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pd4mlevaluationcopy.visit://pd4ml.comFORTHEDISTRICTOFMASSACHUSETTS[Hon.ReginaldC.Lindsay,U.S.DistrictJudge]BeforeSelyaandHoward,CircuitJudges,andSingal,*DistrictJudge.JohnT.Montgomery,withwhomMartinJ.Newhouse,LesleyF.Wolf,andRopes&GrayLLPwereonbrief,forappellants.DavidH.Erichsen,withwhomPeterA.Spaeth,DebraSquires-Lee,MichaelR.Dube,andHaleandDorrLLPwereonbrief,forappellee.June2,2004__________pd4mlevaluationcopy.visit*OftheDistrictofMaine,sittingbydesignation.SELYA,CircuitJudge.Thisappealchallengesthedistrictcourtsdenialofapreliminaryinjunctionseekingwhatamountstoafreezeorder(althoughitsproponentsdescribetherequestedreliefasbeinginthenatureofanequitableattachment).Concluding,aswedo,thatthelowercourtcorrectlychosetoemploythetraditionalfour-partstandardforgaugingtheproprietyofpreliminaryinjunctivereliefinthissituationandproceededtoapplythatstandardfaultlessly,weaffirmthedecisionbelow.I.BACKGROUNDOurstartingpointisthecastofcharacters.Defendant-appelleeBlindsToGo,Inc.(BTG)operatesaslewofretailstoresinNorthAmerica(afewofwhicharelocatedinMassachusetts).Plaintiffs-appellantsCharlesbankEquityFundII,LimitedPartnership(Charlesbank)andHarvardPrivateCapitalHoldings,Inc.(HPCH)areaffiliatedentitiesthatmakeandholdinvestmentsonbehalfofthePresidentandFellowsofHarvardCollege.Thelitigationbetweentheseprotagonistshasitsrootsinaventurecapitaltransaction.OnDecember18,1995,HPCHandBTGenteredintoapreferredsharepurchaseagreement(theAgreement).PursuanttotheAgreement,HPCHmadea$15,000,000capitalinvestmentand,inexchange,BTGissuedtoHPCHtheentiretyofanewclassofstock,totaling20,618,556preferredshareswithconversionprivileges.Asaprophylacticdevice,BTGinsistedthatHPCHgranttotheholdersofBTGscommonstockarightoffirstrefusal.Theprovisionembodyingthissafeguard,asamendedandrestatedina1997shareholdersagreement,requiredthattheholdersofBTGscommonstockbeaffordedtheopportunityoffirstrefusalintheeventofanytransferofthepreferredsharesarisingoutofathirdpartysbona-fideoffertopurchasetheshares(solongastheofferorwasactingatarmslength).TheAgreementcontainedseveralotherprovisions.Ofparticularpertinencehere,HPCHoritspermittedassigneehadtherighttoputallthepreferredsharesinspecifictimeframesorupontheoccurrenceofcertaintriggeringevents.ReceiptofnoticeoftheexerciseofthisoptionobligatedBTGtoredeemtheshareswithinsixtydaysatapersharepricecalculatedinaccordancewithaformuladelineatedinBTGscorporatecharter.AsignificantelementofthisformulawastheEBITDA(i.e.,earningsbeforeinterest,incometax,depreciationandamortizationasdeterminedinaccordancewithgenerallyacceptedaccountingprinciples,consistentlyapplied)fortheimmediatelyprecedingtwelvemonths.Inordertosecurethedueperformanceofthisbuy-backobligation,BTGgrantedtoHPCHasecurityinterestinitsexistingandafter-acquiredassets.TherelationshipbetweenHPCHandBTGproveduneventfulthroughtheendofthemillennium.AprecursortodiscordsurfacedinNovemberof2001,whenHPCHtransferreditspreferredsharesandappurtenantrightsandinterestsundertheAgreement(includingitssecurityinterestinBTGsassets)toCharlesbank.Althoughthe1997shareholdersagreementwasstillineffect,HPCHconsummatedthetransferwithoutfirstofferingthepreferredsharestotheholdersofBTGscommonstock.Charlesbankproceededtoexercisetheputoptioninthefirstavailablepd4mlevaluationcopy.visit(a),itsuedBTGintheUnitedStatesDistrictCourtfortheDistrictofMassachusetts(BTGisaCanadiancorporationthatmaintainsitsprincipalplaceofbusinessthereandCharlesbankisaMassachusettslimitedpartnership).Thecomplaintassertedclaimsforbreachofcontractandbreachoftheimpliedcovenantofgoodfaithandfairdealing.HPCH(aMassachusettscharitablecorporationheadquarteredinthatstate)soonjoinedthefrayasanadditionalplaintiff.Theinterestsofthetwoplaintiffsarecongruentand,fromthispointforward,werefertothem,collectively,asC-H.InOctoberof2002,BTGandtheholdersofitscommonstockcountersuedinaCanadiancourt.TheysoughtadeclarationthatBTGdidnotoweanymoneytoC-Hbecausethetransferofthepreferredshareswasunauthorized.BTGpositedthatthetransactionbetweenCharlesbankandHPCHtriggeredtherightoffirstrefusal;thatHPCHnonethelessdisregardedthatobligation;andthat,therefore,