FILED: NEW YORK COUNTY CLERK 05/09/2011

FILED: NEW YORK COUNTY CLERK 05/09/2011
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
GATE FIVE, LLC,
PC Law # 15232
v.
Plaintiff,
BEYONCÉ KNOWLES-CARTER and
BEYONCÉ, INC.,
Defendants.
Index No. 651094/2011
VERIFIED COMPLAINT
Plaintiff Gate Five, LLC (“Gate Five”), by and through its attorneys, Johnson Gallagher
Magliery LLC, as and for its Verified Complaint against defendants Beyoncé Knowles-Carter
(“Ms. Carter” or “Beyoncé”) and Beyoncé, Inc. (“BI”), 1 alleges as follows:
Nature of the Action
1. Gate Five seeks to hold Ms. Carter, the iconic pop star known as Beyoncé,
accountable for a bad faith breach of contract so callous that, on what appeared to be a whim, she
destroyed Gate Five’s business, and drove 70 people into unemployment, the week before
Christmas. As described in detail below, Ms. Carter breached her contract with Gate Five by
abruptly abandoning the lucrative joint venture she and Gate Five were pursuing to
commercialize a video game called Starpower: Beyoncé. Though she had already negotiated
lavish compensation terms to which she was contractually bound, Ms. Carter, at a crucial
moment in the project’s development, made an extortionate demand for entirely new
compensation terms she suddenly decided she wanted. When her maneuver backfired and drove
away the financier (who found Ms. Carter too erratic to do business with), she pulled out of the
1 Because BI is a corporation that acts through Ms. Carter, both defendants will be collectively referred to as
“Ms. Carter” or “Beyoncé” herein.
INDEX NO. 651094/2011
NYSCEF DOC. NO. 12 RECEIVED NYSCEF: 05/09/2011

project in breach of her contract. Her actions were so unscrupulous that her then manager (who
is also her father) renounced them, while a senior executive of the company that had agreed to
finance the project condemned her conduct as “morally reprehensible” in an e-mail he sent to
one of her talent agents.
2. Starpower: Beyoncé simulates the experience of performing on-stage as a pop
star. It is what is known as a motion-driven video game. Played on a television using a console
such as the Wii, Xbox or PlayStation, motion-driven games require a great deal of physical
movement from the user, unlike the sedentary experience of a traditional video game. Motion-
driven games have become tremendously popular and are now a multibillion-dollar industry.
One game series alone, Wii Sports, sold 76 million units in just 3 years.
3. Gate Five’s majority owners, who are veteran video game and consumer product
developers, created Starpower: Beyoncé using breakthrough technology that permits the user to
interact with the game through body movements rather than a traditional hand held controller.
This transformative new technology enabled the creators of Starpower: Beyoncé (code-named
Project M-Body (“M-Body”) before Ms. Carter became involved) to make a dance game that
was technologically far superior to any that had come before. At the time of the events in
question, the developers of M-Body (who formed BDJ Studios LLC (“BDJ”) in 2009 for the
purpose of commercializing the game) were among the handful of companies in North America
with the right to use this technology.
4. In late 2009, BDJ – which eventually became the majority owner and managing
member of Gate Five – began looking for a celebrity to feature in M-Body. Its members showed
their game to representatives of some of the biggest pop stars in the world, but discussions
advanced most rapidly with Beyoncé, the biggest star of all. Microsoft Corporation (one of the
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only other companies with access to the new technology) was also pursuing her to be the star of
the game that it was developing, but Ms. Carter chose M-Body because she thought it was the
better game.
5. After months of negotiations, Ms. Carter and Gate Five signed an exclusive
license and services agreement (the “Agreement”) in June 2010. In the Agreement, Ms. Carter
granted Gate Five an exclusive worldwide license to use her name, likeness and songs for the
purpose of commercializing a franchise of M-Body-based games; agreed to provide the services
necessary to incorporate her image, voice and dance moves into the games; and agreed to
promote the games. In exchange, Ms. Carter would receive service fees, license fees and
royalties that would net her many millions of dollars, plus an equity interest in Gate Five that
was expected to generate tens of millions of dollars. She even insisted that Gate Five give equity
to her father’s company and pay it a $25,000 monthly “consultancy” fee.
6. With Beyoncé as its headlining star, and its early access to the revolutionary new
technology, Gate Five quickly discovered it would have no problem attracting the financing it
needed to complete the game. After meeting with dozens of potential sources of financing, Gate
Five, at Ms. Carter’s insistence, selected a highly regarded film production company called
Alcon Entertainment LLC (“Alcon”). Alcon had conducted months of meticulous due diligence
on all aspects of the project and concluded that the Starpower: Beyoncé franchise was going to
be a smash hit that would likely generate hundreds of millions of dollars in profit for Gate Five.
Alcon agreed to provide Gate Five with $19.2 million in financing for the first game, and
negotiated for a right of first refusal to finance the sequels.
7. In late October 2010, Alcon, BDJ and Ms. Carter reached agreement on the
material terms of the financing and directed their respective lawyers to draft the final contracts.
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Their lawyers worked throughout November 2010 on the various financing contracts, as well as
a distribution contract with Warner Brothers Interactive Entertainment, Inc. (“Warner
Brothers”) that provided for a worldwide release of the game in at least six languages. The
contracts were completed by early December, and on Friday, December 3, 2010, execution
versions were circulated and payment instructions sent to Alcon, which was set to wire the first
tranche the following Monday.
8. But Ms. Carter made sure the money never made it to Gate Five. Just before
midnight on December 3, her lawyer circulated a letter in which she purported to terminate the
Agreement under a clause permitting either party to terminate in the absence of “committed
financing” by November 15. Her purported termination was as transparently baseless as it was
obviously timed to disrupt the financing. When she purported to terminate the Agreement,
claiming that Gate Five had been unable to obtain $5 million in committed financing, Gate Five
had in fact secured $19.2 million in financing and was literally one business day away from
receiving its money. The $19.2 million was “committed” by November 15 under any reasonable
construction of the word; more to the point, that clause had ceased to have any significance to the
parties, who, by that time, were already finalizing the documentation for an early December
closing. Ms. Carter’s lawyers said in writing what had long been evident to the parties when, on
November 19, they explicitly waived the very clause Ms. Carter later claimed to invoke as her
basis for terminating the Agreement.
9. Shortly after purporting to terminate, Ms. Carter sent a new letter announcing that
she would resume the project, and actually be “very committed” to it, if Gate Five would accept
the entirely new compensation structure she presented for the first time in that letter. With this
letter, Ms. Carter gave herself away, revealing that her purported termination had actually been a
PC Law # 15232 4

ad faith negotiation tactic. She had deliberately interrupted the financing, believing that if she
put it into jeopardy, Gate Five would have no alternative but to give in to her new demands.
10. Ms. Carter’s scheme outraged Alcon, which pulled its financing because of her
erratic behavior. BDJ’s members, however, were desperate to avoid the collapse of a business
venture they had devoted years of their lives and millions of dollars to, and that was on the brink
of great success. So, Gate Five accepted her new compensation demands, and one of BDJ’s
members offered to provide bridge financing the very next day if she would re-commit to the
project. Ms. Carter, in breach of the Agreement, refused.
11. Ms. Carter evidently did decide to resume the project, but without Gate Five.
While she was abandoning Gate Five, her choreographer and creative advisor (who had been
intimately involved with the project) was sending text messages to the art director of Starpower:
Beyoncé, telling him that Ms. Carter still wanted to do a game and wished to hire the people who
had worked on Starpower: Beyoncé when she “found her new company.” He forewarned that
those involved in her new project would have to “give her what she wants” because she is such a
“big star.”
12. With no Beyoncé, no financing, and millions of dollars in debt from creating a
Beyoncé-specific game, Gate Five was forced to abandon the project the week before Christmas.
While Ms. Carter walked away unscathed (in fact, she bought her husband a $2 million car that
month), Gate Five was out of business, and the 70 person development team she had agreed to
hire was left unemployed.
13. Now, through the filing of this action, Gate Five seeks an injunction barring Ms.
Carter from associating with any other video game, and monetary damages consisting of the
hundreds of millions of dollars in profits that Gate Five would have realized if she had honored
PC Law # 15232 5

the Agreement. Alternatively, Gate Five requests a comparable amount equal to the market
value of Gate Five’s lost rights under the Agreement, plus the approximately $6.7 million that
Gate Five spent preparing to perform its duties under the Agreement.
Parties
14. Gate Five is a limited liability company organized under Delaware law, with its
principal place of business in Stamford, Connecticut.
15. Upon information and belief, Beyoncé, Inc. is a corporation organized under
Texas law, with its principal place of business in Houston, Texas.
16. Beyoncé Knowles-Carter is a global pop-star who, upon information and belief,
resides in New York, New York.
Development of the Game
Facts
17. The concept for M-Body originated in 2007, when a product design specialist at
big Boing LLC (“big Boing”), a Sausalito, California based company that specializes in
launching innovative entertainment products, came up with an idea for a dance-themed video
game based on motion-sensing technology. big Boing dedicated a team to design and develop
the game and performed substantial work on initial branding and business plans for it.
18. In 2009, big Boing teamed up with two experienced video game developers,
Eckhardt Consulting, Inc. (“Eckhardt”) and Mako Games LLC (“Mako”), to work on the
project. Eckhardt is a consulting firm whose CEO has 60 video game credits to his name,
including 15 multiplatinum hits, and who was responsible for the music and branding of the
hugely successful games Guitar Hero 1 and 2. Mako is a Connecticut-based video game
development studio whose President has founded and managed successful development
companies collectively responsible for producing over 100 video game titles for clients including
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Electronic Arts, MTV, Major League Baseball and HBO. Together, they formed BDJ for the
purpose of commercializing M-Body.
19. The idea behind M-Body was so original that it outpaced the video game
technology that was available at the time. Although motion-driven video games had been
developed by 2009, none were able to detect a full range of the player’s body movements, as
would be necessary to play M-Body the way it was envisioned. The closest thing to be found
was the Nintendo Wii, but the Wii could only detect one point on the player’s body – the hand in
which she holds the control device for the game. BDJ thus set out to design its own special
controller which, when attached to player’s wrists and ankles, would track a far wider range of
body movements than the Wii (and thus enable the game to evaluate, with greater accuracy, the
player’s dance moves).
20. While BDJ was hard at work, it also got lucky. BDJ learned about a
groundbreaking technology, then practically unknown, that would provide a far better solution
than the wrist/ankle controller BDJ envisioned. The device—which Microsoft would later market
to record-breaking commercial success under the name “Kinect”— was a motion sensing camera
that uses a digital video of the player to detect the player’s body movements and communicate
them to a video game; in turn, the video game, using specialized video game software, can
respond to the player’s movements in real time.
21. This was a truly revolutionary device because it dispensed with the need for a
video game controller altogether, instead allowing the player to interact with the game simply by
moving her body, every part of which the camera could detect. From a technical perspective, the
Kinect was to the Wii what the car was to the horse and buggy. It was just as momentous
commercially; by eliminating the need for a controller, the Kinect would eliminate what had
PC Law # 15232 7

previously been a bar to mass market success for some video games: the fact that many
prospective purchasers found the controllers, which are frequently expensive and complicated to
use, a turn off.
22. BDJ was naturally eager to acquire the right to use this new technology. It sought
out the company that had developed the camera, and they entered into a license agreement in
2009. At that time, there were only a few companies in North America with the right to use the
new technology, one of which was Microsoft.
Beyoncé Commits to the Game
23. BDJ realized that it could maximize M-Body’s commercial prospects by
partnering with a celebrated pop star, known for dancing, to star in and promote the game. The
idea was that a star—like Beyoncé—would teach players to perform her signature routines to her
biggest hit songs. Players would learn by watching a computer-generated avatar of the star—
Beyoncé, for example—demonstrate dance moves that she had personally performed, which BDJ
would incorporate into video game software using highly sophisticated motion capture
technology. Using the Kinect camera, the game would detect with precision how well the player
could mimic each move. If the player performed the moves correctly, she would hear praise in
Beyoncé’s own voice, recorded just for the game; if the player made a mistake, she would hear
Beyoncé’s corrections and further instructions based on the particular body part the player failed
to move correctly.
24. The game would also depict a visual backdrop to simulate the star rehearsing in a
studio or performing on stage; in performance mode, the player would be able to select the star’s
wardrobe and music, and would see stage lights and special effects reminiscent of a pop concert.
PC Law # 15232 8

A screen shot depicting what the player would see while learning and performing the featured
dances looked like this:
25. The appeal of a game like this for Ms. Carter’s fans is difficult to overestimate;
one of the developers working on the project would later say that when he told his young
daughters that, through the game, Beyoncé would teach them her own dances in her own voice,
the girls “were so happy they cried.”
26. With game technology as novel as Kinect, and a game as innovative as M-Body,
BDJ had no trouble attracting celebrities who wanted to star in the game. In November 2009,
BDJ presented the game to representatives for some of the top-selling recording artists in the
world, including Lady Gaga (a Grammy winning singer and dancer whose single, “Poker Face,”
became one of the best selling in history) and the Black Eyed Peas (a well known music group
with numerous chart topping songs and music videos). Impressed by the game and the new
technology, both expressed an interest in working with BDJ.
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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

performance by BI of all terms of the Agreement” and that “Gate Five may proceed directly
against me” for any breach or default by BI.
34. The Agreement is governed by New York law, and the parties agreed to submit to
the jurisdiction of New York courts to resolve any dispute arising from it.
35. The parties also executed a Limited Liability Company Agreement for Gate Five
(the “LLC Agreement”), dated June 15, 2010. The LLC Agreement gave BDJ a 57% interest
in the company. In consideration for the services to be provided under the Agreement,
Ms. Carter was granted a 40% interest, and Music World 3%. The LLC Agreement also
provided that Gate Five owns the intellectual property created for the game and any sequels.
36. In the press release for the game that she prepared in November 2010, Ms. Carter
praised her contractual arrangement with Gate Five as a “revolutionary arrangement in the
gaming world” in that “Beyoncé is an equity partner in the venture,” and thus “vested in the
development of the intellectual property and the company.” Ms. Carter’s representatives had
specifically negotiated for a structure that made her BDJ’s true partner in commercializing the
game rather than simply a celebrity lending her name to someone else’s product. Ms. Carter’s
desire for this elevated role in the project made it even more shocking when, months later, she
abruptly pulled out of the project in breach of the Agreement.
Gate Five Explores its Financing Options
37. In the summer of 2010, Gate Five and Mr. Knowles presented the game to dozens
of potential investors all over the country to determine what kind of financing options would be
available. One thing was abundantly clear: Gate Five would have no problem obtaining
financing. Financiers could easily see what an excellent game Gate Five had and the huge
market advantage it enjoyed because of its early access to the revolutionary new technology.
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Those factors would have been enough for Gate Five to obtain the financing it needed (and did
allow it to raise a substantial amount of financing even before Ms. Carter became involved in the
project), but Gate Five had another remarkable advantage. It had as an equity member and
headline star perhaps the world’s most bankable celebrity – Beyoncé.
38. To call Ms. Carter’s career a runaway success would be a gross understatement.
As global pop icon Beyoncé, she had sold more than 118 million albums, won sixteen Grammy
awards, and released nine number-one hit singles. In 2010, she was ranked as number two on the
Forbes list of top 100 celebrities and was the highest paid musician in the world. Her hit song,
“Single Ladies (Put a Ring on It)”—which she personally approved to be included in Starpower:
Beyoncé —was certified quadruple-platinum by the Recording Industry Association of America,
while the album it was released on earned her six Grammy Awards, the most ever won by a
female artist in a single night.
39. Beyoncé was not only a widely beloved, chart-topping singer and dancer, her
public image embodied the qualities that Gate Five sought to associate with the game. As
potential investors were reminded, Starpower: Beyoncé was “about active, immersive,
aspirational, skill-oriented play.” It would appeal to fans who sought “to dance with Beyoncé,
like Beyoncé,” and to imagine themselves following her “on the path to stardom.” Her image
would be prominently displayed on the cover of the game, as reflected by slides like this:
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With a fan base that “crosses gender, race, and age demographics,” Beyoncé would, in the words
of her manager, give the game “[w]hole-family appeal.” And her own efforts as a public figure
to promote health and exercise through dance would highlight the game’s fitness-oriented theme.
40. Potential investors were also reminded that Beyoncé had enjoyed enormous
success promoting products for L’Oreal, Vizio, Sony Music and American Express and had
launched several new products of her own to great commercial success, including her signature
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perfume, “Heat”—which became a top seller overnight for perfumer Coty—and a clothing line
called House of Dereon. Furthermore, she would use her relationships with behemoths like
L’Oreal and Sony Music to promote the game and cross-sell the various products she endorsed.
As Mr. Knowles stressed, his daughter’s fame, appeal and market power are such that products
she associates with “don’t fail.”
41. For all of these reasons, potential financiers believed Starpower: Beyoncé was
likely to generate huge profits, and thus represented an attractive financing opportunity. Because
it was apparent to both BDJ and Ms. Carter that Gate Five could easily obtain financing, they
agreed not to rush into a deal, but rather, to keep exploring until they found the option they
considered most desirable.
Microsoft Starts Marketing the Kinect and Wal-Mart Commits to Starpower: Beyoncé
42. Meanwhile, the prospects for the game were looking better and better. In June,
2010, Microsoft launched a $500 million advertising campaign for Kinect with the slogan, “You
Are The Controller.” As part of the campaign, Microsoft publicly announced that it planned to
release Kinect for sale the following November, both as a standalone product for owners of the
Xbox (the video game console that Microsoft makes) and as an accessory to be included with
new Xbox purchases.
43. Microsoft’s advertising campaign was a great boon for Gate Five. By informing
people about Kinect and encouraging them to buy it, Microsoft was creating a huge market of
people hungry for high-quality games, like Starpower: Beyoncé, designed to be used with that
technology. With a November 2011 release date, Starpower: Beyoncé would be timing that
market perfectly. Its release would be close enough to the launch of Kinect that it would be one
of the first dance games to use the new technology, yet far enough out that, thanks to Microsoft’s
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marketing juggernaut, tens of millions of households would already have a Kinect when it was
released.
44. Starpower: Beyoncé’s great commercial prospects were acknowledged in 2010 by
one of the top—if not the number one—seller of video games in the U.S.:Wal-Mart. The
developers of the game, accompanied by Mr. Knowles, had two private meetings with Wal-
Mart’s most senior video game buyer, who had discretion over a massive annual video game
budget. They demonstrated a video of the game, explained their credentials and described their
business plan. The Wal-Mart buyer “loved” the game and said, in a meeting in July 2010, that he
would authorize an initial order of at least 500,000 units of Starpower: Beyoncé for Wal-Mart
when production was further along.
45. During the same time period, Mr. Knowles was also working on a separate pitch
to encourage Wal-Mart to choose Beyoncé and the products she is associated with—including
Starpower: Beyoncé—for Wal-Mart’s “Big Bet” program for the 2011-2012 holiday season.
The Big Bet is a prestigious annual marketing program in which Wal-Mart selects a small
number of products or brands that it believes will be gigantic sellers that year and commits
enormous resources to promoting them, including by featuring them in printed newspaper
circulars and in prominent in-store displays throughout all Wal-Mart stores. Wal-Mart had
chosen Ms. Carter as its Big Bet for 2005, a decision that had been extremely profitable for Wal-
Mart, as well as for Ms. Carter and the products she promotes.
46. Ms. Carter’s representatives believed that she would generate even greater sales if
chosen as one of Wal-Mart’s “Big Bets” for the 2011-2012 Holiday Season. To try to secure a
place for her in the Big Bet program for that year, they organized several meetings with all of
Ms. Carter’s product “partners,” including Gate Five, to discuss the objective of courting Wal-
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Mart. Starpower: Beyoncé featured prominently in the materials Ms. Carter presented to Wal-
Mart’s Big Bet team. In a computer model demonstrating the in-store displays that Ms. Carter
envisioned for the Big Bet program, a Vizio television was placed front and center with a copy of
Starpower: Beyoncé for customers to play. The display would look like this:
47. Gate Five also had success attracting the early interest of GameStop, the video
game retailer that operates 6,500 stores worldwide and has for years surpassed or remained neck-
in-neck with Wal-Mart for top video game sales. In the fall of 2010, Gate Five’s representatives,
along with Mr. Knowles, met with senior buyers for GameStop. Over a 2.5 hour period, Gate
Five presented the demonstrative video, the progress of the development work, and their
business plan. The GameStop buyers were thrilled with the game’s prospects and, like the Wal-
Mart buyer, estimated they would place a substantial intial order for it. They also proposed
setting up promotions, including a pre-order campaign enabling consumers to purchase the game
in advance of its release. Mr. Knowles was enthusiastic about the pre-order campaign and
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emphasized to GameStop (as well as to Wal-Mart) that, as an equity partner in Gate Five,
Beyoncé had given her “full commitment” to the success of the game.
Alcon Commits to Financing the Project
48. By the end of summer, Ms. Carter expressed a strong preference that Gate Five
obtain project financing from Alcon, a highly reputable film production company backed by the
billionaire CEO of Federal Express, Fred Smith. Alcon had long been interested in financing the
game and met twice with BDJ in spring 2010. In June, upon learning that Ms. Carter was
contractually committed as the game’s headlining star, Alcon began a thorough due diligence
investigation that lasted all summer and into the fall. Alcon examined in detail the game’s
software and development plans as well as the credentials and backgrounds of its developers.
Alcon also vetted Mako, which had an agreement with Gate Five to take primary responsibility
for the video game development work, and Planet Moon Studios (“Planet Moon”), a video game
development company which Mako planned to hire to help meet the target release date of
November 2011.
49. As part of its due diligence process, Alcon retained a prominent expert in the
video game industry to examine the quality of the development work, and to ensure that Mako
and Planet Moon remained on track for a November 2011 release. After spending days in their
studios—both in summer and again in late 2010—the expert confirmed that the developers were
set to produce a high quality game on budget and on schedule.
50. The results of Alcon’s financial due diligence were also promising. Working
together with Gate Five, Alcon constructed a financial model analyzing in detail the expected
cost structure for game development and marketing, and predicting the revenue and profits
depending on the number of units sold. Based on the cost structure Alcon developed, if the first
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game sold 7 million units (a conservative figure, as discussed infra), Gate Five’s profits would
have exceeded $59 million.
51. Like the other parties, however, Alcon was confident that the first game would be
followed by several sequel games. Creating sequels to a video game was not a novel idea, but a
standard business practice in the video game industry (a practice utilized to tremendous success
by franchises like Guitar Hero, which released approximately 25 titles). In fact, because sequel
games can be produced for less than the first game, and have a well established fan base, it is the
norm, not the exception, for a game which has had even modest success to generate multiple
sequel games. Alcon projected the franchise would generate at least five games in total.
52. In August 2010, Alcon told Gate Five that it would commit to $19.25 million in
funding for the first game, and that it wanted a right of first refusal to finance the sequels. The
parties immediately began to negotiate the other terms of such a deal, under which Alcon would
become an equity member of Gate Five.
Anticipating Funding From Alcon, Ms. Carter Approves Bridge Loans for Gate Five
53. Although Alcon was ready to negotiate terms, Gate Five was almost out of money
to pay for the ongoing development work. The members of Gate Five thus had to make a
business decision: on the one hand, they could instruct the developers to stop working until Gate
Five received Alcon’s funding. This approach was unappealing because a substantial delay
could compromise the game’s development schedule. So, with Ms. Carter’s approval, Gate Five,
in the summer of 2010, took $2 million in bridge loans to avoid an interruption in development,
and Mako hired Planet Moon to provide additional assistance to ensure the game would be
market ready by November 2011.
54. By the end of October 2010, Gate Five, Music World, and Ms. Carter had reached
an agreement with Alcon as to all material terms of their arrangement. On October 29, Alcon
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instructed its lawyer to begin drafting the documents that would constitute the financing deal,
including amended corporate documents for Gate Five (to make Alcon an equity Member),
payoff letters to the bridge lenders, and—importantly—a distribution agreement for the game
between Gate Five and Warner Brothers, the distributor Alcon worked with on its film projects.
Ms. Carter Waives the November 15 Financing Contingency and the Finance Contracts are
Finalized in Early December
55. As the finance contracts were being drafted in November, Ms. Carter, on multiple
occasions, waived the Financing Contingency, the clause she would later purport to invoke as her
basis for terminating. While Ms. Carter’s words and actions after November 15 all indicated that
she remained committed to the project and had no concern about the Financing Contingency, she
double crossed Gate Five and Alcon by suddenly claiming, on December 3, that the failure to
close the financing by November 15 gave her the right to terminate the Agreement. Yet, by the
time she did that, not only had Alcon committed to $19.2 million in financing, Ms. Carter,
through her actions and words, had already waived the Financing Contingency.
56. To start, Ms. Carter had early notice that the financing documents would not close
by November 15. Alcon’s attorneys circulated a first draft on November 10, and that day the
parties adopted a “target” closing date of November 19. Neither Ms. Carter nor her
representatives indicated that time was of the essence, or that the closing date was at all material.
57. To the contrary, her lawyers’ actions after November 15 were wholly inconsistent
with abandoning the project. Starting November 16, for example—the day after her termination
right supposedly arose—her lawyer participated with the other parties and their counsel in a
week-long session in Los Angeles to complete the drafting of the financing documents and
finalize the Warner Brothers contract. Although November 15 had passed, no one mentioned the
Financing Contingency.
PC Law # 15232 20

58. Two days later, her lawyer sent an e-mail confirming that Ms. Carter was going
forward with the project. This e-mail announced “how we’re handling things on our end,” and
identified the attorneys from his firm who would be working to close the various agreements on
her behalf. To avoid any doubt, he clarified that:
Although I do not anticipate that the various documents will be signed this weekend, I do
think Ms. Carter can make a general announcement Monday as planned that she’s
working on a video game project.
59. On November 19, Ms. Carter’s attorney explicitly waived the Financing
Contingency. He sent counsel for all parties an e-mail approving a provision which stated that
the parties’ “termination rights” in connection with the Financing Contingency “are hereby
deleted, and the parties waive any” such rights they would have previously had. He then stated
that he would be “generally available later this afternoon and all weekend as needed to help get
this wrapped up.”
60. And yet again on November 24, after proposing certain changes to the financing
documents (on which the parties shortly thereafter reached an agreement), Ms. Carter’s attorney
confirmed that “[i]f the Alcon team would like to proceed with the transaction based on the terms
outlined, we are prepared to work with you on Friday to get it completed.” The parties agreed
and spent the following week working through the changes.
61. Like her attorneys, Ms. Carter was forging ahead without regard to the Financing
Contingency. On November 19, her publicist circulated a draft press release announcing that by
joining Gate Five, Ms. Carter “has realized a long-held desire to enter the gaming space,” and
that she and “her company”—Gate Five—had “joined forces with Mako Games in the
development of a new project with a focus on dancing, singing, fitness, health and wellness.”
62. And, while the Agreement expressly excused Ms. Carter from performing “any
services” absent satisfaction of the Financing Contingency, in early November she reviewed
PC Law # 15232 21

dozens of pages of design and creative material that Mako sent her on an iPad, providing Mako
with her own handwritten notes and comments. She also personally reviewed and approved the
press release for the game, as well as an internet “splash” page for fans to look at following the
planned public announcement. Later, on Saturday, November 20, she spent five hours with
Mako’s creative director in person in New York City discussing at length the creative and design
aspects of the game. Ms. Carter never once disclosed that she believed November 15 had passed
with no “committed financing,” or that she might wish to end her involvement in the project on
that basis. To the contrary, she personally selected eleven of her most popular songs to feature in
the game, including the mammoth-selling “Single Ladies (Put a Ring on It),” “Crazy in Love,”
and “Get Me Bodied.” She even invited Mako’s creative director to join her in Australia for
“several days”—where she would soon be vacationing—to further discuss choreography and
design issues.
63. Meanwhile, relying on Ms. Carter to act in good faith in finalizing the Alcon
documents, Gate Five, with Ms. Carter’s knowledge, instructed Mako to keep the 70 person
development team working on Starpower: Beyoncé at full capacity throughout the month of
November.
64. After a month of drafting, the various financing contracts and the Warner
Brothers distribution deal were completed on December 2. That night, a senior executive of
Alcon called BDJ’s President to congratulate him on having finalized the deal. On Friday,
December 3, execution versions began to be circulated to the parties, and payment instructions
were sent to Alcon, which was set to wire the first tranche the following Monday.
PC Law # 15232 22

Ms. Carter Shocks Her Business Partners By Abruptly Purporting to Terminate the
Agreement
65. Things changed abruptly, however, in the middle of the following night. At 11:22
p.m. on December 3, 2010, Ms. Carter’s lawyer (the same lawyer who had earlier agreed to
waive the Financing Contingency) sent an e-mail purporting to terminate the Agreement based
on the Financing Contingency. Attached to the e-mail was a notice stating that BI “is electing to
terminate the License Agreement, effective immediately, due to Gate Five LLC’s failure to
satisfy the Financing Contingency on or prior to November 15, 2010.”
66. Ms. Carter’s midnight termination letter shocked everyone. Because the parties
had signed off on the final Alcon contracts the day before, it seemed impossible that she would
seriously contend there was a lack of “committed financing.” BDJ’s President received the e-
mail early Saturday morning and responded in confusion, asking “[w]hat does this mean
practically?” Although Ms. Carter’s attorney confirmed that she was backing out of the project,
he would not say why. The other members of Gate Five offered to work with Ms. Carter to bring
her back to the project, but they explained that until she would identify a problem, they were
“shooting in the dark.”
67. Ms. Carter would not explain her actions to Alcon either. On December 7, an
Alcon senior executive sent an e-mail to one of her agents, calling her “dead of night”
termination letter “deplorable” and noting that she “has never given a clear, consistent
explanation as to why [she] abruptly pulled out of the arrangement [so] we do not even really
know what her ‘issues’ are.”
68. Ms. Carter’s conduct stunned even her father and then-manager. Mr. Knowles, on
December 7, wrote to BDJ’s President that he was “disappointed about all of this. We had no
idea this was happening. I thought in principle we had a deal.” Renouncing his daughter’s
PC Law # 15232 23

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

the issue of financing. The December 9 e-mail made clear that Ms. Carter purported to terminate
not because she was legitimately concerned about financing, but because she was no longer
satisfied with the contract terms she had negotiated and committed to just months before. 3
75. The December 9 e-mail also helped explain why Ms. Carter sent the purported
termination notice when she did. The only plausible conclusion is that Ms. Carter deliberately
interrupted the financing by purporting to terminate because she thought that would leave Gate
Five with no alternative but to accept the new contract she insisted upon shortly after she
purported to terminate.
76. Ms. Carter’s conduct shocked Alcon. Its senior executive’s e-mail to one of her
agents conveyed both the sense of betrayal that stemmed from her sudden abandonment of the
project, as well as the great personal hardships that her conduct would inflict on the other parties
involved. He emphasized, for example, that her sudden abandonment of the game would force
the development studios to lay off their employees and shut down their businesses, given that the
studios were committed to the project as their only source of revenue. Attaching an e-mail from
Planet Moon’s President begging Ms. Carter to “please, please make a deal today,” the Alcon
senior executive characterized her purported termination as “morally reprehensible.” Moreover,
her demand for a new contract meant that Alcon would have to throw out much of the due
diligence and analysis it had painstakingly prepared over the course of many months, and re-start
the process from scratch.
77. Not long after Ms. Carter’s lawyer sent the December 9 e-mail, Alcon withdrew
from the project because it regarded Ms. Carter as an unreliable and erratic business partner.
3 Contemporaneous text messages from Ms. Carter’s creative director, Frank Gatson, support the same conclusion.
When a Mako employee asked him why Ms. Carter had terminated, he said nothing about Gate Five’s finances.
Rather, he linked her termination with her compensation, stating that “she thought the deal used her instead of pay
her” and that they should give her what she wants because “she is a big star. Very big.”
PC Law # 15232 26

Nonetheless, even after her betrayal of trust and Alcon’s withdrawal, Gate Five still tried to
continue the project with Ms. Carter. In an e-mail dated December 16, BDJ’s President told her
lawyer that Gate Five would accept her new demands and emphasized that if she would just
reaffirm the Agreement, “our existing investors”—meaning the bridge lenders—“are ready to
begin funding the project tomorrow.” He explained that “up to $3 million” in additional
financing (on top of the money BDJ had invested and the $2 million bridge loans) was
immediately available “to fund development through April 1,” which would “give us ample
opportunity to work with you to secure a mutually agreeable completion financing deal.”
78. Four days later, Ms. Carter’s lawyer responded in writing that Ms. Carter “has no
interest in moving forward ….” Once again, he made no mention of any concern about Gate
Five’s ability to raise financing.
79. With no Beyoncé, millions of dollars in debt to its bridge lenders, millions of
dollars in debt to its developers, and stuck with a Beyoncé-specific game that could not easily be
retooled for a new celebrity, Gate Five was forced to cease work on the project.
Ms. Carter Solicits Mako Employees for Her “New Company”
80. But while Ms. Carter wanted to abandon Gate Five, it now appears that she had
no intention of abandoning the increasingly profitable motion-driven video game business.
Rather, there is evidence that she still intends to work on a game that is like Starpower: Beyoncé,
and perhaps even a derivative of Starpower: Beyoncé. Text messages her creative director wrote
to Mako’s art director in late December confirmed that Ms. Carter still wanted to work on a
game and explained that she was looking to hire people who had worked on Starpower: Beyoncé.
He wrote:
PC Law # 15232 27

I gave [Ms. Carter] 5 people name and suggested she still work when she finds
new company and u are one of them. But those people should give her what she
wants. . .
81. Around the same time Ms. Carter’s lawyer sent Mako’s lawyer an e-mail in which
he listed the names of five game developers who had been working on Starpower: Beyoncé. Ms.
Carter’s lawyer did not write a single other word in the e-mail – rather, he just identified five
names. Her lawyer had been nearly as cryptic in the phone call that he made to Mako’s lawyer
just before he sent the list. On the phone, Ms. Carter’s lawyer said that Ms. Carter wanted to
know whether certain of the Starpower: Beyoncé developers were employees of Mako or Planet
Moon. He did not explain why Ms. Carter was interested in the employment status of the people
who had worked on Starpower: Beyoncé.
Gate Five’s Injuries
82. Gate Five has lost many millions of dollars as a direct result of Ms. Carter’s
breach of the Agreement. First and foremost, by repudiating the Agreement and refusing to
complete or market the game, Ms. Carter caused Gate Five to lose all of the profits it would have
earned from Starpower: Beyoncé. Because of Ms. Carter’s breach, it is impossible to know
exactly how profitable the franchise would have been. Nonetheless, it is beyond reasonable
contention that the games would have generated very substantial profits.
83. First, there can be no serious dispute that the game would have been completed
and marketed absent Ms. Carter’s breach. At the time she purported to terminate the Agreement,
(i) the development work was on track for a November 2011 release, (ii) Alcon had meticulously
analyzed the game’s cost structure and finalized an agreement to fund 100% of the development
costs, (iii) Gate Five had alternate sources of financing, (iv) the parties had completed a
distribution agreement with Warner Brothers for the worldwide marketing and distribution of the
game in six languages, and on all three major video game consoles (meaning the Wii, the Xbox
PC Law # 15232 28

and the PlayStation), (v) Ms. Carter was contractually bound to actively promote the game and
its sequels, and (vi) Gate Five had received an informal commitment from Wal-Mart’s senior
buyer to make an initial order, for Wal-Mart alone, of at least 500,000 copies of the first game.
Under these circumstances, the only question left to be answered was how many millions of
copies would be sold.
84. Based on the sales of comparable games, that number would have been in the
range of 15 to 30 million copies or more. To begin, it appears that comparable products have
enjoyed sales in that range, as the popularity of interactive video games has soared over the past
few years. The star-driven Guitar Hero franchise—music oriented games played with a guitar-
shaped controlling device—has sold approximately 53 million copies. Another music themed
game is the Rock Band series; with several editions released since 2007, Rock Band has sold
approximately 21 million units worldwide.
85. Starpower: Beyoncé was intended to be marketed not just as a music and dance
game, but also as a fitness game. This genre of games, like music and dance-based games, has
also been extremely popular. Wii Fit, for example, is a fitness game released in 2008 on the Wii.
Wii Fit was reported to have sold 23 million copies in approximately two years. A sequel, Wii
Fit Plus, was released in 2009; on information and belief, this game sold 2.16 million copies
within a single month, and 19 million as of the spring of 2010.
86. In the category of dance-themed video games, Just Dance is a franchise available
only on the Wii; it has already sold approximately 13 million copies and is still selling strong.
The early performance of two new dance games – Dance Central and Michael Jackson: The
Experience – suggests that they will achieve similar success in the market. Michael Jackson:
PC Law # 15232 29

The Experience sold about 2 million copies in five months, while Dance Central sold 1.8 million
copies in the same time frame.
87. Starpower: Beyoncé has major commercial advantages over all of these
comparable products. Wii Fit, Just Dance, Dance Central and Michael Jackson: The Experience
can each be played on only one of the three major game consoles. Starpower: Beyoncé, on the
other hand, would have been playable on all three consoles. And while Wii Fit, Just Dance and
Dance Central are not associated with any celebrity, Starpower: Beyoncé had the biggest star in
the world as its headline star. Third, in contrast with the expensive, bulky control devices that
purchasers must buy in order to play Guitar Hero and Rock Band, purchasers of Starpower:
Beyoncé would not have to buy any dedicated control device and could buy the game for
approximately half of what Guitar Hero cost. Also, none of the artists associated with Guitar
Hero (e.g., the rock bands Van Halen and Aerosmith) are currently enjoying anything close to
Beyoncé’s level of global commercial success.
88. Starpower: Beyoncé had at least two other key commercial advantages over
comparable games. First, it was one of the first music or fitness games built to be played on the
Kinect. This was an enormous benefit given how wildly popular Kinect has turned out to be.
Kinect has been far more successful than Gate Five, Ms. Carter, Alcon, or probably even
Microsoft ever thought it could possibly be. On March 9, 2011, Microsoft announced that it had
sold 10 million units of the Kinect since its release on November 4, 2010; the same day, the
Guinness World Records organization announced that the Kinect had become the “Fastest-
selling Consumer Electronics Device” in history. Inasmuch as the public has fallen in love with
the Kinect and is buying it at a record breaking pace, there is good reason to believe that
Starpower: Beyoncé’s sales would have been boosted by its enormous popularity.
PC Law # 15232 30

89. Second, Ms. Carter was contractually obligated to personally assist with the
development and promotion of the game to an extent that no other celebrity associated with a
video game has ever been. Ms. Carter herself commented that her arrangement with Gate Five
was “revolutionary” in the video game industry because, rather than simply licensing her name
and likeness for Gate Five to use in the game (as is done in most video game deals with
celebrities), she became an equity member of Gate Five and would therefore be personally
“vest[ed] in the development of the . . . company.” She committed under the Agreement, for
example, to participate in facial and body scans to be used by the developers, a motion capture
shoot to incorporate her dancing into the game, voice recording sessions, print and video
commercials, live personal appearances at several promotional events, and to “comply with
whatever reasonable instructions, or suggestions that Gate Five or its agents may give Mrs.
Carter in connection with the rendition of services.” Ms. Carter, in other words, specifically
bargained for an equity stake in Gate Five, and in order to get it she agreed to personally commit
to the development and promotion of the game to an extent that was unprecedented in the
industry. Her representatives stressed this fact in meetings with investors and retailers,
emphasizing that her equity interest in Gate Five, and consequent “full commitment” to
developing and promoting Starpower: Beyoncé, would translate to huge sales.
90. Under these circumstances, an estimate that Starpower: Beyoncé would have sold
15 million copies is a conservative one. Using this number as a modest example (given that the
real number would have likely been much higher, as will be demonstrated at trial), Gate Five
would have earned in excess of $172 million in profits on sales of the game, in light of the
detailed cost-structure chart prepared by Alcon during due diligence. This figure, moreover, does
not even include the substantial profits Gate Five would have earned from sales of additional
PC Law # 15232 31

content that consumers could purchase for the game after buying the game itself, such as
additional songs or features. By wrongfully terminating the Agreement, Ms. Carter prevented
Gate Five from earning these profits.
91. Putting lost profits aside, Gate Five would alternatively be entitled to recover a
comparable amount equal to the market value (in a hypothetical market) of what Ms. Carter
destroyed by breaching the Agreement—i.e., the value of the exclusive right to release, in the fall
of 2011, a dance-based video game available for all three game console systems, starring and
extensively marketed by Beyoncé as a vested business partner. New York courts have
recognized that a contract right such as this has inherent value, and that as an alternative to lost
profits, a plaintiff is entitled to prove and recover that value where his contract rights have been
breached.
92. Finally, wholly apart from the above categories of damages, Ms. Carter’s breach
caused the loss, at the very least, of the money that Gate Five invested into the development of
Starpower: Beyoncé, which amounts to at least $6.7 million. Gate Five is entitled to recover that
sum, and is also entitled to an injunction prohibiting Ms. Carter from pursuing a video game with
any other company during the term specified in the Agreement.
First Cause of Action
(Breach of Contract, Against Both Defendants)
93. Gate Five incorporates by reference the foregoing allegations of the complaint.
94. The Agreement is a valid and binding contract.
95. Under the Agreement, Ms. Carter granted Gate Five, for a period of five years, an
exclusive, perpetual, worldwide, royalty-free license to use her name and likeness in connection
with the development, commercialization and marketing of Starpower: Beyoncé and its sequels,
PC Law # 15232 32

and agreed to provide certain services (i) to enable Gate Five to develop the game, and (ii) to
promote the game.
96. Ms. Carter purported to terminate the Agreement and revoke the license, pursuant
to Section 6(b)(v), which permits either party to terminate if Gate Five fails to obtain “committed
financing or additional capital” in the amount of $5 million by November 15, 2010.
97. Ms. Carter had no right to terminate the Agreement pursuant to Section 6(b)(v)
because Gate Five had already obtained “committed financing or additional capital” in excess of
$5 million by November 15, 2010.
98. Ms. Carter also had no right to terminate the Agreement pursuant to Section
6(b)(v) because she waived that provision, through her own actions and statements and those of
her agents, indicating that she was continuing with the project.
99. Ms. Carter also had no right to terminate because Gate Five relied to its detriment,
by incurring millions of dollars in fees and expenses, on her and her agent’s actions and
statements indicating she was continuing with the project.
100. Ms. Carter’s purported termination of the Agreement pursuant to Section 6(b)(v)
thus constituted a breach.
101. Gate Five has performed all of its obligations under the Agreement.
102. As a result of Ms. Carter’s breaches, Gate Five was unable to complete the
development of Starpower: Beyoncé and its sequels, or to market and sell them, as contemplated
under the Agreement.
103. Gate Five has been injured by Ms. Carter’s conduct in an amount to be
determined at trial.
PC Law # 15232 33

Second Cause of Action, in the Alternative
(Breach of the Implicit Covenant of Good Faith and Fair Dealing,
Against Both Defendants)
104. Gate Five incorporates by reference the foregoing allegations of the complaint.
105. The Agreement is a valid and binding contract.
106. Under the Agreement, Ms. Carter had an implied duty to act good faith not to take
any action to prevent Gate Five from receiving the benefit it bargained for under the Agreement.
107. Even if Ms. Carter had a right to terminate the Agreement based on a failure by
Gate Five to obtain “committed financing” by November 15, 2010 (which is expressly denied),
she exercised that right in bad faith by:
(a) Doing so after she had repeatedly consented to Gate Five’s decision to
wait until after November 15 to close a financing deal;
(b) Timing her termination of the Agreement so that it would disrupt the
closing of Gate Five’s expected financing;
(c) Using the disruption in Gate Five’s expected financing to try to obtain
additional compensation from Gate Five; and
(d) Using the Financing Contingency as a pretext to purport to terminate the
Agreement, even though the Financing Contingency had nothing to do
with her real reasons for seeking to terminate.
108. After terminating the Agreement in bad faith, Ms. Carter refused to provide any
further services to Gate Five.
109. As a direct result of Ms. Carter’s bad faith, Gate Five was unable to complete the
development of Starpower: Beyoncé, or to market and sell the game or its sequels as
contemplated by the parties.
110. Gate Five has been injured in an amount to be determined at trial.
Third Cause of Action
(Injunction, Against Both Defendants)
111. Gate Five incorporates by reference the foregoing allegations of the complaint.
PC Law # 15232 34

terminated it.
112. The Agreement is a valid and binding contract, and Ms. Carter has not validly
113. Under the Agreement, Ms. Carter agreed not to participate in any video game
except Starpower: Beyoncé for a period of eighteen months after the release of that game or any
sequel, “[p]rovided that the Game has been commercially released in the United States on or
prior to December 31, 2011.”
114. By repudiating the Agreement, Ms. Carter has prevented Gate Five from
releasing Starpower: Beyoncé or any sequels; absent Ms. Carter’s wrongful abandonment of the
Agreement, Starpower: Beyoncé would have been released worldwide on or prior to December
31, 2011.
115. On information and belief, Ms. Carter is using, or permitting a third party to use,
her name and likeness in a video game other than Starpower: Beyoncé, in breach of the
Agreement.
116. Gate Five is entitled to an injunction prohibiting Ms. Carter from permitting her
name and likeness to be used in violation of the Agreement.
WHEREFORE, plaintiff Gate Five respectfully requests that the Court enter judgment in
its favor and grant the following relief:
(a) On its first cause of action, an order awarding damages in an amount to be
determined at trial, plus statutory interest;
(b) On its second cause of action, an order awarding damages in an amount to be
determined at trial, plus statutory interest;
(c) On its third cause of action, an order enjoining Ms. Carter and BI from associating
with any other video game; and
PC Law # 15232 35