Disclosed are compounds of formula III and a process to prepare a compound of formula III ##STR00001## wherein R.sub.1, R.sub.2, R.sub.3 and R.sub.6 are defined herein, using a zinc chloride/optionally substituted oxazole adduct and an compound of formula I. Further disclosed are methods of using compounds of formula III to prepare compounds useful in the treatment of Alzheimer's disease and related conditions.