1018-00007 · Penterra Pharmaceuticals Corp · Motions Practice

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CALDERWOOD & HARKNESS LLP

ATTORNEY WORK PRODUCT / PRIVILEGED AND CONFIDENTIAL

MEMORANDUM

This memorandum is protected by the attorney-client privilege and the work-product doctrine. It was prepared in anticipation of litigation and reflects the mental impressions, conclusions, and legal theories of counsel. It is not intended for distribution beyond the addressees and authorized members of the Penterra engagement team without prior approval.

I. Introduction and Purpose

This memorandum was prepared in anticipation of our client Penterra Pharmaceuticals Corp.'s ("Penterra") motion for summary judgment, which is scheduled to be filed on February 11, 2022, in the above-captioned declaratory-judgment action against Vantage Medical Distribution, LLC ("Vantage"). The memorandum is intended to serve as the analytical foundation for the summary judgment brief and to provide the engagement team with a comprehensive assessment of the governing legal framework, the strength of Penterra's position, and the risks posed by Vantage's anticipated counterarguments.

The purpose of this memorandum is to analyze Massachusetts law governing four interrelated doctrines that are central to the dispute between Penterra and Vantage: (1) the enforceability of contractual written-modification clauses (sometimes referred to as "no oral modification" or "NOM" clauses); (2) the enforceability of integration or merger clauses; (3) the doctrine of course of dealing as a purported basis for implied contract modification; and (4) the parol evidence rule. These four doctrines intersect in a manner that bears directly on whether Vantage can sustain its defense and counterclaims in this action.

The core legal question presented is whether Section 13.1 (the written-amendment requirement) and Section 14.8 (the integration clause) of the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA") between Penterra and Vantage bar Vantage's claims that (a) the January 12, 2018 email from Steven Kapoor (Penterra's Vice President of Commercial Operations) to Donald Farnham (Vantage's Chief Executive Officer) (the "Kapoor Email"), and/or (b) Penterra's alleged course of dealing — including Penterra's purported failure to object to Vantage's shipments of Oncalaris® to customers in New York, New Jersey, and Pennsylvania (collectively, the "Tri-State Area") beginning on or about September 14, 2020 — effected a modification of Exhibit A to the EDA, thereby expanding the defined "Territory" beyond the six New England states (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont) to include the Tri-State Area.

As set forth more fully below, the conclusion of this memorandum is that Massachusetts courts generally enforce written-modification clauses and integration clauses according to their terms, and that such clauses preclude implied or oral modifications, including those purportedly based on course of dealing or informal email communications. The Kapoor Email does not satisfy the formal requirements of Section 13.1, and Vantage's course-of-dealing argument cannot overcome the express terms of the EDA. Penterra's motion for summary judgment should succeed on the merits.

II. Factual Background Relevant to Legal Analysis

The following factual summary is drawn from the EDA, the documentary record produced in discovery, and the deposition testimony of three key witnesses. It is presented here to provide the context necessary for the legal analysis that follows. To the extent that factual disputes exist, they are noted; however, as discussed in the legal analysis, the material facts relevant to the enforceability of the written-modification clause and integration clause are largely undisputed.

A. The Exclusive Distribution Agreement

Penterra and Vantage entered into the Exclusive Distribution Agreement on July 1, 2017 (the "EDA"). Under the EDA, Penterra is designated as the "Supplier" and Vantage is designated as the "Distributor." The EDA has an initial term of five years, expiring on June 30, 2022, with two successive one-year automatic renewal options (i.e., the EDA could extend through June 30, 2024 if neither party provides timely notice of non-renewal pursuant to Section 3.2).

The products covered by the EDA are Oncalaris® (pegvisomant-axel), supplied in 20 mg and 40 mg vials, and Renuvesta® (cilosporin-beta), supplied in 5 mg capsules. Both products are specialty pharmaceuticals used primarily in the oncology and immunology therapeutic areas. Oncalaris® is the more commercially significant of the two products, generating the majority of revenue under the EDA.

Section 2.1 of the EDA grants Vantage "the exclusive right to distribute the Products within the Territory, as defined in Exhibit A." This exclusivity provision is the cornerstone of the commercial arrangement: within the Territory, Penterra agreed not to appoint any other distributor for the covered products, and Vantage agreed to certain minimum purchase commitments and marketing obligations.

Exhibit A to the EDA defines the Territory as follows:

"The states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont (collectively, the 'New England States')."

The definition is clear, precise, and unambiguous. It identifies six specific states by name and further parenthetically designates them as the "New England States." There is no language in Exhibit A suggesting that the Territory is subject to expansion, adjustment, or modification through informal means, nor is there any reference to the Tri-State Area or to any territory beyond the six enumerated states.

Section 2.3 of the EDA further provides:

"Distributor shall not actively solicit orders for, or deliver, the Products outside the Territory without Supplier's prior written consent."

This provision expressly prohibits Vantage from distributing the Products outside the New England states absent Penterra's "prior written consent." The use of the phrase "prior written consent" is significant, as it imposes a written-consent requirement distinct from (but consistent with) the written-modification clause in Section 13.1.

Section 13.1 of the EDA (captioned "Amendments") states:

"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."

The clause is expansive in scope: it covers amendments, modifications, and waivers. It requires that any such change be (i) set forth in a written instrument, and (ii) signed by both parties. The bilateral-signature requirement is a critical feature of Section 13.1, as it ensures that no unilateral act by either party — however formal or informal — can effect a change to the EDA's terms.

Section 14.8 of the EDA (captioned "Entire Agreement") states:

"This Agreement, including all Exhibits, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, or agreements relating thereto, whether written or oral."

This is a standard integration or merger clause. Its effect is to establish the EDA as the complete and final expression of the parties' agreement and to exclude all prior negotiations, representations, or agreements — whether written or oral — from the scope of the contractual relationship.

Finally, Section 14.2 of the EDA provides that the Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to its conflict-of-laws principles. There is no dispute between the parties that Massachusetts law governs the interpretation and enforcement of the EDA.

B. The Kapoor Email (January 12, 2018)

Approximately six months after the EDA was executed, Steven Kapoor, Penterra's Vice President of Commercial Operations, sent an email to Donald Farnham, Vantage's Chief Executive Officer, dated January 12, 2018. The full text of the operative portion of the email is as follows:

"Don — good catching up yesterday. We're definitely open to exploring expansion into NY/NJ/PA once your New England footprint is fully ramped. Let's circle back mid-year and see where things stand."

This email is the centerpiece of Vantage's defense and counterclaims. Vantage contends that the Kapoor Email constituted either (a) "prior written consent" to distribute Products in the Tri-State Area under Section 2.3 of the EDA, and/or (b) a written modification of Exhibit A expanding the Territory to include New York, New Jersey, and Pennsylvania.

Penterra's position, which we believe is well-supported by both the text of the email and the applicable law, is that the Kapoor Email expressed nothing more than a forward-looking willingness to negotiate a possible future expansion of the Territory. The email did not constitute consent or an amendment for several reasons that are explored in detail in the legal analysis below. Most fundamentally, the email was not "signed by both parties" as required by Section 13.1, did not reference the EDA or Exhibit A, did not purport to amend any contractual term, and used expressly conditional and aspirational language ("open to exploring," "once your New England footprint is fully ramped," "circle back mid-year").

C. Vantage's Tri-State Conduct

The record establishes that, on or about September 14, 2020 — more than two and a half years after the Kapoor Email — Vantage began shipping Oncalaris® to hospitals and oncology clinics in New York, New Jersey, and Pennsylvania. Vantage did not seek or obtain any formal written authorization from Penterra before commencing these shipments. There is no signed amendment to Exhibit A in the record, nor is there any correspondence from Penterra expressly authorizing the tri-state expansion.

Vantage's tri-state distribution operations generated substantial revenue. According to Vantage's financial records produced in discovery, Vantage's reported tri-state revenues from September 2020 through March 2021 were approximately $6.4 million. This figure represents a significant commercial enterprise, and it is clear that Vantage invested resources in establishing distribution channels outside the contractual Territory.

Vantage also argues that Penterra was aware of, or should have been aware of, Vantage's tri-state shipments beginning in late 2019 — approximately a year before the September 14, 2020 date that is supported by the documentary evidence — and that Penterra's failure to object to these shipments constituted a course of dealing that effectively modified Exhibit A to include the Tri-State Area. The precise timing of Penterra's knowledge is a factual question that may be contested, though we believe the evidence supports Penterra's position that it did not become aware of the extent of Vantage's tri-state activities until early 2021.

On March 8, 2021, Penterra sent a cease-and-desist letter to Vantage demanding that Vantage immediately cease distributing Oncalaris® and Renuvesta® outside the six New England states defined in Exhibit A. The letter was signed by Penterra's General Counsel, Monica Chen, and expressly invoked Sections 2.1, 2.3, and 13.1 of the EDA.

Vantage responded on March 22, 2021, through outside counsel Kenneth M. Rourke of Hargrove, Sinclair & Polk LLP. The response letter asserted that Vantage possessed territorial rights in the Tri-State Area based on the Kapoor Email and Penterra's alleged course of dealing, and threatened a counterclaim for damages in the amount of $35 million if Penterra pursued enforcement of the territorial restriction.

D. Key Deposition Testimony

Three depositions taken during the discovery phase are particularly relevant to the legal analysis.

Donald Farnham (Vantage CEO), deposed on October 18, 2021, testified as follows: He admitted that he did not obtain a signed amendment to Exhibit A at any time between the execution of the EDA and the commencement of Vantage's tri-state shipments. He stated that he relied on the Kapoor Email as authorization to expand into the Tri-State Area. He acknowledged, however, that no Penterra officer or authorized representative expressly authorized tri-state shipments in a writing signed by both parties. When asked directly whether he believed the Kapoor Email constituted a formal amendment to the EDA, Farnham stated that he understood it to be "the green light" but conceded that no formal amendment document was ever drafted, circulated, or signed. This testimony is significant because it confirms the absence of any document satisfying the requirements of Section 13.1.

Steven Kapoor (Penterra VP, Commercial Operations), deposed on November 2, 2021, testified as follows: He stated that his January 12, 2018 email was intended to express a willingness to explore the possibility of future territorial expansion in the event that Vantage's New England distribution operations reached full capacity. He testified unequivocally that the email was not intended to grant consent under Section 2.3 or to amend Exhibit A of the EDA. He further testified that no one at Penterra — including himself — authorized Vantage to begin distributing Products in the Tri-State Area, and that he was unaware of Vantage's tri-state shipments until informed by Penterra's distribution operations team in early 2021.

Rachel Mendez (Penterra Director, Distribution Operations), deposed on November 19, 2021, testified as follows: She explained that Penterra's internal distribution management systems were configured to direct Oncalaris® and Renuvesta® shipments to Vantage only for delivery addresses within the six New England states. She testified that Penterra never modified its systems to include the Tri-State Area within Vantage's authorized delivery zone. She further stated that Penterra never authorized or ratified tri-state shipments through Vantage, and that Penterra's first indication of the unauthorized shipments came through a routine compliance audit conducted in January 2021.

III. Legal Analysis

A. Enforceability of Written-Modification Clauses Under Massachusetts Law

1. The General Rule: Written-Modification Clauses Are Enforceable. Massachusetts courts consistently enforce contractual provisions requiring that amendments or modifications be in writing and signed by both parties. The law in this area is well-settled and has been applied by courts at all levels of the Massachusetts judiciary, including the Supreme Judicial Court ("SJC"), the Appeals Court, and the Superior Court's Business Litigation Session.

The leading authority is Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000). In Cambridge Biotech, the SJC addressed the enforceability of a contractual clause requiring that all amendments and modifications be made in writing and signed by both parties. The case arose from a dispute over a joint venture agreement in which one party contended that the agreement had been informally modified through a series of oral communications and course-of-conduct changes. The SJC rejected this contention, holding that a written-modification clause is generally enforceable under Massachusetts law and that a party cannot circumvent such a clause through alleged oral agreements or informal communications. Id. at 131–32.

The court's reasoning in Cambridge Biotech rested on several foundational principles of contract law. First, the SJC emphasized the importance of party autonomy: parties who bargain for a written-modification clause are entitled to the protection it affords, and courts should not lightly disregard the parties' express agreement about how their contract may be changed. Id. at 131. Second, the court recognized that enforcing written-modification clauses promotes commercial certainty and predictability. In the absence of such enforcement, parties to commercial agreements would face the constant risk that informal conversations, stray emails, or ambiguous conduct could be characterized as binding modifications, thereby undermining the stability of the written agreement. Id. Third, the court noted that enforcing written-modification clauses deters disputes about whether an agreement was informally modified, because it establishes a clear, verifiable standard (a signed writing) that must be met before any modification takes effect. Id. at 132.

The Cambridge Biotech principle has been consistently followed in subsequent Massachusetts appellate decisions. In Cambridgeport Sav. Bank v. Boersner, 413 Mass. 432, 439 (1992), the SJC noted that parties may prescribe the manner in which their agreement may be modified, and that such prescriptive provisions are entitled to enforcement. The Massachusetts Appeals Court has similarly reinforced this principle in a line of cases applying Cambridge Biotech to range commercial disputes. See, e.g., Basis Tech. Corp. v. Hollowell & Co., 71 Mass. App. Ct. 29, 37 (2008) (enforcing written-modification clause and holding that alleged oral modifications were unenforceable); Hyannis Marina, Inc. v. Beal's Marine, Inc., 62 Mass. App. Ct. 764, 769–70 (2004) (rejecting argument that informal communications modified agreement containing written-modification clause).

The Business Litigation Session of the Suffolk County Superior Court, where this action is pending, has likewise applied the Cambridge Biotech framework in numerous commercial disputes involving written-modification clauses. The consistency of the case law in this area provides a strong foundation for Penterra's position.

It is worth noting that the enforceability of written-modification clauses in Massachusetts is not merely a product of judicial preference but reflects a broader policy choice in favor of contractual formality in commercial transactions. The Massachusetts Uniform Commercial Code, M.G.L. c. 106, § 2-209(2), provides that a signed agreement that excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded. Although the EDA is a distribution agreement rather than a pure sale-of-goods contract, the principles underlying § 2-209(2) are consistent with the common-law rule articulated in Cambridge Biotech and reinforce the enforceability of Section 13.1.

2. Application to Section 13.1 of the EDA. Section 13.1 of the EDA requires that any amendment, modification, or waiver be "set forth in a written instrument signed by both parties." This language is clear and unambiguous. It imposes two conjunctive requirements: (i) the modification must be set forth in a written instrument, and (ii) the written instrument must be signed by both parties. Both requirements must be satisfied for a modification to be effective.

Applying these requirements to the Kapoor Email, it is clear that the email categorically fails to satisfy Section 13.1 for multiple independent reasons:

(i) Not a formal written instrument. The Kapoor Email was an informal, conversational email sent in the ordinary course of a business relationship. It was not drafted as, nor does it purport to be, a "written instrument" effectuating an amendment to the EDA. It does not reference the EDA, Exhibit A, Section 13.1, or the amendment procedures specified therein. Courts applying written-modification clauses have drawn a distinction between formal writings intended to serve as amendments and informal communications that merely discuss the possibility of future changes. The Kapoor Email falls squarely in the latter category.

(ii) Signed only by Kapoor. Even if the Kapoor Email could be characterized as a "written instrument" — which it cannot — it bears the signature (or, more precisely, the email sign-off) of only one person: Steven Kapoor. Section 13.1 requires that the instrument be "signed by both parties." No representative of Vantage signed or co-signed any document reflecting an agreement to expand the Territory. The bilateral-signature requirement is a critical safeguard: it ensures that modifications result from the mutual assent of both parties, not from the unilateral action or interpretation of one party.

(iii) Not signed by any Vantage representative as a co-signatory to a bilateral amendment. Donald Farnham's deposition testimony confirms that he did not sign any amendment to Exhibit A or any other document purporting to expand the Territory. The absence of a Vantage signature is fatal to any claim that the Kapoor Email constituted a valid modification under Section 13.1.

(iv) Expressed only forward-looking willingness to "explore" expansion. The operative language of the Kapoor Email — "We're definitely open to exploring expansion into NY/NJ/PA once your New England footprint is fully ramped" — does not constitute an operative amendment. The words "open to exploring" are inherently aspirational and non-committal. They convey a willingness to discuss a possibility, not an agreement to effectuate a change. The conditional clause "once your New England footprint is fully ramped" further underscores the contingent and forward-looking nature of the communication. And the closing sentence — "Let's circle back mid-year and see where things stand" — explicitly contemplates future discussions, not present action.

(v) Did not reference Section 13.1, Exhibit A, or the EDA's amendment procedures. A valid amendment to a commercial agreement of this nature would, at a minimum, identify the agreement being amended, specify the provision being modified, state the new terms, and comply with the agreement's procedural requirements. The Kapoor Email does none of these things. It does not mention the EDA, Exhibit A, or any specific contractual term. It does not purport to redefine the Territory or to modify any provision of the agreement.

Under Cambridge Biotech and its progeny, the conclusion is straightforward: the Kapoor Email does not satisfy the requirements of Section 13.1 and therefore cannot constitute a valid modification of Exhibit A or any other provision of the EDA. Even if the Kapoor Email were construed as a "writing" in some loose sense of the term, a unilateral email expressing aspirational interest in a future possibility does not constitute a "written instrument signed by both parties" as Section 13.1 requires.

3. Exceptions to the General Rule (and Why They Do Not Apply). Massachusetts law recognizes a limited number of narrow exceptions to the general rule that written-modification clauses are enforceable. We have analyzed each exception and conclude that none applies to the facts of this case.

Waiver by Conduct. Some courts have held that a party may waive its right to enforce a written-modification clause through repeated, knowing acquiescence in conduct that is inconsistent with the written terms of the agreement. The theory is that a party may, by its own conduct, waive the procedural protections of the written-modification clause, just as it may waive other contractual rights. However, the SJC in Cambridge Biotech did not broadly adopt waiver-by-conduct as a general exception to the enforceability of written-modification clauses. To the contrary, the court emphasized that written-modification clauses serve an important protective function and that courts should be cautious about finding waiver through conduct alone. Cambridge Biotech, 433 Mass. at 131–32. Massachusetts courts have applied the waiver-by-conduct exception sparingly, and only where the evidence establishes a clear, sustained, and unequivocal pattern of knowing acquiescence over a substantial period of time. See, e.g., Lattuca v. Robsham, 442 Mass. 205, 216 (2004) (discussing the high threshold for waiver by conduct in the contractual context).

Here, even crediting Vantage's version of the facts, the alleged period of acquiescence is approximately six months (September 2020 through March 2021) — and Penterra disputes that it had contemporaneous knowledge of the tri-state shipments during much of that period. This is a far cry from the sustained, long-term pattern of knowing acquiescence that Massachusetts courts have required to find waiver by conduct. Moreover, Penterra acted promptly once it became aware of the unauthorized shipments, sending a cease-and-desist letter on March 8, 2021. The waiver-by-conduct exception does not apply.

Estoppel. A party may be estopped from relying on a written-modification clause if the opposing party detrimentally relied on an oral or informal modification and injustice would result from enforcement of the clause. Massachusetts courts have recognized this exception in principle but have applied it only where stringent requirements are met: (1) the party seeking enforcement made a clear and unambiguous promise or representation that the written-modification requirement would not be enforced; (2) the other party reasonably relied on that promise or representation; and (3) the relying party suffered actual detriment as a result. See Loranger Constr. Corp. v. E.F. Hauserman Co., 6 Mass. App. Ct. 152, 155–56 (1978).

None of these requirements is satisfied here. The Kapoor Email's aspirational language ("open to exploring") does not constitute a clear and unambiguous promise that the written-modification requirement of Section 13.1 would be waived or that the Territory had been expanded. There is no evidence that Penterra represented to Vantage that compliance with Section 13.1 was unnecessary. And even if there were, Vantage's reliance would not have been reasonable given the existence of the written-modification clause in Section 13.1, which Vantage — as a sophisticated commercial party that negotiated and signed the EDA — knew about and was bound by. The estoppel exception does not apply.

Part Performance. Under some circumstances, full or substantial performance of an alleged oral modification may overcome a written-modification clause. The rationale is that where both parties have fully performed under the terms of an alleged modification, it would be inequitable to allow one party to invoke the written-modification clause to undo the modification retroactively. This exception has been recognized primarily in the context of agreements subject to the Statute of Frauds, but some courts have applied analogous reasoning to written-modification clauses. See McInerney v. Charter Golf, Inc., 176 Ill. 2d 482, 490–91 (1997) (discussing part-performance exception in the context of contractual modification requirements).

This exception is inapplicable here for a fundamental reason: there was no mutual performance of a modification. Vantage's decision to begin tri-state shipments on or about September 14, 2020 was a unilateral act by Vantage. Penterra never acted on, endorsed, or ratified the territorial expansion. Penterra did not modify its distribution systems to accommodate tri-state shipments through Vantage, did not issue any authorization for such shipments, and did not take any affirmative step consistent with an agreement to expand the Territory. The part-performance doctrine requires that both parties have performed under the terms of the alleged modification; unilateral action by the party claiming the modification does not suffice. The part-performance exception does not apply.

B. Enforceability of Integration Clauses (Section 14.8) and the Parol Evidence Rule

1. Integration Clauses Under Massachusetts Law. Massachusetts courts give effect to integration or merger clauses, which establish that the written agreement is the complete and final expression of the parties' agreement with respect to the subject matter thereof. An integration clause serves a critical function in commercial transactions: it ensures that the written agreement is the authoritative source of the parties' rights and obligations, and it precludes reliance on prior negotiations, representations, or side agreements that are not reflected in the written document.

Section 14.8 of the EDA is a standard integration clause. It states that the Agreement, "including all Exhibits, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, or agreements relating thereto, whether written or oral." The clause is broadly drafted and covers all "negotiations, representations, or agreements" — whether written or oral — that relate to the subject matter of the EDA.

The legal effect of Section 14.8 under Massachusetts law is to create a strong, though not irrebuttable, presumption that the EDA is fully integrated. See Robert Indus., Inc. v. Spence, 362 Mass. 751, 753–54 (1973) (recognizing that a merger clause is "an important indication" that the parties intended their written agreement to be fully integrated); Bendetson v. Coolidge, 55 Mass. App. Ct. 538, 541 (2002) (holding that an integration clause creates a "strong presumption" of full integration). When a contract is fully integrated, extrinsic evidence of prior or contemporaneous agreements or understandings is inadmissible to contradict or supplement the written terms. This is the essence of the parol evidence rule, which operates in conjunction with the integration clause to protect the integrity of the written agreement.

In the present case, Section 14.8 establishes that the EDA — including Exhibit A's definition of the Territory — is the complete and final expression of the parties' agreement regarding the distribution of Oncalaris® and Renuvesta®. Any prior discussions, negotiations, or understandings regarding the possible inclusion of the Tri-State Area within the Territory are superseded by the plain terms of Exhibit A, which limits the Territory to the six New England states.

2. The Parol Evidence Rule in Massachusetts. The parol evidence rule is a substantive rule of contract law that operates to exclude extrinsic evidence when a written contract is found to be the complete and final expression of the parties' agreement. Under Massachusetts law, when a contract is fully integrated, the parol evidence rule bars the introduction of extrinsic evidence — including prior or contemporaneous oral agreements, negotiations, and informal writings — to vary, contradict, or add to the terms of the written agreement. See Downer v. Ratcliffe, 326 Mass. 281, 285 (1950); Bendetson, 55 Mass. App. Ct. at 541; Somerset Sav. Bank v. Chicago Title Ins. Co., 420 Mass. 422, 427 (1995).

The rule has been consistently applied by Massachusetts courts to protect the finality of written agreements. As the SJC has explained, the parol evidence rule "rests on the conviction that where parties have deliberately put their agreement into writing, the writing itself is the best evidence of the parties' intentions, and that permitting the introduction of extrinsic evidence to contradict or supplement the writing would undermine the certainty and reliability that written contracts are intended to provide." Somerset Sav. Bank, 420 Mass. at 427.

In the context of this dispute, Vantage's reliance on the Kapoor Email to expand the Territory defined in Exhibit A is precisely the type of extrinsic evidence that the parol evidence rule is designed to exclude. Exhibit A unambiguously defines the Territory as the six New England states. The Kapoor Email, even if it could be characterized as evidence of some understanding between the parties regarding future expansion, cannot be used to contradict or supplement the clear territorial definition in Exhibit A.

A technical distinction should be noted. The parol evidence rule, strictly speaking, applies to prior and contemporaneous agreements — that is, agreements made before or at the same time as the written contract. The Kapoor Email is dated January 12, 2018, which post-dates the execution of the EDA on July 1, 2017. Because the Kapoor Email is a subsequent communication, it is technically not subject to the parol evidence rule as such. However, this distinction does not help Vantage. Subsequent modifications are governed by Section 13.1 (the written-modification clause), and as demonstrated in Section III.A above, the Kapoor Email fails to satisfy Section 13.1's requirements. The integration clause in Section 14.8 reinforces this analysis by establishing that the EDA as written — including Exhibit A — is the definitive agreement between the parties, and that any changes to the agreement's terms must comply with the procedural requirements set forth in Section 13.1.

In short, whether the Kapoor Email is analyzed under the parol evidence rule (as a prior or contemporaneous communication) or under the written-modification clause (as a subsequent communication), the result is the same: it cannot be used to alter the Territory defined in Exhibit A.

3. Interaction Between Integration Clause and Written-Modification Clause. The presence of both an integration clause (Section 14.8) and a written-modification clause (Section 13.1) in the EDA creates a dual barrier to Vantage's modification arguments. The integration clause establishes the four corners of the agreement — that is, it defines the universe of terms that constitute the parties' contractual rights and obligations. The written-modification clause governs how those four corners may be changed — that is, it prescribes the exclusive procedure by which the agreement's terms may be amended, modified, or waived.

Together, these two provisions create a comprehensive framework that is designed to protect the stability and predictability of the contractual relationship. The integration clause looks backward: it ensures that all prior negotiations, representations, and agreements are superseded by the written EDA. The written-modification clause looks forward: it ensures that any future changes to the EDA must be effectuated through a specific, verifiable procedure (a written instrument signed by both parties).

Under Massachusetts law, courts have recognized that the combination of an integration clause and a written-modification clause makes it exceptionally difficult for a party to argue that the agreement was informally or impliedly modified. See Cambridge Biotech, 433 Mass. at 131–32 (noting the interaction between a merger clause and a written-modification clause in rejecting an implied modification argument); Basis Tech., 71 Mass. App. Ct. at 37–38 (same). The dual-barrier framework is particularly effective in the commercial context, where sophisticated parties negotiate and agree to these provisions with the express purpose of insulating their agreement from informal changes.

This dual-barrier framework is directly applicable here. Sections 13.1 and 14.8, taken together, establish that the EDA (including Exhibit A) is the complete agreement between Penterra and Vantage, and that no change to the EDA's terms — including the territorial definition — may be effectuated except through a written instrument signed by both parties. Vantage's attempts to circumvent these provisions through the Kapoor Email or course of dealing are squarely foreclosed.

C. Course-of-Dealing Arguments Under Massachusetts Law

1. The Doctrine of Course of Dealing. Course of dealing is a recognized concept in contract law, defined as a sequence of previous conduct between the parties to a particular transaction that establishes a common basis of understanding for interpreting their expressions and other conduct. The concept is codified in the Uniform Commercial Code, M.G.L. c. 106, § 1-303(b), which provides that "[a] 'course of dealing' is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct."

Under UCC Article 1, course of dealing may supplement or qualify the terms of an agreement. See M.G.L. c. 106, § 1-303(d) ("A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining the meaning of the parties' agreement, may give particular meaning to specific terms of the agreement, and may supplement or qualify the terms of the agreement."). However, there is a critical limitation: course of dealing cannot override an express term of the agreement. The UCC establishes a clear hierarchy of terms: (1) express terms of the agreement control; (2) course of performance; (3) course of dealing; and (4) usage of trade. See M.G.L. c. 106, § 1-303(e). Where an express term and a course of dealing conflict, the express term prevails. Id.

This hierarchy has been consistently applied by Massachusetts courts. The SJC has recognized that course of dealing and usage of trade may be used to interpret ambiguous contract terms, but not to contradict or override clear and unambiguous express terms. See Stop & Shop, Inc. v. Ganem, 347 Mass. 697, 701 (1964) (holding that trade usage may supplement but not contradict express terms); Seaco Ins. Co. v. Barbosa, 435 Mass. 772, 779 (2002) (emphasizing the primacy of express contractual language). The limitation is particularly significant in cases involving written-modification clauses: where the agreement expressly requires written, bilateral amendments, course of dealing cannot serve as a backdoor mechanism for implying modifications that bypass the agreed-upon procedural requirements.

2. Application to Vantage's Course-of-Dealing Argument. Vantage argues that Penterra's failure to object to Vantage's shipments of Oncalaris® to customers in the Tri-State Area, beginning in late 2019 (according to Vantage) or September 2020 (according to Penterra), and continuing through early 2021, established a course of dealing that effectively modified Exhibit A to include New York, New Jersey, and Pennsylvania within the defined Territory. This argument fails for multiple independent reasons, each of which is sufficient standing alone to defeat the claim.

First, the express terms of Exhibit A unambiguously limit the Territory to six specifically enumerated New England states. There is no ambiguity in the territorial definition, no gap to be filled, and no interpretive question that requires resort to extrinsic evidence. Course of dealing is properly used to interpret ambiguous terms or to fill gaps in an incomplete agreement; it cannot be used to contradict or override a clear, specific, and unambiguous express term. See M.G.L. c. 106, § 1-303(e); Stop & Shop, 347 Mass. at 701. The Territory is defined with precision — by state name and by parenthetical designation — and there is no plausible reading of Exhibit A that includes New York, New Jersey, or Pennsylvania. Vantage's course-of-dealing argument is, at its core, an attempt to add three states to a territorial definition that unambiguously includes only six states. This is exactly the type of extrinsic evidence that the hierarchy of terms and the parol evidence rule are designed to exclude.

Second, Section 13.1 explicitly requires that any amendment or modification be set forth in a written instrument signed by both parties. Passive acquiescence — even if it occurred, which Penterra disputes — does not satisfy this requirement. Silence or inaction is not a "written instrument," and it is not "signed by both parties." The written-modification clause exists precisely to prevent the type of argument Vantage is making: that a party's failure to object to conduct inconsistent with the agreement's terms constitutes an implied modification. If passive acquiescence could override a written-modification clause, the clause would be rendered meaningless, which would contravene the fundamental canon of contract interpretation that all provisions of an agreement should be given effect. See Starr v. Fordham, 420 Mass. 178, 190 (1995) (holding that courts should interpret contracts so as to give reasonable effect to all provisions).

Third, Section 14.8's integration clause further insulates the agreement from modification by implication. As discussed above, the integration clause establishes the EDA as the complete and final expression of the parties' agreement. The combination of Section 14.8 and Section 13.1 creates a dual barrier that precludes Vantage from arguing that the agreement's terms were modified through course of dealing or any other informal mechanism.

Fourth, Cambridge Biotech and its progeny hold that written-modification clauses bar course-of-dealing-based modification arguments. The SJC's reasoning in Cambridge Biotech is directly applicable: parties who bargain for a written-modification clause are entitled to the protection it affords, and allowing course-of-dealing evidence to override such a clause would undermine the very purpose the clause is designed to serve. Cambridge Biotech, 433 Mass. at 131–32.

Fifth, the factual record does not support Vantage's course-of-dealing argument even on its own terms. Rachel Mendez testified that Penterra's distribution systems were configured to direct Oncalaris® shipments to Vantage only for New England addresses and that Penterra never authorized or ratified tri-state shipments through Vantage. This testimony establishes that Penterra's internal systems and processes were consistent with the territorial limitation in Exhibit A and that Penterra did not take any affirmative act consistent with a modification. Moreover, Penterra sent its cease-and-desist letter on March 8, 2021, approximately six months after Vantage began tri-state shipments (using the September 14, 2020 date supported by the documentary evidence). In the context of a specialty pharmaceutical distribution relationship — which involves complex logistics, regulatory compliance, and multi-layered supply chains — a six-month response time is relatively prompt, particularly where Penterra was not immediately aware of the unauthorized shipments.

Sixth, the period of alleged acquiescence is too short and the conduct too one-sided to establish the sustained, mutual pattern of conduct required to demonstrate a course of dealing sufficient to override an express contractual term. Course of dealing contemplates a "sequence of conduct" that is "fairly to be regarded as establishing a common basis of understanding." M.G.L. c. 106, § 1-303(b). A single period of approximately six months (or even twelve to eighteen months, using Vantage's timeline) during which one party unilaterally shipped products outside the defined territory, without the other party's knowledge or authorization, does not establish a mutual pattern of conduct. There is no evidence that Penterra engaged in any conduct that could be interpreted as participating in or endorsing the territorial expansion. The alleged "course of dealing" is, in reality, a unilateral course of action by Vantage — which is insufficient as a matter of law.

3. Distinguishing Course of Dealing from Waiver. Even if Penterra's delayed objection to Vantage's tri-state shipments could theoretically be characterized as a limited waiver of enforcement for a brief period, such a waiver would not constitute a permanent modification of the contract under Massachusetts law. The distinction between waiver and modification is well-established and legally significant.

A waiver is a voluntary relinquishment of a known right. It is, by its nature, revocable and limited in scope. A party may waive its right to enforce a particular contractual provision on a particular occasion without permanently altering the terms of the agreement. See Cellucci v. Sun Oil Co., 2 Mass. App. Ct. 722, 728 (1974) (holding that waiver is an intentional relinquishment of a known right that does not permanently alter the contract). A modification, by contrast, is a permanent change to the terms of the contract. Under the EDA, a modification requires compliance with Section 13.1 — a written instrument signed by both parties.

Massachusetts courts have held that even repeated instances of non-enforcement do not necessarily constitute a modification of a contractual term, particularly where the contract contains a no-waiver clause or a written-modification clause. See Catlin v. Board of Registration of Architects, 414 Mass. 1, 7 (1992) (discussing the distinction between waiver and modification); Lattuca, 442 Mass. at 216–17 (same). Section 13.1 of the EDA, which covers not only "amendments" and "modifications" but also "waivers," serves a protective function analogous to a standalone no-waiver clause: it requires that even waivers be set forth in a written instrument signed by both parties.

Thus, even under the most favorable interpretation of the facts for Vantage, Penterra's delayed response to Vantage's unauthorized shipments would constitute, at most, a temporary and limited failure to enforce Exhibit A's territorial restriction — not a permanent modification of the Territory. And even this characterization is generous to Vantage, given the factual evidence that Penterra's systems were never modified to accommodate tri-state shipments and that Penterra acted promptly once it became aware of the unauthorized activity.

D. Promissory Estoppel as an Alternative Basis for Modification

1. Elements of Promissory Estoppel Under Massachusetts Law. Promissory estoppel is an equitable doctrine that may, in appropriate circumstances, render a promise enforceable even in the absence of consideration or formal contractual requirements. Under Massachusetts law, the elements of promissory estoppel are: (1) a clear and definite promise; (2) the promisor reasonably expected that the promisee would rely on the promise; (3) the promisee actually and reasonably relied on the promise; and (4) injustice can be avoided only by enforcement of the promise. See Loranger Constr., 6 Mass. App. Ct. at 155–56; Rhode Island Hosp. Trust Nat'l Bank v. Varadian, 419 Mass. 841, 850 (1995).

Massachusetts follows the approach set forth in the Restatement (Second) of Contracts § 90, which provides:

"A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise."

The doctrine is applied cautiously, and Massachusetts courts have emphasized that promissory estoppel is not a substitute for the ordinary requirements of contract formation or modification. See Sullivan v. Chief Justice for Admin. & Mgmt. of the Trial Court, 448 Mass. 15, 28–29 (2006) (noting that promissory estoppel should not be used to circumvent contractual requirements). In particular, courts have held that promissory estoppel cannot be used to override an express contractual provision, such as a written-modification clause, where the party claiming estoppel was aware of the provision and could have insisted on compliance with it.

2. Application to the Facts. Vantage's promissory estoppel argument, which appears to be asserted as an alternative theory in its counterclaim, is based on the Kapoor Email and Penterra's alleged course of dealing. For the reasons set forth below, this argument fails to satisfy any of the four elements of the doctrine.

Element 1: Clear and definite promise. The Kapoor Email states: "We're definitely open to exploring expansion into NY/NJ/PA once your New England footprint is fully ramped. Let's circle back mid-year and see where things stand." This language does not constitute a "clear and definite promise." The words "open to exploring" are inherently tentative and non-committal. They express a willingness to consider a possibility, not an agreement to grant territorial rights. The conditional clause "once your New England footprint is fully ramped" further qualifies the statement, making it contingent on a future event that had not yet occurred. And the closing sentence — "Let's circle back mid-year and see where things stand" — explicitly contemplates future discussions, strongly suggesting that no decision had been made and that the parties would need to revisit the issue at a later date. Reading the Kapoor Email as a whole, it is an expression of general goodwill and commercial optimism, not a clear and definite promise to expand the Territory.

Massachusetts courts have consistently held that vague, conditional, or aspirational statements do not satisfy the "clear and definite promise" requirement of promissory estoppel. See Dixon v. Ostrander Financial, 798 F.3d 9, 14 (1st Cir. 2015) (applying Massachusetts law and holding that equivocal statements do not constitute a clear promise for estoppel purposes); Sullivan, 448 Mass. at 28–29 (requiring specificity and definiteness in the alleged promise).

Element 2: Reasonable expectation of reliance. Even assuming the Kapoor Email could somehow be construed as a promise, there is no evidence that Kapoor or any other Penterra representative reasonably expected Vantage to rely on the email as authorization to begin distributing Products in the Tri-State Area. To the contrary, Kapoor testified that the email was intended to express a willingness to explore future expansion, not to grant authorization. The conditional and aspirational language of the email would not lead a reasonable person to expect that the recipient would treat it as a binding commitment or take irreversible action based on it.

Element 3: Actual and reasonable reliance. Vantage claims that it relied on the Kapoor Email when it began tri-state shipments in September 2020. However, even if Vantage subjectively relied on the email, such reliance was not objectively reasonable in light of the following circumstances:

(i) Section 13.1 of the EDA, which Vantage was aware of as a party to the agreement, requires that any modification be set forth in a written instrument signed by both parties. Vantage knew that a unilateral email from a Penterra executive did not satisfy this requirement.

(ii) No formal amendment to Exhibit A was ever drafted, circulated, or executed. A sophisticated commercial party such as Vantage, represented by experienced counsel, would understand that an informal email does not override the formal requirements of a written distribution agreement.

(iii) The conditional and exploratory nature of the Kapoor Email's language does not support reasonable reliance. The email says "open to exploring" and "let's circle back" — language that any reasonable businessperson would understand as an invitation to future discussion, not a present grant of authority.

Moreover, the temporal gap between the Kapoor Email (January 12, 2018) and Vantage's commencement of tri-state shipments (on or about September 14, 2020) is approximately two years and eight months. This substantial time gap undermines the causation and reliance elements of Vantage's estoppel claim. If Vantage truly relied on the Kapoor Email as authorization to expand into the Tri-State Area, it is difficult to explain why Vantage waited nearly three years before acting on that supposed authorization — and why, during that intervening period, Vantage never sought a formal amendment to Exhibit A or a written confirmation of the territorial expansion.

Element 4: Injustice. Even if the first three elements were satisfied — which they are not — enforcement of the Kapoor Email is not necessary to avoid injustice. Vantage is a sophisticated commercial entity that negotiated and signed a detailed distribution agreement with clear territorial limitations and a written-modification clause. Vantage chose to begin distributing Products outside the Territory without obtaining the written authorization required by the EDA. Vantage assumed the commercial risk associated with that decision. Enforcing the EDA according to its terms — including the territorial limitation, the written-modification clause, and the integration clause — is not unjust; it is the natural consequence of holding parties to the bargain they made.

Finally, it bears emphasis that Massachusetts courts have held that promissory estoppel cannot be used to circumvent an express contractual requirement, particularly a written-modification clause. See Cambridgeport Sav. Bank, 413 Mass. at 439; Basis Tech., 71 Mass. App. Ct. at 37–38. Allowing Vantage to invoke promissory estoppel to override Section 13.1 would effectively render the written-modification clause a nullity and undermine the very commercial certainty that the clause is designed to protect.

IV. Analysis of Potential Counterarguments

A. Vantage's Likely Arguments

Based on the pleadings, discovery responses, and deposition testimony to date, we anticipate that Vantage will advance three principal counterarguments in opposition to Penterra's motion for summary judgment. We address each in turn.

1. The Kapoor Email as "Prior Written Consent" Under Section 2.3. Vantage may argue that Section 2.3 of the EDA — which prohibits Vantage from distributing Products outside the Territory "without Supplier's prior written consent" — establishes a different and lower threshold than Section 13.1's requirement for a "written instrument signed by both parties." Specifically, Vantage may contend that the Kapoor Email, even if it does not qualify as a bilateral amendment under Section 13.1, constitutes unilateral "prior written consent" from Penterra under Section 2.3.

This argument fails for several reasons. First, even under the arguably lower standard of Section 2.3, the Kapoor Email does not constitute "consent." The email does not use the word "consent," "authorize," "approve," or any similar operative term. It uses the phrases "open to exploring" and "let's circle back," which express willingness to discuss a future possibility, not permission to act. A reasonable reading of the email, in context, is that Kapoor was signaling commercial interest in a potential expansion, contingent on future developments and further discussion — not granting consent for Vantage to begin distributing Products outside the Territory.

Second, even if "prior written consent" under Section 2.3 is a unilateral concept (i.e., it requires only Penterra's consent, not a bilateral agreement), it must still constitute actual consent — that is, a clear, affirmative grant of permission. The conditional, aspirational, and future-oriented language of the Kapoor Email falls short of this threshold. Courts applying similar provisions have held that expressions of willingness to negotiate or explore a possibility do not constitute consent. See, e.g., RB Rubber Prods., Inc. v. Rubber Mfrs. Ass'n, 992 F. Supp. 2d 1019, 1031 (D. Or. 2014) (holding that a general expression of willingness to discuss future terms did not constitute consent to act).

Third, the distinction between Sections 2.3 and 13.1 does not help Vantage in any event. Section 2.3 governs whether Vantage may distribute Products outside the Territory with Penterra's consent; Section 13.1 governs whether the Territory itself may be modified. Even if the Kapoor Email could be construed as "prior written consent" under Section 2.3 (which it cannot), it would not modify Exhibit A to expand the defined Territory. The distinction matters because Vantage's claim is not merely that it was permitted to make occasional tri-state shipments with Penterra's case-by-case consent; rather, Vantage claims that the Territory was permanently expanded to include the Tri-State Area. That claim requires a modification of Exhibit A, which can only be accomplished under Section 13.1.

2. Material Breach by Penterra (Meridian National Distributors). Vantage may argue that Penterra's execution of a term sheet with Meridian National Distributors, Inc. ("Meridian") on February 15, 2021 — under which Penterra would appoint Meridian as the exclusive distributor for Oncalaris® and Renuvesta® in New York, New Jersey, and Pennsylvania — constituted an anticipatory breach of the EDA and/or a breach of the implied covenant of good faith and fair dealing.

This argument is without merit. The Territory under the EDA is limited to the six New England states. Penterra's exclusivity obligation to Vantage extends only within the Territory. Outside the Territory, Penterra retained full discretion to appoint distributors for its products. The Meridian term sheet covers the Tri-State Area, which is outside the Territory defined in Exhibit A. Accordingly, Penterra had every right to appoint Meridian (or any other distributor) for the Tri-State Area without violating any provision of the EDA.

Vantage's material-breach argument is, at bottom, a circular argument: it assumes the conclusion it seeks to establish (i.e., that the Territory includes the Tri-State Area) in order to argue that Penterra breached the exclusivity obligation by appointing Meridian in the Tri-State Area. But since the Territory does not include the Tri-State Area — as established by the plain language of Exhibit A and the analysis set forth in this memorandum — the premise of the argument is false, and the argument fails.

3. Implied Covenant of Good Faith and Fair Dealing. Vantage's counterclaim alleges that Penterra breached the implied covenant of good faith and fair dealing by (a) failing to negotiate a territorial expansion in good faith after the Kapoor Email, (b) appointing Meridian as a distributor in the Tri-State Area, and (c) issuing the cease-and-desist letter in March 2021.

Under Massachusetts law, every contract implies a covenant of good faith and fair dealing, which provides that neither party shall do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract. Fortune v. National Cash Register Co., 373 Mass. 96, 104 (1977). However, the implied covenant cannot override express contractual terms. See Vireo & Co. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004) (holding that the implied covenant "may not be invoked to create rights and duties not otherwise provided for in the existing contractual relationship"). Where the contract expressly limits the Territory to six states, the implied covenant cannot be used to expand the Territory to nine states. Penterra's decision to enforce the territorial limitation and to appoint a distributor in the Tri-State Area is consistent with the express terms of the EDA and does not violate the implied covenant.

Furthermore, Penterra had no obligation under the EDA to negotiate a territorial expansion. The Kapoor Email expressed willingness to explore expansion, but this was a business-development discussion, not a contractual obligation. The EDA does not contain a provision requiring Penterra to negotiate territorial expansion, and the implied covenant cannot be used to imply such an obligation where the parties did not include one.

B. Assessment of Risks

While we believe Penterra's legal position is strong, it is appropriate to identify and assess the risks associated with the summary judgment motion.

Risk 1: Factual finding regarding Penterra's knowledge. The strongest risk to Penterra's position is a factual finding that Penterra knew about Vantage's tri-state shipments earlier than Penterra claims and acquiesced over a longer period than the approximately six months supported by the documentary record. Vantage has asserted that tri-state shipments began in late 2019, approximately a year earlier than the September 14, 2020 date reflected in Vantage's own shipping records. If Vantage can produce credible evidence supporting an earlier start date and earlier knowledge on Penterra's part, the court could find a longer period of alleged acquiescence, which would strengthen (though not salvage) Vantage's course-of-dealing and waiver arguments.

However, even if the court finds a longer period of passive awareness, the legal framework under Cambridge Biotech and Section 13.1 should preclude a finding of modification. As discussed above, passive acquiescence — even over an extended period — does not satisfy the writ

CALDERWOOD & HARKNESS LLP
ATTORNEY WORK PRODUCT / PRIVILEGED AND CONFIDENTIAL
MEMORANDUM
This memorandum is protected by the attorney-client privilege and the work-product doctrine. It was prepared in anticipation of litigation and reflects the mental impressions, conclusions, and legal theories of counsel. It is not intended for distribution beyond the addressees and authorized members of the Penterra engagement team without prior approval.
I. Introduction and Purpose
This memorandum was prepared in anticipation of our client Penterra Pharmaceuticals Corp.'s ("Penterra") motion for summary judgment, which is scheduled to be filed on February 11, 2022, in the above-captioned declaratory-judgment action against Vantage Medical Distribution, LLC ("Vantage"). The memorandum is intended to serve as the analytical foundation for the summary judgment brief and to provide the engagement team with a comprehensive assessment of the governing legal framework, the strength of Penterra's position, and the risks posed by Vantage's anticipated counterarguments.
The purpose of this memorandum is to analyze Massachusetts law governing four interrelated doctrines that are central to the dispute between Penterra and Vantage: (1) the enforceability of contractual written-modification clauses (sometimes referred to as "no oral modification" or "NOM" clauses); (2) the enforceability of integration or merger clauses; (3) the doctrine of course of dealing as a purported basis for implied contract modification; and (4) the parol evidence rule. These four doctrines intersect in a manner that bears directly on whether Vantage can sustain its defense and counterclaims in this action.
The core legal question presented is whether Section 13.1 (the written-amendment requirement) and Section 14.8 (the integration clause) of the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA") between Penterra and Vantage bar Vantage's claims that (a) the January 12, 2018 email from Steven Kapoor (Penterra's Vice President of Commercial Operations) to Donald Farnham (Vantage's Chief Executive Officer) (the "Kapoor Email"), and/or (b) Penterra's alleged course of dealing — including Penterra's purported failure to object to Vantage's shipments of Oncalaris® to customers in New York, New Jersey, and Pennsylvania (collectively, the "Tri-State Area") beginning on or about September 14, 2020 — effected a modification of Exhibit A to the EDA, thereby expanding the defined "Territory" beyond the six New England states (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont) to include the Tri-State Area.
As set forth more fully below, the conclusion of this memorandum is that Massachusetts courts generally enforce written-modification clauses and integration clauses according to their terms, and that such clauses preclude implied or oral modifications, including those purportedly based on course of dealing or informal email communications. The Kapoor Email does not satisfy the formal requirements of Section 13.1, and Vantage's course-of-dealing argument cannot overcome the express terms of the EDA. Penterra's motion for summary judgment should succeed on the merits.
II. Factual Background Relevant to Legal Analysis
The following factual summary is drawn from the EDA, the documentary record produced in discovery, and the deposition testimony of three key witnesses. It is presented here to provide the context necessary for the legal analysis that follows. To the extent that factual disputes exist, they are noted; however, as discussed in the legal analysis, the material facts relevant to the enforceability of the written-modification clause and integration clause are largely undisputed.
A. The Exclusive Distribution Agreement
Penterra and Vantage entered into the Exclusive Distribution Agreement on July 1, 2017 (the "EDA"). Under the EDA, Penterra is designated as the "Supplier" and Vantage is designated as the "Distributor." The EDA has an initial term of five years, expiring on June 30, 2022, with two successive one-year automatic renewal options (i.e., the EDA could extend through June 30, 2024 if neither party provides timely notice of non-renewal pursuant to Section 3.2).
The products covered by the EDA are Oncalaris® (pegvisomant-axel), supplied in 20 mg and 40 mg vials, and Renuvesta® (cilosporin-beta), supplied in 5 mg capsules. Both products are specialty pharmaceuticals used primarily in the oncology and immunology therapeutic areas. Oncalaris® is the more commercially significant of the two products, generating the majority of revenue under the EDA.
Section 2.1 of the EDA grants Vantage "the exclusive right to distribute the Products within the Territory, as defined in Exhibit A." This exclusivity provision is the cornerstone of the commercial arrangement: within the Territory, Penterra agreed not to appoint any other distributor for the covered products, and Vantage agreed to certain minimum purchase commitments and marketing obligations.
Exhibit A to the EDA defines the Territory as follows:
"The states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont (collectively, the 'New England States')."
The definition is clear, precise, and unambiguous. It identifies six specific states by name and further parenthetically designates them as the "New England States." There is no language in Exhibit A suggesting that the Territory is subject to expansion, adjustment, or modification through informal means, nor is there any reference to the Tri-State Area or to any territory beyond the six enumerated states.
Section 2.3 of the EDA further provides:
"Distributor shall not actively solicit orders for, or deliver, the Products outside the Territory without Supplier's prior written consent."
This provision expressly prohibits Vantage from distributing the Products outside the New England states absent Penterra's "prior written consent." The use of the phrase "prior written consent" is significant, as it imposes a written-consent requirement distinct from (but consistent with) the written-modification clause in Section 13.1.
Section 13.1 of the EDA (captioned "Amendments") states:
"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."
The clause is expansive in scope: it covers amendments, modifications, and waivers. It requires that any such change be (i) set forth in a written instrument, and (ii) signed by both parties. The bilateral-signature requirement is a critical feature of Section 13.1, as it ensures that no unilateral act by either party — however formal or informal — can effect a change to the EDA's terms.
Section 14.8 of the EDA (captioned "Entire Agreement") states:
"This Agreement, including all Exhibits, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, or agreements relating thereto, whether written or oral."
This is a standard integration or merger clause. Its effect is to establish the EDA as the complete and final expression of the parties' agreement and to exclude all prior negotiations, representations, or agreements — whether written or oral — from the scope of the contractual relationship.
Finally, Section 14.2 of the EDA provides that the Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to its conflict-of-laws principles. There is no dispute between the parties that Massachusetts law governs the interpretation and enforcement of the EDA.
B. The Kapoor Email (January 12, 2018)
Approximately six months after the EDA was executed, Steven Kapoor, Penterra's Vice President of Commercial Operations, sent an email to Donald Farnham, Vantage's Chief Executive Officer, dated January 12, 2018. The full text of the operative portion of the email is as follows:
"Don — good catching up yesterday. We're definitely open to exploring expansion into NY/NJ/PA once your New England footprint is fully ramped. Let's circle back mid-year and see where things stand."
This email is the centerpiece of Vantage's defense and counterclaims. Vantage contends that the Kapoor Email constituted either (a) "prior written consent" to distribute Products in the Tri-State Area under Section 2.3 of the EDA, and/or (b) a written modification of Exhibit A expanding the Territory to include New York, New Jersey, and Pennsylvania.
Penterra's position, which we believe is well-supported by both the text of the email and the applicable law, is that the Kapoor Email expressed nothing more than a forward-looking willingness to negotiate a possible future expansion of the Territory. The email did not constitute consent or an amendment for several reasons that are explored in detail in the legal analysis below. Most fundamentally, the email was not "signed by both parties" as required by Section 13.1, did not reference the EDA or Exhibit A, did not purport to amend any contractual term, and used expressly conditional and aspirational language ("open to exploring," "once your New England footprint is fully ramped," "circle back mid-year").
C. Vantage's Tri-State Conduct
The record establishes that, on or about September 14, 2020 — more than two and a half years after the Kapoor Email — Vantage began shipping Oncalaris® to hospitals and oncology clinics in New York, New Jersey, and Pennsylvania. Vantage did not seek or obtain any formal written authorization from Penterra before commencing these shipments. There is no signed amendment to Exhibit A in the record, nor is there any correspondence from Penterra expressly authorizing the tri-state expansion.
Vantage's tri-state distribution operations generated substantial revenue. According to Vantage's financial records produced in discovery, Vantage's reported tri-state revenues from September 2020 through March 2021 were approximately $6.4 million. This figure represents a significant commercial enterprise, and it is clear that Vantage invested resources in establishing distribution channels outside the contractual Territory.
Vantage also argues that Penterra was aware of, or should have been aware of, Vantage's tri-state shipments beginning in late 2019 — approximately a year before the September 14, 2020 date that is supported by the documentary evidence — and that Penterra's failure to object to these shipments constituted a course of dealing that effectively modified Exhibit A to include the Tri-State Area. The precise timing of Penterra's knowledge is a factual question that may be contested, though we believe the evidence supports Penterra's position that it did not become aware of the extent of Vantage's tri-state activities until early 2021.
On March 8, 2021, Penterra sent a cease-and-desist letter to Vantage demanding that Vantage immediately cease distributing Oncalaris® and Renuvesta® outside the six New England states defined in Exhibit A. The letter was signed by Penterra's General Counsel, Monica Chen, and expressly invoked Sections 2.1, 2.3, and 13.1 of the EDA.
Vantage responded on March 22, 2021, through outside counsel Kenneth M. Rourke of Hargrove, Sinclair & Polk LLP. The response letter asserted that Vantage possessed territorial rights in the Tri-State Area based on the Kapoor Email and Penterra's alleged course of dealing, and threatened a counterclaim for damages in the amount of $35 million if Penterra pursued enforcement of the territorial restriction.
D. Key Deposition Testimony
Three depositions taken during the discovery phase are particularly relevant to the legal analysis.
Donald Farnham (Vantage CEO), deposed on October 18, 2021, testified as follows: He admitted that he did not obtain a signed amendment to Exhibit A at any time between the execution of the EDA and the commencement of Vantage's tri-state shipments. He stated that he relied on the Kapoor Email as authorization to expand into the Tri-State Area. He acknowledged, however, that no Penterra officer or authorized representative expressly authorized tri-state shipments in a writing signed by both parties. When asked directly whether he believed the Kapoor Email constituted a formal amendment to the EDA, Farnham stated that he understood it to be "the green light" but conceded that no formal amendment document was ever drafted, circulated, or signed. This testimony is significant because it confirms the absence of any document satisfying the requirements of Section 13.1.
Steven Kapoor (Penterra VP, Commercial Operations), deposed on November 2, 2021, testified as follows: He stated that his January 12, 2018 email was intended to express a willingness to explore the possibility of future territorial expansion in the event that Vantage's New England distribution operations reached full capacity. He testified unequivocally that the email was not intended to grant consent under Section 2.3 or to amend Exhibit A of the EDA. He further testified that no one at Penterra — including himself — authorized Vantage to begin distributing Products in the Tri-State Area, and that he was unaware of Vantage's tri-state shipments until informed by Penterra's distribution operations team in early 2021.
Rachel Mendez (Penterra Director, Distribution Operations), deposed on November 19, 2021, testified as follows: She explained that Penterra's internal distribution management systems were configured to direct Oncalaris® and Renuvesta® shipments to Vantage only for delivery addresses within the six New England states. She testified that Penterra never modified its systems to include the Tri-State Area within Vantage's authorized delivery zone. She further stated that Penterra never authorized or ratified tri-state shipments through Vantage, and that Penterra's first indication of the unauthorized shipments came through a routine compliance audit conducted in January 2021.
III. Legal Analysis
A. Enforceability of Written-Modification Clauses Under Massachusetts Law
1. The General Rule: Written-Modification Clauses Are Enforceable. Massachusetts courts consistently enforce contractual provisions requiring that amendments or modifications be in writing and signed by both parties. The law in this area is well-settled and has been applied by courts at all levels of the Massachusetts judiciary, including the Supreme Judicial Court ("SJC"), the Appeals Court, and the Superior Court's Business Litigation Session.
The leading authority is Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000). In Cambridge Biotech, the SJC addressed the enforceability of a contractual clause requiring that all amendments and modifications be made in writing and signed by both parties. The case arose from a dispute over a joint venture agreement in which one party contended that the agreement had been informally modified through a series of oral communications and course-of-conduct changes. The SJC rejected this contention, holding that a written-modification clause is generally enforceable under Massachusetts law and that a party cannot circumvent such a clause through alleged oral agreements or informal communications. Id. at 131–32.
The court's reasoning in Cambridge Biotech rested on several foundational principles of contract law. First, the SJC emphasized the importance of party autonomy: parties who bargain for a written-modification clause are entitled to the protection it affords, and courts should not lightly disregard the parties' express agreement about how their contract may be changed. Id. at 131. Second, the court recognized that enforcing written-modification clauses promotes commercial certainty and predictability. In the absence of such enforcement, parties to commercial agreements would face the constant risk that informal conversations, stray emails, or ambiguous conduct could be characterized as binding modifications, thereby undermining the stability of the written agreement. Id. Third, the court noted that enforcing written-modification clauses deters disputes about whether an agreement was informally modified, because it establishes a clear, verifiable standard (a signed writing) that must be met before any modification takes effect. Id. at 132.
The Cambridge Biotech principle has been consistently followed in subsequent Massachusetts appellate decisions. In Cambridgeport Sav. Bank v. Boersner, 413 Mass. 432, 439 (1992), the SJC noted that parties may prescribe the manner in which their agreement may be modified, and that such prescriptive provisions are entitled to enforcement. The Massachusetts Appeals Court has similarly reinforced this principle in a line of cases applying Cambridge Biotech to range commercial disputes. See, e.g., Basis Tech. Corp. v. Hollowell & Co., 71 Mass. App. Ct. 29, 37 (2008) (enforcing written-modification clause and holding that alleged oral modifications were unenforceable); Hyannis Marina, Inc. v. Beal's Marine, Inc., 62 Mass. App. Ct. 764, 769–70 (2004) (rejecting argument that informal communications modified agreement containing written-modification clause).
The Business Litigation Session of the Suffolk County Superior Court, where this action is pending, has likewise applied the Cambridge Biotech framework in numerous commercial disputes involving written-modification clauses. The consistency of the case law in this area provides a strong foundation for Penterra's position.
It is worth noting that the enforceability of written-modification clauses in Massachusetts is not merely a product of judicial preference but reflects a broader policy choice in favor of contractual formality in commercial transactions. The Massachusetts Uniform Commercial Code, M.G.L. c. 106, § 2-209(2), provides that a signed agreement that excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded. Although the EDA is a distribution agreement rather than a pure sale-of-goods contract, the principles underlying § 2-209(2) are consistent with the common-law rule articulated in Cambridge Biotech and reinforce the enforceability of Section 13.1.
2. Application to Section 13.1 of the EDA. Section 13.1 of the EDA requires that any amendment, modification, or waiver be "set forth in a written instrument signed by both parties." This language is clear and unambiguous. It imposes two conjunctive requirements: (i) the modification must be set forth in a written instrument, and (ii) the written instrument must be signed by both parties. Both requirements must be satisfied for a modification to be effective.
Applying these requirements to the Kapoor Email, it is clear that the email categorically fails to satisfy Section 13.1 for multiple independent reasons:
(i) Not a formal written instrument. The Kapoor Email was an informal, conversational email sent in the ordinary course of a business relationship. It was not drafted as, nor does it purport to be, a "written instrument" effectuating an amendment to the EDA. It does not reference the EDA, Exhibit A, Section 13.1, or the amendment procedures specified therein. Courts applying written-modification clauses have drawn a distinction between formal writings intended to serve as amendments and informal communications that merely discuss the possibility of future changes. The Kapoor Email falls squarely in the latter category.
(ii) Signed only by Kapoor. Even if the Kapoor Email could be characterized as a "written instrument" — which it cannot — it bears the signature (or, more precisely, the email sign-off) of only one person: Steven Kapoor. Section 13.1 requires that the instrument be "signed by both parties." No representative of Vantage signed or co-signed any document reflecting an agreement to expand the Territory. The bilateral-signature requirement is a critical safeguard: it ensures that modifications result from the mutual assent of both parties, not from the unilateral action or interpretation of one party.
(iii) Not signed by any Vantage representative as a co-signatory to a bilateral amendment. Donald Farnham's deposition testimony confirms that he did not sign any amendment to Exhibit A or any other document purporting to expand the Territory. The absence of a Vantage signature is fatal to any claim that the Kapoor Email constituted a valid modification under Section 13.1.
(iv) Expressed only forward-looking willingness to "explore" expansion. The operative language of the Kapoor Email — "We're definitely open to exploring expansion into NY/NJ/PA once your New England footprint is fully ramped" — does not constitute an operative amendment. The words "open to exploring" are inherently aspirational and non-committal. They convey a willingness to discuss a possibility, not an agreement to effectuate a change. The conditional clause "once your New England footprint is fully ramped" further underscores the contingent and forward-looking nature of the communication. And the closing sentence — "Let's circle back mid-year and see where things stand" — explicitly contemplates future discussions, not present action.
(v) Did not reference Section 13.1, Exhibit A, or the EDA's amendment procedures. A valid amendment to a commercial agreement of this nature would, at a minimum, identify the agreement being amended, specify the provision being modified, state the new terms, and comply with the agreement's procedural requirements. The Kapoor Email does none of these things. It does not mention the EDA, Exhibit A, or any specific contractual term. It does not purport to redefine the Territory or to modify any provision of the agreement.
Under Cambridge Biotech and its progeny, the conclusion is straightforward: the Kapoor Email does not satisfy the requirements of Section 13.1 and therefore cannot constitute a valid modification of Exhibit A or any other provision of the EDA. Even if the Kapoor Email were construed as a "writing" in some loose sense of the term, a unilateral email expressing aspirational interest in a future possibility does not constitute a "written instrument signed by both parties" as Section 13.1 requires.
3. Exceptions to the General Rule (and Why They Do Not Apply). Massachusetts law recognizes a limited number of narrow exceptions to the general rule that written-modification clauses are enforceable. We have analyzed each exception and conclude that none applies to the facts of this case.
Waiver by Conduct. Some courts have held that a party may waive its right to enforce a written-modification clause through repeated, knowing acquiescence in conduct that is inconsistent with the written terms of the agreement. The theory is that a party may, by its own conduct, waive the procedural protections of the written-modification clause, just as it may waive other contractual rights. However, the SJC in Cambridge Biotech did not broadly adopt waiver-by-conduct as a general exception to the enforceability of written-modification clauses. To the contrary, the court emphasized that written-modification clauses serve an important protective function and that courts should be cautious about finding waiver through conduct alone. Cambridge Biotech, 433 Mass. at 131–32. Massachusetts courts have applied the waiver-by-conduct exception sparingly, and only where the evidence establishes a clear, sustained, and unequivocal pattern of knowing acquiescence over a substantial period of time. See, e.g., Lattuca v. Robsham, 442 Mass. 205, 216 (2004) (discussing the high threshold for waiver by conduct in the contractual context).
Here, even crediting Vantage's version of the facts, the alleged period of acquiescence is approximately six months (September 2020 through March 2021) — and Penterra disputes that it had contemporaneous knowledge of the tri-state shipments during much of that period. This is a far cry from the sustained, long-term pattern of knowing acquiescence that Massachusetts courts have required to find waiver by conduct. Moreover, Penterra acted promptly once it became aware of the unauthorized shipments, sending a cease-and-desist letter on March 8, 2021. The waiver-by-conduct exception does not apply.
Estoppel. A party may be estopped from relying on a written-modification clause if the opposing party detrimentally relied on an oral or informal modification and injustice would result from enforcement of the clause. Massachusetts courts have recognized this exception in principle but have applied it only where stringent requirements are met: (1) the party seeking enforcement made a clear and unambiguous promise or representation that the written-modification requirement would not be enforced; (2) the other party reasonably relied on that promise or representation; and (3) the relying party suffered actual detriment as a result. See Loranger Constr. Corp. v. E.F. Hauserman Co., 6 Mass. App. Ct. 152, 155–56 (1978).
None of these requirements is satisfied here. The Kapoor Email's aspirational language ("open to exploring") does not constitute a clear and unambiguous promise that the written-modification requirement of Section 13.1 would be waived or that the Territory had been expanded. There is no evidence that Penterra represented to Vantage that compliance with Section 13.1 was unnecessary. And even if there were, Vantage's reliance would not have been reasonable given the existence of the written-modification clause in Section 13.1, which Vantage — as a sophisticated commercial party that negotiated and signed the EDA — knew about and was bound by. The estoppel exception does not apply.
Part Performance. Under some circumstances, full or substantial performance of an alleged oral modification may overcome a written-modification clause. The rationale is that where both parties have fully performed under the terms of an alleged modification, it would be inequitable to allow one party to invoke the written-modification clause to undo the modification retroactively. This exception has been recognized primarily in the context of agreements subject to the Statute of Frauds, but some courts have applied analogous reasoning to written-modification clauses. See McInerney v. Charter Golf, Inc., 176 Ill. 2d 482, 490–91 (1997) (discussing part-performance exception in the context of contractual modification requirements).
This exception is inapplicable here for a fundamental reason: there was no mutual performance of a modification. Vantage's decision to begin tri-state shipments on or about September 14, 2020 was a unilateral act by Vantage. Penterra never acted on, endorsed, or ratified the territorial expansion. Penterra did not modify its distribution systems to accommodate tri-state shipments through Vantage, did not issue any authorization for such shipments, and did not take any affirmative step consistent with an agreement to expand the Territory. The part-performance doctrine requires that both parties have performed under the terms of the alleged modification; unilateral action by the party claiming the modification does not suffice. The part-performance exception does not apply.
B. Enforceability of Integration Clauses (Section 14.8) and the Parol Evidence Rule
1. Integration Clauses Under Massachusetts Law. Massachusetts courts give effect to integration or merger clauses, which establish that the written agreement is the complete and final expression of the parties' agreement with respect to the subject matter thereof. An integration clause serves a critical function in commercial transactions: it ensures that the written agreement is the authoritative source of the parties' rights and obligations, and it precludes reliance on prior negotiations, representations, or side agreements that are not reflected in the written document.
Section 14.8 of the EDA is a standard integration clause. It states that the Agreement, "including all Exhibits, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior negotiations, representations, or agreements relating thereto, whether written or oral." The clause is broadly drafted and covers all "negotiations, representations, or agreements" — whether written or oral — that relate to the subject matter of the EDA.
The legal effect of Section 14.8 under Massachusetts law is to create a strong, though not irrebuttable, presumption that the EDA is fully integrated. See Robert Indus., Inc. v. Spence, 362 Mass. 751, 753–54 (1973) (recognizing that a merger clause is "an important indication" that the parties intended their written agreement to be fully integrated); Bendetson v. Coolidge, 55 Mass. App. Ct. 538, 541 (2002) (holding that an integration clause creates a "strong presumption" of full integration). When a contract is fully integrated, extrinsic evidence of prior or contemporaneous agreements or understandings is inadmissible to contradict or supplement the written terms. This is the essence of the parol evidence rule, which operates in conjunction with the integration clause to protect the integrity of the written agreement.
In the present case, Section 14.8 establishes that the EDA — including Exhibit A's definition of the Territory — is the complete and final expression of the parties' agreement regarding the distribution of Oncalaris® and Renuvesta®. Any prior discussions, negotiations, or understandings regarding the possible inclusion of the Tri-State Area within the Territory are superseded by the plain terms of Exhibit A, which limits the Territory to the six New England states.
2. The Parol Evidence Rule in Massachusetts. The parol evidence rule is a substantive rule of contract law that operates to exclude extrinsic evidence when a written contract is found to be the complete and final expression of the parties' agreement. Under Massachusetts law, when a contract is fully integrated, the parol evidence rule bars the introduction of extrinsic evidence — including prior or contemporaneous oral agreements, negotiations, and informal writings — to vary, contradict, or add to the terms of the written agreement. See Downer v. Ratcliffe, 326 Mass. 281, 285 (1950); Bendetson, 55 Mass. App. Ct. at 541; Somerset Sav. Bank v. Chicago Title Ins. Co., 420 Mass. 422, 427 (1995).
The rule has been consistently applied by Massachusetts courts to protect the finality of written agreements. As the SJC has explained, the parol evidence rule "rests on the conviction that where parties have deliberately put their agreement into writing, the writing itself is the best evidence of the parties' intentions, and that permitting the introduction of extrinsic evidence to contradict or supplement the writing would undermine the certainty and reliability that written contracts are intended to provide." Somerset Sav. Bank, 420 Mass. at 427.
In the context of this dispute, Vantage's reliance on the Kapoor Email to expand the Territory defined in Exhibit A is precisely the type of extrinsic evidence that the parol evidence rule is designed to exclude. Exhibit A unambiguously defines the Territory as the six New England states. The Kapoor Email, even if it could be characterized as evidence of some understanding between the parties regarding future expansion, cannot be used to contradict or supplement the clear territorial definition in Exhibit A.
A technical distinction should be noted. The parol evidence rule, strictly speaking, applies to prior and contemporaneous agreements — that is, agreements made before or at the same time as the written contract. The Kapoor Email is dated January 12, 2018, which post-dates the execution of the EDA on July 1, 2017. Because the Kapoor Email is a subsequent communication, it is technically not subject to the parol evidence rule as such. However, this distinction does not help Vantage. Subsequent modifications are governed by Section 13.1 (the written-modification clause), and as demonstrated in Section III.A above, the Kapoor Email fails to satisfy Section 13.1's requirements. The integration clause in Section 14.8 reinforces this analysis by establishing that the EDA as written — including Exhibit A — is the definitive agreement between the parties, and that any changes to the agreement's terms must comply with the procedural requirements set forth in Section 13.1.
In short, whether the Kapoor Email is analyzed under the parol evidence rule (as a prior or contemporaneous communication) or under the written-modification clause (as a subsequent communication), the result is the same: it cannot be used to alter the Territory defined in Exhibit A.
3. Interaction Between Integration Clause and Written-Modification Clause. The presence of both an integration clause (Section 14.8) and a written-modification clause (Section 13.1) in the EDA creates a dual barrier to Vantage's modification arguments. The integration clause establishes the four corners of the agreement — that is, it defines the universe of terms that constitute the parties' contractual rights and obligations. The written-modification clause governs how those four corners may be changed — that is, it prescribes the exclusive procedure by which the agreement's terms may be amended, modified, or waived.
Together, these two provisions create a comprehensive framework that is designed to protect the stability and predictability of the contractual relationship. The integration clause looks backward: it ensures that all prior negotiations, representations, and agreements are superseded by the written EDA. The written-modification clause looks forward: it ensures that any future changes to the EDA must be effectuated through a specific, verifiable procedure (a written instrument signed by both parties).
Under Massachusetts law, courts have recognized that the combination of an integration clause and a written-modification clause makes it exceptionally difficult for a party to argue that the agreement was informally or impliedly modified. See Cambridge Biotech, 433 Mass. at 131–32 (noting the interaction between a merger clause and a written-modification clause in rejecting an implied modification argument); Basis Tech., 71 Mass. App. Ct. at 37–38 (same). The dual-barrier framework is particularly effective in the commercial context, where sophisticated parties negotiate and agree to these provisions with the express purpose of insulating their agreement from informal changes.
This dual-barrier framework is directly applicable here. Sections 13.1 and 14.8, taken together, establish that the EDA (including Exhibit A) is the complete agreement between Penterra and Vantage, and that no change to the EDA's terms — including the territorial definition — may be effectuated except through a written instrument signed by both parties. Vantage's attempts to circumvent these provisions through the Kapoor Email or course of dealing are squarely foreclosed.
C. Course-of-Dealing Arguments Under Massachusetts Law
1. The Doctrine of Course of Dealing. Course of dealing is a recognized concept in contract law, defined as a sequence of previous conduct between the parties to a particular transaction that establishes a common basis of understanding for interpreting their expressions and other conduct. The concept is codified in the Uniform Commercial Code, M.G.L. c. 106, § 1-303(b), which provides that "[a] 'course of dealing' is a sequence of conduct concerning previous transactions between the parties to a particular transaction that is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct."
Under UCC Article 1, course of dealing may supplement or qualify the terms of an agreement. See M.G.L. c. 106, § 1-303(d) ("A course of performance or course of dealing between the parties or usage of trade in the vocation or trade in which they are engaged or of which they are or should be aware is relevant in ascertaining the meaning of the parties' agreement, may give particular meaning to specific terms of the agreement, and may supplement or qualify the terms of the agreement."). However, there is a critical limitation: course of dealing cannot override an express term of the agreement. The UCC establishes a clear hierarchy of terms: (1) express terms of the agreement control; (2) course of performance; (3) course of dealing; and (4) usage of trade. See M.G.L. c. 106, § 1-303(e). Where an express term and a course of dealing conflict, the express term prevails. Id.
This hierarchy has been consistently applied by Massachusetts courts. The SJC has recognized that course of dealing and usage of trade may be used to interpret ambiguous contract terms, but not to contradict or override clear and unambiguous express terms. See Stop & Shop, Inc. v. Ganem, 347 Mass. 697, 701 (1964) (holding that trade usage may supplement but not contradict express terms); Seaco Ins. Co. v. Barbosa, 435 Mass. 772, 779 (2002) (emphasizing the primacy of express contractual language). The limitation is particularly significant in cases involving written-modification clauses: where the agreement expressly requires written, bilateral amendments, course of dealing cannot serve as a backdoor mechanism for implying modifications that bypass the agreed-upon procedural requirements.
2. Application to Vantage's Course-of-Dealing Argument. Vantage argues that Penterra's failure to object to Vantage's shipments of Oncalaris® to customers in the Tri-State Area, beginning in late 2019 (according to Vantage) or September 2020 (according to Penterra), and continuing through early 2021, established a course of dealing that effectively modified Exhibit A to include New York, New Jersey, and Pennsylvania within the defined Territory. This argument fails for multiple independent reasons, each of which is sufficient standing alone to defeat the claim.
First, the express terms of Exhibit A unambiguously limit the Territory to six specifically enumerated New England states. There is no ambiguity in the territorial definition, no gap to be filled, and no interpretive question that requires resort to extrinsic evidence. Course of dealing is properly used to interpret ambiguous terms or to fill gaps in an incomplete agreement; it cannot be used to contradict or override a clear, specific, and unambiguous express term. See M.G.L. c. 106, § 1-303(e); Stop & Shop, 347 Mass. at 701. The Territory is defined with precision — by state name and by parenthetical designation — and there is no plausible reading of Exhibit A that includes New York, New Jersey, or Pennsylvania. Vantage's course-of-dealing argument is, at its core, an attempt to add three states to a territorial definition that unambiguously includes only six states. This is exactly the type of extrinsic evidence that the hierarchy of terms and the parol evidence rule are designed to exclude.
Second, Section 13.1 explicitly requires that any amendment or modification be set forth in a written instrument signed by both parties. Passive acquiescence — even if it occurred, which Penterra disputes — does not satisfy this requirement. Silence or inaction is not a "written instrument," and it is not "signed by both parties." The written-modification clause exists precisely to prevent the type of argument Vantage is making: that a party's failure to object to conduct inconsistent with the agreement's terms constitutes an implied modification. If passive acquiescence could override a written-modification clause, the clause would be rendered meaningless, which would contravene the fundamental canon of contract interpretation that all provisions of an agreement should be given effect. See Starr v. Fordham, 420 Mass. 178, 190 (1995) (holding that courts should interpret contracts so as to give reasonable effect to all provisions).
Third, Section 14.8's integration clause further insulates the agreement from modification by implication. As discussed above, the integration clause establishes the EDA as the complete and final expression of the parties' agreement. The combination of Section 14.8 and Section 13.1 creates a dual barrier that precludes Vantage from arguing that the agreement's terms were modified through course of dealing or any other informal mechanism.
Fourth, Cambridge Biotech and its progeny hold that written-modification clauses bar course-of-dealing-based modification arguments. The SJC's reasoning in Cambridge Biotech is directly applicable: parties who bargain for a written-modification clause are entitled to the protection it affords, and allowing course-of-dealing evidence to override such a clause would undermine the very purpose the clause is designed to serve. Cambridge Biotech, 433 Mass. at 131–32.
Fifth, the factual record does not support Vantage's course-of-dealing argument even on its own terms. Rachel Mendez testified that Penterra's distribution systems were configured to direct Oncalaris® shipments to Vantage only for New England addresses and that Penterra never authorized or ratified tri-state shipments through Vantage. This testimony establishes that Penterra's internal systems and processes were consistent with the territorial limitation in Exhibit A and that Penterra did not take any affirmative act consistent with a modification. Moreover, Penterra sent its cease-and-desist letter on March 8, 2021, approximately six months after Vantage began tri-state shipments (using the September 14, 2020 date supported by the documentary evidence). In the context of a specialty pharmaceutical distribution relationship — which involves complex logistics, regulatory compliance, and multi-layered supply chains — a six-month response time is relatively prompt, particularly where Penterra was not immediately aware of the unauthorized shipments.
Sixth, the period of alleged acquiescence is too short and the conduct too one-sided to establish the sustained, mutual pattern of conduct required to demonstrate a course of dealing sufficient to override an express contractual term. Course of dealing contemplates a "sequence of conduct" that is "fairly to be regarded as establishing a common basis of understanding." M.G.L. c. 106, § 1-303(b). A single period of approximately six months (or even twelve to eighteen months, using Vantage's timeline) during which one party unilaterally shipped products outside the defined territory, without the other party's knowledge or authorization, does not establish a mutual pattern of conduct. There is no evidence that Penterra engaged in any conduct that could be interpreted as participating in or endorsing the territorial expansion. The alleged "course of dealing" is, in reality, a unilateral course of action by Vantage — which is insufficient as a matter of law.
3. Distinguishing Course of Dealing from Waiver. Even if Penterra's delayed objection to Vantage's tri-state shipments could theoretically be characterized as a limited waiver of enforcement for a brief period, such a waiver would not constitute a permanent modification of the contract under Massachusetts law. The distinction between waiver and modification is well-established and legally significant.
A waiver is a voluntary relinquishment of a known right. It is, by its nature, revocable and limited in scope. A party may waive its right to enforce a particular contractual provision on a particular occasion without permanently altering the terms of the agreement. See Cellucci v. Sun Oil Co., 2 Mass. App. Ct. 722, 728 (1974) (holding that waiver is an intentional relinquishment of a known right that does not permanently alter the contract). A modification, by contrast, is a permanent change to the terms of the contract. Under the EDA, a modification requires compliance with Section 13.1 — a written instrument signed by both parties.
Massachusetts courts have held that even repeated instances of non-enforcement do not necessarily constitute a modification of a contractual term, particularly where the contract contains a no-waiver clause or a written-modification clause. See Catlin v. Board of Registration of Architects, 414 Mass. 1, 7 (1992) (discussing the distinction between waiver and modification); Lattuca, 442 Mass. at 216–17 (same). Section 13.1 of the EDA, which covers not only "amendments" and "modifications" but also "waivers," serves a protective function analogous to a standalone no-waiver clause: it requires that even waivers be set forth in a written instrument signed by both parties.
Thus, even under the most favorable interpretation of the facts for Vantage, Penterra's delayed response to Vantage's unauthorized shipments would constitute, at most, a temporary and limited failure to enforce Exhibit A's territorial restriction — not a permanent modification of the Territory. And even this characterization is generous to Vantage, given the factual evidence that Penterra's systems were never modified to accommodate tri-state shipments and that Penterra acted promptly once it became aware of the unauthorized activity.
D. Promissory Estoppel as an Alternative Basis for Modification
1. Elements of Promissory Estoppel Under Massachusetts Law. Promissory estoppel is an equitable doctrine that may, in appropriate circumstances, render a promise enforceable even in the absence of consideration or formal contractual requirements. Under Massachusetts law, the elements of promissory estoppel are: (1) a clear and definite promise; (2) the promisor reasonably expected that the promisee would rely on the promise; (3) the promisee actually and reasonably relied on the promise; and (4) injustice can be avoided only by enforcement of the promise. See Loranger Constr., 6 Mass. App. Ct. at 155–56; Rhode Island Hosp. Trust Nat'l Bank v. Varadian, 419 Mass. 841, 850 (1995).
Massachusetts follows the approach set forth in the Restatement (Second) of Contracts § 90, which provides:
"A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise."
The doctrine is applied cautiously, and Massachusetts courts have emphasized that promissory estoppel is not a substitute for the ordinary requirements of contract formation or modification. See Sullivan v. Chief Justice for Admin. & Mgmt. of the Trial Court, 448 Mass. 15, 28–29 (2006) (noting that promissory estoppel should not be used to circumvent contractual requirements). In particular, courts have held that promissory estoppel cannot be used to override an express contractual provision, such as a written-modification clause, where the party claiming estoppel was aware of the provision and could have insisted on compliance with it.
2. Application to the Facts. Vantage's promissory estoppel argument, which appears to be asserted as an alternative theory in its counterclaim, is based on the Kapoor Email and Penterra's alleged course of dealing. For the reasons set forth below, this argument fails to satisfy any of the four elements of the doctrine.
Element 1: Clear and definite promise. The Kapoor Email states: "We're definitely open to exploring expansion into NY/NJ/PA once your New England footprint is fully ramped. Let's circle back mid-year and see where things stand." This language does not constitute a "clear and definite promise." The words "open to exploring" are inherently tentative and non-committal. They express a willingness to consider a possibility, not an agreement to grant territorial rights. The conditional clause "once your New England footprint is fully ramped" further qualifies the statement, making it contingent on a future event that had not yet occurred. And the closing sentence — "Let's circle back mid-year and see where things stand" — explicitly contemplates future discussions, strongly suggesting that no decision had been made and that the parties would need to revisit the issue at a later date. Reading the Kapoor Email as a whole, it is an expression of general goodwill and commercial optimism, not a clear and definite promise to expand the Territory.
Massachusetts courts have consistently held that vague, conditional, or aspirational statements do not satisfy the "clear and definite promise" requirement of promissory estoppel. See Dixon v. Ostrander Financial, 798 F.3d 9, 14 (1st Cir. 2015) (applying Massachusetts law and holding that equivocal statements do not constitute a clear promise for estoppel purposes); Sullivan, 448 Mass. at 28–29 (requiring specificity and definiteness in the alleged promise).
Element 2: Reasonable expectation of reliance. Even assuming the Kapoor Email could somehow be construed as a promise, there is no evidence that Kapoor or any other Penterra representative reasonably expected Vantage to rely on the email as authorization to begin distributing Products in the Tri-State Area. To the contrary, Kapoor testified that the email was intended to express a willingness to explore future expansion, not to grant authorization. The conditional and aspirational language of the email would not lead a reasonable person to expect that the recipient would treat it as a binding commitment or take irreversible action based on it.
Element 3: Actual and reasonable reliance. Vantage claims that it relied on the Kapoor Email when it began tri-state shipments in September 2020. However, even if Vantage subjectively relied on the email, such reliance was not objectively reasonable in light of the following circumstances:
(i) Section 13.1 of the EDA, which Vantage was aware of as a party to the agreement, requires that any modification be set forth in a written instrument signed by both parties. Vantage knew that a unilateral email from a Penterra executive did not satisfy this requirement.
(ii) No formal amendment to Exhibit A was ever drafted, circulated, or executed. A sophisticated commercial party such as Vantage, represented by experienced counsel, would understand that an informal email does not override the formal requirements of a written distribution agreement.
(iii) The conditional and exploratory nature of the Kapoor Email's language does not support reasonable reliance. The email says "open to exploring" and "let's circle back" — language that any reasonable businessperson would understand as an invitation to future discussion, not a present grant of authority.
Moreover, the temporal gap between the Kapoor Email (January 12, 2018) and Vantage's commencement of tri-state shipments (on or about September 14, 2020) is approximately two years and eight months. This substantial time gap undermines the causation and reliance elements of Vantage's estoppel claim. If Vantage truly relied on the Kapoor Email as authorization to expand into the Tri-State Area, it is difficult to explain why Vantage waited nearly three years before acting on that supposed authorization — and why, during that intervening period, Vantage never sought a formal amendment to Exhibit A or a written confirmation of the territorial expansion.
Element 4: Injustice. Even if the first three elements were satisfied — which they are not — enforcement of the Kapoor Email is not necessary to avoid injustice. Vantage is a sophisticated commercial entity that negotiated and signed a detailed distribution agreement with clear territorial limitations and a written-modification clause. Vantage chose to begin distributing Products outside the Territory without obtaining the written authorization required by the EDA. Vantage assumed the commercial risk associated with that decision. Enforcing the EDA according to its terms — including the territorial limitation, the written-modification clause, and the integration clause — is not unjust; it is the natural consequence of holding parties to the bargain they made.
Finally, it bears emphasis that Massachusetts courts have held that promissory estoppel cannot be used to circumvent an express contractual requirement, particularly a written-modification clause. See Cambridgeport Sav. Bank, 413 Mass. at 439; Basis Tech., 71 Mass. App. Ct. at 37–38. Allowing Vantage to invoke promissory estoppel to override Section 13.1 would effectively render the written-modification clause a nullity and undermine the very commercial certainty that the clause is designed to protect.
IV. Analysis of Potential Counterarguments
A. Vantage's Likely Arguments
Based on the pleadings, discovery responses, and deposition testimony to date, we anticipate that Vantage will advance three principal counterarguments in opposition to Penterra's motion for summary judgment. We address each in turn.
1. The Kapoor Email as "Prior Written Consent" Under Section 2.3. Vantage may argue that Section 2.3 of the EDA — which prohibits Vantage from distributing Products outside the Territory "without Supplier's prior written consent" — establishes a different and lower threshold than Section 13.1's requirement for a "written instrument signed by both parties." Specifically, Vantage may contend that the Kapoor Email, even if it does not qualify as a bilateral amendment under Section 13.1, constitutes unilateral "prior written consent" from Penterra under Section 2.3.
This argument fails for several reasons. First, even under the arguably lower standard of Section 2.3, the Kapoor Email does not constitute "consent." The email does not use the word "consent," "authorize," "approve," or any similar operative term. It uses the phrases "open to exploring" and "let's circle back," which express willingness to discuss a future possibility, not permission to act. A reasonable reading of the email, in context, is that Kapoor was signaling commercial interest in a potential expansion, contingent on future developments and further discussion — not granting consent for Vantage to begin distributing Products outside the Territory.
Second, even if "prior written consent" under Section 2.3 is a unilateral concept (i.e., it requires only Penterra's consent, not a bilateral agreement), it must still constitute actual consent — that is, a clear, affirmative grant of permission. The conditional, aspirational, and future-oriented language of the Kapoor Email falls short of this threshold. Courts applying similar provisions have held that expressions of willingness to negotiate or explore a possibility do not constitute consent. See, e.g., RB Rubber Prods., Inc. v. Rubber Mfrs. Ass'n, 992 F. Supp. 2d 1019, 1031 (D. Or. 2014) (holding that a general expression of willingness to discuss future terms did not constitute consent to act).
Third, the distinction between Sections 2.3 and 13.1 does not help Vantage in any event. Section 2.3 governs whether Vantage may distribute Products outside the Territory with Penterra's consent; Section 13.1 governs whether the Territory itself may be modified. Even if the Kapoor Email could be construed as "prior written consent" under Section 2.3 (which it cannot), it would not modify Exhibit A to expand the defined Territory. The distinction matters because Vantage's claim is not merely that it was permitted to make occasional tri-state shipments with Penterra's case-by-case consent; rather, Vantage claims that the Territory was permanently expanded to include the Tri-State Area. That claim requires a modification of Exhibit A, which can only be accomplished under Section 13.1.
2. Material Breach by Penterra (Meridian National Distributors). Vantage may argue that Penterra's execution of a term sheet with Meridian National Distributors, Inc. ("Meridian") on February 15, 2021 — under which Penterra would appoint Meridian as the exclusive distributor for Oncalaris® and Renuvesta® in New York, New Jersey, and Pennsylvania — constituted an anticipatory breach of the EDA and/or a breach of the implied covenant of good faith and fair dealing.
This argument is without merit. The Territory under the EDA is limited to the six New England states. Penterra's exclusivity obligation to Vantage extends only within the Territory. Outside the Territory, Penterra retained full discretion to appoint distributors for its products. The Meridian term sheet covers the Tri-State Area, which is outside the Territory defined in Exhibit A. Accordingly, Penterra had every right to appoint Meridian (or any other distributor) for the Tri-State Area without violating any provision of the EDA.
Vantage's material-breach argument is, at bottom, a circular argument: it assumes the conclusion it seeks to establish (i.e., that the Territory includes the Tri-State Area) in order to argue that Penterra breached the exclusivity obligation by appointing Meridian in the Tri-State Area. But since the Territory does not include the Tri-State Area — as established by the plain language of Exhibit A and the analysis set forth in this memorandum — the premise of the argument is false, and the argument fails.
3. Implied Covenant of Good Faith and Fair Dealing. Vantage's counterclaim alleges that Penterra breached the implied covenant of good faith and fair dealing by (a) failing to negotiate a territorial expansion in good faith after the Kapoor Email, (b) appointing Meridian as a distributor in the Tri-State Area, and (c) issuing the cease-and-desist letter in March 2021.
Under Massachusetts law, every contract implies a covenant of good faith and fair dealing, which provides that neither party shall do anything that will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract. Fortune v. National Cash Register Co., 373 Mass. 96, 104 (1977). However, the implied covenant cannot override express contractual terms. See Vireo & Co. v. Boston Kenmore Realty Corp., 441 Mass. 376, 385 (2004) (holding that the implied covenant "may not be invoked to create rights and duties not otherwise provided for in the existing contractual relationship"). Where the contract expressly limits the Territory to six states, the implied covenant cannot be used to expand the Territory to nine states. Penterra's decision to enforce the territorial limitation and to appoint a distributor in the Tri-State Area is consistent with the express terms of the EDA and does not violate the implied covenant.
Furthermore, Penterra had no obligation under the EDA to negotiate a territorial expansion. The Kapoor Email expressed willingness to explore expansion, but this was a business-development discussion, not a contractual obligation. The EDA does not contain a provision requiring Penterra to negotiate territorial expansion, and the implied covenant cannot be used to imply such an obligation where the parties did not include one.
B. Assessment of Risks
While we believe Penterra's legal position is strong, it is appropriate to identify and assess the risks associated with the summary judgment motion.
Risk 1: Factual finding regarding Penterra's knowledge. The strongest risk to Penterra's position is a factual finding that Penterra knew about Vantage's tri-state shipments earlier than Penterra claims and acquiesced over a longer period than the approximately six months supported by the documentary record. Vantage has asserted that tri-state shipments began in late 2019, approximately a year earlier than the September 14, 2020 date reflected in Vantage's own shipping records. If Vantage can produce credible evidence supporting an earlier start date and earlier knowledge on Penterra's part, the court could find a longer period of alleged acquiescence, which would strengthen (though not salvage) Vantage's course-of-dealing and waiver arguments.
However, even if the court finds a longer period of passive awareness, the legal framework under Cambridge Biotech and Section 13.1 should preclude a finding of modification. As discussed above, passive acquiescence — even over an extended period — does not satisfy the writ

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