<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 8, 1998
REGISTRATION STATEMENT NO. 333-58795
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 3
TO
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
ALBANY MOLECULAR RESEARCH, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 2833 14-1806984
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
OF INCORPORATION OR
ORGANIZATION)
----------------
21 CORPORATE CIRCLE, ALBANY, NEW YORK 12203
(518) 464-0279
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICE)
----------------
THOMAS E. D'AMBRA, PH.D.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
ALBANY MOLECULAR RESEARCH, INC.
21 CORPORATE CIRCLE
ALBANY, NEW YORK 12203-5154
(518) 464-0279
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
----------------
COPIES TO:
STUART M. CABLE, ESQ. ALEXANDER D. LYNCH, ESQ.
GOODWIN, PROCTER & HOAR LLP BABAK YAGHMAIE, ESQ.
EXCHANGE PLACE BROBECK, PHLEGER & HARRISON LLP
BOSTON, MASSACHUSETTS 02109-2881 1633 BROADWAY
(617) 570-1000 NEW YORK, NEW YORK 10019
(212) 581-1600
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE(3)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01 par
value per share........ 2,530,000 Shares $19.00 $48,070,000 $14,095
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes 330,000 shares of Common Stock which the underwriters have the
option to purchase solely to cover over-allotments, if any.
(2) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(a) under the Securities Act of 1933.
(3) Includes $12,688 which was previously paid by the Registrant upon the
original filing of this Registration Statement on July 9, 1998.
----------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED DECEMBER 8, 1998
PROSPECTUS
2,200,000 SHARES
[ALBANY MOLECULAR RESEARCH, INC. LOGO APPEARS HERE]
COMMON STOCK
All of the 2,200,000 shares of Common Stock offered hereby are being sold by
Albany Molecular Research, Inc. ("Albany Molecular Research" or the "Company").
Prior to this offering, there has been no public market for the Common Stock of
the Company. It is currently estimated that the initial public offering price
will be between $17.00 and $19.00 per share. See "Underwriting" for a
discussion of the factors to be considered in determining the initial public
offering price. The Common Stock has been approved for quotation on the Nasdaq
National Market upon completion of this offering under the symbol "AMRI."
THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 7.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT (1) COMPANY(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share..................................... $ $ $
- --------------------------------------------------------------------------------
Total(3)...................................... $ $ $
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $1,000,000.
(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 330,000 additional shares of Common Stock solely to cover over-
allotments, if any. If all such shares are purchased, the total Price to
Public, Underwriting Discount and Proceeds to Company will be $ , $
and $ , respectively. See "Underwriting."
-----------
The shares of Common Stock are offered by the Underwriters subject to receipt
and acceptance by them and to their right to reject any order in whole or in
part. It is expected that delivery of the shares of Common Stock will be made
at the offices of ING Baring Furman Selz LLC, New York, New York, on or about
, 1998.
ING BARING FURMAN SELZ LLC HAMBRECHT & QUIST
-----------
The date of this Prospectus is , 1998
<PAGE>
[Three Photographs Regarding Medicinal Chemistry and Small-Scale Manufacturing]
ALBANY MOLECULAR RESEARCH, INC. IS AN INTEGRATED CHEMISTRY OUTSOURCING
COMPANY THAT OFFERS A BROAD RANGE OF CHEMISTRY RESEARCH AND DEVELOPMENT
SERVICES, INCLUDING MEDICINAL CHEMISTRY, CHEMICAL DEVELOPMENT, ANALYTICAL
CHEMISTRY SERVICES AND SMALL-SCALE MANUFACTURING. MEDICINAL CHEMISTRY AND
SMALL-SCALE MANUFACTURING ARE SHOWN IN THE PICTURES ABOVE.
----------------
THE COMPANY'S NAME WITH THE COMPANY'S LOGO AND THE COMPANY'S LOGO ARE
REGISTERED TRADEMARKS OF THE COMPANY. ALL OTHER TRADEMARKS AND TRADENAMES
REFERRED TO IN THIS PROSPECTUS ARE THE PROPERTY OF THEIR RESPECTIVE OWNERS.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK BY
CERTAIN METHODS INCLUDING ENTERING STABILIZING BIDS, IMPOSING PENALTY BIDS OR
EFFECTING SYNDICATE COVERING TRANSACTIONS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the Consolidated Financial Statements and Notes thereto
appearing elsewhere in this Prospectus. Investors should carefully consider the
risk factors contained in this Prospectus related to the purchase of Common
Stock of the Company. See "Risk Factors." Except for the historical information
contained herein, the discussion contained in this Prospectus contains
"forward-looking statements" that involve risk and uncertainties. The Company's
actual results could differ materially from those discussed in this Prospectus.
Important factors that could cause or contribute to such differences include
those discussed under the caption "Risk Factors," as well as those discussed
elsewhere herein.
THE COMPANY
Albany Molecular Research is an integrated chemistry outsourcing company that
offers a broad range of chemistry research and development services to
pharmaceutical and biotechnology companies involved in drug discovery and
development. The Company offers services traditionally provided by chemistry
divisions within pharmaceutical companies, including medicinal chemistry,
chemical development, analytical chemistry services and small-scale
manufacturing. The Company's services are designed to permit pharmaceutical and
biotechnology companies to reduce overall drug development time and cost and to
pursue simultaneously a greater number of drug discovery and development
opportunities. Since its inception in 1991, the Company has conducted over 400
projects for more than 100 customers. The Company achieved a 66% compound
annual growth rate in net contract revenue from 1993 to 1997. In addition to
its contract services, the Company conducts a limited amount of proprietary
research and development. The Company has developed and patented a
substantially pure form of, and a manufacturing process for, the active
ingredient in a new, non-sedating antihistamine marketed by Hoechst Marion
Roussel, Inc. ("HMRI") as Allegra in the Americas and as Telfast elsewhere.
Pursuant to a licensing agreement between the Company and HMRI, the Company has
earned $19.3 million in milestones and royalties from HMRI through September
30, 1998 and is entitled to receive ongoing royalties based upon a percentage
of sales of the product.
The pace of drug discovery has accelerated significantly in recent years.
Fueled by advances in disciplines such as molecular biology, genomics and high-
throughput screening, opportunities to develop therapeutics for previously
unmet or undermet medical needs are greater than ever before. In addition,
pharmaceutical and biotechnology companies are under increasing pressure to
quickly deliver new drugs to market. In order to take advantage of these
opportunities and to respond to these pressures, many pharmaceutical companies
have augmented their internal research and development capacity through
outsourcing. Similarly, many biotechnology companies, constrained by cost
pressures, have elected to outsource rather than develop certain research and
development functions in-house. While outsourcing has traditionally been
limited to the later stages of drug development, such as clinical trial
management and manufacturing, many pharmaceutical and biotechnology companies
are utilizing contract chemistry service providers to complement, or in some
cases, supplement internal chemistry expertise.
Chemistry and biology are at the center of the drug discovery and development
process, which includes lead discovery, lead optimization, preclinical testing,
clinical trials and product commercialization. During the critical discovery
phases of this process, chemists and biologists typically work together to
prepare and deliver new chemical substances, develop laboratory models of
disease, test compounds to identify agents which demonstrate desired activity
and finally, create a marketable drug. In recent years, pharmaceutical and
biotechnology companies have sought to outsource chemistry services related to
lead discovery and lead optimization. Currently, only a few companies provide
chemistry services for drug discovery and development. Those that do provide
such services have typically focused only on selected portions of the process.
Albany Molecular Research believes significant opportunities exist for a
company that provides a broad range of outsourced chemistry services.
3
<PAGE>
Albany Molecular Research is one of the first companies to offer a broad
range of outsourced chemistry services for drug discovery and development. The
Company's service offerings include medicinal chemistry, chemical development,
analytical chemistry services and small-scale manufacturing. Medicinal chemists
synthesize small quantities of new and potentially patentable compounds for
biological testing to assist customers in the lead development and optimization
stages of their drug discovery and development efforts. The Company's medicinal
chemists use tools such as computational and combinatorial chemistry in
conjunction with traditional medicinal chemistry techniques. Chemical
development scientists design novel or improved methods, processes and
purification techniques suitable for medium to large scale production of a drug
candidate. The Company's analytical chemistry services consist of identity and
purity testing, method development, validation, stability testing and
regulatory documentation and consulting. Albany Molecular Research also
provides chemical synthesis and manufacturing services for its customers under
cGMP guidelines and has the capacity to produce laboratory scale amounts of
compounds.
The Company's objective is to be the leading provider of comprehensive
outsourced chemistry research services to the pharmaceutical and biotechnology
industries. Key elements of the Company's business strategy include (i)
expanding its range of service offerings, (ii) increasing capacity in each of
its service offerings, (iii) expanding the number of service offerings used by
each of its customers, (iv) increasing its customer base, and (v) capitalizing
on proprietary technology, both by seeking opportunities to obtain contractual
terms with its customers which may entitle the Company to milestones and/or
royalties and by independently identifying and developing possible proprietary
compounds or processes.
----------------
The Company was incorporated under the laws of New York on June 20, 1991 and
will be reincorporated by merger under the laws of Delaware immediately prior
to the effectiveness of this offering. The Company's principal executive
offices are located at 21 Corporate Circle, Albany, New York 12203, and its
telephone number is (518) 464-0279.
4
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Company............. 2,200,000 shares
Common Stock to be outstanding after the
offering(1).................................... 12,215,224 shares
Use of Proceeds................................. To repay a portion of indebtedness, for
additional capital expenditures and for
working capital and other general
corporate purposes, including possible
acquisitions. See "Use of Proceeds."
Proposed Nasdaq National Market symbol.......... AMRI
</TABLE>
- ----------
(1) Excludes: (i) 1,866,006 shares of Common Stock issuable upon the exercise
of outstanding stock options at a weighted average exercise price of $2.47
per share as of November 30, 1998; and (ii) 1,379,771 and 300,000
additional shares of Common Stock reserved for issuance under the Company's
1998 Stock Option and Incentive Plan (the "1998 Stock Plan") and the
Company's 1998 Employee Stock Purchase Plan (the "Purchase Plan"),
respectively. Gives effect to the repurchase by the Company on October 28,
1998 of a total of 1,131,903 shares of Common Stock from the Company's
former chief financial officer and a trust for the benefit of his family
for an aggregate purchase price of approximately $9.9 million (the "Share
Repurchase"). See "Management--Executive Officers, Directors and Key
Employees," "--Employee Stock and Other Benefit Plans--1998 Stock Option
and Incentive Plan," "--1992 Stock Option Plan," "--1998 Employee Stock
Purchase Plan" and "Certain Transactions."
----------------
Except as otherwise noted, all information in this Prospectus assumes no
exercise of the Underwriters' over-allotment option and has been adjusted to
reflect (i) a 2.25-for-1 stock split of the Common Stock to be effective
immediately prior to the effectiveness of this offering; (ii) the conversion of
all outstanding shares of the Company's Series A Convertible Preferred Stock,
par value $0.01 per share (the "Series A Preferred Stock"), into 45,000 shares
of Common Stock, immediately prior to completion of this offering; (iii) the
Company's reincorporation by merger in Delaware to be effective prior to the
effectiveness of this offering; and (iv) the amendment and restatement of the
Company's Certificate of Incorporation in connection with this offering. Unless
the context otherwise requires, all references to "Albany Molecular Research"
or the "Company" mean Albany Molecular Research, Inc., together with its
subsidiary.
5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------ ----------------
1995 1996 1997 1997 1998
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Net contract revenue............... $ 2,959 $ 5,261 $ 8,104 $ 5,819 $ 9,649
Cost of contract revenue........... 1,350 2,835 4,334 3,126 5,320
------- ------- ------- ------- -------
Gross profit from contract
revenue........................... 1,609 2,426 3,770 2,693 4,329
Licensing fees, milestones and roy-
alties, net....................... -- 900 2,278 2,251 14,212
Operating expenses:
Research and development.......... 37 245 627 443 535
Selling, general and
administrative................... 882 1,219 2,246 1,401 3,162
------- ------- ------- ------- -------
Total operating expenses......... 919 1,464 2,873 1,844 3,697
------- ------- ------- ------- -------
Income from operations............. 690 1,862 3,175 3,100 14,844
Other income (expense):
Interest income (expense), net.... 37 (11) (13) (24) 116
Other non-operating income
(expense), net................... 5 20 (26) (15) 4
------- ------- ------- ------- -------
Total other income (expense)..... 42 9 (39) (39) 120
------- ------- ------- ------- -------
Income before income taxes......... 732 1,871 3,136 3,061 14,964
Income tax expense................. 252 637 947 922 5,664
------- ------- ------- ------- -------
Net income......................... $ 480 $ 1,234 $ 2,189 $ 2,139 $ 9,300
======= ======= ======= ======= =======
Basic earnings per share........... $ 0.05 $ 0.12 $ 0.20 $ 0.20 $ 0.86
Diluted earnings per share......... $ 0.04 $ 0.10 $ 0.18 $ 0.18 $ 0.76
Weighted average common shares
outstanding, basic................ 10,263 10,706 10,761 10,759 10,842
Weighted average common shares
outstanding, diluted.............. 11,289 11,786 12,014 11,947 12,254
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
----------------------
PRO FORMA
ACTUAL AS ADJUSTED(1)
------- --------------
<S> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents................................ $ 2,831 $25,723
Working capital.......................................... 8,712 31,604
Total assets............................................. 25,790 48,682
Long-term debt, less current maturities.................. 5,138 2,122
Total shareholders' equity............................... 16,316 42,224
</TABLE>
- ----------
(1) Adjusted to give effect (i) to the Share Repurchase and (ii) to the sale of
2,200,000 shares of Common Stock offered hereby at an assumed initial
public offering price of $18.00 per share and the receipt and application
of the estimated net proceeds therefrom. See "Use of Proceeds,"
"Capitalization," "Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Certain Transactions" and Note 15 of
Notes to Consolidated Financial Statements.
The results for the interim periods are not necessarily indicative of the
results for the full fiscal year.
6
<PAGE>
RISK FACTORS
The following risk factors should be considered carefully in addition to the
other information in this Prospectus before purchasing the Common Stock
offered by this Prospectus. Except for the historical information contained
herein, the discussion contained in this Prospectus contains "forward-looking
statements" that involve risk and uncertainties. The Company's actual results
could differ materially from those discussed in this Prospectus. Important
factors that could cause or contribute to such differences include those
discussed below, as well as those discussed elsewhere herein.
Competitive Market for Experienced Scientists. The Company's future success
will depend to a significant extent on its ability to attract, retain and
motivate highly skilled chemists and other scientists. The Company's ability
to maintain, expand or renew existing engagements with its customers, enter
into new engagements and provide additional services to its existing customers
depends, in large part, on its ability to hire and retain scientists with the
skills necessary to keep pace with continuing changes in drug discovery and
development technologies. The Company believes that there is a shortage of,
and significant competition for, scientists with the skills and experience in
chemistry necessary to perform the services offered by the Company. The
Company competes with the research departments of pharmaceutical companies,
biotechnology companies, combinatorial chemistry companies, contract research
companies and research and academic institutions for new personnel. The
inability to hire additional qualified personnel may materially adversely
affect the Company's future growth. In addition, the Company's inability to
hire additional qualified scientists may require an increase in the level of
responsibility for both existing and new personnel. There can be no assurance
that the Company will be successful in attracting, retaining or motivating its
scientific personnel. Failure to attract, retain or motivate such personnel
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business--Competition."
Dependence on Pharmaceutical and Biotechnology Industries and Clients; Risk
of Cost Overruns. The Company has benefitted to date from the increasing trend
of pharmaceutical and biotechnology companies to outsource chemical research
and development projects. A reversal or slowing of this trend could have a
material adverse effect on the Company's business, financial condition and
results of operations. The Company's contract revenues are highly dependent on
research and development expenditures by the pharmaceutical and biotechnology
industries. The Company's operations could be materially adversely affected by
general economic downturns in its clients' industries, the impact of the
current trend toward consolidation in the pharmaceutical industry or any
decrease in research and development expenditures. In addition, historically,
a substantial portion of the Company's revenue has been derived from contracts
with a limited number of significant customers. For the year ended December
31, 1997, net contract revenue from the Company's three largest customers
represented approximately 29%, 11% and 9% of total net contract revenue,
respectively. For the nine months ended September 30, 1998, net contract
revenue from the Company's three largest customers represented approximately
18%, 17% and 15% of total net contract revenue, respectively. The Company's
contracts generally are terminable upon 30, 60 or 90 days' notice by the
customer. The Company's contracts may be terminated for a number of reasons,
many of which may be beyond the Company's control, such as reduction or
reallocation of a customer's research and development budget or change in a
customer's overall financial condition. The loss of a large contract or
multiple smaller contracts, or a significant decrease in revenue derived from
such contracts, could have a material adverse effect on the Company's
business, financial condition and results of operations. In addition, certain
of the Company's contracts for the provision of its services have a fixed
price or are subject to a maximum fee. As a result, the Company bears the risk
of cost overruns with respect to such contracts. There can be no assurance
that the Company will be able to perform its obligations with respect to any
such contracts within the prescribed fixed fees or applicable maximum fees.
Significant cost overruns with respect to such contracts could have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Business--Customers."
Risks Related to the Allegra/Telfast Royalty. Under the terms of a license
agreement, the Company has granted HMRI, formerly Marion Merrell Dow Inc., an
exclusive, worldwide license in exchange for milestones and royalties to use
the Company's patents relating to fexofenadine HCl, which is the active
ingredient in a new, non-sedating antihistamine marketed and sold by HMRI as a
prescription medicine. Fexofenadine HCl is
7
<PAGE>
marketed under the brand name Allegra in the Americas and under the brand name
Telfast elsewhere. For the year ended December 31, 1997, the Company's
milestones and royalties from fexofenadine HCl were $2.5 million, or 23.8% of
the Company's aggregate net contract revenue plus other operating revenue, and
for the nine months ended September 30, 1998, the Company's milestones and
royalties from fexofenadine HCl were $15.6 million, or 60.4% of the Company's
aggregate net contract revenue plus other operating revenue. The Company's
milestones and royalties from fexofenadine HCl for the nine months ended
September 30, 1998 include $3.0 million in non-recurring milestone payments
and $4.4 million in royalties related to prior periods and as a result such
milestone payments and royalties may not be indicative of future amounts
earned under the license agreement with HMRI. In particular, no further
milestone payments are required under the agreement. The Company does not
participate in the manufacturing, marketing or sale of fexofenadine HCl by
HMRI and relies entirely on the efforts of HMRI to manufacture, market and
sell this product. There can be no assurance that HMRI will continue to be
successful in marketing and selling fexofenadine HCl, that fexofenadine HCl
will continue to receive market acceptance or that the Company will continue
to receive significant royalties from HMRI in accordance with the license
agreement. In addition, there can be no assurance that a comparable or
superior antihistamine to fexofenadine HCl will not be developed or that
fexofenadine HCl will not be found to have unintended side effects which could
cause the United States Food and Drug Administration (the "FDA") or other
government regulatory authorities to require that HMRI withdraw fexofenadine
HCl from the market in the U.S. or other countries or could adversely affect
market acceptance of fexofenadine HCl. The failure of fexofenadine HCl to be
marketed successfully, to continue to receive market acceptance or to generate
significant royalties would have a material adverse effect on the Company's
business, financial condition and results of operations. In the event any of
the Company's patents relating to fexofenadine HCl are subjected to successful
challenge, royalties under the license agreement would be materially and
adversely affected. See "--Proprietary Technology; Unpredictability of Patent
Protection" and "Business--Allegra/Telfast Royalty and Licensing Agreement."
Proprietary Technology; Unpredictability of Patent Protection. The
Company's success will depend, in part, on its ability to obtain and enforce
patents, protect trade secrets, obtain licenses to technology owned by third
parties when necessary, and conduct its business without infringing the
proprietary rights of others. The patent positions of pharmaceutical, medical
products and biotechnology firms can be uncertain and involve complex legal
and factual questions. There can be no assurance that any patent applications
will result in the issuance of patents or, if any patents are issued, whether
they will provide significant proprietary protection or commercial advantage,
or will not be circumvented by others. In the event a third party has also
filed one or more patent applications for inventions which conflict with those
of the Company, the Company may have to participate in interference
proceedings declared by the United States Patent and Trademark Office (the
"PTO") to determine priority of invention, which could result in the loss of
any opportunity to secure patent protection for the inventions and the loss of
any right to use the inventions. Even if the eventual outcome is favorable to
the Company, such proceedings could result in substantial cost to the Company.
The filing and prosecution of patent applications, litigation to establish the
validity and scope of patents, assertion of patent infringement claims against
others and the defense of patent infringement claims by others can be
expensive and time consuming. There can be no assurance that in the event that
any claims with respect to any of the Company's patents, if issued, are
challenged by one or more third parties, that any court or patent authority
ruling on such challenge will determine that such patent claims are valid and
enforceable. An adverse outcome in such litigation could cause the Company to
lose exclusivity afforded by the disputed rights. If a third party is found to
have rights covering products or processes used by the Company, the Company
could be forced to cease using the technologies covered by such rights, could
be subject to significant liability to such third party, and could be required
to license technologies from such third party. Furthermore, even if the
Company's patents are determined to be valid, enforceable, and broad in scope,
there can be no assurance that competitors will not be able to design around
such patents and compete with the Company and its licensees using the
resulting alternative technology. See "Business--Patents and Proprietary
Rights."
Management of Growth and Expansion. The Company's operations have grown
rapidly and substantially in recent years. Such growth has placed and will
continue to place a significant strain on the Company's operational, human and
financial resources. The Company's ability to compete effectively will depend,
in large part, upon its ability to hire, train and assimilate additional
management, professional, scientific and technical
8
<PAGE>
operating personnel and its ability to expand, improve and effectively utilize
its operating, management, marketing and financial systems to accommodate its
expanded operations. The physical expansion of the Company's facilities to
accommodate future growth may lead to significant costs and divert management
and business development resources. The failure by the Company's management to
effectively anticipate, implement and manage the changes required to sustain
the Company's growth may have a material adverse effect on the Company's
business, financial condition and results of operations.
Dependence on Key Personnel. The Company's performance is highly dependent
on the principal members of its senior management and scientific staff,
including, in particular, Dr. Thomas E. D'Ambra, the Company's Chairman and
Chief Executive Officer, Dr. Donald E. Kuhla, the Company's President and
Chief Operating Officer, Dr. Harold Meckler, the Company's Vice President,
Chemical Development, and Dr. Michael P. Trova, the Company's Vice President,
Medicinal Chemistry. Moreover, the responsibilities of the Company's senior
management and scientific staff have recently increased since the departure in
October 1998 of the Company's chief financial officer. The Company is actively
seeking to hire a permanent chief financial officer. Although the Company has
entered into agreements containing non-competition restrictions with its
senior scientific and management personnel and into employment agreements with
Drs. D'Ambra, Kuhla, Meckler and Trova, the Company does not have employment
agreements with all of its key personnel. No assurance can be given that the
Company will be able to retain such personnel or attract and retain a new
chief financial officer on a timely basis. The Company maintains key person
life insurance on Dr. D'Ambra. The loss of one or more members of the
Company's senior management or scientific staff, or the Company's inability to
hire a permanent chief financial officer on a timely basis, could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business--Employees," "Management--Executive
Officers, Directors and Key Employees" and "Certain Transactions."
Competition. The Company faces competition based on a number of factors,
including size, relative expertise and sophistication, speed and costs of
identifying and optimizing potential lead compounds and of developing and
optimizing chemical processes. The Company competes with the research
departments of pharmaceutical companies, biotechnology companies,
combinatorial chemistry companies, contract research companies and research
and academic institutions. Many of these competitors have greater financial
and other resources and more experience in research and development than the
Company. Smaller companies may also prove to be significant competitors,
particularly through arrangements with large corporate collaborators.
Historically, pharmaceutical companies have maintained close control over
their research and development activities, including the synthesis, screening
and optimization of chemical compounds and the development of chemical
processes. Many of these companies, which represent a significant potential
market for the Company's products and services, are developing or already
possess in-house technologies and services offered by the Company. Academic
institutions, governmental agencies and other research organizations are also
conducting research in areas in which the Company provides services either
independently or through collaborative efforts.
The Company anticipates that it will face increased competition in the
future as new companies enter the market and advanced technologies become
available. The Company's services and expertise may be rendered obsolete or
uneconomical by technological advances or novel approaches developed by one or
more of the Company's competitors. The existing approaches of the Company's
competitors or new approaches or technologies developed by the Company's
competitors may be more effective than those developed by the Company. There
can be no assurance that the Company's competitors will not develop more
effective or more affordable technologies or services, thus rendering the
Company's technologies and/or services obsolete, uncompetitive or
uneconomical. There can be no assurance that the Company will be able to
compete successfully with existing or potential competitors or that
competitive factors will not have a material adverse effect on the Company's
business, financial condition or results of operations. See "Business--
Competition."
Variation in Quarterly Operating Results; Seasonality. The Company's results
of operations historically have fluctuated on a quarterly basis and can be
expected to continue to be subject to quarterly fluctuations. Quarterly
operating results can fluctuate as a result of a number of factors, including
the commencement, delay, cancellation or completion of contracts; risks
associated with fixed price contracts; the mix of services provided; seasonal
slowdowns; the timing of start-up expenses for new services and facilities;
and the timing and
9
<PAGE>
integration of acquisitions. In particular, quarterly fluctuations in the
Company's royalty revenue relating to fexofenadine HCl, an anti-histamine
subject to seasonal demand, may produce stronger fluctuations in the Company's
results of operations than those which have occurred over prior periods. The
Company believes that quarterly comparison of its financial results are not
necessarily meaningful and should not be relied upon as an indication of
future performance. In addition, fluctuations in quarterly results could
affect the market price of the
Common Stock in a manner unrelated to the longer term operating performance of
the Company. See "--Absence of Public Trading Market; Offering Price; Possible
Volatility of Future Stock Price" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Quarterly Results."
Limited Marketing Experience; Expansion of Sales Activities. To date, the
Company has sold its services and products primarily through the efforts of
the Company's senior management. The Company anticipates that it will need to
retain additional sales and marketing personnel and expand its sales and
marketing activities in order to achieve significant long-term growth. There
can be no assurance that the Company will be able to build and maintain an
efficient and effective sales and marketing organization or that such an
organization will be successful in attracting new customers. The failure to
build a successful sales organization could have a material adverse effect on
the Company's business, financial condition and results of operations.
Potential Liability and Risks of Operations. The Company develops, tests
and, to a very limited extent, manufactures pharmaceutical products intended
for use in humans. Such activities could expose the Company to the risk of
liability for personal injury or death to persons using such products,
although the Company does not manufacture in bulk, market or sell such
products. No assurance can be given that the Company will not be required to
pay damages or incur defense costs in connection with any such claim. In
addition, the Company could be held liable for errors and omissions in
connection with the services it performs. The Company currently maintains
product liability and errors and omissions insurance with respect to these
risks. No assurance can be given that such insurance will be adequate or can
be maintained at acceptable costs or at all. The failure of such insurance
policies to protect the Company from such claims or liabilities could have a
material adverse effect on the Company's business, financial condition and
results of operations.
All facilities and manufacturing techniques used in the manufacture of
products for clinical use or for sale in the United States must be operated in
conformity with current Good Manufacturing Practices ("cGMP") guidelines as
established by the FDA. The Company's facilities are subject to scheduled
periodic regulatory inspections to ensure compliance with cGMP requirements.
Failure on the part of the Company to comply with applicable requirements
could result in the termination of ongoing research or the disqualification of
data for submission to regulatory authorities. A finding that the Company had
materially violated cGMP requirements could result in additional regulatory
sanctions and, in severe cases, could result in a mandated closing of the
Company's facilities which would materially and adversely affect the Company's
business, financial condition and results of operations.
Risk of Interruption of Operations. The Company's results of operations are
dependent upon the continued use of its highly specialized laboratories and
equipment. The Company's operations are primarily concentrated in a single
facility in Albany, New York. Although the Company has contingency plans in
effect for certain natural disasters, as well as other unforeseen events which
could damage the Company's laboratories or equipment, no assurance can be
given that any such events will not materially interrupt the Company's
business. The Company maintains business interruption insurance to cover lost
revenues caused by such occurrences. However, such insurance would not
compensate the Company for the loss of opportunity and potential adverse
impact on relations with existing customers created by an inability to
complete its customer contracts in a timely manner.
Risks Associated with Acquisitions. The Company from time to time reviews
potential acquisition candidates in the ordinary course of its business. No
assurance can be given that acquisition candidates will be available or will
be available on terms and conditions acceptable to the Company. Acquisitions
involve numerous risks, including among others, difficulties and expenses
incurred in connection with the consummation of such acquisitions by the
Company and the subsequent assimilation of the operations, personnel and
services or products of the acquired companies, the difficulty of operating
new businesses, the diversion of management's
10
<PAGE>
attention from other business concerns and the potential loss of key employees
of the acquired company. Acquisitions of foreign companies may also involve
the additional risks of assimilating differences in business practices and
overcoming language barriers. To date, the Company has grown entirely through
internal expansion, and there can be no assurance that any acquisition will be
identified or completed or, if completed, will be successfully integrated into
the Company's operations. The Company presently has no agreements or
commitments with respect to any acquisition.
Broad Management Discretion in Use of Proceeds. The principal purposes of
the offering are to increase the Company's equity capital, to create a public
market for the Company's Common Stock, to increase the visibility of the
Company in the marketplace and to facilitate future access by the Company to
public equity markets. The Company expects to use the net proceeds from the
offering to repay a portion of its indebtedness, for additional capital
expenditures and for working capital and other general corporate purposes. The
Company has not, however, identified specific uses for a significant portion
of the net proceeds of the offering. Accordingly, the Company's management
will have significant flexibility in applying the net proceeds of the
offering. Although the Company has no plans, commitments or agreements with
respect to any material acquisitions as of the date of this Prospectus, the
Company may seek acquisitions of businesses, products or technologies that are
complementary to those of the Company, and a portion of the net proceeds may
be used for such acquisitions. See "Use of Proceeds."
Potential Adverse Impact of Pharmaceutical and Health Care Reform. The
Company expects that a substantial portion of its contract revenues in the
foreseeable future will be derived from services provided to the
pharmaceutical and biotechnology industries. Accordingly, the Company's future
success is directly dependent upon the success of the companies within those
industries and their continued demand for the Company's services. The levels
of revenues and profitability of pharmaceutical and biotechnology companies
may be affected by the continuing efforts of governmental and third party
payors to contain or reduce the costs of health care through various means and
the initiatives of third party payors with respect to the availability of
reimbursement. For example, in certain foreign markets pricing or
profitability of pharmaceuticals is subject to government control. In the
United States, there have been, and the Company expects that there will
continue to be, a number of federal and state proposals to implement similar
government control. It is uncertain what legislative proposals may be adopted
or what actions federal, state or private third party payors for health care
goods or services may take in response to any health care reform proposals or
legislation. To the extent that such proposals or reforms have a material
adverse effect on the businesses, financial condition, results of operations
and profitability of pharmaceutical and biotechnology companies that are
actual or prospective customers for the Company's services and products, the
Company's business, financial condition and results of operations could be
materially and adversely affected.
Potential Liability Regarding Hazardous Materials. The research and
development processes of the Company involve the controlled use of hazardous
materials. The Company is subject to federal, state and local laws and
regulations governing the use, manufacture, storage, handling and disposal of
such materials and certain waste products. The risk of accidental
contamination or injury from these materials cannot be completely eliminated.
In the event of such an accident, the Company could be held liable for any
damages that result, and any such liability could exceed the resources of the
Company. In addition, there can be no assurance that the Company will not be
required to incur significant costs to comply with environmental laws and
regulations related to the handling or disposal of such materials or waste
products in the future, which could have a material adverse effect on the
Company's business, financial condition or results of operations.
Effective Control by Principal Stockholders. After giving effect to the sale
of the shares of Common Stock offered hereby, Thomas E. D'Ambra, the Company's
Chairman and Chief Executive Officer, and Chester J. Opalka, the Company's
Vice President, Senior Research Chemist and a Director, will beneficially own
in the aggregate approximately 53.1% (51.7% assuming exercise of the
Underwriters' over-allotment option in full) of the outstanding Common Stock.
As a result, these stockholders will be able to exert significant influence
over the outcome of fundamental corporate transactions requiring stockholder
approval, including, but not limited to, mergers and sales of assets and the
election of the members of the Company's Board of Directors. This
concentration of ownership may have the effect of delaying or preventing a
change in control of the Company. See "Principal Stockholders" and "Shares
Eligible for Future Sale."
11
<PAGE>
Shares Eligible for Future Sale. Sales of substantial amounts of Common
Stock in the public market after this offering could adversely affect the
market price of the Common Stock. In addition to the 2,200,000 shares of
Common Stock offered hereby, up to approximately 9,979,561 shares of Common
Stock owned by current stockholders of the Company will be eligible for sale
in the public market pursuant to Rule 144 under the Securities Act of 1933, as
amended (the "Securities Act"), at various times beginning 90 days after the
date of this Prospectus. All executive officers and directors and stockholders
of the Company, who in the aggregate will hold 9,953,199 shares of Common
Stock and options to purchase 1,787,976 shares of Common Stock, have agreed,
pursuant to certain Lock-up Agreements (the "Lock-up Agreements"), that until
180 days after the date of this Prospectus, they will not, directly or
indirectly, offer, sell, assign, transfer, encumber, contract to sell, grant
an option to purchase, make a distribution of, or otherwise dispose of, any
shares of Common Stock, or any securities convertible into or exchangeable for
shares of Common Stock, otherwise than (i) as a bona fide gift or gifts,
provided that the donee or donees thereof agree in writing as a condition
precedent to such gift or gifts to be bound by the terms of the Lock-up
Agreements, or (ii) with the prior written consent of ING Baring Furman Selz
LLC. Sales of substantial amounts of Common Stock (including shares issued in
connection with future acquisitions which may be issued with registration
rights), or the availability of such shares for sale, may adversely affect the
prevailing market price for the Common Stock and could impair the Company's
ability to obtain additional capital through an offering of its equity
securities. See "Shares Eligible for Future Sale."
Absence of a Public Trading Market; Offering Price; Possible Volatility of
Future Stock Price. Prior to this offering, there has been no public market
for the Common Stock, and there can be no assurance that an active market will
develop or be sustained following the consummation of this offering.
Consequently, the offering price of the Common Stock will be determined by
negotiation between the Company and the representatives of the several
Underwriters based on several factors and will not necessarily reflect the
market price of the Common Stock after this offering or the price at which the
Common Stock may be sold in the public market after this offering. See
"Underwriting" for a description of the factors to be considered in
determining the initial public offering price. Following the completion of
this offering, the trading price of the Common Stock could be subject to wide
fluctuations in response to quarter-to-quarter variations in the Company's
operating results, changes in earnings estimates by analysts, material
announcements by the Company or its competitors, governmental regulatory
action, or other events or factors, many of which are beyond the Company's
control. The stock market has experienced extreme price and volume
fluctuations which have affected market prices of smaller capitalization
companies and which often have been unrelated to the operating performance of
such companies. In addition, the Company's operating results in future
quarters may be below the expectations of securities analysts and investors.
In such event, the price of the Common Stock would likely decline, perhaps
substantially. See "Underwriting."
Computer Systems and Year 2000 Issues. The "Year 2000" issue concerns the
potential exposures related to the automated generation of business and
financial misinformation resulting from the application of computer programs
which have been written using two digits, rather than four, to define the
application year of business transactions. The Company's independent
information technology consultant has conducted a comprehensive assessment of
the Company's computer systems to identify the systems that could be affected
by the Year 2000, and has determined that no material changes are required for
the Company's computer systems to be Year 2000 compliant. As such, the Company
believes that, based upon currently available information, it will incur no
material costs associated with becoming Year 2000 compliant. The Company is
seeking to confirm the Year 2000 readiness of its material customers (such as
Astra AB and Eli Lilly and Company), its key licensees (such as HMRI) and its
material vendors. Failure of the Company, its software providers or the
Company's customers or vendors to adequately address the Year 2000 issue could
result in misstatement of reported financial information or otherwise
materially and adversely affect the Company's business, financial condition
and results of operations.
Dividend Policy. The Company has not declared cash dividends on its Common
Stock since its inception and the Company does not anticipate paying cash
dividends on its Common Stock in the foreseeable future. Under Delaware law,
the Company is permitted to pay dividends only out of its surplus, or, if
there is no surplus, out of its net profits. Although the Company's current
credit facility permits the Company to pay cash dividends,
12
<PAGE>
the payment of cash dividends may be prohibited under agreements governing
debt which the Company may incur in the future. See "Dividend Policy" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operation."
Anti-takeover Provisions. Certain provisions of the Company's Restated
Certificate of Incorporation (the "Certificate") and Amended and Restated By-
Laws (the "By-Laws"), certain sections of the Delaware General Corporation
Law, and the ability of the Board of Directors to issue shares of preferred
stock and to establish the voting rights, preferences and other terms thereof,
may be deemed to have an anti-takeover effect and may discourage takeover
attempts not first approved by the Board of Directors (including takeovers
which stockholders may deem to be in their best interests). Such provisions
include, among other things, a classified Board of Directors serving staggered
three-year terms, the elimination of stockholder voting by written consent,
the removal of directors only for cause, the vesting of exclusive authority in
the Board of Directors to determine the size of the Board of Directors and
(subject to certain limited exceptions) to fill vacancies thereon, the vesting
of exclusive authority in the Board of Directors (except as otherwise required
by law) to call special meetings of stockholders, and certain advance notice
requirements for stockholder proposals and nominations for election to the
Board of Directors. These provisions, and the ability of the Board of
Directors to issue preferred stock without further action by stockholders,
could delay or limit the removal of incumbent directors or the assumption of
control by stockholders, even if such removal or assumption of control would
be beneficial to stockholders, and also could discourage or make more
difficult a merger, tender offer or proxy contest, even if such events would
be beneficial, in the short term, to the interests of stockholders. The
Company will be subject to Section 203 of the Delaware General Corporation Law
which, in general, imposes restrictions upon certain acquirors (including
their affiliates and associates) of 15% or more of the Company's Common Stock.
See "Description of Capital Stock--Certain Provisions of Certificate of
Incorporation and By-laws" and "--Statutory Business Combination Provision."
Immediate and Substantial Dilution. Purchasers of the Common Stock in this
offering will incur immediate and substantial dilution in the pro forma net
tangible book value per share of Common Stock. At an assumed initial public
offering price of $18.00 per share, investors in this offering will incur
dilution of $14.83 per share. To the extent outstanding options to purchase
the Company's Common Stock are exercised, there will be further dilution to
investors participating in this offering. Moreover, there can be no assurance
that the Company will not require additional funds to support its working
capital requirements or for other purposes, in which case the Company may seek
to raise such additional funds through public or private equity financing or
from other sources. Any such financing may result in additional dilution to
the Company's stockholders. See "Dilution."
13
<PAGE>
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 2,200,000 shares of
Common Stock offered hereby at an assumed initial public offering price of
$18.00 per share, after deducting the underwriting discounts and estimated
offering expenses payable by the Company, are estimated to be $35.8 million
($41.4 million if the Underwriters' over-allotment option is exercised in
full). The Company expects to use the net proceeds as follows: (i)
approximately $7.9 million will be used to repay indebtedness incurred in
connection with the Share Repurchase; (ii) approximately $5.0 million will be
used to repay a portion of the Company's outstanding indebtedness under its
existing credit facility with Fleet Bank, N.A. (the "Credit Facility"),
including fees and accrued and unpaid interest; and (iii) the balance will be
used for additional capital expenditures and for working capital and other
general corporate purposes. The Company's outstanding indebtedness under the
Credit Facility, which will be partially repaid with a portion of the proceeds
of this offering, was incurred to finance the expansion of the Company's
facilities. The Company routinely evaluates potential acquisitions of
businesses and products that would complement or expand the Company's
business. The Company may use a portion of the net proceeds from this offering
for one or more acquisitions; however, it currently has no commitments or
agreements with respect to such transactions. Pending such use, the balance of
the net proceeds will be invested in short-term, investment grade, interest
bearing obligations.
The Credit Facility consists of a $15 million, three-year, revolving line of
credit, which thereafter converts into a five-year term loan. The Credit
Facility will expire in July 2006. As of November 30, 1998, the Company had an
aggregate outstanding principal balance of $7.0 million under the Credit
Facility. Amounts outstanding under the Credit Facility bear interest at
variable rates which are based upon, at the option of the Company, the
lender's prime rate or LIBOR. The interest rate on such indebtedness at
November 30, 1998 was approximately 5.78% per annum. See "Capitalization" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
DIVIDEND POLICY
The Company has not declared any cash dividends on its Common Stock since
its inception. The Company currently intends to retain its earnings for future
growth and, therefore, does not anticipate paying cash dividends in the
foreseeable future. Under Delaware law, the Company is permitted to pay
dividends only out of its surplus, or, if there is no surplus, out of its net
profits. Although the Company's current Credit Facility permits the Company to
pay cash dividends, the payment of cash dividends may be prohibited under
agreements governing debt which the Company may incur in the future. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
14
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
September 30, 1998 (i) on an actual basis, (ii) on a pro forma basis to give
effect to the Share Repurchase, and (iii) on a pro forma as adjusted basis to
give effect to the Share Repurchase and the sale of the 2,200,000 shares of
Common Stock offered hereby at an assumed initial public offering price of
$18.00 per share and the receipt and application by the Company of the
estimated net proceeds therefrom as described in "Use of Proceeds." This table
should be read in conjunction with the Consolidated Financial Statements of
the Company and Notes thereto included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1998
------------------------------------
PRO FORMA,
ACTUAL PRO FORMA(1) AS ADJUSTED(2)
------ -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
Current maturities of long-term debt(3)... $ 82 $ 1,669 $ 82
Long-term debt, net of current
maturities(3)............................ 5,138 13,471 2,122
Series A Convertible Preferred Stock,
par value $0.01 per share: 100,000
shares authorized, issued and
outstanding, actual and pro forma; no
shares authorized, issued or
outstanding, pro forma as adjusted..... 1 1 --
Preferred Stock, par value $0.01 per
share: 900,000 shares authorized, no
shares issued or outstanding, actual;
2,000,000 shares authorized, no shares
issued or outstanding, pro forma and
pro forma as adjusted.................. -- -- --
Common Stock, par value $0.01 per share:
10,000,000 shares authorized,
10,900,444 shares issued and
outstanding, actual; 9,969,099 shares
issued and outstanding and 1,131,903
shares issued but not outstanding, pro
forma; 50,000,000 shares authorized,
12,214,099 shares issued and
outstanding, pro forma as adjusted(4).. 109 111 122
Additional paid-in capital.............. 2,952 3,092 28,848
Accumulated other comprehensive income.. 70 70 70
Retained earnings....................... 13,184 13,184 13,184
Treasury stock, at cost................. -- (10,062) --
------ ------- -------
Total shareholders' equity.......... 16,316 6,396 42,224
------ ------- -------
Total capitalization...................... 21,536 21,536 44,428
====== ======= =======
</TABLE>
- ----------
(1) Represents the September 30, 1998 balances after giving effect to (i) the
Share Repurchase, (ii) the incurrence of $2.0 million of indebtedness
under the Company's Credit Facility to fund the initial payment for the
Share Repurchase, and (iii) the issuance of promissory notes in the
aggregate principal amount of $7.9 million to finance the remainder of the
Share Repurchase. See Note 15 of Notes to Consolidated Financial
Statements.
(2) The pro forma as adjusted column gives effect to (i) the Share Repurchase
and related transactions described in Note 1 above, (ii) the conversion of
the Series A Convertible Preferred Stock into Common Stock and (iii) the
sale of the 2,200,000 shares of Common Stock offered hereby at an assumed
initial public offering price of $18.00, net of underwriting discount and
estimated offering expenses, and the receipt and application by the
Company of the estimated net proceeds therefrom as described in "Use of
Proceeds."
(3) See Note 3 of Notes to Consolidated Financial Statements for information
concerning long-term debt obligations.
(4) Excludes: (i) 2,055,314 shares of Common Stock issuable upon exercise of
outstanding stock options as of the balance sheet date of which 200,558
have been issued upon exercise of stock options subsequent to the balance
sheet date; (ii) 1,379,771 additional shares of Common Stock available for
future grants under the 1998 Stock Plan; and (iii) 300,000 additional
shares of Common Stock available for future sales under the Purchase Plan.
See "Management--Employee Stock and Other Benefit Plans--1998 Stock Option
and Incentive Plan," "--1992 Stock Option Plan" and "--1998 Employee Stock
Purchase Plan." The numbers of issued and outstanding shares of Common
Stock have been adjusted to give effect to a 2.25-for-1 stock split to be
completed immediately prior to the effectiveness of this offering. At such
time, the number of authorized shares of Common Stock will be increased to
50,000,000.
15
<PAGE>
DILUTION
The net tangible book value of the Common Stock as of September 30, 1998 was
approximately $15.9 million or $1.45 per share. The adjusted pro forma net
tangible book value per share represents the amount of total tangible assets
less total liabilities divided by the number of shares of Common Stock
outstanding, including all outstanding stock grants and the conversion of the
Series A Preferred Stock into Common Stock and excluding all outstanding stock
options and gives effect to the Share Repurchase. After giving effect to the
sale of the 2,200,000 shares of Common Stock offered hereby at an assumed
initial public offering price of $18.00 per share and the receipt and
application by the Company of the net proceeds therefrom, the adjusted pro
forma net tangible book value of the Common Stock as of September 30, 1998
would have been approximately $38.8 million or $3.17 per share. This
represents an immediate increase in pro forma net tangible book value of $1.72
per share to existing shareholders and an immediate dilution of $14.83 per
share to purchasers of Common Stock in this offering. The following table
illustrates this per share dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............... $18.00
Net tangible book value per share .......................... $1.45
Increase per share attributable to new investors............ $1.72
Adjusted pro forma net tangible book value per share after the
offering..................................................... $ 3.17
------
Dilution per share to new investors........................... $14.83
======
</TABLE>
The following table summarizes, on a pro forma basis as of September 30,
1998 after giving effect to the conversion of all outstanding shares of Series
A Preferred Stock, the differences between existing stockholders and the new
investors with respect to the number of shares of Common Stock purchased from
the Company, the total consideration paid and the average price per share
paid:
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
------------------ ------------------- AVERAGE PRICE PAID
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- ------------------
<S> <C> <C> <C> <C> <C>
Existing
stockholders(1)........ 10,014,099 82.0% $ 3,007,639 7.1% $ 0.30
New investors........... 2,200,000 18.0 39,600,000 92.9 18.00
---------- ----- ----------- -----
Total................. 12,214,099 100.0% $42,607,639 100.0%
========== ===== =========== =====
</TABLE>
- ----------
(1) Excludes shares repurchased by the Company in connection with the Share
Repurchase.
The foregoing computations assume no exercise of any outstanding stock
options after September 30, 1998 (other than the exercise in connection with
the Share Repurchase of options to purchase 200,558 shares of Common Stock) or
the Underwriters' over-allotment option. See "Use of Proceeds." As of November
30, 1998, options to purchase 1,866,006 shares of Common Stock were
outstanding with a weighted average exercise price of $2.47 per share. To the
extent these options or the Underwriters' over-allotment option are exercised,
there will be further dilution to new investors. See "Underwriting" for
information concerning the Underwriters' over-allotment option.
16
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated statement of operations data for each of
the years ended December 31, 1995, 1996 and 1997 and selected consolidated
balance sheet data at December 31, 1996 and 1997 are derived from the
consolidated financial statements of the Company which have been audited by
KPMG Peat Marwick LLP, independent auditors, and are included elsewhere
herein. The selected statement of operations data for the years ended December
31, 1993 and 1994 are derived from audited financial statements not included
herein. The selected balance sheet data at December 31, 1993, 1994 and 1995,
is derived from audited financial statements not included herein. The selected
consolidated statement of operations data for the nine month periods ended
September 30, 1997 and 1998 and the selected consolidated balance sheet data
at September 30, 1998 are derived from unaudited consolidated financial
statements also included elsewhere in the Prospectus. The unaudited
consolidated financial statements for such nine month periods have been
prepared by the Company on a basis consistent with the Company's audited
consolidated financial statements and, in the opinion of management, include
all adjustments, consisting only of normal recurring adjustments, necessary
for a fair presentation of the Company's consolidated financial position and
consolidated results of operations for these periods. The consolidated results
of operations for the nine months ended September 30, 1998 are not necessarily
indicative of results for the year ending December 31, 1998 or any future
period. The data set forth below should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the Consolidated Financial Statements and Notes thereto
included herein.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------- --------------
1993 1994 1995 1996 1997 1997 1998
------ ------ ------ ------ ------ ------ ------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Net contract revenue..... $1,071 $1,116 $2,959 $5,261 $8,104 $5,819 $9,649
Cost of contract
revenue................. 818 742 1,350 2,835 4,334 3,126 5,320
------ ------ ------ ------ ------ ------ ------
Gross profit from
contract revenue........ 253 374 1,609 2,426 3,770 2,693 4,329
Licensing fees,
milestones and
royalties, net.......... -- -- -- 900 2,278 2,251 14,212
Operating expenses:
Research and
development............ 54 152 37 245 627 443 535
Selling, general and
administrative ........ 225 253 882 1,219 2,246 1,401 3,162
------ ------ ------ ------ ------ ------ ------
Total operating
expenses............... 279 405 919 1,464 2,873 1,844 3,697
------ ------ ------ ------ ------ ------ ------
Income (loss) from
operations.............. (26) (31) 690 1,862 3,175 3,100 14,844
Other income (expense):
Interest income
(expense), net......... (13) (30) 37 (11) (13) (24) 116
Other non-operating
income (expense), net.. -- -- 5 20 (26) (15) 4
------ ------ ------ ------ ------ ------ ------
Total other income
(expense).............. (13) (30) 42 9 (39) (39) 120
------ ------ ------ ------ ------ ------ ------
Income (loss) before
income taxes............ (39) (61) 732 1,871 3,136 3,061 14,964
Income tax expense
(benefit)............... (4) (48) 252 637 947 922 5,664
------ ------ ------ ------ ------ ------ ------
Net income (loss)........ $ (35) $ (13) $ 480 $1,234 $2,189 $2,139 $9,300
====== ====== ====== ====== ====== ====== ======
Basic earnings (loss) per
share................... $ -- $ -- $ 0.05 $ 0.12 $ 0.20 $ 0.20 $ 0.86
Diluted earnings (loss)
per share............... $ -- $ -- $ 0.04 $ 0.10 $ 0.18 $ 0.18 $ 0.76
Weighted average common
shares outstanding,
basic................... 8,422 8,856 10,263 10,706 10,761 10,759 10,842
Weighted average common
shares outstanding,
diluted................. 8,687 9,234 11,289 11,786 12,014 11,947 12,254
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------- SEPTEMBER 30,
1993 1994 1995 1996 1997 1998
------ ------ ------ ------ ------- -------------
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET
DATA:
Cash and cash equivalents... $ 179 $ 45 $ 35 $1,260 $ 1,262 $ 2,831
Working capital............. 284 87 2,171 3,011 4,407 8,712
Total assets................ 1,044 1,059 5,108 8,501 10,629 25,790
Long-term debt, less current
maturities................. 258 204 748 2,375 1,776 5,138
Total shareholders' equity.. 578 566 3,156 4,411 6,654 16,316
</TABLE>
17
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of the results of operations and financial
condition of the Company should be read in conjunction with the Consolidated
Financial Statements of the Company and the Notes thereto included elsewhere
in this Prospectus. This Prospectus contains forward-looking statements.
Discussions containing such forward-looking statements may be found in the
material set forth below and under "Business," as well as in this Prospectus
generally. Prospective investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties. Actual events or results may differ materially from those
discussed in the forward-looking statements as a result of various factors,
including, without limitation, the risk factors set forth under "Risk
Factors," the discussion set forth below and the matters set forth in this
Prospectus generally.
OVERVIEW
The Company was founded in 1991 and its mission has always been to provide a
broad range of chemistry services throughout the drug discovery and
development process. As the needs of the Company's customers have expanded and
chemistry research outsourcing has increased, the Company has expanded its
service offerings. In January 1994, the Company added its first cGMP
manufacturing facility and in May 1996, the Company added analytical chemistry
services. The Company has expanded its facility in Albany, New York, on
several occasions and currently is undertaking its largest expansion to date,
which it expects to be completed by January 1999.
Net contract revenue consists primarily of fees earned under contracts with
third party customers, net of reimbursed expenses. Reimbursed expenses consist
of laboratory supplies, chemicals and other costs reimbursed by customers and,
in accordance with industry practice, are included in contract revenue.
Reimbursed expenses vary from contract to contract. Accordingly, the Company
views net contract revenue as its primary measure of revenue growth rather
than licensing fees and royalties, which are dependent upon the Company's
licensees' sales. In general, the Company provides services to customers on
(i) a full-time equivalent ("FTE") basis that establishes the number of FTEs
contracted for a project, the duration of the contract period, the fixed price
per FTE, plus an allowance for out-of-pocket expenses which may or may not be
incorporated in the FTE rate, (ii) a time and materials ("T&M") basis under
which the Company charges its customers based on an hourly rate plus out-of-
pocket expenses or (iii) to a limited extent, a fixed price basis. Typically,
FTE and T&M contracts are entered into for two to three year periods and fixed
price contracts are entered into for much shorter periods of time (generally
two to six months). Because the Company's fixed price contracts relate to
projects that are generally limited in scope and such contracts are of
generally short duration, the Company has not historically experienced cost
overruns under such contracts which have had a material adverse effect on the
Company's results of operations. To the extent the Company were to experience
cost overruns under a particular fixed price contract, the profitability of
such contract would be adversely affected and, if that fixed price contract
were material to the Company, such overruns could have a material adverse
effect on the Company's results of operations for the period during which the
contract was performed. FTE and T&M contracts provide for annual adjustments
in billing rates for the scientists assigned to the contract. Generally, the
Company's contracts may be terminated by the customer upon 30, 60 or 90 days'
prior notice. The Company recognizes contract revenue on a percentage-of-
completion or per diem basis. Cost of revenue consists primarily of
compensation and associated fringe benefits for employees and other direct
project related costs.
Net licensing fees, milestones and royalties consist of licensing fees,
milestones and royalties net of technology incentive award expense incurred
under the Company's Technology Development Incentive Plan. The Company
maintains a Technology Development Incentive Plan, the purpose of which is to
stimulate and encourage novel innovative technology development, which allows
eligible participants to share in awards based on ten percent (10%) of the net
revenue earned by the Company relating to patented technology with respect to
which the eligible participant is named as an inventor.
The Company earns royalties from HMRI under a license agreement based on
sales of fexofenadine HCl, marketed as Allegra in the Americas and as Telfast
elsewhere. Although the Company entered into the license
18
<PAGE>
agreement with HMRI in 1995, the Company began to recognize royalty revenue
related to U.S. sales under that agreement in February 1998, due to the
significant time taken for issuance of the Company's patents and the
resolution of related patent interference claims. Royalty payments are due
within 45 days after the end of a calendar quarter and determined based on
such quarter's sales.
Research and development expense consists of payments in connection with
collaborations with academic institutions, compensation and benefits for
scientific personnel for work performed on proprietary research projects and
costs of supplies and chemicals related thereto. Selling, general and
administrative expense consists of compensation and related fringe benefits
for marketing and administrative employees, professional services, marketing
costs and all costs related to facilities and information services, which are
based on contract revenue in each quarter.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain
consolidated statement of operations data as a percentage of net contract
revenue:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------- --------------
1995 1996 1997 1997 1998
------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
Net contract revenue............. 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of revenue.................. 45.6 53.9 53.5 53.7 55.1
------- ------- ------- ------ ------
Gross profit..................... 54.4 46.1 46.5 46.3 44.9
Licensing fees, milestones and
royalties, net.................. -- 17.1 28.1 38.7 147.2
Operating expenses:
Research and development........ 1.3 4.7 7.7 7.6 5.5
Selling, general and
administrative................. 29.8 23.2 27.7 24.1 32.8
------- ------- ------- ------ ------
Total operating expenses........ 31.1 27.9 35.4 31.7 38.3
------- ------- ------- ------ ------
Income from operations........... 23.3 35.4 39.2 53.3 153.8
Other income (expense):
Interest income (expense), net.. 1.3 (0.2) (0.2) (0.5) 1.2
Other non-operating income (ex-
pense), net.................... 0.2 0.4 (0.3) (0.2) 0.1
------- ------- ------- ------ ------
Total other income (expense).... 1.5 0.2 (0.5) (0.7) 1.3
------- ------- ------- ------ ------
Income before income taxes....... 24.8 35.5 38.7 52.6 155.1
Income tax expense............... 8.5 12.1 11.7 15.8 58.7
------- ------- ------- ------ ------
Net income....................... 16.3% 23.4% 27.0% 36.8% 96.4%
======= ======= ======= ====== ======
</TABLE>
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1997
Net contract revenue. Net contract revenue increased 65.8% to $9.6 million
in the first nine months of 1998 from $5.8 million in the first nine months of
1997. The increase was due principally to the performance of a greater number
of projects under contract, primarily for medicinal and chemical development
services, which were enabled through an increase in the number of scientific
staff to 74 at September 30, 1998 from 51 at September 30, 1997.
Gross profit. Gross profit increased 60.7% to $4.3 million in the first nine
months of 1998 from $2.7 million in the first nine months of 1997. Gross
profit remained relatively constant as a percentage of net contract revenue.
Licensing fees, milestones and royalties, net. Net licensing fees,
milestones and royalties increased to $14.2 million in the first nine months
of 1998 from $2.3 million in the first nine months of 1997. As a result of the
February 1998 PTO decision, the Company met all prerequisites of the licensing
agreement with HMRI and recognized and received in the first three months of
1998 milestone payments and royalties on all sales of
19
<PAGE>
fexofenadine HCl in the United States from November 26, 1996, the date of
patent issuance, through
December 31, 1997. The Company recognized $9.6 million in royalties on all
sales of fexofenadine HCl in the United States for the first nine months of
1998. All licensing fees, milestones and royalties associated with the HMRI
license are subject to the Technology Development Incentive Plan. The
Company's milestones and royalties from fexofenadine HCl for the nine months
ended September 30, 1998 include $3.0 million in non-recurring milestone
payments and $4.4 million in royalties related to prior periods and, as a
result, such milestone payments and royalties may not be indicative of future
amounts earned under the license agreement with HMRI. In particular, no
further milestone payments are required under the agreement.
Research and development. Research and development expense increased to
$535,000 in the first nine months of 1998 from $444,000 in the first nine
months of 1997. The increase was due primarily to expenses related to
biological assay study agreements with third parties pertaining to the
Company's proprietary research programs which commenced in February 1997 and
July 1997, respectively.
Selling, general and administrative. Selling, general and administrative
expense increased 125.9% to $3.2 million for the first nine months of 1998
from $1.4 million in the first nine months of 1997 and represented 32.8% of
net contract revenue for the first nine months of 1998 compared to 24.1% for
the first nine months of 1997. The increase was due to a general increase in
administrative and marketing staff to support the expansion of the Company's
operations, increased expenses for recruitment of scientists, increased rent
expense related to the ongoing expansion of the Company's Albany facility and
a one-time expense incurred in the first nine months of 1998 as a result of
the Company's partial reimbursement of its landlord for expenses incurred by
the landlord in relocating other tenants in order to facilitate the Company's
expansion.
Income tax expense. Income tax expense increased to $5.7 million in the
first nine months of 1998 from $922,000 in the first nine months of 1997. The
effective rate was 37.9% in the first nine months of 1998 and 30.1% in the
first nine months of 1997. The increase in income tax expense was primarily a
result of the increase in royalty and licensing fees. The change in the
effective income tax rate principally resulted from the utilization of New
York State investment tax credits in 1997, and an increase in the minimum
effective federal rate from 34.0% to 35.0% due to the fact that the Company's
taxable income was in excess of $10 million for the nine months ended
September 30, 1998.
YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996
Net contract revenue. Net contract revenue increased 54.0% to $8.1 million
in 1997 from $5.3 million in 1996. The increase was due principally to the
performance of a greater number of contracts, primarily for medicinal and
chemical development services, which were enabled through an increase in the
number of scientific staff to 43 at December 31, 1997 from 31 at December 31,
1996.
Gross profit. Gross profit increased 55.4% to $3.8 million in 1997 from $2.4
million in 1996. Gross profit remained relatively constant as a percentage of
net contract revenue at 46.5% in 1997 compared to 46.1% in 1996, reflecting a
fairly consistent mix of the type of contracts during the two years.
Licensing fees, milestones and royalties, net. Licensing fees, milestones
and royalties, net of the Company's technology incentive award, increased
153.1% to $2.3 million in 1997 from $900,000 in 1996. The increase in net
licensing fees, milestones and royalties was due principally to the difference
in prescribed milestones due to the Company from HMRI upon the issuance of
non-U.S. patents to the Company with respect to fexofenadine HCl in 1997 and
1996. As a result of these patent issuances, the Company became entitled to
receive royalties on all sales of fexofenadine HCl in those countries in which
these patents were issued.
Research and development. Research and development expense increased to
$627,000 in 1997 from $245,000 in 1996. The increase was due primarily to
expenses related to biological assay development study agreements with third
parties pertaining to the Company's proprietary research programs, which
commenced in February 1997 and July 1997, respectively.
20
<PAGE>
Selling, general and administrative. Selling, general and administrative
expense increased 84.3% to $2.2 million in 1997 from $1.2 million in 1996, and
represented 27.7% of net contract revenue in 1997 compared to 23.2% in 1996.
The increase was due to a general increase in administrative and marketing
staff due to the continued growth of the Company, an increase in executive
compensation, higher accruals for incentive compensation, increased recruiting
expenditures for scientific staff and an increase in the provision for
doubtful accounts.
Income tax expense. Income tax expense increased to $947,000 in 1997 from
$637,000 in 1996. The effective tax rate was 30.2% in 1997 and 34.1% in 1996.
The increase in income tax expense was primarily a result of the increase in
licensing fees, milestones and royalties. The change in the effective income
tax rate principally resulted from the utilization of New York State
investment tax credits in 1997, which were $161,858.
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
Net contract revenue. Net contract revenue increased 77.8% to $5.3 million
in 1996 from $3.0 million in 1995. The increase was principally due to the
performance of a greater number of projects under contract, primarily for
medicinal chemistry and chemical development services, which were enabled
through an increase in the number of scientific staff to 31 at December 31,
1996 from 15 at December 31, 1995.
Gross profit. Gross profit increased 50.8% to $2.4 million in 1996 from $1.6
million in 1995. Gross profit decreased as a percentage of net contract
revenue to 46.1% in 1996 from 54.4% in 1995, reflecting an increase in the
Company's occupancy expenses in 1996 as a result of the 1996 construction of
chemical development and analytical laboratories and a cGMP manufacturing
facility, which resulted in higher charges for depreciation, utilities, and
rent. Additionally, the Company incurred higher payroll and related costs
because of the higher overall compensation required to attract and retain
scientific staff.
Licensing fees, milestones and royalties, net. Net licensing fees,
milestones and royalties were $900,000 in 1996. There were no net licensing
fees, milestones and royalties in 1995 as licensing fees, milestones and
royalties were offset by the technology incentive award. The $200,000
technology incentive award in 1995 was based on a $200,000 licensing fee
received from HMRI and the proceeds of a $2.0 million equity investment by
HMRI in the Company, net of costs incurred by the Company in connection with
the licensed technology. The increase in net licensing fees, milestones and
royalties was due to the achievement of the first prescribed milestone upon
issuance of the first non-U.S. patent to the Company with respect to
fexofenadine HCl in 1996. As a result of this patent issuance, the Company
became entitled to receive royalties on all sales of fexofenadine HCl in the
country in which the patent was issued.
Research and development. Research and development expense increased to
$245,000 in 1996 from $37,000 in 1995. The increase was primarily due to the
initiation of a research collaboration and the commencement of a related
biological assay study in February 1996.
Selling, general and administrative. Selling, general and administrative
expense increased 38.1% to $1.2 million in 1996 from $882,000 in 1995, and
represented 23.2% of net contract revenue in 1996 compared to 29.8% in 1995.
The increase was principally due to an increase in the number of
administrative staff due to the continued growth of the Company and increased
recruiting expenditures for scientific staff.
Income tax expense. Income tax expense increased to $637,000 in 1996 from
$253,000 in 1995. The effective tax rate was 34.1% in 1996 and 34.5% in 1995.
The increase in income tax expense was primarily a result of the increase in
royalty and licensing fees.
21
<PAGE>
QUARTERLY RESULTS OF OPERATIONS
The following table sets forth unaudited quarterly consolidated operating
results for each of the Company's last ten quarters. This information has been
prepared by the Company on a basis consistent with the Company's audited
consolidated financial statements and includes all adjustments, consisting
only of normal recurring adjustments, that management considers necessary for
a fair presentation of the data. These quarterly results are not necessarily
indicative of future results of operations. This information should be read in
conjunction with the Consolidated Financial Statements and Notes thereto of
the Company included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
QUARTER ENDED
--------------------------------------------------------------------------------------------
JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30, DEC. 31, MAR. 31, JUNE 30, SEPT. 30,
1996 1996 1996 1997 1997 1997 1997 1998 1998 1998
-------- --------- -------- -------- -------- --------- -------- -------- -------- =========
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net contract revenue.... $1,417 $1,373 $1,181 $1,509 $2,099 $2,211 $2,284 $2,873 $3,091 $3,685
Cost of revenue......... 609 748 1,055 928 1,025 1,173 1,208 1,508 1,744 2,068
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Gross profit from
contract revenue....... 808 625 126 581 1,074 1,038 1,076 1,365 1,347 1,617
Licensing fees,
milestones and
royalties, net......... -- -- 900 -- 450 1,801 27 7,289 3,959 2,964
Operating expenses:
Research and
development............ 87 25 128 100 181 162 183 209 132 194
Selling, general and
administrative......... 242 338 444 380 513 508 846 1,083 1,025 1,054
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total operating ex-
penses................. 329 363 572 480 694 670 1,029 1,292 1,157 1,248
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income from operations.. 479 262 454 101 830 2,169 74 7,362 4,149 3,333
Other income (expense):
Interest income
(expense), net......... 10 (7) (21) (15) (1) (8) 11 26 71 19
Other non-operating
income (expense), net.. 5 1 12 4 -- (19) (11) 4 1 (1)
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Total other income
(expense).............. 15 (6) (9) (11) (1) (27) -- 30 72 18
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income before income
taxes.................. 494 256 445 90 829 2,142 74 7,392 4,221 3,351
Income tax expense
(benefit).............. 172 80 151 15 319 588 25 2,853 1,463 1,348
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net income.............. $ 322 $ 176 $ 294 $ 75 $ 510 $1,554 $ 49 $4,539 $2,758 $2,003
====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
The Company's results of operations historically have fluctuated on a
quarterly basis and can be expected to continue to be subject to quarterly
fluctuations. Quarterly operating results can fluctuate as a result of a
number of factors, including the commencement, delay, cancellation or
completion of contracts; risks associated with fixed price contracts; the mix
of services provided; seasonal slowdowns; the timing of start-up expenses for
new services and facilities; and the timing and integration of acquisitions.
In particular, quarterly fluctuations in the Company's royalty revenue
relating to fexofenadine HCl, an antihistamine subject to seasonal demand, may
produce stronger quarterly fluctuations in the Company's consolidated results
of operations than those which have occurred in prior periods.
LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its business through cash flows from operations,
proceeds from borrowings and proceeds from a $2.0 million equity investment by
HMRI in March 1995. During the nine months ended September 30, 1998 and the
years ended December 31, 1997, 1996, and 1995, the Company generated $8.0
million, $1.6 million, $2.1 million and $200,000, respectively, in cash flow
from operations and raised $1.6 million and $1.0 million in its 1996 and 1995
borrowings, respectively. The increase in cash flow for the nine months ended
September 30, 1998 was principally due to an increase in net licensing fees,
milestones and royalties.
During the nine months ended September 30, 1998 and the years ended December
31, 1997, 1996, and 1995, total capital expenditures were $9.5 million,
$870,000, $2.6 million and $1.2 million, respectively. Capital expenditures
were incurred predominantly in connection with the Company's expansion of
service offerings (computational chemistry and analytical services) in 1997,
and in connection with the Company's 1998, 1996 and 1995 facilities
expansions. In December 1997, the Company began its most recent phase of
expansion at its
22
<PAGE>
main location in Albany, New York. The expansion has added 60,000 square feet
to its existing 30,000 square feet of laboratory and administrative space. The
expansion is estimated to cost $8.5 million for construction and an additional
$4.0 million for the purchase of laboratory instrumentation, software and
equipment upgrades. A total of $8.0 million for the expansion had been
incurred through September 30, 1998. The expansion is anticipated to be
completed by January 1999.
Working capital was $8.7 million at September 30, 1998, compared to $4.4
million at December 31, 1997, and $3.0 million at December 31, 1996. The
increase in working capital for the nine month period ended September 30, 1998
was primarily attributable to the milestones and royalties earned by the
Company on its license agreement with HMRI, less the associated technology
incentive compensation expense and income taxes. Of the $15.6 million in
milestones and royalties earned by the Company under the HMRI license
agreement during the nine months ended September 30, 1998, $3.0 million
constituted non-recurring milestone payments. While the Company will continue
to receive quarterly royalty payments under the HMRI license agreement, no
additional milestone payments are due under the agreement. As a result,
amounts earned under the agreement may be materially less than those earned
during the nine months ended September 30, 1998. In addition, future royalties
under the agreement are dependent upon future sales of fexofenadine HCl. The
Company does not participate in the manufacture, marketing or sale of
fexofenadine HCl by HMRI and relies entirely on the efforts of HMRI to
manufacture, market and sell this product. There can be no assurance that HMRI
will continue to be successful in marketing and selling fexofenadine HCl, that
fexofenadine HCl will continue to receive market acceptance or that the
Company will continue to receive royalties from HMRI in accordance with the
terms of the license agreement. The occurrence of any one of these events in
the future could have a material adverse impact on the Company's working
capital, liquidity and capital resources. The increase in working capital from
December 31, 1997 compared to December 31, 1996, was attributable primarily to
an increase in the number of scientific staff working on a greater number of
projects, resulting in a substantial increase in billings at December 31, 1997
compared to December 31, 1996.
The Company has available a Credit Facility to supplement its liquidity
needs. The Credit Facility consists of a $15 million, three-year, revolving
line of credit, which converts thereafter into a five-year term loan. The
Credit Facility expires in July 2006. As of September 30, 1998, the Company
had drawn an aggregate of $5.0 million under the Credit Facility. Amounts
outstanding under the Credit Facility bear interest at variable rates which
are based upon, at the option of the Company, the lender's prime rate or
LIBOR. The interest rate on such indebtedness at September 30, 1998 was 6.14%
per annum. The Credit Facility restricts or prohibits the Company from
incurring indebtedness, incurring liens, disposing of assets and requires the
Company to maintain certain financial ratios on an ongoing basis. The Credit
Facility is secured by a lien on substantially all of the assets of the
Company, other than its patents, and the assignment of the right to receive
royalty payments from HMRI under the license agreement.
The Company will use a portion of the net proceeds from this offering to
repay a portion of the outstanding indebtedness under the Credit Facility. The
Company believes that the remaining net proceeds from this offering, together
with cash generated from operations and borrowings under the Credit Facility,
will be sufficient to fund its anticipated working capital needs and capital
expenditures (other than financing necessary to complete future acquisitions,
if any) for at least the next 24 months. Future acquisitions, if any, could be
funded with cash from operations, the net proceeds of this offering,
borrowings under the Credit Facility and/or the issuance of debt or equity
securities. There can be no assurance that attractive acquisition
opportunities will be available to the Company or will be available at prices
and upon such other terms that are attractive to the Company. The Company
regularly evaluates potential acquisitions of other businesses, products and
product lines and may hold discussions regarding such potential acquisitions.
As a general rule, the Company will publicly announce such acquisitions only
after a definitive agreement has been signed. The Company currently has no
commitments or agreements with respect to any acquisition. In addition, in
order to meet its long-term liquidity needs or consummate future acquisitions,
the Company may incur additional indebtedness or issue additional equity and
debt securities, subject to market and other conditions. There can be no
assurance that such additional financing will be available on terms acceptable
to the Company or at all. The failure to raise the funds necessary to finance
its future cash requirements or consummate future acquisitions could adversely
affect the Company's ability to
23
<PAGE>
pursue its strategy and could negatively affect its operations in future
periods. See "Risk Factors--Risks Associated with Acquisitions."
On October 28, 1998, the Company paid $2.0 million in cash from borrowings
under the Credit Facility and issued $7.9 million in promissory notes in
connection with the Share Repurchase. The Company intends to repay the
outstanding principal balance under the notes out of the net proceeds of this
offering.
YEAR 2000 COMPLIANCE
The "Year 2000" issue concerns the potential exposures related to the
automated generation of business and financial misinformation resulting from
the application of computer programs which have been written using two digits,
rather than four, to define the application year of business transactions. The
Company's Year 2000 remediation and compliance program (the "Year 2000
Project") is managed by a Task Force consisting of representatives from all
major operational units within the Company. The Year 2000 Project is directed
by the Company's President with oversight provided by the Company's Board of
Directors. The Year 2000 Project Task Force's focus has been the functional
areas of informational technology, non-informational technology (embedded
processors), and customer/vendor Year 2000 assessment.
Informational technology. The Company's independent informational technology
consultants have conducted a comprehensive assessment of the Company's main
computer system to identify the company-wide hardware and software impact of
the Year 2000 problem. They determined that no material changes are required
for the Company's hardware and software to be considered Year 2000 compliant.
The Task Force is in the process of identifying the mission critical software
systems that will require Year 2000 compliance determinations. Since
substantially all of the Company's software are purchased "off the shelf"
packages, much of the remediation and testing process is dependent on the
accuracy of work performed by, and the Year 2000 compliance of, such purchased
software. The Company has initiated discussions with its informational
technology vendors and will monitor their Year 2000 compliance programs and
compliance of their products or services with required standards.
Non-informational technology. The Company's non-informational technology
systems consist mainly of embedded processors such as microcontrollers in
security, fire prevention, and climate control systems. The Company has
initiated discussions with vendors supplying such equipment and systems in
order to assess the possibility of a Year 2000 failure in such areas. Because
of the Company's recent physical expansion at its Albany, New York facility, a
majority of the centralized microcontroller systems have been either recently
installed or upgraded in capacity. Thus, the Company believes that a majority
of the systems put in place during this expansion either are currently Year
2000 compliant or will become Year 2000 compliant in the next three months.
Customer/vendor relationships. The Task Force is seeking to confirm the Year
2000 readiness of its material customers (such as Astra AB and Eli Lilly and
Company) and its key licensees (such as HMRI), along with the Company's
material vendors. The failure of any of its material customers or vendors to
be Year 2000 compliant could have an adverse effect on the Company's business,
financial position, and results of operations.
Due to the non-proprietary nature of the Company's software systems,
combined with the recent acquisition of a majority of the Company's
informational technology hardware, the Company anticipates that it will incur
no material costs to become Year 2000 compliant. Due to the unlikely nature of
internal failures at the Company, no contingency plans have been prepared to
address this problem. The most likely reasonable worst case scenario for the
Company with respect to the Year 2000 problem would be the failure of a
material customer or vendor, including an energy vendor, to be Year 2000
compliant such that the failure would either cause the Company to lose a
revenue stream or to experience a withholding of a vendor's goods or services
because of the situation. In the case of a material customer, this could
result in lost revenue, while in the case of a vendor, this could result in
higher than anticipated expenses, as the Company would be required to seek
alternative suppliers of these goods and services.
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BUSINESS
OVERVIEW
Albany Molecular Research is an integrated chemistry outsourcing company
that offers a broad range of chemistry research and development services to
pharmaceutical and biotechnology companies involved in drug discovery and
development. The Company offers services traditionally provided by chemistry
divisions within pharmaceutical companies, including medicinal chemistry,
chemical development, analytical chemistry services and small-scale
manufacturing. The Company's services are designed to permit pharmaceutical
and biotechnology companies to reduce overall drug development time and cost
and to pursue simultaneously a greater number of drug discovery and
development opportunities. Since its inception in 1991, the Company has
conducted over 400 projects for more than 100 customers. The Company achieved
a 66% compound annual growth rate in net contract revenue from 1993 to 1997.
In addition to its contract services, the Company conducts a limited amount of
proprietary research and development. The Company has developed and patented a
substantially pure form of, and a manufacturing process for, the active
ingredient in a new, non-sedating antihistamine marketed by HMRI as Allegra in
the Americas and as Telfast elsewhere. Pursuant to a licensing agreement
between the Company and HMRI, the Company has earned $19.3 million in
milestones and royalties through September 30, 1998 and is entitled to receive
ongoing royalties from HMRI based upon a percentage of sales of the product.
INDUSTRY OVERVIEW
The pace of drug discovery has accelerated significantly in recent years.
Fueled by advances in disciplines such as molecular biology, genomics and
high-throughput synthesis and screening, opportunities to develop therapeutics
for previously unmet or undermet medical needs are greater than ever before.
In addition, pharmaceutical and biotechnology companies are under increasing
pressure to deliver new drugs to market and reduce the time required for drug
development. In order to take advantage of these opportunities and to respond
to these pressures, many pharmaceutical companies have augmented their
internal research and development capacity through outsourcing. Similarly,
many biotechnology companies, constrained by cost pressures, have elected to
outsource rather than develop certain research and development functions in-
house. As a result of these factors, many pharmaceutical and biotechnology
companies are utilizing contract research organizations ("CROs"). The CRO
industry has grown dramatically over the last several years to meet these
needs. Industry analysts estimate that outsourcing represents approximately
10%, or $3.5 billion, of the $35 billion of research and development
expenditures made by pharmaceutical and biotechnology companies in 1996. While
outsourcing has traditionally been limited to the later stages of drug
development, such as clinical trial management and manufacturing, many
pharmaceutical and biotechnology companies are utilizing contract chemistry
service providers to complement or, in some cases, supplement internal
chemistry expertise. Currently, only a few companies provide chemistry
services for drug discovery and development, and have typically focused only
on selected portions of the process. Albany Molecular Research believes that
significant opportunities exist for a company that provides a broad range of
outsourced chemistry services throughout the drug discovery and development
process.
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The Importance of Chemistry in the Drug Discovery and Development Process
Although many scientific disciplines are required for new drug discovery and
development, chemistry and biology are at the center of this process. Chemists
and biologists typically work together to prepare and deliver new chemical
substances, develop laboratory models of disease, test compounds to identify
agents that demonstrate the desired activity and finally create a marketable
drug. Chemistry is an integral part of the drug discovery and development
process, which includes: (i) lead discovery -- the identification of a compound
that may be developed into a new drug; (ii) lead optimization -- an iterative
process of modifying the structure of a lead compound to optimize its
therapeutic properties; (iii) preclinical testing -- the testing of the
compound in increasingly complex animal models; (iv) clinical trials -- the
multi-phase testing of the compound for safety and efficacy in humans; and (v)
product commercialization -- the manufacture, marketing and sale of commercial
quantities of the approved drug.
DRUG DISCOVERY AND DEVELOPMENT PROCESS
- ----------- -------------- ------------- ---------- -------------------
LEAD LEAD PRECLINICAL CLINICAL PRODUCT
DISCOVERY OPTIMIZATION TESTING TRIALS COMMERCIALIZATION
- ----------- -------------- ------------- ---------- -------------------
Lead Discovery. The first major hurdle in drug discovery is the
identification of one or more lead compounds that interact with a biological
target, such as an enzyme, receptor or other protein, that may be associated
with a disease. A biological test or assay based on the target is developed and
used to test or "screen" chemical compounds. Medicinal chemistry is used to
synthesize these compounds rapidly and study the interaction between the three
dimensional molecular structures of the compounds and biological targets (i.e.,
structure-activity relationships (SARs)). The objective of lead discovery is to
identify a lead compound for further research and development.
Lead Optimization. Once a lead compound has been discovered, medicinal
chemistry is used to optimize that lead by modifying and synthesizing analogs
of active lead candidates with improved potency, selectivity and/or
pharmacokinetics (improved absorption, solubility, half-life and metabolism) in
order to identify a more promising drug candidate. This iterative process
involves the synthesis of compounds for biological testing, the analysis of the
screening results and the further design and synthesis of additional compounds
based upon the analysis of structure-activity relationships.
During lead optimization, specialists in chemical development perform the
scale up synthesis of a lead compound as that compound is advanced through the
drug discovery and development process. These scientists are experts in the
preparation of chemicals on a larger scale and focus on the efficiency,
economics, simplicity and safety of the preparation of such chemicals. Chemical
development is also an iterative process which may require progressive
improvements in chemical synthesis as subsequent repeat batches are prepared.
In addition to providing repeat synthesis, significant process research may be
required to refine existing or develop new synthesis processes. Also during the
lead optimization stage, analytical chemistry services are required for
identity and purity testing and method development.
Preclinical Testing. Following the selection of a lead compound during the
lead optimization stage, advanced preclinical testing is conducted in order to
evaluate the efficacy and safety of the lead compound prior to initiating human
clinical trials. The lead compound must demonstrate a scientifically proven
benefit in controlled and well defined biological tests in animal models, and
must exhibit this benefit at doses much lower than those at which side effects
would occur. During the lead optimization and preclinical testing phases, the
synthesis of additional analogs of the lead compound using medicinal chemistry
continues. Often a second compound, referred to as a backup compound or second
generation analog, is synthesized and enters the drug development cycle. In
addition, continued synthesis is desirable in order to prepare compounds of
significant diversity to broaden potential patent coverage. As a result, the
advancement of a lead compound into preclinical
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testing is often a catalyst which increases, rather than reduces, the need for
additional medicinal chemical synthesis. During this phase, specialists in
chemical development continue to conduct significant process research to
optimize the production of a compound.
Clinical Trials. During clinical trials several phases of studies are
conducted to test the safety and efficacy of a drug candidate. As study
populations increase and trial durations lengthen, larger quantities of the
active ingredient are required. The bulk active ingredient, and the formulated
drug product, must be prepared under cGMP guidelines. Analytical chemistry
services are critical to cGMP manufacturing. Additional preparations provide
an opportunity to further refine the manufacturing process, with the ultimate
goal of maximizing the cost effectiveness and safety of the synthesis prior to
commercialization.
Trends Toward Outsourcing of Chemistry Services
Pharmaceutical and biotechnology companies have in recent years increasingly
turned to CROs to manage their drug development processes more efficiently.
Most CROs have traditionally provided services to assist in the later stages
of drug development ranging from animal testing through clinical trials,
manufacturing, marketing and sales. In recent years, pharmaceutical and
biotechnology companies have sought to outsource services at progressively
earlier stages of drug discovery and development, including early-stage
chemistry. The Company believes the following trends have led and will
continue to lead to an increase in chemistry services outsourcing in drug
discovery and development:
Technological innovation in drug development. New technologies, such as
genomics, combinatorial chemistry and high-throughput screening, have
resulted in the identification of a larger number of promising biological
targets and associated active compounds, which has increased the demand for
chemistry services for lead discovery and optimization. Pharmaceutical and
biotechnology companies are increasingly turning toward chemistry
outsourcing to pursue the opportunities made possible by the use of these
new technologies.
Time to market pressures. Pharmaceutical and biotechnology companies are
under increasing pressure to reduce the time to bring new drugs to market
in order to maximize patent life and capture the benefits of being first to
market. Chemistry outsourcing permits pharmaceutical and biotechnology
companies to run multiple projects, and multiple phases of a particular
project, simultaneously.
Reallocation of resources between variable and fixed costs. Over the last
several years, drug companies have centralized their research and
development efforts, streamlined their internal operations and outsourced
certain functions, thereby converting previously fixed costs to variable
costs. Outsourcing chemistry services allows pharmaceutical and
biotechnology companies to use variable resources to maximize productivity
during periods of rapid growth or in response to cost containment
pressures.
Increasing complexity and purity requirements of new drug candidates. Many
drug candidates are technically demanding to synthesize, particularly in
commercial quantities. In addition, increased regulatory pressures for high
purity molecules earlier in the development process have led to more
complex chemistry requirements. Pharmaceutical companies are moving towards
outsourcing to third-party service providers to gain early access to
scalable manufacturing processes.
Need for chemistry expertise in the biotechnology industry. Many
biotechnology and emerging pharmaceutical companies lack the broad range of
expertise needed for the chemistry components of drug discovery and
development. These companies have elected to outsource either all or a
portion of their needs to third party service providers rather than make
the investment required to perform these functions in-house.
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BUSINESS STRATEGY
The Company's objective is to be the leading provider of comprehensive
outsourced chemistry research and development services to the pharmaceutical
and biotechnology industries. Key elements of the Company's business strategy
include the following:
Expand Service Offerings. The Company, since its inception, has expanded
its service offerings across a number of phases of drug discovery and
development to keep pace with the needs of its customers. In 1995, the
Company began offering analytical chemistry services derived from its
medicinal chemistry and chemical development capabilities and has recently
begun to provide combinatorial chemistry services. The Company has also
recently entered into a collaboration with a manufacturer in order to offer
its customers access to use the manufacturer's large-scale cGMP
manufacturing services with minimal disruption and delay. The Company may
expand its service capabilities through strategic acquisitions of companies
or technologies that complement the Company's capabilities.
Increase Capacity. The Company will seek to support its future growth by
increasing capacity both in terms of the number of scientists and the size
of its facilities within each of its service offerings. The Company has
added 39 scientists since January 1, 1997 and continually seeks to recruit
and hire additional experienced scientists. The Company is expanding its
Albany facility to more than triple its current laboratory space and
intends to expand its facilities to increase capacity and accommodate
additional scientists as necessary.
Expand Customer Relationships. The Company seeks to expand the number of
service offerings used by each of its customers by providing chemistry-
related services across many phases of drug discovery and development prior
to bulk manufacturing. In 1997, four of the Company's five largest
customers utilized more than one of its service offerings. The Company
believes that its existing customer base also provides an excellent source
of referrals.
Increase Customer Base. The Company is seeking to increase its customer
base in both domestic and international markets. The Company believes there
are significant opportunities for growth in geographic areas in which the
Company has not conducted significant marketing efforts to date.
Accordingly, the Company has recently expanded its U.S. and international
marketing efforts and will consider adding a physical presence in
additional locations as appropriate. See "--Marketing."
Capitalize on Proprietary Technology. Chemistry technology, such as that
offered by the Company, lies at the core of the proprietary aspects of drug
development. In connection with its contract chemistry services, the
Company seeks opportunities to obtain contractual terms which may entitle
the Company to milestones and/or royalties with respect to compounds or
processes developed in conjunction with its customers. Independent of its
contract chemistry services, the Company seeks to identify and develop
possible proprietary compounds or processes. The Company currently is
investigating a number of compounds for their development potential.
SERVICE OFFERINGS
The Company is an integrated chemistry outsourcing company that offers a
broad range of chemistry research and development services to pharmaceutical
and biotechnology companies involved in drug discovery and development. The
Company's service offerings include medicinal chemistry, chemical development,
analytical chemistry services and cGMP manufacturing. The significant
experience and expertise of the Company's scientists enable the Company to
provide high-quality, sophisticated chemistry services tailored to its
customers' specific needs. The Company's services are designed to permit
pharmaceutical and biotechnology companies to reduce overall drug development
time and costs and to pursue simultaneously a greater number of drug discovery
and development opportunities.
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The chart below sets forth the types of chemistry services which typically
are employed in the different phases of drug discovery and development and
those which are offered by the Company.
[CHART WITH FIVE STAGES OF DRUG DISCOVERY AND DEVELOPMENT ON THE
HORIZONTAL AXIS AND THE COMPANY'S FOUR SERVICE OFFERINGS ON THE VERTICAL
AXIS, WITH BARS INDICATING (I) THE CURRENT SERVICES OFFERED BY THE
COMPANY, (II) SERVICES PROVIDED BY COLLABORATIONS, AND (III) SERVICES
NOT PROVIDED BY THE COMPANY]
Medicinal Chemistry
The chemistry functions associated with the identification and optimization
of a lead compound are handled by chemists specializing in medicinal
chemistry. The role of the medicinal chemist is to synthesize small quantities
of new and potentially patentable compounds for biological testing. The
Company's medicinal chemistry group assists its customers in the pursuit of
new drug leads as well as in lead development and optimization using modern
structure-based drug design. The Company's medicinal chemistry group uses
tools such as computational and combinatorial chemistry in conjunction with
the traditional techniques of medicinal drug development.
Medicinal chemistry services provided by the Company include:
. Design and synthesis of potential lead compounds;
. Design, modification and synthesis of lead compounds with improved
potency, selectivity and pharmacokinetics;
. Development and synthesis of analogs of lead compounds to broaden patent
protection; and
. Resynthesis and expansion of customers' chemistry libraries by employing
combinatorial and computational chemistry.
The following is an example of services provided by the Company's medicinal
chemistry group:
A customer recently engaged the Company's medicinal chemistry group to
pursue a novel therapeutic compound for cardiovascular disease. Scientists at
the Company designed and synthesized over 400 compounds which were
subsequently screened by the customer. After a lead compound was identified
from that series, the customer engaged the Company's chemical development
group to perform scale up and process development for the lead compound. The
Company then synthesized a batch of the compound for use in clinical trials,
which are
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ongoing. During the course of this project, the Company's analytical chemistry
staff performed analytical method development, validation and release testing,
as well as provided regulatory support for the synthesis of the cGMP batch.
The customer has filed a patent application in which two of the three named
inventors were Albany Molecular Research scientists.
As of November 30, 1998, the Company had 48 employees, including 29 Ph.D.
scientists, working in its medicinal chemistry department. The four most
senior scientists in the medicinal chemistry department together have 62 years
of experience in chemistry research and development. As of November 30, 1998,
the Company was working on 15 active medicinal chemistry projects for eight
customers, including Astra AB, Pfizer Inc. and Sphinx Pharmaceuticals, a
division of Eli Lilly and Company ("Sphinx").
Chemical Development
Chemical development involves the scale up synthesis of a lead compound.
Processes developed for small scale production of a compound may not be
suitable for larger scale production because they may be uneconomic,
environmentally unacceptable or present safety concerns. The Company's
chemical development scientists design novel or improved methods and processes
suitable for medium to large scale production. The Company's chemical
development scientists possess expertise in a broad range of structural
classes of molecules and are able to address a wide variety of chemical
synthesis and production problems.
Chemical development services provided by the Company include:
. Process research, consisting of the improvement or modification of
existing processes;
. Discovery and development of new product methodologies to prepare
products;
. Process development and production of single-isomer molecules; and
. Development of practical purification techniques.
The following is an example of the services provided by the Company's
chemical development group:
A customer recently engaged the Company's chemical development group for a
project in which the Company's scientists reduced the time and improved the
safety and overall yield of a customer's manufacturing process. The original
process involved 15 steps and several dangerous high-temperature, high-
pressure reactions, noxious reagents and difficult crystallizations. The
Company's scientists shortened the process to ten steps, eliminated the
undesirable reactions, reagents and crystallizations and doubled the overall
yield. The Company prepared a total of 11 kilograms of final product,
including three kilograms produced under cGMP guidelines for use in clinical
trials.
As of November 30, 1998, the Company had 32 employees, including 21 Ph.D.
scientists, working in its chemical development department. The four most
senior scientists in the chemical development department together have 72
years of experience in chemistry research and development. As of November 30,
1998, the Company was working on 16 active chemical development projects for
eleven customers, including Pfizer Inc., Cambrex Corporation, Triangle
Pharmaceuticals, Inc. and the National Institute on Drug Abuse.
Analytical Chemistry Services
The Company's analytical chemistry services include identity and purity
testing, method development and validation, and stability testing. The Company
also provides regulatory consulting services, including the preparation of
regulatory filings, chemistry manufacturing and control documentation and
testing, and scientific and technical writing. The cGMP guidelines mandated by
the FDA necessitate employing analytical support for drugs under development,
as well as drugs already on the market. The Company's analytical services are
designed to support its customers' compliance with these guidelines. The
Company typically provides these services at several stages throughout drug
discovery and development starting with lead optimization.
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Analytical services provided by the Company include:
. Test method development and validation;
. Quality control and release testing;
. High performance liquid and/or gas chromatography (including purity
assessment), separation of enantiomers and identification of impurities;
. Spectroscopic and nuclear magnetic resonance services;
. Stability studies for bulk active ingredients and formulated drug
products; and
. Preparation of regulatory documentation, including chemistry
manufacturing and control (CMC) sections of investigational new drug
applications ("IND"), new drug applications ("NDA") and Drug Master
Files.
As of November 30, 1998, the Company had 12 employees, including two Ph.D.
scientists, working in its analytical chemistry department. The four most
senior scientists in the Company's analytical services department together
have 59 years of experience in analytical chemistry and regulatory affairs.
cGMP Manufacturing Services
The Company provides chemical synthesis and manufacturing services for its
customers under cGMP guidelines. All facilities and manufacturing techniques
used in the manufacture of products for clinical use or for sale in the United
States must be operated in conformity with cGMP guidelines as established by
the FDA. The Company's Albany facility has production facilities, and
quarantine and restricted access storage necessary for cGMP manufacturing. The
Company currently has the capacity to produce laboratory scale amounts (1 to
approximately 10 or more kilograms) of bulk active ingredients (chemicals).
ALLEGRA/TELFAST ROYALTY AND LICENSING ARRANGEMENT
Fexofenadine HCl (marketed as Allegra in the Americas and as Telfast
elsewhere), a new, non-sedating antihistamine, was developed to address
certain rare side effects associated with its predecessor, Seldane. In 1992,
Seldane was the leading antihistamine on the market with annual sales
approaching $800 million. Seldane, a pro-drug, was rapidly converted by the
liver into its active form, a metabolite known as terfenadine carboxylic acid
("TAM"). A very small percent of Seldane users exhibited ventricular
arrhythmias, a side effect sometimes associated with Seldane. A desire to
eliminate the side effect caused Marion Merrell Dow Inc. (now HMRI) to develop
a synthetic form of the Seldane active metabolite.
Independent of HMRI's development of TAM, the Company developed a new
process to prepare TAM in a purer form. The Company subsequently filed a
patent application in which this process chemistry, and the substantially pure
TAM it produced, fexofenadine HCl, were claimed. The Company has obtained
several U.S. and foreign patents relating to this technology. The Company's
issued patents relating to TAM expire between 2013 and 2015. In March 1995,
the Company entered into a license agreement with HMRI. Under the terms of the
license agreement, the Company granted HMRI an exclusive, worldwide license to
any patents issued to the Company related to its original TAM patent
applications. In connection with the licensing arrangement, HMRI made a $2.0
million equity investment in the Company. Pursuant to the license agreement,
HMRI has paid the Company an initial license fee of $200,000 and, through
September 30, 1998, the Company has earned $6.7 million in milestone payments
and $12.6 million in royalties. HMRI is obligated under the license agreement
to pay ongoing royalties to the Company based upon sales of fexofenadine HCl.
The Company is not entitled, however, to receive any additional milestone
payments under the license agreement. Sales of fexofenadine HCl in the U.S.
were approximately $212 million for the year ended December 31, 1997 and
approximately $339 million for the nine months ended September 30, 1998. See
"Risk Factors--Risks Related to the Allegra/Telfast Royalty" and "--
Proprietary Technology; Unpredictability of Patent Protection."
CURRENT COLLABORATIONS; CUSTOMERS
The Company has entered into a number of collaborations with biotechnology
and pharmaceutical companies that provide services or possess technology
complementary to those provided or possessed by the Company. These
collaborations are focused on particular aspects of the drug discovery or
development process.
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In January 1998, the Company entered into an arrangement with Sphinx
Pharmaceuticals (a division of Eli Lilly and Company) whereby the Company will
use Sphinx technology to resynthesize the Sphinx combinatorial chemistry
library. The Sphinx agreement terminates, in part, upon the completion of the
resynthesis of the Sphinx combinatorial library (which is estimated to occur
in December 1999) and may be terminated by Sphinx upon six months notice. The
Company has been granted a non-exclusive license to use certain parts of the
Sphinx technology, excluding the Lilly Combinatorial Library (as defined in
the Sphinx agreement), after certain milestones have been met and subject to
the payment of royalties by the Company. During the three years following the
expiration of the Sphinx research program, the Company will pay Sphinx
royalties based upon the compensation received by the Company under agreements
with third parties for the use of Sphinx technology. In addition, the Company
is obligated to pay Sphinx ongoing royalties based upon the sales of products
comprising compounds discovered or developed by the Company using Sphinx
technology.
In February 1997, the Company began a collaboration with Cambrex Corporation
("Cambrex"), a New Jersey-based specialty chemistry manufacturing company
which provides large-scale synthesis of pharmaceutical intermediates and
active pharmaceutical ingredients. Cambrex currently has five cGMP
manufacturing facilities in the United States and Europe. The Company, through
Cambrex, can offer its customers the ability to move from small to full-scale
production with minimal disruption and delay. Pursuant to the agreement
between Cambrex and the Company, Cambrex is obligated to pay the Company
royalties based upon projects referred to Cambrex by the Company. In addition,
Cambrex has engaged the Company to develop processes specifically designed to
fit its large-scale cGMP manufacturing capabilities. According to the
agreement, Cambrex intends to fund such projects to an annual level of at
least $750,000. The agreement between Cambrex and the Company will terminate
on April 1, 2000, unless extended.
In October 1998, the Company entered into an agreement with the National
Institute on Drug Abuse, a division of the National Institutes of Health, one
of eight health agencies under the Federal Department of Health and Human
Services ("NIDA") for the manufacture of bulk drug substances to be used in
NIDA's research for the study and treatment of drug abuse and addiction.
NIDA's scientific research programs address the most fundamental and essential
questions about drug abuse, ranging from its causes and consequences, to its
prevention and treatment. The contract, awarded through a competitive bidding
process, requires that NIDA's potential drug candidates be manufactured by the
Company under the strict requirements of cGMP. The Company was subsequently
awarded task orders under this contract for the production of two such
research compounds.
Since its inception, the Company has conducted over 400 projects for more
than 100 customers. The Company's customers include pharmaceutical companies,
biotechnology companies, agricultural companies, fine chemical companies and
contract chemical manufacturers. Contract revenue from Astra AB accounted for
23.7% of the Company's aggregate net contract revenue plus other operating
revenue (including licensing fees, milestones and royalties) for the year
ended December 31, 1997. No other customers accounted for more than 10% of the
Company's aggregate net contract revenue plus other operating revenue
(including licensing fees, milestones and royalties) for such period. For the
year ended December 31, 1997, net contract revenue from the Company's three
largest customers represented approximately 29%, 11% and 9% of total net
contract revenue (excluding licensing fees, milestones and royalties),
respectively. For the nine months ended September 30, 1998, net contract
revenue from the Company's three largest customers represented approximately
18%, 17% and 15% of total net contract revenue (excluding licensing fees,
milestones and royalties), respectively.
MARKETING
Since the Company's inception, its senior management and department heads
have marketed its services. Because its customers are typically highly skilled
scientists, the Company's use of its technical experts in marketing has
allowed it to establish strong customer relationships. In addition to
marketing by senior management, the Company has relied on the marketing
efforts of consultants, both in the United States and abroad. The Company
markets its services directly to customers through targeted mailings, meetings
with senior management of pharmaceutical and biotechnology companies,
maintenance of an extensive Internet website, participation in trade
conferences and shows, and selected advertisements in scientific and trade
journals. The Company has also received a significant amount of business from
customer referrals.
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Historically, the Company has focused its marketing efforts in the eastern
United States and western Europe. Recently, the Company has expanded its
marketing efforts to include the western United States, Japan and the Far
East. Such efforts include increased presence at trade shows in such areas,
advertising in trade publications, visits by senior management to potential
clients and the retention of independent marketing consultants.
COMPETITION
The Company believes that the successful recruitment and retention of
qualified Ph.D., masters and bachelor level scientists is a key element in
achieving its strategic goals. The Company believes that as competitive
pressures in the pharmaceutical industry to produce lead compounds increase,
the recruitment and retention of chemists will become increasingly
competitive. In order to meet this challenge, the Company actively recruits
scientists at colleges and universities, through third-party recruitment firms
and through contacts of the Company's employees. The Company believes the
sophisticated chemistry performed in the course of its business will assist it
in attracting and retaining qualified scientists. As an incentive directed
toward the recruitment and retention of highly skilled scientists, the Company
has a program which provides that any scientist or scientists employed by the
Company named as an inventor on a patent will receive in the aggregate 10% of
any net licensing, milestone and royalty revenues received by the Company with
respect to such patent. The Company offers competitive salaries and benefits
to its scientists.
The Company faces competition based on a number of factors, including size,
relative expertise and sophistication, speed and costs of identifying and
optimizing potential lead compounds and of developing and optimizing chemical
processes. The Company competes with the research departments of
pharmaceutical companies, biotechnology companies, combinatorial chemistry
companies, contract research companies and research and academic institutions.
Many of these competitors have greater financial and other resources and more
experience in research and development than the Company. Smaller companies may
also prove to be significant competitors, particularly through arrangements
with large corporate collaborators.
Historically, pharmaceutical companies have maintained close control over
their research and development activities, including the synthesis, screening
and optimization of chemical compounds and the development of chemical
processes. Many of these companies, which represent a significant potential
market for the Company's products and services, are developing or already
possess in-house technologies and services offered by the Company. Academic
institutions, governmental agencies and other research organizations are also
conducting research in areas in which the Company provides services either on
their own or through collaborative efforts.
The Company anticipates that it will face increased competition in the
future as new companies enter the market and advanced technologies become
available. The Company's services and expertise may be rendered obsolete or
uneconomical by technological advances or entirely different approaches
developed by one or more of the Company's competitors. The existing approaches
of the Company's competitors or new approaches or technologies developed by
the Company's competitors may be more effective than those developed by the
Company. There can be no assurance that the Company's competitors will not
develop more effective or more affordable technologies or services thus
rendering the Company's technologies and/or services obsolete, uncompetitive
or uneconomical.
PATENTS AND PROPRIETARY RIGHTS
The Company's success will depend, in part, on its ability to obtain and
enforce patents, protect trade secrets, obtain licenses to technology owned by
third parties when necessary, and conduct its business without infringing the
proprietary rights of others. The patent positions of pharmaceutical, medical
products and biotechnology firms can be uncertain and involve complex legal
and factual questions. There can be no assurance that any patent applications
will result in the issuance of patents or, if any patents are issued, whether
they will provide significant proprietary protection or commercial advantage,
or will not be circumvented by others. In the event a third party has also
filed one or more patent applications for inventions which conflict with those
of the Company, the Company may have to participate in interference
proceedings declared by the PTO to determine
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priority of invention, which could result in the loss of any opportunity to
secure patent protection for the inventions and the loss of any right to use
the inventions. Even if the eventual outcome is favorable to the Company, such
proceedings could result in substantial cost to the Company. The filing and
prosecution of patent applications, litigation to establish the validity and
scope of patents, assertion of patent infringement claims against others and
the defense of patent infringement claims by others can be expensive and time
consuming. There can be no assurance that in the event that any claims with
respect to any of the Company's patents, if issued, are challenged by one or
more third parties, that any court or patent authority ruling on such
challenge will determine that such patent claims are valid and enforceable. An
adverse outcome in such litigation could cause the Company to lose exclusivity
afforded by the disputed rights. If a third party is found to have rights
covering products or processes used by the Company, the Company could be
forced to cease using the technologies covered by such rights, could be
subject to significant liability to such third party, and could be required to
license technologies from such third party. Furthermore, even if the Company's
patents are determined to be valid, enforceable, and broad in scope, there can
be no assurance that competitors will not be able to design around such
patents and compete with the Company and its licensees using the resulting
alternative technology.
The Company has a policy of seeking patent protection for patentable aspects
of its proprietary technology. The Company owns five United States patents,
three New Zealand patents and one Australian patent relating to fexofenadine
HCl and certain related manufacturing processes. The Company's United States
issued patents expire between 2013 and 2015 and New Zealand and Australian
patents expire in 2014. The Company seeks patent protection with respect to
products and processes developed in the course of its activities when it
believes such protection is in its best interest and when the cost of seeking
such protection is not inordinate. However, no assurance can be given that any
patent application will be filed, that any filed applications will result in
issued patents or that any issued patents will provide the Company with a
competitive advantage or will not be successfully challenged by third parties.
The protections afforded by patents will depend upon their scope and validity,
and others may be able to design around the Company's patents.
The Company may also enter into collaborations or other arrangements with
its customers whereby the Company retains certain ownership rights or may be
entitled to receive milestones and royalties with respect to proprietary
technology developed by the Company during the contract period. However, many
of the Company's contracts with its customers provide that ownership of
proprietary technology developed by the Company in the course of work
performed under the contract is vested in the customer, with the Company
retaining little or no ownership interest.
The Company also relies upon trade secrets and proprietary know-how for
certain unpatented aspects of its technology. To protect such information, the
Company requires all employees, consultants and licensees to enter into
confidentiality agreements limiting the disclosure and use of such
information. There can be no assurance that these agreements provide
meaningful protection or that they will not be breached, that the Company
would have adequate remedies for any such breach, or that the Company's trade
secrets, proprietary know-how, and technological advances will not otherwise
become known to others. In addition, there can be no assurance that, despite
precautions taken by the Company, others have not and will not obtain access
to the Company's proprietary technology. Further, there can be no assurance
that third parties will not independently develop substantially equivalent or
better technology.
GOVERNMENT REGULATION
Although the manufacture, transportation and storage of the Company's
products are subject to certain laws and regulations discussed in the last
paragraph of this section, the sale of the Company's services is not subject
to significant government regulation. However, the Company's future
profitability is dependent on the sales of pharmaceuticals and other products
developed by the Company's customers and collaborators. Regulation by
governmental entities in the United States and other countries will be a
significant factor in the production and marketing of any pharmaceutical
products that may be developed by a customer of the Company. The nature and
the extent to which such regulation may apply to the Company's customers will
vary depending on the nature
34
<PAGE>
of any such pharmaceutical products. Virtually all pharmaceutical products
developed by the Company's customers will require regulatory approval by
governmental agencies prior to commercialization. Human pharmaceutical
products are subject to rigorous preclinical and clinical testing and other
approval procedures by the FDA and by foreign regulatory authorities. Various
federal and, in some cases, state statutes and regulations also govern or
influence the manufacturing, safety, labeling, storage, record keeping and
marketing of such pharmaceutical products. The process of obtaining these
approvals and the subsequent compliance with appropriate federal and foreign
statutes and regulations are time consuming and require the expenditure of
substantial resources.
Generally, in order to gain FDA approval, a company first must conduct
preclinical studies in the laboratory and in animal models to gain preliminary
information on a compound's efficacy and to identify any safety problems. The
results of these studies are submitted as a part of an Investigational New
Drug Application ("IND") that the FDA must review before human clinical trials
of an investigational drug can start. In order to commercialize any products,
the Company or its customer will be required to sponsor and file an IND and
will be responsible for initiating and overseeing the clinical studies to
demonstrate the safety and efficacy that are necessary to obtain FDA approval
of any such products. Clinical trials are normally done in three phases and
generally take two to five years, but may take longer, to complete. After
completion of clinical trials of a new product, FDA and foreign regulatory
authority marketing approval must be obtained. If the product is classified as
a new drug, the Company or its customer will be required to file an NDA and
receive approval before commercial marketing of the drug. The testing and
approval processes require substantial time, effort and expense and there can
be no assurance that any approval will be granted on a timely basis, if at
all. NDAs submitted to the FDA can take several years to obtain approval. Even
if FDA regulatory clearances are obtained, a marketed product is subject to
continual review, and later discovery of previously unknown problems or
failure to comply with the applicable regulatory requirements may result in
restrictions on the marketing of a product or withdrawal of the product from
the market as well as possible civil or criminal sanctions. For marketing
outside the United States, the Company will also be subject to foreign
regulatory requirements governing human clinical trials and marketing approval
for pharmaceutical products. The requirements governing the conduct of
clinical trials, product licensing, pricing and reimbursement vary widely from
country to country.
All facilities and manufacturing techniques used in the manufacture of
products for clinical use or for sale in the United States must be operated in
conformity with cGMP guidelines as established by the FDA. The Company's
facilities are subject to scheduled periodic regulatory inspections to ensure
compliance with cGMP requirements. Failure on the part of the Company to
comply with applicable requirements could result in the termination of ongoing
research or the disqualification of data for submission to regulatory
authorities. A finding that the Company had materially violated cGMP
requirements could result in additional regulatory sanctions and, in severe
cases, could result in a mandated closing of the Company's facilities which
would materially and adversely affect the Company's business, financial
condition and results of operations.
The research and development processes of the Company involve the controlled
use of hazardous materials. The Company is subject to federal, state and local
laws and regulations governing the use, manufacture, storage, handling and
disposal of such materials and certain waste products. Although the Company
believes that its activities currently comply with the standards prescribed by
such laws and regulations, the risk of accidental contamination or injury from
these materials cannot be eliminated. In the event of such an accident, the
Company could be held liable for any damages that result and any such
liability could exceed the resources of the Company. In addition, there can be
no assurance that the Company will not be required to incur significant costs
to comply with environmental laws and regulations in the future.
35
<PAGE>
EMPLOYEES
As of November 30, 1998, the Company had 134 employees, 57 of whom have
obtained a Ph.D. degree in chemistry. Of such employees, 48 were engaged
primarily in medicinal chemistry services (including 29 Ph.D.s), 32 were
engaged primarily in chemical development services (including 21 Ph.D.s), 12
were engaged primarily in analytical services (including two Ph.D.s), six were
engaged primarily in cGMP manufacturing services and 36 were engaged in
management and administration. None of the Company's employees are covered by
a collective bargaining agreement. The Company considers its relations with
its employees to be good.
PROPERTIES
The Company has two operating locations. The Company leases a two-story
facility in Albany, New York, of which it currently occupies 90,000 square
feet. The lease for this facility has a 10 year term, which expires on
November 30, 2007, and provides the Company an option to purchase the building
within the next five years for $3.5 million. The Company's Albany facility has
eight medicinal chemistry, four chemical development and two analytical
laboratories, five dedicated cGMP manufacturing suites, four segregated cGMP
dryer rooms, three analytical instrumentation rooms, and two areas for
stability chambers. The Company's recent expansion is estimated to cost $12.5
million and is expected to be completed by January 1999. The Company also
leases approximately 15,000-square feet of laboratory facilities in
Rensselaer, New York. The lease for these laboratories expires June 30, 2001.
The Company has the option to renew this lease on a year-to-year basis. The
Company's Rensselaer facility has three medicinal chemistry, one combinatorial
chemistry and three chemical development laboratories. In 1997, the Company
had total operating lease costs of $240,000.
LEGAL PROCEEDINGS
The Company, from time to time, may be involved in various claims and legal
proceedings arising in the ordinary course of its business. The Company is not
currently a party to any such claims or proceedings which, if decided
adversely to the Company, would either individually or in the aggregate have a
material adverse effect on the Company's business, financial condition or
results of operations.
36
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES
The executive officers, directors and key employees of the Company, and
their ages as of November 30, 1998, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Thomas E. D'Ambra, Ph.D. ...... 42 Chairman of the Board of Directors and
Chief Executive Officer
Donald E. Kuhla, Ph.D. ........ 56 President, Chief Operating Officer and
Director
Chester J. Opalka.............. 50 Vice President, Senior Research Chemist and
Director
Vice President, Commercial Operations and
Lawrence D. Jones, Ph.D. ...... 47 Quality
Michael P. Trova, Ph.D. ....... 37 Vice President, Medicinal Chemistry
Harold Meckler, Ph.D. ......... 42 Vice President, Chemical Development
James J. Grates................ 37 Director of Human Resources
Controller and acting Chief Financial
Rodney A. Tillinghast(1)....... 32 Officer
Anthony P. Tartaglia,
M.D.(2)(3).................... 66 Director
Frank W. Haydu(2)(3)........... 51 Director
</TABLE>
- ----------
(1) Mr. Tillinghast, the Company's Controller, has been serving as the
Company's acting Chief Financial Officer since the departure on October
28, 1998 of the Company's former chief financial officer. The Company is
actively searching for a new chief financial officer and expects to fill
this position by the end of the first quarter of 1999.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee.
Thomas E. D'Ambra, Ph.D. co-founded the Company in 1991 and currently serves
as the Company's Chairman of the Board and Chief Executive Officer. Prior to
co-founding the Company, Dr. D'Ambra served as the Vice President, Chemistry
and co-founder of Coromed, Inc., a traditional development CRO, from 1989 to
1991 and Group Leader and Senior Research Chemist with Sterling Winthrop,
Inc., a pharmaceutical company, from 1982 to 1989. Dr. D'Ambra holds a B.A.
degree in chemistry from the College of the Holy Cross and a Ph.D. in organic
chemistry from the Massachusetts Institute of Technology.
Donald E. Kuhla, Ph.D. has served as the Company's President and Chief
Operating Officer since July 1998 and as a Director of the Company since
October 1995. Prior to joining the Company as an employee, Dr. Kuhla served as
the Vice President and Chief Technical Officer of Plexus Ventures, Inc., a
biotechnology investment and consulting company, from February 1994 to June
1998, the Chief Operating Officer of Hybridon, Inc., a pharmaceutical company,
and Enzymatics, Inc., a medical diagnostics company, from November 1990 to
February 1994, in various positions with Rorer Group, Inc., a pharmaceutical
company, from 1981 to 1990 and in various positions with Pfizer Inc., a
pharmaceutical company, from 1968 to 1981. Dr. Kuhla has a B.A. degree in
chemistry from New York University and a Ph.D. in organic chemistry from Ohio
State University.
Chester J. Opalka co-founded the Company in 1991, currently serves as a Vice
President and Senior Research Chemist of the Company and has served as a
Director of the Company since its inception. Prior to co-founding the Company,
Mr. Opalka served as a Senior Research Chemist with Coromed, Inc. from January
1991 to September 1991 and in various positions with Sterling Winthrop, Inc.
from 1970 to 1991. Mr. Opalka holds a B.S. degree in chemistry from Niagara
University.
Lawrence D. Jones, Ph.D. has served as the Company's Vice President,
Commercial Operations and Quality since June 1998 and served as the Company's
Vice President, Operations from March 1998 to June 1998. Prior to joining the
Company, Dr. Jones served as the Executive Vice President and co-founder of
Inhalon Pharmaceuticals, Inc., a manufacturer and distributor of generic
inhalation anesthetics, from August 1991 to February 1998, the Director of
Marketing and Development for Kaneka America Corporation, a manufacturer and
distributor of chemical intermediates, from 1988 to 1991, and a Sales and
Marketing Manager with Johnson Matthey, Inc., a pharmaceutical manufacturer,
from 1980 to 1998. Dr. Jones holds a B.A. degree in chemistry from Cornell
University and a Ph.D. in organic chemistry from Duke University.
37
<PAGE>
Michael P. Trova, Ph.D. has served as the Company's Vice President,
Medicinal Chemistry since March 1998 and served as the Company's Director of
Medicinal Chemistry from August 1996 to March 1998 and as the Company's
Assistant Director of Medicinal Chemistry from August 1995 to August 1996.
Prior to joining the Company, Dr. Trova was a staff scientist with American
Cyanamid, Lederle Laboratories, a pharmaceutical company, from 1989 to August
1995 and a post-doctoral researcher at the Massachusetts Institute of
Technology from 1987 to 1989. Dr. Trova holds a B.S. degree in chemistry from
Rensselaer Polytechnic Institute and a Ph.D. in organic chemistry from Ohio
State University.
Harold Meckler, Ph.D. has served as the Company's Vice President, Chemical
Development since May 1997 and served as the Company's Director of Chemical
Development from August 1995 to May 1997. Prior to joining the Company, Dr.
Meckler served as Manager, Organic Chemistry of Telor Ophthalmic
Pharmaceuticals, Inc., a biopharmaceutical company, from March 1994 to August
1995, in various capacities with Ciba-Geigy Corporation, a pharmaceutical
company, from 1984 to March 1994, and Senior Research Chemist, Chemical
Development with Sterling Winthrop, Inc. from 1982 to 1984. Dr. Meckler holds
a B.S. degree in chemistry from the University of Maryland, College Park and a
Ph.D. in organic chemistry from the State University of New York, Buffalo.
James J. Grates has served as the Company's Director of Human Resources
since December 1996. Prior to joining the Company, Mr. Grates was Executive
Vice President, Corporate Services with Corporate Health Dimensions, a health
care service provider company, from April 1995 to December 1996 and Manager of
Human Resources with Norton Performance Plastics, Inc., a plastic
manufacturer, from 1990 to September 1995. Mr. Grates holds a B.S. degree in
business administration from Syracuse University and an A.A.S. degree in
marketing from Herkimer County Community College.
Rodney A. Tillinghast, CPA has served as the Company's controller since
September 1995 and as acting Chief Financial Officer since October 1998. Prior
to joining the Company, Mr. Tillinghast served as an accountant in various
positions, including senior auditor, with KPMG Peat Marwick LLP from September
1992 to September 1995 and as a cost accountant with AL Tech Specialty Steel
Corporation, a stainless and tool steel manufacturer, from 1988 to 1992. Mr.
Tillinghast holds a B.S. degree in accounting from the State University of New
York, College at Fredonia, and a M.S. in accounting from the State University
of New York, Albany.
Anthony P. Tartaglia, M.D. has served as a Director of the Company since
October 1995. Dr. Tartaglia served as a physician with Albany Medical Center
from 1984 until his retirement in June 1998 and also served as Dean of Albany
Medical College from 1990 to June 1995. Dr. Tartaglia previously served as
Executive Director of the Albany Medical Center Hospital from 1987 to 1990,
Senior Vice President for Patient Care of the Albany Medical Center from 1984
to 1987 and as Chief of Medicine at St. Peter's Hospital in Albany from 1975
to 1984. Dr. Tartaglia is also a director of Albank Financial Corporation, a
bank holding company. Dr. Tartaglia holds a B.S. degree in biology from Union
College and a M.D. from the University of Rochester Medical School.
Frank W. Haydu III has served as a Director of the Company since October
1998. Mr. Haydu has served as the Chairman of Haydu & Lind, LLC, a senior
living development company, since co-founding it in June 1996. Mr. Haydu also
recently served as the interim Commissioner of Education of Massachusetts from
February 1998 to July 1998. Prior to co-founding Haydu & Lind, LLC, Mr. Haydu
served as the interim President and Chief Executive Officer of the New England
Medical Center Hospitals, Inc. from October 1995 to May 1996, a Senior Advisor
to Smith Barney, Inc., an investment bank, from August 1994 to August 1995,
and as a Managing Director of Kidder, Peabody & Company, Inc., an investment
bank, from 1990 to August 1994. Mr. Haydu also serves as a director of several
private companies. Mr. Haydu holds a B.A. degree in economics from Muhlenberg
College.
38
<PAGE>
BOARD OF DIRECTORS
The Company currently has five directors. The Company's Board of Directors
is divided into three classes, with the members of each class of directors
serving for staggered three-year terms. The Board consists of two Class I
Directors (Messrs. Opalka and Haydu), one Class II Director (Dr. Kuhla) and
two Class III Directors (Drs. D'Ambra and Tartaglia), whose terms will expire
at the 1999, 2000 and 2001 annual meetings of stockholders, respectively.
Within 90 days after the completion of this offering, the Company intends to
expand the Board of Directors and elect one additional Class II Director, who
will not be an officer or employee of the Company.
The Board of Directors has established an Audit Committee (the "Audit
Committee") and a Compensation Committee (the "Compensation Committee"). The
Audit Committee recommends the independent accounting firm to be appointed to
audit the Company's financial statements and to perform services related to
such audit, reviews the scope and results of such audit with the independent
accountants, reviews the Company's year-end operating results with management
and the independent accountants, considers the adequacy of the internal
accounting procedures and considers the effect of such procedures on the
accountants' independence. The Audit Committee currently consists of Mr. Haydu
and Dr. Tartaglia, neither of whom is an officer or an employee of the
Company. The Compensation Committee reviews and recommends the compensation
arrangements for officers and other senior level employees, reviews general
compensation levels for other employees as a group, determines the options or
stock to be granted to eligible persons under the 1998 Stock Plan and takes
such other action as may be required in connection with the Company's
compensation and incentive plans. The Compensation Committee currently
consists of Mr. Haydu and Dr. Tartaglia. See "--Compensation Committee
Interlocks and Insider Participation."
Directors receive such compensation for their services as the Board of
Directors may from time to time determine. Further, each director is
reimbursed for reasonable travel and other expenses incurred in attending
meetings. Prior to joining the Company in July 1998, Dr. Kuhla also received a
consulting fee of $2,500 per quarter for miscellaneous projects and business
development activities.
EXECUTIVE COMPENSATION
Summary Compensation. The following table sets forth information concerning
compensation for services rendered in all capacities awarded to, earned by or
paid to the Chief Executive Officer and the four other most highly compensated
executive officers of the Company for the year ended December 31, 1997
(the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
1997 ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------ ------------------
NUMBER OF SHARES
NAME AND PRINCIPAL UNDERLYING ALL OTHER
POSITION SALARY($) BONUS($) OPTIONS GRANTED(#) COMPENSATION($)
- ------------------ --------- -------- ------------------ ---------------
<S> <C> <C> <C> <C>
Thomas E. D'Ambra, 178,333 97,125 45,860 253,093(1)
Ph.D. ..................
Chairman and Chief
Executive Officer
Harold Meckler, Ph.D. ... 106,333 25,200 47,048 --
Vice President, Chemical
Development
Michael P. Trova, 95,878 21,635 23,311 9,709(2)
Ph.D. ..................
Vice President,
Medicinal Chemistry
Harold M. Armstrong, 126,667 48,750 21,492 --
Jr.(3) ................
Former Chief Financial
Officer
</TABLE>
- ----------
(1) Constitutes payments to Dr. D'Ambra under the Company's Technology
Development Incentive Plan.
(2) Constitutes reimbursement of moving expenses.
(3) Departed from the Company in October 1998. See "Certain Transactions."
39
<PAGE>
Option Grants, Exercises and Holdings. The following table sets forth
information regarding stock options granted during the year ended December 31,
1997 to each of the Named Executive Officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------
POTENTIAL
REALIZABLE
VALUE
AT ASSUMED
ANNUAL
RATES OF STOCK
PRICE
NUMBER OF PERCENT OF TOTAL APPRECIATION
SECURITIES OPTIONS FOR OPTION
UNDERLYING GRANTED TO EXERCISE TERM(3)
OPTIONS EMPLOYEES IN OR BASE PRICE EXPIRATION ---------------
NAME GRANTED(1) FISCAL YEAR PER SHARE(2) DATE 5% 10%
- ---- ---------- ---------------- ------------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Thomas E. D'Ambra,
Ph.D. ................. 24,777 5.9% $3.06 01/01/02 $20,947 $46,287
21,082 5.1 3.51 12/15/02 20,444 45,176
Harold Meckler, Ph.D. .. 11,767 2.8 3.06 01/01/07 22,645 57,386
22,500 5.4 3.16 05/01/07 44,714 113,315
12,780 3.1 3.51 12/15/07 28,211 71,492
Michael P. Trova,
Ph.D. ................. 12,352 3.0 3.06 01/01/07 23,770 60,239
10,957 2.6 3.51 12/15/07 24,187 61,294
Harold M. Armstrong,
Jr.(4)................. 17,411 4.2 3.06 01/01/07 33,506 84,911
14,828 3.6 3.51 12/15/07 32,732 82,948
</TABLE>
- ----------
(1) Vesting of options is subject to the continuation of such employee's
service relationship with the Company. The options terminate ten years
after the grant date, subject to earlier termination in accordance with
the 1992 Stock Option Plan and the applicable option agreement.
(2) The exercise price equals the fair market value of the stock as of the
grant date as determined by the Board of Directors after consideration of
a number of factors, including, but not limited to, the Company's
financial performance, the Company's status as a private company at the
time of grants, the minority interests represented by the option shares
and the price of shares of equity securities sold to or purchased by
outside investors.
(3) The amounts shown as potential realizable value illustrate what might be
realized upon exercise immediately prior to expiration of the option term
using the 5% and 10% appreciation rates established in regulations of the
Securities and Exchange Commission, compounded annually. The following
table sets forth the potential realizable value of the options held by the
Named Executive Officers using the assumed initial public offering price
of $18.00 per share at the 5% and 10% appreciation rates:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
NUMBER OF ASSUMED ANNUAL RATES OF
SECURITIES STOCK PRICE APPRECIATION
UNDERLYING FOR OPTION TERM
OPTIONS ------------------------------
GRANTED 5% 10%
---------- -------------- ---------------
<S> <C> <C> <C>
Thomas E. D'Ambra, Ph.D. ....... 24,777 $123,218 $272,279
21,082 104,842 231,674
Harold Meckler, Ph.D. .......... 11,767 133,203 337,564
22,500 254,702 645,466
12,780 144,671 366,625
Michael P. Trova, Ph.D. ........ 12,352 139,826 354,346
10,957 124,034 314,327
Harold M. Armstrong, Jr.(4) .... 17,411 197,094 499,476
14,828 167,854 425,376
</TABLE>
(4) In connection with his departure from the Company on October 28, 1998, all
outstanding stock options held by Mr. Armstrong were exercised and the
shares of Common Stock acquired thereby were immediately repurchased by
the Company. See "Certain Transactions."
The potential realizable value is not intended to predict future
appreciation of the price of the Common Stock. The values shown do not
consider non-transferability, vesting or termination of the options upon
termination of such employee's employment with the Company.
40
<PAGE>
Option Exercises and Year-End Holdings. The following table sets forth
information concerning the number and value of unexercised options to purchase
Common Stock held by the Named Executive Officers. None of the Named Executive
Officers exercised any stock options during the year ended December 31, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS
END AT FISCAL YEAR-END(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Thomas E. D'Ambra, Ph.D. .. -- 45,859 $ -- $ 675,647
Harold Meckler, Ph.D. ..... 54,000 47,047 911,520 694,881
Michael P. Trova, Ph.D. ... 54,000 23,309 911,520 343,306
Harold M. Armstrong,
Jr.(2) ................... 168,750 32,238 2,643,750 357,744
</TABLE>
- ----------
(1) There was no public trading market for the Common Stock as of December 31,
1997. Accordingly, these values have been calculated on the basis of the
assumed initial public offering price of $18.00 per share, less the
applicable exercise price.
(2) In connection with his departure from the Company on October 28, 1998, all
outstanding stock options held by Mr. Armstrong were exercised and the
shares of Common Stock acquired thereby were immediately repurchased by
the Company.
EMPLOYEE STOCK AND OTHER BENEFIT PLANS
1998 Stock Option and Incentive Plan. The 1998 Stock Plan was adopted by the
Board of Directors on August 7, 1998 and was approved by the Company's
stockholders on August 26, 1998. The following discussion gives effect to such
adoption and approval. The 1998 Stock Plan permits (i) the grant of Incentive
Options, (ii) the grant of Non-Qualified Options, (iii) the issuance or sale
of Common Stock with or without vesting or other restrictions ("Restricted
Stock") or without restrictions ("Unrestricted Stock" collectively with
Restricted Stock, "Stock Grants"), (iv) the grant of Common Stock upon the
attainment of specified performance goals ("Performance Share Awards"), (v)
the grant of the right to receive cash dividends with the holders of the
Common Stock as if the recipient held a specified number of shares of the
Common Stock ("Dividend Equivalent Rights") and (vi) the grant of the right to
receive the value of the excess of the fair market value of the Common Stock
over the exercise price of the Common Stock ("Stock Appreciation Rights" or
"SARs"). These grants may be made to officers and other employees, directors,
advisors, consultants and other key persons of the Company and its
subsidiaries. The 1998 Stock Plan currently provides for the issuance of
1,379,771 shares of Common Stock plus an additional number of shares of Common
Stock equal to fifteen percent (15%) of the shares of stock issued by the
Company in the previous six months (measured as of June 30 and December 31 of
each year). Of the shares reserved for issuance under the 1998 Stock Plan, no
shares were subject to outstanding options or grants as of August 1, 1998. On
and after the date the 1998 Stock Plan becomes subject to Section 162(m) of
the Internal Revenue Code of 1986, as amended (the "Code"), options with
respect to no more than 200,000 shares of Common Stock may be granted to any
one individual in any calendar year.
The 1998 Stock Plan is administered by the Compensation Committee. Subject
to the provisions of the 1998 Stock Plan, the Compensation Committee has full
power to determine from among the persons eligible for grants under the 1998
Stock Plan the individuals to whom grants will be granted, the combination of
grants to participants and the specific terms of each grant, including
vesting. Incentive Options may be granted only to officers or other full-time
employees of the Company or its subsidiaries, including members of the Board
of Directors who are also full-time employees of the Company or its
subsidiaries. The Compensation Committee may delegate the power to grant
options to non-executive employees to the Company's Chief Executive Officer.
The exercise price of options granted under the 1998 Stock Plan is
determined by the Compensation Committee. In the case of Incentive Options,
the exercise price may not be less than 100% of the fair market value of the
underlying shares on the date of grant. If any employee of the Company or any
subsidiary owns (or
41
<PAGE>
is deemed to own) at the date of grant shares of stock representing in excess
of 10% of the combined voting power of all classes of stock of the Company or
any parent or subsidiary, the option exercise price for Incentive Options
granted to such employee may not be less than 110% of the fair market value of
the underlying shares on that date. Non-Qualified Options may be granted at
prices which are less than the fair market value of the underlying shares on
the date granted. Options typically are subject to vesting schedules,
terminate 10 years from the date of grant and may be exercised for specified
periods subsequent to the termination of the optionee's employment or other
service relationship with the Company. At the discretion of the Compensation
Committee, any option may include a "reload" feature pursuant to which an
optionee exercising an option receives in addition to the number of shares of
Common Stock due on the exercise of such an option an additional option with
an exercise price equal to the fair market value of the Common Stock on the
date such additional option is granted. Upon the exercise of options, the
option exercise price must be paid in full either in cash or by certified or
bank check or other instrument acceptable to the Compensation Committee or, in
the sole discretion of the Compensation Committee, by delivery of shares of
Common Stock already owned by the optionee. The exercise price may also be
delivered to the Company by a broker pursuant to irrevocable instructions to
the broker selling the underlying shares from the optionee.
The 1998 Stock Plan also permits Stock Grants, Performance Share Awards,
grants of Dividend Equivalent Rights and SARs. Stock Grants may be made to
persons eligible under the 1998 Stock Plan, subject to such conditions and
restrictions as the Compensation Committee may determine. Prior to the vesting
of shares, recipients of Stock Grants generally will have all the rights of a
stockholder with respect to the shares, including voting and dividend rights,
subject only to the conditions and restrictions set forth in the 1998 Stock
Plan or in any agreement. The Compensation Committee may also make Stock
Grants to persons eligible under the 1998 Stock Plan in recognition of past
services or other valid consideration, or in lieu of cash compensation. In the
case of Performance Share Awards, the issuance of shares of Common Stock will
occur only after the conditions and restrictions set forth in the grant
agreement are satisfied. SARs may be granted in tandem with, or independently
of, Incentive Options or Non-Qualified Options. The Compensation Committee may
also grant Dividend Equivalent Rights in conjunction with any other grant made
pursuant to the 1998 Stock Plan or as a free standing grant. Dividend
Equivalent Rights may be paid currently or deemed to be reinvested in
additional shares of Common Stock, which may thereafter accrue further
dividends.
The Compensation Committee may, in its sole discretion, accelerate or extend
the date or dates on which all or any particular award or awards granted under
the 1998 Stock Plan may be exercised or vest. Generally, upon a dissolution,
liquidation or sale of a majority of the outstanding voting stock or
substantially all of the assets of the Company, all unvested options, SARs and
other awards shall become vested as of the effective date of such transaction,
except as the Compensation Committee may otherwise specify with respect to
particular awards. Options generally provide for acceleration of vesting in
the event the optionee's employment with the Company is terminated by the
Company without cause or by the optionee for good reason within 18 months
following a change-in-control transaction. To the extent not fully vested and
exercised, options granted under the 1998 Stock Plan terminate upon the
dissolution, liquidation or sale of a majority of the outstanding voting stock
or substantially all of the assets of the Company, except as the parties to
any such transaction may otherwise agree in their discretion.
1992 Stock Option Plan. The Company's 1992 Stock Option Plan (the "1992
Stock Option Plan") was initially approved by the Board of Directors in August
1992 and was subsequently approved by the Company's stockholders. The 1992
Stock Option Plan provides for the issuance of 2,250,000 shares of Common
Stock. The 1992 Stock Option Plan permits the grant of stock options intended
to qualify as incentive stock options under Section 422 of the Internal
Revenue Code of 1986, as amended, ("Incentive Stock Options") and options not
intended to so qualify ("Non-qualified Stock Options"). As of November 30,
1998, options to purchase 1,866,006 shares of Common Stock were outstanding
under the 1992 Stock Option Plan at a weighted average exercise price of $2.47
per share. Options granted under the 1992 Stock Option Plan (i) generally vest
60% on the third anniversary of the date of grant and an additional 20% on
each of the next two anniversaries and (ii) terminate on the tenth anniversary
of the date of grant. In connection with this offering, the number of shares
of
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<PAGE>
Common Stock reserved for issuance under the 1992 Stock Option Plan will be
reduced to 1,866,006. The Company does not intend to make grants under the
1992 Stock Option Plan after the effective date of this offering.
The 1992 Stock Option Plan is administered by a committee of the Board of
Directors (the "Option Committee"). The Option Committee has the power to
amend outstanding stock options so long as such amendment does not adversely
affect the holder of the option. The Option Committee may, in its sole
discretion, accelerate the vesting of any outstanding stock option, including
in the event of a merger, liquidation or sale of substantially all of the
assets of the Company.
1998 Employee Stock Purchase Plan. The Purchase Plan was adopted by the
Board of Directors and subsequently approved by the Company's stockholders in
August 1998. Up to 300,000 shares of Common Stock may be issued under the
Purchase Plan. The Purchase Plan is administered by the Compensation
Committee.
The first offering under the Purchase Plan will begin on July 1, 1999 and
end on December 31, 1999. Subsequent offerings will commence on each January 1
and July 1 thereafter and will have a duration of six months. Generally, all
employees who are customarily employed for more than 20 hours per week as of
the first day of the applicable offering period are eligible to participate in
the Purchase Plan. An employee who owns or is deemed to own shares of stock
representing in excess of 5% of the combined voting power of all classes of
stock of the Company may not participate in the Purchase Plan.
During each offering, an employee may purchase shares under the Purchase
Plan by authorizing payroll deductions of up to 10% of his cash compensation
during the offering period. The maximum number of shares which may be
purchased by any participating employee during any offering period is limited
to 1,000 shares (as adjusted by the Compensation Committee from time to time).
Unless the employee has previously withdrawn from the offering, his
accumulated payroll deductions will be used to purchase Common Stock on the
last business day of the period at a price equal to 85% of the fair market
value of the Common Stock on the first or last day of the offering period,
whichever is lower. Under applicable tax rules, an employee may purchase no
more than $25,000 worth of Common Stock in any calendar year. No Common Stock
has been issued to date under the Purchase Plan.
Technology Development Incentive Plan. The Company maintains a Technology
Development Incentive Plan, the purpose of which is to stimulate and encourage
novel innovative technology development, which allows eligible participants to
share in awards based on ten percent (10%) of the net revenue (as defined
therein) earned by the Company relating to patented technology with respect to
which the eligible participant is named as an inventor.
AGREEMENTS WITH NAMED EXECUTIVE OFFICERS
The Company has entered into employment agreements with each of the Named
Executive Officers (other than Mr. Armstrong, who departed the Company in
October 1998). The terms of the agreements are substantially similar, except
with respect to minimum annual base salary ($200,000, $120,000 and $115,000
for Dr. D'Ambra, Dr. Meckler and Dr. Trova, respectively) and as set forth
below with respect to the termination of employment upon a "change of
control." In addition to their annual base salary, the Named Executive
Officers will be eligible to receive bonus compensation to be determined at
the discretion of the Board of Directors. The agreements have initial
employment terms of three years and automatically renew for one year periods
thereafter. If the Company elects not to extend an agreement for any reason or
if the executive's employment is terminated by the Company without "cause" (as
defined) or by the executive upon a material breach of the agreement by the
Company, the Company will continue to pay the executive his base salary for
one year and will pay to the Executive in monthly installments over such one
year period an amount equal to the executive's cash bonus received in respect
of the immediately preceding year.
Upon termination by the Company of the executive's employment without
"cause" or upon a resignation by the executive for "good reason" (as defined)
or if an employment agreement is not renewed by the Company
43
<PAGE>
within twelve months following a "change of control" (as defined), such
executive will be entitled to receive a severance amount equal to the sum of
(i) a multiple of the executive's annual base salary, plus (ii) the
executive's cash bonus received in respect of the immediately preceding year.
The multiples of base salary to be paid by the Company to Dr. D'Ambra, Dr.
Meckler and Dr. Trova upon the termination of their employment following a
"change of control" are three, one and one times, respectively.
On October 28, 1998, the Company's former chief financial officer, Harold M.
Armstrong, departed from the Company. In connection with Mr. Armstrong's
departure, the Company and Mr. Armstrong entered into a letter agreement
pursuant to which the Company paid Mr. Armstrong a severance payment equal to
his annualized base salary for the 1998 fiscal year and bonus for the 1997
fiscal year. The Company also repurchased a total of 1,131,903 shares of
Common Stock from Mr. Armstrong and a trust for the benefit of his family for
an aggregate purchase price of approximately $9.9 million, of which $2.0
million was paid in cash and $7.9 million was paid in promissory notes. Upon
consummation of this offering, the remaining amounts due under these notes
will be repaid from the net proceeds of this offering. The Company is actively
searching for a new chief financial officer and expects to fill this position
by the end of the first quarter of 1999.
The Company has also entered into Employment Innovation, Proprietary
Information and Post-Employment Activity Agreements with its Named Executive
Officers. Each agreement provides that, during the six month period
immediately following the termination of his employment with the Company, the
Named Executive Officer will not engage, directly or indirectly, in the sale
or performance of any services for a customer for whom he performed services
at any time during the twelve month period immediately preceding the
termination of his employment.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Haydu and Dr. Tartaglia are the members of the Compensation Committee.
Neither Mr. Haydu nor Dr. Tartaglia are executive officers of the Company.
Prior to joining the Company in June 1998, Dr. Kuhla served as a member of the
Compensation Committee. While serving as a member of the Compensation
Committee, Dr. Kuhla received a consulting fee of $2,500 per quarter unrelated
to such service.
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<PAGE>
CERTAIN TRANSACTIONS
In March 1995, the Company entered into a license agreement with HMRI. Under
the terms of the license agreement, the Company granted HMRI an exclusive,
worldwide license to any patents issued to the Company related to its original
1993 TAM U.S. patent application. Pursuant to the license agreement, HMRI paid
the Company $15.6 million, $2.5 million, $1.0 million and $200,000 in
milestones and royalties in the nine months ended September 30, 1998, and the
years ended December 31, 1997, 1996 and 1995, respectively. HMRI is also
obligated to pay ongoing royalties to the Company based upon sales of
fexofenadine HCl. In connection with the transactions contemplated by the
license agreement, HMRI purchased 1,084,821 shares of Common Stock for a total
purchase price of $2.0 million. The Company granted HMRI demand registration
rights with respect to such shares whereby HMRI has the right (i) on any one
occasion beginning six months after completion of this offering to require the
Company to register its shares under the Securities Act for resale to the
public (provided that the aggregate offering price of such shares must be at
least $3.0 million), (ii) to require the Company to register its shares on a
"shelf" registration statement in the event the Company registers shares held
by Dr. D'Ambra and or Mr. Opalka under certain specified circumstances and
(iii) to require the Company to include shares held by HMRI on registration
statements independently filed by the Company, subject to certain
restrictions. In addition, the Company has agreed to indemnify HMRI, its
subsequent transferees, and any underwriters and each of their controlling
persons, against claims and liabilities, including claims and liabilities
arising under the securities laws.
Dr. D'Ambra is entitled to payments under the Company's Technology
Development Incentive Plan for amounts paid to the Company under the license
agreement with HMRI. Under this plan, Dr. D'Ambra has received or is entitled
to receive $1.4 million, $253,000, $100,000 and $200,000 in the nine months
ended September 30, 1998, and the years ended December 31, 1997, 1996 and
1995, respectively. Pursuant to the Company's Technology Development Incentive
Plan, Dr. D'Ambra is entitled to receive 10% of all royalties paid to the
Company under the HMRI license agreement.
On October 28, 1998, the Company's former chief financial officer, Harold M.
Armstrong, departed from the Company. In connection with Mr. Armstrong's
departure, the Company and Mr. Armstrong entered into a letter agreement
pursuant to which the Company paid Mr. Armstrong a severance payment equal to
his annualized base salary and bonus for the 1998 fiscal year. The Company
also repurchased a total of 1,131,903 shares of Common Stock from Mr.
Armstrong and a trust for the benefit of his family for an aggregate purchase
price of approximately $9.9 million, of which $2.0 million was paid in cash
and $7.9 million was paid in promissory notes. Upon consummation of this
offering, the remaining amounts due under these notes will be repaid from the
net proceeds of this offering. The Company is actively searching for a new
chief financial officer and expects to fill this position by the end of the
first quarter of 1999.
The Company is a party to an agreement with Stiefel Laboratories, Inc.
("Stiefel"), the beneficial owner of 11.8% of the outstanding shares of Common
Stock prior to giving effect to this offering, whereby the Company granted
Stiefel participation rights with respect to certain future issuances of
securities by the Company. This agreement will terminate upon completion of
this offering. The Company received $65,000 from Stiefel for services rendered
in the ordinary course of business during 1996.
The Company has adopted a policy providing that all material transactions
between the Company and its officers, directors and other affiliates must (i)
be approved by a majority of the members of the Company's Board of Directors
and by a majority of the disinterested members of the Company's Board of
Directors and (ii) be on terms no less favorable to the Company than could be
obtained from unaffiliated third parties.
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<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of November 30, 1998 and as
adjusted to reflect the sale of the shares of Common Stock offered hereby of
(i) each person known by the Company to own beneficially five percent or more
of the outstanding shares of Common Stock, (ii) each director and the Named
Executive Officers of the Company and (iii) all directors and executive
officers of the Company as a group. Unless otherwise indicated below, to the
knowledge of the Company, all persons listed below have sole voting and
investment power with respect to their shares of Common Stock, except to the
extent authority is shared by spouses under applicable law.
<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES BENEFICIALLY OWNED(1)
NUMBER OF SHARES ---------------------------------
NAME OF BENEFICIAL OWNER(2) BENEFICIALLY OWNED BEFORE OFFERING AFTER OFFERING(3)
- --------------------------- ------------------ --------------- -----------------
<S> <C> <C> <C>
Thomas E. D'Ambra,
Ph.D.(4)................. 4,335,378 43.3% 35.5%
Chester J. Opalka(5)...... 2,147,728 21.4 17.6
Hoechst
Aktiengesellschaft(6).... 1,627,231 16.2 13.3
Charles W. Stiefel(7)..... 1,260,000 11.8 9.8
Harold Meckler, Ph.D.(8).. 54,000 * *
Michael P. Trova,
Ph.D.(9)................. 54,000 * *
Anthony P. Tartaglia,
M.D.(10)................. 31,128 * *
Donald E. Kuhla,
Ph.D.(11)................ 30,341 * *
Frank W. Haydu(12)........ 1,125 * *
All executive officers and
directors as a group (10
persons)(13)............. 6,653,700 65.5 54.5
</TABLE>
- ----------
* Less than 1%.
(1) All percentages have been determined as of November 30, 1998 in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). For purposes of this table, a person or
group of persons is deemed to have "beneficial ownership" of any shares
of Common Stock which such person has the right to acquire within 60 days
after the date of this Prospectus. For purposes of computing the
percentage of outstanding shares of Common Stock held by each person or
group of persons named above, any security which such person or persons
has or have the right to acquire within 60 days after the date of this
Prospectus is deemed to be outstanding, but is not deemed to be
outstanding for the purpose of computing the percentage ownership of any
other person. As of November 30, 1998, a total of 10,015,224 shares of
Common Stock were issued and outstanding and 1,258,972 options to acquire
Common Stock were exercisable within 60 days of November 30, 1998.
(2) The address of all listed stockholders other than Hoechst
Aktiengesellschaft and Charles W. Stiefel is c/o Albany Molecular
Research, Inc., 21 Corporate Circle, Albany, New York 12203. The address
of Hoechst Aktiengesellschaft is c/o Hoechst Marion Roussel, Inc., 10236
Marion Park Drive, Kansas City, Missouri 64137. The address of Charles W.
Stiefel is c/o Stiefel Laboratories, Inc., 255 Alhambra Circle, Suite
1000, Coral Gables, Florida 33134.
(3) Assumes no exercise of the Underwriters' over-allotment option.
(4) Includes 1,719,164 shares held by the Thomas E. D'Ambra GRAT I trust of
which Dr. D'Ambra serves as the trustee. By virtue of his position as
trustee, Dr. D'Ambra may be deemed to be the beneficial owner of all
shares held by such trust. Excludes 45,859 shares subject to options not
exercisable within 60 days.
(5) Includes 409,995 shares held by the Chester T. Opalka 1997 Retained
Annuity Trust of which Mr. Opalka serves as a co-trustee. By virtue of
his position as a co-trustee, Mr. Opalka may be deemed to be the
beneficial owner of all shares held by such trust. Excludes 15,704 shares
subject to options not exercisable within 60 days.
(6) Hoechst Aktiengesellschaft is a publicly-held company and the parent of
Hoechst Marion Roussel Aktiengesellschaft, a German corporation ("HMRA").
HMRA, in turn, is the parent of both HMR Pharma, Inc., a Delaware
corporation, and Hoechst Marion Roussel, S.A., a French corporation,
which together own all of the outstanding shares of Hoechst Marion
Roussel, Inc., the holder of record of these shares.
(7) Includes 630,000 shares subject to options exercisable within 60 days.
Charles W. Stiefel may be deemed to be the beneficial owner of all of the
shares beneficially held by Stiefel Laboratories, Inc., the holder of
record of these shares.
(8) Includes 54,000 shares subject to options exercisable within 60 days.
Excludes 47,047 shares subject to options not exercisable within 60 days.
(9) Includes 36,000 shares subject to options exercisable within 60 days.
Excludes 23,309 shares subject to options not exercisable within 60 days.
(10) Includes 28,125 shares subject to options exercisable within 60 days.
Excludes 11,250 shares subject to options not exercisable within 60 days.
(11) Includes 28,125 shares subject to options exercisable within 60 days.
Excludes 118,125 shares subject to options not exercisable within 60
days.
(12) Excludes 5,625 shares subject to options not exercisable within 60 days.
(13) Includes 146,250 shares subject to options exercisable within 60 days.
Excludes 334,756 shares subject to options not exercisable within 60
days.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED AND OUTSTANDING CAPITAL STOCK
Upon completion of this offering, the authorized capital stock of the
Company will consist of 50,000,000 shares of Common Stock, of which 12,215,224
shares will be issued and outstanding, and 2,000,000 shares of undesignated
preferred stock issuable in one or more series by the Board of Directors
("Preferred Stock"), of which no shares will be issued and outstanding.
Common Stock. The holders of Common Stock are entitled to one vote per share
on all matters to be voted on by stockholders and are entitled to receive such
dividends, if any, as may be declared from time to time by the Board of
Directors from funds legally available therefor. Any issuance of Preferred
Stock with a dividend preference over Common Stock could adversely affect the
dividend rights of holders of Common Stock. Holders of Common Stock are not
entitled to cumulative voting rights. Therefore, the holders of a majority of
the shares voted in the election of directors can elect all of the directors
then standing for election, subject to any voting rights of the holders of any
then outstanding Preferred Stock. The holders of Common Stock have no
preemptive or other subscription rights, and there are no conversion rights or
redemption or sinking fund provisions with respect to the Common Stock. All
outstanding shares of Common Stock, including the shares offered hereby, are,
or will be upon completion of the offering, fully paid and non-assessable.
The Company's Restated Certificate of Incorporation (the "Certificate") and
Amended and Restated By-laws (the "By-Laws"), which will be effective upon
completion of this offering provide, subject to the rights of the holders of
any Preferred Stock then outstanding, that the number of directors shall be
fixed by the Board of Directors. The directors, other than those who may be
elected by the holders of any Preferred Stock, are divided into three classes,
as nearly equal in number as possible, with each class serving for a three-
year term. Subject to any rights of the holders of any Preferred Stock to
elect directors, and to remove any director whom the holders of any Preferred
Stock had the right to elect, any director of the Company may be removed from
office only with cause and by the affirmative vote of at least two-thirds of
the total votes which would be eligible to be cast by stockholders in the
election of such director.
Undesignated Preferred Stock. The Board of Directors of the Company is
authorized, without further action of the stockholders, to issue up to
2,000,000 shares of Preferred Stock in one or more series and to fix the
designations, powers, preferences and the relative, participating, optional or
other special rights of the shares of each series and any qualifications,
limitations and restrictions thereon as set forth in the Company's
Certificate. Any such Preferred Stock issued by the Company may rank prior to
the Common Stock as to dividend rights, liquidation preference or both, may
have full or limited voting rights and may be convertible into shares of
Common Stock.
The issuance of Preferred Stock could have the effect of making it more
difficult for a third party to acquire, or of discouraging a third party from
acquiring or seeking to acquire, a significant portion of the outstanding
Common Stock.
CERTAIN PROVISIONS OF CERTIFICATE OF INCORPORATION AND BY-LAWS
A number of provisions of the Certificate and By-laws which will be
effective upon completion of this offering concern matters of corporate
governance and the rights of stockholders. Certain of these provisions, as
well as the ability of the Board of Directors to issue shares of Preferred
Stock and to set the voting rights, preferences and other terms thereof, may
be deemed to have an anti-takeover effect and may discourage takeover attempts
not first approved by the Board of Directors, including takeovers which
stockholders may deem to be in their best interests. To the extent takeover
attempts are discouraged, temporary fluctuations in the market price of the
Common Stock, which may result from actual or rumored takeover attempts, may
be inhibited. These provisions, together with the classified Board of
Directors and the ability of the Board to issue Preferred Stock without
further stockholder action, also could delay or frustrate the removal of
incumbent directors or the assumption of control by stockholders, even if such
removal or assumption would be beneficial to stockholders of the Company.
These provisions also could discourage or make more difficult a merger, tender
offer or proxy
47
<PAGE>
contest, even if favorable to the interests of stockholders, and could depress
the market price of the Common Stock. The Board of Directors believes that
these provisions are appropriate to protect the interests of the Company and
all of its stockholders. The Board of Directors has no present plans to adopt
any other measures or devices which may be deemed to have an "anti-takeover
effect."
Meetings of Stockholders. The By-laws provide that a special meeting of
stockholders may be called only by the Chairman or a majority of Board of
Directors unless otherwise required by law. The By-laws provide that only
those matters set forth in the notice of the special meeting may be considered
or acted upon at that special meeting unless otherwise provided by law. In
addition, the By-laws set forth certain advance notice and informational
requirements and time limitations on any director nomination or any new
proposal which a stockholder wishes to make at an annual meeting of
stockholders.
No Stockholder Action by Written Consent. The Certificate provides that any
action required or permitted to be taken by the stockholders of the Company at
an annual or special meeting of stockholders must be effected at a duly called
meeting and may not be taken or effected by a written consent of stockholders
in lieu thereof.
Indemnification and Limitation of Liability. The By-laws provide that
directors and officers of the Company shall be, and in the discretion of the
Board of Directors non-officer employees may be, indemnified by the Company to
the fullest extent authorized by Delaware law, as it now exists or may in the
future be amended, against all expenses and liabilities reasonably incurred in
connection with service for or on behalf of the Company. The By-laws also
provide that the right of directors and officers to indemnification shall be a
contract right and shall not be exclusive of any other right now possessed or
hereafter acquired under any by-law, agreement, vote of stockholders or
otherwise. The Certificate contains a provision permitted by Delaware law that
generally eliminates the personal liability of directors for monetary damages
for breaches of their fiduciary duty, including breaches involving negligence
or gross negligence in business combinations, unless the director has breached
his or her duty of loyalty, failed to act in good faith, engaged in
intentional misconduct or a knowing violation of law, paid a dividend or
approved a stock repurchase in violation of the Delaware General Corporation
Law or obtained an improper personal benefit. This provision does not alter a
director's liability under the federal securities laws and does not affect the
availability of equitable remedies, such as an injunction or rescission, for
breach of fiduciary duty. The Company also entered into indemnification
agreements with each of its directors reflecting the foregoing and requiring
the advancement of expenses in proceedings involving the directors in most
circumstances.
Amendment of the Certificate. The Certificate provides that an amendment
thereof must first be approved by a majority of the Board of Directors and
(with certain exceptions) thereafter approved by a majority (or 80% in the
case of any proposed amendment to the provisions of the Certificate relating
to the composition of the Board or amendments of the Certificate) of the total
votes eligible to be cast by holders of voting stock with respect to such
amendment.
Amendment of By-laws. The Certificate provides that the By-laws may be
amended or repealed by the Board of Directors or by the stockholders. Such
action by the Board of Directors requires the affirmative vote of a majority
of the directors then in office. Such action by the stockholders requires the
affirmative vote of at least two-thirds of the total votes eligible to be cast
by holders of voting stock with respect to such amendment or repeal at an
annual meeting of stockholders or a special meeting called for such purpose
unless the Board of Directors recommends that the stockholders approve such
amendment or repeal at such meeting, in which case such amendment or repeal
shall only require the affirmative vote of a majority of the total votes
eligible to be cast by holders of voting shares with respect to such amendment
or repeal.
Ability to Adopt Shareholder Rights Plan. The Board of Directors may in the
future resolve to issue shares of Preferred Stock or rights to acquire such
shares to implement a shareholder rights plan. A shareholder rights plan
typically creates voting or other impediments which are intended to discourage
persons seeking to gain control of the Company by means of a merger, tender
offer, proxy contest or otherwise if such change in control is not in the best
interest of the Company and its stockholders. The Board of Directors has no
present intention of adopting a shareholder rights plan and is not aware of
any attempt to obtain control of the Company.
48
<PAGE>
STATUTORY BUSINESS COMBINATION PROVISION
Upon completion of the offering, the Company will be subject to the
provisions of Section 203 of the Delaware General Corporation Law ("Section
203"). Section 203 provides, with certain exceptions, that a Delaware
corporation may not engage in any of a broad range of business combinations
with a person or affiliate, or associate of such person, who is an "interested
stockholder" for a period of three years from the date that such person became
an interested stockholder unless: (i) the transaction resulting in a person
becoming an interested stockholder, or the business combination, is approved
by the board of directors of the corporation before the person becomes an
interested stockholder; (ii) the interested stockholder acquired 85% or more
of the outstanding voting stock of the corporation in the same transaction
that makes it an interested stockholder (excluding shares owned by persons who
are both officers and directors of the corporation, and shares held by certain
employee stock ownership plans); or (iii) on or after the date the person
becomes an interested stockholder, the business combination is approved by the
corporation's board of directors and by the holders of at least 66 2/3% of the
corporation's outstanding voting stock at an annual or special meeting,
excluding shares owned by the interested stockholder. Under Section 203, an
"interested stockholder" is defined (with certain limited exceptions) as any
person that is (i) the owner of 15% or more of the outstanding voting stock of
the corporation or (ii) an affiliate or associate of the corporation and was
the owner of 15% or more of the outstanding voting stock of the corporation at
any time within the three-year period immediately prior to the date on which
it is sought to be determined whether such person is an interested
stockholder.
A corporation may, at its option, exclude itself from the coverage of
Section 203 by amending its certificate of incorporation or by-laws by action
of its stockholders to exempt itself from coverage, provided that such by-law
or charter amendment shall not become effective until 12 months after the date
it is adopted. Neither the Certificate nor the By-laws contains any such
exclusion.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock will be ChaseMellon
Shareholder Services, L.L.C.
49
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, the Company will have a total of
12,215,224 shares of Common Stock outstanding. Of these shares, the 2,200,000
shares of Common Stock offered hereby will be freely tradable without
restriction or registration under the Securities Act by persons other than
"affiliates" of the Company, as defined in the Securities Act, who would be
required to sell such shares under Rule 144 under the Securities Act. The
remaining 10,015,224 shares of Common Stock outstanding will be "restricted
securities" as that term is defined by Rule 144 (the "Restricted Shares"). The
Restricted Shares were issued and sold by the Company in private transactions
in reliance upon exemptions from registration under the Securities Act.
Of the Restricted Shares, 9,979,561 shares of Common Stock will be eligible
for sale in the public market pursuant to Rule 144 under the Securities Act
beginning 90 days after the date of this Prospectus, and 35,663 shares of
Common Stock will become eligible for sale in the public market pursuant to
Rule 144 at various times thereafter.
In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned restricted securities
for at least one year (including the holding period of any prior owner except
an affiliate), including persons who may be deemed "affiliates" of the
Company, would be entitled to sell within any three-month period a number of
shares that does not exceed the greater of one percent of the number of shares
of Common Stock then outstanding (approximately 122,152 shares upon completion
of the offering) or the average weekly trading volume of the Common Stock
during the four calendar weeks preceding the filing of a Form 144 with respect
to such sale. Sales under Rule 144 are also subject to certain manner of sale
provisions and notice requirements, and to the availability of current public
information about the Company. In addition, a person who is not deemed to have
been an affiliate of the Company at the time during 90 days preceding a sale,
and who has beneficially owned the shares proposed to be sold for at least two
years (including the holding period of any prior owner except an affiliate),
would be entitled to sell such shares under Rule 144(k) without regard to the
requirements described above. Rule 144 also provides that affiliates who are
selling shares that are not Restricted Shares must nonetheless comply with the
same restrictions applicable to Restricted Shares with the exception of the
holding period requirement.
Rule 701 promulgated under the Securities Act provides that shares of Common
Stock acquired pursuant to the exercise of options outstanding prior to this
offering or the grant of Common Stock prior to this offering pursuant to
written compensation plans or contracts may be resold by persons other than
affiliates beginning 90 days after the date of this Prospectus, subject only
to the manner of sale provisions of Rule 144, and by affiliates, beginning 90
days after the date of this Prospectus, subject to all provisions of Rule 144
except its one-year minimum holding period requirement.
The Company's executive officers and directors and stockholders, who in the
aggregate hold 9,953,199 shares of Common Stock and options to purchase
1,787,976 shares of Common Stock, have agreed, pursuant to certain Lock-up
Agreements, that until 180 days after the date of this Prospectus, they will
not, directly or indirectly, offer, sell, assign, transfer, encumber, contract
to sell, grant an option to purchase, make a distribution of, or otherwise
dispose of, any shares of Common Stock, or any securities convertible into or
exchangeable for shares of Common Stock, otherwise than (i) as a bona fide
gift or gifts, provided that the donee or donees thereof agree in writing as a
condition precedent to such gift or gifts to be bound by the terms of the
Lock-up Agreements, or (ii) with the prior written consent of ING Baring
Furman Selz LLC. In addition, the Company has agreed that, without the prior
written consent of ING Baring Furman Selz LLC on behalf of the Underwriters,
the Company will not, directly or indirectly, sell, offer, contract to sell,
make any short sale, pledge, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of any shares of Common Stock or any
securities, convertible into or exchangeable or exercisable for or any rights
to purchase or acquire Common Stock, or enter into any swap or other agreement
that transfers, in whole or in part any of the economic consequences or
ownership of Common Stock, during the 180-day period following the date of
this Prospectus, except that the Company may issue, and grant options to
purchase, shares of Common Stock under its current stock option and purchase
plans and may
50
<PAGE>
issue shares of Common Stock in connection with certain acquisition
transactions, provided such shares are subject to the 180-day Lock-up
Agreement.
As of November 30, 1998, 1,379,771 shares of Common Stock were reserved for
issuance under the 1998 Stock Plan, of which no shares were issuable upon the
exercise of outstanding stock options, 2,250,000 shares of Common Stock were
reserved for issuance under the 1992 Stock Option Plan, of which 1,174,443
shares were issuable upon the exercise of outstanding stock options, 300,000
shares of Common Stock were reserved for issuance under the Purchase Plan and
691,563 shares were issuable upon the exercise of outstanding stock options
granted pursuant to stand alone option agreements. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Management--Employee Stock and Other Benefit Plans--1998 Stock Option and
Incentive Plan," "--1992 Stock Option Plan" and "--1998 Employee Stock
Purchase Plan." The Company intends to file a registration statement on Form
S-8 under the Securities Act to register all shares of Common Stock issuable
pursuant to the 1998 Stock Plan or the Purchase Plan. The Company expects to
file this registration statement within approximately 90 days following the
date of this Prospectus, and such registration statement will become effective
upon filing. Shares covered by this registration statement will thereupon be
eligible for sale in the public markets, subject to Rule 144 limitations
applicable to affiliates and the Lock-up Agreements described above.
Prior to this offering, there has been no public market for the Common Stock
and no predictions can be made of the effect, if any, that the sale or
availability for sale of shares of additional Common Stock will have on the
market price of the Common Stock. Nevertheless, sales of substantial amounts
of such shares in the public market, or the perception that such sales could
occur, could materially and adversely affect the market price of the Common
Stock and could impair the Company's future ability to raise capital through
an offering of its equity securities.
51
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the Underwriters named below, and each
of such Underwriters, for whom ING Baring Furman Selz LLC and Hambrecht &
Quist LLC are acting as representatives (the "Representatives") has severally
agreed to purchase from the Company the respective number of shares of Common
Stock set forth opposite each Underwriter's name below:
<TABLE>
<CAPTION>
NUMBER OF
SHARES OF
NAME COMMON STOCK
---- ------------
<S> <C>
ING Baring Furman Selz LLC. .................................
Hambrecht & Quist LLC. ......................................
---------
Total...................................................... 2,200,000
=========
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the shares offered
hereby, if any are taken.
The Underwriters propose to offer the shares of Common Stock in part
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus, and in part to certain securities dealers at
such price less a concession of not in excess of $ per share. The
Underwriters may allow, and such dealers may re-allow, a concession not in
excess of $ per share to certain brokers and dealers. After the shares of
Common Stock are released for sale to the public, the offering price and other
selling terms may from time to time be varied by the Representatives.
The Company has granted the Underwriters an option exercisable for 30 days
after the date of this Prospectus to purchase up to an aggregate of 330,000
additional shares of Common Stock to cover over-allotments, if any. If the
Underwriters exercise their over-allotment option, the Underwriters have
severally agreed, subject to certain conditions, to purchase approximately the
same percentage thereof that the number of shares to be purchased by each of
them, as shown in the foregoing table, bears to the shares of Common Stock
offered hereby. The Underwriters may exercise such option only to cover over-
allotments, if any, in connection with the sale of the 2,200,000 shares of
Common Stock offered hereby.
The Company has agreed not to offer, sell, contract to sell or otherwise
dispose of any shares of Common Stock for a period of 180 days after the date
of this Prospectus without the prior written consent of ING Baring Furman Selz
LLC, except for the shares of Common Stock offered hereby and except that the
Company may issue securities pursuant to the Company's stock plans and upon
exercise of outstanding options and warrants. In addition, the Company's
executive officers and directors and stockholders, who in the aggregate hold
9,953,199 shares of Common Stock and options to purchase 1,787,976 shares of
Common Stock, have agreed, pursuant to certain Lock-up Agreements, that until
180 days after the date of this Prospectus, they will not, directly or
indirectly, offer, sell, assign, transfer, encumber, contract to sell, grant
an option to purchase, make a distribution of, or otherwise dispose of, any
shares of Common Stock, or any securities convertible into or exchangeable for
shares of Common Stock, otherwise than (i) as a bona fide gift or gifts,
provided that the donee or donees thereof agree in writing as a condition
precedent to such gift or gifts to be bound by the terms of the Lock-up
Agreements, or (ii) with the prior written consent of ING Baring Furman Selz
LLC.
The Representatives of the Underwriters have informed the Company that they
do not intend to confirm sales to any account over which they exercise
discretionary authority.
In connection with this offering, the Underwriters may purchase and sell the
Common Stock in the open market. These transactions may include over-allotment
and stabilizing transactions and purchases to cover
52
<PAGE>
syndicate short positions created in connection with this offering.
Stabilizing transactions consist of certain bids or purchases made for the
purpose of preventing or retarding a decline in the market price of the Common
Stock. Syndicate short positions involve the sale by the Underwriters of a
greater number of shares of Common Stock than they are required to purchase
from the Company in this offering. The Underwriters also may impose a penalty
bid, whereby the syndicate may reclaim selling concessions allowed to
syndicate members or other broker-dealers in respect of the Common Stock sold
in this offering for their account if the syndicate repurchases the shares in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the Common Stock, which may be higher
than the price that might otherwise prevail in the open market. These
transactions may be affected on Nasdaq, in the over-the-counter market or
otherwise, and may, if commenced, be discontinued at any time.
Prior to this offering, there has been no public market for the Common
Stock. The initial public offering price will be negotiated among the Company
and the Representatives. Among the factors to be considered in determining the
initial public offering price of the Common Stock, in addition to prevailing
market conditions, are the Company's historical performance, estimates of the
business potential and earnings prospects of the Company, an assessment of the
Company's management and the consideration of the above factors in relation to
market valuation of companies in related businesses.
The Common Stock has been approved for quotation and trading on the Nasdaq
National Market upon completion of this offering under the symbol "AMRI."
The Company has agreed to indemnify the several Underwriters against or
contribute to losses arising out of certain liabilities, including liabilities
under the Securities Act.
LEGAL MATTERS
The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Goodwin, Procter & Hoar llp, Boston, Massachusetts.
Certain legal matters related to this offering will be passed upon for the
Underwriters by Brobeck, Phleger & Harrison LLP, New York, New York.
EXPERTS
The consolidated financial statements of Albany Molecular Research, Inc. as
of December 31, 1996 and 1997, and for each of the years in the three-year
period ended December 31, 1997 have been audited by KPMG Peat Marwick LLP and
have been included herein and in the Registration Statement in reliance upon
the report of KPMG Peat Marwick LLP, independent certified public accountants,
appearing elsewhere herein, and upon the authority of said firm as experts in
accounting and auditing.
The statements in this Prospectus under the captions "Risk Factors--
Proprietary Technology; Unpredictability of Patent Protection" and "Business--
Allegra/Telfast Royalty and Licensing Arrangement" and "--Patents and
Proprietary Rights" have been reviewed and approved by Ostrolenk, Faber, Gerb
& Soffen, LLP, patent counsel to the Company, as experts on such matters, and
are included herein in reliance upon that review and approval.
53
<PAGE>
ADDITIONAL INFORMATION
The Company has not previously been subject to the reporting requirements of
the Exchange Act. The Company has filed with the Commission a Registration
Statement (which term shall include any amendments thereto) on Form S-1 under
the Securities Act with respect to the Common Stock offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. Statements contained in this Prospectus as to
the contents of any contract or other document are not necessarily complete,
and in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement, each statement
being qualified in all respects by such reference. For further information
with respect to the Company and the Common Stock, reference is made to the
Registration Statement, including the exhibits and schedules thereto, copies
of which may be examined without charge at the Commission's principal office
at 450 Fifth Street, N.W., Washington, D.C. 20549 and the regional offices of
the Commission located at 7 World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, 14th Floor, Chicago,
Illinois 60661-2511. Copies of such materials may be obtained from the Public
Reference Section of the Commission, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at its public reference facilities in New York, New
York, and Chicago, Illinois, at prescribed rates. The Commission also
maintains a World Wide Web site that contains reports, proxy and information
statements and other information regarding registrants (which, after this
offering, will include the Company) that file electronically with the
Commission (at http://www.sec.gov).
Immediately following this offering, the Company will become subject to the
periodic reporting and other informational requirements of the Exchange Act.
As long as the Company is subject to such periodic reporting and information
requirements, it will file with the Commission all reports, proxy statements,
and other information required thereby. The Company intends to furnish holders
of the Common Stock with annual reports containing financial statements
audited by an independent certified public accounting firm.
54
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
ALBANY MOLECULAR RESEARCH, INC.
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of KPMG Peat Marwick LLP, Independent Public Accountants........... F-2
Consolidated Balance Sheets at December 31, 1996 and 1997 and September
30, 1998 (unaudited)..................................................... F-3
Consolidated Statements of Operations for the Years Ended December 31,
1995, 1996 and 1997 and the Nine Months Ended September 30, 1997 and 1998
(unaudited).............................................................. F-4
Consolidated Statements of Stockholders' Equity (Deficit) for the Years
Ended December 31, 1995, 1996 and 1997 and for the Nine Months Ended
September 30, 1998 (unaudited)........................................... F-5
Consolidated Statements of Cash Flows for the Years Ended December 31,
1995, 1996 and 1997 and the Nine Months Ended September 30, 1997 and 1998
(unaudited).............................................................. F-6
Notes to Consolidated Financial Statements................................ F-8
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Albany Molecular Research, Inc.:
We have audited the accompanying consolidated balance sheets of Albany
Molecular Research, Inc. as of December 31, 1997 and 1996, and the related
consolidated statements of operations, shareholders' equity and cash flows for
each of the years in the three-year period ended December 31, 1997. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position
of Albany Molecular Research, Inc. at December 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1997, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Albany, New York
April 2, 1998, except for note 15
which is as of November 30, 1998
F-2
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------- SEPTEMBER 30,
1996 1997 1998
---------- ----------- -------------
ASSETS (UNAUDITED)
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents.............. $1,259,555 $ 1,261,518 $ 2,831,019
Certificate of deposit................. 52,551 -- --
Accounts receivable, (net of allowance
of for doubtful accounts of $0 and
$114,000 at December 31, 1996 and
1997, respectively, and $0 at
September 30, 1998)................... 851,959 1,976,637 2,830,357
Current installment of notes
receivable (Note 14).................. -- -- 104,832
Royalty income receivable.............. -- -- 3,241,317
Investment securities, available-for-
sale (Note 5)......................... 1,734,899 1,949,546 2,030,326
Interest receivable.................... 25,156 25,961 30,571
Inventory.............................. 266,208 317,789 569,346
Unbilled services...................... 202,122 192,822 202,683
Refundable income taxes................ -- 312,377 --
Prepaid expenses....................... 38,132 131,798 672,368
---------- ----------- -----------
Total current assets................. 4,430,582 6,168,448 12,512,819
Property and equipment:
Laboratory equipment and fixtures...... 2,981,155 3,323,232 7,820,403
Office equipment....................... 453,823 840,256 1,634,785
Leasehold improvements................. 983,264 1,000,120 2,710,919
Construction-in-progress............... -- 76,574 2,534,959
---------- ----------- -----------
4,418,242 5,240,182 14,701,066
Accumulated depreciation and
amortization......................... (591,698) (1,265,255) (1,982,935)
---------- ----------- -----------
Net property and equipment........... 3,826,544 3,974,927 12,718,131
Other assets:
Patents and patent application costs... 127,145 212,291 335,214
Licensing rights....................... 26,513 23,567 21,358
Customer list.......................... -- -- 98,333
Notes receivable, excluding current
installment (Note 14)................. -- -- 80,000
Deposits............................... 16,810 16,810 16,810
Deferred income tax benefit (Note 6)... 68,142 230,000 --
Other assets........................... 4,909 3,291 6,877
---------- ----------- -----------
Total other assets................... 243,519 485,959 558,592
---------- ----------- -----------
Total assets......................... $8,500,645 $10,629,334 $25,789,542
========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses.............................. $ 322,754 $ 898,256 $ 2,298,407
Income taxes payable (Note 6).......... 338,684 -- 386,852
Unearned income........................ 135,377 212,008 851,394
Customer deposits...................... 165,000 202,293 182,293
Current installments of obligation
under capital lease................... 3,550 1,256 --
Current installments of long-term debt
(Note 3).............................. 454,683 448,005 81,979
---------- ----------- -----------
Total current liabilities............ 1,420,048 1,761,818 3,800,925
Long-term liabilities:
Obligation under capital lease,
excluding current installments........ 1,256 -- --
Long-term debt, excluding current
installments (Note 3)................. 2,373,708 1,775,703 5,137,577
Deferred income taxes (Note 6)......... 295,119 437,631 534,824
---------- ----------- -----------
Total liabilities.................... 4,090,131 3,975,152 9,473,326
Commitments (Notes 7, 9 and 11)
Stockholders' equity:
Preferred stock, $0.01 par value,
authorized 1,000,000 shares, issued
and outstanding 100,000 shares........ 1,000 1,000 1,000
Common stock, $0.01 par value,
authorized 10,000,000 shares; issued
and outstanding 10,755,327 at
December 31, 1996, 10,770,767 shares
at December 31, 1997 and 10,900,444
shares at September 30, 1998.......... 107,553 107,707 109,004
Additional paid-in capital............. 2,584,152 2,607,593 2,952,293
Retained earnings...................... 1,694,164 3,883,379 13,183,538
Accumulated other comprehensive
income................................ 23,645 54,503 70,381
---------- ----------- -----------
Total stockholders' equity........... 4,410,514 6,654,182 16,316,216
---------- ----------- -----------
Total liabilities and stockholders'
equity.............................. $8,500,645 $10,629,334 $25,789,542
========== =========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
F-3
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED SEPTEMBER 30,
---------------------------------- -----------------------
1995 1996 1997 1997 1998
---------- ---------- ---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Contract revenue........ $3,315,930 $6,177,371 $8,805,066 $6,322,843 $10,165,244
Reimbursed expenses..... (356,664) (916,027) (701,034) (503,416) (515,900)
---------- ---------- ---------- ---------- -----------
Net contract revenue.... 2,959,266 5,261,344 8,104,032 5,819,427 9,649,344
Cost of contract
revenue................ 1,350,158 2,834,760 4,334,245 3,126,705 5,319,992
---------- ---------- ---------- ---------- -----------
Gross profit from
contract revenue....... 1,609,108 2,426,584 3,769,787 2,692,722 4,329,352
---------- ---------- ---------- ---------- -----------
Other operating revenue:
Non-recurring
licensing fees,
milestones and
royalties (Note 9)... 200,000 1,000,000 2,500,000 2,500,000 7,368,921
Recurring royalties
(Note 9)............. -- -- 30,871 639 8,278,161
Technology incentive
award (Note 11)...... (200,000) (100,000) (253,093) (250,069) (1,434,631)
---------- ---------- ---------- ---------- -----------
Other operating
revenue, net....... -- 900,000 2,277,778 2,250,570 14,212,451
---------- ---------- ---------- ---------- -----------
Operating expenses:
Research and
development.......... 36,628 244,812 626,471 443,009 535,069
Selling, general and
administrative....... 882,570 1,219,144 2,246,391 1,400,711 3,162,339
---------- ---------- ---------- ---------- -----------
Total operating
expenses........... 919,198 1,463,956 2,872,862 1,843,720 3,697,408
---------- ---------- ---------- ---------- -----------
Income from operations.. 689,910 1,862,628 3,174,703 3,099,572 14,844,395
---------- ---------- ---------- ---------- -----------
Other income (expense):
Interest expense...... (53,882) (137,967) (175,969) (133,987) (176,865)
Interest income....... 91,532 126,474 163,051 110,290 292,956
Realized gain on sale
of investment
securities........... 6,053 3,895 -- -- --
Other non-operating
income (expense)..... (1,262) 16,235 (25,629) (14,182) 4,011
---------- ---------- ---------- ---------- -----------
Total other income
(expense).......... 42,441 8,637 (38,547) (37,879) 120,102
---------- ---------- ---------- ---------- -----------
Income before income tax
expense................ 732,351 1,871,265 3,136,156 3,061,693 14,964,497
Income tax expense (Note
6)..................... 252,805 637,476 946,941 922,374 5,664,338
---------- ---------- ---------- ---------- -----------
Net income.............. $ 479,546 $1,233,789 $2,189,215 $2,139,319 $ 9,300,159
========== ========== ========== ========== ===========
Basic earnings per
share.................. $ 0.05 $ 0.12 $ 0.20 $ 0.20 $ 0.86
Diluted earnings per
share.................. $ 0.04 $ 0.10 $ 0.18 $ 0.18 $ 0.76
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
F-4
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997 AND THE NINE MONTHS ENDED
SEPTEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK
---------------- ------------------------------
ACCUMULATED
NUMBER $0.01 NUMBER $0.01 ADDITIONAL OTHER RETAINED
COMPREHENSIVE OF PAR OF PAR PAID-IN COMPREHENSIVE EARNINGS
INCOME SHARES VALUE SHARES VALUE CAPITAL INCOME (DEFICIENCY) TOTAL
------------- -------- ------- ---------- -------- ---------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1994
(Note 15)........ $ -- 100,000 $ 1,000 8,856,059 $ 88,561 $ 495,157 $ -- $ (19,171) $ 565,547
Issuance of
common stock... -- -- -- 1,736,030 17,360 2,058,213 -- -- 2,075,573
Net unrealized
gain on
securities
available-for-
sale, net of
tax............ 30,067 -- -- -- -- -- 30,067 -- 30,067
Tax effect of
incentive stock
options held
less than one
year........... -- -- -- -- -- 5,030 -- -- 5,030
Net income for
1995........... 479,546 -- -- -- -- -- -- 479,546 479,546
---------- -------- ------- ---------- -------- ---------- ---------- ----------- -----------
Balance at
December 31,
1995............. $ 509,613 100,000 $ 1,000 10,592,089 $105,921 $2,558,400 $ 30,067 $ 460,375 $ 3,155,763
Issuance of
common stock... -- -- -- 163,238 1,632 23,055 -- -- 24,687
Change in
unrealized gain
on securities
available-for-
sale, net of
tax............ (6,422) -- -- -- -- -- (6,422) -- (6,422)
Tax effect of
incentive stock
options held
less than one
year........... -- -- -- -- -- 2,697 -- -- 2,697
Net income for
1996........... 1,233,789 -- -- -- -- -- -- 1,233,789 1,233,789
---------- -------- ------- ---------- -------- ---------- ---------- ----------- -----------
Balance at
December 31,
1996............. $1,227,367 100,000 $ 1,000 10,755,327 $107,553 $2,584,152 $ 23,645 $ 1,694,164 $ 4,410,514
Issuance of
common stock... -- -- -- 15,440 154 23,441 -- -- 23,595
Change in
unrealized gain
on securities
available-for-
sale, net of
tax............ 30,858 -- -- -- -- -- 30,858 -- 30,858
Net income for
1997........... 2,189,215 -- -- -- -- -- -- 2,189,215 2,189,215
---------- -------- ------- ---------- -------- ---------- ---------- ----------- -----------
Balance at
December 31,
1997............. $2,220,073 100,000 $ 1,000 10,770,767 $107,707 $2,607,593 $ 54,503 $ 3,883,379 $ 6,654,182
Issuance of
common stock... -- -- -- 129,677 1,297 344,700 -- -- 345,997
Change in
unrealized gain
on securities
available-for-
sale, net of
tax............ 15,878 -- -- -- -- -- 15,878 -- 15,878
Net income for
period......... 9,300,159 -- -- -- -- -- -- 9,300,159 9,300,159
---------- -------- ------- ---------- -------- ---------- ---------- ----------- -----------
Balance at
September 30,
1998............. $9,316,037 100,000 $ 1,000 10,900,444 $109,004 $2,952,293 $ 70,381 $13,183,538 $16,316,216
========== ======== ======= ========== ======== ========== ========== =========== ===========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
F-5
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED SEPTEMBER 30,
------------------------------------- -----------------------
1995 1996 1997 1997 1998
----------- ----------- ----------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income.............. $ 479,546 $ 1,233,789 $ 2,189,215 $2,139,319 $ 9,300,159
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization......... 127,358 379,327 689,472 507,803 740,621
Net realized gain on
security
transactions......... (6,053) (3,895) -- -- --
Net loss on sale of
assets............... -- 1,578 9,398 9,398 --
Provision for doubtful
accounts............. -- -- 114,000 23,000 (30,000)
Deferred income tax
(benefit) expense.... 94,131 164,927 (39,919) (45,952) 316,609
Tax effect of stock
sale from stock
options held less
than one year........ 5,030 2,697 -- -- --
Write-off of licensing
costs................ 73,083 -- -- -- --
(Increase) decrease
in:
Accounts
receivable......... (759,876) 35,622 (1,215,678) (694,729) (945,483)
Royalty income
receivable......... -- -- -- -- (3,241,317)
Inventory, prepaid
expenses and
refundable income
taxes.............. (118,682) (88,425) (457,624) (168,792) (479,750)
Interest
receivable......... (17,540) (7,616) (805) (2,727) (4,610)
Due from
shareholder........ 5,197 -- -- -- --
Unbilled services... (114,426) (6,009) 9,300 (120,261) (9,862)
Increase (decrease)
in:
Accounts payable and
accrued expenses... 241,861 (14,055) 575,502 283,288 1,400,150
Customer deposits... 135,000 30,000 37,293 17,300 (20,000)
Unearned income..... 70,623 44,754 76,631 92,123 639,386
Income taxes
payable............ -- 338,684 (338,684) 233,905 386,852
----------- ----------- ----------- ---------- -----------
Net cash provided by
operating activities... 215,252 2,111,378 1,648,101 2,273,675 8,052,755
----------- ----------- ----------- ---------- -----------
INVESTING ACTIVITIES
(Increase) decrease in
certificate of
deposit.............. (51,080) (1,472) 52,551 52,551 --
Purchases of
investment
securities........... (3,040,166) (274,146) (163,216) (162,014) (54,315)
Proceeds from sales of
investment
securities........... 1,183,303 445,467 -- -- --
Purchases of property
and equipment........ (1,204,907) (2,596,060) (869,954) (500,979) (9,460,885)
Proceeds from sale of
equipment............ -- 1,500 4,265 4,265 --
Payments for
deposits............. (1,022) -- -- -- --
Purchase of customer
list................. -- -- -- -- (118,000)
Payments for
organizational
costs................ -- -- -- -- (4,650)
Payments for patent
application costs.... (97,518) (39,185) (85,146) (47,079) (122,923)
----------- ----------- ----------- ---------- -----------
Net cash used in invest-
ing activities......... (3,211,390) (2,463,896) (1,061,500) (653,256) (9,760,773)
----------- ----------- ----------- ---------- -----------
</TABLE>
F-6
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED SEPTEMBER 30,
----------------------------------- -----------------------
1995 1996 1997 1997 1998
---------- ----------- ---------- ---------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
FINANCING ACTIVITIES
Principal payments on
long-term debt and
notes payable........ $ (83,090) $(2,163,883) $ (604,683) $ (490,446) $(2,004,152)
Principal payments
under capital lease
obligations.......... (4,771) (3,478) (3,550) (2,633) (1,256)
Proceeds from
borrowings under
long-term debt and
notes payable........ 1,000,000 3,720,000 -- -- 5,000,000
Payment for deferred
financing costs...... (1,750) -- -- -- 36,930
Disbursements on notes
receivable........... -- -- -- -- (100,000)
Proceeds from sale of
common stock......... 2,075,573 24,687 23,595 22,769 345,997
---------- ----------- ---------- ---------- -----------
Net cash provided by
(used in) financing
activities............. 2,985,962 1,577,326 (584,638) (470,310) 3,277,519
---------- ----------- ---------- ---------- -----------
Increase (decrease) in
cash and cash
equivalents............ (10,176) 1,224,808 1,963 1,150,109 1,569,501
Cash and cash
equivalents at
beginning of period.... 44,923 34,747 1,259,555 1,259,555 1,261,518
---------- ----------- ---------- ---------- -----------
Cash and cash
equivalents at end of
period................. $ 34,747 $ 1,259,555 $1,261,518 $2,409,664 $ 2,831,019
========== =========== ========== ========== ===========
NONCASH ITEMS:
Common stock issued
for purchase of
customer list........ $ -- $ -- $ -- $ -- $ 100,000
Common stock issued
for relocation
incentive............ $ -- $ -- $ -- $ -- $ 200,000
Property acquired
under capital lease.. $ 10,059 $ -- $ -- $ -- $ --
Increase (decrease) in
net unrealized gain
on securities
available-for-sale,
net of tax........... $ 30,067 $ (6,422) $ 30,858 $ (19,378) $ 15,878
ADDITIONAL DISCLOSURES
RELATIVE TO CASH FLOWS:
Interest paid......... $ 53,882 $ 120,058 $ 175,616 $ 133,987 $ 176,865
Income taxes paid..... $ 153,643 $ 91,800 $1,637,921 $ 734,421 $ 4,648,499
Property and equipment
depreciation
expense.............. $ 124,395 $ 368,738 $ 684,909 $ 504,379 $ 717,680
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
F-7
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The Company is an integrated chemistry outsourcing company that offers a
broad range of chemistry research and development services to pharmaceutical
and biotechnology companies involved in drug discovery and development. The
Company offers services traditionally provided by the chemistry divisions
within pharmaceutical companies, including medicinal chemistry, chemical
development, analytical chemistry services and small-scale manufacturing. In
addition to these contract services, the Company conducts a limited amount of
proprietary research and development.
Basis of Consolidation
The consolidated financial statements include the accounts of Albany
Molecular Research, Inc. and its wholly-owned subsidiary, Albany Molecular
Research Export, Inc. (formed in April 1998). All intercompany balances and
transactions have been eliminated during consolidation.
Use of Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the
reporting period. Actual results can vary from these estimates.
Revenue Recognition
The Company recognizes net revenue from its fixed fee type contracts on a
percentage-of-completion basis, and other types of contracts on a per diem
basis as work is performed. In general, provisions include predetermined
payment schedules, or the submission of appropriate billing detail
establishing prerequisites for billings. Unbilled services arise when services
have been rendered under these contracts but customers have not been billed.
Similarly, unearned income represents prebilling for services that have not
yet been billed. Any losses on contracts are recorded when they are
determinable and estimable.
The Company recognizes revenue from licensing fees, milestones and royalties
when the earnings process has been deemed completed and any uncertainties
regarding potential revenue have been resolved.
Credit Risk
The Company provides credit in the normal course of business to its
customers, substantially all of which are in the pharmaceutical and
biotechnology industries. To reduce credit risk, the Company generally
requires advance payments on contracts.
Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
Inventories
Inventories are stated at the lower of cost or market using the first-in,
first-out (FIFO) method and consist primarily of organic chemicals used as raw
materials in the production process.
F-8
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
Property and Equipment
Property and equipment are stated at cost and depreciated on the straight-
line method over their estimated lives, generally three to seven years. The
Company utilizes accelerated depreciation methods for tax purposes over the
minimum statutory period allowed.
Organization Costs
Organization costs are amortized over 60 months.
Patents and Patent Application Costs
The costs of patents issued and acquired are being amortized on the
straight-line method over the estimated remaining lives of the issued patents,
generally 17 years. Patent application and processing costs are capitalized
and will be amortized over the estimated life once a patent is acquired or
expensed in the period the patent application is denied.
Licensing Rights
The costs of licensing rights are being amortized on the straight-line
method over the term of the license agreement, but not in excess of fifteen
years. Licensing costs are accumulated and amortized once the license
agreement is executed. Licensing costs are written off in the period the
licensing rights are canceled or are determined not to provide future
benefits.
Deferred Financing Costs
The costs of acquiring long-term debt obligations are being amortized on the
straight-line method over the term of the obligation, ranging from five to
seven years.
Research and Development
Research and development costs are charged to operations when incurred and
are included in operating expenses.
Income Taxes
The Company applies the asset/liability method of accounting for income
taxes, in which deferred income taxes are recognized for the tax consequences
of temporary differences between the financial statement carrying amounts and
the tax bases of existing assets and liabilities. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the year in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.
Investments
The Company accounts for its investments in accordance with Statement of
Financial Accounting Standards (SFAS) No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Marketable investment securities
at December 31, 1997 consisted of state and political subdivision obligations,
corporate debt obligations, and bond mutual funds, with the Company holding
all of these securities as available-for-sale.
F-9
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
Unrealized holding gains and losses, net of related tax effect, on
available-for-sale securities are excluded from earnings and are reported as a
separate component of shareholders' equity until realized. Interest income is
recognized when earned. Realized gains and losses for securities classified as
available-for-sale are included in earnings and are determined using the
specific identification method.
Interim Financial Data (unaudited)
The interim financial data for the nine months ended September 30, 1997 and
1998 included in the accompanying financial statements is unaudited; however,
in the opinion of the Company, the interim financial data include all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair statement of the results for the interim periods. The interim financial
data are not necessarily indicative of the results of operations for a full
fiscal year.
Comprehensive Income
On January 1, 1998, the Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive
Income." The statement establishes standards for reporting and display of
comprehensive income and its components. Comprehensive income includes the
reported net income of a company adjusted for items that are currently
accounted for as direct entries to equity, such as the mark-to-market
adjustment on securities available for sale, foreign currency items and
minimum pension liability adjustments. In the case of the Company,
comprehensive income represents net income plus other comprehensive income,
which consists of the net change in unrealized gains and losses on securities
available for sale for the period. Accumulated other comprehensive income
represents the net unrealized gain on securities available-for-sale as of the
balance sheet dates. All periods for which the Company has presented financial
information contain the prescribed disclosures.
Reclassifications
Certain amounts in the prior year financial statements have been
reclassified to conform to the presentation in the 1997 financial statements.
Preferred Stock
The Company's preferred stock is convertible in connection with and subject
to an initial public offering by the Company at 20 preferred shares to nine
common shares. For purposes of diluted earnings per share calculations, all
preferred shares are assumed converted to their common stock equivalents.
Recent Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 131, "Disclosures about Segments of an Enterprise and Related
Information," which establishes standards for reporting by public companies
about operating segments of their business. SFAS No. 131 also establishes
standards for related disclosures about products and services, geographic
areas, and major customers. This Statement is effective for periods beginning
after December 15, 1997. Management does not anticipate that the adoption of
this Statement will have a material effect on the Company's financial
statements.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities," which establishes accounting and
reporting standards for derivative instruments, including certain
F-10
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
derivative instruments embedded in other contracts, and for hedging
activities. This Statement is effective for all fiscal quarters of fiscal
years beginning after June 15, 1999. Management does not anticipate that the
adoption of this Statement will have a material effect on the Company's
financial statements.
In 1998, the Accounting Standards Executive Committee (AcSEC) of the AICPA
issued Statement of Position 98-5, "Reporting on the Costs of Start-up
Activities (SOP 98-5). SOP 98-5 requires that the costs of start-up activities
including organizational costs, be expensed as incurred. SOP 98-5 is effective
for financial statements for fiscal years beginning after December 15, 1998.
Management does not anticipate that the adoption of this Statement will have a
material effect on the Company's financial statements.
2. LEASE COMMITMENTS
The Company has a long-term operating lease for its office and laboratory
facilities with a shareholder of the Company. The present lease commenced in
December 1997 and expires in November 2007, with average monthly rental
payments of $23,000. The lease contains a ten-year renewal option with six
months' prior notice. The Company currently holds an option to purchase the
property for $3.5 million. The Company is responsible for paying for the cost
of utilities, operating costs, and property taxes.
The Company also leases laboratory facilities under a separate agreement
with a non-related party that expires June 2001 at a monthly rate of $15,000.
Minimum future payments under noncancelable operating leases as of December
31, 1997 are as follows:
<TABLE>
<S> <C>
1998......................................................... $ 409,687
1999......................................................... 465,103
2000......................................................... 464,488
2001......................................................... 373,670
2002......................................................... 283,652
Thereafter................................................... 1,353,435
----------
Total minimum future lease payments.......................... $3,350,035
==========
</TABLE>
Rental expense amounted to approximately $93,000, $173,000 and $240,000
during 1995, 1996 and 1997, respectively, and $181,000 and $433,000, for the
nine months ended September 30, 1997 and 1998, respectively.
F-11
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
3. LONG-TERM DEBT
Long-term debt is comprised as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
SEPTEMBER 30,
1996 1997 1998
---------- ---------- -------------
<S> <C> <C> <C>
Revolving line of credit from a bank with
a total commitment of $15 million.The
revolving line of credit will convert to
a five year term loan in July 2001.
Interest on the credit facility is
payable monthly at either the bank's
prime rate less 200 basis points or the
London Interbank Offer Rate (LIBOR) plus
50 basis points (the interest rate on the
credit facility was 6.14% at September
30, 1998). Principal payments are due
after the facilities' conversion to the
term loan................................ $ -- $ -- $5,000,000
Note payable to a bank in monthly
installments of $29,762, through October
2003, plus interest at LIBOR plus 1.75%
(7.44% at December 31, 1997) ............ 2,440,478 1,933,333 --
Note payable to the New York Job
Development Authority in monthly
installments of $4,747 including interest
at 5.25%, through June 1, 2001........... 227,841 181,747 145,557
Subordinated note payable to the Albany
Local Development Corporation in monthly
installments of $2,970 including interest
at 7.00%, through December 1, 2000....... 124,035 96,194 73,999
Subordinated note payable to the Albany
Local Development Corporation in monthly
installments of $2,115 including interest
at 7.00%, through June 1, 1998........... 36,037 12,434 --
---------- ---------- ----------
Total long-term debt...................... 2,828,391 2,223,708 5,219,556
Less payments due within one year......... 454,683 448,005 81,979
---------- ---------- ----------
Total long-term debt, net................. $2,373,708 $1,775,703 $5,137,577
========== ========== ==========
</TABLE>
The aggregate maturities of long-term debt for each of the five years
subsequent to December 31, 1997 and thereafter, are as follows:
<TABLE>
<S> <C>
1998.......................................................... $ 448,005
1999.......................................................... 440,341
2000.......................................................... 445,409
2001.......................................................... 385,191
2002.......................................................... 357,143
Thereafter.................................................... 147,619
----------
Total long-term debt........................................ $2,223,708
==========
</TABLE>
In connection with the above bank notes, the Company has entered into a
general security agreement in which all assets now owned and hereafter
acquired by the Company collateralize the notes.
4. NOTE PAYABLE
The Company maintained a line of credit from a bank with unused borrowing
capacity of $500,000 at December 31, 1997. The line is collateralized by a
first security interest in all accounts receivable and inventory. Interest is
payable monthly at LIBOR, plus 1.75% (7.44% at December 31, 1997). Borrowings
under the line of credit are payable on demand.
F-12
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
5. INVESTMENT SECURITIES, AVAILABLE-FOR-SALE
The amortized cost, gross unrealized gains, gross unrealized losses and fair
value for available-for-sale securities by major security type at December 31,
1996 were as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST HOLDING GAINS HOLDING LOSSES FAIR VALUE
---------- ------------- -------------- ----------
<S> <C> <C> <C> <C>
Obligations of states and
political subdivisions.... $1,619,987 $39,409 $ -- $1,659,396
Bond mutual funds.......... 75,503 -- -- 75,503
---------- ------- ------- ----------
$1,695,490 $39,409 $ -- $1,734,899
========== ======= ======= ==========
</TABLE>
Proceeds from the sale of investment securities were $1,183,303 and $445,467
in 1995 and 1996, respectively, resulting in realized gains of $6,053 and
$3,895 for the years then ended.
The amortized cost, gross unrealized gains, gross unrealized losses and fair
value for available-for-sale securities by major security type at December 31,
1997 were as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED
COST HOLDING GAINS HOLDING LOSSES FAIR VALUE
---------- ------------- -------------- ----------
<S> <C> <C> <C> <C>
Obligations of states and
political subdivisions.... $1,619,987 $88,726 $ -- $1,708,713
Corporate debt
obligations............... 158,073 2,113 -- 160,186
Bond mutual funds.......... 80,647 -- -- 80,647
---------- ------- ------- ----------
$1,858,707 $90,839 $ -- $1,949,546
========== ======= ======= ==========
</TABLE>
There were no sales of available-for-sale securities during 1997.
Maturities of debt securities classified as available-for-sale at December
31, 1997 were as follows:
<TABLE>
<CAPTION>
AMORTIZED COST FAIR VALUE
-------------- ----------
<S> <C> <C>
Due after one year through five years............. $ 611,598 $ 631,857
Due after five years through ten years............ 770,097 812,375
Due after ten years............................... 396,365 424,667
---------- ----------
Total debt securities............................. $1,778,060 $1,868,899
========== ==========
</TABLE>
The amortized cost, gross unrealized gains, gross unrealized losses and fair
value for available-for-sale securities by major security type at September
30, 1998 were as follows:
<TABLE>
<CAPTION>
GROSS
GROSS UNREALIZED
AMORTIZED UNREALIZED HOLDING
COST HOLDING GAINS LOSSES FAIR VALUE
---------- ------------- ---------- ----------
<S> <C> <C> <C> <C>
Obligations of states and
political subdivisions........ $1,671,577 $114,552 $ -- $1,786,129
Corporate debt obligations..... 158,073 2,749 -- 160,822
Bond mutual funds.............. 83,375 -- -- 83,375
---------- -------- ------- ----------
$1,913,025 $117,301 $ -- $2,030,326
========== ======== ======= ==========
</TABLE>
There were no sales of investment securities during the nine month periods
ended September 30, 1997 and 1998.
F-13
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
6. INCOME TAXES
Income tax expense (benefit) consists of the following:
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED SEPTEMBER 30,
--------------------------- --------------------
1995 1996 1997 1997 1998
-------- -------- --------- -------- ----------
<S> <C> <C> <C> <C> <C>
Current:
Federal..................... $146,692 $437,800 $ 916,288 $910,110 $4,917,473
State....................... 11,982 34,749 70,572 58,216 429,255
-------- -------- --------- -------- ----------
158,674 472,549 986,860 968,326 5,346,728
-------- -------- --------- -------- ----------
Deferred:
Federal..................... 94,131 159,052 102,117 83,784 72,869
State....................... -- 5,875 (142,036) (129,736) 244,741
-------- -------- --------- -------- ----------
94,131 164,927 (39,919) (45,952) 317,610
-------- -------- --------- -------- ----------
Total income tax expense.... $252,805 $637,476 $ 946,941 $922,374 $5,664,338
======== ======== ========= ======== ==========
</TABLE>
The differences between the income tax expense and income taxes computed
using a federal statutory rate of 34% for the years ended December 31, 1995,
1996, and 1997, and for the nine months ended September 30, 1997, and 35% for
the nine months ended September 30, 1998 were as follows:
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED DECEMBER 31, ENDED SEPTEMBER 30,
------------------------------ ----------------------
1995 1996 1997 1997 1998
-------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Amount computed using
statutory rate......... $248,999 $636,230 $1,066,293 $1,040,976 $5,237,574
Increase (reduction) in
taxes resulting from:
Tax-free interest
income............... (23,254) (31,940) (30,171) (22,497) (23,260)
Benefit of foreign
sales corporation -- -- -- -- (35,520)
Alternative minimum
tax.................. 5,785 (5,540) -- -- --
State taxes, net of
federal benefit...... 7,668 22,914 46,577 38,422 438,097
State investment tax
credits.............. -- -- (161,858) (161,858) --
Others, net........... 13,607 15,812 26,100 27,331 47,447
-------- -------- ---------- ---------- ----------
Total income tax
expense.............. $252,805 $637,476 $ 946,941 $ 922,374 $5,664,338
======== ======== ========== ========== ==========
</TABLE>
Temporary differences giving rise to the Company's deferred tax liability
consist primarily of the excess of depreciation for tax purposes over the
amount for financial reporting purposes.
The Company had available New York State investment tax credits of
approximately $68,000 and $230,000, at December 31, 1996 and 1997,
respectively. These credits have a ten-year carryforward period, with
expiration dates ranging from 2002 to 2007.
At December 31, 1997, the Company had recorded a deferred tax asset of
approximately $230,000; representing New York State investment tax credits.
The estimated annual effective tax rate for the nine months ended September
30, 1998 includes the anticipated realization of these tax credits.
F-14
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
7. EMPLOYEE BENEFIT PLAN
The Company maintains a savings and profit sharing plan under section 401(k)
of the Internal Revenue Code covering all eligible employees. Employees must
complete six months of service and be over 20 1/2 years of age as of the
plan's entry dates. Participants may contribute up to 15% of their
compensation, limited to $9,500 per annum in 1997 and $10,000 per annum in
1998. The Company currently makes matching contributions equal to 50% of the
participant's contributions (up to a limit of 6% of the participant's
compensation). In addition, the Company has reserved the right to make
discretionary profit sharing contributions to employee accounts. Employer
matching contributions vest at a rate of 20% per year beginning after 2 years
of participation in the plan. Employer matching contributions were $8,000,
$10,000 and $21,000 for the years ended December 31, 1995, 1996 and 1997,
respectively. Employer matching contributions were $17,000 and $39,000, for
the nine months ended September 30, 1997 and 1998, respectively.
8. STOCK OPTION PLAN
The Company has a 1992 Stock Option Plan, through which the Company may
issue incentive stock options or non-qualified stock options. Incentive stock
options granted to employees may be granted at prices not less than 100
percent of the fair market value at the date of option grant. Non-qualified
stock options may be granted to employees, directors, advisors, consultants
and other key persons of the Company at prices established at the date of
grant, and may be less than the fair market value at the date of grant. All
incentive stock options may be exercised at any time, after vesting, over a
ten-year period subsequent to the date of grant. Non-qualified stock option
terms will be established at the date of grant, but shall have a duration of
not more than ten years.
The fair value of each option granted is estimated on the grant date using
the Black-Scholes pricing model with the following weighted-average
assumptions used for grants in 1995, 1996 and 1997: no dividend yield for all
years; zero expected volatility for all years; risk-free interest rates of
5.69%, 6.80%, and 6.80%, respectively, and expected lives of five years and
four years for the incentive options for all years and three years and four
years for the non-qualified options for all years.
The Company applies APB Opinion 25 "Accounting for Stock Issued to
Employees" in accounting for its incentive and non-qualified stock
compensation plan. Accordingly, no compensation cost has been recognized for
either plan in 1995, 1996 or 1997. Had compensation cost been determined on
the basis of fair value pursuant to Statement of Financial Accounting
Standards No. 123 "Accounting for Stock-Based Compensation," net income would
have been reduced as follows:
<TABLE>
<CAPTION>
1995 1996 1997
-------- ---------- ----------
<S> <C> <C> <C>
NET INCOME
As reported................................... $479,546 $1,233,789 $2,189,215
======== ========== ==========
Pro forma..................................... $459,057 $1,208,938 $2,146,820
======== ========== ==========
EARNINGS PER SHARE
Basic as reported............................. $ 0.05 $ 0.12 $ 0.20
Diluted as reported........................... $ 0.04 $ 0.10 $ 0.18
Basic pro forma............................... $ 0.04 $ 0.11 $ 0.20
Diluted pro forma............................. $ 0.04 $ 0.10 $ 0.18
</TABLE>
F-15
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
Following is a summary of the status of incentive and non-qualified options
during 1995, 1996, and 1997:
<TABLE>
<CAPTION>
INCENTIVE NON-QUALIFIED
------------------- ------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
NUMBER EXERCISE NUMBER EXERCISE
OF SHARES PRICE OF SHARES PRICE
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Outstanding at January 1, 1995......... 921,375 $0.21 652,500 $2.15
Granted.............................. 108,000 1.12 67,500 1.83
Exercised............................ (45,000) 0.11 -- --
Forfeited............................ -- -- -- --
--------- ----- ------- -----
Outstanding at December 31, 1995....... 984,375 $0.39 720,000 $2.13
========= ===== ======= =====
Options exercisable at December 31,
1995.................................. 606,375 $0.23 652,500 $2.15
========= ===== ======= =====
<CAPTION>
INCENTIVE NON-QUALIFIED
------------------- ------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
NUMBER EXERCISE NUMBER EXERCISE
OF SHARES PRICE OF SHARES PRICE
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Outstanding at January 1, 1996......... 984,375 $0.39 720,000 $2.13
Granted.............................. 95,625 2.30 16,875 2.18
Exercised............................ (163,238) 0.15 -- --
Forfeited............................ -- -- -- --
--------- ----- ------- -----
Outstanding at December 31, 1996....... 916,762 $0.39 736,875 $2.13
========= ===== ======= =====
Options exercisable at December 31,
1996.................................. 713,138 $0.22 652,500 $2.15
========= ===== ======= =====
<CAPTION>
INCENTIVE NON-QUALIFIED
------------------- ------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
NUMBER EXERCISE NUMBER EXERCISE
OF SHARES PRICE OF SHARES PRICE
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Outstanding at January 1, 1997......... 916,762 $0.39 736,875 $2.13
Granted.............................. 361,211 3.33 78,440 3.28
Exercised............................ (8,792) 0.29 -- --
Forfeited............................ (22,500) 2.99 -- --
--------- ----- ------- -----
Outstanding at December 31, 1997....... 1,246,681 $1.32 815,315 $2.23
========= ===== ======= =====
Options exercisable at December 31,
1997.................................. 812,348 $0.34 652,500 $2.00
========= ===== ======= =====
</TABLE>
F-16
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
Following is a summary of the status of employee incentive options
outstanding at December 31, 1997:
<TABLE>
<CAPTION>
OUTSTANDING OPTIONS EXERCISABLE OPTIONS
--------------------------------- ------------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
EXERCISE CONTRACTUAL EXERCISE EXERCISE
PRICE RANGE NUMBER LIFE PRICE NUMBER PRICE
----------- ------- ----------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$0.11 - 0.22 613,125 5.22 years $0.17 613,125 $ 0.17
0.56 91,223 5.83 years 0.55 91,223 0.55
1.12 108,000 7.58 years 1.12 108,000 1.12
1.90 - 2.18 50,625 8.36 years 1.93 -- --
2.99 - 3.60 383,708 9.51 years 3.31 -- --
</TABLE>
The Company estimates that based on a five-year vesting period at December
31, 1997, on a weighted average basis, approximately 87% of such options will
eventually vest.
Following is a summary of the status of non-qualified options outstanding at
December 31, 1997:
<TABLE>
<CAPTION>
OUTSTANDING OPTIONS EXERCISABLE OPTIONS
--------------------------------- ------------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
REMAINING AVERAGE AVERAGE
EXERCISE CONTRACTUAL EXERCISE EXERCISE
PRICE RANGE NUMBER LIFE PRICE NUMBER PRICE
----------- ------- ----------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$0.22 22,500 1.52 years $0.22 22,500 $ 0.22
1.84 - 2.22 714,375 5.52 years 2.19 630,000 2.22
3.06 - 3.51 78,440 9.40 years 3.28 -- --
</TABLE>
The Company estimates that based on a three-year vesting period at December
31, 1997, on a weighted average basis, approximately 77% of such options will
eventually vest.
Any options issued to non-employees are expensed based upon the fair value
of the options.
9. ROYALTY & LICENSING ARRANGEMENT
On March 15, 1995, the Company entered into a License Agreement and a Stock
Purchase Agreement with Marion Merrell Dow Inc., now known as Hoechst Marion
Roussel, Inc. ("HMRI"). Under the terms of the Stock Purchase Agreement, the
Company sold 1,627,231 shares of the Company's Common Stock to HMRI for
$2.0 million. Under the terms of the License Agreement, the Company granted
HMRI an exclusive, worldwide license, with the right to grant sublicenses,
upon the prior written consent of the Company, to any patents issued to the
Company related to its original terfenadine carboxylic acid metabolite patent
application. Terfenadine carboxylic acid metabolite is the active ingredient
in the new non-sedating antihistamine fexofenadine HCl, marketed as a
prescription medicine by HMRI. In return for the license, HMRI agreed to pay
the Company up to $6.5 million based upon the achievement of five patenting
milestones and future royalties based on sales of fexofenadine HCl. The five
patenting milestones consist of:
.Issuance of a U.S. "Intermediate Process Claim";
.Issuance of a U.S. "Process Manufacturing Claim";
.Issuance of an ex-U.S. "Process Manufacturing Claim";
.Issuance of a U.S. "Substantially Pure Claim"; and
.Issuance of an ex-U.S. "Substantially Pure Claim".
F-17
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
In October 1996, the Company was awarded a patent in Australia that
satisfied the ex-U.S. "Process Manufacturing Claim" milestone. In accordance
with the terms of the Agreement, the Company received a milestone payment and
will receive a royalty on all sales of fexofenadine HCl in that country. HMRI
began selling a product using fexofenadine HCl in January 1997 in Australia.
In November 1996, the Company was awarded a U.S. patent that satisfied the
U.S. "Substantially Pure Claim." However, under the terms of the Agreement,
HMRI had the right to institute action to provoke an interference claim and,
upon successfully doing so, was not obligated to pay any milestones or
royalties until, and if, the interference was resolved in favor of the
Company. In February 1998, the United States Patent and Trademark Office
("PTO") Board of Patent Appeals and Interferences rendered a decision that the
Company was first to make the invention and confirming that the Company was
properly awarded the aforementioned patent. Accordingly, in the first six
months of 1998, the Company received and recognized the associated milestone
payment and royalties on all sales of fexofenadine HCl (Allegra) in the United
States from November 26, 1996 through December 31, 1997, as stipulated in the
Agreement. The total payment was $6.3 million. Because of the decision that
the Company was first to make the invention, the Company will be entitled to
receive royalties on all sales of fexofenadine HCl in the United States.
In December 1996, the PTO informed the Company that the Company's patent
application containing a U.S. "Process Manufacturing Claim" was in
interference with a patent application of HMRI. In May 1997, the PTO Board of
Patent Appeals and Interferences rendered a decision that the Company was
first to make the invention. Under the terms of the Agreement, no milestones
or royalties are due to the Company until a patent issued. Under the
procedures of the PTO, a patent is not issued until the PTO publishes it. The
patent was published in May 1998. Upon the patent publication, the Company was
entitled to and did receive the milestone payment for a U.S. "Process
Manufacturing Claim." Additionally, the Company is entitled to receive a
royalty on worldwide "Sales" of fexofenadine HCl from the date of patent
issuance until expiration of the patent. In January 1997, the Company was
awarded a patent that satisfied the U.S. "Intermediate Process Claim"
milestone. In accordance with the terms of the Agreement, the Company received
a milestone payment. There are no royalties associated with this patent.
In July 1997, the Company was awarded a New Zealand patent that satisfied
the ex-U.S. "Substantially Pure Claim" milestone. In accordance with the terms
of the Agreement, the Company received a milestone payment and will receive
royalties on all sales of fexofenadine HCl in that country.
10. CONCENTRATION OF BUSINESS
For the years ended December 31, 1997, 1996 and 1995, net contract revenue
from the Company's three largest customers represented approximately 29%, 11%
and 9% for 1997, 34%, 9% and 9% for 1996, and 42%, 14% and 8% for 1995, of
total net contract revenue for such year, respectively. For the nine months
ended September 30, 1998, net contract revenue from the Company's three
largest customers represented approximately 18%, 17% and 15% of total net
contract revenue, respectively. In the majority of circumstances, there are
agreements in force with these entities that guarantee the Company's continued
involvement in present research projects. However, there regularly exists the
possibility that the Company will have no further association with these
entities once these projects conclude.
11. TECHNOLOGY DEVELOPMENT INCENTIVE PLAN
In 1993, the Company adopted a Technology Development Incentive Plan to
provide a method to stimulate and encourage novel innovative technology
development. To be eligible to participate, the individual must be an
F-18
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
employee of the Company and must be the inventor or co-inventor of novel
technology that results in new revenues generated for, or by, the Company.
Eligible participants will share in awards based on ten percent (10%) of the
"Net Technology Revenue," as defined by the Plan.
In 1995, 1996 and 1997, the Company awarded Technology Incentive
Compensation to the inventor of the terfenadine carboxylic acid metabolite
technology. The inventor is a director, officer and shareholder of the
Company.
12. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of the financial
instruments is made in accordance with the requirements of Statement of
Financial Standards No. 107 "Fair Value of Financial Instruments." Although
the estimated fair value amounts have been determined by the Company using
available market information and appropriate valuation methodologies,
estimates presented are not necessarily indicative of the amounts that the
Company could realize in current market exchanges.
The Company is estimating its fair value disclosures for financial
instruments used the following methods and assumptions:
Cash and short-term investments, receivables, and accounts payable: The
carrying amounts reported in the consolidated balance sheets approximate their
fair value.
Available-for-sale securities and other investments: The fair value of all
securities and investments are estimated from market prices (see Note 5).
The carrying value of long-term debt including current portion, was
approximately $2,828,389 and $2,223,708 at December 31, 1996 and 1997,
respectively, and $5,219,556 at September 30, 1998 while the estimated fair
value was $2,811,378 and $2,208,293 at December 31, 1996 and 1997,
respectively, and $5,215,078 at September 30, 1998 based upon interest rates
available to the Company for issuance of similar debt with similar terms and
remaining maturities.
13. EARNINGS PER SHARE
The following table reconciles basic and diluted earnings per share
calculations:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995 YEAR ENDED DECEMBER 31, 1996
------------------------------- -------------------------------
AVERAGE PER SHARE AVERAGE PER SHARE
NET INCOME SHARES AMOUNT NET INCOME SHARES AMOUNT
---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Basic earnings per
share.................. $479,546 10,262,766 $0.05 $1,233,789 10,706,214 $0.12
Dilutive effect of stock
options and grants..... -- 981,424 -- -- 1,034,349 --
Dilutive effect of
assumed preferred stock
conversion............. -- 45,000 -- -- 45,000 --
-------- ---------- ----- ---------- ---------- -----
Diluted earnings per
share.................. $479,546 11,289,190 $0.04 $1,233,789 11,785,563 $0.10
======== ========== ===== ========== ========== =====
</TABLE>
F-19
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 1995, 1996 AND 1997
(INFORMATION WITH RESPECT TO THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
IS UNAUDITED)
Not included in the December 31, 1995 shares above were 805,500 shares that
were anti-dilutive for earnings per share purposes.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997
-------------------------------
AVERAGE PER SHARE
NET INCOME SHARES AMOUNT
---------- ---------- ---------
<S> <C> <C> <C>
Basic earnings per share................... $2,189,215 10,760,827 $0.20
Dilutive effect of stock options and
grants.................................... -- 1,207,798 --
Dilutive effect of assumed preferred stock
conversion................................ -- 45,000 --
---------- ---------- -----
Diluted earnings per share................. $2,189,215 12,013,625 $0.18
========== ========== =====
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, 1997 SEPTEMBER 30, 1998
------------------------------- -------------------------------
AVERAGE PER SHARE AVERAGE PER SHARE
NET INCOME SHARES AMOUNT NET INCOME SHARES AMOUNT
---------- ---------- --------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C>
Basic earnings per
share.................. $2,139,319 10,759,312 $0.20 $9,300,159 10,842,259 $0.86
Dilutive effect of stock
options and grants..... -- 1,142,306 -- -- 1,366,505 --
Dilutive effect of
assumed preferred stock
conversion............. -- 45,000 -- -- 45,000 --
---------- ---------- ----- ---------- ---------- -----
Diluted earnings per
share.................. $2,139,319 11,946,618 $0.18 $9,300,159 12,253,764 $0.76
========== ========== ===== ========== ========== =====
</TABLE>
Not included in the September 30, 1998 shares above were 174,375 shares that
were anti-dilutive for earnings per share purposes.
14. NOTES RECEIVABLE
The notes receivable represents advances to two senior officers of the
Company. The notes receivable and accrued interest will not be repaid provided
the officers remain in the employ of the Company. If employment is terminated
within the five year amortization period, a pro-rata portion of the principal
and interest shall be repayable to the Company.
15. SUBSEQUENT EVENTS
On November 30, 1998, the Board of Directors approved a 3-for-2 split of the
Company's common stock that was effective on that date. Also, in connection
with the filing of a registration statement with the Securities and Exchange
Commission for an initial public offering of the Company's common stock, the
Company will effect a reincorporation by merger prior to the effective date of
such registration statement. In connection with such reincorporation, each
share of outstanding common stock of Albany Molecular Research, Inc.
(incorporated in New York) will be exchanged for 1-1/2 shares of common stock
of a new company to be incorporated in Delaware. All share and per share
information included in the accompanying financial statements have been
restated to reflect the 3-for-2 stock split and the reincorporation by merger.
On October 28, 1998, the Company entered into a severance and stock
repurchase agreement with its former chief financial officer ("Former CFO").
In exchange for a release of any and all claims against the Company, the
Former CFO accepted a financial package that included a severance component
equal to one-years' base salary and the prior years' bonus. The Company also
agreed to vest all currently unexercisable stock options of the Former CFO and
to repurchase the shares represented by these options. The Former CFO agreed
to exchange all of his outstanding shares and the shares that were represented
by all of his outstanding stock options for a purchase price of approximately
$9.9 million. In total, the Company repurchased 1,131,903 shares of Common
Stock. The Former CFO received a $2.0 million initial payment together with a
five-year note payable for the remainder of the consideration, with principal
due in annual installments and interest due in quarterly installments at the
prime rate (7.75% at November 30, 1998).
F-20
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN
ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
---------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 3
Risk Factors............................................................. 7
Use of Proceeds.......................................................... 14
Dividend Policy.......................................................... 14
Capitalization........................................................... 15
Dilution................................................................. 16
Selected Consolidated Financial Data..................................... 17
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 18
Business................................................................. 25
Management............................................................... 37
Certain Transactions..................................................... 45
Principal Stockholders................................................... 46
Description of Capital Stock............................................. 47
Shares Eligible for Future Sale.......................................... 50
Underwriting............................................................. 52
Legal Matters............................................................ 53
Experts.................................................................. 53
Additional Information................................................... 54
Index to Consolidated Financial Statements............................... F-1
</TABLE>
---------------
UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS
EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN
THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS DELIVERY
REQUIREMENT IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS
WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
2,200,000 SHARES
[ALBANY MOLECULAR RESEARCH, INC. LOGO APPEARS HERE]
COMMON STOCK
---------------
PROSPECTUS
---------------
ING BARING FURMAN SELZ LLC
HAMBRECHT & QUIST
, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION(1)
The following table sets forth the estimated expenses payable by the Company
in connection with this offering (excluding underwriting discounts and
commissions):
<TABLE>
<CAPTION>
NATURE OF EXPENSE AMOUNT
----------------- -----------
<S> <C>
SEC Registration Fee............................................ $ 14,095
NASD Filing Fee................................................. 4,801
Nasdaq Listing Fee.............................................. 75,625
Accounting Fees and Expenses.................................... 200,000
Legal Fees and Expenses......................................... 450,000
Printing Expenses............................................... 150,000
Blue Sky Qualification Fees and Expenses........................ 10,000
Transfer Agent's Fee............................................ 25,000
Miscellaneous................................................... 70,479
-----------
TOTAL......................................................... $ 1,000,000
===========
</TABLE>
- ----------
(1) The amounts set forth above, except for the SEC, NASD and Nasdaq fees, are
in each case estimated.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
In accordance with Section 145 of the General Corporation Law of the State
of Delaware, Article VII of the Company's Amended and Restated Certificate of
Incorporation (the "Certificate") provides that no director of the Company
shall be personally liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) in respect of
certain unlawful dividend payments or stock redemptions or repurchases, or
(iv) for any transaction from which the director derived an improper personal
benefit. In addition, the Certificate provides that if the Delaware General
Corporation Law is amended to authorize the further elimination or limitation
of the liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended.
Article V of the Company's Amended and Restated By-laws provides for
indemnification by the Company of its officers and certain non-officer
employees under certain circumstances against expenses (including attorneys
fees, judgments, fines and amounts paid in settlement) reasonably incurred in
connection with the defense or settlement of any threatened, pending or
completed legal proceeding in which any such person is involved by reason of
the fact that such person is or was an officer or employee of the Company if
such person acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the Company, and, with
respect to criminal actions or proceedings, if such person had no reasonable
cause to believe his or her conduct was unlawful.
The Company has entered into indemnification agreements with each of its
directors reflecting the provisions of its By-laws and requiring the
advancement of expenses in proceedings involving such directors in most
circumstances.
Under Section 8 of the Underwriting Agreement filed as Exhibit 1.1 hereto,
the Underwriters have agreed to indemnify, under certain conditions, the
Company, its directors, certain officers and persons who control the Company
within the meaning of the Securities Act against certain liabilities.
II-1
<PAGE>
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Set forth in chronological order below is information regarding the number
of shares of capital stock issued by the Registrant for the past three years
beginning in July 1995. Further included is the consideration, if any,
received by the Registrant for such shares, and information relating to the
section of the Securities Act of 1933, as amended (the "Securities Act"), or
rule of the Securities and Exchange Commission under which exemption from
registration was claimed. The following transactions give effect to the
Company's 2.25-for-1 stock split of its Common Stock, which will become
effective in connection with the offering.
(1) In August 1995, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase an aggregate of 108,000 shares of
the Registrant's Common Stock to employees of the Registrant in reliance
upon the exemption from registration under Rule 701 promulgated under the
Securities Act.
(2) In October 1995, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase an aggregate of 67,500 shares of
the Registrant's Common Stock to directors of the Registrant in reliance
upon the exemption from registration under Rule 701 promulgated under the
Securities Act.
(3) In February 1996, the Registrant issued 78,750 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $11,550 to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(4) In May 1996, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase an aggregate of 67,500 shares of
the Registrant's Common Stock to employees and directors of the
Registrant in reliance upon the exemption from registration under Rule
701 promulgated under the Securities Act.
(5) In May 1996, the Registrant issued 45,113 shares of the Registrant's
Common Stock upon the exercise of outstanding stock options for an
aggregate exercise price of $5,063 to employees of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(6) In July 1996, the Registrant issued 33,750 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $4,950 to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(7) In July 1996, the Registrant issued 5,625 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $3,125 to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(8) In October 1996, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase an aggregate of 22,500 shares of
the Registrant's Common Stock to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(9) In December 1996, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase an aggregate of 22,500 shares of
the Registrant's Common Stock to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(10) In January 1997, pursuant to stock option agreements, the Registrant
granted options to purchase an aggregate of 34,115 shares of the
Registrant's Common Stock to employees of the Registrant in reliance upon
the exemption from registration under Rule 701 promulgated under the
Securities Act.
(11) In January 1997, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase an aggregate of 84,348 shares of
the Registrant's Common Stock to employees of the Registrant in reliance
upon the exemption from registration under Rule 701 promulgated under the
Securities Act.
II-2
<PAGE>
(12) In January 1997, the Registrant issued 113 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $63 to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(13) In February 1997, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase an aggregate of 22,500 shares of
the Registrant's Common Stock to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(14) In April 1997, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase an aggregate of 16,875 shares of
the Registrant's Common Stock to directors of the Registrant in reliance
upon the exemption from registration under Rule 701 promulgated under the
Securities Act.
(15) In May 1997, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase an aggregate of 67,500 shares of
the Registrant's Common Stock to employees of the Registrant in reliance
upon the exemption from registration under Rule 701 promulgated under the
Securities Act.
(16) In May 1997, the Registrant issued 2,153 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $1,196 to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(17) In June 1997, the Registrant granted an aggregate of 6,647 shares of the
Registrant's Common Stock to directors of the Registrant in reliance upon
the exemption from registration under Rule 701 promulgated under the
Securities Act.
(18) In July 1997, the Registrant issued 900 shares of the Registrant's Common
Stock upon the exercise of an outstanding stock option for an aggregate
exercise price of $500 to an employee of the Registrant in reliance upon
the exemption from registration under Rule 701 promulgated under the
Securities Act.
(19) In September 1997, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase 22,500 shares of the Registrant's
Common Stock to an employee of the Registrant in reliance upon the
exemption from registration under Rule 701 promulgated under the
Securities Act.
(20) In December 1997, pursuant to stock option agreements, the Registrant
granted options to purchase an aggregate of 27,450 shares of the
Registrant's Common Stock to employees of the Registrant in reliance upon
the exemption from registration under Rule 701 promulgated under the
Securities Act.
(21) In December 1997, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase an aggregate of 164,363 shares of
the Registrant's Common Stock to employees of the Registrant in reliance
upon the exemption from registration under Rule 701 promulgated under the
Securities Act.
(22) In December 1997, the Registrant issued 5,625 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $825 to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(23) In February 1998, the Registrant issued 6,750 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $990 to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(24) In February 1998, the Registrant issued 5,738 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $638 to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(25) In March 1998, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase an aggregate of 33,750 shares of
the Registrant's Common Stock to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
II-3
<PAGE>
(26) In March 1998, the Registrant issued 1,876 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $3,444 to the estate of a former director of
the Registrant in reliance upon the exemption from registration under
Rule 701 promulgated under the Securities Act.
(27) In March 1998, the Registrant issued 5,175 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $575 to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(28) In March 1998, the Registrant issued 22,500 shares of the Registrant's
Common Stock to Hoffman Enterprises, the Registrant's landlord, as
partial reimbursement for expenses incurred by Hoffman Enterprises in
relocating other tenants in order to facilitate the Company's expansion
in reliance upon the exemption from registration under Section 4(2) of
the Securities Act.
(29) In March 1998, the Registrant issued 11,250 shares of the Registrant's
Common Stock to Michael J. Sherrod in consideration of his interest in
his regulatory consulting business in reliance upon the exemption from
registration under Section 4(2) of the Securities Act.
(30) In April 1998, the Registrant issued 26,100 shares of the Registrant's
Common Stock upon the exercise of outstanding stock options for an
aggregate exercise price of $5,300 to employees of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(31) In May 1997, under the Registrant's 1992 Stock Option Plan, the
Registrant granted options to purchase 5,625 shares of the Registrant's
Common Stock to a director of the Registrant in reliance upon the
exemption from registration under Rule 701 promulgated under the
Securities Act.
(32) In May 1998, the Registrant issued 9,000 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $10,080 to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(33) In June 1998, the Registrant issued 9,000 shares of the Registrant's
Common Stock upon the exercise of outstanding stock options for an
aggregate exercise price of $2,240 to employees of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(34) In June 1998, the Registrant granted 788 shares of the Registrant's
Common Stock to a director of the Registrant in reliance upon the
exemption from registration under Rule 701 promulgated under the
Securities Act.
(35) In July 1998, the Registrant issued 22,500 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $5,000 to a consultant of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(36) In August 1998, the Registrant issued 9,000 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $10,080 to an employee of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
(37) In October 1998, the Registrant issued 200,558 shares of the Registrant's
Common Stock upon the exercise of an outstanding stock option for an
aggregate exercise price of $141,560 to a former officer of the
Registrant in reliance upon the exemption from registration under Rule
701 promulgated under the Securities Act.
(38) In October 1998, the Registrant issued 1,125 shares of the Registrant's
Common Stock to a director of the Registrant as compensation for his
services as a director in reliance upon the exemption from registration
under Rule 701 promulgated under the Securities Act.
II-4
<PAGE>
(39) In October 1998, the Registrant granted options to purchase 5,625 shares
of the Registrant's Common Stock to a director of the Registrant in
reliance upon the exemption from registration under Rule 701 promulgated
under the Securities Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
<TABLE>
<C> <S>
*1.1 Form of Underwriting Agreement.
+3.1 Certificate of Incorporation.
+3.2 Form of Amended and Restated Certificate of Incorporation (to be filed
immediately prior to effectiveness of the Registration Statement).
+3.3 Form of Restated Certificate of Incorporation (to be filed following
the closing of the offering referred to in the Registration Statement).
+3.4 By-Laws.
+3.5 Form of Amended and Restated By-laws (to be effective upon
effectiveness of the Registration Statement).
4.1 Specimen certificate for shares of Common Stock, $0.01 par value, of
the Registrant.
+5.1 Opinion of Goodwin, Procter & Hoar LLP as to the validity of the
securities being offered.
10.1 Lease dated as of October 9, 1992, as amended, by and between the
Registrant and Hoffman Enterprises.
10.2 1998 Stock Option and Incentive Plan of the Registrant.
+10.3 Amended and Restated 1992 Stock Option Plan of the Registrant.
+10.4 1998 Employee Stock Purchase Plan of the Registrant.
+10.5 Form of Indemnification Agreement between the Registrant and each of
its directors.
+10.6 Form of Employee Incentive Stock Option Certificate and Agreement for
Amended and Restated 1992 Stock Option Plan.
10.7 License Agreement dated March 15, 1995 by and between the Registrant
and Marion Merrell Dow Inc. (now Hoechst Marion Roussel, Inc.)
(excluding certain portions which have been omitted as indicated based
upon a request for confidential treatment, but which have been filed
separately with the Commission).
10.8 Principles of Cooperation Between Albany Molecular Research and Cambrex
Corporation dated February 1, 1997 by and between the Registrant and
Cambrex Corporation (excluding certain portions which have been omitted
as indicated based upon a request for confidential treatment, but which
have been filed separately with the Commission).
10.9 Agreement dated December 16, 1997 by and between the Registrant and Eli
Lilly and Company (excluding certain portions which have been omitted
as indicated based upon a request for confidential treatment, but which
have been filed separately with the Commission).
+10.10 Technology Development Incentive Plan.
10.11 Form of Employment Agreement between the Registrant and Thomas E.
D'Ambra, Ph.D.
10.12 Form of Employment Agreement between the Registrant and Harold Meckler,
Ph.D.
10.13 Form of Employment Agreement between the Registrant and Michael P.
Trova, Ph.D.
10.14 Form of Employee Innovation, Proprietary Information and Post-
Employment Activity Agreement between the Registrant and each of its
Named Executive Officers.
10.15 Letter Agreement between the Registrant and Harold M. Armstrong, Jr.
+21.1 Subsidiaries of the Registrant.
+23.1 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1
hereto).
</TABLE>
II-5
<PAGE>
<TABLE>
<C> <S>
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of Ostrolenk, Faber, Gerb & Soffen, LLP.
+24.1 Powers of Attorney (included on signature pages).
27.1 Financial Data Schedule.
</TABLE>
- ----------
+ Previously filed.
* To be filed by amendment.
(B) FINANCIAL STATEMENT SCHEDULES
All schedules have been omitted because they are not required or because the
required information is given in the Financial Statements or Notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act, and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS AMENDMENT NO. 3 TO THE REGISTRATION STATEMENT TO BE
SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE
CITY OF ALBANY, STATE OF NEW YORK, ON DECEMBER 8, 1998.
Albany Molecular Research, Inc.
/s/ Thomas E. D'Ambra, Ph.D.
By: _________________________________
Thomas E. D'Ambra, Ph.D.
Chairman and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 3 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<S> <C>
SIGNATURE TITLE DATE
/s/ Thomas E. D'Ambra, Ph.D. Chairman of the December 8,
- ------------------------------------- Board, Chief 1998
THOMAS E. D'AMBRA, PH.D. Executive Officer
and Director
(Principal
Executive Officer)
* President and December 8,
- ------------------------------------- Director 1998
DONALD E. KUHLA, PH.D.
/s/ Rodney A. Tillinghast Controller and December 8,
- ------------------------------------- Acting 1998
RODNEY A. TILLINGHAST Chief Financial
Officer (Principal
Accounting Officer)
* Vice President, December 8,
- ------------------------------------- Senior Research 1998
CHESTER J. OPALKA Chemist and
Director
* Director December 8,
- ------------------------------------- 1998
ANTHONY P. TARTAGLIA, M.D.
*By:/s/ Thomas E. D'Ambra, Ph.D.
----------------------------------
THOMAS E. D'AMBRA, PH.D.
ATTORNEY-IN-FACT
</TABLE>
II-7
<PAGE>
POWER OF ATTORNEY
KNOWN ALL MEN BY THESE PRESENTS that each individual whose signature appears
below constitutes and appoints each of Thomas E. D'Ambra and Donald E. Kuhla
such person's true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution for such person and in such person's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post effective amendments and Registration Statements filed under
Rule 462(b)) to this Registration Statement, and to file the same, with all
exhibits thereto, and all documents in connection therewith, with the
Securities and Exchange Commission, granting unto each said attorney-in-fact
and agent full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as such person might or could do in person, hereby
ratifying and confirming all that any said attorney-in-fact and agent, or any
substitute or substitutes of any of them, may lawfully do or cause to be done
by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
<TABLE>
<S> <C>
</TABLE>
SIGNATURE TITLE DATE
/s/ Frank W. Haydu III Director December 8, 1998
- -------------------------------------
FRANK W. HAYDU III
II-8
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
*1.1 Form of Underwriting Agreement.
+3.1 Certificate of Incorporation.
+3.2 Form of Amended and Restated Certificate of Incorporation (to be
filed immediately prior to effectiveness of the Registration
Statement).
+3.3 Form of Restated Certificate of Incorporation (to be filed
following the closing of the offering referred to in the
Registration Statement).
+3.4 By-Laws.
+3.5 Form of Amended and Restated By-laws (to be effective upon
effectiveness of the Registration Statement).
4.1 Specimen certificate for shares of Common Stock, $0.01 par
value, of the Registrant.
+5.1 Opinion of Goodwin, Procter & Hoar LLP as to the validity of the
securities being offered.
10.1 Lease dated as of October 9, 1992, as amended, by and between
the Registrant and Hoffman Enterprises.
10.2 1998 Stock Option and Incentive Plan of the Registrant.
+10.3 Amended and Restated 1992 Stock Option Plan of the Registrant.
+10.4 1998 Employee Stock Purchase Plan of the Registrant.
+10.5 Form of Indemnification Agreement between the Registrant and
each of its directors.
+10.6 Form of Employee Incentive Stock Option Certificate and
Agreement for Amended and Restated 1992 Stock Option Plan.
10.7 License Agreement dated March 15, 1995 by and between the
Registrant and Marion Merrell Dow Inc. (now Hoechst Marion
Roussel, Inc.) (excluding certain portions which have been
omitted as indicated based upon a request for confidential
treatment, but which have been filed separately with the
Commission).
10.8 Principles of Cooperation Between Albany Molecular Research and
Cambrex Corporation dated February 1, 1997 by and between the
Registrant and Cambrex Corporation (excluding certain portions
which have been omitted as indicated based upon a request for
confidential treatment, but which have been filed separately
with the Commission).
10.9 Agreement dated December 16, 1997 by and between the Registrant
and Eli Lilly and Company (excluding certain portions which have
been omitted as indicated based upon a request for confidential
treatment, but which have been filed separately with the
Commission).
+10.10 Technology Development Incentive Plan.
10.11 Form of Employment Agreement between the Registrant and Thomas
E. D'Ambra, Ph.D.
10.12 Form of Employment Agreement between the Registrant and Harold
Meckler, Ph.D.
10.13 Form of Employment Agreement between the Registrant and Michael
P. Trova, Ph.D.
10.14 Form of Employee Innovation, Proprietary Information and Post-
Employment Activity Agreement between the Registrant and each of
its Named Executive Officers.
10.15 Letter Agreement between the Registrant and Harold M. Armstrong,
Jr.
+21.1 Subsidiaries of the Registrant.
+23.1 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1
hereto).
23.2 Consent of KPMG Peat Marwick LLP.
23.3 Consent of Ostrolenk, Faber, Gerb & Soffen, LLP.
+24.1 Powers of Attorney (included on signature pages).
27.1 Financial Data Schedule.
</TABLE>
- ----------
+ Previously filed.
*To be filed by amendment.
<PAGE>
EXHIBIT 4.1
================================================================================
COMMON STOCK COMMON STOCK
ALBANY MOLECULAR RESEARCH, INC.(R)
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
THIS CERTIFICATE IS TRANSFERABLE SEE REVERSE FOR CERTAIN DEFINITIONS
IN BOSTON, MA OR NEW YORK, NY CUSIP 012423 10 9
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS CERTIFIES THAT
is the owner of
FULLY-PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF
ONE CENT ($.01) EACH OF THE COMMON STOCK OF
ALBANY MOLECULAR RESEARCH, INC., transferable on the books of the Corporation by
the holder hereof in person or by duly authorized attorney, upon surrender of
this certificate properly endorsed. This certificate and the shares represented
hereby are issued and shall be held subject to the laws of the State of Delaware
and the Certificate of Incorporation and the By-Laws of the Corporation, as the
same may be from time to time amended, to all of which the holder by acceptance
hereof assents. This certificate is not valid unless countersigned by the
Transfer Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
[ALBANY MOLECULAR RESEARCH, INC. 1998 DELAWARE SEAL]
[Signature of Treasurer or Secretary] [Signature of Chairman of the
Board and Chief Executive
Officer]
COUNTERSIGNED AND REGISTERED:
ChaseMellon Shareholder Services, L.L.C.
TRANSFER AGENT AND REGISTRAR
By [Signature of Authorized Officer]
AUTHORIZED SIGNATURE
================================================================================
<PAGE>
ALBANY MOLECULAR RESEARCH, INC.
The Corporation has more than one class of stock authorized to be issued.
The Corporation will furnish without charge to each stockholder upon request a
copy of the full text of the powers, designations, preferences and relative,
participating, optional or other rights of the shares of each class of stock
(and any series thereof) authorized to be issued by the Corporation and the
qualifications, limitations or restrictions of such preferences and/or rights,
all as set forth in the Certificate of Incorporation and amendments thereto
filed with the Secretary of State of the State of Delaware.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- ------ Custodian ---------------
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with rights Under Uniform Gifts to Minors
of survivorship and not as
tenants in common Act ------------------
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
For value received,________________________________________ hereby sell,
assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares
- --------------------------------------------------------------------------------
of the Capital Stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
Attorney
- --------------------------------------------------------------------------------
to transfer the said stock on the books of the within-named Corporation with
full power of substitution in the premises.
Dated___________
-----------------------------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE,
IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT,
OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed:
By
- ---------------------------------------------------------------
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS
AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.
2
<PAGE>
Exhibit 10.1
LEASE AGREEMENT
---------------
THIS AGREEMENT is made the 9th day of October, 1992, by and between HOFFMAN
ENTERPRISES,, a New York partnership having its principal office at 25 Corporate
Circle, Albany, New York (the "Landlord") and ALBANY MOLECULAR RESEARCH, INC.,,
a New York business corporation with its principal office at 877 25th Street,
Watervliet, New York 12189 (the "Tenant").
W I T N E S S E T H:
-------------------
The Landlord hereby leases to the Tenant a portion of the premises located
at, and commonly referred to as 21 Corporate Circle, City of Albany, New York,
including all improvements and buildings thereon (the "Property") consisting of
approximately 11,375 square feet, which is more particularly described and cross
hatched in yellow outline on the site plan attached hereto as Exhibit "A" (the
"Premises"), for a term of ten (10) years to commence on the earlier of: (a) the
date the Tenant occupies the Premises or (b) the lst day of November, 1992 (the
"Commencement Date"), and to end on the 31st day of October, 2002, unless
terminated earlier as provided herein (the "Lease Term"). The Premises is to be
used and occupied by the Tenant only for small manufacturing of various types of
chemical compounds and related purposes and warehouse distribution and general
research with related office space and for no other use or purpose.
1. Annual Rent. The Tenant shall pay to the Landlord annual rent for the
-----------
Premises in accordance with the following schedule:
Term Annual Rent Monthly Rent
- ---- ------------ -------------
November 1, 1992 - April 30, 1993 $31,200.00* $5,200.00
May 1, 1993 - October 31, 1993 56,956.25* 9,492.70
November 1, 1993 - October 31, 1994 88,156.25 7,346.35
November 1, 1994 - October 31, 1995 88,156.25 7,346.35
November 1, 1995 - October 31, 1996 88,156.25 7,346.35
November 1, 1996 - October 31, 1997 88,156.25 7,346.35
November 1, 1997 - October 31, 1998 93,843.75 7,820.31
November 1, 1998 - October 31, 1999 93,843.75 7,820.31
November 1, 1999 - October 31, 2000 93,843.75 7,820.31
November 1, 2000 - October 31, 2001 93,843.75 7,820.31
November 1, 2001 - October 31, 2002 93,843.75 7,820.31
* Based on six (6) months of the Lease Term, not twelve (12) months. Rent
will be collected on a per diem basis if the Commencement Date occurs in
October, 1992.
The payments to be made by the Tenant to the Landlord shall be in
accordance with the above schedule and shall hereinafter be
<PAGE>
called the "Rent." The Rent to be paid by the Tenant to the Landlord, as set
forth above, shall be paid by the Tenant to the Landlord in equal consecutive
monthly payments, in advance, on the first day of each and every month during
the Lease Term, without offset, abatement, demand or any prior notice of any
kind. All amounts required or provided to be paid by the Tenant under the Lease
shall be deemed additional rent, and the failure to pay such additional rent
shall in all instances be treated, without exception, as the failure to pay
Rent.
The Tenant shall be responsible for the payment of a late payment penalty
in the amount of two percent (2%) of the unpaid portion of rent or additional
rent for each and every unpaid installment of Rent or additional rent due under
this Lease which remains unpaid for more than ten (10) days after the applicable
due date under this Lease. The late penalty paid by the Tenant under this
Section "1(B)" shall be deemed additional rent and the failure to pay such
additional rent shall in all instances be treated, without exception, as the
failure to pay rent.
2. Repairs and Maintenance. The Landlord shall be responsible for the
-----------------------
structural repairs of the roof, walls, floors of the Premises, and the common
areas of the Property; however, the Landlord shall not be responsible for any
repairs or maintenance necessitated by the negligence or actions or operations
conducted by the Tenant at the Premises. The Tenant shall be responsible for
the cost and expense of maintaining the HVAC system for the Premises. Except as
set forth above as the Landlord's repair obligations, the Tenant shall take good
care of the Premises and, at the Tenant's own cost and expense, shall make all
other necessary repairs and maintenance to the Premises. At the end or other
expiration of the Lease Term, the Tenant shall deliver the Premises in good
order and condition, damages by the elements and fair wear and tear excepted.
3. Legal Compliance. The Tenant shall execute and comply promptly with
----------------
all statutes, ordinances, rules, orders, regulations and requirements of the
Federal, New York State and local governments and of any and all of their
departments and bureaus, applicable to the Premises specifically occupied by the
Tenant, for the correction, prevention and abatement of nuisances or other
grievances, in, upon, or connected with, the Premises during the Lease Term; and
also shall comply promptly with, and execute, all rules, orders and regulations
of the New York Board of Fire Underwriters, or any other similar body, at the
Tenant's own cost and expense, if such rules, orders and regulations are the
direct responsibility of the Tenant.
4. Assignment and Sublease. The Tenant shall not assign this Agreement,
-----------------------
or underlet or underlease the Premises, or any part of the Premises, or make any
alterations of the Premises, without the Landlord's prior written consent in
each instance. It is
2
<PAGE>
agreed and understood by the Tenant that in the event of any permitted
assignment:
A. The Tenant hereunder shall not be released or discharged from any
and all liability under this Lease and that the Tenant shall evidence its
continuing liability under this Lease by written assignment document acceptable
to the Landlord;
B. The consent by the Landlord to any assignment shall not waive or
eliminate the requirement of the Landlord's consent to any subsequent assignment
or sublease.
This Lease shall be binding upon any of the successors or assigns of the
Tenant's business, any purchaser of all or substantially all of the Tenant's
assets. The use of the Premises and operation thereof by the proposed assignee
shall in all respects comply with all applicable zoning laws, land use and
environmental rules, regulations, laws, statutes, ordinances or items of similar
impact including regulatory agency rules, etc.
5. Prohibited Activities. The Tenant shall not occupy the Premises, or
---------------------
permit or suffer the same to be occupied, for any business or purpose deemed by
the Landlord to be disreputable or extra-hazardous on account of fire, under the
penalty of damages and forfeiture, and, in the event of a breach of this
prohibition, at the option of the Landlord the Lease Term shall cease
immediately, as if it were the expiration of the original Lease Term.
6. Fire and Other Casualties.
-------------------------
A. The Tenant must give the Landlord prompt notice of any fire,
accident, damage or dangerous or defective condition occurring at, or to, the
Premises. If the Premises are rendered totally unusable because of fire or
other casualty, the Tenant is not required to pay the Rent for the time the
Premises are totally unusable, but only to the extent that the Landlord is
receiving the proceeds from the Tenant's loss of rental value insurance coverage
maintained under paragraph 30 herein. If a part of the Premises is usable, the
Landlord need only repair the damaged structural parts of the Premises. The
Landlord is not required to repair or replace any equipment, fixtures,
furnishings or decorations. The Landlord is not responsible for delays due to
settling insurance claims, obtaining estimates, labor and supply problems or any
other cause not fully under the Landlord's control.
B. If a fire or other casualty is caused by an act, or the neglect,
of the Tenant, the Tenant's employees or invitees, then all necessary repairs
will be made at the Tenant's expense and the Tenant must pay the full Rent with
no adjustment. The cost of such repairs are agreed to be additional rent.
3
<PAGE>
C. The Landlord has the right to demolish or rebuild any building on
the Premises if there is substantial damage to it by fire or other casualty.
The Landlord may cancel this Lease within thirty (30) days after any substantial
damage due to fire or other casualty by giving the Tenant notice of the
Landlord's intention to demolish or rebuild. This Lease will end thirty (30)
days after the Landlord's cancellation notice to the Tenant. The Tenant must
deliver the Premises to the Landlord on or before the cancellation date in such
notice and pay all rent due to the date of the fire or other casualty. If this
Lease is canceled, the Landlord is not required to repair any portion of the
Premises. Such a cancellation does not release the Tenant of liability in
connection with such fire or other casualty if the casualty or fire is caused by
the Tenant or the negligence or omission of the Tenant, its employees, invitees
or agents. The provisions of this paragraph are intended to replace the terms
of Section 227 of the New York Real Property Law.
7. Inspections and Alterations. The Tenant agrees that the Landlord's
---------------------------
agents shall have the right to enter into and upon the Premises or any part
thereof at all reasonable hours upon reasonable notice, except in an emergency
situation, where the Landlord shall not be required to give any notice to the
Tenant, for the purpose of examining the same, or making such repairs or
alterations therein as may be necessary for the safety and preservation thereof.
8. Landlord's Showing and Signs. The Tenant agrees to permit the
----------------------------
Landlord or the Landlord's agents to show the Premises to persons wishing to
hire or purchase the same. The Tenant agrees that, at any time within the last
six (6) months of the Lease Term, the Landlord or the Landlord's agents shall
have the right to place notices on the front of the Premises, or any part
thereof, offering the premises "To Let" or "For Sale", and the Tenant hereby
agrees to permit the same to remain thereon without hindrance or molestation.
The Tenant may be permitted to erect a directory panel sign on the Industrial
Park panel sign on Route 155, at its sole cost and expense. The directory panel
sign shall be the same size as the directory panel signs for the other tenants
of the industrial park. The Tenant may also erect, at its sole cost and
expense, following the prior written consent of the Landlord which may be
withheld in the Landlord's sole discretion, signage that fits within the glass
front door for the Premises and further, provided such signage is in compliance
with governmental law or requirements, to the extent applicable.
9. Deserted or Vacated Premises. If the Premises or any part thereof
----------------------------
shall be deserted or become vacant during the Lease Term, or if any default be
made in the payment of the Rent or any additional rent due hereunder or any part
thereof for more than five (5) days after the respective due date, or notice of
the nonpayment of additional rent by the Landlord to the Tenant, or if
4
<PAGE>
any default be made in the performance of any of the covenants contained in this
Agreement other than the payment of Rent or additional rent for more than twenty
(20) days after written notice to the Tenant or violates any of the terms,
covenants and conditions of the Stock Agreement (as defined herein), the
Landlord or the Landlord's agents may re-enter the Premises by force, summary
proceedings or otherwise, and remove all persons therefrom, without being liable
to prosecution therefor, and the Tenant hereby expressly waives the service of
any notice in writing of an intention to re-enter. Notwithstanding such action
by the Landlord, the Tenant shall pay, at the same time as the Rent becomes
payable hereunder, a sum equal to the Rent and additional rent due hereunder,
and the Landlord may rent the Premises on behalf of the Tenant, reserving the
right to rent the Premises for a period of time extending beyond the Lease Term,
without releasing the Tenant from any liability. All such moneys so collected
shall be applied in the following manner: first, to the expense of resuming or
obtaining possession of the Premises; second, to the cost of restoring the
Premises to a rentable condition or finish or improvements to the Premises for a
new tenant; and, third, to the payment of the Rent, additional rent, and all
other charges due, and to become due, to the Landlord. The Landlord
acknowledges that it will utilize reasonable efforts to mitigate the Tenant's
damages under this Section 9. Any surplus of such moneys then shall be paid to
the Tenant at the expiration of the Lease Term, but the Tenant shall remain
liable for any deficiency of such moneys.
10. Damages to Premises. The Landlord may replace, at the Tenant's
-------------------
expense, any and all broken glass in and about the Premises, if said broken
glass has not been replaced by Tenant within seven (7) days after notice from
Landlord to Tenant. Bills for the payment therefor shall be rendered by the
Landlord to the Tenant at such times as the Landlord may elect, and shall be due
from, and payable by, the Tenant when rendered, and the amount thereof shall be
deemed to be, and shall be paid as, additional rent. Any damage or injury to
the Premises, caused by the carelessness, negligence or improper conduct on the
part of the Tenant or the Tenant's agents, employees or invitees shall be
repaired as speedily as possible by the Tenant, at the Tenant's own cost and
expense.
11. Obstructions to Access. The Tenant shall not encumber or obstruct the
----------------------
sidewalk in front of, the entrance to, or any hallways and stairs of, the
Premises, nor shall the Tenant allow the same to be obstructed or encumbered in
any manner by any other person under Tenant's control or by Tenant's invitees.
12. Tenant's Signs. The Tenant shall not place, or cause or allow to be
--------------
placed, any sign or signs of any kind whatsoever at, in or about, the entrance
to the Premises or any other part of the Premises, except in or at such place or
places to which the Landlord has consented, in writing. If the Landlord or the
5
<PAGE>
Landlord's agents shall deem it necessary to remove any such sign(s) in order to
paint the Premises or any building thereon or to make any other repairs,
alterations or improvements in or upon the Premises or any part thereof, the
Landlord shall have the right to do so, providing such sign(s) be removed and
replaced at the Landlord's expense, as promptly as possible after the completion
of such painting, repairs, alterations or improvements.
13. Landlord's Liability. The parties agree that the Landlord is exempt
--------------------
from any and all liability for any damage or injury to person(s) or property
caused by, or resulting from, steam, electricity, gas, water, rain, ice or snow,
or any leak or flow of any gas or liquid from, or into, any part of the Premises
and from any damage or injury resulting or arising from any other cause or
happening whatsoever, unless such damage or injury be caused by, or be due to,
the gross negligence of the Landlord. The Landlord's liability and the
liability of the partners of the Landlord shall be absolutely limited, and the
Landlord and the partners of the Landlord shall have no personal liability or
obligation with respect to any provision of the Lease or any obligation or
liability arising from this Lease or in connection with a default or breach by
the Landlord of its obligations under this Lease. The Tenant agrees to look
solely to the equity and insurance of the Landlord in the Premises and the
insurance maintained by the Landlord on the Premises, as required hereunder, for
the complete satisfaction of any remedies and causes of action of the Tenant
against the Landlord or the partners of the Landlord. Such exculpation of
liability in favor of the Landlord and its partners shall be absolute and
without any exception whatsoever.
14. Repossession of Premises. If default be made in any of the covenants
------------------------
contained in this Agreement, then the Landlord may re-enter the Premises, and
the same to have again, re-possess and enjoy after the satisfaction of the
applicable notice and cure periods for nonmonetary defaults as set forth in
Section 17 herein.
15. Subordination of Lease. This Lease shall not be a lien against the
----------------------
Premises in respect to any mortgages that now are on, or that hereafter may be
placed against, the Premises, and the recording of such mortgage(s) shall have
preference and precedence and be superior and prior in lien of this Lease,
irrespective of the date of their recording and the Tenant agrees to execute,
without cost, any such instrument which the Landlord deems necessary or
desirable to further effect the subordination of this Lease to any such
mortgage(s). A refusal by the Tenant to execute such an instrument of
subordination within thirty (30) days following the request of the Landlord
shall entitle the Landlord or the Landlord's assigns to the option of canceling
this Lease without incurring any expense or damage and the Lease Term hereby is
expressly limited accordingly.
6
<PAGE>
16. Security Deposit. Tenant will deposit with the Landlord the sum of
----------------
$15,166.66 (the "Security Deposit") as security for the full and faithful
performance by the Tenant of all of the terms, covenants and conditions of this
Lease upon the Tenant's part to be performed, which said sum shall be returned
to the Tenant after the time fixed as the expiration of the term herein,
provided the Tenant has fully and faithfully carried out all of said terms,
covenants and conditions on Tenant's part to be performed. The Security Deposit
due from the Tenant hereunder will be paid by the Tenant in two installments;
the first installment in the amount of Seven Thousand Three Hundred Forty-six
and 35/100 Dollars ($7,346.35) will be due and payable on November 1, 1992 and
the final installment of Seven Thousand Eight Hundred Twenty and 31/100 Dollars
($7,820.31) will be due and payable on or before December 15, 1993. In the
event of a sale of the Premises, the Landlord shall have the right to transfer
the Security Deposit to the vendor for the benefit of the Tenant and the
Landlord shall be released by the Tenant from all liability for the return of
such security, and the Tenant agrees to look to the new landlord solely for the
return of said security, and it is agreed that this provision shall apply to
every transfer or assignment made of the security to the new landlord. Tenant
shall not mortgage, assign or encumber the Security Deposit without the written
consent of the Landlord. Landlord may utilize all or a portion of the Security
Deposit to cure or apply toward the cure of any of the Tenant's defaults under
this Lease regardless of whether such default is a monetary or nonmonetary
default, and Tenant shall redeposit with Landlord the entire Security Deposit or
the amount utilized for the repair, whichever is less, within twenty (20) days
following notice and demand from the Landlord.
17. Termination Upon Default. It is expressly understood and agreed that
------------------------
if the Premises shall be deserted or vacated, or if default be made in the
payment of the Rent for more than five (5) days after the respective due date,
or if, without the consent of the Landlord, the Tenant shall sell, assign, or
mortgage this Lease, or if default be made in the performance of any of the
terms, covenants and agreements of this Lease required to be performed by the
Tenant for more than twenty (20) days after written notice from the Landlord, or
if the Tenant shall fail to comply with any of the statutes, ordinances, rules,
orders, regulations and requirements of the Federal, New York State or local
governments, following appropriate notice, if any, as required under the
applicable governmental statute, law or ordinance, or of any and all of their
departments and bureaus, applicable to the Premises, or if the Tenant shall
file, or subject to applicable Federal and New York State Law, there be filed
against the Tenant, a petition in bankruptcy or similar arrangement, or if the
Tenant be adjudicated a bankrupt or make an assignment for the benefit of
creditors or take advantage of any insolvency act or the Landlord may, if the
Landlord so elects at any time thereafter, terminate this Lease and the Lease
Term, on
7
<PAGE>
giving to the Tenant the legal notice required) by Article VII of the New York
State Real Property Actions and Proceedings Law, in writing of the Landlord's
intention so to do, and this Lease and the Lease Term shall expire and come to
an end on the date fixed in such notice as if such date were the date originally
fixed in this Lease for the expiration of the Lease Term. Such notice shall be
given in the manner set forth herein.
18. Water, Sewer Rents and Utilities. The Tenant shall pay directly to
--------------------------------
the applicable governmental jurisdiction or utility all rents or charges which
may, during the Lease Term, be assessed or imposed for the water used or
consumed in or on the Premises, whether determined by meter or otherwise, as
soon as and when the same may be assessed or imposed. The Tenant shall pay any
and all sewer rents or charges imposed upon the Premises. All such rents,
charges or expenses shall be paid as additional rent and shall be added to the
next month's Rent thereafter to become due.
The Tenant shall pay for all electric and gas consumption fees and charges
incurred by the Tenant directly to such utility provided, in its operation of
its business in the Premises or its usage of the Premises throughout the term of
the Lease.
19. Hazardous Activities.
--------------------
A. The Tenant will not, nor will the Tenant permit undertenants or
other persons to, do anything in the Premises, or bring anything, or permit
anything to be brought, into the Premises or to be kept therein, which will in
any way increase the rate of fire insurance on the Premises, nor use the
Premises or any part thereof, nor suffer or permit their use, for any business
or purpose which would cause an increase in the rate of fire insurance on the
Premises. If the Tenant violates this prohibition,, in addition to creating a
default hereunder, pursuant to Paragraph 5, the Tenant agrees to pay on demand
any such increase in fire insurance premiums.
B. The Tenant shall comply with the environmental laws which include
all federal, state, local and municipal laws, statutes, ordinances, rules,
regulations, orders, decrees or requirements for regulating, relating to or
imposing liability or standards of conduct concerning the use, storage,
treatment, transportation, manufacture, refinement, handling, production and/or
disposal of "Hazardous Materials" (as hereinafter defined), or otherwise pertain
to environmental protection, as now or at any time hereafter in effect,
including but not limited to the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Section 9601; the Superfund Amendment
and Reauthorization Act of 1986, Public Law 99-499, 100 Stat. 1613; the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901; the Occupational Safety
and Health Act, 29 U.S.C. Section 655 and Section 657; the Clean Air Act, 42
U.S.C. Section 7401; The Clean
8
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Water Act, 33 U.S.C. Section 1251; the New York State Environmental Quality
Review Act, New York State Environmental Conservation Law Section 8-1101; and
The New York Environmental Conservation Law; together with all amendments
thereto, substitutions therefore, rules and regulations promulgated thereunder
and all amendments to and substitutions for the rules and regulations (the
aforementioned are hereinafter called the "Environmental Laws"). The Tenant
represents and warrants to the Landlord the following:
(1) The Tenant or any responsible person acting on behalf of the
Tenant will not use, store, treat, transport, manufacture, refine, handle or
produce any hazardous or toxic substance on or about the Premises in any manner
which would cause a violation of any applicable Environmental Law;
(2) The Tenant or any responsible person acting on behalf of the
Tenant will not permit or suffer or cause to permit the Premises to be, in any
manner, in violation of any Environmental Law;
(3) The Tenant or any person acting on behalf of the Tenant will not
at any time dispose of any hazardous materials at or about the Premises or
operate a hazardous waste treatment or storage or disposal facility;
(4) The Tenant or any person acting on behalf of the Tenant will not
create or suffer to create any condition at or about the Premises or any portion
thereof which could subject the Tenant or Landlord to any liability for any
remedial action or removal or for any other environmental clean-up of any kind
or description; and
(5) The Tenant shall defend, indemnify and hold the Landlord and the
Landlord's employees, agents, partners, officers, directors and trustees from
any and against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and/or expenses of whatever kind or nature and/or
any other environmental clean-up of any kind or description known, or unknown,
contingent or otherwise arising out of or in any way relating to any past,
present or future violation of any environmental law applicable at any time or
arising out of any way relating to the enforcement of any such Environmental Law
with respect to the Premises. The Tenant representations, warranties,
obligations and liabilities under this Section 19.B. shall survive the term of
this Lease, foreclosure or eviction of the Tenant from the Premises, any
assignment or sublease under this Lease.
20. No Waiver of Performance. The failure of the Landlord to insist upon
------------------------
a strict performance of any of the terms, conditions and covenants in this
Agreement shall not be deemed a waiver of any rights or remedies that the
Landlord may have, and such failure shall not be deemed a waiver of such or any
subsequent breach or
9
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default in the same or any of the other terms, conditions and covenants herein.
21. Condemnation of Premises. If the whole or any part of the Premises
------------------------
shall be acquired or condemned by Eminent Domain for any public or quasi public
use or purpose, then the Lease Term shall cease and terminate from the date of
title vesting in such proceeding and the Tenant shall have no claim against the
Landlord for the value of any unexpired portion of the Lease Term. No part of
any such award shall belong to the Tenant.
22. Abandonment of Fixtures. If, after default in payment of rent or a
-----------------------
violation of any other provision of this Lease, or upon the expiration of this
Lease, the Tenant moves out of the Premises, or is dispossessed, and fails to
remove any trade fixtures installed by the Tenant during the initial
construction or other property owned by the Tenant prior to such default,
removal or expiration of Lease, or prior to the issuance of the final order or
execution of the warrant, then all of such fixtures and other property shall be
deemed abandoned by the Tenant and the same shall become the property of the
Landlord, without any additional consideration to the Tenant.
23. Fees. The Landlord and the Tenant acknowledge and agree that the
----
Landlord will construct and build out the Premises for the account of the
Tenants and to its specifications. The Landlord and the Tenant acknowledge and
agree that the Tenant will reimburse the Landlord for its cost of building the
Premises to the Tenant's specifications by the tender of 130,000 shares of the
Tenant's common stock with a par value of .01 per share and 100,000 shares of
the Tenant's Series A Convertible Preferred Stock. For purposes of this Lease,
the leasehold improvements will be owned by the Tenant during the term of the
Lease. At the expiration of the Lease Term, the leasehold improvements which
comprise part of the Premises will revert to the Landlord at the expiration of
the Lease Term, without payment or remuneration by the Landlord to the Tenant.
24. Rent Due After Repossession. In the event that the relation of the
---------------------------
Landlord and the Tenant ceases or terminates by reason of the re-entry of the
Landlord under the terms and covenants contained in this Agreement, or by the
eviction of the Tenant by summary proceedings or otherwise, or after the
abandonment of the Premises by the Tenant, it is hereby agreed that the Tenant
shall remain liable for, and shall pay in monthly payments, the Rent which is
scheduled herein to be paid subsequent to the date of such re-entry by the
Landlord, and the Tenant expressly agrees to pay, as damages for such breach of
the covenants contained herein, the difference between the Rent required in this
Agreement and the Rent actually collected and received, if any, by the Landlord
during the remainder of the unexpired original Lease Term. Such deficiency
between the Rent
10
<PAGE>
required and the Rent collected shall become due and payable in monthly payments
during the remainder of the unexpired Lease Term, as the amounts of such
deficiency shall be ascertained by the Landlord from time to time. The Landlord
acknowledges that it will utilize reasonable efforts to mitigate the Tenant's
damages under this Section 23.
25. Rights of Redemption and Jury Trial. The Tenant hereby waives all
-----------------------------------
rights to redeem the Premises and the right to a jury trial under any laws of
the State of New York and the Laws of the United States of America.
26. Acts of God and Governmental Emergencies. This Lease and the
----------------------------------------
obligation of the Tenant to pay the Rent hereunder required to be performed by
all of the other covenants and agreements hereunder required to be performed by
the Tenant shall in no way be affected, impaired or excused because the Landlord
is unable to supply, or is delayed in supplying, any service expressly or
impliedly to be supplied or is unable to make, or is delayed in making, any
necessary repairs, additions, alterations or decorations or is unable to supply,
or is delayed in supplying, any necessary equipment or fixtures, if the Landlord
is prevented or delayed from so doing by reason of an act of God or a
governmental preemption in connection with a National Emergency or in connection
with any rule, order or regulation of any department or subdivision thereof of
any governmental agency or by reason of the condition of supply and demand which
have been, or are, affected by war or other emergency.
27. No Rent Abatement. No diminution or abatement of the Rent, or other
-----------------
compensation, shall be claimed by, or allowed to, the Tenant for inconvenience
or discomfort arising from the making of repairs or improvements to the Premises
or to its components, to comply with any law, ordinance or order of a
governmental authority; however, the Landlord will utilize its best efforts to
cause said compliance to occur on a reasonably prompt basis. In respect to the
various "services," if any, herein expressly or impliedly agreed to be furnished
by the Landlord to the Tenant, it is agreed that there shall be no diminution or
abatement of the Rent, or any other compensation, for interruption or
curtailment of such "service" when such interruption or curtailment shall be due
to accident, alterations or repairs desirable or necessary to be made, or to
inability or difficulty in securing supplies or labor for the maintenance of
such "service" or to some other cause, not constituting gross negligence on the
part of the Landlord. No such interruption or curtailment of any such "service"
shall be deemed a constructive eviction. The Landlord shall not be required to
furnish, and the Tenant shall not be entitled to receive, any of such "services"
during any portion of the Lease Term when the Tenant is in default in respect to
the payment of the Rent. There shall not be any abatement or diminution of the
Rent because of the making of repairs, improvements or decorations to the
Premises
11
<PAGE>
after the date set forth above for the commencement of the Lease Term (the
"Commencement Date"), it being understood that the Tenant's obligation to pay
Rent, in any event, shall commence to run on the Commencement Date. If the
Landlord is undertaking any structural repairs to the Premises and such
structural repairs materially interfere with the Tenant's use and operation,
then the Landlord will render to the Tenant a fair and equitable reduction in
the rent, calculated on a per diem basis, for only the time period that the
Landlord is undertaking such structural repair work.
28. Delivery of Possession. The Landlord shall not be liable for failure
----------------------
to give possession of the Premises to the Tenant upon the Commencement Date, if
the reason for such failure is that a prior Tenant or any other person is
wrongfully holding over or is in wrongful possession, or for any other reason.
However, the Rent shall not commence until possession is given, or is available,
to the Tenant, and the amount of the first such payment shall be reduced, on a
per diem basis, to reflect the actual date of delivery of possession.
29. Real Estate Taxes; Other Expenses.
---------------------------------
A. Real Estate Taxes. It is the intention and agreement of the
-----------------
Landlord and the Tenant that the Tenant shall pay its proportionate share of the
increase in the real property taxes imposed on the Property for each calendar
year over the Base Period Real Property Taxes (as hereinafter defined). For the
purposes hereof, Tenant's proportionate share shall be 22.7%, which is the
percentage resulting from dividing the square footage of the Premises (11,375
square feet) by the total square footage of the building located on the Property
(50,050 square feet) (hereinafter called the "Tenant's Share"). Additionally,
the increase in real property taxes shall be the amount by which the real estate
taxes for any particular calendar year exceeds $19,950 (the "Base Period Real
Property Taxes"), which is the estimate of the real estate taxes assessed
against the Property for the calendar year 1993 (the 1993 city/county taxes and
the 1993-1994 school taxes on the Property). The Tenant's share of the increase
in the Tenant's appropriate share of real estate taxes shall be determined in
accordance with the following formula:
Tenant's Share = (Real Property Taxes on Property (-) Base Period Real
Property Taxes) (x) Tenant's Share
Tenant's proportionate share of the increase in the real property taxes on
the Property shall be additional rent and shall be paid by Tenant to Landlord
within ten (10) days after written demand for the payment of the same by
Landlord to Tenant is given.
12
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Such demand shall be accompanied by a copy of the respective tax bills.
B. Snow Plowing. The Tenant shall be responsible for its pro rata
------------
share of the snow plowing and snow removal costs Incurred by the Landlord for
the Property. The Tenant's Share shall be determined by taking Landlord's total
snow plowing and snow removal costs for each year for the Property and
multiplying the same by the Tenant's Share (as previously defined) and the
resulting product shall be due and payable by Tenant within twenty (20) days
after the submission of a bill therefor. The Landlord shall obtain separate
snow plowing and snow removal bills for the Property.
C. Other Expenses. All other costs, expenses and obligations of
--------------
every kind relating to the use and occupancy of the Premises, including all
janitorial services (except as otherwise expressly provided in this Agreement)
which may arise or become due during the Lease Term shall be paid by the Tenant
and the Landlord shall be held harmless, indemnified and defended by the Tenant
against all such costs, expenses and obligations.
30. Quiet Enjoyment. The Landlord hereby covenants that the Tenant, on
---------------
paying the Rent and performing the other covenants required of the Tenant
pursuant to this Agreement, shall and may peacefully and quietly have, hold and
enjoy the Premises for the Lease Term, provided however, that this covenant
shall be conditioned upon the Landlord's retention of title to the Premises.
31. Insurance.
---------
A. The Landlord shall be responsible for providing and maintaining
fire insurance on the shell of the Building, at its sole cost and expense and
loss of rental value insurance coverage for the lease on the Premises or similar
coverage providing substantially the same benefits. The Landlord covenants that
it will keep the level of fire insurance coverage required under this Section
30(A) to a level that will prevent the Landlord from becoming a "co-insurer" of
the Property.
B. The Tenant shall be responsible for providing fire insurance with
standard extended coverage and all risk endorsements for the full insurable
value of all of the Tenant's leasehold improvements, merchandise, trade
fixtures, plate glass, furnishings, wall coverings, floor covering, equipment
and all items of the Tenant's personal property located within the Premises.
C. The Tenant agrees to carry public liability insurance on the
Premises during the Lease Term, naming the Landlord as an additional insured,
providing single limit insurance of One Million Dollars ($1,000,000) and
contractual liability
13
<PAGE>
coverage recognizing this Lease and naming the Landlord as an additional insured
D. The Tenant agrees to carry business interruption insurance
coverage for not less than one (1) year's Minimum Annual Rent due under the
Lease. Such business interruption insurance coverage shall name the Landlord
and its mortgagee as the loss payee, as their respective interests may appear.
Prior to occupancy of the Premises, the Tenant shall provide the Landlord with
copies of such insurance policies or certificates evidencing that such insurance
is in full force and effect, stating the terms of such insurance.
Notwithstanding anything in this Lease to the contrary, the Landlord shall be
given a minimum of thirty (30) days prior written notice by the Tenant's
insurance company prior to the cancellation, termination or change in such
insurance.
The Landlord, its agents and employees shall not be liable for, and Tenant
waives all claims for damage including, but not limited to, consequential
damages to persons, property or otherwise sustained by Tenant resulting from
equipment being out of repair, Landlord's failure to keep any part of the
Premises in repair, except for the Landlord's gross negligence in maintaining
the structural portions of the Premises, injury done by natural elements, defect
or failure of plumbing, heating or air-conditioning equipment, electrical wiring
and insulation, gas, water and sewer pipes.
32. Scope of Tenant's Work; Cost.
----------------------------
A. Landlord and Tenant agree that the build out of the Premises
shall be in accordance with Exhibit "A" attached hereto. The Landlord shall be
responsible for obtaining the final plans and specifications for the
construction of the Premises which shall be substantially in accordance with the
site plan attached hereto as Exhibit "A" (the "Final Plans and Specifications")
and the Final Plans and Specifications shall be initialed by the parties hereto
or referenced as Exhibit "A". Landlord shall be responsible for the completion
of the construction work in accordance with the Final Plans and Specifications
and the Landlord shall arrange for such construction with the contractors,
materialmen and subcontractors of its choice. To partially reimburse the
Landlord for its advance of funds for the build out of the Premises, Tenant
shall deliver to the Landlord the sum of $50,000 (the "Buildout Feel"). The
Buildout Fee shall be paid in three equal installments of Sixteen Thousand Six
Hundred Sixty-six and 67/100 Dollars ($16,666.67), which shall be due and
payable on December 1, 1992, January 1, 1992 and February 2, 1993. Said $50,000
is in addition to such other sums as Tenant is required to pay to the Landlord
pursuant to this Lease. Any changes in the Final Plans and Specifications after
the approval of such document shall not be binding on the Landlord until there
is a binding written agreement on the cost for such change in the Final Plans
and Specifications
14
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and the time period for the completion of the work contemplated by such change.
B. Landlord and Tenant agree and acknowledge that the Rent includes
an amount sufficient to reimburse Landlord for all amounts so advanced
hereunder. In the event this Lease is terminated prior to its expiration date
of September 30, 2002, Tenant shall pay to Landlord, upon such termination (a)
$150,000 less (b) $1,667 multiplied by the number months that have elapsed from
October 1, 1992 to the first day of the month of the lease termination, however,
the Tenant will receive a dollar for dollar credit against any sums due
hereunder for any payment made by the Tenant upon any acceleration of the Rent
due under this Lease following an event of default under Section 23.
33. Miscellaneous.
-------------
A. Notices and Addresses. All notices and other communications
---------------------
required or permitted hereunder shall be made only in writing and shall be
deemed given three days after mailing to a Party by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
To the Landlord:
----------------
Hoffman Enterprises
25 Corporate Circle
Albany, New York
With a copy to
--------------
Miller, Seeley & Segel, P.C.
5 Washington Square
Washington Avenue Extension
Albany, New York 12205
Attention: Paul J. Goldman, Esq.
To the Tenant:
--------------
Albany Molecular Research, Inc.
877 25th Street
Watervliet, New York 12189
By notice given pursuant to this Paragraph, either Party may designate any
further or different address to which subsequent notices, offers or other
communications to it shall be sent.
B. Titles and Captions. All Section and Paragraph titles or
-------------------
captions in this Agreement are for convenience of reference only. They shall
not be deemed to be a part of this Agreement and in no way do they define,
limit, extend or describe the scope or intent of any of the provisions hereof.
15
<PAGE>
C. References.
----------
(1) Any reference made herein to a Party, other person or document, by
means of a shortened version of the proper name of same, shall be a reference to
the appropriate Party, other person or document for whom such shortened name
shall be explained parenthetically, upon the first mention herein of that Party,
other person or document.
(2) Any reference made herein to a "Section" or a "Paragraph" shall be
a reference to the corresponding portion of this Agreement, unless specifically
provided to the contrary in any such reference.
D. Pronouns and Plurals. Whenever the context may require, any
--------------------
pronoun used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural, and vice versa.
E. Further Action. The Parties shall execute and deliver all
--------------
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of this Agreement.
F. Applicable Law. This Agreement shall be construed in accordance
--------------
with, and be governed by, the laws of the State of New York.
G. Exclusive Agreement. This Agreement constitutes the entire
-------------------
agreement between the Parties pertaining to the subject matter hereof and
supersedes all prior agreements and understandings pertaining thereto. No
covenant, representation or condition not expressed in this Agreement shall
affect, or be deemed to interpret, change or restrict the express provisions
hereof.
H. Trial By Jury. It is mutually agreed between the Landlord and
-------------
the Tenant that each of them shall, and hereby does, waive trial by jury in any
action, proceeding or counterclaim brought by either of the parties against the
other on any matters whatsoever arising out of, or in any way connected with,
this Lease, the Tenant's use or occupancy of the Premises, and any claim of
injury or damage related to any of the same.
I. Amendment or Termination. Except as otherwise provided herein,
------------------------
this Agreement may be modified or amended only with the prior written approval
of both Parties, and it may not be discharged or terminated except in writing.
J. Rights and Remedies. The rights and remedies of the Parties set
-------------------
forth herein shall not be mutually exclusive, and the implementation of one or
more of the provisions of this Agreement
16
<PAGE>
shall not preclude the implementation of any other provision(s). Each Party
hereby confirms that damages at law may be an inadequate remedy for a breach or
threatened breach of any provision hereof. The respective rights and
obligations hereunder shall be enforceable by specific performance, injunction
or other equitable remedy, and nothing herein contained is intended to, or
shall, limit or affect any rights at law, or by statute or otherwise, of either
Party for a breach or threatened breach of any provision hereof, it being the
intention by this Paragraph to make clear that the agreement of the Parties
hereunder shall be enforceable in equity as well as at law or otherwise.
K. Separability. Any provisions of applicable law which supersede
------------
or invalidate any provision hereof shall not affect the validity of the balance
of this Agreement, and the remaining provisions hereof shall be enforced as if
such superseded or invalid provision were deleted.
L. Counterparts. This Agreement may be executed in two or more
------------
counterparts, all of which taken together shall constitute one agreement,
binding on both Parties.
M. Authorization and Representation. Each Party hereby severally
--------------------------------
represents that it has been duly authorized to execute, deliver and perform this
Agreement through its members, officers or agents signing on its behalf and
affixing any appropriate seal hereto.
N. Binding Effect. This Agreement shall be binding upon, and inure
--------------
to the benefit of, the Parties and their successors, legal representatives and
assigns.
O. Approvals. Any approval or consent of any Party required for any
---------
matter hereunder shall be valid only if given in writing.
P. Brokerage Commission. The Landlord and the Tenant acknowledge
--------------------
and agree that Realty USA, and no other broker, brought about this Stock
Agreement and that a brokerage commission shall be paid by the Landlord to
Realty USA in accordance with the separate agreement between the Landlord and
Realty USA.
34. Tenant Termination Option. Notwithstanding anything to the contrary,
-------------------------
if the Premises has not been substantially completed in accordance with the
final plans and specifications on or before March 15, 1993, then the Tenant
shall have the option to tender a termination notice to the Landlord, giving the
Landlord fifteen (15) days notice to substantially complete the build out of the
Premises in accordance with the final plans and specifications. If the Landlord
fails to substantially complete the build out of the Premises within the fifteen
(15) day period set forth in the previous sentence, then thereafter this Lease
shall be deemed to have been cancelled and to be of no further force and effect,
and
17
<PAGE>
the parties shall be released of all further liability and obligation to each
other.
35. Corporate Resolution. The Tenant shall deliver a corporate resolution
--------------------
of the Board of Directors and shareholders of the Tenant, authorizing the
execution and delivery of this Lease.
IN WITNESS WHEREOF, the individual party has set his hand and seal hereto
and the corporate party has caused these presents to be signed by its proper
corporate officer and caused its proper corporate seal to be affixed hereto, all
on the day and year first above written.
LANDLORD: HOFFMAN ENTERPRISES
By: /s/ Thomas Hoffman
-------------------
TENANT: ALBANY MOLECULAR RESEARCH, INC.
By: /s/ Harold M. Armstrong, Jr.
-----------------------------
Harold M. Armstrong, Jr.
Chief Executive Officer
18
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF ALBANY )
On the 15 day of October, 1992, before me personally appeared Tom Hoffman,
to me known, and known to me to be the person who executed the foregoing
instrument and who being duly sworn by me did depose and say that he is a
General Partner of Hoffman Enterprises, a General Partnership organized and
existing under the laws of the State of New York, and that he executed the
foregoing instrument in the partnership name of Hoffman Enterprises, and that he
had the authority to sign same, and he acknowledged to me that he executed the
same as the act and deed of said partnership.
/s/ Paul G. Goldman
--------------------
Notary Public - State of New York
My Commission Expires:
STATE OF NEW YORK )
) ss.:
COUNTY OF ALBANY )
On the 15 day of October, 1992, before me personally came Harold M.
Armstrong, Jr., to me known, who, being by me duly sworn, did depose and say
that: he is the Chief Executive officer of Albany Molecular Research, Inc., the
corporation described in, and which executed, the above instrument; and, he
signed his name to that instrument by order of the Board of Directors of that
corporation.
/s/ Paul G. Goldman
--------------------
Notary Public - State of New York
My Commission Expires:
19
<PAGE>
EXHIBIT "A"
Site Plan and Final Plans and Specifications
FLOOR PLAN TENANT FIT-UP
FLOOR PLAN - EXISTING SHELL
KARNER INDUSTRIAL PARK
ALBANY, NEW YORK, ALBANY MOLECULAR RESEARCH, INC.
LAST REVISION OCTOBER 7, 1992
EXHIBIT "A"
20
<PAGE>
AMENDMENT NUMBER 001
LEASE AGREEMENT
BETWEEN
HOFFMAN ENTERPRISES
AND
ALBANY MOLECULAR RESEARCH, INC.
The purpose of this amendment is to correct first page of lease which
defines square footage of space leased by tenant and payment due landlord as a
result of increase in space being leased and also page twelve (12) which defines
the percentage of building being occupied as a result of the increase.
These two pages will replace pages one (1) and twelve (12) of original
lease agreement dated October 9, 1992.
21
<PAGE>
LEASE AGREEMENT
---------------
THIS AGREEMENT is made the 9th day of April 1996, by and between HOFFMAN
ENTERPRISES, a New York partnership having its principal office at 25 Corporate
Circle, Albany, New York (the "Landlord") and ALBANY MOLECULAR RESEARCH, INC., a
New York business corporation with its principal office at 21 Corporate Circle,
Albany, New York 12203 (the "Tenant").
W I T N E S S E T H:
-------------------
The Landlord hereby leases to the Tenant a portion of the premises located
at, and commonly referred to as 21 Corporate Circle, City of Albany, New York
including all improvements and building thereon (the "Property") consisting of
approximately 26,675 square feet, which is more particularly described and cross
hatched in yellow outline on the site plan attached hereto as Exhibit "A" (the
"Premises"), for a term of six (6) years and six (6) months to commence on the
lst day of May, 1996 and to end on the 31st day of October, 2002, unless
terminated earlier as provided herein (the "Lease Term"). The Premises is to be
used and occupied by the Tenant only for small manufacturing of various types of
chemical compounds and related purposes and warehouse distribution and general
research with related office space and for no other use or purpose.
1. Annual Rent. The Tenant shall pay to the Landlord annual rent for the
-----------
Premises in accordance with the following schedule:
<TABLE>
<CAPTION>
Term Annual Rent Monthly Rent
- ---- ----------- ------------
<S> <C> <C>
May 1, 1996 - October 31, 1997 $182,231.25 $15,185.94
November 1, 1997 - December 31, 1997 190,193.75 15,849.48
January 1, 1998 - October 31, 1999 187,093.75 15,591.15
November 1, 1999 - October 31, 2002 177,993.75 14,832.81
</TABLE>
The payments to be made by the Tenant to the Landlord shall be in
accordance with the above schedule and shall hereinafter be
22
<PAGE>
after the date set forth above for the commencement of the Lease Term (the
"Commencement Date"), it being understood that the Tenant's obligation to pay
Rent, in any event, shall commence to run on the Commencement Date. If the
Landlord is undertaking any structural repairs to the Premises and such
structural repairs materially interfere with the Tenant's use and operation,
then the Landlord will render to the Tenant a fair and equitable reduction in
the rent, calculated on a per diem basis, for only the time period that the
Landlord is undertaking such structural repair work.
28. Delivery of Possession. The Landlord shall not be liable for failure
----------------------
to give possession of the Premises to the Tenant upon the Commencement Date, if
the reason for such failure is that a prior Tenant or any other person is
wrongfully holding over or is in wrongful possession, or for any other reason.
However, the Rent shall not commence until possession is given, or is available,
to the Tenant, and the amount of the first such payment shall be reduced, on a
per diem basis, to reflect the actual date of delivery of possession.
29. Real Estate Taxes; Other Expenses.
---------------------------------
A. Real Estate Taxes. It is the intention and agreement of the
-----------------
Landlord and the Tenant that the Tenant shall pay its proportionate share of the
increase in the real property taxes imposed on the Property for each calendar
year over the Base Period Real Property Taxes (as hereinafter defined). For the
purposes hereof, Tenant's proportionate share shall be 53.3, which is the
percentage resulting from dividing the square footage of the Premises (26,675
square feet) by the total square footage of the building located on the Property
(50,050 square feet) (hereinafter called the "Tenant's Share"). Additionally,
the increase in real property taxes shall be the amount of which the real estate
taxes for any particular calendar year exceeds $19,950 (the "Base Period Real
Property Taxes"), which is the estimate of the real estate taxes assessed
against the Property for the calendar year 1993 (the 1993 city/county taxes and
the 1993-1994 school taxes on the Property). The Tenant's share of the increase
in the Tenant's appropriate share of real estate taxes shall be determined in
accordance with the following formula:
Tenant's Share = (Real Property Taxes on Property (-) Base Period Real
Property Taxes) (x) Tenant's Share
Tenant's proportionate share of the increase in the real property taxes on
the Property shall be additional rent and shall be paid by Tenant to Landlord
within ten (10) days after written demand for the payment of the same by
Landlord to Tenant is given.
23
<PAGE>
IN WITNESS THEREOF this Amendment has been executed as of the date below.
Date: 5/29/96 LESSOR:
HOFFMAN ENTERPRISES
/s/ Thomas Hoffman
----------------------------------------
LESSEE:
ALBANY MOLECULAR RESEARCH, INC.
_______________________________
/s/ Thomas D'Ambra
----------------------------------------
24
<PAGE>
EXHIBIT A
[Copy of Floor Plan]
25
<PAGE>
AMENDMENT NUMBER 002
LEASE AGREEMENT
BETWEEN
HOFFMAN ENTERPRISES
AND
ALBANY MOLECULAR RESEARCH, INC.
The purpose of this amendment is to correct first page of lease which
defines square footage of space leased by tenant and payment due landlord as a
result of increase in space being leased, and Paragraph 29 on page twelve (12)
which defines the percentage of building, and also the addition of Paragraph 36,
Option of First Refusal, and Paragraph 37, Option of Purchase both contained on
Page 18.
These three pages will replace pages one (1), twelve (12) and page eighteen
(18) of original lease agreement dated October 9, 1992 and Amendment Number 001
dated April 9, 1996.
26
<PAGE>
LEASE AGREEMENT
---------------
THIS AGREEMENT is made the First Day of December 21, 1997 by and between
HOFFMAN ENTERPRISES, a New York partnership having its principal office at 25
Corporate Circle, Albany, New York (the "Landlord") and tenant, Albany Molecular
Research Inc., 21 Corporate Circle, a New York Corporation.
W I T N E S S E T H:
-------------------
The Landlord hereby leases to the Tenant the premises located at, and
commonly referred to as 21 Corporate Circle, City of Albany, New York, including
all improvements and buildings thereon (the "Property") consisting of
approximately 50,052 square feet of combination office space and warehouse space
which is more particularly described and cross hatched in yellow outline on the
site plan attached hereto as Exhibit "A" (the "Premises"), for a term of 15
(Fifteen) years, lease to commence on December 1, 1997 (the "Commencement
Date"), and to end on the last day of November 30, 2012, unless terminated
earlier as provided herein (the "Lease Term").
1. Annual Rent.
------------
A. The Tenant shall pay to the Landlord annual rent for the
Premises in accordance with the following schedule:
Term Annual Rent Monthly Rent
---- ----------- ------------
December 1, 1997 - November 30, 2007 $275,286.00 $22,940.50
December 1, 2007 - November 30, 2012 Adjusted by the CPI for inflation but in
no event more than 10%
The payments to be made by the Tenant to the Landlord shall be in
accordance with the above schedule and shall hereinafter be called the "Rent."
The Rent to be paid by the Tenant to the Landlord, as set forth above, shall be
paid by the Tenant to the Landlord in equal consecutive monthly payments, in
advance, on the first day of each and every month during the Lease Term, without
offset, abatement, demand or any prior notice of any kind. All amounts required
or provided to be paid by the Tenant under the Lease shall be deemed additional
rent, and the failure to pay such additional rent in all instances be treated,
without exception, as the failure to pay Rent.
B. The Tenant shall be responsible for the payment of a late payment
penalty in the amount of four percent (4%) of the
27
<PAGE>
after the date set forth for the commencement of the Lease Term (the
"Commencement Date"), it being understood that the Tenant's obligation to pay
Rent, in any event, shall commence to run on the Commencement Date. If the
Landlord is undertaking any structural repairs to the Premises and such
structural repairs materially interfere with the Tenant's use and operation,
then the Landlord will render to the Tenant a fair and equitable reduction in
the rent, calculated on a per diem basis, for only the time period that the
Landlord is undertaking such structural repair work.
28. Delivery of Possession. The Landlord shall not be liable for failure
----------------------
to give possession of the Premises to the Tenant upon the Commencement Date, of
the reason for such failure is that a prior Tenant or any other person is
wrongfully holding over or is in wrongful possession, or for any other reason.
However, the Rent shall not commence until possession is given, or is available,
to the Tenant, and the amount of the first such payment shall be reduced, on a
per diem basis, to reflect the actual date of delivery of possession.
29. Real Estate Taxes; Other Expenses.
---------------------------------
A. Real Estate Taxes. It is the intention and agreement of the
-----------------
Landlord and the Tenant that the Tenant shall pay its proportionate share of the
increase in the real property taxes imposed on the Property for each calendar
year over the Base Period Real Property Taxes (as hereinafter defined). For the
purposes hereof, Tenant's proportionate share shall be 100%, which is the
percentage resulting from dividing the square footage of the Premises (50,052
square feet) by the total square footage of the building located on the Property
(50,052 square feet) (hereinafter called the "Tenant's Share"). Additionally,
the increase in real property taxes shall be the amount by which the real estate
taxes for any particular calendar year exceeds $19,950 (the "Base Period Real
Property Taxes"), which is the estimate of the real estate taxes assessed
against the Property for the calendar year 1993 (the 1993 city/county taxes and
the 1993-1004 school taxes on the Property). The Tenant's share of the increase
in the Tenant's appropriate share of real estate taxes shall be determined in
accordance with the following formula:
Tenant's Share = (Real Property Taxes on Property (-) Base Period Real
Property Taxes) (x) Tenant's Share.
Tenant's proportionate share of the increase in the real property taxes on
the Property shall be additional rent and shall be paid by Tenant to Landlord
within ten (10) days after written demand for the payment of the same by
Landlord to Tenant is given.
28
<PAGE>
the parties shall be released of all further liability and obligation to each
other.
35. Corporate Resolution. The Tenant shall deliver a corporate resolution
--------------------
of the Board of Directors and shareholders of the Tenant, authorizing the
execution and delivery of this Lease.
36. Option to First Refusal. Tenant shall have the right of first refusal
-----------------------
to purchase 21 Corporate Circle. Tenant must respond within 48 hours (2
business days) of notification that an offer of Purchase has been received by
Landlord.
37. Option to Purchase. Tenant may opt to purchase the building for
------------------
$3,500,000 within one year of signing this amendment by depositing with Landlord
a non refundable retainer of One Million Dollars. Balance 2.5 million to
Purchase to be paid at the end of the 5th year of the Amendment, November 30,
2002.
IN WITNESS WHEREOF, the individual party has set his hand seal hereto and
the corporation party has caused these presents to be signed by its proper
corporate officer and caused its proper corporation seal to be affixed hereto,
all on the day and year first above written.
LANDLORD: HOFFMAN ENTERPRISES
By: /s/ Thomas Hoffman
------------------------------------
TENANT: ALBANY MOLECULAR RESEARCH, INC.
By: /s/ Thomas D'Ambra
------------------------------------
29
<PAGE>
Exhibit 10.2
ALBANY MOLECULAR RESEARCH, INC.
1998 STOCK OPTION AND INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
----------------------------------------
The name of the plan is the Albany Molecular Research, Inc. 1998 Stock
Option and Incentive Plan (the "Plan"). The purpose of the Plan is to encourage
and enable the officers, employees, directors, consultants, advisors, and other
key persons of Albany Molecular Research, Inc. (the "Company") and its
Subsidiaries (as defined below) upon whose judgment, initiative and efforts the
Company largely depends for the successful conduct of its business to acquire a
proprietary interest in the Company. It is anticipated that providing such
persons with a direct stake in the Company's welfare will assure a closer
identification of their interests with those of the Company, thereby stimulating
their efforts on the Company's behalf and strengthening their desire to remain
with the Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Administrator" is defined in Section 2(a).
"Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Deferred Stock Awards, Restricted Stock
Awards, Unrestricted Stock Awards, Performance Share Awards and Dividend
Equivalent Rights.
"Board" means the Board of Directors of the Company.
"Change of Control" is defined in Section 17.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Committee" means the Committee of the Board referred to in Section 2(a).
"Covered Employee" means an employee who is a "Covered Employee" within the
meaning of Section 162(m) of the Code.
"Deferred Stock Award" means Awards granted pursuant to Section 8.
"Dividend Equivalent Right" means Awards granted pursuant to Section 12.
"Effective Date" means the date on which the Plan is approved by
stockholders as set forth in Section 19.
<PAGE>
"Fair Market Value" of the Stock on any given date means (i) if the Stock
is admitted to quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), NASDAQ National System or a national
securities exchange, the determination shall be made by reference to market
quotations. If there are no market quotations for such date, the determination
shall be made by reference to the last date preceding such date for which there
are market quotations, or (ii) if the Stock is not publicly traded on a
securities exchange or traded in the over-the-counter market or, if traded or
quoted, there are no transactions or quotations within the last ten trading days
or trading has been halted for extraordinary reasons, the Fair Market Value on
any given date shall be determined in good faith by the Committee with reference
to the rules and principles of valuation set forth in Section 20.2031-2 of the
Treasury Regulations. Notwithstanding the foregoing, the Fair Market Value of
the Stock on the first day of the Company's Initial Public Offering shall be the
initial public price as set forth in the final prospectus for such Initial
Public Offering.
"Incentive Stock Option" means any Stock Option designated and qualified as
an "incentive stock option" as defined in Section 422 of the Code.
"Independent Director" means a member of the Board who is neither an
employee or officer of the Company or any Subsidiary.
"Initial Public Offering" means the first underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offer and sale of Stock to the public.
"Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Performance Cycle" means one or more periods of time, which may be of
varying and overlapping durations, as the Administrator may select, over which
the attainment of one or more performance criteria will be measured for the
purpose of determining a participant's right to and the payment of a Performance
Share Award, Restricted Stock Award or Deferred Stock Award.
"Performance Share Award" means any Award granted pursuant to Section 10.
"Restricted Stock Award" means any Award granted pursuant to Section 7.
"Stock" means the Common Stock, par value $.01 per share, of the Company,
subject to adjustments pursuant to Section 3.
2
<PAGE>
"Stock Appreciation Rights" means any Award granted pursuant to Section 6.
"Subsidiary" means any corporation or other entity (other than the Company)
in any unbroken chain of corporations or other entities, beginning with the
Company, if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50 percent or more of the economic interest or the total combined
voting power of all classes of stock or other interests in one of the other
corporations or entities in the chain.
"Unrestricted Stock Award" means any Award granted pursuant to Section 9.
SECTION 2. ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT
---------------------------------------------------------
PARTICIPANTS AND DETERMINE AWARDS
---------------------------------
(a) Committee. The Plan shall be administered by the Board of Directors of
---------
the Company, or at the discretion of the Board, by a committee of the Board
comprised, except as contemplated by Section 2(c), of not less than two
Independent Directors (in either case, the "Administrator").
(b) Powers of Administrator. The Administrator shall have the power and
-----------------------
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(i) to select the officers, employees, Independent Directors,
consultants and key persons of the Company and its Subsidiaries to whom
Awards may from time to time be granted;
(ii) to determine the time or times of grant, and the extent, if any,
of Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation
Rights, Restricted Stock Awards, Deferred Stock Awards, Unrestricted Stock
Awards, Performance Share Awards and Dividend Equivalent Rights, or any
combination of the foregoing, granted to any one or more participants;
(iii) to determine the number of shares of Stock to be covered by any
Award;
(iv) to determine and modify from time to time the terms and
conditions, including restrictions, not inconsistent with the terms of the
Plan, of any Award, which terms and conditions may differ among individual
Awards and participants, and to approve the form of written instruments
evidencing the Awards;
(v) to accelerate at any time the exercisability or vesting of all
or any portion of any Award and/or to include provisions in Awards
providing for such acceleration;
3
<PAGE>
(vi) to impose any limitations on Awards granted under the Plan,
including limitations on transfers, repurchase provisions and the like and
to exercise repurchase rights or obligations;
(vii) subject to the provisions of Section 5(a)(ii), to extend at any
time the period in which Stock Options may be exercised;
(viii)to determine at any time whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the
participant and whether and to what extent the Company shall pay or credit
amounts constituting interest (at rates determined by the Administrator) or
dividends or deemed dividends on such deferrals; and
(ix) at any time to adopt, alter and repeal such rules, guidelines
and practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written
instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in connection
with the Plan; and to otherwise supervise the administration of the Plan.
All decisions and interpretations of the Administrator shall be binding on
all persons, including the Company and Plan participants.
(c) Delegation of Authority to Grant Awards. The Administrator, in its
---------------------------------------
discretion, may delegate to the Chief Executive Officer of the Company all or
part of the Administrator's authority and duties with respect to the granting of
Awards at Fair Market Value, to individuals who are not subject to the reporting
and other provisions of Section 16 of the Act or "covered employees" within the
meaning of Section 162(m) of the Code. Any such delegation by the Administrator
shall include a limitation as to the amount of Awards that may be granted during
the period of the delegation and shall contain guidelines as to the
determination of the exercise price of any Stock Option or Stock Appreciation
Right, the conversion ratio or price of other Awards and the vesting criteria.
The Administrator may revoke or amend the terms of a delegation at any time but
such action shall not invalidate any prior actions of the Administrator's
delegate or delegates that were consistent with the terms of the Plan.
SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION
----------------------------------------------------
(a) Stock Issuable. The maximum number of shares of Stock reserved and
--------------
available for issuance under the Plan shall be such aggregate number of shares
of Stock as does not exceed the sum of (i) 1,379,771 shares; plus (ii) as of
each June 30 and December 31, an additional positive number equal to fifteen
percent (15%) of the shares of Stock issued by the Company during the six-month
period then ended; provided, however, that the maximum
4
<PAGE>
number of shares of Stock for which Incentive Stock Options may be granted under
the Plan shall not exceed 919,847 shares. For purposes of the foregoing
limitations, the shares of Stock underlying any Awards which are forfeited,
canceled, reacquired by the Company, satisfied without the issuance of Stock or
otherwise terminated (other than by exercise) shall be added back to the shares
of Stock available for issuance under the Plan. Subject to such overall
limitation, shares of Stock may be issued up to such maximum number pursuant to
any type or types of Award; provided, however, that Stock Options or Stock
Appreciation Rights with respect to no more than 200,000 shares of Stock may be
granted to any one individual participant during any calendar year period. The
shares available for issuance under the Plan may be authorized but unissued
shares of Stock or shares of Stock reacquired by the Company. Upon the exercise
of a Stock Appreciation Right settled in shares of Stock, the right to purchase
an equal number of shares of Stock covered by a related Stock Option, if any,
shall be deemed to have been surrendered and will no longer be exercisable, and
said number of shares of Stock shall no longer be available under the Plan.
(b) Recapitalizations. If, through or as a result of any merger,
-----------------
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, the outstanding shares of
Stock as a class are increased or decreased or are exchanged for a different
number or kind of shares or other securities of the Company or any successor
company, or additional shares or new or different shares or other securities of
the Company or any successor Company or other non-cash assets are distributed
with respect to such shares of Stock or other securities, the Administrator
shall make an appropriate or proportionate adjustment in (i) the maximum number
of shares reserved for issuance under the Plan, (ii) the number of Stock Options
or Stock Appreciation Rights that can be granted to any one individual
participant, (iii) the number and kind of shares or other securities subject to
any then outstanding Awards under the Plan, and (iv) the price for each share
subject to any then outstanding Stock Options, Stock Appreciation Rights or
other Awards under the Plan, without changing the aggregate exercise price
(i.e., the exercise price multiplied by the number of shares) as to which such
Stock Options, Stock Appreciation Rights or other Awards remain exercisable.
The adjustment by the Administrator shall be final, binding and conclusive. No
fractional shares of Stock shall be issued under the Plan resulting from any
such adjustment, but the Administrator in its discretion may make a cash payment
in lieu of fractional shares.
The Administrator may also adjust the number of shares subject to
outstanding Awards and the exercise price and the terms of outstanding Awards to
take into consideration material changes in accounting practices or principles,
extraordinary dividends, acquisitions or dispositions of stock or property or
any other event if it is determined by the Administrator that such adjustment is
appropriate to avoid distortion in the operation of the Plan, provided that no
such adjustment shall be made in the case of an Incentive Stock Option, without
the consent of the participant, if it would constitute a modification, extension
or renewal of the Option within the meaning of Section 424(h) of the Code.
5
<PAGE>
(c) Mergers and Other Transactions. In the case of and subject to the
------------------------------
consummation of (i) the dissolution or liquidation of the Company, (ii) the sale
of all or substantially all of the assets of the Company on a consolidated basis
to an unrelated person or entity, (iii) a merger, reorganization or
consolidation in which the holders of the Company's outstanding voting power
immediately prior to such transaction do not own a majority of the outstanding
voting power of the surviving or resulting entity immediately upon completion of
such transaction, (iv) the sale of all of the Stock of the Company to an
unrelated person or entity or (v) any other transaction in which the owners of
the Company's outstanding voting power prior to such transaction do not own at
least a majority of the outstanding voting power of the relevant entity after
the transaction (in each case, a "Covered Transaction"), all Options and Stock
Appreciation Rights that are not exercisable shall become fully exercisable and
all other Awards with conditions and restrictions relating solely to the passage
of time and continued employment shall become fully vested, except as the
Administrator may otherwise specify with respect to particular Awards. Upon the
consummation of the Covered Transaction, the Plan and all outstanding Awards
granted hereunder shall terminate, unless provision is made in connection with
the Covered Transaction for the assumption of Awards heretofore granted, or the
substitution of such Awards with new Awards of the successor entity or parent
thereof, with appropriate adjustment as to the number and kind of shares and, if
appropriate, the per share exercise prices, as provided in Section 3(b) above.
In the event of such termination, each optionee shall be permitted, within a
specified period of time determined by the Administrator prior to consummation
of the Covered Transaction, to exercise all outstanding Options and Stock
Appreciation Rights held by such optionee, including those that are not then
exercisable, subject to the consummation of the Covered Transaction.
(d) Substitute Awards. The Administrator may grant Awards under the Plan
-----------------
in substitution for stock and stock based awards held by employees of another
corporation who become employees of the Company or a Subsidiary as the result of
a merger or consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation. The Administrator may direct that the
substitute awards be granted on such terms and conditions as the Administrator
considers appropriate in the circumstances. Any substitute Awards granted under
this Plan shall not count against the share limitation set forth in Section
3(a).
SECTION 4. ELIGIBILITY
-----------
Participants in the Plan will be such officers and other employees,
Independent Directors, consultants, advisors and other key persons (including
prospective employees) of the Company and its Subsidiaries who are responsible
for or contribute to the management, growth or profitability of the Company and
its Subsidiaries as are selected from time to time by the Administrator, in its
sole discretion.
6
<PAGE>
SECTION 5. STOCK OPTIONS
-------------
Any Stock Option granted under the Plan shall be pursuant to a stock option
agreement which shall be in such form as the Administrator may from time to time
approve. Option agreements need not be identical.
Stock Options granted under the Plan may be either Incentive Stock Options
or Non-Qualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is a "subsidiary corporation"
within the meaning of Section 424(f) of the Code. Non-Qualified Stock Options
may be granted to officers, employees, Independent Directors, advisors,
consultants and other key persons of the Company and its Subsidiaries. To the
extent that any Option does not qualify as an Incentive Stock Option, it shall
be deemed a Non-Qualified Stock Option.
No Incentive Stock Option shall be granted under the Plan after August 26,
2008.
(a) Terms of Stock Options. Stock Options granted under the Plan shall be
----------------------
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Administrator shall deem desirable.
(i) Exercise Price. The exercise price per share for the Stock
--------------
covered by a Stock Option shall be determined by the Administrator at the
time of grant but shall not be less than 100 percent of the Fair Market
Value on the date of grant in the case of Incentive Stock Options, or 85%
of the Fair Market Value on the date of grant, in the case of Non-Qualified
Stock Options (other than options granted in lieu of cash compensation).
If an employee owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) more than 10 percent of the
combined voting power of all classes of stock of the Company or any parent
or subsidiary corporation and an Incentive Stock Option is granted to such
employee, the option price of such Incentive Stock Option shall be not less
than 110 percent of the Fair Market Value on the grant date.
(ii) Option Term. The term of each Stock Option shall be fixed by
-----------
the Administrator, but no Stock Option shall be exercisable more than ten
years after the date the option is granted. If an employee owns or is
deemed to own (by reason of the attribution rules of Section 424(d) of the
Code) more than 10 percent of the combined voting power of all classes of
stock of the Company or any parent or subsidiary corporation and an
Incentive Stock Option is granted to such employee, the term of such option
shall be no more than five years from the date of grant.
(iii) Exercisability; Rights of a Stockholder. Stock Options shall
---------------------------------------
become vested and exercisable at such time or times, whether or not in
installments, as shall be determined by the Administrator at or after the
grant date; provided, however, that Stock Options granted in lieu of cash
compensation shall be exercisable in full as of the
7
<PAGE>
grant date. The Administrator may at any time accelerate the exercisability
of all or any portion of any Stock Option. An optionee shall have the
rights of a stockholder only as to shares acquired upon the exercise of a
Stock Option and not as to unexercised Stock Options.
(iv) Method of Exercise. Stock Options may be exercised in whole or
------------------
in part, by giving written notice of exercise to the Company, specifying
the number of shares to be purchased. Payment of the purchase price may be
made by one or more of the following methods to the extent provided in the
Option Award Agreement; provided, however, that the methods set forth in
subsections (B) and (C) below shall become available only after the closing
of the Initial Public Offering:
(A) In cash, by certified or bank check or other instrument
acceptable to the Administrator;
(B) Through the delivery (or attestation to the ownership) of shares
of Stock that have been purchased by the optionee on the open market
or that have been beneficially owned by the optionee for at least six
months, and are not then subject to restrictions under any Company
plan, if permitted by the Administrator in its discretion; such
surrendered shares shall be valued at Fair Market Value on the
exercise date;
(C) By the optionee delivering to the Company a properly executed
exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable and acceptable
to the Company to pay the purchase price; provided that in the event
the optionee chooses to pay the purchase price as so provided, the
optionee and the broker shall comply with such procedures and enter
into such agreements of indemnity and other agreements as the
Administrator shall prescribe as a condition of such payment
procedure; or
(D) By the optionee delivering to the Company a promissory note
if the Board has expressly authorized the loan of funds to the optionee for
the purpose of enabling or assisting the optionee to effect the exercise of
his Stock Option; provided that at least so much of the exercise price as
represents the par value of the Stock shall be paid other than with a
promissory note.
Payment instruments will be received subject to collection. The delivery
of certificates representing the shares of Stock to be purchased pursuant
to the exercise of a Stock Option will be contingent upon receipt from the
optionee (or a purchaser acting in his stead in accordance with the
provisions of the Stock Option) by the Company of the full purchase price
for such shares and the fulfillment of any other requirements contained in
the Stock Option or applicable provisions of laws. In the event an
optionee chooses to pay the purchase price by previously-owned shares of
stock through the attestation
8
<PAGE>
method described in Section 5(a)(iv)(B), the number of shares of Stock
transferred to the optionee upon the exercise of the Stock Option shall be
net of the number of shares attested to.
(v) Termination. Unless otherwise provided in the option agreement
-----------
or determined by the Administrator, upon the optionee's termination of
employment (or other business relationship) with the Company and its
Subsidiaries, the optionee's rights in his Stock Options shall
automatically terminate.
(vi) Annual Limit on Incentive Stock Options. To the extent required
---------------------------------------
for "incentive stock option" treatment under Section 422 of the Code, the
aggregate Fair Market Value (determined as of the time of grant) of the
shares of Stock with respect to which Incentive Stock Options granted under
this Plan and any other plan of the Company or its parent and subsidiary
corporations become exercisable for the first time by an optionee during
any calendar year shall not exceed $100,000. To the extent that any Stock
Option exceeds this limit, it shall constitute a Non-Qualified Stock
Option.
(b) Reload Options. At the discretion of the Administrator, Options
--------------
granted under the Plan may include a "reload" feature pursuant to which an
optionee exercising an option by the delivery of a number of shares of Stock in
accordance with Section 5(a)(iv)(B) hereof would automatically be granted an
additional Option (with an exercise price equal to the Fair Market Value of the
Stock on the date the additional Option is granted and with the same expiration
date as the original Option being exercised, and with such other terms as the
Administrator may provide) to purchase that number of shares of Stock equal to
the sum of (i) the number delivered to exercise the original Option and (ii) the
number withheld to satisfy tax liabilities, with an Option term equal to the
remainder of the original Option term unless the Administrator otherwise
determines in the Award agreement for the original Option grant.
(c) Non-transferability of Options. No Stock Option shall be transferable
------------------------------
by the optionee otherwise than by will or by the laws of descent and
distribution and all Stock Options shall be exercisable, during the optionee's
lifetime, only by the optionee, or by the optionee's legal representative or
guardian in the event of the optionee's incapacity. Notwithstanding the
foregoing, the Administrator, in its sole discretion, may provide in the Award
agreement regarding a given Option that the optionee may transfer, without
consideration for the transfer, his Non-Qualified Stock Options to members of
his immediate family, to trusts for the benefit of such family members, to
partnerships in which such family members are the only partners; provided,
however, that the transferee agrees in writing to be bound by the terms and
conditions of this Plan and the applicable Option Agreement.
SECTION 6. STOCK APPRECIATION RIGHTS
-------------------------
(a) Nature of Stock Appreciation Rights. A Stock Appreciation Right is an
-----------------------------------
Award entitling the recipient to receive an amount in cash or shares of Stock or
a combination thereof having a value equal to the excess of the Fair Market
Value of the Stock on the date of exercise
9
<PAGE>
over the exercise price per Stock Appreciation Right set by the Administrator at
the time of grant, which price shall be determined by the Administrator in its
sole discretion (or over the option exercise price per share, if the Stock
Appreciation Right was granted in tandem with a Stock Option) multiplied by the
number of shares of Stock with respect to which the Stock Appreciation Right
shall have been exercised, with the Administrator having the right to determine
the form of payment.
(b) Grant and Exercise of Stock Appreciation Rights. Stock Appreciation
-----------------------------------------------
Rights may be granted by the Administrator in tandem with, or independently of,
any Stock Option granted pursuant to Section 5 of the Plan. In the case of a
Stock Appreciation Right granted in tandem with a Non-Qualified Stock Option,
such Stock Appreciation Right may be granted either at or after the time of the
grant of such Option. In the case of a Stock Appreciation Right granted in
tandem with an Incentive Stock Option, such Stock Appreciation Right may be
granted only at the time of the grant of the Option.
A Stock Appreciation Right or applicable portion thereof granted in tandem
with a Stock Option shall terminate and no longer be exercisable upon the
termination or exercise of the related Option.
(c) Terms and Conditions of Stock Appreciation Rights. Stock Appreciation
-------------------------------------------------
Rights shall be subject to such terms and conditions as shall be determined from
time to time by the Administrator, subject to the following:
(i) Stock Appreciation Rights granted in tandem with Options shall be
exercisable at such time or times and to the extent that the related Stock
Options shall be exercisable.
(ii) Upon exercise of a Stock Appreciation Right, the applicable
portion of any related Option shall be surrendered.
(iii) All Stock Appreciation Rights shall be exercisable during the
participant's lifetime only by the participant or the participant's legal
representative.
SECTION 7. RESTRICTED STOCK AWARDS
-----------------------
(a) Nature of Restricted Stock Awards. A Restricted Stock Award is an
---------------------------------
Award entitling the recipient to acquire, at par value or such other purchase
price determined by the Administrator, shares of Stock subject to such
restrictions and conditions as the Administrator may determine at the time of
grant ("Restricted Stock"). Conditions may be based on continuing employment
(or other business relationship) and/or achievement of pre-established
performance goals and objectives. The grant of a Restricted Stock Award is
contingent on the participant executing the Restricted Stock Award agreement.
The terms and conditions of each such agreement shall be determined by the
Administrator, and such terms and conditions may differ among individual Awards
and participants.
10
<PAGE>
(b) Rights as a Stockholder. Upon execution of a written instrument
-----------------------
setting forth the Restricted Stock Award and paying any applicable purchase
price, a participant shall have the rights of a stockholder with respect to the
voting of the Restricted Stock, subject to such conditions contained in the
written instrument evidencing the Restricted Stock Award. Unless the
Administrator shall otherwise determine, certificates evidencing the Restricted
Stock shall remain in the possession of the Company until such Restricted Stock
is vested as provided in Section 7(d) below, and the participant shall be
required, as a condition of the grant, to deliver to the Company a stock power
endorsed in blank.
(c) Restrictions. Restricted Stock may not be sold, assigned, transferred,
------------
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the Restricted Stock agreement. If a participant's employment (or
other business relationship) with the Company and its Subsidiaries terminates
for any reason, or upon such other events as may be stated in the Restricted
Stock agreement, the Company or its assigns shall have the right to repurchase
Restricted Stock that has not vested at the time of termination at its original
purchase price, from the participant or the participant's legal representative.
(d) Vesting of Restricted Stock. The Administrator at the time of grant
---------------------------
shall specify the date or dates and/or the attainment of pre-established
performance goals, objectives and other conditions on which the non-
transferability of the Restricted Stock and the Company's right of repurchase or
forfeiture shall lapse. Subsequent to such date or dates and/or the attainment
of such pre-established performance goals, objectives and other conditions, the
shares on which all restrictions have lapsed shall no longer be Restricted Stock
and shall be deemed "vested." Except as may otherwise be provided by the
Administrator either in the Award agreement or, subject to Section 15 below, in
writing after the Award agreement is issued, a participant's rights in any
shares of Restricted Stock that have not vested shall automatically terminate
upon the participant's termination of employment (or other business
relationship) with the Company and its Subsidiaries and such shares shall be
subject to the Company's right of repurchase as provided in Section 7(c) above.
(e) Waiver, Deferral and Reinvestment of Dividends. The Restricted Stock
----------------------------------------------
agreement may require or permit the immediate payment, waiver, deferral or
investment of dividends paid on the Restricted Stock.
SECTION 8. DEFERRED STOCK AWARDS
---------------------
(a) Nature of Deferred Stock Awards. A Deferred Stock Award is an Award
-------------------------------
of phantom stock units to a participant, subject to restrictions and conditions
as the Administrator may determine at the time of grant. Conditions may be
based on continuing employment (or other business relationship) and/or
achievement of pre-established performance goals and objectives. The grant of a
Deferred Stock Award is contingent on the participant executing the Deferred
Stock Award agreement. The terms and conditions of each such agreement shall be
determined by the Administrator, and such terms and conditions may differ among
individual
11
<PAGE>
Awards and participants. At the end of the deferral period, the Deferred Stock
Award, to the extent vested, shall be paid to the participant in the form of
shares of Stock.
(b) Election to Receive Deferred Stock Awards in Lieu of Compensation. The
-----------------------------------------------------------------
Administrator may, in its sole discretion, permit a participant to elect to
receive a portion of the cash compensation or Restricted Stock Award otherwise
due to such participant in the form of a Deferred Stock Award. Any such
election shall be made in writing and shall be delivered to the Company no later
than the date specified by the Administrator and in accordance with rules and
procedures established by the Administrator. The Administrator shall have the
sole right to determine whether and under what circumstances to permit such
elections and to impose such limitations and other terms and conditions thereon
as the Administrator deems appropriate.
(c) Rights as a Stockholder. During the deferral period, a participant
-----------------------
shall have no rights as a stockholder; provided, however, that the participant
may be credited with Dividend Equivalent Rights with respect to the phantom
stock units underlying his Deferred Stock Award, subject to such terms and
conditions as the Administrator may determine.
(d) Restrictions. A Deferred Stock Award may not be sold, assigned,
------------
transferred, pledged or otherwise encumbered or disposed of during the deferral
period.
(e) Termination. Except as may otherwise be provided by the Administrator
-----------
either in the Award agreement or, subject to Section 15 below, in writing after
the Award agreement is issued, a participant's right in all Deferred Stock
Awards that have not vested shall automatically terminate upon the participant's
termination of employment (or cessation of business relationship) with the
Company and its Subsidiaries for any reason.
SECTION 9. UNRESTRICTED STOCK AWARDS
-------------------------
The Administrator may, in its sole discretion, grant (or sell at a purchase
price determined by the Administrator) an Unrestricted Stock Award to any
participant, pursuant to which such participant may receive shares of Stock free
of any vesting restrictions ("Unrestricted Stock") under the Plan. Unrestricted
Stock Awards may be granted or sold as described in the preceding sentence in
respect of past services or other valid consideration, or in lieu of any cash
compensation due to such individual.
SECTION 10. PERFORMANCE SHARE AWARDS
------------------------
(a) Nature of Performance Share Awards. A Performance Share Award is an
----------------------------------
Award entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Administrator may make Performance Share
Awards independent of or in connection with the granting of any other Award
under the Plan. The Administrator in its sole discretion shall determine
whether and to whom Performance Share Awards shall be made, the performance
goals applicable under each such Award, the periods during which
12
<PAGE>
performance is to be measured, and all other limitations and conditions
applicable to the awarded Performance Shares; provided, however, that the
Administrator may rely on the performance goals and other standards applicable
to other performance unit plans of the Company in setting the standards for
Performance Share Awards under the Plan.
(b) Restrictions on Transfer. Performance Share Awards and all rights with
------------------------
respect to such Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered.
(c) Rights as a Stockholder. A participant receiving a Performance Share
-----------------------
Award shall have the rights of a stockholder only as to shares actually received
by the participant under the Plan and not with respect to shares subject to the
Award but not actually received by the participant. A participant shall be
entitled to receive a stock certificate evidencing the acquisition of shares of
Stock under a Performance Share Award only upon satisfaction of all conditions
specified in the Performance Share agreement (or in a performance plan adopted
by the Administrator).
(d) Termination. Except as may otherwise be provided by the Administrator
-----------
either in the Award agreement or, subject to Section 15 below, in writing after
the Award agreement is issued, a participant's rights in all Performance Share
Awards shall automatically terminate upon the participant's termination of
employment (or business relationship) with the Company and its Subsidiaries for
any reason.
(e) Acceleration, Waiver, Etc. At any time prior to the participant's
--------------------------
termination of employment (or other business relationship) by the Company and
its Subsidiaries, the Administrator may in its sole discretion accelerate, waive
or, subject to Section 15, amend any or all of the goals, restrictions or
conditions imposed under any Performance Share Award.
SECTION 11. PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES
---------------------------------------------
Notwithstanding anything to the contrary contained herein, if any
Restricted Stock Award, Deferred Stock Award or Performance Share Award granted
to a Covered Employee is intended to qualify as "Performance-based Compensation"
under Section 162(m) of the Code and the regulations promulgated thereunder (a
"Performance-based Award"), such Award shall comply with the provisions set
forth below:
(a) Performance Criteria. The performance criteria used in performance
--------------------
goals governing Performance-based Awards granted to Covered Employees may
include any or all of the following: (i) the Company's return on equity,
assets, capital or investment; (ii) pre-tax or after-tax profit levels of the
Company or any Subsidiary, a division, an operating unit or a business segment
of the Company, or any combination of the foregoing; (iii) cash flow, funds from
operations or similar measure; (iv) total shareholder return; (v) changes in the
market price of the Stock; (vi) sales or market share; or (vii) earnings per
share.
13
<PAGE>
(b) Grant of Performance-based Awards. With respect to each Performance-
---------------------------------
based Award granted to a Covered Employee, the Administrator shall select,
within the first 90 days of a Performance Cycle (or, if shorter, within the
maximum period allowed under Section 162(m) of the Code) the performance
criteria for such grant, and the achievement targets with respect to each
performance criterion (including a threshold level of performance below which no
amount will become payable with respect to such Award). Each Performance-based
Award will specify the amount payable, or the formula for determining the amount
payable, upon achievement of the various applicable performance targets. The
performance criteria established by the Administrator may be (but need not be)
different for each Performance Cycle and different goals may be applicable to
Performance-based Awards to different Covered Employees.
(c) Payment of Performance-based Awards. Following the completion of a
-----------------------------------
Performance Cycle, the Administrator shall meet to review and certify in writing
whether, and to what extent, the performance criteria for the Performance Cycle
have been achieved and, if so, to also calculate and certify in writing the
amount of the Performance-based Awards earned for the Performance Cycle. The
Administrator shall then determine the actual size of each Covered Employee's
Performance-based Award, and, in doing so, may reduce or eliminate the amount of
the Performance-based Award for a Covered Employee if, in its sole judgment,
such reduction or elimination is appropriate.
(d) Maximum Award Payable. The maximum Performance-based Award payable to
---------------------
any one Covered Employee under the Plan for a Performance Cycle is 200,000
Shares (subject to adjustment as provided in Section 3(b) hereof).
SECTION 12. DIVIDEND EQUIVALENT RIGHTS
--------------------------
(a) Dividend Equivalent Rights. A Dividend Equivalent Right is an Award
--------------------------
entitling the recipient to receive credits based on cash dividends that would
have been paid on the shares of Stock specified in the Dividend Equivalent Right
(or other award to which it relates) if such shares had been issued to and held
by the recipient. A Dividend Equivalent Right may be granted as a component of
another Award or as a freestanding award. The terms and conditions of Dividend
Equivalent Rights shall be specified in the grant. Dividend equivalents
credited to the holder of a Dividend Equivalent Right may be paid currently or
may be deemed to be reinvested in additional shares of Stock, which may
thereafter accrue additional equivalents. Any such reinvestment shall be at
Fair Market Value on the date of reinvestment or such other price as may then
apply under a dividend reinvestment plan sponsored by the Company, if any.
Dividend Equivalent Rights may be settled in cash or shares of Stock or a
combination thereof, in a single installment or installments. A Dividend
Equivalent Right granted as a component of another Award may provide that such
Dividend Equivalent Right shall be settled upon exercise, settlement, or payment
of, or lapse of restrictions on, such other award, and that such Dividend
Equivalent Right shall expire or be forfeited or annulled under the same
conditions as such other award. A Dividend Equivalent
14
<PAGE>
Right granted as a component of another Award may also contain terms and
conditions different from such other award.
(b) Interest Equivalents. Any Award under this Plan that is settled in
--------------------
whole or in part in cash on a deferred basis may provide in the grant for
interest equivalents to be credited with respect to such cash payment. Interest
equivalents may be compounded and shall be paid upon such terms and conditions
as may be specified by the grant.
(c) Termination. Except as may otherwise be provided by the Administrator
-----------
either in the Award agreement or, subject to Section 15 below, in writing after
the Award agreement is issued, a participant's rights in all Dividend Equivalent
Rights or interest equivalents shall automatically terminate upon the
participant's termination of employment (or cessation of business relationship)
with the Company and its Subsidiaries for any reason.
SECTION 13. TAX WITHHOLDING
---------------
(a) Payment by Participant. Each participant shall, no later than the date
----------------------
as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Administrator regarding payment of, any federal, state, or
local taxes of any kind required by law to be withheld with respect to such
income. The Company and its Subsidiaries shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the participant. The Company's obligation to deliver stock certificates
to any participant is subject to and conditioned on tax obligations being
satisfied by the participant.
(b) Payment in Stock. Subject to approval by the Administrator, a
----------------
participant may elect to have such tax withholding obligation satisfied, in
whole or in part, by (i) authorizing the Company to withhold from shares of
Stock to be issued pursuant to any Award a number of shares with an aggregate
Fair Market Value (as of the date the withholding is effected) that would
satisfy the withholding amount due, (ii) transferring to the Company shares of
Stock owned by the participant with an aggregate Fair Market Value (as of the
date the withholding is effected) that would satisfy the withholding amount due,
or (iii) in a combination of (i) and (ii).
SECTION 14. TRANSFER, LEAVE OF ABSENCE, ETC.
--------------------------------
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another; or
15
<PAGE>
(b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to re-
employment is guaranteed either by a statute or by contract or under the policy
pursuant to which the leave of absence was granted or if the Administrator
otherwise so provides in writing.
SECTION 15. AMENDMENTS AND TERMINATION
--------------------------
The Board may, at any time, amend or discontinue the Plan and the
Administrator may, at any time, amend or cancel any outstanding Award (or
provide substitute Awards at the same or reduced exercise or purchase price or
with no exercise or purchase price in a manner not inconsistent with the terms
of the Plan), but such price, if any, must satisfy the requirements which would
apply to the substitute or amended Award if it were then initially granted under
this Plan for the purpose of satisfying changes in law or for any other lawful
purpose, but no such action shall adversely affect rights under any outstanding
Award without the holder's written consent. If and to the extent determined by
the Administrator to be required by the Code to ensure that Incentive Stock
Options granted under the Plan are qualified under Section 422 of the Code to
ensure that compensation earned under Awards qualifies as performance-based
compensation under Section 162(m) of the Code, Plan amendments shall be subject
to approval by the Company stockholders who are eligible to vote at a meeting of
stockholders.
SECTION 16. STATUS OF PLAN
--------------
With respect to the portion of any Award which has not been exercised and
any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the
Administrator may authorize the creation of trusts or other arrangements to meet
the Company's obligations to deliver Stock or make payments with respect to
Awards hereunder, provided that the existence of such trusts or other
arrangements is consistent with the foregoing sentence.
SECTION 17. CHANGE OF CONTROL PROVISIONS
----------------------------
Upon the occurrence of a Change of Control as defined in this Section 17:
(a) Except as otherwise provided in the applicable Award agreement, each
outstanding Stock Option and Stock Appreciation Right shall automatically become
fully exercisable.
(b) Except as otherwise provided in the applicable Award Agreement,
conditions and restrictions on each outstanding Restricted Stock Award, Deferred
Stock Award and Performance Share Award which relate solely to the passage of
time and continued employment will be removed. Performance or other conditions
(other than conditions and
16
<PAGE>
restrictions relating solely to the passage of time and continued employment)
will continue to apply unless otherwise provided in the applicable Award
Agreement.
(c) "Change of Control" shall mean the occurrence of any one of the
following events:
(i) any "Person," as such term is used in Sections 13(d) and 14(d) of
the Act (other than the Company, any of its Subsidiaries, or any trustee,
fiduciary or other person or entity holding securities under any employee
benefit plan or trust of the Company or any of its Subsidiaries and other
than Thomas E. D'Ambra, Ph.D.), together with all "affiliates" and
"associates" (as such terms are defined in Rule 12b-2 under the Act) of
such person, shall become the "beneficial owner" (as such term is defined
in Rule 13d-3 under the Act), directly or indirectly, of securities of the
Company representing 25 percent or more of the combined voting power of the
Company's then outstanding securities having the right to vote in an
election of the Company's Board of Directors ("Voting Securities") (in such
case other than as a result of an acquisition of securities directly from
the Company); or
(ii) persons who, as of the Effective Date, constitute the Company's
Board of Directors (the "Incumbent Directors") cease for any reason,
including, without limitation, as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a majority
of the Board, provided that any person becoming a director of the Company
subsequent to the Effective Date shall be considered an Incumbent Director
if such person's election was approved by or such person was nominated for
election by either (A) a vote of at least a majority of the Incumbent
Directors or (B) a vote of at least a majority of the Incumbent Directors
who are members of a nominating committee comprised, in the majority, of
Incumbent Directors; but provided further, that any such person whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of members of the Board of
Directors or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board, including by reason of
agreement intended to avoid or settle any such actual or threatened contest
or solicitation, shall not be considered an Incumbent Director; or
(iii) the stockholders of the Company shall approve (A) any
consolidation or merger of the Company where the stockholders of the
Company, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own (as such
term is defined in Rule 13d-3 under the Act), directly or indirectly,
shares representing in the aggregate more than 50 percent of the voting
shares of the corporation issuing cash or securities in the consolidation
or merger (or of its ultimate parent corporation, if any), (B) any sale,
lease, exchange or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single plan) of all
or substantially all of the assets of the Company or (C) any plan or
proposal for the liquidation or dissolution of the Company.
17
<PAGE>
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (i) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
shares of Voting Securities outstanding, increases the proportionate number of
shares of Voting Securities beneficially owned by any person to 25 percent or
more of the combined voting power of all then outstanding Voting Securities;
provided, however, that if any person referred to in this sentence shall
thereafter become the beneficial owner of any additional shares of Voting
Securities (other than pursuant to a stock split, stock dividend, or similar
transaction or as a result of an acquisition of securities directly from the
Company), then a "Change of Control" shall be deemed to have occurred for
purposes of the foregoing clause (i).
SECTION 18. GENERAL PROVISIONS
------------------
(a) No Distribution; Compliance with Legal Requirements. The Administrator
---------------------------------------------------
may require each person acquiring Stock pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange or similar
requirements have been satisfied. The Administrator may require the placing of
such stop-orders and restrictive legends on certificates for Stock and Awards as
it deems appropriate.
(b) Delivery of Stock Certificates. Stock certificates to participants
------------------------------
under this Plan shall be deemed delivered for all purposes when the Company or a
stock transfer agent of the Company shall have mailed such certificates in the
United States mail, addressed to the participant, at the participant's last
known address on file with the Company.
(c) Other Compensation Arrangements; No Employment Rights. Nothing
-----------------------------------------------------
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, and such arrangements may be either
generally applicable or applicable only in specific cases. The adoption of this
Plan and the grant of Awards do not confer upon any employee any right to
continued employment with the Company or any Subsidiary.
(d) Trading Policy Restrictions. Option exercises and other Awards under
---------------------------
the Plan shall be subject to the Company's insider trading policy, as in effect
from time to time.
SECTION 19. EFFECTIVE DATE OF PLAN
----------------------
This Plan shall become effective upon approval by the holders of a majority
of the shares present or represented by proxy and entitled to vote at a meeting
of stockholders at which a quorum is present. Subject to such approval by the
stockholders and to the
18
<PAGE>
requirement that no Stock may be issued hereunder prior to such approval, Stock
Options and other Awards may be granted hereunder on and after the adoption of
this Plan by the Board.
SECTION 20. GOVERNING LAW
-------------
This Plan and all Awards and actions taken thereunder shall be governed by,
and construed in accordance with, the laws of the State of Delaware, applied
without regard to conflict of law principles, except to the extent such law is
preempted by federal law.
DATE APPROVED BY BOARD OF DIRECTORS: August 7, 1998
DATE APPROVED BY STOCKHOLDERS: August 26, 1998
19
<PAGE>
EXHIBIT 10.7
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
LICENSE AGREEMENT
TERFENADINE ACID METABOLITE
THIS AGREEMENT is entered into as of the 15th day of March, 1995, (the
"Effective Date") by and between MARION MERRELL DOW INC., a corporation
organized under the laws of Delaware ("MMD") and ALBANY MOLECULAR RESEARCH INC.,
a corporation organized under the laws of New York ("ALBANY"), with respect to
the following facts.
A. MMD possesses U.S. Patent No. 4,254,129 (the "MMD '129 Patent") and
two patent applications (the "MMD-Krauss Patent Application" as defined further
in Exhibit A-1; and the "MMD-King Application" as further defined in Exhibit
A-2) relating to terfenadine carboxylate ("Terfenadine Acid Metabolite" or
"TAM," (as defined further in Exhibit A)).
B. ALBANY also has rights to and has filed, in the U.S., U.S. Patent
Application Serial No. 08/083,102 (the "ALBANY Patent Application," as defined
further in Exhibit B).
C. The parties recognize and acknowledge that MMD may provoke, or the
U.S. Patent and Trademark Office (U.S. PTO) may declare, an interference
proceeding, between either of the MMD Patent Applications and the ALBANY Patent
Application or patents issuing therefrom.
D. MMD desires to obtain an exclusive license to the ALBANY Patent
Application and all patents issuing therefrom and ALBANY is willing to grant
such a license to MMD in accordance with the terms and conditions of this
Agreement.
E. Simultaneously with this Agreement, MMD and ALBANY are entering into a
Stock Purchase Agreement whereunder MMD shall purchase from ALBANY 723,214
shares of ALBANY's Common Stock, at a purchase price of $2.7654331 per share
and a Commercialization Agreement for further work to be undertaken by ALBANY
relating primarily to additional development of the TAM manufacturing process.
NOW THEREFORE, in consideration of the foregoing and the covenants and
promises contained in this Agreement, the parties agree as follows:
ARTICLE 1
DEFINITIONS
-----------
Capitalized terms used herein shall have the meanings set forth in
Exhibit A.
<PAGE>
ARTICLE 2
LICENSE
-------
2.1 License Grant. Subject to the terms and conditions of this Agreement,
ALBANY hereby grants to MMD an exclusive, worldwide license, with the right to
grant sublicenses, upon the prior written consent of ALBANY which shall not be
unreasonably withheld, under the ALBANY Patent Application, the ALBANY Patents,
and the Technology developed under the Commercialization Agreement between the
parties dated the date hereof, to develop, manufacture or have manufactured,
market and sell TAM and/or Product.
2.2 Sublicense to Controlled Affiliates. Notwithstanding the provisions
of Section 2.1, MMD shall have the right to grant sublicenses to its Controlled
Affiliates (as defined in Section 6.3.2) and to TDCC, without ALBANY'S written
consent, on such terms as are specified in a form of Sublicense Agreement
approved in advance by ALBANY and providing for the right of ALBANY to cause the
termination of the sublicense when such Sublicensee is no longer a Controlled
Affiliate. MMD agrees to notify ALBANY promptly of any such sublicenses,
identifying the Sublicensee, and agrees to provide to ALBANY a copy of the
signed sublicense agreement.
2.3 No Other Patents. ALBANY hereby represents and warrants that, as of
the date of this Agreement, there do not exist any patents or pending patent
applications owned or controlled by ALBANY, other than the ALBANY Patent
Application, which would be infringed by the practice of the inventions claimed
under the ALBANY Patent Application or which would otherwise prevent the
practice of any claims under the ALBANY Patents. The parties agree and
acknowledge, however, that if such patents or patent applications owned or
controlled by ALBANY are subsequently found to have existed prior to the
Effective Date, or found to exist during the term of this Agreement, ALBANY
shall grant to MMD a fully paid-up nonexclusive license to such patents and/or
patent applications, to the extent necessary for the practice of the ALBANY
Patent Application and the ALBANY Patents.
ARTICLE 3
INTELLECTUAL PROPERTY
---------------------
3.1 Prosecution.
ALBANY confirms to MMD that it has previously filed under the Patent
Cooperation Treaty ("PCT") the ALBANY Patent Application so as to achieve
international patent coverage including in the ex-US Countries (as defined
herein), in which MMD maintains a significant marketing presence.
2
<PAGE>
ALBANY shall diligently and in good faith, through its counsel, conduct the
prosecution (including patent issuance prosecution) of the ALBANY Patent
Application in the U.S. and in all countries in which the ALBANY Patent
Application is filed. MMD shall reimburse ALBANY for all reasonable, necessary,
and appropriate expenses incurred for such prosecution.
3.2 ALBANY Patents. After the respective dates of the allowance and
issuance of ALBANY Patents in any country, and except for the fees and costs
associated with any U.S. interference dealt with separately in this Article 3,
MMD shall, through its counsel and at its own expense, diligently direct and
conduct such processes as appropriate for extension, renewals, Supplemental
Protection Certificates and maintenance of the ALBANY Patents.
3.3 Abandonment. Should ALBANY decide, for any reason, not to prosecute
the ALBANY Patent Application or maintain the ALBANY Patents pursuant to this
Article 3, it will promptly notify MMD, and MMD may prosecute, maintain or
abandon the ALBANY Patent Application or ALBANY Patents, at its own expense and
in its sole discretion. ALBANY shall cooperate with MMD, at the reasonable
expense of MMD, in the prosecution and maintenance of the ALBANY Patent
Application and ALBANY Patents by MMD pursuant to this Section 3.3.
3.4 U.S. Interference Proceeding. The parties recognize and acknowledge
that certain patent applications owned by MMD or its Affiliates or Sublicensees,
including the MMD-Krauss Patent Application and the MMD-King Patent Application,
and the ALBANY Patent Application, may claim overlapping subject matter and
that, therefore, an interference proceeding may be declared as to certain claims
by the U.S. PTO either prior or subsequent to the issuance of any patent or
patents from the ALBANY Patent Application or patent applications owned by MMD
or its Affiliates or Sublicensees. It is further understood by the parties that
it is in the best interests of both parties to resolve all issues of
interference in order to ensure that the claims of any patent or patents which
may issue from the ALBANY Patent Application and/or the patent applications
owned by MMD or its Affiliates or Sublicensees are valid and enforceable. In the
event that an interference is declared or provoked, the parties agree to resolve
issues relating to this interference as follows:
3.4.1 Arbitration. Both parties will immediately exchange proofs on
-----------
the issue of priority. If the parties cannot agree as to who should prevail in
an interference, the parties agree that the issue of priority and any other
matters which may properly be considered pursuant to interference practice
before the U.S. PTO shall be determined by arbitration pursuant to the
provisions of 35 USC Sec. 135 and 37 CFR Sec. 1.690.
3.4.2 Single Arbitrator. The parties agree that the arbitration
-----------------
shall be conducted using a single arbitrator. In the event the parties are
unable to agree on a
3
<PAGE>
single arbitrator, the arbitration shall be conducted by a single arbitrator
chosen by agreement of two arbitrators, one selected by each of the respective
parties.
3.4.3 Procedure. Upon selection of an arbitrator, the parties shall meet
---------
with the arbitrator to determine the issues for consideration and the procedure
to be followed. The procedure to be followed in the arbitration shall be as set
forth in 37 CFR, Part 1, Subpart E, including but not limited to, motion
practice and the submission of priority evidence by declaration and/or by
testimony, except as otherwise agreed by the parties. The arbitrator shall
establish a reasonable schedule for action not inconsistent with practice in the
U.S. PTO or with the parties' desire to expedite the process leading to a
decision.
3.4.4 Legal Fees; Reimbursement. In the event that ALBANY prevails in
-------------------------
the arbitrated interference with the Process Manufacturing Claim, and the
arbitration decision is accepted by the U.S. PTO, ALBANY shall bear its own fees
and costs associated with the interference. However, in the event that ALBANY
does not prevail in the arbitrated interference with the Process Manufacturing
Claim, MMD shall reimburse ALBANY for actual out-of-pocket legal fees and costs
associated with the interference within ninety (90) days of receipt of an
itemized invoice therefor, provided that such reimbursement shall be limited to
the amount of the fees actually paid and incurred by MMD and its Affiliates and
Sublicensees for its own counsel in such interference. To the extent MMD
determines that such reimbursement shall not be paid in full, MMD and its
Affiliates and Sublicensees shall submit to ALBANY a detailed accounting of all
costs incurred for its own internal and external counsel in such interference
and ALBANY shall have the right to, and MMD and its Affiliates and Sublicensees
will execute whatever documents need to be executed to accommodate such right,
make inquiries of each counsel representative as to the validity and
completeness of the detail provided.
3.4.5 Submission of Agreements. The parties agree to comply with the
------------------------
requirements of 35 USC 135(c) relating to submission of agreements between the
parties to the U.S. PTO.
3.4.6 Third Party to Interference. In the event that a third party is
---------------------------
joined by the U.S. PTO in any interference proceeding relating to the MMD-Krauss
Patent Application and/or MMD-King Patent Application and the ALBANY Patent
Application, the entire interference proceeding will be conducted in the PTO
unless all parties agree to the arbitration as provided in this Section 3.4.
3.5 Enforcement of ALBANY Patents.
3.5.1 ALBANY warrants that, insofar as it is aware, no claim is pending
or has been made that the manufacture, distribution and/or Sale of Product, or
any material formula, process, or material employed in connection therewith,
infringes upon or conflicts
4
<PAGE>
in any way with any proprietary rights owned by others (except for MMD and its
Affiliates and Sublicensees).
3.5.2 Initiation of Infringement Actions. In the event MMD or ALBANY
----------------------------------
becomes aware of any actual or threatened infringement of any ALBANY Patents,
that party shall promptly notify the other party. MMD shall promptly take all
reasonable legal action necessary to cause each of its Assignees, Controlled
Affiliates, or Sublicensees (and to request each of its other pharmaceutical
Affiliates), to notify MMD in the event any of such entities become aware of any
such actual or threatened infringement, to protect against infringement by third
parties of the ALBANY Patents and any uses or processes pertaining thereto.
ALBANY agrees to promptly notify MMD if it receives a patent certification or
any other notice of litigation, and to advise MMD of any litigation it initiates
or which may be initiated against it, and to keep MMD advised throughout such
litigation. All costs of such litigation shall be borne solely by MMD.
3.6 Defense of Third Party Infringement Claims.
3.6.1 Defense of Infringement Claims. In the event MMD or ALBANY becomes
------------------------------
aware that MMD or any of its Affiliates or Sublicensees's practice of ALBANY
Patents is the subject of a claim for patent infringement, that party shall
promptly notify the other and the parties shall consider the claim and the most
appropriate action to take. MMD shall cause each of its Assignees, Affiliates,
or Sublicensees to notify MMD promptly in the event such entity becomes aware
that its practice of the ALBANY Patent is the subject of a claim of patent
infringement. MMD shall have the right to control the defense of any such suit
brought against MMD or any of its Assignees, Affiliates, or Sublicensees and
shall do so at its own expense. MMD shall have the right to require ALBANY's
reasonable cooperation in any such suit, upon written notice to ALBANY, and
ALBANY shall have the obligation to participate and MMD shall bear the costs of
its participation. MMD shall have the right to enter into any settlement upon
ALBANY's written consent, which consent shall not be unreasonably withheld.
3.6.2 Royalty Reduction. In the event that a third party asserts that
-----------------
MMD's manufacture, use or Sale of Product constitutes infringement of such third
party's patent which dominates the ALBANY Patents, MMD shall be entitled to
deduct from royalty payments otherwise due ALBANY under this Agreement the
lesser of One Million Dollars ($1,000,000) or twenty five percent (25%) of any
costs, expenses (including reasonable legal fees and expenses) and damages paid
to such third party or amounts paid in a settlement with such third party;
provided that the amount that MMD is entitled to deduct from royalty payments
due for any quarter shall not exceed one third (1/3) of the royalties due ALBANY
for such quarter.
5
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
3.7 Product Liability Indemnification. MMD agrees to defend ALBANY, its
agents, directors, officers and employees, at MMD's cost and expense, and will
indemnify and hold harmless ALBANY, its agents, directors, officers and
employees, from and against any and all losses, costs, damages, fees or expenses
(including attorney fees and disbursements) arising out of or in connection with
the manufacture, commercialization, marketing, Sale or use of any Product,
including, but not limited to, any actual or alleged injury, damage, death or
other consequence occurring to any person or property as a result, directly or
indirectly, of the possession, use or consumption of any Product, whether
claimed by reason of breach of warranty, theory of strict liability, negligence,
Product defect or otherwise, and regardless of the form in which any such claim
is made.
3.8 Attorneys Fees and Expenses. MMD shall reimburse ALBANY for all of
ALBANY's expenses, including attorney fees and disbursements, arising out of or
relating to a claim by ALBANY to enforce Sections 3.2, 3.4, 3.5, 3.6, and 3.7.
ARTICLE 4
PAYMENT OBLIGATIONS
4.1 Initial License Fee. On the Effective Date hereof MMD shall pay to the
order of ALBANY as the initial license fee for the ALBANY Patent Application the
sum of Two Hundred Thousand Dollars ($200,000) in the form of an MMD check or
wire transfer to the following account of Albany Molecular Research, Inc.: ***;
ABA # ***; Account Number ***.
4.2 Milestone Payments. MMD further agrees, on the occurrence of the
events described in this Section 4.2, to make the following additional milestone
payments to the account of ALBANY in the manner set forth in the preceding
section:
(a) With respect to the Process Manufacturing Claim, when and if a
patent with such a claim issues in the U.S., the sum of *** Dollars ($***)
will be paid to ALBANY, at the earlier to occur of (i) the survival of an
interference action with MMD or (ii) the expiration of one year from the date of
issuance, provided that no interference action has been declared by the PTO and
not at that time resolved. MMD shall, within thirty (30) days of the date
notified in writing by ALBANY of the issuance, institute appropriate action to
provoke an interference claim with respect to such patent. So long as MMD
institutes appropriate action to provoke an interference with such patent within
thirty (30) days of the date of notification of issuance and MMD subsequently
prevails in an interference, MMD shall be entitled to reimbursement of all sums
paid under this subsection (a);
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
(b) With respect to the Process Manufacturing Claim in ex-U.S.
countries on the occurrence of the issuance of a patent in the first of such
ex-U.S. countries, the sum of One Million Dollars ($1,000,000);
(c) With respect to the Intermediate Process Claim, when and if a
patent with such a claim issues in the U.S., the sum of *** Dollars ($***) will
be paid to Albany, at the earlier to occur of (i) the survival of an
interference action with MMD or (ii) the expiration of one year from the date of
issuance, provided that no interference action has been declared by the PTO and
not at that time resolved. MMD shall, within thirty (30) days of the date
notified in writing by ALBANY of the issuance, institute appropriate action to
provoke an interference claim with respect to such patent. So long as MMD
institutes appropriate action to provoke an interference with such patent within
thirty (30) days of the date of notification of issuance and MMD subsequently
prevails in an interference, MMD shall be entitled to reimbursement of all sums
paid under this subsection (c);
(d) With respect to the Substantially Pure Claim, when and if a
patent with such a claim issues in the U.S., the sum of *** Dollars ($***)
will be paid to ALBANY, at the earlier to occur of (i) the survival of an
interference action with MMD or (ii) the expiration of one year from the date of
issuance, provided that no interference action has been declared by the PTO and
not at that time resolved. MMD shall, within thirty (30) days of the date
notified in writing by ALBANY of the issuance, institute appropriate action to
provoke an interference claim with respect to such patent. So long as MMD
institutes appropriate action to provoke an interference with such patent within
thirty (30) days of the date of notification of issuance and MMD subsequently
prevails in an interference, MMD shall be entitled to reimbursement of all sums
paid under this subsection (d);
(e) With respect to the Substantially Pure Claim in ex-U.S.
countries, on the occurrence of the issuance of a patent in any such ex-U.S.
countries, the sum of *** Dollars ($***); and
(f) If ALBANY's Substantially Pure Claim does not issue in the U.S.,
but ALBANY, by reason of its activities pursuing such application in the U.S.
PTO, facilitates the issuance of MMD or its Affiliates and Sublicensees own
Substantially Pure Claim from MMD's-King Patent Application, or any other MMD or
its Affiliates and Sublicensees current or future application, a one time
commercialization fee of *** Dollars ($***).
4.3 Royalty Payments.
4.3.1 Royalty Rates. In addition to the milestone payments described in
-------------
the preceding section, MMD will pay ALBANY the following royalties as a percent
of the
7
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
Net Sales Revenue for Products Sold by MMD or its Affiliates or Sublicensees
from and after the issue date of the applicable ALBANY patent:
(a) If an ALBANY Patent issues containing the Process Manufacturing
Claim in the U.S. and survives an interference as stipulated in Section 4.2(a),
royalties at the rate of *** Percent (***%) of MMD or any of its Affiliates and
Sublicensees worldwide Net Sales Revenues, commencing with Sales from and after
the issue date of the applicable ALBANY patent, for as long as MMD or any of its
Affiliates or Sublicensees utilizes a process which, in the absence of this
Agreement, would otherwise infringe the Process Manufacturing Claim;
(b) If an ALBANY Patent containing a Process Manufacturing Claim does
not issue in the U.S., but does issue in any ex-U.S. countries, a royalty at the
rate of *** Percent (***%) of MMD or any of its Affiliates and Sublicensees Net
Sales Revenues, commencing with Sales from and after the issue date of the
applicable ALBANY patent in those ex-U.S. countries in which a patent with such
Claim issues for as long as MMD or any of its Affiliates or Sublicensees
utilizes a process which, in the absence of this Agreement, would otherwise
infringe the Process Manufacturing Claim as issued in the ex-U.S. country;
(c) No royalties shall be paid in the event that an ALBANY Patent
issues containing an Intermediate Process Claim;
(d) If an ALBANY Patent issues containing a Substantially Pure Claim
in the U.S. and survives an interference as stipulated in Section 4.2(d),
royalties at the rate of *** Percent (***%) of MMD or any of its Affiliates and
Sublicensees Net Sales Revenues in the U.S. commencing with Sales from and after
the issue date of the applicable ALBANY patent for as long as MMD or any of its
Affiliates or Sublicensees markets and/or Sells a product which, in the absence
of this Agreement, would otherwise infringe the Substantially Pure Claim as
issued;
(e) If an ALBANY Patent issues containing a Substantially Pure Claim
in any of the ex-U.S. countries, royalties at the rate of *** Percent (***%) of
MMD or any of its Affiliates and Sublicensees Net Sales Revenues in each of the
ex-U.S. countries in which such a patent issues commencing with Sales from and
after the issue date of the applicable ALBANY patent for as long as MMD or any
of its Affiliates or Sublicensees markets and/or Sells a product which, in the
absence of this Agreement, would otherwise infringe the Substantially Pure Claim
as issued in the ex-U.S. country;
(f) If any ALBANY Patent with the Substantially Pure Claim does not
issue in the U.S., but ALBANY, by reason of its activities pursuing such
application in the U.S. PTO facilitates the issuance to MMD or any of its
Affiliates or Sublicensees
8
<PAGE>
a patent with a Substantially Pure Claim under a patent application of MMD or
any of its Affiliates or Sublicensees patent application, no royalties shall be
payable; and
(g) Royalty rates described in (a), (b), (d) and (e) above are
individually triggered by satisfaction of the preconditions described for each.
4.3.2 Royalty Payment. All royalties due hereunder shall be calculated
---------------
every calendar quarter, or such pro rata share thereof as is applicable, and
shall be paid by MMD to ALBANY within forty-five (45) days after the end of such
quarter.
4.3.3 Exchange Rate. All amounts payable will first be calculated in the
-------------
currency of sale and then converted into United States dollars on a quarterly
basis using as a rate of exchange the actual foreign currency exchange rate on
the last day of the month preceding the end of the quarter or such other method
as is consistent with MMD's internal foreign currency translation procedures.
4.4 Tax Withholding. In the event that MMD is required to withhold taxes
imposed upon ALBANY for any payment under this Agreement by virtue of the
statutes, laws, codes or governmental regulations of the U.S., then such
payments shall be made by MMD on behalf of ALBANY by deducting from the payment
due ALBANY and remitting such taxes to the proper authorities on a timely basis
and the payments provided for under this Agreement shall be adjusted
appropriately, provided that MMD shall supply ALBANY with official documentation
and/or tax receipts on such withholdings supporting such taxes and such payments
as may be required by ALBANY for its tax records within sixty (60) days of the
withholding.
ARTICLE 5
CONFIDENTIALITY
---------------
5.1 Confidentiality. During the term of this Agreement and for a period
of ten (10) years thereafter, each party agrees, for itself, its employees
agents, consultants, Controlled Affiliates, other pharmaceutical Affiliates,
Sublicensees and clinical investigators that it and each such person or entity
will maintain in confidence all Confidential Information disclosed in connection
with this Agreement and shall obtain written confidentiality agreements from
each such person or entity. Neither party nor its employees, agents,
consultants, assignees, Controlled Affiliates, other pharmaceutical Affiliates,
Sublicensees and clinical investigators shall use or disclose such Confidential
Information except as permitted under this Agreement. Each party shall promptly
notify the other upon discovery of any unauthorized use or disclosure of the
Confidential Information. "Confidential Information", with respect to each
party, means any confidential or proprietary information, including, any present
or future formulas, research project, work in process, inventions, procedures,
development, scientific, engineering,
9
<PAGE>
manufacturing, marketing, business or financial plan or records, personnel
matter, products, sales, suppliers, customers, employees, or investors, whether
such Confidential or proprietary information is in oral, written, graphic or
electronic form (including all copies in whole or in part of any of the
foregoing) and which derives value from being known to the discloser or owner.
"Confidential Information" shall not include any information which:
a) the recipient can demonstrate to the reasonable satisfaction of
the disclosing party was already known to the recipient, other than under an
obligation of confidentiality, at the time of disclosure;
b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure;
c) becomes generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the recipient;
d) was disclosed to the recipient, other than under an obligation of
confidentiality, by a third party who had no obligation not to disclose such
information to others; or
e) the recipient can demonstrate to the reasonable satisfaction of
the disclosing party was independently developed by the recipient without
reference to the disclosure.
5.2 Financial Disclosure. The parties agree that the material financial
terms of the Agreement shall also be considered Confidential Information of both
parties and may be disclosed only as required in ALBANY's financial statements.
MMD and its Affiliates and Sublicensees understand that such financial
statements are, or may be, required to be delivered to certain entities and/or
individuals, including shareholders, financial institutions, underwriters, other
lending institutions, government agencies, customers and potential customers and
investors.
5.3 Authorized Disclosure. Each party may disclose the Confidential
Information to the extent such disclosure is reasonably necessary in filing or
prosecuting patent applications, prosecuting or defending litigation, furthering
the research and other progress contemplated by the Commercialization Agreement
or complying with applicable governmental regulations including those requiring
promulgation of periodic reports to shareholders, provided that if such party is
required to make any such disclosure of the Confidential Information it shall,
to the extent practicable, give reasonable advance notice to the other party of
such disclosure requirement and, except to the extent inappropriate in the case
of patent applications, shall use diligent efforts to secure confidential
treatment
10
<PAGE>
of such information required to be disclosed. In addition, MMD may disclose
such Confidential Information to its Controlled Affiliates, other pharmaceutical
Affiliates, and Sublicensees. In connection with any such disclosure, MMD and
its Controlled Affiliates, other pharmaceutical Affiliates, and Sublicensees
shall use diligent efforts to secure confidential treatment of such information
and MMD shall be responsible for any prohibited disclosure by itself or any such
person or entity. ALBANY agrees to request confidential treatment by the
Securities and Exchange Commission with respect to the material financial terms
of this Agreement.
ARTICLE 6
TERM; TERMINATION
-----------------
6.1 Term. This Agreement will commence as of the Effective Date and,
unless sooner terminated as provided hereunder, shall terminate upon the
expiration of the last to expire patent of the ALBANY Patents having a claim
which covers any Product made, used or Sold by MMD or any of its Affiliates and
Sublicensees.
6.2 Termination by MMD.
6.2.1 Unilateral Right to Terminate. In the event MMD and its
-----------------------------
Assignees, Affiliates, and Sublicensees decide to discontinue in any country
development and/or commercialization of Product for any commercial or scientific
reason, MMD shall have the right to terminate this Agreement with respect to
such country upon sixty (60) days' written notice. In the event of such
termination, MMD shall pay ALBANY all accrued payments due ALBANY through the
termination date and ALBANY shall have the right to grant licenses covering the
Technology for sale in such country.
6.2.2 Termination for Breach by ALBANY. MMD shall have the right
--------------------------------
to terminate this Agreement, in addition to pursuing any remedies available
under law or in equity, upon sixty (60) days' written notice to ALBANY, if
ALBANY is in material breach of this Agreement and such breach is not cured
within such sixty (60) day period (unless any such breach is not curable within
sixty (60) days and ALBANY is proceeding to use diligent and continuing efforts
to cure such breach, in such event, such notice period shall be extended for the
time reasonably necessary for cure); provided, however, in the event of such
breach for which MMD elects not to terminate this Agreement, MMD may elect to
continue this Agreement while pursing its legal remedies, including the receipt
of damages related to such breach. Any final, non-appealable damages awarded
may, at MMD's option, be deducted from any royalties or other payments owned to
ALBANY.
11
<PAGE>
6.3 Termination by ALBANY
6.3.1 Right to Terminate upon Notice from MMD. In the event that MMD
---------------------------------------
or any of its Assignees, Affiliates, and Sublicensees decides to discontinue in
any country development and/or commercialization of Product for any commercial
or scientific reason, MMD shall give notice in writing to ALBANY of such
decision and thereafter, ALBANY shall have the right to immediately terminate
this Agreement with respect to such country by written notice to MMD. In the
event of such termination, MMD shall pay ALBANY all accrued payments due ALBANY
through the termination date and ALBANY shall have the right to grant licenses
covering the Technology for sale in such country.
6.3.2 Right to Terminate upon Notice from MMD. In the event that MMD
---------------------------------------
and such of its Affiliates as to which MMD owns or controls at least ninety five
percent (95%) of the voting stock (a "Controlled Affiliate") fail to devote
their reasonable best efforts to market and Sell Products in any country ALBANY
shall have the right to immediately terminate this Agreement with respect to
such country by sixty (60) day written notice to MMD. In the event of such
termination, MMD shall pay ALBANY all accrued payments due ALBANY through the
termination date.
6.3.3 Termination for breach by MMD. ALBANY shall have the right to
-----------------------------
terminate this Agreement, in addition to pursuing any remedies available under
law or in equity, upon sixty (60) days' written notice to MMD, if MMD or any of
its Assignees, Affiliates, or Sublicensees is in material breach of this
Agreement and such breach is not cured within such sixty (60) day period (unless
any such breach is not curable within sixty (60) days and MMD and such Assignee,
Affiliate, or Sublicensee is proceeding to use diligent and continuing efforts
to cure such breach, in such event such notice period shall be extended for the
time reasonably necessary for cure). Notwithstanding the foregoing, in the event
of nonpayment of any amounts due hereunder, the initial sixty (60) day time
frame set forth above shall be extended for an additional period of up to thirty
(30) days if MMD is attempting to resolve any dispute over the payment
obligation or amount in good faith. Upon resolution of any such dispute, MMD
shall pay ALBANY any amounts owing with interest thereon at the prime rate on
the date of such resolution, as stated in the Wall Street Journal, New York
edition, on such date or the immediately preceding business date if such
resolution date is not a business date.
6.4 Reversion of Rights after Termination. Upon termination,
-------------------------------------
ALBANY shall have the exclusive right, title and interest in and to the ALBANY
Patent Application and the ALBANY Patents; none of MMD or any of its Affiliates
or Sublicensees shall have any right to exploit the ALBANY Patent Application or
the ALBANY Patent from and after the date of termination.
6.5 Termination by either party pursuant to this Article VI shall
be by written notice to the other party and, unless otherwise provided herein,
shall be effective
12
<PAGE>
on the date specified in such written notice to the other party, giving effect
to any applicable notice period provided hereunder.
6.6 Promptly upon termination of this Agreement, each party shall return
to the other party hereto all Technology and Confidential Information of such
other party.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
------------------------------
7.1 Mutual Representations and Warranties. Each party hereby represents
and warrants:
7.1.1 Corporate Power. Such party is duly organized and validly
---------------
existing under the laws of the state of its incorporation and has full corporate
power and authority to enter into this Agreement and to carry out the provisions
hereof.
7.1.2 Due Authorization. Such party is duly authorized to execute
-----------------
and deliver this Agreement and to perform its obligations hereunder.
7.1.3 Binding Agreement. This Agreement is a legal and valid
-----------------
obligation binding upon it and enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement by such party does not
conflict with any agreement, instrument or understanding, oral or written, to
which it is a party or by which it may be bound, nor violate any law or
regulation of any court, governmental body or administrative or other agency
having jurisdiction over it.
7.2 ALBANY Representations and Warranties.
7.2.1 Ownership. ALBANY represents and warrants that (i) it has
---------
received an assignment of the rights of all named inventors in and to the ALBANY
Patent Application, (ii) it has not granted any license under the ALBANY Patent
Application or ALBANY Patents except pursuant to this Agreement and is under no
obligation to grant such license, (iii) it is the owner of the entire right,
title and interest in and to the ALBANY Patent Application, and (iv) there are
no outstanding liens, encumbrances, agreements or understandings of any kind,
written, oral or implied, which are inconsistent with any provision of this
Agreement.
7.2.2 No Patent Infringement. ALBANY represents and warrants that no
----------------------
individual or entity has asserted to ALBANY that ALBANY, or any employee, agent,
representative or other person affiliated with ALBANY is infringing or has
infringed any foreign or domestic patent or has misappropriated or improperly
used or disclosed any trade secret, confidential information or know-how (and
ALBANY is unaware of any basis
13
<PAGE>
for such claim) which relates in any manner to the subject matter of this
Agreement except as separately disclosed, in writing, to MMD.
7.2.3 Patent Proceedings. Except as to MMD, ALBANY represents and
------------------
warrants to the best of its knowledge that the ALBANY Patent Application is not
currently the subject of any pending interference, opposition, cancellation or
other protest proceeding.
7.3 MMD Representations and Warranties. Except as to ALBANY, MMD
represents and warrants that no individual or entity has asserted to MMD that
MMD would be infringing any foreign or domestic patent or would be
misappropriating or improperly using or disclosing any trade secret,
confidential information, or know-how (and MMD is unaware of any basis for such
claim) which relates in any manner to the subject matter of this Agreement
except as separately disclosed, in writing, to ALBANY.
ARTICLE 8
CHOICE OF LAW
-------------
8.1 Choice of Law. This agreement shall be construed in accordance with,
and its performance shall be governed by, and construed in accordance with the
substantive laws of the State of New York.
ARTICLE 9
RECORDS; AUDIT
--------------
9.1 Records Retention. MMD shall keep, and cause its Controlled
Affiliates, other pharmaceutical Affiliates, Sublicensees, and Assignees to
keep, complete and accurate records pertaining to the Sale of Products in
sufficient detail to permit ALBANY to confirm the accuracy of calculations of
all payments hereunder. Such records will be maintained for two (2) calendar
years following the year in which any such payments were made hereunder.
9.2 Audit Right. ALBANY shall have the right to audit the records of MMD
and of its Controlled Affiliates, other pharmaceutical Affiliates, and
Sublicensees concerning the payments due hereunder. Any such audit may be
performed by the firm of independent certified public accountants employed by
MMD to conduct its regular annual audit or by a firm of independent certified
accountants selected by ALBANY reasonably acceptable to MMD. In any such audit,
the accountants shall have the right to examine such books of MMD and of its
Controlled Affiliates, other pharmaceutical Affiliates, and Sublicensees at all
reasonable times (but not more than once in each
14
<PAGE>
calendar year) within two years after the end of the year in which any such
payments were made for the purpose of verifying that such payments were properly
made under this Agreement. Such examination shall be made during normal business
hours. ALBANY agrees that information furnished to it as a result of any such
examination shall be limited to a statement by such firm of independent public
accountants to the effect that it has reviewed the books of account of MMD and
that the amount of the payment has been determined in conformity with such books
of account and the applicable provisions of this Agreement, or setting forth any
required adjustments and the reasons for such adjustments. If the verification
hereunder is performed at substantially the same time as the regular annual
audit of MMD by the firm of independent certified public accountants employed by
MMD to conduct its regular annual audit, the fees and expenses of such
verification shall be borne by MMD. In any other event the fees and expenses of
such verification shall be borne by ALBANY, provided that MMD shall reimburse
ALBANY for such fees and expenses in the event that the audit reveals a
discrepancy between the amount paid in any year and the amount due for such year
of more than five percent (5%).
9.3 Survival. This Article 9 shall survive any termination of this
Agreement for a period of two (2) years.
ARTICLE 10
MISCELLANEOUS PROVISIONS
------------------------
10.1 Relationship of the Parties. Neither party is, nor will be deemed to
be, an agent or legal representative of the other party for any purpose. Neither
party will be entitled to enter into any contracts in the name of or on behalf
of the other party, and neither party will be entitled to pledge the credit of
the other party in any way or hold itself out as having authority to do so. No
party will incur any debts or make any commitments for the other, except to the
extent, if at all, specifically provided herein.
10.2 Assignment. Except as otherwise provided herein, neither this
Agreement nor any interest hereunder will be assignable in part or in whole by
any party without the prior written consent of the other, provided, however,
that either party may assign this Agreement to any successor by merger or sale
of substantially all of its assets in a manner such that the assignor will
remain liable and responsible for the performance and observance of all its
duties and obligations hereunder. This Agreement will be binding upon the
successors and permitted assigns of the parties and the name of a party
appearing herein will be deemed to include the names of such party's successor's
and permitted assigns to the extent necessary to carry out the intent of this
Agreement. Any assignment which is not in accordance with this section will be
void.
15
<PAGE>
10.3 Public Announcements.
10.3.1 Press Releases and Third-Party Communications. After
---------------------------------------------
execution hereof and during the term of this Agreement, neither party shall
issue a press release relating to this Agreement without first obtaining the
approval of the other, such approval not to be unreasonably withheld. The
parties will jointly develop a strategy for responding to third-party inquiries
related to this Agreement.
10.3.2 Publication. During the term of this Agreement, neither party
-----------
shall approve or make any confidential or non-confidential disclosures of the
Technology or the Confidential Information without first securing the written
approval of the other party, which approval shall not be unreasonably withheld.
10.4 Notice. All notices and other communications hereunder will be in
writing and will be deemed given if delivered personally or registered or
certified mail, return receipt requested and postage prepaid or sent by express
courier service, to the parties at the following addresses (or at such other
addresses for a party as will be specified by the like notice; provided, that
notices of a change of address will be effective only upon receipt thereof):
If to ALBANY, addressed to:
Albany Molecular Research, Inc.
21 Corporate Circle
Albany, NY 12203-5154
Attn: Vice President, Finance & Operations
If to MMD, addressed to:
Marion Merrell Dow, Inc.
9300 Ward Parkway
P.O. Box 8480
Kansas City, Missouri 64114-0480
Attn: General Counsel
10.5 Amendment. No amendment, modification or supplement of any provision
of the Agreement will be valid or effective unless made in writing and signed by
a duly authorized officer of each party.
10.6 Waiver. No provision of the Agreement unless such provision
otherwise provides will be waived by any act, omission or knowledge of a party
or its agents or employees except by an instrument in writing expressly waiving
such provision and signed by a duly authorized officer of the waiving party.
16
<PAGE>
10.7 Survival. In the event of termination or expiration of this
Agreement, Sections 3.6, 3.7, 4.2(f), 6.4, and 10.3 and Articles 5, 8, and 9
shall survive.
10.8 Severability. Whenever possible, each provision of the Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of the Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
the Agreement.
10.9 Entire Agreement of the Parties. The Agreement together with the
Stock Purchase Agreement and Commercialization Agreement (both of even date
herewith) constitute and contain the complete, final and exclusive understanding
and agreement of the parties and cancel and supersede any and all prior
negotiations, correspondence, understandings, and agreements, whether oral or
written, between the parties respecting the subject matter thereof.
10.10 Arbitration. Other than the arbitration in Section 3.4, any dispute
arising out of, or relating to, this Agreement shall be resolved by arbitration,
held in New York State, under the Commercial Rules of the American Arbitration
Association. The decision of the Arbitrator(s) shall be binding and conclusive.
10.11 Payment Terms. All payment terms not otherwise defined in this
Agreement, shall be due and payable no later than thirty (30) days after the
date of an invoice submitted by ALBANY to MMD and reasonably detailing the
expenses invoiced.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
including all Exhibits attached hereto and incorporated herein by reference.
MARION MERRELL DOW INC. ALBANY MOLECULAR RESEARCH, INC.
By: /s/ Fred W. Lyons, Jr. By: /s/ Harold M. Armstrong, Jr.
------------------------------- -----------------------------------------
Title: Chairman & CEO Title: Vice President, Finance & Operations
---------------------------- --------------------------------------
17
<PAGE>
EXHIBIT A
DEFINITIONS
1. "Affiliate" means any entity that directly or indirectly Owns, is
---------
Owned by or is under common Ownership with a party to this Agreement, where
"Owns" or "Ownership" means direct or indirect possession of at least fifty
percent (50%) of the outstanding voting securities of a corporation or a
comparable equity interest in any other type of entity.
2. "Agreement" means the present agreement with all Exhibits hereto.
---------
3. "ALBANY Patent Application" means the patent application described in
-------------------------
Exhibit B hereto as originally filed, and including any divisional,
continuations-in-part and continuations thereof as well as non-U.S. counterpart
applications.
4. "ALBANY Patents" means all patents issuing from the ALBANY Patent
--------------
Application. Patents as used herein shall include, without limitation, all
extensions, reissues, reexaminations certificates, renewals, divisions,
continuations, and continuations-in-part of the aforementioned.
5. "Claim or Claims" means any claim or claims of ALBANY Patents which
---------------
cover essentially the same scope as claim 1 (hereinafter referred to as "Process
Manufacturing Claim"), claims 7 and 8 (hereinafter referred to as "Intermediate
Process Claim"), and claim 20 (hereinafter referred to as "Substantially Pure
Claim") of the ALBANY Patent Application as described in Exhibit B.
6. "ex-US countries" are Canada, Japan, Australia and New Zealand,
---------------
France, Germany, Italy, Spain and the United Kingdom.
7. "MMD" '129 Patent" means U.S. Patent Number 4254129.
----------------
8. "MMD-King Patent Application" means the MMD patent application as
---------------------------
originally filed and included as Exhibit A-2 hereto and including any
divisional, continuations-in-part, and continuations thereof.
9. "MMD-Krauss Patent Application" means the MMD patent application as
-----------------------------
originally filed and included as Exhibit A-1 hereto and including any
divisional, continuations-in-part, and continuations thereof.
10. "Net Sales Revenue" means the total of all amounts invoiced by MMD or
-----------------
its Affiliates and Sublicensees, as appropriate, for the Sale of Product in the
relevant territory, less the following deductions to the extent included in the
amount invoiced:
18
<PAGE>
(a) trade, cash, quantity or other discounts including rebates
actually allowed or taken;
(b) amounts repaid or credited by reason of rejections, defects or
returns or because of retroactive price reductions;
(c) freight, insurance and other transportation;
(d) rebates paid pursuant to law or government regulations; and
(e) taxes on the Sales of Product, whether denominated as value
added taxes, sales taxes or excise taxes to the extent arising out of said Sales
and included in said invoiced amount.
Notwithstanding the foregoing, amounts received by MMD or any of its
Affiliates for the sale of Products among MMD and its Affiliates, whether for
their internal use or for resale or other disposition shall not be included in
the computation of Net Sales Revenue hereunder but must be included when
invoiced to non-affiliated third parties by MMD or its Affiliates.
In the event that a pharmaceutical or diagnostic product is developed and
sold by MMD or any of its Affiliates or Sublicensees which is comprised in part
of Product and of one or more other active ingredients or other parts which
could be sold separately (collectively, a "Combination Product"), the parties
shall determine, by mutual agreement, the percentage of sales revenue generated
by Sale of the Combination Product that will be included for the purpose of
calculating "Net Sales Revenue".
11. "Product" means any therapeutic, diagnostic or prophylactic
-------
composition or article of manufacture developed, manufactured or Sold by MMD or
any of its Affiliates or Sublicensees, which when used, made, practiced or Sold
would, but for the license granted MMD pursuant to this Agreement, constitute an
infringement of an ALBANY Patent.
12. "Sale, Sell, or Sold" means the transfer by MMD or any of its
-------------------
Affiliates or Sublicensees to a third party of custody, possession or indicia,
or any right of ownership in a Product. A Sale shall be effective immediately
upon said transfer. Notwithstanding the foregoing, a transfer of a Product to a
third party without consideration in connection with the development, testing,
marketing or promotion of a Licensed Product shall not be deemed to be a Sale
hereunder.
13. "Sublicensee" means a third party to whom MMD has granted a
-----------
sublicense to make, have made, use or sell Products. Notwithstanding the
foregoing, a third party shall not be deemed to be a Sublicensee hereunder if
such third party is a distributor of
19
<PAGE>
MMD who performs a routine distribution function but who does not bear primary
responsibility for marketing.
14. "TDCC" means The Dow Chemical Company and successors to all or
----
substantially all of its pharmaceutical business as currently operated.
15. "Technology" shall mean all inventions, whether patentable or
----------
unpatentable, discoveries, trade secrets, information, experience, data,
formulas, procedures and results, and improvements thereon, developed by ALBANY
which relate to the research, development, synthesis or use of manufacturing
processes for TAM or which is developed by ALBANY pursuant to the Research
Program described in Exhibit C hereto, as may be amended by mutual agreement of
the parties.
16. "Terfenadine Acid Metabolite" or "TAM" means 4-[1-hydroxy-4-[4-
---------------------------
hydroxydiphenylmethyl)-1-piperidinyl]butyl]-[Greek letter alpha], [Greek letter
alpha]-dimethyl-benzeacetic acid,
or a pharmaceutically acceptable salt thereof.
20
<PAGE>
EXHIBIT A-1
MMD Patent Application
----------------------
21
<PAGE>
NOVEL PROCESS FOR PIPERIDINE DERIVATIVES
----------------------------------------
BACKGROUND OF THE INVENTION
---------------------------
The present invention is related to a novel process for preparing certain
piperidine derivatives which are useful as antihistamines, antiallergy agents
and bronchodilators [United States Patent No. 4,254,129, March 3, 1981, United
States Patent No. 4,254,130, March 3, 1981 and United States Patent No.
4,285,958, April 25, 1981].
These piperidine derivatives can be described by the following formulas:
[MOLECULAR DIAGRAM APPEARS HERE]
-1-
<PAGE>
wherein
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
R\\3\\ is -CH\\2\\OH, -COOH or -COOalkyl wherein the alkyl
moiety has from 1 to 6 carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers
thereof.
The novel process for preparing the piperidine derivatives of formula (I)
and formula (II) of the present invention offers high yields and ease of
purification.
SUMMARY OF THE INVENTION
------------------------
The present invention provides a novel process for preparing the piperidine
derivatives of formula (I) and formula (II)
[MOLECULAR DIAGRAM APPEAR HERE]
-2-
<PAGE>
wherein
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
R\\3\\ is -CH\\2\\OH, -COOH or -COOalkyl wherein the alkyl
moiety has from 1 to 6 carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers
thereof comprising the steps of:
(a) reacting a benzeneacetic acid compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above and R is hydrogen or C\\1\\-C\\6\\ alkyl with a
suitable reducing agent to give a phenethyl alcohol;
(b) reacting the phenethyl alcohol with a (omega)-halo compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents C1, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)-halo
hydroxyethylphenylketone; and
-3-
<PAGE>
(c) reacting the (omega)-halo hydroxyethylphenylketone with a piperidine
compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\ and R\\2\\ are as defined above in the presence of a suitable
non-nucleophilic base to produce a piperidine hydroxyethylphenylketone
derivative of formula (II) wherein R\\3\\ is -CH\\2\\OH;
(d) optionally reacting the piperidine hydroxyethylphenylketone
derivative of formula (II) wherein R\\3\\ is -CH\\2\\OH with a suitable
oxidizing agent to produce a piperidine carboxyphenylketone derivative of
formula (II) wherein R\\3\\is -COOH;
(e) optionally reacting the piperidine carboxyphenylketone derivative of
formula (II) wherein R\\3\\ is -COOH to produce a piperidine carboxyphenylketone
ester derivative of formula (II) wherein R\\3\\ is -COOalkyl.
(f) optionally reacting the piperidine carboxyphenylketone derivative of
formula (II) wherein R\\3\\ is -COOH or the piperidine carboxyphenylketone ester
derivative of formula (II) wherein R\\3\\ is -COOalkyl with a suitable reducing
agent to produce a piperidine carboxyphenylalcohol
-4-
<PAGE>
derivative of formula (I) wherein R\\3\\ is -COOH or the piperidine
carboxyphenylalcohol ester of formula (I) wherein R\\3\\ is -COOalkyl;
(g) optionally reacting the piperidine carboxyphenylalcohol derivative of
formula (I) wherein R\\3\\ is -COOH to produce a piperidine carboxyphenylalcohol
ester derivative of formula (I) wherein R\\3\\ is -COOalkyl; and
(h) optionally reacting the piperidine hydroxyethylphenylketone derivative
of formula (II) wherein R\\3\\ is -CH\\2\\OH, the piperidine carboxyphenylketone
derivative of formula (II) wherein R\\3\\ is -COOH, the piperidine
carboxyphenylketone ester derivative of formula (II) wherein R\\3\\ is
- -COOalkyl, the piperidine carboxyphenylalcohol derivative of formula (I) wherein
R\\3\\ is -COOH or the piperidine carboxyphenylalcohol ester of formula (I)
wherein R\\3\\ is -COOalkyl with an appropriate deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-g are optionally protected or unprotected.
Alternatively, the present invention provides a novel process for preparing
the piperidine derivatives of formula (I) comprising the steps of:
(a) reacting the (omega)-halo hydroxyethylphenylketone with a suitable
reducing agent to produce a (omega)-halo hydroxyethylphenylalcohol;
(b) reacting the (omega)-halo hydroxyethylphenylalcohol with a piperidine
compound of the formula
-5-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\ and R\\2\\ are as defined above, in the presence of a suitable
non-nucleophilic base to produce a piperidine hydroxyethylphenylalcohol
derivative of formula (I) wherein R\\3\\ is -CH\\2\\OH;
(c) optionally reacting the piperidine hydroxyethylphenylalcohol derivative
of formula (I) wherein R\\3\\ is -CH\\2\\OH with a suitable oxidizing agent to
produce a piperidine carboxyphenylalcohol derivative of formula (I) wherein
R\\3\\ is-COOH; and
(d) optionally reacting the piperidine carboxyphenylalcohol derivative of
formula (I) wherein R\\3\\ is -COOH to produce the piperidine
carboxyphenylalcohol ester derivative of formula (I) wherein R\\3\\ is
- -COOalkyl.
(e) optionally reacting the piperidine hydroxyethylphenylalcohol derivative
of formula (I) wherein R\\3\\ is -CH\\2\\OH, the piperidine carboxyphenylalcohol
derivative of formula (I) wherein R\\3\\ is -COOH or the piperidine
carboxyphenylalcohol ester derivative of formula (I) wherein R\\3\\ is -COOalkyl
with an appropriate deprotecting reagent,
-6-
<PAGE>
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-d are optionally protected or unprotected.
In addition, the present invention provides a novel process for preparing
the piperidine derivatives of formula (I) comprising the steps of:
(a) reacting the piperidine hydroxyethylphenylketone derivative of formula
(II) wherein R\\3\\ is -CH\\2\\OH with a suitable reducing agent to produce a
piperidine hydroxyethylphenylalcohol derivative of formula (I) wherein R\\3\\ is
- -CH\\2\\OH;
(b) optionally reacting the piperidine hydroxyethylphenylalcohol derivative
of formula (I) wherein R\\3\\ is -CH\\2\\OH with a suitable oxidizing agent to
produce a piperidine carboxyphenylalcohol derivative of formula (I) wherein
R\\3\\ is -COOH; and
(c) optionally reacting the piperidine carboxyphenylalcohol derivative of
formula (I) wherein R\\3\\ is -COOH to produce the piperidine
carboxyphenylalcohol ester derivative of formula (I) wherein R\\3\\ is
- -COOalkyl.
(d) optionally reacting the piperidine hydroxyethylphenylketone derivative
of formula (II) wherein R\\3\\ is -CH\\2\\OH, the piperidine
hydroxyethylphenylalcohol derivative of formula (I) wherein R\\3\\ is
- -CH\\2\\OH, the piperidine carboxyphenylalcohol derivative of formula (I)
wherein R\\3\\ is -COOH or the piperidine carboxyphenylalcohol ester derivative
of formula (I) wherein R\\3\\ is -COOalkyl with an appropriate deprotecting
reagent, with the proviso that each of the hydroxy groups present in the
compounds
-7-
<PAGE>
described in steps a-c are optionally protected or unprotected.
As used herein, straight or branched alkyl groups having from 1 to 6
carbon atoms as referred to herein are methyl, ethyl, n-propyl, isopropyl,
n-butyl, sec-butyl, tert-butyl, n-pentyl, neopentyl and n-hexyl.
The piperidine derivatives of the formula (I) and formula (II) can form
pharmaceutically acceptable salts. Pharmaceutically acceptable acid addition
salts of the compounds of this invention are those of any suitable inorganic or
organic acid. Suitable inorganic acids are, for example, hydrochloric,
hydrobromic, sulfuric, and phosphoric acids. Suitable organic acids include
carboxylic acids, such as, acetic, propionic, glycolic, lactic, pyruvic,
malonic, succinic, fumaric, malic, tartaric, citric, cyclamic, ascorbic, maleic,
hydroxymaleic, and dihydroxymaleic, benzoic, phenylacetic, 4-aminobenzoic,
4-hydroxybenzoic, anthranillic, cinnamic, salicyclic, 4-aminosalicyclic,
2-phenoxybenzoic, 2-acetoxybenzoic, and mandelic acid, sulfonic acids, such as,
methanesulfonic, ethanesulfonic and (beta)-hydroxyethanesu1fonic acid. Non-toxic
salts of the compounds of the above-identified formula formed with inorganic or
organic bases are also included within the scope of this invention and include,
for example, those of alkali metals, such as, sodium, potassium and lithium,
alkaline earth metals, for example, calcium and magnesium, light metals of group
IIIA, for example, aluminum, organic amines, such as, primary, secondary or
tertiary amines, for example, cyclohexylamine, ethylamine, pyridine,
methylaminoethanol and piperazine. The salts are prepared by conventional means
as, for example, by treating
-8-
<PAGE>
a piperidine derivative of formula (I) or formula (II) with an appropriate acid
or base.
The novel process for preparing the piperidine derivatives of formula (I)
and formula (II) is outlined in Scheme A. In Scheme A, all substituents are as
previously defined unless otherwise indicated.
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<PAGE>
Scheme A
[MOLECULAR DIAGRAM APPEARS HERE]
-10-
<PAGE>
Scheme A Cont.
[MOLECULAR DIAGRAM APPEARS HERE]
A' = hydrogen, protected hydroxy or hydroxy
B = Halo or OH
D = hydrogen or a suitable protecting group
R\\1\\' and R\\2\\' = hydrogen, protected hydroxy, hydroxy or
taken together to form a second bond
between the carbon atoms bearing R\\1\\'
and R\\2\\'
R = C\\1\\-C\\6\\ alkyl or hydrogen
-11-
<PAGE>
Scheme A provides a general synthetic procedure for preparing the
piperidine derivatives of formula (I) and formula (II).
In step a, the carboxy functionality of an appropriate benzeneacetic acid
compound of structure (1), wherein R is hydrogen or C\\1\\-C\\6\\ alkyl, is
reduced to give the corresponding phenethyl alcohol of structure (2), wherein D
is hydrogen.
For example, reduction of the appropriate benzeneacetic acid of structure
(1), wherein R is hydrogen, using, for example, sodium
bis(2-methoxyethoxy)aluminum hydride, lithium aluminum hydride, diborane or
aluminum hydride with diborane being preferred. Reduction of the appropriate
benzeneactic acid of structure (1), wherein R is C\\1\\-C\\6\\ alkyl, using, for
example, lithium aluminum hydride, lithium borohydride, sodium
bis(2-methoxyethoxy)aluminum hydride, aluminum hydride, lithium
triethylborohydride and lithium tri-sec-butylborohydride with lithium aluminum
hydride being preferred. Suitable solvents are ethers, for example, diethyl
ether, tetrahydrofuran or dioxane. These reduction reactions are carried out at
temperatures ranging from about 0 degrees C to the reflux temperature of the
solvent, and the reaction time varies from about 1/2 hour to 8 hours.
The starting benzeneacetic acid compounds of structure (1) are known in the
art of are prepared by procedures well known in the art. For example, the
benzeneacetic acid compound of structure (1) wherein R is C\\1\\-C\\6\\ alkyl
and A' is hydroxy may be prepared by treating a hot solution of 1 equivalent of
an appropriate straight or branched alkyl C\\1\\-\\6\\ ester of
3-trifluoroacetoxyphenylacetic acid in dimethoxyethane with a base, such as,
sodium hydride under
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<PAGE>
a nitrogen atmosphere followed by the addition of 2.1 equivalents of
methyliodide in dimethoxyethane to the mixture over about a 20 minute period.
The mixture is refluxed for about 3 hours then concentrated to remove most of
the solvent after which diethyl ether, then water are added cautiously. The
organic layer is separated, extracted with ether, dried over magnesium sulfate
and distilled to give the appropriate ester of the benzeneacetic acid compound
of structure (1) wherein A' is a trifluoroacetoxy protected hydroxy and R is
C\\1\\-C\\6\\ alkyl. To a solution of the methylated ester in 50% alcohol/water
is added 3X molar amount of potassium carbonate. The solution is stirred at
about 25 (degrees) C for about 8 hours then concentrated to a semisolid at
reduced pressure at about 50 (degrees) C and upon cooling water is added and the
mixture is neutralized with dilute hydrochloric acid then extracted with ether.
The ether extract is dried over magnesium sulfate, filtered and concentrated to
give the appropriate ester of the benzeneacetic acid compound of structure (1)
wherein A' is hydroxy and R is C\\1\\-C\\6\\ alkyl. The esters of the
benzeneacetic acid compounds of structure (1) wherein A' is a trifluoroacetoxy
protected hydroxy and R is C\\1\\-C\\6\\ alkyl are known in the art, for
example, from ethyl m-hydroxyphenylacetate by treatment with trifluoroacetic
anhydride.
In step b, the appropriate phenethyl alcohol of structure (2), wherein A'
is hydrogen, hydroxy or a suitably protected hydroxy, is acylated with the
(omega)-halo compound of structure (3) wherein B is halo under Freidel-Crafts
conditions to give the corresponding (omega)-halo hydroxyethylphenylketone of
structure (4) wherein A' is described as above.
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<PAGE>
For example, the (omega)-halo hydroxyethylphenylketone of structure (4),
wherein A' is hydrogen, hydroxy or a protected hydroxy, may be prepared by
reacting an appropriate phenyethyl alcohol of structure (2), wherein A' is
hydrogen, hydroxy or a protected hydroxy, with a appropriate (omega)-halo
compound of structure (3) wherein B is halo, which are known in the art or are
prepared by procedures well known in the art, under the general conditions of a
Friedel-Crafts acylation using a suitable Lewis acid. The reaction is carried
out in a solvent, such as carbon disulfide, methylene chloride,
tetrachloroethane or nitrobenzene with methylene chloride being the preferred
solvent. The reaction time varies from about 1/2 hour to 8 hours, preferably 1
to 5 hours and the reaction temperature varies from about 0 (degrees) C to 25
(degrees) C. The (omega)-halo hydroxyethylphenylketone of structure (4) wherein
A' is hydrogen, hydroxy or a protected hydroxy is recovered from the reaction
zone by an aqueous quench followed by extraction as is known in the art. The
(omega)-halo hydroxyethylphenylketone of structure (4) wherein A' is hydrogen,
hydroxy or a protected hydroxy may be purified by procedures well known in the
art, such as crystallization.
Alternatively, the appropriate phenethyl alcohol of structure (2) wherein
A' is hydroxy may be acylated with the (omega)-halo compound of structure (3)
wherein B is hydroxy in the presence of a Lewis acid to give the corresponding
halo hydroxyethylphenylketone of structure (4) as described in Arch. Pharm. 306,
807 1973. In general, an appropriate phenethyl alcohol of structure (2), wherein
- ---
A' is hydroxy, and the (omega)-halo compound of structure (3), wherein B is
hydroxy, are melted together at about 50 (degrees) C, then cooled to about 10
degrees C after which a Lewis acid is added in an amount about 2.2 times the
molar amount of the appropriate phenethyl alcohol of structure (2), wherein A'
is hydroxy,
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<PAGE>
employed. The mixture is heated at about 70 degrees C for about 2 hours after
which a 30% sodium acetate solution is added and extracted with ether. The
organic layer is dried and the solvent evaporated to give the (omega)-halo
hydroxyethylphenylketone of structure (4) wherein A' is hydroxy. The
(omega)-halo hydroxyethylphenylketone of structure (4) may be purified by
procedures well known in the art, such as crystallization.
Suitable Lewis acids for the acylation reaction described in step b are
well known and appreciated in the art. Examples of suitable Lewis acids are
boron trichloride, aluminum chloride, titanium tetrachloride, boron trifluoride,
tin tetrachloride and zinc chloride. The selection and utilization of suitable
Lewis acids for the acylation reaction of step b is well known and appreciated
by one of ordinary skill in the art.
The starting (omega)-halo compounds of (3) are commercially available of
easily prepared by generally known methods.
While not necessary for utilization in the acylation reaction of step b,
the hydroxyethyl functionality of those phenethyl alcohols of structure (2) may
be protected with a suitable protecting group. The selection and utilization of
suitable protecting groups for the phenethyl alcohols of structure (2) is well
known by one of ordinary skill in the art and is described in "Protective Groups
in Organic Syntheses", Theodora W. Greene, Wiley (1981). For example, suitable
protecting groups for the hydroxyethyl functionality include ethers such as
tetrahydrothiopyranyl, tetrahydrothiofuranyl, 2-(phenylselenyl)ethyl ether,
o-nitrobenzyl ether, trimethylsilyl ether, isopropyldimethylsilyl ether,
t-butyldimethylsilyl ether, t-butyldiphenylsilyl ether, tribenzylsilyl ether,
-15-
<PAGE>
triisopropylsilyl ether; and esters, such as acetate ester, isobutyrate ester,
pivaloate ester, adamantoate ester, benzoate ester, 2,4,6-trimethylbenzoate
(mesitoate) ester, methyl carbonate, p-nitrophenyl carbonate, p-nitrobenzyl
carbonate, S-benzyl thiocarbonate and N-phenylcarbamate, with acetoxy being
preferred.
For those (omega)-halo hydroxyethylphenylketone of structure (4),
wherein A' is hydrogen, hydroxy or a protected hydroxy and D is hydrogen, the
Friedel-Crafts acylation may result in acylation of the hydroxyethyl
functionality and will require deprotection prior to the oxidation reaction
described in optional step d. Suitable deprotecting agents and methods are
described in optional step d, infra.
While also not necessary for utilization in the acylation reaction of step
b, the phenol functionality of those phenethyl alcohols of structure (2),
wherein A' is hydroxy may be protected with a suitable protecting group. For
example, suitable protecting groups for the phenolic hydroxy include methyl
ether, 2-methoxyethoxymethyl ether (MEM), cyclohexyl ether, o-nitrobenzyl ether,
9-anthryl ether, t-butyldimethylsilyl ether, acetate, benzoate, methyl
carbamate, benzyl carbamate, aryl pivaloate and aryl methanesulfonate.
In step c, the (omega)-halo functionality of the appropriate (omega)-halo
hydroxyethylphenylketone of structure (4) is alkylated with the appropriate
piperidine compound of structure (5) to give the corresponding piperidine
hydroxyethylphenylketone derivative of formula (II) wherein R\\3\\ is
- -CH\\2\\OH.
For example, the alkylation reaction is carried out in a suitable solvent
preferably in the present of a base and
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<PAGE>
optionally in the presence of a catalytic amount of an iodide source, such as
potassium or sodium iodide, for about 4 to 120 hours and at temperatures of
about 70 degrees C to the reflux temperature of the solvent. Suitable solvent
for the alkylation reaction include alcohol solvents such as, methanol, ethanol,
isopropyl alcohol, or n-butanol; ketone solvents, such as, methyl isobutyl
ketone; hydrocarbon solvents, such as, benzene, toluene or xylene; halogenated
hydrocarbons, such as, chlorobenzene or methylene chloride or dimethylformamide.
Suitable bases for the alkylation reaction include inorganic bases, for example,
sodium bicarbonate, potassium carbonate, or potassium bicarbonate or organic
bases, such as, a trialkylamine, for example, triethylamine or pyridine, or an
excess of an appropriate piperidine compound of structure (5) may be used.
For those piperidine compounds of structure (5), wherein R\\1\\ is hydroxy,
it is preferred that R\\1\\ be unprotected for utilization in the alkyation
reaction of step c, but those hydroxy functionalities present in the piperidine
compounds of structure (5), wherein R\\1\\ is hydroxy may be protected with a
suitable protecting group. The selection and utilization of suitable protecting
groups for the piperidine compounds of structure (5), wherein R\\1\\ is hydroxy
is well known by one of ordinary skill in the art and is described in
"Protective Groups in Organic Syntheses", Theodora W Greene, Wiley (1981). For
example, suitable protecting groups for those hydroxy functionalities present
include ethers such as tetrahydrothiopyranyl, tetrahydrothiofuranyl,
2-(phenylselenyl)ethyl ether, o-nitrobenzyl ether, trimethylsilyl ether,
isopropyldimethylsilyl ether, t-butyldimethylsilyl ether, t-butyldiphenylsilyl
ether, tribenzylsilyl ether, triisopropylsilyl ether; and esters,
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<PAGE>
such as acetate ester, isobutyrate ester, pivaloate ester, adamantoate ester,
benzoate ester, 2,4,6-trimethylbenzoate (mesitoate) ester, methyl carbonate,
p-nitrophenyl carbonate, p-nitrobenzyl carbonate, S-benzyl thiocarbonate and
N-phenylcarbamate.
The piperidine compounds of structure (5) wherein R\\1\\ and R\\2\\ are
hydrogen and where R\\1\\ is hydroxy and R\\2\\ is hydrogen are readily
available to one or ordinary skill in the art. The piperidine compounds of
structure (5) wherein R\\1\\ and R\\2\\ form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\ may be prepared by dehydration of the
corresponding compound wherein R\\1\\ is hydroxy by procedures generally known
in the art.
In optional step d, the hydroxyethyl functionality of the appropriate
piperidine hydroxyethylphenylketone derivative of formula (II) wherein R\\3\\ is
- -CH\\2\\OH is oxidized to give the corresponding piperidine carboxyphenylketone
derivative of formula (II) wherein R\\3\\ is COOH.
For example, oxidation of the appropriate piperidine
hydroxyethylphenylketone derivative of formula (II) wherein R\\3\\ is -CH\\2\\OH
may be achieved using a variety of oxidizing agents and methods.
One such method involves a two-step procedure in which the hydroxyethyl
functionality of the appropriate piperidine hydroxyethylphenylketone derivative
of formula (II) wherein R\\3\\ is -CH\\2\\OH is first oxidized to the
corresponding aldehyde functionality using, for example, Swern Oxidation
conditions (dimethyl sulfoxide, oxyalyl chloride and triethylamine), as is known
in the art. The Swern Oxidation is carried out in suitable aprotic organic
solvents such as methylene chloride at temperatures ranging
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<PAGE>
from about -78 degrees C to room temperature, and the reaction time varies from
about 1/2 hour to 8 hours. Other suitable reagents for the oxidation of the
hydroxyethyl functionality of the appropriate piperidine
hydroxyethylphenylketone derivative of formula (II) wherein R\\3\\ is -CH\\2\\OH
to the corresponding aldehyde functionality are Dess-Martin reagent, chromium
(IV) oxide, nickel peroxide, sodium dichromate, potassium dichromate, t-butyl
chromate, silver oxide, argentic picolinate manganese dioxide lead tetraacetate,
dicyclohexylcarbodiimide, 2,3-dichloro-5,6-dicyanoquinone, tetrachloro-l,
2-benzoquinone, 2,2,6,6-tetramethylpiperidinyl-l-oxy (TEMPO) or quinolinium
chlorochromate.
The intermediate aldehyde compound is then oxidized further to give the
corresponding piperidine carboxyphenylketone derivative of formula (II) wherein
R\\3\\ is -COOH using, for example, potassium permanganate. The potassium
permanganate oxidation is carried out in a suitable acidic medium such as
hydrochloric acid/acetone at a temperature ranging from about 0 degrees C to
room temperature and the reaction time varies from about 1/2 hour to 8 hours.
Other suitable reagents for the oxidation of the intermediate aldehyde to the
corresponding piperidine carboxyphenylketone derivative of formula (II) wherein
R\\3\\ is -COOH are chromium (IV) oxide, silver (I) oxide, silver oxide,
argentic picolinate, peroxide, nitric acid, m-chloroperbenzoic acid and
peracetic acid.
Another method involves a one-step procedure in which the hydroxyethyl
functionality of the appropriate piperidine hydroxyethylphenylketone derivative
of formula (II) wherein R\\3\\ is -CH\\2\\OH is oxidized directly to the carboxy
functionality to give the corresponding piperidine carboxyphenylketone
derivative of formula (II) wherein R\\3\\ is
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<PAGE>
- -COOH. Oxidizing reagents suitable for direct, one-step oxidation of the
hydroxyethyl functionality to the carboxy functionality include, for example,
chromatium (IV) oxide, potassium permanganate, nitric acid, nitrogen dioxide,
ruthenium (VIII) oxide, nickel peroxide, silver oxide, t-butyl chromate and
xenic acid.
Oxidation using Swern Oxidation conditions, nickel peroxide, chromium (IV)
oxide, silver oxide, sodium dichromate, potassium dichromate, manganese dioxide,
2,3-dichloro-5,6-dicyanoquinone and tetrachloro-1,2-benzoquinone is preferred
for those piperidine hydroxyethylphenylketone derivatives of formula (II)
wherein R\\3\\ is -CH\\2\\OH wherein R\\1\\ and R\\2\\ taken together form a
second bond between the carbon atoms bearing R\\1\\ and R\\2\\.
As one skilled in the art would appreciate, those piperidine
hydroxyethylphenylketone derivatives of formula (II) wherein R\\3\\ is
- -CH\\2\\OH wherein the hydroxyethyl functionality is protected must be reacted
with an appropriate deprotecting reagent prior to the oxidation reaction
described in step d. The selection and utilization of appropriate deprotecting
reagents is well known by one of ordinary skill in the art and is described in
"Protective Groups in Organic Syntheses", Theodora W. Greene, Wiley (1981).
Examples of appropriate deprotecting reagents are mineral acids, strong organic
acids, Lewis acids, aqueous mineral bases, catalytic hydrogenation and the like.
For example, cleavage of an acetate ester protecting group on the hydroxyethyl
functionality of the piperidine hydroxyethylphenylketone derivatives of formula
(II) wherein R\\3\\ is -CH\\2\\OH can be achieved by using a base, such as
sodium methoxide in methanol as is known in the art. Other methods known in the
art for acetate ester cleavage include potassium carbonate in methanol,
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<PAGE>
methanolic ammonia, sodium hydroxide/pyridine in methanol and potassium cyanide
in ethanol.
In optional step e, the ketone functionality of the appropriate
piperidine carboxyphenylketone derivatives of formula (II) wherein R\\3\\ is
- -COOH is reduced to give the corresponding piperidine carboxyphenylalcohol
derivatives of formula (I) wherein R\\3\\ is -COOH
For example, reduction of the appropriate piperidine carboxyphenylketone
derivatives of formula (II) wherein R\\3\\ is -COOH, using, for example, sodium
borohydride, potassium borohydride, sodium cyanoborohydride, or
tetramethylammonium borohydride is carried out in lower alcohol solvents, such
as, methanol, ethanol, isopropyl alcohol or n-butanol at temperatures ranging
from about 0 degrees C to the reflux temperature of the solvent, and the
reaction time varies from about 1/2 hour to 8 hours. Other suitable reducing
agents are, for example, lithium tri-tert-butylaluminohydride and
diisobutylaluminum hydride. These reduction reactions are carried out in
suitable solvents diethyl ether, tetrahydrofuran or dioxane at temperatures
ranging from about 0 degrees C to the reflux temperature of the solvent, and the
reaction time varies from about 1/2 hour to 8 hours.
Catalytic reduction may also be employed in the preparation of appropriate
piperidine carboxyphenylalcohol derivatives of formula (I) wherein R\\3\\ is
- -COOH from an appropriate piperidine carboxyphenylketone derivatives of formula
(II) wherein R\\3\\ is -COOH, using, for example, Raney nickel, palladium,
platinum or rhodium catalysts in lower alcohol solvents, such as, methanol,
ethanol, isopropyl alcohol or n-butanol or acetic acid or their aqueous
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<PAGE>
mixtures, or by the use of aluminum isopropoxide in isopropyl alcohol.
Reduction using sodium borohydride or potassium borohydride is preferred
over catalytic reduction for those piperidine carboxyphenylketone derivatives of
formula (II) wherein R\\3\\ is -COOH wherein R\\1\\ and R\\2\\ taken together
form a second bond between the carbon atoms bearing R\\1\\ and R\\2\\.
In addition, a chiral reduction of the appropriate piperidine
carboxyphenylketone derivatives of formula (II) wherein R\\3\\ is -COOH, using,
for example, (+)-B-chlorodiisopinocamphenylborane gives the corresponding
(R)-piperidine carboxyphenylalcohol derivatives of formula (I) wherein R3 is
- -COOH and (-)-B-chlorodiisopinocamphenylborane gives the corresponding
(S)-piperidine carboxyphenylalcohol derivatives of formula (I) wherein R\\3\\
is -COOH. Other suitable chiral reducing agents are, (R) and (S)-
oxazaborolidine/BH\\3\\, potassium 9-o-(l,2:5,6-di-o-isopropylidine-(alpha)-D-
glucofuransoyl)-9-boratabicyclo[3.3.1)nonane, (R) and (S)-B-3-pinanyl-9-
borabicyclo[3.3.l]nonane, NB-Enantride, Lithium (R)-(+) and (S)-(-)-2,2'-
dihydroxy-l,l'-binaphthyl alkoxyl aluminum hydride, (R)-(+) and (S)-(-)-2,2'-
dihydroxy-6,6'-dimethylbiphenyl borane-amine complex, tris [[(lS,2S,5R)-2-
isopropyl-5-methyl-cyclohex-l-yl]) methyl] aluminum, [[(1R, 3R)-2, 2-
dimethylbicyclo[2.2.1]hept-3-yl]methyl]beryllium chloride, (R)-BINAP-ruthenium
complex/H\\2\\ and 6,6'-bis(diphenylphosphino)-3,3'-dimethoxy-2,2' ,4,4'-
tetramethyl-1,1'-biphenyl.
As one skilled in the art would appreciate, the carboxy functionalities of
the piperidine carboxyphenylketone derivatives of formula (II) wherein R\\3\\ is
- -COOH and piperidine carboxyphenylalcohol derivatives of formula (I)
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<PAGE>
wherein R\\3\\ is -COOH may be esterified by techniques and procedures well
known and appreciated by one of ordinary skill in the art to give the
corresponding piperidine carboxyphenylketone ester derivatives of formula (II)
wherein R\\3\\ is -COOalkyl and piperidine carboxyphenylalcohol ester
derivatives of formula (I) wherein R\\3\\ is -COOalkyl.
For example, one such method involves reacting an appropriate piperidine
carboxyphenylketone derivative of formula (II) wherein R\\3\\ is -COOH with an
excess of an appropriate HOalkyl wherein the alkyl moiety has from 1 to 6 carbon
atoms and is straight or branched in the presence of a small amount of mineral
acid, e.g. sulfuric acid at reflux. Another suitable method involves reacting an
appropriate piperidine carboxyphenylketone derivative of formula (II) wherein
R\\3\\ is -COOH or piperidine carboxyphenylalcohol derivative of formula (I)
wherein R\\3\\ is -COOH with an excess of diazomethane in a suitable solvent
such as ether at room temperature to give the methyl ester. In addition, the
piperidine carboxyphenylketone ester derivatives of formula (II) wherein R\\3\\
is -COOalkyl or piperidine carboxyphenylalcohol ester derivatives of formula (I)
wherein R\\3\\ is -COOalkyl may also be prepared by reacting an appropriate
piperidine carboxyphenylketone derivatives of formula (II) wherein R\\3\\ is
- -COOH or piperidine carboxyphenylalcohol derivatives of formula (I) wherein
R\\3\\ is -COOH with an excess of 2,2-dimethoxypropane in a suitable solvent
such as methanol at 0 degrees C to room temperature to give the methyl ester.
Another suitable method involves first reacting an appropriate piperidine
carboxyphenylketone derivatives of formula (II) wherein R\\3\\ is -COOH with
thionyl chloride in a suitable solvent such as methylene chloride to give an
intermediate acid chloride, followed by addition of a suitable alcohol of the
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<PAGE>
formula HOalkyl wherein the alkyl moiety has from 1 to 6 carbon atoms and is
straight or branched.
As one skilled in the art would appreciate, the reduction of the ketone
functionality of the appropriate piperidine carboxyphenylketone derivatives of
formula (II) wherein R\\3\\ is -COOH described in step e can be conducted on the
(omega)-halo hydroxyethylphenylketone of structure (4) or piperidine
hydroxyethylphenylketone derivatives of formula (II) wherein R\\3\\ is
- -CH\\2\\OH.
For example, reduction of an appropriate (omega)-halo
hydroxyethylphenylketone of structure (4) using the techniques and methods
described previously in step e gives the corresponding (omega)-halo
hydroxyethylphenylalcohol. The resulting benzylic alcohol functionality may be
optionally protected using the protecting groups described previously for
hydroxyethyl in step b. The (omega)-halo hydroxyethylphenylalcohol so formed is
then subjected to the alkylation reaction with an appropriate piperidine
compound of structure (5) described previously in step c to give the
corresponding piperidine hydroxyethylphenylalcohol derivative of formula (I)
wherein R\\3\\ is protected or unprotected -CH\\2\\OH. The appropriate
piperidine hydroxyethylphenylalcohol derivative of formula (I) wherein R\\3\\
is -CH\\2\\OH is then subjected to the oxidation reaction described previously
in step d using a selective oxidizing agent such as 2,2,6,6-
tetramethylpiperidinyl-1-oxy (TEMPO) or quinolinium chlorochromate to give the
intermediate aldehyde followed by oxidation with silver oxide to give the
corresponding piperidine carboxyphenylalcohol derivative of formula (I) wherein
R\\3\\ is -COOH. Reduction of an appropriate piperidine hydroxyethylphenylketone
derivative of formula (II) wherein R\\3\\ is protected or unprotected -CH\\2\\OH
using the techniques and methods
-24-
<PAGE>
described previously in step e gives the corresponding piperidine
hydroxyethylphenylalcohol derivative of formula (I) wherein R\\3\\ is -CH\\2\\OH
which is then subjected to the oxidation reaction described previously in step d
using a selective oxidizing agent such as 2,2,6,6-tetramethylpiperidinyl-1-oxy
(TEMPO) or quinolinium chlorochromate to give the intermediate aldehyde followed
by oxidation with silver oxide to give the corresponding piperidine
carboxyphenylalcohol derivative of formula (I) wherein R\\3\\ is -COOH.
As one skilled in the art would appreciate, the benzeneacetic acid
compounds of structure (1), the phenethyl alcohols of structure (2), the
(omega)-halo hydroxyethylphenylketones of structure (4), piperidine compounds of
structure (5), piperidine hydroxyethylphenylketone derivatives of formula (II)
wherein R\\3\\ is -CH\\2\\OH, the piperidine carboxyphenylketone derivatives of
formula (II) wherein R\\3\\ is -COOH, the piperidine carboxyphenylketone ester
derivatives of formula (II) wherein R\\3\\ is -COOalkyl, the piperidine
hydroxyethylphenylalcohol derivatives of formula (I) wherein R\\3\\ is-
CH\\2\\OH, the piperidine carboxyphenylalcohol derivatives of formula (I)
wherein R\\3\\ is COOH or the piperidine carboxyphenylalcohol ester derivatives
of formula (I) wherein R\\3\\ is -COOalkyl which bear hydroxy or phenolic
functionalities may be protected prior to use in the synthesis depicted in
Scheme A using suitable protecting groups as described previously in step b.
As one skilled in the art would appreciate, the benzeneactic acids of
structure (1), the phenethyl alcohols of structure (2), the (omega)-halo
hydroxyethylphenylketones of structure (4), piperidine compounds of structure
(5), piperidine hydroxyethylphenylketone derivatives of formula
-25-
<PAGE>
(II) wherein R\\3\\ is -CH\\2\\OH, the piperidine carboxyphenylketone
derivatives of formula (II) wherein R\\3\\ is -COOH or the piperidine
carboxyphenylketone ester derivatives of formula (II) wherein R\\3\\ is
- -COOalkyl, the piperidine hydroxyethylphenylalcohol derivatives of formula (I)
wherein R\\3\\ is -CH\\2\\OH, the piperidine carboxyphenylalcohol derivatives of
formula (I) wherein R\\3\\ is COOH or the piperidine carboxyphenylalcohol ester
derivatives of formula (I) wherein R\\3\\ is COOalkyl which bear protected
hydroxy or phenolic functionalities may be reacting with prior appropriate
deprotecting reagents prior to use in the synthesis depicted in Scheme A. The
selection and utilization of appropriate deprotecting reagents is well known by
one of ordinary skill in the art and is described in "Protective Groups in
Organic Syntheses", Theodora W. Greene, Wiley (1981). Examples of appropriate
deprotecting reagents are mineral acids, strong organic acids, Lewis acids,
aqueous mineral bases, catalytic hydrogenation and the like.
For example, cleavage of an acetate ester protecting group on the
hydroxyethyl functionality of any of the (omega)-halo hydroxyethylphenylketones
of structure (4), piperidine compounds of structure (5), piperidine
hydroxyethylphenylketone derivatives of formula (II) wherein R\\3\\ is-CH\\2\\OH
or piperidine hydroxyethylphenylalcohol derivatives of formula (I) wherein
R\\3\\ is -CH\\2\\OH can be achieved by using a base, such as sodium methoxide
in methanol as is known in the art. Other methods known in the art for acetate
ester cleavage include potassium carbonate in methanol, methanolic ammonia,
sodium hydroxide/pyridine in methanol and potassium cyanide in ethanol.
-26-
<PAGE>
Cleavage of (beta)-methoxyethoxymethyl (MEM) protecting groups on any of
those (omega)-halo hydroxyethylphenylketones of structure (4), piperidine
compounds of structure (5), piperidine hydroxyethylphenylketone derivative of
formula (II) wherein R\\3\\ is -CH\\2\\OH, piperidine carboxyphenylketone
derivative of formula (II) wherein R\\3\\ is -COOH, piperidine
carboxyphenylketone ester derivatives of formula (II) wherein R\\3\\ is
- -COOalkyl, piperidine carboxyphenylalcohol derivatives of formula (I) wherein
R\\3\\ is -COOH, piperidine carboxyphenylalcohol ester derivatives of formula
(I) wherein R\\3\\ is -COOalkyl or piperidine hydroxyethylphenylalcohol
derivatives of formula (I) wherein R\\3\\ is -CH\\2\\OH wherein A is hydroxy,
for example, can be achieved by using trifluoroacetic acid at room temperature
or using 5 to 8 equivalents of powdered anhydrous zinc bromide in methylene
chloride at about 25 degrees C by the general procedure of E. J. Corey et al.,
Tetrahedron Letters, 11, 809-812 1976.
--
The following examples present typical syntheses as described in Scheme A.
These examples are understood to be illustrative only and are not intended to
limit the scope of the present invention in any way. As used herein, the
following terms have the indicated meanings: "g" refers to grams; "mmol" refers
to millimoles; "mL" refers to milliliters; "bp" refers to boiling point; "mp"
refers to melting point; "degrees C" refers to degrees Celsius; "mm Hg" refers
to millimeters of mercury; "muL" refers to microliters; "mug" refers to
micrograms; and "muM" refers to micromolar.
-27-
<PAGE>
Example 1
---------
4-[4-[4-(Hydroxydiphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-(alpha),(alpha)-
- -------------------------------------------------------------------------------
dimethylbenzeneacetic acid hydrochloride
- ----------------------------------------
Step a: 2,2-Dimethyl-phenethyl acetate
- --------------------------------------
Dissolve (alpha),(alpha)-dimethy1phenyl acetic acid (140.0g, 0.853mol) in
anhydrous tetrahydrofuran (l00mL) and place under a nibtrogen atmosphere. Add,
by dropwise addition, a solution of lithium aluminum hydride (639mL of a 1.0M
solution in tetrahydrofuran, 24.3g, 0.639mol) over a period of approximately 2
hours. Quench with deionized water (24mL), with 15% aqueous sodium hydroxide
(24mL) and again with deionized water (72mL). Stir the milky white mixture for
20 minutes, filter through filter aid, dry (MgS0\\4\\) and filter through filter
aid once more. Evaporate the solvent in vacuo to give 2,2-dimethyiphenethyl
alcohol as a clear yellow oil.
Dissolve 2,2-dimethylphenethyl alcohol (118.0g, 0.786mol) in pyridine
(700mL). Add, by dropwise addition, acetic anhydride (222mL, 240.7g, 2.358mol)
and stir overnight at room temperature. Evaporate the solvent in vacuo and
purify by distillation to give the title compound as a clear colorless oil; bp
75 degrees C @ 0.4mmHg.
Step b: 4-(4-Chloro-l-oxobutyl)-2,2-dimethylphenethyl acetate
- -------------------------------------------------------------
Charge a flask with aluminum chloride (223g, l.68mol) and methylene chloride
(200mL). Place under a nitrogen atmosphere, cool to 0 degrees-5 degrees C and
add, by dropwise addition, (omega)-chlorobutyryl chloride (188.6g, l.34mol).
After acid chloride addition is complete, add, by dropwise addition, 2,2-
dimethylphenethyl acetate (128.0g, 0.67mol), keeping the temperature at
approximately 0 degrees C. Continue stirring at 0 degrees C for 2 hours, quench
by slowly pouring over
-28-
<PAGE>
approximately 2L of crushed ice. Add methylene chloride (500mL) and stir for 5
minutes. Separate the organic phase and extract the aqueous phase with methylene
chloride (300mL). Combine the organic phases and wash with saturated aqueous
sodium hydrogen carbonate (3X200mL), with deionized water (200mL) and brine
(200mL). Dry (MgS0\\4\\) and stir for 30 minutes before filtering. Evaporate the
solvent in vacuo and purify by chromatography (ethyl acetate/hexane) to give the
title compound as an orange/brown oil.
IR (neat) 3239, 2970, 1741, 1684, 1607, 1408, 1375, 1233, 1040, 998, 844, 823
cm-/1/;
/1/H NMR (CDC1\\3\\) (delta) 7.93 (d, 2H, J = 9.0Hz), 7.46 (d, 2H, J = 9.0 Hz),
4.14 (S, 2H), 3.68 (t, 2H, J = 7.5 Hz), 3.16 (t, 2H, J = 7.5 Hz), 2.2 (m, 2H),
2.00 (S, 3H), 1.38 (S, 6H);
/13/C NMR (CDC1\\3\\) (delta) 198.5, 170.9, 151.9, 134.8, 127.9, 126.2, 72.4,
44.6, 38.6, 35.2, 26.7, 25.7, 20.8;
MS (CI, CH\\4\\) m/z (rel. intensity) 297 (MH+, 56), 261 (59), 237 (100), 219
(52).
Step c: 4-[4-[4-(Hydroxydiphenylmethyl)-1-piperidinyl]-1-oxobutyl]-2,
- ---------------------------------------------------------------------
2-dimethylphenethyl alcohol
- ---------------------------
Mix 4-(4-chloro-l-oxobutyl)-2,2-dimethylphenethyl acetate (99.5g, 0.335mol),
(alpha),(alpha)-dipheny1-4-piperidinemethanol (l0l.8g, 0.335mol), potassium
hydrogen carbonate (83.8g, 0.838mol), potassium iodide (1.00g, 0.006mol),
toluene (600mL) and water (220mL). Stir at reflux for 72 hours, add toluene
(200mL) and deionized water (l00mL). Filter through filter aid while at
80 degrees C and separate the organic phase. Dry (MgS0\\4\\), filter and purify
by chromatography (ethyl acetate) to give 4-[4-[4-(hydroxydiphenylmethyl)-l-
piperidinyl]-1-oxobutyl]-2,2-dimethylphenethyl acetate as an oily solid.
-29-
<PAGE>
IR (KBr) 3690, 3608, 3012, 2950, 2810, 1734, 1681, 1607, 1470, 1448, 1376,
1253, 1040, 997, 704, 667 cm-/1/;
/1/H NMR (CDCl\\3\\) (delta) 7.90 (d, 2H, J = 8.2 Hz), 7.4 (m, 5H), 7.3
(m, 5H), 7.2 (m, 2H), 4.14 (s, 2H), 3.0 (m, 4H), 2.4 (m, 3H), 2.0 (m, 3H),
1.95 (s, 3H), 1.4 (m, 4H), 1.38 (s, 6H);
/13/C NMR (CDCl\\3\\) (delta) 199.4, 170.9, 151.7, 145.8, 135.1, 128.1,
128.0, 126.5, 126.2, 125.7, 79.3, 72.5, 57.6, 53.7, 43.8, 38.6, 36.1,
25.7, 21.2, 20.8;
MS (CI, CH\\4\\) m/z (rel. intensity) 528 (MH+, 100), 510 (63), 450 (12),
293 (14).
Dissolve 4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-oxobutyl]-2,2-
dimethylphenethyl acetate (69.0g, 0.l3lmol) in methanol (2.5L) and add 10%
aqueous sodium hydroxide (769mL, 1.92mo1). Stir at reflux for 1.5 hours,
cool to 68 degrees C and evaporate the solvent in vacuo to a residue
(700mL). Add chloroform (lL) and stir until solids are dissolved. Separate
the organic phase and extract the aqueous phase with chloroform (3X300mL).
Combine the organic phases, dry (MgSO\\4\\) and evaporate the solvent in
vacuo and recrystallize (toluene) to give the title compound as a cream-
colored powder; mp 135-137 degrees C.
IR (KBr) 3609, 3011, 2950, 2809, 2772, 1680, 1606, 1492, 1470, 1448, 1366,
1282, 1238, 1044, 791, 704, 668 cm/-1/;
/1/H NMR (CDCl\\3\\) (delta) 7.93 (d, 2H, J = 8.2 Hz), 7.4 (m, 5H), 7.3
(m, 5H), 7.2 (m, 2H), 3.64 (s, 2H), 2.9 (m, 4H), 2.4 (m, 3H), 1.9 (M, 5H),
1.38 (s, 6H), 1.3 (m, 4H);
/13/C NMR (CDCl\\3\\) (delta) 199.6, 152.1, 145.9, 135.2, 128.2, 126.4,
125.7, 79.5, 72.7, 57.8, 53.9, 44.0, 40.4, 36.2, 26.1, 25.2, 22.2;
MS (CI, CH\\4\\) m/z (rel. intensity) 486 (MH+, 100), 468 (81), 408 (19),
293 (23).
-30-
<PAGE>
Step d: 4-[4-[4-(Hydoxydiphenylmethyl)-l-piperidinyl]-l-oxobutyl]-(alpha),
----------------------------------------------------------------------
(alpha)-dimethylbenzeneacetic acid hydrochloride
------------------------------------------------
Dissolve oxalyl chloride (1.57g, 12.4mmol) in methylene chloride (l7mL),
cool to -55 degrees C and place under a nitrogen atmosphere. Add, by
dropwise addition, a solution of dimethylsulfoxide (1.77g, 1.6lmL) in
methylene chloride (4.5ml). Stir for 15 minutes and add, by dropwise
addition, a solution of 4-[4-[4-(hydoxydiphenylmethyl)-l-piperidinyl]-l-
oxobutyl]-2, 2-dimethylphenethyl alcohol (5.0g, l0.3mol) in methylene
chloride (33mL). Stir for 30 minutes and add, by dropwise addition,
triethylamine (7.2mL). Stir for 15 minutes and then allow to warm to
- 10 degrees C. Add a solution of oxone (12.66g) in deionized water
(50mL). Stir for 15 minutes and add methylene chloride (25mL). Separate
the organic phase, wash with brine, dry (MgSO4) and evaporate the solvent
in vacuo. Purify by chromatography (ethyl acetate) to give 4-[4-[4-
(hydoxydiphenylmethyl)-1-piperidinyl]-1-oxobutyl](alpha), (alpha)-
dimethylbenzeneacetaldehyde.
/1/H NMR (CDC1\\3\\) (delta) 9.52 (s, 1H), 7.95 (d, 2H, J = 8.2 Hz), 7.5
(m, 4H), 7.36 (d, 2H, J = 8.2 Hz), 7.3 (m, 4H), 7.2 (m, 2H), 2.9 (m, 4H),
2.4 (m, 4H), 2.0 (m, 4H), 1.50 (s, 6H), 1.4 (m, 4H);
/13/C NMR (CDCl\\3\\) (delta) 6 202, 199.9, 146.2, 136.2, 128.7, 128.3,
127.1, 126.6, 125.9, 79.4, 57.7, 53.8, 50.6, 43.9, 42.5, 36.2, 25.9, 22.3,
21.5;
MS (CI, CH\\4\\) m/z (rel. intensity) 484 (MH+, 76), 466 (100), 454 (19),
406 (16), 293 (16), 233 (19), 183 (49, 155 (54).
Dissolve 4-[4-[4-(hydroxydiphenylmethyl)-l-piperidinyl]-l-oxobutyl]-
(alpha), (alpha)-dimenthylbenzeneacetaldehyde (3.40g, 7.03mmol) in acetone
(30mL) and cool to 15 degrees C. Add, by dropwise addition, lN
hydrochloric acid (10.5mL). After addition of the hydrochloric acid is
complete, add, by dropwise
-31-
<PAGE>
addition, a solution of potassium permanganate (1.82g, 11.5lmmol) in
acetone (80mL). Stir at room temperature for 6 hours, filter and wash
the filter cake with acetone (60mL). Evaporate the filtrate in vacuo,
dilute with methylene chloride (500mL), dry (MgSO\\4\\) and filter.
Evaporate the solvent in vacuo and purify by chromatography (ethyl
acetate) to give the title compound as a pale yellow solid.
IR (KBr) 3420, 3057, 2964, 1677, 1604, 1569, 1470, 1448, 1406, 1363,
1249, 1189, 1099, 750, 705 cm/-1/;
/1/H NMR (CDC1\\3\\) (delta) 7.75 (d, 2H, J = 8.2 Hz), 7.4 (m, 6H), 7.2
(m, 4H), 7.1 (m, 2H), 3.9 (br. s, 2H), 3.1 (m, 2H), 2.9 (m, 2H), 2.6 (m,
2H), 2.3 (m, 2H), 1.9 (m,3H), 1.7 (m, 2H). 1.44 (s, 6H), 1.4 (m, 2H);
/13/C NMR (CDC1\\3\\) (delta) 199.4, 147.2, 134.5, 127.7, 127.5, 126.2,
125.7, 78.4, 57.3, 53.5, 46.6, 43.5, 35.6, 26.8, 25.9, 21.3;
MS (CI, CH\\4\\) m/z (rel. intensity) 500 (MH+, 79), 482 (62), 456
(100), 422 (30), 366 (42).
Step e: 4-[4-[4-(Hydroxydiphenylmethyl)-1-piperindinyl]-1-
------------------------------------------------------------
hydroxybutyl])-(alpha),(alpha)-dimethylbenzeneacetic acid hydrochloride
-----------------------------------------------------------------------
Add sodium borohydride (0.l05g, 2.77mmo1) to a solution of sodium
hydroxide (0.053g, 1.33mmo1) in deionized water (2mL) and add,
by dropwise addition, to a solution of 4-[4-[4-
hydroxydiphenylmenthyl)-1-piperidinyl]-1-oxobutyl]-(alpha),(alpha)-
dimethylbenzeneacetic acid hydrochloride (0.70g, l.3lmmol) in ethanol
(30mL). Stir at room temperature for 3.5 hours at pH 7-8. Evaporate the
solvent in vacuo and stir the residue with methylene chloride (15mL) and
deionized water (15mL). Dry (MgSO\\4\\), acidify to pH 3 with gaseous
hydrogen chloride and evaporate the solvent. Add ether with stirring,
filter the white solid and wash with additional ether. Dry to give the
title compound.
-32-
<PAGE>
IR (KBr) 3403, 3058, 2971, 1718, 1634, 1492, 1471, 1448, 1393, 1227,
1150, 1099, 1069, 839, 750, 706 cm-/1/; /1/H NMR (CDCl\\3\\) (delta)
7.50 (d, 4H, J = 8.2 Hz), 7.3 (m, 8H), 7.2 (m, 2H), 4.66 (t, 1H, J = 5.6
Hz), 3.5 (m, 2H), 3.0 (m, 4H), 2.8 (m, 2H), 1.7 (m, 8H), 1.53 (s, 6H);
/13/C NMR (CDCl\\3\\) (delta) 181.1, 147.4, 146.1, 144.4, 129.5, 128.0,
127.4, 127.2, 79.9, 73.9, 57.0, 54.1, 42.7, 36.8, 27.1, 25.7, 21.7;
MS (CI, CH\\4\\) m/z (rel. intensity) 502 (MH+, 50), 485 (33), 484
(100), 458 (25), 454 (33), 424 (17).
Example 2
---------
(R)-4-[4-[4-(Hydroxydiphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]
------------------------------------------------------------------
-(alpha),(alpha)-dimethylbenzeneacetic, ethyl ester
---------------------------------------------------
Dissolve (+)-B-chlorodiisopinocamphenylborane (2.5g, 7.8mmol) in
anhydrous tetrahydrofuran (5mL). Add a solution of 4-[4-[4-
(hydroxydiphenylmethyl)-l-piperidinyl]-1-oxobutyl]-(alpha),(alpha)-
dimethylbenzeneacetic ethyl ester (2g, 3.54mmol) in anhydrous
tetrahydrofuran (5mL). Stir at room temperature for 3 days and cool to 0
degrees C. Add water (lmL) and 30% hydrogen peroxide (2mL) and stir for
20 minutes. Add methylene chloride (30mL) and wash with brine (30mL),
then aqueous sodium hydrogen carbonate (30mL), then brine (30mL). Dry
(MgSO\\4\\), evaporate the solvent in vacuo and purify by chromatography
(1:19 methanol:ethyl acetate) to give the title compound as a solid; mp
87-90 degrees C.
IR (KBr) 3436, 3058, 2932, 2813, 1725, 1632, 1599, 1470, 1448, 1255,
1147, 1097, 830, 749, 704 cm-/1/;
/1/H NMR (CDC1\\3\\) (delta) 7.5 (m, 4H), 7.3 (m, 8H), 7.2 (m, 2H), 4.6
(m, 1H), 4.08 (q, 2H, J = 7.5 Hz), 3.1 (m, lH), 3.0 (m, 1H), 2.4 (m,
3H), 2.0 (m, 3H), 1.7 (m, 5H), 1.53 (s, 6H), 1.5 (m, 2H), 1.42 (s, 2H),
1.15 (t, 3H, J = 7.5 Hz); [(alpha)] /20/\\D\\ +39.4 degrees (c = 0.99,
CHC1\\3\\).
-33-
<PAGE>
Example 3
(S)-4-[4-[4-(Hydroxydiphenylmethyl)-1-piperidinyl]-1-
--------------------------------------------------------
hydroxybutyl]-(alpha),(alpha)-dimethylvenzeneacetic acid, ethyl ester
---------------------------------------------------------------------
Dissolve (-)-B-chlorodiisopinocamphenylborane (2.5g, 7.8mmol) in
anhydrous tetrahydrofuran (5mL). Add a solution of 4-[4-[4-
(hydroxydiphenylmethyl)-l-piperidinyl]-1-oxobutyl]-(alpha), (alpha)-
dimethylbenzeneacetic acid, ethyl ester (2g, 3.54mmol) in anhydrous
tetrahydrofuran (5mL). Stir at room temperature for 3 days and cool to
0 degrees C. Add water (lmL) and 30% hydrogen peroxide (2mL) and stir
for 20 minutes. Add methylene chloride (30mL) and wash with brine
(30mL), then aqueous sodium hydrogen carbonate (30mL), then brine
(30mL). Dry (MgSO\\4\\), evaporate the solvent in vacuo and purify by
chromatography to give the title compound.
-34-
<PAGE>
WHAT IS CLAIMED IS:
1. A process for preparing a compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1
to 6 carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers
thereof comprising the steps of:
(a) reacting a benzeneacetic acid compound of the formula
-35-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above and R is hydrogen or C\\1\\-C\\6\\ alkyl with a
suitable reducing agent to give a phenethyl alcohol;
(b) reacting the phenethyl alcohol with a (omega)-halo compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents C\\l\\, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)-halo
hydroxyethylphenylketone; and
(c) reacting the (omega)-halo hydroxyethylphenylketone with a piperidine
compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
-36-
<PAGE>
wherein R1 and R2 are as defined above in the presence of a suitable
non-nucleophilic base to produce a piperidine hydroxyethylphenylketone;
(d) reacting the piperidine hydroxyethylphenylketone with a suitable
oxidizing agent to produce a piperidine carboxyphenylketone;
(e) reacting the piperidine carboxyphenylketone with a suitable reducing
agent to produce a piperidine carboxyphenylalcohol;
(f) optionally reacting the piperidine carboxyphenylalcohol to form a
piperidine carboxyphenylalcohol ester; and
(g) optionally reacting the piperidine carboxyphenylalcohol or the
piperidine carboxyphenylalcohol ester with an appropriate deprotecting
reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-f are optionally protected or unprotected.
2. A process according for preparing a compound of the formula
-37-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers
thereof comprising the steps of:
(a) reacting a benzeneacetic acid compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
-38-
<PAGE>
wherein A is as defined above and R is hydrogen or C\\1\\-C\\6\\ alkyl with a
suitable reducing agent to give a phenethyl alcohol;
(b) reacting the phenethyl alcohol with a (omega)-halo compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as
defined above, in the presence of a suitable Lewis acid to produce a
(omega)-halo hydroxyethylphenylketone; and
(c) reacting the (omega)-halo hydroxyethylphenylketone with a
piperidine compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R1 and R2 are as defined above in the presence of a suitable
non-nucleophilic base to produce a piperidine hydroxyethylphenylketone;
(d) reacting the piperidine hydroxyethylphenylketone with a suitable
oxidizing agent to produce a piperidine carboxyphenylketone;
-39-
<PAGE>
(e) optionally reacting the piperidine carboxyphenylketone to form a
piperidine carboxyphenylketone ester; and
(f) optionally reacting the piperidine carboxyphenylketone or the
piperidine carboxyphenylketone ester with an appropriate deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-e are optionally protected or unprotected.
3. A process for preparing a compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
-40-
<PAGE>
wherein
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
R\\3\\ is -CH\\2\\OH;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers thereof
comprising the steps of:
(a) reacting a benzeneacetic acid compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above and R is hydrogen or C\\1\\-C\\6\\ alkyl with a
suitable reducing agent to give a phenethyl alcohol;
(b) reacting the phenethyl alcohol with a (omega)-halo compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as
defined above, in the presence of a suitable Lewis acid to produce a (omega)-
halo hydroxyethylphenylketone;
-41-
<PAGE>
(c) reacting the (omega)-halo hydroxyethylphenylketone with a
piperidine compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\ and R\\2\\ are as defined above in the presence of a suitable
non-nucleophilic base to produce a piperidine hydroxyethylphenylketone; and
(d) optionally reacting the piperidine hydroxyethylphenylketone with an
appropriate deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-c are optionally protected or unprotected.
4. A process according to Claim 1 wherein the reducing agent of step e
is (+)-B-chlorodiisopinocamphenylborane.
5. A process according to Claim 1 wherein the reducing agent of step e
is (-)-B-chlorodiisopinocamphenylborane.
-42-
<PAGE>
6. A process for preparing a compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers thereof
comprising the steps of:
(a) reacting a benzeneacetic acid compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
-43-
<PAGE>
wherein A is as defined above and R is hydrogen or C\\1\\-C\\6\\ alkyl with a
suitable reducing agent to give a phenethyl alcohol;
(b) reacting the phenethyl alcohol with a (omega)-halo compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)-halo
hydroxyethylphenylketone;
(c) reacting the (omega)-halo hydroxyethylphenylketone with a suitable
reducing agent to produce a (omega)-halo hydroxyethylphenylalcohol;
(d) reacting the (omega)-halo hydroxyethylphenylalcohol with a piperidine
compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
-44-
<PAGE>
wherein R\\1\\ and R\\2\\ are as defined above, in the presence of a suitable
non-nucleophilic base to produce a piperidine hydroxyethylphenylalcohol;
(e) reacting the piperidine hydroxyethylphenylalcohol with a suitable
oxidizing agent to produce a piperidine carboxyphenylalcohol;
(f) optionally reacting the piperidine carboxyphenylalcohol to form a
piperidine carboxyphenylalcohol ester; and
(g) optionally reacting the piperidine carboxyphenylalcohol or the
piperidine carboxyphenylalcohol ester with an appropriate deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-f are optionally protected or unprotected.
7. A process for preparing a compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
-45-
<PAGE>
wherein
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and ,R\\2\\;
n is an integer of from 1 to 5;
R\\3\\ is -CH\\2\\OH;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers thereof
comprising the steps of:
(a) reacting a benzeneacetic acid compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above and R is hydrogen or C\\1\\-C\\6\\ alkyl with a
suitable reducing agent to give a phenethyl alcohol;
(b) reacting the phenethyl alcohol with a (omega)-halo compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)-halo
hydroxyethylphenylketone;
-46-
<PAGE>
(c) reacting the (omega)-halo hydroxyethylphenylketone with a suitable
reducing agent to produce a (omega)-halo hydroxyethylphenylalcohol;
(d) reacting the (omega)-halo hydroxyethylphenylalcohol with a piperidine
compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\ and R\\2\\ are as defined above, in the presence of a suitable
non-nucleophilic base to produce a piperidine hydroxyethylphenylalcohol; and
(e) optionally reacting the piperidine hydroxyethylphenylalcohol with an
appropriate deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-d are optionally protected or unprotected.
8. A process according to Claim 6 wherein the reducing agent of step c
is (+)-B-chlorodiisopinocamphenylborane.
9. A process according to Claim 6 wherein the reducing agent of step c
is (-)-B-chlorodiisopinocamphenylborane.
-47-
<PAGE>
10. A process according to Claim 7 wherein the reducing agent of step c
is (+)-B-chlorodiisopinocamphenylborane.
11. A process according to Claim 7 wherein the reducing agent of step c
is (-)-B-chlorodiisopinocamphenylborane.
12. A process for preparing a compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\
n is an integer of from 1 to 5;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and pharmaceutically acceptable salts and
individual optical isomers
thereof comprising the steps of:
-48-
<PAGE>
(a) reacting a benzeneacetic acid compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above and R is hydrogen or C\\1\\-C\\6\\ alkyl with a
suitable reducing agent to give a phenethyl alcohol;
(b) reacting the phenethyl alcohol with a (omega)-halo compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)-halo
hydroxyethylphenylketone;
(c) reacting the (omega)-halo hydroxyethylphenylketone with a piperidine
compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
-49-
<PAGE>
wherein R\\1\\ and R\\2\\ are as defined above, in the presence of a suitable
non-nucleophilic base to produce a piperidine hydroxyethylphenylketone;
(d) reacting the piperidine hydroxyethylphenylketone with a suitable
reducing agent to produce a piperidine hydroxyethylphenylalcohol;
(e) reacting the piperidine hydroxyethylphenylalcohol with a suitable
oxidizing agent to produce a piperidine carboxyphenylalcohol;
(f) optionally reacting the piperidine carboxyphenylalcohol to form a
piperidine carboxyphenylalcohol ester; and
(g) optionally reacting the piperidine carboxyphenylalcohol or the
piperidine carboxyphenylalcohol ester with an appropriate deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-f are optionally protected or unprotected.
-50-
<PAGE>
13. A process for preparinq a compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
R\\3\\ is -CH\\2\\OH; and
pharmaceutically acceptable salts and individual optical isomers thereof
comprising the steps of:
(a) reacting a benzeneacetic acid compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above and R is hydrogen or C\\1\\-C\\6\\ alkyl with a
suitable reducing agent to give a phenethyl alcohol;
-51-
<PAGE>
(b) reacting the phenethyl alcohol with a (omega)-halo compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)-halo
hydroxyethylphenylketone;
(c) reacting the (omega)-halo hydroxyethylphenylketone with a piperidine
compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\ and R\\2\\ are as defined above, in the presence of a suitable
non-nucleophilic base to produce a piperidine hydroxyethylphenylketone;
(d) reacting the piperidine hydroxyethylphenylketone with a suitable
reducing agent to produce a piperidine hydroxyethylphenylalcohol; and
-52-
<PAGE>
(e) optionally reacting the piperidine hydroxyethylphenylalcohol with an
appropriate deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-d are optionally protected or unprotected.
14. A process according to claim 12 wherein the reducing agent of step d
is (+)-B-chlorodiisopinocamphenylborane
15. A process according to claim 12 wherein the reducing agent of step d
is (-)-B-chlorodiisopinocamphenylborane.
16. A process according to claim 13 wherein the reducing agent of step d
is (+)-B-chlorodiisopinocamphenylborane.
17. A process according to claim 13 wherein the reducing agent of step d
is (-)-B-chlorodiisopinocamphenylborane.
-53-
<PAGE>
ABSTRACT OF THE DISCLOSURE
--------------------------
The present invention is related to a novel process for preparing
certain piperidine derivatives which are useful as antihistamines, antiallergy
agents and bronchodilators.
-54-
<PAGE>
NOVEL INTERMEDIATES USEFUL FOR THE PREPARATION OF
-------------------------------------------------
ANTIHISTAMINIC PIPERIDINE DERIVATIVES
-------------------------------------
BACKGROUND OF THE INVENTION
---------------------------
The present invention is related to novel intermediates which are useful
in the preparation of certain piperidine derivatives which are useful as
antihistamines, antiallergy agents and bronchodilators [United States Patent No.
4,254,129, March 3, 1981, United States Patent No. 4,254,130, March 3, 1981,
United States Patent No. 4,285,958, April 25, 1981 and United States Patent No.
4,550,116, Oct. 29, 1985).
These antihistaminic piperidine derivatives can be described by the
following formula:
[MOLECULAR DIAGRAM APPEARS HERE]
-1-
<PAGE>
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen;
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy;
and pharmaceutically acceptable salts and individual optical isomers
thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form
a second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or
where R\\1\\ represented hydroxy, m is an integer 0.
SUMMARY OF THE INVENTION
------------------------
The present invention provides novel intermediates useful for the
preparation of certain antihistaminic piperidine derivatives of formula (I)
[MOLECULAR DIAGRAM APPEARS HERE]
-2-
<PAGE>
wherein
w represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form a
second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or where
R\\1\\ represented hydroxy, m is an integer 0.
These novel intermediates are described by the following formulas:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
A is a hydrogen or hydroxy;
and R\\5\\ is H, OH, Br, Cl, I, CN, -COOH, -COOalkyl or -CONR\\6\\R\\7\\
wherein the alkyl moiety has from 1 to 6 carbon atoms and is straight
or branched and R\\6\\ and R\\7\\ are each independently H, C\\1\\-
C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or R\\6\\ and R\\7\\ taken together
with the nitrogen atom form a pyrrolidine, piperidine or morpholine,
with
-3-
<PAGE>
the proviso that R\\6\\ and R\\7\\ cannot both be
represented by C\\1\\-C\\6\\alkoxy.
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
A is a hydrogen or hydroxy; and
R\\5\\ is H, OH, Br, Cl, I, CN, -COOH, -COOalkyl or -CONR\\6\\R\\7\\
wherein the alkyl moiety has from 1 to 6 carbon atoms and is
straight or branched and R\\6\\ and R\\7\\ are each
independently H, C\\1\\-C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or
R\\6\\ and R\\7\\ taken together with the nitrogen atom form
a pyrrolidine, piperidine or morpholine, with the proviso
that R\\6\\ and R\\7\\ cannot both be represented by C\\1\\-
C\\6\\alkoxy.
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
A is a hydrogen or hydroxy; and
R\\5\\ is H, OH, Br, Cl, I, CN, -COOH, -COOalkyl or -CONR\\6\\R\\7\\
wherein the alkyl moiety has from 1 to 6 carbon atoms and is
straight or branched and R\\6\\ and R\\7\\ are each
independently H, C\\1\\-C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or
R\\6\\ and R\\7\\ taken together with the nitrogen atom form
a pyrrolidine, piperidine or morpholine, with the proviso
that R\\6\\ and R\\7\\ cannot both be represented by C\\1\\-
C\\6\\alkoxy.
-4-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
Hal is Cl, Br or I;
n is an integer of from 1 to 5;
A is a hydrogen or hydroxy; and
R\\5\\ is H, OH, Br, Cl, I, CN, -COOH or -CONR\\6\\R\\7\\
wherein R\\6\\ and R\\7\\ are each independently H, C\\1\\-
C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or R\\6\\ and R\\7\\ taken
together with the nitrogen atom form a pyrrolidine,
piperidine or morpholine, with the proviso that R\\6\\ and
R\\7\\ cannot both be represented by C\\1\\-C\\6\\alkoxy.
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
Hal is Cl, Br or I;
n is an integer of from 1 to 5;
A is a hydrogen or hydroxy; and
R\\5\\ is H, OH, Br, Cl, I, CN, -COOH,-COOalkyl or -CONR\\6\\R\\7\\
wherein the alkyl moiety has from 1 to 6 carbon atoms and is
straight or branched and R\\6\\ and R\\7\\ are each
independently H, C\\1\\-C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or
R\\6\\ and R\\7\\ taken together with the nitrogen atom form
a pyrrolidine, piperidine or morpholine, with the proviso
that R\\6\\ and R\\7\\ cannot both be represented by C\\1\\-
C\\6\\alkoxy.
-5-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
Hal is Cl, Br or I;
n is an integer of from 1 to 5;
A is a hydrogen or hydroxy;
R\\5\\ is H, OH, Br, Cl, I, CN, -COOH, -COOalkyl or -CONR\\6\\R\\7\\
wherein the alkyl moiety has from 1 to 6 carbon atoms and is
straight or branched and R\\6\\ and R\\7\\ are each
independently H, C\\1\\-C\\6\\alkyl, C\\1\\-C\\6\\alkoxy
or R\\6\\ and R\\7\\ taken together with the nitrogen atom
form a pyrrolidine, piperidine or morpholine, with the
proviso that R\\6\\ and R\\7\\ cannot both be represented by
C\\1\\-C\\6\\alkoxy.
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
Hal is Cl, Br or I;
n is an integer of from 1 to 5; and
A is a hydrogen or hydroxy.
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is a hydrogen or hydroxy.
-6-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
Hal is Cl, Br or I;
n is an integer of from 1 to 5;
A is a hydrogen or hydroxy; and
R\\5\\ is H, Br, Cl, I, CN, -COOH, -COOalkyl or -CONR\\6\\R\\7\\
wherein the alkyl moiety has from 1 to 6 carbon atoms and is
straight or branched and R\\6\\ and R\\7\\ are each
independently H, C\\1\\-C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or
R\\6\\ and R\\7\\ taken together with the nitrogen atom
form a pyrrolidine, piperidine or morpholine, with the
proviso that R\\6\\ and R\\7\\ cannot both be represented by
Ci-C\\6\\alkoxy; and
individual optical isomers thereof.
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
-7-
<PAGE>
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\5\\ is H, Br, Cl, I, CN or -CONR\\6\\R\\7\\ wherein R\\6\\ and
R\\7\\ are each independently H, C\\1\\-C\\6\\alkyl, C\\1\\-
C\\6\\alkoxy or R\\6\\ and R\\7\\ taken together with the
nitrogen atom form a pyrrolidine, piperidine or morpholine,
with the proviso that R\\6\\ and R\\7\\ cannot both be
represented by C\\1\\-C\\6\\alkoxy;
A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers
thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form
a second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or
where R\\1\\ represented hydroxy, m is an integer 0.
In addition, the present invention provides novel processes for
preparing the antihistaminic piperidine derivatives of formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
-8-
<PAGE>
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers
thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form
a second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or
where R\\1\\ represented hydroxy, m is an integer 0, comprising the
steps of:
(a) reacting a cumene compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above with a (omega)-halo compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)-halo
cumylketone compound;
(b) reacting the (omega)-halo cumylketone compound with a suitable
halogenating agent to give a (omega)-halo-halocumylketone compound;
-9-
<PAGE>
(c) reacting the (omega)-halo-halocumylketone compound compound with a
suitable cyanating agent to give a (omega)-halocyanocumylketone compound;
(d) reacting the (omega)-halo-cyanocumylketone compound with an
appropriate straight or branched C\\1\\-C\\6\\ alcohol in the presence of a
suitable anhydrous acid to give a (omega)'-ha1o-(alpha)'-keto-(alpha),(alpha)-
dimethylphe acid imidate compound;
(e) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid imidate compound with water to give a (omega)'-halo-
(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid ester compound;
(f) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethyiphenylacetic acid ester compound with a piperidine compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\, R\\2\\ and m are as defined above in the presence of a suitable
non-nucleophilic base to produce a (omega)'-piperidine(alpha)'-keto-
(alpha),(alpha)-diniethylphenyl derivative of formula (I) wherein R\\3\\ is
COOalkyl and W is -C(=O)-;
(g) optionally hydrolyzing the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
COOalkyl and W Is -C(=O)- to produce a (omega)'-piperidine-(alpha)'-
-10-
<PAGE>
hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\
is COOH and W is-C(=O)-;
(h) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
COOalkyl and W is -C(=O)- or the (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH and W
is -C(=O)- with a suitable reducing agent to produce a (omega)'-piperidine-
(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I)
wherein R\\3\\ is -COOH and W is -CH(OH)- or the (omega)'-piperidine-(alpha)'-
hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\
is -COOalkyl and W is-CH(OH)-; and
(i) optionally reacting the (omega)'-piperidine-(alpha)'-hydroxy-
(alpha), (alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
- -COOH and W is-CH(=OH)- or the appropriate (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is-C(=O)- with an appropriate straight or branched C\\1\\-C\\6\\ alcohol
in the presence of a suitable acid to produce a (omega)'-piperidine-(alpha)'-
hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\
is -COOalkyl and W is -CH(OH)- or a (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative wherein R\\3\\ is -COOalkyl and W is -C(=O)-;
and
(j) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)-, the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
- -COOalkyl and W is -C-(=O)-, the (omega)'-piperidine-(alpha)'
- -hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\
is -COOH and W is -CH(OH)-or the (omega)'-piperidine-(alpha)'-hydroxy-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
- -COOalkyl and W is -CH(OH)- with an appropriate deprotecting reagent,
-11-
<PAGE>
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-i are optionally protected or unprotected.
In addition, the present invention provides novel processes for
preparing the antihistaminic piperidine derivatives of formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
W represents -C(=O)- or -CH(OH);
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers
thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form
a second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or
where R\\1\\ represented hydroxy, m is an integer 0, comprising the
steps of:
-12-
<PAGE>
(a) reacting a (omega)-halo-halocumylketone compound with carbon dioxide
under electrochemical reduction conditions to give a (omega)'-halo-(alpha)'
- -keto-(alpha),(alpha) compound;
(b) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)
dimethyiphenylacetic compound compound with an appropriate straight or branched
C\\1\\-C\\6\\ alcohol in the presence of a suitable anhydrous acid to give a
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethyiphenylacetic acid ester
compound;
(c) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethyiphenylacetic acid ester compound with a piperidine compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\, R\\2\\ and m are as defined above in the presence of a suitable
non-nucleophilic base to produce (omega)'-piperidine- (alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
COOalkyl and W = -C(=O)-;
(d) optionally hydrolyzing the (omega)'-piperidine-(alpha)'-
keto(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
COOalkyl and W is -C(=O)- to produce a (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH
and W is -C(=O)-;
-13-
<PAGE>
(e) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
COOalkyl and W is -C(=O)- or the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH
and W is -C(=O)- with a suitable reducing agent to produce a (omega)'
- -piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl' derivative of
formula (I) wherein R\\3\\ is -COOH and W is -CH(OH)- or the (omega)'
- -piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative of
formula (I) wherein R\\3\\ is -COOalkyl and W is -CH(OH)-; and
(f) optionally reacting the (omega)'-piperidine-(alpha)'-hydroxy-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -
COOH and W is -CH(OH)- or the appropriate (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)- with an appropriate straight or branched C\\1\\-C\\6\\ alcohol
in the presence of a suitable acid to produce a (omega)'-piperidine-(alpha)'
- -hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\
is -COOalkyl and W is -CH(OH)-or a (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -
COOalkyl and W is - C(=O)-; and
(g) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)-, the (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -
C(=O)-, the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl
derivative of formula (I) wherein R\\3\\ is -COOH and W is -CH(OH)- or the
(omega)'-piperidine-(alpha)' -hydroxy-(alpha),(alpha)-dimethylphenyl derivative
of formula (I) wherein R\\3\\ is -COOalkyl and W is -CH(OH)- with an appropriate
deprotecting reagent,
-14-
<PAGE>
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-f are optionally protected or unprotected.
In addition, the present invention provides novel processes for
preparing the antihistaminic piperidine derivatives of formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer 3;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and pharmaceutically acceptable salts
and individual optical isomers thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form
a second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or
where R\\1\\ represented hydroxy, m is an integer 0, comprising the
steps of:
-15-
<PAGE>
(a) reacting a cumyl compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above with an appropriate cyclopropyl compound of the
structure
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, in the presence of a suitable Lewis acid to
produce a cyclopropyl cumylketone compound;
(b) reacting the cyclopropyl cumylketone compound with a suitable
halogenating agent to give a cyclopropyl halocumylketone compound;
(c) reacting the cyclopropyl halocumylketone compound with carbon dioxide
under electrochemical reduction conditions to give a cyclopropylketo-(alpha),
(alpha)-dimethyiphenylacetic acid compound;
(d) reacting the cyclopropylketo-(alpha),(alpha)- dimethyiphenylacetic
with an appropriate straight or branched C\\1\\-C\\6\\ alcohol in the presence
of a suitable anhydrous acid to give a (omega)'-halo-(alpha)'-keto-
(alpha),(alpha)-dimethylphenylacetic acid ester compound;
-16-
<PAGE>
(e) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid ester compound with a piperidine compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\, R\\2\\ and m are as defined above in the presence of a suitable
non-nucleophilic base to produce a (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
COOalkyl and W = -C(=O)-;
(f) optionally hydrolyzing the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
COOalkyl and W is -C(=O)- to produce a (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH
and W is -C(=O)-;
(g) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
COOalkyl and W is -C(=O)- or the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH
and W is -C(=O)- with a suitable reducing agent to produce a (omega)'-
piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative of
formula (I) wherein R\\3\\ is -COOH and W is -CH(OH)- or the (omega)'-
piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative of
formula (I) wherein R\\3\\ is -COOalkyl and W is -CH(OH)-; and
(h) optionally reacting the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -
-17-
<PAGE>
COOH and W is -CH(OH)- or the appropriate (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)- with an appropriate straight or branched C\\1\\-C\\6\\ alcohol
in the presence of a suitable acid to produce a (omega)'-piperidine-(alpha)'-
hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\
is -COOalkyl and W is -CH(OH)-or a (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -
COOalkyl and W is -C(=O)-; and
(i) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)-, the (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is - COOalkyl and W is
- -C(=O)-, the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl
derivative of formula (I) wherein R\\3\\ is -COOH and W is -CH(OH)- or the
(omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative
of formula (I) wherein R\\3\\ is -COOalkyl and W is -CH(OH)- with an appropriate
deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-h are optionally protected or unprotected.
Another embodiment of the present invention involves a process for
preparing the piperidine derivatives of formula
-18-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
W represents -C(=O)- or -CH(OH);
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched; each of A is hydrogen or hydroxy;
and
pharmaceutically acceptable salts and individual optical isomers thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form a
second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or where
R\\1\\ represented hydroxy, m is an integer 0, comprising the steps of:
(a) reacting a (alpha),(alpha)-dimethylphenylacetic acid amide compound of
the formula
-19-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above and R\\6\\ and R\\7\\ are each independently H,
C\\1\\-C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or R\\6\\ and R\\7\\ taken together with
the nitrogen atom for a pyrrolidine, piperidine or morpholine, with the proviso
that R\\6\\ and R\\7\\ cannot both be represented by C\\1\\-C\\6\\alkoxy with a
(omega)-halo compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)-halo-
(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid amide compound;
(b) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid amide compound with a piperidine compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\ and R\\2\\ are as defined above in the presence of a suitable
non-nucleophilic base to produce a (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (XI)
-20-
<PAGE>
wherein R\\5\\ is -CONR\\6\\R\\7\\ wherein R\\6\\ and R\\7\\ are as defined
above;
(c) optionally hydrolyzing the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (XI) wherein R\\5\\ is
- -CONR\\6\\R\\7\\ wherein R\\6\\ and R\\7\\ are as defined above to produce a
(omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-dimethylphenyl derivative of
formula (I) wherein R\\3\\ is COOH and W is -C(=O)-;
(d) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH
and W is -C(=O)- with a suitable reducing agent to produce a (omega)'-
piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula
(I) wherein R\\3\\ is -COOH and W is -CH(OH)-; and
(e) optionally reacting the (omega)'-piperidine-(alpha)'-hydroxy-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -CH(OH)- or the appropriate (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)- with an appropriate straight or branched C\\1\\-C\\6\\ alcohol
in the presence of a suitable acid to produce a (omega)'-piperidine-(alpha)'-
hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\
is -COOalkyl and W is -CH(OH)- or a (omega)'-piperidine-(alpha)'keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOalkyl and
W is -C(=O)-; and
(f) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)-, the (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is
- -C(=O)-, the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl
derivative of formula (I) wherein R\\3\\ is -COOH and W is-CH(OH)- or the
(omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative
of formula (I) wherein R\\3\\ is -
-21-
<PAGE>
COOalkyl and W is -CH(OH)- with an appropriate deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-e are optionally protected or unprotected.
Another embodiment of the present invention involves a process for
preparing the piperidine derivatives of formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
w represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has
from 1 to 6 carbon atoms and is straight or branched; each of A is hydrogen
or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form a
second bond between the carbon atoms bearing
-22-
<PAGE>
R\\1\\ and R\\2\\ or where R\\1\\ represented hydroxy, m is an integer 0,
comprising the steps of:
(a) reacting a toluene compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above with a (omega)-halo compund of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents Cl, Br or I and n Is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)-halo-
tolylketone compound;
(b) reacting the (omega)-halo-toly1ketone compound with a suitable base to
give a cyclopropyl-tolylketone compound;
(c) reacting the cyclopropyl-tolylketone compound with a suitable
halogenating agent to give a cyclopropyl-halotolylketone compound;
(d) reacting the cyclopropyl-halotolylketone compound with a suitable
cyanating agent to give a cyclopropyl cyanotolylketone compound;
(e) reacting the cyclopropyl cyanotolylketone compound with a suitable
methylating agent to give a cyclopropyl cyanocumylketone compound;
-23-
<PAGE>
(f) reacting the cyclopropyl cyanocumylketone compound with a suitable base
to give a cyc1opropylketo-(alpha),(alpha)-dimethylphenylacetic acid amide;
(g) reacting the cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid
amide with an appropriate straight or branched C\\1\\-C\\6\\ alcohol in the
presence of a suitable anhydrous acid to give a (omega)'-halo-(alpha)'-keto-
(alpha),(alpha)-dimethylphenylacetic acid ester compound;
(h) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid ester compound with a piperidine compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\, R\\2\\ and m are as defined above in the presence of a suitable
non-nucleophilic base to produce a (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative;
(i) optionally hydrolyzing the (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative to produce a (omega)'-piperidine-(alpha)'-
keto-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
COOH and W is -C(=O)-;
(j) optionally reacting the (omega)' piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH
and W is -C(=O)- with a suitable reducing agent to produce a
-24-
<PAGE>
(omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative
of formula (I) wherein R\\3\\ is -COOH and W is -CH(OH)-; and
(k) optionally reacting the (omega)'-piperidine-(alpha)'-hydroxy-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -CH(OH)- or the appropriate (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)- with an appropriate straight or branched C\\1\\-C\\6\\ alcohol
in the presence of a suitable acid to produce a (omega)'-piperidine-(alpha)'-
hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\
is -COOalkyl and W is -CH(OH)- or a (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (II) wherein R\\3\\ is
- -COOalkyl and W is -C(=O)-; and
(1) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (II) wherein R\\3\\ is
- -COOH and W is -C(=O)-, the (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl derivative of formula (II) wherein R\\3\\ is -COOalkyl and W is
- -C(=O)-, the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl
derivative of formula (I) wherein R\\3\\ is -COOH and W is -CH(OH)- or the
(omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl of formula
(I) wherein R\\3\\ is-COOalkyl and W is -CH(OH)-with an appropriate deprotecting
reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-k are optionally protected or unprotected.
Another embodirnent of the present invention involves a process for
preparing the piperidine derivatives of formula
-25-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form a
second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or where
R\\1\\ represented hydroxy, m is an integer 0, comprising the steps of:
(a) reacting a phenylacetic acid ester compound of the formula
-26-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above with a (omega)-halo compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)'-halo-
(alpha)'-keto-phenylacetic acid ester compound;
(b) reacting the (omega)'-halo-(alpha)'-keto-phenylacetic acid ester
compound with a suitable methylating agent in the presence of a suitable base to
give a cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid ester;
(c) purifying the cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid
ester by distillation and/or recrystallization;
(d) reacting the cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid
ester with an appropriate straight or branched C\\1\\-C\\6\\ alcohol in the
presence of a suitable anhydrous acid to give a (omega)'-halo-(alpha)'-keto-
(alpha),(alpha)-dimethylphenylacetic acid ester compound;
(e) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid ester compound with a piperidine compound of the
formula
-27-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\, R\\2\\ and m are as defined above in the presence of a suitable
non-nucleophilic base to produce a (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOalkyl
and W is -C(=O)-;
(f) optionally hydrolyzing the (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is - COOalkyl
and W is -C(=O)- to produce a (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH and W is
- -C(=O)-;
(g) optionally reacting the (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH and W
is -C(=O)- with a suitable reducing agent to produce a (omega)'-piperidine-
(alpha)-hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I)
wherein R\\3\\ is -COOH and W is -CH(OH)-; and
(h) optionally reacting the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH and W
is -CH(OH)- or the appropriate (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH and W
is -C(=O)- with an appropriate straight or branched C\\1\\-C\\6\\ alcohol in
the presence of a suitable acid to produce a (omega)'-piperidine-(alpha)'-
hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\
is -COOalkyl and W is-CH(OH)- or a (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl
-28-
<PAGE>
derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -C(=O)-; and
(i) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)-, the (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -
C(=O)-, the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl
derivative of formula (I) wherein R\\3\\ is -COOH and W is -CH(OH)- or the
(omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl of formula
(I) wherein R\\3\\ is-COOalkyl and W is -CH(OH)- with an appropriate
deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-h are optionally protected or unprotected.
As used herein, the term "C\\1\\-C\\6\\alkyl" or "alkyl" refers to a
straight or branched alkyl group having from 1 to 6 carbon atoms and as referred
to herein are methyl, ethyl, n-propyl, isopropyl, n-butyl, sec-butyl, tert-
butyl, n-pentyl, neopentyl and n-hexyl. The term "C\\1\\-C\\6\\alkoxy" refers to
a straight or branched alkoxy group having from 1 to 6 carbon atoms and as
referred to herein are methoxy, ethoxy, n-propoxy, isopropoxy, n-butoxy, sec-
butoxy, tert-butoxy, n-pentoxy, neopentoxy and n-hexoxy. The term "Hal" or
"halo" refers to a halogen group and includes Cl, Br or I.
The piperidine derivatives of the formula (IX) can form pharmaceutically
acceptable salts. Pharmaceutically acceptable acid addition salts of the
compounds of this invention are those of any suitable inorganic or organic acid.
Suitable inorganic acids are, for example, hydrochloric, hydrobromic, sulfuric,
and phosphoric acids. Suitable organic acids include carboxylic acids, such as,
-29-
<PAGE>
acetic, propionic, glycolic, lactic, pyruvic, malonic, succinic, fumaric, malic,
tartaric, citric, cyclamic, ascorbic, maleic, hydroxymaleic, and
dihydroxymaleic, benzoic, phenylacetic, 4-aminobenzoic, 4-hydroxybenzoic,
anthranillic, cinnamic, salicyclic, 4-aminosalicyclic, 2-phenoxybenzoic,
2-acetoxybenzoic, and mandelic acid, sulfonic acids, such as, methanesulfonic,
ethanesulfonic and (beta)-hydroxyethanesulfonic acid. Non-toxic salts of the
compounds of the above-identified formula formed with inorganic or organic bases
are also included within the scope of this invention and include, for example,
those of alkali metals, such as, sodium, potassium and lithium, alkaline earth
metals, for example, calcium and magnesium, light metals of group IIIA, for
example, aluminum, organic amines, such as, primary, secondary or tertiary
amines, for example, cyclohexylamine, ethylamine, pyridine, methylaminoethanol
and piperazine. The salts are prepared by conventional means as, for example, by
treating a piperidine derivative of formula (I) with an appropriate acid or
base.
-30-
<PAGE>
The novel intermediates of formula (II), formula (III), formula (IV),
formula (V), formula (VI) and formula (VII) wherein R\\5\\ is hydrogen may be
prepared as described in Scheme A. In Scheme A, all substituents are as
previously defined unless otherwise indicated.
Scheme A
[MOLECULAR DIAGRAM APPEARS HERE]
-31-
<PAGE>
Scheme A provides various general synthetic procedures for preparing the
novel intermediates of formula (II), formula (III) and formula (IV) wherein
R\\5\\ is hydrogen.
In step a, the appropriate toluene derivative of structure (1) is
methylated to give the corresponding ethylbenzene derivative of structure (2).
For example, the appropriate toluene derivative of structure (1) is reacted
with a slight molar excess of an appropriate methylating agent, such as
iodomethane, chloromethane or bromomethane in the presence of a suitable
non-nucleophilic base, such as potassium t-butoxide or sodium hydride. The
reaction is typically conducted in a suitable organic solvent, such as diglyme
or methylene chloride, for a period of time ranging from 30 minutes to 24 hours
and at a temperature range of from -78 degrees C to room temperature. The
corresponding ethylbenzene derivative of structure (2) is recovered from the
reaction zone by extractive methods as is known in the art and may be purified
by distillation.
In step b, the appropriate ethylbenzene derivative of structure (2) is
methylated to give the corresponding cumene derivative of structure (3) as
described previously in step a, but using at least 2 molar equivalents of
methylating agent.
In step c, the appropriate toluene derivative of structure (1) is
dimethylated to give the corresponding cumeme derivative of structure (3) as
described previously in step a but using at least 2 molar equivalents of
methylating agent.
-32-
<PAGE>
In step d, the appropriate toluene derivative of structure (1) is acylated
with an appropriate (omega)-halo compound of the structure Hal-(CH\\2\\)\\n\\-
C(=0)-B, wherein B is Hal or hydroxy, Hal is Cl, Br or I and n is as previously
defined to give the corresponding (omega)-halo tolylketone compound of structure
(4).
For example, the appropriate (omega)-halo tolylketone compound of structure
(4) may be prepared by reacting an appropriate toluene derivative of structure
(1) with an appropriate (omega)-halo compound of the structure Hal-
(CH\\2\\)\\n\\-C(=O)-B, wherein B is Hal or hydroxy, Hal is Cl, Br or I and n is
as previously defined, which are known in the art or are prepared by procedures
well known in the art, under the general conditions of a Friedel-Crafts
acylation using a suitable Lewis acid. The reaction is carried out in a solvent,
such as carbon disulfide, 1,2-dichloroethane, n-hexane, acetonitrile, 1-
nitropropane, nitromethane, diethyl ether and carbon tetrachloride, methylene
chloride, tetrachloroethane or nitrobenzene with methylene chloride being the
preferred solvent. The reaction time varies from about 1/2 hour to 25 hours,
preferably 10 to 16 hours and the reaction temperature varies from about
0 degrees C to 25 degrees C. The corresponding (omega)-halo tolylketone compound
of structure (4) is recovered from the reaction zone by an aqueous quench
followed by extraction as is known in the art. The (omega)-halo tolylketone
compound of structure (4) may be purified by procedures well known in the art,
such as crystallization and/or distillation.
Alternatively, the appropriate toluene derivative of structure (1) may be
acylated with the (omega)-halo compound of the structure Hal-(CH\\2\\)\\n\\-
C(=O)-B, wherein B is hydroxy, Hal is Cl, Br or I and n is as previously defined
in the presence of a Lewis acid to give the corresponding (omega)-halo
-33-
<PAGE>
tolylketone compound of structure (4) as described in Arch. Pharm. 306, 807
---
1973. In general, an appropriate toluene derivative of structure (1) and the
(omega)-halo compound of the structure Hal-(CH\\2\\)\\n\\-C(=O)-B, wherein B is
hydroxy, are melted together at about 50 degrees C, then cooled to about 10
degrees C after which a Lewis acid is added in an amount about 2.2 times the
molar amount of the appropriate toluene derivative of structure (1) employed.
The mixture is heated at about 70 degrees C for about 2 hours after which a 30%
sodium acetate solution is added and extracted with ether. The organic layer is
dried and the solvent evaporated to give the corresponding (omega)-halo
tolylketone compound of structure (4). The (omega)-halo tolylketone compound of
structure (4) may be purified by procedures well known in the art, such as
crystallization and/or distillation.
Suitable Lewis acids for the acylation reaction described in step d are
well known and appreciated in the art. Examples of suitable Lewis acids are
boron trichloride, aluminum chloride, titanium tetrachloride, boron trifluoride,
tin tetrachloride, ferric chloride, cobalt(II) chloride and zinc chloride, with
aluminum chloride being preferred. The selection and utilization of suitable
Lewis acids for the acylation reaction of step d is well known and appreciated
by one of ordinary skill in the art.
The starting (omega)-halo compound of the structure Hal-(CH\\2\\)\\n\\C(=O)
- -B, wherein B is Hal or hydroxy, Hal is Cl, Br or I and n is as previously
defined are commercially available or easily prepared by generally known
methods.
While also not necessary for utilization in the acylation reaction of step
d, the phenol functionality of those toluene derivatives of structure (1),
wherein A is
-34-
<PAGE>
hydroxy may be protected with a suitable protecting group. For example, suitable
protecting groups for the phenolic hydroxy include methyl ether,
2-methoxyethoxymethyl ether (MEM), cyclohexyl ether, o-nitrobenzyl ether,
9-anthryl ether, t-butyldimethylsilyl ether, acetate, benzoate, methyl
carbamate, benzyl carbamate, aryl pivaloate and aryl methanesulfonate.
In step e, to appropriate toluene derivative of structure (1) is acylated
with an appropriate cyclopropyl compound of the structure
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is as previously defined to give the corresponding cyclopropyl
tolylketone derivative of structure (5) as described previously in step d.
In step f, the appropriate ethylbenzene derivative of structure (2) is
acylated with an appropriate (omega)-halo compound of the structure
Hal-(CH\\2\\)\\n\\-C(=O)-B, wherein B is Hal or hydroxy, Hal is Cl, Br or I and
n is as previously defined to give the corresponding (omega)-halo
ethylphenylketone compound of structure (6) as described previously in step d.
In step g, the appropriate ethylbenzene derivative of structure (2) is
acylated with an appropriate cyclopropyl compound of the structure
-35-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is as previously defined to give the corresponding cyclopropyl
ethylphenylketone derivative of structure (7) as described previously in step e.
In step h, the appropriate cumene derivative of structure (3) is acylated
with an appropriate (omega)-halo compound of the structure Hal-(CH\\2\\)\\n\\-
C(=O)-B, wherein B is Hal or hydroxy, Hal is Cl, Br or I and n is as previously
defined to give the corresponding (omega)-halo cumylketone compound of structure
(8) as described previously in step d.
In step i, to appropriate cumene derivative of structure (3) is acylated
with an appropriate cyclopropyl compound of the structure
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is as previously defined to give the corresponding cyclopropyl
cumylketone derivative of structure (9) as described previously in step e.
In step j, the cyclopropyl functionality of the appropriate cyclopropyl
tolylketone derivative of structure (5) is ring-opened to give the corresponding
(omega)-halo tolylketone compound of structure (4) wherein n = 3.
-36-
<PAGE>
For example, the appropriate cyclopropyl tolylketone derivative of
structure (5) is reacted with an appropriate hydrogen halide in a suitable
organic solvent, such as toluene, xylene and ethanol. The reaction is typically
conducted at a temperature range of from room temperature to 70 degrees C and
for a period of time ranging from 20 minutes to 10 hours. The corresponding
(omega)-halo tolylketone compound of structure (4) wherein n = 3 is isolated
from the reaction zone by evaporation of the solvent or may be stored in a
solution of the hydrogen halide.
In step k, the appropriate (omega)-halo tolylketone compound of structure
(4) wherein n = 3 is ring-closed to give the corresponding cyclopropyl
tolylketone derivative of structure (5).
For example, the appropriate (omega)-halo tolylketone compound of structure
(4) wherein n = 3 is reacted with an appropriate non-nucleophilic base, such as
sodium hydroxide or potassium hydroxide in a suitable organic protic solvent,
such as methanol or ethanol. The reaction is typically conducted at a
temperature range of from -10 degrees C to room temperature and for a period of
time ranging from 10 minutes to 5 hours. The corresponding cyclopropyl
tolylketone derivative of structure (5) is isolated from the reaction zone by
extractive methods as are known in the art and may be purified by distillation.
In step 1, the cyclopropyl functionality of the appropriate cyclopropyl
ethylphenylketone derivative of structure (7) is ring-opened to give the
corresponding (omega)-halo ethylphenylketone compound of structure (6) wherein n
= 3 as described previously in step j.
-37-
<PAGE>
In step m, the appropriate (omega)-halo ethylphenylketone compound of
structure (6) wherein n = 3 is ring-closed to give the corresponding cyclopropyl
ethylphenylketone derivative of structure (7) as described previously in step k.
In step n, the cyclopropyl functionality of the appropriate cyclopropyl
cumylketone derivative of structure (9) is ring-opened to give the corresponding
(omega)-halo cumylketone compound of structure (8) wherein n = 3 as described
previously in step j.
In step O, the appropriate (omega)-halo cumylketone compound of structure
(8) wherein n = 3 is ring-closed to give the corresponding cyclopropyl
cumylketone derivative of structure (9) as described previously in step k.
In step p, the appropriate (omega)-halo ethylphenylketone compound of
structure (6) is methylated to give the corresponding (omega)-halo cumylketone
compound of structure (8) as described previously in step a.
In step q, the appropriate cyclopropyl tolylketone derivative of structure
(5) is dimethylated to give the corresponding cyclopropyl cumylketone derivative
of structure (9) as described previously in step c.
In step r, the appropriate (omega)-halo tolylketone compound of structure
(4) is methylated to give the corresponding (omega)-halo ethylphenylketone
compound of structure (6) as described previously in step a.
In step s, the appropriate (omega)-halo tolylketone compound of structure
(4) is dimethylated to give the corresponding
-38-
<PAGE>
(omega)-halo cumylketone compound of structure (8) as described previously in
step c.
In step t, the appropriate cyclopropyl ethylphenylketone derivative of
structure (7) is methylated to give the corresponding cyclopropyl cumylketone
derivative of structure (9) as described previously in step a.
In step u, the appropriate cyclopropyl tolylketone derivative of structure
(5) is methylated to give the corresponding cyclopropyl ethylphenylketone
derivative of structure (7) as described previously in step a.
Starting materials for use in Scheme A are readily available to one of
ordinary skill in the art.
The following examples present typical syntheses as described in Scheme A.
These examples are understood to be illustrative only and are not intended to
limit the scope of the present invention in any way. As used herein, the
following terms have the indicated meanings: "g" refers to grams; "mmol" refers
to millimoles; "mL" refers to milliliters; "bp" refers to boiling point;
"degree C" refers to degrees Celsius; "mm Hg" refers to millimeters of mercury;
"(mu)L" refers to microliters; "(mu)g" refers to micrograms; and "(mu)M"
refers to micromolar.
Example 1
---------
Step h: 4-Chloro-1-(4-isoproyl-phenyl)-butan-1-one
- -------------------------------------------------
Slurry aluminum chloride (140.9g, 1.075mo1) and 4-chlorobutyryl chloride (148g,
l.05mol) in methylene chloride (l.0L) add, by dropwise addition, cumene (125g,
l.04mol) over a thirty minute period under a nitrogen atmosphere while
maintaining the internal temperature
-39-
<PAGE>
between 5-8 degrees C with an ice bath. Allow the stirred solution to come to
room temperature and continue stirring under nitrogen for 14 hours. Cautiously
add the methylene chloride solution to 1L of crushed ice with stirring and add
additional methylene chloride (400mL). Separate the organic phase and wash with
10% hydrochloric acid (3X300mL), water (3X300mL), 10% sodium bicarbonate
(3x300mL) and water (3X300mL). Dry (MgSO\\4\\), filter and wash with methylene
chloride (l50mL). Evaporate the solvent to give the title compound (203g, 86%)
as a clear oil which crystallizes on standing; mp 35-37 degrees C.
/1/H NMR (300MHz, CDC1\\3\\) (delta) 7.91 (d, J=8.2Hz, 2H), 7.31 (d, J=8.2Hz,
2H), 3.65 (t, J=6.3Hz, 2H), 3.13 (t, J=6.9Hz, 2H), 2.95 (p, J=6.9Hz, 1H), 2.20
(p, J=6.6Hz, 2H), 1.26 (d, J=6.9Hz, 6H); /13/C NMR (75MHz, CDCl\\3\\)
(delta)198.2, 154.4, 134.4, 128.1, 126.5, 44.5, 32.96, 34.0, 26.7, 23.5; IR
(CDC1\\3\\) 2950, 2920, 1675, 1680, 1600, 1410, 1225 cm/-1/; MS (GCCIMS
(methane)) 255 (3), 251 (10), 227 (30 (M+H)), 225 (100 (M+H)), 189 (70), 147
(95), 107 (13, 105 (40).
Anal. Calcd for C\\13\\H\\17\\OCl: C, 69.48; H, 7.62; Found: C, 69.31; H,
7.39.
Example 2
---------
Step d: 4-Chloro-l-(4-methyl-phenyl)-butan-l-one
- ------------------------------------------------
Suspend anhydrous A1C13 (156g, l.l5mol) in toluene (1500mL) and cool to 2-
4 degrees C. Add, by slow addition, a solution of 4-chlorobutyryl chloride
(165.5g, l.l5mol) in toluene (300mL). Stir for 15 minutes and pour into stirring
ice-water (2.5L). Stir for 30 hours, decant the toluene and extract the aqueous
phase with toluene (700mL). Combine the organic layers and wash three times with
water (lL, IL, 500mL). Evaporate the solvent in vacuo to give the title compound
as a pale yellow oil (292.3g, 95%).
-40-
<PAGE>
Example 3
---------
Step k: Cyclopropyl-p-tolyl-methanone
- -------------------------------------
Dissolve potassium hydroxide (126g) in methanol (450mL), stir and cool in an
ice-water bath. Add, by dropwise addition, a solution of
4-chloro-l-(4-methyl-phenyl)-butan-l-one (292g) in methanol (450mL). Stir for
20 minutes at 8-10 degrees C and partially evaporate the methanol in vacuo to
give 400mL of a residue. Pour the residue, with stirring, into water (l500mL),
filter the white solid and dry under vacuum to give the title compound as a
white solid (190.8g, 90%).
The following compounds can be prepared using the methodology depicted in
Scheme A:
Cyclopropyl-(4-isopropyl-phenyl)-methanone;
Cyclopropyl-(4-ethyl-phenyl)-methanone; and
4-Chloro-l-(4-ethyl-phenyl)-butan-l-one.
-41-
<PAGE>
The novel intermediates of formula (II), formula (III), formula (IV),
formula (V), formula (VI) and formula (VII) wherein R\\5\\ is OH, Cl, Br or I
may be prepared as described in Scheme B. In Scheme B, all substituents are as
previously defined unless otherwise indicated.
-42-
<PAGE>
Scheme B
[MOLECULAR DIAGRAM APPEARS HERE]
-43-
<PAGE>
Scheme B provides various general synthetic procedures for preparing the
novel intermediates of formula (II), formula (III), formula (IV), formula (V),
formula (VI) and formula (VII) wherein R\\5\\ is OH, Cl, Br or I.
In step a, the appropriate (omega)-halo cumylketone compound of structure
(8) is halogenated to give the corresponding (omega)-halo-halocumylketone
compound of structure (10).
For example, the appropriate (omega)-halo-halocumylketone compound of
structure (10) may be prepared by reacting an appropriate (omega)-halo
cumylketone compound of structure (8) with a suitable halogenating agent
optionally in the presence of a catalytic amount of a suitable initiator.
Examples of suitable brominating agents are N-bromosuccinimide, and l,3-dibromo-
5,5-dimethyl hydantoin, with N-bromosuccinimide being preferred. An example of
suitable chlorinating agent is N-chlorosuccinimide and an example of a suitable
iodinating agent is N-iodosuccinimide. Examples of suitable initiators are
benzoyl peroxide, AIBN, t-butyl peroxide and ultraviolet light. The reaction is
carried out in a solvent, such as carbon tetrachloride, methylene chloride, 1,2-
dichiorobenzene, 1,2-dichloroethane, ethyl formate or ethyl acetate, with carbon
tetrachloride being the preferred solvent. The reaction time varies from about
1/2 hour to 8 hours, preferably 1/2 to 2 hours and the reaction temperature
varies from about 25 degrees C to the reflux temperature of the solvent
employed, preferably 70 degrees C to 80(degrees)C. The corresponding (omega)-
halo halocumylketone compound of structure (10) is recovered from the reaction
zone by extractive methods as are known in the art followed by evaporation of
the solvent.
In addition, the halogenation reaction of step a may be carried out in a
2-phase procedure. For example, the
-44-
<PAGE>
appropriate (omega)-halo-halocumylketone compound of structure (10) may be
prepared by reacting an appropriate (omega)-halo cumylketone compound of
structure (8) with a suitable halogenating agent, such as sodium bromate/sodium
bromide, in a solvent mixture such as methylene chloride and water, catalyzing
the reaction with, for example, ultraviolet light. The corresponding (omega)-
halo-halocumylketone compound of structure (10) is recovered from the reaction
zone by extractive methods as are known in the art followed by evaporation of
the solvent.
The (omega)-halo-halocumylketone compound of structure (10) may
dehydrohalogenate to the corresponding (alpha)-methylstyrene, giving various
mixtures of (omega)-halo-halocumylketone compound of structure (10) and (alpha)-
methylstyrene compounds. The (alpha)-methylstyrene compounds in such a mixture
may be back-converted to (omega)-halo-halocumylketone compound of structure (10)
by treatment with anhydrous hydrogen halide gas. Typically, a solution of the
mixture of (omega)-halo-halocumylketone compound of structure (10) and (alpha)-
methylstyrene compounds in a suitable organic solvent, such as methylene
chloride or acetonitrile, is treated with a suitable anhydrous hydrogen halide
gas, such as hydrogen chloride. The reaction is typically treated with the
hydrogen halide gas for a period of time ranging from 30 minutes to 5 hours and
at a temperature range of from 0 degrees C to room temperature. The remediated
(omega)-halo-halocumylketone compound of structure (10) may be isolated by
evaporation of solvent, but may be stored as a solution in the organic solvent
containing hydrogen halide gas.
In addition, halogen exchange of the benzylic halogen can be accomplished
by thorough solvolysis in the presence of the appropriate hydrogen halide.
-45-
<PAGE>
For example, the (omega)-chloro-halocumylketone compound of structure (10)
can be prepared from the (omega)-bromo-halocumylketone compound of structure
(10) by thorough aqueous solvolysis in the presence of hydrogen chloride.
In step b, the appropriate cyclopropyl cumylketone derivative of structure
(9) is halogenated to give the corresponding cyclopropyl halocumylketone
compound of structure (11) as described previously in step a.
In step c, the cyclopropyl functionality of the appropriate cyclopropyl
halocumylketone compound of structure (11) is ring-opened to give the
corresponding (omega)-halo-halocumylketone compound of structure (10) wherein n
= 3 as described previously in Scheme A, step j.
In step d, the appropriate (omega)-halo ethylphenylketone compound of
structure (6) is halogenated to give the corresponding (omega)-halo-
haloethylphenylketone compound of structure (12) as described previously in step
a.
In step e, the appropriate (omega)-halo tolylketone compound of structure
(4) is halogenated to give the corresponding (omega)-halo halotolylketone
compound of structure (13) as described previously in step a.
In step f, the appropriate cyclopropyl ethylphenylketone derivative of
structure (7) is halogenated to give the corresponding cyclopropyl
haloethylphenylketone compound of structure (14) as described previously in step
a.
In step g, the appropriate cyclopropyl tolylketone derivative of structure
(5) is halogenated to give the
-46-
<PAGE>
corresponding cyclopropyl halotolylketone of structure (15) as described
previously in step a.
In step h, the appropriate cyclopropyl halotolylketone of structure (15) is
ring-opened to give the corresponding (omega)-halo halotolylketone compound of
structure (13) wherein n = 3 as described previously in Scheme A, step j.
In step i, the appropriate cyclopropyl haloethylphenylketone compound of
structure (14) is ring-opened to give the corresponding (omega)-halo
haloethylphenylketone compound of structure (12) wherein n = 3 as described
previously in Scheme A, step j.
In addition, the novel intermediates of formula (II), formula (III),
formula (IV), formula (V), formula (VI) and formula (VII) wherein R\\5\\ is OH
may be prepared by solvolysis of the corresponding novel intermediates of
formula (II), formula (III), formula (IV), formula (V), formula (VI) and formula
(VII) wherein R\\5\\ is Cl, Br or I, with, for example, tetrahydrofuran and
water or any slightly acidic medium.
Starting materials for use in Scheme B are readily available to one of
ordinary skill in the art.
The following examples present typical syntheses as described in Scheme B.
These examples are understood to be illustrative only and are not intended to
limit the scope of the present invention in any way. As used herein, the
following terms have the indicated meanings: "g" refers to grams; "mmol" refers
to millimoles; "mL" refers to milliliters; "bp" refers to boiling point;
"degrees C" refers to degrees Celsius; "mm Hg" refers to millimeters of
mercury; "(mu)L" refers to microliters; "(mu)g" refers to micrograms; and
"(mu)M" refers to micromolar.
-47-
<PAGE>
Example 4
---------
I-[4-(l-Bromo-l-methyl-ethly-ethyl)-phenyl]-4-chloro-butan-1-one
- ----------------------------------------------------------------
Step a, Method A:
- -----------------
Dissolve 4-chloro-l-(4-isopropyl-phenyl)-butan-l-one (2.l0g, 9.35mmo1) in
carbontetrachloride (30mL), add N-bromosuccinimide (l.75g, 9.83mmo1) and
benzoylperoxide (3mg) and stir at reflux for 1 hour. Cool the reaction mixture,
filter, wash with water and brine. Dry (MgSO\\4\\), filter and evaporate the
solvent in vacuo to give the title compound as an amber oil.
Step a, Method B:
- -----------------
Dissolve 4-chloro-l-(4-isopropyl-phenyl)-butan-l-one (5.00g, 22.2mmol) and
N-bromosuccinimide (4.lg, 23.0mmol) in carbon tetrachloride (25mL) and add AIBN
radical initiator (300mg). Stir and maintain under a nitrogen atmosphere at
80-90 degrees C or optionally irradiate with a sunlamp until a vigorous exotherm
occurs at which point momentarily remove until reflux subsides and then reapply
the heat. Reflux for 30 minutes and add another potion of N-bromosuccinimide
(l00mg) while maintaining reflux and reflux an additional 15 minutes. Cool to
room temperature and precipitate the succinimide from the solution by allowing
to stand overnight. Filter and wash the succinimide (2.25g) with carbon
tetrachloride (20mL). Combine the filtrates and evaporate the solvent in vacuo
to give the title compound as a yellow oil (6.80g, 100%).
/1/H NMR (300MHz, CDCl\\3\\) (delta) 7.935 (d, J=8.4Hz, 2H), 7.70 (d, J=8.4Hz,
2H), 3.66 (t, J=6.3Hz, 2H), 3.16 (t, J=6.8Hz, 2H), 2.21 (p, J=6.8Hz, 2H), 2.19
(s, 6H); /13/C NMR (75MHz, CDCl\\3\\) (delta) 198.1 (151.63), 135.8, 128.0,
126.0, 62.3, 44.5, 35.3,
-48-
<PAGE>
35.1, 26.7; IR (neat) 2970, 2910, 1680, 1675, 1600, 1402, 1225, 1180 cm/-1/.
Step a, Method C:
- -----------------
Dissolve 4-chloro-l-(4-isopropyl-phenyl)-butan-l-one (74.7g, 333mmo1) in
methylene chloride (250mL) and add sodium bromate (17.6g, ll7mmol) in water
(75mL) in a three-necked Morton flask equipped with an overhead stirrer. Cool
the solution to 10 degrees C and irradiate with two 150W incandescent flood
lamps. Add, by dropwise addition, a solution of sodium bromide (24g, 233mmo1)
and stir for 2 hours. Illuminate for another 30 minutes, add sodium dithionate
(2.0g), separate the organic phase, dry (MgSO\\4\\) and evaporate the solvent
in vacuo to give the title compound (l00g, 99%).
Step a, Method D:
- -----------------
Dissolve l-[4-(l-bromo-l-methyl-ethyl)-phenyl]-4-chloro-butan-l-one (l0.4g
assayed at 67% by weight and containing l8wt% l-[4-(2-propene)-phenyl]-4-chloro-
butan-1-one) in methylene chloride (50mL) and sparge hydrogen chloride through
the solution for 70 minutes. Evaporate the solvent in vacuo to give a 3:1
mixture of l-[4-(l-bromo-l-methyl-ethyl)-pheny1]-4-chloro-butan-l-one and l-[4-
(l-chloro-l-methyl-ethyl)-phenyl]-4-chloro-butan-l-one (ll.6g).
Example 5
---------
(4-Bromomethyl-phenyl)-cyclopropyl-methanone
- --------------------------------------------
Step g: Dissolve 4-chloro-l-(4-isopropyl-phenyl)-butan-l-one (20g, 124mmo1) and
2,2'-Azolons (2-methylpropionitrile) (0.5g) in methylene chloride (l00mL) and
cool to 5 degrees C. Add a suspension of N-bromosuccinimide (12g) in methylene
chloride (50mL) and irradiate with light (150 Watt lamp), maintaining the
temperature at 5 degrees C. After 2, 3 and 7 hour
-49-
<PAGE>
time periods, add additional N-bromosuccinimide (6g, 6g, 2.8g) and continue
stirring. After 7.5 hours, wash with water (200mL) and with 0.4M sodium hydrogen
carbonate (2X200mL). Dry (Na\\2\\SO\\4\\), evaporate the solvent in vacuo and
recrystallize (hexane) to give the title compound as a crystalline solid
(26.7g).
The following compounds can be prepared by procedures depicted in Scheme B:
[4-(1-bromoethyl)-phenyl]-cyclopropyl-methanone;
[4-(l-bromo-1-methyl-ethyl)-phenyl]-cyclopropyl-methanone;
l-[4-(l-bromomethyl)-phenyl]-4-chloro-butan-l-one; and
1-[4-(1-bromoethyl)-phenyl]-4-chloro-butan-l-one.
The novel intermediates of formula (VIII) and (IX) and the novel
intermediates of formula (II), formula (III), formula (IV), formula (V), formula
(VI) and formula (VII) wherein R\\5\\ is Cl, Br or I may also be prepared as
described in Scheme C. In Scheme C, all substituents are as previously defined
unless otherwise indicated.
-50-
<PAGE>
Scheme C
[MOLECULAR DIAGRAM APPEARS HERE]
Scheme C provides various general synthetic procedures for preparing the
the novel intermediates of formula (VIII) and (IX) and novel intermediates of
formula (II), formula (III), formula (IV), formula (V), formula (VI) and formula
(VII) wherein R\\5\\ is Cl, Br or I.
In step a, the appropriate (alpha)-methylstyrene compound or structure (16)
is acylated with an appropriate (omega)-halo compound of the structure Hal-
(CH2)\\n\\-C(=O)-B, wherein B is Hal or hydroxy, Hal is Cl, Br or I and n is as
previously defined to give the corresponding (omega)-halo-(alpha)-methylstyrene
compound of structure (17) as described previously in Scheme A, step d.
-51-
<PAGE>
In step b, the appropriate (alpha)-methylstryrene compount of structure
(16) is acylated with an appropriate cyclopropyl compount of the structure.
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is as previously defined to give the corresponding cyclopropyl
(alpha)-methy1styreneketone derivative of structure (18) as described previously
in Scheme A, step e.
In step c, the appropriate (omega)-halo-(alpha)-methylstyrene compound of
structure (17) wherein n = 3 is ring-closed to give the corresponding
cyclopropyl (alpha)-methylstyreneketone derivative of structure (18) as
described previously in Scheme A, step k.
In step d, the appropriate cyclopropyl (alpha)-methylstyreneketone
derivative of structure (18) is ring-opened to give the corresponding (omega)-
halo-(alpha)-methylstyrene compound of structure (17) wherein n = 3 as described
previously in Scheme A, step j.
In step e, the appropriate (omega)-halo-(alpha)-methylstyrene compound of
structure (17) is hydrohalogenated to give the corresponding (omega)-halo-
halocumylketone derivative of structure (10).
For example, the appropriate (omega)-halo-(alpha)-methylstyrene compound of
structure (17) is treated with anhydrous hydrogen halide at a temperature range
of from -50 degrees C to room temperature, preferably 0 degrees C - 5 degrees C
and for a period of time ranging from 5 minutes to 2 hours. The (omega)-halo-
-52-
<PAGE>
halocumylketone derivative of structure (10) is recovered from the reaction zone
by purging with nitrogen.
In step f, the appropriate (omega)-halo-halocumylketone derivative of
structure (10) is dehydrohalogenated to give the corresponding (omega)-halo-
(alpha)-methylstyrene compound of structure (17) by treatment with base as is
known in the art.
In step g, the appropriate cyclopropyl (alpha)-methylstyreneketone
derivative of structure (18) is hydrohalogenated to give the corresponding
cyclopropyl halocumylketone comound of structure (11) as described previously in
step e.
In step h, the appropriate cyclopropyl halocumylketone comound of
structure (11) is dehydrohalogenated to give the corresponding cyclopropyl
(alpha)-methylstyreneketone derivative of structure (18) as described previously
in step f.
-53-
<PAGE>
The novel intermediates of formula (II), formula (III), formula (IV),
formula (V), formula (VI) and formula (VII) wherein R\\5\\ is CN may be prepared
as described in Scheme D. In Scheme D, all substituents are as previously
defined unless otherwise indicated.
-54-
<PAGE>
Scheme D
[MOLECULAR DIAGRAM APPEARS HERE]
-55-
<PAGE>
Scheme D Cont.
[MOLECULAR DIAGRAM APPEARS HERE]
Scheme D provides various general synthetic procedures for preparing the
novel intermediates of formula (II), formula (III), formula (IV), formula (V),
formula (VI) and formula (VII) wherein R5 is CN.
In step a, the appropriate (omega)-halo-halocumylketone compound of
structure (10) is cyanated to give the corresponding (omega)-halo-
cyanocumylketone compound of structure (19).
For example, the appropriate (omega)-halo-cyanocumylketone compound of
structure (19) may be prepared by reacting an appropriate (omega)-halo-
halocumylketone compound of structure (10) with a suitable cyanating agent.
Examples of suitable cyanating agents are trimethylsilyl cyanide,
diethylaluminum cyanide and tetrabutylammonium cyanide,
-56-
<PAGE>
with trimethylsilyl cyanide being preferred. The reaction is carried out in a
solvent, such as methylene chloride, tetrachloroethane and carbon tetrachloride,
with methylene chloride being the preferred solvent. A catalytic amount of a
suitable Lewis acid may also be employed in the reaction. Examples of suitable
Lewis acids are boron trichloride, aluminum chloride, titanium tetrachloride,
boron trifluoride, tin tetrachloride and zinc chloride, with tin tetrachloride
being preferred. The reaction time varies from about 1/2 hour to 8 hours,
preferably 1/2 to 2 hours and the reaction temperature varies from about 0
degrees C to room temperature, preferably room temperature. The (omega)-halo-
cyanocumylketone compound of structure (16) is recovered from the reaction zone
by an aqueous quench followed by extraction as is known in the art. The
(omega)-halo-cyanocumylketone compound of structure (16) may be purified by
procedures well known in the art, such as chromatography and crystallization.
In step b, the appropriate (omega)-halo cumylketone compound of structure
(8) is cyanated to give the corresponding (omega)-halo-cyanocumylketone compound
of structure (19).
For example, the (omega)-halo-cyanocumylketone compound of structure (19)
may be prepared by reacting an appropriate the (omega)-halo cumylketone compound
of structure (8) with a suitable cyanating agent. Examples of suitable cyanating
agent are cyanogen chloride, cyanogen bromide and cyanogen iodide, with cyanogen
chloride being preferred. The reaction is carried out according to the
procedures outlined by Tanner and Bunce, J. Am. Chem. Soc., 91, 3028 (1969).
-----------------
In step c, the appropriate cyclopropyl halocumylketone compound of
structure (11) is cyanated to give the
-57-
<PAGE>
corresponding cyclopropyl cyanocumylketone compound of structure (20) as
described previously in step a.
In step d, the appropriate cyclopropyl cumylketone derivative of structure
(9) is cyanated to give the corresponding cyclopropyl cyanocumylketone compound
of structure (20) as described previously in step b.
In step e, the appropriate (omega)-halo-haloethylphenylketone compound of
structure (12) is cyanated to give the corresponding (omega)-halo-
cyanoethylphenylketone compound of structure (21) as described previously in
step a.
In step f, the appropriate (omega)-halo-ethylphenylketone compound of
structure (6) is cyanated to give the corresponding (omega)-halo-
cyanoethylphenylketone compound of structure (21) as described previously in
step b.
In step g, the appropriate (omega)-halo halotolylketone compound of
structure (13) is cyanated to give the corresponding (omega)-halo
cyanotolylketone compound of structure (22) as described previously in step a.
In step h, the appropriate (omega)-halo tolylketone compound of structure
(4) is cyanated to give the corresponding (omega)-halo cyanotolylketone compound
of structure (22) as described previously in step b.
In step i, the appropriate cyclopropyl ethylphenylketone compound of
structure (7) is cyanated to give the corresponding cyclopropyl
cyanoethylphenylketone compound of structure (23) as described previously in
step b.
-58-
<PAGE>
In step j, the appropriate cyclopropyl haloethylphenylketone compound of
structure (14) is cyanated to give the corresponding cyclopropyl
cyanoethylphenylketone compound of structure (23) as described previously in
step a.
In step k, the appropriate cyclopropyl tolylketone compound of structure
(5) is cyanated to give the corresponding cyclopropyl cyanotolylketone compound
of structure (24) as described previously in step b.
In step l, the appropriate cyclopropyl halotolylketone of structure (15)
is cyanated to give the corresponding cyclopropyl cyanotolylketone compound of
structure (24) as described previously in step a.
Starting materials for use in Scheme D are readily available to one of
ordinary skill in the art.
The following examples present typical syntheses as described in Scheme D.
These examples are understood to be illustrative only and are not intended to
limit the scope of the present invention in any way. As used herein, the
following terms have the indicated meanings: "g" refers to grams; "mmol" refers
to millimoles; "mL" refers to milliliters; "bp" refers to boiling point;
"degree C" refers to degrees Celsius; "mm Hg" refers to millimeters of mercury;
"(mu)L" refers to microliters; "(mu)g" refers to micrograms; and "(mu)M" refers
to micromolar.
Example 6
---------
Step a: 2- [4-(4-chloro-butyryl)-phenyl]-2-methyl-propionitirile
-----------------------------------------------------------------
Dissolve l-[4-(l-bromo-l-methyl-ethyl)-phenyl]-4-ch1oro-butan-l-one (2.00g,
6.59mmol) in anhydrous methylene
-59-
<PAGE>
chloride (20mL) and place under an argon atmosphere. Add trimethylsilyl cyanide
(l.l0mL, 8.25mmol) followed by tin (IV) chloride (O.20mL, l.7mmol) via syringe.
Stir at reflux for 1 hour, add water (20mL) and stir for an additional 1/2 hour.
Separate the layers and extract the aqueous layer with methylene chloride.
Combine the organic layers, wash with brine, dry (MgSO\\4\\), filter and
evaporate the solvent in vacuo. Purify by silica gel chromatography (15% ethyl
acetate/hexane) to give the title compound as a white solid; mp
79-80 degrees C.
Example 7
---------
Step 1: 4-Cyclopropanecarbonyl-phenyl)-acetonitrile
- ---------------------------------------------------
Mix (4-bromomethyl-phenyl)-cyclopropyl-methanone (5.0g, 2lmmol), potassium
cyanide (2.0g, 30mmol), tetra-butylammonium bromide (150mg), water (5mL) and
acetonitrile (50mL) Mechanically stir at room temperature for 3 hours, pour into
water (450mL) and stir overnight. Collect by filtration and recrystallize
(hexane) to give the title compound as a white crystalline solid; mp 86-
87 degrees C.
The following compounds can be prepared by the synthetic procedures
depicted in Scheme D:
2-(4-Cyclopropanecarbonyl-phenyl)-propionitrile;
2-(4-Cyclopropanecarbonyl-phenyl)-2-methyl-propionitrile;
[4-(4-Chloro-butyryl)-phenyl]-acetonitrile; and
2-[4-(4-Chloro-butyryl)-phenyl]-propionitrile.
-60-
<PAGE>
The novel intermediates of formula (II), formula (III), formula (IV),
formula (V), formula (VI) and formula (VII) wherein R\\5\\ is CN may also be
prepared as described in Scheme E. In Scheme E, all substituents are as
previously defined unless otherwise indicated.
Scheme E
[MOLECULAR DIAGRAM APPEARS HERE]
-61-
<PAGE>
Scheme E provides alternative various general synthetic procedures for
preparing the novel intermediates of formula (II), formula (III), formula (IV),
formula (V), formula (VI) and formula (VII) wherein R\\5\\ is CN.
In step a, the appropriate phenylacetonitrile compound of structure (25)
is methylated to give the corresponding 2-cyanoethylbenzene compound of
structure (26) as described previously in Scheme A, step a.
Appropriate phenylacetonitrile compounds of structure (25) may be
prepared from the corresponding benzyl halide by techniques and procedures
well known by one of ordinary skill in the art and described previously in
Scheme D, step a.
Appropriate benzyl halide compounds may be prepared from the
corresponding toluene derivative of structure (1) as described previously in
Scheme B, step a.
In step b, the appropriate 2-cyanoethylbenzene compound of structure
(26) is methylated to give the corresponding 2-cyano-2-propylbenzene compound of
structure (27) as described previously in Scheme A, step a.
Appropriate 2-cyanoethylbenzene compound of structure (26) may be
prepared from the corresponding (alpha)-methylbenzyl halide by techniques and
procedures well known by one of ordinary skill in the art and as described
previously in step a.
Appropriate (alpha)-methylbenzyl halide compounds may be prepared from
the corresponding ethylbenzene derivative of structure (2) as described
previously in Scheme B, step a.
-62-
<PAGE>
In step c, the appropriate phenylacetonitrile compound of structure (25)
is dimethylated to give the corresponding 2-cyano-2-propylbenzene compound of
structure (27) as described previously in Scheme A, step c.
In step d, the appropriate phenylacetonitrile compound of structure (25)
is acylated with an appropriate (omega)-halo compound of the structure Hal-
(CH\\2\\)\\n\\-C(=O)-B, wherein B is Hal or hydroxy, Hal is C1, Br or I and n is
as previously defined to give the corresponding (omega)-halo cyanotolylketone
compound of structure (22) as described previously in Scheme A, step d.
In step e, the appropriate phenylacetonitrile compound of structure (25)
is acylated with an appropriate cyclopropyl compound of the structure
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is as previously defined to give the corresponding cyclopropyl
cyanotolylketone compound of structure (24) as described previously in Scheme A,
step e.
In step f, the appropriate 2-cyanoethylbenzene compound of structure
(26) is acylated with an appropriate (omega)-halo compound of the structure Ha1-
(CH\\2\\)\\n\\-C(=O)-B, wherein B is Hal or hydroxy, Hal is Cl, Br or I and n is
as previously defined to give the corresponding (omega)-halo
cyanoethylphenylketone compound of structure (21) as described previously in
Scheme A, step d.
-63-
<PAGE>
In step g, the appropriate 2-cyanoethylbenzene compound of structure
(26) is acylated with an appropriate cyclopropyl compound of the structure
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is as previously defined to give the corresponding cyclopropyl
cyanoethylphenylketone compound of structure (23) as described previously in
Scheme A, step e.
In step h, the appropriate 2-cyano-2-propylbenzene compound of structure
(27) is acylated with an appropriate (omega)-halo compound of the structure
Hal-(CH\\2\\)\\n\\-C(=O)-B, wherein B is Hal or hydroxy, Hal is Cl, Br or I and
n is as previously defined to give the corresponding (omega)-halo-
cyanocumylketone compound of structure (19) as described previously in Scheme A,
step d.
Appropriate 2-cyano-2-propylbenzene compound of structure (27) may be
prepared from the corresponding (alpha),(alpha)-dimethylbenzyl halide by
techniques and procedures well known by one of ordinary skill in the art and as
described previously in step a.
Appropriate (alpha),(alpha)-dimethylbenzyl halide compounds may be
prepared from the corresponding cumene derivative of structure (3) as described
previously in Scheme B, step a.
In step i, the appropriate 2-cyano-2-propylbenzene compound of structure
(27) is acylated with an appropriate cyclopropyl compound of the structure
-64-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is as previously defined to give the corresponding cyclopropyl
cyanocumylketone compound of structure (20) as described previously in Scheme A,
step e.
In step j, the cyclopropyl functionality of the appropriate cyclopropyl
cyanotolylketone compound of structure (24) is ring-opened to give the
corresponding (omega)-halo cyanotolylketone compound of structure (22) wherein n
= 3 as described previously in Scheme A, step j.
In step k, the appropriate (omega)-halo cyanotolylketone compound of
structure (22) wherein n = 3 is ring-closed to give the corresponding
cyclopropyl cyanotolylketone compound of structure (24) as described previously
in Scheme A, step k.
In step l, the cyclopropyl functionality of the appropriate cyclopropyl
cyanoethylphenylketone compound of structure (23) is ring-opened to give the
corresponding (omega)-halo-cyanoethylphenylketone compound of structure (21)
wherein n = 3 as described previously in Scheme A, step j.
In step m, the appropriate (omega)-halo cyanoethylphenylketone compound
of structure (21) wherein n = 3 is ring-closed to give the corresponding
cyclopropyl cyanoethylphenylketone compound of structure (23) as described
previously in Scheme A, step k.
-65-
<PAGE>
In step n, the cyclopropyl functionality of the appropriate cyclopropyl
cyanocumylketone compound of structure (20) is ring-opened to give the
corresponding (omega)-halo-cyanocumylketone compound of structure (19) wherein n
= 3 as described previously in Scheme A, step j.
In step o, the appropriate (omega)-halo-cyanocumylketone compound of
structure (19) is ring-closed to give the corresponding cyclopropyl
cyanocumylketone compound of structure (20) as described previously in Scheme A,
step k.
In step p, the appropriate (omega)-halo-cyanoethylphenylketone compound
of structure (21) is methylated to give the corresponding (omega)-halo-
cyanocumylketone compound of structure (19) as described previously in Scheme A,
step a.
In step q, the appropriate cyclopropyl cyanotolylketone compound of
structure (24) is dimethylated to give the corresponding cyclopropyl
cyanocumylketone compound of structure (20) as described previously in Scheme A,
step c.
In step r, the appropriate (omega)-halo cyanotolylketone compound of
structure (22) is methylated to give the corresponding (omega)-halo-
cyanoethylphenylketone compound of structure (21) as described previously in
Scheme A, step a.
In step s, the appropriate (omega)-halo cyanotolylketone compound of
structure (22) is dimethylated to give the corresponding (omega)-halo-
cyanocumylketone compound of structure (19) as described previously in Scheme A,
step c.
In step t, the appropriate cyclopropyl cyanoethylphenylketone compound
of structure (23) is methylated to give the corresponding cyclopropyl
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<PAGE>
cyanocumylketone compound of structure (20) as described previously in Scheme A,
step a.
In step u, the appropriate cyclopropyl cyanotolylketone compound of
structure (24) is methylated to give the corresponding cyclopropyl
cyanoethylphenylketone compound of structure (23) as described previously in
Scheme A, step a.
Starting materials for use in Scheme E are readily available to one of
ordinary skill in the art.
The following examples present typical syntheses as described in Scheme
E. These examples are understood to be illustrative only and are not intended to
limit the scope of the present invention in any way. As used herein, the
following terms have the indicated meanings: "g" refers to grams; "mmol" refers
to millimoles; "mL" refers to milliliters; "bp" refers to boiling point;
"degree C" refers to degrees Celsius; "mm Hg" refers to millimeters of mercury;
"(mu)L" refers to microliters; "(mu)g" refers to micrograms; and "(mu)M"
refers to micromolar.
Example 8
---------
Step g: 2-(4-Cyc1opropanecarbonyl-phenyl)-2-methy1-propionitrile
- -----------------------------------------------------------------
Dissolve potassium t-butoxide (2.42g, 21.6mmol) in diglyme (8mL), cool to
10 degrees C and slowly add with mechanical stirring, a solution of
(4-cyclopropanecarbonyl-phenyl)-acetonitrile (2g, l0.8mmol) and methyl iodide
(l.5mL, 24.0mmol) in diglyme (l0mL). After 10 minutes, add additional potassium
t-butoxide (0.3g, 2.6mmol) in diglyme (2mL) and stir for a total of 45
minutes. Pour into a mixture of water (l00mL) and ethyl acetate (50mL) and
adjust the pH to 1.5-2 with dilute hydrochloric acid.
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<PAGE>
Separate the organic phase and extract the aqueous phase with ethyl acetate
(50mL) Combine the organic phases and wash with brine (2Xl00mL). Dry
(Na\\2\\SO\\4\\), evaporate the solvent in vacuo and recrystallize (ethyl
ether/hexane) to give the title compound as a yellow solid; mp 80-82 degrees C.
The following compounds can be prepared by procedures depicted in Scheme
E:
(4-Cyclopropanecarbonyl-phenyl) -acetonitrile;
2-[4-(4-chloro-butyryl)-phenyl]-2-methyl-propionitirile;
2-(4-Cyclopropanecarbonyl-phenyl)-propionitrile;
[4-(4-Chloro-butyryl)-phenyl]-acetonitrile; and
2-[4-(4-Chloro-butyryl)-phenyl]-propionitrile.
The novel intermediates of formula (II), formula (III), formula (IV),
formula (V), formula (VI) and formula (VII) wherein R\\5\\ is COOalkyl may also
be prepared as described in Scheme F. In Scheme F, all substituents are as
previously defined unless otherwise indicated.
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<PAGE>
Scheme F
[MOLECULAR DIAGRAM APPEARS HERE]
Scheme F provides alternative various general synthetic procedures for
preparing the novel intermediates of formula (II), formula (III), formula (IV),
formula (V), formula (VI) and formula (VII) wherein R\\5\\ is COOalkyl.
-69-
<PAGE>
In step a, the appropriate phenylacetic acid ester compound of structure
(28) is methylated to give the corresponding (alpha)-methylphenylacetic acid
ester compound of structure (29) as described previously in Scheme A, step a.
Appropriate phenylacetic acid ester compounds of structure (28) are
prepared from the corresponding phenylacetic acid compounds by standard
esterification reactions which are well known by one of ordinary skill in the
art.
Appropriate phenylacetic acid compounds may be prepared by hydrolysis
of the corresponding phenylacetonitrile compounds of structure (25) by
techniques and procedures well known and appreciated by one of ordinary skill in
the art, such as base hydrolysis. Alternatively, the phenylacetic acid compounds
may be prepared by electrochemical carboxylation of the corresponding benzyl
halide as described in Scheme H, step h.
In step b, the appropriate (alpha)-methylphenylacetic acid ester
compound of structure (29) is methylated to give the corresponding
(alpha),(alpha)-dimethylphenylacetic acid ester compound of structure (30) as
described previously in Scheme A, step a.
Alternatively (alpha)-methylphenylacetic acid ester compound of
structure (29) are prepared for the corresponding (alpha)-methylphenylacetic
acid compounds by standard esterification reactions which are well known by one
of ordinary skill in the art as described in step a.
Appropriate (alpha)-methylphenylacetic acid compounds may be prepared by
hydrolysis of the corresponding 2-cyanoethylbenzene compound of structure (26)
as described
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<PAGE>
previously in step a. Alternatively, the (alpha)-methylphenylacetic acid
compounds may be prepared by electrochemical carboxylation of the corresponding
(alpha)-methylbenzyl halide as described in Scheme H, step h.
In step c, the appropriate phenylacetic acid ester compound of structure
(28) is dimethylated to give the corresponding (alpha),(alpha)-
dimethylphenylacetic acid ester compound of structure (30) as described
previously in Scheme A, step c.
Alternatively (alpha),(alpha)-dimethylphenylacetic acid ester compound
of structure (30) are prepared for the corresponding (alpha),(alpha)-
dimethylphenylacetic acid compounds by standard esterification reactions which
are well known by one of ordinary skill in the art as described in step a.
Appropriate (alpha),(alpha)-dimethylphenylacetic acid compounds may be
prepared by hydrolysis of the corresponding 2-cyano-2-propylbenzene compound of
structure (27) as described previously in step a. Alternatively, the
(alpha),(alpha)-dimethylphenylacetic acid compounds may be prepared by
electrochemical carboxylation of the corresponding (alpha),(alpha)-
dimethylbenzyl halide as described in Scheme H, step h. Appropriate
(alpha),(alpha)-dimethylbenzyl halide compounds may be prepared by
hydrohalogenation of the corresponding (alpha)-methylstyrene as described
previously in Scheme C, step e.
In step d, the appropriate phenylacetic acid ester compound of structure
(28) is acylated with an appropriate (omega)-halo compound of the structure Hal-
(CH\\2\\)\\n\\-C(=O)-B, wherein B is Hal or hydroxy, Hal is Cl, Br or I and n is
as previously defined to give the corresponding (omega)'-halo-(alpha)'-keto-
phenylacetic acid ester compound of structure (34) as described previously in
Scheme A, step d.
-71-
<PAGE>
In step e, the appropriate phenylacetic acid ester compound of structure
(28) is acylated with an appropriate cyclopropyl compound of the structure
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is as previously defined to give the corresponding
cyclopropylketo-phenylacetic acid ester compound of structure (33) as described
previously in Scheme A, step e.
In step f, the appropriate (alpha)-methylphenylacetic acid ester
compound of structure (26) is acylated with an appropriate (omega)-halo compound
of the structure Hal-(CH\\2\\)\\n\\- C(=O)-B, wherein B is Hal or hydroxy, Hal
is Cl, Br or I and n is as previously defined to give the corresponding
(omega) '-halo-(alpha)'-keto-(alpha)-methylphenylacetic acid ester compound of
structure (30) as described previously in Scheme A, step d.
In step g, the appropriate (alpha)-methylphenylacetic acid ester
compound of structure (29) is acylated with an appropriate cyclopropyl compound
of the structure
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is as previously defined to give the corresponding cyclopropylketo-
(alpha)-methylphenylacetic acid ester compound of structure (35) as described
previously in Scheme A, step e.
-72-
<PAGE>
In step h, the appropriate (alpha),(alpha)-dimethylphenylacetic acid
ester compound of structure (30) is acylated with an appropriate (omega)-halo
compound of the structure Hal-(CH\\2\\)\\n\\-C(=O)-B, wherein B is Hal or
hydroxy, Hal is Cl, Br or I and n is as previously defined to give the
corresponding (omega)'halo-(alpha)'-keto-(alpha),(alpha)-di-methylphenylacetic
acid ester compound of structure (31) as described previously in Scheme A,
step d.
Appropriate (alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (30) are prepared for the corresponding (alpha),(alpha)-
dimethylphenylacetic acid compounds by standard esterification reactions which
are well known by one of ordinary skill in the art as described in step a.
Appropriate (alpha),(alpha)-dimethylphenylacetic acid compounds may be
prepared by hydrolysis of the corresponding 2-cyano-2-propylbenzene compound of
structure (27) as described previously in step a.
In step i, the appropriate (alpha),(alpha)-dimethylphenylacetic acid
ester compound of structure (30) is acylated with an appropriate cyclopropyl
compound of the structure
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is as previously defined to give the corresponding cyclopropylketo-
(alpha), (alpha)-dimethylphenylacetic acid ester compound of structure (32) as
described previously in Scheme A, step e.
-73-
<PAGE>
In step j, the appropriate (omega)'-halo-(alpha)'-keto-(alpha)-
methylphenylacetic acid ester compound of structure (33) is methylated to give
the corresponding (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-di-
methylphenylacetic acid ester compound of structure (32) as described previously
in Scheme A, step a.
In step k, the cyclopropyl functionality of the appropriate
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (32) is ring-opened to give the corresponding (omega)'-halo-(alpha)'-
keto-(alpha),(alpha)-di-methylphenylacetic acid ester compound of structure (31)
wherein n = 3 as described previously in Scheme A, step j.
In step l, the appropriate (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
di-methylphenylacetic acid ester compound of structure (31) wherein n = 3 is
ring-closed to give the corresponding cyclopropylketo-(alpha),(alpha)-
dimethylphenylacetic acid ester compound of structure (32) as described
previously in Scheme A, step k.
In step m, the appropriate (omega)'-halo-(alpha)'-keto-phenylacetic acid
ester compound of structure (34) is dimethylated to give the corresponding
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-di-methylphenylacetic acid ester
compound of structure (31) as described previously in Scheme A, step c.
In step n, the appropriate (omega)'-halo-(alpha)'-keto-phenylacetic
acid ester compound of structure (34) is methylated to give the corresponding
(omega)'-halo-(alpha)'-keto-(alpha)-methylphenylacetic acid ester compound of
structure (33) as described previously in Scheme A, step a.
In step o, the cyclopropyl functionality of the appropriate
cyclopropylketo-(alpha)-methylphenylacetic acid ester compound of structure (35)
is ring-opened to give the
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<PAGE>
corresponding (omega)'-halo-(alpha)'-keto-(alpha)-methylphenylacetic acid ester
compound of structure (33) wherein n = 3 as described previously in Scheme A,
step j.
In step p, the appropriate (omega)'-halo-(alpha)'-keto-(alpha)-
methylphenylacetic acid ester compound of structure (33) wherein n = 3 is ring-
closed to give the corresponding cyclopropylketo-(alpha)-methylphenylacetic acid
ester compound of structure (35) as described previously in Scheme A, step k.
In step q, the appropriate cyclopropylketo-(alpha)-methylphenylacetic
acid ester compound of structure (35) is methylated to give the corresponding
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (32) as described previously in Scheme A, step a.
In step r, the appropriate cyclopropylketo-phenylacetic acid ester
compound of structure (36) is dimethylated to give the corresponding
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (32) as described previously in Scheme A, step c.
In step s, the cyclopropyl functionality of the appropriate
cyclopropylketo-phenylacetic acid ester compound of structure (36) is ring-
opened to give the corresponding (omega)'-halo-(alpha)'-keto-phenylacetic acid
ester compound of structure (34) wherein n = 3 as described previously in Scheme
A, step j.
In step t, the appropriate (omega)'-halo-(alpha)'-keto-phenylacetic acid
ester compound of structure (34) wherein n = 3 as is ring-closed to give the
corresponding cyclopropylketo-phenylacetic acid ester compound of structure (36)
as described previously in Scheme A, step k.
-75-
<PAGE>
In step u, the appropriate cyclopropylketo-phenylacetic acid ester
compound of structure (36) is methylated to give the corresponding
cyclopropylketo-(alpha)-methylphenylacetic acid ester compound of structure (35)
as described previously in Scheme A, step a.
Starting materials for use in Scheme F are readily available to one of
ordinary skill in the art.
The following examples present typical syntheses as described in
Scheme F. These examples are understood to be illustrative only and are not
intended to limit the scope of the present invention in any way. As used herein,
the following terms have the indicated meanings: "g" refers to grams; "mmol"
refers to millimoles; "mL" refers to milliliters; "bp" refers to boiling point;
"degrees C" refers to degrees Celsius; "mm Hg" refers to millimeters of
mercury; "(mu)L" refers to microliters; "(mu)g" refers to micrograins; and
"(mu)M" refers to micromolar.
Example 9
---------
Step d: [4-(4-Chloro-butyryl)-phenyl]-acetic acid, ethyl ester
- --------------------------------------------------------------
Load a 3-neck flask with sublimed A1C1\\3\\ (293g, 2.08mmol) and heptane
(400mL). Cool to below 5 degrees C and slowly add chlorobutyryl chloride
(125mL),keeping the temperature below 5 degrees C. Add phenylethyl acetate
(160mL), keeping the temperature below 10 degrees C and stir overnight. Decant
the heptane layer and dissolve the residue in methylene chloride (400mL). Slowly
pour the methylene chloride solution into a mixture of concentrated hydrochloric
acid (200mL) and cracked ice. Separate the organic phase, wash with water (1L),
followed by 5% sodium hydrogen carbonate (1L). Evaporate the solvent in vacuo to
give a red oil (243g).
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<PAGE>
Dissolve the red oil (243g) in methylene chloride (250mL) and sparge with
hydrogen chloride gas for 1.5 hours and evaporate the solvent in vacuo to give
the title compound as a 50:50 mixture of para and meta isomers (243g).
Example 10
----------
Step k: 2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid, ethyl ester
- -----------------------------------------------------------------------------
Dissolve 2-(4-cyclopropanecarbonyl-phenyl)-2-methyl-propionic acid, ethyl ester
(100g) in xylene (500mL) and ethanol (100mL) and heat to 70 degrees C. Sparge
the atmosphere of the reaction with hydrogen chloride gas (24.6g) over 220
hours. Evaporate the solvent in vacuo to give the title compound.
Example 11
----------
Step h: 2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid, 2-ethylhexyl
- ------------------------------------------------------------------------------
ester
- -----
Mix 2-ethyl-1-hexanol (6.5g, 5mol), triethylamine (50.5g, 0.5mol) and methylene
chloride (50mL). Add, by dropwise addition, 2-phenylacetyl chloride (5mol) and
warm to 50 degrees C. Stir at room temperature overnight, filter and wash the
filtercake with methylene chloride (50mL). Combine the organic phases and wash
with 5% aqueous hydrochloric acid (50mL) and water. Dry (MgSO\\4\\), evaporate
the solvent in vacuo and purify by distillation to give 2-phenylacetic acid, 2-
(2-ethylhexy)l ester.
Mix chlorobutyryl chloride (16.9g) and AlCl\\3\\ (29.3g) at room temperature.
Add 2-phenylacetic acid, 2-ethylhexyl ester (27.6g), keeping the temperature
below 10 degrees C. Heat at 35 degrees C for 24 hours, quench in ice water
(200g). Separate the organic phase, dry (MgSO\\4\\) and evaporate the solvent in
vacuo. Dilute the residue with ethanol (150mL), add
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<PAGE>
hydrogen chloride (5g) and heat to 75 degrees C. After 2.5 hours, add another 5g
of hydrogen chloride and stir at 75 degrees C for 24 hours. Evaporate the
solvent in vacuo to give the title compound.
Example 12
----------
Step 1 and step m: 2-(4-Cyclopropanecarbonyl-phenyl)-2-methyl-propionic acid,
- -----------------------------------------------------------------------------
ethyl ester
- -----------
Dissolve 2-[4-(4-chloro-butyryl)-phenyl)-acetic acid, ethyl ester (28.5g) in
toluene (50mL) and evaporate the solvent in vacuo to remove traces of ethanol.
Dissolve the residue in diglyme (50mL) and add, by dropwise addition, to a
suspension of sodium hydride (12.2g of a 60% suspension in mineral oil) slurried
in diglyme (150mL) containing methyl chloride (10g). Slowly add methyl chloride
(10g) and stir for 15 minutes. Filter through filter aid, wash filtercake with
acetonitrile and evaporate the solvent. Remove meta-isomer by distillation
(150 degrees C @ lmm) and crystallize (ethanol) to give the title compound
(93%).
The novel intermediates of formula (II), formula (III), formula (IV),
formula (V), formula (VI) and formula (VII) wherein R\\5\\ is CONR\\6\\R\\7\\
may also be prepared as described in Scheme G. In Scheme G, all substituents are
as previously defined unless otherwise indicated.
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<PAGE>
Scheme G
[MOLECULAR DIAGRAM APPEARS HERE]
Scheme G provides alternative various general synthetic procedures for
preparing the novel intermediates of formula (II), formula (III), formula (IV),
formula (V), formula (VI) and formula (VII) wherein R\\5\\ is CONR\\6\\R\\7\\.
-79-
<PAGE>
In step a, the appropriate phenylacetic acid amide compound of structure
(37) is methylated to give the corresponding (alpha)-methylphenylacetic acid
amide compound of structure (38) as described previously in Scheme A, step a.
Appropriate phenylacetic acid amide compound of structure (37) are
prepared from the corresponding phenylacetic acid by standard amide-forming
reactions as are known in the art. The appropriate phenylacetic acids may be
prepared by hyrdolysis of the corresponding 2-cyano-2-propylbenzene compound of
structure (27) by techniques and procedures well known and appreciated by one of
ordinary skill in the art.
In step b, the appropriate (alpha)-methylphenylacetic acid amide
compound of structure (38) is methylated to give the corresponding
(alpha),(alpha)-dimethylphenylacetic acid amide compound of structure (39) as
described previously in Scheme A, step a.
Appropriate (alpha)-methylphenylacetic acid amide compound of structure
(38) are prepared from the corresponding (alpha)-methylphenylacetic acid by
standard amide-forming reactions as are known in the art as described in step a.
In step c, the appropriate phenylacetic acid amide compound of structure
(37) is dimethylated to give the corresponding (alpha),(alpha)-
dimethylphenylacetic acid amide compound of structure (39) as described
previously in Scheme A, step c.
In step d, the appropriate phenylacetic acid amide compound of structure
(37) is acylated with an appropriate (omega)-halo compound of the structure Hal-
(CH\\2\\)\\n\\-C(=0)-B, wherein B is Hal or hydroxy, Hal is Cl, Br or I and n is
as
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<PAGE>
previously defined to give the corresponding (omega)'-halo-(alpha)-keto-
phenylacetic acid amide compound of structure (43) as described previously in
Scheme A, step d.
In step e, the appropriate phenylacetic acid amide compound of structure
(37) is acylated with an appropriate cyclopropyl compound of the structure
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is as previously defined to give the corresponding cyclopropylketo-
phenylacetic acid amide compound of structure (45) as described previously in
Scheme A, step e.
In step f, the appropriate (alpha)-methylphenylacetic acid amide
compound of structure (38) is acylated with an appropriate (omega)-halo compound
of the structure Hal-(CH\\2\\)\\n\\-C(=0)-B, wherein B is Hal or hydroxy, Hal is
Cl, Br or I and n is as previously defined to give the corresponding (omega)'-
halo-(alpha)'-keto-(alpha)-methylphenylacetic acid amide compound of structure
(42) as described previously in Scheme A, step d.
In step g, the appropriate (alpha)-methylphenylacetic acid amide
compound of structure (38) is acylated with an appropriate cyclopropyl compound
of the structure
[MOLECULAR DIAGRAM APPEARS HERE]
-81-
<PAGE>
wherein B is as previously defined to give the corresponding cyclopropylketo-
(alpha)-methylphenylacetic acid amide compound of structure (44) as described
previously in Scheme A, step e.
In step h, the appropriate (alpha),(alpha)-dimethylphenylacetic acid
amide compound of structure (39) is acylated with an appropriate (omega)-halo
compound of the structure Hal-(CH\\2\\)\\n\\-C(=0)-B, wherein B is Hal or
hydroxy, Hal is Cl, Br or I and n is as previously defined to give the
corresponding (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-di-methylphenylacetic
acid amide compound of structure (40) as described previously in Scheme A, step
d.
Appropriate (alpha),(alpha)-dimethylphenylacetic acid amide compound of
structure (39) are prepared from the corresponding (alpha),(alpha)-
dimethylphenylacetic acid by standard amide-forming reactions as are known in
the art as described in step a.
In step i, the appropriate (alpha),(alpha)-dimethylphenylacetic acid
amide compound of structure (39) is acylated with an appropriate cyclopropyl
compound of the structure
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is as previously defined to give the corresponding cyclopropylketo-
(alpha),(alpha)-dimethylphenylacetic acid amide compound of structure (41) as
described previously in Scheme A, step e.
In step j, the appropriate (omega)'-halo-(alpha)'-keto-(alpha)-
methylphenylacetic acid amide compound of structure (42) is
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<PAGE>
methylated to give the corresponding (omega)'-halo-(alpha)'-keto-(alpha),
(alpha)-di-methylphenylacetic acid amide compound of structure (40) as described
previously in Scheme a, step a.
In step k, the cyclopropyl functionality of the appropriate
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid amide compound of
structure (41) is ring-opened to give the corresponding (omega)'-halo-(alpha)'-
keto-(alpha),(alpha)-di-methylphenylacetic acid amide compound of structure (40)
wherein n = 3 as described previously in Scheme A, step j.
In step 1, the appropriate (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
di-methylphenylacetic acid amide compound of structure (40) wherein n = 3 is
ring-closed to give the corresponding cyclopropylketo-(alpha),(alpha)-
dimethylphenylacetic acid amide compound of structure (41) as described
previously in Scheme A, step k.
In step m, the appropriate (omega)'-halo-(alpha)'-keto-phenylacetic acid
amide compound of structure (43) is dimethylated to give the corresponding
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-di-methylphenylacetic acid amide
compound of structure (40) as described previously in Scheme A, step c.
In step n, the appropriate (omega)'-halo-(alpha)'-keto-phenylacetic acid
amide compound of structure (43) is methylated to give the corresponding
(omega)'-halo-(alpha)'keto-(alpha)-methylphenylacetic acid amide compound of
structure (42) as described previously in Scheme A, step a.
In step o, the cyclopropyl functionality of the appropriate
cyclopropylketo-(alpha)-methylphenylacetic acid amide compound of structure
(44) is ring-opened to give the corresponding (omega)'-halo-(alpha)'-keto-
(alpha)-methylphenylacetic acid
-83-
<PAGE>
amide compound of structure (42) wherein n = 3 as described previously in
Scheme A, step j.
In step p, the appropriate (omega)'-halo-(alpha)'-keto-(alpha)-
methlphenylacetic acid amide compound of structure (42) wherein n = 3 is ring-
closed to give the corresponding cyclopropylketo-(alpha)-methylphenylacetic acid
amide compound of structure (44) as described previously in Scheme A, step k.
In step q, the appropriate cyclopropylketo-(alpha)-methylphenylacetic
acid amide compound of structure (44) is methylated to give the corresponding
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid amide compound of
structure (41) as described previously in Scheme A, step a.
In step r, the appropriate cyclopropylketo-phenylacetic acid amide
compound of structure (45) is dimethylated to give the corresponding
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid amide compound of
structure (41) as described previously in Scheme A, step c.
In step s, the cyclopropyl functionality of the appropriate
cyclopropylketo-phenylacetic acid amide compound of structure (45) is ring-
opened to give the corresponding (omega)'-halo-(alpha)'-keto-phenylacetic acid
amide compound of structure (43) wherein n = 3 as described previously in Scheme
A, step j.
In step t, the appropriate (omega)'-halo-(alpha)'-keto-phenylacetic acid
amide compound of structure (43) wherein n = 3 is ring-closed to give the
corresponding cyclopropylketo-phenylacetic acid amide compound of structure (45)
as described previously in Scheme A, step k.
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In step u, the appropriate cyclopropylketo-phenylacetic acid amide
compound of structure (45) is methylated to give the corresponding
cyclopropylketo-(alpha)-methylphenylacetic acid amide compound of structure (44)
as described previously in Scheme A, step a.
Starting materials for use in Scheme G are readily available to one of
ordinary skill in the art.
The following example present typical syntheses as described in
Scheme G. These examples are understood to be illustrative only and are not
intended to limit the scope of the present invention in any way. As used
herein, the following terms have the indicated meanings: "g" refers to grams;
"mmol" refers to millimoles; "mL refers to milliliters; "bp" refers to boiling
point; "degrees C" refers to degrees Celsius; "mm Hg" refers to millimeters of
mercury; "(mu)L" refers to microliters; "(mu)g" refers to micrograms; and
"(mu)M" refers to micromolar.
Example 13
----------
Step h: 2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid, N-methoxy-N-
- ------------------------------------------------------------------------------
methylamide
- -----------
Dissolve 2-methyl-2-phenyl-propionic acid (15.0g, 91.2mmol) in toluene (80mL)
and add, by dropwise addition over 5 minutes, thionyl chloride (15mL, 206mmol).
Stir at room temperature overnight, add additional thionyl chloride (3mL,
41.1mmol) and heat to reflux for 1 hour. Remove excess thionyl chloride by
azeotropic distillation with toluene (40mL). Add toluene (20mL) to the reaction
mixture along with a solution of potassium carbonate (28.0g, 203mmol) in water
(40mL). Add, by dropwise addition, a solution of N,O-dimethylhydroxylamine
hydrochloride (8.9g, 91.2mmol) in water (20mL) without cooling and stir for 2
hours. Add tert-butylmethyl either (75mL) following by slow
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addition of aqueous HC1 (2N, 75mL) with vigorous stirring. Separate the organic
layer and wash with aqueous HC1 (2N, 75mL), saturated sodium hydrogen carbonate
(25mL) and brine (50mL). Dry the organic layer over (Na\\2\\SO\\4\\), filter,
evaporate the filtrate in vacuo and purify by vacuum distillation to give
2-methyl-2-phenyl-propionic acid, N-methoxy-N-methylamide (18.0g, 95%); bp 91-
103 degrees C/5mm Hg.
MS (CI, CH\\4\\) m/e 208 (M/+/+l, 100), 119.
Slurry AlCl\\3\\ (10.15g, 76.1mmol) and methylene chloride (45mL) under a
nitrogen atmosphere at room temperature. Add 4-chlorobutyryl chloride (4.27mL,
38.1mmol), stir for 20 minutes and add, by dropwise addition over 10 minutes, a
solution of 2-methyl-2-phenyl-propionic acid, N-methoxy-N-methylamide (6.58g,
31.7mmol) in methylene chloride (15mL). Stir at room temperature for 45 minutes,
then heat at 30-35 degrees C for 7 hours. Pour into ice water (150mL) and
separate the layers. Wash the aqueous layer with water (3X75mL), combine the
aqueous layers and extract with methylene chloride (2X75mL). Combine the organic
layers and dry (Na\\2\\SO\\4\\). Filter, evaporate the filtrate in vacuo and
purify by silica gel chromatography (3:1 hexane/ethyl acetate) to give the title
compound (6.19g, 63%) as a light yellow oil.
MS (CI,CH\\4\\) m/e 312 (M/+/+l), 276.
Example 14
----------
Step h: 2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid, dimethylamide
- ------------------------------------------------------------------------------
Dissolve 2-methyl-2-phenyl-propionic acid (l5.0g, 91.2mmol) in toluene (80mL)
and add, by dropwise addition over 5 minutes, thionyl chloride (15mL, 206mmol).
Stir at room temperature overnight, add additional thionyl chloride (3mL,
41.1mmol) and heat to reflux for 1 hour. Remove
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excess thionyl chloride by azeotropic distillation with toluene (40mL). Add
toluene (20mL) to the reaction mixture along with a solution of potassium
carbonate (28.0g, 203mmol) in water (40mL). Add, by dropwise addition, a 40%
aqueous solution of dimethylamine hydrochloride (20mL, 0.18mol) without cooling
and stir for 2 hours. Add tert-butylmethyl ether (75mL) following by slow
addition of aqueous HC1 (2N, 75mL) with vigorous stirring. Separate the organic
layer and wash with aqueous HC1 (2N, 75mL), saturated sodium hydrogen carbonate
(25mL) and brine (50mL). Dry the organic layer over (Na\\2\\SO\\4\\), filter,
evaporate the filtrate in vacuo and purify by crystallization to give 2-methyl-
2-phenyl-propionic acid, dimethylamide (15.35g, 88%) as a white solid; mp 57-
59 degrees C.
Anal. Calcd for C\\12\\H\\17\\NO: C, 75.35; H, 8.96; N, 7.32;
Found: C, 75.12; H, 8.86; N, 7.26.
Add AlCl\\3\\ (1.12g, 8.40mmol) to carbon tetrachloride (6mL) under a nitrogen
atmosphere at room temperature. Add 4-chlorobutyryl chloride (0.49mL, 4.37mmol),
stir for 15 minutes and add, by dropwise addition over 3 minutes, a solution
of 2-methyl-2-phenyl-propionic acid, dimethylamide (0.64g, 3.36mmol) in carbon
tetrachloride (6mL). Stir at room temperature for 17 hours, dilute with
methylene chloride (l0mL), pour into ice water (50mL) and separate the layers.
Wash the aqueous layer with methylene chloride (2X70mL), 5% aqueous sodium
hydrogen carbonate, combine the organic layers and dry (Na\\2\\SO\\4\\). Filter,
evaporate the filtrate in vacuo and purify by silica gel chromatography (5:2
hexane/ethyl acetate) to give the title compound (0.72g, 72%) as a light yellow
oil.
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Example 15
----------
Step h: 2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid,
- -----------------------------------------------------------------
pyrrolidineamide
- ----------------
Dissolve 2-methyl-2-phenyl-propionic acid (l5.0g, 91.2mmol) in toluene (80mL)
and add, by dropwise addition over 5 minutes, thionyl chloride (15mL, 206mmol).
Stir at room temperature overnight, add additional thionyl chloride (3mL,
41.1mmol) and heat to reflux for 1 hour. Remove excess thionyl chloride by
azeotropic distillation with toluene (40mL). Add tolune (20mL) to the reaction
mixture along with a solution of potassium carbonate (28.0g, 203mmol) in water
(40mL). Add, by dropwise addition, pyrrolidine (7.61mL, 91mmol) without
cooling and stir for 2 hours. Add tert-butylmethyl ether (75mL) following by
slow addition of aqueous HC1 (2N, 75mL) with vigorous stirring. Separate the
organic layer and wash with aqueous HC1 (2N, 75mL), saturated sodium hydrogen
carbonate (25mL) and brine (50mL). Dry the organic layer over (Na\\2\\SO\\4\\),
filter, evaporate the filtrate in vacuo and purify by crystallization to give
2-methyl-2-phenyl-propionic acid, pyrrolidineamide (18.28g, 92%) as a solid; mp
96-97 degrees C.
Anal. Calcd for C\\14\\H\\19\\NO: C, 77.38; H, 8.81; N, 6.45;
Found: C, 77.21; H, 8.70; N, 6.41.
Add AlCl\\3\\ (8.31g, 62.3mmol) to carbon tetrachloride (65mL) under a nitrogen
atmosphere at room temperature. Add 4-chlorobutyryl chloride (03.5mL,
31.2mmol), stir for 15 minutes and add, by dropwise addition over 15 minutes, a
solution of 2-methyl-2-phenyl-propionic acid, pyrrolidineamide (5.64g, 26.0mmol)
in carbon tetrachloride (60mL). Stir at room temperature for 17 hours, pour into
ice water (100mL) and separate the layers. Wash the aqueous layer with methylene
chloride (2X70mL), 5% aqueous sodium hydrogen carbonate, combine the organic
layers and
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dry (Na\\2\\SO\\4\\). Filter, evaporate the filtrate in vacuo and purify by
silica gel chromatography (5:2 hexane/ethyl acetate) to give the title compound
(6.55g, 78%) as a light yellow oil.
Example 16
----------
Step 1: 2-(4-Cyclopropanecarbonyl-phenyl)-2-methyl-propionic acid, N-methoxy-N-
- -------------------------------------------------------------------------------
methylamide
- -----------
Add potassium hydroxide (13g) to 2-[4-(4-chloro-butyryl-phenyl]-2-methyl-
propionamide, N-methoxy-N-methylamide (96.6mmol) and stir at room temperature
for 40 minutes, filter and wash the filtercake with ethanol. Evaporate the
ethanol in vacuo, dissolve in methylene chloride (100mL), wash with water
(50mL), 5% sodium hydrogen carbonate (50mL) and water (50mL). Evaporate the
solvent in vacuo, removing water with toluene azeotrope. Purify the product by
distillation followed by recrystallization (heptane) to give the title compound
(7.4g).
The following compounds can be prepared by procedures depicted in
Scheme G:
(4-cyclopropanecarbonyl-phenyl)-acetic acid, N-methoxy-N-methylamide;
(4-cyclopropanecarbonyl-phenyl)-acetic acid, dimethylamide;
(4-cyclopropanecarbonyl-phenyl)-acetic acid, pyrrolidineamide;
2-(4-Cyclopropanecarbonyl-phenyl)-proprionic acid, N-methoxy-N-methylamide;
2-(4-Cyclopropanecarbonyl-phenyl)-proprionic acid, dimethylamide;
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2-(4-Cyclopropanecarbonyl-phenyl)-proprionic acid, pyrrolidineamide;
2-(4-Cyclopropanecarbonyl-phenyl)-2-methyl-proprionic acid, N-methoxy-
N-methylamide;
2-(4-Cyclopropanecarbonyl-phenyl)-2-methyl-proprionic acid, dimethylamide;
2-(4-Cyclopropanecarbonyl-phenyl)-2-methyl-proprionic acid, pyrrolidineamide;
[4-(4-Chloro-butyryl)-phenyl]-acetic acid, N-methoxy-N-methylamide;
[4-(4-Chloro-butyryl)-phenyl]-acetic acid, dimethylamide;
[4-(4-Chloro-butyryl)-phenyl]-acetic acid, pyrrolidineamide;
2-[4-(4-Chloro-butyryl)-phenyl]-propionic acid, N-methoxy-N--methylamide;
2-[4-(4-Chloro-butyryl)-phenyl]-propionic acid, dimethylamide;
2-[4-(4-Chloro-butyryl)-phenyl]-propionic acid, pyrroldineamide;
2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid, N-methoxy-
N-methylamide;
2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid, dimethylamide;
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2-[4-(4-chloro-butyryl)-phenyl]-2-methyl-propionic acid, pyrroldineamide;
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<PAGE>
The novel intermediates of formula (II), formula (III), formula (IV),
formula (V), formula (VI) and formula (VII) wherein R\\5\\ is COOH, COOalkyl or
CONR\\6\\R\\7\\ may be prepared as described in Scheme H. In Scheme H, all
substituents are as previously defined unless otherwise indicated.
Scheme H
[MOLECULAR DIAGRAM APPEARS HERE]
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Scheme H Cont.
[MOLECULAR DIAGRAM APPEARS HERE]
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Scheme H Cont.
[MOLECULAR DIAGRAM APPEARS HERE]
Scheme H provides various general synthetic procedures for preparing the
novel intermediates of formula (II), formula (III), formula (IV), formula
(V), formula (VI) and formula (VII) wherein R\\5\\ is COOH, COOalkyl or
CONR\\6\\R\\7\\.
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In step a, the nitrile functionality of the appropriate
(omega)-halo-cyanocumylketone compound of structure (19) is converted to the
corresponding ester by reaction with an appropriate C\\1\\ to C\\6\\ alcohol to
give the corresponding (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid ester compound of structure (31).
For example, the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid ester compound of structure (31) may be prepared by
reacting an appropriate (omega)-halo-cyanocumylketone compound of structure (19)
with an appropriate C\\1\\-C\\6\\ alcohol in the presence of a suitable
anhydrous acid followed by treatment with water. Examples of appropriate
alcohols are methanol, ethanol, propanol, and the like, with methanol being
preferred. Examples of appropriate acids are hydrogen chloride and hydrogen
bromide, with hydrogen chloride being preferred. The reaction time varies from
about 1/2 hour to 48 hours, preferably 3 to 5 hours and the reaction temperature
varies from about -20 degrees C to room temperature, preferably -10 degrees C to
0 degrees C. The (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid ester compound of structure (28) is recovered from the
reaction zone by evaporation of the solvent followed by extraction as is known
in the art. The (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic
acid ester compound of structure (31) may be purified by procedures well known
in the art, such as chromatography.
In step b, the nitrile functionality of the appropriate
(omega)-halo-cyanocumylketone compound of structure (19) is converted to the
corresponding amide to give the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)
- -dimethylphenylacetic acid amide compound of structure (40) wherein R\\6\\ and
R\\7\\ are both hydrogen.
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For example, hydrolysis may be achieved by using a suitable acid, such
as concentrated hydrochloric acid as is known in the art.
In step c, the carboxy ester functionality of the appropriate (omega)'-
halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (31) is hydrolyzed to give the corresponding (omega)'-halo-(alpha)'-
keto-(alpha),(alpha)-dimethylphenylacetic acid compound of structure (46).
For example, hydrolysis may be achieved by using a suitable
non-nucleophilic base, such as sodium methoxide in methanol as is known in the
art. Other methods known in the art for ester cleavage include potassium
carbonate in methanol, methanolic ammonia, potassium carbonate, potassium
hydroxide, calcium hydroxide, sodium hydroxide, magnesium hydroxide, sodium
hydroxide/pyridine in methanol, potassium cyanide in ethanol and sodium
hydroxide in aqueous alcohols, with potassium hydroxide being preferred. The
reaction is typically carried out in an aqueous lower alcohol solvent, such as
methanol, ethanol, isopropyl alcohol, n-butanol, 2-ethoxyethanol or ethylene
glycol or pyridine, at temperatures ranging from room temperature to the reflux
temperature of the solvent, and the reaction time varies from about 1/2 hour to
100 hours.
In step d, the carboxy functionality of the appropriate (omega)'-halo-
(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid compound of structure
(46) may be esterified by techniques and procedures well known and appreciated
by one of ordinary skill in the art to give the corresponding (omega)'-halo-
(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (31).
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For example, one such method involves reacting an appropriate (omega)'-
halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid compound of
structure (46) with an excess of an appropriate C\\1\\-C\\6\\ alcohol which is
straight or branched in the presence of a small amount of mineral acid, such as
hydrochloric acid or sulfuric acid, hydrochloric acid being preferred, at
reflux. Another suitable method involves reacting an appropriate (omega)'-halo-
(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid compound of structure
(46) with an excess of diazomethane in a suitable solvent such as ether at room
temperature to give the methyl ester. In addition, the (omega)'-halo-(alpha)'-
keto-(alpha),(alpha)-dimethylphenylacetic acid ester compound of structure (28)
may also be prepared by reacting an appropriate (omega)'-halo-(alpha)'-keto-
(alpha),(alpha)-di-methylphenylacetic acid compound of structure (46) with an
excess of 2,2-dimethoxypropane in a suitable solvent such as methanol at
0 degrees C to room temperature to give the methyl ester. Another suitable
method involves first reacting an appropriate (omega)'-halo-(alpha)'-keto-
(alpha),(alpha)-dimethylphenylacetic acid compound of structure (46) with
thionyl chloride in a suitable solvent such as methylene chloride to give an
intermediate acid chloride, followed by addition of a suitable C\\1\\ to C\\6\\
alcohol which is straight or branched. Another suitable method involves the
alkylation of the carboxylate anion with an appropriate electrophile, such as
dimethyl sulfate or ethyl bromide, to give the corresponding (omega)'-halo-
(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (31). Such methods are well known in the art and are described in J.
Org. Chem., 29, 2490-2491 (1964).
Alternatively, step k and step d may be combined and the (omega)'-halo-
(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (34) wherein n = 3 may be prepared from the corresponding
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid compound of structure
(50).
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Alternatively, step p, step k and step d may be combined and the
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid ester
compound of structure (31) wherein n = 3 may be prepared from the corresponding
cyclopropyl cyanocumylketone compound of structure (20).
In step e, the nitrile functionality of the appropriate
(omega)-halo-cyanocumylketone compound of structure (19) is converted to the
corresponding carboxy to give the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid compound of structure (46).
For example, hydrolysis may be achieved by using a suitable acid, such
as concentrated hydrochloric acid as is known in the art.
In step f, the amide functionality of the appropriate
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid amide
compound of structure (40) is converted to the corresponding acid by acid
hydrolysis as is known in the art to give the corresponding (omega)'-halo-
(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid compound of structure
(46).
For example, hydrolysis may be achieved by using a suitable non-
nucleophilic base, such as sodium methoxide in methanol as is known in the art.
Other methods known in the art for ester cleavage include potassium carbonate in
methanol, methanolic ammonia, potassium carbonate, potassium hydroxide, calcium
hydroxide, sodium hydroxide, magnesium hydroxide, sodium hydroxide/pyridine in
methanol, potassium cyanide in ethanol and sodium hydroxide in aqueous alcohols,
with potassium hydroxide being preferred. The reaction is typically carried out
in an aqueous lower alcohol solvent, such as methanol, ethanol, isopropyl
alcohol, n-butanol, 2-ethoxyethanol or ethylene glycol or
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pyridine, at temperatures ranging from room temperature to the reflux
temperature of the solvent, and the reaction time varies from about 1/2 hour to
100 hours.
In step g, the carboxy functionality of the appropriate (omega)'-halo-
(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid compound of structure
(46) may be amidated by techniques and procedures well known and appreciated by
one of ordinary skill in the art to give the corresponding (omega)'-halo-
(alpha)'-keto-(alpha),(alpha)-dimethyiphenylacetic acid amide compound of
structure (40).
In step h, the (alpha)-halo functionality of the appropriate (omega)-
halo-halocumylketone compound of structure (10) is carboxylated to give the
corresponding (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic
acid compound of structure (46).
For example, a solution of the appropriate (omega)-halo-halocumylketone
compound of structure (10) and a suitable catalyst, such as tetraethylammonium
bromide, in a suitable polar aprotic organic solvent, such as acetonitrile, N,N-
dimethylacetamide, 1-methyl-2-pyrrolidinone or dimethylformamide, are placed in
a jacketed glass cell and fitted with an expanded silver mesh cathode, magnesium
anode and carbon dioxide delivery tube. Rotation of the electrodes provides
stirring, while electrical contact with the electrodes is made via spring loaded
sliding carbon brushes placed against the concentric metal shafts (insulated
from each other with a length of plastic tubing) onto which the electrodes are
mounted. Carbon dioxide is introduced into the cell at pressures of 1-10 atm,
for a period of time ranging from 30 minutes to 50 hours and at a temperature
range of from -30 degrees C to 50 degrees C. The corresponding (omega)'-halo-
(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid compound of structure
(46) is isolated, after acidification with a
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suitable mineral acid, such as hydrochloric acid, by extractive methods as are
known in the art.
It is preferred that the (omega)-halo functionality of the appropriate
(omega)-halo-halocumylketone compound of structure (10) for use in step h be a
(omega)-chloro.
Alternatively, the treatment of appropriate (omega)-halo-halocumylketone
compound of structure (10) with a transition metal catalyst such as palladium,
nickel or cobalt, optionally in the presence of a phosphine catalysis using low
to modest pressures of carbon monoxide as described by Stahly et al. in U.S.
Patent 4,990,658, 1991 also provides the corresponding (omega)'-halo-(alpha)'-
keto-(alpha),(alpha)-dimethylphenylacetic acid compound of structure (46).
In step i, the appropriate the amide functionality of the appropriate
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-di-methylphenylacetic acid amide
compound of structure (40) is converted to the corresponding ester to give the
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid ester
compound of structure (31).
For example,the appropriate (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethyiphenylacetic acid amide compound of structure (40) is reacted with an
appropriate hydrogen halide in an appropriate organic solvent such as ethanol.
The reaction is typically conducted at a temperature range of from room
temperature to reflux and for a period of time ranging from 5 minutes to 1 hour.
The (omega)'-halo-(alpha)'-keto-(alpha),(alpha)dimethylphenylacetic acid ester
compound of structure (31) is recovered from the reaction zone by extractive
methods as is known in the art.
In step j, the appropriate (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid compound of structure (46)
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wherein n = 3 is ring-closed to give the corresponding cyclopropylketo-(alpha),
(alpha)-dimethylphenylacetic acid compound of structure (47) as described
previously in Scheme A, step k.
In step k, the appropriate cyclopropylketo-(alpha),(alpha)-
dimethylphenylacetic acid compound of structure (47) is ring-opened to give the
corresponding (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic
acid compound of structure (46) wherein n = 3 as described previously in Scheme
A, step j.
In step 1, the nitrile functionality of the appropriate cyclopropyl
cyanocumylketone compound of structure (20) is converted to the corresponding
ester by reaction with an appropriate C\\1\\ to C\\6\\ alcohol to give the
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (32) as described previously in step a.
In step m, the nitrile functionality of the appropriate cyclopropyl
cyanocumylketone compound of structure (20) is converted to the corresponding
amide to give the (omega)'-halo-(alpha)-keto-(alpha),(alpha)-
di-methylphenylacetic acid amide compound of structure (41) wherein R\\6\\ and
R\\7\\ are both hydrogen as described previously in step b.
In step n, the carboxy ester functionality of the appropriate
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (32) is hydrolyzed to give the corresponding cyclopropylketo-
(alpha),(alpha)-dimethylphenylacetic acid compound of structure (47) as
described previously in step c.
In step o, the carboxy functionality of the appropriate
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid compound of structure
(47) may be esterified by techniques and procedures well known and appreciated
by one of ordinary
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skill in the art to give the corresponding cyclopropylketo-(alpha),
(alpha)-dimethylphenylacetic acid ester compound of structure (32) as described
previously in step d.
In step p, the nitrile functionality of the appropriate cyclopropyl
cyanocumylketone compound of structure (20) is converted to the corresponding
carboxy to give the cylopropylketo-(alpha),(alpha)-dimethylphenylacetic acid
compound of structure (47) as described previously in step e.
In step q, the amide functionality of the appropriate
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid amide compound of
structure (41) is converted to the corresponding acid by acid hydrolysis as is
known in the art to give the corresponding cyclopropylketo-(alpha),(alpha)-
dimethylphenylacetic acid compound of structure (47) as described previously in
step f.
In addition, step q and step k may be combined and the
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid compound
of structure (46) wherein n = 3 may be prepared from the corresponding
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid amide compound of
structure (41) as described previously in Scheme A, step j.
In step r, the carboxy functionality of the appropriate
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid compound of structure
(47) may be amidated by techniques and procedures well known and appreciated by
one of ordinary skill in the art to give the corresponding cyclopropylketo-
(alpha),(alpha)-dimethylphenylacetic acid amide compound of structure (41) as
described previously in step g.
In step s, the (alpha)-halo functionality of the appropriate cyclopropyl
halocumylketone compound of structure (11) is
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carboxylated to give the corresponding cyclopropylketo-(alpha),(alpha)-
dimethylphenylacetic acid compound of structure (47) as described previously in
step h.
In step t, the appropriate the amide functionality of the appropriate
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid amide compound of
structure (41) is converted to the corresponding ester to give the
cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (32) as described previously in step i.
In step u, the nitrile functionality of the appropriate (omega)-halo-
cyanoethylphenylketone compound of structure (21) is converted to the
corresponding ester by reaction with an appropriate C\\1\\ to C\\6\\ alcohol to
give the (omega)'-halo-(alpha)'-keto-(alpha)-methylphenylacetic acid ester
compound of structure (33) as described previously in step a.
In step v, the nitrile functionality of the appropriate (omega)-halo-
cyanoethylphenylketone compound of structure (21) is converted to the
corresponding amide to give the (omega)'-halo-(alpha)'-keto-(alpha)-
methylphenylacetic acid amide compound of structure (42) wherein R\\6\\ and
R\\7\\ are both hydrogen as described previously in step b.
In step w, the carboxy ester functionality of the appropriate (omega)'-
halo-(alpha)'-keto-(alpha)-methylphenylacetic acid ester compound of structure
(33) is hydrolyzed to give the corresponding (omega)'-halo-(alpha)'-keto-
(alpha)-methylphenylacetic acid compound of structure (48) as described
previously in step c.
In step x, the carboxy functionality of the appropriate (omega)'-halo-
(alpha)'-keto-(alpha)-methylphenylacetic acid compound of structure (48) may be
esterified by techniques and
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procedures well known and appreciated by one of ordinary skill in the art to
give the corresponding (omega)'-halo-(alpha)'-keto-(alpha)'-methylphenylacetic
acid ester compound of structure (33) as described previously in step d.
Alternatively, step ee and step x may be combined and the (omega)'-halo-
(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (33) wherein n = 3 may be prepared from the corresponding
cyclopropylketo-(alpha)-methylphenylacetic acid compound of structure (49) as
described previously in step d.
Alternatively, step jj, step ee and step x may be combined and the
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid ester
compound of structure (33) wherein n = 3 may be prepared from the corresponding
cyclopropyl cyanoethylphenylketone compound of structure (23) as described
previously in step d.
In step y, the nitrile functionality of the appropriate (omega)-halo-
cyanoethylphenylketone compound of structure (21) is converted to the
corresponding carboxy to give the (omega)'-halo-(alpha)'-keto-(alpha)-
methylphenylacetic acid compound of structure (48) as described previously in
step e.
In step z, the amide functionality of the appropriate (omega)'-halo-
(alpha)'-keto-(alpha)-methylphenylacetic acid amide compound of structure (42)
is converted to the corresponding acid by acid hydrolysis as is known in the art
to give the (omega)'-halo-(alpha)'-keto-(alpha)-methylphenylacetic acid compound
of structure (48) as described previously in step f.
In step aa, the carboxy functionality of the appropriate (omega)'-halo-
(alpha)'-keto-(alpha)-methylphenylacetic acid compound of structure (48) may be
amidated by techniques
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<PAGE>
and procedures well known and appreciated by one of ordinary skill in the art to
give the corresponding (omega)'-halo-(alpha)'-keto-(alpha)-methylphenylacetic
acid amide compound of structure (42) as described previously in step g.
In step bb, the (alpha)-halo functionality of the appropriate (omega)-
halo-haloethylphenylketone compound of structure (12) is carboxylated to give
the corresponding (omega)'-halo-(alpha)'-keto-(alpha)-methylphenylacetic acid
compound of structure (48) as described previously in step h.
In step cc, the appropriate the amide functionality of the appropriate
(omega)'-halo-(alpha)'-keto-(alpha)-methylphenylacetic acid amide compound of
structure (42) is converted to the corresponding ester to give the (omega)'
- -halo-(alpha)'-keto-(alpha)-methylphenylacetic acid ester compound of structure
(33) as described previously in step i.
In step dd, the appropriate (omega)'-halo-(alpha)'-keto-(alpha)-
methylphenylacetic acid compound of structure (48) wherein n = 3 is ring-closed
to give the corresponding cyclopropylketo-(alpha)-methylphenylacetic acid
compound of structure (49) as described previously in Scheme A, step k.
In step ee, the appropriate cyclopropylketo-(alpha)-methylphenylacetic
acid compound of structure (49) is ring-opened to give the corresponding
(omega)'-halo-(alpha)'-keto-(alpha)-methylphenylacetic acid compound of
structure (48) wherein n = 3 as described previously in Scheme A, step j.
In step ff, the nitrile functionality of the appropriate cyclopropyl
cyanoethylphenylketone compound of structure (23) is converted to the
corresponding ester by reaction with an appropriate C\\1\\ to C\\6\\ alcohol to
give the
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<PAGE>
cyclopropylketo-(alpha)-methylphenylacetic acid ester compound of structure (35)
as described previously in step a.
In step gg, the nitrile functionality of the appropriate cyclopropyl
cyanoethylphenylketone compound of structure (23) is converted to the
corresponding amide to give the cyclopropylketo-(alpha)-methylphenylacetic acid
amide compound of structure (44) wherein R\\6\\ and R\\7\\ are both hydrogen as
described previously in step b.
In step hh, the carboxy ester functionality of the appropriate
cyclopropylketo-(alpha)-methylphenylacetic acid ester compound of structure (35)
is hydrolyzed to give the corresponding cyclopropylketo-(alpha)-
methylphenylacetic acid compound of structure (49) as described previously in
step c.
In step ii, the carboxy functionality of the appropriate
cyclopropylketo-(alpha)-methylphenylacetic acid compound of structure (49) may
be esterified by techniques and procedures well known and appreciated by one of
ordinary skill in the art to give the corresponding cyclopropylketo-(alpha)-
methylphenylacetic acid ester compound of structure (35) as described previously
in step d.
In step jj, the nitrile functionality of the appropriate cyclopropyl
cyanoethylphenylketone compound of structure (23) is converted to the
corresponding carboxy to give the cyclopropylketo-(alpha)-methylphenylacetic
acid compound of structure (49) as described previously in step e.
In step kk, the amide functionality of the appropriate cyclopropylketo-
(alpha)-methylphenylacetic acid amide compound of structure (44) is converted to
the corresponding acid by acid hydrolysis as is known in the art to give the
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corresponding cyclopropylketo-(alpha)-methylphenylacetic acid compound of
structure (49) as described previously in step f.
In addition, step kk and step ee may be combined and the (omega)'-halo-
(alpha)'-keto-(alpha)-methylphenylacetic acid compound of structure (48) wherein
n = 3 may be prepared from the corresponding cyclopropylketo-(alpha)-
methylphenylacetic acid amide compound of structure (44) as described previously
in Scheme A, step j.
In step 11, the carboxy functionality of the appropriate
cyclopropylketo-(alpha)-methylphenylacetic acid compound of structure (49) may
be amidated by techniques and procedures well known and appreciated by one of
ordinary skill in the art to give the corresponding cyclopropylketo-(alpha)-
methylphenylacetic acid amide compound of structure (44) as described previously
in step g.
In step mm, the (alpha)-halo functionality of the appropriate
cyclopropyl haloethylphenylketone compound of structure (14) is carboxylated to
give the corresponding cyclopropylketo-(alpha)-methylphenylacetic acid compound
of structure (49) as described previously in step h.
In step nn, the appropriate the amide functionality of the appropriate
(omega)'-halo-(alpha)'-keto-(alpha)-methylphenylacetic acid amide compound of
structure (42) is converted to the corresponding ester to give the (omega)'
- -halo-(alpha)'-keto-(alpha)-methylphenylacetic acid ester compound of structure
(33) as described previously in step i.
In step oo, the nitrile functionality of the appropriate (omega)-halo
cyanotolylketone compound of structure (22) is converted to the corresponding
ester by reaction
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with an appropriate C\\1\\ to C\\6\\ alcohol to give the (omega)'-halo-(alpha)'-
keto-phenylacetic acid ester compound of structure (34) as described previously
in step a.
In step pp, the nitrile functionality of the appropriate (omega)-halo
cyanotolylketone compound of structure (22) is converted to the corresponding
amide to give the (omega)'-halo-(alpha)'-keto-phenylacetic acid amide compound
of structure (43) wherein R\\6\\ and R\\7\\ are both hydrogen as described
previously in step b.
In step qq, the carboxy ester functionality of the appropriate (omega)'-
halo-(alpha)'-keto-phenylacetic acid ester compound of structure (34) is
hydrolyzed to give the corresponding (omega)'-halo-(alpha)'-keto-
methylphenylacetic acid compound of structure (50) as described previously in
step c.
In step rr, the carboxy functionality of the appropriate (omega)'-halo-
(alpha)'-keto-methylphenylacetic acid compound of structure (50) may be
esterified by techniques and procedures well known and appreciated by one of
ordinary skill in the art to give the corresponding (omega)'-halo-(alpha)'-keto-
phenylacetic acid ester compound of structure (34) as described previously in
step d.
Alternatively, step yy and step rr may be combined and the (omega)'-
halo-(alpha)'-keto-phenylacetic acid ester compound of structure (34) wherein n
= 3 may be prepared from the corresponding (omega)'-halo-(alpha)'-keto-
methylphenylacetic acid compound of structure (50) as described previously in
step d.
Alternatively, step ddd, step yy and step rr may be combined the
(omega)'-halo-(alpha)'-keto-phenylacetic acid ester
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compound of structure (34) wherein n = 3 may be prepared from the corresponding
cyclopropyl cyanotolylketone compound of structure (24) as described previously
in step d.
In step ss, the nitrile functionality of the appropriate (omega)-halo
cyanotolylketone compound of structure (22) is converted to the corresponding
carboxy to give the (omega)'-halo-(alpha)'-keto-methylphenylacetic acid compound
of structure (50) as described previously in step e.
In step tt, the amide functionality of the appropriate (omega)'-halo-
(alpha)'-keto-phenylacetic acid amide compound of structure (43) is converted to
the corresponding acid by acid hydrolysis as is known in the art to give the
(omega)'-halo-(alpha)'-keto-methylphenylacetic acid compound of structure (50)
as described previously in step f.
In step uu, the carboxy functionality of the appropriate (omega)'-halo-
(alpha)'-keto-methylphenylacetic acid compound of structure (50) may be amidated
by techniques and procedures well known and appreciated by one of ordinary skill
in the art to give the corresponding (omega)'-halo-(alpha)'-keto-phenylacetic
acid amide compound of structure (43) as described previously in step g.
In step vv, the (alpha)-halo functionality of the appropriate (alpha)-
halo halotolylketone compound of structure (13) is carboxylated to give the
corresponding (omega)'-halo-(alpha)'-keto-methyiphenylacetic acid compound of
structure (50) as described previously in step h.
In step ww, the appropriate the amide functionality of the appropriate
(omega)'-halo-(alpha)'-keto-phenylacetic acid amide compound of structure (43)
is converted to the
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<PAGE>
corresponding ester to give the (omega)'-halo-(alpha)'-keto-phenylacetic acid
ester compound of structure (34) as described previously in step i.
In step xx, the appropriate (omega)'-halo-(alpha)'-keto-
methyiphenylacetic acid compound of structure (50) wherein n = 3 is ring-closed
to give the corresponding cyclopropylketo-phenylacetic acid compound of
structure (51) as described previously in Scheme A, step k.
In step yy, the appropriate cyclopropylketophenylacetic acid compound of
structure (51) is ring-opened to give the corresponding (omega)'-halo-(alpha)'-
keto-methylphenylacetic acid compound of structure (50) wherein n = 3 as
described previously in Scheme A, step j.
In step zz, the nitrile functionality of the appropriate cyclopropyl
cyanotolylketone compound of structure (24) is converted to the corresponding
ester by reaction with an appropriate C\\1\\ to C\\6\\ alcohol to give the
cyclopropylketo-phenylacetic acid ester compound of structure (36) as described
previously in step a.
In step aaa, the nitrile functionality of the appropriate cyclopropyl
cyanotolylketone compound of structure (24) is converted to the corresponding
amide to give the cyclopropylketo-phenylacetic acid amide compound of structure
(45) wherein R\\6\\ and R\\7\\ are both hydrogen as described previously in step
b.
In step bbb, the carboxy ester functionality of the appropriate
cyclopropylketo-phenylacetic acid ester compound of structure (36) is hydrolyzed
to give the corresponding cyclopropylketo-phenylacetic acid compound of
structure (51) as described previously in step c.
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<PAGE>
In step ccc, the carboxy functionality of the appropriate
cyclopropylketo-phenylacetic acid compound of structure (51) may be esterified
by techniques and procedures well known and appreciated by one of ordinary skill
in the art to give the corresponding cyclopropylketo-phenylacetic acid ester
compound of structure (36) as described previously in step d.
In step ddd, the nitrile functionality of the appropriate cyclopropyl
cyanotolylketone compound of structure (24) is converted to the corresponding
carboxy to give the cyclopropylketo-phenylacetic acid compound of structure (51)
as described previously in step e.
In step eee, the amide functionality of the appropriate
cyclopropylketo-phenylacetic acid amide compound of structure (45) is converted
to the corresponding acid by acid hydrolysis as is known in the art to give the
corresponding cyclopropylketo-phenylacetic acid compound of structure (51) as
described previously in step f.
In addition, step yy and step eee may be combined and the
(omega)'-halo-(alpha)'-keto-methylphenylacetic acid compound of structure (50)
wherein n = 3 may be prepared from the corresponding cyclopropylketo-
phenylacetic acid amide compound of structure (45) as described previously in
Scheme A, step j.
In step fff, the carboxy functionality of the appropriate
cyclopropylketo-phenylacetic acid compound of structure (51) may be amidated by
techniques and procedures well known and appreciated by one of ordinary skill in
the art to give the corresponding cyclopropylketo-phenylacetic
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<PAGE>
acid amide compound of structure (45) as described previously in step g.
In step ggg, the (alpha)-halo functionality of the appropriate
cyclopropyl halotolylketone of structure (15) is carboxylated to give the
corresponding cyclopropylketo-phenylacetic acid compound of structure (51) as
described preyiously in step h.
In step hhh, the appropriate the amide functionality of the appropriate
cyclopropylketo-phenylacetic acid amide compound of structure (45) is converted
to the corresponding ester to give the cyclopropylketo-phenylacetic acid ester
compound of structure (36) as described previously in step i.
Starting materials for use in Scheme H are readily available to one of
ordinary skill in the art.
The following examples present typical syntheses as described in Scheme
H. These examples are understood to be illustrative only and are not intended to
limit the scope of the present invention in any way. As used herein, the
following terms have the indicated meanings: "g" refers to grams; "mmol" refers
to millimoles; "mL" refers to milliliters; "bp" refers to boiling point;
degrees C refers to degrees Celsius; "mm Hg" refers to millimeters of mercury;
"(mu)L" refers to microliters; "(mu)g" refers to micrograms; and "(mu)M"
refers to micromolar.
Example 17
----------
Step a: 2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid, methyl ester
- -------------------------------------------------------------------------------
Place anhydrous methanol (5mL) under argon, cool to 0 degree C and add hydrogen
chloride until saturated. Add 2-[4-(4-chloro-
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butyryl)-phenyl]-2-methyl-propionitrile (lO3mg, 4.l2mmol), remove the ice bath
and stir for 5 hours at room temperature. Allow to stand at -10 degrees C
overnight, and stir an additional 3 hours at room temperature. Pour into cracked
ice (20g) and allow to stand for 5 minutes. Evaporate the solvent in vacuo to
1/2 volume, dilute with water and extract with methylene chloride (3X). Combine
the organic layers, wash with saturated sodium hydrogen carbonate and brine. Dry
(MgSO\\4\\), filter and evaporate the solvent in vacuo. Extract the residue into
hot hexane (l2mL), filter hot and evaporate the solvent in vacuo to give the
title compound as a colorless oil (97mg, 83%).
Example 18
Step d: 2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid, ethyl ester
- -------------------------------------------------------------------------------
Add anhydrous hydrogen chloride gas (18.0g) to anhydrous ethanol DB (210g) by
purging the solution. Add this hot solution (60 degrees C) to a solution of
2-[4-(4-chloro-butyryl)-phenyl]-2-methyl-propionic acid (31g, ll5.6mmol) and
reflux under a nitrogen atmosphere for 2.5 hours. Evaporate the solvent in vacuo
dissolve the residue in methylene chloride (l50mL) and wash with water
(2X100mL). Dry (MgSO\\4\\), filter through silica gel, washing the gel with
methylene chloride (250mL). Combine the organic washings and evaporate the
solvent in vacuo to give the title compound as a colorless oil (33.3g, 97%).
/1/H NMR (300MHz, CDCl\\3\\) (delta) 7.96 (d, J=8.3Hz, 2H), 7.45 (d, J=8.3Hz,
2H), 4.15 (q, J=7.lHz, 2H), 3.70 (t, J=6.6Hz, 2H), 3.19 (t, J=6.8Hz, 2H), 2.25
(p, J=6.6Hz, 2H), 1.61 (s, 6H), 1.20 (q, J=7.lHz, 3H); /13/C NMR (75 MHz,
CDC1\\3\\) (delta) 198.4, 176.0, 150.3, 135.1, 128.1, 126.0, 61.0, 46.8, 44.6,
35.2, 26.7, 26.3, 14.0; IR (neat) 2978, 1728, 1686, 1606, 1254, 1231, 1148, 1097
cm-/1/
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Anal. Calcd for C\\16\\H\\21\\O\\3\\C1: C, 64.75; H, 7.13;
Found: C, 64.24; H, 7.18.
Example 19
----------
Step d: 2-[4-(4-Chloro-butyryl)-phenvl]-2-methyl-propionic acid, methyl ester
- -------------------------------------------------------------------------------
Dissolve 2-[4-(4-chloro-butyryl)-phenyl]-2-methyl-propionic acid (6.2g,
23.lmmol) in hot methanolic solution of anhydrous hydrogen chloride (42mL of a
methanol containing 3.2g of anhydrous hydrogen chloride). Reflux for 42 minutes,
evaporate the solvent in vacuo, dissolve the residue in methylene chloride and
wash with water. Dry (MgSO\\4\\), filter through silica gel, washing the gel
with methylene chloride. Combine the organic washings and evaporate the solvent
in vacuo to give the title compound as a clear oil (6.21g, 94%).
/1/H NMR (30MHz, CDC1\\3\\) (delta) 7.95 (d, J=8.5Hz, 2H), 7.44 (d, J=8.5Hz,
2H), 3.66 (s, 3H), 3.67 (t, J=6.6Hz, 2H), 3.17 (t, J=6.6Hz, 2H), 2.30 (p,
J=6.6Hz, 2H), 1.61 (s, 6H); /13/C NMR (75 MHz, CDC1\\3\\) (delta) 198.0, 176.2,
149.8, 135.0, 128.0, 125.8, 52.4, 46.9, 44.7, 35.3, 26.8, 26.5.
Anal. Calcd for C\\15\\H\\19\\O\\3\\C1: C, 63.72; H, 6.77;
Found: C, 63.50; H, 6.67.
Example 20
----------
Step d: 2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid, methyl ester
- -------------------------------------------------------------------------------
Mix 2-[4-(4-chloro-butyryl)-phenyl]-2-methyl-propionic acid (10.0g, 37.3mmol)
and anhydrous potassium carbonate (3.5g, 25.3mmol). Heat to 40 degrees C in
acetonitrile (l00mL) and stir under a nitrogen atmosphere. Add dimethyl sulfate
(13.3g, l05mmol) and reflux for 45 minutes. Evaporate the solvent
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in vacuo, dissolve the residue in ethyl acetate (50mL) and wash with water
(4X50mL). Dry (MgSO\\4\\), filter through silica gel and evaporate the solvent
in vacuo to give the title compound (6.4g, 89%).
Example 21
----------
Step h: 2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid
- ---------------------------------------------------------------
Fit a jacketed glass cell of about 6L capacity with a rotating expanded silver
mesh cathode/magnesium anode assembly, a carbon dioxide delivery tube, and a
stainless steel thermocouple. Load the cell with acetonitrile (5.8L) and
tetraethylammonium bromide (26g). Sparge with carbon dioxide and cool in cooling
bath. When the contents of the cell reach -10 degrees C, add hydrogen chloride
remediated l-[4-(l-bromo-l-methyl-ethyl)-phenyl]-4-chloro-butan-l-one and 1-[4-
(1-chloro-l-methyl-ethyl)-phenyl]-4-chloro-butan-l-one (424.9g, 53.5 mole %
bromo and 20.4 mole % chloro by HPLC analysis, 1087 mmol total active tertiary
benzylic halide) and perform electrolysis at a controlled current of 8 amps (20
mA cm/-2/) for 6 hours. Drain the contents, acidify with chilled aqueous 6M
hydrochloric acid, extract, evaporate the solvent in vacuo and recrystallize to
give the title compound (186g, 64%); 78.5-80.3 degrees C.
/1/H NMR (300MHz, CDCl\\3\\) (delta) 10.5 (br s, 2H), 7.96 (d, J=8.2Hz, 2H),
7.50 (d, J=8.2Hz, 2H), 3.67 (t, J=6.8Hz, 2H), 3.17 (t, J=6.8Hz, 2H), 2.22 (m,
J=6.7Hz, 2H), 1.63 (s, 6H); /13/C NMR (75MHz, CDCl\\3\\) (delta) 198.2, 181.9,
149.0, 135.2, 128.1, 126.1, 46.7, 44.7, 35.3, 26.9, 26.7; MS (CIMS (Methane))
271 (3), 269 (11), 233 (100), 187 (75).
Anal. Calcd for C\\14\\H\\17\\O\\3\\C1: C, 62.57; H, 6.38;
Found: C, 63.10; H, 6.59.
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<PAGE>
Example 22
----------
Step h: 2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid
- ---------------------------------------------------------------
Fit a jacketed glass cell of about 50ml capacity with an expanded silver mesh
cathode (14 cm/2/ geometric area), a roughly concentric magnesium sacrificial
anode, a tube to deliver carbon dioxide gas and a magnetic stir bar. Add a
solution of hydrogen chloride remediated 1-[4-(l-bromo-1-methyl-ethyl)-phenyl]-
4-chloro-butan-l-one and l-[4-(1-chloro-l-methyl-ethyl)-phenyl]-4-chloro-butan-l
- -one (2.79g, 89 mole %, 3:1 ratio of tertiary benzylic bromide to tertiary
benzylic chloride by NMR, approximately 8.6mmol total active tertiary benzylic
halide) in acetonitrile (45mL) and tetraethylammonium bromide (0.19g). Close the
cell and cool to -10 degrees C with a continuous carbon dioxide sparge for 169
minutes at an average current density of 13 mA cm/-2/. Warm to contents of the
cell to ambient temperature, drain the contents, acidify with chilled aqueous 6M
hydrochloric acid, extract and evaporate the solvent in vacuo to give the title
compound (l.53g, 66%).
Example 23
----------
Step h: 2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid
- ---------------------------------------------------------------
Fit a jacketed glass cell of 50mL capacity with an expanded silver mesh cathode
(14 cm2 geometric area), a roughly concentric magnesium sacrificial anode, a
tube to deliver carbon dioxide gas, and a magnetic stir bar. Cool the cell
to -10 degrees C under carbon dioxide. Add a solution of tetraethylammonium
chloride (40mL of a 0.02M solution in dimethylformamide) and
l-[4-(1-chloro-l-methyl-ethyl)-phenyl]-4-chloro-butan-1-one (2.91g, 85% pure
by NMR, 9.8lmmol) and carry out electrolysis for 178 minutes at an average
current density of 12.4 mA cm-2: the total charge passed is equal to 98% of
the calculated theoretical two
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<PAGE>
electron value. Warm the contents of the cell to ambient temperature, drain the
contents, acidify with chilled aqueous 6M hydrochloric acid, extract and
evaporate the solvent in vacuo to give the title compound (l.89g, 72%).
Example 24
----------
Step m: 2-(4-Cyclopropanecarbonyl-phenyl)-2-methyl-propionamide
- ---------------------------------------------------------------
Dissolve 2-(4-cyclopropanecarbonyl-phenyl)-2-methyl-propionitrile (lOOmg) in
aqueous ethanolic potassium hydroxide (2mL) (prepared from ethanol (5mL), water
(5mL) and solid potassium hydroxide (l.5g). Stir overnight at room temperature,
then heat at reflux for 6 hours. Cool and evaporate the solvent in vacuo to give
the title compound.
Example 25
----------
Step t: 2-(4-Cyclopropanecarbonyl-phenyl)-2-methyl-propionic acid, ethyl ester
- ------------------------------------------------------------------------------
Dissolve 2-(4-cyclopropanecarbonyl-phenyl)-2-methyl-propionamide (100mg) in
ethanol and bubble in hydrochloride gas for 5 minutes while stirring. Reflux for
10 hours, distill off the ethanol and extract into ethyl acetate. Evaporate the
solvent in vacuo to give the title compound as an oil (50mg).
Example 26
----------
Step k and step g: 2-[4-(4-Bromo-butyryl)-phenyl]-2-methyl-propionic acid
- -------------------------------------------------------------------------
Treat 2-(4-cyclopropanecarbonyl-phenyl)-2-methyl-N-methyl-N-methoxy propionamide
(0.l5g, 0.53mmol) with 48% HBr (1mL) for 2 hours at 80 degrees C. Cool to room
temperature, dilute with water (5mL) and neutralize with aqueous sodium hydrogen
carbonate until pH 7. Extract with methylene chloride (3X15mL), dry
(Na\\2\\SO\\4\\), filter and evaporate the solvent in
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vacuo. Purify by silica gel chromatography (3:1 hexane/ethyl acetate) to give
the title compound (0.l5g, 95%).
\\1\\H NMR (CDCl\\3\\) (delta) 7.97 (d, 2H), 7.51 (d, 2H), 3.53 (t, 2H), 3.16
(t, 2H), 2.30 (quin, 2H), 1.60 (5, 6H);/13/C NMR (CDC1\\3\\) (delta) 198.4,
181.8, 149.5, 131.0, 128.3, 126.3, 46.6, 36.5, 33.6, 26.9, 26.1; MS (CI)
(M/+/+H) 303 (100), 315 (98), 233 (80).
Example 27
----------
Step P: 2-(4-Cyclopropanecarbonyl-phenyl)-2-methyl-propionic acid
- -----------------------------------------------------------------
Combine 2-(4-cyclopropanecarbonyl-phenyl)-2-methyl-propionitrile (0.5g) in 12.5%
sodium hydroxide (20mL) and ethanol (12.5mL). Heat to reflux for 21 hours, cool
and remove the ethanol by vacuum distillation. Extract the residual aqueous
suspension with methylene chloride (40mL), acidify the aqueous phase with 20%
HCl and extract with methylene chloride (2X40mL). Combine the organic phases,
dry (Na\\2\\SO\\4\\) and evaporate the solvent in vacuo to give the title
compound as a crystalline solid (350mg, 70%); mp 83-85 degrees C.
/1/H NMR (CDCl\\3\\) (delta) 7.50-8.00 (4H, d), 2.66 (1H, m), 1.62 (6H, S),
1.24 (2H, m), 1.04 (2H, m).
The following compounds can be prepared by using the procedures depicted
in Scheme H:
(4-Cyclopropanecarbonyl-phenyl)-acetic acid;
2-(4-Cyclopropanecarbonyl-phenyl)-propionic acid;
2-(4-Cyclopropanecarbonyl-phenyl)-2-methyl-propionic acid;
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<PAGE>
[4-(4-Chloro-butyryl)-phenyl)-acetic acid;
2-[4-(4-Chloro-butyryl)-phenyl]-propionic acid;
2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid;
(4-Cyclopropanecarbonyl-phenyl)-acetic acid, ethyl ester;
2-(4-Cyclopropanecarbonyl-phenyl)-propionic acid, ethyl ester;
[4-(4-Chloro-butyryl)-phenyl]-acetic acid, ethyl ester;
2-[4-(4-Chloro-butyryl)-phenyl]-propionic acid, ethyl ester;
2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionic acid, ethyl ester;
(4-Cyclopropanecarbonyl-phenyl)-acetamide;
2-(4-Cyclopropanecarbonyl-phenyl)-propionamide;
[4-(4-Chloro-butyryl)-phenyl]-acetamide;
2-[4-(4-Chloro-butyryl)-phenyl]-propionamide;
2-[4-(4-Chloro-butyryl)-phenyl]-2-methyl-propionamide;
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<PAGE>
The novel intermediates of formula (X) may be prepared as described in
Scheme I. In Scheme I, all substituents are as previously defined unless
otherwise indicated.
Scheme I
[MOLECULAR DIAGRAM APPEARS HERE]
Scheme I provides various general synthetic procedures for preparing the
novel intermediates of formula (X).
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<PAGE>
In step a, the ketone functionality of the appropriate
(omega)-halo-halocumylketone compound of structure (10) is reduced to give the
corresponding (omega)-halo-halocumylalcohol compound of structure (52).
For example, reduction of the appropriate (omega)-halo-halocumylketone
compound of structure (10), using, for example, a suitable reducing agent such
as sodium borohydride, potassium borohydride, sodium cyanoborohydride, or
tetramethylammonium borohydride is carried out in lower alcohol solvents, such
as, methanol, ethanol, isopropyl alcohol or n-butanol at temperatures ranging
from about 0 degrees C to the reflux temperature of the solvent, and the
reaction time varies from about 1/2 hour to 8 hours. Other suitable reducing
agents are, for example, lithium tri-tert-butylaluminohydride and
diisobutylaluminum hydride. These reduction reactions are carried out in
suitable solvents diethyl ether, tetrahydrofuran or dioxane at temperatures
ranging from about 0 degrees C to the reflux temperature of the solvent, and the
reaction time varies from about 1/2 hour to 8 hours.
Catalytic reduction may also be employed in the preparation of
appropriate (omega)-halo-halocumylalcohol compound of structure (52) from an
appropriate (omega)-halohalocumylketone compound of structure (10), using
hydrogen gas in the presence of a suitable catalyst such as Raney nickel,
palladium, platinum or rhodium catalysts in lower alcohol solvents, such as,
methanol, ethanol, isopropyl alcohol or n-butanol or acetic acid or their
aqueous mixtures, or by the use of aluminum isopropoxide in isopropyl alcohol.
In addition, a chiral reduction of the appropriate
(omega)-halo-halocumylketone compound of structure (10), using, for
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<PAGE>
example, (+)-B-chlorodiisopinocamphenylborane gives the corresponding (R)-
(omega)-ha1o-ha1ocumy1a1coho1 compound of structure (52) and (-)-B-
chlorodiisopinocamphenylborane gives the corresponding (S)-(omega)-ha1o-
ha1ocumy1a1cohol compound of structure (52). Other suitable chiral reducing
agents are, (R) and (S)-oxazaborolidine/BH\\3\\, potassium 9-O-(1, 2:5, 6-di-O-
isopropylidine-(alpha)-D-g1ucofuransoyl)-9-boratabicyclo[3.3.l]nonane, (R) and
(S)-B-3-pinanyl-9-borabicyclo[3.3.l]nonane, NB-Enantride, Lithium (R)-(+) and
(S)-(-)-2,2'-dihydroxy-1,l'-binaphthyl alkoxyl aluminum hydride, (R)-(+) and
(S)-(-)-2,2'- dihydroxy-6, 6'-dimethylbiphenyl borane-amine complex,
tris[[(lS,2S,5R)-2-isopropyl-5-methyl-cyclohex-l-yl]methyl]aluminum, [[(lR,3R)-
2,2-dimethylbicyclo[2.2.1]hept-3-yl]methyl]beryllium chloride, (R)-BINAP-
ruthenium complex H\\2\\ and 6,6'-bis(diphenylphosphino)-3,3'-dimethoxy-2,2',4,
4'-tetramethyl-l, 1'-biphenyl.
In step b, the ketone functionality of the appropriate (omega)-halo-
cyanocumylketone compound of structure (19) is reduced to give the corresponding
(omega)-halo-cyanocumylalcohol compound of structure (53) as described
previously in step a.
In step c, the ketone functionality of the appropriate (omega)-halo-
cyanocumylketone compound of structure (8) is reduced to give the corresponding
(omega)-halo-cyanocumylalcohol compound of structure (54) as described
previously in step a.
In step d, the (alpha)-halo functionality of the appropriate
(omega)-halo-halocumylalcohol compound of structure (52) is cyanated to give the
corresponding (omega)-halo-cyanocumylalcohol compound of structure (53) as
described previously in Scheme D, step a.
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<PAGE>
In step e, the appropriate (omega)-halo-cyanocumylalcohol compound of
structure (54) is cyanated to give the corresponding (omega)-halo-
cyanocumylalcohol compound of structure (53) as described previously in Scheme
D, step b.
In step f, the appropriate appropriate (omega)-halocyanocumylalcohol
compound of structure (54) is halogenated to give the corresponding (omega)-
halo-halocumylalcohol compound of structure (52) as described previously in
Scheme B, step a.
In step g, the (alpha)-halo functionality of the appropriate (omega)-
halo-halocumylalcohol compound of structure (52) is converted to the
corresponding carboxy to give the (omega)'-halo-(alpha)'-hydroxy-(alpha),
(alpha)-dimethylphenylacetic acid compound of structure (56) as described
previously in Scheme H, step h.
In step h, the nitrile functionality of the appropriate (omega)-halo-
cyanocumylalcohol compound of structure (53) is converted to the corresponding
ester to give the (omega)'-halo-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenylacetic acid ester compound of structure (55) as described
previously in Scheme H, step a.
In step i, the nitrile functionality of the appropriate (omega)-halo-
cyanocumylalcohol compound of structure (53) is converted to the corresponding
acid to give the (omega)'-halo-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenylacetic acid compound of structure (56) as described previously in
Scheme H, step e.
In step j, the nitrile functionality of the appropriate (omega)-halo-
cyanocumylalcohol compound of structure (53) is converted to the corresponding
amide to give the (omega)'-halo-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenylacetic acid amide compound of
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<PAGE>
structure (57) wherein R\\6\\ and R\\7\\ are each hydrogen as described
previously in Scheme H, step b.
In step k, the ketone functionality of the appropriate
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid ester
compound of structure (31) is reduced to give the corresponding (omega)'-halo-
(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenylacetic acid ester compound of
structure (55) as described previously in step a.
In step 1, the ketone functionality of the appropriate
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid compound
of structure (46) is reduced to give the corresponding (omega)'-halo-(alpha)'-
hydroxy-(alpha),(alpha)-dimethylphenylacetic acid compound of structure (56) as
described previously in step a.
In step m, the ketone functionality of the appropriate
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid amide
compound of structure (40) is reduced to give the corresponding (omega)'-halo-
(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenylacetic acid amide compound of
structure (57) as described previously in step a.
In step n, the carboxy ester functionality of the appropriate (omega)'
- -halo-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenylacetic acid ester compound
of structure (55) is hydrolyzed to give the corresponding (omega)'-halo-(alpha)'
- -hydroxy-(alpha),(alpha)-dimethylphenylacetic acid compound of structure (56)
as described previously in Scheme H, step c.
In step o, the carboxy functionality of the appropriate
(omega)'-halo-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenylacetic acid
compound of structure (56) may be esterified by techniques and procedures well
known and appreciated by one of ordinary skill in the art to give the
corresponding (omega)'-halo-(alpha)'-
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<PAGE>
hydroxy-(alpha),(alpha)-dimethylphenylacetic acid ester compound of structure
(55) as described previously in Scheme H, step d.
In step p, the carboxy functionality of the appropriate
(omega)'-halo-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenylacetic acid
compound of structure (56) may be amidated by techniques and procedures well
known and appreciated by one of ordinary skill in the art to give the
corresponding (omega)'-halo-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenylacetic acid amide compound of structure (57) as described
previously in Scheme H, step g.
In step q, the amide functionality of the appropriate (omega)'-halo-
(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenylacetic acid amide compound of
structure (57) is converted to the corresponding acid by acid hydrolysis as is
known in the art to give the (omega)'-halo-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenylacetic acid compound of structure (56) as described previously in
Scheme H, step f.
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<PAGE>
The novel intermediates of formula (XI) wherein R\\5\\ is hydrogen, CN,
COOalkyl or CONR\\6\\R\\7\\ may be prepared as described in Scheme J. In Scheme
J, all substituents are as previously defined unless otherwise indicated.
-126-
<PAGE>
Scheme J
[MOLECULAR DIAGRAM APPEARS HERE]
R\\5\\' IS H, CN COOalkyl or CONR\\6\\R\\7\\
-127-
<PAGE>
Scheme J provides various general synthetic procedures for preparing the
novel intermediates of formula (XI) wherein R\\5\\ is hydrogen, CN, COOalkyl or
CONR\\6\\R\\7\\.
In step a, the (omega)'-halo functionality of the appropriate
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenyl compound of
structure (58) wherein R\\5\\ is hydrogen, CN, COOalkyl or CONR\\6\\R\\7\\ is
alkylated with the appropriate piperidine compound of structure (59) to give the
corresponding (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-dimethylphenyl
compound of structure (60) wherein R\\5\\ is hydrogen, CN, COOalkyl or
CONR\\6\\R\\7\\.
For example, the (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl compound of structure (60) wherein R\\5\\ is hydrogen, CN,
COOalkyl or CONR\\6\\R\\7\\ may be prepared by reacting the appropriate (omega)'
- -halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenyl compound of structure (58)
wherein R\\5\\ is hydrogen, CN, COOalkyl or CONR\\6\\R\\7\\ with the appropriate
piperidine compound of structure (59) in a suitable solvent preferably in the
present of a suitable non-nucleophilic base and optionally in the presence of a
catalytic amount of an iodide source, such as potassium or sodium iodide. The
reaction time varies from about 4 to 120 hours and the reaction temperature
varies from about 70 degrees C to the reflux temperature of the solvent.
Suitable solvent for the alkylation reaction include alcohol solvents such as,
methanol, ethanol, isopropyl alcohol, or n-butanol; ketone solvents, such as,
cyclohexanone, methyl isobutyl ketone; hydrocarbon solvents, such as, benzene,
toluene or xylene; halogenated hydrocarbons, such as, chlorobenzene or methylene
chloride or dimethylformamide. Suitable non-nucleophilic bases for the
alkylation reaction include inorganic bases, for example, sodium bicarbonate,
potassium carbonate, or potassium bicarbonate or organic bases, such as, a
trialkylamine, for example, triethylamine or
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<PAGE>
pyridine, or an excess of an appropriate piperidine compound of structure (59)
may be used.
For those piperidine compounds of structure (59), wherein R\\1\\ is
hydroxy, it is preferred that R\\1\\ be unprotected for utilization in the
alkyation reaction of step a, but those hydroxy functionalities present in the
piperidine compounds of structure (59), wherein R\\1\\ is hydroxy may be
protected with a suitable protecting group. The selection and utilization of
suitable protecting groups for the piperidine compounds of structure (59),
wherein R\\1\\ is hydroxy is well known by one of ordinary skill in the art and
is described in "Protective Groups in Organic Syntheses", Theodora W. Greene,
Wiley (1981). For example, suitable protecting groups for those hydroxy
functionalities present include ethers such as tetrahydrothiopyranyl,
tetrahydrothiofuranyl, 2-(phenylselenyl)ethyl ether, o-nitrobenzyl ether,
trimethylsilyl ether, isopropyldimethylsilyl ether, t-butyldimethylsilyl ether,
t-butyldiphenylsilyl ether, tribenzylsilyl ether, triisopropylsilyl ether; and
esters, such as acetate ester, isobutyrate ester, pivaloate ester, adamantoate
ester, benzoate ester, 2, 4, 6-trimethylbenzoate (mesitoate) ester, methyl
carbonate, p-nitrophenyl carbonate, p-nitrobenzyl carbonate, S-benzyl
thiocarbonate and N-phenylcarbamate.
The piperidine compounds of structure (59) are readily available to one
of ordinary skill in the art and are described in United States Patent No.
4,254,129, March 3, 1981, United States Patent No. 4,254,130, March 3, 1981,
United States Patent No. 4,285,958, April 25, 1981 and United States Patent No.
4,550,116, Oct. 29, 1985. The piperidine compounds of structure (59) wherein
R\\1\\ and R\\2\\ form a second bond between the carbon atoms bearing R\\1\\ and
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<PAGE>
R\\2\\ may be prepared by dehydration of the corresponding compound wherein
R\\1\\ is hydroxy by procedures generally known in the art, such as refluxing in
strongly acidic solution.
The piperidine compounds of structure (59) include the limitations
provided for previously for piperidine derivatives of formula (I) and (XI) in
that when R\\1\\ and R\\2\\ are taken together to form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\ or where R\\1\\ represented hydroxy, m is
an integer 0.
In step b, the (omega)'-halo functionality of the appropriate
(omega)-halo-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl compound of
structure (61) wherein R\\5\\ is hydrogen, CN, COOalkyl or CONR\\6\\R\\7\\ is
alkylated with the appropriate piperidine compound of structure (59) to give the
corresponding (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenyl compound of structure (62) wherein R\\5\\ is hydrogen, CN,
COOalkyl or CONR\\6\\R\\7\\ as described previously in step a.
In step c, the ketone functionality of the appropriate (omega)'-
piperidine-(alpha)'-keto-(alpha),(alpha)-dimethylphenyl compound of structure
(60) wherein R\\5\\ is hydrogen, CN, COOalkyl or CONR\\6\\R\\7\\ is reduced to
give the corresponding (omega)'-piperidine-(alpha)-hydroxy-(alpha),(alpha)-
dimethylphenyl compound of structure (62) wherein R\\5\\ is hydrogen, CN,
COOalkyl or CONR\\6\\R\\7\\.
For example, reduction of the appropriate (omega)'-piperidine-(alpha)'-
keto-(alpha),(alpha)-dimethylphenyl compound of structure (60) wherein R\\5\\
is hydrogen, CN, COOalkyl or CONR\\6\\R\\7\\, using, for example, a suitable
reducing agent such as sodium borohydride, potassium borohydride, sodium
cyanoborohydride, or tetramethylammonium borohydride is carried out in lower
alcohol solvents, such as, methanol, ethanol, isopropyl alcohol or n-butanol at
temperatures
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<PAGE>
ranging from about 0 degrees C to the reflux temperature of the solvent, and
the reaction time varies from about 1/2 hour to 8 hours. Other suitable reducing
agents are, for example, lithium tri-tert-butylaluminohydride and
diisobutylaluminum hydride. These reduction reactions are carried out in
suitable solvents diethyl ether, tetrahydrofuran or dioxane at temperatures
ranging from about 0 degrees C to the reflux temperature of the solvent, and
the reaction time varies from about 1/2 hour to 8 hours.
Catalytic reduction may also be employed in the preparation of
appropriate (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl
compound of structure (62) wherein R\\5\\ is hydrogen, CN, COOalkyl or
CONR\\6\\R\\7\\ from an appropriate (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl compound of structure (60) wherein R\\5\\ is
hydrogen, CN, COOalkyl or CONR\\6\\R\\7\\, using hydrogen gas in the presence of
a suitable catalyst such as Raney nickel, palladium, platinum or rhodium
catalysts in lower alcohol solvents, such as, methanol, ethanol, isopropyl
alcohol or n-butanol or acetic acid or their aqueous mixtures, or by the use of
aluminum isopropoxide in isopropyl alcohol.
Reduction using sodium borohydride or potassium borohydride is preferred
over catalytic reduction for those (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl compound of structure (60) wherein R\\5\\ is
hydrogen, CN, COOalkyl or CONR\\6\\R\\7\\ and wherein R\\1\\ and R\\2\\ taken
together form a second bond between the carbon atoms bearing R\\1\\ and R\\2\\
In addition, a chiral reduction of the appropriate (omega)'-piperidine-
(alpha)'-keto-(alpha),(alpha)-dimethylphenyl compound of structure (60) wherein
R\\5\\ is hydrogen, CN, COOalkyl or CONR\\6\\R\\7\\, using, for example, (+)-B-
chlorodiisopinocamphenylborane gives the corresponding (R)-(omega)'-piperidine-
(alpha)'-keto-(alpha),(alpha)-dimethylphenyl
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<PAGE>
compound of structure (60) wherein R\\5\\ is hydrogen, CN, COOalkyl or
CONR\\6\\R\\7\\ and (-)-B-chlorodiisopinocamphenylborane gives the corresponding
(S)-(omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-dimethylphenyl compound
of structure (60) wherein R\\5\\ is hydrogen, CN, COOalkyl or CONR\\6\\R\\7\\.
Other suitable chiral reducing agents are, (R) and (S)-oxazaborolidine/BH\\3\\,
potassium 9-O-(l,2:5,6-di-O-isopropylidine-(alpha)-D-glucofuransoyl)-9-
boratabicyc1o[3.3.l]nonane, (R) and (S)-B-3-pinanyl-9-borabicyclo[3.3.1]nonane,
NB-Enantride, Lithium (R)-(+) and (S)-(-)-2,2'-dihydroxy-l,l'-binaphthyl alkoxyl
aluminum hydride, (R)-(+) and (S)-(-)-2,2'-dihydroxy-6,6'-dimethylbiphenyl
borane-amine complex, tris[[(1S,2S,5R)-2-isopropyl-5-methyl-cyclohex-l-
yl]methyl]aluminum, [[(lR,3R)-2,2-dimethylbicyclo[2.2.1]hept-3-
yl]methyl]beryllium chloride, (R)-BINAP-ruthenium complex/H\\2\\ and 6,6'-
bis(diphenylphosphino)-3,3'-dimethoxy-2,2',4,4'-tetramethyl-l,1'-biphenyl.
Starting materials for use in Scheme J are readily available to one of
ordinary skill in the art.
The following examples present typical syntheses as described in Scheme
J. These examples are understood to be illustrative only and are not intended to
limit the scope of the present invention in any way. As used herein, the
following terms have the indicated meanings: "g" refers to grams; "mmol" refers
to millimoles; "mL" refers to milliliters; "bp" refers to boiling point;
"degrees C" refers to degrees Celsius; "mm Hg" refers to millimeters of
mercury; "(muL)" refers to microliters; "(mug)" refers to micrograms; and
"(muM)' refers to micromolar.
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<PAGE>
Example 28
----------
Step a: 4-[4-[4-(Hydroxydiphenylmethyl)-1-piperidinyl]-l-oxobutyl]-(alpha),
- ---------------------------------------------------------------------------
(alpha)-dimethylbenzeneacetic acid methyl ester
- -----------------------------------------------
Mix methyl 4'-(4-chloro-l-oxobutyl)-(alpha),(alpha)-dimethylbenzene acetate
(0.335mol), (alpha),(alpha)-diphenyl-4-piperidinemethanol (l0l.8g, 0.335mo1),
potassium hydrogen carbonate (83.8g, 0.838mol), potassium iodide (l.00g,
0.006mol), toluene (600mL) and water (220mL). Stir at reflux for 72 hours, add
toluene (200mL) and deionized water (l00mL). Filter through filter aid while at
80 degrees C and separate the organic phase. Dry (MgSO\\4\\), filter and purify
by chromatography to give the title compound.
Example 29
----------
Step c: 4-[4-[4-(Hydroxydiphenylmethyl)-l-piperidinyl]-l-hydroxybutyl]-(alpha)
- ------------------------------------------------------------------------------
(alpha)-hylbenzeneacetic acid
- -----------------------------
Add sodium borohydride (0.l05g, 2.77mmo1) to a solution of sodium hydroxide
(0.053g, l.33mmo1) in deionized water (2mL) and add, by dropwise addition, to a
solution of 4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-oxobutyl]-(alpha),
(alpha)-dimethylbenzeneacetic acid hydrochloride (0.70g, l.3lmmol) in ethanol
(30mL). Stir at room temperature for 3.5 hours at pH 7-8. Evaporate the solvent
in vacuo and stir the residue with methylene chloride (l5mL) and deionized water
(l5ml). Dry (MgSO\\4\\), acidify to pH 3 with gaseous hydrogen chloride and
evaporate the solvent. Add ether with stirring, filter the white solid and
wash with additional ether. Dry to give the title compound.
Example 30
----------
Step c: (R)-4-[4-[4-(Hydroxydiphenylmethyl)-l-piperidinyl]-1-hydroxybutyl]
- -----------------------------------------------------------------------------
- -(alpha),(alpha)-dimethvlbenzeneacetic, ethyl ester
- ---------------------------------------------------
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<PAGE>
Dissolve (+)-B-chlorodiisopinocamphenylborane (2.5g, 7.8mmol) in anhydrous
tetrahydrofuran (5mL). Add a solution of 4-[4-[4-(hydroxydiphenylmethyl)-l-
piperidinyl]-l-oxobutyl)-(alpha),(alpha)-dimethylbenzeneacetic, ethyl ester (2g,
3.54mmol) in anhydrous tetrahydrofuran (5mL). Stir at room temperature for 3
days and cool to 0 degrees C. Add water (lmL) and 30% hydrogen peroxide (2mL)
and stir for 20 minutes. Add methylene chloride (30mL) and wash with brine
(30mL), then aqueous sodium hydrogen carbonate (30mL), then brine (30mL). Dry
(MgSO\\4\\), evaporate the solvent in vacuo and purify by chromatography to give
the title compound.
Example 31
----------
Step c: (S)-4-[4-[4-(Hydroxydiphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-
- ---------------------------------------------------------------------------
(alpha),(alpha)-dimethylbenzeneacetic acid, ethyl ester
- -------------------------------------------------------
Dissolve (-)-B-chlorodiisopinocamphenylborane (2.5g, 7.8mmol) in anhydrous
tetrahydrofuran (5mL). Add a solution of 4-[4-[4-(hydroxydiphenylmethyl)-l-
piperidinyl]-l-oxobutyl]-(alpha),(alpha)-dimethylbenzeneacetic acid, methyl
ester (3.54mmo1) in anhydrous tetrahydrofuran (5mL). Stir at room temperature
for 3 days and cool to 0 degrees C. Add water (lmL) and 30% hydrogen peroxide
(2mL) and stir for 20 minutes. Add methylene chloride (30mL) and wash with brine
(30mL), then aqueous sodium hydrogen carbonate (30mL), then brine (30mL). Dry
(MgSO\\4\\), evaporate the solvent in vacuo and purify by chromatography to give
the title compound.
Example 32
----------
Step a: N,N-Dimethyl-2-(4-{4-[4-hydroxy-diphenylmethyl)-piperidin-l-yl]-
- -------------------------------------------------------------------------------
butyryl}-phenyl]-isobutyramide
- -------------------------------
Dissolve N,N-dimethyl-2-[4-(4-chlorobutyryl)-phenyl]-isobutyramide (1.00g,
3.38mmo1) in xylene (3m1) and add (alpha),(alpha)-diphenyl-4-piperidinemethanol
(l.09g, 4.07mmol) and potassium hydrogen carbonate (0.68g, 6.76mmo1) in water
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<PAGE>
(2.5mL). Heat at 100 degrees C for 20 hours, remove hot water by pipette, dilute
with ethyl acetate (20mL) and wash with water (20mL). Cool the organic layer to
room temperature, dry (MgSO\\4\\), evaporate the solvent in vacuo and purify by
silica gel chromatography (9:1 ethyl acetate/methanol) and recrystallize (ethyl
acetate/hexane) to give the title compound (1.13g, 63%) as a crystalline solid;
mp 135-137 degrees C.
Example 33
----------
Step c: N,N-Dimethyl-2-(4-{1-hydroxy-4-[4-hydroxy-diphenylmethyl)-piperidin
- ----------------------------------------------------------------------------
- -1-yl]-butyry}-phenyl)-isobutyramide
- ------------------------------------
Dissolve N,N-dimethyl-2-(4-{4-[4-hydroxy-diphenylmethyl)-piperidin-1-yl]-
butyryl}-phenyl)-isobutyramide (3.00g, 5.69mmol) in ethanol (30mL), cool using
an ice/water bath and add sodium borohydride (0.87g, 23.04mmol) in
tetrahydrofuran (10mL). Remove the cold bath and stir at room temperature for
2.5 hours. Add water (25mL) and ethyl acetate (25mL) and separate the layers.
Extract the aqueous layer with ethyl acetate (20mL), dry (MgSO\\4\\) and
evaporate the solvent in vacuo to give the title compound (3.06g, 100%) as a
white foam; mp 166-169 degrees C.
MS (CI, CH\\4\\) m/e 529 (M/+/+1), 280, 183.
Anal. Calcd for C\\34\\H\\44\\N\\2\\O\\3\\.0.3H\\2\\O: C, 77.24; H, 8.39; N,
5.30; Found: C, 76.99; H, 8.36; N. 5.17.
Example 34
----------
Step a: N-Methoxy-N-methyl-2-(4-{4-[4-hydroxy-diphenylmethyl)-piperidin-1-yl]
- -----------------------------------------------------------------------------
- -butyryl}-phenyl)-isobutyramide
- -------------------------------
Dissolve N-methoxy-N-methyl-2-[4-(4-chlorobutyryl)-phenyl]-isobutyramide (1.44g,
4.62mmol) in 2:1 xylene/water (5mL) and add (alpha),(alpha)-diphenyl-4-
piperidinemethanol (1.36g, 5.07mmol)
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<PAGE>
and potassium hydrogen carbonate (0.93g, 9.24mmol). Heat at 108 degrees C for 22
hours, remove hot water by pipette, cool to room temperature and stir for 2
days. Evaporate the solvent in vacuo and purify by silica gel chromatography
(10:1 ethyl acetate/methanol) and recrystallize (ethyl acetate) to give the
title compound (1.77g, 71%) as a white crystalline solid; mp 159-
160.5 degrees C.
MS (CI, CH\\4\\) m/e 543 (M/+/+1), 293, 250, 183.
Anal. Calcd for C\\34\\H\\42\\N\\2\\O\\4\\.0.3H\\2\\O; C, 74.50; H, 7.83; N,
5.11; Found: C, 74.75; H, 7.96; N. 5.15.
Example 35
----------
Step c: N-Methoxy-N-methyl-2-(4-{1-hydroxy-4-[4-hydroxy-diphenylmethyl)-
- ------------------------------------------------------------------------
piperidine-1-vl]-butyryl}-phenyl)-isobutyramide
- -----------------------------------------------
Dissolve N-methoxy-N-methyl-2-(4-{4-[4-hydroxy-diphenylmethyl)-piperidin-1-yl]
- -butyryl}-phenyl)-isobutyramide (8.83g, 16.27mmol) in 3.5:1
methanol/tetrahydrofuran (85mL). Add sodium borohydride (0.62g, 16.27mmol) in 8
portions over 20 minutes at room temperature. Stir at room temperature for 2
hours, evaporate the solvent in vacuo, dissolve the residue in ethyl acetate
(60mL) and add water (25m). Stir at room temperature for 10 minutes, separate
the layers and wash the organic layer with brine (2X25mL). Combine the organic
layers, extract with ethyl acetate (35mL), dry (Na\\2\\SO\\4\\), evaporate the
solvent in vacuo and dry to give the title compound (8.89g, 100%) as a foam; mp
80-83 degrees C.
MS (CI, CH\\4\\) m/e 545 (M/+/+1), 280, 236, 183.
Anal. Calcd for C\\34\\H\\44\\N\\2\\O\\4\\.0.2H\\2\\O: C, 74.47; H, 8.16; N,
5.12; Found: C, 74.08; H, 8.16; N. 4.93.
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<PAGE>
Example 36
----------
Step a: 1-[4-(1,1-Dimethyl-2-oxo-2-pyrrolidin-1-yl-ethyl)-phenyl]-4-[4-hydroxy-
- -------------------------------------------------------------------------------
diphenylmethyl)-piperidine-1-yl]-butan-1-one
- --------------------------------------------
Dissolve 4-chloro-1-[4-(1,1-dimethyl-2-oxo-2-pyrrolidin-1-yl-ethyl)-phenyl]-
butan-1-one (6.88g, 21.38mmol) in xylene (14mL) and add a suspension of
(alpha),(alpha)-diphenyl-4-piperidinemethanol hydrochloride (6.50g, 23.51mmol)
and potassium carbonate (6.14g, 4.44mmol) in water (30mL). Heat at 100 degrees C
for 24 hours, cool to room temperature, add methylene chloride (100mL) and
separate the layers. Extract the aqueous layer with methylene chloride (100mL),
wash with water (150mL), dry (Na\\2\\SO\\4\\), evaporate the solvent in vacuo
and purify by silica gel chromatography (4:1 ethyl acetate/methanol) to give the
title compound (8.20g, 70%) as an off-white solid.
Anal. Calcd for C\\36\\H\\44\\N\\2\\O\\3\\.2H\\2\\O: C, 77.72; H, 8.04; N,
5.08; Found: C, 77.38; H, 7.91; N, 4.93.
Example 37
----------
Step c: 2-(4-{1-Hydroxy-4-[4-hydroxydiphenylmethyl)-piperidin-1-yl]-butyl}-
- ---------------------------------------------------------------------------
phenyl)-2-methyl-1-pyrrolidin-1-yl-propan-1-one
- -----------------------------------------------
Dissolve 1-[4-(1,1-dimethyl-2-oxo-2-pyrrolidin-1-yl-ethyl)-phenyl]-4-[4-hydroxy-
diphenylmethyl)-piperidine-1-yl]-butan-1-one (0.55g, 1.00mmol) in methanol
(10mL) and add sodium borohydride (38mg, 1.00mmol) at 10 degrees C. Stir at room
temperature for 2 hours, evaporate the solvent in vacuo and dissolve the residue
in methylene chloride (60mL). Add water (10mL) and stir for 10 minutes. Separate
the layers, wash with brine (5mL), dry (Na\\2\\SO\\4\\) and evaporate the
solvent in vacuo to give the title compound (0.53g, 96%) as a white foam; mp
87-93 degrees C.
-137-
<PAGE>
Example 38
----------
Step a: 4-[4-[4-(Hydroxydiphenylmethyl)-1-piperidinyl]-1-
- ---------------------------------------------------------
oxobutyl]-(alpha),(alpha)-dimethylbenzeneacetic acid, ethyl ester
- -----------------------------------------------------
hydrochloride
- -------------
Dissolve 2-[4-(4-chloro-butyryl)-phenyl]-2-methyl-propionic acid, ethyl ester
(15.0g, 49.53mmol) and (alpha),(alpha)-diphenyl-4-piperidinemethanol (29.66g,
106.4mmol) in xylene (60mL). Reflux for 5.5 hours, cool in an ice bath, filter
and wash with cold xylenes (25mL). Filter the filtrate through silica gel (20g)
and wash the gel with xylenes (40mL). Add xylene (60mL) and concentrated
hydrochloric acid (6.45g, 65.6mmol) with stirring. Add additional xylenes (40mL)
and stir for 2 hour. Filter, wash with xylene (50mL), vacuum dry and slurry with
a mixture of ethanol (60mL) and hexane (120mL) at 70-72 degrees C for 30
minutes. Filter, wash with 3:1 v/v solution of n-heptane/ethanol (30mL) and dry
to give the title compound as a light white solid (19.7g, 70%); mp 206-208
degrees C.
/1/H NMR (300MHz, CDCl\\3\\) ? 7.90 (d, J=8.7Hz, 2H), 7.47 (m, 4H), 7.41 (d,
J=8.7Hz, 2H), 7.27 (m, 4H), 7.15 (m, 4H), 4.10 (q, J=7.lHz, 2H), 2.93 (m, 4H),
2.37 (m, 3H), 2.2 (broad s, lH), 1.92 (m, 4H), 1.59 (s, 6H), 1.39 (m, 4H), 1.16
(t, J=7.lHz, 3H); /13/C NMR (75MHz, CDCl\\3\\) (delta) 199.5, 176.1, 149.8,
146.0, 135.5, 128.2, 128.1, 126.4, 125.9, 125.7, 79.4, 61.0, 57.8, 53.9, 46.7,
44.1, 36.3, 26.3, 26.2, 21.9, 14.0; IR (CDCl\\3\\) 3514, 2945, 1726, 1682, 1446,
1254, 1147 1097 cm\-1\;
Anal. Calcd for C\\34\\H\\41\\O\\4\\N.HC1: C, 72.39; H, 7.50; N, 2.48; Found:
C, 71.68; H, 7.52; N, 2.34.
-138-
<PAGE>
Example 39
----------
Step a: 4-[4-[4-(Hydroxydiphenylmethyl)-1-piperidinyl]-1-oxobutyl]-(alpha),
- ---------------------------------------------------------------------------
(alpha)-dimethylbenzeneacetic acid, methyl ester hydrochloride
- --------------------------------------------------------------
Dissolve 2-[4-(4-chloro-butyryl)-phenyl]-2-methyl-propionic acid, methyl ester
(2.82g, 10.0mmol) and (alpha),(alpha)-diphenyl-4-piperidinemethanol (5.58g,
21.0mmol) in toluene (20mL). Reflux for 29 hours, cool in an ice bath, filter,
filter the filtrate through silica gel (5g) and wash the gel with toluene
(10mL). Evaporate the solvent in vacuo and dissolve the residue in ethyl ether
(100mL). Add anhydrous hydrogen chloride and filter to give the title compound
as an off-white powder (4.2g, 76%); mp 165-175 degrees C.
/1/H NMR (300MHz, CDCl\\3\\) (delta) 7.93 (d, J=8.3Hz, 2H), 7.47 (m, 4H), 7.42
(d, J=8.3Hz, 2H), 7.30 (m, 4H), 7.18 (m, 2H), 3.64 (s, 3H), 2.96 (m, 4H), 2.42
(m, 4H), 1.96 (m, 4H), 1.62 (s, 6H), 1.41 (m, 4H); /13C/ NMR (75MHz, CDCl\\3\\)
(delta) 199.1, 176.3, 149.4, 145.8, 135.5, 128.1, 128.0, 127.7, 126.3, 125.7,
1225.6, 79.4, 57.9, 54.0, 52.4, 46.9, 44.1, 36.4, 26.4, 26.3, 22; MS
(CI/NH\\3\\) 514 (100 (M+H)), 293 (4), 268 (7).
Anal. Calcd for C\\33\\H\\39\\O\\4\\N.HC1: C, 72.05; H, 7.33; N, 2.55; Found:
C, 71.85; H, 7.23, N, 2.33.
Example 40
----------
Step c: 4-[4-[4-(Hydroxydiphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-(alpha),
- -------------------------------------------------------------------------------
(alpha)-dimethylbenzeneacetic acid, methyl ester hydrochloride
- --------------------------------------------------------------
Dissolve 4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-oxobutyl]-
(alpha),(alpha)-dimethylbenzeneacetic acid, methyl ester hydrochloride (550mg,
1.00mmol) in methanol (5mL) and add sodium borohydride (62.8mg) in three
batches. Stir for 1 hour, add 50% aqueous sodium hydroxide (800mg) and heat to
-139-
<PAGE>
reflux with stirring. After 3 hours, cool to -10 degrees C, add approximately
1.5mL of 6N HCl over 10 minutes, filter the solid and wash with ice water (12mL)
such that the final filtrate is pH=5. Dry the resulting solid in vacuo (50-
60 degrees C, 10/-1/ mm) overnight to give the title compound (515mg, 94%); mp
165-180 degrees C.
/1/H NMR (300MHz, 5% MeOD\\4\\ in CDCl\\3\\) (delta) 7.50 (d, J=7.3Hz, 4H), 7.30
(m, 8H), 7.18 (t, J=7.OHz, 2H), 4.66 (t, J=5.3Hz, lH), 3.47 (m, 6H), 2.97 (m,
2H), 2.69 (m, 3H), 1.6-2.2 (m, 6H), 1.55 (s, 6H); /13/C NMR (75MHz, 5% MeOD\\4\\
in CDCl\\3\\) (delta) 179.1, 145.3, 143.8, 142.3, 128.2, 126.6, 125.7, 125.5,
125.4, 78.4 (bis benzylic), 72.5 (benzylic), 57.4, 53.2, 46.2, 24.2, 35.9, 26.6,
24.1, 20.8: MS (CI/NH\\3\\) 502 (100 (M+H)), 280 (5), 200 (10).
Alternatively, the novel intermediates of formula (XI) may be prepared
as described in Scheme K. In Scheme K, all substituents are as previously
defined unless otherwise indicated.
-140-
<PAGE>
Scheme K
[MOLECULAR DIAGRAM APPEARS HERE]
W = -C(=O)- or -CH(OH)-
-141-
<PAGE>
Scheme K provides various alternative general synthetic procedures for
preparing the novel intermediates of formula (XI).
In step a, the appropriate (omega)'-piperidine-2-methylethylphenyl
compound of structure (63) is cyanated to give the corresponding (omega)'-
piperidine-(alpha),(alpha)-dimethylphenylacetonitrile compound of structure (64)
as described previously in Scheme D, step b.
In step b, the appropriate (omega)'-piperidine-2-methylethylphenyl
compound of structure (63) is halogenated to give the corresponding (omega)'-
piperidine-(alpha),(alpha)-dimethylbenzyl halide compound of structure (65) as
described previously in Scheme B, step a.
In step c, the nitrile functionality of the appropriate (omega)'-
piperidine-(alpha),(alpha)-dimethylphenylacetonitrile compound of structure (64)
is converted to the corresponding ester to give the (omega)'-piperidine-
(alpha),(alpha)-dimethylphenylacetic acid ester compound of structure (66) as
described previously in Scheme H, step a.
In step d, the halo functionality of the appropriate (omega)'-piperidine-
(alpha),(alpha)-dimethylbenzyl halide compound of structure (65) is converted to
the corresponding carboxy to give the (omega)'-piperidine-(alpha),(alpha)-
dimethylphenylacetic acid compound of structure (67) as described previously in
Scheme H, step h.
In step e, the nitrile functionality of the appropriate (omega)'-
piperidine-(alpha),(alpha)-dimethylphenylacetonitrile compound of structure (64)
is converted to the corresponding carboxy to give the (omega)'-piperidine-
(alpha),(alpha)-
-142-
<PAGE>
dimethylphenylacetic acid compound of structure (67) as described previously in
Scheme H, step e.
In step f, the nitrile functionality of the appropriate (omega)'-
piperidine-(alpha),(alpha)-dimethylphenylacetonitrile compound of structure (64)
is converted to the corresponding amide to give the (omega)'-piperidine-
(alpha),(alpha)-dimethylphenylacetic acid amide compound of structure (68)
wherein R\\6\\ and R\\7\\ are each hydrogen as described previously in Scheme H,
step b.
In step g, the carboxy ester functionality of the appropriate (omega)'-
piperidine-(alpha),(alpha)-dimethylphenylacetic acid ester compound of structure
(66) is hydrolyzed to give the corresponding (omega)'-piperidine-(alpha),
(alpha)-dimethylphenylacetic acid compound of structure (67) as described
previously in Scheme H, step c.
In step h, the carboxy functionality of the appropriate (omega)'-
piperidine-(alpha),(alpha)-dimethylphenylacetic acid compound of structure (67)
may be esterified by techniques and procedures well known and appreciated by one
of ordinary skill in the art to give the corresponding (omega)'-piperidine-
(alpha),(alpha)-dimethylphenylacetic acid ester compound of structure (66) as
described previously in Scheme H, step d.
In step i, the carboxy functionality of the appropriate (omega)'-
piperidine-(alpha),(alpha)-dimethylphenylacetic acid compound of structure (67)
may be amidated by techniques and procedures well known and appreciated by one
of ordinary skill in the art to give the corresponding (omega)'-piperidine-
(alpha),(alpha)-dimethylphenylacetic acid amide compound of structure (68) as
described previously in Scheme H, step g.
-143-
<PAGE>
In step j, the amide functionality of the appropriate (omega)'-
piperidine-(alpha),(alpha)-dimethylphenylacetic acid amide compound of structure
(68) is converted to the corresponding acid by acid hydrolysis as is known in
the art to give the (omega)'-piperidine-(alpha),(alpha)-dimethylphenylacetic
acid compound of structure (67) as described previously in Scheme H, step f.
Starting materials for use in Scheme K are readily available to one
of ordinary skill in the art.
The following examples present typical syntheses as described in Scheme
K. These examples are understood to be illustrative only and are not intended to
limit the scope of the present invention in any way. As used herein, the
following terms have the indicated meanings: "g" refers to grams; "mmol" refers
to millimoles; "mL" refers to milliliters; "bp" refers to boiling point;
"degrees C" refers to degrees Celsius; "mm Hg" refers to millimeters of
mercury; "(mu)L" refers to microliters; "(mu)g" refers to micrograms; and
"(mu)M" refers to micromolar.
Example 41
----------
Step g: 4-[4-[4-(Hydroxydiphenylmethyl)-1-piperidinyl]-1-
- ---------------------------------------------------------
oxobutyl]-(alpha),(alpha)-dimethylbenzeneacetic acid hydrochloride
- ------------------------------------------------------------------
Dissolve 4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-oxobutyl]-
(alpha),(alpha)-dimethylbenzeneacetic acid methyl ester (0.131mol) in methanol
(2.5L) and add 10% sodium hydroxide (769mL, 1.92mol). Stir at reflux for 1.5
hours, cool to 68 degrees C and evaporate the solvent in vacuo to a residue. Add
chloroform (1L) and stir until the solids are dissolved. Separate the organic
phase and extract the aqueous phase with chloroform (3X300mL). Combine the
organic phases, dry (MgSO\\4\\) and evaporate the solvent in vacuo to give a
residue. Treat the residue with ethereal HCl, filter and dry to give the title
compound.
-144-
<PAGE>
Example 42
----------
Step j: 4-[4-[4-(Hydroxydiphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-(alpha),
- ------------------------------------------------------------------------------
(alpha)-dimethylbenzeneacetic acid
- ----------------------------------
Dissolve N-methoxy-N-methyl-2-(4-{1-hydroxy-4-[4-hydroxy-diphenylmethyl)-
piperidine-1-yl)-butyryl}-phenyl)-isobutyramide (8.35g, 15.33mmol) in
isopropanol (50mL) and add potassium hydroxide (8.63g, 153.7mmol). Heat to
reflux for 2 hours, add additional potassium hydroxide (4.35g, 77.5mmol) and
heat at reflux for an additional 16 hours. Cool to room temperature, treat with
concentrated HC1 by dropwise addition until pH = 3. Dilute with water (100mL),
stir vigorously for 2 hours, add ethyl acetate (30mL) and stir for 1 hour.
Filter to give the title compound (7.15g, 87%) as an off-white solid.
MS (CI, CH\\4\\) m/e 502 (M/+/+1), 107.
Anal. Calcd for C\\32\\H\\39\\NO\\4\\.HC1.2.6H\\2\\O: C, 65.70; H, 7.61; N,
2.39; Found: C, 65.25; H, 7.70; N, 2.36.
Example 41
----------
Step j: 4-[4-[4-(Hydroxydiphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-(alpha),
- ------------------------------------------------------------------------------
(alpha)-dimethylbenzeneacetic acid
- ----------------------------------
Dissolve N,N-dimethyl-2-(4-{1-hydroxy-4-[4-hydroxy-diphenylmethyl)-piperidin-1-
yl]-butyry}-phenyl)-isobutyramide (15.33mmol) in isopropanol (50mL) and add
potassium hydroxide (8.63g, 153.7mmol). Heat to reflux for 2 hours, add
additional potassium hydroxide (4.35g, 77.5mmol) and heat at reflux for an
additional 16 hours. Cool to room temperature, treat with concentrated HC1 by
dropwise addition until pH = 3. Dilute with water (100mL), stir vigorously for 2
hours, add ethyl acetate (30mL) and stir for 1 hour. Filter to give the title
compound (41%).
-145-
<PAGE>
As one skilled in the art would appreciate, the compounds depicted in
Schemes A through K which bear hydroxy or phenolic functionalities may be
protected prior to use in the synthesis depicted in Schemes A through K using
suitable protecting groups. For example, suitable protecting groups for the
phenolic hydroxy include methyl ether, 2-methoxyethoxymethyl ether (MEM),
cyclohexyl ether, o-nitrobenzyl ether, 9-anthryl ether, t-butyldimethylsilyl
ether, acetate, benzoate, methyl carbamate, benzyl carbamate, aryl pivaloate and
aryl methanesulfonate.
As one skilled in the art would appreciate, the compounds depicted in
Schemes A through K which bear (alpha)-ketone functionalities may be protected
prior to use in the synthesis depicted in Schemes A through K using suitable
protecting groups. The selection and utilization of suitable protecting groups
for ketone groups is well known by one of ordinary skill in the art and is
described in "Protective Groups in Organic Syntheses", Theodora W. Greene, Wiley
(1981). For example, suitable protecting groups for ketone functionalities
include acyclic acetals and ketals such as dimethyl acetal, cyclic acetals and
ketals such as 1,3-dioxanes and 1,3-dioxolanes, dithio acetals and ketals such
as 1,3-dithiane and 1,3-dithiolane, hemithio acetals and ketals, O-substituted
cyanohydrins, substituted hydrozones, imines, oxazolidines, imidazolidines and
thiazolidines.
As one skilled in the art would appreciate, the compounds depicted in
Schemes A through K which bear protected hydroxy and/or ketone functionalities
may be reacting with appropriate deprotecting agents prior to use in any of the
steps depicted in Schemes A through K. The selection and utilization of
appropriate deprotecting reagents is well known by one of ordinary skill in the
art
-146-
<PAGE>
and is described in "Protective Groups in Organic Syntheses", Theodora W.
Greene, Wiley (1981). Examples of appropriate deprotecting reagents are mineral
acids, strong organic acids, Lewis acids, aqueous mineral bases, catalytic
hydrogenation and the like.
For example, cleavage of (beta)-methoxyethoxymethyl (MEM) protecting
groups on any of the compounds depicted in Schemes A through K which bear
protected hydroxy ketone functionalities, for example, can be achieved by using
trifluoroacetic acid at room temperature or using 5 to 8 equivalents of powdered
anhydrous zinc bromide in methylene chloride at about 25 degrees C by the
general procedure of E. J. Corey et al., Tetrahedron Letters, 11, 809-812 1976.
--
In addition, the individual (R) and (S) isomers of the (omega)'-
piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl compounds of
structure (62) can be prepared by techniques are procedures well known and
appreciated by one of ordinary skill in the art.
For example, the mixture of (R) and (S) isomers of the (omega)'-
piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl compounds of
structure (62) may be subjected to chiral chromatography to give the
corresponding individual (R)-(omega)'-piperidine-(alpha)'-hydroxy-(alpha),
(alpha)-dimethylphenyl compounds of structure (62) and (S)-(omega)'-piperidine-
(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl compounds of structure (62).
In addition, the individual (R) and (S) isomers of the (omega)-halo-
(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl compound of structure (61) and
the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl
compounds of structure (62) can be prepared by techniques and procedures well
known and appreciated by one of ordinary skill in the art and described in
"Enanatiomers,
-147-
<PAGE>
Racemates, and Resolutions", Jacques, Collet and Wilen, Wiley (1981).
One such method involves reacting the mixture of (R) and (S) isomers of
the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl
compounds of structure (62) with appropriate chiral acids to give the
corresponding mixture of diastereomeric acid addition salts. The individual (R)-
(omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl chiral acid
addition salt compounds of structure (62) and (S)-(omega)'-piperidine-(alpha)'-
hydroxy-(alpha),(alpha)-dimethylphenyl chiral acid addition salt compounds of
structure (62) are obtained by recrystallization and the individual (omega)'-
piperidine-(R)-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl compounds of
structure (62) and (omega)'-piperidine-(S)-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenyl compounds of structure (62) are obtained by subjecting the
individual (omega)'-piperidine-(R)-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenyl chiral acid addition salt compounds of structure (62) and
(omega)'-piperidine-(S)-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl chiral
acid addition salt compounds of structure (62) to base in order to free the
piperidine nitrogen from the acid addition complex. Examples of suitable chiral
acids are tartaric acid (+), (-), O,O'-dibenzoyltartaric acid (+), (-), O,O'-
di-p-toluyltartaric acid (+), (-), 2-Nitrotartranillic acid (+), (-), mandelic
acid (+), (-), malic acid (+), (-), 2-phenoxypropionic acid (+), hydratropic
acid (+), (-), N-acetylleucine (-), (+), N-((alpha)-methylbenzyl)succinamide
(+), (-), N-((alpha))-methylbenzyl)phthalamic acid (+), (-), camphor-10-sulfonic
acid (+), 3-bromocamphor-9-sulfonic acid (+), (-), camphor-3-sulfonic acid (+),
quinic acid (+), (-), Di-O-isopropylidene-2-oxo-L-gulonic acid (-), Lasalocid (-
), l,l'-binaphthyl-2,2'-phosphoric acid (+), (-), chloestenonesulfonic acid.
-148-
<PAGE>
In addition, the individual (R) and (S) isomers of the
(omega)-halo-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl compound of
structure (61) and the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenyl compounds of structure (62) can be prepared by reacting the
mixture of (R) and (S) isomers of the (omega)'-piperidine-(alpha)'-hydroxy-
(alpha),(alpha)-dimethylphenyl compounds of structure (62) with appropriate
organic chiral acids to give the corresponding mixture of diastereomeric acid
esters. The individual (omega)'-piperidine-(R)-(alpha)'-ester-(alpha),(alpha)-
dimethylphenyl compounds of structure (62) and (omega)'-piperidine-(S)-(alpha)'-
ester-(alpha),(alpha)-dimethylphenyl compounds of structure (62) are obtained by
recrystallization or chromatography and the individual (omega)'-piperidine-(R)-
(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl compounds of structure (62) and
(omega)'-piperidine-(S)-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl
compounds of structure (62) are obtained by subjecting the individual (omega)'-
piperidine-(R)-(alpha)'-ester-(alpha),(alpha)-dimethylphenyl compounds of
structure (62) and (omega)'-piperidine-(S)-(alpha)'-ester-(alpha),(alpha)-
dimethylphenyl compounds of structure (62) to hydrolysis conditions.
-149-
<PAGE>
WHAT IS CLAIMED IS:
1. A compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
A is a hydrogen or hydroxy;
R\\5\\ is H, OH, Br, Cl, I, CN, -COOH, -COOalkyl or -CONR\\6\\R\\7\\
wherein the alkyl moiety has from 1 to 6 carbon atoms and is straight
or branched and R\\6\\ and R\\7\\ are each independently H, C\\1\\-
C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or R\\6\\ and R\\7\\ taken together
with the nitrogen atom form a pyrrolidine, piperidine or morpholine,
with the proviso that R\\6\\ and R\\7\\ cannot both be represented by
C\\1\\-C\\6\\alkoxy.
2. A compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
A is a hydrogen or hydroxy; and
R\\5\\ is H, OH, Br, Cl, I, CN, -COOH, -COOalkyl or -CONR\\6\\R\\7\\
wherein the alkyl moiety has from 1 to 6 carbon atoms and is straight
or branched and R\\6\\ and R\\7\\ are each independently H, C\\1\\-
C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or R\\6\\ and R\\7\\ taken together
with the nitrogen atom form a pyrrolidine, piperidine or morpholine,
with the proviso that R\\6\\ and R\\7\\ cannot both be represented by
C\\1\\-C\\6\\alkoxy.
-150-
<PAGE>
3. A compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
A is a hydrogen or hydroxy; and
R\\5\\ is H, OH, Br, Cl, I, CN, -COOH, -COOalkyl or -CONR\\6\\R\\7\\
wherein the alkyl moiety has from 1 to 6 carbon atoms and is straight
or branched and R\\6\\ and R\\7\\ are each independently H, C\\1\\-
C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or R\\6\\ and R\\7\\ taken together
with the nitrogen atom form a pyrrolidine, piperidine or morpholine,
with the proviso that R\\6\\ and R\\7\\ cannot both be represented by
C\\1\\-C\\6\\alkoxy.
4. A compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
Hal is Cl, Br or I;
n is an integer of from 1 to 5;
A is a hydrogen or hydroxy; and
R\\5\\ is H, OH Br, Cl, I, CN, -COOH or -CONR\\6\\R\\7\\ wherein R\\6\\
and R\\7\\ are each independently H, C\\1\\-C\\6\\alkyl, C\\1\\-
C\\6\\alkoxy or R\\6\\ and R\\7\\ taken together with the nitrogen
atom form a pyrrolidine, piperidine or morpholine, with the proviso
that R\\6\\ and R\\7\\ cannot both be represented by C\\1\\-
C\\6\\alkoxy.
-151-
<PAGE>
5. A compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
Hal is Cl, Br or I;
n is an integer of from 1 to 5;
A is a hydrogen or hydroxy; and
R\\5\\ is H, OH, Br, Cl, I, CN, -COOH,-COOalkyl or -CONR\\6\\R\\7\\
wherein the alkyl moiety has from 1 to 6 carbonatoms and is straight
or branched and R\\6\\ and R\\7\\ are each independently H, C\\1\\-
C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or R\\6\\ and R\\7\\ taken together
with the nitrogen atom form a pyrrolidine, piperidine or morpholine,
with the proviso that R\\6\\ and R\\7\\ cannot both be represented by
C\\1\\-C\\6\\alkoxy.
6. A compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
Hal is Cl, Br or I;
n is an integer of from 1 to 5;
A is a hydrogen or hydroxy; and
R\\5\\ is H, OH, Br, Cl, I, CN, -COOH, -COOalkyl or -CONR\\6\\R\\7\\
wherein the alkyl moiety has from 1 to 6 carbon atoms and is straight
or branched and R\\6\\ and R\\7\\ are each independently H, C\\1\\-
C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or R\\6\\ and R\\7\\ taken together
with the nitrogen atom form a pyrrolidine, piperidine or morpholine,
with the proviso that R\\6\\ and R\\7\\ cannot both be represented by
C\\1\\-C\\6\\alkoxy.
-152-
<PAGE>
7. A compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
Hal is Cl, Br or I;
n is an integer of from 1 to 5;
A is a hydrogen or hydroxy; and
R\\5\\ is H, Br, Cl, I, CN, -COOH, -COOalkyl or -CONR\\6\\R\\7\\ wherein
the alkyl moiety has from 1 to 6 carbon atoms and is straight
or branched and R\\6\\ and R\\7\\ are each independently H,
C\\1\\-C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or R\\6\\ and R\\7\\ taken
together with the nitrogen atom form a pyrrolidine, piperidine or
morpholine, with the proviso that R\\6\\ and R\\7\\ cannot both be
represented by C\\1\\-C\\6\\alkoxy;
and individual optical isomers thereof.
8. A compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
Hal is Cl, Br or I;
n is an integer of from 1 to 5; and
A is a hydrogen or hydroxy.
-153-
<PAGE>
9. A compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is a hydrogen or hydroxy.
10. A compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\5\\ is H, Br, Cl, I, CN or -CONR\\6\\R\\7\\ wherein R\\6\\ and R\\7\\
are each independently H, C\\1\\-C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or
R\\6\\ and R\\7\\ taken together with the nitrogen atom form a
pyrrolidine, piperidine or morpholine, with the proviso that R\\6\\
and R\\7\\ cannot both be represented by C\\1\\-C\\6\\alkoxy;
A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers thereof,
-154-
<PAGE>
with the proviso that where R\\1\\ and R\\2\\ are taken together to form a
second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or where
R\\1\\ represented hydroxy, m is an integer 0.
11. A process for preparing a compound of the formula
[MOLECULAR DIAGRAM]
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together
to form a second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or
where R\\1\\ represented hydroxy, m is an integer 0, comprising the steps
of:
-155-
<PAGE>
(a) reacting a cumene compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above with a (omega)-halo compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)-halo
cumylketone compound;
(b) reacting the (omega)-halo cumylketone compound with a suitable
halogenating agent to give a (omega)-halo-halocumylketone compound;
(c) reacting the (omega)-halo-halocumylketone compound compound with a
suitable cyanating agent to give a (omega)-halocyanocumylketone compound;
(d) reacting the (omega)-halo-cyanocumylketone compound with an appropriate
straight or branched C\\1\\-C\\6\\ alcohol in the presence of a suitable
anhydrous acid to give a (omega)'-halo-(alpha)-keto-(alpha),(alpha)-
dimethylphenylacetic acid imidate compound;
(e) reacting the (omega)'-halo-(alpha)'-keto-(alpha)-dimethylphenylacetic
acid imidate compound with water to give a (omega)'-halo-(alpha)'-keto-
(alpha),(alpha)-dimethylphenylacetic acid ester compound;
(f) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
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<PAGE>
dimethylphenylacetic acid ester compound with a piperidine compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\, R\\2\\ and m are as defined above in the presence of a suitable
non-nucleophilic base to produce a (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOalkyl and
W is -C(=O)-;
(g) optionally hydrolyzing the (omega)'-piperidine- (alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOalkyl and
W is -C(=O)- to produce a (omega)'-piperidine- (alpha)'-hydroxy-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH and W
is-C(=O)-;
(h) optionally reacting the (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOalkyl and
W is -C(=O)- or the (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH and W is -C(=O)-
with a suitable reducing agent to produce a (omega)'-piperidine-(alpha)'
- -hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein
R\\3\\ is -COOH and W is -CH(OH)- or the (omega)'-piperdine-(alpha)'-hydroxy
- -(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -
COOalkyl and W is -CH(OH)-; and
(i) optionally reacting the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),
(alpha)-dimethylphenyl derivative of formula (i) wherein R\\3\\ is -COOH and W
is -CH(OH)- or the appropriate (omega)'-piperdine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH and W is
- -C(=O)- with an appropriate straight or branched C\\1\\-C\\6\\ alcohol in the
presence of a suitable acid to
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<PAGE>
produce a (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl
derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -CH(OH)- or a
(omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-dimethylphenyl derivative
wherein R\\3\\ is -COOalkyl and W is -C(=O)-; and
(j) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)-, the (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is
- -C(=O)-, the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH and W is
- -CH(OH)- or the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -
CH-(OH)- with an appropriate deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-i are optionally protected or unprotected.
12. A process for preparing a compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
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<PAGE>
R\\1\\ and R\\2\\ taken together form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has
from 1 to 6 carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form
a second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or where
R\\1\\ represented hydroxy, m is an integer 0, comprising the steps of:
(a) reacting a (omega)-halo-halocumylketone compound with carbon
dioxide under electrochemical reduction conditions to give a
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic compound;
(b) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethyiphenylacetic compound with an appropriate straight or branched
C\\1\\-C\\6\\ alcohol in the presence of a suitable anhydrous acid to give a
(omega)'-halo-(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid ester
compound;
(c) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid ester compound with a piperidine compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\, R\\2\\ and m are as defined above in the presence of a suitable
non-nucleophilic base to produce a (omega)'-piperidine-
-159-
<PAGE>
(alpha)'-keto-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein
R\\3\\ is COOalkyl and W = -C(=O)-;
(d) optionally hydrolyzing the (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOalkyl and
W is -C(=O)- to produce a (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH and W is
- -C(=O)-;
(e) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
COOalkyl and W is -C(=O)- or the (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH and W
is -C(=O)- with a suitable reducing agent to produce a (omega)'-piperidine-
(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I)
wherein R\\3\\ is-COOH and W is -CH(OH)- or the (omega)'-piperidine-(alpha)'-
hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\
is -COOalkyl and W is-CH(OH)-; and
(f) optionally reacting the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH and W
is -CH(OH)- or the appropriate (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH and W
is -C(=O)- with an appropriate straight or branched C\\1\\-C\\6\\ alcohol in the
presence of a suitable acid to produce a (omega)'-piperidine-(alpha)'-hydroxy-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -
COOalkyl and W is -CH(OH)-or a (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOalkyl and
W is -C(=O)-; and
(g) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)-, the (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -
C(=O)-, the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-
dimethyiphenyl derivative of formula (I) wherein R\\3\\ is -COOH
-160-
<PAGE>
and W is -CH(OH)- or the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -
CH(OH)- with an appropriate deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-f are optionally protected or unprotected.
13. A process for preparing a compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer 3;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together
to form a second bond between the carbon atoms bearing
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<PAGE>
R\\1\\ and R\\2\\ or where R\\1\\ represented hydroxy, m is an integer 0,
comprising the steps of:
(a) reacting a cumyl compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above with an appropriate cyclopropyl compound of the
structure
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, in the presence of a suitable Lewis acid to
produce a cyclopropyl cumylketone compound;
(b) reacting the cyclopropyl cumylketone compound with a suitable
halogenating agent to give a cyclopropyl halocumylketone compound;
(c) reacting the cyclopropyl halocumylketone compound with carbon dioxide
under electrochemical reduction conditions to give a cyclopropylketo-
(alpha),(alpha)-dimethyiphenylacetic acid compound;
(d) reacting the cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic with
an appropriate straight or branched C\\1\\-C\\6\\ alcohol in the presence of a
suitable anhydrous acid to give a (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid ester compound;
(e) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid ester compound with a piperidine compound of the
formula
-162-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\, R\\2\\ and m are as defined above in the presence of a suitable
non-nucleophilic base to produce a (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOalkyl and
W = -C(=O)-;
(f) optionally hydrolyzing the (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOalkyl and
W is -C(=O)- to produce a (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH and W is
- -C(=O)-;
(g) optionally reacting the (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOalkyl and
W is -C(=O)- or the (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH and W
is -C(=O)- with a suitable reducing agent to produce a (omega)'-piperidine-
(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I)
wherein R\\3\\ is -COOH and W is -CH(OH)- or the (omega)'-piperidine-(alpha)'-
hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\
is -COOalkyl and W is-CH(OH)-; and
(h) optionally reacting the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH and W
is -CH(OH)- or the appropriate (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH and W
is -C(=O)- with an appropriate straight or branched C\\1\\-C\\6\\ alcohol in the
presence of a suitable acid to produce a (omega)'-piperidine-(alpha)'-hydroxy-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -
COOalkyl and W is
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<PAGE>
- -CH(OH)-or a (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-dimethylphenyl
derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -C(=O)-; and
(i) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is-C(=O)-, the (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethy1pheny1 derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -
C(=O)-, the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-
dimethy1phenyl derivative of formula (I) wherein R\\3\\ is -COOH and W is -
CH(OH)- or the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -
CH(OH)- with an appropriate deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-h are optionally protected or unprotected .
14. A process for preparing a compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\;
-164-
<PAGE>
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form a
second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or where
R\\1\\ represented hydroxy, m is an integer 0, comprising the steps of:
(a) reacting a (alpha),(alpha)-dimethylphenylacetic acid amide compound of
the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above and R\\6\\ and R\\7\\ are each independently H,
C\\1\\-C\\6\\alkyl, C\\1\\-C\\6\\alkoxy or R\\6\\ and R\\7\\ taken together
with the nitrogen atom for a pyrrolidine, piperidine or morpholine, with the
proviso that R\\6\\ and R\\7\\ cannot both be represented by
C\\1\\-C\\6\\alkoxy with a (omega)-halo compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)'-halo-
(alpha)'-keto-(alpha),(alpha)-dimethylphenylacetic acid amide compound;
-165-
<PAGE>
(b) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid amide compound with a piperidine compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\ and R\\2\\ are as defined above in the presence of a suitable
non-nucleophilic base to produce a (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (XI) wherein R\\5\\ is
- -CONR\\6\\R\\7\\ wherein R\\6\\ and R\\7\\ are as defined above;
(c) optionally hydrolyzing the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (XI) wherein R\\5\\ is -
CONR\\6\\R\\7\\ wherein R\\6\\ and R\\7\\ are as defined above to produce a
(omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-dimethylphenyl derivative of
formula (I) wherein R\\3\\ is COOH and W is-C(=O)-,
(d) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH
and W is -C(=O)- with a suitable reducing agent to produce a (omega)'-
piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative of
formula (I) wherein R\\3\\ is -COOH and W is-CH(OH); and
(e) optionally reacting the (omega)'-piperidine-(alpha)'-hydroxy-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -CH(OH)- or the appropriate (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)-with an appropriate straight or branched C\\1\\-C\\6\\ alcohol
in the presence of a suitable acid to produce a (omega)'-piperidine-(alpha)'-
hydroxy-(alpha),(alpha)-dimethylphenyl
-166-
<PAGE>
derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -CH(OH)- or a
(omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-dimethylphenyl derivative of
formula (I) wherein R\\3\\ is -COOalkyl and W is -C(=O)-; and
(f) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -C(=O)-, the (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethy1pheny1 derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -
C(=O)-, the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethy1pheny1
derivative of formula (I) wherein R\\3\\ is -COOH and W is-CH(OH)- or the
(omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethy1pheny1 derivative
of formula (I) wherein R\\3\\ is -COOalkyl and W is -CH(OH)- with an appropriate
deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-e are optionally protected or unprotected.
15. A process for preparing a compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
(I)
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
-167-
<PAGE>
R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has from 1 to 6
carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical isomers thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form
a second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or where
R\\1\\ represented hydroxy, m is an integer 0, comprising the steps of:
(a) reacting a toluene compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above with a (omega)-halo compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)-halo-
tolylketone compound;
(b) reacting the (omega)-halo-tolylketone compound with a suitable base
to give a cyclopropyl-tolylketone compound;
(c) reacting the cyclopropyl-tolylketone compound with a suitable
halogenating agent to give a cyclopropyl-halotolylketone compound;
-168-
<PAGE>
(d) reacting the cyclopropyl-halotolylketone compound with a suitable
cyanating agent to give a cyclopropyl cyanotolylketone compound;
(e) reacting the cyclopropyl cyanotolylketone compound with a suitable
methylating agent to give a cyclopropyl cyanocumylketone compound;
(f) reacting the cyclopropyl cyanocumylketone compound with a suitable
base to give a cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic acid amide;
(g) reacting the cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic
acid amide with an appropriate straight or branched C\\1\\-C\\6\\ alcohol in the
presence of a suitable anhydrous acid to give a (omega)'-halo-(alpha)'-keto-
(alpha),(alpha)-dimethylphenylacetic acid ester compound;
(h) reacting the (omega)'-halo-(alpha)'-keto-(alpha),(alpha)-
dimethylphenylacetic acid ester compound with a piperidine compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\, R\\2\\ and m are as defined above in the presence of a suitable
non-nucleophilic base to produce a (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative;
(i) optionally hydrolyzing the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative to produce a (omega)'-piperidine-
(alpha)'-keto-(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein
R\\3\\ is COOH and W is -C(=O)=;
-169-
<PAGE>
(j) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH
and W is -C(=O)- with a suitable reducing agent to produce a (omega)'
- -piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative of
formula (I) wherein R\\3\\ is -COOH and W is -CH(OH)-; and
(k) optionally reacting the (omega)'-piperidine-(alpha)'-hydroxy-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -CH(OH)- or the appropriate (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH and W
is -C(=O)- with an appropriate straight or branched C\\1\\-C\\6\\ alcohol in the
presence of a suitable acid to produce a (omega)'-piperidine-(alpha)'-hydroxy-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is
- -COOalkyl and W is -CH(OH)- or a (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (II) wherein R\\3\\ is-
COOalkyl and W is -C(=O)-; and
(l) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (II) wherein R\\3\\ is
- -COOH and W is -C(=O)-, the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (II) wherein R\\3\\ is
- -COOalkyl and W is -C(=O)-, the (omega)'-piperidine-(alpha)'-hydroxy-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is -CH(OH)- or the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-
dimethylphenyl of formula (I) wherein R\\3\\ is -COOalkyl and W is -CH(OH)- with
an appropriate deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-k are optionally protected or unprotected.
-170-
<PAGE>
16. A process for preparing a compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen; or
R\\1\\ and R\\2\\ taken together form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has
from 1 to 6 carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual optical
isomers thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together to form
a second bond between the carbon atoms bearing R\\1\\ and R\\2\\ or where
R\\1\\ represented hydroxy, m is an integer 0, comprising the steps of:
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<PAGE>
(a) reacting a phenylacetic acid ester compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein A is as defined above with a (omega)-halo compound of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein B is halo or hydroxy, Hal represents Cl, Br or I and n is as defined
above, in the presence of a suitable Lewis acid to produce a (omega)'-halo-
(alpha)'-keto-phenylacetic acid ester compound;
(b) reacting the (omega)'-halo-(alpha)'-keto-phenlylacetic acid ester
compound with a suitable methylating agent in the presence of a suitable base to
give a cyclopropylketo-(alpha),(alpha)-dimethyiphenylacetic acid ester;
(c) purifying the cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic
acid ester by distillation and/or recrystallization;
(d) reacting the cyclopropylketo-(alpha),(alpha)-dimethylphenylacetic
acid ester with an appropriate straight or branched C\\1\\-C\\6\\ alcohol in the
presence of a suitable anhydrous acid to give a (omega)'-halo-(alpha)'-keto-
(alpha),(alpha)-dimethylphenylacetic acid ester compound;
-172-
<PAGE>
(e) reacting the (omega)'-halo-(alpha)'-keto-(alpha)-(alpha)-
dimethylphenylacetic acid ester compound with a piperidine compound of the
formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein R\\1\\, R\\2\\ and m are as defined above in the presence of a suitable
non-nucleophilic base to produce a (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -
COOalkyl and W is -C(=O)-;
(f) optionally hydrolyzing the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -
COOalkyl and W is -C(=O)- to produce a (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH
and W is -C(=O)-;
(g) optionally reacting the (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is COOH
and W is -C(=O) with a suitable reducing agent to produce a (omega)'-piperidine-
(alpha)'-hydroxy-(alpha),(alpha)-dimethylphenyl derivative of formula (I)
wherein R\\3\\ is -COOH and W is -CH(OH)-; and
(h) optionally reacting the (omega)'-piperidine-(alpha)'-hydroxy-
(alpha),(alpha)-dimethy1phenyl derivative or formula (I) wherein R\\3\\ is -COOH
and W is -CH(OH)- or the appropriate (omega)'-piperidine-(alpha)'-keto-
(alpha),(alpha)-dimethylphenyl derivative of formula (I) wherein R\\3\\ is -COOH
and W is-C(=O)- with an appropriate straight or branched C\\1\\-C\\6\\ alcohol
in the presence of a suitable acid to produce a (omega)'-pideridine-(alpha)'-
hydroxy-(alpha),(alpha)-dimethylphenyl
-173-
<PAGE>
derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -CH(OH)- or a
(omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-dimethylphenyl derivative of
formula (I) wherein R\\3\\ is -COOalkyl and W is -C(=O)-; and
(i) optionally reacting the (omega)'-piperidine-(alpha)'-keto-(alpha),
(alpha)-dimethylpheny1 derivative of formula (I) wherein R\\3\\ is -COOH -and W
is -C(=O)-, the (omega)'-piperidine-(alpha)'-keto-(alpha),(alpha)-
dimethylpheny1 derivative of formula (I) wherein R\\3\\ is -COOalkyl and W is -
C(=O)-, the (omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylpheny1
derivative of formula (I) wherein R\\3\\ is -COOH and W is -CH(OH)- or the
(omega)'-piperidine-(alpha)'-hydroxy-(alpha),(alpha)-dimethylpheny1 of formula
(I) wherein R\\3\\ is -COOalkyl and W is -CH(OH)-with an appropriate
deprotecting reagent,
with the proviso that each of the hydroxy groups present in the compounds
described in steps a-h are optionally protected or unprotected.
17. A process according to Claims 11-16 wherein the reducing agent is a
chiral reducing agent.
18. A process according to Claim 17 wherein the chiral reducing agent
is (+)-B-chlorodiisopinocamphenylborane.
19. A process according to Claim 17 wherein the chiral reducing agent is
(-)-B-chlorodiisopinocamphenylborane.
-174-
<PAGE>
ABSTRACT OF THE DISCLOSURE
--------------------------
The present invention is related to a novel intermediates and processes which
are useful in the preparation of certain antihistaminic piperidine derivatives
of the formula
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
W represents -C(=O)- or -CH(OH)-;
R\\1\\ represents hydrogen or hydroxy;
R\\2\\ represents hydrogen;
R\\1\\ and R\\2\\ taken together form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\;
n is an integer of from 1 to 5;
m is an integer 0 or 1;
R\\3\\ is -COOH or -COOalkyl wherein the alkyl moiety has
from 1 to 6 carbon atoms and is straight or branched;
each of A is hydrogen or hydroxy; and
pharmaceutically acceptable salts and individual
optical isomers thereof,
with the proviso that where R\\1\\ and R\\2\\ are taken together
to form a second bond between the carbon atoms bearing
R\\1\\ and R\\2\\ or where R\\1\\ represented hydroxy, m is an integer 0.
-175-
<PAGE>
EXHIBIT A-2
MMD Patent
----------
U.S. Patent No. _____, issued _____
Title: __________
22
<PAGE>
EXHIBIT B
ALBANY Patent Application
U.S. Patent Application Serial Number: ______________
Title: _______________
Field: ________
23
<PAGE>
EXHIBIT C
Research Program
Promptly upon execution of this commercialization agreement, two projects
(Project 1 and Project 2) will be assigned to ALBANY, which are within their
competencies. Both projects relate to the 50 to 100-g scale preparation of
intermediates, which are critical to Chemical and Development in MMD.
Project 1
- ---------
Preparation of a 50-g sample of a polyfunctional alcohol amine derivative. The
compound, prepared earlier at g-scale, can be synthesized following a four step
sequence. The route involves enolate alkylation chemistry, Raney Ni
hydrogenation and LAH reduction. Specifications for final compound have been set
by MMD, and can be communicated to ALBANY on an as needed basis.
This project is estimated by MMD to require support by one chemist for 2-3
months. Within one week upon Receiving Project 1, ALBANY will provide MMD with a
more accurate delivery schedule for the 50-g sample.
Project 2
- ---------
Preparation of a 100-g sample of a highly functionalized benzothiazinone
derivative. The compound can be prepared from commercially available
2H-1,4-benzothiazin-3(4H)-one in about 5-6 steps.
With no in-house experience for the above chemistry, MMD estimates that Project
2 will need support by one chemist for 2-4 months. Within one week upon
receiving Project 2, ALBANY will provide MMD with a more accurate estimated
delivery schedule for the requested 100 g of compounds.
After having obtained ALBANY's estimates on the delivery schedules for Projects
1 and 2, MMD will immediately provide two additional projects to ALBANY, which
are within their competencies. During the duration of the agreement MMD will
continue to provide synthesis projects to ALBANY at a rate that allows ALBANY to
use most efficiently their chemists' resources.
24
<PAGE>
Title: PIPERIDINE DERIVATIVES AND PROCESS FOR THEIR PRODUCTION
Inventors: Thomas E. D'Ambra
Docket: 20011/1010
<PAGE>
PIPERIDINE DERIVATIVES AND
PROCESS FOR THEIR PRODUCTION
FIELD OF THE INVENTION
----------------------
The present invention relates to piperidine derivatives and a process
for their production.
BACKGROUND OF THE INVENTION
---------------------------
Terfenadine, 1-(p-tert-butylphenyl)-4-[-[4'-((alpha)-
hydroxydiphenylmethyl)-1'-piperidinyl]-butanol is a non-sedating anti-histamine.
It is reported to be a specific H\\2\\-receptor antagonist that is also devoid
of any anticholingeric, antiserotoninergic, and anti-adrenergic effects both
in vitro and in vivo. See D. McTavish, K.L. Goa, M. Ferrill, Drugs 1990, 39,552;
- -------- ------- --- -----
C.R. Kingsolving, N.L. Monroe, A.A. Carr, Pharmacologist. 1973, 15, 221; J.K.
--------------
Woodward, N.L. Munro, Arzneim-Forsch, 1982, 32, 1154; K.V. Mann, KJ. Tietze,
--------------
Clin. Pharm. 1989, 6, 331. A great deal of effort has been made investigating
- -----------
structure-activity relationships of terfenadine analogs, and this is reflected
in the large number of U.S. patents disclosing this compound and related
structures as follows:
U.S. Patent No.3,687,956 to Zivkovic
U.S. Patent No.3,806,526 to Carr, et. al.
U.S. Patent No.3,829,433 to Carr, et. al.
U.S. Patent No.3,862,173 to Carr, et. al.
U.S. Patent No.3,878,217 to Carr, et. al.
U.S. Patent No.3,922,276 to Duncan, et. al.
U.S. Patent No.3,931,197 to Carr, et. al.
U.S. Patent No.3,941,795 to Carr, et. al.
U.S. Patent No.3,946,022 to Carr, et. al.
U.S. Patent No.3,956,296 to Duncan, et. al.
U.S. Patent No.3,965,257 to Carr, et. al.
U.S. Patent No.4,742,175 to Fawcett, et. al.
<PAGE>
-2-
Terfenadine has been linked to potentially fatal abnormal heart
rhythms in some patients with liver disease or who also take the antifungal drug
ketoconazole or the antibiotic erythromycin. In animal and human metabolic
studies, terfenadine was shown to undergo high first-pass effect, which results
in readily measurable plasma concentrations of the major metabolite 4-[4-[4-
(hydroxydiphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-(alpha),(alpha)-
dimethyphenylacetic acid, also known as terfenadine carboxylic acid metabolite.
The terfenadine carboxylic acid metabolite also possesses anti-histaminic
activity in animal models and may lack the cardiac side effects seen with
terfenadine.
Piperidine derivatives related to the terfenadine carboxylic acid
metabolite are disclosed in the following U.S. patents:
U.S. Patent No.4,254,129 to Carr, et. al.
U.S. Patent No.4,254,130 to Carr, et. al.
U.S. Patent No.4,285,957 to Carr, et. al.
U.S. Patent No.4,285,958 to Carr, et. al.
In these patents, 4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-
hydroxybutyl]-(alpha),(alpha)-dimethylbenzeneacetic acid and related compounds
are prepared by alkylation of a substituted piperidine derivative of the
formula:
[MOLECULAR DIAGRAM APPEARS HERE]
with an (omega)-haloalkyl substituted phenyl ketone of the formula:
<PAGE>
-3-
[MOLECULAR DIAGRAM APPEARS HERE]
wherein the substituents halo, R\\1\\, R\\2\\, n, z, and R\\6\\ are described in
column 6 of U.S. Patent No.4,254,130.
It is further described that the (omega)-haloalkyl substituted phenyl
ketone wherein Z is hydrogen are prepared by reacting an appropriate straight or
branched lower alkyl C\\1-6\\ ester of (alpha)-(alpha)-dimethylphenylacetic acid
with the compound of the following formula:
[MOLECULAR DIAGRAM APPEARS HERE]
under the general conditions of a Friedel~Crafts acylation, wherein halo and m
are described in column 11 of U.S. Patent No.4,254,129. The reaction is carried
out in carbon disulfide as the preferred solvent.
Applicant has discovered that the preparation of ethyl 4-(4-ch1oro-1-
oxobutyl)-(alpha),(alpha)-dimethylphenylacetate by reaction of 4-chlorobutyryl
chloride, aluminum chloride, and ethyl (alpha),(alpha)-dimethylphenylacetate in
carbon disulfide, as described in Example 1 of U.S. Patent Nos. 4,254,130 and
4,285,958 provides an inseparable mixture of monosubstituted aromatic
regioisomers of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
<PAGE>
-4-
wherein the chlorobutyryl substituent is attached at either of the three
aromatic carbons which are meta or para to the dimethylacetate substituent.
These regioisomers are not separable by standard techniques of thin layer
chromatography, or column chromatography, and low field proton nuclear magnetic
resonance spectroscopy is inconclusive in identifying the product of this
reaction as a mixture. When the mixture of monosubstituted aromatic regioisomers
of the preceding formula is reacted with a piperidine of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
a second mixture of aromatic regioisomers is obtained of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein the monosubstituted meta, para mixture of regioisomers is obtained.
It is known in the art that a monoalkyl substituent on a benzene ring is
ortho, para directing in electrophilic aromatic substitution reactions such as a
Friedel-Crafts reaction. Thus, it would be expected that the Friedel-Crafts
reaction
<PAGE>
-5-
of (alpha)-chlorobutyryl chloride with ethyl (alpha),(alpha)-
dimethylphenylacetate would yield predominantly the para substituted product of
the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
because of the electron donating, para-directing character of the dimethylalkyl
substituent combined with the steric hindrance associated with reaction of the
ortho positions. In practice, the inductive electronic withdrawing effect of the
carboxylic ester of ethyl (alpha),(alpha)-dimethylphenylacetate counteracts
the expected alkyl electron donating effect, resulting in no significant
directing effect for the aromatic substitution reaction. For the described
reaction, a statistical mixture of meta to para regioisomers results, with the
two meta positions predominating.
The above second mixture of regioisomers can be converted to a third
mixture of regioisomers of formula:
[MOLECULAR DIAGRAM APPEARS HERE]
<PAGE>
-6-
Although the second mixture of regioisomers and the third mixture of
regioisomers can be analyzed by HPLC experiments, a practical separation to
obtain gram quantities of substantially pure regioisomers has not been achieved.
Each mixture (including the first), would be expected to contain 33% of the para
isomer and 67% of the meta isomer. Since these components are inseparable, it
has not been possible to obtain either of the regioisomers in each mixture in
substantially pure form.
SUMMARY OF THE INVENTION
------------------------
The present invention relates to substantially pure piperidine
derivative compounds of the formulae:
[MOLECULAR DIAGRAM APPEARS HERE]
or
[MOLECULAR DIAGRAM APPEARS HERE]
<PAGE>
-7-
wherein
R\\1\\ is hydrogen or hydroxy;
R\\2\\ is hydrogen;
or R\\1\\ and R\\2\\ taken together form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\;
R\\3\\ is -COOH or -COOR\\4\\;
R\\4\\ is an alkyl with 1 to 6 carbon atoms;
A, B, and D are the substituents of their rings, each of
which may be different or the same, and are selected from the group
consisting of hydrogen, halogens, alkyl, hydroxy, alkoxy, or other
substituents
or a salt thereof. These compounds are useful in pharmaceutical compositions,
particularly as antihistatmines, antiallergy agents, and bronchodilators.
The piperidine derivative compound is prepared by a process which is
initiated by providing a substantially pure regioisomer of the following
formula:
[MOLECULAR DIAGRAM APPEARS HERE]
The substantially pure regioisomer is converted to the piperidine derivative
having a keto group with a piperidine compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
<PAGE>
-8-
A number of synthetic pathways for preparing the substantially pure regioisomer
and for reacting it with the piperidine compound having a keto group are
disclosed. The piperidine derivative having a keto group can be converted to the
above piperidine derivative having a hydroxyl group by reduction.
Although a wide variety of piperidine derivatives can be produced by the
process of the present invention, it is particularly useful in forming a
hydroxylated piperidine derivative of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
Alternatively, the process of the present invention can be used to produce a
piperidine derivative with a keto group of the following formula:
<PAGE>
-9-
[MOLECULAR DIAGRAM APPEARS HERE]
DETAILED DESCRIPTION OF THE INVENTION
-------------------------------------
The present invention relates to substantially pure piperidine derivative
compounds of the formulae:
[MOLECULAR DIAGRAM APPEARS HERE]
<PAGE>
-10-
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\1\\ is hydrogen or hydroxy;
R\\2\\ is hydrogen;
or R\\1\\ and R\\2\\ taken together form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\;
R\\3\\ is -COOH or -COOR\\4\\;
R\\4\\ is an alkyl with 1 to 6 carbon atoms;
A, B, and D are the substituents of their rings, each of
which may be different or the same, and are selected from the group
consisting of hydrogen, halogens, alkyl, hydroxy, alkoxy, or other
substituents
or a salt thereof.
These substantially pure piperidine derivative compounds may be in the
form of 4-diphenyltmethylpiperidine derivatives represented by the following
formulae:
<PAGE>
-11-
[MOLECULAR DIAGRAM APPEARS HERE]
where A, B, D, R\\3\\ are defined above. The substantially pure piperidine
derivative compounds include 4-(hydroxydiphenylmethyl)piperidine derivatives
according to the following formulae:
[MOLECULAR DIAGRAM APPEARS HERE]
<PAGE>
-12-
[MOLECULAR DIAGRAM APPEARS HERE]
where A, B, D, R\\3\\ are defined above. Another useful class of piperidine
derivative compounds are 4-diphenylmethylenepiperidine derivatives in accordance
with the following formulae:
[MOLECULAR DIAGRAM APPEARS HERE]
<PAGE>
-13-
where A, B, D, R\\3\\ are defined above. Examples of R\\4\\ are straight or
branched alkyl groups, including methyl, ethyl, n-propyl, isopropyl, n-butyl,
sec-butyl, tert-butyl, n-pentyl, neopentyl, and n-hexyl groups.
Illustrative examples of compounds of the present invention are as follows:
4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-
(alpha),(alpha)-dimethylbenzeneacetic acid;
4-[4-[4-(diphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-(alpha),(alpha)-
dimethylbenzeneacetic acid;
4-[4-[4-(diphenylmethylene)-1-piperidinyl]-1-hydroxybutyl]-(alpha),
(alpha)-dimethylbenzeneacetic acid;
4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-
(alpha),(alpha)-dimethyl-3-hydroxybenzeneacetic acid;
4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-
(alpha),(alpha)-dimethyl-2-hydroxybenzeneacetic acid;
4-[4-[4-(diphenylmethylene)-1-piperidinyl]-1-hydroxybutyl]-(alpha),(alpha)-
dimethyl-3-hydroxybenzeneacetic acid;
5-[4-[4-(diphenylmethylene)-1-piperidinyl]-1-hydroxybutyl]-(alpha),(alpha)-
dimethylbenzeneacetic acid;
ethyl 4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-
(alpha),(alpha)-dimethylbenzeneacetic;
n-pentyl 4-[4-[4-(diphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-
(alpha),(alpha)-dimethylbenzeneacetate;
ethyl 4-[4-[4-(diphenylmethylene)-1-piperidinyl]-1-hydroxybutyl]-
(alpha),(alpha)-dimethylbenzeneacetate;
methyl 4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-hydroxybutyl]-
(alpha),(alpha)-dimethylbenzeneacetate;
ethyl 4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-
hydroxybutyl]-(alpha),(alpha)-dimethyl-(3-hydroxybenzene)acetate;
<PAGE>
n-propyl 4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-
hydroxybutyl]-(alpha),(alpha)-dimethyl-(2-hydroxybenzene)acetate;
n-hexyl 4-[4-[4-(diphenylmethylene)-1-piperidinyl]-1-hydroxybutyl]-
(alpha),(alpha)-dimethyl-(3-hydroxybenzene)acetate;-
ethyl 5-[4-[4-(diphenylmethylene)-1-piperidinyl]-1-
hydroxybutyl](alpha), (alpha)-ditmethylbenzeneacetate;
(alpha),(alpha)-diphenyl-1-(4-(4-tert-butyl-2-hydroxy)phenyl)-4-
hydroxybutyl-4-piperidinemethanol;
(alpha),(alpha)-diphenyl-1-(4-(4-tert-butyl-3-hydroxy)phenyl)-4-
hydroxybutyl-4-piperidinemethanol;
(alpha),(alpha)-diphenyl-1-(3-(4-tert-butyl-2-hydroxy)phenyl)-3-
hydroxypropyl-4-piperidinemethanol;
(alpha),(alpha)-diphenyl-1-(5-(4-tert-butyl-2-acetyloxy)phenyl)-5-
hydroxypentyl-4-piperidinemehanol;
(alpha),(alpha)-diphenyl-1-(4-(4-hydroxy-tert-butyl-2-hydroxy)-phenyl)-
4-hydroxybutyl-4-piperidinemethanol;
(alpha),(alpha)-diphenyl-1-(4-(4-hydroxy-tert-butyl-3-hydroxy)-phenyl)-
4-hydroxybutyl-4-piperidinemethanol;
(alpha),(alpha)-diphenyl-1-(3-(4-hydroxy-tert-butyl-2-hydroxy)-phenyl)-
3-hydroxybutyl-4-piperidinemethanol;
(alpha),(alpha)-diphenyl-1-(4-(4-hydroxy-tert-butyl)phenyl)-
4-hydroxybutyl-4-piperidinemethanol;
1-(4-tert-butyl-2-hydroxyphenyl)-4-(4-diphenylmelhylene)-1-
(piperidinyl)butanol;
1-(4-tert-butyl-3-hydroxyphenyl)-4-(4-diphenylmethylene)-1-
(piperidinyl)butanol;
1-(4-tert-butyl-3-hydroxyphenyl)-2-(4-diphenylmethylene)-1-
(piperidinyl)butanol;
1-(4-tert-butyl-2-butyryloxyphenyl)-6-(4-(diphenylmethyl)-1-
piperidinyl)hexanol;
-14-
<PAGE>
1-(4-hydroxy-tert-butyl-2-hydroxyphenyl)-4-(4-(diphenylmethylene)-1-
(piperidinyl)butanol;
1-(4-hydroxy-tert-butyl-3-hydroxyphenyl)-4-(4-(diphenyltmethylene)-1-
(piperidinyl)butanol;
1-(4-hydroxy-tert-butylphenyl)-4-(4-(diphenylmethylene)-1-
(piperidinyl)butanol;
Particularly preferred are compounds of the formulae:
[MOLECULAR DIAGRAM APPEARS HERE]
and
[MOLECULAR DIAGRAM APPEARS HERE]
-15-
<PAGE>
Optionally, both diphenyl groups from the piperidine compound may be alkyl
(e.g., methyl) substituted at the position para to the methylene.
This invention also includes pharmaceutically acceptable salts in the
form of inorganic or organic acid or base addition salts of the above
compounds. Suitable inorganic acids are, for example, hydrochloric,
hydrobromic, sulfuric, and phosphoric acids. Suitable organic acids include
carboxylic acids, such as, acetic, propionic, glycolic, lactic, pyruvic,
malonic, succinic, futmaric, malic, tartaric, citric, cyclamic, ascorbic,
maleic, hydroxymaleic, dihydroxymaleic, benzoic, phenylacetic,
4-aminobenzoic, anthranillic, cinnamic, salicyclic, 4-aminosalicyclic, 2-
phenoxybenzoic, 2-acetoxybenzoic, and mandelic acid. Sulfonic acids, such
as, methanesulfonic, ethanesulfonic, and (beta)-hydroxyethane-sulfonic acid
are also suitable acids. Non-toxic salts of the compounds of the above-
identified formulas formed with inorganic and organic bases include, for
example, those alkali metals, such as, sodium, potassium, and lithium,
alkaline earth metals, for example, calcium and magnesium, light metals of
group IIIA, for example, aluminum, organic amines, such as, primary,
secondary, or tertiary amines, for example, cyclohexylamine, ethylamine,
pyridine, methylaminoethanol, and piperazine. These salts are prepared by
conventional means, for example, by treating the piperidine derivative
compounds of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
or
-16-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
where R\\1\\, R\\2\\, and R\\3\\ are defined above, with an appropriate acid
or base.
The piperidine derivative compounds of the present invention can be
utilized as the biologically active components in pharmaceutical
compositions. The compounds of this invention are useful as antihistamines,
antiallergy agents, and bronchodilators. They may be administered alone or
with suitable pharmaceutical carriers, and can be in solid or liquid form
such as, tablets, capsules, powders, solutions, suspensions or emulsions.
The compounds of this invention can be administered orally,
parenterally, for example, subcutaneously, intravenously, intramuscularly,
intraperitoneally, by intranasal instillation or by application to mucous
membranes, such as, that of the nose, throat and bronchial tubes. Such
application to mucous membranes can be achieved with an aerosol spray
containing small particles of a compound of this invention in a spray or dry
powder form.
The quantity of the compound of the present invention administered will
vary depending on the patient and the mode of administration and can be any
effective amount. The quantity of the compound administered may vary over a
wide range to provide in a unit dosage an effective amount of from about
0.01 to 20 mg/kg of body weight of the patient per day to achieve the
desired effect. For example, the desired antihistamine, antiallergy, and
bronchodilator effects can
-17-
<PAGE>
be obtained by consumption of a unit dosage form such as a tablet containing
1 to 50 mg of the compound of the present invention taken 1 to 4 times
daily.
The solid unit dosage forms can be of the conventional type. This, the
solid form can be a capsule, such as an ordinary gelatin type containing the
compound of the present invention and a carrier, for example, lubricants and
inert fillers such as, lactose, sucrose, or cornstarch. In another
embodiment, these compounds are tableted with conventional tablet bases such
as lactose, sucrose, or cornstarch in combination with binders like acacia,
cornstarch, or gelatin, disintegrating agents such as, cornstarch, potato
starch, or alginic acid, and a lubricant like stearic acid or magnesium
stearate.
The compounds of this invention may also be administered in injectable
dosages by solution or suspension of the compounds of the present invention
in a physiologically acceptable diluent with a pharmaceutical carrier. Such
carriers include sterile liquids such as water and oils, with or without the
addition of a surfactant and other pharmaceutically acceptable adjuvants.
Illustrative oils are those of petroleum, animal, vegetable, or synthetic
origin, for example, peanut oil, soybean oil, or mineral oil. In general,
water, saline, aqueous dextrose and related sugar solution, and glycols such
as, propylene glycol or polyethylene glycol, are preferred liquid carriers,
particularly for injectable solutions.
For use as aerosols the compounds of this invention in solution or
suspension may be packaged in a pressurized aerosol container together with
suitable propellants, for example, hydrocarbon propellants like propane,
butane, or isobutane with conventional adjuvants. The compounds of the
present invention also may be administered in a non-pressurized form such as
in a nebulizer or atomizer.
The compounds of the present invention can be used to treat warm
blooded animals, birds, and mammals. Examples of such beings include humans,
cats, dogs, horses, sheep, cows, pigs, lambs, rats, mice, and guinea pigs.
-18-
<PAGE>
The piperidine derivative compounds of the present invention are
prepared by providing a substantially pure regioisomer of the following
formula:
[MOLECULAR DIAGRAM APPEARS HERE]
and then converting the substantially pure regioisomer to the piperidine
derivative compounds of the invention having a keto group with a piperidine
compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
The resulting piperidine derivative compounds with a keto group can be
converted by reduction to the above-described piperidine compounds with a
hydroxyl group.
There are several techniques of providing these substantially pure
regioisomers.
-19-
<PAGE>
Process One For Producing Substantially Pure Regioisomer
--------------------------------------------------------
In one embodiment of the present invention, the substantially pure
regioisomer is formed by initially acylating a starting compound of the
formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\5\\ is -OR\\6\\ -N(R\\6\\)\\2\\, and -SR\\6\\, and
R\\6\\ is an alkyl with 1 to 6 carbons,
with a compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
X is a halogen,
under conditions effective to produce a first mixture of regioisomers
of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
-20-
<PAGE>
-21-
Such conditions include those conventionally utilized in a Friedel-Crafts
acylation reaction catalyzed by, for example, AlCl\\3\\. The reaction is
carried out in a solvent such as, carbon disulfide, tetrachloroethane, or
nitrobenzene with carbon disulfide being the preferred solvent. The reaction
is carried out for a time period of 1/2 to 12 hours, preferably 3 to 5
hours, at a temperature of 0 to 25 C.
The first mixture of regioisomers can be hydrolyzed under conditions
effective to form a second mixture of regioisomers of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
Typically this reaction is carried out by base hydrolysis procedures which
are well known in the art. For example, the first mixture of regioisomers
can be treated with an inorganic base, such as, sodium hydroxide or
potassium hydroxide, in an aqueous lower alcohol solvent. Suitable solvents
include aqueous methanol, ethanol, isopropanol, or n-butanol solutions.
Hydrolysis is carried out at reflux temperatures of the solvent for 1/2 to
12 hours.
Following such hydrolyzation, the substantially pure regioisomer of the
formula:
[MOLECULAR DIAGRAM APPEARS HERE]
<PAGE>
-22-
is recovered from the second mixture of regioisomers. Such recovery is
carried out by crystallizing the substantially pure regioisomer salt of the
formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
X/+/ is a Lewis Acid
Such crystallization is carried out by fractional crystallization techniques
known in the art. Generally, such procedures involve dissolving the second
mixture of regioisomers in a solvent containing a salt at temperatures of
20 C to the reflux temperature of the solvent. The resulting solution is
then slowly cooled to temperatures of -20 to 25 C.
Suitable solvents for fractional crystallization include: alcohol
solvents, like methanol, ethanol, isopropyl alcohol, and n-butanol; ketone
solvents, such as acetone or methyl ethyl ketone; ester-containing solvents,
like ethyl acetate or isopropyl acetate; ethereal solvents such as
tetrahydrofuran; acetonitrile; and dimethylformamide. Ethyl acetate is
preferred.
Suitable salts for fractional crystallization are those where X/+/ is
an alkali metal salt, like sodium and potassium salts, or, more preferably,
ammonium salts of the form NR\\7\\R\\8\\R\\9\\, where R\\7\\, R\\8\\, and
R\\9\\ is hydrogen or a straight or branched alkyl of 1 to 6 carbon atoms
which may be substituted at any position with a phenyl ring or a substituted
phenyl ring. The ammonium salt can also be cinchonidine, quinine, quinidine,
quinuclidine, brucine, thebaine, or cinchonine. Of these salt complexes,
cinchonidine is preferred.
The substantially pure regioisomer salt is then isolated by filtration
and converted to the substantially pure regioisomer of the formula:
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
by procedures well known in the art. Typically, such conversion is
accomplished by treatment with acid.
Process Two For Producing Substantially Pure Regioisomer
--------------------------------------------------------
In another embodiment of the process of the present invention, the
substantially pure regioisomer is produced by acylating a starting compound
of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\3\\ is -COOH, -COOalkyl, -CON(alkyl)\\2\\, -COSalkyl where the alkyl
moieties have 1 to 6 carbon atoms and are straight or branched with a
compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
X\\1\\ is a halogen, trialkyl tin, trialkyl borate, triflate,
or organometallic reagents of lithium or magnesium derived from
-23-
<PAGE>
bromine or iodine, with any alkyl groups having 1 to 4 carbon atoms and
being straight or branched under conditions effective to produce the
substantially pure regioisomer of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
This acylation reaction is carried out in a suitable solvent in the presence of
an appropriate catalyst for about 1 to 120 hours and at temperatures of about
0 C to the reflux temperature of the solvent. Suitable solvents for acylation
include: hydrocarbon solvents, such as benzene, toluene, xylene, or cyclohexane;
halogenated hydrocarbons, such as chlorobenzene, dichloroethane, methylene
chloride, chloroform, or carbon tetrachloride; carbon disulfide;
dimethylformamide; ethereal solvents, like tetrahydrofuran and diethylether; or
dioxane.
A variety of catalysts may be utilized when A is hydrogen. Suitable
catalysts include palladium catalysts, like palladium chloride, palladium
acetate, tetrakis(triphenylphosphine)palladium(0),
dichlorobis(triphenylphosphine palladium(II), or
benzylchlorobis(triphenylphosphine)palladium(II); or nickel-phosphine catalysts.
Acylation may also be carried out in the presence of added lithium chloride or
triphenylphosphine. The latter acylation reaction is known in the art as
organometallic cross coupling reactions and are conducted by the general
procedures of D. Milstein, et al., J. Org. Chem., 1979, 44, 1613; J.W. Labadie,
-------------
et al., J. Org. Chem., 1983, 48, 4634; C. Sahlberg, et al., Tetrahedron Letters,
------------- -------------------
1983, 24, 5137; D. Milstein, et al., J.Am. Chem. Soc., 1978, 100, 3636; and K.
----------------
Tamao, et al., Tetrahedron, 1982, 38, 3347.
-----------
-24-
<PAGE>
Process Three For Producing Substantially Pure Regioisomer
- ----------------------------------------------------------
In another embodiment of the process of the present invention, the
substantially pure regioisomer is produced by acylating a starting compound
of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\5\\ is -OR\\6\\, -N(R\\6\\)\\2\\, and -SR\\6\\, and
R\\6\\ is an alkyl with 1 to 6 carbon atoms
with a compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
under conditions effective to produce a first mixture of regioisomers of the
formula:
[MOLECULAR DIAGRAM APPEARS HERE]
-25-
<PAGE>
Typically, such acylation is carried out by a Friedel-Crafts reaction, as
described above in Process One for Producing Substantially Pure
Regioisomers.
The substantially pure regioisomer salt is recovered by fractional
crystallization, isolation, and converting, as described above with
reference to Process One for Producing Substantially Pure Regioisomers.
Once the substantially pure regioisomer of the present invention is
produced by one of the above (or some other) process, there are a number of
procedures for using that compound to produce the piperidine derivatives of
the present invention.
Process One Of Converting The Substantially Pure Regioisomer to The
-------------------------------------------------------------------
Substantially Pure Piperidine Derivative Having A Keto Group
------------------------------------------------------------
According to one aspect of the present invention, the substantially
pure regioisomer can be halogenated under conditions effective to form a
first intermediate compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein X is a halogen.
Suitable halogens include chlorine, bromine, and iodine. Suitable conditions
for carrying out such halogenating include reacting the substantially pure
regioisomer with a halogen nucleophile and a Lewis Acid. The ring opening
reaction is carried out in a suitable solvent, optionally in the presence of
a catalytic amount of base for about 0.5 to 24 hours and a temperature of
about -40 degrees C to the reflux temperature of the solvent. Suitable
halogen nucleophiles include sodium iodide, sodium bromide, potassium
iodide, potassium bromide, cesium iodide,
-26-
<PAGE>
cesium bromide, trimethylsilyl iodide, manganese iodide, cerium iodide,
magnesium bromide, magnesium iodide, magnesium carbonate, calcium bromide,
and calcium iodide. Suitable Lewis Acids include silicon compounds such as
trimethylsilyl chloride and trimethylsilyl iodide; aluminum compounds such
as aluminum chloride, trimethyl aluminum, diethyl aluminum chloride, ethyl
aluminum dichloride, and diethyl aluminum cyanide; magnesium salts; and
boron salts. Suitable solvents for the ring opening reaction include
hydrocarbon solvents, such as, benzene, toluene, xylene, or cyclohexane;
ethereal solvents such as ether, tetrahydrofuran, dioxane, or
dimethoxyethane; or halogenated hydrocarbons, such as, chlorobenzene,
methylene chloride, carbon tetrachloride, chloroform, or dichloroethane.
After such halogenation, the first intermediate compound is reacted
with a piperidine compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
under conditions effective to form the piperidine derivative compound having
a keto group of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
-27-
<PAGE>
This alkylation reaction is carried out in a suitable solvent preferably in the
presence of a base and, optionally, in the presence of a catalytic amount of
potassium iodide for about 4 to 120 hours at a temperature of about 70 C to the
reflux temperature of the solvent. Suitable solvents for the alkylation reaction
include alcohol solvents, such as, methanol, ethanol, isopropyl alcohol, or
n-butanol; ketone solvents, such as, methyl isobutyl ketone; hydrocarbon
solvents, such as, benzene, toluene, or xylene; halogenated hydrocarbons, such
as, chlorobenzene or methylene chloride; or dimethylformamide. Suitable bases
for the alkylation reaction include inorganic bases, for example, sodium
bicarbonate, potassium carbonate, or potassium bicarbonate or organic bases,
such as a trialkylamine, for example, triethylamine or pyridine, or an excess of
the piperidine compound can be used.
When R\\3\\ is -COOalkyl, the alkylation reaction is followed by base
hydrolysis to convert R\\3\\ substituents that are -COOalkyl groups to -COOH
groups. Such base hydrolysis involves treatment of the substantially pure
piperidine derivative with an inorganic base, such as, sodium hydroxide in an
aqueous lower alcohol solvent, such as, aqueous methanol, ethanol, isopropyl
alcohol, or n-butanol at reflux temperature for about 1/2 hour to 12 hours.
Piperidine compounds where each of R\\1\\ and R\\2\\ is hydrogen or
wherein R\\1\\ is hydroxy and R\\2\\ is hydrogen are commercially available or
may be prepared according to procedures well known in the art (e.g. F.J.
McCarty, C.H. Tilford, M.G. Van Campen, J Am. Chem. Soc., 1961, 26, 4084).
----------------
Piperidine compounds wherein R\\1\\ and R\\2\\ form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\ may be prepared by dehydration of the
corresponding compound wherein R\\1\\ is hydroxy by procedures generally known
in the art.
-28-
<PAGE>
Second Process For Converting Substantially Pure Regioisomer To Substantially
- --------------------------------------------------------------------------------
Pure Piperidine Derivative Having A Keto Group
- --------------------------------------------------------------------------------
In another embodiment of the present invention, the substantially
pure regioisomer of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
is reacted directly with a piperidine compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
under conditions effective to form the piperidine derivative compound having a
keto group of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
-29-
<PAGE>
This alkylation reaction is carried out in a suitable solvent preferably in the
presence of a base and optionally in the presence of a Lewis Acid such as
magnesium, cesium, or calcium salts or trimethylsilyl chloride or in the
presence of a catalytic amount of potassium iodide for about 4 to 120 hours at a
temperature of about 70 C to the reflux temperature of the solvent. Suitable
solvents for the alkylation reaction include alcohol solvents, such as,
methanol, ethanol, isopropyl alcohol, or n-butanol; ketone solvents, such as,
methyl isobutyl ketone; hydrocarbon solvents, such as, benzene, toluene, or
xylene; and halogenated hydrocarbons, such as, chlorobenzene or methylene
chloride; or dimethylformamide. Suitable bases of the alkylation reaction
include inorganic bases, for example, sodium bicarbonate, potassium carbonate,
or potassium bicarbonate or organic bases, such as, a trialkylamine, for
example, triethylamine or pyridine, or an excess of a compound of the piperidine
compound may be used.
Processes for Reduction of Keto Group in Substantially Pure Piperidine
- ----------------------------------------------------------------------
Derivative
- ----------
As discussed above, the process of the present invention is useful in
producing substantially pure piperidine derivatives with either a keto group or
a hydroxyl group. Derivatives with keto groups can be converted to similar
compounds with hydroxyl groups by reduction reactions which are well known in
the art.
Reduction can be carried out with sodium borohydride or potassium
borohydride in lower alcohol solvents, such as, methanol, ethanol, isopropyl
alcohol, or n-butanol.
When lithium aluminum hydride or diborane are used as reducing agents,
suitable solvents are ethers, for example, diethyl ether, tetrahydrofuran, or
dioxane. These reduction reactions are carried out at temperatures ranging from
about 0 C to the reflux temperature of the solvent, and the reaction time varies
from about 0.5 to 8 hours.
-30-
<PAGE>
Catalytic reduction may also be employed using, for example, Raney
nickel, palladium, platinum or rhodium catalysts in lower alcohol solvents, such
as, methanol, ethanol, isopropyl alcohol, or n-butanol or acetic acid or their
aqueous mixtures, or by the use of aluminum isopropoxide in isopropyl alcohol.
Reduction using sodium borohydride is generally preferred over catalytic
reduction when forming carboxylic acids or esters. When the starting material is
an ester, lithium aluminum hydride is the preferred reducing agent, while
diborane is preferred when starting with an acid.
When esters with hydroxyl groups have been formed, base
hydrolysis can be used to produce a carboxylic acid. Such procedures are well
known and generally involve treatment with an inorganic base, such as, sodium
hydroxide or potassium hydroxide, in an aqueous lower alcoholic solvent, such as
aqueous methanol, ethanol, isopropyl alcohol, or n-butanol. Base hydrolysis is
carried out at about the solvent reflux temperature for about 1/2 hour to 12
hours.
EXAMPLES
--------
Example l - Preparation of Ethyl 3- and 4-(4-chloro-l-oxobutyl)-(alpha)
- -----------------------------------------------------------------------
,(alpha)-dimethylphenylacetate
- ------------------------------
Aluminum chloride (44 g; 0.33 mol) was added slowly in portions to a
solution of freshly distilled 4-chlorobutyryl chloride (17 mL; 0.15 mol) in 460
mL of carbon disulfide at -10 C under a nitrogen atmosphere. The mixture was
stirred for 15 minutes, then the cooling bath was removed and the mixture was
allowed to warm to ambient temperature. The mixture was stirred then for 15
minutes more, then cooled again to -10 C and a solution of ethyl
(alpha),(alpha)-dimethylphenyl acetate (26.6 g; 0.14 mol) in 70 mL of carbon
disulfide was added dropwise. The mixture was maintained with stirring for 3 hr,
then stirred overnight at room temperature.
-31-
<PAGE>
The reaction mixture was partitioned between H\\2\\O and CHCl\\3\\. The
combined organic portions were washed with saturated aqueous NaHCO\\3\\
solution, dried over MgSO\\4\\ filtered and concentrated in vacuo. The residue
was dissolved in CH\\2\\Cl\\2\\ and filtered through a plug of SiO\\2\\, eluting
with 10% EtOAc in hexane. Concentration of the product-containing fractions
afforded 39.4 g of ethyl 3-and 4-(4-chloro-1-oxobutyl)-(alpha),(alpha)-
dimethylphenylacetate as a mixture of aromatic regioisomers.
Example 2 - Preparation of 4-(Cyclopropyl-oxo-methyl)-(alpha),(alpha)-
- ---------------------------------------------------------------------
dimethylphenylacetic acid
- -------------------------
To a solution of 39.4 g of ethyl 3- and 4-(4-chloro-1-oxobutyl)-
(alpha),(alpha)-dimethylphenylacetate obtained in Example l dissolved in 800 mL
of CH\\3\\OH and 200 mL of H\\2\\O was added 40 g of NaOH. The resulting mixture
was refluxed for one hour. The cooled mixture was then concentrated in vacuo to
remove the CH\\3\\OH. The concentrate was diluted with H\\2\\O and washed with
two portions of EtOAc. The aqueous layer was acidified with concentrated HCl and
extracted with two portions of EtOAc. The extracts were dried over MgSO\\4\\
filtered, and concentrated in vacuo to afford 30.3 g of crude product.
--------
The crude product was dissolved in 600 mL of EtOAc, 38 g of
cinchonidine was added, and the mixture was stirred overnight. The resulting
solids were filtered and washed with EtOAc and sucked dry under a rubber dam to
afford 25 g of a tan solid.
The solids were partitioned between EtOAc and 2N HCl. The aqueous layer
was extracted with EtOAc. The combined organics were dried over MgSO\\4\\
filtered, and concentrated in vacuo to afford 10.6 g of an oil (33% from ethyl
--------
(alpha),(alpha)-dimethyl-phenylacetate).
Example 3 - Preparation of 4-(4-Iodo-l-oxobutyl)-(alpha),(alpha)-
- -----------------------------------------------------------------
dimethylphenylacetic acid
- -------------------------
A solution of 10.5 g of 4-(cyclopropyl-oxo-methyl)-(alpha),(alpha)-
dimethylphenylacetic acid, prepared in accordance with Example 2, in 250 mL of
-32-
<PAGE>
CH\\2\\C1\\2\\ was cooled in an ice-MeOH bath and 25 g of trimethylsilyliodide
was then added rapidly via pipette. The mixture was stirred in the ice bath for
one hour, warmed to ambient temperature, and stirred for one hour. A solution of
aqueous sodium bisulfite was then added and the mixture was stirred well. The
phases were partitioned and the aqueous layer was extracted with CH\\2\\Cl\\2\\.
The combined organics were washed with saturated aqueous NaCl, dried over
MgSO\\4\\, filtered, and concentrated in vacuo to afford 12.6 g (77%) of 4-(4-
--------
iodo-1-oxobutyl)-(alpha),(alpha)-dimethylphenylacetic acid.
Example 4 - Preparation of Methyl 4-[4-Iodo-l-oxobutyl)-(alpha),(alpha)-
- ------------------------------------------------------------------------
dimethylphenylacetate
- ---------------------
To a solution of 12.6 g of 4-(4-iodo-l-oxobutyl)-(alpha),
(alpha)-dimethylphenylacetic acid, prepared in accordance with Example 3, in 100
mL of Et\\2\\O cooled in an ice bath, was added 40 mL of ethereal CH\\2\\N\\2\\.
The mixture was stirred at 0 C for few minutes, then let stand for 2 hr. A few
drops of AcOH were added to decompose excess CH\\2\\N\\2\\, then the mixture was
filtered and stripped to afford 12.6 g (96%) of methyl 4-(4-iodo-l-oxobutyl)-
(alpha),(alpha),-dimethylphenylacetate.
Example 5 - Preparation of Methyl 4-[4-[4-(Hydroxydiphenylmethyl)-l-
- --------------------------------------------------------------------
piperidinyl]-l-oxobutyl]-(alpha),(alpha)-dimethylphenylacetate
- --------------------------------------------------------------
A solution of 12.6 g of methyl 4-(4-iodo-l-oxobutyl)-(alpha),(alpha)-
dimethylphenylacetate, prepared in accordance with Example 4, in 500 mL of
toluene in a one liter three neck flask with mechanical stirring was added 8.8 g
of 4-((alpha),(alpha)-diphenyl)piperidinemethanol and 23 g of K\\2\\CO\\3\\ and
the mixture was refluxed for 7 hr. The cooled reaction mixture was then filtered
and concentrated in vacuo. The residue was dissolved in Et\\2\\O and treated
--------
with excess ethereal HCl. The mixture was then concentrated to a solid. The
solid was treated with EtOAc and collected by filtration. The product was then
partitioned between EtOAc and 2N Na\\2\\CO\\3\\. The organics were dried over
MgSO\\4\\, filtered, and
-33-
<PAGE>
concentrated in vacuo to afford 13.5 g (79%) of methyl 4-[4-[4-
--------
(hydroxydiphenylmethyl)-1-piperidinyl]-1-oxobutyl]-(alpha),(alpha)-
dimethylphenylacetate.
Example 6 - Preparation of Methyl 4-[4-[4-(Hydroxydiphenylmethyl)-l-
- --------------------------------------------------------------------
piperidiny1]-l-hydroxybutyl]-(alpha),(alpha)-dimethylphenylacetate
- ------------------------------------------------------------------
A solution of 13.5 g of methyl 4-[4-[4-(hydroxydiphenylmethyl)-1-
piperidinyl]-1-oxobutyl]-(alpha),(alpha)-dimethylphenylacetate, prepared in
accordance with Example 5, in 250 mL of CH\\3\\OH was cooled in an ice-CH\\3\\OH
bath and 1.8 g of NaBH\\4\\ was added in portions. After l hr, the mixture was
concentrated to a solid. The residue was partitioned between EtOAc and saturated
aqueous NaHCO\\3\\. The aqueous portion was extracted with EtOAc. The combined
organics were washed with saturated aqueous NaCl, dried over MgSO\\4\\,
filtered, and concentrated in vacuo to afford 9.5 g (70%) of methyl 4-[4-[4-
--------
(hydroxydiphenylmethyl)4-piperidinyl]-1-hydroxybutyl]-(alpha),(alpha)-
dimethylphenylacetate as a foam.
Example 7- Preparation of 4-[4-[4-Hydroxydiphenylmethyl)-l-piperidinyl]-1-
- --------------------------------------------------------------------------
hydroxybutyl]-(alpha),(alpha)-dimethylphenylacetic Acid
- -------------------------------------------------------
To a solution of 9.5 g of methyl-4-[4-[4-(hydroxydiphenylmethyl)-1-
piperidinyl]-1-hydroxybutyl]-(alpha),(alpha)-dimethylphenylacetate, prepared in
accordance with Example 6, in 300 mL of CH\\3\\OH and 150 mL of H\\2\\O was
added 10 g of NaOH. The mixture was refluxed for 1 hr, then cooled. The
CH\\3\\OH was removed in vacuo. The concentrate was diluted with H\\2\\O and
--------
CHCl\\3\\ and the pH adjusted to approximately 5.5 to 6.0. The phases were
separated and the aqueous phase was extracted with CHCl\\3\\. The combined
organics were dried over MgSO\\4\\, filtered, and stripped to afford 9.0 g of
crude product.
The crude product was dissolved in CH\\2\\Cl\\2\\ and chromatographed
on Davisil Grade 633 SiO\\2\\ eluting with a gradient of CHCl\\3\\, to 10%
CH\\3\\OH in CHCl\\3\\, to 25% CH\\3\\OH in CHCl\\3\\. The product containing
fractions were concentrated to afford 5.2 g of white crystals. An analytical
sample was prepared
-34-
<PAGE>
by treatment of the product with EtOAc, mp 199-203 C. Calc. for
C\\32\\H\\39\\NO\\4\\: C, 76.62; H, 7.84; N, 2.79. Found: C, 76.24; H, 7.76; N,
2.75.
Example 8 - Preparation of Methyl 4-[4-[4-(Bis(4-methylphenyl)hydroxymethyl)-
- ----------------------------------------------------------------------------
1-piperidinyl]-l-oxobutyl]-(alpha),(alpha)-dimethylphenylacetate
- ----------------------------------------------------------------
To a solution of 6.4 g (0.017 mol) of methyl 4-(4- iodo-l-oxobutyl)-
(alpha),(alpha)-dimethylphenylacetate, prepared in accordance with Example 4,
in 500 mL of toluene in a one liter round bottom flask equipped with a
mechanical stirrer was added 5.1 g (0.017 mol) of 4-((alpha),(alpha)-bis(4-
methylphenyl)-piperidinemethanol, followed by 11.8 g (0.086 mol) of solid
potassium carbonate. The solution was heated to reflux for 24 hr. After cooling,
the mixture was filtered and the toluene was removed in vacuo. The residue was
partitioned between ethyl acetate and 2 N sodium bicarbonate solution. The
aqueous layer was extracted twice with ethyl acetate, the combined organic
layers were dried with sodium sulfate and the ethyl acetate was removed in vacuo
--------
to provide 6.8 g (73%) of methyl 4-[4-(4-(bis(4-methylphenyl)hydroxymethyl)-1-
pipendinyl]-1-oxobutyl]-(alpha),(alpha)-dimethylphenylacetate as a viscous, dark
colored oil.
Example 9 - Preparation of Methyl 4-[4-[4-(Bis(4-Methylphenyl)hydroxymethyl)-
- -----------------------------------------------------------------------------
1-piperidinyl]-l-hydroxybutyl]-(alpha),(alpha)-dimethylphenylacetate
- --------------------------------------------------------------------
To a -10 C solution of 6.8 g (0.013 mol) of methyl 4-[4-(4-(bis(4-
methylphenyl)hydroxymethyl)4-piperidinyl]-1-oxobutyl]-(alpha),(alpha)
- -dimethylphenylacetate, prepared in accordance with Example 8, in 150 mL of
methanol in a 500 mL round bottom flask equipped with a mechanical stirrer was
slowly added 0.86 g (0.023 mol) of sodium borohydride, and the reaction was
stirred for 2 hr. The methanol was removed in vacuo and the residue was
--------
partitioned between ethyl acetate and aqueous sodium bicarbonate solution. The
aqueous layer was extracted with ethyl acetate, the combined organic layers were
dried with sodium sulfate, and the ethyl acetate was removed in vacuo to provide
--------
6.9 g of a dark colored foam. The resultant material was purified by column
-35-
<PAGE>
chromatography (Davisil grade 633 silica gel, packed in methylene chloride,
material applied in chloroform, and eluted with a gradient of 2% methanol to
methylene chloride to 5% methanol to methylene chloride) to afford 5.3 g (77%)
of methyl 4-[4-[4-(bis(4-methy1phenyl)hydroxymethy1)-1-piperidinyl]-1-
hydroxybutyl]-(alpha),(alpha)-dimethylphenylacetate.
Example 10 - Preparation of 4-[4-[4-(Bis(4-methylphenyl)hydroxymethyl)-1-
- -------------------------------------------------------------------------
piperidinyl]-l-hydroxybutyl]-(alpha),(alpha)-dimethylphenylacetic Acid
- ----------------------------------------------------------------------
To 350 mL of methanol in a 1L round bottom flask equipped with a
mechanical stirrer was added 5.3 g (9.8 mmol) of methyl 4-[4-[4-(bis(4-
methylphenyl)hydroxymethyl)-1-piperidinyl]-1-hydroxybutyl]-(alpha),(alpha)-
dimethylphenylacetate, prepared in accordance with Example 9, 5.1 g (0.13 mol)
of solid sodium hydroxide, and 100 mL of water. The mixture was heated to reflux
for 3 hr. After cooling, the methanol was removed in vacuo and 6 N hydrochloric
--------
acid was added dropwise until the solution was no longer basic (pH = 7). The
solution was extracted three times with ethyl acetate. The organic layers were
combined and a white crystalline solid precipitated out of solution. The solid
was washed with ether to provide 1.8 g (34%) of 4-[4-[4-(bis(4-
methylphenyl)hydroxymethyl)-1-piperidinyl]-1-hydroxybutyl]-(alpha),(alpha)-
dimethylphenylacetic acid, as the dihydrate, mp 208-215 C. Analysis. Calcd. for
C\\34\\H\\43\\N0\\4\\-2(H\\2\\O): C, 72.18; H, 8.37; N, 2.47. Found: C, 72.02;
H, 8.36; N, 2.41.
Example 11 - Preparation of 4-(1-Hydroxy-4-iodobutyl)-(alpha),(alpha)-
- ----------------------------------------------------------------------
dimethylphenylacetic acid
- -------------------------
To a solution of 50 mg of 4-(4-iodo-1-oxobutyl)-(alpha),(alpha)-
dimethylphenylacetic acid, prepared in accordance with Example 3, in 3 mL of
methanol was added 50 mg of NaBH\\4\\. The mixture was stirred for 30 minutes,
acidified with 2N HCl, and the methanol removed in vacuo. The concentrate was
--------
extracted with EtOAc. The organics were dried over Na\\2\\SO\\4\\, filtered, and
-36-
<PAGE>
concentrated to afford 40 mg of 4-(1-hydroxy-4-iodobutyl)-(alpha),(alpha)-
dimethylphenylacetic acid.
Example 12 - Preparation of 4-[4-[4-(Hydroxydiphenylmethyl)-l-piperidinyl]-l-
- -----------------------------------------------------------------------------
oxobutyl]-(alpha),(alpha)-dimethylphenylacetic acid
- ---------------------------------------------------
A mixture of 800 mg of 4-(4-iodo-1-oxobutyl)-(alpha),(alpha)-
dimethylphenylacetic acid, prepared in accordance with Example 3, 800 mg of
4-((alpha),(alpha)-diphenyl)piperidinemethanol, and 2.4 g of K\\2\\CO\\3\\ in 25
mL of toluene was stirred for 48 hours at room temperature. The mixture was
concentrated in vacuo. The residue was treated with EtOAc, filtered, and
--------
concentrated to afford 4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-
oxobutyl]-(alpha),(alpha)-dimethylphenylacetic acid.
Example 13 - Preparation of 4-[4-[4-Hydroxydiphenylmethyl)-l-piperidinyl]-1-
- ----------------------------------------------------------------------------
hydroxybutyl]-(alpha),(alpha)-dimethylphenylacetic Acid
- -------------------------------------------------------
A mixture of 4-[4-[4-(hydroxydiphenylmethyl)-1-piperidinyl]-1-
oxobutyl]-(alpha),(alpha)-dimethylphenylacetic acid, prepared in accordance
with Example 12, and 300 mg of NaBH\\4\\ in 25 mL of CH\\3\\OH was stirred
overnight at room temperature. The mixture was then concentrated in vacuo. The
--------
residue was partitioned between EtOAc and H\\2\\O. The aqueous portion was
treated with concentrated HCl until pH 6, then extracted with EtOAc. The
organics were concentrated in vacuo. The residue was dissolved in EtOAc,
--------
filtered, and concentrated in vacuo to an oil. The oil was dissolved in
--------
CH\\3\\OH and concentrated to a solid. The solid was slurried with EtOAc,
filtered, and rinsed with EtOAc to afford 4-[4-[4-hydroxydiphenylmethyl)-1-
piperidinyl]-1-hydroxybutyl]-(alpha),(alpha)-dimethylphenylacetic acid.
Although the invention has been described in detail for the purpose of
illustration, it is understood that such detail is solely for that purpose, and
-37-
<PAGE>
variations can be made therein by those skilled in the art without departing
from the spirit and scope of the invention which is defined by the following
claims.
-38-
<PAGE>
WHAT IS CLAIMED:
l. A process of preparing a piperidine derivative compound of the
formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\1\\ is hydrogen or hydroxy;
R\\2\\ is hydrogen;
or R\\1\\ and R\\2\\ taken together form a second bond between the
carbon atoms bearing R\\1\\ and R\\2\\;
R\\3\\ is -COOH or -COOR\\4\\
R\\4\\ has l to 6 carbon atoms;
A, B, and D are the substituents of their rings, each of which
may be different or the same, and are selected from the group
consisting of hydrogen, halogens, alkyl, hydroxy, alkoxy, or other
substituents
said process comprising:
providing a substantially pure regioisomer of the following formula:
[MOLECULAR DIAGRAM APPEARS HERE] and
-39-
<PAGE>
converting the substantially pure regioisomer to the piperidine
derivative compound with a piperidine compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
2. A process according to claim 1, wherein said providing comprises:
acylating a starting compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\5\\ is -OR\\6\\, -N(R\\6\\)\\2\\, and -SR\\6\\, and
R\\6\\ is an alkyl with l to 6 carbons,
with a compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
-40-
<PAGE>
wherein
X is a halogen,
under conditions effective to produce a first mixture of regioisomers
of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
hydrolyzing the first mixture of regioisomers under conditions
effective to form a second mixture of a regioisomers of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
recovering from the second mixture of regioisomers the substantially
pure regioisomer of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
-41-
<PAGE>
3. A process according to claim 2, wherein said recovering comprises:
crystallizing from the second mixture of regioisomers a substantially
pure regioisomer salt of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein X/+/ is a Lewis Acid;
isolating the substantially pure regioisomer salt; and
converting the substantially pure regioisomer salt to the
substantially pure regioisomer of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
4. A process according to claim 3, wherein X/+/ is an alkali metal
salt or an ammonium salt of the form NR\\7\\R\\8\\R\\9\\ wherein R\\7\\,
R\\8\\, and R\\9\\ are individually hydrogen or a straight or branched alkyl of
l to 6 carbon atoms, or an alkyl substituted at any position with a phenyl ring
or a substituted phenyl ring.
-42-
<PAGE>
5. A process according to claim 4, wherein X+ is cinchonidine and A is
hydrogen.
6. A process according to claim 2, wherein said acylating is carried
out by a Friedel-Crafts reaction using AlCI\\3\\ catalyst.
7. A process according to claim 1, wherein said providing comprises:
acylating a starting compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
with a compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
X\\1\\ is a halogen, trialkyl tin, triflate, or substituents
useful in a organometallic coupling reactions
under conditions effective to produce the substantially pure regioisomer of the
formula:
-43-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
8. A process according to claim 1, wherein said providing comprises:
acylating a starting compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\5\\ is -OR\\6\\, -N(R\\6\\)\\2\\, and -SR\\6\\, and
R\\6\\ is an alkyl with 1 to 6 carbon atoms
with a compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
under conditions effective to produce a first mixture of regioisomers of the
formula:
-44-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
hydrolyzing the first mixture of regioisomers under conditions
effective to form a second mixture of regioisomers of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
recoverying from the second mixture of regioisomers the substantially
pure regioisomer of the following formula:
[MOLECULAR DIAGRAM APPEARS HERE]
9. A process according to claim 8, wherein said recovering comprises:
crystallizing a substantially pure regioisomer salt of the formula:
-45-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
wherein X+ is a Lewis Acid
from the second mixture of regioisomers;
isolating the substantially pure regioisomer salt; and
converting the substantially pure regioisomer salt to the
substantially pure regioisomer of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
10. A process according to claim 9, wherein X+ is an alkali metal salt
or an ammonium salt of the form NR\\7\\R\\8\\R\\9\\, wherein R\\7\\, R\\8\\ and
R\\9\\ is hydrogen or a straight or branched alkyl of 1 to 6 carbon atoms, or an
alkyl substituted at any position with a phenyl ring or a substituted phenyl
ring.
11. A process according to claim 10 wherein X/+/ is cinchonidine and A
is hydrogen.
-46-
<PAGE>
12. A process according to claim 8, wherein said acylating is carried
out with a catalyst containing palladium, nickel, or mixtures thereof.
13. A process according to claim 1 further comprising:
reducing the piperidine derivative under conditions effective to form
a hydroxylated piperidine derivative of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
14. A process according to claim 13, wherein the hydroxylated
piperidine derivative has the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
-47-
<PAGE>
15. A process according to claim 13, wherein the hydroxylated
piperidine derivative has the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
16. A process according to claim 1, wherein said converting comprises:
halogenating the substantially pure regioisomer of the following
formula:
[MOLECULAR DIAGRAM APPEARS HERE]
under conditions effective to form a first intermediate compound of
the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
-48-
<PAGE>
wherein
X is a halogen and
reacting the first intermediate compound with a piperidine compound of
the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
under conditions effective to form the piperidine derivative of the following
formula:
[MOLECULAR DIAGRAM APPEARS HERE]
17. A process according to claim 1, wherein said converting comprises:
reacting the substantially pure regioisomer of the following formula:
-49-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
with a piperidine compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
under conditions effective to form the piperidine derivative of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
18. A process according to claim 1, wherein the piperidine derivative
has the formula:
-50-
<PAGE>
[MOLECULAR DIAGRAM APPEARS HERE]
19. A process according to claim 1, wherein the piperidine derivative
has the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
20. A substantially pure piperdine derivative compound of the
formulae:
[MOLECULAR DIAGRAM APPEARS HERE]
-51-
<PAGE>
or
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\1\\ is hydrogen or hydroxy;
R\\2\\ is hydrogen;
or R\\1\\ and R\\2\\ taken together form a second bond between
the carbon atoms bearing R\\1\\ and R\\2\\;
R\\3\\ is -COOH or -COOR\\4\\;
R\\4\\ is an alkyl with 1 to 6 carbon atoms;
A, B, and D can be one or more different substituents of
their rings and are individually hydrogen, halogens, alkyl,
hydroxy, alkoxy, or other substituents.
or a salt thereof.
21. A substantially pure piperidine derivative compound according to
claim 20, wherein the compound has the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
-52-
<PAGE>
22. A substantially pure piperidine derivative compound according to
claim 20, wherein the compound has the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
23. A substantially pure piperidine derivative compound according to
claim 20, wherein the compound has the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
-53-
<PAGE>
24. A substantially pure piperidine derivative compound according to
claim 23, wherein the compound has the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
25. A substantially pure piperidine derivative compound according to
claim 20, wherein the compound has the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
26. A substantially pure piperidine derivative compound according to
claim 25, wherein the compound has the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
-54-
<PAGE>
27. A pharmaceutical composition comprising:
a pharmaceutical carrier and
the substantially pure piperidine derivative compound according to
claim 20.
28. A pharmaceutical composition according to claim 27, wherein said
substantially pure piperidine derivative compound is present in an effective
antiallergic amount.
29. A pharmaceutical composition according to claim 27, wherein said
composition consists essentially of said substantially pure piperidine
derivative compound.
30. A method of treating allergic reactions in a patient comprising:
administering to the patient said pharmaceutical composition
according to claim 27 in an effective amount.
31. A compound of the formula:
[MOLECULAR DIAGRAM APPEARS HERE]
wherein
R\\3\\ is -COOH or -COOR\\4\\;
R\\4\\ is an alkyl with 1 to 6 carbon atoms;
A is the substituents of its ring, each of which may be different
or the same, and are selected from the group consisting of
hydrogen, halogens, alkyl, hydroxy, alkoxy, or other substituents.
-55-
<PAGE>
PIPERIDINE DERIVATIVES AND
PROCESS FOR THEIR PRODUCTION
ABSTRACT OF DISCLOSURE
----------------------
The present invention relates to substantially pure piperidine
derivative compounds of the formulae:
[MOLECULAR DIAGRAM APPEARS HERE]
or
[MOLECULAR DIAGRAM APPEARS HERE]
-56-
<PAGE>
wherein
R\\1\\ is hydrogen or hydroxy;
R\\2\\ is hydrogen;
or R\\1\\ and R\\2\\ taken together form a second bond between the carbon
atoms bearing R\\1\\ and R\\2\\;
R\\3\\ is -COOH or -COOR\\4\\;
R\\4\\ has 1 to 6 carbon atoms;
A, B, and D are the substituents of their respective rings each of
which may be different or the same and are hydrogen, halogens, alkyl,
hydroxy, alkoxy, or other substituents.
A process of preparing such piperidine derivative compounds in substantially
pure form is also disclosed.
-57-
<PAGE>
EXHIBIT 10.8
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
[LETTERHEAD OF CAMBREX CORPORATION APPEARS HERE]
PRINCIPLES OF COOPERATION
BETWEEN
ALBANY MOLECULAR RESEARCH
AND
CAMBREX CORPORATION
ALBANY MOLECULAR RESEARCH ("AMR") is in the business of providing scientific
research and development services to its customers in the pharmaceutical
industry and wishes to offer scale up and manufacturing capabilities to its
customers related to such research and development efforts.
CAMBREX CORPORATION ("CAMBREX") is in the business of manufacturing and selling
bulk active ingredients and intermediates to the pharmaceutical industry and
wishes to become a supplier to AMR's customers who are in need of such supply,
and to strengthen its research and development capability to ensure continued
availability of new products on its own behalf.
AMR and CAMBREX therefore agree to cooperate and coordinate their activities in
these areas to their mutual benefit under the principles outlined below or as
otherwise may be discussed and agreed between them. The parties intend that this
Agreement of Cooperation will be supplemented by individual further agreements
as may be appropriate when specific activities (such as technology licensing or
R&D project funding) are undertaken.
Research & Development
1. During the term of this Agreement CAMBREX intends to fund R&D projects in
the pharmaceutical area it shall determine after consultation with AMR to an
annual level of at least $750,000.
2. In consultation with AMR concerning capabilities and capacities, CAMBREX
shall define the specific objectives and targets of the research projects it
wishes AMR to undertake (the "Projects"). During their consultation the parties
shall estimate the commercial potential of such projects.
3. In consultation with CAMBREX, AMR shall advise its capability to undertake
and complete such Project, and shall estimate its timing and cost. It is agreed
that an AMR research scientist's time shall be costed for this purpose at
$*** per year, including all management overheads and normal support costs.
(This amount shall be indexed annually at a rate of ***%.) fractional parts of
many different skilled professionals will be needed, project accounting will be
based on man-days of effort.
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
4. AMR shall advise CAMBREX in the event it has a conflicting assignment, and
AMR shall not be obligated to undertake Projects where AMR has obligations to
third parties preventing it from doing such research or in cases where the
Project overlaps with AMR's internal research efforts.
5. Upon acceptance of a Project, AMR shall draw up detailed research programs
designating key milestones to achieve the specified objectives and specified
targets of the Projects and shall advise CAMBREX periodically concerning its
progress.
6. CAMBREX shall own all new technology and inventions arising from the
Projects, and AMR shall take reasonable steps to vest these in CAMBREX. In
addition, AMR shall grant CAMBREX a non-exclusive, non-transferable license to
any technology owned or licensed by AMR which is necessary to enable CAMBREX to
commercialize the Project's result.
Commercialization Referrals
1. (A) In certain cases customers for whom AMR provides research services are
in need of scale up and manufacturing capacity. After consultation with CAMBREX
to determine CAMBREX's capabilities and capacities, AMR shall refer these
commercialization projects to CAMBREX, and shall recommend CAMBREX as an
appropriate manufacturer. In addition, AMR shall promote CAMBREX's manufacturing
capabilities to other in its customer base.
(B) AMR shall provide CAMBREX with the first option to commercialize and
exploit manufacturing technology proprietary to AMR and that AMR seeks to have
commercialized. In consultation with AMR, CAMBREX shall advise AMR promptly with
an indication of interest in the project. With regard to any such project, AMR
shall retain all rights in its technology but shall license the appropriate
technology to CAMBREX who shall have the exclusive rights to commercialize the
project.
2. ***.
Mutual Restrictions
1. During the term of this Agreement AMR shall not seek to become a large
scale manufacturer.
Term and Termination
1. This agreement shall commence on 1 April 1997, continue for three years and
may be extended for additional annual terms by mutual agreement.
2
<PAGE>
Practical Implementation
The parties agree to take all such steps as are necessary to implement the
provisions of this agreement effectively on an ongoing basis.
Signed for Cambrex Corporation: /s/ James A. Mack
-----------------------------------------------
by: James Mack, President & Chief Executive Officer
date: 2/1/97
Signed for Albany Molecular Research: /s/ Thomas D'Ambra
-------------------------------------------
by: Thomas D'Ambra, President
date: 2/1/97
3
<PAGE>
EXHIBIT 10.9
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
AGREEMENT
---------
THIS AGREEMENT is entered into as of the last date of signature hereto (the
"Effective Date") by and between Eli Lilly and Company, a corporation organized
under the laws of Indiana ("Lilly") and having its principal office at Lilly
Corporate Center, Indianapolis, Indiana, 46285, and Albany Molecular Research,
Inc., a corporation organized under the laws of New York ("Albany") and having
its principal office at 21 Corporate Circle, Albany New York 12203.
Recitals
--------
A. Lilly possesses technology and knowledge with regard to combinatorial
chemical synthesis and wishes to transfer a portion of this know-how to Albany
to enable Albany to become proficient in Lilly's art of practice of
combinatorial chemistry for the purpose of resynthesizing Lilly's combinatorial
collection of chemical compounds.
B. Albany provides resources and services in pharmaceutical chemical
synthesis, analogs and small scale manufacturing and wishes to make available
its resources for the purpose of re-synthesizing Lilly's combinatorial chemistry
library and to establish a group dedicated to combinatorial organic synthesis.
C. The Parties recognize and acknowledge that Lilly, in exchange for
transferring combinatorial chemistry know-how to Albany, wishes to protect the
confidential nature of this technology, maintain a limited period of exclusivity
on Albany's practice of this technology, and participate in future revenues
which Albany may receive as a result of the practice of this technology.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and premises contained in this Agreement, the Parties agree as follows:
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
-2-
ARTICLE I
---------
Definitions
-----------
Section 1.1 General. Terms defined in this Article I and parenthetically
-------
elsewhere shall have the same meaning throughout this Agreement, including the
Recitals hereto. Defined terms may be used in the singular or plural.
Section 1.2 "Affiliates" means (a) any corporation or entity of which Lilly
or Albany at the time in question, directly or indirectly owns or controls more
than fifty percent (50%) of the stock having the right to vote for directors
thereof, or (b) any corporation, individual or entity which now or hereafter
directly or indirectly owns or controls more than fifty percent (50%) of the
stock of Lilly or Albany having the right to vote for directors thereof.
Section 1.3 "Cash Compensation" means any signature fees, license fees,
milestone payments and royalties or equity payments which Albany receives
pursuant to rights granted to Albany under this Agreement. By way of example,
and without limitation, Cash Compensation shall not include payments made to
Albany for research and/or development provided that any agreements covering
such payments are made on an arms length basis on market terms therefor. If
non-monetary consideration is so received, then a commercially reasonable
monetary value will be assigned for purposes of calculating Lilly's share of
compensation.
Section 1.4 "Combinatorial Technology" means ***.
Section 1.5 "Confidential Information" means all materials and information
disclosed by one Party to the other under this Agreement, including, without
limitation: information and materials (whether or not patentable) regarding
Lilly's or Albany's technology, products, research strategy, business
information or objectives; all information and data furnished to either Lilly or
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
-3-
Albany by any representative of Lilly or Albany, as the case may be; and all
information or data that is acquired by Lilly or Albany by observation during
any visit to the other Parties' facilities.
Section 1.6 "CPI-U" means the Consumer Price Index for all Urban
Consumers as published by the United States Department of Labor, Bureau of Labor
Statistics. The base period for the purpose of calculating adjustments using the
CPI-U under this Agreement shall be December 1, 1997.
Section 1.7 "Effective Date" means the signature date of the last of the
Parties to sign this Agreement.
Section 1.8 "FTE" means a full time equivalent scientific person year
(consisting of a total of *** (***) hours per year of scientific work on or
directly related to the Program), carried out by an Albany employee. Scientific
work on or directly related to the Program to be performed by Albany employees
can include, but is not limited to, experimental laboratory work, recording and
writing of results, reviewing literature and references, holding scientific
discussions, managing and leading scientific staff, and carrying out Program
management duties.
Section 1.9 "Lilly Combinatorial Library" means a collection of
approximately *** (***) organic chemical compounds
that are owned by Lilly and were produced by Lilly using Combinatorial
Technology.
Section 1.10 "Lilly Know-How" means all discoveries, trade secrets,
inventions, and other proprietary information, including formulae, algorithms,
software, technical drawings and methods, and materials, whether or not
patentable, relating to Combinatorial Technology which are owned by Lilly and
disclosed to Albany pursuant to this Agreement.
Section 1.11 "Lilly Licensed Technology" means Lilly Know-How and Lilly
Patent Rights.
Section 1.12 "Lilly Patent Rights" means a Patent Right claiming Lilly
Know-How.
Section 1.13 "Lilly Scaffold" means a common structural subunit used in the
synthesis of the Lilly Combinatorial Library.
Section 1.14 "Lilly Strategic Focus Area" means a medical area of
pharmaceutical discovery research, development or marketing which Lilly has
targeted as an area for strategic growth as evidenced by its prominent role in
Lilly strategic business planning documents and
<PAGE>
-4-
presentations, a commitment of Lilly research or development personnel or
resources to the area, or the stature accorded the area as reflected in Lilly's
pharmaceutical research or development organizational structure. The current
Lilly Strategic Focus Areas are as set forth on Appendix A to this Agreement.
----------
Section 1.15 "Net Sales" means, with respect to a Product, the gross amount
invoiced by Albany or an Albany Affiliate to unrelated Third Parties for the
Product, less:
a) Trade, quantity and cash discounts allowed;
b) Discounts, refunds, rebates, chargebacks, retroactive price
adjustments, and any other allowances which effectively reduce the
net selling price and are appropriately deducted from sales under
generally accepted accounting principles;
c) Product returns and allowances;
d) That portion of the sales value associated with drug delivery
systems, which calculation methodology requires approval by Lilly,
such approval not to be unreasonably withheld; and
e) Any tax imposed on the product that is appropriately deducted from
sales under generally accepted accounting principles;
Such amounts shall be determined from the books and records of Albany
maintained in accordance with generally accepted accounting principles ("GAAP"),
consistently applied.
In the event a Product is sold as part of a Combination Product, the Net
Sales of the Product, for the purposes of determining royalty payments, shall be
determined by multiplying the Net Sales of the Combination Product (as defined
above in this Section 1.15) by the fraction, A/(A+B) where A is the average sale
price of the Product when sold separately in finished form and B is the average
sale price of the other product(s) sold separately in finished form. In the
event that the average sale price of both the Product and the other product(s)
in the Combination Product cannot be determined, the Net Sales of the Product
shall be deemed to be equal to fifty percent (50%) of the Net Sales of the
Combination Product. The Net Sales price for a Combination Product shall be
calculated once each calendar year and such price shall be used during all
applicable royalty reporting periods for the entire calendar year. When
determining the average sale price of a Product or product(s), the average sale
price shall be calculated using data
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
-5-
arising from the twelve (12) months preceding the calculation of the Net Sales
price for the Combination Product. As used above, the term "Combination Product"
means any pharmaceutical product which comprises the Product and other active
compounds and/or ingredients determined in accordance with the method of
accounting normally employed by Albany in computing cost of goods.
Section 1.16 "Party" means Lilly or Albany; "Parties" means Lilly and
Albany.
Section 1.17 "Patent Right(s)" means a patent or patent application,
including provisional applications, Patent Cooperation Treaty (PCT) patent
applications, and all divisions, continuations, continuations-in-part, reissues,
reexaminations, extensions, Supplementary Protection Certificates, and any
similar intellectual property rights, and all counterparts thereof in any
country.
Section 1.18 "Product" means a composition which has been packaged and
labeled and is ready for administration for human or animal therapy comprising a
compound discovered or developed by Albany using the Lilly Licensed Technology
or Program Technology. Product does not include any compound contained in the
Lilly Combinatorial Library or any Lilly Scaffold.
Section 1.19 "Program" means the research program to re-synthesize the
Lilly Combinatorial Library as it exists on the Effective Date, (***) which is
to be undertaken by Albany and is funded by Lilly pursuant to this Agreement.
Section 1.20 "Program Know-How" means all information, data or materials
discovered or developed in the course of the Program (whether or not patentable)
by Albany or jointly by Albany and Lilly, including without limitation:
instructions; processes; formulae; assays; biological, chemical,
pharmacological, toxicological, pharmaceutical, physical and analytical,
clinical, safety, manufacturing and quality control data, information and
materials.
Section 1.21 "Program Patent Rights" means Patent Rights covering Program
Know-How.
Section 1.22 "Program Technology" means Program Know-How and Program
Patent Rights.
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
-6-
Section 1.23 "SAR Projects" means a synthesis project in which the
objective is to optimize the activity of a known lead compound using either
combinatorial technology or traditional medicinal chemistry.
Section 1.24 "Third Party" means any person or organization, incorporated
or unincorporated, other than Albany and Lilly and their respective Affiliates.
ARTICLE II
----------
Exclusive Arrangement/Restrictions
----------------------------------
Section 2.1 Exclusivity. During the term of the Program, Albany agrees that
-----------
it shall not participate, either directly or in collaboration with any Third
Party in any research relating to Combinatorial Chemistry except pursuant to the
terms of this Agreement, without first securing the written approval of Lilly.
Section 2.2 Non-Use of Technology. During the term of the Program, Albany
---------------------
shall not (a) utilize the Lilly Licensed Technology or the Program Technology in
any collaboration with a Third Party unless agreed to by Lilly in writing; or
(b) utilize the Lilly Licensed Technology or the Program Technology to generate
any Combinatorial Library for internal use or to be offered to Third Parties for
use.
Section 2.3 Utilization of Technology. After the expiration or termination
-------------------------
of the Program and for a period of *** (***) years thereafter, Albany may only
utilize the Lilly Licensed Technology and the Program Technology for its
internal research programs or in collaboration with Third Parties subject to the
provisions of this Agreement. Thereafter, Albany may utilize the Lilly Licensed
Technology and the Program Technology without obligation to Lilly, subject to
the obligations of Article VIII.
Section 2.4 Third Party Agreements. Albany shall notify Lilly in the event
----------------------
that Albany desires to enter into negotiations with a Third Party on an
agreement relating to a collaboration which would utilize Lilly Licensed
Technology or Program Technology (a "Third Party Collaboration"). Lilly shall
have the right to veto any *** (***) of such proposed Third Party Collaborations
if such proposed collaborations are within a Lilly Strategic Focus Area.
Following the last of such *** (***) vetoes by Lilly, Albany may enter into any
Third Party
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
-7-
Collaboration subject to the other terms of this Agreement. If such proposed
Third Party Collaboration is outside the Lilly Strategic Focus Area, Albany may
enter into such proposed Third Party Collaboration subject to the other terms of
this Agreement.
Section 2.5 Other Collaboration. During the term of the Program, and in
-------------------
the event that Albany desires to enter into a collaboration or other arrangement
with a Third Party in the area of Combinatorial Technology research that would
not utilize Lilly Licensed Technology or Program Technology, Albany shall inform
the Program Chairs. The Program Chairs may approve or disapprove such proposed
collaboration or other arrangement. In the event the Program Chairs disapprove,
Albany shall not enter into such collaboration or other arrangement. In the
event that the Program Chairs are unable to agree, such question shall be
referred to the Executive Director of Lilly's Research Technologies for
resolution. If such a collaboration or other arrangement is approved, any such
collaboration or other arrangement conducted at Albany facilities shall be
conducted in facilities that are separate from those facilities used to conduct
the Program.
Section 2.6 Security. Albany shall use its best efforts to protect and
--------
to keep confidential the Lilly Licensed Technology and Program Technology. Other
than provided in this Agreement, only those Albany employees working directly on
the Program shall have access to the Lilly Licensed Technology and/or Program
Technology and only those Albany employees working directly on the Program, as
well as management, security, maintenance personnel, and other personnel that
are approved by both Program Chairs shall have access to the facilities in which
the Program is being conducted.
ARTICLE III
-----------
Program
-------
Section 3.1 Goals and Objectives. Albany agrees to re-synthesize the
--------------------
Lilly Combinatorial Library under the terms and conditions of this Agreement.
Promptly upon execution of this Agreement, and from time to time during the term
of the Program as described in Article IV, Lilly will commence a training
program of representatives of the FTE's to be assigned by Albany to the Program.
Re-synthesis of the Lilly Combinatorial Library shall be completed when Albany
*** the Lilly
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
-8-
Combinatorial Library meeting the qualitative standards set forth in accordance
with Section 3.10, and the Lilly Combinatorial Library has been delivered to
Lilly pursuant to Section 3.11.
Section 3.2 Program Managers. The Parties shall each designate one (1)
----------------
Program Manager. The Program Managers shall have the responsibility for the day-
to-day management of activities of the Parties under the Program. Each Party
shall make its initial designation of its representation not later than thirty
(30) days after execution of this Agreement.
Section 3.3 Program Chairs. Each Party shall designate one (1)
--------------
representative as a Program Chair. The initial Program Chair of Lilly shall be
***, and the initial Program Chair of Albany shall be Thomas E. D'Ambra, Ph.D.
The Program Chairs shall meet no less frequently than once each calendar
quarter, and shall meet at such other times as deemed appropriate by the Program
Chairs. Each Party may change its Program Chair at any time upon written notice
to the other Party. The location of the Program Chairs' meetings shall alternate
between New York and North Carolina, or as otherwise mutually agreed. The
Program Chairs may conduct meetings by telephone or video-conference. If a
Program Chair of a Party is unable to attend a meeting, such Party may designate
an alternate to attend such meeting in place of the missing Program Chair. The
Program Chairs shall be responsible for coordinating and reviewing the
activities of the Parties under the Program. The Program Chairs shall be
informed of the specific individuals who will work on the Program. The Program
Chairs shall also attempt to settle any disputes that may arise between the
Parties. The unanimous vote of the Program Chairs shall be required to take any
action. The Program Chairs shall refer any issue that it is unable to resolve to
the Executive Director of Lilly's Research Technologies for resolution.
Section 3.4 Albany's Commitment to the Program. Albany shall commit ***
----------------------------------
(***) FTEs to work on the Program. The ratio of Ph.D. to non-Ph.D. FTEs
committed to the Program by Albany shall be ***. The number of FTEs working on
the Program may be increased at the request of Lilly for additional compensation
which shall equal the pro-rata equivalent of the compensation provided in
Section 6.1.2 and which amount shall be adjusted by the CPI in accordance with
Section 6.1.2.
Section 3.5 Diligence. Albany shall use reasonable efforts in pursuing
---------
and conducting research under the Program. Albany shall use reasonable efforts
to carry out all work done in
<PAGE>
-9-
connection with the Program in compliance with any federal, state or local laws,
regulations and guidelines governing the conduct of such work.
Section 3.6 Reports. Within thirty (30) days of the end of each six (6)
-------
month period during the term of the Agreement, Albany shall provide Lilly with a
written summary of Albany's Program activities, the results thereof, and any
material issue presented during the conduct of such Program activities during
such six (6) month period. The reports shall contain a description on the size,
characteristics, and quality of the Lilly Combinatorial Library, and any Program
Technology developed in such period.
Section 3.7 Safety and Environmental. In carrying out its
------------------------
responsibilities under this Agreement, Albany agrees to assure that the services
are conducted in compliance with any applicable Lilly protocols and/or
specifications of which Albany is reasonably advised in a timely manner and in
compliance with all applicable laws, rules, and regulations, including, but not
limited to, the U.S. Food, Drug, and Cosmetic Act and the regulations
promulgated pursuant thereto. Also included is compliance with all relevant
environmental regulations in force at the U.S. federal, state, and local levels.
Section 3.8 Work Standards. Albany represents and warrants that it will
--------------
render the services hereunder in accordance with prevailing high professional
standards and will make all reasonable efforts to produce consistently high
levels of accuracy and expertise and to meet timetables set forth under this
Agreement for completion of services. Albany further represents and warrants
that personnel assigned to perform services under this Agreement shall have the
skills necessary to efficiently perform such services and shall produce
chemicals, data, and/or reports, as the case may be, in a form and of a quality
suitable to Lilly, provided that the re-synthesized Lilly Combinatorial Library
provided by Albany hereunder shall meet the standards set pursuant to Section
3.10.
Section 3.9 Delay Notification. Albany will endeavor with all reasonable
------------------
effort to conform to its obligations identified herein. Although no anticipated
delays or limits in performing any activities under the Program are expected, if
such delays or limits are encountered, Albany will notify Lilly accordingly.
Lilly agrees to accommodate any reasonable change in timetables as a result of
such delays, provided the activities under the Program have been proceeding to
Lilly's satisfaction.
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
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Section 3.10 Library Standards. Promptly after the Effective Date, the
-----------------
Lilly Program Manager will work with the Albany Program Manager to develop
analytical quality standards from the Lilly Combinatorial Library to be
synthesized pursuant to this Agreement. Such standards shall be reviewed by the
Program Chairs and approved by Lilly. Once established, such analytical quality
standards shall be annexed to this Agreement as Exhibit B.
Section 3.11 Delivery. Albany shall deliver the re-synthesized Lilly
--------
Combinatorial Library, or portions thereof, to Lilly's Sphinx facility in
Durham, North Carolina upon completion as agreed by the Program Chairs. Shipment
of the Lilly Combinatorial Library or portions thereof shall be made in
accordance with both Department of Transportation and Lilly standard procedures.
Lilly shall disclose its standards to Albany prior to the shipment of the Lilly
Combinatorial Library or any portion thereof to Lilly.
ARTICLE IV
----------
Disclosure
----------
Section 4.1 Disclosure of Lilly Licensed Technology. Promptly after the
---------------------------------------
Effective Date, Lilly will commence a training program of representatives of the
FTE's assigned by Albany to the Program. Under such training program, Lilly
shall disclose the Lilly Licensed Technology to Albany. Such representatives
shall be responsible for disclosing the Lilly Licensed Technology to the other
Albany FTEs that will work on the Program. Lilly shall only be required to
disclose the Lilly Licensed Technology to Albany that Lilly deems necessary or
useful for Albany to fulfill its obligations under this Agreement, such
disclosure being in a manner to enable the assigned Albany FTE's to perform
***. Such disclosure may include electronic or written materials provided by
Lilly.
Section 4.2 Chemical Materials and Information. Lilly will provide
----------------------------------
Albany with the structure of the compounds contained in the Lilly Combinatorial
Library as well as the structure of the Lilly Scaffolds. Lilly may, at its
option, provide to Albany sufficient amounts of the Lilly
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
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Scaffolds necessary for Albany to resynthesize the Lilly Combinatorial Library.
Albany shall not permit any Third Party to observe or have access to any
compound in the Lilly Combinatorial Library, any Lilly Scaffold, or any
information regarding the structures of any such compounds or Lilly Scaffolds.
Section 4.3 Hardware. Lilly shall disclose to Albany ***
--------
used by Lilly in the synthesis, purification and analysis of the Lilly
Combinatorial Library, including preferred suppliers of such hardware that are
used by Lilly. Albany may purchase such equipment from Lilly, if available, or
the preferred suppliers from which Lilly purchased such equipment. If Albany
purchases such equipment from Lilly, such purchase shall be at ***, and Albany
shall pay Lilly for the equipment within fifteen (15) days of receipt of an
invoice from Lilly for such equipment.
Section 4.4 Further Disclosure. The Parties shall designate individuals
------------------
to participate in informal meetings or to make informal visits as often as once
per month, or as otherwise agreed to by the Parties (the time and place of each
such meeting or visit to be determined by mutual Agreement of the Parties).
Albany shall allow reasonable access to their facilities by Lilly
representatives to observe work done and to be conducted under the Program
during normal business hours on reasonable advance notice. Each Party shall be
responsible for all of its expenses in connection with such visits.
Section 4.5 Site visits by Lilly. During the term of the Program, and at
--------------------
the request of Albany, Lilly shall dispatch at least one (1) qualified Lilly
representative to Albany for a period of up to *** (***) working days, to
provide technical assistance in connection with the synthesis of the Lilly
Combinatorial Library. Such Lilly representative granted access to Albany's
facility shall be bound by the reasonable rules and regulations of Albany and
may be prohibited from or have limited access to certain areas within Albany's
facility. Lilly shall be solely responsible for all expenses incurred by such
Lilly representative in connection with such visit.
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
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ARTICLE V
---------
Grant of Rights
---------------
Section 5.1 License to Albany.
-----------------
5.1.1. Subject to the terms and conditions of this Agreement, Lilly
hereby grants to Albany during the term of the Program a non-exclusive license,
without the right to grant sublicenses, under Lilly Licensed Technology and
Lilly's interest in the Program Technology to re-synthesize the Lilly
Combinatorial Library in accordance with this Agreement.
5.1.2. Subject to the terms and conditions of this Agreement, Lilly
hereby grants to Albany after the term of the Program a non-exclusive license,
with the right to grant sublicenses, under Lilly Licensed Technology and Lilly's
interest in the Program Technology for any purpose.
5.1.3. All licenses granted by Lilly to Albany under this Agreement
specifically exclude any right or license to make, use, or sell Lilly Scaffolds
or the Lilly Combinatorial Library, in whole or in part.
Section 5.2 License to Lilly. Subject to the terms and conditions of this
----------------
Agreement, Albany hereby grants to Lilly, and its Affiliates, a royalty free,
non-exclusive worldwide license, with the right to grant sublicenses, under
Albany's interest in the Program Technology to utilize the Program Technology
for any purpose.
Section 5.3 Lilly Options.
-------------
5.3.1. During the term of the Program and for a period of *** (***)
years after the termination or expiration of the Program, Lilly shall have the
option to have Albany perform additional Combinatorial Chemistry synthesis
projects ("Additional Projects"). In the event Lilly desires to exercise such an
option, Lilly shall notify Albany in writing and the Parties shall promptly
negotiate an agreement covering each such Additional Project, which agreement
shall contain terms that are substantially similar to this Agreement. Such
agreements shall provide that there shall be *** for each such Additional
Project, and that the FTE Rate for each such Additional Project to be paid by
Lilly under such agreements shall be *** per Albany FTE devoted to such
Additional Project. Such FTE Rate will be adjusted according to the CPI-U in
1999.
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
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5.3.2. During the term of the Program and for a period of *** (***)
years after the termination or expiration of the Program, Lilly shall have the
option to have Albany perform SAR Projects. In the event Lilly desires to
exercise such an option, Lilly shall notify Albany in writing and the Parties
shall promptly negotiate an agreement covering each such SAR Project, which
agreement shall contain terms that are substantially similar to this Agreement.
Such agreements shall also provide that there shall be *** for each such SAR
Project, and that the FTE Rate to be paid by Lilly for each SAR Project shall be
an average of *** per Albany FTE devoted to such SAR Project (***). Such FTE
Rate shall be determined on an SAR Project-by-SAR Project basis and adjusted in
accordance with the Ph.D. to non-Ph.D. committed to each such SAR Project. Such
FTE Rate will be adjusted according to the CPI-U in 1999.
ARTICLE VI
------- --
Payments
--------
Section 6.1 Payments to Albany.
------------------
6.1.1. As partial consideration for Albany's performance of its
obligations hereunder, Lilly shall pay to Albany ***, which amount shall be used
by Albany for expenses incurred under the Program including but not limited to:
***. Such payment shall be made by Lilly within thirty (30) days after the
Effective Date.
6.1.2. As partial consideration for Albany's performance of its
obligations hereunder, Lilly hereby agrees to pay to Albany as described in
Section 6.1.3, and per FTE committed to the Program of *** (the "FTE Rate")
commencing on January 1, 1998 and continuing each quarter thereafter until the
expiration or termination of the Program. On January 1, 1999 and each
January 1 thereafter
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION, THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
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during the term of the Program, the FTE Rate shall be adjusted by an amount
equal to the percentage change, if any, in the CPI-U.
6.1.3. During the term of the Program, Albany shall submit to Lilly
signed invoices identifying the number of FTE's, and the monthly equivalent of
time incurred, at the completion of each quarter's efforts. Such invoices shall
be paid by Lilly within thirty (30) days of receipt and shall be in the form of
a Lilly check or wire transfer to the following account of Albany Molecular
Research, Inc.; ***; ABA # ***; Account Number ***. Lilly shall have the right
to have Albany's independent certified accountants, which accountants shall be
reasonably acceptable to Lilly, audit financial records of Albany pertaining to
this Agreement not more than once a calendar year.
6.1.4. The Parties acknowledge that payments made by Lilly pursuant
to this Article are for contract research and development expenses, and agree
that any and all tax credits or deductions for such contract research and
development expenses arising from such payments shall be claimed by Lilly.
Section 6.2 Payments to Lilly.
-------- -- -----
6.2.1. Cash Compensation Received by Albany. As partial consideration
---- ------------ -------- ---------
for Lilly's performance of its obligations hereunder, Albany hereby agrees to
pay to Lilly, all Cash Compensation Albany shall receive under any agreement
entered into with a Third Party, for the use of Lilly Licensed Technology or the
Program Technology within three (3) years of expiration or termination of this
Program as follows: ***. Albany FTE rate charges to any Third Party on any such
projects shall not exceed ***. In the event that Albany enters into such an
Agreement that does not provide for Cash Compensation, Albany shall pay Lilly
*** percent (***%) of the gross revenues received by Albany under such Agreement
up to a total of ***. Such Cash Compensation payments to Lilly shall be paid
within thirty (30) days after receipt of such Cash Compensation by Albany.
6.2.2. Royalty. In addition to the foregoing, with respect to each
-------
calendar quarter, Albany shall pay to Lilly a running royalty equal to ***
percent (***%) of Net Sales of any
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
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Products comprising a compound discovered or developed by Albany using Lilly
Licensed Technology or Program Technology that are sold by Albany and/or its
Affiliates or its sublicensees of such Product.
6.2.3. Length of Royalty Payments. The royalties payable to Lilly
------ -- ----------------
under Section 6.2.2 of this Agreement shall be paid on a country-by-country
basis from the date of first commercial sale of each such Product in a
particular country until ten (10) years thereafter.
6.2.4. Royalty Reports. Albany shall deliver to Lilly within ninety
---------------
(90) days after the end of each calendar quarter a written accounting of
Albany's and its Affiliates sales and other consideration received subject to
royalty payment due to Lilly for such quarter. Such reports shall contain (i)
the Net Sales by Product and royalty due on a country-by-country basis for the
quarter reporting period, and (ii) a worldwide sales forecast for the subsequent
five quarters following the current royalty reporting quarter. When Albany
delivers the accounting to Lilly, Albany shall also deliver all royalty payments
due to Lilly for the calendar quarter. Such royalty reports shall be sent to Eli
Lilly and Company, Attention: *** or other address that may be designated by
Lilly.
6.2.5. Wire Transfer of Funds. All payments made by Albany to Lilly
---- -------- -- -----
under this Article VI shall be made by Federal Reserve electronic wire transfer
credit in immediately available funds to Lilly's designated bank account.
6.2.6. Audits. Albany and its Affiliate's shall keep, and cause any
------
sublicensee to keep, accurate records in sufficient detail to enable the amounts
due to Lilly to be determined. Within the term of this Agreement and within one
(1) year after its termination, Lilly shall not more than once each year have
the right at its expense to have independent certified public accountants,
selected by Lilly and reasonably acceptable to Albany, inspect Albany's, and its
Affiliate's, records for any of the two (2) preceding years for the purpose of
determining the accuracy of royalty payments. The independent certified
accountants shall keep confidential any information obtained during such
inspection and shall reported to Lilly only the amounts of royalties due and
payable. If Albany has underpaid a royalty amount due under this Agreement by
more than *** percent (***%), Albany shall promptly pay the appropriate amount
to Lilly and shall also reimburse Lilly for the cost of such audit.
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
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6.2.7. Exchange Rates. All payments to be made by Albany to Lilly
--------------
under this Agreement shall be made in United States dollars. In the case of
sales outside the United States, the rate of exchange to be used in computing
the amount of currency equivalent in United States dollars due Lilly shall be
made using Albany's then current standard exchange rate methodology, which
methodology shall be in conformity with generally accepted accounting principles
and approved and reviewed by Albany's independent certified public accountants.
6.2.8. Late Payments. Any amounts not paid by either Party when due
-------------
under this Agreement shall be subject to interest from and including the date
payment is due through and including the date upon which the non-paying Party
has collected immediately available funds in an account designated by such non-
paying Party at a rate equal to the sum of *** percent (***%) plus the prime
rate of interest quoted in the "Money Rates" section of The Wall Street Journal,
calculated daily on the basis of a 360-day year, or similar agreed upon
reputable data source.
Section 6.3 Taxes. All taxes which Lilly is required to pay with respect to
-----
the payments made under this Agreement shall be paid by Lilly. If laws or
regulations require withholding taxes, the taxes will be deducted prior to
remittance of the payments to Lilly and will be paid by Albany to the
appropriate government tax authority. Proof of payment shall then be provided
to Lilly either within ninety (90) days after each payment or once each year for
the prior calendar year within ninety (90) days after December 31.
Section 6.4 Reports. Albany shall provide Lilly with semi-annual reports
-------
starting one (1) year after the termination or expiration of the Program
relating to compounds discovered or developed by Albany, its Affiliates or its
sublicensees using the Lilly Licensed Technology or the Program Technology. Such
reports shall also include a summary of results of any research conducted
pursuant to any agreement with a Third Party entered into by Albany pursuant to
Section 2.4, but only to the extent that such reports are not in breach of any
obligation of confidentiality to such Third Party.
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
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ARTICLE VII
------- ---
Patent Ownership, Protection, Validity And Related Matters
----------------------------------------------------------
Section 7.1 Ownership. Albany shall own all inventions within the scope of
---------
the Program made solely by its employees. All inventions made jointly by
employees of Lilly and employees of Albany shall be owned jointly by Albany and
Lilly. Lilly shall own all inventions within the scope of the Program made
solely by its employees.
Section 7.2 Patentable Inventions. The Parties hereby agree that all
---------------------
Program Know-How shall be ***. If a patentable invention is conceived in the
course of the Program, Lilly and Albany shall discuss that invention and the
desirability of filing a United States patent application covering the
invention, as well as any foreign counterparts. Lilly shall make the final
decision on whether a patent application should be filed on such invention. In
the event Lilly determines that a patent application should be filed on such
invention, Albany shall file and prosecute the application. If an invention is
made jointly pursuant to 35 U.S.C. (S)116, Lilly shall make the decision on
whether a patent application covering such joint invention should be filed. In
the event Lilly determines that a patent application should be filed on such
joint invention, Lilly shall file and prosecute the application. All patent
applications and patents covering any invention made under the Program shall be
owned by the Parties or Party, as the case may be, that own(s) said invention.
Section 7.3 Review and Comment. Each Party shall provide the Program Chairs
------------------
with a copy of any patent application which first discloses any specific Program
Know-How prior to filing the first of such applications in any jurisdiction for
review and comment by the Program Chairs or its designees. The Program Chairs
and/or its designees shall maintain any such patent application in confidence,
pursuant to Article VIII.
Section 7.4 Retention of Rights. Each Party shall continue to own and
-------------------
retain proprietary rights to its Know-How and Patent Rights which are licensed
or disclosed under this Agreement except as specifically provided herein.
Section 7.5 Prosecution and Maintenance. Each Party agrees to prosecute and
---------------------------
maintain the Program Patent Rights owned by it, and to prosecute any
interference or opposition
<PAGE>
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proceedings with respect to such Program Patent Rights. Patent Rights jointly
owned by the Parties shall be prosecuted and maintained, including the
prosecution of any interference or opposition proceedings with respect thereto,
by Lilly. The Party initially responsible for such prosecution and maintenance
(the "Initial Responsible Party") shall give notice to the other Party of any
decision to cease such prosecution and maintenance and, in such case, shall
permit the other Party at its sole discretion to continue prosecution or
maintenance. If the other Party elects to continue prosecution or maintenance,
the Initial Responsible Party shall execute such documents and perform such acts
as may be reasonably necessary for the other Party to continue prosecution or
maintenance.
Section 7.6 Third Party Infringement. Albany and Lilly each agrees to take
------------------------
reasonable actions to protect the Program Patent Rights from infringement and to
protect the Program Know-How from unauthorized use, when, from its own knowledge
or upon notice by the other Party, the Party with knowledge or receiving notice
becomes aware of the reasonable probability that such infringement or
unauthorized use exists.
Section 7.7 Costs and Expenses. Each Party shall bear its own costs and
------------------
expenses in filing, prosecuting, maintaining and extending Program Patent
Rights.
Section 7.8 Third Party Infringement. If any Program Patent Right is
------------------------
infringed by a Third Party, the Party to this Agreement first having knowledge
of such infringement shall promptly notify the other in writing, which notice
shall set forth the facts of such infringement in reasonable detail. Albany
shall have the primary right, but not the obligation, to institute, prosecute,
and control any action or proceeding with respect to such infringement of its
Program Patent Rights, by counsel of its own choice, and Lilly shall have the
right, at its own expense, to be represented in such action by counsel of its
own choice. Lilly shall have the primary right, but not the obligation, to
institute, prosecute, and control any action or proceeding with respect to such
infringement of the jointly owned Program Patent Rights, by counsel of its own
choice, and Albany shall have the right, at its own expense, to be represented
in such action by counsel of its own choice. If the Party having the primary
right to institute, prosecute, and control any action or proceeding with respect
to such infringement of a Program Patent Rights (the "Initial Controlling
Party") shall fail to bring such action or proceeding within a period of one
hundred twenty (120) days after receiving written notice from the other Party or
otherwise having knowledge of such
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
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infringement, the other Party shall have the right to bring and control any such
action by counsel of it's own choice, and the Initial Controlling Party shall
have the right, at its own expense, to be represented in any such action by
counsel of its own choice. If one Party brings any such action or proceeding,
the other Party agrees, if necessary, to be joined as a party plaintiff and to
give the first Party reasonable assistance and authority to file and to
prosecute such suit. The costs and expenses of all suits brought by either Party
under this Section 7.8 shall be reimbursed on a pro-rata basis to both parties
out of any damages or other monetary awards recovered therein in favor of Albany
and/or Lilly. Any remaining damages shall then belong to the Party bringing and
prosecuting such action or proceeding. No settlement or consent judgment or
other voluntary final disposition of a suit under this Section 7.8 may be
entered into without the joint consent of Albany and Lilly (which consent shall
not be withheld unreasonably).
ARTICLE VIII
------------
Confidentiality
---------------
Section 8.1 Confidentiality. During the term of this Agreement and for a
---------------
period of *** (***) years thereafter, each Party agrees, for itself, its
employees, agents, consultants, assignees, Affiliates, sublicensees and clinical
investigators that it and each such person or entity will maintain in confidence
all Confidential Information disclosed in connection with this Agreement and
shall obtain written confidentiality agreements from each such person or entity.
Neither Party nor its employees, agents, consultants, assignees, Affiliates,
sublicensees and clinical investigators shall use or disclose such Confidential
Information except as permitted under this Agreement. Each Party shall promptly
notify the other upon discovery of any unauthorized use or disclosure of the
Confidential Information. Confidential Information shall not include any
information which:
a) the recipient can demonstrate to the reasonable satisfaction of
the disclosing Party was already known to the recipient, other
than under an obligation of confidentiality, at the time of
disclosure;
b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure;
<PAGE>
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c) becomes generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act
or omission of the recipient;
d) was disclosed to the recipient, other than under an obligation of
confidentiality, by a Third Party who had no obligation not to
disclose such information to others; or
e) the recipient can demonstrate by contemporaneous written
documentation to the reasonable satisfaction of the disclosing
Party as independently developed by the recipient without
reference to the disclosure.
Section 8.2 Employee Obligations. Albany and Lilly each agree that it shall
--------------------
provide Know-How and other Confidential Information received from the other
Party only to its employees, consultants and advisors who have a need to know
and have an obligation to treat such information and materials as confidential.
On an annual basis, Albany agrees to explicitly counsel its consultants and
advisors of the implications arising from such obligations.
Section 8.3 Material Breach. Albany acknowledges that Lilly's Confidential
---------------
Information, including the Lilly Licensed Technology, is of a special and unique
character which gives it peculiar value and that consequently any wrongful use
or disclosure of such Confidential Information will cause injury not readily
measurable in monetary damages, and therefore irreparable. Such wrongful use or
disclosure of such Confidential Information shall constitute a breach of this
Agreement and Lilly shall have the right to terminate this Agreement in
accordance with Article IX and all licenses granted to Albany under Section 5.1
shall automatically terminate upon such termination by Lilly.
Section 8.4 Authorized Disclosure. Each Party may disclose the Confidential
---------------------
Information to the extent such disclosure is reasonably necessary in filing or
prosecuting patent applications as provided hereunder, prosecuting or defending
litigation or complying with applicable governmental regulations, including
those requiring promulgation of periodic reports to shareholders, provided that
if such Party is required to make any such disclosure of the Confidential
Information it shall, give reasonable advance notice to the other Party of such
disclosure requirement and, except to the extent inappropriate in the case of
patent applications, use diligent efforts to secure confidential treatment of
such information required to be disclosed.
<PAGE>
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In addition, each Party may disclose such Confidential Information to its
Affiliates and sublicensees. In connection with any such disclosure each Party
shall use diligent efforts to secure confidential treatment of such information
and each Party shall be responsible for any prohibited disclosure by any such
person or entity. Any copy of this Agreement to be filed with the Securities and
Exchange Commission or any other governmental body shall be redacted to the
satisfaction of both Parties prior to such filing.
Section 8.5 Press Releases and Third Party Communications. After execution
---------------------------------------------
hereof and during the term of this Agreement, neither Party shall issue a press
release relating to this Agreement without first obtaining the approval of the
other, such approval not to be unreasonably withheld. The Parties will jointly
develop a strategy for responding to Third Party inquiries related to this
Agreement. During the term of this Agreement, neither Party shall approve or
make any confidential or non-confidential disclosures of the Lilly Licensed
Technology, Program Technology or any other Confidential Information to any
Third Party without first securing the written approval of the other Party,
which approval shall not be unreasonably withheld. Should the two (2) Parties
not be in mutual agreement, the Lilly shall make the final determination.
Section 8.6 Publications. Albany shall not publish or otherwise
------------
disclose any Lilly Licensed Technology or Program Technology without Lilly's
written permission.
ARTICLE IX
----------
Term, Termination Rights, And Obligations Upon Termination
----------------------------------------------------------
Section 9.1 Term. The term of this Agreement shall begin on the Effective
----
Date and continue until the completion by Albany of the re-synthesis of the
Lilly Combinatorial Library. The Parties agree that the goal for completion of
the resynthesis of the Lilly Combinatorial Library shall be two (2) years from
the Effective Date. In the event that Albany has not delivered the re-
synthesized Lilly Combinatorial Library to Lilly within two (2) years of the
Effective Date, Lilly may, at its option, terminate this Agreement. If Lilly
does not terminate the Agreement at such time, this Agreement shall continue
under the same terms and conditions specified herein.
<PAGE>
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Section 9.2 Permissive Early Termination. Lilly may terminate this
----------------------------
Agreement upon six (6) months advanced written notice. In the event of
termination pursuant to the is Section 9.2, Lilly shall have the right to apply
seventy-five percent (75%) of the payments to be made to Albany pursuant to
Sections 6.1.2 and 6.1.3 for work conducted during the six (6) month period
after receipt of such written notice by Albany under this Section 9.2 to fund:
(a) an existing Additional Project or SAR Project or (b) an Additional Project
or SAR Project to be agreed upon by the Parties after the date of such written
notification to Albany under this Section 9.2.
Section 9.3 Termination for Breach. If either Party shall be in default of
----------------------
any of its obligations under this Agreement and shall fail to remedy such
default within sixty (60) days after receipt of written notice of such default,
this Agreement shall terminate at the end of such sixty (60) day period.
Section 9.4 Effect of Termination or Expiration. Termination or expiration
-----------------------------------
of this Agreement shall not affect the rights and obligations of the Parties ac-
rued prior to termination or expiration, including the obligations of
confidentiality under Article VIII, provided however, that in case of a
termination for breach pursuant to Section 9.3 the licenses and options granted
under Article V shall: (i) continue for the non-breaching Party and (b)
terminate for the to the breaching Party.
ARTICLE X
---------
Miscellaneous Provisions
------------------------
Section 10.1 Representation of Authority. Albany and Lilly each represents
---------------------------
and warrants to the other that as of the Effective Date it has full right, power
and authority to enter into this Agreement.
Section 10.2 Employee Obligations. Each Party represents and warrants that
--------------------
all of its employees, officers, and consultants have executed agreements or have
existing obligations under law requiring, in the case of employees and officers,
assignment to such Party of all inventions made during the course of and as
the result of their association with such Party and obligating the individual to
maintain as confidential such Party's confidential information as well
<PAGE>
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as confidential information of a Third Party which such Party may receive, to
the extent required to support such Party's obligations under this Agreement.
Section 10.3 Further Assurances. Each Party hereto agrees to execute,
------------------
acknowledge and deliver such further instruments, and to do all such other acts,
as may be necessary or appropriate in order to carry out the purposes and intent
of this Agreement.
Section 10.4 Disclosure of Agreement. Except as required by law, neither
-----------------------
Albany nor Lilly shall release any information to any Third Party with respect
to the existence and terms of this Agreement without the prior written consent
of the other. This prohibition includes, but is not limited, to any press
releases, educational and scientific conferences, promotional materials,
governmental filings, and discussions with public officials and the media.
Section 10.5 No Agency. It is understood and agreed that nothing in this
---------
Agreement shall be construed as authorization for either Albany or Lilly to act
as agent for the other. Lilly shall not incur any liability for any act or
failure to act by employees of Albany. Albany shall not incur any liability for
any act or failure to act by employees of Lilly.
Section 10.6 Force Majeure. The Parties to the Agreement shall be excused
-------------
from the performance of their obligations under this Agreement if such
performance is prevented by Force Majeure and the nonperforming Party promptly
provides notice of the prevention to the other Parties. Such excuse shall be
continued so long as the condition constituting Force Majeure continues and the
nonperforming Party takes reasonable efforts to remove the condition. For
purposes of this Agreement, Force Majeure shall include conditions beyond the
control of the Parties, including without limitation, an act of God, voluntary
or involuntary compliance with any regulation, law or order of any government,
war, civil commotion, epidemic, failure or default of public utilities or common
carriers, destruction of production facilities or materials by fire, earthquake,
storm or like catastrophe.
Section 10.7 Amendment. This Agreement may not be amended, supplemented, or
---------
otherwise modified except by an instrument in writing signed by the Parties.
Section 10.8 Notices and Reports. All notices required by this Agreement
-------------------
shall be in writing. All notices and reports shall be deemed given if delivered
personally or by registered or certified mail, return receipt requested and
postage prepaid or sent by express courier service, to
<PAGE>
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the Parties at the following addresses or such other addresses as may be
designated in writing by the respective Parties:
To Lilly: Eli Lilly and Company/Sphinx Pharmaceutical
4615 University Drive
Durham, NC 27707
Attn: Vice President of Research-Sphinx
Copy to: General Counsel
To Albany: Albany Molecular Research, Inc.
Corporate Circle
Albany, NY 12203-5154
Attn: Executive Vice President and Chief Financial Officer
Section 10.9 Governing Law. This Agreement shall be governed by, and
-------------
construed in accordance with, the laws of the State of Indiana, excluding any
choice of law rules which may direct the application of the law of any other
jurisdiction. Questions effecting the construction and effect of any Program
Patent Rights shall be determined by the laws of the country in which the
Program Patent Right has been applied for and granted.
Section 10.10 Assignment. The Parties may not assign their rights and
----------
obligations under this agreement without the prior written consent of the
others, except in connection with any merger, reorganization or sale of all or
substantially all of its assets to which this Agreement relates. This Agreement
shall be binding upon and shall inure to the benefit of the successors and
permitted assigns of the Parties.
Section 10.11 Headings. The captions or headings of the Sections or other
--------
subdivisions hereof are inserted only as a matter of convenience or for
reference and shall have no effect on the meaning of the provisions hereof.
Section 10.12 Severance of Clauses. Should any provision of this
--------------------
Agreement be determined by a court of competent jurisdiction to violate or
contravene any applicable law or policy, such provision will be severed or
modified by the court to the extent necessary to comply with the applicable law
or policy, and such modified provision and the remainder of the provisions
hereof will continue in full force and effect.
<PAGE>
-25-
Section 10.13 No Waiver. The waiver of a breach hereunder may be effected
---------
only by a writing signed by the waiving Party and shall not constitute a waiver
of any other breach.
Section 10.14 Entire Agreement. The Agreement constitutes the entire
----------------
Agreement of the Parties relating to the subject matter.
Section 10.15 Counterparts. The Agreement has been executed in two (2)
------------
counterparts, both of which shall constitute an original, but which together
shall constitute the same instrument.
Section 10.16 Surviving Rights. Termination, expiration, or cancellation
----------------
of this Agreement by any Party shall not relieve the Parties of any rights or
obligations accrued hereunder prior to such termination, expiration, or
cancellation.
IN WITNESS WHEREOF, each of the Parties hereto, through their
duly-authorized representative, has executed this Agreement on the day and year
first above written.
ELI LILLY AND COMPANY ALBANY MOLECULAR RESEARCH, INC.
By: /s/ August M. Watanabe By: /s/ Thomas D'Ambra, Ph.D.
--------------------------- ------------------------------
August M. Watanabe Name: Thomas E. D'Ambra, Ph.D.
Executive Vice President ---------------------------
Title: President
---------------------------
Date: December 15, 1997 Date: December 16, 1997
------------------------- ----------------------------
<PAGE>
CONFIDENTIAL INFORMATION HAS BEEN OMITTED PURSUANT TO RULE 406 UNDER THE
SECURITIES ACT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION. THE LOCATIONS
OF THE OMITTED INFORMATION HAVE BEEN INDICATED WITH ASTERISKS.
-26-
EXHIBIT A
---------
LILLY STRATEGIC FOCUS AREAS
1. CNS
***
2. Endocrine
***
3. Antiinfectives
***
4. Cardiovascular
***
5. Cancer
***
<PAGE>
-27-
EXHIBIT B
---------
LIBRARY STANDARDS
(to be annexed to this Agreement in accordance with Section 3.10)
[No Annex Attached]
<PAGE>
Exhibit 10.11
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT (the "Agreement") is made as of the ____ day of
______________, ____, by and between Albany Molecular Research, Inc., a New York
corporation (the "Company"), and Thomas E. D'Ambra, Ph.D. (the "Executive").
WHEREAS, the Executive is an officer and key employee of the Company; and
WHEREAS, the parties hereto desire to assure that the Executive's knowledge
and familiarity with the business of the Company will continue to be available
to the Company after the date hereof.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties agree as follows:
1. Employment. Subject to the provisions of Section 6, the Company
----------
hereby employs the Executive and the Executive accepts such employment upon the
terms and conditions hereinafter set forth.
2. Term of Employment. The term of the Executive's employment pursuant
------------------
to this Agreement shall commence on and as of the date hereof (the "Effective
Date") and shall remain in effect for a period of three (3) years from the
Effective Date (the "Term"). The Term shall be renewed automatically for
periods of one (1) year (each a "Renewal Term") commencing at the third
anniversary of the Effective Date and on each subsequent anniversary thereafter,
unless notice that this Agreement will not be extended is given by either the
Executive or the Company not less than sixty (60) days prior to the expiration
of the Term (as extended by any Renewal Term); provided that if the Company
--------
elects not to extend this Agreement for any reason, the Executive shall receive
the payments set forth in Section 6(e); and provided further that if the Company
-------- -------
(or any of its successors) elects not to renew this Agreement at any time during
the one year following a Change in Control (as defined in Section 6(g)), the
provisions of Section 6(g) shall apply. The period during which the Executive
serves as an employee of the Company in accordance with and subject to the
provisions of this Agreement is referred to in this Agreement as the "Term of
Employment."
3. Capacity.
--------
(a) Duties. During the Term of Employment, the Executive shall report
------
directly to the Board of Directors of the Company and (i) shall serve as an
executive officer of the Company with the title Chairman of the Board and Chief
Executive Officer, subject to election by the Board of Directors of the Company,
(ii) shall perform such duties and responsibilities as may be reasonably
determined by the Board of Directors of the Company consistent with the
Executive's title and position, duties and responsibilities as an executive
officer of the Company as of the Effective Date; provided that such duties and
--------
responsibilities shall be within the general area of the Executive's experience
and skills, (iii) upon the request of the Board of Directors of the Company,
shall serve as an officer and/or director of the
<PAGE>
Company and any of its subsidiaries or affiliates (provided that the Company
--------
shall indemnify the Executive for liabilities incurred as such in accordance
with its current practices to the fullest extent permitted by applicable law);
and (iv) shall render all services incident to the foregoing.
(b) Extent of Service. The Executive agrees to diligently serve the
-----------------
interests of the Company and shall devote substantially all of his working time,
attention, skill and energies to the advancement of the interests of the Company
and its subsidiaries and affiliates and the performance of his duties and
responsibilities hereunder; provided that nothing in this Agreement shall be
--------
construed as preventing the Executive from (i) investing the Executive's assets
in any entity in a manner not prohibited by Section 7 and in such form or manner
as shall not require any material activities on the Executive's part in
connection with the operations or affairs of the entities in which such
investments are made, or (ii) engaging in religious, charitable or other
community or non-profit activities that do not impair the Executive's ability to
fulfill the Executive's duties and responsibilities under this Agreement.
4. Compensation.
------------
(a) Salary. During the Term of Employment, the Company shall pay the
------
Executive a salary (the "Base Salary") at an annual rate as shall be determined
from time to time by the Board of Directors of the Company or the Compensation
Committee of the Board of Directors consistent with the general policies and
practices of the Company and subject to periodic review in accordance with the
policies and practices of the Company; provided, however, that in no event shall
-------- -------
such rate per annum be less than $200,000. Such salary shall be subject to
withholding under applicable law and shall be payable in periodic installments
in accordance with the Company's usual practice for its senior executives, as in
effect from time to time.
(b) Bonus. Commencing on the first annual compensation determination
-----
date established by the Company during the Term of Employment and on each such
date thereafter, the Company shall review the performance of the Company and of
the Executive during the prior year, and the Company may provide the Executive
with additional compensation as a bonus in accordance with any bonus plan then
in effect from time to time for senior executives of the Company. Any such
bonus plan shall have such terms as may be established in the sole discretion of
the Board of Directors of the Company or the Compensation Committee of the Board
of Directors.
5. Benefits.
--------
(a) Regular Benefits. During the Term of Employment, the Executive
----------------
shall be entitled to participate in any and all medical, dental, pension and
life insurance plans, disability income plans and other employee benefit plans
as in effect from time to time for senior executives of the Company. Such
participation shall be subject to (i) the terms of the applicable plan
documents, (ii) generally applicable policies of the Company and (iii) the
2
<PAGE>
discretion of the Board of Directors of the Company or the administrative or
other committee provided for in, or contemplated by, such plan. Compliance with
this Section 5(a) shall in no way create or be deemed to create any obligation,
express or implied, on the part of the Company or any subsidiary or affiliate of
the Company with respect to the continuation of any benefit or other plan or
arrangement maintained as of or prior to the Effective Date or the creation and
maintenance of any particular benefit or other plan or arrangement at any time
after the Effective Date.
(b) Reimbursement of Expenses. The Company shall promptly reimburse
-------------------------
the Executive for all reasonable business expenses incurred by the Executive
during the Term of Employment in accordance with the Company's practices for
senior executives of the Company, as in effect from time to time.
(c) Vacation. During the Term of Employment, the Executive shall
--------
receive at least four (4) weeks paid vacation annually or such greater amount as
is in accordance with the Company's practices for senior executives of the
Company, as in effect from time to time.
6. Termination of Employment. Notwithstanding the provisions of Section
-------------------------
2, the Executive's employment under this Agreement shall terminate under the
following circumstances set forth in this Section 6.
For purposes of this Agreement, "Date of Termination" means (i) if the
-------------------
Executive's employment is terminated by his death as provided in Section 6(c),
the date of his death; (ii) if the Executive's employment is terminated due to
his permanent disability as provided in Section 6(c), the date on which notice
of termination is given; (iii) if the Executive's employment is terminated under
Section 6(e), sixty (60) days after the date on which notice of termination is
given; and (iv) if the Executive's employment is terminated under Section 6(f),
the date on which the applicable cure period expires.
(a) Mutual Consent. The Executive's employment under this Agreement
--------------
may be terminated at any time by the mutual consent of the Executive and the
Company on such terms as both parties shall mutually agree.
(b) Termination by the Company for Cause. The Executive's
------------------------------------
employment under this Agreement may be terminated by the Company for "cause" at
any time upon written notice to the Executive without further liability on the
part of the Company. For purposes of this Agreement, a termination shall be for
"cause" if:
(i) the Executive shall commit an act of fraud, embezzlement,
misappropriation or breach of fiduciary duty against the Company or any of its
subsidiaries or affiliates or shall be convicted by a court of competent
jurisdiction or shall plead guilty or nolo contendere to any felony or any crime
involving moral turpitude;
3
<PAGE>
(ii) the Executive shall commit a material breach of any of the
covenants, terms or provisions of Section 7 or 8 hereof which breach has not
been cured within fifteen (15) days after delivery to the Executive by the
Company of written notice thereof;
(iii) the Executive shall commit a material breach of any of
the covenants, terms or provisions hereof (other than pursuant to Section 7 or 8
hereof) which breach has not been remedied within thirty (30) days after
delivery to the Executive by the Company of written notice thereof; or
(iv) the Executive shall have disobeyed reasonable written
instructions from the Company's Board of Directors which are consistent with the
terms and conditions of this Agreement or shall have deliberately, wilfully,
substantially and continuously failed to perform the Executive's duties
hereunder, after written notice and under circumstances effectively constituting
a voluntary resignation of the Executive's position with the Company.
Upon termination for cause as provided in this Section 6(b), (A) all
obligations of the Company under this Agreement shall thereupon immediately
terminate other than any obligations with respect to earned but unpaid Base
Salary and (B) the Company shall have any and all rights and remedies under this
Agreement and applicable law.
(c) Death; Disability. The Executive's employment under this
-----------------
Agreement may be terminated by the Company upon the earlier of death or
permanent disability (as defined below) of the Executive continuing for a period
of one hundred eighty (180) days. Upon any such termination of the Executive's
employment, all obligations of the Company under this Agreement shall thereupon
immediately terminate other than any obligations with respect to (i) earned but
unpaid salary through the Date of Termination; provided that Base Salary
--------
payments as provided by Section 4(a) shall continue to be made to the Executive
(or his estate) through the Term (as extended by any Renewal Term) but only if
and to the extent payments to the Executive or his estate under any applicable
disability or life insurance policy is less than the amount the Executive would
otherwise receive as Base Salary hereunder, (ii) Bonus payments with respect to
the calendar year within which such termination occurred on the basis of and to
the extent contemplated in any bonus plan then in effect with respect to senior
executive officers of the Company, pro-rated on the basis of the number of days
of the Executive's actual employment hereunder during such calendar year through
the Date of Termination, and (iii) in the case of permanent disability,
continuation at the Company's expense of health insurance benefits (medical and
dental) until the first anniversary of the Date of Termination to the extent
permitted under the Executive's group health insurance policy. As used herein,
the term "permanent disability" or "permanently disabled" means the inability of
the Executive, by reason of injury, illness or other similar cause, to perform a
major part of his duties and responsibilities in connection with the conduct of
the business and affairs of the Company. The Company shall provide written
notice to the Executive of the termination of his employment hereunder due to
permanent disability.
4
<PAGE>
(d) Voluntary Termination by the Executive. At any time during the
--------------------------------------
Term of Employment, the Executive may terminate his employment under this
Agreement upon sixty (60) days' prior written notice to the Company. Upon
termination by the Executive as provided in this Section 6(d), all obligations
of the Company under this Agreement shall thereupon immediately terminate other
than any obligations with respect to earned but unpaid Base Salary.
(e) Termination by the Company Without Cause. The Executive's
----------------------------------------
employment under this Agreement may be terminated by the Company at any time
without "cause" (as defined in Section 6(b)) by the Company upon sixty (60)
days' prior written notice to the Executive. Upon any such termination of the
Executive's employment, all obligations of the Company under this Agreement
shall thereupon immediately terminate other than any obligations with respect to
earned but unpaid Base Salary and bonus under Section 4. In addition, subject
to the Executive signing a general release of claims in a form and manner
satisfactory to the Company, the Company shall continue to pay the Executive his
Base Salary at the rate then in effect pursuant to Section 4(a) for a period of
one (1) year from the Date of Termination and shall pay to the Executive in
monthly installments over such one-year period, an amount equal to the
Executive's cash bonus, if any, received in respect of the immediately preceding
year pursuant to Section 4(b).
(f) Termination by the Executive upon Company Breach. The Executive
------------------------------------------------
shall have the right to terminate his employment hereunder upon written notice
to the Company in the event of (i) a material adverse change or diminution in
the nature or scope of the powers, functions, titles, duties or responsibilities
of the Executive that is adverse to the Executive or (ii) a breach by the
Company of any of its material obligations hereunder, in each case after the
Executive has given written notice to the Company specifying such default by the
Company and giving the Company a reasonable time, not less than thirty (30)
days, to conform its performance to its obligations hereunder. The failure of
the Executive to give notice of any of the foregoing events shall not under any
circumstances constitute a waiver of the Executive's right to terminate his
employment and receive the amounts payable under this Section 7(f). Upon any
such termination of the Executive's employment, all obligations of the Company
under this Agreement shall thereupon immediately terminate other than any
obligations with respect to earned but unpaid Base Salary and bonus under
Section 4. In addition, subject to the Executive signing a general release of
claims in a form and manner satisfactory to the Company, the Company shall
continue to pay the Executive his Base Salary at the rate then in effect
pursuant to Section 4(a) for a period of one (1) year from the Date of
Termination and shall pay to the Executive in monthly installments over such
one-year period, an amount equal to the Executive's cash bonus, if any, received
in respect of the immediately preceding year pursuant to Section 4(b).
(g) Termination Pursuant to a Change of Control. If there is a Change
-------------------------------------------
of Control, as defined below, during the Term of Employment, the provisions of
this Section 6(g) shall apply and shall continue to apply throughout the
remainder of the Term (as extended by any Renewal Term). If, within one (1)
year following a Change of Control, the Executive's
5
<PAGE>
employment is terminated by the Company without cause (in accordance with
Section 6(e) above) or by the Executive for "Good Reason" (as defined in Section
6(g)(ii) below) or the Company elects not to renew this Agreement in accordance
with Section 2, the Company shall pay to the Executive (or the Executive's
estate, if applicable) a lump sum amount equal to three (3) times the sum of (x)
the Executive's Base Salary at the rate then in effect pursuant to Section 4(a),
plus (y) an amount equal to the Executive's cash bonus, if any, received in
- ----
respect of the immediately preceding year pursuant to Section 4(b).
(i) "Change of Control" shall mean the occurrence of any one of
-----------------
the following events:
(A) any "person" as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Act") (other than the
Company, any of its subsidiaries, or any trustee, fiduciary or other person or
entity holding securities under any employee benefit plan or trust of the
Company or any of its subsidiaries and other than Thomas E. D'Ambra, Ph.D.),
together with all "affiliates" and "associates" (as such terms are defined in
Rule 12b-2 under the Act) of such person, shall become the "beneficial owner"
(as such term is defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Company representing twenty-five percent (25%) or more of
the combined voting power of the Company's then outstanding securities having
the right to vote in an election of the Company's Board of Directors ("Voting
Securities") (in such case other than as a result of an acquisition of
securities directly from the Company);
(B) persons who, as of the Effective Date, constitute the Company's
Board of Directors (the "Incumbent Directors") cease for any reason, including,
without limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the Board; provided
--------
that any person becoming a director of the Company subsequent to the Effective
Date shall be considered an Incumbent Director if such person's election was
approved by or such person was nominated for election by either (1) a vote of at
least a majority of the Incumbent Directors or (2) a vote of at least a majority
of the Incumbent Directors who are members of a nominating committee comprised,
in the majority, of Incumbent Directors; but provided further that any such
-------- -------
person whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of members of the Board of
Directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the Board, including by reason of agreement
intended to avoid or settle any such actual or threatened contest or
solicitation, shall not be considered an Incumbent Director; or
(C) the stockholders of the Company shall approve (1) any
consolidation or merger of the Company where the stockholders of the Company,
immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, beneficially own (as such term is defined in Rule
13d-3 under the Act), directly or indirectly, shares representing in the
aggregate more than fifty percent (50%) of the voting shares of the corporation
issuing cash or securities in the consolidation or merger (or of its ultimate
parent
6
<PAGE>
corporation, if any), (2) any sale, lease, exchange or other transfer (in
one transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of the Company
or (3) any plan or proposal for the liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (A) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
shares of Voting Securities outstanding, increases the proportionate number of
shares of Voting Securities beneficially owned by any person to twenty-five
percent (25%) or more of the combined voting power of all then outstanding
Voting Securities; provided, however, that if any person referred to in this
-------- -------
sentence shall thereafter become the beneficial owner of any additional shares
of Voting Securities (other than pursuant to a stock split, stock dividend, or
similar transaction or as a result of an acquisition of securities directly from
the Company), then a "Change of Control" shall be deemed to have occurred for
purposes of the foregoing clause (A).
(ii) "Good Reason" shall mean the occurrence of any of the
-----------
following:
(A) a material adverse change or diminution in the nature or scope of
the powers, functions, titles, duties or responsibilities of the Executive that
is adverse to the Executive;
(B) a breach by the Company of any of its material obligations
hereunder;
(C) the failure by the Company to obtain an effective agreement from
any successor to assume and agree to perform this Agreement; or
(D) the relocation of the offices at which the Executive is
principally employed as of the Change of Control to a location more than fifty
(50) miles from such offices, which relocation is not approved by the Executive.
(iii) The Executive shall provide the Company with reasonable
notice and an opportunity to cure any of the events listed in Section 6(g)(ii)
and shall not be entitled to compensation pursuant to this Section 6(g) unless
the Company fails to cure within a reasonable period of not less than thirty
(30) days; and
(iv) It is the intention of the Executive and of the Company that no
payments by the Company to or for the benefit of the Executive under this
Agreement or any other agreement or plan, if any, pursuant to which the
Executive is entitled to receive payments or benefits shall be nondeductible to
the Company by reason of the operation of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), relating to parachute payments or any
like statutory or regulatory provision. Accordingly, and
7
<PAGE>
notwithstanding any other provision of this Agreement or any such agreement or
plan, if by reason of the operation of said Section 280G or any like statutory
or regulatory provision, any such payments exceed the amount which can be
deducted by the Company, such payments shall be reduced to the maximum amount
which can be deducted by the Company. To the extent that payments exceeding such
maximum deductible amount have been made to or for the benefit of the Executive,
such excess payments shall be refunded to the Company with interest thereon at
the applicable Federal rate determined under Section 1274(d) of the Code,
compounded annually, or at such other rate as may be required in order that no
such payments shall be nondeductible to the Company by reason of the operation
of said Section 280G or any like statutory or regulatory provision. To the
extent that there is more than one method of reducing the payments to bring them
within the limitations of said Section 280G or any like statutory or regulatory
provision, the Executive shall determine which method shall be followed;
provided that if the Executive fails to make such determination within forty
- --------
five (45) days after the Company has given notice of the need for such
reduction, the Company may determine the method of such reduction in its sole
discretion.
(h) No Mitigation. Without regard to the reason for the termination
-------------
of the Executive's employment hereunder, the Executive shall be under no
obligation to mitigate damages with respect to such termination under any
circumstances and in the event the Executive is employed or receives income from
any other source, there shall be no offset against the amounts due from the
Company hereunder.
7. Non-Competition.
---------------
(a) Because the Executive's services to the Company are special and
because the Executive has access to the Company's confidential information,
during the Term of Employment, the Executive shall not, without the express
written consent of the Company, directly or indirectly, engage, participate,
invest in, be employed by or assist, whether as owner, part-owner, shareholder,
partner, director, officer, trustee, employee, agent or consultant, or in any
other capacity, any Person (as hereinafter defined) other than the Company and
its affiliates in the Designated Industry (as hereinafter defined); provided,
--------
however, that nothing herein shall be construed as preventing the Executive from
- -------
making passive investments in a Person in the Designated Industry if the
securities of such Person are publicly traded and such investment constitutes
less than one percent (1%) of the outstanding shares of capital stock or
comparable equity interests of such Person.
(b) For purposes of this Agreement, the following terms have the
following meanings:
"Person" means an individual, a corporation, an association, a
------
partnership, a limited liability company, an estate, a trust and any other
entity or organization; and
8
<PAGE>
"Designated Industry" means the business of providing chemistry
-------------------
research and development services to pharmaceutical and biotechnology companies
involved in drug development and discovery and any and all activities related
thereto, including, without limitation, medicinal chemistry, chemical
development, analytical chemistry services and small-scale manufacturing and any
other business conducted by the Company during the Executive's employment with
the Company.
8. Confidentiality. In the course of performing services hereunder and
---------------
otherwise, the Executive has had, and it is anticipated that the Executive will
from time to time have, access to confidential records, data, customer lists,
trade secrets, technology and similar confidential information owned or used in
the course of business by the Company and its subsidiaries and affiliates (the
"Confidential Information"). The Executive agrees (i) to hold the Confidential
Information in strict confidence, (ii) not to disclose the Confidential
Information to any Person (other than in the regular business of the Company),
and (iii) not to use, directly or indirectly, any of the Confidential
Information for any competitive or commercial purpose; provided, however, that
-------- -------
the limitations set forth above shall not apply to any Confidential Information
which (A) is then generally known to the public, (B) became or becomes generally
known to the public through no fault of the Executive, or (C) is disclosed in
accordance with an order of a court of competent jurisdiction or applicable law.
Upon termination of the Executive's employment with the Company, all data,
memoranda, customer lists, notes, programs and other papers and items, and
reproductions thereof relating to the foregoing matters in the Executive's
possession or control, shall be returned to the Company and remain in its
possession. This Section 8 shall survive the termination of this Agreement for
any reason.
9. Conflicting Agreements. The Executive hereby represents and warrants
----------------------
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants which
would affect the performance of his obligations hereunder. As of the Effective
Date, the Executive is not performing any other duties for, and is not a party
to any similar agreement with, any Person competing with the Company or any of
its affiliates.
10. Severability. In case any of the provisions contained in this
------------
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, any such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had been
limited or modified (consistent with its general intent) to the extent necessary
to make it valid, legal and enforceable, or if it shall not be possible to so
limit or modify such invalid, illegal or unenforceable provision or part of a
provision, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision or part of a provision had never been contained in this
Agreement.
9
<PAGE>
11. Litigation and Regulatory Cooperation. During and after the
-------------------------------------
Executive's employment, the Executive shall cooperate fully with the Company in
the defense or prosecution of any claims or actions now in existence or which
may be brought in the future against or on behalf of the Company which relate to
events or occurrences that transpired while the Executive was employed by the
Company. The Executive's full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Company at mutually convenient times. During and after the Executive's
employment, the Executive also shall cooperate fully with the Company in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while the Executive was employed by the Company.
The Company shall reimburse the Executive for any reasonable out-of-pocket
expenses incurred in connection with the Executive's performance of obligations
pursuant to this Section 11. This Section 11 shall survive the termination of
this Agreement for any reason.
12. Arbitration of Disputes. Any dispute or controversy arising under
-----------------------
or in connection with this Agreement shall be settled exclusively by arbitration
in Albany, New York, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered in any court having
jurisdiction. In the event that the Company terminates the Executive's
employment for cause under Section 6(b) and the Executive contends that cause
did not exist, then the Company's only obligation shall be to submit such claim
to arbitration and the only issue before the arbitrator will be whether the
Executive was in fact terminated for cause. If the arbitrator determines that
the Executive was not terminated for cause by the Company, then the only
remedies that the arbitrator may award are (i) payment of amounts which would
have been payable if the Executive's employment had been terminated under
Section 6(e), (ii) the costs of arbitration, (iii) the Executive's attorneys'
fees, and (iv) all rights and benefits granted or in effect with respect to the
Executive under the Company's stock option plans and agreements with the
Executive pursuant thereto, with the vesting and exercise of any stock options
and the forfeitability of any stock-based grants held by the Executive to be
governed by the terms of such plans and the related agreements between the
Executive and the Company. If the arbitrator finds that the Executive's
employment was terminated for cause, the arbitrator will be without authority to
award the Executive anything, and the parties will each be responsible for their
own attorneys' fees, and they will divide the costs of arbitration equally.
Furthermore, should a dispute occur concerning the Executive's mental or
physical capacity as described in Section 6(c), a doctor selected by the
Executive and a doctor selected by the Company shall be entitled to examine the
Executive. If the opinion of the Company's doctor and the Executive's doctor
conflict, the Company's doctor and the Executive's doctor shall together agree
upon a third doctor, whose opinion shall be binding. This Section 12 shall
survive the termination of this Agreement for any reason.
13. Specific Performance. Notwithstanding Section 12 hereof, it is
--------------------
specifically understood and agreed that any breach of the provisions of this
Agreement, including, without limitation, Sections 7 and 8 hereof, by the
Executive is likely to result in irreparable injury to the Company and its
subsidiaries and affiliates, that the remedy at law alone will be an
10
<PAGE>
inadequate remedy for such breach and that, in addition to any other remedy it
may have, the Company shall be entitled to enforce the specific performance of
this Agreement by the Executive and to seek both temporary and permanent
injunctive relief (to the extent permitted by law), without the necessity of
proving actual damages. To the extent that any court action is permitted
consistent with or to enforce Section 7 or 8 of this Agreement, the parties
hereby consent to the jurisdiction of the courts of the State of New York and
the United States District Court for the Eastern District of New York.
Accordingly, with respect to any such court action, the Executive (i) submits to
the personal jurisdiction of such courts, (ii) consents to service of process,
and (iii) waives any other requirement (whether imposed by statute, rule of
court or otherwise) with respect to personal jurisdiction or service of process.
14. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given (i)
when delivered by hand, (ii) when transmitted by facsimile and receipt is
acknowledged, or (iii) if mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so mailed:
To the Company:
Albany Molecular Research, Inc.
21 Corporate Circle
Albany, New York 12203-5154
Facsimile: (518) 464-0289
Attention: Board of Directors
To the Executive:
Thomas E. D'Ambra, Ph.D.
------------------
------------------
------------------
or to such other address of which any party may notify the other parties as
provided above. Notices shall be effective as of the date of such delivery or
mailing.
15. Amendment; Waiver. This Agreement shall not be amended, modified or
-----------------
discharged in whole or in part except by an Agreement in writing signed by both
of the parties hereto. The failure of either of the parties to require the
performance of a term or obligation or to exercise any right under this
Agreement or the waiver of any breach hereunder shall not prevent subsequent
enforcement of such term or obligation or exercise of such right or the
enforcement at any time of any other right hereunder or be deemed a waiver of
any subsequent breach of the provision so breached, or of any other breach
hereunder.
11
<PAGE>
16. Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
successors of the Company by way of merger, consolidation or transfer of all or
substantially all of the assets of the Company, and may not be assigned by the
Executive.
17. Entire Agreement. This Agreement, together with that certain Employee
----------------
Innovation, Proprietary Information and Post-Employment Activity Agreement
executed by the Employee, constitute the entire agreement between the parties
concerning the subjects hereof and thereof and supersede all prior
understandings and agreements between the parties relating to the subject matter
hereof and thereof.
18. Governing Law. This Agreement shall be construed and regulated in all
-------------
respects under the laws of the State of New York.
19. Counterparts. This Agreement may be executed in counterparts, each of
------------
which when so executed and delivered shall be taken to be an original, but such
counterparts shall together constitute one and the same document.
[Remainder of Page Intentionally Left Blank]
12
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
ALBANY MOLECULAR RESEARCH, INC.
By:
---------------------------
Name:
Title:
EXECUTIVE:
---------------------------
Thomas E. D'Ambra, Ph.D.
13
<PAGE>
Exhibit 10.12
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT (the "Agreement") is made as of the ____ day of
_____________, ____, by and between Albany Molecular Research, Inc., a New York
corporation (the "Company"), and Harold Meckler, Ph.D. (the "Executive").
WHEREAS, the Executive is an officer and key employee of the Company; and
WHEREAS, the parties hereto desire to assure that the Executive's knowledge
and familiarity with the business of the Company will continue to be available
to the Company after the date hereof.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties agree as follows:
1. Employment. Subject to the provisions of Section 6, the Company
----------
hereby employs the Executive and the Executive accepts such employment upon the
terms and conditions hereinafter set forth.
2. Term of Employment. The term of the Executive's employment pursuant
------------------
to this Agreement shall commence on and as of the date hereof (the "Effective
Date") and shall remain in effect for a period of three (3) years from the
Effective Date (the "Term"). The Term shall be renewed automatically for
periods of one (1) year (each a "Renewal Term") commencing at the third
anniversary of the Effective Date and on each subsequent anniversary thereafter,
unless notice that this Agreement will not be extended is given by either the
Executive or the Company not less than sixty (60) days prior to the expiration
of the Term (as extended by any Renewal Term); provided that if the Company
--------
elects not to extend this Agreement for any reason, the Executive shall receive
the payments set forth in Section 6(e); and provided further that if the Company
-------- -------
(or any of its successors) elects not to renew this Agreement at any time during
the one year following a Change in Control (as defined in Section 6(g)), the
provisions of Section 6(g) shall apply. The period during which the Executive
serves as an employee of the Company in accordance with and subject to the
provisions of this Agreement is referred to in this Agreement as the "Term of
Employment."
3. Capacity.
--------
(a) Duties. During the Term of Employment, the Executive shall report
------
directly to the President and Chief Operating Officer of the Company and (i)
shall serve as an executive officer of the Company with the title Vice
President, Chemical Development, subject to election by the Board of Directors
of the Company, (ii) shall perform such duties and responsibilities as may be
reasonably determined by the President and Chief Operating Officer of the
Company consistent with the Executive's title and position, duties and
responsibilities as an executive officer of the Company as of the Effective
Date; provided that such duties and responsibilities shall be within the general
--------
area of the Executive's experience and skills, (iii) upon the request of the
Board of Directors of the Company, shall serve as an officer and/or
<PAGE>
director of the Company and any of its subsidiaries or affiliates (provided that
--------
the Company shall indemnify the Executive for liabilities incurred as such in
accordance with its current practices to the fullest extent permitted by
applicable law); and (iv) shall render all services incident to the foregoing.
(b) Extent of Service. The Executive agrees to diligently serve the
-----------------
interests of the Company and shall devote substantially all of his working time,
attention, skill and energies to the advancement of the interests of the Company
and its subsidiaries and affiliates and the performance of his duties and
responsibilities hereunder; provided that nothing in this Agreement shall be
--------
construed as preventing the Executive from (i) investing the Executive's assets
in any entity in a manner not prohibited by Section 7 and in such form or manner
as shall not require any material activities on the Executive's part in
connection with the operations or affairs of the entities in which such
investments are made, or (ii) engaging in religious, charitable or other
community or non-profit activities that do not impair the Executive's ability to
fulfill the Executive's duties and responsibilities under this Agreement.
4. Compensation.
------------
(a) Salary. During the Term of Employment, the Company shall pay the
------
Executive a salary (the "Base Salary") at an annual rate as shall be determined
from time to time by the Board of Directors of the Company or the Compensation
Committee of the Board of Directors consistent with the general policies and
practices of the Company and subject to periodic review in accordance with the
policies and practices of the Company; provided, however, that in no event shall
-------- -------
such rate per annum be less than $120,000. Such salary shall be subject to
withholding under applicable law and shall be payable in periodic installments
in accordance with the Company's usual practice for its senior executives, as in
effect from time to time.
(b) Bonus. Commencing on the first annual compensation determination
-----
date established by the Company during the Term of Employment and on each such
date thereafter, the Company shall review the performance of the Company and of
the Executive during the prior year, and the Company may provide the Executive
with additional compensation as a bonus in accordance with any bonus plan then
in effect from time to time for senior executives of the Company. Any such
bonus plan shall have such terms as may be established in the sole discretion of
the Board of Directors of the Company or the Compensation Committee of the Board
of Directors.
5. Benefits.
--------
(a) Regular Benefits. During the Term of Employment, the Executive
----------------
shall be entitled to participate in any and all medical, dental, pension and
life insurance plans, disability income plans and other employee benefit plans
as in effect from time to time for senior executives of the Company. Such
participation shall be subject to (i) the terms of the applicable plan
documents, (ii) generally applicable policies of the Company and (iii) the
<PAGE>
discretion of the Board of Directors of the Company or the administrative or
other committee provided for in, or contemplated by, such plan. Compliance with
this Section 5(a) shall in no way create or be deemed to create any obligation,
express or implied, on the part of the Company or any subsidiary or affiliate of
the Company with respect to the continuation of any benefit or other plan or
arrangement maintained as of or prior to the Effective Date or the creation and
maintenance of any particular benefit or other plan or arrangement at any time
after the Effective Date.
(b) Reimbursement of Expenses. The Company shall promptly reimburse
-------------------------
the Executive for all reasonable business expenses incurred by the Executive
during the Term of Employment in accordance with the Company's practices for
senior executives of the Company, as in effect from time to time.
(c) Vacation. During the Term of Employment, the Executive shall
--------
receive at least three (3) weeks paid vacation annually or such greater amount
as is in accordance with the Company's practices for senior executives of the
Company, as in effect from time to time.
6. Termination of Employment. Notwithstanding the provisions of Section
-------------------------
2, the Executive's employment under this Agreement shall terminate under the
following circumstances set forth in this Section 6.
For purposes of this Agreement, "Date of Termination" means (i) if the
-------------------
Executive's employment is terminated by his death as provided in Section 6(c),
the date of his death; (ii) if the Executive's employment is terminated due to
his permanent disability as provided in Section 6(c), the date on which notice
of termination is given; (iii) if the Executive's employment is terminated under
Section 6(e), sixty (60) days after the date on which notice of termination is
given; and (iv) if the Executive's employment is terminated under Section 6(f),
the date on which the applicable cure period expires.
(a) Mutual Consent. The Executive's employment under this Agreement
--------------
may be terminated at any time by the mutual consent of the Executive and the
Company on such terms as both parties shall mutually agree.
(b) Termination by the Company for Cause. The Executive's
------------------------------------
employment under this Agreement may be terminated by the Company for "cause" at
any time upon written notice to the Executive without further liability on the
part of the Company. For purposes of this Agreement, a termination shall be for
"cause" if:
(i) the Executive shall commit an act of fraud, embezzlement,
misappropriation or breach of fiduciary duty against the Company or any of its
subsidiaries or affiliates or shall be convicted by a court of competent
jurisdiction or shall plead guilty or nolo contendere to any felony or any crime
involving moral turpitude;
<PAGE>
(ii) the Executive shall commit a material breach of any of the
covenants, terms or provisions of Section 7 or 8 hereof which breach has not
been cured within fifteen (15) days after delivery to the Executive by the
Company of written notice thereof;
(iii) the Executive shall commit a material breach of any of
the covenants, terms or provisions hereof (other than pursuant to Section 7 or 8
hereof) which breach has not been remedied within thirty (30) days after
delivery to the Executive by the Company of written notice thereof; or
(iv) the Executive shall have disobeyed reasonable written
instructions from the Company's President and Chief Operating Officer or Board
of Directors which are consistent with the terms and conditions of this
Agreement or shall have deliberately, wilfully, substantially and continuously
failed to perform the Executive's duties hereunder, after written notice and
under circumstances effectively constituting a voluntary resignation of the
Executive's position with the Company.
Upon termination for cause as provided in this Section 6(b), (A) all
obligations of the Company under this Agreement shall thereupon immediately
terminate other than any obligations with respect to earned but unpaid Base
Salary and (B) the Company shall have any and all rights and remedies under this
Agreement and applicable law.
(c) Death; Disability. The Executive's employment under this
-----------------
Agreement may be terminated by the Company upon the earlier of death or
permanent disability (as defined below) of the Executive continuing for a period
of one hundred eighty (180) days. Upon any such termination of the Executive's
employment, all obligations of the Company under this Agreement shall thereupon
immediately terminate other than any obligations with respect to (i) earned but
unpaid salary through the Date of Termination; provided that Base Salary
--------
payments as provided by Section 4(a) shall continue to be made to the Executive
(or his estate) through the Term (as extended by any Renewal Term) but only if
and to the extent payments to the Executive or his estate under any applicable
disability or life insurance policy is less than the amount the Executive would
otherwise receive as Base Salary hereunder, (ii) Bonus payments with respect to
the calendar year within which such termination occurred on the basis of and to
the extent contemplated in any bonus plan then in effect with respect to senior
executive officers of the Company, pro-rated on the basis of the number of days
of the Executive's actual employment hereunder during such calendar year through
the Date of Termination, and (iii) in the case of permanent disability,
continuation at the Company's expense of health insurance benefits (medical and
dental) until the first anniversary of the Date of Termination to the extent
permitted under the Executive's group health insurance policy. As used herein,
the term "permanent disability" or "permanently disabled" means the inability of
the Executive, by reason of injury, illness or other similar cause, to perform a
major part of his duties and responsibilities in connection with the conduct of
the business and affairs of the Company. The Company shall provide written
notice to the Executive of the termination of his employment hereunder due to
permanent disability.
<PAGE>
(d) Voluntary Termination by the Executive. At any time during the
--------------------------------------
Term of Employment, the Executive may terminate his employment under this
Agreement upon sixty (60) days' prior written notice to the Company. Upon
termination by the Executive as provided in this Section 6(d), all obligations
of the Company under this Agreement shall thereupon immediately terminate other
than any obligations with respect to earned but unpaid Base Salary.
(e) Termination by the Company Without Cause. The Executive's
----------------------------------------
employment under this Agreement may be terminated by the Company at any time
without "cause" (as defined in Section 6(b)) by the Company upon sixty (60)
days' prior written notice to the Executive. Upon any such termination of the
Executive's employment, all obligations of the Company under this Agreement
shall thereupon immediately terminate other than any obligations with respect to
earned but unpaid Base Salary and bonus under Section 4. In addition, subject
to the Executive signing a general release of claims in a form and manner
satisfactory to the Company, the Company shall continue to pay the Executive his
Base Salary at the rate then in effect pursuant to Section 4(a) for a period of
one (1) year from the Date of Termination and shall pay to the Executive in
monthly installments over such one-year period, an amount equal to the
Executive's cash bonus, if any, received in respect of the immediately preceding
year pursuant to Section 4(b).
(f) Termination by the Executive upon Company Breach. The Executive
------------------------------------------------
shall have the right to terminate his employment hereunder upon written notice
to the Company in the event of (i) a material adverse change or diminution in
the nature or scope of the powers, functions, titles, duties or responsibilities
of the Executive that is adverse to the Executive or (ii) a breach by the
Company of any of its material obligations hereunder, in each case after the
Executive has given written notice to the Company specifying such default by the
Company and giving the Company a reasonable time, not less than thirty (30)
days, to conform its performance to its obligations hereunder. The failure of
the Executive to give notice of any of the foregoing events shall not under any
circumstances constitute a waiver of the Executive's right to terminate his
employment and receive the amounts payable under this Section 7(f). Upon any
such termination of the Executive's employment, all obligations of the Company
under this Agreement shall thereupon immediately terminate other than any
obligations with respect to earned but unpaid Base Salary and bonus under
Section 4. In addition, subject to the Executive signing a general release of
claims in a form and manner satisfactory to the Company, the Company shall
continue to pay the Executive his Base Salary at the rate then in effect
pursuant to Section 4(a) for a period of one (1) year from the Date of
Termination and shall pay to the Executive in monthly installments over such
one-year period, an amount equal to the Executive's cash bonus, if any, received
in respect of the immediately preceding year pursuant to Section 4(b).
(g) Termination Pursuant to a Change of Control. If there is a Change
-------------------------------------------
of Control, as defined below, during the Term of Employment, the provisions of
this Section 6(g) shall apply and shall continue to apply throughout the
remainder of the Term (as extended by any Renewal Term). If, within one (1) year
following a Change of Control, the Executive's
<PAGE>
employment is terminated by the Company without cause (in accordance with
Section 6(e) above) or by the Executive for "Good Reason" (as defined in Section
6(g)(ii) below) or the Company elects not to renew this Agreement in accordance
with Section 2, the Company shall pay to the Executive (or the Executive's
estate, if applicable) a lump sum amount equal to the sum of (x) the Executive's
Base Salary at the rate then in effect pursuant to Section 4(a), plus (y) an
----
amount equal to the Executive's cash bonus, if any, received in respect of the
immediately preceding year pursuant to Section 4(b).
(i) "Change of Control" shall mean the occurrence of any one of
-----------------
the following events:
(A) any "person" as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Act") (other than the
Company, any of its subsidiaries, or any trustee, fiduciary or other person or
entity holding securities under any employee benefit plan or trust of the
Company or any of its subsidiaries and other than Thomas E. D'Ambra, Ph.D.),
together with all "affiliates" and "associates" (as such terms are defined in
Rule 12b-2 under the Act) of such person, shall become the "beneficial owner"
(as such term is defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Company representing twenty-five percent (25%) or more of
the combined voting power of the Company's then outstanding securities having
the right to vote in an election of the Company's Board of Directors ("Voting
Securities") (in such case other than as a result of an acquisition of
securities directly from the Company);
(B) persons who, as of the Effective Date, constitute the Company's
Board of Directors (the "Incumbent Directors") cease for any reason, including,
without limitation, as a result of a tender offer, proxy contest, merger or
similar transaction, to constitute at least a majority of the Board; provided
--------
that any person becoming a director of the Company subsequent to the Effective
Date shall be considered an Incumbent Director if such person's election was
approved by or such person was nominated for election by either (1) a vote of at
least a majority of the Incumbent Directors or (2) a vote of at least a majority
of the Incumbent Directors who are members of a nominating committee comprised,
in the majority, of Incumbent Directors; but provided further that any such
-------- -------
person whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of members of the Board of
Directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a person other than the Board, including by reason of agreement
intended to avoid or settle any such actual or threatened contest or
solicitation, shall not be considered an Incumbent Director; or
(C) the stockholders of the Company shall approve (1) any
consolidation or merger of the Company where the stockholders of the Company,
immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, beneficially own (as such term is defined in Rule
13d-3 under the Act), directly or indirectly, shares representing in the
aggregate more than fifty percent (50%) of the voting shares of the corporation
issuing cash or securities in the consolidation or merger (or of its ultimate
parent
<PAGE>
corporation, if any), (2) any sale, lease, exchange or other transfer (in
one transaction or a series of transactions contemplated or arranged by any
party as a single plan) of all or substantially all of the assets of the Company
or (3) any plan or proposal for the liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (A) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
shares of Voting Securities outstanding, increases the proportionate number of
shares of Voting Securities beneficially owned by any person to twenty-five
percent (25%) or more of the combined voting power of all then outstanding
Voting Securities; provided, however, that if any person referred to in this
-------- -------
sentence shall thereafter become the beneficial owner of any additional shares
of Voting Securities (other than pursuant to a stock split, stock dividend, or
similar transaction or as a result of an acquisition of securities directly from
the Company), then a "Change of Control" shall be deemed to have occurred for
purposes of the foregoing clause (A).
(ii) "Good Reason" shall mean the occurrence of any of the
-----------
following:
(A) a material adverse change or diminution in the nature or scope of
the powers, functions, titles, duties or responsibilities of the Executive that
is adverse to the Executive;
(B) a breach by the Company of any of its material obligations
hereunder;
(C) the failure by the Company to obtain an effective agreement from
any successor to assume and agree to perform this Agreement; or
(D) the relocation of the offices at which the Executive is
principally employed as of the Change of Control to a location more than fifty
(50) miles from such offices, which relocation is not approved by the Executive.
(iii) The Executive shall provide the Company with reasonable
notice and an opportunity to cure any of the events listed in Section 6(g)(ii)
and shall not be entitled to compensation pursuant to this Section 6(g) unless
the Company fails to cure within a reasonable period of not less than thirty
(30) days; and
(iv) It is the intention of the Executive and of the Company that no
payments by the Company to or for the benefit of the Executive under this
Agreement or any other agreement or plan, if any, pursuant to which the
Executive is entitled to receive payments or benefits shall be nondeductible to
the Company by reason of the operation of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), relating to parachute payments or any
like statutory or regulatory provision. Accordingly, and
<PAGE>
notwithstanding any other provision of this Agreement or any such agreement or
plan, if by reason of the operation of said Section 280G or any like statutory
or regulatory provision, any such payments exceed the amount which can be
deducted by the Company, such payments shall be reduced to the maximum amount
which can be deducted by the Company. To the extent that payments exceeding such
maximum deductible amount have been made to or for the benefit of the Executive,
such excess payments shall be refunded to the Company with interest thereon at
the applicable Federal rate determined under Section 1274(d) of the Code,
compounded annually, or at such other rate as may be required in order that no
such payments shall be nondeductible to the Company by reason of the operation
of said Section 280G or any like statutory or regulatory provision. To the
extent that there is more than one method of reducing the payments to bring them
within the limitations of said Section 280G or any like statutory or regulatory
provision, the Executive shall determine which method shall be followed;
provided that if the Executive fails to make such determination within forty-
- --------
five (45) days after the Company has given notice of the need for such
reduction, the Company may determine the method of such reduction in its sole
discretion.
(h) No Mitigation. Without regard to the reason for the termination
-------------
of the Executive's employment hereunder, the Executive shall be under no
obligation to mitigate damages with respect to such termination under any
circumstances and in the event the Executive is employed or receives income from
any other source, there shall be no offset against the amounts due from the
Company hereunder.
7. Non-Competition.
---------------
(a) Because the Executive's services to the Company are special and
because the Executive has access to the Company's confidential information,
during the Term of Employment, the Executive shall not, without the express
written consent of the Company, directly or indirectly, engage, participate,
invest in, be employed by or assist, whether as owner, part-owner, shareholder,
partner, director, officer, trustee, employee, agent or consultant, or in any
other capacity, any Person (as hereinafter defined) other than the Company and
its affiliates in the Designated Industry (as hereinafter defined); provided,
--------
however, that nothing herein shall be construed as preventing the Executive from
- -------
making passive investments in a Person in the Designated Industry if the
securities of such Person are publicly traded and such investment constitutes
less than one percent (1%) of the outstanding shares of capital stock or
comparable equity interests of such Person.
(b) For purposes of this Agreement, the following terms have the
following meanings:
"Person" means an individual, a corporation, an association, a
------
partnership, a limited liability company, an estate, a trust and any other
entity or organization; and
<PAGE>
"Designated Industry" means the business of providing chemistry
-------------------
research and development services to pharmaceutical and biotechnology companies
involved in drug development and discovery and any and all activities related
thereto, including, without limitation, medicinal chemistry, chemical
development, analytical chemistry services and small-scale manufacturing and any
other business conducted by the Company during the Executive's employment with
the Company.
8. Confidentiality. In the course of performing services hereunder and
---------------
otherwise, the Executive has had, and it is anticipated that the Executive will
from time to time have, access to confidential records, data, customer lists,
trade secrets, technology and similar confidential information owned or used in
the course of business by the Company and its subsidiaries and affiliates (the
"Confidential Information"). The Executive agrees (i) to hold the Confidential
Information in strict confidence, (ii) not to disclose the Confidential
Information to any Person (other than in the regular business of the Company),
and (iii) not to use, directly or indirectly, any of the Confidential
Information for any competitive or commercial purpose; provided, however, that
-------- -------
the limitations set forth above shall not apply to any Confidential Information
which (A) is then generally known to the public, (B) became or becomes generally
known to the public through no fault of the Executive, or (C) is disclosed in
accordance with an order of a court of competent jurisdiction or applicable law.
Upon termination of the Executive's employment with the Company, all data,
memoranda, customer lists, notes, programs and other papers and items, and
reproductions thereof relating to the foregoing matters in the Executive's
possession or control, shall be returned to the Company and remain in its
possession. This Section 8 shall survive the termination of this Agreement for
any reason.
9. Conflicting Agreements. The Executive hereby represents and warrants
----------------------
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants which
would affect the performance of his obligations hereunder. As of the Effective
Date, the Executive is not performing any other duties for, and is not a party
to any similar agreement with, any Person competing with the Company or any of
its affiliates.
10. Severability. In case any of the provisions contained in this
------------
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, any such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had been
limited or modified (consistent with its general intent) to the extent necessary
to make it valid, legal and enforceable, or if it shall not be possible to so
limit or modify such invalid, illegal or unenforceable provision or part of a
provision, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision or part of a provision had never been contained in this
Agreement.
<PAGE>
11. Litigation and Regulatory Cooperation. During and after the
-------------------------------------
Executive's employment, the Executive shall cooperate fully with the Company in
the defense or prosecution of any claims or actions now in existence or which
may be brought in the future against or on behalf of the Company which relate to
events or occurrences that transpired while the Executive was employed by the
Company. The Executive's full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Company at mutually convenient times. During and after the Executive's
employment, the Executive also shall cooperate fully with the Company in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while the Executive was employed by the Company.
The Company shall reimburse the Executive for any reasonable out-of-pocket
expenses incurred in connection with the Executive's performance of obligations
pursuant to this Section 11. This Section 11 shall survive the termination of
this Agreement for any reason.
12. Arbitration of Disputes. Any dispute or controversy arising under
-----------------------
or in connection with this Agreement shall be settled exclusively by arbitration
in Albany, New York, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered in any court having
jurisdiction. In the event that the Company terminates the Executive's
employment for cause under Section 6(b) and the Executive contends that cause
did not exist, then the Company's only obligation shall be to submit such claim
to arbitration and the only issue before the arbitrator will be whether the
Executive was in fact terminated for cause. If the arbitrator determines that
the Executive was not terminated for cause by the Company, then the only
remedies that the arbitrator may award are (i) payment of amounts which would
have been payable if the Executive's employment had been terminated under
Section 6(e), (ii) the costs of arbitration, (iii) the Executive's attorneys'
fees, and (iv) all rights and benefits granted or in effect with respect to the
Executive under the Company's stock option plans and agreements with the
Executive pursuant thereto, with the vesting and exercise of any stock options
and the forfeitability of any stock-based grants held by the Executive to be
governed by the terms of such plans and the related agreements between the
Executive and the Company. If the arbitrator finds that the Executive's
employment was terminated for cause, the arbitrator will be without authority to
award the Executive anything, and the parties will each be responsible for their
own attorneys' fees, and they will divide the costs of arbitration equally.
Furthermore, should a dispute occur concerning the Executive's mental or
physical capacity as described in Section 6(c), a doctor selected by the
Executive and a doctor selected by the Company shall be entitled to examine the
Executive. If the opinion of the Company's doctor and the Executive's doctor
conflict, the Company's doctor and the Executive's doctor shall together agree
upon a third doctor, whose opinion shall be binding. This Section 12 shall
survive the termination of this Agreement for any reason.
13. Specific Performance. Notwithstanding Section 12 hereof, it is
--------------------
specifically understood and agreed that any breach of the provisions of this
Agreement, including, without limitation, Sections 7 and 8 hereof, by the
Executive is likely to result in irreparable injury to the Company and its
subsidiaries and affiliates, that the remedy at law alone will be an
<PAGE>
inadequate remedy for such breach and that, in addition to any other remedy it
may have, the Company shall be entitled to enforce the specific performance of
this Agreement by the Executive and to seek both temporary and permanent
injunctive relief (to the extent permitted by law), without the necessity of
proving actual damages. To the extent that any court action is permitted
consistent with or to enforce Section 7 or 8 of this Agreement, the parties
hereby consent to the jurisdiction of the courts of the State of New York and
the United States District Court for the Eastern District of New York.
Accordingly, with respect to any such court action, the Executive (i) submits to
the personal jurisdiction of such courts, (ii) consents to service of process,
and (iii) waives any other requirement (whether imposed by statute, rule of
court or otherwise) with respect to personal jurisdiction or service of process.
14. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given (i)
when delivered by hand, (ii) when transmitted by facsimile and receipt is
acknowledged, or (iii) if mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so mailed:
To the Company:
Albany Molecular Research, Inc.
21 Corporate Circle
Albany, New York 12203-5154
Facsimile: (518) 464-0289
Attention: Chief Executive Officer
To the Executive:
Harold Meckler, Ph.D.
-------------------
-------------------
-------------------
or to such other address of which any party may notify the other parties as
provided above. Notices shall be effective as of the date of such delivery or
mailing.
15. Amendment; Waiver. This Agreement shall not be amended, modified or
-----------------
discharged in whole or in part except by an Agreement in writing signed by both
of the parties hereto. The failure of either of the parties to require the
performance of a term or obligation or to exercise any right under this
Agreement or the waiver of any breach hereunder shall not prevent subsequent
enforcement of such term or obligation or exercise of such right or the
enforcement at any time of any other right hereunder or be deemed a waiver of
any subsequent breach of the provision so breached, or of any other breach
hereunder.
<PAGE>
16. Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
successors of the Company by way of merger, consolidation or transfer of all or
substantially all of the assets of the Company, and may not be assigned by the
Executive.
17. Entire Agreement. This Agreement, together with that certain Employee
----------------
Innovation, Proprietary Information and Post-Employment Activity Agreement
executed by the Employee, constitute the entire agreement between the parties
concerning the subjects hereof and thereof and supersede all prior
understandings and agreements between the parties relating to the subject matter
hereof and thereof.
18. Governing Law. This Agreement shall be construed and regulated in all
-------------
respects under the laws of the State of New York.
19. Counterparts. This Agreement may be executed in counterparts, each of
------------
which when so executed and delivered shall be taken to be an original, but such
counterparts shall together constitute one and the same document.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
ALBANY MOLECULAR RESEARCH, INC.
By:
-----------------------------
Name:
Title:
EXECUTIVE:
-----------------------------
Harold Meckler, Ph.D.
<PAGE>
Exhibit 10.13
EMPLOYMENT AGREEMENT
--------------------
EMPLOYMENT AGREEMENT (the "Agreement") is made as of the ____ day of
______________, ____, by and between Albany Molecular Research, Inc., a New York
corporation (the "Company"), and Michael P. Trova, Ph.D. (the "Executive").
WHEREAS, the Executive is an officer and key employee of the Company; and
WHEREAS, the parties hereto desire to assure that the Executive's knowledge
and familiarity with the business of the Company will continue to be available
to the Company after the date hereof.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties agree as follows:
1. Employment. Subject to the provisions of Section 6, the Company
----------
hereby employs the Executive and the Executive accepts such employment upon the
terms and conditions hereinafter set forth.
2. Term of Employment. The term of the Executive's employment pursuant
------------------
to this Agreement shall commence on and as of the date hereof (the "Effective
Date") and shall remain in effect for a period of three (3) years from the
Effective Date (the "Term"). The Term shall be renewed automatically for
periods of one (1) year (each a "Renewal Term") commencing at the third
anniversary of the Effective Date and on each subsequent anniversary thereafter,
unless notice that this Agreement will not be extended is given by either the
Executive or the Company not less than sixty (60) days prior to the expiration
of the Term (as extended by any Renewal Term); provided that if the Company
--------
elects not to extend this Agreement for any reason, the Executive shall receive
the payments set forth in Section 6(e); and provided further that if the Company
-------- -------
(or any of its successors) elects not to renew this Agreement at any time during
the one year following a Change in Control (as defined in Section 6(g)), the
provisions of Section 6(g) shall apply. The period during which the Executive
serves as an employee of the Company in accordance with and subject to the
provisions of this Agreement is referred to in this Agreement as the "Term of
Employment."
3. Capacity.
--------
(a) Duties. During the Term of Employment, the Executive shall report
------
directly to the Chief Executive Officer of the Company and (i) shall serve as an
executive officer of the Company with the title Vice President, Medicinal
Chemistry, subject to election by the Board of Directors of the Company, (ii)
shall perform such duties and responsibilities as may be reasonably determined
by the Chief Executive Officer of the Company consistent with the Executive's
title and position, duties and responsibilities as an executive officer of the
Company as of the Effective Date; provided that such duties and responsibilities
--------
shall be within the general area of the Executive's experience and skills, (iii)
upon the request of the Board of Directors of the Company, shall serve as an
officer and/or director of the Company and any of
<PAGE>
its subsidiaries or affiliates (provided that the Company shall indemnify the
--------
Executive for liabilities incurred as such in accordance with its current
practices to the fullest extent permitted by applicable law); and (iv) shall
render all services incident to the foregoing.
(b) Extent of Service. The Executive agrees to diligently serve the
-----------------
interests of the Company and shall devote substantially all of his working time,
attention, skill and energies to the advancement of the interests of the Company
and its subsidiaries and affiliates and the performance of his duties and
responsibilities hereunder; provided that nothing in this Agreement shall be
--------
construed as preventing the Executive from (i) investing the Executive's assets
in any entity in a manner not prohibited by Section 7 and in such form or manner
as shall not require any material activities on the Executive's part in
connection with the operations or affairs of the entities in which such
investments are made, or (ii) engaging in religious, charitable or other
community or non-profit activities that do not impair the Executive's ability to
fulfill the Executive's duties and responsibilities under this Agreement.
4. Compensation.
------------
(a) Salary. During the Term of Employment, the Company shall pay the
------
Executive a salary (the "Base Salary") at an annual rate as shall be determined
from time to time by the Board of Directors of the Company or the Compensation
Committee of the Board of Directors consistent with the general policies and
practices of the Company and subject to periodic review in accordance with the
policies and practices of the Company; provided, however, that in no event shall
-------- -------
such rate per annum be less than $115,000. Such salary shall be subject to
withholding under applicable law and shall be payable in periodic installments
in accordance with the Company's usual practice for its senior executives, as in
effect from time to time.
(b) Bonus. Commencing on the first annual compensation determination
-----
date established by the Company during the Term of Employment and on each such
date thereafter, the Company shall review the performance of the Company and of
the Executive during the prior year, and the Company may provide the Executive
with additional compensation as a bonus in accordance with any bonus plan then
in effect from time to time for senior executives of the Company. Any such
bonus plan shall have such terms as may be established in the sole discretion of
the Board of Directors of the Company or the Compensation Committee of the Board
of Directors.
5. Benefits.
--------
(a) Regular Benefits. During the Term of Employment, the Executive
----------------
shall be entitled to participate in any and all medical, dental, pension and
life insurance plans, disability income plans and other employee benefit plans
as in effect from time to time for senior executives of the Company. Such
participation shall be subject to (i) the terms of the applicable plan
documents, (ii) generally applicable policies of the Company and (iii) the
discretion of the Board of Directors of the Company or the administrative or
other committee
2
<PAGE>
provided for in, or contemplated by, such plan. Compliance with this Section
5(a) shall in no way create or be deemed to create any obligation, express or
implied, on the part of the Company or any subsidiary or affiliate of the
Company with respect to the continuation of any benefit or other plan or
arrangement maintained as of or prior to the Effective Date or the creation and
maintenance of any particular benefit or other plan or arrangement at any time
after the Effective Date.
(b) Reimbursement of Expenses. The Company shall promptly reimburse
-------------------------
the Executive for all reasonable business expenses incurred by the Executive
during the Term of Employment in accordance with the Company's practices for
senior executives of the Company, as in effect from time to time.
(c) Vacation. During the Term of Employment, the Executive shall
--------
receive at least three (3) weeks paid vacation annually or such greater amount
as is in accordance with the Company's practices for senior executives of the
Company, as in effect from time to time.
6. Termination of Employment. Notwithstanding the provisions of Section
-------------------------
2, the Executive's employment under this Agreement shall terminate under the
following circumstances set forth in this Section 6.
For purposes of this Agreement, "Date of Termination" means (i) if the
-------------------
Executive's employment is terminated by his death as provided in Section 6(c),
the date of his death; (ii) if the Executive's employment is terminated due to
his permanent disability as provided in Section 6(c), the date on which notice
of termination is given; (iii) if the Executive's employment is terminated under
Section 6(e), sixty (60) days after the date on which notice of termination is
given; and (iv) if the Executive's employment is terminated under Section 6(f),
the date on which the applicable cure period expires.
(a) Mutual Consent. The Executive's employment under this Agreement
--------------
may be terminated at any time by the mutual consent of the Executive and the
Company on such terms as both parties shall mutually agree.
(b) Termination by the Company for Cause. The Executive's
------------------------------------
employment under this Agreement may be terminated by the Company for "cause" at
any time upon written notice to the Executive without further liability on the
part of the Company. For purposes of this Agreement, a termination shall be for
"cause" if:
(i) misappropriation or breach of fiduciary duty against the
Company or any of its subsidiaries or affiliates or shall be convicted by a
court of competent jurisdiction or shall plead guilty or nolo contendere to any
felony or any crime involving moral turpitude;
3
<PAGE>
(ii) the Executive shall commit a material breach of any of the
covenants, terms or provisions of Section 7 or 8 hereof which breach has not
been cured within fifteen (15) days after delivery to the Executive by the
Company of written notice thereof;
(iii) the Executive shall commit a material breach of any of the
covenants, terms or provisions hereof (other than pursuant to Section 7 or 8
hereof) which breach has not been remedied within thirty (30) days after
delivery to the Executive by the Company of written notice thereof; or
(iv) the Executive shall have disobeyed reasonable written
instructions from the Company's Chief Executive Officer or Board of Directors
which are consistent with the terms and conditions of this Agreement or shall
have deliberately, wilfully, substantially and continuously failed to perform
the Executive's duties hereunder, after written notice and under circumstances
effectively constituting a voluntary resignation of the Executive's position
with the Company.
Upon termination for cause as provided in this Section 6(b), (A) all
obligations of the Company under this Agreement shall thereupon immediately
terminate other than any obligations with respect to earned but unpaid Base
Salary and (B) the Company shall have any and all rights and remedies under this
Agreement and applicable law.
(c) Death; Disability. The Executive's employment under this
-----------------
Agreement may be terminated by the Company upon the earlier of death or
permanent disability (as defined below) of the Executive continuing for a period
of one hundred eighty (180) days. Upon any such termination of the Executive's
employment, all obligations of the Company under this Agreement shall thereupon
immediately terminate other than any obligations with respect to (i) earned but
unpaid salary through the Date of Termination; provided that Base Salary
--------
payments as provided by Section 4(a) shall continue to be made to the Executive
(or his estate) through the Term (as extended by any Renewal Term) but only if
and to the extent payments to the Executive or his estate under any applicable
disability or life insurance policy is less than the amount the Executive would
otherwise receive as Base Salary hereunder, (ii) Bonus payments with respect to
the calendar year within which such termination occurred on the basis of and to
the extent contemplated in any bonus plan then in effect with respect to senior
executive officers of the Company, pro-rated on the basis of the number of days
of the Executive's actual employment hereunder during such calendar year through
the Date of Termination, and (iii) in the case of permanent disability,
continuation at the Company's expense of health insurance benefits (medical and
dental) until the first anniversary of the Date of Termination to the extent
permitted under the Executive's group health insurance policy. As used herein,
the term "permanent disability" or "permanently disabled" means the inability of
the Executive, by reason of injury, illness or other similar cause, to perform a
major part of his duties and responsibilities in connection with the conduct of
the business and affairs of the Company. The Company shall provide written
notice to the Executive of the termination of his employment hereunder due to
permanent disability.
4
<PAGE>
(d) Voluntary Termination by the Executive. At any time during the
--------------------------------------
Term of Employment, the Executive may terminate his employment under this
Agreement upon sixty (60) days' prior written notice to the Company. Upon
termination by the Executive as provided in this Section 6(d), all obligations
of the Company under this Agreement shall thereupon immediately terminate other
than any obligations with respect to earned but unpaid Base Salary.
(e) Termination by the Company Without Cause. The Executive's
----------------------------------------
employment under this Agreement may be terminated by the Company at any time
without "cause" (as defined in Section 6(b)) by the Company upon sixty (60)
days' prior written notice to the Executive. Upon any such termination of the
Executive's employment, all obligations of the Company under this Agreement
shall thereupon immediately terminate other than any obligations with respect to
earned but unpaid Base Salary and bonus under Section 4. In addition, subject
to the Executive signing a general release of claims in a form and manner
satisfactory to the Company, the Company shall continue to pay the Executive his
Base Salary at the rate then in effect pursuant to Section 4(a) for a period of
one (1) year from the Date of Termination and shall pay to the Executive in
monthly installments over such one-year period, an amount equal to the
Executive's cash bonus, if any, received in respect of the immediately preceding
year pursuant to Section 4(b).
(f) Termination by the Executive upon Company Breach. The Executive
------------------------------------------------
shall have the right to terminate his employment hereunder upon written notice
to the Company in the event of (i) a material adverse change or diminution in
the nature or scope of the powers, functions, titles, duties or responsibilities
of the Executive that is adverse to the Executive or (ii) a breach by the
Company of any of its material obligations hereunder, in each case after the
Executive has given written notice to the Company specifying such default by the
Company and giving the Company a reasonable time, not less than thirty (30)
days, to conform its performance to its obligations hereunder. The failure of
the Executive to give notice of any of the foregoing events shall not under any
circumstances constitute a waiver of the Executive's right to terminate his
employment and receive the amounts payable under this Section 7(f). Upon any
such termination of the Executive's employment, all obligations of the Company
under this Agreement shall thereupon immediately terminate other than any
obligations with respect to earned but unpaid Base Salary and bonus under
Section 4. In addition, subject to the Executive signing a general release of
claims in a form and manner satisfactory to the Company, the Company shall
continue to pay the Executive his Base Salary at the rate then in effect
pursuant to Section 4(a) for a period of one (1) year from the Date of
Termination and shall pay to the Executive in monthly installments over such
one-year period, an amount equal to the Executive's cash bonus, if any, received
in respect of the immediately preceding year pursuant to Section 4(b).
(g) Termination Pursuant to a Change of Control. If there is a Change
-------------------------------------------
of Control, as defined below, during the Term of Employment, the provisions of
this Section 6(g) shall apply and shall continue to apply throughout the
remainder of the Term (as extended by any Renewal Term). If, within one (1)
year following a Change of Control, the Executive's
5
<PAGE>
employment is terminated by the Company without cause (in accordance with
Section 6(e) above) or by the Executive for "Good Reason" (as defined in Section
6(g)(ii) below) or the Company elects not to renew this Agreement in accordance
with Section 2, the Company shall pay to the Executive (or the Executive's
estate, if applicable) a lump sum amount equal to the sum of (x) the Executive's
Base Salary at the rate then in effect pursuant to Section 4(a), plus (y) an
----
amount equal to the Executive's cash bonus, if any, received in respect of the
immediately preceding year pursuant to Section 4(b).
(i) "Change of Control" shall mean the occurrence of any one of
-----------------
the following events:
(A) any "person" as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act") (other than
the Company, any of its subsidiaries, or any trustee, fiduciary or other person
or entity holding securities under any employee benefit plan or trust of the
Company or any of its subsidiaries and other than Thomas E. D'Ambra, Ph.D.),
together with all "affiliates" and "associates" (as such terms are defined in
Rule 12b-2 under the Act) of such person, shall become the "beneficial owner"
(as such term is defined in Rule 13d-3 under the Act), directly or indirectly,
of securities of the Company representing twenty-five percent (25%) or more of
the combined voting power of the Company's then outstanding securities having
the right to vote in an election of the Company's Board of Directors ("Voting
Securities") (in such case other than as a result of an acquisition of
securities directly from the Company);
(B) persons who, as of the Effective Date, constitute the
Company's Board of Directors (the "Incumbent Directors") cease for any reason,
including, without limitation, as a result of a tender offer, proxy contest,
merger or similar transaction, to constitute at least a majority of the Board;
provided that any person becoming a director of the Company subsequent to the
- --------
Effective Date shall be considered an Incumbent Director if such person's
election was approved by or such person was nominated for election by either (1)
a vote of at least a majority of the Incumbent Directors or (2) a vote of at
least a majority of the Incumbent Directors who are members of a nominating
committee comprised, in the majority, of Incumbent Directors; but provided
--------
further that any such person whose initial assumption of office is in connection
- -------
with an actual or threatened election contest relating to the election of
members of the Board of Directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a person other than the Board, including
by reason of agreement intended to avoid or settle any such actual or threatened
contest or solicitation, shall not be considered an Incumbent Director; or
(C) the stockholders of the Company shall approve (1) any
consolidation or merger of the Company where the stockholders of the Company,
immediately prior to the consolidation or merger, would not, immediately after
the consolidation or merger, beneficially own (as such term is defined in Rule
13d-3 under the Act), directly or indirectly, shares representing in the
aggregate more than fifty percent (50%) of the voting shares of the corporation
issuing cash or securities in the consolidation or merger (or of its ultimate
parent
6
<PAGE>
corporation, if any), (2) any sale, lease, exchange or other transfer (in one
transaction or a series of transactions contemplated or arranged by any party as
a single plan) of all or substantially all of the assets of the Company or (3)
any plan or proposal for the liquidation or dissolution of the Company.
Notwithstanding the foregoing, a "Change of Control" shall not be deemed to
have occurred for purposes of the foregoing clause (A) solely as the result of
an acquisition of securities by the Company which, by reducing the number of
shares of Voting Securities outstanding, increases the proportionate number of
shares of Voting Securities beneficially owned by any person to twenty-five
percent (25%) or more of the combined voting power of all then outstanding
Voting Securities; provided, however, that if any person referred to in this
-------- -------
sentence shall thereafter become the beneficial owner of any additional shares
of Voting Securities (other than pursuant to a stock split, stock dividend, or
similar transaction or as a result of an acquisition of securities directly from
the Company), then a "Change of Control" shall be deemed to have occurred for
purposes of the foregoing clause (A).
(ii) "Good Reason" shall mean the occurrence of any of the
-----------
following:
(A) a material adverse change or diminution in the
nature or scope of the powers, functions, titles, duties or responsibilities of
the Executive that is adverse to the Executive;
(B) a breach by the Company of any of its material
obligations hereunder;
(C) the failure by the Company to obtain an effective
agreement from any successor to assume and agree to perform this Agreement; or
(D) the relocation of the offices at which the
Executive is principally employed as of the Change of Control to a location more
than fifty (50) miles from such offices, which relocation is not approved by the
Executive.
(iii) The Executive shall provide the Company with reasonable
notice and an opportunity to cure any of the events listed in Section 6(g)(ii)
and shall not be entitled to compensation pursuant to this Section 6(g) unless
the Company fails to cure within a reasonable period of not less than thirty
(30) days; and
(iv) It is the intention of the Executive and of the Company
that no payments by the Company to or for the benefit of the Executive under
this Agreement or any other agreement or plan, if any, pursuant to which the
Executive is entitled to receive payments or benefits shall be nondeductible to
the Company by reason of the operation of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), relating to parachute payments or any
like statutory or regulatory provision. Accordingly, and
7
<PAGE>
notwithstanding any other provision of this Agreement or any such agreement or
plan, if by reason of the operation of said Section 280G or any like statutory
or regulatory provision, any such payments exceed the amount which can be
deducted by the Company, such payments shall be reduced to the maximum amount
which can be deducted by the Company. To the extent that payments exceeding such
maximum deductible amount have been made to or for the benefit of the Executive,
such excess payments shall be refunded to the Company with interest thereon at
the applicable Federal rate determined under Section 1274(d) of the Code,
compounded annually, or at such other rate as may be required in order that no
such payments shall be nondeductible to the Company by reason of the operation
of said Section 280G or any like statutory or regulatory provision. To the
extent that there is more than one method of reducing the payments to bring them
within the limitations of said Section 280G or any like statutory or regulatory
provision, the Executive shall determine which method shall be followed;
provided that if the Executive fails to make such determination within forty-
- --------
five (45) days after the Company has given notice of the need for such
reduction, the Company may determine the method of such reduction in its sole
discretion.
(h) No Mitigation. Without regard to the reason for the termination
-------------
of the Executive's employment hereunder, the Executive shall be under no
obligation to mitigate damages with respect to such termination under any
circumstances and in the event the Executive is employed or receives income from
any other source, there shall be no offset against the amounts due from the
Company hereunder.
7. Non-Competition.
---------------
(a) Because the Executive's services to the Company are special and
because the Executive has access to the Company's confidential information,
during the Term of Employment, the Executive shall not, without the express
written consent of the Company, directly or indirectly, engage, participate,
invest in, be employed by or assist, whether as owner, part-owner, shareholder,
partner, director, officer, trustee, employee, agent or consultant, or in any
other capacity, any Person (as hereinafter defined) other than the Company and
its affiliates in the Designated Industry (as hereinafter defined); provided,
--------
however, that nothing herein shall be construed as preventing the Executive from
- -------
making passive investments in a Person in the Designated Industry if the
securities of such Person are publicly traded and such investment constitutes
less than one percent (1%) of the outstanding shares of capital stock or
comparable equity interests of such Person.
(b) For purposes of this Agreement, the following terms have the
following meanings:
"Person" means an individual, a corporation, an association, a
------
partnership, a limited liability company, an estate, a trust and any other
entity or organization; and
8
<PAGE>
"Designated Industry" means the business of providing chemistry
-------------------
research and development services to pharmaceutical and biotechnology companies
involved in drug development and discovery and any and all activities related
thereto, including, without limitation, medicinal chemistry, chemical
development, analytical chemistry services and small-scale manufacturing and any
other business conducted by the Company during the Executive's employment with
the Company.
8. Confidentiality. In the course of performing services hereunder and
---------------
otherwise, the Executive has had, and it is anticipated that the Executive will
from time to time have, access to confidential records, data, customer lists,
trade secrets, technology and similar confidential information owned or used in
the course of business by the Company and its subsidiaries and affiliates (the
"Confidential Information"). The Executive agrees (i) to hold the Confidential
Information in strict confidence, (ii) not to disclose the Confidential
Information to any Person (other than in the regular business of the Company),
and (iii) not to use, directly or indirectly, any of the Confidential
Information for any competitive or commercial purpose; provided, however, that
-------- -------
the limitations set forth above shall not apply to any Confidential Information
which (A) is then generally known to the public, (B) became or becomes generally
known to the public through no fault of the Executive, or (C) is disclosed in
accordance with an order of a court of competent jurisdiction or applicable law.
Upon termination of the Executive's employment with the Company, all data,
memoranda, customer lists, notes, programs and other papers and items, and
reproductions thereof relating to the foregoing matters in the Executive's
possession or control, shall be returned to the Company and remain in its
possession. This Section 8 shall survive the termination of this Agreement for
any reason.
9. Conflicting Agreements. The Executive hereby represents and warrants
----------------------
that the execution of this Agreement and the performance of his obligations
hereunder will not breach or be in conflict with any other agreement to which he
is a party or is bound, and that he is not now subject to any covenants which
would affect the performance of his obligations hereunder. As of the Effective
Date, the Executive is not performing any other duties for, and is not a party
to any similar agreement with, any Person competing with the Company or any of
its affiliates.
10. Severability. In case any of the provisions contained in this
------------
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, any such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement, but this Agreement shall be
construed as if such invalid, illegal or unenforceable provision had been
limited or modified (consistent with its general intent) to the extent necessary
to make it valid, legal and enforceable, or if it shall not be possible to so
limit or modify such invalid, illegal or unenforceable provision or part of a
provision, this Agreement shall be construed as if such invalid, illegal or
unenforceable provision or part of a provision had never been contained in this
Agreement.
9
<PAGE>
11. Litigation and Regulatory Cooperation. During and after the
-------------------------------------
Executive's employment, the Executive shall cooperate fully with the Company in
the defense or prosecution of any claims or actions now in existence or which
may be brought in the future against or on behalf of the Company which relate to
events or occurrences that transpired while the Executive was employed by the
Company. The Executive's full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf of
the Company at mutually convenient times. During and after the Executive's
employment, the Executive also shall cooperate fully with the Company in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to events or
occurrences that transpired while the Executive was employed by the Company.
The Company shall reimburse the Executive for any reasonable out-of-pocket
expenses incurred in connection with the Executive's performance of obligations
pursuant to this Section 11. This Section 11 shall survive the termination of
this Agreement for any reason.
12. Arbitration of Disputes. Any dispute or controversy arising under
--- -----------------------
or in connection with this Agreement shall be settled exclusively by arbitration
in Albany, New York, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered in any court having
jurisdiction. In the event that the Company terminates the Executive's
employment for cause under Section 6(b) and the Executive contends that cause
did not exist, then the Company's only obligation shall be to submit such claim
to arbitration and the only issue before the arbitrator will be whether the
Executive was in fact terminated for cause. If the arbitrator determines that
the Executive was not terminated for cause by the Company, then the only
remedies that the arbitrator may award are (i) payment of amounts which would
have been payable if the Executive's employment had been terminated under
Section 6(e), (ii) the costs of arbitration, (iii) the Executive's attorneys'
fees, and (iv) all rights and benefits granted or in effect with respect to the
Executive under the Company's stock option plans and agreements with the
Executive pursuant thereto, with the vesting and exercise of any stock options
and the forfeitability of any stock-based grants held by the Executive to be
governed by the terms of such plans and the related agreements between the
Executive and the Company. If the arbitrator finds that the Executive's
employment was terminated for cause, the arbitrator will be without authority to
award the Executive anything, and the parties will each be responsible for their
own attorneys' fees, and they will divide the costs of arbitration equally.
Furthermore, should a dispute occur concerning the Executive's mental or
physical capacity as described in Section 6(c), a doctor selected by the
Executive and a doctor selected by the Company shall be entitled to examine the
Executive. If the opinion of the Company's doctor and the Executive's doctor
conflict, the Company's doctor and the Executive's doctor shall together agree
upon a third doctor, whose opinion shall be binding. This Section 12 shall
survive the termination of this Agreement for any reason.
13. Specific Performance. Notwithstanding Section 12 hereof, it is
--------------------
specifically understood and agreed that any breach of the provisions of this
Agreement, including, without limitation, Sections 7 and 8 hereof, by the
Executive is likely to result in irreparable injury to the Company and its
subsidiaries and affiliates, that the remedy at law alone will be an
10
<PAGE>
inadequate remedy for such breach and that, in addition to any other remedy it
may have, the Company shall be entitled to enforce the specific performance of
this Agreement by the Executive and to seek both temporary and permanent
injunctive relief (to the extent permitted by law), without the necessity of
proving actual damages. To the extent that any court action is permitted
consistent with or to enforce Section 7 or 8 of this Agreement, the parties
hereby consent to the jurisdiction of the courts of the State of New York and
the United States District Court for the Eastern District of New York.
Accordingly, with respect to any such court action, the Executive (i) submits to
the personal jurisdiction of such courts, (ii) consents to service of process,
and (iii) waives any other requirement (whether imposed by statute, rule of
court or otherwise) with respect to personal jurisdiction or service of process.
14. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given (i)
when delivered by hand, (ii) when transmitted by facsimile and receipt is
acknowledged, or (iii) if mailed by certified or registered mail with postage
prepaid, on the third business day after the date on which it is so mailed:
To the Company:
Albany Molecular Research, Inc.
21 Corporate Circle
Albany, New York 12203-5154
Facsimile: (518) 464-0289
Attention: Chief Executive Officer
To the Executive:
Michael P. Trova, Ph.D.
----------------------------
----------------------------
----------------------------
or to such other address of which any party may notify the other parties as
provided above. Notices shall be effective as of the date of such delivery or
mailing.
15. Amendment; Waiver. This Agreement shall not be amended, modified or
-----------------
discharged in whole or in part except by an Agreement in writing signed by both
of the parties hereto. The failure of either of the parties to require the
performance of a term or obligation or to exercise any right under this
Agreement or the waiver of any breach hereunder shall not prevent subsequent
enforcement of such term or obligation or exercise of such right or the
enforcement at any time of any other right hereunder or be deemed a waiver of
any subsequent breach of the provision so breached, or of any other breach
hereunder.
11
<PAGE>
16. Successors and Assigns. This Agreement shall inure to the benefit of
----------------------
successors of the Company by way of merger, consolidation or transfer of all or
substantially all of the assets of the Company, and may not be assigned by the
Executive.
17. Entire Agreement. This Agreement, together with that certain Employee
----------------
Innovation, Proprietary Information and Post-Employment Activity Agreement
executed by the Employee, constitute the entire agreement between the parties
concerning the subjects hereof and thereof and supersede all prior
understandings and agreements between the parties relating to the subject matter
hereof and thereof.
18. Governing Law. This Agreement shall be construed and regulated in all
-------------
respects under the laws of the State of New York.
19. Counterparts. This Agreement may be executed in counterparts, each of
------------
which when so executed and delivered shall be taken to be an original, but such
counterparts shall together constitute one and the same document.
[Remainder of Page Intentionally Left Blank]
12
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
ALBANY MOLECULAR RESEARCH, INC.
By:
-----------------------------
Name:
Title:
EXECUTIVE:
-----------------------------
Michael P.Trova, Ph.D.
13
<PAGE>
EXHIBIT 10.14
EMPLOYEE INNOVATION, PROPRIETARY INFORMATION
AND POST-EMPLOYMENT ACTIVITY AGREEMENT
TO ALBANY MOLECULAR RESEARCH, INC.:
In consideration of my employment or the continuation of my current employment
at will by Albany Molecular Research, Inc., and of the salary or wages paid to
me, I agree:
a) to disclose and assign to the Company as its exclusive property all
inventions and technical or business innovations developed or
conceived by me solely or jointly with others during the period of my
employment (1) that are along the lines of the business, work or
investigations of the Company or its affiliates to which my employment
relates or as to which I may receive information due to my employment,
or (2) that result from or are suggested by any work which I may do
for the Company or (3) that are otherwise made through the use of
Company time, facilities or materials;
b) to execute all necessary papers and otherwise provide proper
assistance (at the Company's expense), during and subsequent to my
employment, to enable the Company to obtain for itself or its
nominees, patents, copyrights, or other legal protection for such
inventions or innovations in any and all countries;
c) to make and maintain for the Company adequate and current written
records of all such inventions or innovations;
d) upon any termination of my employment to deliver to the Company
promptly all written and other materials which are of a secret or
confidential nature relating to the business of the Company or its
affiliates;
e) not to use, publish or otherwise disclose (except as my Company duties
may require), either during or subsequent to my employment, any secret
or confidential information or data of the Company or any information
or data of others which the Company is obligated to maintain in
confidence;
f) not to disclose or utilize in my work with the Company any secret or
confidential information of others (including any prior employers), or
any inventions or innovations of my own which are not included within
the scope of this agreement; and
g) not to undertake during the six (6) month period immediately following
any termination of my employment to engage directly or indirectly in
the sale to or performance for any customer of the Company for which I
performed services as an employee of the Company at any time during
the twelve (12) month period immediately preceding such termination of
employment of services of the type which I performed as an employee of
the Company, whether as an employee of such customer, a vendor of
services to such customer, an employee of a third party, or otherwise.
<PAGE>
It is acknowledged and agreed that the remedies at law for breach of this
agreement would be inadequate, and that, in addition to any such remedies at
law, the Company shall also therefor be entitled to equitable relief to enforce
compliance with the terms of this agreement and to restrain any violation of
such terms.
This agreement does not apply to an invention for which no equipment, supplies,
facility or trade secret information of the Company was used and which was
developed entirely on my own time, unless (a) the invention relates (i) directly
to the business of the Company or (ii) to the Company's actual or demonstrably
anticipated research or development, or (b) the invention results from any work
performed by me for the Company.
This agreement supersedes and replaces any existing agreement between the
Company and me relating generally to the same subject matter. It may not be
modified or terminated, in whole or part, except in writing signed by an
authorized representative of the Company. Discharge of my undertaking in this
agreement shall be an obligation of my executors, administrators, or other legal
representatives or assigns.
I represent that, except as stated below, I have no agreements with or
obligations to others in conflict with the foregoing.
---------------------------------------
Employee
---------------------------------------
Date
2
<PAGE>
EXHIBIT 10.15
October 20, 1998
CONFIDENTIAL
- ------------
Mr. Harold M. Armstrong, Jr.
716 Sachem Circle
Slingerlands, NY 12159
Dear Harold:
This letter agreement (this "Agreement") formalizes the agreement that we
have reached regarding your voluntary resignation from Albany Molecular
Research, Inc. (the "Company") as of the date hereof (the "Resignation Date").
The purpose of this Agreement is to establish an amicable arrangement for ending
your employment relationship and to set forth our understanding with respect to
certain outstanding shares of the Company's Common Stock, par value $.01 per
share (the "Common Stock"), and options to purchase Common Stock held by you or
your affiliates. For purposes of this Agreement, all references to the
"Company" shall include Albany Molecular Research, Inc., a New York corporation,
and any of its subsidiaries.
In exchange for the promises of you and the Company set forth below, you
and the Company agree as follows:
1. TERMINATION OF EMPLOYMENT. You hereby resign as Executive Vice
President, Chief Financial Officer, Treasurer and Secretary of the Company, as a
member of the Board of Directors of the Company and from any other position
(whether as an officer, director or employee) currently held by you with the
Company or any of its subsidiaries effective as of the eighth day following your
execution hereof (the "Resignation Date"). Said resignations are hereby
accepted by the Company and on behalf of its subsidiaries effective as of the
eighth day following your execution hereof.
2. SEVERANCE. You shall receive on the Resignation Date, in
consideration of the release of claims set forth in paragraph 10(a) and the
other covenants set forth in this Agreement, an amount equal to your annual base
salary as in effect on the date hereof plus an amount equal to your last bonus,
in all cases subject to withholding under applicable law.
<PAGE>
Mr. Harold M. Armstrong, Jr.
October 20, 1998
Page 2
Other than the payments described above, you shall not be entitled to any
additional payments from the Company relating to your employment with the
Company.
3. BENEFITS. You and your beneficiaries shall be entitled to participate
(at the Company's expense) in any and all medical and dental plans in which you
and your beneficiaries are currently enrolled until the first anniversary of the
Resignation Date at which time all such benefits shall terminate, subject to the
rights of you and your beneficiaries to continue certain benefits in accordance
with and subject to the law known as COBRA. In addition, the Company shall
allow you and your beneficiaries to continue enrollment in such plans at your
and their expense for the maximum period permitted under such plans. Your
eligibility to participate in the Company's other employee benefit plans and
programs ceases on or after the Resignation Date in accordance with the terms
and conditions of each of those benefit plans and programs.
4. STOCK OWNERSHIP IN THE COMPANY.
(a) You and the Harold M. Armstrong, Jr. Family Trust I (the "Trust")
hereby agree to sell to the Company, and the Company hereby agrees to purchase,
on the Resignation Date all of the shares of the Company's Common Stock
beneficially owned or held of record by you or the Trust on the date hereof
(including any shares subject to options to purchase) (the "Company Shares"),
free and clear of any liens, claims or other encumbrances, at a price per share
of Twenty Dollars ($20), less any exercise price due with respect thereto in the
case of shares subject to options to purchase. Set forth on Appendix A hereto
----------
is a schedule of all of the Company Shares and the purchase price to be paid by
the Company with respect thereto. The Company hereby agrees that any option to
purchase shares of Common Stock issued to you shall be deemed fully vested on
the Resignation Date irrespective of the terms thereof and shall be deemed
exercised by you on such date. In consideration for the Company Shares, the
aggregate purchase price to be paid to you and the Trust is $9,919,800 (the
"Purchase Price"). The Purchase Price shall be paid to you and the Trust on the
Resignation Date by payments of $1,383,960 and $600,000 in cash, respectively,
and the issuance of secured promissory notes in substantially the form attached
hereto as Exhibit A in the principal amounts of $5,535,840 and $2,400,000 (the
---------
"Notes"), respectively. In connection with the Company's purchase of the
Company Shares, you, the Trust and the Company shall also enter into Pledge
Agreements in substantially the form attached hereto as Exhibit B (the "Pledge
---------
Agreements"). From time to time after the date hereof, at the request of the
Company and without further consideration, you and the Trust will execute and
deliver further instruments of transfer and assignment and take such other
action as the Company may reasonably require to more effectively transfer and
<PAGE>
Mr. Harold M. Armstrong, Jr.
October 20, 1998
Page 3
assign to, and vest in, the Company, the Company Shares. The Company
acknowledges and agrees that, notwithstanding a breach or claimed breach by you
or the Trust of any of your obligations under this Agreement other than under
this paragraph 4 at any time following the Resignation Date, the Company's
obligation to purchase the Company Shares and to pay the obligations under the
promissory notes described above will not be affected. In the event of any
breach other than under this paragraph 4, the Company's sole recourse is limited
to a claim for damages without set-off against the amounts due under the
promissory notes.
(b) In consideration of the Company's purchase of the Company Shares, you
and the Trust hereby represent and warrant to the Company each of the following
as of the date hereof:
(i) This Agreement constitutes, and the other documents and
instruments executed or to be executed hereunder, when executed and
delivered in accordance herewith, constitute or will constitute, the valid
and legally binding obligations of you and the Trust, enforceable against
you and the Trust in accordance with their terms, except as enforceability
may be restricted, limited or delayed by applicable bankruptcy or other
laws affecting creditors' rights generally.
(ii) You and the Trust hold beneficial and record title to 503,068
shares of Common Stock (which includes any shares subject to options to
purchase) in the aggregate, free and clear of all security interests,
liens, encumbrances, options, pledges and other restrictions (together
"Liens"), and such shares are the only shares of capital stock held by you
or the Trust or with respect to which you or the Trust has any rights in
the Company.
(iii) The execution and delivery of this Agreement by you and the
Trust and the consummation of the transactions contemplated hereby by you
and the Trust will not violate any order, writ, injunction or decree of any
court or other governmental body applicable to you or the Trust.
(iv) You have full right, authority, power and capacity to enter into
and deliver this Agreement on behalf of the Trust and each agreement,
document and instrument to be executed and delivered by or on behalf of the
Trust pursuant to, or as contemplated by, this Agreement and to carry out
the transactions contemplated hereby and thereby on behalf of the Trust.
<PAGE>
Mr. Harold M. Armstrong, Jr.
October 20, 1998
Page 4
5. REPRESENTATIONS OF THE COMPANY. In consideration of your and the
Trust's sale of the Company Shares, the Company hereby represents and warrants
to you and the Trust each of the following as of the date hereof:
(i) This Agreement constitutes, and the other documents and
instruments executed or to be executed hereunder, when executed and
delivered in accordance herewith, constitute or will constitute, the valid
and legally binding obligations of the Company, enforceable against the
Company in accordance with its terms, except as enforceability may be
restricted, limited or delayed by applicable bankruptcy or other laws
affecting creditors' rights generally.
(ii) The execution and delivery of this Agreement by the Company and
the consummation of the transactions contemplated hereby by the Company
will not violate any order, writ, injunction or decree of any court or
other governmental body applicable to the Company.
(iii) The Company hereby represents and warrants that the Company has
full right, authority, corporate power and capacity to enter into and
deliver, and the Company's Board of Directors has authorized, this
Agreement, and each agreement, document and instrument to be executed and
delivered by or on behalf of the Company pursuant to, or as contemplated
by, this Agreement and to carry out the transactions contemplated hereby
and thereby on behalf of the Company.
6. RELEASE OF GUARANTEE. The Company shall use reasonable commercial
efforts to have the Guarantee (the "Guarantee") made by you to the New York Job
Development Authority released. In the event the Company is unable to have the
Guarantee released, the Company hereby agrees to indemnify and hold harmless you
and your heirs and beneficiaries at law or by will (each, an "Indemnified
Party") from and against and in respect of all losses, liabilities, obligations,
damages, deficiencies, actions, suits, proceedings, demands, assessments,
orders, judgments, fines, penalties, costs and expenses (including the
reasonable fees, disbursements and expenses of attorneys) of any kind or nature
whatsoever (whether or not arising out of third-party claims and including all
amounts paid in investigation, defense or settlement of the foregoing)
sustained, suffered or incurred by or made against any Indemnified Party arising
out of, based upon or in connection with the Guarantee.
7. CONFIDENTIALITY. You acknowledge that, in the course of performing
services for the Company, you have had, and will from time to time have until
the Resignation Date,
<PAGE>
Mr. Harold M. Armstrong, Jr.
October 20, 1998
Page 5
access to information of a confidential or proprietary nature, including without
limitation, all confidential or proprietary investment methodologies, trade
secrets, proprietary or confidential plans, client identities and information,
client lists, service providers, business operations or techniques, records and
data ("Intellectual Property") owned or used in the course of business by the
Company. You hereby agree always to keep secret and not ever publish, divulge,
furnish, use or make accessible to anyone any Intellectual Property of the
Company; provided that you may disclose Intellectual Property pursuant to (i) a
-------- ----
valid subpoena or (ii) as otherwise required by law, but in either case only
after providing the Company with prior written notice (to the attention of the
Chief Executive Officer) as soon as reasonably practicable, but in no event less
than five (5) business days before such disclosure is compelled, if practicable.
You understand that your obligations with respect to Intellectual Property will
continue until any such Intellectual Property has become, through no fault of
yours, generally known to the public.
8. RETURN OF PROPERTY. You hereby acknowledge that all documents,
records, materials, software, equipment (other than two computers that are
currently located at your home, provided that you delete or return all
Intellectual Property stored thereon), information and other physical or
Intellectual Property that have come into your possession or been produced or
created by you in connection with your employment with or for the Company
("Property") have been and remain the sole property of the Company. You hereby
acknowledge that you have returned to the Company all such Property.
9. LITIGATION COOPERATION. You agree to cooperate fully with the Company
in (i) the defense, prosecution or investigation of any claims or actions which
already have been brought or threatened and of which you have knowledge, or
which may be brought or threatened in the future against or on behalf of the
Company or actions which already have been brought or which may be brought in
the future against or on behalf of the Company relating to a period in which you
were an employee of the Company and (ii) responding to, cooperating with, or
contesting any governmental audit, inspection, inquiry or investigation, in
either case that relate to events or occurrences that transpired during your
employment with the Company. Your full cooperation in connection with such
claims or actions shall include, without implication of limitation: being
available to meet with counsel to prepare for discovery or trial; to testify
truthfully as a witness when reasonably requested and at reasonable times
designated by the Company; and to meet with counsel or other designated
representative of the Company to prepare responses to and to cooperate with the
Company's processing of governmental audits, inspections, inquiries or
investigations. You agree that you will maintain the confidences and privileges
of the Company. You will be reimbursed by the Company only
<PAGE>
Mr. Harold M. Armstrong, Jr.
October 20, 1998
Page 6
for any reasonable out-of-pocket expenses that you reasonably incur in
connection with such cooperation, subject to reasonable and satisfactory
documentation. The Company will not exercise their rights under this paragraph
so as to interfere with your ability to engage in gainful employment and shall
endeavor to schedule your responsibilities hereunder so as not to interfere with
your schedule so long as you promptly provide timely alternative dates on which
you can fulfill your obligations hereunder.
10. NON-DISPARAGEMENT AND COOPERATION DURING TRANSITION. You agree not to
make or cause to be made, directly or indirectly, any statement to any person
(other than immediate family members) criticizing or disparaging the Company or
any of its stockholders, directors, officers or employees or commenting
unfavorably or falsely on the character, business judgment, business practices
or business reputation of the Company or any of its stockholders, directors,
officers or employees. You agree that from the date of your receipt of this
Agreement, you will cooperate fully with the Company in arranging for an orderly
and professional transition of your responsibilities. You further agree that
you will present the circumstances of your departure in a light that will not
reflect unfavorably on the Company or its affiliates.
11. RELEASE.
(a) You and the Trust hereby irrevocably and unconditionally release,
acquit, and forever discharge the Company and its affiliates, securityholders,
subsidiaries, affiliates and related entities and their respective current and
former partners, members, officers, directors, agents, and employees, from any
and all claims, demands, or causes of action based upon any past action,
omission, or event, whether known or unknown, and whether or not in litigation
which you or the Trust may have had from the beginning of time until the date
hereof or which could be asserted by another on your behalf or the Trust's
behalf, based on any action, omission, or event relating to your employment at
the Company and/or the cessation thereof through the date hereof or your status
a stockholder or director of the Company. This release includes actions
claiming violation of Title VII of the Civil Rights Act of 1964, as amended, 42
U.S.C. 2000e et seq., the Age Discrimination in Employment Act, the Americans
------
with Disabilities Act, the New York Human Rights Law, the Rights of Persons with
Disabilities Law of New York, the Smokers' Rights Law of New York, the Equal
Rights Law of New York, all other labor laws of New York, and any other federal,
state, or local law, order or regulation. This release also includes any claims
for wrongful discharge or that the Company has dealt with you unfairly or in bad
faith, and actions raising tortious claims, actions raising any claim of express
or implied contract of employment, or any other cause of action or claims
<PAGE>
Mr. Harold M. Armstrong, Jr.
October 20, 1998
Page 7
of violation of common law. This release is for any and all relief, without
regard to its form or characterization. Included in this release are any and all
claims for attorneys fees and for future damages allegedly arising from the
alleged continuation of the effects of any past action, omission or event.
Notwithstanding anything in this release to the contrary, this release shall not
be construed to limit your right or the Trust's right to enforce this Agreement,
the Notes or the Pledge Agreements. In executing this Agreement and agreeing to
this release, you and the Trust acknowledge that you and the Trust have been
informed that the Company may engage in an initial public offering of its Common
Stock or enter into other transactions which may substantially increase the
value of the Company's equity and that in selling the Company Shares pursuant to
this Agreement you and the Trust will not participate in or receive the
financial benefit of any such future events.
(b) The Company hereby irrevocably and unconditionally releases, acquits,
and forever discharges you and your (and your successors, assigns, heirs and
survivors, or any of them), from any and all claims, demands, or causes of
action based upon any past action, omission, or event, whether known or unknown,
and whether or not in litigation which the Company may have or which could be
asserted by another on the Company's behalf, based on any action, omission, or
event relating to your employment at the Company and/or the cessation thereof
through the date hereof or your status a stockholder or director of the Company
other than with respect to acts or omissions by you during the course of your
- ----- ----
employment that constitute gross misconduct, gross negligence or that you did
not believe in good faith were in, or not opposed to, the best interests of the
Company. This release is for any and all relief, without regard to its form or
characterization. Included in this release are any and all claims for attorneys
fees and for future damages allegedly arising from the alleged continuation of
the effects of any past action, omission or event. Notwithstanding anything in
this release to the contrary, this release shall not be construed to limit the
Company's right to enforce this Agreement, the Notes or the Pledge Agreements.
12. MISCELLANEOUS.
You are advised to consult with an attorney before signing this Agreement.
By signing this Agreement, you acknowledge that you are doing so
voluntarily and only after consultation with your personal attorney. You also
acknowledge that you are not relying on any representations by the undersigned
or any other representative of the Company or any of its representatives
concerning the meaning of any aspect of this Agreement.
<PAGE>
Mr. Harold M. Armstrong, Jr.
October 20, 1998
Page 8
You acknowledge that you have been given the opportunity, if you so
desired, to consider this Agreement for twenty-one (21) days before executing
it. If not signed by you and returned to Thomas E. D'Ambra, Ph.D., Chairman and
Chief Executive Officer, Albany Molecular Research, Inc., 21 Corporate Circle,
Albany, NY 12203-5154, so that he receives it by close of business on the
twenty-second (22nd) day after your receipt of the Agreement, this Agreement
will not be valid. In addition, if you breach any of the conditions of the
Agreement within the twenty-one (21) day period, the offer of this Agreement
will be withdrawn and your execution of the Agreement will not be valid. In the
event that you execute and return this Agreement within twenty-one (21) days or
less of the date of its delivery to you, you acknowledge that such decision was
entirely voluntary and that you had the opportunity to consider this letter
agreement for the entire twenty-one (21) day period. The Company acknowledges
that for a period of seven (7) days from the date on which you execute this
Agreement, you shall retain the right to revoke this Agreement by written notice
delivered to Dr. D'Ambra at the address indicated above, and that this Agreement
shall not become effective or enforceable until the expiration of such
revocation period.
In the event of any dispute, this Agreement will be construed as a whole,
will be interpreted in accordance with its fair meaning, and will not be
construed strictly for or against either you or the Company. The laws of New
York will govern any dispute about this Agreement, including any interpretation
or enforcement of this Agreement. In the event that any provision or portion of
a provision of this Agreement shall be determined to be unenforceable, the
remainder of this Agreement shall be enforced to the fullest extent possible as
if such provision or portion of a provision were not included. This Agreement
may be modified only by a written agreement signed by you and the Trust and an
authorized representative of the Company.
The Company is executing this Agreement with you and the Trust on behalf of
itself and each of its subsidiaries.
<PAGE>
Mr. Harold M. Armstrong, Jr.
October 20, 1998
Page 9
If you and the Trust agree to these terms, please sign and date below and
return this Agreement to the undersigned within the time limitation set forth
above.
Sincerely,
ALBANY MOLECULAR RESEARCH, INC.
By: /s/ Thomas E. D'Ambra, Ph.D.
--------------------------------------
Name: Thomas E. D'Ambra, Ph.D.
Title: Chairman and Chief Executive Officer
ACCEPTED AND AGREED TO:
/s/ Harold M. Armstrong, Jr.
- --------------------------------
Harold M. Armstrong, Jr.
Dated: October 20, 1998
HAROLD M. ARMSTRONG JR. FAMILY TRUST I
By:/s/ Harold M. Armstrong, Jr.
-----------------------------------
Name: Harold M. Armstrong, Jr.
Title: Trustee
Dated: October 20, 1998
<PAGE>
APPENDIX A
<TABLE>
<CAPTION>
SHARES
ISSUABLE AGGREGATE NET
NUMBER OF UPON EXERCISE EXERCISE PURCHASE
SECURITYHOLDER SHARES HELD OF STOCK OPTIONS PRICE PRICE
- -------------------------- ------------- ---------------- ----------- --------
<S> <C> <C> <C> <C>
HAROLD M. ARMSTRONG, JR.
263,931 -- $5,278,620
75,000 $37,500 1,462,500
7,547 51,999 98,941
6,590 52,061 79,739
-----------
TOTAL PURCHASE PRICE $6,919,800
HAROLD M. ARMSTRONG, JR.
FAMILY TRUST I
150,000 -- $3,000,000
-----------
TOTAL PURCHASE PRICE $3,000,000
AGGREGATE PURCHASE PRICE $9,919,800
===========
</TABLE>
<PAGE>
EXHIBIT A
---------
SECURED PROMISSORY NOTE
$[5,535,840][2,400,000] October ___, 1998
FOR VALUE RECEIVED, Albany Molecular Research, Inc., a New York corporation
(the "Corporation"), hereby promises to pay to the order of [Harold M.
Armstrong, Jr., an individual] [the Harold M. Armstrong, Jr. Family Trust I, a
trust formed under the laws of the State of [New York]] (the "Payee"), the
principal sum of [Five Million Five Hundred Thirty-Five Thousand Eight Hundred
Forty] [Two Million Four Hundred Thousand] Dollars ($[5,535,840][2,400,000])
(the "principal"), together with interest on the unpaid principal accruing at a
rate per annum equal to the prime rate, as published from time to time in The
Wall Street Journal (New York Edition) (the "Prime Rate"), subject to increase
after an Event of Default.
1. Payment of Principal and Interest. The Corporation shall pay to the
---------------------------------
Payee, within ten (10) days after the end of each calendar quarter, all accrued
and unpaid interest on the outstanding principal amount. The Corporation shall
also pay to the Payee, within ten (10) days after the end of each anniversary of
the date of this Note, an amount equal to one-fifth (1/5) of the original
principal amount (less any principal prepaid as of such date and not applied to
offset a prior principal payment), plus all accrued and unpaid interest thereon.
All payments made by the Corporation to the Payee under this Note shall be made
in lawful tender of the United States and shall be credited first to the accrued
interest and the remainder shall be applied to principal. In any event, any
principal then unpaid shall be due and payable, with accrued interest thereon,
on the earliest of: (i) the date of the closing of a public offering of the
Corporation's Common Stock, par value $.01 per share (the "Common Stock"),
pursuant to an effective registration statement under the Securities Act of
1933; or (ii) the fifth anniversary of the date of this Note (the "Maturity
Date").
2. Security for Note. To secure the obligations of the Corporation under
-----------------
this Note, the Corporation has executed and delivered to the Payee that certain
Pledge Agreement dated as of October ___, 1998 (the "Pledge Agreement"),
pursuant to which the Corporation has pledged [282,455][120,000] shares of the
Corporation's Common Stock.
3. Events of Default; Remedies. In the event that: (i) there occurs an
---------------------------
assignment for the benefit of creditors or commencement of any proceeding under
any insolvency law by or against the Corporation, (ii) the Corporation shall
default in the payment or performance of any obligation represented by this Note
and such default shall continue for thirty days or (iii) any default shall occur
under the Pledge Agreement (each, an "Event of Default"), all principal and
interest shall, at any time, at the option of the Payee, forthwith become due
and payable notwithstanding the stated term and Maturity Date. The obligation
of the Corporation
<PAGE>
to pay amounts due and payable hereunder shall be absolute and unconditional,
and the Payee shall have full recourse to recover amounts due and payable
hereunder. From and after an occurrence of an Event of Default and at all times
while it is continuing, until all obligations hereunder are paid in full, the
interest rate shall increase to two (2) percentage points above the Prime Rate.
4. Prepayment. This Note may be prepaid in whole or in part without
----------
penalty.
5. Fees and Expenses. Corporation agrees to pay all charges (including
-----------------
reasonable attorney's fees) of Payee in connection with the collection and/or
enforcement of this Note or in protecting or preserving the security for this
Note, whether or not suit is brought against Corporation.
6. Waivers of Certain Rights. The Corporation hereby waives presentment,
-------------------------
demand, notice and protest, and acceptance, endorsement, performance, default or
enforcement of this Note, assents to any and all extensions or postponements of
the time of payment or any other indulgence, to any substitution, exchange or
release of collateral and/or to the addition or release of any other party or
person primarily or secondarily liable, and generally waives all suretyship
defenses and defenses in the nature thereof.
7. No Waiver. The failure of Payee at any time to exercise any option or
---------
right hereunder shall not constitute a waiver of Payee's right to exercise such
option or right at any other time.
8. Notices and Demands. Any notice or demand which, by any provision of
-------------------
this Note, except as otherwise provided herein, is required or provided to be
given shall be deemed to have been sufficiently given or served and received for
all purposes three days after being sent by certified or registered mail,
postage and charges prepaid, return receipt requested, or by express delivery
providing receipt of delivery.
9. Assignability. This Note shall be binding upon and inure to the
-------------
benefit of the successors of each of the parties hereto, but it shall not be
assignable by the Corporation. The Payee may assign or otherwise transfer this
Note to any other person or entity, and such other person or entity shall
thereupon become vested, to the extent set forth in the agreement evidencing
such assignment or transfer, with all the rights in respect thereof granted to
the Payee herein.
10. Record of Payments. The Payee need not enter payments of principal or
------------------
interest upon this Note but may maintain a record thereof on a separate ledger
maintained by the Payee.
11. Governing Law. This Note shall be governed by, construed, and
-------------
enforced in accordance with the laws of the State of New York. If any provision
of this Note is held to be
12
<PAGE>
invalid or unenforceable by a court of competent jurisdiction, the other
provisions of this Note shall remain in full force and effect. If the payment of
any interest due hereunder would subject Payee to any penalty under applicable
law, then the payments due hereunder shall be automatically reduced to what they
would be at the highest rate authorized under applicable law. Any dispute or
controversy in connection with this Note shall be determined and settled by a
court of competent jurisdiction. Each party shall bear his or its own expenses,
including fees and disbursements of attorneys, accountants and witnesses;
provided that, in the event the court determines that the Corporation has
breached its payment obligations under this Note, the Corporation shall
reimburse the Payee for all reasonable expenses incurred by [him][it] to enforce
[his][its] rights under this Note.
12. Maximum Rate of Interest. All agreements between the Corporation and
------------------------
the Payee are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to be paid to the
Payee for the use, forbearance or detention of the indebtedness evidenced hereby
exceed the maximum permissible under applicable law. As used herein, the term
"applicable law" shall mean the law in effect as of the date hereof, provided,
however, that in the event there is a change in the law which results in a
higher permissible rate of interest, then this Note shall be governed by such
new law as of its effective date. If, from any circumstance whatsoever,
fulfillment of any provision hereof at the time performance of such provision
shall be due, shall involve transcending the limit of validity prescribed by
law, then the obligation to be fulfilled shall automatically be reduced to the
limit of such validity, and if from any circumstances the Payee should ever
receive as interest an amount which would exceed the highest lawful rate, such
amount which would be excessive interest shall be applied to the reduction of
the principal balance evidenced hereby and not to the payment of interest.
This Note shall take effect as an instrument under seal.
WITNESS: CORPORATION:
ALBANY MOLECULAR RESEARCH, INC.
- ------------------------- By: -------------------------
Name: Name: Thomas E. D'Ambra, Ph.D.
Title: Chairman and Chief Executive Officer
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<PAGE>
EXHIBIT B
---------
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "Agreement"), dated as of October ___, 1998, is
entered into by and between Albany Molecular Research, Inc., a New York
corporation (the "Corporation"), and [Harold M. Armstrong, Jr., an individual]
[the Harold M. Armstrong, Jr. Family Trust I, a trust formed under the laws of
the State of [New York]] (the "Pledgee"). In consideration of the Pledgee
accepting a promissory note (the "Note") from the Corporation as partial
consideration for the Corporation's purchase all of the Pledgee's shares of the
Corporation's Common Stock, par value $.01 per share (the "Common Stock"), the
Corporation hereby agrees as follows:
Section 1. Pledge. The Corporation hereby pledges, assigns and transfers
------
to the Pledgee, and grants to the Pledgee a security interest in,
[282,454][120,000] shares of the Corporation's Common Stock (as adjusted to
reflect stock splits, stock dividends or the like) ("Collateral"), including any
distributions, dividends or other payments made in connection with the
Collateral or other securities, instruments and other property issued or
accepted in substitution for or in addition to any of the Collateral (in each
case determined as if such shares were issued and outstanding at the time of any
distributions, dividends or other payments on shares of Common Stock or the
issuance or acceptance of any other securities, instruments and other property
in substitution for or in addition to shares of Common Stock).
Section 2. Obligations. This Agreement and the security interest granted
-----------
hereby secure the payment of all obligations of the Corporation to the Pledgee
under the Note issued by the Corporation to the Pledgee on the date hereof (the
"Obligations"), and the Obligations of the Corporation under this Agreement, and
any and all renewals or extensions thereof. So long as any of the Obligations
are outstanding, unless and until the Corporation shall be in default hereunder
or there shall be any default of any of the Obligations, the Corporation shall
retain all rights of ownership with respect to the Collateral. In the event the
Obligations shall be in default or in the event that the Corporation shall be in
default under the terms hereof, the Pledgee may, in its discretion, vote and
exercise all of the powers of an owner with respect to any of the relevant
Collateral. Without limiting the generality of the other remedies provided
herein and in addition thereto, in the event any of the Obligations shall be in
default or upon any default by the Corporation hereunder, the Pledgee after the
occurrence of an Event of Default may take all steps necessary to cause the
Collateral to be transferred into the name of the Pledgee, including but not
limited to taking steps necessary to comply with restrictions on sale or
transfer of the interest constituting such Collateral, and in connection
therewith the Corporation appoints the Pledgee such Corporation's attorney-in-
fact to execute and deliver such offers, tender offers, certificates, documents
or instruments of every nature or description required for the purpose of the
transfer of such Collateral into the name of the Pledgee, or any other person.
14
<PAGE>
If any cash distribution or dividend is made in respect of any Collateral
(other than from the Pledgee pursuant to Section 3 hereof), the Corporation
shall accept the same in trust for the Pledgee.
If any stock certificate or option is issued, whether as an addition to, as
a distribution, dividend or payment on, in substitution of, in exchange for or
as evidence of Corporation's interest in any Collateral, or otherwise, the
Corporation shall accept same in trust for the Pledgee.
The Corporation is herewith delivering to the Pledgee all certificates or
instruments representing or evidencing Collateral, if any, in suitable form for
transfer or delivery, or accompanied by duly executed instruments of transfer or
assignment to be held subject to the preceding paragraph.
Section 3. Release of Collateral. Upon each principal payment by the
----------------------
Corporation to the Pledgee under the Note, the Pledgee shall promptly release a
proportionate amount of the Collateral such that the total amount of Collateral
released at any time shall always bear the same proportion to the amount of the
total Collateral hereunder as the amount of principal paid at such time bears to
the amount of original principal under the Note.
Section 4. Representations and Warranties. The Corporation represents and
------------------------------
warrants to the Pledgee as follows:
(a) The Corporation is, and (as to any substitute or additional Collateral)
shall be, the sole owner of the Collateral pledged by the Corporation, free and
clear of any lien, security interest, option or other charge or encumbrance,
except for (i) the security interest created by this Agreement and (ii)
restrictions imposed by applicable laws, and, subject to the same exceptions,
the Corporation has and shall have the right to transfer such Collateral and to
grant a security interest therein to the Pledgee as provided in this Agreement.
(b) No effective financing statement or similar notice covering any
Collateral pledged by the Corporation is or shall be on file in any recording
office, and no other pledge or assignment thereof has been made, or shall have
been made, other than in favor of the Pledgee, except as the Pledgee may
approve.
Section 5. Further Action by Corporation. The Corporation shall, at the
-----------------------------
expense of the Corporation, promptly execute and deliver all further notices,
instruments and documents, including, without limitation, financing statements,
and take all such further action as may be reasonably necessary or reasonably
advisable or as the Pledgee at any time may reasonably request, in order to
perfect, preserve and protect the security interest granted or purported to be
granted hereby or to enable the Pledgee to exercise and enforce such rights,
powers and remedies with respect to Collateral.
15
<PAGE>
Section 6. Preservation of Collateral.
--------------------------
(a) The Pledgee shall give to the Collateral the same degree of care and
protection which it gives to its own property, provided, however, that the
Pledgee shall have no liability to the Corporation for any losses, costs,
expenses or damages due to any acts or omissions of third parties, or due to any
acts of God or other causes beyond its control. The Pledgee shall have no duty
to preserve any rights with respect to any Collateral, including, without
limitation, rights against prior parties, or to take, or to notify the
Corporation of the need to take, any action respecting any rights, privileges or
options relating to any Collateral. To replace any certificates, however, the
Corporation shall not be required to supply any bond or other indemnity.
(b) The Corporation shall furnish to the Pledgee, promptly upon receipt
thereof, copies of all material notices, requests and other documents received
by the Corporation relating to Collateral unless the same were sent by the
Pledgee.
(c) The Corporation shall not (i) sell, assign, transfer or otherwise
dispose of any Collateral, or create or suffer to exist any lien, security
interest, assignment by operation of law or other charge or encumbrance on, or
with respect to, any Collateral, except for the security interest created by
this Agreement, or (ii) attempt any action prohibited by paragraph (c)(i) of
this Section 6.
Section 7. Defaults. A default (an "Event of Default") shall be deemed to
--------
have occurred hereunder if (a) the Corporation fails in any material respect to
perform any material obligation hereunder, if any material representation or
warranty hereunder was untrue in any material respect when made, or if any
default or Event of Default by the Corporation occurs under the Note or any
agreement evidencing, or constituting or granting security for, the Obligations,
and (b) the Pledgee gives to the Corporation written notice thereof and such
default shall not have been cured within fourteen (14) days or such additional
time as may be required to effect such cure if diligently pursued.
Section 8. Remedies. Upon and after the occurrence of any Event of
--------
Default which is then continuing or which has not been cured within the time
period given for such cure:
(a) The Pledgee may exercise its rights with respect to the Collateral,
without regard to the existence of any other security or source of payment for
Obligations, including without limitation the rights set forth in Section 2, and
may demand, sue for collection or make any other compromise or settlement with
respect to other rights and remedies provided for herein or otherwise available
to it, and the Pledgee shall have all of the rights and remedies of a secured
party in New York under the Uniform Commercial Code.
(b) Except as specifically reserved herein, the Corporation waives all
suretyship defenses at law and in equity, including waste and impairment of
Collateral, and further waives the requirement of any demand and presentment.
Twenty-one (21) days' prior notice to the Corporation at the address provided
below or at such other address as the Corporation shall
16
<PAGE>
provide to the Pledgee in writing for such purpose, of the time and place of any
public sale of Collateral, or of the time after which any private sale or any
other intended disposition is to be made, shall constitute reasonable
notification.
(c) The Pledgee is authorized at any such sale (including without
limitation any sale to itself or any affiliate of the Pledgee, the same being
expressly authorized and contemplated herein), if the Pledgee deems it advisable
to do so, in order to comply with any applicable securities laws, to restrict
the prospective bidders or purchasers to persons who will represent and agree
that they are purchasing the Collateral for their own account for investment,
and not with a view to the distribution or resale thereof. Sales made subject
to such restriction shall not, solely by reason thereof, be deemed not to have
been made in a commercially reasonable manner.
(d) The Pledgee is specifically authorized, with respect to any Collateral
that consists of security, to acquire such Collateral itself or to transfer such
Collateral to any affiliate of the Pledgee at a price which shall be determined
reasonably and in good faith by the mutual agreement of the Corporation and the
Pledgee. The Corporation expressly waives any requirement that the Pledgee
conduct a public or private sale with respect to such security and agrees that
such a disposition is commercially reasonable.
(e) In case of any sale of all or part of the Collateral on credit for
future delivery, the Collateral so sold shall be retained by the Pledgee until
the purchase price is paid. The Pledgee shall incur no liability in case of the
failure of the purchaser to pay for the Collateral as so sold if the Collateral
is recovered, or of the failure of the Pledgee to make any sale of Collateral
after giving notice thereof, and in case of any such failure, such Collateral
may again be sold.
(f) All cash proceeds received by the Pledgee in respect of any sale,
collection or other enforcement or disposition of Collateral shall be applied
(after deduction of any amounts payable to the Pledgee for reasonable expenses
of the sale, collection or disposition of Collateral) against Obligations in
such order as the Pledgee shall elect in accordance with the terms of the Note.
Upon payment in full of all Obligations, the Corporation shall be entitled to
the return of all Collateral pledged by it and all proceeds thereof, which have
not been used or applied toward the payment of Obligations as herein authorized.
Section 9. Waivers and Remedies. Except as otherwise provided herein or
--------------------
by law, the Corporation waives presentment, demand, notice and protest, notice
of acceptance of this Agreement, and except as provided in Section 8(b) notice
of all action by the Pledgee in reliance hereon. No failure by the Pledgee to
exercise, no delay by the Pledgee in exercising, and no single or partial
exercise of, any right, remedy or power hereunder or under any other agreement
relating to the Obligations or to Collateral shall operate as a waiver thereof,
or of any other right, remedy or power at any time. No amendment, modification
or waiver of any provision of this Agreement shall be effective unless contained
in a writing signed by the Pledgee. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. The rights, remedies and powers of the Pledgee and the
17
<PAGE>
Corporation, not only hereunder, but also under any promissory note or notes of
the Corporation held by the Pledgee, any other agreements of the Corporation
with the Pledgee and applicable law, are cumulative and may be exercised
successively, concurrently or alternatively.
Section 10. Term; Binding Effect. This Agreement shall remain in full
--------------------
force and effect until payment and satisfaction in full of all Obligations,
shall be binding upon the Corporation and its successors and assigns and shall
inure to the benefit of the Pledgee and its successors and assigns.
Section 11. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York, except to the
extent that the perfection of the security interest granted hereby in respect of
any item of Collateral may be governed by the law of another jurisdiction.
Unless otherwise defined herein, all words and terms used in this Agreement
shall have the meanings provided in the New York Uniform Commercial Code. If
any provision of this Agreement, or the application thereof to any person or
circumstance, is held invalid, such provision shall be deemed to be modified to
comply with applicable law or if not able to be so modified, shall be deemed to
be severed from the Agreement, the remaining provisions of which to be valid and
enforceable.
Section 12. Signatures. This Agreement may be executed in counterparts.
----------
Section 13. Headings. The captions in this Agreement have been included
--------
for reference only and shall not define or limit the provisions hereof.
18
<PAGE>
EXECUTED as of the date first set forth above.
CORPORATION:
ALBANY MOLECULAR RESEARCH, INC.
By: ________________________________
Name: Thomas E. D'Ambra, Ph.D.
Title: Chairman and Chief Executive Officer
PLEDGEE:
____________________________________
<PAGE>
EXHIBIT 23.2
ACCOUNTANTS' CONSENT
The Board of Directors
Albany Molecular Research, Inc.:
We consent to the use of our report included herein and to the reference to our
firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
Albany, New York
December 7, 1998
<PAGE>
EXHIBIT 23.3
December 4, 1998
The Board of Directors of
Albany Molecular Research, Inc.
We consent to the reference to our firm under the caption "Experts" contained
in the Registration Statement on Form S-1 of Albany Molecular Research, Inc.
and the Prospectus forming a part thereof.
Ostrolenk, Faber, Gerb & Soffen, LLP
/s/ Harold Einhorn
Harold Einhorn
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