EXHIBIT
      10.1

     

    REDEMPTION
      AGREEMENT

     

    This
      agreement is made as of January 30, 2007 between Denali Sciences, Inc., a
      Delaware corporation (“Denali”)
      and
      the holders of common stock in Denali set forth on Schedule
      A
      hereto
      (collectively, the “Sellers”).

     

    The
      Sellers desire to sell to Denali, and Denali desires to re-purchase from each
      Seller, the amount of shares of Denali common stock set forth on Schedule
      A
      opposite
      their names (the “Shares”)
      according to the terms set forth herein.

     

    The
      parties therefore agree as follows:

     

    1. Sale
      of the Shares.
      Subject
      to the terms of this agreement, and in reliance upon the representations,
      warranties, and covenants contained in this agreement, the Sellers shall sell
      the Shares to Denali, and Denali shall re-purchase the Shares from the Sellers,
      for an aggregate amount equal to $125,000 less Denali liabilities as of the
      effective date of the merger between Velcera Pharmaceuticals, Inc.
      (“Velcera”)
      and
      Denali Acquisition Corp., Denali’s wholly-owned subsidiary (“MergerCo”)
      (the
“Merger”),
      multiplied by the percent of outstanding shares of Denali common stock held
      by
      parties to this agreement (the “Purchase
      Price”).
      Each
      Seller shall be entitled to his, her, or its pro
      rata
      share of
      the Purchase Price. 

     

    2. Closing.

     

    (a) The
      purchase and sale of the Shares shall take place at a closing (the “Closing”),
      to
      occur immediately following the closing of the Merger. The parties hereto shall
      have no obligation to complete the Closing in the event the Merger is not
      consummated.

     

    (b) At
      the
      Closing:

     

    (i)
      The
      Sellers shall deliver to Denali certificates representing the Shares, duly
      endorsed in form for transfer to Denali.

     

    (ii)
      Denali shall pay to each Seller such Seller’s pro
      rata
      share of
      the Purchase Price for the Shares.

     

    (iii)
      At
      any time or from time to time after the date hereof, at Denali’s request and
      without further consideration, the Sellers shall execute and deliver to Denali
      such other instruments of sale, transfer, conveyance, assignment and
      confirmation, provide such materials and information and take such other actions
      as Denali may deem necessary, desirable or helpful in order to more effectively
      transfer, convey and assign to Denali, and to confirm Denali’s title to, the
      Shares, and to otherwise carry out the purposes of this agreement. 

     

    3. Representations
      of Sellers.
      Each
      Seller, severally, and not jointly, hereby represents to Denali as
      follows:

    


    a. Each
      Seller is the sole record and beneficial owner of the Shares owned by such
      Seller free and clear of any and all liens, pledges, security interests,
      options, claims, charges, restrictions or encumbrances of any kind or nature
      (“Encumbrances”)
      and
      upon the delivery of the Shares, Denali will receive good and marketable title
      to the Shares free and clear of all Encumbrances. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    b. The
      execution and delivery of this agreement and the consummation of the
      transactions contemplated hereby will not conflict with or result in a breach
      of
      any terms or constitute a default under any agreement or undertaking of
      Seller.

    


    c. To
      each
      Seller’s knowledge, the Shares are not the subject of any litigation or
      injunction. Seller has full power and authority and capacity to transfer the
      Shares.

    


    d. No
      third
      party consent, approval or notification for which Seller is responsible is
      necessary for Seller to effect the transactions contemplated by this
      agreement.

    


    e. Seller
      has had an opportunity to review Denali’s most recent financial statements, its
      corporate records, and the merger agreement related to the Merger. Seller
      further acknowledges to having had the opportunity to ask questions of and
      receive answers from Denali’s officers regarding any matters material to
      Seller’s decision to enter into this agreement. 

    


    f. Seller
      has been encouraged to and has had the opportunity to review the merits of
      the
      sale of the Shares with tax and legal counsel and financial advisors as deemed
      appropriate. 

    


    g. Seller
      either alone, or with the assistance of tax counsel, legal counsel, or other
      financial advisors, has such knowledge and experience in financial and business
      matters to be capable of evaluating the merits and risks of selling the
      Shares.

    


    h. Seller
      has read this agreement in its entirety and is familiar with and acknowledges
      all of the provisions of this agreement including Denali’s
      representations.

    


    4. Representations
      of Denali.
      Denali
      hereby represents to Sellers as follows:

    


    a. Denali
      has full power and authority to enter into this agreement and to perform its
      obligations hereunder.

    


    b. The
      execution, delivery and performance of this agreement by Denali and the
      consummation of the transactions contemplated hereby have been duly and validly
      authorized by all requisite corporate action, and no other corporate proceedings
      are necessary to authorize the execution and delivery of this
      agreement.

    


    c. Denali
      is
      duly organized, validly existing and in good standing under the laws of the
      State of Delaware. Denali has full power and authority to execute and deliver
      this Agreement and to perform its obligations under this agreement. This
      agreement constitutes the valid and legally binding obligation of Denali,
      enforceable in accordance with its terms, subject as to enforcement to
      applicable bankruptcy, insolvency, reorganization, moratorium and other laws
      affecting the rights of creditors generally, to the exercise of judicial
      discretion as to the availability of equitable remedies such as specific
      performance and injunction.

    


    d. To
      Denali’s knowledge, there are no actions, claims or other matters pending or
      threatened against or affecting Denali in respect of the transactions
      contemplated hereby. 

     

    
      
        
        

      

      
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    5. Waiver
      and Release.
      Each
      Seller, on behalf of itself, himself, or herself, Seller’s affiliates,
      predecessors, successors, and assigns (all of the foregoing, including Seller,
      the “Seller
      Parties”)
      hereby
      forever, fully, and unconditionally releases and discharges Denali from any
      and
      all obligations, offsets, actions, suits, debts, sums of money, contracts,
      covenants, agreements, promises, legal rights, claims, counterclaims, causes
      of
      action, demands, damages, costs, compensation, liabilities, losses and expenses
      of any nature or of any kind, whether known or unknown, asserted or unasserted,
      liquidated or unliquidated, absolute or contingent, accrued or non-accrued,
      which any of the Seller Parties ever had, now have, hereinafter may have or
      claim to have, whether grounded in law or equity, in contract or in tort, by
      statute or otherwise against Denali or its directors or officers by reason
      of
      any matter whatsoever (collectively, the “Released
      Claims”);
      provided, however, that the Released Claims shall not include any damages,
      liabilities, claims or causes of action arising out of a breach of this
      agreement by Denali. 

    


    6. Miscellaneous.

     

    (a) Notices. All
      notices and other communications hereunder shall be in writing and shall be
      sufficiently given if made by hand delivery, by facsimile, by overnight delivery
      service for next business day delivery, or by registered or certified mail
      (return receipt requested), in each case with delivery charges prepaid, to
      the
      parties at the following addresses (or at such other address for a party as
      shall be specified by it by like notice):

    


    
      	
              If
                to Denali:

            	
              Denali
                Sciences, Inc. 

              c/o
                Paramount BioCapital Investments, LLC

              787
                Seventh Avenue, 48th
                Floor

              New
                York, New York 10019

              Attn:
                Timothy Hofer

              Facsimile:
                (212) 554-4355

            
	 	 
	
              If
                to Sellers:

            	
              At
                each Sellers address as reflected in Denali’s
                records.

            


    

     

    All
      such
      notices and other communications shall be deemed to have been duly given as
      follows: when delivered by hand, if personally delivered, when received; if
      delivered by registered or certified mail (return receipt requested), when
      receipt acknowledged; or if sent by facsimile, on the day of transmission or,
      if
      that day is not a business day, on the next business day; and the next business
      day delivery after being timely delivered to a recognized overnight delivery
      service.

     

    (b) Termination.
      Any party hereto may terminate this agreement if the Closing has not occurred
      on
      or before April 15, 2007 by providing notice as set forth above. In the event
      a
      Seller terminates this agreement, the termination will only be effective with
      respect to that terminating Seller and not the other Sellers.

     

    (c) Severability. If
      any
      term, provision, covenant or restriction in this agreement is held by a court
      of
      competent jurisdiction to be invalid, void or unenforceable, the remainder
      of
      the terms, provisions, covenants and restrictions of this agreement shall remain
      in full force and effect and shall in no way be affected, impaired or
      invalidated, and the parties shall negotiate in good faith to modify this
      agreement and to preserve each party’s anticipated benefits under this
      agreement.

     

    
      
        
        

      

      
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    (d) Amendment. This
      agreement may not be amended or modified except by an instrument in writing
      approved by the parties to this agreement and signed on behalf of each of the
      parties hereto.

     

    (e) Waiver. Any
      party
      hereto may (i) extend the time for the performance of any of the obligations
      or
      other acts of the other party hereto or (ii) waive compliance with any of the
      agreements of the other party or with any conditions to its own obligations,
      in
      each case only to the extent such obligations, agreements and conditions are
      intended for its benefit. Any such extension or waiver shall only be effective
      if made in writing and duly executed by the party giving such extension or
      waiver.

     

    (f) Entire
      Agreement; Assignment. This
      agreement: (i) constitutes the entire agreement, and supersedes all other prior
      agreements and undertakings, both written and oral, among the parties, with
      respect to the subject matter hereof; and (ii) shall be binding upon and inure
      to the benefit of the parties hereto and their respective successors and
      assigns, but shall not be assignable by either party hereto without the prior
      written consent of the other party hereto.

     

    (g) Counterparts. This
      agreement may be executed in any number of counterparts, and each such
      counterpart shall be deemed to be an original instrument, but all such
      counterparts together shall constitute but one agreement. Signatures
      delivered by facsimile and other electronic means of transmission shall be
      valid
      and binding to the same extent as original signatures. 

     

    (h) Third
      Party Beneficiaries. Each
      party hereto intends that this agreement,
      except
      as expressly provided herein, shall
      not
      benefit or create any right or cause of action in or on behalf of any person
      other than the parties hereto. 

     

    (i) Governing
      Law.
      This
      agreement is governed by the internal laws of the State of Delaware without
      regard to such state’s principles of conflicts of laws that would defer to the
      substantive laws of another jurisdiction.

     

    (j) Jurisdiction;
      Service of Process.
      Any
      action or proceeding seeking to enforce any provision of, or based on any right
      arising out of, this agreement must, to the extent such courts will accept
      such
      jurisdiction, be brought
      against any of the
      parties in the courts of the State of Delaware, or, if it has or can acquire
      jurisdiction, in the United States District Court for the District of Delaware,
      and each of the parties consents to the jurisdiction of those courts (and of
      the
      appropriate appellate
      courts) in any such action or proceeding and waives any objection to venue
      laid
      therein. Process
      in any such action or proceeding may be served by sending or delivering a copy
      of the process to the party to be served at the address and in the manner
      provided for the giving of notices
      in Section 6(a). Nothing in this Section 6(j) however,
      affects the right of any party to serve legal process in any other manner
      permitted by law.

    


    Signatures
      appear on next page

     

    
      
        
        

      

      
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    The
      parties hereto are signing this redemption agreement as of the date first above
      written. 

     

    
      	 	 	 
	 	
              DENALI
                SCIENCES, INC.

            
	 
 	 
 	 
 
	 	By:  	/s/
              Timothy M. Hofer
	 	
              

              Name:
                Timothy Hofer

            
	 	Title:
              Sole Director


    

     

    
      	 	 	 	 
	 	 	 	
              SELLERS

            
	 	 	 	 
	
            	 	 	
              

              Denali
                Stockholders, Names Omitted.

            


    

     

    
      
        
        

      

      
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