expense is an Operating Expense, Property Tax, or Insurance Expense
     pursuant to this Lease.

3.5  Tenant shall pay all Base Rent and additional monthly rent to Landlord, in
     advance, on or before the first day of each and every calendar month during
     the term of this Lease. Tenant shall pay all rent to Landlord without
     notice, demand, deduction or offset, in lawful money of the United States
     of America, at the address of Landlord specified in the Basic Lease
     Information, or to any other person or at any other place that Landlord may
     from time to time designate in writing.

                                   ARTICLE 4
           Operating Expenses, Insurance Expenses and Property Taxes

4.1  Tenant shall pay all "Operating Expenses" related to the Building or the
     Premises commencing upon the date that Landlord delivers possession of the
     ground floor to Tenant. As used in this Lease, "Operating Expenses" means
     all costs and expenses incurred in connection with the ownership,
     management, operation, maintenance or repair of the

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     Building or the Premises (excluding Insurance Expenses, which are specified
     below in paragraph 4.3) or in connection with providing services in
     accordance with this Lease, including the following: expenses relating to
     the operation, maintenance or repair of the Building or the Premises; water
     and sewer charges or fees; license, permit and inspection fees;
     electricity, water, air conditioning, gas fuel, steam, heat, light, power
     and other utilities; sales, use and excise taxes on goods and services
     purchased for the Building or the Premises; telephone, delivery, postage,
     stationery supplies and other expenses relating to the Building or the
     Premises; repairs to and maintenance of the Building, including Building
     systems and accessories thereto and repair and replacement of worn-out or
     broken equipment, facilities, parts and installations, and the replacement
     of major Building systems if required by the Tenant during the term of the
     Lease; janitorial, window cleaning, security, guard, extermination, water
     treatment, garbage and waste disposal, rubbish removal, plumbing and other
     services.

     Additionally, Operating Expenses shall not include the following:

     (i)    Any Landlord bad debt loss, rent loss, or reserves for bad debts or
            rent loss;

     (ii)   Reserves of any kind;

     (iii)  Costs relating to compliance with earthquake retrofit ordinances
            enacted prior to Commencement Date and which is exclusive of any
            retrofitting of the Base Building;

     (iv)   Costs incurred due to default by Landlord of the terms and
            conditions of this Lease;

     (v)    Interest on debt or amortization payments on any mortgage or
            mortgages, and rental under any ground or underlying leases or lease
            for the Premises or the Building;

     (vi)   Landlord's general overhead or general administrative expenses not
            specifically incurred in the operation of the Building, except for
            allocated overhead costs to cover accounting, audit, management and
            related costs;

     (vii)  Rentals and other related expenses incurred in leasing permanent
            air-conditioning systems, elevators or other building equipment
            ordinarily considered to be of a capital nature, except temporary
            equipment which is used in providing janitorial, maintenance or
            engineering services and which is not permanently affixed to the
            Building;

     (viii) All items and services for which Tenant reimburses Landlord or pays
            to other persons;

     (ix)   Advertising and promotional expenditures associated with obtaining
            tenants for the Building, or not having a reasonably foreseeable
            benefit for Tenant except for such expenses that are incurred as a
            result of the Tenant's default or early termination of the Lease;

     (x)    Wages, salaries, commissions or other compensation paid to employees
            above the level

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            of overall manager of the Building;

     (xi)   Charitable contributions made by Landlord;

     (xii)  Purchase costs of paintings, sculptures or other art work purchased
            for display in the Building;

     (xiii) Environmental or hazardous waste clean-up costs incurred by Landlord
            with respect to the Building except any such costs attributed to
            contamination caused by Tenant.

4.2  Tenant shall pay all Property Taxes relating to the Premises or the
     Building. As used in this Lease, "Property Taxes" shall mean all taxes,
     assessments, excises, levies, fees and charges (and any tax, assessment,
     excise, levy, fee or charge levied wholly or partly in lieu thereof or as a
     substitute therefor or as an addition thereto) of every kind and
     description, general or special, ordinary or extraordinary, foreseen or
     unforeseen, secured or unsecured, whether or not now customary or within
     the contemplation of Landlord and Tenant, that are levied, assessed,
     charged, confirmed or imposed by any public or government authority on or
     against, or otherwise with respect to, the Building or any part thereof or
     any personal property used in connection with the Building. Property Taxes
     shall not include net income (measured by the income of Landlord from all
     sources or from sources other than solely rent), franchise, excess profit
     taxes, gift taxes, documentary transfer inheritance or capital stock taxes
     of Landlord, unless levied or assessed against Landlord in whole or in part
     in lieu of, as a substitute for, or as an addition to any Property Taxes.
     Notwithstanding the foregoing, Tenant shall not be responsible for paying
     any increase in real property tax specified in tax assessor's records and
     worksheets as being caused by any sale, transfer, or exchange of the
     Building or any part thereof.

4.3  Tenant shall pay all Insurance Expenses relating to the Premises or the
     Building. As used in this Lease, "Insurance Expenses" shall mean cost of
     acquiring liability, property, and other insurance on the Building and/or
     the Premises as the Landlord may, in Landlord's reasonable discretion, deem
     appropriate; provided, however, that "Insurance Expenses" shall not include
     the cost of acquiring earthquake or flood insurance on the Building and/or
     the Premises.

4.4  Landlord shall provide reasonable notice to Tenant of the nature and amount
     of any Operating Expenses, Property Taxes, and/or Insurance Expenses that
     are incurred by or billed to Landlord. Tenant shall provide Landlord with
     either direct payment or proof of payment of any invoice or bill for
     Operating Expenses within thirty (30) days of Landlord's notice. If at any
     time during the term of this Lease, Tenant fails to pay the Operating
     Expenses, Insurance Expenses and/or Property Taxes as required hereunder,
     Landlord may make that payment, and Tenant shall immediately reimburse
     Landlord. Tenant shall have the right to inspect, copy and review
     Landlord's books and records with respect to Operating Expenses. In the
     event that any review of Operating Expenses made at Tenant's request by
     independent accountants, selected by Tenant and reasonably satisfactory to
     Landlord, shall result in a decrease of the amount of Operating Expenses
     for any year of 5% or more, Landlord shall pay the cost of such review.

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                                   ARTICLE 5
                                      Use

5.1  The Premises shall be used for office, multimedia, software engineering,
     consulting, customer service, sales and administration thereto and no other
     purpose without the Landlord's prior written consent, which shall not be
     unreasonably withheld. Tenant shall have exclusive signage rights for the
     entire Premises. Tenant shall not do, nor permit to be done, in, on or
     about the Premises, nor bring or keep or permit to be brought or kept
     therein, anything which is prohibited by or will in any way conflict with
     any law, ordinance, rule, regulation or order now in force or which may
     hereafter be enacted, or which is prohibited by any insurance policy
     carried by Landlord for the Building, or will in any way increase the
     existing rate of, cause a cancellation of, or affect any insurance for the
     Building. Tenant shall not bring or keep, nor permit to be brought or kept,
     in the Premises or the Building any toxic or hazardous substance, material
     or waste or any other contaminant or pollutant. Tenant shall not do or
     permit anything to be done in or about the Premises which will in any way
     obstruct or interfere with the rights of Landlord or other tenants of the
     Building, or injure or annoy them. Tenant shall not use nor allow the
     Premises to be used for any improper, immoral, unlawful or objectionable
     activity, nor shall Tenant cause, maintain or permit any nuisance in, on or
     about the premises or commit or suffer to be committed any waste in, on or
     about the Premises. Tenant may bring pets into the Building and the
     Premises subject to such reasonable rules and regulations as Landlord may
     establish.

                                   ARTICLE 6
                  No Services, Warranties or Representations

6.1  Landlord shall supply no services to the Building or the Premises. Tenant
     shall take the Premises in their "AS IS" condition. Except for the work of
     the Landlord described on Exhibit C, Tenant hereby acknowledges and agrees
     that the lease of the Premises and the Building is made on an "AS IS" basis
     and that the Landlord has not made, and does not make, any representation,
     warranties or guarantees of any kind or character whatsoever, whether
     express or implied, oral or written, concerning or with respect to the
     Premises or the Building; except as set forth in paragraph 6.2.

6.2  Landlord represents that (i) it is the sole owner of the Building, (ii) it
     has the power and authority to execute and deliver this Lease and that this
     Lease is binding upon Landlord in accordance with its terms, (iii) the
     Premises, in the state existing on the Commencement Date, but without
     regard to alterations or improvements made by Tenant or the use for which
     Tenant will occupy the Premises, does not violate any covenants or
     restrictions of record, or any applicable building code, regulation or
     ordinance in effect on the Commencement Date, including, without
     limitation, the federal Americans With Disabilities Act and regulations
     thereunder, (iv) there is no pending litigation relating to the Premises or
     the Building, (v) there are no known defects in the Premises or the
     Building, (vi) all equipment and building systems in the Premises and the
     Building are in good operating condition and repair as of the Commencement
     Date, (vii) the Premises and the Building are in compliance with all laws
     relating to the storage, use and disposal of hazardous materials, and
     (viii) the

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     Premises and the Building are free of any asbestos-containing materials.

                                   ARTICLE 7
                            Maintenance and Repairs

7.1  Landlord shall make necessary repairs to the roof and exterior structural
     elements of the Building, including the Base Building mechanical (heating,
     ventilating and air conditioning) and electrical systems. Tenant shall, at
     all times during the term of this Lease and at Tenant's sole cost and
     expense, maintain and repair the Building interior and every part thereof
     and all equipment, fixtures and improvements therein. Tenant shall maintain
     the mechanical (heating, ventilating and air conditioning) and electrical
     systems of the Building and keep them clean and in good order and operating
     condition. Subject to paragraph 8.2 hereof, Tenant shall, at the end of the
     term of this Lease, surrender to Landlord the Premises and all alterations,
     additions, fixtures and improvements therein or thereto in the same
     condition as when received, ordinary wear and tear and damage thereto by
     fire or other casualty excepted.

                                   ARTICLE 8
                                  Alterations

8.1  Except as shown on Exhibit D, Tenant shall not make any alterations,
     additions or improvements in or to the Premises or any part thereof, or
     attach any fixtures or equipment thereto, without Landlord's prior written
     consent which consent shall not be unreasonably withheld or delayed.
     Notwithstanding the preceding sentence, Tenant may make alterations,
     additions or improvements without Landlord's consent if the total cost of
     those alterations, additions or improvements is no more than Five Thousand
     Dollars ($5,000.00) per occurrence and the alterations, additions or
     improvements will not affect in any way the structural, exterior or roof
     elements of the Building or the elevator, mechanical, electrical, plumbing
     or life safety systems of the Building. Tenant shall give prior written
     notice of any such allowed alterations, additions or improvements to
     Landlord. All alterations, additions and improvements in or to the Premises
     to which Landlord consents shall be made by Landlord at Tenant's sole cost
     and expense. Tenant shall give written notice to Landlord of the date on
     which construction of any work will be commenced at least five (5) days
     prior to that date. Tenant shall keep the Premises and the Building free
     from mechanics' liens and all other liens arising out of any work
     performed, labor supplied, materials furnished or other obligations
     incurred by Tenant. Tenant shall promptly and fully pay and discharge all
     claims on which any such lien could be based or shall provide a bond or
     other adequate security therefor. Landlord shall have the right to post and
     keep posted on the Premises any notices that may be provided by law or
     which Landlord may deem to be proper for the protection of Landlord, the
     Premises and the Building from liens, and, upon thirty (30) days' prior
     written notice to Tenant, to take any other action Landlord deems necessary
     to remove or discharge liens or encumbrances at the expense of Tenant.

8.2  All alterations, additions, fixtures and improvements shall become part of
     the Building and Landlord's property. All movable furniture, equipment,
     trade fixtures, computers, office

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     machines and other personal property shall remain the property of Tenant.
     Upon termination of this Lease, Tenant shall, at Tenant's expense, remove
     all such movable furniture, equipment, trade fixtures, computers, office
     machines and other personal property from the Building and repair all
     damage caused by the removal. Termination of this Lease shall not affect
     the obligations of Tenant pursuant to this paragraph 8.2 to be performed
     after termination.

                                   ARTICLE 9
                                   Insurance

9.1  Landlord shall not be liable to Tenant for any damage to or loss or theft
     of any property or for any bodily or personal injury, illness or death of
     any person in, on or about the Premises or the Building arising at any time
     and from any cause whatsoever, except to the extent caused by the
     negligence or willful misconduct of Landlord. Tenant waives all claims
     against Landlord arising from any liability described in this paragraph
     9.1, except to the extent caused by the negligence or willful misconduct of
     Landlord.

9.2  Tenant shall indemnify and defend Landlord against and hold Landlord
     harmless from all claims, demands, liabilities, damages, losses, costs and
     expenses, including reasonable attorneys' fees and disbursements, arising
     from or related to any use or occupancy of the Premises, or the Building,
     or any condition of the Premises, or any default in the performance of
     Tenant's obligations, or any damage to any property (including property or
     employees and invitees of Tenant) or any bodily or personal injury, illness
     or death of any person (including employees and invitees of Tenant)
     occurring in, on or about the Premises or any part thereof arising at any
     time and from any cause whatsoever (except to the extent caused by the
     negligence or willful misconduct of Landlord) or occurring in, on or about
     any part of the Building other than the Premises when the damage, bodily or
     personal injury, illness or death is caused by any act or omission of
     Tenant or its agents, officers, employees, contractors, invitees or
     licensees. This paragraph 9.2 shall survive the termination of this Lease
     with respect to any damage, bodily or personal injury, illness or death
     occurring prior to termination.

9.3  Landlord shall indemnify and defend Tenant against and hold Tenant harmless
     from all claims, demands, liabilities, damages, losses, costs and expenses,
     including reasonable attorney's fees and disbursements, arising from or
     related to (i) Landlord's negligence or willful misconduct, or (ii) any
     default in the performance of Landlord's obligations under this Lease. This
     paragraph 9.3 shall survive the termination of this Lease with respect to
     any damage, bodily or personal injury, illness or death occurring prior to
     termination.

9.4  Landlord shall indemnify, defend and hold harmless Tenant and any and all
     officers, directors, employees, shareholders, agents or affiliates of
     Tenant from and against any and all direct and indirect, actual and
     consequential costs, expenses, losses, demands, claims, liabilities,
     judgments, causes of action, proceedings or hearings which arise from the
     use, disposal, emission, discharge, injection, spill, escape, leak, release
     or threatened release of any hazardous material in the Building or the
     Premises on or before the Commencement

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     Date, or brought onto the Premises or the Building by or for Landlord or by
     anyone under Landlord's control.

9.5  Tenant shall procure and maintain, at its own expense, with companies
     satisfactory to Landlord in its reasonable discretion, the following
     insurance coverage:

     a. All Risk Property insurance which insures the Building and Tenant's
        Property on site from fire and vandalism on a replacement basis, with
        business interruption coverage equal to at least one year's rent.

     b. Workers' Compensation and Employers' Liability Insurance as required by
        California law, affording 30 days' notice of cancellation to the Owner.
        The Employers' liability coverage shall have the limits required by law.

     c. General Liability Insurance on an "occurrence" basis, having a limit of
        not less than $1,000,000 for bodily injury and not less than $1,000,000
        for property damage liability, including:


        (1) Premises and Operations coverage with X, C and U exclusions deleted,
            if applicable;
        (2) Products and Completed Operations coverage;
        (3) Broad Form Property Damage coverage, including completed operations;
        (4) Blanket Contractual coverage (specifically covering this Lease);
        (5) Personal Injury coverage;
        (6) An endorsement affording 30 days' notice of cancellation to Landlord
            in the event of cancellation or material reduction in coverage;
        (7) An endorsement providing that the insurance as afforded is primary,
            and any other insurance maintained by Landlord is excess and
            noncontributing with the insurance required hereunder;
        (8) Business interruption insurance, in an amount equal to at least one
            year's rent.

     d. Business Auto Liability in the amount of $1,000,000 combined single
        limit for bodily injury and/or property damage liability including:

        (1) Owned autos and trucks;
        (2) Hired or borrowed autos and trucks;
        (3) Non-owned autos and trucks;
        (4) An endorsement affording 30 days' notice of cancellation to Landlord
            in the event of cancellation or material reduction in coverage.

     e. Excess or Umbrella Bodily Injury and/or Property Damage Liability
        Insurance with limits not less than $1,000,000 per occurrence for bodily
        injury and/or property damage liability, listing the above-described
        General Liability, Employers' Liability and Comprehensive Auto Liability
        as underlying policies and including:

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        (1) A Broad-as-Primary endorsement;
        (2) An endorsement naming Landlord as an additional insured;
        (3) An endorsement affording 30 days' notice of cancellation to Landlord
            in the event of cancellation or material reduction in coverage;
        (4) An endorsement providing that the insurance as afforded is primary,
            and any other insurance maintained by Landlord is excess and
            noncontributing with the insurance required hereunder.

     Tenant shall, at Tenants' sole cost and expense, be responsible for
     insuring Tenant's furniture, equipment, fixtures, computers, office
     machines, automobiles and vehicles, and all other personal property.

9.6  All insurance required under this Article 9 and all renewals thereof shall
     be issued by good and responsible companies qualified to do and doing
     business in the State of California. Each policy shall expressly provide
     that the policy shall not be canceled or altered without thirty (30) days'
     prior written notice to Landlord and shall remain in effect notwithstanding
     any cancellation or alteration until notice has been given to Landlord and
     the thirty-day period has expired. All liability insurance under this
     Article 9 shall name Landlord, and any other parties designated by
     Landlord, as an additional insured, shall be primary and noncontributing
     with any insurance that may be carried by Landlord, shall afford coverage
     for all claims based on any act, omission, event or condition that occurred
     or arose (or the onset of which occurred or arose) during the policy
     period, and shall expressly provide that Landlord, although named as an
     insured, shall nevertheless be entitled to recover under the policy for any
     loss, injury or damage to the Landlord. Upon the issuance thereof, Tenant
     shall deliver each policy or a certified copy and a certificate thereof to
     Landlord for retention by Landlord. If Tenant fails to insure or fails to
     furnish to Landlord upon thirty (30) days' written notice to do so any
     policy or certified copy and certificate thereof as required, Landlord
     shall have the right from time to time to effect such insurance for the
     benefit of Tenant or Landlord or both of them, and all premiums paid
     therefor by Landlord shall be payable by Tenant as additional rent on
     demand.

9.7  Tenant waives on behalf of all insurers under all policies of property,
     liability and other insurance (excluding workers' compensation) now or
     hereafter carried by Tenant insuring or covering the Premises, or any
     portion or any contents thereof, or any operations therein, all rights of
     subrogation that any insurer might otherwise, if at all, have to any claims
     of Tenant against Landlord. Landlord waives on behalf of all insurers under
     all policies of property, liability and other insurance (excluding workers'
     compensation) now or hereafter carried by Landlord insuring or covering the
     Building or any portion or any contents thereof, or any operations therein,
     all rights of subrogation that any insurer might otherwise, if at all, have
     to any claims of Landlord against Tenant. Tenant shall, prior to or
     immediately after the date of this Lease, procure from each of the insurers
     under all policies of property, liability and other insurance (excluding
     workers' compensation) now or hereafter carried by Tenant insuring or
     covering the Premises, or any portion or any contents thereof, or any
     operations therein, a waiver of all rights of subrogation that the insurer
     might otherwise, if

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     at all, have to any claims of Tenant against Landlord as required by this
     paragraph 9.5.

                                  ARTICLE 10
                      Compliance with Legal Requirements

10.1 Tenant shall, at Tenant's sole cost and expense, promptly comply with all
     laws, ordinances, rules, regulations, orders and other requirements of any
     government or public authority now in force or which may hereafter be in
     force, with all requirements of any board of fire underwriters or other
     similar body now or hereafter constituted, and with all directions and
     certificates of occupancy issued pursuant to any law by any governmental
     agency or officer, insofar as any of them relate to or are required by the
     condition, use or occupancy of the Premises or the operation, use or
     maintenance of any personal property, fixtures, machinery, equipment or
     improvements in the Premises, or the Building. Tenant shall not be required
     to make structural changes or to make improvements required by the ADA
     unless such structural changes or such improvements required by the ADA are
     related to or required by Tenant's acts or particular use of the Premises
     or by improvements made by or for Tenant. Similarly, Tenant shall not be
     required to make changes to the electrical, water, HVAC or other utility
     systems of the Building unless such changes are related to or required by
     Tenant's acts or particular use of the Premises or by improvements made by
     or for Tenant.

                                  ARTICLE 11
                            Assignment or Sublease

11.1 Tenant shall not, directly or indirectly, without the prior written consent
     of Landlord (which consent shall not be unreasonably withheld), assign this
     Lease or any interest herein or sublease the Premises or any part thereof,
     or permit the use or occupancy of the Premises by any person or entity
     other than Tenant. Tenant shall not, directly or indirectly, without the
     prior written consent of Landlord, which consent shall not be unreasonably
     withheld or delayed, pledge, mortgage or hypothecate this Lease or any
     interest herein. This Lease shall not, nor shall any interest herein, be
     assignable as to the interest of Tenant involuntarily or by operation of
     Law without the prior written consent of Landlord, which consent shall not
     be unreasonably withheld or delayed. Any of the foregoing acts without
     prior written consent of Landlord shall be void and shall, at the option of
     Landlord, constitute a default that entitles Landlord to terminate this
     Lease. Without limiting or excluding other reasons for withholding
     Landlord's consent Landlord shall have the right to withhold consent if it
     is not demonstrated to the satisfaction of Landlord that the proposed
     assignee or subtenant is financially able to perform all of the obligations
     of Tenant under this Lease (as evidenced by financial statements and
     business and credit references acceptable to Landlord). Tenant agrees that
     the instrument by which any assignment or sublease to which Landlord
     consents is accomplished shall expressly provide that the assignee or
     subtenant will perform all of the covenants to be performed by Tenant under
     this Lease (in the case of a sublease, only insofar as such covenants
     relate to the portion of the Premises subject to the sublease) as and when
     performance is due after the effective date of the assignment or sublease
     and that Landlord will have the right to enforce those covenants directly
     against the assignee or subtenant. Any purported assignment or sublease
     without an instrument containing the foregoing provisions

                                      -10-
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     shall be void. Tenant shall in all cases remain liable for the performance
     by any assignee or subtenant of all covenants and obligations of this
     Lease. Notwithstanding anything in this Article 11 or elsewhere in this
     Lease to the contrary, Tenant may assign or sublet the Premises, or any
     portion thereof, without consent, to any entity which controls, is
     controlled by or is under common control with Tenant, or to any entity
     resulting from the merger, initial public offering or consolidation with
     Tenant, or to any person or entity which acquires all the assets of Tenant
     as a going concern of the business that is being conducted on the Premises,
     provided that before such assignment or sublet shall be effective said
     entity shall assume, in full, the obligations of Tenant under this Lease.

11.2 If Tenant wishes to assign this Lease or sublease all or any part of the
     Premises, Tenant shall give written notice to Landlord identifying the
     intended assignee or subtenant by name and address and specifying all of
     the terms of the intended assignment or sublease. Tenant shall give
     Landlord any additional information concerning the intended assignee or
     subtenant (including complete financial statements and a business history)
     or the intended assignment or sublease (including true copies thereof) as
     Landlord reasonably requests. For a period of fifteen (15) days after
     written notice is given by Tenant, Landlord shall have the right, by giving
     written notice to Tenant, (a) to consent in writing to the intended
     assignment or sublease, unless Landlord determines not to consent, or (b)
     to enter into an assignment of this Lease or a sublease of the Premises, as
     the case may be, with Tenant upon the terms set forth in such written
     notice, or (c) in the case of an assignment of this Lease or sublease of
     the entire Premises for substantially the balance of the term of this
     Lease, to terminate this Lease, effective as of the date on which the
     intended assignment or sublease would have been effective if Landlord had
     not exercised this termination right. If Landlord does not exercise any of
     the rights set forth in the preceding sentence by giving written notice to
     Tenant within fifteen (15) days, Landlord shall be deemed to consent in
     writing to the intended assignment or sublease. If Landlord elects to enter
     into an assignment of this Lease or a sublease of the Premises or to
     terminate this Lease, Landlord may enter into a new lease or agreement
     covering the Premises or any portion thereof with the intended assignee or
     subtenant on any terms to which Landlord and the assignee or subtenant may
     agree, or enter into a new lease or agreement covering the Premises or any
     portion thereof with any other person or entity. In such event, Tenant
     shall not be entitled to any portion of the profit, if any, that Landlord
     may realize on account of the new lease or agreement. If Landlord elects to
     terminate this Lease, then from and after the date of termination, Landlord
     and Tenant each shall have nor further obligation to the other under this
     Lease with respect to the Premises except for matters occurring or
     obligations arising hereunder prior to the date of termination.

11.3 If Landlord consents in writing (or is deemed to consent in writing in
     accordance with paragraph 11.2), Tenant may complete the intended
     assignment or sublease subject to the following covenants: (a) the
     assignment or sublease shall be on the same terms as set forth in the
     written notice given by Tenant to Landlord, (b) no assignment or sublease
     shall be valid and no assignee or subtenant shall take possession of the
     Premises or any part thereof until an executed duplicate original of the
     assignment or sublease, in compliance with paragraph 11.1 hereof, has been
     delivered to Landlord, (c) no assignee or subtenant shall

                                      -11-
<PAGE>

     have a right further to assign or sublease, and (d) one-half of all
     "Excess Rent" (as hereinafter defined) derived from the assignment or
     sublease is paid to Landlord. Tenant shall pay Excess Rent to Landlord
     immediately as and when it is received by Tenant. As used in this paragraph
     11.3, "Excess Rent" shall mean the amount by which the total money and
     other economic consideration to be paid by the assignee or subtenant as a
     result of an assignment or sublease, whether denominated rent or otherwise,
     after a deduction has been made for Tenant's real estate leasing
     commissions and tenant improvement costs, exceeds, in the aggregate, the
     total amount of rent that Tenant is obligated to pay to Landlord under this
     Lease.

11.4 No assignment or sublease whatsoever shall release Tenant from Tenant's
     obligations and liabilities under this Lease or alter the primary liability
     of Tenant to pay all rent and to perform all obligations to be paid and
     performed by Tenant. The acceptance of rent by Landlord from any other
     person or entity shall not be deemed to be a waiver by Landlord of any
     provision of this Lease. Consent to one assignment or sublease shall not be
     deemed consent to any subsequent assignment or sublease. If any assignee,
     subtenant or successor of Tenant defaults in the performance of any
     obligation to be performed by Tenant under this Lease, Landlord may proceed
     directly against Tenant without the necessity of exhausting remedies
     against the assignee, subtenant or successor.

11.5 If Tenant requests the consent or approval of Landlord to any assignment,
     sublease or other action by Tenant, Tenant shall pay to Landlord on demand,
     as additional rent, all costs and expenses, including reasonable attorneys'
     fees and disbursements, incurred by Landlord in connection therewith.

                                  ARTICLE 12
                               Entry by Landlord

12.1 Landlord shall have the right to enter the Premises and/or the Building at
     any time upon prior notice and accompanied by a representative of Tenant to
     (a) inspect the premises, (b) exhibit the Premises to prospective
     purchasers, lenders or tenants, (c) determine whether Tenant is performing
     all of Tenant's obligations, and (d) post notices of non-responsibility.
     Except for damages caused by Landlord's negligence or willful misconduct,
     Tenant waives all claims for damages for any injury or inconvenience to or
     interference with Tenant's business, any loss of occupancy or quiet
     enjoyment of the Premises or any other loss occasioned by Landlord's entry.
     Tenant shall provide to Landlord, and Landlord shall at all times have, a
     key to unlock all doors to the Premises, and Landlord shall have the right
     to use any and all means which Landlord may deem proper to open doors in an
     emergency to obtain entry to the Premises and/or the Building. Any such
     entry by Landlord shall not under any circumstances be construed or deemed
     to be a forcible or unlawful entry into or a detainer of the Premises or an
     eviction, actual or constructive, of Tenant from the Premises, or any
     portion thereof

                                      -12-
<PAGE>

                                  ARTICLE 13
                        Events of Default and Remedies

13.1 The occurrence of any one or more of the following events ("Event of
     Default") shall constitute a breach of this Lease by Tenant:

     a. Tenant fails to pay any Base Rent, and that failure continues for more
        than five (5) business days after Tenant's receipt of written notice
        from Landlord pursuant to the notice provisions herein.

     b. Tenant fails to pay any additional rent or other amount of money or
        charge payable by Tenant hereunder as and when it becomes due and
        payable, and that failure continues for more than ten (10) business days
        after Tenant's receipt of written notice from Landlord pursuant to the
        notice provisions herein.

     c. Tenant fails to perform or breaches any other agreement or covenant of
        this Lease to be performed or observed by Tenant as and when performance
        or observance is due, and that failure to breach continues for more than
        thirty (30) days after Landlord gives written notice thereof to Tenant.
        If, by the nature of the agreement or covenant, the failure or breach
        cannot reasonably be cured within a period of thirty (30) days, an Event
        of Default shall not exist as long as Tenant commences with due
        diligence and dispatch the curing of the failure or breach within the
        period of thirty (30) days and, having so commenced, thereafter
        prosecutes with diligence and dispatch and completes the curing of the
        failure or breach.

     d. Tenant (1) files, or consents by answer or otherwise to the filing
        against it of a petition for relief or reorganization or arrangement or
        any other petition in bankruptcy or for liquidation or to take advantage
        of any bankruptcy, insolvency or other debtors' relief law of any
        jurisdiction, (2) makes an assignment for the benefit of its creditors,
        (3) consents to the appointment of a custodian, receiver, trustee or
        other officer with similar powers of Tenant or of any substantial part
        of Tenant's property, or (4) takes action for the purpose of any of the
        foregoing.

     e. Without consent by Tenant, a court or government authority enters an
        order, and the order is not vacated within thirty (30) days, (1)
        appointing a custodian, receiver, trustee or other officer with similar
        powers with respect to Tenant or with respect to any substantial part of
        Tenant's property, or (2) constituting an order for relief or approving
        a petition for relief or reorganization or arrangement or any other
        petition in bankruptcy or for liquidation or to take advantage of any
        bankruptcy, insolvency or other debtors' relief law of any jurisdiction,
        or (3) ordering the dissolution, winding-up or liquidation of Tenant.

     f. This Lease or any estate of Tenant hereunder is levied upon under any
        attachment or execution, and the attachment or execution is not vacated
        within sixty (60) days or Tenant does not provide a bond or other
        adequate security therefor.

                                      -13-
<PAGE>

     g. Tenant intentionally abandons the Premises.

13.2 If an Event of Default occurs, Landlord shall have the right at any time to
     give a written termination notice to Tenant and, on the date specified in
     the notice, Tenants' right to possession shall terminate and this Lease
     shall terminate. Upon termination, Landlord shall have the right to recover
     from Tenant:

     a. The worth at the time of award of all unpaid rent that had been earned
        at the time of termination;

     b. The worth at the time of award of the amount by which all unpaid rent
        that would have been earned after termination until the time of award
        exceeds the amount of rental loss that Tenant proves could have been
        reasonably avoided;

     c. The worth at the time of award of the amount by which all unpaid rent
        for the balance of the term of this Lease after the time of award
        exceeds the amount of rental loss that Tenant proves could be reasonably
        avoided; and

     d. All other amounts necessary to compensate Landlord for all detriment
        proximately caused by Tenant's failure to perform all of Tenant's
        obligations under this Lease or which in the ordinary course of things
        would be likely to result therefrom. The "worth at the time of award" of
        the amounts referred to in clauses a. and b. above shall be computed by
        allowing interest at the lesser of the maximum annual interest rate
        allowed by law for business loans (not primarily for personal, family or
        household purposes) not exempt from the usury law at the time of
        termination or twelve percent (12%) per annum. The "worth at the time of
        award" of the amount referred to in clause c. above shall be computed by
        discounting the amount at the discount rate of the Federal Reserve Bank
        of San Francisco at the time of award plus one percent (11%). For the
        purpose of determining unpaid rent under clauses a., b. and c. above,
        the rent reserved in this Lease shall be deemed to be the total rent
        payable by Tenant under Articles 3, 4 and 5 hereof.

13.3 Even though Tenant has breached this Lease, this Lease shall continue in
     effect for so long as Landlord does not terminate Tenant's right to
     possession, and Landlord shall have the right to enforce all of its rights
     and remedies under this Lease, including the right to recover all rent as
     it becomes due under this Lease. Acts of maintenance or preservation or
     efforts to re-let the Premises or the appointment of a receiver upon
     initiative of Landlord to protect Landlord's interest under this Lease
     shall not constitute a termination of Tenant's right to possession unless
     written notice of termination is given by Landlord to Tenant.

13.4 The remedies provided for in this Lease are in addition to all other
     remedies available to Landlord at law or in equity by statute or otherwise.

13.5 All agreements and covenants to be performed or observed by Tenant under
     this Lease shall be at Tenant's sole cost and expense and without any
     abatement of rent. If Tenant fails to

                                      -14-
<PAGE>

     pay any sum of money to be paid by Tenant or to perform any other act to be
     performed by Tenant under this Lease, Landlord shall have the right, but
     shall not be obligated, upon thirty (30) days prior written notice to
     Tenant and without waiving or releasing Tenant from any obligations of
     Tenant, to make any such payment or to perform any such other act on behalf
     of Tenant in accordance with this Lease. All sums so paid by Landlord and
     all necessary incidental costs shall be deemed additional rent hereunder
     and shall be payable by Tenant to Landlord on demand, together with
     interest from the date of expenditure by Landlord to the date of repayment
     by Tenant at the lesser of the maximum annual interest rate allowed by law
     for business loans (not primarily for personal, family or household
     purposes) not exempt from the usury law at the date of expenditure or
     twelve percent (12%) per annum. Landlord shall have, in addition to all
     other rights and remedies of Landlord, the same rights and remedies in the
     event of the nonpayment of these sums plus interest by Tenant as in the
     case of default by Tenant in the payment of rent.

13.6 If Tenant abandons or surrenders the Premises, or is dispossessed by
     process of law or otherwise, any movable furniture, equipment, trade
     fixtures or personal property belonging to Tenant and left in the Premises
     shall be deemed to have been abandoned, at the option of Landlord, and
     Landlord shall have the right, upon thirty (30) days prior written notice
     to Tenant, to sell or otherwise dispose of the abandoned personal property
     in any commercially reasonable manner.

13.7 Landlord shall be in default of this Lease if it fails or refuses to
     perform any provision of this Lease that it is obligated to perform if the
     failure to perform is not cured within thirty (30) days after Landlord's
     receipt of notice of the default pursuant to the notice provisions in this
     Lease. If the default cannot be reasonably cured within thirty (30) days,
     Landlord shall not be in default of this Lease if Landlord commences to
     cure the default within the thirty (30) day period and diligently and in
     good faith continues to cure the default. Tenant, at any time after
     Landlord commits a default, can cure the default at Landlord's cost. If
     Tenant at any time, by reason of Landlord's default, pays any sum or does
     any act that requires the payment of any sum, the sum paid by Tenant shall
     be due immediately from Landlord to Tenant at the time the sum is paid. If
     Landlord fails to reimburse Tenant as required by this paragraph, Tenant
     shall have the right to withhold from future rent due the sum Tenant has
     paid until Tenant is reimbursed in full for said sum.

                                  ARTICLE 14
                             Damage or Destruction

14.1 If the Building or the Premises, or any part thereof, is damaged by fire or
     other casualty before the Commencement Date or during the term of this
     Lease, and this Lease is not terminated pursuant to paragraph 14.2 hereof,
     Landlord shall repair the damage and restore the Building and the Premises
     to substantially the same condition in which the Building and the Premises
     existed before the occurrence of the fire or other casualty and this Lease
     shall, subject to this paragraph 14.1, remain in full force and effect. If
     the fire or other casualty damages the Premises or the Building necessary
     for Tenant's use and occupancy of the Premises and if the damage is not the
     result of the negligence or willful misconduct of

                                      -15-
<PAGE>

     Tenant or Tenant's agents, officers, employees, contractors, licensees or
     invitees, then, during the period the Premises are rendered unusable by the
     damage, Tenant shall be entitled to a reduction in Base Rent in the
     proportion that the area of the Premises rendered unusable bears to the
     total area of the Premises. Landlord shall not be obligated to repair any
     damage to, or to make any replacement of, any movable furniture, equipment,
     trade fixtures or personal property in the Premises. Tenant shall, at
     Tenant's sole cost and expense, repair and replace all such movable
     furniture, equipment trade fixtures and personal property. Tenant hereby
     waives California Civil Code sections 1932(2) and 1933(4).

14.2 If the Building or the Premises, or any part thereof, is damaged by fire or
     other casualty before the Commencement Date or during the term of this
     Lease and (a) the fire or other casualty occurs during the last twelve (12)
     months of the term of this Lease and the repair and restoration work to be
     performed by Landlord in accordance with paragraph 14.1 cannot, as
     reasonably estimated by Landlord, be completed within two (2) months after
     the occurrence of the fire or other casualty, or (b) the insurance proceeds
     received by Landlord in respect of the damage are not adequate to pay the
     entire cost, as reasonably estimated by Landlord, of the repair and
     restoration work to be performed by Landlord in accordance with paragraph
     14.1, and Tenant does not elect in its sole discretion to pay the
     difference thereof or (c) the repair and restoration work to be performed
     by Landlord in accordance with paragraph 14.1 hereof cannot, as reasonably
     estimated by Landlord, be completed within six (6) months after the
     occurrence of the fire or other casualty, then Landlord shall have the
     right, by giving written notice to Tenant within sixty (60) days after the
     occurrence of the fire or other casualty, to terminate this Lease as of the
     date of the notice. In such event, Rent shall abate as of the date of such
     casualty in the proportion that the area of the Premises rendered unusable
     bears to the total area of the Premises. If Landlord does not exercise the
     right to terminate this Lease in accordance with this paragraph, Landlord
     shall repair the damage and restore the Building and the Premises in
     accordance with paragraph 16.1 hereof and this Lease shall remain in full
     force and effect. A total destruction of the Building shall automatically
     terminate this Lease effective as of the date of the total destruction.

                                  ARTICLE 15
                                Eminent Domain

15.1 If any part, but less than all, of the Premises is taken by exercise of the
     power of eminent domain before the Commencement Date, Landlord or Tenant
     may terminate this Lease upon notice to the other within thirty (30) days
     after the date of taking and before the Commencement Date. If any part, but
     less than all, of the Premises is taken during the term of this Lease, and
     if the remaining portion of the Premises is not reasonably suitable for
     Tenant's purposes, Tenant may terminate this Lease, by giving written
     notice to Landlord within thirty (30) days after the date of the taking. If
     either Landlord or Tenant exercises its right to terminate this Lease in
     accordance with this paragraph, this Lease shall terminate as of the date
     of the taking. If neither Landlord nor Tenant exercises its right to
     terminate this Lease in accordance with this paragraph, this Lease shall
     terminate as to the portion of the Premises taken as of the date of taking
     and shall remain in full force and effect as to the portion of the Premises
     not taken, and the Base Rent shall be reduced as of the date of taking

                                      -16-
<PAGE>

     in the proportion that the area of the Premises taken bears to the total
     area of the Premises. If all of the Premises is taken by exercise of the
     power of eminent domain before the Commencement Date or during the term of
     this Lease, this Lease shall terminate as of the date of the taking.

15.2 If all or any part of the Premises is taken by exercise of the power of
     eminent domain, all awards, compensation, damages, income, rent and
     interest payable in connection with the taking shall, except as expressly
     set forth in this paragraph, be paid to and become the property of
     Landlord, and Tenant hereby assigns to Landlord all of the foregoing
     monies. Tenant shall have the right to claim and receive directly from the
     entity exercising the power of eminent domain only the share of any award
     determined to be owing to Tenant for the taking of improvements installed
     in the taken portion of the Premises by Tenant at Tenant's sole cost and
     expense, based on the unamortized cost actually paid by Tenant for the
     improvements, for the taking of Tenant's movable furniture, equipment trade
     fixtures and personal property, for loss of goodwill, for interference with
     or interruption of Tenant's business, or for removal and relocation
     expenses.

15.3 Notwithstanding paragraphs 15.1 and 15.2 hereof to the contrary, if the use
     of all or any part of the Premises is taken by exercise of the power of
     eminent domain during the term of this Lease on a temporary basis for a
     period less than the term of this Lease remaining after the taking, this
     Lease shall continue in full force and effect, Tenant shall continue to pay
     all of the rent and to perform all of the covenants of Tenant in accordance
     with this Lease, to the extent reasonably practicable under the
     circumstances, and the, condemnation proceeds in respect of the temporary
     taking shall be paid to Tenant; provided, however, that Rent shall abate in
     the proportion that the area of the Premises so taken bears to the total
     area of the Premises to the extent any condemnation proceedings are not
     specifically earmarked therefore.

15.4 As used in this Article 15, a "taking" means the acquisition of all or part
     of the Premises for a public use by exercise of the power of eminent domain
     or by a transfer in lieu thereof. A taking shall be considered to occur as
     of the earlier of the date on which possession of the Premises (or portion
     thereof) by the entity exercising the power of eminent domain is authorized
     as stated in an order for possession, or the date on which title to the
     Premises (or portion thereof) vests in the entity exercising the power of
     eminent domain. Tenant hereby waives California Code of Civil Procedure
     sections 1265.110 through 1265.160.

                                  ARTICLE 16
                        Subordination, Merger and Sale

16.1 This Lease shall be subject and subordinate at all times to the lien of all
     mortgages and deeds of trust securing any amount or amounts whatsoever that
     may now exist or hereafter be placed on or against the Building or on or
     against Landlord's interest or estate therein, all without the necessity of
     having further instruments executed by Tenant to effect the subordination.
     Notwithstanding the foregoing, in the event of a foreclosure of any such
     mortgage or deed of trust or of any other action or proceeding for the
     enforcement thereof,

                                      -17-
<PAGE>

     or of any sale thereunder, this Lease shall not be terminated or
     extinguished, nor shall the rights and possession of Tenant hereunder be
     disturbed, if no Event of Default then exists under this Lease, and Tenant
     shall attorn to the person who acquires Landlord's interest hereunder
     through any such mortgage or deed of trust. Tenant agrees to execute,
     acknowledge and deliver upon demand any further instruments evidencing
     subordination of this Lease to the lien of all such mortgages and deeds of
     trust that may reasonably be required by Landlord, but Tenants' covenant to
     subordinate this Lease to mortgages or deeds of trust hereafter executed is
     conditioned upon the inclusion of the commitments specified in the
     preceding sentence in each such senior mortgage or deed of trust, or in a
     separate subordination agreement. Landlord shall obtain from the holder of
     each current mortgage, deed of trust and ground lease, a non-disturbance
     agreement in recordable form, providing that in the event of any
     foreclosure or termination, or transfer in lieu of any of the foregoing, or
     the exercise of any other remedy under such mortgage, deed of trust or
     ground lease that: (a) Tenant's use, possession and enjoyment of the
     Premises shall not be disturbed and this Lease shall continue in full force
     and effect as long as Tenant is not in default, and (b) this Lease shall
     automatically become a lease directly between any successor to Landlord's
     interest and Tenant.

16.2 The voluntary or other surrender of this Lease by Tenant, or a mutual
     cancellation thereof, shall not work a merger and shall, at the option of
     Landlord, terminate all or any existing subleases or subtenancies or
     operate as an assignment to Landlord of any or all subleases or
     subtenancies.

16.3 If the original Landlord hereunder, or any successor owner of the Building,
     sells or conveys the Building, all liabilities and obligations on the part
     of the original Landlord, or the successor owner, under this Lease accruing
     after the sale or conveyance shall terminate and the original Landlord, or
     the successor owner, shall automatically be released therefrom, and
     thereupon all of Landlord's liabilities and obligations shall be binding
     upon the new owner. Tenant agrees to attorn to the new owner.


                                  ARTICLE 17
                             Estoppel Certificate

17.1 At any time and from time to time, Tenant shall, within ten (10) days after
     written request by Landlord, execute, acknowledge and deliver to Landlord a
     certificate certifying: (a) that this Lease is unmodified and in full force
     and effect (or, if there have been modifications, that this Lease is in
     full force and effect as modified, and stating the date and nature of each
     modification); (b) the Commencement Date and the Expiration Date determined
     in accordance with Article 2 hereof and the date, if any, to which all rent
     and other sums payable hereunder have been paid; (c) that no notice has
     been received by Tenant of any default by Tenant hereunder that has not
     been cured, except as to defaults specified in the certificate; (d) that
     Landlord is not in default under this Lease, except as to defaults
     specified in the certificate; and (e) any other matters that may be
     reasonably requested by Landlord or any actual or prospective purchaser or
     mortgage lender. Any such certificate may be relied upon by Landlord and
     any actual or prospective purchaser or mortgage lender of the Building

                                      -18-
<PAGE>

     or any part thereof At any time and from time to time, Tenant shall, within
     ten (10) days after written request by Landlord, deliver to Landlord copies
     of current financial statements (including, without limitation, a balance
     sheet, an income statement, and an accumulated retained earnings
     statement), annual reports, and other financial and operating information
     and data of Tenant prepared by Tenant in the course of Tenant's business as
     reasonably requested by Landlord. Unless available to the public, Landlord
     shall disclose Tenant's financial statements, annual reports and other
     information or data only to actual or prospective purchasers or mortgage
     lenders of the Building or any part thereof, and otherwise keep them
     confidential unless other disclosure is required by law.

                                  ARTICLE 18
                                 Holding Over

18.1 If, without objection by Landlord, Tenant holds possession of the Premises
     after expiration of the term of this Lease, Tenant shall become a tenant
     from month to month upon the terms herein specified but at a Base Rent
     equal to One Hundred Fifty Percent (150%) of the Base Rent in effect at the
     expiration of the term of this Lease pursuant to Article 3 hereof, payable
     in advance on or before the first day of each month. The month-to-month
     tenancy may be terminated by either Landlord or Tenant upon thirty (30)
     days' written notice of termination to the other at any time.

                                  ARTICLE 19
                               Security Deposit

19.1 Upon signing this Lease, Tenant shall pay to Landlord the sum of
     (the"Deposit"). The Deposit shall be held by Landlord as security for the
     performance by Tenant of all of the covenants of this Lease to be performed
     by Tenant, and Tenant shall be entitled to interest thereon. If Tenant
     fails to perform any of the covenants of this Lease to be performed by
     Tenant, then Landlord shall have the right, but no obligation, to apply the
     Deposit, or so much thereof as may be necessary, to cure any failure by
     Tenant. If Landlord applies the Deposit or any part thereof to cure any
     failure by Tenant, then Tenant shall immediately pay to Landlord the sum
     necessary to restore the Deposit to the full amount required by this
     paragraph. Any remaining portion of the Deposit shall be returned to Tenant
     upon termination of this Lease. Upon termination of the original Landlord's
     or any successor owner's interest in the Premises or the Building, the
     original Landlord or the successor owner shall be released from further
     liability with respect to the Deposit upon the original Landlord's or
     successor owner's compliance with California Civil Code section 1950.7.

                                  ARTICLE 20
                               Letter of Credit

20.1 Tenant shall, on execution of this Lease, deliver to Landlord and cause to
     be in effect during the Lease term, an unconditional, irrevocable Letter of
     Credit in the amount equal to nine (9) months of the Base Rent. The Letter
     of Credit shall be issued by a Letter of Credit bank selected by Tenant and
     acceptable to Landlord. A Letter of Credit bank is a bank that

                                      -19-
<PAGE>

     accepts deposits, maintains accounts, has a local San Francisco office that
     will negotiate a letter of credit, and the deposits of which are insured by
     the Federal Deposit Insurance Corporation. Tenant shall pay all expenses,
     points, or fees incurred by Tenant in obtaining the Letter of Credit.

20.2 The amount of the Letter of Credit shall be reduced by twenty percent (20%)
     on each rental adjustment date. The replacement Letter of Credit shall be
     effective at least thirty (30) days before expiration of the Letter of
     Credit that it replaces. Each replacement Letter of Credit shall be issued
     by a Letter of Credit bank acceptable to Landlord and shall otherwise
     comply with the requirements of this Article 20.

20.3 Landlord shall hold the Letter of Credit as security for the performance of
     Tenant's obligations under this Lease. If, after notice and failure to cure
     within the applicable period, Tenant defaults on any provision of this
     Lease, Landlord may, without prejudice to any other remedy it has, draw on
     that portion of the Letter of Credit necessary to:

     a)  Pay any rent or other sum in default;
     b)  Pay or reimburse Landlord for any amount that Landlord may spend or
         become obligated to spend in exercise Landlord's rights under Article
         13; or
     c)  Compensate Landlord for any expense, loss or damage that Landlord may
         suffer because of Tenant's default.

     If Tenant fails to renew or replace the Letter of Credit at least thirty
     (30) days before its expiration, Landlord may, without prejudice to any
     other remedy it has, draw on all of the Letter of Credit.

                                  ARTICLE 21
                                    Waiver

21.1 The waiver by Landlord or Tenant of any breach of any covenant in this
     Lease shall not be deemed to be a waiver of any subsequent breach of the
     same or any other covenant in this Lease, nor shall any custom or practice
     which may grow up between Landlord and Tenant in the administration of this
     Lease be construed to waive or to lessen the right of Landlord or Tenant to
     insist upon performance by Landlord or Tenant in strict accordance with
     this Lease. The subsequent acceptance of rent hereunder by Landlord or the
     payment of rent by Tenant shall not waive any preceding breach by Tenant of
     any covenant in this Lease, nor cure any Event of Default, nor waive any
     forfeiture of this Lease or unlawful detainer action, other than the
     failure of Tenant to pay the particular rent so accepted, regardless of
     Landlord's or Tenant's knowledge of the preceding breach at the time of
     acceptance or payment of that rent.

                                  ARTICLE 22
                                    Notices

22.1 All requests, approvals, consents, notices and other communications given
     by Landlord or

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     Tenant under this Lease shall be properly given only if made in writing and
     either deposited in the United States mail, postage prepaid, certified with
     return receipt requested, or delivered by hand (which may be through a
     messenger or recognized delivery or courier service) and addressed, if to
     Landlord, at the address of Landlord specified in the Basic Lease
     Information, or at another place as Landlord may from, time to time
     designate in a written notice to Tenant, or if to Tenant before the
     Commencement Date, at the address of Tenant specified in the Basic Lease
     Information, and after the Commencement Date at the Premises, or at another
     place as Tenant may from time to time designate in a written notice to
     Landlord. All requests, approvals, consents, notices and other
     communications shall be effective on the date of receipt as evidenced by
     the certified mail receipt if mailed, or on the date of delivery if hand-
     delivered.

                                  ARTICLE 23
                                 Improvements

23.1 Landlord shall, at Landlord's sole cost and expense, make the improvements
     to the Building which are specified in Exhibit "C" attached hereto. It is
     expected that Landlord will substantially complete the construction of the
     improvements specified in Exhibit "C" and Exhibit "D" attached hereto by
     November 1, 1999. The term "substantial completion," shall be as defined by
     the American Institute of Architects ("AIA") in AIA Document C704, a copy
     of which is attached hereto as Exhibit "E." If the improvements are not
     substantially completed by November 1, 1999 Tenant shall have the right to
     terminate this Lease by giving Landlord written notice of election to
     cancel the Lease within ten (10) days after November 1, 1999.
     Notwithstanding the foregoing, the date of completion of the Landlord's
     construction shall not affect the Tenant's obligation to pay rent as set
     forth in paragraph 3.1.

23.2 Tenant shall be entitled to a tenant improvement allowance (the "Tenant
     Improvement Allowance) in the amount of $20 for each of the 21,504 rentable
     square feet of the Building for the costs relating to the design and
     construction of Tenant's improvements which are permanently affixed to the
     Premises (the "Tenant Improvements"). In no event shall Landlord be
     obligated to make disbursements for Tenant Improvements in a total amount
     which exceeds the Tenant Improvement Allowance. If upon completion of the
     work specified in Exhibits C and D the entire Tenant Improvement Allowance
     is not exhausted, the remaining balance shall be paid to Tenant in the form
     of a Base Rent credit in an equivalent amount.

23.3 The Tenant Improvement Allowance shall be disbursed by Landlord for costs
     related to the construction of the Tenant Improvements. The Tenant
     Improvements are specified in Exhibit D. The costs of the Tenant
     Improvements covered by the Tenant Improvement Allowance shall include:

     a)  Professional fees for architects and engineers and the costs of
         documents and materials supplied by Landlord and Landlord's consultant
         in connection with the preparation and review of construction drawings
         for Tenant Improvements specified in Exhibit D;

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     b)  The cost of any changes to the construction drawings or Tenant
         Improvements required by Code;

     c)  Any overhead costs associated with the construction of the Tenant
         Improvements such as equipment rental, utilities and off-site parking
         charges.

23.4 Landlord has established specifications for the Building standard
     components to be used in construction of the Tenant Improvements in the
     Building which specifications shall be supplied to Tenant by Landlord. The
     quality of Tenant Improvements shall be equal to or of greater quality than
     the quality of the specifications, provided that Landlord may, at
     Landlord's reasonable discretion, require the Tenant Improvements to comply
     with certain specifications. Landlord may make reasonable changes to the
     specifications from time to time.

23.5 Landlord shall retain the architect to prepare construction drawings.
     Landlord shall retain the engineer to prepare all plans and engineering
     drawings related to the Tenant Improvements. The plans and drawings to be
     prepared by Architect and Engineer shall be known collectively as the
     "Construction Drawings." All Construction Drawings shall reflect the design
     and specifications requested by Tenant and shall be subject to Landlord's
     and Tenant's reasonable approval. Landlord's review of the Construction
     Drawings shall be for its sole purpose and shall not imply Landlord's
     review of the same, or obligate Landlord to review the same, for quality,
     design, code compliance or other like matters. Landlord shall not be
     responsible for any omissions or errors contained in the Construction
     Drawings.

23.6 Landlord shall submit the Construction Drawings to the appropriate
     municipal authorities for all applicable building permits necessary to
     commence and fully complete the construction of the Tenant Improvements.
     Landlord hereby agrees that neither Tenant nor Tenant's consultants shall
     be responsible for obtaining any building permit or certificate of
     occupancy for the Building and that obtaining the same shall be the
     Landlord's responsibility; provided, however, that Tenant shall, in any
     event, cooperate with Landlord in executing permit applications and
     performing other administerial acts reasonably necessary to enable Landlord
     to obtain any such permit or certificate of occupancy.

23.7 After the Construction Drawings are approved by Landlord and Tenant, the
     Landlord will provide Tenant with a cost proposal which shall include, as
     nearly as possible, the cost of all Tenant Improvement Allowance Items to
     be incurred by Tenant in. connection with the design and construction of
     the Tenant Improvements. Tenant shall approve the cost proposal of the
     contractor whom Tenant elects for Landlord to retain to construct the
     Tenant improvements. Landlord shall thereafter be released by Tenant to
     engage the contractor to commence the construction of the Tenant
     Improvements.

23.8 If the approved Cost Proposal exceeds the Tenant Improvement Allowance,
     Tenant shall deliver to Landlord cash in an amount (the "Over-Allowance
     Amount") equal to the difference between (i) the amount of the Cost
     Proposal and (ii) the amount of the Tenant Improvement Allowance. The Over-
     Allowance Amount shall be disbursed by Landlord

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      prior to the disbursement of any then-remaining portion of the Tenant
      Improvement Allowance, and such disbursements shall be pursuant to the
      same procedure as the Tenant Improvement Allowance. In the event that,
      after the cost proposal is approved by Tenant, any revisions, changes, or
      substitutions shall be made to the Construction Drawings or the Tenant
      Improvements, except revisions, changes and substitutions made by Landlord
      or upon Landlord's request, any additional costs which arise in connection
      with such revisions, changes or substitutions or any other additional
      costs shall be paid by Tenant to Landlord immediately upon Landlord's
      request as an addition to the Over-Allowance Amount.

23.9  Landlord hereby assigns to Tenant all warranties and guarantees by
      Contractor relating to the Tenant Improvements, and Tenant hereby waives
      all claims against Landlord relating to or arising out of construction of
      the Tenant Improvements, except for claims arising from Landlord's direct
      negligence or willful misconduct.

23.10 Tenant has designated David Fraze as its sole representative with respect
      to the matters set forth in this Article 23 who, until further notice to
      Landlord, shall have full authority and responsibility to act on behalf of
      the Tenant as is required in this article.

23.11 Landlord has designated Greg Faulkner as its sole representative with
      respect to the matters set forth in this Article 23 who, until further
      notice to Tenant, shall have full authority and responsibility to act on
      behalf of the Landlord as required in this article.

23.12 Notwithstanding provision to the contrary contained in this Lease, if an
      event vent of default as described in Article 13 of the Lease, or a
      default by Tenant under this Article 23, has occurred at any time or
      before the substantial completion of the Tenant Improvements, then, in
      addition to all the rights and remedies granted to Landlord pursuant to
      the Lease, Landlord shall have the right to withhold payment of all or any
      portion of the Tenant Improvement Allowance and/or Landlord may cause
      Contractor to cease the construction of the Tenant Improvements. In
      addition, all other obligations of Landlord under the terms of this
      Article 23 shall be forgiven until such time as such default is cured
      pursuant to the terms of the Lease.

                                  ARTICLE 24
                                 Miscellaneous

24.1  The words "Landlord" and "Tenant" as used herein shall include the plural
      as well as the singular. The words "'include," "includes" and "including"
      shall be deemed to be followed by the phrase "without limitation." If
      there is more than one Tenant, the obligations hereunder imposed upon
      Tenant shall be joint and several. Time is of the essence of this Lease
      and each and all of its provisions. Submission of this instrument for
      examination or signature by Tenant does not constitute a reservation of or
      option for lease, and it is not effective as a lease or otherwise until
      execution and delivery by both Landlord and Tenant. Subject to Article 11
      hereof, this Lease shall benefit and bind Landlord and Tenant and the
      personal representatives, heirs, successors and assigns of Landlord and
      Tenant. Tenant shall not use the name of the Building for any purpose
      whatsoever other than as the address of

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     Tenant at the Premises. If any provision of this Lease is determined to be
     illegal or unenforceable, that determination shall not affect any other
     provision of this Lease and all other provisions shall remain in full force
     and effect.

24.2 Tenant acknowledges that the late payment by Tenant of any monthly
     installment of Base Rent or additional monthly rent will cause Landlord to
     incur costs and expenses, the exact amount of which is extremely difficult
     and impractical to fix. These costs and expenses will include
     administration and collection costs and processing and accounting expenses.
     Therefore, if any monthly installment of Base Rent or additional monthly
     rent is not received by Landlord within ten (10) days after payment is due,
     Tenant shall immediately pay to Landlord a late charge equal to four
     percent (4%) of the delinquent installment. Landlord and Tenant agree that
     this late charge represents a reasonable estimate of the costs and expenses
     and is fair compensation to Landlord for the loss suffered by Tenant's
     failure to make timely payment. In no event shall the late charge be deemed
     to grant to Tenant a grace period or extension of time within which to pay
     any monthly rent or prevent Landlord from exercising any right or enforcing
     any remedy available to Landlord upon Tenant's failure to pay each
     installment of monthly rent due under this Lease in a timely fashion,
     including the right to terminate this Lease. All amounts of money payable
     by Tenant to Landlord hereunder, if not paid when due, shall bear interest
     from the due date until paid at the lesser of the maximum annual interest
     rate allowed by law for business loans (not primarily for personal, family
     or household purposes) not exempt from the usury law at the due date or
     twelve percent (12%) per annum.

24.3 If there is any legal action or proceeding between Landlord and Tenant to
     enforce this lease or to protect or establish any right or remedy under
     this Lease, the unsuccessful party to the action or proceeding shall pay to
     the prevailing party all costs and expenses, including reasonable
     attorneys' fees and disbursements, incurred by such prevailing party in the
     action or proceeding and in any appeal in connection therewith. If the
     prevailing party recovers a judgment in any such action, proceeding or
     appeal, its costs, expenses and attorneys' fees and disbursements shall be
     included in and as a part of the judgment.

24.4 There are no oral agreements between Landlord and Tenant affecting this
     Lease, and this Lease supersedes and cancels any and all previous
     negotiations, arrangements, brochures, offers, agreements and
     understandings, oral or written, if any, between Landlord and Tenant or
     displayed by Landlord or Tenant with respect to the subject matter of this
     Lease, the Premises or the Building. There are no representations between
     Landlord and Tenant or between any real estate broker and Tenant other than
     those expressly set forth in this Lease and all reliance with respect to
     any representations is solely upon representations expressly set forth in
     this Lease. This Lease may not be amended or modified in any respect
     whatsoever except by an instrument in writing signed by Landlord and
     Tenant.

24.5 Landlord shall be solely responsible for payment of any real estate
     brokerage commissions owed to the Landlord's and Tenant's respective
     brokers as a consequence of this Lease. Landlord shall indemnify, protect,
     defend and hold harmless the Tenant against all claims, demands, losses,
     liabilities, judgements and expenses for any real estate commission alleged

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<PAGE>

     to be owing to the other's real estate broker upon the execution and
     commencement of this Lease. Landlord's obligations hereunder shall not
     extend to any claim made for a broker commission, finder's fee, referral
     fee, or other compensation by a broker who is not specified in the Basic
     Lease Information.

24.6 This Lease shall be governed by and construed in accordance with the laws
of the State of California. All exhibits attached to this Lease are thereby made
a part of this Lease.

IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date
set forth below.

                                  LANDLORD:

                                  TRANOD, a California general partnership

Dated:  7/15,   1999              By /s/ GREG FAULKNER
        ----                         -----------------
                                         Greg Faulkner, Partner

Dated:  7/15,   1999              By /s/ ART KERMOYAN
        ----                         ----------------
                                         Art Kermoyan, Partner

                                  TENANT:

                                  PETOPIA.COM

Dated:   7/15, 1999               By /s/ DAVID FRAZE
                                     ---------------
                                         David Fraze, CFO

Dated:  ______________, 1999      By _____________________

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