1018-00007 · Penterra Pharmaceuticals Corp · Motions Practice

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MEMORANDUM

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum is protected by the attorney-client privilege and the work product doctrine. It is intended solely for use by attorneys and authorized personnel of Calderwood & Harkness LLP in connection with the representation of Penterra Pharmaceuticals Corp. Do not distribute, copy, or disclose without prior authorization from the Responsible Partner.

I. Question Presented

Whether Calderwood & Harkness LLP should seek leave of court on behalf of Penterra Pharmaceuticals Corp. ("Penterra" or "Client") to file a sur-reply in response to the Opposition to Penterra's Motion for Summary Judgment and Reply in Support of Vantage's Cross-Motion for Summary Judgment (the "April 1 Brief"), filed by Vantage Medical Distribution, LLC ("Vantage"), through its counsel Hargrove, Sinclair & Polk LLP ("HSP"), on April 1, 2022. This memorandum examines whether the April 1 Brief raises genuinely new arguments or introduces new evidence not previously addressed in the parties' cross-motions practice, and whether the strategic benefits of filing a sur-reply outweigh the attendant risks in light of the oral argument currently scheduled for May 6, 2022.

II. Short Answer

We should not seek leave to file a sur-reply.

After a careful review of Vantage's 32-page April 1 Brief, I have concluded that it does not raise genuinely new arguments and does not introduce new evidence that was not fairly presented in Vantage's original Cross-Motion for Summary Judgment filed on February 25, 2022. The arguments advanced in the April 1 Brief are repackaged versions of positions that both sides have already fully briefed. Specifically, we addressed each of Vantage's three core theories — (1) that the January 12, 2018 Kapoor Email constituted "prior written consent" under Section 2.3 of the Exclusive Distribution Agreement, (2) that course of dealing or implied modification expanded the defined Territory, and (3) that promissory estoppel entitles Vantage to relief — in both our Memorandum in Support of Penterra's Motion for Summary Judgment (filed February 11, 2022) and our combined Opposition to Vantage's Cross-Motion and Reply in Support of Penterra's Motion (filed March 18, 2022).

Filing a sur-reply without strong justification carries several meaningful risks. First, the motion for leave could be denied outright, consuming time and resources to no productive end. Second, seeking additional briefing may signal to Hon. Diane L. Costigan, J. that we view our existing papers as inadequate — an impression that is both inaccurate and harmful to our client's position. Third, a motion for leave and any subsequent briefing could unnecessarily prolong the schedule in advance of the oral argument currently set for May 6, 2022, potentially delaying the court's resolution of the cross-motions.

Instead, I recommend that we direct our resources toward preparing a comprehensive oral argument memorandum for Linda's use at the May 6 hearing, which will allow us to address any refined emphasis in Vantage's April 1 Brief in a more targeted and efficient manner. Should Linda or Priya disagree with this assessment after reviewing the analysis below, I am prepared to draft a motion for leave and a proposed sur-reply on an expedited basis.

III. Procedural Background

A. Briefing Schedule to Date

The cross-motions for summary judgment have been fully briefed over the course of approximately two months. The relevant filings and dates are as follows:

February 11, 2022 — Penterra's Motion for Summary Judgment. Penterra filed its Motion for Summary Judgment, supported by: (i) the Memorandum of Law in Support of Penterra's Motion for Summary Judgment (42 pages); (ii) Penterra's Statement of Undisputed Material Facts pursuant to Superior Court Rule 9A(b)(5) (73 numbered paragraphs); (iii) the Affidavit of Steven Kapoor, Vice President of Commercial Operations at Penterra, with attached exhibits including the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA"), the January 12, 2018 email from Mr. Kapoor to Donald R. Farnham, and relevant internal correspondence; and (iv) the Affidavit of Rachel Mendez, Director of Distribution & Logistics at Penterra, with attached exhibits including shipping records and distribution data. Our memorandum argued that Penterra was entitled to judgment as a matter of law on its claims for breach of contract (unauthorized distribution outside the defined Territory) and declaratory relief (that the EDA permits termination), and that Vantage's counterclaims fail as a matter of law.

February 25, 2022 — Vantage's Cross-Motion for Summary Judgment. Vantage, through HSP counsel Kenneth M. Rourke and associate Alicia Fontaine, filed its Cross-Motion for Summary Judgment with a supporting memorandum of law and a counter-statement of facts. Vantage's cross-motion sought judgment on its counterclaims (breach of contract, breach of implied covenant of good faith and fair dealing, and promissory estoppel) and denial of Penterra's motion. Vantage's papers advanced the three theories described in detail below: the Kapoor Email as "prior written consent," course of dealing as implied modification, and promissory estoppel based on detrimental reliance.

March 18, 2022 — Penterra's Combined Opposition and Reply. Penterra filed its combined Opposition to Vantage's Cross-Motion for Summary Judgment and Reply in Support of Penterra's Motion for Summary Judgment. This 38-page filing addressed each of Vantage's three theories point by point, reasserted the strength of the contractual text (particularly Sections 2.3, 13.1, and 14.8 and Exhibit A), and marshaled the deposition testimony and documentary record to demonstrate that no genuine dispute of material fact exists. The filing was accompanied by a supplemental affidavit of Steven Kapoor addressing specific claims raised in Vantage's cross-motion.

April 1, 2022 — Vantage's Combined Opposition and Reply. Vantage filed its Opposition to Penterra's Motion for Summary Judgment and Reply in Support of Vantage's Cross-Motion for Summary Judgment (the filing at issue in this memorandum). The April 1 Brief runs 32 pages and, as analyzed in detail in Section IV below, advances the same three theories previously briefed by Vantage.

May 6, 2022 — Oral Argument. Oral argument on the cross-motions is scheduled before Hon. Diane L. Costigan, J. in the Business Litigation Session. No continuance has been requested by either party, and the hearing remains on the court's calendar.

B. Sur-Reply Practice in the Business Litigation Session

It is important to note at the outset that the Massachusetts Superior Court, Business Litigation Session, does not provide for sur-replies as of right. The standard briefing sequence for cross-motions for summary judgment — as reflected in the scheduling order entered by Judge Costigan on January 14, 2022 — contemplates an opening memorandum, an opposition/cross-motion, a combined opposition-and-reply by the original movant, and a final opposition-and-reply by the cross-movant. That sequence is now complete.

A party wishing to file a sur-reply must seek leave of court by motion. The BLS Standing Order governing motion practice (Standing Order 1-09, as amended) emphasizes the court's interest in efficient resolution of business disputes and discourages unnecessary or duplicative filings. In practice, leave to file a sur-reply is granted only where the opposing party has raised genuinely new arguments or cited new evidence for the first time in its reply brief that the movant could not have anticipated or addressed in its prior filings. The burden rests on the party seeking leave to demonstrate that the sur-reply is necessary to prevent prejudice — not merely that additional briefing would be desirable or that the party has more to say on an issue already addressed.

Judge Costigan's individual practices are consistent with this general approach. In the two years she has presided over the BLS, she has granted leave to file a sur-reply in only a handful of cases, and in each instance the opposing party had submitted new expert declarations or cited new authorities that fundamentally altered the legal landscape of the motion. There is no indication that Vantage's April 1 Brief presents the kind of circumstances that would warrant leave in this session.

For these procedural reasons, any motion for leave to file a sur-reply would face an uphill battle and would require us to identify specific new material in Vantage's filing that we were unable to address previously. As discussed below, no such material exists.

IV. Analysis of Vantage's April 1, 2022 Brief

A. Overview of Vantage's Arguments

Vantage's April 1 Brief is organized around three principal contentions, each of which closely tracks the arguments raised in Vantage's original Cross-Motion for Summary Judgment (February 25, 2022) and the underlying counterclaims filed by Vantage on May 14, 2021 (breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel). The brief opens with a lengthy statement of facts that largely repeats Vantage's counter-statement of facts from February 25, with minor stylistic revisions. The legal argument section is divided into three parts corresponding to Vantage's three theories. Each is examined in turn below.

B. Argument 1: The January 12, 2018 Kapoor Email as "Prior Written Consent"

Vantage's position. Vantage reasserts — for the third time in this litigation — that the January 12, 2018 email from Steven Kapoor to Donald R. Farnham constituted "prior written consent" within the meaning of Section 2.3 of the EDA. As the court is already aware from the parties' prior filings, the email reads in its entirety:

"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."

Vantage contends that Mr. Kapoor's statement that Penterra was "definitely open to exploring expansion into NY/NJ/PA" constitutes affirmative written consent from an authorized representative of Penterra to distribute Penterra products outside the six New England States defined as the "Territory" in Exhibit A to the EDA. In its April 1 Brief, Vantage re-parses the language of the email, emphasizing the word "definitely" and arguing that the phrase "open to exploring expansion" should be read as a present grant of consent rather than a forward-looking expression of willingness to consider future arrangements.

Assessment. This argument is identical in substance to the argument raised in Vantage's February 25 Cross-Motion. Vantage merely reiterates its textual parsing of the Kapoor Email, reorganizes its presentation slightly, and adds no new evidence or case authority. Our March 18 filing squarely addressed why the Kapoor Email does not satisfy the "prior written consent" requirement of Section 2.3. Specifically, our brief demonstrated the following:

First, the email is aspirational and conditional on its face. The operative language — "open to exploring," "once your New England footprint is fully ramped," "Let's circle back mid-year and see where things stand" — is unmistakably forward-looking. It does not grant permission; it expresses a willingness to discuss future possibilities. The word "exploring" is inherently tentative and does not convey the kind of definitive authorization contemplated by Section 2.3's "prior written consent" requirement.

Second, even if the email could be read as something more than an expression of willingness to consider future expansion, it fails to satisfy the formal requirements for modifying the EDA. Section 13.1 states unambiguously: "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." An informal email from a single Penterra executive, sent without reference to the EDA or any specific contractual provision, and without a countersignature or any other formality, does not constitute a "written instrument signed by both parties."

Third, Mr. Kapoor's own deposition testimony (November 2, 2021) confirms that his email expressed willingness to explore future expansion but did not grant consent. When asked directly whether his January 12, 2018 email was intended to authorize Vantage to begin distributing Penterra products in New York, New Jersey, or Pennsylvania, Mr. Kapoor testified: "No. We were saying we'd be happy to talk about it down the road, once Vantage had built out the New England market. That's all it was." This testimony was cited extensively in our MSJ papers and remains unrebutted.

Fourth, Mr. Farnham's own deposition testimony (October 18, 2021) is telling. When asked whether he obtained a signed amendment to Exhibit A adding New York, New Jersey, or Pennsylvania to the defined Territory, Mr. Farnham admitted: "We didn't get a formal amendment done." This admission was cited in our March 18 filing and remains in the summary judgment record.

New material? None. Vantage cites no new cases and introduces no new deposition testimony beyond what was already in the summary judgment record. The depositions of Donald R. Farnham (October 18, 2021), Steven Kapoor (November 2, 2021), Rachel Mendez (November 19, 2021), and Brian Kopec (December 7, 2021) were all completed before briefing began and were available to both parties throughout the cross-motions process. Vantage has not submitted any new declarations or affidavits in connection with the April 1 Brief. The only difference between Vantage's treatment of this argument on February 25 and its treatment on April 1 is rhetorical emphasis — a rearrangement of the same facts and the same legal arguments, not the introduction of anything new.

Conclusion. No sur-reply is needed on this point. Vantage's argument regarding the Kapoor Email has been fully addressed in our prior briefing, and the contractual text, deposition record, and governing law overwhelmingly support our position.

C. Argument 2: Course of Dealing / Implied Modification of Exhibit A

Vantage's position. Vantage reiterates its theory that Penterra's alleged failure to object to Vantage's shipments to customers in New York beginning in late 2019, combined with Vantage's growing tri-state sales over the following approximately eighteen months (approximately $6.4 million in revenues from Penterra product sales in New York, New Jersey, and Pennsylvania during the period from September 2020 through March 2021), effected an implied modification of the Territory defined in Exhibit A to the EDA. Exhibit A defines the Territory as the six New England States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont (the "New England States"). Vantage argues that by failing to enforce the territorial limitation as Vantage expanded beyond those states, Penterra implicitly consented to an expansion of the Territory to include New York, New Jersey, and Pennsylvania.

Assessment. This is a recapitulation of the course-of-dealing theory presented in Vantage's February 25 Cross-Motion. Our March 18 Opposition addressed this theory comprehensively, making three principal arguments that remain dispositive:

Integration clause. Section 14.8 of the EDA provides: "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 integration clause precludes reliance on extrinsic evidence — including evidence of course of dealing, course of performance, or trade usage — to modify or supplement the terms of the EDA. The Territory defined in Exhibit A is an express term of a fully integrated agreement and cannot be altered by implication or by a party's unilateral conduct.

Written-amendment clause. Section 13.1 provides in relevant part: "No amendment, modification, or waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by both parties." This clause is clear and unambiguous. No such written instrument exists with respect to any expansion of the Territory. Vantage does not contend otherwise.

Massachusetts law. Massachusetts courts consistently enforce written-modification clauses and integration clauses. In Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122, 131 (2000), the Supreme Judicial Court held that a contractual provision requiring modifications to be in writing is enforceable and precludes claims that a contract was modified by oral agreement or course of dealing. Our March 18 filing cited Cambridge Biotech and its progeny, and Vantage has not distinguished or addressed these authorities in any meaningful way.

Vantage's new emphasis. The one arguably refined aspect of Vantage's April 1 Brief on this point is that Vantage places somewhat greater emphasis on the concept of "waiver" as distinct from "modification." Vantage argues that even if the EDA was not formally modified to expand the Territory, Penterra's silence and inaction in the face of Vantage's tri-state distribution activities from late 2019 through March 2021 constituted a waiver of the territorial restriction contained in Section 2.3 and Exhibit A. HSP's brief devotes approximately four pages (pages 18 through 21 of the April 1 Brief) to the waiver theory, citing general principles of Massachusetts waiver law and arguing that Penterra's conduct was inconsistent with an intent to enforce the territorial limitation.

This waiver emphasis, however, is a distinction without a difference under the present facts. Section 13.1 expressly covers "waiver" in addition to "amendment" and "modification," requiring a "written instrument signed by both parties" for the effectiveness of any waiver. Our March 18 brief quoted Section 13.1 in full and specifically addressed the waiver issue, noting that the contractual requirement of a signed writing for waivers forecloses any claim that Penterra's silence constituted an effective waiver. Moreover, even under general Massachusetts waiver principles — which require an intentional relinquishment of a known right — Penterra's conduct does not establish waiver. As Steven Kapoor testified in his deposition, Penterra was unaware of the scope of Vantage's tri-state distribution activities until Rachel Mendez's logistics team identified anomalies in shipping data in early 2021. Ignorance of the conduct allegedly constituting waiver is fatal to a waiver claim.

In short, while Vantage's April 1 Brief places marginally more emphasis on the waiver label, the underlying facts and legal framework are unchanged. This is not a genuinely new argument; it is a re-emphasis of a theory already presented and already rebutted.

New material? No new evidence or case authority. The financial data regarding approximately $6.4 million in tri-state revenues was already part of the summary judgment record, having been established through Vantage's internal sales records produced in discovery during the document production phase (July through September 2021). Vantage has not submitted any new declarations, new financial data, or new discovery materials. The case authorities cited in the April 1 Brief on the waiver point are general Massachusetts waiver cases that do not address the critical question of waiver in the context of an express written-modification clause — the same deficiency we identified in our March 18 filing.

Conclusion. No sur-reply is needed on this point. The waiver framing is not a genuinely new argument, and in any event it is foreclosed by Section 13.1's express coverage of waivers, which we have already briefed. To the extent the court has questions about the waiver/modification distinction, we can address them efficiently at oral argument on May 6.

D. Argument 3: Promissory Estoppel and Detrimental Reliance

Vantage's position. Vantage reasserts its promissory estoppel counterclaim (Count III of Vantage's May 14, 2021 Counterclaims), contending that Donald R. Farnham, Vantage's founder and CEO, reasonably relied on the Kapoor Email and on Penterra's alleged acquiescence in Vantage's tri-state distribution activities to invest substantially in distribution infrastructure and sales operations serving New York, New Jersey, and Pennsylvania. Vantage cites the activities of Brian Kopec, Vantage's Regional Sales Director, who directed sales efforts into the tri-state area beginning in mid-2019 and oversaw the hiring of six additional sales representatives for the region. Vantage references its threatened $35 million damages figure, which was initially raised in the March 22, 2021 demand letter from Kenneth M. Rourke of HSP to Jennifer Chao, Penterra's then-General Counsel, and which Vantage contends reflects lost profits, wasted capital expenditures, and reputational harm arising from the termination of Vantage's tri-state operations.

Assessment. This argument was presented as Count III of Vantage's May 14, 2021 Counterclaims, was briefed in detail in Vantage's February 25 Cross-Motion, and was comprehensively addressed in our March 18 filing. Our prior papers demonstrated that Vantage's promissory estoppel claim fails as a matter of law for three independent reasons:

No clear and definite promise. Under Massachusetts law, promissory estoppel requires, as a threshold element, a clear and definite promise. See Loranger Constr. Corp. v. E.F. Hauserman Co., 6 Mass. App. Ct. 152, 155 (1978). The Kapoor Email — "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" — is not a clear and definite promise. It is a conditional, tentative expression of interest in future discussions. A statement that one is "open to exploring" something is the opposite of a commitment, and the explicit conditions ("once your New England footprint is fully ramped"; "Let's circle back mid-year and see where things stand") underscore the preliminary nature of the communication.

Promissory estoppel cannot circumvent an unambiguous written-modification clause. Massachusetts courts have consistently held that promissory estoppel cannot be used as an end-run around the requirements of a fully integrated written agreement. Where the parties have agreed to a written-modification clause, a party cannot claim that it reasonably relied on an informal communication to modify the agreement's terms. See Cambridge Biotech Corp., 433 Mass. at 131; Cellucci v. Sun Oil Co., 2 Mass. App. Ct. 722, 728 (1974). The EDA's integration clause (Section 14.8) and written-modification clause (Section 13.1) foreclose any claim that an informal email, standing alone, created enforceable obligations outside the four corners of the agreement.

Reliance was unreasonable. Even assuming arguendo that the Kapoor Email could be construed as a promise (which it cannot), Vantage's reliance on it would be unreasonable as a matter of law. Mr. Farnham — a sophisticated businessman who founded and operates a $148 million-per-year distribution company — was a signatory to the EDA. He was aware of the written-modification clause in Section 13.1 and the integration clause in Section 14.8. He admitted in his deposition that he did not obtain a formal amendment to Exhibit A. Under these circumstances, no reasonable businessperson could have relied on a casual email as authorization to invest millions of dollars in expanding into territories not covered by the EDA's express terms.

Vantage's new framing. Vantage's April 1 Brief attempts to reframe the estoppel claim by placing heightened emphasis on the magnitude of Vantage's investment in tri-state operations and on Vantage's economic dependency on its relationship with Penterra. Specifically, Vantage highlights the following financial data: Vantage's total revenues from Penterra products in FY 2021 were approximately $67 million, representing approximately 45.3% of Vantage's total FY 2021 revenue of approximately $148 million. Vantage argues that the depth of this commercial relationship, combined with the scale of Vantage's tri-state investment, renders Vantage's reliance reasonable and makes it inequitable for Penterra to enforce the territorial limitation.

This economic-dependency argument, however, goes to the weight of reliance — i.e., how much Vantage relied and how costly that reliance was — not to the threshold question of whether a legally cognizable promise existed in the first place. The promissory estoppel analysis begins with the existence of a clear and definite promise, and Vantage cannot reach the reliance element without first establishing that threshold. The Kapoor Email is not a promise, regardless of how much Vantage invested in reliance on it. Moreover, the magnitude of Vantage's investment arguably underscores the unreasonableness of proceeding without a formal contractual amendment — a sophisticated distributor investing millions of dollars in a territorial expansion should have ensured that the expansion was documented in a written amendment to the EDA, as required by Section 13.1.

New material? The financial figures cited in Vantage's April 1 Brief — including the $67 million revenue figure, the 45.3% dependency ratio, and the $148 million total revenue figure — were already in the summary judgment record. These figures are drawn from Vantage's internal financial records, which were audited by Cranmer, Hodges & Associates, P.C. and produced in discovery during the document production phase. Vantage has not submitted any new financial data, new declarations, or new expert reports. The case authorities cited by Vantage on the promissory estoppel point are the same general estoppel cases previously cited in the February 25 Cross-Motion; no new case law is introduced.

Conclusion. No sur-reply is needed on this point. Vantage's promissory estoppel theory has been fully briefed and fails as a matter of law for multiple independent reasons, none of which are affected by Vantage's reemphasis of financial data already in the record.

E. Summary Assessment of Whether Any Genuinely New Arguments Were Raised

After a thorough review of Vantage's 32-page April 1, 2022 filing — including its statement of facts, its legal argument, and its supporting citations — I have identified no genuinely new arguments, no new evidence, and no new legal authorities that were not already addressed in our prior briefing. Vantage's arguments remain the same three theories advanced since the May 14, 2021 counterclaims: (1) the Kapoor Email as written consent under Section 2.3; (2) course of dealing, waiver, and implied modification of Exhibit A; and (3) promissory estoppel based on detrimental reliance.

All three theories were fully briefed by both sides in the February and March filings. Vantage's April 1 Brief presents these arguments with minor variations in emphasis — particularly the waiver/modification distinction and the economic-dependency framing of the estoppel claim — but neither variation rises to the level of a genuinely new argument that would warrant leave to file a sur-reply under BLS practice.

The evidentiary record is unchanged. No new declarations, affidavits, deposition testimony, or documentary exhibits have been submitted. The four key depositions (Farnham, Kapoor, Mendez, and Kopec) remain the same depositions cited by both parties throughout the cross-motions process. The financial data cited by Vantage was produced in discovery and is already part of the summary judgment record.

In sum, there is no basis under BLS practice for seeking leave to file a sur-reply.

V. Risk Assessment: Costs of Filing vs. Not Filing

A. Risks of Seeking Leave to File a Sur-Reply

Three principal risks attend a motion for leave to file a sur-reply in this case:

Perception of weakness. A motion for leave to file a sur-reply may signal to Judge Costigan that we believe our existing briefing is incomplete or inadequate, or that Vantage's arguments have more force than we previously acknowledged. Given the strength of our position — which is anchored in the unambiguous text of Exhibit A, Section 2.3, Section 13.1, and Section 14.8, and which is supported by the deposition testimony of Vantage's own witnesses — this risk is unwarranted. Our February 11 and March 18 filings comprehensively address every argument Vantage has raised, and a sur-reply risks suggesting otherwise. The last thing we want to do is give the court the impression that we are scrambling to respond to arguments that have already been met.

Judicial economy and court relations. The Business Litigation Session places a premium on efficient resolution of complex commercial disputes. Judge Costigan maintains an active docket, and the oral argument on May 6 provides a natural and efficient mechanism for addressing any remaining concerns the court may have about the parties' competing positions. A motion for leave to file a sur-reply — which would itself require briefing, potentially a hearing, and then the drafting and filing of the sur-reply itself — would consume court resources and could be viewed as inconsistent with the BLS's expectation of streamlined practice. We have a strong working relationship with the BLS, and we should be mindful of preserving it.

Delay risk. While a motion for leave to file a sur-reply would not automatically delay the oral argument, it could introduce uncertainty into the schedule. If Judge Costigan were to grant leave — which is unlikely given the absence of genuinely new material — she might allow Vantage an opportunity to respond, further extending the briefing timeline. Even if the motion were denied, the filing and resolution of the motion itself would consume time that is better spent preparing for oral argument. With oral argument less than four weeks away, we should be focusing our efforts on that hearing, not on collateral procedural motions.

B. Risks of Not Filing a Sur-Reply

Unanswered points. There is a marginal risk that the court could focus on Vantage's "waiver" framing — the aspect of the April 1 Brief that comes closest to a new emphasis — without having a dedicated, point-by-point rebuttal in a sur-reply. However, this risk is minimal for three reasons. First, Section 13.1's language expressly covers waivers, requiring a "written instrument signed by both parties" for any waiver to be effective; this language is quoted in our March 18 brief and is self-evidently dispositive. Second, our March 18 brief discusses waiver and cites the applicable provision, so the court already has our position in writing. Third, we will have the opportunity to address the waiver issue directly and in detail at oral argument on May 6, where we can respond to any specific questions the court may have.

Assessment. The risk of not filing a sur-reply is de minimis. The waiver framing is not genuinely new; it is a relabeling of the same course-of-dealing theory previously advanced and previously rebutted. The court has our position on the relevant contractual provisions, the relevant case law, and the relevant deposition testimony. No reasonable assessment of the risk/benefit calculus supports seeking leave to file a sur-reply in these circumstances.

VI. Alternative: Addressing Vantage's Points at Oral Argument

Rather than seeking leave to file a sur-reply, I recommend that we direct our resources toward preparing comprehensive oral argument materials for Linda Osei's use at the May 6 hearing. This approach allows us to address any refined emphasis in Vantage's April 1 Brief in a more targeted and efficient manner, tailored to the court's actual questions and concerns rather than speculating in advance about which arguments the court may find most salient.

Specifically, the oral argument preparation should address the following points drawn from Vantage's April 1 Brief:

The waiver/modification distinction. We should prepare Linda to address the argument that Penterra's silence regarding Vantage's tri-state shipments constituted a waiver, as distinct from a modification, of the territorial restriction. The key response is textual: Section 13.1 expressly covers all three concepts — "amendment, modification, or waiver" — and requires a "written instrument signed by both parties" for the effectiveness of any of them. There is no gap in Section 13.1 through which a waiver theory can pass. Additionally, we should prepare to address the factual predicate: Penterra was not silently acquiescing in known conduct, because Penterra was unaware of the scope of Vantage's tri-state activities until early 2021, as Steven Kapoor testified.

The economic-dependency framing of Vantage's estoppel claim. Vantage's emphasis on the magnitude of its investment and its dependency on Penterra products ($67 million in revenue, 45.3% of total FY 2021 revenue) is designed to evoke sympathy rather than establish legal entitlement. We should prepare Linda to redirect the court's focus to the threshold legal question: whether a clear and definite promise existed. The economic data, however sympathetic, cannot create a promise where none exists. Moreover, the magnitude of Vantage's investment underscores the unreasonableness of proceeding without a formal amendment — a point that cuts against Vantage, not in its favor.

This approach is more efficient than a sur-reply for several reasons. It avoids the procedural costs and risks of a motion for leave. It allows Linda to engage directly with the court's concerns in real time. And it preserves the impression — which is accurate — that our existing briefing fully and adequately addresses every argument Vantage has raised.

Patrick Gallagher and I have already begun preparing the oral argument memorandum, which will include a detailed argument-by-argument response to Vantage's April 1 Brief, anticipated questions from Judge Costigan, and suggested responses. We expect to have a draft to Linda for review no later than April 22, 2022, allowing two weeks for revision and preparation before the May 6 hearing.

VII. Recommendation

Based on the foregoing analysis, my recommendation is as follows:

Do not seek leave to file a sur-reply. Vantage's April 1 filing repackages the same three arguments — (1) the Kapoor Email as "prior written consent" under Section 2.3; (2) course of dealing, waiver, and implied modification of Exhibit A; and (3) promissory estoppel based on detrimental reliance — that have already been fully addressed in our prior filings. There is no new evidence, no new legal authority, and no genuinely new legal theory that warrants additional briefing. A motion for leave to file a sur-reply would likely be denied, could be perceived as a signal of weakness, and would consume time and resources better devoted to oral argument preparation.

Prepare for oral argument. We should focus our resources on a comprehensive oral argument preparation memorandum for the May 6 hearing before Judge Costigan. The memorandum will ensure that any refined emphasis in Vantage's April 1 Brief — particularly the waiver/modification distinction and the economic-dependency framing of the estoppel claim — is squarely addressed in Linda's oral presentation. This is the most efficient and strategically sound use of the remaining time before the hearing.

Open to revisiting. If Linda or Priya disagrees with this assessment, or if either of you identifies any specific passage in Vantage's April 1 Brief that you believe warrants further written rebuttal, I am happy to revisit this recommendation promptly. I can prepare a motion for leave to file and a proposed sur-reply on an expedited basis — likely within three to four business days — should you determine that a sur-reply is warranted. Please let me know how you would like to proceed.

VIII. Appendix: Key Contract Provisions Referenced

For convenience of reference, the following summarizes the key provisions of the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA") between Penterra Pharmaceuticals Corp. ("Supplier") and Vantage Medical Distribution, LLC ("Distributor") that are central to the pending cross-motions:

Section 2.1 (Grant of Exclusive Territory). Grants Vantage the exclusive right to distribute Penterra's products within the Territory defined in Exhibit A, subject to the terms and conditions of the EDA. The exclusivity is limited to the geographic area specified in Exhibit A and does not extend to any territory not expressly listed therein.

Section 2.3 (Limitation on Distribution Outside Territory). Provides that the Distributor "shall not distribute, sell, or offer to sell the Products outside the Territory without the Supplier's prior written consent." This provision creates an affirmative prohibition on out-of-territory distribution and conditions any exception on the Supplier's "prior written consent" — a term that requires deliberate, documented authorization from Penterra.

Section 5.2 (Minimum Annual Purchase Commitment). Requires Vantage to purchase a minimum of $9.5 million per year of Penterra products at wholesale acquisition cost ("WAC"). This provision is relevant to the broader contractual framework and to Vantage's performance obligations within the defined Territory.

Section 13.1 (Amendments, Modifications, and Waivers). Provides: "No amendment, modification, or waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by both parties." This provision is critical because it forecloses any claim that the EDA was modified by oral agreement, course of dealing, or unilateral conduct, and expressly requires a signed written instrument for any waiver of contractual rights.

Section 14.2 (Governing Law). Provides that the EDA shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to its conflicts of law principles.

Section 14.5 (Exclusive Jurisdiction). Provides that any dispute arising out of or relating to the EDA shall be brought exclusively in the courts of the Commonwealth of Massachusetts. This provision is the basis for the current action in the Business Litigation Session of the Suffolk County Superior Court.

Section 14.8 (Entire Agreement / Integration Clause). Provides: "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 integration clause establishes the EDA as the complete and exclusive statement of the parties' agreement and bars reliance on extrinsic evidence to vary or supplement its terms.

Exhibit A (Territory Definition). Defines the "Territory" as: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont — the six New England States. New York, New Jersey, and Pennsylvania are not included in the Territory.

Key Case Authority:

Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000). The Supreme Judicial Court held that a contractual provision requiring modifications to be in writing is enforceable under Massachusetts law and precludes claims that a contract was modified by oral agreement, course of dealing, or other informal means. This case is directly on point and supports Penterra's position that the territorial limitation in the EDA cannot be modified or waived absent a signed written instrument as required by Section 13.1.

Please direct any questions or comments regarding this memorandum to Hannah Brinkley at hbrinkley@calderwoodharkness.com or ext. 4218.

From:	Hannah Brinkley, Lead Associate
To:	Linda Osei, Responsible Partner; Priya Anand, Billing Partner
CC:	Patrick Gallagher, Working Associate
Date:	April 8, 2022
Re:	Penterra Pharmaceuticals Corp. v. Vantage Medical Distribution, LLC, Docket No. 2184-CV-01537-BLS (MA Superior Court, Business Litigation Session, Suffolk County) — Analysis of Whether to Seek Leave to File Sur-Reply to Vantage's April 1, 2022 Opposition and Reply Brief
Matter No.:	1018-00007
Client:	Penterra Pharmaceuticals Corp.

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT This memorandum is protected by the attorney-client privilege and the work product doctrine. It is intended solely for use by attorneys and authorized personnel of Calderwood & Harkness LLP in connection with the representation of Penterra Pharmaceuticals Corp. Do not distribute, copy, or disclose without prior authorization from the Responsible Partner.
I. Question Presented
Whether Calderwood & Harkness LLP should seek leave of court on behalf of Penterra Pharmaceuticals Corp. ("Penterra" or "Client") to file a sur-reply in response to the Opposition to Penterra's Motion for Summary Judgment and Reply in Support of Vantage's Cross-Motion for Summary Judgment (the "April 1 Brief"), filed by Vantage Medical Distribution, LLC ("Vantage"), through its counsel Hargrove, Sinclair & Polk LLP ("HSP"), on April 1, 2022. This memorandum examines whether the April 1 Brief raises genuinely new arguments or introduces new evidence not previously addressed in the parties' cross-motions practice, and whether the strategic benefits of filing a sur-reply outweigh the attendant risks in light of the oral argument currently scheduled for May 6, 2022.
II. Short Answer
We should not seek leave to file a sur-reply.
After a careful review of Vantage's 32-page April 1 Brief, I have concluded that it does not raise genuinely new arguments and does not introduce new evidence that was not fairly presented in Vantage's original Cross-Motion for Summary Judgment filed on February 25, 2022. The arguments advanced in the April 1 Brief are repackaged versions of positions that both sides have already fully briefed. Specifically, we addressed each of Vantage's three core theories — (1) that the January 12, 2018 Kapoor Email constituted "prior written consent" under Section 2.3 of the Exclusive Distribution Agreement, (2) that course of dealing or implied modification expanded the defined Territory, and (3) that promissory estoppel entitles Vantage to relief — in both our Memorandum in Support of Penterra's Motion for Summary Judgment (filed February 11, 2022) and our combined Opposition to Vantage's Cross-Motion and Reply in Support of Penterra's Motion (filed March 18, 2022).
Filing a sur-reply without strong justification carries several meaningful risks. First, the motion for leave could be denied outright, consuming time and resources to no productive end. Second, seeking additional briefing may signal to Hon. Diane L. Costigan, J. that we view our existing papers as inadequate — an impression that is both inaccurate and harmful to our client's position. Third, a motion for leave and any subsequent briefing could unnecessarily prolong the schedule in advance of the oral argument currently set for May 6, 2022, potentially delaying the court's resolution of the cross-motions.
Instead, I recommend that we direct our resources toward preparing a comprehensive oral argument memorandum for Linda's use at the May 6 hearing, which will allow us to address any refined emphasis in Vantage's April 1 Brief in a more targeted and efficient manner. Should Linda or Priya disagree with this assessment after reviewing the analysis below, I am prepared to draft a motion for leave and a proposed sur-reply on an expedited basis.
III. Procedural Background
A. Briefing Schedule to Date
The cross-motions for summary judgment have been fully briefed over the course of approximately two months. The relevant filings and dates are as follows:
February 11, 2022 — Penterra's Motion for Summary Judgment. Penterra filed its Motion for Summary Judgment, supported by: (i) the Memorandum of Law in Support of Penterra's Motion for Summary Judgment (42 pages); (ii) Penterra's Statement of Undisputed Material Facts pursuant to Superior Court Rule 9A(b)(5) (73 numbered paragraphs); (iii) the Affidavit of Steven Kapoor, Vice President of Commercial Operations at Penterra, with attached exhibits including the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA"), the January 12, 2018 email from Mr. Kapoor to Donald R. Farnham, and relevant internal correspondence; and (iv) the Affidavit of Rachel Mendez, Director of Distribution & Logistics at Penterra, with attached exhibits including shipping records and distribution data. Our memorandum argued that Penterra was entitled to judgment as a matter of law on its claims for breach of contract (unauthorized distribution outside the defined Territory) and declaratory relief (that the EDA permits termination), and that Vantage's counterclaims fail as a matter of law.
February 25, 2022 — Vantage's Cross-Motion for Summary Judgment. Vantage, through HSP counsel Kenneth M. Rourke and associate Alicia Fontaine, filed its Cross-Motion for Summary Judgment with a supporting memorandum of law and a counter-statement of facts. Vantage's cross-motion sought judgment on its counterclaims (breach of contract, breach of implied covenant of good faith and fair dealing, and promissory estoppel) and denial of Penterra's motion. Vantage's papers advanced the three theories described in detail below: the Kapoor Email as "prior written consent," course of dealing as implied modification, and promissory estoppel based on detrimental reliance.
March 18, 2022 — Penterra's Combined Opposition and Reply. Penterra filed its combined Opposition to Vantage's Cross-Motion for Summary Judgment and Reply in Support of Penterra's Motion for Summary Judgment. This 38-page filing addressed each of Vantage's three theories point by point, reasserted the strength of the contractual text (particularly Sections 2.3, 13.1, and 14.8 and Exhibit A), and marshaled the deposition testimony and documentary record to demonstrate that no genuine dispute of material fact exists. The filing was accompanied by a supplemental affidavit of Steven Kapoor addressing specific claims raised in Vantage's cross-motion.
April 1, 2022 — Vantage's Combined Opposition and Reply. Vantage filed its Opposition to Penterra's Motion for Summary Judgment and Reply in Support of Vantage's Cross-Motion for Summary Judgment (the filing at issue in this memorandum). The April 1 Brief runs 32 pages and, as analyzed in detail in Section IV below, advances the same three theories previously briefed by Vantage.
May 6, 2022 — Oral Argument. Oral argument on the cross-motions is scheduled before Hon. Diane L. Costigan, J. in the Business Litigation Session. No continuance has been requested by either party, and the hearing remains on the court's calendar.
B. Sur-Reply Practice in the Business Litigation Session
It is important to note at the outset that the Massachusetts Superior Court, Business Litigation Session, does not provide for sur-replies as of right. The standard briefing sequence for cross-motions for summary judgment — as reflected in the scheduling order entered by Judge Costigan on January 14, 2022 — contemplates an opening memorandum, an opposition/cross-motion, a combined opposition-and-reply by the original movant, and a final opposition-and-reply by the cross-movant. That sequence is now complete.
A party wishing to file a sur-reply must seek leave of court by motion. The BLS Standing Order governing motion practice (Standing Order 1-09, as amended) emphasizes the court's interest in efficient resolution of business disputes and discourages unnecessary or duplicative filings. In practice, leave to file a sur-reply is granted only where the opposing party has raised genuinely new arguments or cited new evidence for the first time in its reply brief that the movant could not have anticipated or addressed in its prior filings. The burden rests on the party seeking leave to demonstrate that the sur-reply is necessary to prevent prejudice — not merely that additional briefing would be desirable or that the party has more to say on an issue already addressed.
Judge Costigan's individual practices are consistent with this general approach. In the two years she has presided over the BLS, she has granted leave to file a sur-reply in only a handful of cases, and in each instance the opposing party had submitted new expert declarations or cited new authorities that fundamentally altered the legal landscape of the motion. There is no indication that Vantage's April 1 Brief presents the kind of circumstances that would warrant leave in this session.
For these procedural reasons, any motion for leave to file a sur-reply would face an uphill battle and would require us to identify specific new material in Vantage's filing that we were unable to address previously. As discussed below, no such material exists.
IV. Analysis of Vantage's April 1, 2022 Brief
A. Overview of Vantage's Arguments
Vantage's April 1 Brief is organized around three principal contentions, each of which closely tracks the arguments raised in Vantage's original Cross-Motion for Summary Judgment (February 25, 2022) and the underlying counterclaims filed by Vantage on May 14, 2021 (breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel). The brief opens with a lengthy statement of facts that largely repeats Vantage's counter-statement of facts from February 25, with minor stylistic revisions. The legal argument section is divided into three parts corresponding to Vantage's three theories. Each is examined in turn below.
B. Argument 1: The January 12, 2018 Kapoor Email as "Prior Written Consent"
Vantage's position. Vantage reasserts — for the third time in this litigation — that the January 12, 2018 email from Steven Kapoor to Donald R. Farnham constituted "prior written consent" within the meaning of Section 2.3 of the EDA. As the court is already aware from the parties' prior filings, the email reads in its entirety:
"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."
Vantage contends that Mr. Kapoor's statement that Penterra was "definitely open to exploring expansion into NY/NJ/PA" constitutes affirmative written consent from an authorized representative of Penterra to distribute Penterra products outside the six New England States defined as the "Territory" in Exhibit A to the EDA. In its April 1 Brief, Vantage re-parses the language of the email, emphasizing the word "definitely" and arguing that the phrase "open to exploring expansion" should be read as a present grant of consent rather than a forward-looking expression of willingness to consider future arrangements.
Assessment. This argument is identical in substance to the argument raised in Vantage's February 25 Cross-Motion. Vantage merely reiterates its textual parsing of the Kapoor Email, reorganizes its presentation slightly, and adds no new evidence or case authority. Our March 18 filing squarely addressed why the Kapoor Email does not satisfy the "prior written consent" requirement of Section 2.3. Specifically, our brief demonstrated the following:
First, the email is aspirational and conditional on its face. The operative language — "open to exploring," "once your New England footprint is fully ramped," "Let's circle back mid-year and see where things stand" — is unmistakably forward-looking. It does not grant permission; it expresses a willingness to discuss future possibilities. The word "exploring" is inherently tentative and does not convey the kind of definitive authorization contemplated by Section 2.3's "prior written consent" requirement.
Second, even if the email could be read as something more than an expression of willingness to consider future expansion, it fails to satisfy the formal requirements for modifying the EDA. Section 13.1 states unambiguously: "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." An informal email from a single Penterra executive, sent without reference to the EDA or any specific contractual provision, and without a countersignature or any other formality, does not constitute a "written instrument signed by both parties."
Third, Mr. Kapoor's own deposition testimony (November 2, 2021) confirms that his email expressed willingness to explore future expansion but did not grant consent. When asked directly whether his January 12, 2018 email was intended to authorize Vantage to begin distributing Penterra products in New York, New Jersey, or Pennsylvania, Mr. Kapoor testified: "No. We were saying we'd be happy to talk about it down the road, once Vantage had built out the New England market. That's all it was." This testimony was cited extensively in our MSJ papers and remains unrebutted.
Fourth, Mr. Farnham's own deposition testimony (October 18, 2021) is telling. When asked whether he obtained a signed amendment to Exhibit A adding New York, New Jersey, or Pennsylvania to the defined Territory, Mr. Farnham admitted: "We didn't get a formal amendment done." This admission was cited in our March 18 filing and remains in the summary judgment record.
New material? None. Vantage cites no new cases and introduces no new deposition testimony beyond what was already in the summary judgment record. The depositions of Donald R. Farnham (October 18, 2021), Steven Kapoor (November 2, 2021), Rachel Mendez (November 19, 2021), and Brian Kopec (December 7, 2021) were all completed before briefing began and were available to both parties throughout the cross-motions process. Vantage has not submitted any new declarations or affidavits in connection with the April 1 Brief. The only difference between Vantage's treatment of this argument on February 25 and its treatment on April 1 is rhetorical emphasis — a rearrangement of the same facts and the same legal arguments, not the introduction of anything new.
Conclusion. No sur-reply is needed on this point. Vantage's argument regarding the Kapoor Email has been fully addressed in our prior briefing, and the contractual text, deposition record, and governing law overwhelmingly support our position.
C. Argument 2: Course of Dealing / Implied Modification of Exhibit A
Vantage's position. Vantage reiterates its theory that Penterra's alleged failure to object to Vantage's shipments to customers in New York beginning in late 2019, combined with Vantage's growing tri-state sales over the following approximately eighteen months (approximately $6.4 million in revenues from Penterra product sales in New York, New Jersey, and Pennsylvania during the period from September 2020 through March 2021), effected an implied modification of the Territory defined in Exhibit A to the EDA. Exhibit A defines the Territory as the six New England States: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont (the "New England States"). Vantage argues that by failing to enforce the territorial limitation as Vantage expanded beyond those states, Penterra implicitly consented to an expansion of the Territory to include New York, New Jersey, and Pennsylvania.
Assessment. This is a recapitulation of the course-of-dealing theory presented in Vantage's February 25 Cross-Motion. Our March 18 Opposition addressed this theory comprehensively, making three principal arguments that remain dispositive:
Integration clause. Section 14.8 of the EDA provides: "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 integration clause precludes reliance on extrinsic evidence — including evidence of course of dealing, course of performance, or trade usage — to modify or supplement the terms of the EDA. The Territory defined in Exhibit A is an express term of a fully integrated agreement and cannot be altered by implication or by a party's unilateral conduct.
Written-amendment clause. Section 13.1 provides in relevant part: "No amendment, modification, or waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by both parties." This clause is clear and unambiguous. No such written instrument exists with respect to any expansion of the Territory. Vantage does not contend otherwise.
Massachusetts law. Massachusetts courts consistently enforce written-modification clauses and integration clauses. In Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122, 131 (2000), the Supreme Judicial Court held that a contractual provision requiring modifications to be in writing is enforceable and precludes claims that a contract was modified by oral agreement or course of dealing. Our March 18 filing cited Cambridge Biotech and its progeny, and Vantage has not distinguished or addressed these authorities in any meaningful way.
Vantage's new emphasis. The one arguably refined aspect of Vantage's April 1 Brief on this point is that Vantage places somewhat greater emphasis on the concept of "waiver" as distinct from "modification." Vantage argues that even if the EDA was not formally modified to expand the Territory, Penterra's silence and inaction in the face of Vantage's tri-state distribution activities from late 2019 through March 2021 constituted a waiver of the territorial restriction contained in Section 2.3 and Exhibit A. HSP's brief devotes approximately four pages (pages 18 through 21 of the April 1 Brief) to the waiver theory, citing general principles of Massachusetts waiver law and arguing that Penterra's conduct was inconsistent with an intent to enforce the territorial limitation.
This waiver emphasis, however, is a distinction without a difference under the present facts. Section 13.1 expressly covers "waiver" in addition to "amendment" and "modification," requiring a "written instrument signed by both parties" for the effectiveness of any waiver. Our March 18 brief quoted Section 13.1 in full and specifically addressed the waiver issue, noting that the contractual requirement of a signed writing for waivers forecloses any claim that Penterra's silence constituted an effective waiver. Moreover, even under general Massachusetts waiver principles — which require an intentional relinquishment of a known right — Penterra's conduct does not establish waiver. As Steven Kapoor testified in his deposition, Penterra was unaware of the scope of Vantage's tri-state distribution activities until Rachel Mendez's logistics team identified anomalies in shipping data in early 2021. Ignorance of the conduct allegedly constituting waiver is fatal to a waiver claim.
In short, while Vantage's April 1 Brief places marginally more emphasis on the waiver label, the underlying facts and legal framework are unchanged. This is not a genuinely new argument; it is a re-emphasis of a theory already presented and already rebutted.
New material? No new evidence or case authority. The financial data regarding approximately $6.4 million in tri-state revenues was already part of the summary judgment record, having been established through Vantage's internal sales records produced in discovery during the document production phase (July through September 2021). Vantage has not submitted any new declarations, new financial data, or new discovery materials. The case authorities cited in the April 1 Brief on the waiver point are general Massachusetts waiver cases that do not address the critical question of waiver in the context of an express written-modification clause — the same deficiency we identified in our March 18 filing.
Conclusion. No sur-reply is needed on this point. The waiver framing is not a genuinely new argument, and in any event it is foreclosed by Section 13.1's express coverage of waivers, which we have already briefed. To the extent the court has questions about the waiver/modification distinction, we can address them efficiently at oral argument on May 6.
D. Argument 3: Promissory Estoppel and Detrimental Reliance
Vantage's position. Vantage reasserts its promissory estoppel counterclaim (Count III of Vantage's May 14, 2021 Counterclaims), contending that Donald R. Farnham, Vantage's founder and CEO, reasonably relied on the Kapoor Email and on Penterra's alleged acquiescence in Vantage's tri-state distribution activities to invest substantially in distribution infrastructure and sales operations serving New York, New Jersey, and Pennsylvania. Vantage cites the activities of Brian Kopec, Vantage's Regional Sales Director, who directed sales efforts into the tri-state area beginning in mid-2019 and oversaw the hiring of six additional sales representatives for the region. Vantage references its threatened $35 million damages figure, which was initially raised in the March 22, 2021 demand letter from Kenneth M. Rourke of HSP to Jennifer Chao, Penterra's then-General Counsel, and which Vantage contends reflects lost profits, wasted capital expenditures, and reputational harm arising from the termination of Vantage's tri-state operations.
Assessment. This argument was presented as Count III of Vantage's May 14, 2021 Counterclaims, was briefed in detail in Vantage's February 25 Cross-Motion, and was comprehensively addressed in our March 18 filing. Our prior papers demonstrated that Vantage's promissory estoppel claim fails as a matter of law for three independent reasons:
No clear and definite promise. Under Massachusetts law, promissory estoppel requires, as a threshold element, a clear and definite promise. See Loranger Constr. Corp. v. E.F. Hauserman Co., 6 Mass. App. Ct. 152, 155 (1978). The Kapoor Email — "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" — is not a clear and definite promise. It is a conditional, tentative expression of interest in future discussions. A statement that one is "open to exploring" something is the opposite of a commitment, and the explicit conditions ("once your New England footprint is fully ramped"; "Let's circle back mid-year and see where things stand") underscore the preliminary nature of the communication.
Promissory estoppel cannot circumvent an unambiguous written-modification clause. Massachusetts courts have consistently held that promissory estoppel cannot be used as an end-run around the requirements of a fully integrated written agreement. Where the parties have agreed to a written-modification clause, a party cannot claim that it reasonably relied on an informal communication to modify the agreement's terms. See Cambridge Biotech Corp., 433 Mass. at 131; Cellucci v. Sun Oil Co., 2 Mass. App. Ct. 722, 728 (1974). The EDA's integration clause (Section 14.8) and written-modification clause (Section 13.1) foreclose any claim that an informal email, standing alone, created enforceable obligations outside the four corners of the agreement.
Reliance was unreasonable. Even assuming arguendo that the Kapoor Email could be construed as a promise (which it cannot), Vantage's reliance on it would be unreasonable as a matter of law. Mr. Farnham — a sophisticated businessman who founded and operates a $148 million-per-year distribution company — was a signatory to the EDA. He was aware of the written-modification clause in Section 13.1 and the integration clause in Section 14.8. He admitted in his deposition that he did not obtain a formal amendment to Exhibit A. Under these circumstances, no reasonable businessperson could have relied on a casual email as authorization to invest millions of dollars in expanding into territories not covered by the EDA's express terms.
Vantage's new framing. Vantage's April 1 Brief attempts to reframe the estoppel claim by placing heightened emphasis on the magnitude of Vantage's investment in tri-state operations and on Vantage's economic dependency on its relationship with Penterra. Specifically, Vantage highlights the following financial data: Vantage's total revenues from Penterra products in FY 2021 were approximately $67 million, representing approximately 45.3% of Vantage's total FY 2021 revenue of approximately $148 million. Vantage argues that the depth of this commercial relationship, combined with the scale of Vantage's tri-state investment, renders Vantage's reliance reasonable and makes it inequitable for Penterra to enforce the territorial limitation.
This economic-dependency argument, however, goes to the weight of reliance — i.e., how much Vantage relied and how costly that reliance was — not to the threshold question of whether a legally cognizable promise existed in the first place. The promissory estoppel analysis begins with the existence of a clear and definite promise, and Vantage cannot reach the reliance element without first establishing that threshold. The Kapoor Email is not a promise, regardless of how much Vantage invested in reliance on it. Moreover, the magnitude of Vantage's investment arguably underscores the unreasonableness of proceeding without a formal contractual amendment — a sophisticated distributor investing millions of dollars in a territorial expansion should have ensured that the expansion was documented in a written amendment to the EDA, as required by Section 13.1.
New material? The financial figures cited in Vantage's April 1 Brief — including the $67 million revenue figure, the 45.3% dependency ratio, and the $148 million total revenue figure — were already in the summary judgment record. These figures are drawn from Vantage's internal financial records, which were audited by Cranmer, Hodges & Associates, P.C. and produced in discovery during the document production phase. Vantage has not submitted any new financial data, new declarations, or new expert reports. The case authorities cited by Vantage on the promissory estoppel point are the same general estoppel cases previously cited in the February 25 Cross-Motion; no new case law is introduced.
Conclusion. No sur-reply is needed on this point. Vantage's promissory estoppel theory has been fully briefed and fails as a matter of law for multiple independent reasons, none of which are affected by Vantage's reemphasis of financial data already in the record.
E. Summary Assessment of Whether Any Genuinely New Arguments Were Raised
After a thorough review of Vantage's 32-page April 1, 2022 filing — including its statement of facts, its legal argument, and its supporting citations — I have identified no genuinely new arguments, no new evidence, and no new legal authorities that were not already addressed in our prior briefing. Vantage's arguments remain the same three theories advanced since the May 14, 2021 counterclaims: (1) the Kapoor Email as written consent under Section 2.3; (2) course of dealing, waiver, and implied modification of Exhibit A; and (3) promissory estoppel based on detrimental reliance.
All three theories were fully briefed by both sides in the February and March filings. Vantage's April 1 Brief presents these arguments with minor variations in emphasis — particularly the waiver/modification distinction and the economic-dependency framing of the estoppel claim — but neither variation rises to the level of a genuinely new argument that would warrant leave to file a sur-reply under BLS practice.
The evidentiary record is unchanged. No new declarations, affidavits, deposition testimony, or documentary exhibits have been submitted. The four key depositions (Farnham, Kapoor, Mendez, and Kopec) remain the same depositions cited by both parties throughout the cross-motions process. The financial data cited by Vantage was produced in discovery and is already part of the summary judgment record.
In sum, there is no basis under BLS practice for seeking leave to file a sur-reply.
V. Risk Assessment: Costs of Filing vs. Not Filing
A. Risks of Seeking Leave to File a Sur-Reply
Three principal risks attend a motion for leave to file a sur-reply in this case:
Perception of weakness. A motion for leave to file a sur-reply may signal to Judge Costigan that we believe our existing briefing is incomplete or inadequate, or that Vantage's arguments have more force than we previously acknowledged. Given the strength of our position — which is anchored in the unambiguous text of Exhibit A, Section 2.3, Section 13.1, and Section 14.8, and which is supported by the deposition testimony of Vantage's own witnesses — this risk is unwarranted. Our February 11 and March 18 filings comprehensively address every argument Vantage has raised, and a sur-reply risks suggesting otherwise. The last thing we want to do is give the court the impression that we are scrambling to respond to arguments that have already been met.
Judicial economy and court relations. The Business Litigation Session places a premium on efficient resolution of complex commercial disputes. Judge Costigan maintains an active docket, and the oral argument on May 6 provides a natural and efficient mechanism for addressing any remaining concerns the court may have about the parties' competing positions. A motion for leave to file a sur-reply — which would itself require briefing, potentially a hearing, and then the drafting and filing of the sur-reply itself — would consume court resources and could be viewed as inconsistent with the BLS's expectation of streamlined practice. We have a strong working relationship with the BLS, and we should be mindful of preserving it.
Delay risk. While a motion for leave to file a sur-reply would not automatically delay the oral argument, it could introduce uncertainty into the schedule. If Judge Costigan were to grant leave — which is unlikely given the absence of genuinely new material — she might allow Vantage an opportunity to respond, further extending the briefing timeline. Even if the motion were denied, the filing and resolution of the motion itself would consume time that is better spent preparing for oral argument. With oral argument less than four weeks away, we should be focusing our efforts on that hearing, not on collateral procedural motions.
B. Risks of Not Filing a Sur-Reply
Unanswered points. There is a marginal risk that the court could focus on Vantage's "waiver" framing — the aspect of the April 1 Brief that comes closest to a new emphasis — without having a dedicated, point-by-point rebuttal in a sur-reply. However, this risk is minimal for three reasons. First, Section 13.1's language expressly covers waivers, requiring a "written instrument signed by both parties" for any waiver to be effective; this language is quoted in our March 18 brief and is self-evidently dispositive. Second, our March 18 brief discusses waiver and cites the applicable provision, so the court already has our position in writing. Third, we will have the opportunity to address the waiver issue directly and in detail at oral argument on May 6, where we can respond to any specific questions the court may have.
Assessment. The risk of not filing a sur-reply is de minimis. The waiver framing is not genuinely new; it is a relabeling of the same course-of-dealing theory previously advanced and previously rebutted. The court has our position on the relevant contractual provisions, the relevant case law, and the relevant deposition testimony. No reasonable assessment of the risk/benefit calculus supports seeking leave to file a sur-reply in these circumstances.
VI. Alternative: Addressing Vantage's Points at Oral Argument
Rather than seeking leave to file a sur-reply, I recommend that we direct our resources toward preparing comprehensive oral argument materials for Linda Osei's use at the May 6 hearing. This approach allows us to address any refined emphasis in Vantage's April 1 Brief in a more targeted and efficient manner, tailored to the court's actual questions and concerns rather than speculating in advance about which arguments the court may find most salient.
Specifically, the oral argument preparation should address the following points drawn from Vantage's April 1 Brief:
The waiver/modification distinction. We should prepare Linda to address the argument that Penterra's silence regarding Vantage's tri-state shipments constituted a waiver, as distinct from a modification, of the territorial restriction. The key response is textual: Section 13.1 expressly covers all three concepts — "amendment, modification, or waiver" — and requires a "written instrument signed by both parties" for the effectiveness of any of them. There is no gap in Section 13.1 through which a waiver theory can pass. Additionally, we should prepare to address the factual predicate: Penterra was not silently acquiescing in known conduct, because Penterra was unaware of the scope of Vantage's tri-state activities until early 2021, as Steven Kapoor testified.
The economic-dependency framing of Vantage's estoppel claim. Vantage's emphasis on the magnitude of its investment and its dependency on Penterra products ($67 million in revenue, 45.3% of total FY 2021 revenue) is designed to evoke sympathy rather than establish legal entitlement. We should prepare Linda to redirect the court's focus to the threshold legal question: whether a clear and definite promise existed. The economic data, however sympathetic, cannot create a promise where none exists. Moreover, the magnitude of Vantage's investment underscores the unreasonableness of proceeding without a formal amendment — a point that cuts against Vantage, not in its favor.
This approach is more efficient than a sur-reply for several reasons. It avoids the procedural costs and risks of a motion for leave. It allows Linda to engage directly with the court's concerns in real time. And it preserves the impression — which is accurate — that our existing briefing fully and adequately addresses every argument Vantage has raised.
Patrick Gallagher and I have already begun preparing the oral argument memorandum, which will include a detailed argument-by-argument response to Vantage's April 1 Brief, anticipated questions from Judge Costigan, and suggested responses. We expect to have a draft to Linda for review no later than April 22, 2022, allowing two weeks for revision and preparation before the May 6 hearing.
VII. Recommendation
Based on the foregoing analysis, my recommendation is as follows:
Do not seek leave to file a sur-reply. Vantage's April 1 filing repackages the same three arguments — (1) the Kapoor Email as "prior written consent" under Section 2.3; (2) course of dealing, waiver, and implied modification of Exhibit A; and (3) promissory estoppel based on detrimental reliance — that have already been fully addressed in our prior filings. There is no new evidence, no new legal authority, and no genuinely new legal theory that warrants additional briefing. A motion for leave to file a sur-reply would likely be denied, could be perceived as a signal of weakness, and would consume time and resources better devoted to oral argument preparation.
Prepare for oral argument. We should focus our resources on a comprehensive oral argument preparation memorandum for the May 6 hearing before Judge Costigan. The memorandum will ensure that any refined emphasis in Vantage's April 1 Brief — particularly the waiver/modification distinction and the economic-dependency framing of the estoppel claim — is squarely addressed in Linda's oral presentation. This is the most efficient and strategically sound use of the remaining time before the hearing.
Open to revisiting. If Linda or Priya disagrees with this assessment, or if either of you identifies any specific passage in Vantage's April 1 Brief that you believe warrants further written rebuttal, I am happy to revisit this recommendation promptly. I can prepare a motion for leave to file and a proposed sur-reply on an expedited basis — likely within three to four business days — should you determine that a sur-reply is warranted. Please let me know how you would like to proceed.
VIII. Appendix: Key Contract Provisions Referenced
For convenience of reference, the following summarizes the key provisions of the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA") between Penterra Pharmaceuticals Corp. ("Supplier") and Vantage Medical Distribution, LLC ("Distributor") that are central to the pending cross-motions:
Section 2.1 (Grant of Exclusive Territory). Grants Vantage the exclusive right to distribute Penterra's products within the Territory defined in Exhibit A, subject to the terms and conditions of the EDA. The exclusivity is limited to the geographic area specified in Exhibit A and does not extend to any territory not expressly listed therein.
Section 2.3 (Limitation on Distribution Outside Territory). Provides that the Distributor "shall not distribute, sell, or offer to sell the Products outside the Territory without the Supplier's prior written consent." This provision creates an affirmative prohibition on out-of-territory distribution and conditions any exception on the Supplier's "prior written consent" — a term that requires deliberate, documented authorization from Penterra.
Section 5.2 (Minimum Annual Purchase Commitment). Requires Vantage to purchase a minimum of $9.5 million per year of Penterra products at wholesale acquisition cost ("WAC"). This provision is relevant to the broader contractual framework and to Vantage's performance obligations within the defined Territory.
Section 13.1 (Amendments, Modifications, and Waivers). Provides: "No amendment, modification, or waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by both parties." This provision is critical because it forecloses any claim that the EDA was modified by oral agreement, course of dealing, or unilateral conduct, and expressly requires a signed written instrument for any waiver of contractual rights.
Section 14.2 (Governing Law). Provides that the EDA shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, without regard to its conflicts of law principles.
Section 14.5 (Exclusive Jurisdiction). Provides that any dispute arising out of or relating to the EDA shall be brought exclusively in the courts of the Commonwealth of Massachusetts. This provision is the basis for the current action in the Business Litigation Session of the Suffolk County Superior Court.
Section 14.8 (Entire Agreement / Integration Clause). Provides: "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 integration clause establishes the EDA as the complete and exclusive statement of the parties' agreement and bars reliance on extrinsic evidence to vary or supplement its terms.
Exhibit A (Territory Definition). Defines the "Territory" as: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont — the six New England States. New York, New Jersey, and Pennsylvania are not included in the Territory.
Key Case Authority:
Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000). The Supreme Judicial Court held that a contractual provision requiring modifications to be in writing is enforceable under Massachusetts law and precludes claims that a contract was modified by oral agreement, course of dealing, or other informal means. This case is directly on point and supports Penterra's position that the territorial limitation in the EDA cannot be modified or waived absent a signed written instrument as required by Section 13.1.
Please direct any questions or comments regarding this memorandum to Hannah Brinkley at hbrinkley@calderwoodharkness.com or ext. 4218.
From: | Hannah Brinkley, Lead Associate
To: | Linda Osei, Responsible Partner; Priya Anand, Billing Partner
CC: | Patrick Gallagher, Working Associate
Date: | April 8, 2022
Re: | Penterra Pharmaceuticals Corp. v. Vantage Medical Distribution, LLC, Docket No. 2184-CV-01537-BLS (MA Superior Court, Business Litigation Session, Suffolk County) — Analysis of Whether to Seek Leave to File Sur-Reply to Vantage's April 1, 2022 Opposition and Reply Brief
Matter No.: | 1018-00007
Client: | Penterra Pharmaceuticals Corp.

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