FILED: NEW YORK COUNTY CLERK 05/09/2011

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