Inclusive, ) .; ~ 16 ) - ~~ OJ Defendants

COMP Corey Eschweiler, State Bar No. 6635 2 Adam Smith, State Bar No. 9690 GLASER, WElL, FINK, JACOBS, HOWARD & SHAPIRO, LLP 3 3763 Howard Hughes Parkway, Suite 300 Las Vegas, Nevada 89169 4 Telephone: (702) 650-7900 Facsimile: (702) 650-7950 5 Attorneys for Nevada Cancer Institute 6

Q. DISTRICT COURT .J .J 9

0 CLARK COUNTY, NEVADA ~ - 10 ~ ~ 0 NEV ADA CANCER INSTITUTE, a Nevada ) x 0 In ~ 11 Case No.: ~ . non-profit corporation, ) 0 , ~ ) ~ ~ ~ 12 Dept. No.: ~ . ~ 0 Plaintiff, ) ~ .. G II ~ o : c g ~ ) "' i: I: a ~ 0 v 13 COMPLAINT .. ~ : : (, : .. v. ) 0 : : ~ : ;; ) o :i . - 0 ~ u G. N "" 14 JAMES RHODES, an individual; GL YNDA ) ARBITRATION EXEMPT ~. 0( ~: ~ - i.. Ii.. _.. Ioc RHODES, an individual; DOES I through X, ) (Amount in controversy exceeds $50,000) ~ ..: 15 z l ~ inclusive; ROE Corporations XI through XX, ) - 0 .. X ~ inclusive, ) .; ~ 16 ) - ~~ OJ Defendants. ) ~ 17 ) ~ OJ ~ ~ Plaintiff ~ 18 Nevada Cancer Institute alleges as follows: ci

19 PARTIES

20 1. Nevada Cancer Institute is, and at all relevant times was, a Nevada non-profit

21 corporation whose mission is to reduce the burden of cancer for Nevada, the nation, and the world

22 through innovative and collaborative research, education, and patient care.

23 2. Upon information and belief, Defendant James ("Jim") Rhodes is a Nevada resident

24 who has developed and continues to develop substantial land holdings in the Southwestern United

25 States, including Nevada and Arizona.

26 3. Upon information and belief, Defendant Glynda Rhodes is a Nevada resident and is

27 married to Jim Rhodes.

28 4. The true names and capacities, whether individual, corporate, associate, or otherwise, 2 of defendants herein designated as DOES I through X and ROE CORPORATIONS X through XX 3 are unknown to Nevada Cancer Institute at this time, which therefore sues said defendants by such 4 fictitious names. Nevada Cancer Institute is informed and believes and thereon alleges the DOE and 5 ROE defendants are responsible for the wrongful or related acts complained of and described more 6 fully herein. Nevada Cancer Institute wil seek leave to amend this complaint to allege the true

7 names and capacities of DOE and ROE defendants as they become known. 8 GENERAL ALLEGATIONS Q. .J .J 9 5. This action arises from Jim and Glynda Rhodes' (collectively, the "Rhodes") failure o -~ ~ 10 to honor two binding commitments to Nevada Cancer Institute in the amounts of $ 1 ,000,000 and ~ X g In " 11 $10,000,000 (collectively, the "Binding Commitments," or individually, the "$IM Commitment" ~ ~ o , ~ ~ ~ ~ 0( ;; 0 1 2 and the "$ 1 OM Commitment"). ~ ; II 0: ~ 0 If.c ~ t: u- 1:0( I:.. 0,., iø 0 13 6. The Binding Commitments were made in an effort to improve the Rhodes' public iiIi !I~ .A. Ii ~II 0 G o m II Z G;; J:~~i:Ë: ~ ;..;; ~ 14 image after Jim Rhodes was accused of having improper dealings with various Clark County ...... c ~ ; 3 1 5 Commissioners and other public offcials in Nevada and Arizona. ..- .x ~ .. ~ 16 7. In exchange for the Binding Commitments, among other consideration, Nevada ¡; ~ ~ 1 7 Cancer Institute provided the Rhodcs with positive publicity, including press releases, numerous ~ OJ ~ ~ ~ 18 news articles, prominent name displays at Nevada Cancer Institute, and recognition at Nevada ci 19 Cancer Institute's annual gala, Rock for the Cure.

20 8. The Rhodes' refusal to honor the Binding Commitments has a direct, negative effect 21 on Nevada Cancer Institute's ability to perform research and treat patients diagnosed with cancer. 22 This effect is felt not only by Nevada Cancer Institute and its present and future patients, but by the

23 community, country, and world as a whole. 24 NEGATIVE PUBLICITY

25 9. The harmful media exposure regarding the Rhodes was extremely detailed and 26 damaging to their reputations, requiring the Rhodes to seek creative solutions to repair their 27 tarnished reputations. Those solutions included making charitable commitments in an effort to 28 obtain favorable publicity to combat the abundance of disparaging media coverage.

2 10. The following public assertions, regardless of their veracity, were made by numerous

2 media outlets and had a significant, detrimental effect on the Rhodes' public image. 3 A. Rhodes employs Erin Kenny

4 11. Since at least 2003, Jim Rhodes has received negative publicity regarding dealings

5 with the Clark County Commission and a proposed development that would build a dense

6 community of homes near Red Rock National Conservation Area.

7 12. As an example of the negative publicity, Jim Rhodes was accused of bribing Clark 8 County Commissioner Erin Kenny. Specifically, Jim Rhodes allegedly paid Erin Kenny large sums

Q. .J .J 9 in exchange for favorable treatment for Rhodes' projects while Erin Kenny was on the Clark County

o -~ 10 Commission. ~ ~ X g In ~ 11 13. On July 24,2003 Erin Kenny pleaded guilty to conspiracy to commit wire fraud and ~ ~ o , ~ ~ ~ ~ 0( ;; 0 12 wire fraud for the purpose of depriving the citizens of Nevada of her honest services as a Clark ~ ~ ;Clg: ~i::~~~ 13 County Commissioner. li¡; UI ~::O: . Ii II o lZ Ii Z lØ;; ~.i:~-J: ~ ;..;; ~ 14 14. As part of her plea, Erin Kenny admitted to receiving bribes to abuse her position as i.. Ii...... CM ~ ; 3 15 a Clark County Commissioner, and agreed to testify against other Clark County Commissioners in ..- .x ~ .. ~ 16 exchange for a lesser sentence. ¡; ~ ~ 17 15. On July 18,2007, Erin Kenny was sentenced to serve 30 months in federal prison ~ OJ Ul ~ ~ 18 and to pay more than $ 1 00,000 in fines for taking bribes. ci 19 16. After Erin Kenny left the Clark County Commission, and before she pleaded guilty,

20 Jim Rhodes hired Erin Kenny as a lobbyist. Erin Kenny's purported "job" was to influence elected

21 officials at Jim Rhodes' direction. In return, Jim Rhodes paid Erin Kenny approximately $ 1 6,000

22 per month.

23 17. On Jim Rhodes behalf, Erin Kenny lobbied her successor, Clark County 24 Commissioner Mark James, to allow Jim Rhodes to build a dense residential development near Red 25 Rock National Conservation Area on land Jim Rhodes, or one or more entities he controls,

26 purchased for approximately $54,000,000.

3 18. Erin Kenny fought proposed state and county ordinances that would limit the

2 development of the land near Red Rock National Conservation Area to approximately 1,200 homes

3 instead of Rhodes' planned 5,500 homes.

4 19. Both the state and county ordinances eventually passed and limited the ability to 5 develop the area, although Jim Rhodes is still trying to obtain zoning changes, entitlements, and

6 other land use rights to create the development.

7 B. Ilegal Campaign Contributions to Nevada Elected Offcials

8 20. As another example of negative publicity, Jim Rhodes was accused of funneling

Q. .J .J 9 ilegal campaign contributions to United States Senator Harry Reid and Clark County Commissioner o ~ - 10 ~ Dario Herrera in 2002. Jim Rhodes is alleged to have verified this misconduct in signed admissions ~ X g In " 11 to the Federal Election Commission in order to strike a plea deaL. ~ = o , ~ ~ ~ ~ 0( ;; 0 12 21. On May 5, 2006, Dario Herrera was convicted "of conspiracy and multiple counts of ~ ; II 0: ~:i.:~OII 0 ll 0,. _ 0( .. . II 13 wire fraud and extortion under color of offcial right for depriving the Clark County Commission lL ~Ul lL . )0 Ii 0Il 10 o CD Ii Z lØ;; J: ~ ;..;; ~ ~~i:Ë: 14 and the citizens of Clark County of their right to the honest services of public offcials." August 2 1, ...... c :i oi: 15 z l ~ 2006 Department of Justice News Release. ..- .X ~ ,. ~ 16 22. Dario Herrera was sentenced to serve 50 months in prison, pay a $ 1 5,000 fine, and ¡; ~ ~ 17 forfeit $60,000 in assets. ¡d. ~ OJ Ul ~ ~ 18 C. Jim Rhodes Begins Developing in Arizona ci 19 23. When elected offcials in Nevada began to shun Jim Rhodes because of his alleged

20 indiscretions, he began acquiring land to develop in Arizona, where state authorities were unaware 21 of his past.

22 24. In or about December 2006, Jim Rhodes purchased more than 1,000 acres in the East 23 Valley of Phoenix, with the right to develop 6,700 more acres, for approximately $58,600,000. In 24 addition, Jim Rhodes assembled 25,000 acres between Kingman and the Nevada state line to

25 develop 130,000 homes (collectively, the "Arizona Land").

26 25. In order to develop the Arizona Land, Jim Rhodes, individually or through entities he 27 controlled, attempted to obtain various zoning changes, entitlements, water rights, and other land

28 use rights in early 2007.

4 26. At the same time, Jim Rhodes attempted to obtain government authorization to

2 operate utilities in Arizona to serve neighborhoods Jim Rhodes intended to build on the Arizona

3 Land. The authorization process included an investigation by government offcials into Jim Rhodes'

4 character to determine if he was "fit and proper" to operate an Arizona utility.

5 27. Jim Rhodes' ability to obtain city, county, and state approval for various entitlement

6 and zoning requests was becoming increasingly difficult due to the disparaging media coverage.

7 28. By April 2007, numerous newspaper articles, columns, and editorials had been

8 published in Nevada, Arizona, and elsewhere detailing the allegations of Jim Rhodes' improper

Q. .J .J 9 dealings with Clark County Commissioners, his proposed development near Red Rock National 0 ~ - 10 ~ Conservation Area, and various lawsuits with business partners. ~ 0 x 0 In " 11 29. The media scrutiny in both Nevada and Arizona began to mount and threatened to ~ . c , ~ ~ Ul ~ ~ . ~ 0 12 destroy potential licensing, zoning, and entitlements for the Rhodes' developments. ~ ; IØ 0 : Ul o ll.. ~ ': .. :I II 0,. 0 v 13 30. Specific examples of such scrutiny appeared in Arizona's East Valley Tribune on .. ~ : : ô : .. 0 : :;:;; ~ o :t . - 0 ~ u ".. N.. 14 April 22 and April 23, 2007, calling Jim Rhodes a "land baron" and stating that he "has admitted to ~ 0( :ix 0(. ~0.. i...... Iec 15 ilegally using his money to aid powerful politicians in Nevada; that he has repeatedly and -~ ;. 3 .. x " .; ~ 16 successfully been sued over allegations of fraud, theft and self-dealing by his investment partners - ~ OJ ~ 17 and others; and that he has a long history of complaints for shoddy workmanship." See Land Baron ~ OJ Ul ~ ~ 18 has checkered past, East Valley Tribune (Apr. 22, 2007); Baron's aim was 5,500 homes on 1,200 ci 19 site, East Valley Tribune (Apr. 23, 2007).

20 REPAIRING THE RHODES' IMAGE

21 31. The media frenzy surrounding the Rhodes and their alleged misconduct over the past

22 several years jeopardized not only their business interests, but their livelihood. As a result, the 23 Rhodes were eager to change their public image.

24 32. One possible solution to repair the Rhodes' public image was to make well-

25 publicized and prominent charitable donations. While the Rhodes had previously committed

26 $ 1 ,000,000 in 2005 to Nevada Cancer Institute (though never fully funded), they were interested in

27 making a larger donation that would garner significant media attention.

5 33. On or about February 24, 2007, the Rhodes met with representatives of Nevada

2 Cancer Institute, including Shelley Gitomer and Heather Murren, to discuss the Rhodes making a

3 large commitment.

4 34. At this meeting, the Rhodes presented a scrapbook they compiled that detailed the

5 philanthropic reputations of others, including Michael Bloomberg.

6 35. The Rhodes stated that they would like to obtain a public reputation for philanthropy

7 like the individuals detailed in their scrapbook.

8 36. The Rhodes also discussed making the $ 1 OM Commitment to Nevada Cancer

Q. .J .J 9 Institute. o ~ - 10 37. Over approximately the next eight months, the Rhodes continued discussions with ~ ~ X g In ~ 11 Nevada Cancer Institute regarding the $ 1 OM Commitment. ~ ~ o , ~ ~ ~ ~ 0( .:; 0 12 38. In each of those communications, the Rhodes told Shelley Gitomer, Heather Murren, Ul3: 0" ; Go:0,. ~ 1: 1:: ~ Ò _ oC 0( , II 13 Ii ~ D. :i 0 I) or both of them that the Rhodes would fund the $ 1 OM Commitment. In return, the Rhodes required IL en .. ii " o II ~ Z lØ;; ~ ~ ~.;;; ~ ~~~:~: 14 publicity related to the binding commitment and the prominent display at Nevada Cancer Institute of ...... C 15 the names of Jim and Glynda Rhodes, and Jim Rhodes' father, Leonard Rhodes. -~ ;. 3 .. . ~ .. ~ 16 39. As November 2007, approached, the Rhodes began discussing possible media ¡; ~ ~ 17 approaches to publicize the $ 1 OM Commitment. One possible scenario was for the Rhodes to ~ OJ Ul ~ ~ 18 become the honorees for the annual Rock for the Cure event on November 15,2007. Rock for the ci 19 Cure was Nevada Cancer Institute's annual gala that attracted more than 1,000 attendees, including 20 local celebrities, businesspeople, politicians, and media, as well as national figures Rod Stewart, 21 Larry King, and others.

22 40. Nevada Cancer Institute had never previously recognized a primary honoree at the

23 event, but considered honoring the Rhodes because of the size of the $ 1 OM Commitment.

24 41. After further negotiation, the Rhodes and Nevada Cancer Institute agreed that the 25 Rhodes would be the honorees for Rock for the Cure, and that Jim Rhodes' mother would be 26 featured in a video of breast cancer survivors shown at the event - all in furtherance of the Rhodes'

27 demand for publicity of the $ 10M Commitment.

6 THE RHODES' WRITTEN COMMITMENT

2 42. As a prerequisite to any public announcement at Rock for the Cure, Nevada Cancer

3 Institute required that the Rhodes provide written confirmation of the $ 1 OM Commitment.

4 43. To this end, the Rhodes and their counsel, David Lyon, met with Shelley Gitomer,

5 Heather Murren, and others during the week of Rock for the Cure, and confirmed the details of the

6 $ 10M Commitment.

7 44. On November 15, 2007, the day of Rock for the Cure, David Lyon, counsel for the

8 Rhodes, sent a letter detailing the parties' agreement. A true and correct copy of David Lyon's letter

Q. .J .J 9 is attached hereto as Exhibit 1.

o ~ - 10 ~ 45. Specifically, David Lyon confirmed that the Rhodes committed "at least Ten Million ~ X g In ~ 11 Dollars," and described the mechanism through which the Rhodes would fund the $lOM ~ = c , ~ -e~ ~ ~;~ 0 12 Commitment. ~ ; II 0: r. 0 ii 0", UII J: C I: .(,.~ Øl 0 , ;: ~ 0. ,. 0 : 13 46. David Lyon also confirmed that the $ 10M Commitment was made by "Jim and ii ti ." ID o lD Ir Z lI;; 3: ~ ~,;;; ~ 14 Glynda," and was "absolute and unconditionaL" ~ 0( ~:~ ~ .... II.. .._ CJi ~ ; 3 15 47. Jim and Glynda Rhodes both personally signed David Lyon's letter, stating that its ..- .x ~ ,. ~ 16 terms were" Approved and Confirmed." ¡; ~ ~ 17 48. That same night, at Rock for the Cure, the Rhodes publicly announced the $ i OM ~ OJ Ul ~ ~ 18 Commitment to a crowd of high profie attendees. Both Jim and Glynda Rhodes gave prepared ci 19 speeches discussing the $ 1 OM Commitment.

20 49. After Rock for the Cure, Nevada Cancer Institute issued a press release announcing

21 the $ 1 OM Commitment, in furtherance of the Rhodes' demand for publicity.

22 50. Nevada Cancer Institute also arranged for the $ 1 OM Commitment to be included in 23 multiple print publications and otherwise assured that the $ 1 OM Commitment was well publicized, 24 including news coverage on local and regional television stations.

25 51. The Rhodes' names were also prominently displayed in the Nevada Cancer Institute 26 lobby to further demonstrate the Rhodes' philanthropy.

27 52. By all accounts, the Rhodes were thrilled with the exposure and publicity they

28 received in correlation with the $ 1 OM Commitment.

7 53. By late 2007, the Rhodes had stil not funded the $IOM Commitment. Fearful of 2 more damaging publicity while still attempting to obtain land use approvals and other favorable

3 rulings from public offcials, the Rhodes executed a second written confirmation of the $ 10M

4 Commitment on December 28, 2007 to induce Nevada Cancer Institute to book the $ 1 OM 5 Commitment in its 2007 financial statements. Both Jim Rhodes and Glynda Rhodes signed the 6 written confirmation, which was faxed to Nevada Cancer Institute by the Rhodes' counsel, David 7 Lyon, on December 31, 2007. A true and correct copy of the second written commitment is

8 attached hereto as Exhibit 2.

Q. .J .J 9 54. In reliance on the Rhodes' oral and written commitments, Nevada Cancer Institute

o -~ ~ 10 recorded a receivable of $ 10,000,000 from the Rhodes in Nevada Cancer Institute's public financial ~ X g In ~ 1 1 statements and renegotiated financing covenants to allow for payment of the $ i OM Commitment. ~ ~ C , 0 ~ ~ ~ 0( ;; 0 12 THE RHODES' FAILURE TO FUND THEIR BINDING COMMITMENTS ~ ; I) 0: tn 0 li 0,. ~ :I IE ~ ~ Ô 13 55. Over the course of 2008, it became increasingly clear that the Rhodes never intended IL¡; II~::O: . Ii Il o iz II Z 11;; ~.~:~-~ 8 ~.;;; ~ 14 to fund the $IOM Commitment. i 'I.. _ IIc .. .. After the second written commitment was made, the Rhodes' attorney began ~ ; ~ 15 56. ..- .x " .. ~ 16 suggesting funding structures that materially deviated from the structure agreed to between the ¡; ~ ~ 17 Rhodes and Nevada Cancer Institutc. These included structures that would place liability with the ~ OJ Ul ~ ~ 18 Rhodes' companies, instead of personally with Jim or Glynda Rhodes as required in the $ 1 OM ci 19 Commitment.

20 57. The motive for the Rhodes' push to remove their personal liability recently b~came

21 clear when many of their related entities fied for bankruptcy.

22 58. Another of the new funding structures presented by the Rhodes would have tied the

23 $ 1 OM Commitment to the receipt of land use entitlements for the Rhodes' development near Red

24 Rock National Conservation Area.

25 59. In other words, the Rhodes were attempting to give Nevada Cancer Institute a 26 financial interest in making sure the subject land received the entitlements the Rhodes previously 27 had been unable to obtain.

8 60. The newly proposed funding structures were not consistent with the $ i OM 2 Commitment agreed to by the parties and provided no assurance that Nevada Cancer Institute would

3 ever receive the funding that was promised.

4 61. After nearly a year of discussion regarding funding alternatives, the Rhodes have 5 refused to communicate with any Nevada Cancer Institute representatives, let alone fund their

6 obligations.

7 62. This lack of communication includes defaulting on the $ 1 M Commitment made in

8 2005, under which the Rhodes still owe $400,000.

Q. .J .J 9 63. Instead of intending to actually follow through with their Binding Commitments, the o ~ - 10 ~ Rhodes were simply using Nevada Cancer Institute to obtain positive media attention and curry ~ X g In " 11 favor with public offcials. ~ = o , ~ ~ ~ ~ 0( .:; 0 12 64. The Rhodes never intended to make payments under the $ 1 OM Commitment, despite ~ ; lD 0: II 0 ii 0 r- ~ i: :~~O ;: ~ D. )0 0 : 13 signing an agreement to do so. oii iiUl 'I ." Z II ii; ~ ~ ~ .;;~ ~~~:~: 14 65. The Rhodes have never a made a payment under the $ 1 OM Commitment...... c :i oC: 15 66. In fact, since obtaining vast publicity and recognition for the $ 1 OM Commitment, the -z l. ~ .. , ~ ,. ~ 16 Rhodes have not given any funds to Nevada Cancer Institute on either Binding Commitment. ¡; " ~ 17 67. The Rhodes' disappearing act has directly interfered with Nevada Cancer Institute's ~ OJ Ul ~ ~ 18 ability to operate as both a research and patient care facility. ci 19 68. Nevada Cancer Institute is now required to bring this action to force the Rhodes to

20 honor their Binding Commitments.

21 FIRST CLAIM FOR RELIEF

22 (Breach of Contract - $lM Commitment)

23 69. Nevada Cancer Institute incorporates the allegations in Paragraphs 1 through 68 as

24 though fully set forth herein.

25 70. The Rhodes entered into a valid and binding agreement to make the $ i M

26 Commitment in 2005.

27 71. The $ 1 M Commitment required that the Rhodes make five annual payments of

28 $200,000.

9 72. The Rhodes made the first three of the $200,000 payments, but have refused to make

2 the final two payments totaling $400,000.

3 73. Nevada Cancer Institute performed or was excused from performing under the $ 1 M

4 Commitment.

5 74. The Rhodes breached the $ 1 M Commitment by failing to make the remaInIng

6 $400,000 in payments.

7 75. Nevada Cancer Institute sustained damages in excess of $ 1 0,000 as a result of the

8 Rhodes' breach of the $ 1 M Commitment.

Q. .J .J 9 76. Nevada Cancer Institute has been required to retain the services of an attorney to

o -~ ~ 10 commence this action and is entitled to its attorney's fees and costs. ~ X g In ~ 11 SECOND CLAIM FOR RELIEF ~ ~ o , ~ ~ ~ ~ 0( ;; 0 12 ~ ~ ;I)g: (Breach of Contract - $10M Commitment) ~i::~~¿ 13 77. Nevada Cancer Institute incorporates the allegations in Paragraphs 1 through 76 as Ii;: ti ~::o: . II l: o m li Z lØ;; ~ ~ :.;;~ 14 though fully set forth herein. ~~~:Ë: ...... c :I 0(: 15 The Rhodes entered into a valid and binding agreement to make the $ 10M z l ~ 78. ..- .X ~ .. ~ 16 Commitment. ¡; ~ ~ 17 79. Nevada Cancer Institute performed or was excuscd from pcrforming under the $ 10M ~ OJ Ul ~ ~ 18 Commitment. ci 19 80. The Rhodes breached the $ 1 OM Commitment by failing to make any payments.

20 81. Nevada Cancer Institute sustained damages in excess of $ i 0,000 as a result of the

21 Rhodes' breach of the $ i OM Commitment.

22 82. Nevada Cancer Institute has been required to retain the services of an attorney to

23 commence this action and is entitled to its attorney's fees and costs. 2524 THIRD (Fraud) CLAIM FOR RELIEF 26 83. Nevada Cancer Institute incorporates the allegations in Paragraphs 1 through 82 as

27 though fully set forth herein.

10 84. As set forth above, the Rhodes represented to Nevada Cancer Institute, orally and in 2 writing, that they would make the $ i OM Commitment.

3 85. The Rhodes knew at the time they made their representations that those

4 representations were false and that the Rhodes never intended to make any payments under the

5 $ 1 OM Commitment.

6 86. Instead, the Rhodes intended to use the public nature of Rock for the Cure and

7 Nevada Cancer Institute's public and well-known reputation to obtain free publicity, which has now 8 caused damage to Nevada Cancer Institute.

Q. .J .J 9 87. Nevada Cancer Institute reasonably relied on the Rhodes' misrepresentations, o -~ ~ 10 including, but not limited to, booking a receivable in Nevada Cancer Institute's public financial ~ X g In ~ 11 statements, issuing press releases and disseminating information to the general public, planning and ~ ~ c , ~ ~ ~ ~ .i ;; 0 12 budgeting for Nevada Cancer Institute's future, and running Nevada Cancer Institute's day-to-day ~ ; Go: ~ 0 " c ~ r: u i: I: a" 0 13 operations. Ii;: (I ~::å: . II II o m lr Z ci;; ~ ~ ~.;;~ 14 ~ .i i: ~ .. 88. Nevada Cancer Institute was justified in its reliance on the Rhodes' -,.. lr.. .._ clI :i c: 15 z l ~ misrepresentations. ..- .x " .. ~ 16 89. The Rhodes' conduct constitutes oppreSSlOn, fraud, and malice pursuant to NRS ¡; ~ ~ 17 42.001 et seq. such that Nevada Cancer Institute is entitled to punitive damages in an amount to be ~ OJ Ul ~ ~ 18 determined at triaL. ci 19 90. Nevada Cancer Institute sustained damages in excess of $ i 0,000 as a result of the

20 Rhodes' fraud.

21 91. Nevada Cancer Institute has been required to retain the services of an attorney to

22 commence this action and is entitled to its attorney's fees and costs. 23 FOURTH CLAIM FOR RELIEF 24 (Negligent Misrepresentation)

25 92. Nevada Cancer Institute incorporates the allegations in Paragraphs i through 91 as

26 though fully set forth herein.

27 93. As set forth above, the Rhodes represented to Nevada Cancer Institute, orally and in 28 writing, that they would make the $ 1 OM Commitment.

1 1 94. The Rhodes failed to exercise reasonable care or competence in communicating

2 information to Nevada Cancer Institute.

3 95. Nevada Cancer Institute reasonably relied on the Rhodes' misrepresentations, 4 including, but not limited to, booking a receivable in Nevada Cancer Institute's public financial

5 statements, issuing press releases and disseminating information to the general public, planning and

6 budgeting for Nevada Cancer Institute's future, and running Nevada Cancer Institute's day-to-day

7 operations.

8 96. Nevada Cancer Institute was justified in its reliance on the Rhodes'

Q. .J .J 9 misrepresentations.

o ~ - 10 97. The Rhodes' conduct constitutes oppression, fraud, and malice pursuant to NRS ~ ~ X g In " 11 42.001 et seq. such that Nevada Cancer Institute is entitled to punitive damages in an amount to be ~ ~ o , ~ 0(~ ~ ~;~ 0 12 determined at triaL. ~ : I) 0: In a ll 0", ~ i: c~~o 13 98. Nevada Cancer Institute sustained damages in excess of $ 1 0,000 as a result of the IL;: '"~::ô: . Ii II o ai ii Z I);; ~ ~ ~.;;~ ~ 0( ~:~- 14 Rhodes' negligent misrepresentations. -,.. ii.. .._ cII 15 99. Nevada Cancer Institute has been required to retain the services of an attorney to -~ :. 3 .. . ~ .. ~ 16 commence this action and is entitled to its attorney's fees and costs. ¡; ~ ~ 17 WHEREFORE, Nevada Cancer Institute prays for relief as follows: ~ OJ Ul ~ ~ 18 1. For compensatory damages in excess of $ i 0,000 on all claims; ci 19 2. For punitive damages in an amount to be determined by the Court;

20 3. For prejudgment interest on all amounts received herein;

12 4. For reasonable attorney's fees and costs incurred in pursuing this action; and

2 5. For such other and further relief as the Court deems just and necessary.

3 GLASER, WElL, FINK, JACOBS HOWARD & SHAPIRO, I; .. 4

5 By: ~1_ L Corey M. Eschweiler, Esq. 6 Nevada Bar No. 6635 Adam Smith, Esq. 7 Nevada Bar No. 9690 GLASER, WElL, FINK, JACOBS, 8 HOWARD & SHAPIRO, LLP Q. 3763 Howard Hughes Pkwy .J .J 9 Suite 300 0 Las Vegas, Nevada 89169 ~ - 10 ~ ~ 0 x 0 Attorneys for Nevada Cancer Institute In ~ 11 ~ . c , ~ ~ ~ ~ ~ . ~ 0 12 ~ ; I) g: ~ " :t : ~ ~ ¿ v 13 .. ~ : : å : .. 0 : :;:;; o :i . -- 0 ~ u ". N.. ~ 14 ~ oi x::. . 0 ~ '" -,...... '" c II :i .: 15 -z l. ~ .. x ~ .; ~ 16 - ~ OJ " ~ 17 ~ OJ Ul ~ ~ 18 ci 19

13 EXHIBIT 1

EXHIBIT 1 Fabian FABIAN & CLENDENIN, P. C. David J. Lyon & Attorneys at Law Attorney at Law Clendenin 215 South State, Twelfth Floor A Prore~siunai Corporalion Salt Lake City, UT 84111 Direct Dial: (801) 323-2270 Telephone: (801) 531-8900 Facsimile: (801) 532-3370 P.O. Box 510210 dlyon~fabianlaw.com Cl~9 Salt Lake City, UT 84151-0210

Peter W. Bilings David J. Lyon Steven R. McMurray Robert J. Dale November 15, 2007 Jay B. Bell Daniel W. Anderson Gary E. Jubber Rosemary J. Beless W. Culen Batte Kevin N. Anderson Nevada Cancer Institute Normn J. Younker 10000 West Charleston Boulevard, Suite 260 JOM E.5. Robson Las Vegas, Nevada 89135 Douglas B. Canon DouglaJ. Payne Attention: Heather H. Murren, CF A, Chief Executive Officer Diae H. Ban P. Bruce Badger John Oack) D. Ray Dear Ms. Murren: Scott R. Sabey Victor A. Poll This letter is to confirm in writing the pledge that is being made by James Jon C. Martion Scott M. Petersen M. Rhodes ("Jim") and Glynda Rhodes ("Glynda") with respect to a gift to Brent R. Chipman the Nevada Cancer Institute (the "Institute") and reflects the discussions Bradley L. Tilt Mattew L. Anderson held on Monday with Jim, Glynda, Owen Nitz and myself regarding this Joa M. Andrews gift. The Rhodes' pledge is that they wil grant and contribute to the Jason W. Hardin Sara E. Bouley Institute interests in property having an aggregate value suffcient to permit David N. Keley the Institute to realize at least Ten Milion Dollars ($10,000,000) in total cash Oiristian D. Austin proceeds as a result of the pledge. James c. Waddoups Kyle C. Jones Felicia B. Canfield As we discussed, the Rhodes pledge is to be satisfied by Jim and Glynda Matthew B. Hutchinson Lisa M. Demmons causing a contribution to be made to the Institute of a non-voting preferred Rachel G. Terr member interest (the "Preferred Interest") in a limited liabilty company TinlOthy K. Oark Susa M. Baron ("Newco LLC") to be formed under Nevada law. Newco LLC itself wil be capitalized with, and wil own, investment real property having a fair Of Counsel market value in excess of liabilities in the range of $12,000,000 to Ralph H. Miler M. Byron Fisher $15,000,000. The terms of the Preferred Interest in Newco LLC wil be George D. Melling structured and established to have a fair market value suffcient ultimateIy Kenneth J. Warren to generate at least $10,000,000 of cash proceeds for the Institute. There wil Michele Mitchell Elizbeth A. Whitsett be provisions in the Operating Agreement to protect and preserve the value Brent D. Chritensn of the Preferred Interest in Newco LLC to be owned by the Institute. Wilam H. Adam Gregory M. Sayli Jennifer E. Decker The gift of the Preferred Interest to the Institute wil be absolute and unconditional, subject only to the agreed terms and conditions of the ..t ,,'

November 15,2007

Page 2

Operating Agreement of Newco LLC and the provisions of the following paragraph reIating to the honoring of Leonard Rhodes, Jim's father. The Institute wil have the right to sell all or any portion of the Preferred Interest at any time to any persons or parties.

Ths gift is to be in honor of Jim's father, Leonard Rhodes. We discussed when we met possibIe means of honoring Jim's father. In subsequent discussions with Shelley Gitomer it was proposed that the lobby of the main Institute building be named after Leonard Rhodes because of its visibility. In Iight of the several possible opportunities available (including the naming of the lobby), Jim and GIynda are prepared to commit to the pledge subject to the understanding that the Institute wil work with Jim and Glynda in good faith to determe an appropriate means of the Institute honoring Jim's father in light of the nature, timing and size of the gift being made, and taking into account, if and as appropriate, future gifts which may be made to the Institute by Jim and Glynda.

Please Iet me know if you have any questions.

Very truly yours,

Ffl Clendenin, P.e. DaVil:

Approved and Confirmed: !J ?J /t J~.RhOdeS

~yndaRes cc: Shelley Gitomer W.OwenNitz EXHIBIT 2

EXHIBIT 2 12/31/2007 13: 15 FAX 8015323370 FABIAN & CLENDENIN (4 002 12/28/2887 19: 53 7828949466 PAG 82/B2

James M.. & Glynda Rhodes 4730 Soutb Fort Apache Road, Suite 300 Las Vegas, NY 89147

Decber 28, 2007

Nev Cacer Intute 10000 Wes "charlestn Boulev Sui 260 La Vega, Nevad 89135 Attntion: Heaer H. Mun CF Ai Chief Executive Offcer

De Ms- Mll:

TIs let is conf in wrti9; the$lO,OOO,OOO (Ten Milion Dollar) 'pledge that is be mae by James M. Rhodes ("Jim") 'and Glynda Rhod C"Glynda") as a gi to 1ie Nev .Cace Intu (the "Intue") and reflec the anounceent of th S10,OO,OQ (fen Millon Dollar) gi publicly mae at the lrtute's anual.gaJa event On November 15, 2007,

Glynda lUodes