FILED: NEW YORK COUNTY CLERK 05/09/2011

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.
PC Law # 15232 3