EXHIBIT
      10.2

    


    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. 

     

    
      
         

      

      
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    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, however, shall not be unreasonably withheld;


    


    (c) In
      no
      event shall the Companies be liable to pay the fees and disbursements of more
      than one counsel in any single Proceeding except to the extent that, in the
      opinion of counsel of the Indemnitee, the Indemnitee have conflicting interests
      in the outcome of such Proceeding, or

     

    (d) To
      the
      extent it would be otherwise prohibited by law, if so established by a judgment
      or other final adjudication adverse to Indemnitee. 

     

    6. Fees
      and Expenses of Independent Legal Counsel.
      The
      Companies agree to pay the reasonable fees and expenses of Independent Legal
      Counsel and to fully indemnify such Independent Legal Counsel against any and
      all expenses and losses incurred by any of them arising out of or relating
      to
      this agreement or their engagement pursuant hereto. 

     

    7. Remedies
      of Indemnitee.
      

     

    (a) In
      the
      event that (i) a determination pursuant to Section 4 hereof is made that
      Indemnitee is not entitled to indemnification, (ii) payment has not been timely
      made following a determination of entitlement to indemnification pursuant to
      this agreement, or (iii) Indemnitee otherwise seeks enforcement of this
      agreement, Indemnitee shall be entitled to a final adjudication in the Court
      of
      Chancery of the State of Delaware of the remedy sought.

     

    (b) If
      a
      determination that Indemnitee is entitled to indemnification has been made
      pursuant to Section 4 hereof, or is deemed to have been made pursuant to Section
      4 hereof or otherwise pursuant to the terms of this agreement, the Companies
      shall be bound by such determination in the absence of a misrepresentation
      or
      omission of a material fact by Indemnitee in connection with such determination.
      

     

    (c) The
      Companies shall be precluded from asserting that the procedures and presumptions
      of this agreement are not valid, binding and enforceable. The Companies shall
      stipulate in any such court or before any such arbitrator that the Companies
      are
      bound by all the provisions of this agreement and are precluded from making
      any
      assertion to the contrary. 

     

    
      
         

      

      
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    (d) Expenses
      reasonably incurred by Indemnitee in connection with Indemnitee’s request for
      indemnification under, seeking enforcement of or to recover damages for breach
      of this agreement shall be borne by the Companies when and as incurred by
      Indemnitee.

     

    8. Contribution.
      To the
      fullest extent permissible under applicable law, if the indemnification provided
      for in this agreement is unavailable to Indemnitee for any reason whatsoever,
      the Companies, in lieu of indemnifying Indemnitee, shall contribute to the
      amount incurred by Indemnitee, whether for judgments, fines, penalties, excise
      taxes, amounts paid or to be paid in settlement and/or for Expenses, in
      connection with any claim relating to an indemnifiable event under this
      agreement, in such proportion as is deemed fair and reasonable in light of
      all
      of the circumstances of such Proceeding in order to reflect (i) the relative
      benefits received by the Companies and Indemnitee as a result of the event(s)
      and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative
      fault of the Companies (and their directors, officers, employees and agents)
      and
      Indemnitee in connection with such event(s) and/or transaction(s). 

     

    9. Modification,
      Waiver, Termination and Cancellation.
      No
      supplement, modification, termination, cancellation or amendment of this
      agreement shall be binding unless executed in writing by both of the parties
      hereto. No waiver of any of the provisions of this agreement shall be deemed
      or
      shall constitute a waiver of any other provisions hereof (whether or not
      similar), nor shall such waiver constitute a continuing waiver. 

     

    10. Subrogation.
      In the
      event of payment under this agreement, the Companies shall be subrogated to
      the
      extent of such payment to all of the rights of recovery of Indemnitee, who
      shall
      execute all papers required and shall do everything that may be necessary to
      secure such rights, including the execution of such documents necessary to
      enable the Companies effectively to bring suit to enforce such rights.


     

    11. Notice
      by Indemnitee and Defense of Claim.
      Indemnitee shall promptly notify the Companies in writing upon being served
      with
      any summons, citation, subpoena, complaint, indictment, information or other
      document relating to any matter, whether civil, criminal, administrative or
      investigative, but the omission so to notify the Companies will not relieve
      it
      from any liability that it may have to Indemnitee if such omission does not
      prejudice the Companies’ rights. If such omission does prejudice the Companies’
rights, the Companies will be relieved from liability only to the extent of
      such
      prejudice; nor will such omission relieve the Companies from any liability
      that
      it may have to Indemnitee otherwise than under this agreement. 

     

    12. Notices.
      All
      notices, requests, demands and other communications hereunder shall be in
      writing and shall be deemed to have been duly given if (i) delivered by hand
      and
      receipted for by the party to whom said notice or other communication shall
      have
      been directed, or (ii) mailed by certified or registered mail with postage
      prepaid, on the third business day after the date on which it is so mailed:
      

     

    
      	
              (a)
                If to Denali, to:

            	 	
              Denali
                Sciences, Inc.

            
	 	 	
              201
                Corporate Drive

            
	 	 	
              Langhorne,
                Pennsylvania 19047

            
	 	 	
              Attention:
                Dennis F. Steadman

            


    

     

    
      
         

      

      
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              (b)
                If to Velcera, to:

            	 	
              Velcera
                Pharmaceuticals, Inc.

            
	 	 	
              201
                Corporate Drive

            
	 	 	
              Langhorne,
                Pennsylvania 19047

            
	 	 	
              Attention:
                Dennis F. Steadman

            
	 	 	 
	
              (c)
                If to Mr. Hofer, to:

            	 	
              Timothy
                M. Hofer

            
	 	 	
              787
                Seventh Avenue

            
	 	 	
              48th
                Floor

            
	 	 	
              New
                York, New York 10019

            


    

    


    or
      to
      such other address as may have been furnished to Indemnitee by the Companies
      or
      to the Companies by Indemnitee, as the case may be. 

     

    13. Nonexclusivity.
      The
      rights of Indemnitee hereunder shall not be deemed exclusive of any other rights
      to which Indemnitee may be entitled under applicable law, Denali’s certificate
      of incorporation or bylaws or otherwise. 

     

    14. Certain
      Definitions.
      

      

    (a) “Expenses”
shall
      include all direct and indirect costs (including, without limitation, attorneys’
fees, retainers, court costs, transcripts, fees of experts, witness fees, travel
      expenses, duplicating costs, printing and binding costs, telephone charges,
      postage, delivery service fees, all other disbursements or out-of-pocket
      expenses) actually and reasonably incurred in connection with either the
      investigation, defense, settlement or appeal of a Proceeding or establishing
      or
      enforcing a right to indemnification under this agreement, applicable law or
      otherwise; provided, however, that “Expenses” shall not include any Liabilities.


      

    (b) “Independent
      Legal Counsel”
shall
      mean a law firm or a member of a firm selected by the Companies and approved
      by
      Indemnitee (which approval shall not be unreasonably withheld). Notwithstanding
      the foregoing, the term “Independent Legal Counsel” shall not include any person
      who, under the applicable standards of professional conduct then prevailing,
      would have a conflict of interest in representing either the Companies or
      Indemnitee in an action to determine Indemnitee’ right to indemnification under
      this agreement. 

     

    (c) “Liabilities”
shall
      mean liabilities of any type whatsoever including, but not limited to, any
      judgments, fines, ERISA excise taxes and penalties, penalties and amounts paid
      in settlement (including all interest assessments and other charges paid or
      payable in connection with or in respect of such judgments, fines, penalties
      or
      amounts paid in settlement) of any Proceeding. 

     

    (d) “Proceeding”
shall
      mean any threatened, pending or completed action, claim, suit, arbitration,
      alternate dispute resolution mechanism, investigation, administrative hearing
      or
      any other proceeding whether civil, criminal, administrative or investigative,
      that is associated with Indemnitee’ actions as officers and/or directors of
      Denali relating to the approval of or consummation of the Merger, absent bad
      faith, gross negligence, intentional misconduct, including any action brought
      by
      or in the right of Denali or Velcera. 

     

    
      
         

      

      
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    15. Binding
      Effect; Duration and Scope of Agreement.
      This
      agreement shall be binding upon and inure to the benefit of and be enforceable
      by the parties hereto and their respective successors and assigns (including
      any
      direct or indirect successor by purchase, merger, consolidation or otherwise
      to
      all or substantially all of the business or assets of the Companies), spouses,
      heirs and personal and legal representatives. This agreement shall continue
      in
      effect for two (2) years subsequent to the closing of the Merger, regardless
      of
      whether Indemnitee continues to serve as director of Denali. 

     

    16. Severability.
      If any
      provision or provisions of this agreement (or any portion thereof) shall be
      held
      to be invalid, illegal or unenforceable for any reason whatsoever: 

     

    (a) the
      validity, legality and enforceability of the remaining provisions of this
      agreement shall not in any way be affected or impaired thereby; and


     

    (b) to
      the
      fullest extent legally possible, the provisions of this agreement shall be
      construed so as to give effect to the intent of any provision held invalid,
      illegal or unenforceable. 

     

    17. Governing
      Law.
      This
      agreement shall be governed by and construed and enforced in accordance with
      the
      laws of the State of Delaware, as applied to contracts between Delaware
      residents entered into and to be performed entirely within the State of
      Delaware, without regard to conflict of laws rules. 

     

    18. Consent
      to Jurisdiction.
      The
      Companies and Indemnitee each irrevocably consent to the jurisdiction of the
      courts of the State of Delaware for all purposes in connection with any action
      or proceeding that arises out of or relates to this agreement and agree that
      any
      action instituted under this agreement shall be brought only in the state courts
      of the State of Delaware. 

     

    19. Entire
      Agreement.
      This
      agreement represents the entire agreement between the parties hereto, and there
      are no other agreements, contracts or understandings between the parties hereto
      with respect to the subject matter of this agreement.

    


    20. Counterparts.
      This
      agreement may be executed in one or more counterparts, each of which shall
      for
      all purposes be deemed to be an original but all of which together shall
      constitute one and the same agreement. 

     

    
      
         

      

      
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    The
      parties are signing this indemnity agreement as of the date first set forth
      above.

     

    
      	 	 	 	 
	 	 	 	
              DENALI
                SCIENCES, INC.

            
	 	 	 	 
	 	 	 	/s/
              J. Jay
              Lobell
	
            	 	 	
              

              Name:
                J. Jay Lobell

            
	
            	 	 	Title: President


    

    
       

      
        	 	 	 	 
	 	 	 	
                
                  VELCERA
                    PHARMACEUTICALS, INC.

                

              
	 	 	 	 
	 	 	 	/s/
                Dennis F.
                Steadman
	
              	 	 	
                

                
                  Name:
                    Dennis F. Steadman

                

              
	
              	 	 	
                Title: President

              


         

        
          	 	 	 	 
	 	 	 	/s/
                  Timothy M.
                  Hofer
	
                	 	 	
                  

                  
                    
                      Timothy
                        M.
                        Hofer

                    

                  

                


        

      

    

     

    
      
         

      

      
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