FILED: NEW YORK COUNTY CLERK 05/09/2011

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
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