EXHIBIT 10.16

                                  M A T R I X
                    F U N D I N G   C O R P O R A T I O N

 6975 Union Park Center, Second Floor
 Midvale, Utah  84047


                      MASTER LEASE AGREEMENT NO. R0758


This Master Lease Agreement is made this 25th day of January, 1999 between 
MATRIX FUNDING CORPORATION, with its principal office at 6975 Union Park 
Center, Second Floor, Midvale, UT 84047 (the "Lessor"), and PETCO ANIMAL 
SUPPLIES, INC., with its principal office at 9125 Rehco Road, San Diego, CA 
92121 (the "Lessee").

1. LEASE:

Lessor agrees to lease to Lessee, and Lessee agrees to lease from Lessor, 
the property (together with all attachments, replacements, parts, 
substitutions, additions, repairs, accessions and accessories, incorporated 
therein and/or affixed thereto) (collectively, the "Property") described in 
any Lease Schedule ("Schedule") executed and delivered by Lessor and Lessee 
in connection with this Master Lease Agreement.  Each Schedule shall 
incorporate by reference the terms and conditions of this Master Lease 
Agreement, and together with the Acceptance Certificate (as defined herein) 
and Master Progress Funding Agreement, if applicable, shall constitute a 
separate "Lease".  In the event of conflict between the provisions of this 
Master Lease Agreement and any Schedule, the provisions of the Schedule 
shall govern.

2. ADDITIONAL DEFINITIONS:

(a) Except as otherwise provided in Section 6(a) hereof, "Acceptance Date" 
means, as to the Property designated on any Schedule, the date Lessee 
accepts the Property as set forth in any acceptance certificate signed by 
the Lessee which is acceptable to Lessor (the "Acceptance Certificate").  
If Lessee fails to sign and deliver an Acceptance Certificate, then except 
as otherwise provided in Section 6(a) hereof, the Acceptance Date shall be 
a date determined by Lessor which shall be no sooner than the date Lessee 
receives substantially all of the Property.

(b) "Commencement Date" means, as to the Property designated on any 
Schedule, where the Acceptance Date for such Schedule falls on the first 
day of a calendar quarter, that date, and, in any other case, the first day 
of the calendar quarter following the calendar quarter in which such 
Acceptance Date falls.

3. TERM OF LEASE:

The term of any Lease, as to all Property designated on the applicable 
Schedule, shall commence on the Acceptance Date for such Property, and 
shall continue for an "Initial Period" ending that number of months from 
the Commencement Date as specified in the Schedule.  Thereafter, Lessee 
shall have options to purchase or return the Property or to extend the 
Lease, all as provided in Section 18(m) of this Agreement.

4. RENT AND PAYMENT:

Lessee shall pay as rent for use of the Property, aggregate rentals equal 
to the sum of all the Monthly Rentals (defined in the Schedule) and other 
payments due under the Lease for the entire Initial Period.  The Monthly 
Rental shall begin on the Acceptance Date and shall be due and payable by 
Lessee in advance on the first day of each month throughout the Initial 
Period.  If the Acceptance Date does not fall on the first day of a 
calendar quarter, then the first rental payment shall be calculated by 
multiplying the number of days from and including the Acceptance Date to 
the Commencement Date by a daily rental equal to one thirtieth (1/30) of 
the Monthly Rental, and shall be due and payable on the Acceptance Date.  
Lessee shall pay all rentals to Lessor, or its assigns, at Lessor's address 
set forth above (or as otherwise directed in writing by Lessor, or its 
assigns), without notice or demand.  LESSEE SHALL NOT ABATE, SET OFF OR 
DEDUCT ANY AMOUNT OR DAMAGES FROM OR REDUCE ANY MONTHLY RENTAL OR OTHER 
PAYMENT DUE FOR ANY REASON.  THIS LEASE IS NON-CANCELABLE FOR THE ENTIRE 
TERM OF THE INITIAL PERIOD AND ANY EXTENSION PERIODS.




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If any rental or other payment due under any Lease shall be unpaid after 
its due date, Lessee will pay on demand, as a late charge, but not as 
interest, the greater of twenty-five dollars ($25) or five percent (5%) of 
any such unpaid amount but in no event to exceed maximum lawful charges.  
If late charges are assessed by a lending institution due to any late 
payment by Lessee, Lessee agrees to pay such late charges or to reimburse 
Lessor for their payment.

5. TAXES:

Lessee shall pay to Lessor when due all taxes, fees, assessments and 
charges paid, payable or required to be collected by Lessor, however 
designated, which are levied or based on the Monthly Rental or other 
payment due under the Lease, or on the possession, use, operation, lease, 
rental, sale, purchase, control or value of the Property, including without 
limitation, registration and license fees and assessments, state and local 
privilege or excise taxes, documentary stamp taxes or assessments, sales 
and use taxes, personal and other property taxes, and taxes or charges 
based on gross revenue, but excluding taxes based on Lessor's net income 
(collectively, "taxes").  Lessor shall invoice Lessee for all taxes in 
advance of their payment due date, and Lessee shall promptly remit to 
Lessor all taxes upon receipt of an invoice from Lessor.  Lessee shall pay 
all penalties and interest resulting from its failure to timely remit all 
taxes to Lessor when invoiced by Lessor.  Lessor shall file all required 
sales and use tax and personal property tax returns and reports concerning 
the Property with all applicable governmental agencies.

6. USE; ALTERATIONS AND ATTACHMENTS:

(a) After Lessee receives and inspects any Property and is satisfied that 
the Property is satisfactory, Lessee shall execute and deliver to Lessor an 
Acceptance Certificate in form provided by Lessor; provided, however, that 
Lessee's failure to execute and deliver an Acceptance Certificate for any 
Property shall not affect the validity and enforceability of the Lease with 
respect to the Property.  If Lessee has signed and delivered a Master 
Progress Funding Agreement, Lessor may, in its sole discretion, at any time 
by written notice to Lessee, declare all prior Authorizations signed in 
connection with the Master Progress Funding Agreement to be and constitute 
the "Acceptance Certificate" for all purposes under the Lease, and the 
Acceptance Date of the Lease shall be the date determined by Lessor in its 
sole discretion which shall not be earlier than the date of the last 
Authorization.

(b) Lessee shall at all times keep the Property in its sole possession and 
control.  The Property shall not be moved from the location stated in the 
Schedule without the prior written consent of Lessor.

(c) Lessee shall cause the Property to be installed, used, operated and, at 
the termination of the Lease, removed (i) in accordance with any applicable 
manufacturer's manuals or instructions; (ii) by competent and duly 
qualified personnel only; and (iii) in accordance with applicable 
governmental regulations.

(d) Lessee may not make alterations or attachments to the Property without 
first obtaining the written consent of Lessor.  Any such alterations or 
attachments shall be made at Lessee's expense and shall not interfere with 
the normal and satisfactory operation or maintenance of the Property.  The 
manufacturer may incorporate engineering changes or make temporary 
alterations to the Property upon request of Lessee.  Unless Lessor shall 
otherwise agree in writing, all such alterations and attachments shall be 
and become the property of Lessor upon their attachment to the Property or, 
at the option of Lessor, shall be removed by Lessee at the termination of 
the Lease as to such Property and the Property restored at Lessee's expense 
to its original condition, reasonable wear and tear only excepted.

(e) The Property is and shall remain personal property during the term of 
the Lease notwithstanding that any portion thereof may in any manner become 
affixed, attached to or located on real property or any building or 
improvement thereon.  Lessee shall not permit the Property to become an 
accession to other goods or a fixture to or part of any real property.  
Lessee will obtain and deliver to Lessor a waiver of liens, in form 
satisfactory to Lessor, from all persons not a party hereto who might 
secure an interest, lien or other claim in the Property.

(f) In the event the Property includes software (including all 
documentation, later versions, updates, modifications) (herein "Software"), 
the following shall apply: (i) Lessee shall possess and use the Software in 
accordance with the terms and conditions of any license agreement 
("License") entered into with the owner/vendor of such Software (at 




<PAGE> 3
Lessor's request, Lessee shall provide a complete copy of the License to 
Lessor); (ii) as due consideration for Lessor's payment of the Software 
price and for providing the Software to Lessee at a lease rate (as opposed 
to a debt rate), Lessee agrees that Lessor is leasing (and not financing) 
the Software to Lessee; (iii) except as otherwise specifically provided 
herein, the Software shall be deemed Property for all purposes under the 
Lease.

(g) Lessee shall comply with all applicable laws, regulations, 
requirements, rules and orders, all manufacturer's instructions and 
warranty requirements, and with the conditions and requirements of all 
policies of insurance with respect to the Property and the Lease.

(h) The Property is leased solely for commercial or business purposes.

7. MAINTENANCE AND REPAIRS; RETURN OF PROPERTY:

(a) During the continuance of each Lease, Lessee shall, at its expense, and 
in accordance with all manufacturer maintenance specifications, (i) keep 
the Property in good repair, condition and working order; (ii) make all 
necessary adjustments, repairs and replacements; (iii) furnish all required 
parts, mechanisms, devices and servicing; and (iv) not use or permit the 
Property to be used for any purpose for which, in the opinion of the 
manufacturer, the Property is not designed or reasonably suitable. Such 
parts, mechanisms and devices shall immediately become a part of the 
Property for all purposes hereunder and title thereto shall vest in Lessor. 
If the manufacturer does not provide maintenance specifications, Lessee 
shall perform all maintenance in accordance with industry standards for 
like Property.

(b) During the continuance of each Lease, Lessee shall, at its own expense, 
enter into and maintain in force a contract with the manufacturer or other 
qualified maintenance organization satisfactory to Lessor for maintenance 
of each item of Property.  Such contract as to each item shall commence 
upon the Acceptance Date.  Lessee shall furnish Lessor with a copy of such 
contract upon demand.

(c) Lessee shall pay all shipping and delivery charges and other expenses 
incurred in connection with the Property.  Upon default, or at the 
expiration or earlier termination of any Lease, Lessee shall, at its own 
expense,  assemble, prepare for shipment and promptly return the Property 
to Lessor at the location within the Continental United States designated 
by Lessor.  Upon such return, the Property shall be in the same operating 
order, repair, condition and appearance as on the Acceptance Date, except 
for reasonable wear and tear from proper use thereof, and shall include all 
engineering changes theretofore prescribed by the manufacturer.  Lessee 
shall provide maintenance certificates or qualification letters and/or 
arrange for and pay all costs which are necessary for the manufacturer to 
accept the Property under contract maintenance at its then standard rates 
("recertification").  The term of the Lease shall continue upon the same 
terms and conditions until such recertification has been obtained.  With 
regard to Software, at the expiration or earlier termination of any Lease 
Lessee shall (i) delete from its systems all Software then installed, (ii) 
destroy all copies or duplicates of the Software which were not returned to 
Lessor, and (iii) cease using the Software altogether.  Upon its receipt 
from Lessee, Lessor shall be responsible to return the Software to the 
owner/vendor so that Lessee shall not be in breach of any software license.

8. OWNERSHIP AND INSPECTION:

(a) The Property shall at all times be the property of Lessor or its 
assigns, and Lessee shall have no right, title or interest therein except 
as to the use thereof subject to the terms and conditions of the Lease.  
For purposes of the foregoing, Lessee transfers to Lessor all right, title 
and interest (including all ownership interest) which Lessee may have in 
and to the Property.  Lessor may affix (or require Lessee to affix) tags, 
decals or plates to the Property indicating Lessor's ownership, and Lessee 
shall not permit their removal or concealment.  Lessee shall not permit the 
name of any person or entity other than Lessor or its assigns to be placed 
on the Property as a designation that might be interpreted as a claim of 
ownership or security interest.

(b) LESSEE SHALL KEEP THE PROPERTY AND LESSEE'S INTEREST UNDER ANY LEASE 
FREE AND CLEAR OF ALL LIENS AND ENCUMBRANCES, EXCEPT THOSE PERMITTED IN 
WRITING BY LESSOR OR ITS ASSIGNS.

(c) Lessor, its assigns and their agents shall have free access to the 
Property at all reasonable times during normal business hours for the 
purpose of inspecting the Property and for any other purpose contemplated 
in the Lease.




<PAGE> 4
(d) Lessee shall immediately notify Lessor in writing of all details 
concerning any damage or loss to the Property, including without 
limitation, any damage or loss arising from the alleged or apparent 
improper manufacture, functioning or operation of the Property.

9. WARRANTIES:

(a) Lessee acknowledges that Lessor is not the manufacturer of the Property 
nor the manufacturer's agent nor a dealer therein. The Property is of a 
size, design, capacity, description and manufacture selected by the Lessee.  
Lessee is satisfied that the Property is suitable and fit for its purposes.  
LESSEE AGREES THAT LESSOR HAS NOT MADE AND DOES NOT MAKE ANY WARRANTY OR 
REPRESENTATION WHATSOEVER, EXPRESS OR IMPLIED, AS TO THE PROPERTY, 
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OR REPRESENTATION AS TO: (i) 
THE DESCRIPTION, CONDITION, DESIGN, QUALITY OR PERFORMANCE OF THE PROPERTY 
OR QUALITY OR CAPACITY OF MATERIALS OR WORKMANSHIP IN THE PROPERTY; (ii) 
ITS MERCHANTABILITY OR FITNESS OR SUITABILITY FOR A PARTICULAR PURPOSE 
WHETHER OR NOT DISCLOSED TO LESSOR; AND (iii) DELIVERY OF THE PROPERTY FREE 
OF THE RIGHTFUL CLAIM OF ANY PERSON BY WAY OF INFRINGEMENT OR THE LIKE.  
LESSOR EXPRESSLY DISCLAIMS ALL SUCH WARRANTIES.  Lessor shall not be liable 
to Lessee for any loss, damage or expense of any kind or nature caused, 
directly or indirectly, by the Property or the use, possession or 
maintenance thereof, or the repair, service or adjustment thereof, or by 
any delay or failure to provide any such maintenance, repair, service or 
adjustment, or by any interruption of service or loss of use thereof or for 
any loss of business howsoever caused.

(b) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THE LEASE, LESSOR 
SHALL NOT, UNDER ANY CIRCUMSTANCES, BE LIABLE TO LESSEE OR ANY THIRD PARTY, 
FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR EXEMPLARY DAMAGES ARISING OUT OF 
OR RELATED TO THE TRANSACTION CONTEMPLATED HEREUNDER, WHETHER IN AN ACTION 
BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY) OR ANY 
OTHER LEGAL THEORY, INCLUDING WITHOUT LIMITATION, LOSS OF ANTICIPATED 
PROFITS, OR BENEFITS OF USE OR LOSS OF BUSINESS, EVEN IF LESSOR IS APPRISED 
OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING.

IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT EACH AND EVERY PROVISION OF ANY 
LEASE WHICH PROVIDES FOR A LIMITATION OF LIABILITY, DISCLAIMER OF 
WARRANTIES OR EXCLUSION OF DAMAGES, IS INTENDED BY THE PARTIES TO BE 
SEVERABLE FROM ANY OTHER PROVISION AND IS A SEPARABLE AND INDEPENDENT 
ELEMENT OF RISK ALLOCATION AND IS INTENDED TO BE ENFORCED AS SUCH.

(c) Lessor assigns to Lessee all assignable warranties on the Property, 
including without limitation any warranties described in Lessor's purchase 
contract, which assignment shall be effective only (i) during the Initial 
Period and any extensions thereof, and (ii) so long as no Event of Default 
exists.

10. NET LEASE; LESSEE'S OBLIGATIONS ABSOLUTE AND UNCONDITIONAL:

This Agreement is a "net lease" and, as between Lessor and Lessee, Lessee 
shall be responsible for and shall indemnify Lessor against, all costs, 
expenses and claims of every nature whatsoever arising out of or in 
connection with or related to the Lease or the Property.

Lessee agrees that its obligation to pay Monthly Rental and other 
obligations under the Lease shall be irrevocable, independent, absolute and 
unconditional and shall not be subject to any abatement, reduction, 
recoupment, defense, offset or counterclaim otherwise available to Lessee; 
nor, except as otherwise expressly provided herein or as agreed to by 
Lessor in writing, shall this Agreement terminate for any reason whatsoever 
prior to the end of the Initial Period.

11. ASSIGNMENT BY LESSOR:

Lessor may assign or transfer its rights and interests in the Lease and 
Property to another party ("Lessor's Assignee") either outright or as 
security for loans.  Upon notice of any such assignment and instructions 
from Lessor, Lessee shall pay its Monthly Rental and other payments and 


<PAGE> 5
perform its other obligations under the Lease to the Lessor's Assignee (or 
to another party designated by Lessor's Assignee).  Upon any such sale or 
assignment, LESSEE'S OBLIGATIONS TO LESSOR'S ASSIGNEE UNDER THE ASSIGNED 
SCHEDULE  SHALL BE ABSOLUTE AND UNCONDITIONAL AND LESSEE WILL NOT ASSERT 
AGAINST LESSOR'S ASSIGNEE ANY CLAIM, DEFENSE, OFFSET OR COUNTERCLAIM WHICH 
LESSEE MIGHT HAVE AGAINST LESSOR.  Lessor's Assignee shall have all of the 
rights but none of the obligations of Lessor under the assigned Lease, and 
after such assignment Lessor shall continue to be responsible for all of 
Lessor's obligations under the Lease.

Upon any such assignment, Lessee agrees to execute and deliver to Lessor: 
(i) estoppel certificates, acknowledgments of assignment and other 
documents requested by Lessor which acknowledge the assignment and affirm 
provisions of the Lease, and (ii) UCC-1 financing statements or 
precautionary filings as requested.

Only one executed counterpart of any Schedule shall be marked "Original"; 
any other executed counterparts shall be marked "Duplicate Original" or 
"Counterpart".  No security interest in any Schedule may be created through 
the transfer and possession of any counterpart other than the "Original".

12. RISK OF LOSS ON LESSEE:

From the earlier of the date the supplier ships the Property to Lessee or 
the date Lessor confirms Lessee's purchase order or contract to supplier 
until the date the Property is returned to Lessor as provided in the Lease, 
Lessee hereby assumes and shall bear all risk of loss for theft, damage or  
destruction to the Property, howsoever caused.  NO SUCH LOSS OR DAMAGE 
SHALL IMPAIR ANY OBLIGATION OF LESSEE UNDER THIS LEASE WHICH SHALL CONTINUE 
IN FULL FORCE AND EFFECT.  

In the event of damage or loss to the Property (or any part thereof) and 
irrespective of payment from any insurance coverage maintained by Lessee, 
but applying full credit therefore, Lessee shall at the option of Lessor, 
(a) place the Property in good repair, condition and working order; or (b) 
replace the Property (or any part thereof) with like property of equal or 
greater value, in good repair, condition and working order and transfer 
clear title to such replacement property to Lessor whereupon such 
replacement property shall be deemed the Property for all purposes under 
the Lease; or (c) pay to Lessor the total rent due and owing at the time of 
such payment plus an amount calculated by Lessor which is equal to the 
Casualty Loss Value specified in the Casualty Loss Schedule attached to the 
applicable Schedule.

13. INSURANCE:

Lessee shall obtain and maintain for the entire term of this Lease, at its 
own expense (as primary insurance for Lessor and Lessee), property damage 
and liability insurance and insurance against loss or damage to the 
Property including without limitation loss by fire (including so-called 
extended coverage), theft, collision and such other risks of loss as are 
customarily insured against on the type of Property leased under any Lease 
and by businesses in which Lessee is engaged, in such amounts, in such form 
and with such insurers as shall be satisfactory to Lessor; provided, 
however, that the amount of insurance against loss or damage to the 
Property shall be equal to or greater than the Casualty Loss Value of such 
items of Property as specified in the Casualty Loss Schedule attached to 
the Schedule.  Each insurance policy will name Lessee as insured and Lessor 
and its assignees as additional insureds and loss payees thereof as their 
interests may appear, shall contain cross-liability endorsements and shall 
contain a clause requiring the insurer to give Lessor and its assignees at 
least 30 days prior written notice of any material alteration in the terms 
of such policy or of the cancellation thereof.  Lessee shall furnish to 
Lessor a certificate of insurance or other evidence satisfactory to Lessor 
that such insurance coverage is in effect; provided, however, that Lessor 
shall be under no duty either to ascertain the existence of or to examine 
such insurance policy or to advise Lessee in the event such insurance 
coverage shall not comply with the requirements hereof.  All insurance 
covering loss or damage to the Property shall contain a breach of warranty 
clause satisfactory to Lessor.

14. INDEMNIFICATION:

Except for the gross negligence or willful misconduct of Lessor, Lessee 
shall indemnify and hold Lessor harmless from and against any and all 
claims, (including  without limitation negligence, tort and strict 
liability), damages, judgments, suits and legal proceedings, and any and 
all costs and expenses in connection therewith (including attorney's fees 
incurred by Lessor either in enforcing this indemnity or in defending 
against such claims), arising out of or in any manner connected with or 


<PAGE> 6
resulting from the Lease or the Property, including, without limitation the 
manufacture, purchase, financing, ownership, rejection, non-delivery, 
transportation, delivery, possession, use, operation, maintenance, 
condition, lease, return, storage or disposition thereof; including without 
limitation (a) claims for injury to or death of persons and for damage to 
property; (b) claims relating to patent, copyright, or trademark 
infringement, (c) claims relating to latent or other defects in the 
Property whether or not discoverable by Lessor and (d) claims for wrongful, 
negligent or improper act or misuse by Lessor.  Lessee agrees to give 
Lessor prompt notice of any such claim or liability.  For purposes of this 
paragraph and any Lease, the term "Lessor" shall include Lessor, its 
successors and assigns, shareholders, directors, officers, representatives 
and agents, and the provisions of this paragraph shall survive expiration 
of any Lease with respect to events occurring prior thereto.

Upon request of Lessor, Lessee shall assume the defense of all demands, 
claims, or actions, suits and all proceedings against Lessor for which 
indemnity is provided and shall allow Lessor to participate in the defense 
thereof. Lessor shall be subrogated to all rights of Lessee for any matter 
which Lessor has assumed obligation hereunder, and may settle any such 
demand, claim, or action without Lessee's prior consent, and without 
prejudice to Lessor's right to indemnification hereunder.

15. EVENTS OF DEFAULT:

An "Event of Default" shall occur under any Lease if Lessee:

(a) fails to pay any Monthly Rental or other payment required under the 
Lease when the same becomes due and payable and such failure continues for 
ten (10) days after its due date.

(b) attempts to or does, remove, sell, assign, transfer, encumber, sublet 
or part with possession of any one or more items of the Property or any 
interest under any Lease, except as expressly permitted herein, or permits 
a judgment or other claim to become a lien upon any or all of Lessee's 
assets or upon the Property;

(c) permits any item of Property to become subject to any levy, seizure, 
attachment, assignment or execution; or Lessee abandons any item of 
Property;

(d) or any guarantor, fails to observe or perform any of its covenants and 
obligations required to be observed or performed under the Lease and such 
failure continues uncured for ten (10) days after occurrence thereof.

(e) or any guarantor, breaches any of its representations and warranties 
made under any Lease, or if any such representations or warranties shall be 
false or misleading in any material respect.

(f) or any guarantor, shall (i) be adjudicated insolvent or a bankrupt, or 
cease, be unable, or admit in writing its inability, to pay its debts as 
they mature, or make a general assignment for the benefit of creditors or 
enter into any composition or arrangement with creditors; (ii) apply for or 
consent to the appointment of a receiver, trustee or liquidator of it or of 
a substantial part of its property, or authorize such application or 
consent, or proceedings seeking such appointment shall be instituted 
against it without such authorization, consent or application and shall 
continue undismissed for a period of 60 days; (iii) authorize or file a 
voluntary petition in bankruptcy or apply for or consent to the application 
of any bankruptcy, reorganization in bankruptcy, arrangement, readjustment 
of debt, insolvency, dissolution, moratorium or other similar law of any 
jurisdiction, or authorize such application or consent; or proceedings to 
such end shall be instituted against it without such authorization, 
application or consent and such proceeding instituted against it shall 
continue undismissed for a period of 60 days;

(g) or any guarantor, shall suffer an adverse change in its financial 
condition after the date hereof as determined by Lessor in its sole 
discretion, or there shall occur a substantial change in ownership of the 
outstanding stock of Lessee or a substantial change in control of its board 
of directors.

(h) shall be in default under any other Schedule or agreement executed with 
Lessor; or shall fail to sign and deliver to Lessor any document requested 
by Lessor in connection with any Lease or shall fail to do any thing 
determined by Lessor to be necessary or desirable to effectuate the 
transaction contemplated by the Lease or to protect Lessor's rights and 
interests in the Lease and  Property; or shall fail to provide financial 
statements to Lessor as provided in Section 18(g) hereof.




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16. REMEDIES:

Upon the occurrence of any Event of Default and at any time thereafter, 
Lessor may, with or without giving notice to Lessee or canceling the Lease, 
do any one or more of the following: 

(a) enforce this Agreement according to its terms; 

(b) advance funds on Lessee's behalf to cure the Event of Default, 
whereupon Lessee shall immediately reimburse Lessor therefor, together with 
late charges accrued thereon;

(c) refuse to deliver the Property to Lessee;

(d) upon notice to Lessee, cancel this Master Lease Agreement and any or 
all Schedules executed pursuant thereto; 

(e) if Lessor determines, in its sole discretion, not to take possession of 
the Property, Lessor shall continue to be the owner of the Property and 
may, but is not obligated to, dispose of the Property by sale or otherwise, 
all of which determinations may be made by Lessor in its sole discretion 
and for its own account;

(f) declare immediately due and payable all amounts due or to become due 
hereunder for the full term of the Lease (including any renewal or purchase 
options which Lessee has contracted to pay);

(g) with or without terminating the Lease, recover the Casualty Loss Value 
of the Property as of the rent payment date immediately preceding the date 
of default together with all costs and expenses incurred by Lessor in the 
repossession, recovery, storage, repair, sale, re-lease or other 
disposition of the Property, including without limitation, reasonable 
attorneys' fees and costs incurred in connection therewith or otherwise 
resulting or arising from Lessee's default, and any indemnity if then 
determinable, plus interest on all of the above until paid (before and 
after judgment) at the lesser of the rate of eighteen percent (18%) per 
annum or the highest rate permitted by law (collectively, "Lessor's 
Damages");

(h) without notice to Lessee, repossess the Property wherever found, with 
or without legal process, and for this purpose Lessor and/or its agents or 
assigns may enter upon any premises of or under the control or jurisdiction 
of Lessee or any agent of Lessee, without liability for suit, action or 
other proceeding by Lessee (any damages occasioned by such repossession 
being hereby expressly waived by Lessee) and remove the Property therefrom; 
Lessee further agrees on demand, to assemble the Property and make it 
available to Lessor at a place to be designated by Lessor;

(i) in its sole discretion, re-lease or sell any or all of the Property at 
a public or private sale on such terms and notice as Lessor shall deem 
reasonable (such sale may, at Lessor's sole option, be conducted at 
Lessee's premises), and recover from Lessee liquidated damages for the loss 
of a bargain and not as a penalty an amount equal to the Lessor's Damages. 

(j) if Lessee breaches any of its obligations under Section 7(c) of this 
Agreement, Lessee shall be liable to Lessor for additional damages in an 
amount not less than two (2) times the original cost paid by Lessor for the 
Software, and at Lessor's option, Lessor shall be entitled to injunctive 
relief.

(k) exercise any other right or remedy which may be available to it under 
the Uniform Commercial Code or any other applicable law;

(l) a cancellation hereunder shall occur only upon notice by Lessor and 
only as to such items of Property as Lessor specifically elects to cancel 
and this Lease shall continue in full force and effect as to the remaining 
items, if any;

In the event Lessor in good faith believes the Property to be in danger of 
misuse, abuse or confiscation or to be in any other way threatened; or 
believes in good faith that the Property is no longer sufficient or has 
declined or may decline in value; or believes in good faith for any other 
reason that the prospect of payment or performance has become impaired, 
Lessor shall have the right, in its sole discretion, to either require 
additional collateral or declare the entire indebtedness under any Lease 
immediately due and payable.




<PAGE> 8
Lessor may exercise any and all rights and remedies available at law or in 
equity, including those available under the Uniform Commercial Code.  The 
rights and remedies afforded Lessor hereunder shall not be deemed to be 
exclusive, but shall be in addition to any rights or remedies provided by 
law.  Lessor's failure promptly to enforce any right or remedy hereunder 
shall not operate as a waiver of such right or remedy, and Lessor's waiver 
of any default shall not constitute a waiver of any subsequent or other 
default.  Lessor may accept late payments or partial payments of amounts 
due under the Lease  and may delay enforcing any of Lessor's rights or 
remedies hereunder without losing or waiving any of Lessor's rights or 
remedies under the Lease.

17. LESSEE'S REPRESENTATIONS AND WARRANTIES:

Lessee represents and warrants as follows: 

(a) If Lessee is a corporation, duly organized and validly existing in good 
standing under the laws of the jurisdiction of its incorporation, duly 
qualified to do business in each jurisdiction where any Property is, or is 
to be located, and has full corporate power and authority to hold property 
under lease and to enter into and perform its obligations under any Lease; 
the execution, delivery and performance by Lessee of any Lease has been 
duly authorized by all necessary corporate action on the part of Lessee, 
and is not inconsistent with its Articles of Incorporation or By-Laws or 
other governing instruments.

(b) If Lessee is a partnership, duly organized by written partnership 
agreement and validly existing in accordance with the laws of the 
jurisdiction of its organization, duly qualified to do business in each 
jurisdiction where the Property is, or is to be located, and has full power 
and authority to hold property under lease and to enter into and perform 
its obligations under any Lease; the execution, delivery and performance by 
Lessee of any Lease has been duly authorized by all necessary action on the 
part of the Lessee, and is not inconsistent with its partnership agreement 
or other governing instruments.  Upon request, Lessee will deliver to 
Lessor certified copies of its partnership agreement and other governing 
instruments and original certificate of partners and other instruments 
deemed necessary or desirable by Lessor.  To the extent required by 
applicable law, Lessee has filed and published its fictitious business name 
certificate.

(c) The execution, delivery and performance by Lessee of any Lease does not 
violate any law or governmental rule, regulation, or order applicable to 
Lessee, does not and will not contravene any provision, or constitute a 
default under any indenture, mortgage, contract, or other instrument to 
which it is bound and, upon execution and delivery of each Lease, will 
constitute a legal, valid and binding agreement of Lessee, enforceable in 
accordance with its terms.

(d) No action, including any permits or consents, in respect of or by any 
state, federal or other governmental authority or agency is required with 
respect to the execution, delivery and performance by Lessee of any Lease.

(e) All computer hardware and software that is utilized by Lessee in the 
operation of its businesses is and will be "Year 2000 Compliant" in that it 
is and will be capable of accepting, processing and printing date data 
between and within the twentieth and twenty-first centuries, and neither 
the performance nor functionality of any computer hardware or software is 
affected by dates prior to, during, or after the Year 2000.  Upon request, 
Lessee shall provide written assurances to Lessor that its hardware and 
software are "Year 2000 Compliant".

18. GENERAL:

(a) Entire Agreement.  Each Schedule shall incorporate the terms and 
conditions of  this Master Lease Agreement and, together with the 
Acceptance Certificate (as defined herein) and Master Progress Funding 
Agreement (and Authorizations thereunder), if applicable, and any 
amendments to any of the foregoing documents, shall supersede all prior 
agreements and constitute the entire understanding and agreement between 
the Lessor and Lessee with regard to the subject matter hereof and thereof, 
and there is no understanding or agreement, oral or written, which is not 
set forth herein or therein.

(b) Time Is of the Essence; Provisions Severable.  Time is of the essence 
with respect to any Lease.  The provisions contained in any agreement shall 
be deemed to be independent and severable.  The invalidity or partial 
invalidity of any one provision or portion of the Lease under the laws of 
any jurisdiction shall not affect the validity or enforceability of any 
other provisions of the Lease.  The captions and headings set forth herein 
are for convenience of reference only and shall not define or limit any of 
the terms hereof.  




<PAGE> 9
(c) Notices.  Notices or demands required to be given hereunder shall be in 
writing and addressed to the other party at the address herein or such 
other address provided by written notice hereunder and shall be effective 
(i) upon the next business day if sent by guaranteed overnight express 
service (such as Federal Express); (ii) on the same day if personally 
delivered; or (iii) three days after mailing if sent by certified or 
registered U.S. mail, postage prepaid.

(d) Governing Law; Waiver of Trial by Jury.  THIS LEASE SHALL IN ALL 
RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE 
STATE OF UTAH, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND 
PERFORMANCE.  LESSEE AGREES TO SUBMIT TO THE JURISDICTION OF THE STATE 
AND/OR FEDERAL COURTS IN THE STATE OF UTAH IN ALL MATTERS RELATING TO THE 
LEASE, THE PROPERTY AND THE CONDUCT OF THE RELATIONSHIP BETWEEN LESSOR AND 
LESSEE.  THIS LEASE WAS EXECUTED IN THE STATE OF UTAH (BY THE LESSOR HAVING 
COUNTERSIGNED IT IN UTAH) AND IS TO BE PERFORMED IN THE STATE OF UTAH (BY 
REASON OF ONE OR MORE PAYMENTS REQUIRED TO BE MADE TO LESSOR IN UTAH).  
LESSOR AND LESSEE HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS 
ARISING OUT OF THE LEASE OR PROPERTY OR THE CONDUCT OF THE RELATIONSHIP 
BETWEEN LESSOR AND LESSEE.

(e) Binding Effect; Survivability.  The provisions of each Lease shall 
inure to the benefit of and shall bind Lessor and Lessee and their 
respective permitted successors and assigns.  All representations, 
warranties, covenants and indemnities of Lessee made or agreed to in the 
Lease or in any certificates delivered in connection therewith shall 
survive the expiration, termination or cancellation of the Lease for any 
reason.

(f) Further Assurances; Financing Statements.  Lessee will cooperate with 
Lessor in protecting Lessor's interests in the Property, the Lease and the 
amounts due under the Lease, including, without limitation, the execution 
and delivery of Uniform Commercial Code statements and filings and other 
documents requested by Lessor.  Lessee shall pay all costs of filing any 
financing, continuation or termination statements with respect to the 
Property and Lease, including without limitation, any intangibles tax, 
documentary stamp tax or other similar tax or charge relating thereto and 
of all UCC or other lien searches deemed necessary or advisable by Lessor.  
Lessee will do whatever may be necessary or advisable to have a statement 
of the interest of Lessor in the Property noted on any certificate of title 
relating to the Property and will deposit said certificate with Lessor.  
Lessee will execute and deliver to Lessor such other documents and written 
assurances and take such further action as Lessor may request to more fully 
carry out the implementation, effectuation, confirmation and perfection of 
the Lease and any rights of Lessor thereunder.  Lessee grants to Lessor a 
security interest in all deposits and other property transferred or pledged 
to Lessor to secure the payment and performance of all of Lessee's 
obligations under the Lease.

(g) Financial Statements.  Lessee shall provide to Lessor a copy of its 
annual audited financial statements within 90 days after its fiscal year 
end, and a copy of its quarterly unaudited financial statements within 45 
days after the end of each fiscal quarter.

(h) Provisional Security Interest.  In the event a court of competent 
jurisdiction or other governing authority shall determine that the Lease  
is not a "true lease" or is a lease intended as security or that Lessor (or 
its assigns) does not hold legal title to or is not the owner of the 
Property, then the Lease shall be deemed to be a security agreement with 
Lessee, as debtor, having granted to Lessor, as secured party, a security 
interest in the Property effective the date of the Lease, and the Property 
shall secure, in addition to the indebtedness set forth herein, any other 
indebtedness owing by Lessee to Lessor.  In such case, Lessor shall have 
all of the rights, privileges and remedies of a secured party under the 
Utah Uniform Commercial Code.

(i) Change in Lessee's Name or Address.  Lessee shall not change its name 
or address from that set forth above, unless it shall have given Lessor or 
its assigns no less than 30 days' prior written notice. 

(j) Covenant of Quiet Possession.  Lessor agrees that so long as no Event 
of Default has occurred and is continuing, Lessee shall be entitled to 
quietly possess the Property subject to and in accordance with the terms 
and conditions of this Agreement. 

(k) Lessor's Right to Perform for Lessee.  If Lessee fails to perform or 
comply with any of its agreements contained herein, Lessor may perform or 
comply with such agreements and the amount of any payments and expenses of 



<PAGE> 10
Lessor incurred in connection with such performance or compliance 
(including attorneys' fees), together with interest thereon at the lesser 
of the rate of eighteen percent (18%) per annum, or the highest rate 
permitted by law shall be deemed additional rent payable by Lessee upon 
demand.

(l) Attorneys' Fees.  Lessee shall reimburse Lessor for all charges, costs, 
expenses and attorneys' fees incurred by Lessor (a) in defending or 
protecting its interest in the Property; (b) in the execution, delivery, 
administration, amendment and enforcement of the Lease or the collection of 
any rent or other payments due under the Lease; and (c) in any lawsuit or 
other legal or arbitration/mediation proceeding to which the Lease gives 
rise, including without limitation, actions in tort.

(m) Lessee's Options at End of Initial Period.  At the end of the Initial 
Period of any Lease, or upon any expiration of any renewal or extension 
thereof as provided for in option (2) herein or otherwise, Lessee shall, 
provided at least one hundred eighty (180) days prior written notice is 
received by Lessor from Lessee via certified mail, do one of the following: 
(1) purchase the Property for a price to be determined by Lessor and 
Lessee, (2) extend the Lease for six (6) additional months at the rate 
specified on the respective Schedule, or (3) return the Property to Lessor 
at Lessee's expense to a destination within the continental United States 
specified by Lessor and terminate the Schedule; provided, however, that for 
option (3) to apply, all accrued but unpaid late charges, interest, taxes, 
penalties, and any and all other sums due and owing under the Schedule must 
first be paid in full, the provisions of Sections 6(c) and (d) and 7(c) 
hereof must be specifically complied with, and Lessee must enter into a new 
Schedule with Lessor to lease Property which replaces the Property listed 
on the old Schedule.  With respect to options (1) and (3), each party shall 
have the right in its absolute and sole discretion to accept or reject any 
terms of purchase or of any new Schedule, as applicable.  In the event 
Lessor and Lessee have not agreed to either option (1) or (3) by the end of 
the Initial Period or any renewal or extension period then in effect, or if 
Lessee fails to give written notice of its option via certified mail at 
least one hundred eighty (180) days prior to the termination of the Initial 
Period or any renewal or extension period then in effect, then option (2) 
shall apply at the end of the Initial Period or any renewal or extension 
period then in effect.

(n) Amendment and Modification.  The Lease may not be amended or modified 
except by a writing signed by a duly authorized representative of each 
party, but no such amendment or modification needs further consideration to 
be binding.  Notwithstanding the foregoing, Lessee authorizes Lessor to 
amend any Schedule to identify more accurately the Property (including, 
without limitation, supplying serial numbers or other identifying data), 
and such amendment shall be binding on Lessor and Lessee unless Lessee 
objects thereto within 10 days after receiving notice of the amendment from 
Lessor.

19. WAIVERS:

To the extent permitted by applicable law, Lessee hereby waives any and all 
rights and remedies conferred upon a Lessee by Sections 2A-508 through 2A-
522 of the Uniform Commercial Code, including but not limited to Lessee's 
rights to: (i) cancel the Lease; (ii) repudiate the Lease; (iii) reject the 
Property; (iv) revoke acceptance of the Property; (v) recover damages from 
Lessor for any breaches or warranty or for any other reason; (vi) claim, 
grant or permit a security interest in the Property in Lessee's possession 
or control for any reason; (vii) deduct all or any part of any claimed 
damages resulting from Lessor's default, if any, under the Lease; (viii) 
"cover" by making any purchase or lease of or contract to purchase or lease 
Property in substitution for those due from Lessor; (ix) recover any 
general, special, incidental or consequential damages, for any reason 
whatsoever; and (x) commence legal action against Lessor for specific 
performance, replevin, detinue, sequestration, claim and deliver or the 
like for any Property identified to the Lease.  To the extent permitted by 
applicable law, Lessee also hereby waives any rights now or hereafter 
conferred by statute or otherwise which may require Lessor to sell, lease 
or otherwise use any Property in mitigation of Lessor's damages as set for 
in Section 16 hereof or which may otherwise limit or modify any of Lessor's 
rights or remedies in that section.

No waiver or modification by Lessor of any of the terms and conditions 
hereof shall be effective unless in writing signed by an officer of Lessor. 

20. ASSIGNMENT BY LESSEE:

LESSEE MAY NOT ASSIGN THIS AGREEMENT OR ANY OF ITS RIGHTS HEREUNDER OR 
SUBLEASE THE PROPERTY WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR.  NO 
PERMITTED ASSIGNMENT OR SUBLEASE SHALL RELIEVE LESSEE OF ANY OF ITS 



<PAGE> 11
OBLIGATIONS HEREUNDER.

BY INITIALING THIS SECTION, LESSEE ACKNOWLEDGES THAT IT HAS READ THE ABOVE 
PARAGRAPH UNDER SECTIONS 18, 19 AND 20, AND FULLY UNDERSTANDS THEIR CONTENT 
AND AGREES TO THEIR PROVISIONS.

Initialed 
         --------

21. POWER OF ATTORNEY.  LESSEE HEREBY AUTHORIZES AND APPOINTS LESSOR AND 
LESSOR'S AGENTS AND ASSIGNS AS LESSEE'S ATTORNEY-IN-FACT TO COMPLETE, 
EXECUTE, FILE AND AMEND ON LESSEE'S BEHALF UCC FINANCING STATEMENTS, 
PRECAUTIONARY OR OTHERWISE, IN CONNECTION WITH THE PROPERTY AND LEASE AND 
TO CONFORM THE DESCRIPTION OF THE PROPERTY (INCLUDING SERIAL NUMBERS) IN 
ANY SUCH FINANCING STATEMENTS OR OTHER DOCUMENTATION.

IN WITNESS WHEREOF, Lessor and Lessee have executed this Agreement on the 
day and year first above written.

LESSOR:	                      LESSEE:

MATRIX FUNDING CORPORATION	    PETCO ANIMAL SUPPLIES, INC.
	

BY: /s/ Sherrie Copier            BY: /s/ John D. Morberg
   -----------------------           ------------------------ 

TITLE:  Assistant Vice President  TITLE: Vice President and Controller




<PAGE> 12

                        CERTIFICATE OF INCUMBENCY


The undersigned, does hereby certify that he/she is the ASSISTANT SECRETARY
of Petco Animal Supplies, Inc., a corporation duly organized, existing in 
good standing under the laws of the state of its incorporation, and qualified
to do business in all states where it is now conducting business (hereinafter
"Corporation"), and further certifies as follows:

1. That the individuals whose names appear below are duly elected officers 
of the Corporation, elected, qualified and acting in the offices set forth 
beside their names.

2. That pursuant to the Corporation's By-Laws and/or Resolutions, as 
amended, the following persons  have been properly designated and appointed 
to the offices indicated and that said persons continue to hold such 
offices at this time.

NAME	                  OFFICE	                      SPECIMEN SIGNATURE

John D. Morberg       Vice President and Controller /s/ John D. Morberg
--------------------- ----------------------------- -------------------
Brian K. Devine       Chairman, President and CEO   /s/ Brian K. Devine
--------------------- ----------------------------- ------------------- 

3. That the persons designated to serve in the above entitled capacities 
have been given sufficient authority to act on behalf of and to bind the 
Corporation, and that each document executed before, after or on the date 
of this Certificate, by any one or more of the above persons will 
constitute a legally binding and enforceable obligation of the Corporation, 
and the Corporation has authorized and approved the same.

4. That this Certificate shall be in full force and effect until revoked in 
writing by the Secretary, Assistant Secretary or by any other duly 
authorized officer of the Corporation.

5. That pursuant to the Corporation's By-Laws and/or Resolutions, as 
amended, the undersigned has the power and authority to execute this 
Certificate on behalf of the Corporation.

IN WITNESS WHEREOF, I have affixed my name and set the seal of the 
Corporation this 26th day of January, 1999.


/s/ Diane L. Stewart
--------------------
Signature

Assistant Secretary
--------------------
Title


(Corporate Seal)