INDEMNITY AGREEMENT

This indemnity agreement dated as of February 26, 2007 is between Denali Sciences, Inc., a Delaware corporation (“ Denali ”), Velcera Pharmaceuticals, Inc., a Delaware corporation (“ Velcera ” and together with Denali, the “ Companies ”), and Timothy M. Hofer (the “ Indemnitee ”),

Indemnitee is the sole director of Denali and is willing to serve, continue to serve and to take on additional service for or on behalf of Denali on the condition that he is indemnified as provided herein; and

It is intended that the Companies will promptly pay Indemnitee all amounts necessary to effectuate in full the indemnity provided herein.

The parties hereto agree as follows:

1.   Services by Indemnitee . Indemnitee agrees to serve as director of Denali, so long as Indemnitee is duly appointed or elected and qualified in accordance with the applicable provisions of Denali’s certificate of incorporation and bylaws, and until such time as Indemnitee resigns or fails to stand for election or is removed as director.

2.   Indemnification . Subject to the limitations set forth herein and in Section 6 hereof, the Companies hereby agree to indemnify Indemnitee as follows:

The Companies shall, with respect to any Proceeding (as hereinafter defined) associated with Indemnitee acting in his official capacity as director of Denali relating to the consideration, approval or consummation of that certain Merger Agreement dated January 31, 2007 between Velcera, Denali and Denali Acquisition Corp. (the “ Merger ”), indemnify Indemnitee to the fullest extent permitted by Section 145 of the General Corporation Law of Delaware (the “ DGCL ”) and the certificate of incorporation of Denali in effect on the date hereof or as such law or certificate of incorporation may from time to time be amended (but, in the case of any such amendment, only to the extent such amendment permits Denali to provide broader indemnification rights than the law or Certificate of Incorporation permitted Denali to provide before such amendment). Notwithstanding the foregoing, the Companies shall not be required to indemnify Indemnitee for acts or omissions of Indemnitee constituting bad faith, gross negligence or intentional misconduct, except for actual or alleged gross negligence in connection with the scope or depth of the performance of due diligence with respect to Velcera and its business. The right to indemnification conferred herein and in the certificate of incorporation of Denali shall be presumed to have been relied upon by Indemnitee in serving or continuing to serve Denali and shall be enforceable as a contract right. Without in any way diminishing the scope of the indemnification provided by this Section 2, the Companies will indemnify Indemnitee against Expenses (as hereinafter defined) and Liabilities (as hereinafter defined) actually and reasonably incurred by Indemnitee or on his behalf in connection with the investigation, defense, settlement or appeal of such Proceeding. In addition to, and not as a limitation of, the foregoing, the rights of indemnification of Indemnitee provided under this agreement shall include those rights set forth in Sections 7 below. Notwithstanding the foregoing, the Companies shall be required to indemnify Indemnitee in connection with a Proceeding commenced by Indemnitee (other than a Proceeding commenced by Indemnitee to enforce Indemnitee’ rights under this agreement) only if the commencement of such Proceeding was authorized by the Board of Directors. Notwithstanding anything to the contrary contained herein, the Companies shall have no obligation to indemnify Indemnitee to the extent such indemnification would not be permitted under Section 145 of the DGCL or Denali’s certificate of incorporation in effect on the date hereof.

3.   Presumptions and Effect of Certain Proceedings . Upon making a request for indemnification, Indemnitee shall be presumed to be entitled to indemnification under this agreement and the Companies shall have the burden of proof to overcome that presumption in reaching any contrary determination. The termination of any Proceeding by judgment, order, settlement, arbitration award or conviction, or upon a plea of nolo contendere or its equivalent shall not affect this presumption or, except as determined by a judgment or other final adjudication adverse to Indemnitee, establish a presumption with regard to any factual matter relevant to determining Indemnitee’s rights to indemnification hereunder. If the person or persons so empowered to make a determination pursuant to Section 4 hereof shall have failed to make the requested determination within ninety (90) days after any judgment, order, settlement, dismissal, arbitration award, conviction, acceptance of a plea of nolo contendere or its equivalent, or other disposition or partial disposition of any Proceeding or any other event that could enable the Companies to determine Indemnitee’s entitlement to indemnification, the requisite determination that Indemnitee is entitled to indemnification shall be deemed to have been made.

4.   Procedure for Determination of Entitlement to Indemnification .

(a)   Whenever Indemnitee believes that Indemnitee is entitled to indemnification pursuant to this agreement, Indemnitee shall submit a written request for indemnification to the Companies. Any request for indemnification shall include sufficient documentation or information reasonably available to Indemnitee for the determination of entitlement to indemnification. In any event, Indemnitee shall submit Indemnitee’s claim for indemnification within a reasonable time, not to exceed ninety (90) days after any judgment, order, settlement, dismissal, arbitration award, conviction, acceptance of a plea of nolo contendere or its equivalent, or final termination, whichever is the later date for which Indemnitee requests indemnification.

(b)   Independent Legal Counsel (as hereinafter defined) shall determine whether Indemnitee is entitled to indemnification. Determination of Indemnitee’s entitlement to indemnification shall be made not later than ninety (90) days after the Companies’ receipt of Indemnitee’s written request for such indemnification, provided that any request for indemnification for Liabilities, other than amounts paid in settlement, shall have been made after a determination thereof in a Proceeding.

5.   Specific Limitations on Indemnification . Notwithstanding anything in this agreement to the contrary, the Companies shall not be obligated under this agreement to make any payment to Indemnitee with respect to any Proceeding:

(a)   To the extent that payment is actually made to Indemnitee under any insurance policy, or is made to Indemnitee by either of the Companies or affiliates otherwise than pursuant to this agreement. Notwithstanding the availability of such insurance, Indemnitee also may claim indemnification from the Companies pursuant to this agreement by assigning to the Companies any claims under such insurance to the extent Indemnitee is paid by the Companies;

(b)   For Liabilities in connection with Proceedings settled without the Companies’ consent, which consent, howeve