FILED: NEW YORK COUNTY CLERK 05/09/2011

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
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