1018-00007 · Penterra Pharmaceuticals Corp · Pleadings

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COMMONWEALTH OF MASSACHUSETTS SUPERIOR COURT BUSINESS LITIGATION SESSION SUFFOLK COUNTY

Docket No. 2184-CV-01537-BLS

MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF PENTERRA PHARMACEUTICALS CORP.'S MOTION FOR SUMMARY JUDGMENT

Filed: February 11, 2022

CALDERWOOD & HARKNESS LLP Linda Osei (BBO No. 672148) Priya Anand (BBO No. 689231) Hannah Brinkley (BBO No. 694507) Patrick Gallagher (BBO No. 701833) 1 Federal Street, 35th Floor Boston, MA 02110 Telephone: (617) 555-4200

Counsel for Plaintiff Penterra Pharmaceuticals Corp.

TABLE OF AUTHORITIES

Cases

Statutes and Rules

I. PRELIMINARY STATEMENT

This case presents a straightforward question of contract interpretation that the Court can and should resolve on summary judgment: Does the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA" or "Agreement") between Plaintiff Penterra Pharmaceuticals Corp. ("Penterra" or "Plaintiff") and Defendant Vantage Medical Distribution, LLC ("Vantage" or "Defendant") grant Vantage exclusive distribution rights in New York, New Jersey, and Pennsylvania — states that appear nowhere in the Agreement — or is Vantage's Territory limited to the six New England states expressly enumerated in Exhibit A? The answer is the latter, and the undisputed factual record compels judgment in Penterra's favor.

Penterra is a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol "PTRA," headquartered at 400 Carnegie Center Drive, Suite 600, Princeton, New Jersey 08540. Penterra is a specialty pharmaceutical company focused on oncology, rare diseases, and immunology therapeutics. Its flagship product, Oncalaris® (pegvisomant-axel), is a next-generation pegylated enzyme therapy for the treatment of refractory colorectal cancer that has been on the market since 2016 and generated approximately $412 million in revenue in fiscal year 2021.

Vantage is a Massachusetts limited liability company with its principal office at 75 Cabot Road, Suite 310, Medford, Massachusetts 02155. Vantage is a regional specialty pharmaceutical distributor serving the northeastern United States. Vantage reported approximately $148 million in total revenue for fiscal year 2021, of which approximately $67 million — roughly 45.3% — derived from products supplied by Penterra under the EDA.

The core dispute centers on the EDA's territorial scope. The EDA expressly defines the "Territory" by reference to Exhibit A, which lists — exhaustively and without any ambiguity — exactly six states: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. These six states are collectively defined in Exhibit A as the "New England States." New York, New Jersey, and Pennsylvania are not mentioned in Exhibit A or anywhere else in the EDA. No signed written amendment to Exhibit A has ever been executed by the parties. This fact is undisputed.

The sole document upon which Vantage stakes its claim to the tri-state area is a January 12, 2018 email from Steven Kapoor, Penterra's Vice President of Commercial Operations, to Donald Farnham, Vantage's Managing Member and CEO. In that email, Kapoor wrote: "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 brief, informal email is exactly what it reads as: a casual expression of willingness to consider a future discussion about potential territory expansion. It is not a grant of consent. It is not an amendment to Exhibit A. It was not signed by both parties — or even by one authorized signatory acting in an amending capacity. It does not satisfy any of the contractual prerequisites for modifying the EDA, including the written-amendment requirement in Section 13.1, which provides that no modification shall be effective unless set forth in a "written instrument signed by both parties."

Despite the absence of any contractual basis for doing so, on or about September 14, 2020 — more than two and a half years after the Kapoor Email and without any intervening agreement expanding the Territory — Vantage unilaterally began shipping Oncalaris® to hospitals and oncology clinics in New York, New Jersey, and Pennsylvania. From September 2020 through March 2021, Vantage generated approximately $6.4 million in unauthorized tri-state revenues from these shipments. Vantage made no effort to seek or obtain Penterra's prior written consent before commencing these shipments, as required by Section 2.3 of the EDA.

When Penterra discovered the unauthorized distribution activity and moved to appoint Meridian National Distributors, Inc. ("Meridian") as its distributor for the tri-state area, Vantage threatened Penterra with a $35 million lawsuit. Penterra then filed this action seeking a declaratory judgment confirming that the Territory under the EDA is limited to the six New England states and that Vantage's tri-state distribution was unauthorized.

Vantage responded by filing counterclaims for breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel, seeking $35 million in damages. Each of these counterclaims is predicated on the legally untenable theory that Vantage holds exclusive distribution rights in states that appear nowhere in the parties' written agreement.

The undisputed record — including the plain language of the EDA, the documentary evidence produced in discovery, and the sworn deposition testimony of all key witnesses — establishes that Penterra is entitled to judgment as a matter of law on its declaratory judgment claim and that Vantage's counterclaims must be dismissed with prejudice.

II. STATEMENT OF FACTS

The following facts are drawn from the parties' joint statement of undisputed material facts, the exhibits thereto, and the deposition transcripts produced during fact discovery, which concluded on January 14, 2022. Except where specifically noted, these facts are not in genuine dispute.

A. The Parties

Penterra Pharmaceuticals Corp. is a Delaware corporation that has been publicly traded on the Nasdaq Stock Market under the ticker symbol "PTRA" since 2011. Statement of Undisputed Material Facts ("SUF") ¶ 1. Penterra's corporate headquarters are located at 400 Carnegie Center Drive, Suite 600, Princeton, New Jersey 08540. Id. Penterra is a specialty pharmaceutical company that develops, manufactures, and commercializes therapeutics in the areas of oncology, rare diseases, and immunology. SUF ¶ 2.

Penterra's flagship oncology product is Oncalaris® (pegvisomant-axel), a next-generation pegylated enzyme therapy indicated for the treatment of refractory colorectal cancer. SUF ¶ 3. Oncalaris® was first launched commercially in the United States in 2016 and is available in 20 mg and 40 mg vials. Id. In fiscal year 2021, Oncalaris® accounted for approximately $412 million of Penterra's consolidated revenue, representing approximately 22% of Penterra's total consolidated revenue of $1.87 billion as reported in Penterra's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission. SUF ¶ 4; Ex. 1 (Penterra 10-K for FY 2021, excerpted). Penterra also markets Renuvesta® (cilosporin-beta, 5 mg capsules), an immunology product. SUF ¶ 5.

Penterra distributes its products throughout the United States through a network of regional exclusive distributors, supplemented by two national specialty pharmacy partners. SUF ¶ 6. This distribution model allows Penterra to maintain close relationships with regional distributors who have deep knowledge of the hospitals, oncology clinics, and pharmacy operations within their assigned territories. Id. The integrity of the territorial boundaries is a cornerstone of Penterra's distribution strategy, as overlapping territories would create channel conflict, undermine pricing discipline, and erode the incentive structure that motivates regional distributors to invest in customer relationships and service quality. SUF ¶ 7.

Vantage Medical Distribution, LLC is a Massachusetts limited liability company with its principal office at 75 Cabot Road, Suite 310, Medford, Massachusetts 02155. SUF ¶ 8. Vantage was founded in 2009 by Donald R. Farnham, who serves as Vantage's Managing Member and Chief Executive Officer. Id. Prior to founding Vantage, Farnham served as a Senior Vice President at Camberwell Enterprises, a national pharmaceutical wholesaler, where he was responsible for hospital and clinic accounts in the northeastern United States. SUF ¶ 9; Ex. 4 (Farnham Dep. Tr.) at 14:8-15:4.

Vantage focuses on the distribution of hospital- and clinic-based oncology and immunology products in the northeastern United States. SUF ¶ 10. Vantage reported approximately $148 million in total revenue for fiscal year 2021, of which approximately $67 million — approximately 45.3% — derived from products supplied by Penterra under the EDA. SUF ¶ 11; Ex. 5 (Vantage Internal Financial Statements for FY 2021, produced as VANTAGE_00014823-14831). The concentration of Vantage's revenue in Penterra products underscores the significance of the EDA to Vantage's business but does not alter the contractual limitations to which Vantage agreed when it entered into the Agreement.

B. The Exclusive Distribution Agreement

On July 1, 2017, Penterra and Vantage entered into the Exclusive Distribution Agreement that is at the center of this dispute. SUF ¶ 12; Ex. 2 (the "EDA"). The EDA identifies Penterra as "Supplier" and Vantage as "Distributor." Ex. 2, Preamble.

The EDA has an initial term of five years, running from July 1, 2017 through June 30, 2022, with two successive one-year automatic renewal options. Ex. 2, § 3.1. The Agreement provides that either party may prevent automatic renewal by providing the other party with 180 days' written notice of non-renewal prior to the expiration of the then-current term. Ex. 2, § 3.2.

The products covered by the EDA are Oncalaris® (pegvisomant-axel), available in 20 mg and 40 mg vials, and Renuvesta® (cilosporin-beta), available in 5 mg capsules. Ex. 2, § 1.1 & Ex. B ("Product Schedule").

The territorial grant at the heart of this dispute is set forth in Section 2.1 of the EDA, which provides in relevant part:

"Supplier hereby grants to Distributor the exclusive right to distribute the Products within the Territory, as defined in Exhibit A."

Ex. 2, § 2.1. Exhibit A to the EDA, titled "Territory Definition," states in its entirety:

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

Ex. 2, Ex. A. The language of Exhibit A is clear and leaves no room for doubt. The Territory consists of six specifically named states, all of which are New England states. No other state is referenced in Exhibit A or in the territorial grant provision of Section 2.1.

Section 2.3 of the EDA imposes a corresponding restriction on the Distributor's activities outside the Territory:

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

Ex. 2, § 2.3. This provision serves as an important complement to the territorial grant: while Section 2.1 grants Vantage exclusive rights within the Territory, Section 2.3 expressly prohibits Vantage from distributing outside the Territory absent Penterra's "prior written consent." The existence of this restriction would be wholly unnecessary and superfluous if Vantage's reading of the EDA were correct — i.e., if the Territory were understood to encompass whatever geographic area the parties informally discussed, rather than the six states listed in Exhibit A.

Section 5.2 of the EDA establishes a minimum purchase commitment, requiring Vantage to purchase a minimum of $9.5 million of Oncalaris® per year, calculated at the wholesale acquisition cost ("WAC"). Ex. 2, § 5.2. The record demonstrates that Vantage exceeded this minimum commitment in every year of the Agreement's term:

SUF ¶¶ 18-21; Ex. 6 (Vantage Purchase Records, produced as VANTAGE_00008412-08519). While Vantage's consistent overperformance against the minimum commitment is noteworthy, it is irrelevant to the question of whether the Territory includes states outside of New England. The minimum purchase commitment applies to purchases of Oncalaris® without geographic qualification — it is a volume floor, not a territorial grant.

Three additional provisions of the EDA bear directly on this dispute. First, Section 13.1 contains a written-amendment requirement:

"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."

Ex. 2, § 13.1. Second, Section 14.2 provides that the EDA is governed by the laws of the Commonwealth of Massachusetts, without regard to conflicts of law principles. Ex. 2, § 14.2. Third, Section 14.8 contains a comprehensive integration clause:

"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."

Ex. 2, § 14.8. Section 14.5 further provides for exclusive jurisdiction in state or federal courts in the Commonwealth of Massachusetts. Ex. 2, § 14.5.

C. The January 12, 2018 Email

The January 12, 2018 email from Steven Kapoor to Donald Farnham (the "Kapoor Email") is the centerpiece of Vantage's claim to tri-state distribution rights. SUF ¶ 22; Ex. 3 (Kapoor Email). It is therefore critical that the Court understand both what this email says and, equally important, what it does not say.

At the time of the Kapoor Email, Steven Kapoor held the title of Vice President of Commercial Operations at Penterra. SUF ¶ 23. In that capacity, Kapoor was responsible for managing Penterra's relationships with its network of regional distributors, overseeing supply chain logistics, and coordinating with Penterra's sales leadership on distribution strategy. Ex. 7 (Kapoor Dep. Tr.) at 22:6-23:14. Kapoor reported to the Senior Vice President of Commercial Strategy, who in turn reported to Penterra's Chief Commercial Officer. Id. at 23:15-24:3.

On January 11, 2018, Kapoor and Farnham spoke by telephone. SUF ¶ 24; Ex. 7 (Kapoor Dep. Tr.) at 48:11-49:2. During that call, Farnham raised the possibility that Vantage might eventually expand its operations into the tri-state area of New York, New Jersey, and Pennsylvania. Id. at 49:3-50:8. The following day, on January 12, 2018, Kapoor sent Farnham the email at issue:

"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."

Ex. 3. This email is the entirety of the communication. There is no attachment, no reference to Exhibit A, no reference to the EDA, no proposed amendment language, and no signature block. SUF ¶ 25.

Several features of the Kapoor Email are notable and undisputed. First, the email uses the phrase "open to exploring" — language that is aspirational and forward-looking, not language of present consent or agreement. Second, the email conditions any exploration on Vantage's New England footprint being "fully ramped," acknowledging that Vantage's existing Territory obligations had not yet been fully developed. Third, the email proposes to "circle back mid-year" — a future conversation, not a present commitment. Fourth, the email is signed only by Kapoor and was never countersigned, accepted, or acknowledged in writing by Farnham or anyone else at Vantage as constituting a contractual amendment.

Kapoor testified at his deposition on November 2, 2021 that the email "expressed a willingness to explore future expansion" but "did not constitute consent to expand the Territory or an amendment to Exhibit A." Ex. 7 (Kapoor Dep. Tr.) at 53:18-54:7. Kapoor further testified that he did not have the authority to unilaterally amend the EDA or to expand the Territory without approval from senior management and execution of a formal amendment. Id. at 55:2-56:11. No such approval was ever sought or obtained. Id. at 56:12-57:1.

Critically, the "mid-year" follow-up contemplated by the Kapoor Email never occurred. No meeting or discussion in mid-2018 resulted in any agreement — written or oral — to expand the Territory. SUF ¶ 26. No signed amendment to Exhibit A was ever prepared, circulated, or executed. SUF ¶ 27. Farnham himself admitted as much at his deposition on October 18, 2021. Ex. 4 (Farnham Dep. Tr.) at 87:14-88:5 ("Q: Was any signed amendment to Exhibit A ever executed between Penterra and Vantage? A: No, not that I'm aware of.").

D. Vantage's Unauthorized Tri-State Distribution

On or about September 14, 2020 — more than two years and eight months after the Kapoor Email and without any intervening agreement expanding the Territory — Vantage unilaterally began shipping Oncalaris® to hospitals and oncology clinics in New York, New Jersey, and Pennsylvania. SUF ¶ 28.

Brian Kopec, Vantage's Director of Sales and Business Development, testified at his deposition on December 7, 2021 that he directed Vantage's sales expansion into the tri-state area beginning in approximately June 2020, when Vantage's sales representatives began contacting hospitals and oncology practices in New York, New Jersey, and Pennsylvania to solicit Oncalaris® orders. Ex. 8 (Kopec Dep. Tr.) at 31:4-32:18. Kopec testified that by September 2020, Vantage had secured purchase commitments from several hospital systems and began shipping product to those customers. Id. at 33:2-34:11.

From September 2020 through March 2021, Vantage generated approximately $6.4 million in tri-state revenues from unauthorized shipments of Oncalaris®. SUF ¶ 29; Ex. 9 (Vantage Tri-State Sales Records, produced as VANTAGE_00021340-21418). These shipments were made without Penterra's knowledge or authorization. SUF ¶ 30.

Rachel Mendez, Penterra's Senior Director of Distribution and Logistics, testified at her deposition on November 19, 2021 that Penterra's distribution and logistics systems were configured to direct Oncalaris® shipments to Vantage's warehouses only for delivery to end customers with addresses in the six New England states. Ex. 10 (Mendez Dep. Tr.) at 41:8-42:14. Mendez testified that Penterra's systems did not flag or prevent Vantage from reshipping product to tri-state addresses once the product was in Vantage's possession, but that Penterra had never authorized Vantage to make such shipments. Id. at 42:15-43:9. Mendez further confirmed that Penterra did not learn of Vantage's tri-state distribution activities until approximately January 2021, when a Penterra field sales representative in New York reported encountering Vantage-distributed Oncalaris® at a hospital in Manhattan. Id. at 44:3-45:17.

Farnham testified at his deposition that he did not seek or obtain Penterra's written consent before commencing tri-state shipments. Ex. 4 (Farnham Dep. Tr.) at 102:7-103:2. When asked why, Farnham stated that he believed the Kapoor Email, combined with what he characterized as Penterra's "failure to object" to certain earlier shipments to New York addresses in late 2019, amounted to tacit approval. Id. at 103:3-104:14. Farnham could not identify any specific shipment to a New York address in 2019, however, and acknowledged that he had no written communication from any Penterra representative authorizing tri-state distribution. Id. at 104:15-106:8.

E. Penterra's Response and the Pre-Litigation Dispute

Upon learning of Vantage's unauthorized tri-state distribution in early 2021, Penterra took immediate action to enforce the terms of the EDA and to proceed with its own plans for the tri-state market.

On February 15, 2021, Penterra executed a term sheet with Meridian National Distributors, Inc. ("Meridian"), a New York corporation with principal offices at 520 Seventh Avenue, 12th Floor, New York, New York 10018. SUF ¶ 31; Ex. 11 (Meridian Term Sheet). The term sheet contemplated that Meridian would serve as Penterra's exclusive distributor for Oncalaris® and Renuvesta® in New York, New Jersey, Pennsylvania, and Maryland. Id. Thomas Welliver, President of Meridian, is based in New York, and Meridian operates throughout the mid-Atlantic region. SUF ¶ 32. The term sheet represented Penterra's strategic plan to establish a dedicated, authorized distributor for the tri-state area and Maryland — states that were never part of Vantage's Territory under the EDA.

However, the Meridian arrangement stalled when Vantage asserted exclusive rights to the tri-state area and threatened litigation. SUF ¶ 33.

On March 8, 2021, Jennifer Chao, Penterra's General Counsel, sent a cease-and-desist letter to Donald Farnham via certified mail and email, demanding that Vantage immediately cease all distribution of Oncalaris® and Renuvesta® outside the six New England states defined in Exhibit A. SUF ¶ 34; Ex. 12 (Chao Cease-and-Desist Letter). The letter cited the relevant provisions of the EDA, including Section 2.1 (territorial grant), Section 2.3 (restriction on out-of-territory activity), Exhibit A (Territory definition), and Section 13.1 (written-amendment requirement). Id. The letter further noted that no signed written amendment to Exhibit A had ever been executed and that Vantage's tri-state activities were unauthorized and in breach of the EDA. Id.

On March 22, 2021, Kenneth M. Rourke of Hargrove, Sinclair & Polk LLP ("HSP"), counsel for Vantage, responded on Vantage's behalf. SUF ¶ 35; Ex. 13 (Rourke Response Letter). In his response, Rourke asserted that Vantage had exclusive distribution rights in the tri-state area based on the Kapoor Email and an alleged course of dealing between the parties. Id. Rourke further stated that if Penterra proceeded to appoint a competing distributor in the tri-state area, Vantage would pursue claims for breach of contract and tortious interference with prospective business relations, seeking not less than $35 million in damages. Id.

F. The Litigation

On April 12, 2021, Penterra filed its Complaint for Declaratory Judgment in the Superior Court of Massachusetts, Business Litigation Session, Suffolk County, Docket No. 2184-CV-01537-BLS. SUF ¶ 36; Docket Entry No. 1. The Complaint seeks a declaration that the Territory under the EDA is limited to the six New England states defined in Exhibit A and that Vantage's distribution of Oncalaris® in New York, New Jersey, and Pennsylvania was unauthorized and in violation of Section 2.3 of the EDA.

On May 14, 2021, Vantage, through its counsel at Hargrove, Sinclair & Polk LLP, filed its Answer and Counterclaims. SUF ¶ 37; Docket Entry No. 8. Vantage's counterclaims assert three causes of action: (1) breach of contract, alleging that Penterra's efforts to appoint Meridian as a tri-state distributor violated Vantage's exclusive distribution rights; (2) breach of the implied covenant of good faith and fair dealing, alleging that Penterra acted in bad faith by attempting to strip Vantage of its purported tri-state distribution rights; and (3) promissory estoppel, alleging that Vantage reasonably relied on the Kapoor Email as a promise of territorial expansion and invested resources in tri-state operations to its detriment. Id. Vantage seeks $35 million in compensatory damages across all three counterclaims. Id.

Fact discovery ran from July 2021 through January 14, 2022. SUF ¶ 38. The parties exchanged extensive document productions totaling approximately 47,000 pages. Id. Both parties served and responded to interrogatories and requests for admission. SUF ¶ 39. Four depositions of key witnesses were conducted during this period:

• Donald R. Farnham, Managing Member and CEO of Vantage — October 18, 2021;

• Steven Kapoor, Vice President of Commercial Operations at Penterra — November 2, 2021;

• Rachel Mendez, Senior Director of Distribution and Logistics at Penterra — November 19, 2021; and

• Brian Kopec, Director of Sales and Business Development at Vantage — December 7, 2021.

SUF ¶ 40.

G. Key Deposition Testimony

The deposition testimony of the four key witnesses, taken in its totality, is fully consistent with Penterra's position and confirms the absence of any genuine dispute of material fact regarding the scope of the Territory.

Donald R. Farnham (October 18, 2021). Farnham, as Vantage's Managing Member and CEO, was the individual principally responsible for Vantage's decision to expand into the tri-state area. Farnham testified that he understood at the time the EDA was executed that Exhibit A defined the Territory as the six New England states. Ex. 4 (Farnham Dep. Tr.) at 63:5-64:2. When asked directly whether any signed amendment to Exhibit A was ever executed, Farnham admitted that no such instrument exists:

"Q: Mr. Farnham, has any signed amendment to Exhibit A of the Exclusive Distribution Agreement ever been executed between Penterra and Vantage?

A: No, not that I'm aware of."

Ex. 4 at 87:14-88:5. Farnham further admitted that no Penterra officer expressly authorized tri-state shipments in writing:

"Q: Did any officer, director, or authorized representative of Penterra ever provide you with written authorization to distribute Oncalaris in New York, New Jersey, or Pennsylvania?

A: Not in writing specifically, no."

Ex. 4 at 91:3-92:1. Farnham's sole basis for claiming authorization was the Kapoor Email and what he characterized as Penterra's "failure to object" to certain shipments. Id. at 103:3-104:14. Yet Farnham could not identify any specific 2019 shipment to a New York address or produce any documentation of such shipments. Id. at 104:15-106:8.

Steven Kapoor (November 2, 2021). Kapoor, who authored the January 12, 2018 email at the center of this dispute, testified unambiguously that the email did not constitute consent to expand the Territory or an amendment to Exhibit A:

"Q: When you sent this email on January 12, 2018, did you intend it to serve as Penterra's consent for Vantage to distribute Oncalaris in New York, New Jersey, or Pennsylvania?

A: No, absolutely not. It was an expression of willingness to have a conversation about it in the future. It was not consent.

Q: Did you intend it to serve as an amendment to Exhibit A of the EDA?

A: No."

Ex. 7 (Kapoor Dep. Tr.) at 53:18-54:7. Kapoor further testified that he did not have the authority to unilaterally amend the EDA or expand the Territory:

"Q: Did you have the authority, as Vice President of Commercial Operations, to unilaterally amend the terms of the EDA, including the territorial definition in Exhibit A?

A: No. Any amendment to the agreement would need to go through our legal department and be approved by senior management. It would need to be a formal written amendment."

Ex. 7 at 55:2-56:11. Kapoor confirmed that no such formal approval was ever sought or obtained with respect to a tri-state expansion for Vantage. Id. at 56:12-57:1.

Rachel Mendez (November 19, 2021). Mendez, Penterra's Senior Director of Distribution and Logistics, testified regarding Penterra's internal systems and procedures for managing distributor territories. Mendez confirmed that Penterra's distribution and logistics systems were configured to direct Oncalaris® shipments to Vantage's warehouse facilities only for delivery to end customers located in the six New England states:

"Q: Were Penterra's distribution systems configured in any way to authorize or facilitate Vantage's shipment of Oncalaris to customers in New York, New Jersey, or Pennsylvania?

A: No. Our systems were set up to ship to Vantage for New England addresses only. Once the product was in Vantage's hands, we didn't have visibility into where they were reshipping, but we certainly did not authorize shipments to the tri-state area."

Ex. 10 (Mendez Dep. Tr.) at 42:15-43:9. Mendez's testimony directly refutes any suggestion that Penterra was aware of or sanctioned Vantage's tri-state distribution activities.

Brian Kopec (December 7, 2021). Kopec, Vantage's Director of Sales and Business Development, testified regarding his role in directing Vantage's sales expansion into the tri-state area. Kopec confirmed that he began coordinating outreach to hospitals and oncology clinics in New York, New Jersey, and Pennsylvania in approximately June 2020. Ex. 8 (Kopec Dep. Tr.) at 31:4-32:18. Kopec testified that by September 2020, Vantage had secured purchase commitments from several hospital systems in the tri-state area and commenced product shipments. Id. at 33:2-34:11. Kopec identified specific customers in New York City, northern New Jersey, and the Philadelphia metropolitan area that contributed to the approximately $6.4 million in tri-state revenue. Id. at 36:5-39:14. When asked whether he had reviewed the EDA before commencing tri-state sales activities, Kopec testified that he had not and that he relied on Farnham's representation that Vantage had authorization to sell in those states. Id. at 40:2-41:8.

In sum, the undisputed deposition testimony confirms the following: (1) no signed amendment to Exhibit A was ever executed; (2) no Penterra representative authorized tri-state distribution in writing; (3) the Kapoor Email was not intended as — and did not constitute — consent or an amendment; (4) Penterra's internal systems did not authorize or facilitate tri-state distribution; and (5) Vantage's tri-state expansion was a unilateral decision made without contractual authorization.

III. LEGAL STANDARD

Under Massachusetts Rule of Civil Procedure 56(c) and Superior Court Rule 9A(b)(5), summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and responses to requests for admission under Rule 36, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Mass. R. Civ. P. 56(c).

The Supreme Judicial Court has articulated the standard for summary judgment in Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). In Kourouvacilis, the Court held that the moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Id. The Court must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Id. However, once the moving party has met its initial burden, the burden shifts to the non-moving party to present specific facts — not mere speculation, conjecture, or conclusory allegations — showing that a genuine issue of material fact exists for trial. Id. at 716-17. "Bare assertions and conclusions are not enough to withstand a motion for summary judgment." Id. at 716.

The federal analog, as articulated by the United States Supreme Court in Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986), is consistent with and persuasive authority for the Massachusetts standard. Under Celotex, summary judgment is a mechanism by which courts may identify and dispose of factually unsupported claims and defenses, thereby promoting judicial efficiency and preventing parties from proceeding to trial on theories that lack evidentiary support. Id. at 323-24.

Critically, where the interpretation of a written contract is at issue, and the contract language is unambiguous, the court interprets the contract as a matter of law without resort to extrinsic evidence. Seaboard Sur. Co. v. Gillette Co., 64 Mass. App. Ct. 59, 62 (2005) ("Where the terms of a contract are plain and free from ambiguity, they must be construed in their usual and ordinary sense."). Contract interpretation is particularly well-suited to resolution on summary judgment because, where the contractual language is clear, there is no factual dispute to submit to a jury — the legal meaning of the contract is a question of law for the Court. Id.; see also Warner Ins. Co. v. Commissioner of Ins., 406 Mass. 354, 362 (1990) ("The interpretation of a contract is a question of law for the court.").

This case presents precisely such a scenario. The relevant contractual provisions — Section 2.1, Section 2.3, Exhibit A, Section 13.1, and Section 14.8 — are clear, unambiguous, and susceptible to only one reasonable interpretation. There is no genuine dispute of material fact as to any issue relevant to the Court's determination of the parties' rights under the EDA. Penterra is entitled to judgment as a matter of law.

IV. ARGUMENT

A. The Plain Language of the EDA Limits the Territory to the Six New England States

1. Exhibit A Is Unambiguous

The starting point for any contract interpretation dispute under Massachusetts law is the language of the contract itself. Seaboard Sur. Co. v. Gillette Co., 64 Mass. App. Ct. 59, 62 (2005). Where the contract language is "plain and free from ambiguity," the court must enforce the contract "according to the plain import of its terms." Id. Courts do not "add words to a contract that the parties themselves chose not to include." Id. at 63.

The territorial provisions of the EDA are a model of clarity. Section 2.1 grants Vantage "the exclusive right to distribute the Products within the Territory, as defined in Exhibit A." Ex. 2, § 2.1 (emphasis added). By expressly incorporating Exhibit A, Section 2.1 makes the definition of the Territory a specific, identifiable, and bounded concept — not a vague or evolving notion, but a fixed set of geographic boundaries established by a specific exhibit to the Agreement.

Exhibit A, in turn, defines the Territory in language that admits of no ambiguity whatsoever:

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

Ex. 2, Ex. A. Exhibit A identifies exactly six states. It identifies those states by name. It groups them under the collective designation "New England States" — a designation that is both geographically accurate and commonly understood. New York is not a New England state. New Jersey is not a New England state. Pennsylvania is not a New England state. None of these three states appears in Exhibit A or anywhere else in the EDA.

There is no catch-all clause in Exhibit A. There is no language such as "including but not limited to." There is no provision stating that the Territory "may include such additional states as the parties may agree." There is no cross-reference to any side letter, memorandum of understanding, or other document that might expand the Territory beyond the six named states. The definition is exhaustive on its face.

The canon of expressio unius est exclusio alterius — the expression of one thing is the exclusion of another — applies with particular force here. Where a contract lists specific items, the listing is presumed to be exclusive, and items not listed are presumed to be excluded. See Warner Ins. Co., 406 Mass. at 362. The EDA lists six states in Exhibit A. States not listed — including New York, New Jersey, and Pennsylvania — are excluded from the Territory.

Section 2.3 of the EDA provides further reinforcement of the territorial boundaries. That section provides that "Distributor shall not actively solicit orders for, or deliver, the Products outside the Territory without Supplier's prior written consent." Ex. 2, § 2.3. The very existence of Section 2.3 presupposes that there is an "outside the Territory" — i.e., that the Territory has defined boundaries beyond which Vantage is prohibited from operating. If Vantage's reading of the EDA were correct — if the Territory were somehow understood to include any states that the parties informally discussed as potential future additions — then Section 2.3 would be rendered meaningless, because there would be no principled way to determine the geographic limits of Vantage's distribution rights at any given time.

Massachusetts law disfavors interpretations that render contractual provisions superfluous. See Seaboard Sur., 64 Mass. App. Ct. at 63 ("Every word of a contract must be presumed to have been employed for a purpose, and a construction which ignores any word or clause is to be rejected."). The Court should give effect to Section 2.3 by interpreting it according to its plain meaning: Vantage may not distribute outside the six-state Territory defined in Exhibit A without Penterra's prior written consent. That consent was never given.

In sum, the plain language of the EDA — Sections 2.1 and 2.3 and Exhibit A, read together — unambiguously limits the Territory to the six New England states. There is no ambiguity to resolve, no gap to fill, and no extrinsic evidence to consider. The Court should enforce the contract according to its plain terms.

2. Vantage Cannot Expand Exhibit A Through a Casual Email

Confronted with unambiguous contractual language that does not support its position, Vantage pins its hopes on the January 12, 2018 Kapoor Email. That email — Vantage's sole documentary basis for claiming tri-state distribution rights — reads in its entirety:

Ex. 3. This email, by its plain language, does not grant Vantage the right to distribute Oncalaris® in New York, New Jersey, or Pennsylvania. It does not amend Exhibit A. It does not constitute the "prior written consent" required by Section 2.3. It does none of these things, for several independent reasons.

First, the operative phrase — "open to exploring" — is aspirational and forward-looking. To be "open to exploring" a subject is to express a willingness to consider it, not to agree to it. It is the contractual equivalent of "we'll think about it." Massachusetts courts have consistently distinguished between language that reflects a commitment and language that reflects a willingness to negotiate. See Mass. Mut. Life Ins. Co. v. Residential Funding Co., 843 F. Supp. 2d 191, 204 (D. Mass. 2012) (distinguishing between "binding commitments" and "expressions of intent to negotiate"). The phrase "open to exploring" falls squarely in the latter category.

Second, the email conditions any future exploration on a predicate that was not satisfied at the time of the email and, more importantly, was never the subject of any subsequent determination: that Vantage's "New England footprint" be "fully ramped." This conditional language further undermines any reading of the email as a present commitment. It signals that even the exploration of tri-state expansion was contingent on Vantage first demonstrating success within its existing Territory — a condition that was to be assessed at a future date through a future conversation that never occurred.

Third, the email proposes to "circle back mid-year" — language that contemplates a future discussion, not a present agreement. "Let's circle back" is an expression commonly understood to mean "let's revisit this topic later." It does not convey a present decision or authorization. The very fact that Kapoor proposed a future discussion implies that no decision had been made and no authorization had been given.

Fourth, the email does not use any language of consent, authorization, or amendment. It does not say "we hereby consent to your distribution of Oncalaris in New York, New Jersey, and Pennsylvania." It does not say "Exhibit A is hereby amended to include the following states." It does not say "you are authorized to distribute outside the Territory." These are the sorts of formulations that would be required to convey the legal significance Vantage attributes to the email — and they are entirely absent.

Fifth, the email was sent by Kapoor alone. It was not signed by both parties as required by Section 13.1. Kapoor testified that he did not have the authority to unilaterally amend the EDA. Ex. 7 (Kapoor Dep. Tr.) at 55:2-56:11. Even if the email could be read as expressing something more than an interest in future discussion — which it cannot — it was not the product of the bilateral execution process that Section 13.1 demands.

Sixth, Farnham himself acknowledged the email's limitations. At his deposition, Farnham admitted that no signed amendment to Exhibit A was ever executed and that no Penterra officer expressly authorized tri-state shipments in writing. Ex. 4 (Farnham Dep. Tr.) at 87:14-88:5; 91:3-92:1. If Farnham believed the Kapoor Email constituted authorization, he would have had no reason to seek a signed amendment — yet the absence of such an amendment is precisely what the record shows.

Even construing the Kapoor Email in the light most favorable to Vantage, it does not constitute "prior written consent" within the meaning of Section 2.3. The term "prior written consent" in the context of a sophisticated commercial distribution agreement connotes a formal authorization — a deliberate, documented act by which the consenting party manifests its agreement to a specific proposed action. It does not encompass a casual email in which one party's employee expresses a willingness to think about something in the future. To hold otherwise would be to drain the "prior written consent" requirement of all meaning and to allow the boundaries of a carefully negotiated distribution territory to be redrawn on the basis of informal email banter.

B. The Written-Amendment Requirement (Section 13.1) Precludes Any Modification

1. Section 13.1 Is Enforceable Under Massachusetts Law

Even if the Kapoor Email could somehow be read as something more than a casual expression of interest — a reading that its plain language does not support — it would still be legally insufficient to modify the EDA because it fails to satisfy the requirements of Section 13.1. That section 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."

Ex. 2, § 13.1. Written-modification clauses like Section 13.1 are a standard feature of commercial contracts and serve a vital protective function: they ensure that the parties' negotiated agreement cannot be altered by casual remarks, informal discussions, or unilateral actions. They protect the integrity of the written agreement and prevent disputes of the very kind that Vantage now advances.

The Supreme Judicial Court has affirmed the enforceability of written-modification clauses under Massachusetts law. In Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000), the Court held that a contractual provision requiring modifications to be in writing was "a valid and enforceable contractual provision." Id. at 131. The Court recognized that such clauses serve important commercial purposes, including providing certainty and stability to the parties' contractual relationship and preventing disputes over whether informal communications or conduct effected a modification of the agreement. Id. at 131-32.

The First Circuit, applying Massachusetts law, has reached the same conclusion. In Gens v. Resolution Trust Corp., 112 F.3d 569, 576 (1st Cir. 1997), the court held that where a contract contains a written-modification clause, the parties are bound by it, and a claimed modification that does not satisfy the clause's requirements is ineffective. See also Renovest Co. v. Hodges Dev. Corp., 135 N.H. 72, 78 (1991) (persuasive authority recognizing that no-oral-modification clauses protect parties from "the uncertainties inherent in claimed oral modifications").

The Kapoor Email fails to satisfy Section 13.1 in at least three respects. First, it is not a "written instrument" in the contractual sense. A "written instrument" in the context of a no-modification clause denotes a formal document that memorializes an agreed-upon change to the parties' contract — not a one-line email dashed off after a phone call. See Mass. Mut., 843 F. Supp. 2d at 204 (distinguishing between formal contractual instruments and informal communications). Second, the email was not "signed by both parties." It was sent by Kapoor alone and was never countersigned, accepted, or acknowledged by Farnham or any other Vantage representative as a binding contractual amendment. Section 13.1 requires signatures from both parties — a requirement that ensures bilaterality and mutual assent, hallmarks of enforceable contract modification. Third, the email does not purport to "amend, modify, or waive" any provision of the EDA. It does not reference the EDA, Exhibit A, Section 2.1, Section 2.3, or any other contractual provision. It does not describe itself as an amendment. It contains no operative language of modification.

Under Cambridge Biotech and its progeny, the Kapoor Email is legally ineffective to modify the EDA. Section 13.1 is enforceable, and it has not been satisfied. Any claimed modification of the Territory is therefore void.

2. No Signed Written Instrument Exists Expanding the Territory

The legal conclusion compelled by Section 13.1 is confirmed by the factual record. After extensive fact discovery — including the production of approximately 47,000 pages of documents by both parties, comprehensive interrogatory responses, and the depositions of four key witnesses — no signed written instrument amending Exhibit A or expanding the Territory beyond the six New England states has been identified. This fact is not merely undisputed; it is affirmatively established by the admissions of Vantage's own principal.

Farnham admitted at his deposition that no signed amendment to Exhibit A was ever executed. Ex. 4 (Farnham Dep. Tr.) at 87:14-88:5. Kapoor testified that no formal amendment process was ever initiated, no amendment was ever prepared or circulated, and no approval from Penterra's senior management was ever sought or obtained. Ex. 7 (Kapoor Dep. Tr.) at 56:12-57:1.

The absence of any signed written instrument expanding the Territory is dispositive under Section 13.1. The EDA is clear: no modification is effective unless set forth in a signed writing. No signed writing exists. The Territory therefore remains as defined in Exhibit A: the six New England states.

C. The Integration Clause (Section 14.8) Bars Extrinsic Evidence of Modification

1. The EDA Is a Fully Integrated Agreement

Section 14.8 of the EDA contains a comprehensive merger and integration clause:

Ex. 2, § 14.8. This clause establishes that the EDA is a fully integrated agreement — that is, the parties intended the written agreement to be the complete and exclusive statement of their contractual arrangement regarding the subject matter covered by the EDA, including the territorial scope of Vantage's distribution rights.

Under the parol evidence rule as applied in Massachusetts, extrinsic evidence — including prior or contemporaneous oral or written statements — may not be introduced to contradict, vary, or supplement the terms of a fully integrated agreement. Schwanbeck v. Federal-Mogul Corp., 31 Mass. App. Ct. 390, 395 (1991) ("When a contract is fully integrated, the parol evidence rule precludes the introduction of extrinsic evidence to contradict or add to its terms."). The rationale for the rule is that parties who have taken the trouble to reduce their agreement to writing — and to include an integration clause — should be held to the terms they have written, rather than being subjected to after-the-fact claims about what they allegedly meant or orally agreed. Id.

The First Circuit, applying Massachusetts law, has given full effect to integration clauses in commercial agreements. In Gens v. Resolution Trust Corp., 112 F.3d 569, 575-76 (1st Cir. 1997), the court held that where a contract contains an integration clause, parol evidence of prior or contemporaneous agreements is inadmissible to vary the contract's terms. The court observed that "the integration clause serves the important function of putting the parties on notice that all prior negotiations have been merged into the written agreement." Id. at 576.

The practical effect of Section 14.8 in this case is that Vantage may not introduce extrinsic evidence — including the Kapoor Email, any alleged oral understandings between Farnham and Kapoor, and any claimed course of dealing — to contradict or supplement the territorial definition in Exhibit A. Exhibit A says what it says: six New England states. To the extent Vantage seeks to use the Kapoor Email or any other extrinsic evidence to argue that the Territory was understood by the parties to include the tri-state area, that evidence is barred by the parol evidence rule as codified in the integration clause.

2. Vantage's Course-of-Dealing Argument Fails

In addition to the Kapoor Email, Vantage has advanced the theory that Penterra's alleged failure to object to certain Vantage shipments to New York in late 2019, combined with the Kapoor Email, effected a modification of Exhibit A through course of dealing. This argument fails for multiple independent reasons.

First, the course-of-dealing argument is foreclosed by Section 13.1. As discussed above, Section 13.1 provides that no modification of the EDA is effective unless set forth in a "written instrument signed by both parties." A course of dealing — which by definition consists of conduct rather than a formal written instrument — cannot satisfy this requirement. In Cambridge Biotech, 433 Mass. at 131-32, the Supreme Judicial Court held that a written-modification clause cannot be circumvented by a course-of-dealing argument absent extraordinary circumstances such as fraud, duress, or other equitable considerations not present here. There is no allegation or evidence of fraud or duress in this case.

Second, the course-of-dealing argument is independently barred by the integration clause in Section 14.8. A course of dealing is, by its nature, extrinsic to the written agreement — it consists of the parties' conduct outside the four corners of the contract. As such, evidence of a claimed course of dealing is precisely the type of extrinsic evidence that the integration clause is designed to exclude.

Third, even on its own terms, the course-of-dealing argument is factually unsupported. Vantage's theory rests on the premise that Penterra was aware of, and failed to object to, Vantage shipments to New York addresses in late 2019. But the record does not support this premise. Farnham, when asked at his deposition to identify specific 2019 shipments to New York addresses, was unable to do so. Ex. 4 (Farnham Dep. Tr.) at 104:15-106:8. He could identify no dates, no customers, no invoices, and no shipping records. Id. Rachel Mendez testified that Penterra's distribution systems directed shipments to Vantage only for New England addresses and that Penterra had no visibility into Vantage's downstream reshipping activity. Ex. 10 (Mendez Dep. Tr.) at 42:15-43:9. Mendez further testified that Penterra did not learn of Vantage's tri-state distribution until approximately January 2021. Id. at 44:3-45:17.

A party's silence cannot constitute acquiescence or modification when the party was unaware of the conduct to which it allegedly acquiesced. Penterra cannot be said to have "failed to object" to shipments of which it had no knowledge. And even if Penterra had been aware — which it was not — silence does not constitute an affirmative modification under Massachusetts law, particularly where the contract expressly requires a signed writing for modifications. See Starr v. Fordham, 420 Mass. 178, 186 (1995) (holding that a party's failure to enforce a contractual provision on one occasion does not waive the right to enforce it on subsequent occasions, particularly where the contract contains a written-modification clause).

Fourth, to the extent Vantage argues that Penterra's conduct created a waiver of the territorial limitation, that argument is similarly foreclosed by Section 13.1, which expressly provides that no "waiver" of any provision of the Agreement shall be effective unless set forth in a signed writing. Penterra has never executed a written waiver of Section 2.3 or Exhibit A, and the record contains no evidence of any such waiver.

In sum, Vantage's course-of-dealing argument is legally barred by the written-amendment requirement and the integration clause, and factually unsupported by the record. It provides no basis for denying summary judgment.

D. Vantage's Counterclaims Fail as a Matter of Law

Each of Vantage's three counterclaims rests on the central premise that Vantage holds exclusive distribution rights in New York, New Jersey, and Pennsylvania. Because that premise is false — the Territory is limited to the six New England states defined in Exhibit A — all three counterclaims fail as a matter of law.

1. Breach of Contract (Count I of Counterclaims)

Vantage's breach-of-contract counterclaim alleges that Penterra breached the EDA by seeking to appoint Meridian National Distributors, Inc. as a distributor for Oncalaris® and Renuvesta® in New York, New Jersey, Pennsylvania, and Maryland. According to Vantage, this action violated Vantage's exclusive distribution rights in the tri-state area.

The fatal flaw in this claim is that the EDA does not grant Vantage exclusive distribution rights in the tri-state area. Section 2.1 grants Vantage "the exclusive right to distribute the Products within the Territory, as defined in Exhibit A." Ex. 2, § 2.1. Exhibit A defines the Territory as "the states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont." Ex. 2, Ex. A. New York, New Jersey, and Pennsylvania are not in the Territory. Maryland is not in the Territory.

Because the EDA's exclusivity provision applies only "within the Territory, as defined in Exhibit A," Penterra had no contractual obligation to refrain from appointing distributors outside the Territory. Penterra was free to appoint any distributor it wished for states not covered by the EDA's territorial grant — including New York, New Jersey, Pennsylvania, and Maryland. The Meridian term sheet, executed on February 15, 2021, involved precisely such states. SUF ¶ 31; Ex. 11. Thomas Welliver, President of Meridian, is based in New York. Meridian operates in New York, New Jersey, Pennsylvania, and Maryland — all outside the six-state New England Territory. SUF ¶ 32.

Penterra's negotiation of the Meridian term sheet was not only consistent with the EDA but was an exercise of rights that the EDA expressly preserved. The EDA's grant of exclusivity to Vantage in the six New England states necessarily implies that Penterra retained the right to distribute its products through other channels in all other states. Penterra's decision to engage Meridian for the tri-state area and Maryland was a commercially reasonable exercise of that retained right.

To prevail on a breach-of-contract claim under Massachusetts law, a plaintiff must establish, inter alia, a breach of a contractual obligation. See Uno Rests., Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 381 (2004). Vantage cannot establish that Penterra breached any provision of the EDA by appointing a distributor for states outside the Territory. There is no genuine dispute of material fact on this point. Vantage's breach-of-contract counterclaim fails as a matter of law and should be dismissed with prejudice.

2. Breach of Implied Covenant of Good Faith and Fair Dealing (Count II of Counterclaims)

Vantage's second counterclaim alleges that Penterra breached the implied covenant of good faith and fair dealing by attempting to appoint Meridian as a tri-state distributor, thereby purportedly depriving Vantage of the fruits of the EDA.

Under Massachusetts law, every contract implies a covenant of good faith and fair dealing. Uno Rests., 441 Mass. at 385. However, the implied covenant is not an independent source of contractual rights — it operates only within the framework of the express contractual terms. Id. The implied covenant "may not be invoked to create rights and duties not otherwise provided for in the existing contractual relationship, as the purpose of the covenant is to guarantee that the parties remain faithful to the intended and agreed expectations of the parties in their performance." Id. (internal quotation marks omitted).

Critically, the implied covenant cannot be used to override or expand the express terms of a contract. A party does not breach the implied covenant by exercising a right that the contract expressly grants or by declining to do something that the contract does not require. Id. at 386. The implied covenant "cannot create rights that do not otherwise exist under the contract." Id.

Penterra's conduct in seeking to appoint Meridian as a distributor for states outside the Territory was squarely within Penterra's contractual rights. The EDA granted Vantage exclusivity only in the six New England states. Penterra retained all rights to distribute its products in every other state. Penterra's exercise of those retained rights — by negotiating a distribution arrangement with Meridian for New York, New Jersey, Pennsylvania, and Maryland — cannot constitute a breach of the implied covenant. To hold otherwise would be to use the implied covenant as a vehicle for expanding Vantage's territorial rights beyond what the parties expressly agreed — precisely the result that Uno Restaurants prohibits.

Vantage's implied covenant claim is, at bottom, a repackaging of its breach-of-contract claim. Both claims rest on the same factual predicate: Penterra's appointment of Meridian for the tri-state area. Both claims rest on the same legal theory: that Vantage has exclusive rights in the tri-state area. Because that theory is contradicted by the plain language of the EDA, both claims fail.

Moreover, even if the implied covenant claim were analyzed independently of the breach-of-contract claim, it would still fail because Penterra acted in good faith throughout. Penterra performed its obligations under the EDA — it supplied products to Vantage, honored Vantage's exclusivity within the Territory, and never appointed a competing distributor for any of the six New England states. Penterra took action with respect to the tri-state area only after learning that Vantage had been making unauthorized shipments, and only after sending a cease-and-desist letter and giving Vantage an opportunity to comply. There is nothing about Penterra's conduct that suggests bad faith.

Vantage's breach of implied covenant counterclaim fails as a matter of law and should be dismissed with prejudice.

3. Promissory Estoppel (Count III of Counterclaims)

Vantage's third counterclaim asserts promissory estoppel, alleging that it reasonably relied on the Kapoor Email as a promise of territorial expansion and invested resources in tri-state distribution operations to its detriment.

Under Massachusetts law, the elements of promissory estoppel are: (1) a promise; (2) that the promisor should reasonably have expected to induce action or forbearance on the part of the promisee; (3) actual reliance by the promisee; and (4) that injustice can be avoided only by enforcement of the promise. Canney v. New England Tel. & Tel. Co., 353 Mass. 158, 164 (1967). The burden is on the party asserting promissory estoppel to establish each of these elements. Id. Vantage cannot satisfy any of them.

Element 1: A Promise. The threshold requirement for promissory estoppel is the existence of a "promise" — "a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee i

COMMONWEALTH OF MASSACHUSETTS SUPERIOR COURT BUSINESS LITIGATION SESSION SUFFOLK COUNTY
Docket No. 2184-CV-01537-BLS
MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF PENTERRA PHARMACEUTICALS CORP.'S MOTION FOR SUMMARY JUDGMENT
Filed: February 11, 2022
CALDERWOOD & HARKNESS LLP Linda Osei (BBO No. 672148) Priya Anand (BBO No. 689231) Hannah Brinkley (BBO No. 694507) Patrick Gallagher (BBO No. 701833) 1 Federal Street, 35th Floor Boston, MA 02110 Telephone: (617) 555-4200
Counsel for Plaintiff Penterra Pharmaceuticals Corp.
TABLE OF CONTENTS
TABLE OF AUTHORITIES
Cases
Statutes and Rules
I. PRELIMINARY STATEMENT
This case presents a straightforward question of contract interpretation that the Court can and should resolve on summary judgment: Does the Exclusive Distribution Agreement dated July 1, 2017 (the "EDA" or "Agreement") between Plaintiff Penterra Pharmaceuticals Corp. ("Penterra" or "Plaintiff") and Defendant Vantage Medical Distribution, LLC ("Vantage" or "Defendant") grant Vantage exclusive distribution rights in New York, New Jersey, and Pennsylvania — states that appear nowhere in the Agreement — or is Vantage's Territory limited to the six New England states expressly enumerated in Exhibit A? The answer is the latter, and the undisputed factual record compels judgment in Penterra's favor.
Penterra is a Delaware corporation publicly traded on the Nasdaq Stock Market under the ticker symbol "PTRA," headquartered at 400 Carnegie Center Drive, Suite 600, Princeton, New Jersey 08540. Penterra is a specialty pharmaceutical company focused on oncology, rare diseases, and immunology therapeutics. Its flagship product, Oncalaris® (pegvisomant-axel), is a next-generation pegylated enzyme therapy for the treatment of refractory colorectal cancer that has been on the market since 2016 and generated approximately $412 million in revenue in fiscal year 2021.
Vantage is a Massachusetts limited liability company with its principal office at 75 Cabot Road, Suite 310, Medford, Massachusetts 02155. Vantage is a regional specialty pharmaceutical distributor serving the northeastern United States. Vantage reported approximately $148 million in total revenue for fiscal year 2021, of which approximately $67 million — roughly 45.3% — derived from products supplied by Penterra under the EDA.
The core dispute centers on the EDA's territorial scope. The EDA expressly defines the "Territory" by reference to Exhibit A, which lists — exhaustively and without any ambiguity — exactly six states: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. These six states are collectively defined in Exhibit A as the "New England States." New York, New Jersey, and Pennsylvania are not mentioned in Exhibit A or anywhere else in the EDA. No signed written amendment to Exhibit A has ever been executed by the parties. This fact is undisputed.
The sole document upon which Vantage stakes its claim to the tri-state area is a January 12, 2018 email from Steven Kapoor, Penterra's Vice President of Commercial Operations, to Donald Farnham, Vantage's Managing Member and CEO. In that email, Kapoor wrote: "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 brief, informal email is exactly what it reads as: a casual expression of willingness to consider a future discussion about potential territory expansion. It is not a grant of consent. It is not an amendment to Exhibit A. It was not signed by both parties — or even by one authorized signatory acting in an amending capacity. It does not satisfy any of the contractual prerequisites for modifying the EDA, including the written-amendment requirement in Section 13.1, which provides that no modification shall be effective unless set forth in a "written instrument signed by both parties."
Despite the absence of any contractual basis for doing so, on or about September 14, 2020 — more than two and a half years after the Kapoor Email and without any intervening agreement expanding the Territory — Vantage unilaterally began shipping Oncalaris® to hospitals and oncology clinics in New York, New Jersey, and Pennsylvania. From September 2020 through March 2021, Vantage generated approximately $6.4 million in unauthorized tri-state revenues from these shipments. Vantage made no effort to seek or obtain Penterra's prior written consent before commencing these shipments, as required by Section 2.3 of the EDA.
When Penterra discovered the unauthorized distribution activity and moved to appoint Meridian National Distributors, Inc. ("Meridian") as its distributor for the tri-state area, Vantage threatened Penterra with a $35 million lawsuit. Penterra then filed this action seeking a declaratory judgment confirming that the Territory under the EDA is limited to the six New England states and that Vantage's tri-state distribution was unauthorized.
Vantage responded by filing counterclaims for breach of contract, breach of the implied covenant of good faith and fair dealing, and promissory estoppel, seeking $35 million in damages. Each of these counterclaims is predicated on the legally untenable theory that Vantage holds exclusive distribution rights in states that appear nowhere in the parties' written agreement.
The undisputed record — including the plain language of the EDA, the documentary evidence produced in discovery, and the sworn deposition testimony of all key witnesses — establishes that Penterra is entitled to judgment as a matter of law on its declaratory judgment claim and that Vantage's counterclaims must be dismissed with prejudice.
II. STATEMENT OF FACTS
The following facts are drawn from the parties' joint statement of undisputed material facts, the exhibits thereto, and the deposition transcripts produced during fact discovery, which concluded on January 14, 2022. Except where specifically noted, these facts are not in genuine dispute.
A. The Parties
Penterra Pharmaceuticals Corp. is a Delaware corporation that has been publicly traded on the Nasdaq Stock Market under the ticker symbol "PTRA" since 2011. Statement of Undisputed Material Facts ("SUF") ¶ 1. Penterra's corporate headquarters are located at 400 Carnegie Center Drive, Suite 600, Princeton, New Jersey 08540. Id. Penterra is a specialty pharmaceutical company that develops, manufactures, and commercializes therapeutics in the areas of oncology, rare diseases, and immunology. SUF ¶ 2.
Penterra's flagship oncology product is Oncalaris® (pegvisomant-axel), a next-generation pegylated enzyme therapy indicated for the treatment of refractory colorectal cancer. SUF ¶ 3. Oncalaris® was first launched commercially in the United States in 2016 and is available in 20 mg and 40 mg vials. Id. In fiscal year 2021, Oncalaris® accounted for approximately $412 million of Penterra's consolidated revenue, representing approximately 22% of Penterra's total consolidated revenue of $1.87 billion as reported in Penterra's Annual Report on Form 10-K filed with the United States Securities and Exchange Commission. SUF ¶ 4; Ex. 1 (Penterra 10-K for FY 2021, excerpted). Penterra also markets Renuvesta® (cilosporin-beta, 5 mg capsules), an immunology product. SUF ¶ 5.
Penterra distributes its products throughout the United States through a network of regional exclusive distributors, supplemented by two national specialty pharmacy partners. SUF ¶ 6. This distribution model allows Penterra to maintain close relationships with regional distributors who have deep knowledge of the hospitals, oncology clinics, and pharmacy operations within their assigned territories. Id. The integrity of the territorial boundaries is a cornerstone of Penterra's distribution strategy, as overlapping territories would create channel conflict, undermine pricing discipline, and erode the incentive structure that motivates regional distributors to invest in customer relationships and service quality. SUF ¶ 7.
Vantage Medical Distribution, LLC is a Massachusetts limited liability company with its principal office at 75 Cabot Road, Suite 310, Medford, Massachusetts 02155. SUF ¶ 8. Vantage was founded in 2009 by Donald R. Farnham, who serves as Vantage's Managing Member and Chief Executive Officer. Id. Prior to founding Vantage, Farnham served as a Senior Vice President at Camberwell Enterprises, a national pharmaceutical wholesaler, where he was responsible for hospital and clinic accounts in the northeastern United States. SUF ¶ 9; Ex. 4 (Farnham Dep. Tr.) at 14:8-15:4.
Vantage focuses on the distribution of hospital- and clinic-based oncology and immunology products in the northeastern United States. SUF ¶ 10. Vantage reported approximately $148 million in total revenue for fiscal year 2021, of which approximately $67 million — approximately 45.3% — derived from products supplied by Penterra under the EDA. SUF ¶ 11; Ex. 5 (Vantage Internal Financial Statements for FY 2021, produced as VANTAGE_00014823-14831). The concentration of Vantage's revenue in Penterra products underscores the significance of the EDA to Vantage's business but does not alter the contractual limitations to which Vantage agreed when it entered into the Agreement.
B. The Exclusive Distribution Agreement
On July 1, 2017, Penterra and Vantage entered into the Exclusive Distribution Agreement that is at the center of this dispute. SUF ¶ 12; Ex. 2 (the "EDA"). The EDA identifies Penterra as "Supplier" and Vantage as "Distributor." Ex. 2, Preamble.
The EDA has an initial term of five years, running from July 1, 2017 through June 30, 2022, with two successive one-year automatic renewal options. Ex. 2, § 3.1. The Agreement provides that either party may prevent automatic renewal by providing the other party with 180 days' written notice of non-renewal prior to the expiration of the then-current term. Ex. 2, § 3.2.
The products covered by the EDA are Oncalaris® (pegvisomant-axel), available in 20 mg and 40 mg vials, and Renuvesta® (cilosporin-beta), available in 5 mg capsules. Ex. 2, § 1.1 & Ex. B ("Product Schedule").
The territorial grant at the heart of this dispute is set forth in Section 2.1 of the EDA, which provides in relevant part:
"Supplier hereby grants to Distributor the exclusive right to distribute the Products within the Territory, as defined in Exhibit A."
Ex. 2, § 2.1. Exhibit A to the EDA, titled "Territory Definition," states in its entirety:
"The states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont (collectively, the 'New England States')."
Ex. 2, Ex. A. The language of Exhibit A is clear and leaves no room for doubt. The Territory consists of six specifically named states, all of which are New England states. No other state is referenced in Exhibit A or in the territorial grant provision of Section 2.1.
Section 2.3 of the EDA imposes a corresponding restriction on the Distributor's activities outside the Territory:
"Distributor shall not actively solicit orders for, or deliver, the Products outside the Territory without Supplier's prior written consent."
Ex. 2, § 2.3. This provision serves as an important complement to the territorial grant: while Section 2.1 grants Vantage exclusive rights within the Territory, Section 2.3 expressly prohibits Vantage from distributing outside the Territory absent Penterra's "prior written consent." The existence of this restriction would be wholly unnecessary and superfluous if Vantage's reading of the EDA were correct — i.e., if the Territory were understood to encompass whatever geographic area the parties informally discussed, rather than the six states listed in Exhibit A.
Section 5.2 of the EDA establishes a minimum purchase commitment, requiring Vantage to purchase a minimum of $9.5 million of Oncalaris® per year, calculated at the wholesale acquisition cost ("WAC"). Ex. 2, § 5.2. The record demonstrates that Vantage exceeded this minimum commitment in every year of the Agreement's term:
SUF ¶¶ 18-21; Ex. 6 (Vantage Purchase Records, produced as VANTAGE_00008412-08519). While Vantage's consistent overperformance against the minimum commitment is noteworthy, it is irrelevant to the question of whether the Territory includes states outside of New England. The minimum purchase commitment applies to purchases of Oncalaris® without geographic qualification — it is a volume floor, not a territorial grant.
Three additional provisions of the EDA bear directly on this dispute. First, Section 13.1 contains a written-amendment requirement:
"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."
Ex. 2, § 13.1. Second, Section 14.2 provides that the EDA is governed by the laws of the Commonwealth of Massachusetts, without regard to conflicts of law principles. Ex. 2, § 14.2. Third, Section 14.8 contains a comprehensive integration clause:
"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."
Ex. 2, § 14.8. Section 14.5 further provides for exclusive jurisdiction in state or federal courts in the Commonwealth of Massachusetts. Ex. 2, § 14.5.
C. The January 12, 2018 Email
The January 12, 2018 email from Steven Kapoor to Donald Farnham (the "Kapoor Email") is the centerpiece of Vantage's claim to tri-state distribution rights. SUF ¶ 22; Ex. 3 (Kapoor Email). It is therefore critical that the Court understand both what this email says and, equally important, what it does not say.
At the time of the Kapoor Email, Steven Kapoor held the title of Vice President of Commercial Operations at Penterra. SUF ¶ 23. In that capacity, Kapoor was responsible for managing Penterra's relationships with its network of regional distributors, overseeing supply chain logistics, and coordinating with Penterra's sales leadership on distribution strategy. Ex. 7 (Kapoor Dep. Tr.) at 22:6-23:14. Kapoor reported to the Senior Vice President of Commercial Strategy, who in turn reported to Penterra's Chief Commercial Officer. Id. at 23:15-24:3.
On January 11, 2018, Kapoor and Farnham spoke by telephone. SUF ¶ 24; Ex. 7 (Kapoor Dep. Tr.) at 48:11-49:2. During that call, Farnham raised the possibility that Vantage might eventually expand its operations into the tri-state area of New York, New Jersey, and Pennsylvania. Id. at 49:3-50:8. The following day, on January 12, 2018, Kapoor sent Farnham the email at issue:
"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."
Ex. 3. This email is the entirety of the communication. There is no attachment, no reference to Exhibit A, no reference to the EDA, no proposed amendment language, and no signature block. SUF ¶ 25.
Several features of the Kapoor Email are notable and undisputed. First, the email uses the phrase "open to exploring" — language that is aspirational and forward-looking, not language of present consent or agreement. Second, the email conditions any exploration on Vantage's New England footprint being "fully ramped," acknowledging that Vantage's existing Territory obligations had not yet been fully developed. Third, the email proposes to "circle back mid-year" — a future conversation, not a present commitment. Fourth, the email is signed only by Kapoor and was never countersigned, accepted, or acknowledged in writing by Farnham or anyone else at Vantage as constituting a contractual amendment.
Kapoor testified at his deposition on November 2, 2021 that the email "expressed a willingness to explore future expansion" but "did not constitute consent to expand the Territory or an amendment to Exhibit A." Ex. 7 (Kapoor Dep. Tr.) at 53:18-54:7. Kapoor further testified that he did not have the authority to unilaterally amend the EDA or to expand the Territory without approval from senior management and execution of a formal amendment. Id. at 55:2-56:11. No such approval was ever sought or obtained. Id. at 56:12-57:1.
Critically, the "mid-year" follow-up contemplated by the Kapoor Email never occurred. No meeting or discussion in mid-2018 resulted in any agreement — written or oral — to expand the Territory. SUF ¶ 26. No signed amendment to Exhibit A was ever prepared, circulated, or executed. SUF ¶ 27. Farnham himself admitted as much at his deposition on October 18, 2021. Ex. 4 (Farnham Dep. Tr.) at 87:14-88:5 ("Q: Was any signed amendment to Exhibit A ever executed between Penterra and Vantage? A: No, not that I'm aware of.").
D. Vantage's Unauthorized Tri-State Distribution
On or about September 14, 2020 — more than two years and eight months after the Kapoor Email and without any intervening agreement expanding the Territory — Vantage unilaterally began shipping Oncalaris® to hospitals and oncology clinics in New York, New Jersey, and Pennsylvania. SUF ¶ 28.
Brian Kopec, Vantage's Director of Sales and Business Development, testified at his deposition on December 7, 2021 that he directed Vantage's sales expansion into the tri-state area beginning in approximately June 2020, when Vantage's sales representatives began contacting hospitals and oncology practices in New York, New Jersey, and Pennsylvania to solicit Oncalaris® orders. Ex. 8 (Kopec Dep. Tr.) at 31:4-32:18. Kopec testified that by September 2020, Vantage had secured purchase commitments from several hospital systems and began shipping product to those customers. Id. at 33:2-34:11.
From September 2020 through March 2021, Vantage generated approximately $6.4 million in tri-state revenues from unauthorized shipments of Oncalaris®. SUF ¶ 29; Ex. 9 (Vantage Tri-State Sales Records, produced as VANTAGE_00021340-21418). These shipments were made without Penterra's knowledge or authorization. SUF ¶ 30.
Rachel Mendez, Penterra's Senior Director of Distribution and Logistics, testified at her deposition on November 19, 2021 that Penterra's distribution and logistics systems were configured to direct Oncalaris® shipments to Vantage's warehouses only for delivery to end customers with addresses in the six New England states. Ex. 10 (Mendez Dep. Tr.) at 41:8-42:14. Mendez testified that Penterra's systems did not flag or prevent Vantage from reshipping product to tri-state addresses once the product was in Vantage's possession, but that Penterra had never authorized Vantage to make such shipments. Id. at 42:15-43:9. Mendez further confirmed that Penterra did not learn of Vantage's tri-state distribution activities until approximately January 2021, when a Penterra field sales representative in New York reported encountering Vantage-distributed Oncalaris® at a hospital in Manhattan. Id. at 44:3-45:17.
Farnham testified at his deposition that he did not seek or obtain Penterra's written consent before commencing tri-state shipments. Ex. 4 (Farnham Dep. Tr.) at 102:7-103:2. When asked why, Farnham stated that he believed the Kapoor Email, combined with what he characterized as Penterra's "failure to object" to certain earlier shipments to New York addresses in late 2019, amounted to tacit approval. Id. at 103:3-104:14. Farnham could not identify any specific shipment to a New York address in 2019, however, and acknowledged that he had no written communication from any Penterra representative authorizing tri-state distribution. Id. at 104:15-106:8.
E. Penterra's Response and the Pre-Litigation Dispute
Upon learning of Vantage's unauthorized tri-state distribution in early 2021, Penterra took immediate action to enforce the terms of the EDA and to proceed with its own plans for the tri-state market.
On February 15, 2021, Penterra executed a term sheet with Meridian National Distributors, Inc. ("Meridian"), a New York corporation with principal offices at 520 Seventh Avenue, 12th Floor, New York, New York 10018. SUF ¶ 31; Ex. 11 (Meridian Term Sheet). The term sheet contemplated that Meridian would serve as Penterra's exclusive distributor for Oncalaris® and Renuvesta® in New York, New Jersey, Pennsylvania, and Maryland. Id. Thomas Welliver, President of Meridian, is based in New York, and Meridian operates throughout the mid-Atlantic region. SUF ¶ 32. The term sheet represented Penterra's strategic plan to establish a dedicated, authorized distributor for the tri-state area and Maryland — states that were never part of Vantage's Territory under the EDA.
However, the Meridian arrangement stalled when Vantage asserted exclusive rights to the tri-state area and threatened litigation. SUF ¶ 33.
On March 8, 2021, Jennifer Chao, Penterra's General Counsel, sent a cease-and-desist letter to Donald Farnham via certified mail and email, demanding that Vantage immediately cease all distribution of Oncalaris® and Renuvesta® outside the six New England states defined in Exhibit A. SUF ¶ 34; Ex. 12 (Chao Cease-and-Desist Letter). The letter cited the relevant provisions of the EDA, including Section 2.1 (territorial grant), Section 2.3 (restriction on out-of-territory activity), Exhibit A (Territory definition), and Section 13.1 (written-amendment requirement). Id. The letter further noted that no signed written amendment to Exhibit A had ever been executed and that Vantage's tri-state activities were unauthorized and in breach of the EDA. Id.
On March 22, 2021, Kenneth M. Rourke of Hargrove, Sinclair & Polk LLP ("HSP"), counsel for Vantage, responded on Vantage's behalf. SUF ¶ 35; Ex. 13 (Rourke Response Letter). In his response, Rourke asserted that Vantage had exclusive distribution rights in the tri-state area based on the Kapoor Email and an alleged course of dealing between the parties. Id. Rourke further stated that if Penterra proceeded to appoint a competing distributor in the tri-state area, Vantage would pursue claims for breach of contract and tortious interference with prospective business relations, seeking not less than $35 million in damages. Id.
F. The Litigation
On April 12, 2021, Penterra filed its Complaint for Declaratory Judgment in the Superior Court of Massachusetts, Business Litigation Session, Suffolk County, Docket No. 2184-CV-01537-BLS. SUF ¶ 36; Docket Entry No. 1. The Complaint seeks a declaration that the Territory under the EDA is limited to the six New England states defined in Exhibit A and that Vantage's distribution of Oncalaris® in New York, New Jersey, and Pennsylvania was unauthorized and in violation of Section 2.3 of the EDA.
On May 14, 2021, Vantage, through its counsel at Hargrove, Sinclair & Polk LLP, filed its Answer and Counterclaims. SUF ¶ 37; Docket Entry No. 8. Vantage's counterclaims assert three causes of action: (1) breach of contract, alleging that Penterra's efforts to appoint Meridian as a tri-state distributor violated Vantage's exclusive distribution rights; (2) breach of the implied covenant of good faith and fair dealing, alleging that Penterra acted in bad faith by attempting to strip Vantage of its purported tri-state distribution rights; and (3) promissory estoppel, alleging that Vantage reasonably relied on the Kapoor Email as a promise of territorial expansion and invested resources in tri-state operations to its detriment. Id. Vantage seeks $35 million in compensatory damages across all three counterclaims. Id.
Fact discovery ran from July 2021 through January 14, 2022. SUF ¶ 38. The parties exchanged extensive document productions totaling approximately 47,000 pages. Id. Both parties served and responded to interrogatories and requests for admission. SUF ¶ 39. Four depositions of key witnesses were conducted during this period:
• Donald R. Farnham, Managing Member and CEO of Vantage — October 18, 2021;
• Steven Kapoor, Vice President of Commercial Operations at Penterra — November 2, 2021;
• Rachel Mendez, Senior Director of Distribution and Logistics at Penterra — November 19, 2021; and
• Brian Kopec, Director of Sales and Business Development at Vantage — December 7, 2021.
SUF ¶ 40.
G. Key Deposition Testimony
The deposition testimony of the four key witnesses, taken in its totality, is fully consistent with Penterra's position and confirms the absence of any genuine dispute of material fact regarding the scope of the Territory.
Donald R. Farnham (October 18, 2021). Farnham, as Vantage's Managing Member and CEO, was the individual principally responsible for Vantage's decision to expand into the tri-state area. Farnham testified that he understood at the time the EDA was executed that Exhibit A defined the Territory as the six New England states. Ex. 4 (Farnham Dep. Tr.) at 63:5-64:2. When asked directly whether any signed amendment to Exhibit A was ever executed, Farnham admitted that no such instrument exists:
"Q: Mr. Farnham, has any signed amendment to Exhibit A of the Exclusive Distribution Agreement ever been executed between Penterra and Vantage?
A: No, not that I'm aware of."
Ex. 4 at 87:14-88:5. Farnham further admitted that no Penterra officer expressly authorized tri-state shipments in writing:
"Q: Did any officer, director, or authorized representative of Penterra ever provide you with written authorization to distribute Oncalaris in New York, New Jersey, or Pennsylvania?
A: Not in writing specifically, no."
Ex. 4 at 91:3-92:1. Farnham's sole basis for claiming authorization was the Kapoor Email and what he characterized as Penterra's "failure to object" to certain shipments. Id. at 103:3-104:14. Yet Farnham could not identify any specific 2019 shipment to a New York address or produce any documentation of such shipments. Id. at 104:15-106:8.
Steven Kapoor (November 2, 2021). Kapoor, who authored the January 12, 2018 email at the center of this dispute, testified unambiguously that the email did not constitute consent to expand the Territory or an amendment to Exhibit A:
"Q: When you sent this email on January 12, 2018, did you intend it to serve as Penterra's consent for Vantage to distribute Oncalaris in New York, New Jersey, or Pennsylvania?
A: No, absolutely not. It was an expression of willingness to have a conversation about it in the future. It was not consent.
Q: Did you intend it to serve as an amendment to Exhibit A of the EDA?
A: No."
Ex. 7 (Kapoor Dep. Tr.) at 53:18-54:7. Kapoor further testified that he did not have the authority to unilaterally amend the EDA or expand the Territory:
"Q: Did you have the authority, as Vice President of Commercial Operations, to unilaterally amend the terms of the EDA, including the territorial definition in Exhibit A?
A: No. Any amendment to the agreement would need to go through our legal department and be approved by senior management. It would need to be a formal written amendment."
Ex. 7 at 55:2-56:11. Kapoor confirmed that no such formal approval was ever sought or obtained with respect to a tri-state expansion for Vantage. Id. at 56:12-57:1.
Rachel Mendez (November 19, 2021). Mendez, Penterra's Senior Director of Distribution and Logistics, testified regarding Penterra's internal systems and procedures for managing distributor territories. Mendez confirmed that Penterra's distribution and logistics systems were configured to direct Oncalaris® shipments to Vantage's warehouse facilities only for delivery to end customers located in the six New England states:
"Q: Were Penterra's distribution systems configured in any way to authorize or facilitate Vantage's shipment of Oncalaris to customers in New York, New Jersey, or Pennsylvania?
A: No. Our systems were set up to ship to Vantage for New England addresses only. Once the product was in Vantage's hands, we didn't have visibility into where they were reshipping, but we certainly did not authorize shipments to the tri-state area."
Ex. 10 (Mendez Dep. Tr.) at 42:15-43:9. Mendez's testimony directly refutes any suggestion that Penterra was aware of or sanctioned Vantage's tri-state distribution activities.
Brian Kopec (December 7, 2021). Kopec, Vantage's Director of Sales and Business Development, testified regarding his role in directing Vantage's sales expansion into the tri-state area. Kopec confirmed that he began coordinating outreach to hospitals and oncology clinics in New York, New Jersey, and Pennsylvania in approximately June 2020. Ex. 8 (Kopec Dep. Tr.) at 31:4-32:18. Kopec testified that by September 2020, Vantage had secured purchase commitments from several hospital systems in the tri-state area and commenced product shipments. Id. at 33:2-34:11. Kopec identified specific customers in New York City, northern New Jersey, and the Philadelphia metropolitan area that contributed to the approximately $6.4 million in tri-state revenue. Id. at 36:5-39:14. When asked whether he had reviewed the EDA before commencing tri-state sales activities, Kopec testified that he had not and that he relied on Farnham's representation that Vantage had authorization to sell in those states. Id. at 40:2-41:8.
In sum, the undisputed deposition testimony confirms the following: (1) no signed amendment to Exhibit A was ever executed; (2) no Penterra representative authorized tri-state distribution in writing; (3) the Kapoor Email was not intended as — and did not constitute — consent or an amendment; (4) Penterra's internal systems did not authorize or facilitate tri-state distribution; and (5) Vantage's tri-state expansion was a unilateral decision made without contractual authorization.
III. LEGAL STANDARD
Under Massachusetts Rule of Civil Procedure 56(c) and Superior Court Rule 9A(b)(5), summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and responses to requests for admission under Rule 36, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Mass. R. Civ. P. 56(c).
The Supreme Judicial Court has articulated the standard for summary judgment in Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). In Kourouvacilis, the Court held that the moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Id. The Court must view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Id. However, once the moving party has met its initial burden, the burden shifts to the non-moving party to present specific facts — not mere speculation, conjecture, or conclusory allegations — showing that a genuine issue of material fact exists for trial. Id. at 716-17. "Bare assertions and conclusions are not enough to withstand a motion for summary judgment." Id. at 716.
The federal analog, as articulated by the United States Supreme Court in Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986), is consistent with and persuasive authority for the Massachusetts standard. Under Celotex, summary judgment is a mechanism by which courts may identify and dispose of factually unsupported claims and defenses, thereby promoting judicial efficiency and preventing parties from proceeding to trial on theories that lack evidentiary support. Id. at 323-24.
Critically, where the interpretation of a written contract is at issue, and the contract language is unambiguous, the court interprets the contract as a matter of law without resort to extrinsic evidence. Seaboard Sur. Co. v. Gillette Co., 64 Mass. App. Ct. 59, 62 (2005) ("Where the terms of a contract are plain and free from ambiguity, they must be construed in their usual and ordinary sense."). Contract interpretation is particularly well-suited to resolution on summary judgment because, where the contractual language is clear, there is no factual dispute to submit to a jury — the legal meaning of the contract is a question of law for the Court. Id.; see also Warner Ins. Co. v. Commissioner of Ins., 406 Mass. 354, 362 (1990) ("The interpretation of a contract is a question of law for the court.").
This case presents precisely such a scenario. The relevant contractual provisions — Section 2.1, Section 2.3, Exhibit A, Section 13.1, and Section 14.8 — are clear, unambiguous, and susceptible to only one reasonable interpretation. There is no genuine dispute of material fact as to any issue relevant to the Court's determination of the parties' rights under the EDA. Penterra is entitled to judgment as a matter of law.
IV. ARGUMENT
A. The Plain Language of the EDA Limits the Territory to the Six New England States
1. Exhibit A Is Unambiguous
The starting point for any contract interpretation dispute under Massachusetts law is the language of the contract itself. Seaboard Sur. Co. v. Gillette Co., 64 Mass. App. Ct. 59, 62 (2005). Where the contract language is "plain and free from ambiguity," the court must enforce the contract "according to the plain import of its terms." Id. Courts do not "add words to a contract that the parties themselves chose not to include." Id. at 63.
The territorial provisions of the EDA are a model of clarity. Section 2.1 grants Vantage "the exclusive right to distribute the Products within the Territory, as defined in Exhibit A." Ex. 2, § 2.1 (emphasis added). By expressly incorporating Exhibit A, Section 2.1 makes the definition of the Territory a specific, identifiable, and bounded concept — not a vague or evolving notion, but a fixed set of geographic boundaries established by a specific exhibit to the Agreement.
Exhibit A, in turn, defines the Territory in language that admits of no ambiguity whatsoever:
"The states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont (collectively, the 'New England States')."
Ex. 2, Ex. A. Exhibit A identifies exactly six states. It identifies those states by name. It groups them under the collective designation "New England States" — a designation that is both geographically accurate and commonly understood. New York is not a New England state. New Jersey is not a New England state. Pennsylvania is not a New England state. None of these three states appears in Exhibit A or anywhere else in the EDA.
There is no catch-all clause in Exhibit A. There is no language such as "including but not limited to." There is no provision stating that the Territory "may include such additional states as the parties may agree." There is no cross-reference to any side letter, memorandum of understanding, or other document that might expand the Territory beyond the six named states. The definition is exhaustive on its face.
The canon of expressio unius est exclusio alterius — the expression of one thing is the exclusion of another — applies with particular force here. Where a contract lists specific items, the listing is presumed to be exclusive, and items not listed are presumed to be excluded. See Warner Ins. Co., 406 Mass. at 362. The EDA lists six states in Exhibit A. States not listed — including New York, New Jersey, and Pennsylvania — are excluded from the Territory.
Section 2.3 of the EDA provides further reinforcement of the territorial boundaries. That section provides that "Distributor shall not actively solicit orders for, or deliver, the Products outside the Territory without Supplier's prior written consent." Ex. 2, § 2.3. The very existence of Section 2.3 presupposes that there is an "outside the Territory" — i.e., that the Territory has defined boundaries beyond which Vantage is prohibited from operating. If Vantage's reading of the EDA were correct — if the Territory were somehow understood to include any states that the parties informally discussed as potential future additions — then Section 2.3 would be rendered meaningless, because there would be no principled way to determine the geographic limits of Vantage's distribution rights at any given time.
Massachusetts law disfavors interpretations that render contractual provisions superfluous. See Seaboard Sur., 64 Mass. App. Ct. at 63 ("Every word of a contract must be presumed to have been employed for a purpose, and a construction which ignores any word or clause is to be rejected."). The Court should give effect to Section 2.3 by interpreting it according to its plain meaning: Vantage may not distribute outside the six-state Territory defined in Exhibit A without Penterra's prior written consent. That consent was never given.
In sum, the plain language of the EDA — Sections 2.1 and 2.3 and Exhibit A, read together — unambiguously limits the Territory to the six New England states. There is no ambiguity to resolve, no gap to fill, and no extrinsic evidence to consider. The Court should enforce the contract according to its plain terms.
2. Vantage Cannot Expand Exhibit A Through a Casual Email
Confronted with unambiguous contractual language that does not support its position, Vantage pins its hopes on the January 12, 2018 Kapoor Email. That email — Vantage's sole documentary basis for claiming tri-state distribution rights — 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."
Ex. 3. This email, by its plain language, does not grant Vantage the right to distribute Oncalaris® in New York, New Jersey, or Pennsylvania. It does not amend Exhibit A. It does not constitute the "prior written consent" required by Section 2.3. It does none of these things, for several independent reasons.
First, the operative phrase — "open to exploring" — is aspirational and forward-looking. To be "open to exploring" a subject is to express a willingness to consider it, not to agree to it. It is the contractual equivalent of "we'll think about it." Massachusetts courts have consistently distinguished between language that reflects a commitment and language that reflects a willingness to negotiate. See Mass. Mut. Life Ins. Co. v. Residential Funding Co., 843 F. Supp. 2d 191, 204 (D. Mass. 2012) (distinguishing between "binding commitments" and "expressions of intent to negotiate"). The phrase "open to exploring" falls squarely in the latter category.
Second, the email conditions any future exploration on a predicate that was not satisfied at the time of the email and, more importantly, was never the subject of any subsequent determination: that Vantage's "New England footprint" be "fully ramped." This conditional language further undermines any reading of the email as a present commitment. It signals that even the exploration of tri-state expansion was contingent on Vantage first demonstrating success within its existing Territory — a condition that was to be assessed at a future date through a future conversation that never occurred.
Third, the email proposes to "circle back mid-year" — language that contemplates a future discussion, not a present agreement. "Let's circle back" is an expression commonly understood to mean "let's revisit this topic later." It does not convey a present decision or authorization. The very fact that Kapoor proposed a future discussion implies that no decision had been made and no authorization had been given.
Fourth, the email does not use any language of consent, authorization, or amendment. It does not say "we hereby consent to your distribution of Oncalaris in New York, New Jersey, and Pennsylvania." It does not say "Exhibit A is hereby amended to include the following states." It does not say "you are authorized to distribute outside the Territory." These are the sorts of formulations that would be required to convey the legal significance Vantage attributes to the email — and they are entirely absent.
Fifth, the email was sent by Kapoor alone. It was not signed by both parties as required by Section 13.1. Kapoor testified that he did not have the authority to unilaterally amend the EDA. Ex. 7 (Kapoor Dep. Tr.) at 55:2-56:11. Even if the email could be read as expressing something more than an interest in future discussion — which it cannot — it was not the product of the bilateral execution process that Section 13.1 demands.
Sixth, Farnham himself acknowledged the email's limitations. At his deposition, Farnham admitted that no signed amendment to Exhibit A was ever executed and that no Penterra officer expressly authorized tri-state shipments in writing. Ex. 4 (Farnham Dep. Tr.) at 87:14-88:5; 91:3-92:1. If Farnham believed the Kapoor Email constituted authorization, he would have had no reason to seek a signed amendment — yet the absence of such an amendment is precisely what the record shows.
Even construing the Kapoor Email in the light most favorable to Vantage, it does not constitute "prior written consent" within the meaning of Section 2.3. The term "prior written consent" in the context of a sophisticated commercial distribution agreement connotes a formal authorization — a deliberate, documented act by which the consenting party manifests its agreement to a specific proposed action. It does not encompass a casual email in which one party's employee expresses a willingness to think about something in the future. To hold otherwise would be to drain the "prior written consent" requirement of all meaning and to allow the boundaries of a carefully negotiated distribution territory to be redrawn on the basis of informal email banter.
B. The Written-Amendment Requirement (Section 13.1) Precludes Any Modification
1. Section 13.1 Is Enforceable Under Massachusetts Law
Even if the Kapoor Email could somehow be read as something more than a casual expression of interest — a reading that its plain language does not support — it would still be legally insufficient to modify the EDA because it fails to satisfy the requirements of Section 13.1. That section 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."
Ex. 2, § 13.1. Written-modification clauses like Section 13.1 are a standard feature of commercial contracts and serve a vital protective function: they ensure that the parties' negotiated agreement cannot be altered by casual remarks, informal discussions, or unilateral actions. They protect the integrity of the written agreement and prevent disputes of the very kind that Vantage now advances.
The Supreme Judicial Court has affirmed the enforceability of written-modification clauses under Massachusetts law. In Cambridge Biotech Corp. v. Pasteur Falveris Diagnostics, 433 Mass. 122 (2000), the Court held that a contractual provision requiring modifications to be in writing was "a valid and enforceable contractual provision." Id. at 131. The Court recognized that such clauses serve important commercial purposes, including providing certainty and stability to the parties' contractual relationship and preventing disputes over whether informal communications or conduct effected a modification of the agreement. Id. at 131-32.
The First Circuit, applying Massachusetts law, has reached the same conclusion. In Gens v. Resolution Trust Corp., 112 F.3d 569, 576 (1st Cir. 1997), the court held that where a contract contains a written-modification clause, the parties are bound by it, and a claimed modification that does not satisfy the clause's requirements is ineffective. See also Renovest Co. v. Hodges Dev. Corp., 135 N.H. 72, 78 (1991) (persuasive authority recognizing that no-oral-modification clauses protect parties from "the uncertainties inherent in claimed oral modifications").
The Kapoor Email fails to satisfy Section 13.1 in at least three respects. First, it is not a "written instrument" in the contractual sense. A "written instrument" in the context of a no-modification clause denotes a formal document that memorializes an agreed-upon change to the parties' contract — not a one-line email dashed off after a phone call. See Mass. Mut., 843 F. Supp. 2d at 204 (distinguishing between formal contractual instruments and informal communications). Second, the email was not "signed by both parties." It was sent by Kapoor alone and was never countersigned, accepted, or acknowledged by Farnham or any other Vantage representative as a binding contractual amendment. Section 13.1 requires signatures from both parties — a requirement that ensures bilaterality and mutual assent, hallmarks of enforceable contract modification. Third, the email does not purport to "amend, modify, or waive" any provision of the EDA. It does not reference the EDA, Exhibit A, Section 2.1, Section 2.3, or any other contractual provision. It does not describe itself as an amendment. It contains no operative language of modification.
Under Cambridge Biotech and its progeny, the Kapoor Email is legally ineffective to modify the EDA. Section 13.1 is enforceable, and it has not been satisfied. Any claimed modification of the Territory is therefore void.
2. No Signed Written Instrument Exists Expanding the Territory
The legal conclusion compelled by Section 13.1 is confirmed by the factual record. After extensive fact discovery — including the production of approximately 47,000 pages of documents by both parties, comprehensive interrogatory responses, and the depositions of four key witnesses — no signed written instrument amending Exhibit A or expanding the Territory beyond the six New England states has been identified. This fact is not merely undisputed; it is affirmatively established by the admissions of Vantage's own principal.
Farnham admitted at his deposition that no signed amendment to Exhibit A was ever executed. Ex. 4 (Farnham Dep. Tr.) at 87:14-88:5. Kapoor testified that no formal amendment process was ever initiated, no amendment was ever prepared or circulated, and no approval from Penterra's senior management was ever sought or obtained. Ex. 7 (Kapoor Dep. Tr.) at 56:12-57:1.
The absence of any signed written instrument expanding the Territory is dispositive under Section 13.1. The EDA is clear: no modification is effective unless set forth in a signed writing. No signed writing exists. The Territory therefore remains as defined in Exhibit A: the six New England states.
C. The Integration Clause (Section 14.8) Bars Extrinsic Evidence of Modification
1. The EDA Is a Fully Integrated Agreement
Section 14.8 of the EDA contains a comprehensive merger and integration clause:
"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."
Ex. 2, § 14.8. This clause establishes that the EDA is a fully integrated agreement — that is, the parties intended the written agreement to be the complete and exclusive statement of their contractual arrangement regarding the subject matter covered by the EDA, including the territorial scope of Vantage's distribution rights.
Under the parol evidence rule as applied in Massachusetts, extrinsic evidence — including prior or contemporaneous oral or written statements — may not be introduced to contradict, vary, or supplement the terms of a fully integrated agreement. Schwanbeck v. Federal-Mogul Corp., 31 Mass. App. Ct. 390, 395 (1991) ("When a contract is fully integrated, the parol evidence rule precludes the introduction of extrinsic evidence to contradict or add to its terms."). The rationale for the rule is that parties who have taken the trouble to reduce their agreement to writing — and to include an integration clause — should be held to the terms they have written, rather than being subjected to after-the-fact claims about what they allegedly meant or orally agreed. Id.
The First Circuit, applying Massachusetts law, has given full effect to integration clauses in commercial agreements. In Gens v. Resolution Trust Corp., 112 F.3d 569, 575-76 (1st Cir. 1997), the court held that where a contract contains an integration clause, parol evidence of prior or contemporaneous agreements is inadmissible to vary the contract's terms. The court observed that "the integration clause serves the important function of putting the parties on notice that all prior negotiations have been merged into the written agreement." Id. at 576.
The practical effect of Section 14.8 in this case is that Vantage may not introduce extrinsic evidence — including the Kapoor Email, any alleged oral understandings between Farnham and Kapoor, and any claimed course of dealing — to contradict or supplement the territorial definition in Exhibit A. Exhibit A says what it says: six New England states. To the extent Vantage seeks to use the Kapoor Email or any other extrinsic evidence to argue that the Territory was understood by the parties to include the tri-state area, that evidence is barred by the parol evidence rule as codified in the integration clause.
2. Vantage's Course-of-Dealing Argument Fails
In addition to the Kapoor Email, Vantage has advanced the theory that Penterra's alleged failure to object to certain Vantage shipments to New York in late 2019, combined with the Kapoor Email, effected a modification of Exhibit A through course of dealing. This argument fails for multiple independent reasons.
First, the course-of-dealing argument is foreclosed by Section 13.1. As discussed above, Section 13.1 provides that no modification of the EDA is effective unless set forth in a "written instrument signed by both parties." A course of dealing — which by definition consists of conduct rather than a formal written instrument — cannot satisfy this requirement. In Cambridge Biotech, 433 Mass. at 131-32, the Supreme Judicial Court held that a written-modification clause cannot be circumvented by a course-of-dealing argument absent extraordinary circumstances such as fraud, duress, or other equitable considerations not present here. There is no allegation or evidence of fraud or duress in this case.
Second, the course-of-dealing argument is independently barred by the integration clause in Section 14.8. A course of dealing is, by its nature, extrinsic to the written agreement — it consists of the parties' conduct outside the four corners of the contract. As such, evidence of a claimed course of dealing is precisely the type of extrinsic evidence that the integration clause is designed to exclude.
Third, even on its own terms, the course-of-dealing argument is factually unsupported. Vantage's theory rests on the premise that Penterra was aware of, and failed to object to, Vantage shipments to New York addresses in late 2019. But the record does not support this premise. Farnham, when asked at his deposition to identify specific 2019 shipments to New York addresses, was unable to do so. Ex. 4 (Farnham Dep. Tr.) at 104:15-106:8. He could identify no dates, no customers, no invoices, and no shipping records. Id. Rachel Mendez testified that Penterra's distribution systems directed shipments to Vantage only for New England addresses and that Penterra had no visibility into Vantage's downstream reshipping activity. Ex. 10 (Mendez Dep. Tr.) at 42:15-43:9. Mendez further testified that Penterra did not learn of Vantage's tri-state distribution until approximately January 2021. Id. at 44:3-45:17.
A party's silence cannot constitute acquiescence or modification when the party was unaware of the conduct to which it allegedly acquiesced. Penterra cannot be said to have "failed to object" to shipments of which it had no knowledge. And even if Penterra had been aware — which it was not — silence does not constitute an affirmative modification under Massachusetts law, particularly where the contract expressly requires a signed writing for modifications. See Starr v. Fordham, 420 Mass. 178, 186 (1995) (holding that a party's failure to enforce a contractual provision on one occasion does not waive the right to enforce it on subsequent occasions, particularly where the contract contains a written-modification clause).
Fourth, to the extent Vantage argues that Penterra's conduct created a waiver of the territorial limitation, that argument is similarly foreclosed by Section 13.1, which expressly provides that no "waiver" of any provision of the Agreement shall be effective unless set forth in a signed writing. Penterra has never executed a written waiver of Section 2.3 or Exhibit A, and the record contains no evidence of any such waiver.
In sum, Vantage's course-of-dealing argument is legally barred by the written-amendment requirement and the integration clause, and factually unsupported by the record. It provides no basis for denying summary judgment.
D. Vantage's Counterclaims Fail as a Matter of Law
Each of Vantage's three counterclaims rests on the central premise that Vantage holds exclusive distribution rights in New York, New Jersey, and Pennsylvania. Because that premise is false — the Territory is limited to the six New England states defined in Exhibit A — all three counterclaims fail as a matter of law.
1. Breach of Contract (Count I of Counterclaims)
Vantage's breach-of-contract counterclaim alleges that Penterra breached the EDA by seeking to appoint Meridian National Distributors, Inc. as a distributor for Oncalaris® and Renuvesta® in New York, New Jersey, Pennsylvania, and Maryland. According to Vantage, this action violated Vantage's exclusive distribution rights in the tri-state area.
The fatal flaw in this claim is that the EDA does not grant Vantage exclusive distribution rights in the tri-state area. Section 2.1 grants Vantage "the exclusive right to distribute the Products within the Territory, as defined in Exhibit A." Ex. 2, § 2.1. Exhibit A defines the Territory as "the states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont." Ex. 2, Ex. A. New York, New Jersey, and Pennsylvania are not in the Territory. Maryland is not in the Territory.
Because the EDA's exclusivity provision applies only "within the Territory, as defined in Exhibit A," Penterra had no contractual obligation to refrain from appointing distributors outside the Territory. Penterra was free to appoint any distributor it wished for states not covered by the EDA's territorial grant — including New York, New Jersey, Pennsylvania, and Maryland. The Meridian term sheet, executed on February 15, 2021, involved precisely such states. SUF ¶ 31; Ex. 11. Thomas Welliver, President of Meridian, is based in New York. Meridian operates in New York, New Jersey, Pennsylvania, and Maryland — all outside the six-state New England Territory. SUF ¶ 32.
Penterra's negotiation of the Meridian term sheet was not only consistent with the EDA but was an exercise of rights that the EDA expressly preserved. The EDA's grant of exclusivity to Vantage in the six New England states necessarily implies that Penterra retained the right to distribute its products through other channels in all other states. Penterra's decision to engage Meridian for the tri-state area and Maryland was a commercially reasonable exercise of that retained right.
To prevail on a breach-of-contract claim under Massachusetts law, a plaintiff must establish, inter alia, a breach of a contractual obligation. See Uno Rests., Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376, 381 (2004). Vantage cannot establish that Penterra breached any provision of the EDA by appointing a distributor for states outside the Territory. There is no genuine dispute of material fact on this point. Vantage's breach-of-contract counterclaim fails as a matter of law and should be dismissed with prejudice.
2. Breach of Implied Covenant of Good Faith and Fair Dealing (Count II of Counterclaims)
Vantage's second counterclaim alleges that Penterra breached the implied covenant of good faith and fair dealing by attempting to appoint Meridian as a tri-state distributor, thereby purportedly depriving Vantage of the fruits of the EDA.
Under Massachusetts law, every contract implies a covenant of good faith and fair dealing. Uno Rests., 441 Mass. at 385. However, the implied covenant is not an independent source of contractual rights — it operates only within the framework of the express contractual terms. Id. The implied covenant "may not be invoked to create rights and duties not otherwise provided for in the existing contractual relationship, as the purpose of the covenant is to guarantee that the parties remain faithful to the intended and agreed expectations of the parties in their performance." Id. (internal quotation marks omitted).
Critically, the implied covenant cannot be used to override or expand the express terms of a contract. A party does not breach the implied covenant by exercising a right that the contract expressly grants or by declining to do something that the contract does not require. Id. at 386. The implied covenant "cannot create rights that do not otherwise exist under the contract." Id.
Penterra's conduct in seeking to appoint Meridian as a distributor for states outside the Territory was squarely within Penterra's contractual rights. The EDA granted Vantage exclusivity only in the six New England states. Penterra retained all rights to distribute its products in every other state. Penterra's exercise of those retained rights — by negotiating a distribution arrangement with Meridian for New York, New Jersey, Pennsylvania, and Maryland — cannot constitute a breach of the implied covenant. To hold otherwise would be to use the implied covenant as a vehicle for expanding Vantage's territorial rights beyond what the parties expressly agreed — precisely the result that Uno Restaurants prohibits.
Vantage's implied covenant claim is, at bottom, a repackaging of its breach-of-contract claim. Both claims rest on the same factual predicate: Penterra's appointment of Meridian for the tri-state area. Both claims rest on the same legal theory: that Vantage has exclusive rights in the tri-state area. Because that theory is contradicted by the plain language of the EDA, both claims fail.
Moreover, even if the implied covenant claim were analyzed independently of the breach-of-contract claim, it would still fail because Penterra acted in good faith throughout. Penterra performed its obligations under the EDA — it supplied products to Vantage, honored Vantage's exclusivity within the Territory, and never appointed a competing distributor for any of the six New England states. Penterra took action with respect to the tri-state area only after learning that Vantage had been making unauthorized shipments, and only after sending a cease-and-desist letter and giving Vantage an opportunity to comply. There is nothing about Penterra's conduct that suggests bad faith.
Vantage's breach of implied covenant counterclaim fails as a matter of law and should be dismissed with prejudice.
3. Promissory Estoppel (Count III of Counterclaims)
Vantage's third counterclaim asserts promissory estoppel, alleging that it reasonably relied on the Kapoor Email as a promise of territorial expansion and invested resources in tri-state distribution operations to its detriment.
Under Massachusetts law, the elements of promissory estoppel are: (1) a promise; (2) that the promisor should reasonably have expected to induce action or forbearance on the part of the promisee; (3) actual reliance by the promisee; and (4) that injustice can be avoided only by enforcement of the promise. Canney v. New England Tel. & Tel. Co., 353 Mass. 158, 164 (1967). The burden is on the party asserting promissory estoppel to establish each of these elements. Id. Vantage cannot satisfy any of them.
Element 1: A Promise. The threshold requirement for promissory estoppel is the existence of a "promise" — "a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee i

COMMONWEALTH OF MASSACHUSETTS SUPERIOR COURT BUSINESS LITIGATION SESSION SUFFOLK COUNTY

TABLE OF CONTENTS

TABLE OF AUTHORITIES

I. PRELIMINARY STATEMENT

II. STATEMENT OF FACTS

III. LEGAL STANDARD

IV. ARGUMENT

Record

Parties

Dates

Amounts