Re: Dkt. Nos. 64-3, 65, 88

ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT; DENYING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT

INTRODUCTION

Defendant Volcano Corporation merged with CardioSpectra, Inc. in 2007 in exchange for $25 million in cash to CardioSpectra’s shareholders, the plaintiffs in this action, and four additional payments if certain milestones were achieved. Volcano achieved the first milestone and made the first payment of $11 million. Milestone 2 obligated Volcano to pay the plaintiffs $10 million if Volcano achieved FDA approval of a medical device system developed from CardioSpectra’s assets. Milestones 3 and 4 obligated Volcano to pay the plaintiffs $17 million if Volcano achieved sales of $25 million of certain products. Volcano did not make those payments. The plaintiffs allege that Volcano breached its contractual obligation to use good faith and reasonable commercial efforts to achieve Milestone 2. The plaintiffs also allege that Milestones 3 and 4 were satisfied by sales of products developed by Volcano’s subsidiary, Axsun Technologies.

I must decide on the parties’ cross-motions for summary judgment whether there is a material factual dispute that would give plaintiffs the right to be paid on the second, third and fourth milestones. Because the plaintiffs have failed to present evidence on which a jury could reasonably conclude either that Volcano did not use good faith or reasonable commercial efforts to achieve Milestone 2, and because the definition of “OCT Products” in the Merger Agreement precludes plaintiffs from counting sales of the Axsun products towards Milestones 3 and 4, I GRANT Volcano’s motion for summary judgment and DENY the plaintiffs’ motion for summary judgment. I also DENY plaintiffs’ motion for sanctions.

BACKGROUND

I. VOLCANO’S ACQUISITION OF CARDIOSPECTRA

Volcano is a publicly traded medical device company focused on intravascular imaging (within blood vessels). Huennekens Decl. ¶ 2 [Dkt. No. 66]; Huennekens Depo. 124:19-20 [Dkt. No. 64-10]. In December 2007, Volcano acquired CardioSpectra, Inc., a medical device start-up company.

Cardiospectra had developed an Optical Coherence Tomography (“OCT”) system that produced high-resolution images of portions of coronary arteries. Bañas Depo. 220:5-221:6 [Dkt. No. 68-2]; Castella Depo. 90:10-21 [Dkt. No. 67-11]. CardioSpectra’s OCT system consisted of three primary parts: a console, a patient *945 interface module and pull-back device (“PIM”), and a catheter. Castella Depo. 90:10-93:24; Bañas Depo. 220:15-221:6; Main Deck Ex. Q.

The OCT system required Food and Drug Administration (“FDA”) approval of a 510(k) application before it could be marketed or sold in the United States. 1 The-OCT system also required FDA approval of an Investigational Device Exemption (“IDE”) 2 application before the OCT system could be tested on humans in the event that the FDA required human clinical data to support the 510(k) application. Bañas Depo. 133:21-134:9. CardioSpectra did not have FDA approval of either a 510(k) application or an IDE application at the time that it presented its OCT system to Volcano in August 2007. Bañas Depo. 216:23-217:3.

II. TERMS OF THE MERGER AGREEMENT

Volcano merged with CardioSpectra for approximately $25.2 million in December 2007. The Merger Agreement includes four Milestone Merger Considerations which, if achieved, require Volcano to pay the plaintiffs an additional $38 million. The milestones are:

Merger Agreement § 2.5(a)(i)-(iv) [Dkt. No. 64-19].

Volcano met the first milestone by securing European regulatory approval for a Generation 1 OCT System in May 2008 and paid the plaintiffs $11 million in accordance with section 2.5(a)(i) of the Merger Agreement. Bañas Deck ¶ 5; Bañas Depo. 142:5-8. Volcano did not meet the second' milestone. The plaintiffs allege that Volcano breached the Merger Agreement by failing to act in good faith and to use commercially reasonable efforts to achieve the second milestone, which Volcano denies.

The parties dispute whether the third and fourth milestones were met. The plaintiffs assert that the $25 million in sales of OCT Products needed to achieve Milestones 3 and 4 were satisfied by sales by Axsun Technologies, a wholly-owned subsidiary which Volcano acquired in late 2008. In response, Volcano argues that Axsun’s sales do not count towards the sales thresholds in Milestones 3 and 4. Volcano also asserts that if the Axsun sales count, the plaintiffs have not provided evidence of $25 million in qualifying sales by Axsun.

LEGAL STANDARD

Summary judgment is proper “if the movant shows that there is no genuine *946 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548 , 91 L.Ed.2d 265 (1986). The moving party, however, has no burden to disprove matters on which the non-moving party will have the burden of proof at trial. The moving party need only demonstrate to the court “that there is an absence of evidence to support the nonmoving party’s case.” Id. at 325 , 106 S.Ct. 2548 .

Once the moving party has met its burden, the burden shifts to the non-moving party to “designate specific facts showing a genuine issue for trial.” Id. at 324 , 106 S.Ct. 2548 (quotation marks omitted). To carry this burden, the non-moving party must “do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 , 106 S.Ct. 1348 , 89 L.Ed.2d 538 (1986). “The mere existence of a scintilla of evidence ... will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party].” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505 , 91 L.Ed.2d 202 (1986).

In deciding a summary judgment motion, the court must view the evidence in the light most favorable to the non-moving party and draw all justifiable inferences in its favor. Id. at 255 , 106 S.Ct. 2505 . “Credibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge ... ruling on a motion for summary judgment.” Id. However, conclusory or speculative testimony in affidavits is insufficient to raise genuine issues of fact and defeat summary judgment. See Thornhill Publ’g Co. v. GTE Corp., 594 F.2d 730 , 738 (9th Cir.1979).

DISCUSSION

I. MILESTONE 2

The plaintiffs allege that Volcano breached the Merger Agreement by failing to use commercially reasonable efforts and to act in good faith to achieve Milestone 2, which provides for a $10 million payment to the plaintiffs upon FDA approval or FDA 510(k) clearance of a Generation la OCT System by December 31, 2010. Merger Agreement § 2.5(a)(ii). The parties’ arguments revolve around the meaning of the Merger Agreement’s requirement that Volcano “act in good faith and [ ] use commercially reasonable efforts, to cause each of the Milestones to be achieved.” Id. § 2.5(b) (emphasis added). “Commercially reasonable efforts” are defined in the agreement but “act in good faith” is not.

A. Commercially reasonable efforts

The Merger defines “commercially reasonable efforts” as

Merger Agreement § 2.5(b). In light of this contractually defined standard, to defeat summary judgment the plaintiffs must present evidence from which a jury could reasonably conclude that Volcano did not *947 use the same efforts, sales terms, expertise and resources for the OCT Products that Volcano normally uses for other products which have similar market potential and are at a similar stage in their development or product life as the OCT Products, while taking into account relevant factors affecting the cost, risk and timing of development and the total potential of the OCT Products, as measured by the facts and circumstances at the time. See, e.g., Anderson, 477 U.S. at 249-50 , 106 S.Ct. 2505 (“[Tjhere is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted.”) (citations omitted).

The plaintiffs failed to identify a relevant comparator product against which Volcano’s efforts on the OCT Products could be measured. Their only attempt was with VIBE, an intravascular ultrasound (“IVUS”) catheter developed by Volcano. The plaintiffs assert that Volcano’s “IVUS and OCT technologies had similar market potential and were at a similar stage of development or product life.” In support, the plaintiffs cite the deposition of Volcano’s former Vice President of Marketing and Business Development, Vincent Burgess, who stated that IVUS is a “core product,” and a presentation slide labeled Volcano OCT Market Opportunity, which, according to the plaintiffs, shows that “OCT had a market potential of $492,000,000 ($172,000,000 unique to OCT and $320,000,000 it could cannibalize from IVUS, leaving IVUS with $300,000,000).” Pltfs.’ Opp. at 13 n.40 (citing Second Woodward Decl. Ex. 16 (Burgess Dep. at 241:5-11), Ex. 34 (Ex. 225 to Burgess Depo. at Volcano 94809)). The plaintiffs also assert that “Volcano’s IVUS device VIBE and OCT éach received their CE marks by demonstrating “safety” to the same European regulatory body within months of one another — an objective indication that both devices were at a similar stage of development or product life.”

Plaintiffs’ evidence concerning VIBE fails to draw a colorable comparison with the OCT Products, and based on the record before the Court, neither the OCT Products nor any individual OCT Product has similar market potential as the VIBE catheter or any other product. 3 The OCT Market Opportunity slide, the sole evidence proffered by the plaintiffs to establish similar market potential, discusses OCT and IVUS market projections generally, but it does not refer to VIBE or any OCT Product (or any other product). The slide says nothing about the market potential of the VIBE or OCT Products, much less that those products have similar market potentials. Likewise, Mr. Burgess’s statement that IVUS is a “core product” says nothing about the respective market potentials of VIBE or the OCT Products. Given the total absence of any evidence regarding the respective market potentials of VIBE and any OCT Products, the plaintiffs’ claim that Volcano failed to use “commercially reasonable efforts” fails. 4

*948 B. Act in good faith

Unlike “commercially reasonable efforts,” the Merger Agreement does not define “act in good faith.” Volcano argues that the Merger Agreement’s express good faith requirement is a subjective standard, requiring “honesty in fact” and that the plaintiffs must come forward with evidence showing that Volcano acted in bad faith. Volcano Mot. at 22 (citing DV Realty Advisors, LLC v. Policemen’s Annuity & Ben. Fund of Chi., 75 A.3d 101 , 110 (Del.2013)). Volcano argues that its conduct is in good faith “unless it went so far beyond the bounds of reasonable judgment that it seems essentially inexplicable on any ground other than bad faith.” The plaintiffs disagree, arguing that the relevant standard is “analogous to the implied covenant of good faith and fair dealing in Delaware law, which restricts a party from acting unreasonably to deny the other side the fruits of the parties’ bargain.” Pltfs.’ Opp. at 16 (citing Chamison v. Health-Trust, Inc., 735 A.2d 912, 920 (Del.Ch.1999)). This is a debate which I do not need to resolve because I find that the plaintiffs have not presented evidence on which a jury could reasonably conclude that Volcano’s failed to act in good faith, regardless of which standard of good faith I use. 5 '

The plaintiffs claim that the following alleged conduct by Volcano precludes summary judgment for Volcano:

The evidence proffered by the plaintiffs does not support their allegations, does not create a question of fact and does not preclude summary judgment for Volcano. I will address each allegation in order.

First, the plaintiffs’ assertion that Volcano willfully abandoned the prospect of developing a Generation la OCT System is based on deposition testimony from former CardioSpectra shareholders Wood and Milner. See Opp. at 17 n.70 (citing Second Woodward Decl. Ex. 23 (Wood Dep. at 185:20-186:3, 186:8-20, 187:7-17); Ex. 22 (Milner Dep. at 209:12-210:5). But Wood’s and Milner’s testimony merely discusses their disappointment that Volcano failed to bring an OCT system to market; the testimony says nothing about Volcano’s “willful abandonment” of its development of such a system. See, e.g., Milner Depo. 209:17-21 (“[AJfter we had — got the CE mark approval in Europe, at least in my own mind, I questioned, well, why — why isn’t Volcano trying to make any sales in Europe? I asked — at least asked myself that question.”). The mere fact that Volcano did not bring a Generation 1 a OCT System to market does not, without more, provide a reasonable basis for the jury to conclude that Volcano “willfully abandoned the prospect of developing” such a system, much less that Volcano did not act in good faith.

Second, the plaintiffs have not provided any evidence that Volcano made significant cuts in the OCT budget early in 2009. On the contrary, Volcano showed that the OCT budget for 2009 exceeded the 2008 budget by more than 35% (approximately $1.2 million). Main Decl., Ex. J.

Third, with no explanation whatsoever, the plaintiffs cite a slide from a Volcano OCT Basics and Product Update presentation and the expert report of Dr. Zvi Ladin in support of their assertion that Volcano assigned junior and inexperienced regulatory and clinical employees “to lead regulatory and clinical efforts for OCT, with virtually no oversight from Volcano management.” Pltfs.’ Opp. at 17 n.72 (citing Second Woodward Decl. Ex. 26 (E-l, p.31 (expert report)); Ex. 37 (Ex. 284 to Jawharkar Dep. at Volcano 193435)). The plaintiffs do not indicate what portions of the documents cited support their argument, or how.

I have reviewed the documents for relevant material. The slide from the Volcano OCT Basics and Product Update presentation states:

Ex. 37 (Ex. 284 to Jawharkar Dep. at Volcano 193435). This slide is not evidence of a lack of good faith. It shows that Volcano employees Ms. Jawharkar and Mr. Redline were assigned to “handle ground work” related to OCT regulatory needs, and that they were supported by R *950 & D 6 resources to acquire the information necessary to address the FDA’s questions and by CardioMed for high level consulting. 7

Dr. Ladin’s report states that Volcano’s “effort for compiling a new IDE was headed by Jwala Jawharkar and Dan Redline,” that Ms. Jawharkar had minimal regulatory experience, and that Mr. Redline had minimal understanding of the IDE process. Second Woodward Deck Ex. 26 (E-1, p.31). Dr. Ladin cites the depositions of Ms. Jawharkar and Mr. Redline in support of these assertions, but the portions that he cites do not appear to be in the record presented to the Court. The pages he cites are not included in the deposition excerpts included with the Second Woodward Declaration. I therefore disregard this assertion. In any event, without more, the fact that inexperienced employees led regulatory or clinical efforts for the OTC Products does not support a finding of a lack of good faith. Moreover, as noted above, Ms. Jawharkar and Mr. Red-line were supported by CardioMed for high level regulatory consulting.

Fourth, the plaintiffs only quote a portion of the statement by Volcano Executive Vice-President of Operations and R & D, John Sheridan. Reviewing the entire statement (which was addressed to plaintiff Bañas), it is clear that Mr. Sheridan’s comment regarding a “waste of valuable resources” was about pursuing a 510(k) application for the Generation 1 System, which, he stated, “we’ve” (presumably including Mr. Bañas) decided “is not going to be sold.” Woodward Ex. 59. The Generation 1 System was the subject of Milestone 1, not Milestone 2. Volcano achieved Milestone 1 the same month as this statement, triggering Volcano’s obligation to pay the plaintiffs $11 million — which it satisfied. This statement therefore has nothing to do with a lack of good faith regarding Milestone 2. On the contrary, in the statement, Mr. Sheridan advocated that Volcano “focus on other more important initiatives,” including the Generation 1 a System, which was the subject of Milestone 2. If anything, the email shows that Mr. Sheridan advocated redirecting more resources towards achieving Milestone 2.

Fifth, in support of their claim that Volcano executives secretly strategized ways to avoid the milestone payments, the plaintiffs cite an email from Volcano Executive Vice President, Marketing and Business Development, Mr. Burgess, to other Volcano executives, stating “[a]s a reminder for tomorrows BD section, I am going to gloss over our Goodman discussions. Don’t want to worry Chris Bañas that we might do something to put his milestones at risk.” Woodward Ex. 60. Standing alone, this does not evidence a lack of good faith, or even that Volcano was putting the milestones at risk. Indeed, Volcano met Milestone 1 the following month. This statement says nothing about Milestone 2. The plaintiffs also cite Exhibit 63 to the Woodward Declaration, apparently an email where Volcano executives noted that Volcano can later “kill the program.” But there is no Exhibit 63 to the Woodward Declaration (it stops at Exhibit 62). I therefore disregard this assertion. In any event, without more, a statement apparently regarding Volcano’s contractual right to terminate the program by declaring a commercial or technical failure does not evidence a lack of good faith.

*951 Sixth, the emails cited by the plaintiffs in support of them assertion that Volcano identified missteps and cut corners do not support a showing of a lack of good faith in Volcano’s efforts to achieve Milestone 2. Second Woodward Decl. Ex. 44 (at Volcano 201047); Ex. 57 (Ex. 258 to Sheehan Dep. at Volcano 182716); Ex. 62 (Ex. 45 to Quaglia Dep at Volcano 201045). None of the comments relate specifically to FDA approval or 510(k) clearance of a Generation 1 a OCT System, the subject of Milestone 2. More importantly, even assuming that the emails show lack of diligence or incompetence within Volcano’s OCT business unit, that is distinct from showing a lack of good faith. Cf Hanover Ins. Co. v. Hudak & Dawson Const., 946 F.Supp.2d 1208, 1220 (N.D.Ala.2013) (“A lack of diligence or negligence is not the equivalent of bad faith, and even gross negligence is not the same as bad faith.”); cf Park B. Smith, Inc. v. CHF Indus. Inc., 811 F.Supp.2d 766, 775 (S.D.N.Y.2011) (“an attorney’s ignorance, incompetence, or lack of diligence is not evidence of bad faith”).

It is also notable that Volcano hired plaintiff Bañas to head development of the OCT Products. Bañas was CEO of CardioSpectra and was personally interested in achieving the milestones. His appointment to such a critical position for achievement of the milestones seems both appropriate and an act of good faith. That neither Bañas nor the other plaintiffs can identify evidence creating a material dispute over Volcano’s good faith strengthens the reasons to grant Volcano’s motion.

The plaintiffs have not presented facts on which a jury could reasonably find that Volcano breached the Merger Agreement by failing to act in good faith to achieve Milestone 2. Volcano’s motion for summary judgment is GRANTED on the good faith claim.

II. MILESTONES 3 AND 4

Milestones 3 and 4 require Volcano to pay the plaintiffs $17 million if Volcano attains sales totaling $25 million from commercial sales of OCT Products by December 31, 2014. 8 Merger Agreement at § 2.5(a)(iv). The plaintiffs dispute whether Volcano has achieved these milestones. At the heart of the dispute is whether OCT Products, a term expressly defined in the Merger Agreement, includes certain products developed by Axsun Technologies, a wholly-owned subsidiary of Volcano that Volcano acquired in December 2008, a year after Volcano acquired CardioSpectra. The plaintiffs argue that OCT Products, as defined, include the Axsun products. See, e.g., Pltfs.’ Mot. at 3 (“sales of the items that Volcano sold through Axsun fall within the category of ‘OCT Products’ as defined in the Agreement”). Volcano argues that they do not. The parties both argue that the plain language of the Merger Agreement is unambiguous and in accord with their interpretation of OCT Products. Both parties also argue that extrinsic evidence supports their interpretations in the event that I find the language ambiguous.

The plaintiffs have two principal hurdles to clear for their interpretation to prevail. First, I must find that OCT Products are not limited to the four categories of products identified in the definition — consoles, patient interface modules and pull-back devices (“PIMs”), OCT catheters or wands, and products contained in a Licensed Patent — but include any component of an OCT system, such as OCT laser light sources, even if not sold as a component of a console. Second, I must find that OCT *952 Products, as defined in the Merger Agreement, are not limited to products developed from assets Volcano acquired from CardioSpectra as part of the merger, but can include products developed by a subsidiary of Volcano which Volcano had not yet acquired when the Merger Agreement was negotiated and executed.

For the reasons stated below, the' plaintiffs do not clear either hurdle. I find that the Merger Agreement is unambiguous and only Volcano’s interpretation is reasonable. 9 I therefore GRANT Volcano’s motion for summary judgment regarding Milestones 3 and 4 and DENY the plaintiffs’ motion for summary judgment.

A. Volcano’s acquisition of Axsun Technologies

In December 2008, Volcano acquired Ax-sun Technologies, a manufacturer of compact laser components that can be used in OCT imaging devices. Axsun became a wholly-owned subsidiary of Volcano. Bañas Depo. 348:24-349:2; Huennekens Depo. 144:14-16. Axsun developed and sold four products which the plaintiffs argue fall within the definition of OCT Products for purposes of Milestones 3 and 4: Axsun Swept Laser OEM Engine, Axsun Swept Laser Benchtop Engine, Axsun Camera Link DAQ Board, and Axsun Swept Laser Engine with Integrated DAQ. The plaintiffs assert that these Ax-sun products are “OCT laser light sources.” See Pltfs.’ Mot. at 11.

B. Interpretation of OCT Products

The Merger -Agreement defines OCT Product as:

Merger at A13.

Importantly, the plaintiffs do not argue that the Axsun products are consoles, patient interface modules and pull-back devices, or OCT catheters or wands, i.e., the products specifically identified in the definition of OCT Product. 11 Likewise, the plaintiffs concede that the Axsun products are not covered by the scope of any Valid Claim contained in any Licensed Patent. See Ex. V (Pltfs.’ Supp. Resp. Interrog. No. 13). Rather, the plaintiffs argue that OCT Product, as defined in the Merger Agreement, is “a broad, catch-all term” because “within its initial example of ‘consoles,’ it incorporates an open-ended, nonexclusive list of items.” Pltfs.’ Mot. at 11. The plaintiffs argue that OCT Products therefore include “OCT laser light sources, such as the swept laser engines made by Axsun and sold by Volcano.” Pltfs.’ Mot. at 11. In contrast, Volcano argues that the plaintiffs’ interpretation (i) conflicts *953 with the plain language of the Merger Agreement; (ii) frustrates the scheme of the Merger Agreement; and (iii) nullifies other provisions in the Merger Agreement. I address each argument in turn below.

1. The language of the Merger Agreement 12

“[T]he threshold inquiry when presented with a contract dispute on a motion for summary judgment is whether the contract is ambiguous.” United Rentals, Inc. v. RAM Holdings, Inc., 937 A.2d 810, 830 (Del.Ch.2007) (citation omitted). The court decides the meaning of an unambiguous contract as a matter of law. JANA Master Fund Ltd. v. CNET Networks, Inc., 954 A.2d 335, 338-39 (Del.Ch.2008). “Ambiguity does not exist simply because the parties disagree about what the contract means.” United Rentals, 937 A.2d at 830 . Rather, contracts are ambiguous “when the provisions in controversy are reasonably or fairly susceptible of different interpretations or may have two or more different meanings.” Id. (citation omitted). “If a contract is unambiguous, extrinsic evidence may not be used to interpret the intent of the parties, to vary the terms of the contract or to create an ambiguity.” Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232-33 (Del.1997). However, “when there is uncertainty in the meaning and application of contract language,” a court must consider extrinsic evidence “to arrive at a proper interpretation of contractual terms.” Id. To succeed on a motion for summary judgment, a party must establish that its interpretation is the only reasonable interpretation.

The plaintiffs’ interpretation of OCT Products is unreasonable. OCT Products are specifically defined as four types of products: consoles; PIMs; OCT catheters and wands; and products covered by a Licensed Patent. The term “consoles” is immediately followed by a parenthetical which states: “(including OCT laser light sources[,] processors, application software, data storage devices, printers and other related components).” The plaintiffs’ interpretation unreasonably treats the components listed in the parenthetical as OCT Products on equal footing with the four categories of products specifically identi.fied as OCT Products, thereby depriving OCT Products of the limits expressly provided in the definition. If an OCT laser light source is a qualifying OCT Product— not as a component of a console, but standing alone — then so are the other components listed in the parenthetical, including data storage devices and printers, even when not used as components of a console. Such a broad interpretation of OCT Products is unreasonable given that the definition expressly limits OCT Products to four specific categories of products.

The plaintiffs’ interpretation ignores that the supposedly “open-ended” parenthetical on which it relies appears only after the term “consoles” and therefore modifies only “consoles”; it does not mean that “OCT laser light sources, processors, application software, data storage devices, printers and other related components,” standing alone, in any context, are OCT Products. The parenthetical itself may be open-ended in the sense that it does not list every conceivable component of a console. But the definition of OCT Products is decidedly not open-ended; it is expressly limited to four categories of products: consoles, PIMs, OCT catheters and wands, and products covered by a licensed patent. *954 The plaintiffs’ interpretation disregards this limitation.

As Volcano points out, the plaintiffs’ interpretation “broadens the definition of ‘OCT Product’ beyond any reasonable or meaningful limit.” Volcano Opp. at 12. The plaintiffs respond that “[t]his argument is irrelevant, as there is evidence only of Volcano’s sales of the four Axsun OCT products.” Pltfs.’ Reply at 2. The plaintiffs miss the point. An interpretation that broadens the definition of OCT Product beyond any meaningful limit is compelling evidence that the interpretation is unreasonable.

The only fair and reasonable interpretation of the parenthetical is that it explains what a console is by providing an illustrative list of components of a console. Unlike PIMs, catheters and wands, or products covered by a Licensed Patent, the term “consoles” evidently required further explanation. By comparison, immediately following the product category “patient interface modules and pull-back devices” is a parenthetical stating “(also referred to as a PIM).” There can be no doubt that this parenthetical only modifies, or explains, the term that precedes it: “patient interface modules and pull-back devices.”

2. The plaintiffs’ interpretation frustrates the scheme of the Merger Agreement

The plaintiffs’ interpretation frustrates the purpose of the Merger Agreement because it requires Volcano to pay the plaintiffs millions of dollars for sales achieved by Volcano which have nothing to do with the assets Volcano acquired from the plaintiffs.

The structure and substance of the Merger Agreement makes clear that all of the milestone payments are intended as earn-out provisions tied to development of the intellectual property Volcano acquired from CardioSpectra. Milestone 1 is triggered by regulatory approval of a first generation OCT System by December 31, 2009. Milestone 2 is triggered by regulatory approval of a subsequent OCT System one year later, by December 31, 2010. Milestones 3 and 4 are triggered by sales of OCT Products by December 31, 2013 and December 31, 2014, respectively. The plaintiffs concede that Milestones 1 and 2 are specifically linked to regulatory approval of intellectual property acquired from CardioSpectra. See Pltfs.’ Opp. at 4. Given the sequence of events, there is no reasonable explanation for tying Milestones 1 and 2 to CardioSpectra’s assets, but not Milestones 3 and 4. The plaintiffs have provided no reasonable explanation for why the drafters would reward the plaintiffs only for regulatory approval of products developed from CardioSpectra’s assets, but would reward them for sales of products developed from other assets. If, as the plaintiffs assert, the intent was to protect the plaintiffs from the possibility that Volcano acquired a different OCT company and “shelved” the plaintiffs’ assets, then all the milestones should be triggered without being pegged to the plaintiffs’ assets. The plaintiffs concede that that is not the case. See Pltfs.’ Opp. at 4. On the contrary, the chronological timing of the milestones implicitly presupposes a sequence of events: first Volcano obtains regulatory approval of the assets acquired from CardioSpectra and then it commercializes those products.

3. The plaintiffs’ interpretation nullifies other provisions of the Merger Agreement

The plaintiffs’ interpretation that OCT Products are not limited to products developed from the plaintiffs’ assets conflicts with other provisions in the agreement. The Merger Agreement defines commercially reasonably efforts as “the use of *955 efforts, sales terms, expertise and resources normally used by [Volcano] for other products, which, as compared with the OCT Products-, are of similar market potential.... ” Merger Agreement at A-9 (emphasis added). This definition is meaningless if OCT Products include products by other companies, including those not yet acquired by Volcano. For example, there is no argument that Volcano could satisfy the “commercially reasonable efforts” standard by matching the efforts used by Volcano for products comparable to Axsun’s products (as opposed to products comparable to the OCT Products being developed from CardioSpectra’s assets). Rather, it is clear that “OCT Products” in the “commercially reasonable efforts” definition refers to products developed from CardioSpectra’s assets.

In addition, the Merger Agreement allows Volcano to “terminate] the development and/or commercialization of all or some OCT Systems or OCT Products” upon the reasonable determination that a Technical Failure or Commercial Failure has occurred. Merger Agreement § 2.5(c). By definition, Technical and Commercial Failures occur where events cause Volcano’s development or commercialization of the OCT Products to be commercially unreasonable or not reasonably likely. Merger Agreement at A-4, A-16. That provision is meaningless if OCT Products refers to Axsun products, which were not developed by Volcano and which Volcano had not even acquired at this time. The fact that Volcano did in fact declare a commercial failure, as the plaintiffs claim, is immaterial; the point is that Volcano’s power to declare commercial and technical failures, as set forth in the agreement, is limited to the products developed from CardioSpectra’s assets, which is what happened.

III. ANTICIPATORY BREACH

The plaintiffs’ complaint alleges that ‘Volcano is in anticipatory breach of the Agreement, and is preventing the achievement of the third and fourth milestones, thus depriving Plaintiffs of the milestone payments.” SAC ¶ 36. “A repudiation of a contract is an outright refusal by a party to perform a contract or its conditions.” W. Willow-Bay Court, LLC v. Robino-Bay Count Plaza, LLC, 2009 WL 458779 , *4 (Del.Ch. Feb. 23, 2009) (citation omitted). A party’s refusal to perform may be evidenced by words or by conduct. A refusal to perform through conduct requires “a voluntary and affirmative act rendering performance apparently or actually impossible.” Id. The plaintiffs claim that “by the time Plaintiffs sued Volcano in [March] 2012, Volcano had effectively abandoned its commercialization plan for a Generation la OCT System, ensuring there would never be sales of that System sufficient to trigger Milestones 3 and 4.” Pltfs.’ Opp. at 19. The plaintiffs, however, have presented no evidence that Volcano refused to achieve Milestones 3 and 4 in March 2012 or at any other time before Volcano declared a Commercial Failure in November 2013, pursuant to the Merger Agreement. 13 The anticipatory claim therefore fails as a matter of law and I GRANT Volcano’s motion for summary judgment regarding this claim.

IV. MOTION FOR SANCTIONS

The plaintiffs filed a motion for sanctions (Dkt. No. 88), alleging that Volcano withheld responsive material regarding its commercially reasonable efforts from its *956 discovery responses and then attached the responsive material to its reply brief in support of its motion for summary judgment. The allegedly responsive material attached to Volcano’s reply brief relates to Volcano’s commercial efforts for VIBE, a catheter developed by Volcano.

The plaintiffs argue that Volcano should have provided material regarding VIBE and Volcano’s other products in response to the following requests for production:

The plaintiffs’ Milestone 2 claim required the plaintiffs to establish that the OCT Products were comparable to other Volcano products for purposes of the “commercially reasonable efforts comparison” standard. Plaintiffs contend that the above requests required Volcano to produce documents regarding VIBE and its other products, including the material that Volcano attached to its reply brief, because “commercially reasonable efforts” are defined as the efforts normally used by Volcano for other products similar to the OCT Products. But this assertion is meritless for at least two reasons.

First, Volcano does not consider VIBE, or any other product, to be similar to the OCT Products. It had no reason to produce documents regarding VIBE or other products in response to the requests. It attached the VIBE documents to its reply brief in order to dispute the plaintiffs’ contention that VIBE is similar to OCT Products, which was appropriate.

Second, the plaintiffs were provided a list of Volcano’s products, including VIBE, in discovery. They could have and should have propounded discovery specifically directed to discovering whether Volcano’s other products were valid comparisons. Yet they never did. The requests listed above were not reasonably directed at the material the plaintiffs accuse Volcano of withholding. The failure to identify an adequate comparator against which to measure Volcano’s commercially reasonable efforts was caused by the way in which plaintiffs drafted their discovery, not the way in which Volcano responded. The motion for sanctions is DENIED.

CONCLUSION

Volcano’s motion for summary judgment is GRANTED. The plaintiffs’ motion for summary judgment is DENIED. The plaintiffs’ motion for sanctions is DENIED. The trial set for May 27, 2014 and all related pre-trial deadlines are VACATED.

IT IS SO ORDERED.

. See Federal Food, Drug, and Cosmetic Act, § 510(k), 52 Stat. 1040 , as amended, 21 U.S.C. § 360 (k); see also 21 C.F.R. § 807 et seq. (governing premarket notification procedures for medical devices).

. See 21 C.F.R.'§ 812 et seq. (governing Investigational Device Exemptions)

. I deny the plaintiffs’ motion for sanctions, which alleges that Volcano withheld evidence related to Volcano's use of commercially reasonable efforts, at the end of this order. Plaintiffs failed to request information in discovery about products comparable to the OCT Products.

. Volcano also claims that VIBE was a Class III device, which requires clinical data for premarket approval, whereas the OCT Products were Class II devices, for which clinical data is not a requirement, and therefore the plaintiffs cannot shows that the "facts and circumstances” required Volcano to make the same regulatory decisions for OCT Products that it did for VIBE. Volcano Reply at 13-14. The plaintiffs dispute this claim. I need not reach this matter because I find that the *948 “commercially reasonable efforts” claim fails for the reason stated above.

. Volcano has the better argument. In Delaware, 'an undefined good faith provision in an agreement is governed by a subjective standard and assessed "in the context of the larger provision — or value — it sought to protect.” DV Realty Advisors, 75 A.3d at 110 (finding that the use of the term "good faith” in the agreement was intended to ensure that the-Limited Partners do not arbitrarily or capriciously remove the General Partner). In DV Realty Advisors, the Delaware Supreme Court defined the lack of good faith as conduct "so far beyond the bounds of reasonable judgment that it seems essentially inexplicable on any ground other than bad faith.” Nothing in that opinion limited that standard to disputes involving partnership agreements. Contrary to the plaintiffs’ argument, the distinction between the implied covenant of good faith and contractually obligated good faith is not limited to partnership agreements. See, e.g., Stewart v. BF Bolthouse Holdco, LLC, 2013 WL 5210220 , *17 (Del.Ch. Aug. 30, 2013) (finding, in contract dispute between former employees and company, that "the parties’ express agreement to evaluate Defendants' use of discretion under the standard of good faith supersedes the implied covenant and precludes its application to that discretionary right”).

. I assume that R + D refers to research and development.

. Volcano asserts that plaintiff Bañas himself used CardioMed for regulatory consulting before and after the merger. The plaintiffs do not dispute this.

. Milestone 3 calls for $10 million if Volcano achieves $10 million in qualifying sales by December 31, 2013. Milestone 4 calls for an additional $7 million if Volcano achieves $25 million in total cumulative sales by one year later, December 31, 2014.

. Because I find the Merger Agreement unambiguous, I do not consider the extrinsic evidence offered by the parties.

. The parties agree that a comma was mistakenly omitted between the words “sources” and "processors.”

. Volcano asserts that “Plaintiffs do not contend that Axsun's laser components are consoles, PIMs, catheters or software.” Def. Opp. at 11. The plaintiffs do not dispute this ássertion in their briefing. However, at oral argument, counsel for the plaintiffs appeared to argue that a laser light source is a console, stating: "I don't understand the Court’s — if you see 'including without limitation' and you understand what a console is, how an OCT laser light source could not be a console.” But there is no evidence that laser light sources are consoles.

. The parties agree that Delaware law governs the interpretation of the Merger Agreement. See Merger Agreement § 13.9(a).

. There is no dispute that Volcano declared a Commercial Failure in November 2013. See, e.g., Pltfs.' Opp. at 19.