Free Statement - District Court of Arizona - Arizona

EXHIBIT 16
Case2:04-cv-00384-ROS Document 412-18 Filed 12/15/2006 Page:1 0f3

¤ A dz/1;s;o4_ 12:34 FAI 48048s:s_21s_ . mms BR_UEgKNEj§, h M 002/003
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utworricss KURT M·.“RUE°KN 1 3
t Trrus, BRUECKNER Sr BERRY ,'°,’;;'§,t_ , 4 —
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4 scorrsoats. atuzona asm-1:27 . JOHN R_TE,_,_,ER , Q
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TELEPHONE 4s0.4uz.9<.0o 22 Z
1=.¤.csiMtLE 4n¤.4sa.s21s L, · February 13* 2904 cg ;
E-MAIL gcncrsl@tbb-l:tw.com. . I
WEB *~W·Ll=b·l¤w-¤>m VIA FACSIMILE .602~3S2-607 0 `E
AND FIRST-CLASS —
Steven D. Pidgeon, Esq. . _
Snell & Wilmer L.L.P. i `I ` _ Q
OH€ Al`lZ0l’1a Center ;
Phoenix, Arizona 85004-000 _
. Re: Greg Hancock - Meritage an I
V Dear Steve: , J
-. Section 2.5A(4)(b) of the May 7, 2001 Master Transaction Agreement among our '
*§ respective clients provides as$To1lows: QE Y
"Buyer shall pay to Greg Hancock ninety percent,,(90%) of each estimated Earn- i
Out Payment for the,p.revious (i.e., just ended) Earn-Out Period in cash on or i
before the 30* day following the end ofthe last relevant Earn—Out Period .... " ji
. it · A
4 Accordingly, payment of the ninety percent estimate of Greg I-Iancock’s Eam-Out ‘
Payment for the Earn-Out Period ended December 31, 2003 was due January 30, 2004. _
Unfortunately, Greg has received no payment as required nor has he received any ‘
communication &om your client explaining why payment was not made. While Greg is not a .
party to the Master Transaction Agreement, he is clearly an intended thirdsparty beneficiary of i
this Agreement. Similarly, Greg has not received the $20,000 payment which was also due on Q
January 30, 2004 in accordance with Steve Hilton’s November 22, 2002 correspondence. :
While under other circtirnstances, one might conclude that this was merely an oversight, I
_ after reviewing this tile again, this latest incident appears to be yet another example of your it '
client’s consistent pattern ofihiistmting Grcg’s efforts to receive his share of the purchase price ·
for Hancock Communities from Meritage. Greg wrote (my office typed) a letter to Iolm Landon =· _ _
about a year ago setting forth some ofthe difficulties he was having with your client’s heavy- " ‘
` handed management tactics. Your client dismantled Greg’s_ team and emascul ated his authority Q
causing him to resign in iiustration. Your client wrongfully withheld portions of his 2001 and j
2002 earn—outs. It now appears that this was all part of a plan to frustrate Greg’s ability to get the '
if-- , earn-out payments and fully realize the benetit of his bargain. `
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Case 2:04—cv—0O384—FlOS Document 412-184 4 Filed 12g1§j2Q0_6,.J2ag,e2»eP ·

" ` ·‘ 02/lf;/04 12::14 FAX 4804833215 Trrus BRUEQKNER _ al 0 3/003_
· Steven D. Pidgeon, Esq. ‘
Snell & Wilmcr L.L.P. V · .
J. ·· .. February 13, 2004 ' · ·
- Page 2 " `
p if 3
On the other hand, the principals of your client have made a fortune in the homebuilding §
business. Part of this success is attributable to the Hancock Communities acquisition for which j
your client should be congratulated. However, when it comes to members of the Hancock family, i' I
your client has a nasty, hard edge. Most recently, your client tired Greg’s brother, Rick, days . j
before his wife was scheduled to give birth and days before the office holiday party. For some Q
reason, your client wants to punish those associated with the "Hancock" name and reliises to pay ·[‘
Greg what he is due. ` .
Enough is enough. Demand is hereby made for the immediate payment of all amounts l
now past due under Section 2.5A(4)(b) of the Master Transaction Agreement as well as the t i
$90,000 now past due as- promised by Steve Hilt0n’s November 22, 2002 letter. ;`
` _Z; l
· Further, in view of your client's repeated breaches of the Master Transaction Agreement,
pursuant to Section 7.3 of the License Agreement, dated May 30, 2001, your c1ient’s license to ij; `
- use the "Licensed Marks," "Hancock 1-Iomes" and "Hancock Communities" is hereby terminated gl
immediately. Demand is further made, pursuant to_Section 8.1 of the License Agreement, that .3, L
your client transfer and assign to my client any right, title and interest to the Licensed Marks ;
which your client may have acquired as a result of its activities under the License Agreement. _ ,1
. . ; {
Although not required to do so, my client is willing to provide a reasonable period of { ' .
time to your clientlto change its name and to change its signage and marketing materials. We , s
expect this could be accomplished in a couple weeks. Vi
' We expect immediate payment of all past due amounts demanded by this letter. If your
client does not cease using my c1icnt’s property by March 1, 2004, my client will pursue all A · _
remedies at his disposal including those provided by Section 16 of the May 30, 2001 License { Q
Agreement. I
S Very truly yours,
· Tl”I`US, BRUECKNER & BERRY, P.C. '
. ' { {
I on A. itus
JAT/nr 1 ` p . - §
cc: Greg Hancock {Q S
LZITY SBBY (pursuant to Section l0 ofthe License Agrecltlcnt) I
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Case 2:04-cv—OO384-ROS Document 412-18 Filed 1271-5/2005...Bage.3 of. Q

Case 2:04-cv-00384-ROS

Document 412-18

Filed 12/15/2006

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