What is wrong in this reaction?
The problem is with the free $\ce{NH}$. Grignard reagents are strong bases ($\mathrm{p}K_\mathrm{a}\sim 50$), strong enough to deprotonate $\ce{R2NH}$. Any Grignard that formed would be immediately quenched by the free $\ce{NH}$. You need to protect, this is typically done with tBOC, more discussion here.