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Exhibit 4.21


PROCESS DEVELOPMENT AND MANUFACTURING
AGREEMENT

This PROCESS
DEVELOPMENT AND MANUFACTURING AGREEMENT (hereinafter Agreement) is made by and between Prana
Biotechnology Ltd ACN 080 699 065 (Prana),
a company incorporated in Australia whose registered office and principal place
of business is at Level 2,369 Royal Parade, Parkville Victoria 3052 and Dr.
Reddys Laboratories Limited (Dr. Reddys),
a company incorporated and existing under the laws of India, having its
principal place of business at 7-1-27 Ameerpet Hyderabad 500 016 India.

Dr. Reddys
and Prana are individually referred to as a Party and jointly as the
Parties.

WHEREAS:

| |      |  |                                                                                                                                                                                                                                                                                                                                                                          
| | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)  |  | After
 executing a Confidentiality Agreement dated 28th March 2008, Prana
 and Dr. Reddys entered into discussions relating to Pranas requirement for
 a process development and manufacturing project (hereinafter referred to as
 Project) to carry out process research, feasibility, optimization,
 scale-up, cGMP manufacture and stability studies of PBT2 API.
| |      |  |                                                                                                                                                                                                                                                                                                                                                                          
| | (ii) |  | Following
 such discussions and the exchange of proposal requests and offers between the
 Parties, Dr. Reddys has agreed, at the request of Prana, to undertake the
 Project, on the terms and conditions contained in this Agreement.                                                                                                                                  

NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

| |    |                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | 
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| | 1. | Definitions                                                                                                                                                                    
| |    |                                                                                                                                                                                
| |    | For
 purposes of this Agreement, capitalized terms, whether used in the singular
 or plural, shall have the following meanings, unless the context clearly
 requires otherwise:
| |    |                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | (a)                                                                                                                                                                             | Affiliate
 shall mean, with respect to a Party, any entity controlling, controlled by,
 or under common control with such Party. For these purposes, control shall
 refer to: (i) the possession, directly or indirectly, of the power to direct
 the management or policies of an entity, whether through the ownership of
 voting securities, by contract or otherwise; or (ii) the ownership, directly
 or indirectly, of more than fifty percent (50%) of the voting securities or
 other ownership interest of an entity.
| |    |                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    | (b)                                                                                                                                                                             | Agreement
 means this agreement and includes any schedule or annexure to it.                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |              
| | -------------
| | -s- signature

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| |  |     |                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                         
| |  | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------
| |  | (c) | API means
 an active pharmaceutical ingredient of the Compound.                                                                                                     
| |  |     |                                                                                                                                                                       
| |  | (d) | Approved
 Purposes for a given Party means the performance of the Project and its
 obligations under this Agreement.                                                
| |  |     |                                                                                                                                                                       
| |  | (e) | Business
 Day means a day other than Saturday, Sunday or a public holiday or bank
 holiday in the place where an act is to be performed or a payment is to be
 made.
| |  |     |                                                                                                                                                                       
| |  | (f) | Commencement
 Date means 23 September, 2008.                                                                                                                        
| |  |     |                                                                                                                                                                       
| |  | (g) | Compound
 or PBT2 means 5,7-Dichloro-2-dimethylaminomethyl-8-hydroxyquinoline
 hydrochloride.                                                                     
| |  |     |                                                                                                                                                                       
| |  | (h) | Confidential
 Information means Dr. Reddys Confidential Information or Prana Confidential
 Information as the context allows.                                      
| |  |     |                                                                                                                                                                       
| |  | (i) | Dr. Reddys
 Confidential Information means:                                                                                                                        
| |  |     |                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                         
| |  |     | (i)                                                                                                                                                                    | the
 Proposal;                                                                                                                                                                                                                                                                                                                                                                                                             
| |  |     |                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                         
| |  |     | (ii)                                                                                                                                                                   | all
 information concerning Dr. Reddys comprising its research projects, plans
 and strategies, trade secrets, Know-how, technology, business operations and
 financial dealings which is or has been disclosed to or obtained by Prana
 prior to or after the date of this Agreement (whether orally, electronically
 or in writing) other than Prana Confidential information and information that
 Prana can establish:
| |  |     |                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                         
| |  |     |                                                                                                                                                                        | (A)                                                                                                                                                                                                                                                                                                                                                                                                                         | was already
 in the public domain at the time of its provision to Prana; or                                             
| |  |     |                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                         
| |  |     |                                                                                                                                                                        | (B)                                                                                                                                                                                                                                                                                                                                                                                                                         | was
 independently discovered by Prana without the aid, application or use of the
 Dr. Reddys Confidential Information.
| |  |     |                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                         
| |  | (j) | First RFP
 has the meaning given in the definition of RFP.                                                                                                        
| |  |     |                                                                                                                                                                        |                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                         
| |  | (k) | GMP or
 cGMP means the current good manufacturing practices, standards and
 requirements specified in US 21 CFR parts 210 and 211 and ICH Q7.                     

| |              
| | -------------
| | -s- signature

2

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| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                       | 
| |  | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------- | 
| |  | (1) | Intellectual
 Property Rights (IP) means
 any and all intellectual, industrial and commercial property rights
 throughout the world including rights and interests in respect of or in
 connection with Patents, inventions, ideas, discoveries, trade secrets,
 Know-how, whether or not patentable, confidential information, copyright
 (including future copyright and rights in the nature of or analogous to
 copyright), trade marks, service marks, database rights, designs, whether or
 not registered or registrable and includes applications for any of the
 foregoing and the right to apply for any of the foregoing in any part of the
 world.
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                       | 
| |  | (m) | Know-how
 means all information not in the public domain of whatsoever nature,
 including trade secrets, ideas, discoveries, inventions, data, formulae,
 techniques, procedures for experiments and tests, methods or schemes for
 synthesising compounds, uses of/or indications for chemical compounds,
 technical data or specifications, testing methods, assays, isolation and
 purification methods, designs, sketches, records, biological materials and
 analyses.                                                                                                                                                                                     
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                       | 
| |  | (n) | Material
 Form in relation to information, includes any form (whether visible or not)
 of storage from which the information can be reproduced, and any form in
 which the information is embodied or encoded and in relation to Prana
 Materials, means the materials themselves.                                                                                                                                                                                                                                                                                                                                                                              
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                       | 
| |  | (o) | Patents
 mean all patent applications, patents, or letters patents, and any claims in
 any such patent applications or patents, in any part of the world, including,
 without limitation, all continuations, continuation-in-parts, reissues,
 extensions, substitutions, confirmations, registrations, re-validations, and
 additions, and any supplementary protection certificates in respect thereof.                                                                                                                                                                                                                                                       
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                       | 
| |  | (p) | Prana
 Arising IP means all IP generated, developed, conceived, created, invented,
 developed, discovered, derived, modified, improved or adapted by Dr. Reddys,
 Prana or their respective Affiliates and Representatives in the course of
 performing the Project.                                                                                                                                                                                                                                                                                                                                                                                           
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                       | 
| |  | (q) | Prana
 Background IP means all Intellectual Property Rights vested in, owned or
 controlled by or licensed to Prana or any Affiliate of it as at the
 Commencement Date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                       | 
| |  | (r) | Prana
 Confidential Information means:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                       | 
| |  |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | the Prana
 Materials;
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                       | 
| |  |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | the Results;         

| |              
| | -------------
| | -s- signature

3

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| |  |     |                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                             
| |  | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------
| |  |     | (iii)                                                                                                                                                                                                                 | the RFP;                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  |     |                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                             
| |  |     | (iv)                                                                                                                                                                                                                  | Prana
 Background IP and Prana Arising IP;                                                                                                                                                                                                                                                                                                                                                                                                         
| |  |     |                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                             
| |  |     | (v)                                                                                                                                                                                                                   | all
 information concerning Prana comprising the Compound, Pranas research
 projects, plans and strategies, products, materials and compounds, trade
 secrets, Know how, technology, business operations and financial dealings
 which is or has been disclosed to or obtained by Dr. Reddys prior to or
 after the date of this Agreement (whether orally, electronically or in
 writing) other than information that Dr. Reddys can establish:
| |  |     |                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                             
| |  |     |                                                                                                                                                                                                                       | (A)                                                                                                                                                                                                                                                                                                                                                                                                                                                 | was already
 in the public domain at the time of its provision to Dr. Reddys; or                                                           
| |  |     |                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                             
| |  |     |                                                                                                                                                                                                                       | (B)                                                                                                                                                                                                                                                                                                                                                                                                                                                 | was
 independently discovered by Dr. Reddys outside the Project without the aid,
 application or use of the Prana Confidential Information.
| |  |     |                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                             
| |  | (s) | Prana
 Materials means:                                                                                                                                                                                            
| |  |     |                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                             
| |  |     | (i)                                                                                                                                                                                                                   | samples of
 the Compounds and any other materials including reference standards provided
 by Prana to Dr. Reddys for the purpose of the Project; and                                                                                                                                                                                                                                                                                              
| |  |     |                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                             
| |  |     | (ii)                                                                                                                                                                                                                  | any APIs of
 the Compound or other materials manufactured by Dr. Reddys in the course of
 the Project.                                                                                                                                                                                                                                                                                                                                            
| |  |     |                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                             
| |  | (t) | Project
 means a process development and manufacturing project consisting of
 Sub-Projects to carry out process research, feasibility, optimization,
 scale-up, cGMP manufacture and Stability Studies of PBT2 API.
| |  |     |                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                             
| |  | (u) | Project
 Works means each of the Sub-Projects that Prana gives Dr. Reddys written
 authority to undertake.                                                                                                          
| |  |     |                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                             
| |  | (v) | Proposal
 means both:                                                                                                                                                                                              
| |  |     |                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                             
| |  |     | (i)                                                                                                                                                                                                                   | Dr. Reddys
 2nd Revised Offer for PBT2 manufacture dated 18 September, 2008
 provided in response to the First RFP and contained in Appendix C; and                                                                                                                                                                                                                                                                                               

| |              
| | -------------
| | -s- signature

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| |  |      |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                             | 
| |  | ---- | --------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |  |      | (ii)                                                                                                                                    | Dr. Reddys
 Offer for PBT2 Optimization through Route 2 dated 29 September, 2008 provided
 in response to the RFP Addendum and contained in Appendix D.                                                                                                                                                                                                   
| |  |      |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                             | 
| |  | (w)  | Quality
 Agreement means the agreement to be entered by the Parties pursuant to
 clause 2(i).                                        
| |  |      |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                             | 
| |  | (x)  | Representatives
 in relation to a Party means a director, officer, employee, contractor,
 consultant, agent or adviser of that Party.
| |  |      |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                             | 
| |  | (y)  | Results
 means:                                                                                                                      
| |  |      |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                             | 
| |  |      | (i)                                                                                                                                     | all results,
 data, information, processes, procedures, methodologies, techniques,
 concepts, ideas, compounds, materials, items or things conceived, created,
 developed, discovered, derived, modified, improved or adapted by Dr. Reddys
 or Prana or their respective Affiliates and Representatives during, or as a
 consequence of, the Project; and
| |  |      |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                             | 
| |  |      | (ii)                                                                                                                                    | all papers,
 materials, records, laboratory notebooks and documents (in written or
 electronic form) which have been produced by Dr. Reddys or Prana or their
 respective Affiliates and Representatives in relation to the Project and the
 Results.                                                                                                     
| |  |      |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                             | 
| |  | (z)  | RFP means
 both:                                                                                                                     
| |  |      |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                             | 
| |  |      | (i)                                                                                                                                     | the Request
 for Proposal: Process Development and cGMP API Manufacture of PBT2 sent by
 Prana to Dr. Reddys on 14 August, 2008 for the purpose of inviting a
 Proposal from Dr. Reddys for the Project (First
 RFP), and contained in Appendix E; and                                                                                                 
| |  |      |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                             | 
| |  |      | (ii)                                                                                                                                    | the Request
 for Proposal Addendum: Process Development and cGMP API Manufacture of PBT2
 submitted by Prana to Dr. Reddys (RFP
 Addendum) and contained in Appendix F.                                                                                                                                                                                 
| |  |      |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                             | 
| |  | (aa) | RFP
 Addendum has the meaning given in the definition of RFP.                                                                        
| |  |      |                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                             | 
| |  | (bb) | Route 2
 means the method of manufacture of the Compound which is referred to in the
 RFP Addendum as Route 2.                       

| |              
| | -------------
| | -s- signature

5

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| |    |                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 
| | -- | ----------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| |    | (cc)                                      | Route 3
 means the method of manufacture of the Compound which is referred to in the
 First RFP as Route 3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 
| |    | (dd)                                      | Scope of
 Project Works means the particular tasks for each Sub-Projects as specified
 in Appendix A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 
| |    | (ee)                                      | Sign-Off
 means a formal written statement issued by Prana to Dr. Reddys which would
 indicate the acceptance of work that is carried out by Dr. Reddys towards
 any Sub-Project as authorized by Prana and also acknowledgment of completion
 of Dr. Reddys obligations under that Sub-Project work.                                                                                                                                                                                                                                                                                                                                                            
| |    |                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 
| |    | (ff)                                      | Sub-Projects
 means the discrete works projects specified in the Scope of Project Works to
 be undertaken by Dr. Reddys pursuant to this Agreement, subject in each case
 to the receipt of written approval from Prana.                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 
| |    | (gg)                                      | Timetable
 means the timetable for the commencement and completion of each Sub-Project.
 Timetables may be replaced in accordance with clauses 2 (b) or 2 (d). The
 first Timetable is contained in Annexure B.                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 
| | 2. | Engagement and Obligations of Dr. Reddys
| |    |                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 
| |    | (a)                                       | Prana
 engages Dr. Reddys to perform the Project (to the extent of those
 Sub-Projects authorised by Prana in accordance with clause 2 (b)), and Dr.
 Reddys agrees to accept the engagement on the terms and conditions contained
 in this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                               
| |    |                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 
| |    | (b)                                       | Dr. Reddys
 must receive written authority from Pranas Head of Development or its
 Discovery and Non-Clinical Development Manager before commencing any
 Sub-Project. Subject to clause 3 (b) in relation to Sub-Project 1A, without
 such authority for a given Sub-Project, Dr Reddys must not undertake and may
 not charge Prana its fee for the Sub-Project or any other amount. If in
 relation to a given Sub-Project, Prana provides written authority to
 undertake the Sub-Project after the relevant commencement date specified in
 the Timetable, then the Parties will agree in writing in good faith on a new
 Timetable to replace the existing one.
| |    |                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 
| |    | (c)                                       | Dr. Reddys
 will perform and carry out the Project Works will all due care and skill in
 accordance with the Scope of Project Works and the Latest Timetable that
 would be agreed by and between Dr. Reddys and Prana. In case the timetable
 gets revised due to whatsoever reason, Dr. Reddys and Prana will agree in
 good faith to reassess the timetable and update the existing Timetable in
 writing.                                                                                                                                                                                                                                                       

| |              
| | -------------
| | -s- signature

6

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| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| |  | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |  | (d) | During the
 course of the Project, Prana may give Dr. Reddys written notice of any
 Project Works (or parts thereof) that have become a priority for Prana. On
 receipt of such a notice, Dr. Reddys must re-prioritise its work in order to
 perform the priority works. In this regard, the parties must, where the
 circumstances reasonably require it, agree in good faith in writing on a new
 Timetable and payment terms to replace the existing Timetable and terms.
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| |  | (e) | Dr. Reddys
 must provide the following updates and reports to Prana:                                                                                                                                                                                                                                                                                                                                                                                                          
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| |  |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | weekly
 written updates (in a format acceptable to Prana, which will be communicated
 to Dr. Reddys in a separate email) of the work undertaken and the Results
 obtained for the week, problems encountered by Dr. Reddys, the stage of the Timetable
 that Dr. Reddys is up to and any other information that would be relevant to
 Prana in relation to the Project; and                                                                                                                                                              
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| |  |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | a written
 report (in a format acceptable to Prana, which will be communicated to Dr.
 Reddys in a separate email) detailing all of the work carried out and all
 the Results obtained for each Sub-Project undertaken, including all
 practices, procedures, processes and data (including spectra) and information
 developed or generated in the conduct of the Sub-Project along with any
 future recommendations, within thirty (30) days of the completion of the work
 specified in the Scope of Project Works for that Sub-Project.
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| |  | (f) | Dr. Reddys
 will participate in weekly teleconferences with Prana to present its updates
 and reports and allow Prana to ask any questions that it may have concerning
 the Project and set the work priorities for the following week. A
 Representative of Dr. Reddys must take the minutes of each telephone
 conference and prepare these for the consideration and approval of the
 Parties at the next telephone conference.                                           
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| |  | (g) | All Results
 arising out of the Project must be recorded in laboratory notebooks. These
 laboratory notebooks must:                                                                                                                                                                                                                                                                                                                                                            
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| |  |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | only be used
 in relation to the Project;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| |  |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | be
 maintained and signed in accordance with best industry practice; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| |  |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | be made
 available for inspection by Prana upon request by Prana in writing.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| |  | (h) | Dr. Reddys
 must comply with GMP (in relation to the manufacturing work to be undertaken
 by it) and all applicable laws in the performance of its obligations under
 this Agreement.                                                                                                                                                                                                                                                                                         

| |              
| | -------------
| | -s- signature

7

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| |    |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | 
| | -- | ------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| |    | (i)     | Prana and Dr
 Reddys agree to enter into a quality agreement (on mutually agreed terms) in
 relation to the GMP manufacturing work in Sub-Project 5 prior to the
 commencement of that Sub-Project.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | 
| |    | (j)     | Provided
 Prana gives reasonable notice, Dr. Reddys must allow Prana or any
 Representative of it to attend any premises at which Project Works are being
 conducted for the purpose of inspecting all Project works, materials and
 information to ensure the compliance by Dr. Reddys with its obligations
 under this Agreement. Pranas Representative shall only have the right to
 access works, materials and information that relate exclusively to the
 Project, and only if such access would not compromise Dr. Reddys
 confidentiality obligations to another party and/or its internal QA programs.
 Notwithstanding the foregoing, if Pranas Representative is not an employee
 of Prana, (i) it must not be a competitor of Dr. Reddys or any of its
 Affiliates, and (ii) will not be permitted to access or to examine any
 Project works, materials and information, until he/she has entered into a
 non-disclosure agreement with Dr. Reddys                                                                                                           
| |    |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | 
| |    | (k)     | If at any
 time during or after the termination of this Agreement, Prana requires a
 third party to perform any work relating to PBT2 (or any API of it),
 including its manufacture, then Dr Reddys must, at the request of Prana,
 co-operate with Prana and the third party supplier and provide such
 assistance, advice, documentation and information (including the relevant
 Results) as is necessary to enable the third party supplier to perform the
 work requested by Prana subject to a written understanding between the parties
 (which is consistent with this paragraph (k)). In consideration of Dr Reddys
 assistance under this paragraph (k), Prana agrees to pay Dr Reddys a service
 fee which shall be agreed in good faith by the Parties within 14 days of
 Pranas initial request. Prana also agrees to pay all out-of-pocket expenses
 reasonably incurred by Dr Reddys, provided that any anticipated expenses in
 excess of USD$1,000 are approved by Prana in writing before they are
 incurred.                                            
| |    |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | 
| | 3. | Payment
| |    |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | 
| |    | (a)     | The total cost
 of the Project is One Million Three Hundred and Sixty Five Thousand United
 States Dollars (USD 1,365,000/-) (Including Scenario 1 manufacturing in
 Sub-Project 5) OR Eight Hundred and Seventy Eight Thousand United States
 Dollars (USD 878,000/-) (Including Scenario 2 manufacturing in Sub-Project 5),
 payable to Dr. Reddys, for all the work and deliverables under the
 Sub-Projects if the entire Project is undertaken by Dr Reddys.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | 
| |    | (b)     | The amount
 payable by Prana to Dr. Reddys for Sub-Project 1A as set out below is a
 concessional price and has been quoted on the basis that Dr. Reddys shall
 exclusively receive written authority under Clause 2(b) to undertake all the
 Sub-Projects in accordance with the Scope of Project Works contained in
 Appendix A. Specifically, if for any reason Prana elects not to provide
 written authority to Dr. Reddys for commencing Sub-Project 5 within 90 days
 of the date specified in the Timetable, Prana shall not be entitled to the
 concessional price. In such an event Dr. Reddys is at liberty to increase
 the price to USD 130,000/- for Sub-Project 1A if that Sub-Project is approved
 by Prana and undertaken by Dr Reddys and raise an additional invoice for the
 additional amount of USD 70,000 and Prana shall be liable to pay the same.
 The prices mentioned hereunder are valid for a period of 12 months effective
 from Commencement Date. After expiry of such 12 month term, Dr. Reddys may
 at its discretion revise the prices.

| |              
| | -------------
| | -s- signature

8

---

---



Sub-Project Pricing

| |                                                                                                                                                                 
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Sub-Projects 1 & 2: Process Development
 (Familiarization / Optimization Study  only one of routes  either Route 2
 or Route 3) and Analytical Method Transfer

-          USD
130,000/-


| |                                                                                                                                                                                                                                                                                                                      
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Sub-Project 1A: Optimization of
 second route that is not covered under Project 1 above, this could be either
 Route 2 (if Route 3 gets covered under Project 1 above) or Route 3 (if Route
 2 gets covered under Project 1
 above) (optional work)and Prana
 reserves the right to request this service in
 writing)

-          USD 60,000/-


| |                                                       |   |             
| | ----------------------------------------------------- | - | ------------
| | Sub-Project 2A: Manufacture of
 500 gm Scale-up batch | - | USD 93,000/-
| |                                                       |   |             
| | Sub-Project 3: Polymorph Studies                      | - | USD 55,000/-
| |                                                       |   |             
| | Sub-Project 4: Manufacture of
 Gold Standard          | - | USD 30,000/-

| |                                             |   |                
| | ------------------------------------------- | - | ---------------
| | Sub-Project 5: cGMP
 manufacture:           |   |                
| |                                             |   |                
| | Scenario
 1                                 | - | USD 1,027,000/-
| |                                             |   |                
| | Scenario
 2                                 | - | USD 540,000/-  
| |                                             |   |                
| | Sub-Project 6: Stability Study
 (48 months) | - | USD 30,000/-   

| |              
| | -------------
| | -s- signature

9

---

---



| |                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------
| | The payment terms for each
 Sub-Project shall be:                                                                                                    
| |                                                                                                                                                      
| | Sub-Project 1 & 2:                                                                                                                                   
| |                                                                                                                                                      
| |           50%
 of the value will be paid as an advance (USD 65,000/-) on authorisation of
 this Sub-project subject to clause 2(b)                  
| |                                                                                                                                                      
| |           50% of the contract value will be paid after
 completion (USD 65,000/-)                                                                   
| |                                                                                                                                                      
| | Sub-Project 1A:                                                                                                                                      
| |                                                                                                                                                      
| |           50%
 of the value will be paid as an advance (USD 30,000/-) on authorisation of
 this Sub-project subject to clause 2(b)                  
| |                                                                                                                                                      
| |           50% of the contract value will be paid after
 completion (USD 30,000/-)                                                                   
| |                                                                                                                                                      
| | Sub-Project 2A:                                                                                                                                      
| |                                                                                                                                                      
| |           50%
 of the value will be paid as an advance (USD 46,500/-) on authorisation of
 this Sub-project subject to clause 2(b)                  
| |                                                                                                                                                      
| |           50% of the contract value will be paid after
 completion (USD 46,500/-)                                                                   
| |                                                                                                                                                      
| | Sub-Project 3 & 4:                                                                                                                                   
| |                                                                                                                                                      
| |           50%
 of the value will be paid as an advance (USD 42,500/-) on authorisation of
 the Sub-project subject to clause 2(b)                   
| |                                                                                                                                                      
| |           50% of the contract value will be paid after
 completion (USD 42,500/-)                                                                   
| |                                                                                                                                                      
| | Sub-Project 5:                                                                                                                                       
| |                                                                                                                                                      
| |           40% of the value will be paid as an advance
 (USD 410,800/- OR USD 216,000/-) on authorisation of this Sub-project
 subject to clause 2(b)
| |                                                                                                                                                      
| |           20%
 of the value will be paid after sharing the Certificate of Analysis (USD
 205,400/- ORUSD 108,000/-)                                 
| |                                                                                                                                                      
| |           40% of the value will be paid after material
 reaches the destination (USD 410,800/- OR USD 216,000/-)                                    

| |              
| | -------------
| | -s- signature

10

---

---



| |                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------
| | Sub-Project 6:                                                                                                                    
| |                                                                                                                                   
| |           20% of the value will be paid as an advance
 (USD 6,000/-) on authorisation of this Sub-project subject to clause
 2(b)
| |                                                                                                                                   
| |           25% of the value will be paid after completion
 of 1st year (USD 7,500/-)                                              
| |                                                                                                                                   
| |           25% of the value will be paid after completion
 of 2nd year (USD 7,500/-)                                              
| |                                                                                                                                   
| |           20% of the value will be paid after completion
 of 3rd year (USD 6,000/-)                                              
| |                                                                                                                                   
| |           10% of the value will be paid after completion
 of 4th year and submission of final report (USD 3,000/-)               

| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 
| |  | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| |  | (c) | All payments
 are to be made within 30 days of invoicing. Except in relation to advances,
 each of the Sub-Projects shall be invoiced on completion of the Sub-Project.
 Further, each Sub-Project may be invoiced independent of the completion of
 other Sub-Projects. If any Sub-Project is not authorised by Prana (for
 whatever reason), then Prana will have no liability to pay Dr Reddys for the
 Sub-Project fees or any other amount. If Sub-Project 5 does not get
 authorised then the price for Sub-Project 1A will be revised in accordance
 with the terms mentioned above.                                                                                                                                                            
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 
| |  | (d) | All payments
 (other than advance payments) are subject to Prana having received the
 requisite updates and reports under clause 2 (e) and, where applicable, the
 relevant materials in the quantities, form and purity that complies with
 Pranas requirements as specified in Scope of Project Works.                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 
| |  | (e) | The payment
 amount mentioned herein do not include freight, insurance and other shipping
 expenses for transportation of Compound (or any API of it), materials or
 samples thereof to Australian port of entry or any other international port
 and Prana shall bear all such expenses, and shall reimburse Dr. Reddys in
 full in case Dr. Reddys is called upon to incur any such expenses. In case
 the Compound (or any API of it) or materials are to be retained at Dr.
 Reddys after the manufacture is over, then this shall be held at Dr. Reddys
 at the risk of Prana (subject to Dr Reddys complying with its obligations
 under clause 6).                                                                                          
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | 
| |  | (f) | All payments
 by Prana to Dr. Reddys pursuant to this Agreement shall be made without any
 withholding or deduction of any withholding tax or other tax or mandatory
 payment to governmental agencies. If Prana is legally required to make any
 such withholding or deduction from any payment to Dr. Reddys under this
 Agreement, the sum payable by Prana upon which such withholding or deduction
 is based shall be increased to the extent necessary to ensure that, after
 such withholding or deduction, Dr. Reddys receives and retains, free from
 liability for such withholding or deduction, a net amount equal to the amount
 Dr. Reddys would have received and retained in the absence of such required
 withholding or deduction.

| |              
| | -------------
| | -s- signature

11

---

---



| |    |                                         |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                | 
| | -- | --------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
| | 4. | Intellectual Property and Patent Rights
| |    |                                         |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                | 
| |    | (a)                                     | Dr. Reddys
 acknowledges and agrees that the Prana Background IP will at all times remain
 the exclusive property of Prana or its relevant Affiliate.                                                                                                                                                                                                                
| |    |                                         |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                | 
| |    | (b)                                     | The Parties
 acknowledge and agree that all Prana Arising IP will vest in and be solely
 owned by Prana.                                                                                                                                                                                                                                                              
| |    |                                         |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                | 
| |    | (c)                                     | Dr Reddys
 will subject to a separate written understanding between the parties and for
 such consideration as the Parties, acting reasonably and in good faith, may
 mutually agree, provide Prana all assistance and advice and execute all
 necessary documents as may be required by Prana from time to time, in
 relation to:                                   
| |    |                                         |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                | 
| |    |                                         | (i)                                                                                                                                                                                                                                                                                                                                                                    | any
 applications by Prana for Patents or other registrable Intellectual Property
 Right in respect of the Arising IP;                                                                                                                                                        
| |    |                                         |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                | 
| |    |                                         | (ii)                                                                                                                                                                                                                                                                                                                                                                   | the
 prosecution and maintenance of any such applications and consequent
 registrations;                                                                                                                                                                                      
| |    |                                         |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                | 
| |    |                                         | (iii)                                                                                                                                                                                                                                                                                                                                                                  | any
 applications, submissions or other documents that Prana seeks to file with a
 regulatory authority or other government department, agency or body to obtain
 an approval or consent in relation to the testing, manufacture or sale of the
 Compound or an API of it; and
| |    |                                         |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                | 
| |    |                                         | (iv)                                                                                                                                                                                                                                                                                                                                                                   | any other
 purpose reasonably arising from or incidental to this Agreement.                                                                                                                                                                                                   
| |    |                                         |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                | 
| | 5. | Term and Termination                   
| |    |                                         |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                | 
| |    | (a)                                     | This
 Agreement shall commence on the Commencement Date and shall, subject always
 to earlier termination under this Clause 5, continue until ninety (90) days
 after delivery by Dr. Reddys to Prana of the final written report and /or
 Compound API or other material required to be manufactured as the case may be
 for the last Sub-Project approved by Prana.
| |    |                                         |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                | 
| |    | (b)                                     | Notwithstanding
 any other provision of this Agreement, either Party shall have the right at
 any time by giving notice to the other to terminate this Agreement forthwith
 in any of the following events:                                                                                                                                                           
| |    |                                         |                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                | 
| |    |                                         | (i)                                                                                                                                                                                                                                                                                                                                                                    | if the other
 Party commits a material breach of this Agreement and the breach is not
 capable of remedy;                                                                                                                                                                     

| |              
| | -------------
| | -s- signature

12

---

---



| |  |     |                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| |  | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |  |     | (ii)                                                                                                                                                                                                                                                                              | if the other
 Party commits a material breach of this Agreement and, where such breach is
 capable of remedy, that Party does not remedy such breach within 30 days from
 service of notice upon it that it is in breach and requiring it to remedy
 such breach; or                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |  |     |                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| |  |     | (iii)                                                                                                                                                                                                                                                                             | if the other
 Party enters into liquidation, whether compulsory or voluntary (other than
 for the purposes of solvent reconstruction or amalgamation where the
 resulting Party assumes all such Partys obligations under this Agreement),
 or has a receiver, controller or administrator or similar official appointed
 over some or all it assets or compounds with its creditors or suffers any
 similar action in consequence of its indebtedness to creditors; or                                                                                                                                                                                                                                                                 
| |  |     |                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| |  |     | (iv)                                                                                                                                                                                                                                                                              | if either
 Party is delayed or incapable of performing its obligations under this Agreement
 as a result of a matter described in Clause 12 for continuous period of 90
 days or more.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  |     |                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| |  | (c) | Notwithstanding
 any other provision of this Agreement, either Party may terminate this
 Agreement by giving the other Party 30 days written notice.                                                                                                                             
| |  |     |                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| |  | (d) | The
 obligations of the Parties under clauses 1, 2 (k), 3, 4, 5, 7, 9 (b), 10, 14
 and 15 will survive the expiry or termination of this Agreement. The
 obligations of the Parties under clause 6 will survive the expiry or
 termination of this Agreement for seven (7) years.
| |  |     |                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| |  | (e) | On the
 expiry or termination of this Agreement:                                                                                                                                                                                                                                 
| |  |     |                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| |  |     | (i)                                                                                                                                                                                                                                                                               | Dr. Reddys
 must provide Prana with all outstanding updates and reports as existing at
 the date of such expiry/termination under clause 2 (e) for any completed or
 partly completed Sub-Project;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |  |     |                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| |  |     | (ii)                                                                                                                                                                                                                                                                              | Dr. Reddys
 must deliver to Prana all materials produced by it as part of any completed
 or partly completed Sub-Project in the quantities, form and purity that
 complies with Pranas requirements as set forth in the Scope of Project Works
 (Appendix A);                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  |     |                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| |  |     | (iii)                                                                                                                                                                                                                                                                             | Prana must
 pay all sums which have accrued or been invoiced by Dr. Reddys up to the
 expiry or termination date. If a Sub-Project is only partly completed on the
 expiry or termination date, then Dr. Reddys will only be entitled to a
 proportion of its fee for that Sub-Project and non-cancellable pass-through
 expenses necessary to wind down such Sub-Project. Proportion of the fee shall
 be calculated on the basis of the percentage of the Sub-Project completed by
 Dr. Reddys. If this amount is less than the total of the advance and other
 progress payments already paid by Prana for the Sub-Project, then Dr. Reddys
 must refund the difference within 30 days of its excess fee being agreed with
 Prana;
| |  |     |                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | 
| |  |     | (iv)                                                                                                                                                                                                                                                                              | Dr. Reddys
 must return the Prana Materials and all Material Forms of the Prana
 Confidential Information to Prana. In the case of Prana Materials, the
 Parties acknowledge and agree that Dr. Reddys may retain samples of the
 Prana Materials manufactured by it so that it may comply with its GMP
 obligations;                                                                                                                                                                                                                                                                                                                                                                                                                  

| |              
| | -------------
| | -s- signature

13

---

---



| |    |                 |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                          | 
| | -- | --------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |    |                 | (v)                                                                                                                                                                                                                                                                                                                                                     | Prana must
 return all Material Forms of the Dr. Reddys Confidential Information to Dr.
 Reddys.                                                                                      
| |    |                 |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                          | 
| |    | (f)             | No expiry or
 termination of this Agreement shall affect any of the rights and obligations
 of the parties accrued up to the date of expiry or termination.                                                                                                                                                                                            
| |    |                 |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                          | 
| | 6. | Confidentiality
| |    |                 |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                          | 
| |    | (a)             | Each Party
 acknowledges and agrees that the Confidential Information of the other Party
 will at all times remain the exclusive property of that other Party. Each
 Party also undertakes to keep the Confidential Information of the other
 secret and to protect and preserve the confidential nature and secrecy of
 that Confidential Information.
| |    |                 |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                          | 
| |    | (b)             | Prana agrees
 and acknowledges in relation to Dr. Reddys Confidential Information, and Dr.
 Reddys agrees and acknowledges in relation to Prana Confidential
 Information, that it:                                                                                                                                                                  
| |    |                 |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                          | 
| |    |                 | (i)                                                                                                                                                                                                                                                                                                                                                     | may only use
 or reproduce the other Partys Confidential Information for the Approved
 Purposes;                                                                                       
| |    |                 |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                          | 
| |    |                 | (ii)                                                                                                                                                                                                                                                                                                                                                    | must not
 disclose the other Partys Confidential Information to any person except as
 permitted by this Agreement;                                                                     
| |    |                 |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                          | 
| |    |                 | (iii)                                                                                                                                                                                                                                                                                                                                                   | must not
 permit unauthorised persons to have access to the other Partys Confidential
 Information;                                                                                    
| |    |                 |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                          | 
| |    |                 | (iv)                                                                                                                                                                                                                                                                                                                                                    | must not
 make, or assist or permit any person (including its Representatives) to make
 any unauthorised use, disclosure or reproduction of the other Partys
 Confidential Information;
| |    |                 |                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                          | 
| |    |                 | (v)                                                                                                                                                                                                                                                                                                                                                     | must ensure
 that any person who has access to the other Partys Confidential Information
 does not make any unauthorised use, reproduction or disclosure of that
 information;         

| |              
| | -------------
| | -s- signature

14

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| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                        | 
| |  | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
| |  |     | (vi)                                                                                                                                                                                                                                                                                                                                                                                                | must enforce
 the confidentiality obligations imposed or required to be imposed by this
 Agreement, including diligently prosecuting at its cost any breach or
 threatened breach of those confidentiality obligations by a person to whom
 that Party has disclosed the other Partys Confidential Information and,
 where appropriate, making applications for interim or interlocutory relief;
 and
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                        | 
| |  |     | (vii)                                                                                                                                                                                                                                                                                                                                                                                               | must provide
 assistance reasonably requested by the other Party, in relation to any
 proceedings the other Party may take against any person for unauthorised use,
 copying or disclosure of the other Partys Confidential Information.                                                                                                                                                             
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                        | 
| |  | (c) | A Party may
 disclose the other Partys Confidential Information to a Representative on a
 need to know basis but in each case, only to the extent necessary for the
 Approved Purposes, and provided the Representatives are placed under
 confidentiality obligations no less onerous than those set out in this
 Agreement.                                                                     
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                        | 
| |  | (d) | Each Party
 must procure that its Representatives (whether or not still employed or
 engaged in that capacity) do not do or omit to do anything which, if done or
 omitted to be done by that Party, would breach its obligations under this
 Agreement.                                                                                                                                           
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                        | 
| |  | (e) | The
 obligations of confidentiality and non-disclosure contained in this clause 6
 do not apply if and to the extent that the Confidential Information is
 required to be supplied by virtue of any statute, law or regulation. Each
 Party must notify the other immediately if it becomes aware of any legal
 requirement to disclose part or all of the other Partys Confidential
 Information.
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                        | 
| |  | (f) | Each Party
 must:                                                                                                                                                                                                                                                                                                                                                                                  
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                        | 
| |  |     | (i)                                                                                                                                                                                                                                                                                                                                                                                                 | establish
 and maintain effective security measures to safeguard the other Partys
 Confidential Information from access or use not authorised under this
 Agreement;                                                                                                                                                                                                                                 
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                        | 
| |  |     | (ii)                                                                                                                                                                                                                                                                                                                                                                                                | keep the
 other Partys Confidential Information under its own control;                                                                                                                                                                                                                                                                                                                               
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                        | 
| |  |     | (iii)                                                                                                                                                                                                                                                                                                                                                                                               | maintain
 complete, accurate and up-to-date records of use, copying and disclosure of
 the other Partys Confidential Information and immediately produce these
 records to the other Party, on request; and                                                                                                                                                                                          
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                        | 
| |  |     | (iv)                                                                                                                                                                                                                                                                                                                                                                                                | immediately
 notify the other Party of any suspected or actual unauthorised use, copying
 or disclosure of the other Partys Confidential Information.                                                                                                                                                                                                                                                

| |              
| | -------------
| | -s- signature

15

---

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| |    |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| | -- | --------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |    | (g)       | Either Party
 may at any time by notice in writing to the other Party request the return of
 all Material Forms of its Confidential Information in the possession, power
 or control of the other Party or any of its Representatives (whether or not
 those Material Forms were created by the other Party or its Representatives)
 and the other Party must immediately comply with such request. In the case of
 Prana Materials to be returned by Dr. Reddys, the parties acknowledge and
 agree that Dr. Reddys may retain samples of the Prana Materials manufactured
 by it so that it may comply with its GMP obligations.                                                                                                         
| |    |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| |    | (h)       | Return of
 the Material Forms of Confidential Information under clause 5(e) does not
 release a Party from its obligations under this clause 6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| | 7. | Liability
| |    |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| |    | (a)       | Each Party
 agrees to be responsible and assume liability for and indemnify the other
 Party and its Representatives and Affiliates (collectively the Indemnified
 Party) from and against all liabilities, losses, damages, claims and
 proceedings suffered or incurred by the Indemnified Party as a result of any
 breach of this Agreement by it, or any wrongful or negligent acts or
 omissions or breach of any law by it or its Representatives or Affiliates.                                                                                                                                                                                                                                                                    
| |    |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| |    | (b)       | Provided Dr.
 Reddys has complied with its obligations under clauses 2 (c), (h) and (j)
 and 6 of this Agreement and that Dr. Reddys has completed its obligations
 under each sub projects authorized by Prana and as set out in Appendix A,
 which Prana has subsequently agreed to by giving Dr. Reddys a formal
 Sign-off, Prana will defend, indemnify and hold harmless Dr. Reddys and its
 Representatives and Affiliates from and against any and all liability losses,
 costs, damages or expenses (including court costs and attorneys fees)
 incurred from or arising in connection with any claim (including claims for
 infringing third party Intellectual Property Rights) arising out of or are in
 any way relating to:
| |    |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| |    |           | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Pranas use
 of the Prana Arising IP, the Results, Compound, APIs or any materials
 produced during the Project and provided to Prana;                                                                                                                                                                                                                                                                                         
| |    |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| |    |           | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Dr. Reddys
 use, for Approved Purposes, of the Prana Materials, Compound APIs, Prana
 Background IP, Prana Arising IP or the Results;                                                                                                                                                                                                                                                                                         
| |    |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| |    |           | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | personal
 injuries or death to persons or property loss or damage which occurs on Dr.
 Reddys premises or the premises of Dr. Reddys Affiliates as a result of the
 conduct of the Project to the extent it is attributable to circumstances that
 could have been avoided by Dr Reddys if it had been aware of relevant
 information on the Compound that was knowingly or negligently withheld from
 Dr. Reddys by Prana.
| |    |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| |    | (c)       | Dr. Reddys
 will indemnify and hold harmless Prana, its Representatives and Affiliates
 from and against all costs, expenses, liabilities, losses, damages, claims
 and proceedings suffered or incurred by them which have arisen out of or are
 in any way relating to:                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                                                                                                                                                                                                 | 
| |    |           | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | personal
 injuries or death to persons or property loss or damage which occurs on Dr.
 Reddys premises or the premises of Dr. Reddys Affiliates which are caused
 by any act or omission, negligence or breach of this Agreement by Dr. Reddys
 or its Affiliates or any of their respective Representatives;                                                                                                             

| |              
| | -------------
| | -s- signature

16

---

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| |    |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                       | 
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |    |                                                                                                                                                                                                                                                                                                                                                                                 | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | any use by
 Dr. Reddys (other than for the Approved Purposes) or its Affiliates (or by
 third parties under licence from or other arrangement with Dr. Reddys or its
 Affiliates) of the Prana Materials, Prana Background IP, the Prana Arising
 IP, the Results or Compound APIs.
| |    |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                       | 
| |    | (d)                                                                                                                                                                                                                                                                                                                                                                             | Despite any
 other provision of this Agreement, neither Party will have any liability to
 the other Party (or any Affiliate of it) for any consequential or indirect
 loss or damage (including loss of profits) (Consequential Loss) suffered or incurred by the other Party
 (or any Affiliate of it), howsoever arising This paragraph (d) will not
 prevent a Party recovering Consequential Loss suffered or incurred by it (or
 an Affiliate of it) as a result of a breach by the other Party of its
 obligations of confidentiality under this Agreement nor will it prevent
 either Party recovering from the other, as applicable, Consequential Loss
 under paragraphs b(i), b(ii) b(iii) and (c)(ii) above.               
| |    |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                       | 
| | 8. | Hazardous Information                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                       | 
| |    | Prana will
 make all information (if any) which it has available to it concerning the
 health and other hazards of the Compound and its synthesis and any other
 materials including reference standards provided by Prana to Dr. Reddys for
 the purpose of the Project. Dr Reddys must assess these hazards and take the
 necessary measures in relation to the Project to:
| |    |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                       | 
| |    | (a)                                                                                                                                                                                                                                                                                                                                                                             | ensure the
 safety of its Representatives; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                       | 
| |    | (b)                                                                                                                                                                                                                                                                                                                                                                             | avoid any
 loss or damage to its premises or property.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                       | 
| | 9. | Assignment and Subcontracting                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                       | 
| |    | (a)                                                                                                                                                                                                                                                                                                                                                                             | No
 assignment of this Agreement by either Party shall be effective without the
 prior written consent of Prana.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                       | 
| |    | (b)                                                                                                                                                                                                                                                                                                                                                                             | Prana may
 assign all or any of its rights and obligations under this Agreement at any
 time without the prior consent of Dr Reddys. If it assigns this Agreement to
 a third party, then Dr Reddys reserves the right to terminate this Agreement
 once it has completed the Sub-Projects which have been authorized by Prana
 and are in progress. If such an assignment is carried out by Prana, then the
 assignee will have to guarantee the payments that have become or will become
 due to Dr. Reddys in relation to the Sub-Projects being carried out by Dr.
 Reddys. The assignee will also have to fulfill its obligations under the
 guarantee even if Dr. Reddys terminates this Agreement after such an
 assignment.
| |    |                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                       | 
| |    | (c)                                                                                                                                                                                                                                                                                                                                                                             | Dr. Reddys
 must not subcontract any of its obligations under this Agreement without the
 prior written consent of Prana.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

| |              
| | -------------
| | -s- signature

17

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| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| | --- | ------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |     | (d)     | If Prana in
 its absolute discretion consents to the subcontracting of the performance of
 any of the Project Works, then:                                                                            
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| |     |         | (i)                                                                                                                                                                                                    | Dr. Reddys
 shall remain fully responsible for the performance of the Project Works and
 must continue to comply with each and every one of its obligations under this
 Agreement;                                                                                                  
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| |     |         | (ii)                                                                                                                                                                                                   | without
 limitation, all acts or omissions of the subcontractor shall be deemed acts
 or omissions of Dr. Reddys; and                                                                                                                                                               
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| |     |         | (iii)                                                                                                                                                                                                  | Dr. Reddys
 must ensure that any subcontractor so engaged complies with, and enters into
 a written agreement with Dr. Reddys under the terms of which the subcontractor
 agrees to comply with all relevant provisions of this Agreement as if it were
 a party to this Agreement.
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| | 10. | Notices
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| |     | (a)     | A notice,
 consent, approval or other communication (each a Notice) under this agreement must be signed by or on behalf
 of the Party giving it, addressed to the Party to whom it is to be given and:
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| |     |         | (i)                                                                                                                                                                                                    | delivered to
 that Partys address;                                                                                                                                                                                                                                                  
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| |     |         | (ii)                                                                                                                                                                                                   | sent by
 pre-paid mail to that Partys address; or                                                                                                                                                                                                                                   
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| |     |         | (iii)                                                                                                                                                                                                  | transmitted
 by facsimile to that Partys address.                                                                                                                                                                                                                                   
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| |     | (b)     | A Notice
 given to a Party in accordance with this clause 10 is treated as having been
 given and received:                                                                                           
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| |     |         | (i)                                                                                                                                                                                                    | if delivered
 to a Partys address, on the day of delivery if a Business Day, otherwise on
 the next Business Day;                                                                                                                                                                   
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| |     |         | (ii)                                                                                                                                                                                                   | if sent by
 pre-paid mail, on the tenth Business Day after posting; or                                                                                                                                                                                                               
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| |     |         | (iii)                                                                                                                                                                                                  | if
 transmitted by facsimile to a Partys address and a correct and complete
 transmission report is received, on the day of transmission if a Business
 Day, otherwise on the next Business Day.                                                                                    
| |     |         |                                                                                                                                                                                                        |                                                                                                                                                                                                                                                                                       | 
| |     | (c)     | For the
 purpose of this clause the address of a Party is the address set out below or
 another address of which that Party may from time to time give notice to the
 other Party:                    

| |              |                                                    
| | ------------ | ---------------------------------------------------
| | If to Prana: | Dianne Angus                                       
| |              | Chief Operating Officer                            
| |              | Prana Biotechnology Ltd                            
| |              | Level 2, 369 Royal Parade,
 Parkville Victoria 3052
| |              |                                                    
| |              | Facsimile: +61 3 9348 0377                         

| |              
| | -------------
| | -s- signature

18

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| |                    |                                       
| | ------------------ | --------------------------------------
| | If to Dr. Reddys: | Mr. Manoj Mehrotra                    
| |                    | Vice President  Business
 Development
| |                    | Dr. Reddys Laboratories Limited      
| |                    | 7-1-27, Ameerpet                      
| |                    | Hyderabad500 016                     
| |                    | A.P., India                           
| |                    |                                       
| |                    | Facsimile: +91 40 2304 6600           

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                             |  | 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| | 11. | Entire Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                             |  | 
| |     | Save for the
 Confidentiality Agreement between the Parties dated 28 March 2008, the letter
 Agreement between the Parties dated 23 September, 2008 and the Quality
 Agreement, this Agreement, sets forth the entire agreement between the
 Parties as to its subject matter. In the event of any incompatibility between
 the terms of this Agreement and the said Confidentiality Agreement, the
 letter agreement or the Quality Agreement, the terms of this Agreement shall
 prevail and take priority. None of the terms of this Agreement shall be
 amended except in writing signed by both Parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                             |  | 
| | 12. | Force Majeure                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                             |  | 
| |     | A Party
 shall not be liable for a failure to perform any of its obligations under
 this Agreement due to any cause or circumstance which is beyond its control,
 including without limitation, acts of God, wars, riots, interference by
 military or para-military, strikes, lock-outs or other labour unrest, fires,
 explosions, shipwrecks, shortage in material if the supplier(s) of such material
 is unable to supply due to causes and circumstances beyond their control as
 exemplified above (Force Majeure).
 In the case of Force Majeure, the obligations of the Party affected shall be
 suspended and it shall not be liable for damages or for penalties for
 non-performance to the extent that such nonperformance is caused by the Force
 Majeure event with the proviso that if the Force Majeure period should extend
 more than three (3) months then the other Party shall have the right to
 terminate this Agreement forthwith upon written notice at any time after
 expiration of said three (3) months period. In addition, non-performance
 shall only be excused during the continuation of the Force Majeure event.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                             |  | 
| | 13. | Independent Contractors                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                             |  | 
| |     | The parties
 are independent contractors and this Agreement shall not be construed as
 creating or evidencing a partnership, agency, employment or joint venture
 relationship between them.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                             |  | 
| | 14. | Dispute Resolution                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                             |  | 
| |     | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | If a dispute
 arises in connection with this Agreement or relating to this Agreement
 including its interpretation and any question regarding its existence,
 validity or termination, then a Party wishing to have the dispute resolved
 must give the other Party a notice specifying the dispute and requiring its
 resolution under this clause 14 (Dispute
 Notice).

| |              
| | -------------
| | -s- signature

19

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| |     |                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                 | 
| | --- | ------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | 
| |     | (b)                            | Within 14
 days of the date of service of the Dispute Notice, each Party must:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |     |                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                 | 
| |     |                                | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | appoint a
 Representative with authority to negotiate and settle the dispute; and              
| |     |                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                 | 
| |     |                                | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | notify the
 other Party in writing of the appointed Representatives name and contact
 details.
| |     |                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                 | 
| |     | (c)                            | The
 authorised Representatives and the Parties that they represent must then use
 their reasonable endeavours to resolve the dispute within 42 days of the date
 of service of the Dispute Notice. If they fail to resolve the dispute within
 this period, then either Party may institute arbitration proceedings under
 the London Court of International Arbitration Rules, which Rules are deemed
 to be incorporated by reference into this clause. The number of arbitrators
 shall be one. The seat, or legal place, of arbitration shall be London. The
 language to be used in the arbitration proceedings shall be English.
| |     |                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                 | 
| | 15. | Governing Law and Jurisdiction
| |     |                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                 | 
| |     | (a)                            | This
 Agreement shall be construed, governed, interpreted, and applied in
 accordance with the laws of England.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                 | 
| |     | (b)                            | Each Party
 irrevocably and unconditionally:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |     |                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                 | 
| |     |                                | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | submits to
 the jurisdiction of the London Court of International Arbitration; and             
| |     |                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                 | 
| |     |                                | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | waives any
 claim or objection based on absence of jurisdiction or inconvenient forum.         

| |              
| | -------------
| | -s- signature

20

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---



|                                                                  |                    | 
|----------------------------------------------------------------- | ------------------ | 
|Executed by the Parties by
 their duly authorised representatives
|                                                                 
|Prana
 Biotechnology Ltd                                          |                   
|                                                                  |                   
|By                                                                | -s- Dianne Angus   | 
|                                                                  |                   
|                                                                  |                    | 
|(Name): Dianne Angus                                              |                   
|                                                                  |                   
|(Title): Chief Operating
 Officer                                 |                   
|                                                                  |                   
|(Date): 23 Dec. 08                                               |                   
|                                                                  |                   
|Dr. Reddys
 Laboratories Limited                                 |                   
|                                                                  |                   
|By                                                                | -s- Manoj Mehrotra | 
|                                                                  |                   
|                                                                  |                    | 
|(Name): Manoj Mehrotra                                            |                   
|                                                                  |                   
|(Title): Vice President 
 Business Development                   |                   
|                                                                  |                   
|(Date): Dec 26, 2008                                              |                   

21

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---



Amendment to Agreement dated
26th Dec08 signed by and between

Dr. Reddys Laboratories
Limited
Bollaram Road, Miyapur,
Hyderabad 500 049India(hereinafter referred to as Dr. Reddys)

and

Prana Biotechnology Ltd
Level 2, 369 Royal Parade, Parkville Victoria, 3052
Australia
(hereinafter referred to as Prana)

Dr. Reddys and Prana are
collectively referred to as the PARTIES

|                                                                                                                                            
|--------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                            
|This
 amendment will supersede the mentioned clauses contained in above mentioned
 agreement and will be in effect from 3rd
 Feb09 onwards.

|                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. Terms to be varied               
|The
 following sentence in Clause 2:
|(b)                                  | Dr. Reddys must receive
 written authority from Pranas Head of Development or its Discovery and Non-Clinical Development Manager
 before commencing any Sub-Project. Subject
 to clause 3 (b) in relation to Sub-Project 1A, without such authority for a
 given Sub-Project, Dr Reddys must not undertake and may not charge
 Prana its fee for the Sub-Project or any other amount. If in relation to a
 given Sub-Project, Prana provides written authority to undertake the
 Sub-Project after the relevant commencement date specified in the Timetable, then the Parties will
 agree in writing in good faith on a new Timetable to replace the
 existing one.                                                                                                                                                                                                                          
|                                    
|is
 ammended as follows:            
|                                    
|(b)                                  | Dr. Reddys must receive
 written authority from Pranas Head of Development or its Discovery and Non-Clinical Development Manager
 before commencing any Sub-Project. Subject to clause 3 (b) in relation to
 Sub-Project 1A, without such authority for a given Sub-Project, Dr
 Reddys must not undertake and may not charge Prana its fee for the
 Sub-Project or any other amount. Following such written authorization by
 Prana for a given Sub-project, Prana, upon Dr. Reddys request, will also
 issue a Purchase Order for the materials to be manufactured in accordance
 with the given Sub-Project. If in relation to a given Sub-Project, Prana
 provides written authority to undertake the Sub-Project after the relevant
 commencement date specified in the Timetable, then the Parties will agree in
 writing in good faith on a new Timetable to replace the existing one.

In witness whereof, the
parties hereto have signed this Agreement

|                                                               |                    |                                                         |                    |                   |  |  | 
|-------------------------------------------------------------- | ------------------ | ------------------------------------------------------- | ------------------ | ----------------- |  |  | 
|Signed
 for and on behalf of
 Dr. Reddys Laboratories Limited |                    | Signed
 for and on behalf of
 Prana
 Biotechnology Ltd.
|                                                               |                    |                                                         |                   
|Signature                                                      | -s- Manoj Mehrotra |                                                         | Signature          | -s- Dianne Angus 
|                                                               |                    |                                                        
|Name: Manoj Mehrotra                                           |                    | Name: Dianne Angus                                     
|                                                               |                    |                                                         |                    |                  
|Witness Signature                                              | -s- Graham Heeily  |                                                         | Witness
 Signature | -s- GRAHAM HEEILY
|                                                               |                    |                                                        
|Witness Name: Rajat Kumar                                      |                    | Witness
 Name: Graham Heeily                           



---

---

# Amendment 2 to
Agreement dated 26th Dec08 signed by and between

# Dr. Reddys
Laboratories Limited
Bollaram Road, Miyapur,
Hyderabad 500 049
India
(hereinafter referred
to as Dr. Reddys)

# and

# Prana Biotechnology Ltd
Level 2, 369 Royal
Parade, Parkville Victoria, 3052
Australia
(hereinafter referred
to as Prana)

Dr. Reddys and Prana are collectively referred to as the PARTIES

|
|

|This
amendment will include the following additional and amended clauses in the above
mentioned agreement and will be in effect from 13th March09 onwards.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------

|1. | Terms
to be added
|-- | -----------------

|i. | The
following section is inserted in Appendix A:
|-- | ------------------------------------------------

Sub-Project 1B: Process
Optimisation for the Reduction of Potentially Genotoxic Impurities in PBT2 API

The identification of three possible
genotoxic impurities, quinoline N-oxide, quinoline chloride and chloroethane, has resulted
in the requirement for tighter control of their presence in PBT2 API. The new
specification for these impurities has been set at not more than 3 ppm, on a
weight-for-weight basis, according to the draft FDA guidance on genotoxic
impurities1 and the similar EMEA document2. In addition to the
process development and optimisation goals detailed in Sub-Project 1 as detailed in the
main agreement dated 26th Dec08, Dr. Reddys will perform the following
additional activities:

| | (a) | Optimise
the process to achieve levels of the potentially genotoxic impurities                at
the new required specification in the scale up manufacture of PBT2
               (Sub-Project 5).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Establish
in-process control (IPC) specifications for the potentially genotoxic
               impurities to achieve consistency in the levels in the API.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Monitor
the levels of the potentially genotoxic impurities, to the level                required,
in each intermediate batch produced during process optimisation, as
               appropriate to the stage in the process.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|
|

|1 Guidance
for Industry  Genotoxic and Carcinogenic Impurities in Drug           Substances
and Products: Recommended Approaches (Draft Guidance), U.S.           Department of
Health and Human Services Food and Drug Administration, Center for           Drug
Evaluation and Research (CDER) December 2008
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2 Guideline
On The Limits Of Genotoxic Impurities, European Medicines Agency,           Committee For
Medicinal Products For Human Use (CHMP) June 2006

Page 1 of 4

---

---

|ii. | The
following section is inserted in Appendix A:
|--- | ------------------------------------------------

# Sub-Project 2B:
Further Analytical Method Development and Limited Validation

The scope of this Sub-Project
involves the development and validation of new methods for PBT2 API assay and related
substances and potentially genotoxic impurities.

| | (a) | Analysis
by Dr. Reddys has shown the possible presence of a previously
                    un-reported impurity in previously manufactured GMP batches of PBT2.
A new                     method is therefore required to be developed and validated to
ensure all                     impurities in the API, except those identified as
potentially genotoxic, are                     measured and reported according to the
relevant ICH guideline3. Dr                     Reddys will validate
the methods according to the ICH guideline on the                     validation of
analytical procedures4 and limit their activities to                     the
following validation parameters only:
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1. | System
Precision  PBT2 and related substances
| | -- | ----------------------------------------------

| | 2. | Repeatability
 PBT2 and related substances
| | -- | -------------------------------------------

| | 3. | Intermediate
Precision  PBT2 and related substances
| | -- | ----------------------------------------------------

| | 4. | Specificity
 PBT2 and related substances
| | -- | -----------------------------------------

| | 5. | Stability
Indicating Nature  PBT2 only
| | -- | ---------------------------------------

| | 6. | Detection
limit and Quantitation limit  PBT2 and known related substances
                    (chlorquinaldol, chlorobenzoic acid, quinoline diol, quinoline
diacetate)
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7. | Linearity
and Range  PBT2 and known related substances (chlorquinaldol,
                    chlorobenzoic acid, quinoline diol, quinoline diacetate)
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------

| | 8. | Robustness.
If this evaluation does not show the method to be robust, the method
                    will be further developed to establish robustness according to the
definition                     set out in the guideline.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The method developed should be able
to quantify all the known related substances (chlorquinaldol, chlorobenzoic acid,
quinoline diol, quinoline diacetate but excluding quinoline n-oxide and quinoline
chloride) on a weight-for-weight basis to a Quantitation limit of 0.05%. The limited
validation will be performed according to an approved protocol with acceptance criteria
for each validation parameter being set in advance and agreed on by both parties. A
validation report will be produced suitable for inclusion in regulatory submissions.

| | (b) | To
support the new specifications for the limit of the potentially genotoxic
               impurities in PBT2 API (quinoline N-oxide, quinoline chloride and
chloroethane),                methods are required to be developed to enable the
quantification of these                impurities, on a weight-for-weight basis, to a
limit of quantification of 3 ppm                as required by the EMEA and (draft) FDA
guidelines on genotoxic impurities                (refer to Sub-Project 1B). Dr Reddys
will validate the methods according                to the ICH guideline on the validation
of analytical procedures(4)               and limit their activities to the
following validation parameters only for each                analyte:
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 1. | System
Precision
| | -- | ----------------

|
|

|3 Impurities
In New Drug Substances Q3A(R2), International Conference On           Harmonisation Of
Technical Requirements For Registration Of Pharmaceuticals For           Human Use,
October 2006
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

4 Validation
Of Analytical Procedures: Text And Methodology Q2(R1), International           Conference
On Harmonisation Of Technical Requirements For Registration Of           Pharmaceuticals
For Human Use, November 2005

Page 2 of 4

---

---

| | 2. | Repeatability
| | -- | -------------

| | 3. | Intermediate
Precision
| | -- | ----------------------

| | 4. | Specificity
| | -- | -----------

| | 5. | Detection
limit and Quantitation limit
| | -- | --------------------------------------

| | 6. | Linearity
and Range
| | -- | -------------------

| | 7. | Robustness
(solution stability)
| | -- | -------------------------------

The limited validation will be
performed according to an approved protocol with acceptance criteria for each validation
parameter being set in advance and agreed on by both parties. A validation report will be
produced suitable for inclusion in regulatory submissions.

|iii. | The
following section is inserted in Clause 3 under Sub-Project           Pricing:
|---- | ------------------------------------------------------------------------------------

|                                                                                                        |               
|------------------------------------------------------------------------------------------------------- | --------------
|Sub-Project 1B: Process
Optimisation for the Reduction of Potentially Genotoxic Impurities in PBT2 API
|                                                                                                        |  USD 20,000/-
|                                                                                                        |               
|Sub-Project 2B: Further
Analytical Method Development and Validation                                   
|                                                                                                        |  USD 15,000/-

The cost of Sub-Project 2B takes into
account both the increased scope it introduces as well as the corresponding decrease in
scope of Sub-Project 2

|iv. | The
following text is inserted in Clause 3 under The payment terms for           each
Sub-Project shall be::
|--- | --------------------------------------------------------------------------------------------------------------

Sub-Project 1B:

     50% of the
value will be paid as an advance (USD 10,000/-) on authorisation of this Sub-project
subject

     50% of the
contract value will be paid after completion (USD 10,000/-)

Sub-Project 2B:

     50% of the
value will be paid as an advance (USD 7,500/-) on authorisation of this Sub-project
subject

     50% of the
contract value will be paid after completion (USD 7,500/-)

|2. | Terms
to be varied
|-- | ------------------

| | The
above additions to the agreement dated 26th Dec08 result in a decrease in
the scope of Sub-project 2. Amendments reflecting this decreased scope are shown below.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|i. | Clause
4 of Appendix A is amended to the following:
|-- | ---------------------------------------------------

|4. | Sub-Project 2: Analytical Method Tech Transfer and Development
|--- | --------------------------------------------------------------

| | The
scope of this Sub-Project, set out below, will include the transfer of analytical
technology to Dr. Reddys from Prana, the refinement of the transferred methods and
the establishment of further methods by Dr. Reddys. Final specifications for the
API will be agreed on by both parties during the course of the Project
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Page 3 of 4

---

---

| | (a) | The
current methods for the release of PBT2 drug substance to an approved
                    specification and analysis of stability samples will be provided for
transfer to                     Dr. Reddys laboratories. In order to confirm the
success of the transfer,                     the methods for the determination of
polymorphic form will undergo a formal                     method transfer verification.
Prana will supply Dr. Reddys with samples of                     PBT2 produced from
different batches for analysis so as to compare the results                     with the
current CoAs for those batches. The transferred methods will be
                    considered verified if the comparison of the Dr. Reddys
analysis results                     and the current CoA results falls within predefined
limits, agreed by both                     parties, and documented in an analytical
method transfer protocol.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Dr.
Reddys will establish methods and specifications for heavy metals,
                    water determination by Karl Fischer titration, residue on ignition,
chloride                     content, melting point by DSC and microbial limits in PBT2
drug substance. Where                     applicable, the relevant compendial methods
from the USP will be used. These                     methods will be validated or
verified, to the extent agreed with Prana, for                     their intended use.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (c) | If,
after execution of Sub-Projects 1 and 1A (if Project 1A gets executed), the
                    solvents used in the manufacturing process used in Sub-Projects 2A, 4
and 5                     differ from those of the manufacturing process of the previous
PBT2 GMP batch                     (DA1020702.1), Dr. Reddys will develop a method
for the determination of                     the applicable residual solvents in the API
in accordance with the limits set in                     the ICH guideline Q3C
Impurities: Residual Solvents. Note For Guidance On                     Impurities:
Residual Solvents. The method will be validated or verified,                     to
the extent agreed with Prana, for its intended use. If the solvents used in
                    the manufacturing process remain unchanged, the current method for
residual                     solvents will undergo method transfer verification, as
described in Clause                     i(a).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In witness whereof, the parties
hereto have signed this Agreement

|                                 |                            
|-------------------------------- | ---------------------------
|
|
|
|
|Signed for and on behalf of      | Signed for and on behalf of
|Dr. Reddy's Laboratories Limited | Prana Biotechnology Ltd.   
|                                
|                                
|Signature                        | Signature                  
|Name: Manoj Mehrotra             | Name: Dianne Angus         
|                                
|                                
|Witness Signature                | Witness Signature          
|Witness Name:                    | Witness Name:              

Page 4 of 4

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