FILED: NEW YORK COUNTY CLERK 05/09/2011

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27. In the fall of 2009, BDJ met several times with Ms. Carter’s representatives, including her father and then manager, Matthew Knowles of Music World, Inc. (“Music World”). These discussions gained instant traction. As BDJ’s members knew when they started these meetings, Ms. Carter was a fan of motion-based video games and had wanted to have her own game for some time. In a 2009 interview in Billboard magazine, she had actually described as follows the sort of game that she wanted to work on: I’d like to get involved in video games, since I really love Wii Fit. 2 I think it would be a great idea to incorporate choreography, because, for me, my workout is way more fun when it involves dancing, as opposed to running on a boring treadmill. So I would love to do some kind of fitness game but incorporate dance and performance into it. I think a lot of women would enjoy that. When one of BDJ’s members read her statement, he commented that “she’s describing our game.” 28. Not surprisingly, Ms. Carter’s representatives were immediately interested in BDJ’s game and the new technology. By December 2009, their discussions had progressed to the point that they exchanged a term sheet contemplating that Beyoncé would be the star of M- Body. Working together with her team, BDJ began tailoring M-Body around her music and personal style shortly thereafter. 29. On March 8, 2010, Ms. Carter personally hosted a meeting with BDJ at her New York office. The BDJ team demonstrated the motion sensing camera and showed her a video they had commissioned depicting how M-Body would look, and how it would be played. Ms. Carter loved the game and the camera and authorized her representatives to finalize deal terms with BDJ. 30. BDJ was not the only company that had been seeking to work with Beyoncé on a dance-based video game. Microsoft was developing its own interactive dance game to be played 2 Wii Fit is a fitness oriented video game designed to work with the Wii gaming console. PC Law # 15232 10
with the Kinect, and it was actively pursuing her to be the star of that game. Ms. Carter chose to work with BDJ rather than Microsoft because, she said, she thought M-Body was the better game. She also preferred the deal terms BDJ was willing to offer, as BDJ was prepared to give her an equity interest in the profits realized by the game, as well as music license fees, royalties, and service fees, and was willing to offer her a meaningful opportunity, as a partner in the venture, to work with the developers on her own creative ideas for the game’s visual aspects, design, choreography and music. The Relevant Agreements 31. In June 2010, after months of negotiations dating back to late 2009, the parties signed the Agreement, under which Ms. Carter formally committed to work with BDJ to create and commercialize, through Gate Five, Starpower: Beyoncé. In the Agreement, Ms. Carter granted Gate Five a five-year exclusive license to use and publicize her name and likeness in connection with Starpower: Beyoncé and any sequels or subsequent games. She also agreed (i) to cooperate with Gate Five to create the game, (ii) to make substantial efforts to complete and promote it; and (iii) not to participate in any other video game for a period of 18 months from the release of the game or any sequel. 32. The Agreement contained a termination clause, Section 6(b)(v), which permitted either party to terminate in the event “Gate Five fails to obtain committed financing or additional capital in an amount equal to or greater than $5,000,000 on or prior to August 31, 2010” (the “Financing Contingency”). The Financing Contingency was later moved from August 31 to November 15. 33. Although the Agreement is between Gate Five and Ms. Carter’s company, BI, Ms. Carter personally signed an “Inducement Letter” in which she agreed to “guarantee full PC Law # 15232 11
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Page 3 and 4: only other companies with access to
Page 5 and 6: ad faith negotiation tactic. She ha
Page 7 and 8: Electronic Arts, MTV, Major League
Page 9: A screen shot depicting what the pl
Page 13 and 14: Those factors would have been enoug
Page 15 and 16: perfume, “Heat”—which became
Page 17 and 18: Mart. Starpower: Beyoncé featured
Page 19 and 20: game sold 7 million units (a conser
Page 21 and 22: 58. Two days later, her lawyer sent
Page 23 and 24: Ms. Carter Shocks Her Business Part
Page 25 and 26: that she was moving forward with th
Page 27 and 28: Nonetheless, even after her betraya
Page 29 and 30: and the PlayStation), (v) Ms. Carte
Page 31 and 32: 89. Second, Ms. Carter was contract
Page 33 and 34: and agreed to provide certain servi
Page 35: terminated it. 112. The Agreement i

FILED: NEW YORK COUNTY CLERK 05/09/2011

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