Contract analysis

I. Purpose and Summary The purpose of this memorandum is to provide an up-to-date summary of the status of fact discovery as of November 15, 2021, in the declaratory-judgment action filed by Penterra Pharmaceuticals Corp. ("Penterra" or "PPC") against Vantage Medical Distribution, LLC ("Vantage" or "VMD") in the Superior Court of Massachusetts, Business Litigation Session, before the Honorable Diane L. Costigan, J. T

II. Key Litigation Background A brief recitation of the key litigation background is provided here for context, particularly for Priya Anand's reference as billing partner. Penterra filed its Complaint for Declaratory Judgment on April 12, 2021, seeking a judicial declaration that Vantage's exclusive distribution territory under the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA") is limited to the six

III. Written discovery — Penterra's Requests to Vantage A. Penterra's First Set of Interrogatories to Vantage Penterra's First Set of Interrogatories to Defendant Vantage Medical Distribution, LLC was served on August 9, 2021. The set contains 25 interrogatories, which is the maximum permitted under the Massachusetts Rules of Civil Procedure, as applicable in the Business Litigation Session, absent leave of court. Th

1. Internal Vantage emails and memoranda regarding tri-state solicitation: These documents show that Brian Kopec, Vantage's Outside Sales Director, actively solicited customer accounts in New York, New Jersey, and Pennsylvania beginning in approximately late summer 2020. Several emails between Kopec and Farnham discuss specific hospital contacts and pricing proposals for tri-state accounts. See, e.g., VMD 004312–0043

2. Shipping records confirming tri-state shipments: Vantage's shipping and logistics records confirm that the first shipment of Oncalaris® to an address outside New England was made on or about September 14, 2020, to a hospital in Albany, New York. Subsequent shipments were made throughout the fall of 2020 and into 2021. See VMD 008001–008247.

3. Vantage financial summaries: Vantage produced internal financial summaries showing that tri-state revenues totaled approximately $6.4 million from September 2020 through March 2021. These summaries break down revenue by state and by quarter, and they are generally consistent with the shipping records produced.

4. Farnham internal communications regarding the Kapoor Email: Several of Farnham's internal emails and memoranda reference the January 12, 2018 Kapoor Email as the basis for Vantage's belief that it was authorized to expand into the tri-state area. In one such email, dated August 3, 2020, Farnham wrote to Kopec: "Steven's email from '18 gives us the green light to start building out the tri-state market. Let's get m

IV. Written discovery — Vantage's Requests to Penterra A. Vantage's First Set of Interrogatories to Penterra Vantage's First Set of Interrogatories to Plaintiff Penterra Pharmaceuticals Corp. was served on September 3, 2021. Penterra's responses were served on October 4, 2021, which was timely, following a three-day extension agreed to by HSP to accommodate the Columbus Day holiday weekend. The responses were prepare

1. The Territory is limited to the six New England states as expressly defined in Exhibit A to the EDA. The Territory definition was negotiated at arm's length and was specifically agreed upon by both parties at the time of execution.

2. The January 12, 2018 Kapoor Email expressed a general willingness to explore the possibility of future territorial expansion but did not constitute "prior written consent" under Section 2.3 of the EDA, nor did it constitute a written amendment signed by both parties as required by Section 13.1. The email was aspirational and forward-looking, and it was expressly conditioned on future discussions and evaluation.

3. Penterra executed a term sheet with Meridian National Distributors, Inc. on February 15, 2021, for distribution of Oncalaris® and Renuvesta® in New York, New Jersey, Pennsylvania, and Maryland. Penterra was entitled to engage a distributor for territories outside the scope of Vantage's exclusive Territory, and the Meridian term sheet does not constitute a breach of the EDA.

4. Penterra first learned of Vantage's unauthorized tri-state shipments in approximately late February 2021, when Rachel Mendez identified anomalies in distribution data suggesting that Vantage was shipping product to addresses outside of New England. Upon confirming the unauthorized activity, Jennifer Chao sent the March 8, 2021 cease-and-desist letter to Donald Farnham, demanding that Vantage immediately cease all

1. The executed EDA and all exhibits: Including Exhibit A (Territory Definition), which unambiguously defines the Territory as the six New England states. See PPC 000001–000047.

2. The complete email chain surrounding the January 12, 2018 Kapoor Email: Including the initial email from Farnham to Kapoor raising the possibility of expansion, Kapoor's January 12, 2018 reply, and several subsequent emails in which the parties discuss scheduling a follow-up call. The chain does not contain any language that could be construed as a binding commitment or formal consent. See PPC 001203–001211.

3. Steven Kapoor's internal communications: Including emails between Kapoor and other Penterra executives (including Jennifer Chao and Rachel Mendez) regarding Vantage's sales performance, the possibility of territorial expansion, and the internal assessment that any expansion would require a formal amendment to the EDA. See PPC 002340–002389.

4. The Meridian term sheet dated February 15, 2021: A non-binding term sheet between Penterra and Meridian National Distributors, Inc. (President: Thomas Welliver) for exclusive distribution of Oncalaris® and Renuvesta® in New York, New Jersey, Pennsylvania, and Maryland. See PPC 004102–004108.

5. Jennifer Chao's March 8, 2021 cease-and-desist letter: Addressed to Donald Farnham, demanding that Vantage immediately cease all solicitation, sale, and delivery of Penterra products outside the six New England states and reserving all of Penterra's rights and remedies under the EDA. See PPC 004501–004503.

6. Rachel Mendez's distribution and logistics records: Including internal distribution system reports showing that Penterra's logistics systems directed Oncalaris® shipments to Vantage solely for delivery to addresses within the New England Territory. No shipments were authorized or directed by Penterra for delivery to tri-state addresses through Vantage. See PPC 005301–005487.

7. Vantage purchase records: Penterra produced its internal records of Vantage's purchase volumes for the Products under the EDA, which reflect the following annual totals: These figures reflect significant and consistent growth in Vantage's purchases over the life of the EDA, substantially exceeding the $9.5 million annual minimum purchase requirement set forth in the EDA. Privilege Assertions. Penterra asserted att

V. Depositions A. Depositions Completed

1. Deposition of Donald R. Farnham — October 18, 2021 Witness: Donald R. Farnham, Managing Member and Chief Executive Officer of Vantage Medical Distribution, LLC. Location: Offices of Hargrove, Sinclair & Polk LLP, 200 Ashbury Asset Advisors, Suite 1800, Boston, Massachusetts. Duration: Approximately 6 hours, including breaks. Examining Counsel: Hannah Brinkley (Calderwood & Harkness LLP). Defending Counsel: Kenneth

2. Deposition of Steven Kapoor — November 2, 2021 Witness: Steven Kapoor, Vice President of Commercial Operations, Penterra Pharmaceuticals Corp. Location: Offices of Calderwood & Harkness LLP, 1 Federal Street, 35th Floor, Boston, Massachusetts. Duration: Approximately 5.5 hours, including breaks. Examining Counsel: Kenneth M. Rourke and Alicia Fontaine (Hargrove, Sinclair & Polk LLP). Defending Counsel: Linda Osei

1. Deposition of Rachel Mendez — Scheduled November 19, 2021 Witness: Rachel Mendez, Director of Distribution & Logistics, Penterra Pharmaceuticals Corp. Location: Offices of Calderwood & Harkness LLP, 1 Federal Street, 35th Floor, Boston, Massachusetts. Anticipated Examining Counsel: Alicia Fontaine (Hargrove, Sinclair & Polk LLP). Defending Counsel: Hannah Brinkley (Calderwood & Harkness LLP). Anticipated Topics: W

2. Deposition of Brian Kopec — Scheduled December 7, 2021 Witness: Brian Kopec, Outside Sales Director, Vantage Medical Distribution, LLC. Location: Offices of Hargrove, Sinclair & Polk LLP, 200 Ashbury Asset Advisors, Suite 1800, Boston, Massachusetts. Anticipated Examining Counsel: Hannah Brinkley or Patrick Gallagher (Calderwood & Harkness LLP) — assignment to be confirmed by Linda Osei. Defending Counsel: Kenneth

VI. Outstanding discovery Disputes A. Privilege Log Dispute Background. As noted in Section IV.B above, Penterra produced a privilege log with its first tranche of documents on October 15, 2021, and supplemented the log with its second tranche on November 1, 2021. The privilege log identifies a total of 47 documents withheld on the basis of attorney-client privilege, work-product protection, or both. Of these 47 entr

VII. Document Review and Key Evidence Summary A. Key Favorable Documents The following documents are among the most significant pieces of evidence supporting Penterra's position in this case. These documents should form the backbone of our anticipated summary judgment motion:

1. Exhibit A to the EDA (Territory Definition). Exhibit A unambiguously defines the Territory as: "The states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont (collectively, the 'New England States')." There is no reference to New York, New Jersey, or Pennsylvania in Exhibit A, and the definition is clear and specific. This is the single most important document in the case, and its plain

2. Section 2.3 of the EDA (Limitation on Out-of-Territory Activity). Section 2.3 provides: "Distributor shall not actively solicit orders for, or deliver, the Products outside the Territory without Supplier's prior written consent." This provision establishes a clear requirement of "prior written consent" for any out-of-territory activity, which Vantage admittedly did not obtain.

3. Section 13.1 of the EDA (Amendments). Section 13.1 provides: "No amendment, modification, or waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by both parties." This provision bars any claim that the Territory was modified by oral agreement, email, or course of dealing.

4. Section 14.8 of the EDA (Entire Agreement / Integration Clause). Section 14.8 provides that the EDA, together with its exhibits and schedules, constitutes the entire agreement of the parties and supersedes all prior negotiations, representations, or agreements, whether written or oral. This provision reinforces the conclusion that the written terms of the EDA — including Exhibit A — are the sole expression of the

5. The January 12, 2018 Kapoor Email. While Vantage relies on this email as the foundation of its defense and counterclaims, the email, read in its entirety and in context, is aspirational and forward-looking. The key sentence reads: "We're definitely open to exploring expansion into NY/NJ/PA once your New England footprint is fully ramped." The email does not use the words "consent," "amend," "authorize," or "approv

6. Farnham Deposition Testimony (October 18, 2021). Farnham's admission that no signed amendment to Exhibit A was obtained before Vantage commenced tri-state shipments, and his acknowledgment that no Penterra officer expressly authorized tri-state shipments in writing beyond the Kapoor Email, are powerful admissions that support Penterra's position on summary judgment.

7. Kapoor Deposition Testimony (November 2, 2021). Kapoor's consistent and credible testimony that the January 12, 2018 email was aspirational and did not constitute consent or amendment provides strong support for Penterra's interpretation of the email and the EDA. B. Key Adverse or Concerning Documents In the interest of providing a balanced assessment, the following documents or evidentiary issues present potentia

1. The Kapoor Email Language ("We're definitely open to exploring expansion"). While we maintain that this language is aspirational and forward-looking, Vantage will undoubtedly argue that it created a reasonable expectation of expansion and that Farnham was justified in interpreting it as a signal of consent. The word "definitely" may be highlighted by Vantage as reflecting a firm commitment rather than a tentative

2. Absence of Contemporaneous Objection (Late 2019 – February 2021). Vantage's discovery production includes shipping records suggesting that some limited Oncalaris® shipments were made to a hospital in New York as early as late 2019. See VMD 007814–007819. Penterra did not send a cease-and-desist letter until March 8, 2021, approximately 15 to 18 months after the earliest recorded tri-state shipment. Vantage will li

3. Vantage's Growth in Oncalaris® Purchases. Vantage's purchases of Penterra products grew from $11.2 million in FY 2018 to $14.8 million in FY 2019, to $18.3 million in FY 2020, and were on pace for approximately $21.47 million (annualized) in FY 2021. This growth substantially exceeded the $9.5 million annual minimum purchase requirement in the EDA. Vantage may argue that this growth trajectory reflects an understa

VIII. Expert discovery The scheduling order entered by Judge Costigan does not establish a separate expert discovery deadline, as this case is primarily one of contract interpretation governed by the written terms of the EDA and applicable Massachusetts contract law. Neither party has designated expert witnesses to date, and we do not currently anticipate that expert testimony will be necessary for Penterra's affirma

IX. Discovery Budget and Timing Estimated discovery Costs to Date. The following categories of discovery-related costs have been incurred or are estimated as of the date of this memorandum: • Deposition transcripts: Approximately $4,800 estimated for the Farnham and Kapoor deposition transcripts (final and rough copies, including videographer fees for the Farnham deposition). • Document hosting and review platform co

X. Action Items and Upcoming Deadlines The following table summarizes the key action items and upcoming deadlines for the remainder of fact discovery: All team members should calendar these dates and promptly communicate any scheduling conflicts or changes.

XI. Conclusion and Recommendations Based on the foregoing review, I offer the following conclusions and recommendations for the team's consideration:

1. Discovery is proceeding on schedule. Both parties have substantially completed their document productions, two of four depositions have been taken, and the remaining depositions are scheduled well in advance of the January 14, 2022 discovery close. The case is tracking toward a summary-judgment disposition, which remains our primary strategic objective.

2. The deposition testimony of Farnham and Kapoor strongly supports Penterra's position. Farnham's admissions — that no signed amendment to Exhibit A was obtained, that no Penterra officer expressly authorized tri-state shipments in writing beyond the Kapoor Email, and that he directed Kopec to begin soliciting tri-state accounts based solely on his interpretation of the Kapoor Email — are highly favorable to Penterr

3. We should aggressively pursue resolution of the outstanding discovery disputes. The privilege log dispute and the incomplete interrogatory responses must be resolved before the January 14, 2022 discovery close to ensure that the record is complete. With respect to the privilege log dispute, we should be prepared to oppose any motion to compel and to submit the challenged documents for in camera review if necessary

4. The remaining depositions should further solidify the factual record. The Mendez deposition on November 19, 2021, should establish that Penterra's distribution systems were not configured for tri-state deliveries through Vantage and that Penterra was unaware of Vantage's unauthorized tri-state shipments until late February 2021. This testimony will be important in rebutting Vantage's anticipated argument that Pent

5. We anticipate filing Penterra's motion for summary judgment shortly after the close of discovery. Based on the current state of the evidence, we believe Penterra has a strong basis for summary judgment on its declaratory-judgment claim and on the dismissal of Vantage's counterclaims. The unambiguous contract language, the absence of a signed amendment, and the deposition testimony all point in Penterra's favor. We