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                                                                   EXHIBIT 10.39

                    SECURITY AGREEMENT IN COPYRIGHTED WORKS

     This Security Agreement In Copyrighted Works (this "Agreement") is made at
Los Angeles, California as of January 31, 2000, is entered into between
PETOPIA.COM, INC., a Delaware corporation ("Grantor"), which has a mailing
address at 1200 Folsom Street, San Francisco, California 94103, and GREYROCK
CAPITAL, a Division of Banc of America Commercial Finance Corporation
("Greyrock"), which has a mailing address at 10880 Wilshire Blvd., Suite 1850,
Los Angeles, CA 90024.

                                   RECITALS

     A.   Greyrock is providing financing to Grantor pursuant to the Loan and
Security Agreement of even date herewith between Greyrock and Grantor (as
amended from time to time, the "Loan Agreement"). Pursuant to the Loan
Agreement, Grantor has granted to Greyrock a security interest in all of
Grantor's present and future assets, including without limitation all of
Grantor's present and future general intangibles, and including without
limitation the "Copyrights" (as defined below), to secure all of its present and
future indebtedness, liabilities, guaranties and other obligations to Greyrock.

     B.   To supplement Greyrock's rights in the Copyrights, Grantor is
executing and delivering this Agreement.

     NOW, THEREFORE, for valuable consideration, Grantor agrees as follows:

     1.    Assignment. To secure the complete and timely payment and performance
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of all "Obligations" (as defined in the Loan Agreement), and without limiting
any other security interest Grantor has granted to Greyrock, Grantor hereby
hypothecates to Greyrock and grants, assigns, and conveys to Greyrock a security
interest in Grantor's entire right, title, and interest in and to all of the
following, now owned and hereafter acquired (collectively, the "Collateral"):

          (a)  Registered Copyrights and Applications for Copyright
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Registrations. All of Grantor's present and future United States and foreign
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registered copyrights and copyright registrations, including, without
limitation, the registered copyrights listed in Schedule A to this Agreement
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(and including all of the exclusive rights afforded a copyright registrant in
the United States under 17 U.S.C. (S)106 and any exclusive rights which may in
the future arise by act of Congress or otherwise) and all of Grantor's present
and future applications for copyright registrations (including applications for
copyright registrations of derivative works and compilations) (collectively, the
"Registered Copyrights"), and any and all royalties, payments, and other amounts
payable to Grantor in connection with the Registered Copyrights, together with
all renewals and extensions of the Registered Copyrights, the right to recover
for all past, present, and future infringements of the Registered Copyrights,
and all computer programs, computer databases, computer program flow diagrams,
source codes, object codes and all tangible property embodying or incorporating
the Registered Copyrights, and all other rights of every kind whatsoever
accruing thereunder or pertaining thereto.

          (b)  Unregistered Copyrights. All of Grantor's present and future
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copyrights which are not registered in the United States Copyright Office (the
"Unregistered Copyrights"), whether now owned or hereafter acquired, and any and
all royalties, payments, and other amounts payable to Grantor in connection with
the Unregistered Copyrights, together with all renewals and extensions of the
Unregistered Copyrights, the right to recover for all past, present, and future
infringements of the Unregistered Copyrights, and all computer programs,
computer databases, computer program flow diagrams, source codes, object codes
and all tangible property embodying or incorporating the Unregistered
Copyrights, and all other rights of every kind whatsoever accruing thereunder or
pertaining thereto. The Registered Copyrights and the Unregistered Copyrights
collectively are referred to herein as the "Copyrights."

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          (c)  Licenses. All of Grantor's right, title and interest in and to
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any and all present and future license agreements with respect to the Copyrights
(the "Licenses").

          (d)  Accounts Receivable.  All present and future accounts, accounts
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receivable and other rights to payment arising from, in connection with or
relating to the Copyrights.

          (e)  Proceeds.  All cash and non-cash proceeds of any and all of the
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foregoing.

     2.   Representations. Grantor represents and warrants that:
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          (a)  Each of the Copyrights is valid and enforceable (except to the
extent that the Unregistered Copyrights must be registered to be enforced);

          (b)  Except for the security interest granted hereby and the non-
exclusive licenses granted to Grantor's licensees with respect to the Copyrights
in the ordinary course of business of Grantor, Grantor is (and upon creation of
all future Copyrights, will be) the sole and exclusive owner of the entire and
unencumbered right, title, and interest in and to each of the Copyrights and
other Collateral, free and clear of any liens, charges, or encumbrances;

          (c)  Grantor has no knowledge of any pending or threatened
infringement of any of the Copyrights by any third person.

          (d)  Listed on Schedule A are all Registered Copyrights owned by
Grantor, in which Grantor has an interest, or which are used in Grantor's
business.

          (e)  Each employee, agent and/or independent contractor who has
participated in the creation of the property constituting the Collateral has
either executed an assignment of his or her rights of authorship to Grantor or
is an employee of Grantor acting within the scope of his or her employment and
was such an employee at the time of said creation.

     3.   Covenants. Until all of the Obligations have been satisfied in full
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and the Loan Agreement has terminated:

          (a)  Grantor shall not grant a security interest in any of the
Copyrights or other Collateral to any other person and shall not enter into any
agreement or take any action that is inconsistent with Grantor's obligations
hereunder or Grantor's other Obligations or would impair Greyrock's rights,
under this Agreement or otherwise, without Greyrock's prior written consent.

          (b)  Grantor shall use reasonable efforts to ensure that each use of
the Copyrights described in Section 1 of this Agreement carries a complete and
accurate copyright notice.

          (c)  Grantor shall use its reasonable efforts to preserve and defend
Grantor's rights in material Copyrights.

          (d)  Grantor shall undertake all reasonable measures to cause its
employees, agents and independent contractors to assign to Grantor all rights of
authorship to any copyrighted material in which Grantor has or may subsequently
acquire any right or interest.

     4.   Greyrock May Supplement. Grantor authorizes Greyrock to modify this
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Agreement by amending Schedule A to include any future copyrights to be included
in the Registered Copyrights. Grantor shall from time to time update the lists
of Registered Copyrights as Grantor obtains or acquires copyrights in the
future. Notwithstanding the foregoing, no failure to so modify this Agreement or
amend Schedule A shall in any way affect, invalidate or detract

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from Greyrock's continuing security interest in all Copyrights, whether or not
listed on Schedule A.

     5.   Default. Upon an Event of Default (as defined in the Loan Agreement)
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Greyrock shall have, in addition to all of its other rights and remedies under
the Loan Agreement, all rights and remedies of a secured party under the Uniform
Commercial Code (as enacted in any jurisdiction in which the Copyrights or other
Collateral are located or deemed to be located) or other applicable law. Upon
occurrence of an Event of Default, Grantor shall, upon request of Greyrock, give
written notice to all parties to the Licenses that all payments thereunder shall
be made to Greyrock, and Greyrock may itself give such notice.

     6.   Fees and Expenses. In accordance with Section 9.11 of the Loan
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Agreement, Grantor shall reimburse Greyrock all reasonable fees, costs, and
expenses incurred by Greyrock in connection with (a) preparing this Agreement
and all other documents relating to this Agreement, (b) consummating this
transaction, (c) filing or recording any documents (including all taxes in
connection therewith) in public offices; and (d) paying or discharging any
taxes, counsel fees, maintenance fees, encumbrances, or other amounts in
connection with protecting, maintaining, or preserving the Copyrights or
defending or prosecuting any actions or proceedings arising out of or related to
the Copyrights.

     7.   Greyrock's Rights. In the event that Grantor fails to use its best
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efforts to preserve and defend Grantor's rights in the Copyrights (except as
permitted by paragraph 3(c) hereof) within a reasonable period of time after
learning of the existence of any actual or threatened infringement thereof, upon
twenty (20) days prior written notice to Grantor, Greyrock shall have the right,
but shall in no way be obligated to, bring suit or take any other action, in its
own name or in Grantor's name, to enforce or preserve Greyrock's or Grantor's
fights in the Copyrights. Grantor shall at the request of Greyrock and at
Grantor's expense do any lawful acts and execute any documents requested by
Greyrock to assist with such enforcement. In the event Grantor has not taken
action to enforce or preserve Greyrock's and Grantor's rights in the Copyrights
and Greyrock thereupon takes such action, Grantor, upon demand, shall promptly
reimburse and indemnify Greyrock for all costs and expenses incurred in the
exercise of Greyrock's or Grantor's rights under this Section 8.

     8.   No Waiver. No course of dealing between Grantor and Greyrock, nor any
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failure to exercise nor any delay in exercising, on the part of Greyrock, any
right, power, or privilege under this Agreement or under the Loan Agreement or
any other agreement, shall operate as a waiver. No single or partial exercise of
any fight, power, or privilege under this Agreement or under the Loan Agreement
or any other agreement by Greyrock shall preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right, power, or
privilege by Greyrock.

     9.   Rights Are Cumulative. All of Greyrock's rights and remedies with
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respect to the Copyrights and other Collateral whether established by this
Agreement, the Loan Agreement, or any other documents or agreements, or by law
shall be cumulative and may be exercised concurrently or in any order.

     10.  Copyright Office. At the request of Greyrock, Grantor shall execute
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any further documents necessary or appropriate to create and perfect Greyrock's
security interest in the Copyrights, including without limitation any documents
for filing with the United States Copyright Office and/or any applicable state
office. Greyrock may record this Agreement, an abstract thereof, or any other
document describing Greyrock's interest in the Copyrights with the United States
Copyright Office, at the expense of Grantor.

     11.  Indemnity. Grantor shall indemnify, and hold harmless Greyrock and
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Greyrock's pursuant to Section 5.10 of the Loan Agreement.

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     12.   Severability. The provisions of this Agreement are severable. If any
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provision of this Agreement is held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforcebility shall affect only
such provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such provision or part thereof in any other jurisdiction, or any
other provision of this Agreement in any jurisdiction.

     13.   Amendments; Entire Agreement. This Agreement is subject to
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modification only by a writing signed by the parties, except as provided in
Section 5 of this Agreement. To the extent that any provision of this Agreement
conflicts with any provision of the Loan Agreement, the provision giving
Greyrock greater rights or remedies shall govern, it being understood that the
purpose of this Agreement is to add to, and not detract from, the rights granted
to Greyrock under the Loan Agreement. This Agreement, the Loan Agreement, and
the documents relating thereto comprise the entire agreement of the parties with
respect to the matters addressed in this Agreement.

     14.   Further Assurances. At Greyrock's request, Grantor shall execute and
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deliver to Greyrock any further instruments or documentation, and perform any
acts, that may be reasonably necessary or appropriate to implement this
Agreement, the Loan Agreement or any other agreement, and the documents relating
thereto, including without limitation any instrument or documentation reasonably
necessary or appropriate to create, maintain, perfect, or effectuate Greyrock's
security interests in the Copyrights or other Collateral.

     15.   Release. At such time as Grantor shall completely satisfy all of the
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Obligations and the Loan Agreement shall be terminated, Greyrock shall execute
and deliver to Grantor all assignments and other instruments as may be
reasonably necessary or proper to terminate Greyrock's security interest in the
Copyrights, subject to any disposition of the Copyrights which may have been
made by Greyrock pursuant to this Agreement. For the purpose of this Agreement,
the Obligations shall be deemed to continue if Grantor enters into any
bankruptcy or similar proceeding at a time when any amount paid to Greyrock
could be ordered to be repaid as a preference or pursuant to a similar theory,
and shall continue until it is finally determined that no such repayment can be
ordered.

     16.   True and Lawful Attorney. Grantor hereby appoints Greyrock as
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Grantor's true and lawful attorney, with full power of substitution, to do any
or all of the following, in the name, place and stead of Grantor: (a) execute an
abstract of this Agreement or any other document describing Greyrock's interest
in the Copyrights, for filing with the United States Copyright Office; (b)
execute any modification of this Agreement pursuant to Section 5 of this
Agreement; and (c) following an Event of Default (as defined in the Loan
Agreement) execute any assignments, notices or transfer documents for purposes
of transferring title or right to receive any of the Copyrights or other
Collateral to any person, including without limitation Greyrock.

     17.   Successor. The benefits and burdens of this Agreement shall inure to
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the benefit of and be binding upon the respective successors and permitted
assigns of the parties; provided that Grantor may not transfer any material
portion of the Collateral or any rights hereunder, without the prior written
consent of Greyrock, except as specifically permitted hereby.

     19.   Governing Law. The validity and interpretation of this Agreement and
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the rights and obligations of the parties shall be governed by the laws of the
State of California, excluding its conflict of law rules to the extent such
rules would apply the law of another jurisdiction, and the United States.

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     20.  Waiver of Right to Jury Trial. Greyrock and Grantor each hereby waive
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the right to trial by jury in any action or proceeding based upon, arising out
of, or in any way relating to:(1) this Agreement; or (ii) any other present or
future instrument or agreement between Greyrock and Grantor; or (iii) any
conduct, acts or omissions of Greyrock or Grantor or any of their directors,
officers, employees, agents, attorneys or any other persons affiliated with
Greyrock or Grantor; in each of the foregoing cases, whether sounding in
contract or tort or otherwise.

     WITNESS the execution hereof as of the date first written above.

                              Grantor:

                              PETOPIA.COM, INC.

                              By: /s/ GREGORY SMITH
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                              Name (please print):

                              Gregory Smith
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                              Title: Vice President of Finance
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                              Chairman of the Board, President, or Vice
                              President Accepted.

Greyrock:

GREYROCK CAPITAL,
a Division of Banc of America Commercial Finance Corporation

By: ___________________________
Name (please print):
_______________________________
Title:_________________________

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