FILED: NEW YORK COUNTY CLERK 05/09/2011

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maneuver, Mr. Knowles observed that “obviously Beyoncé is getting advice from her new attorneys and others that we are not align with.” Ms. Carter’s Purported Termination Constituted a Breach of the Agreement 69. Ms. Carter had no right to terminate the Agreement, making her attempt to do so a breach of contract. As Ms. Carter well knew, Alcon had committed no later than October 29 to provide $19.25 million, based on the material terms agreed to that day, and subject only to the parties’ good faith approval of written documents embodying those terms. This alone constituted “committed financing” by November 15, sufficient to avoid termination pursuant to the Financing Contingency. 70. The Alcon financing was, in any event, committed by December 2, when the contracts had been finalized and were waiting to be signed. Because Gate Five had $19.2 million in committed financing by December 2 at the very latest, Ms. Carter’s December 3 termination, for a supposed failure to have secured $5 million in committed financing, was invalid. 71. Third, Ms. Carter repeatedly waived the Financing Contingency, rendering her termination right void regardless of whether financing was committed by November 15. Her lawyer stated in writing that Ms. Carter would proceed with the Alcon deal even though it had not closed by November 15. He also approved in writing a contract provision which expressly deleted the Financing Contingency. And Ms. Carter’s own conduct after November 15—such as spending hours with Mako working on the game, inviting Mako’s creative director to Australia to work on choreography and design issues, and finalizing a press release and internet “splash” page for the game—had been entirely inconsistent with an intent to terminate. 72. Ms. Carter’s conduct also estopped her from terminating based on the Financing Contingency because Gate Five relied to its detriment upon her words and conduct indicating PC Law # 15232 24
that she was moving forward with the project. For example, if Gate Five had known that Ms. Carter planned to terminate based on the Financing Contingency, it would have instructed Mako to stop work. Instead, relying on Ms. Carter’s words and actions indicating that she intended to move forward with the project, Gate Five (with Ms. Carter’s knowledge) instructed Mako to continue working at full capacity on Starpower: Beyoncé, at great expense to Gate Five. Ms. Carter Makes An Extortionate Demand For New Compensation, Alcon Withdraws Financing, and Ms. Carter Leaves the Project 73. Because the $19.2 million financing deal was complete on December 2, it was apparent to everyone that Ms. Carter was not backing out of the project because of a supposed failure to obtain $5 million in “committed financing.” Her true motivations became clearer on December 9, when her lawyer wrote to Gate Five and Alcon to suggest that she might not walk away after all. The e-mail did not mention any concern about financing. Instead, it addressed just one topic – Ms. Carter’s compensation. Though the parties had spent months negotiating compensation terms in the winter and spring of 2010, and had executed a binding contract in June 2010, her lawyer proposed, for the first time on December 9, a “new arrangement” regarding her compensation. The “new arrangement” was, in reality, a complete reworking of the structure and terms of compensation that she and BDJ had negotiated so carefully just months before. Her lawyer wrote that Ms. Carter was still “excited” about the project, and would be “very engaged and committed to it” if Gate Five would accept the “new arrangement,” i.e., if it would scrap her existing contract and replace it with an entirely new one. 74. The December 9 e-mail proved that Ms. Carter’s purported termination had nothing to do with financing. If Ms. Carter believed the status of financing was so dire that she had to leave the project, it is inconceivable that her lawyer would have written that she was still excited about the project, and would resume her involvement with it, without ever mentioning PC Law # 15232 25
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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 and 10: A screen shot depicting what the pl
Page 11 and 12: with the Kinect, and it was activel
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: Ms. Carter Shocks Her Business Part
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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